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Tenaha Licensing LLC v. Ascom (US) Inc.

United States District Court, D. Delaware

January 2, 2020

TENAHA LICENSING LLC, Plaintiff,
v.
ASCOM (US) INC., Defendant.

          REPORT AND RECOMMENDATION

          SHERRY R. FALLBON UNITED STATES MAGISTRATE JUDGE.

         Presently before the Court is the Defendant's motion to dismiss Plaintiffs action for patent infringement, arguing that the asserted patent claims are ineligible under 35 U.S.C. § 101 because they are directed to an abstract idea. (D.I. 6)[1] Defendant also argues that the Complaint's allegations of indirect patent infringement are insufficient and should be dismissed. (D.I. 7 at 19-20) As explained below, the asserted patent is directed to an abstract idea and concedes that all of the claimed techniques and devices asserted by Plaintiff to be inventive were actually well-known and conventional. Therefore, the Court recommends that the District Court GRANT the motion, finding the patent claims ineligible and dismissing the case with prejudice.

         I. BACKGROUND

         Plaintiff Tenaha Licensing LLC ("Plaintiff or "Tenaha") is a Texas corporation with its principal place of business in Piano, Texas. (D.I. 1 at ¶ 1) Defendant Ascom (US) Inc. ("Defendant" or "Ascom") is a Delaware corporation with its principal place of business in Morrisville, North Carolina. (Id. at ¶ 2; D.I. 8 at ¶ 2)

         Tenaha is the assignee of the asserted patent in this patent infringement suit-U.S. Patent No. 8, 238, 869 ("the '869 patent"). (D.I. 1, ex. A) The '869 patent is entitled "LIFESAVER PERSONAL ALERT AND NOTIFICATION DEVICE[, ]" ('869 patent, Title; D.I. 1 at ¶ 8), and describes methods of relaying notifications to users. (See '869 patent, col. 1:10-11 (describing the "field of invention" as "devices and methods for personal alert and notification")) The background section of the patent describes two categories of "currently known alert systems" that provide "specific message[s]" to either an individual or the general public: "wide area alert/notification systems" and "local area alert/notification systems[.]" (Id., col. 1:14-18; see also id., col. 1:19-62 (describing each system)) The '869 patent explains that the "present invention is directed to systems, devices and methods of transmitting in a wide area notification zone a plurality of notifications to a plurality of users in an automated, independent, and localized manner." (Id., cols. 1:66-2:12) The specification explains this goal is accomplished by activating a "low-range transceiver" to "send a notification to [a] plurality of users via wearable transceivers" in response to a "signal from a wide area notification device[.]" (Id., col. 2:2-12) "Most preferably," the low-range transceiver is activated by a "trigger device." (Id.; but see id, cols. 10:63-11:12 (asserted claim 15 not reciting "trigger device")) The patent describes, in expansive terms, several "suitable devices" for the "wide area notification device," "trigger device," "low-range transceiver," and the "wearable transceiver" of the invention. (Id. cols 2:13-9:34)

         Plaintiff alleges Defendant infringes "at least claim 15 of the '869 patent":

15. A method of providing emergency and non-emergency event notification to a plurality of users, comprising:
using a low-range transceiver to automatically relay within a wide area notification area a first emergency notification signal from a wide area notification device, and to further provide an audible and/or visible alert notification in response to the first emergency notification signal; and
manually, and independently from the first emergency notification signal, providing a second non-emergency notification signal to at least one of the plurality of users using the low-range transceiver, wherein the nonemergency notification signal is a user-specific and event-specific notification signal that is transmitted by an operator of the low-range transceiver to a wireless transmitter that is worn by a user, wherein the user is a person other than the operator.

(Id., cols. 10:63-11:12; D.I. 1 at ¶ 14)

         Plaintiff filed its Complaint for patent infringement on March 26, 2019. (D.I. 1) On April 22, 2019, Defendant filed the pending motion to dismiss the Complaint for lack of patent-eligible subject matter pursuant to 35 U.S.C. § 101 and for failure to state a claim of indirect infringement. (D.I. 6; D.I. 7) Briefing was completed on June 20, 2019, (D.I. 14), and the Court heard oral argument on November 15, 2019, (D.I. 21 (hereinafter "Tr.")).

         II. STANDARD OF REVIEW

         A. Failure to State a Claim

         Ascom moves to dismiss the pending action pursuant to Rule 12(b)(6), which permits a party to seek dismissal of a complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). According to Ascom, Tenaha's Complaint fails to state a claim because the asserted claims of the '869 patent are ineligible for patent protection under 35 U.S.C. § 101. Patent eligibility under 35 U.S.C. § 101 is a threshold test. Bilski v. Kappos, 561 U.S. 593, 602 (2010). Therefore, "patent eligibility can be determined at the Rule 12(b)(6) stage ... when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law." Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018).

         When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all factual allegations in the complaint and view them in the light most favorable to the plaintiff. Umland v. Planco Fin. Servs., 542 F.3d 59, 64 (3d Cir. 2008). Dismissal under Rule 12(b)(6) is only appropriate if the complaint does not contain "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). However, "a court need not 'accept as true allegations that contradict matters properly subject to judicial notice or by exhibit,' such as the claims and the patent specification." Secured Mail Solutions LLC v. Universal Wilde, Inc., 873 F.3d 905, 913 (Fed. Cir. 2017) (quoting Anderson v. Kimberly-Clark Corp., 570 Fed.Appx. 927, 931 (Fed. Cir. 2014)).

         B. Patent-Eligible Subject Matter

         Section 101 of the Patent Act provides that patentable subject matter extends to four broad categories: "Whoever invents or discovers any new and useful [1] process, [2] machine, [3] manufacture, or [4] composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." 35 U.S.C. § 101. The Supreme Court recognizes three exceptions to the subject matter eligibility requirements of [Section] 101: laws of nature, physical phenomena, and abstract ideas. Alice Corp, Pty. v. CLS Bank lnt'l, 573 U.S. 208, 218 (2014). The purpose of these exceptions is to protect the "basic tools of scientific and technological work," Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012), which are "part of the storehouse of knowledge of all men . . . free to all men and reserved exclusively to none," Bilski, 561 U.S. at 602 (internal quotation marks and citations omitted).

         The Supreme Court articulated a two-step "framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts." Alice, 573 U.S. at 217; see also Mayo, 566 U.S. at 77-78. At step one, the court must determine whether the claims are directed to one of the three patent-ineligible concepts. Alice, 573 U.S. at 217. If not, "the claims satisfy [Section] 101 and [the court] need not proceed to the second step." Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356, 1361 (Fed. Cir. 2018). If the claims are directed to a patent-ineligible concept, the court must proceed to the second step of identifying an '"inventive concept'-i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself." Alice, 573 U.S. at 217-18 (quoting Mayo, 566 U.S. at 72-73).

         At step one, "the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter." Internet Patents Corp, v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015); see also Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) ("DIRECTV") ("The 'abstract idea' step of the inquiry calls upon us to look at the 'focus of the claimed advance over the prior art' to determine if the claim's 'character as a whole' is directed to excluded subject matter."). However, "courts must be careful to avoid oversimplifying the claims by looking at them generally and failing to account for the specific requirements of the claims." McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1313 (Fed. Cir. 2016) (internal quotation marks omitted). "At step one, therefore, it is not enough to merely identify a patent-ineligible concept underlying the claim; [courts] must determine whether that patent-ineligible concept is what the claim is 'directed to.'" Rapid Litig. Mgmt. Ltd. v. Cellz Direct, Inc., 827 F.3d 1042, 1050 (Fed. Cir. 2016).

         At step two, the court must "look to both the claim as a whole and the individual claim elements" to determine whether they "amount[ ] to significantly more than a patent upon the [ineligible concept] itself." McRO, 837 F.3d at 1312. "Simply appending conventional steps, specified at a high level of generality, [is] not enough to supply an inventive concept." Alice, 573 U.S. at 222 (internal quotation marks omitted). Instead, the claim elements must "involve more than performance of 'well-understood, routine, [and] conventional activities previously known to the industry.'" Berkheimer v. HP Inc.,881 F.3d 1360, 1367 (Fed. Cir. 2018) (citation and internal quotation marks omitted); see also Mayo, 566 U.S. at 73. "The inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art. . . . [A]n inventive concept can be ...


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