Opinion
Case No. 2:23-cv-06298-MCS-BFM
2023-10-18
ASK SYDNEY, LLC, Plaintiff, v. SNAP, INC., Defendant.
Joseph J. Zito, Pro Hac Vice, Whitestone Law, Tysons, VA, Susan S.Q. Kalra, William P. Ramey, III, Ramey LLP, Houston, TX, for Plaintiff. Jennifer Haltom Doan, Pro Hac Vice, Kyle Randall Akin, Joshua Reed Thane, Haltom and Doan, Texarkana, TX, Eimeric Reig-Plessis, Winston and Strawn, San Francisco, CA, Kelly C. Hunsaker, Winston and Strawn, Redwood City, CA, Paul Benedict Salvaty, Winston and Strawn LLP, Los Angeles, CA, for Defendant.
Joseph J. Zito, Pro Hac Vice, Whitestone Law, Tysons, VA, Susan S.Q. Kalra, William P. Ramey, III, Ramey LLP, Houston, TX, for Plaintiff. Jennifer Haltom Doan, Pro Hac Vice, Kyle Randall Akin, Joshua Reed Thane, Haltom and Doan, Texarkana, TX, Eimeric Reig-Plessis, Winston and Strawn, San Francisco, CA, Kelly C. Hunsaker, Winston and Strawn, Redwood City, CA, Paul Benedict Salvaty, Winston and Strawn LLP, Los Angeles, CA, for Defendant.
ORDER GRANTING MOTION FOR JUDGMENT ON THE PLEADINGS [50]
MARK C. SCARSI, UNITED STATES DISTRICT JUDGE
Defendant SNAP, Inc. has moved for judgment on the pleadings on the grounds that the patents asserted by Plaintiff Ask Sydney, LLC cover patent-ineligible subject matter under 35 U.S.C. § 101; and the Complaint fails to state a plausible claim for infringement ("Mot.," ECF No. 50). Plaintiff filed a response ("Opp.," ECF No. 52). Defendant filed a reply ("Reply," ECF No. 53). The Court held a hearing on October 16, 2023.
For the following reasons, the Court GRANTS the motion for judgment on the pleadings (ECF No. 50) and dismisses the Complaint with prejudice. The pleadings sufficiency portion of the motion is MOOT.
I. BACKGROUND
In this patent infringement action, Plaintiff alleges that Defendant infringes Claim 1 of U.S. Patent No. 9,323,786 (the "'786 Patent"), and Claim 1 of U.S. Patent No. 10,474,705 (the "'705 Patent"). See Compl., ¶¶ 12-13; see also ECF No. 1-1 at Ex. A (the '786 Patent), Ex. B (the '705 Patent). The '786 Patent relates to a system and method that "analyz[es] tags associated with a sequence of images presented to a user" to present the user with "a current interest." '786 Patent at Abstract. In sum, an image is displayed to a user, the user indicates a preference for the image, and using the tags associated with the image and user input, a sequence of images is displayed. See id. Where prior "application[s] d[id] not help a user determine what the user's current interest is despite the applications[ ] having access to the user's history," the claimed invention purports to help a user figure out what they want by "guid[ing] a user to his or her current interest based on a sequential presentation of images representative of possible physical objects of interest." Id. at 1:46-48, 1:55-58; see also id., Claim 1. The '705 Patent shares a specification with the '786 Patent and discloses similar method claims.
The exhibits attached to the Complaint lack page numbers, which are required by Local Rule 11-5.2. The exhibits attached to the motion share the same deficiency. See ECF No. 50-1 through 50-4. Counsel are admonished to comply with all Local Rules.
II. LEGAL STANDARDS
A. Rule 12(c)
Under Federal Rule of Civil Procedure 12(c), "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). A Rule 12(c) motion challenges the legal sufficiency of the pleadings. Judgment under this rule is proper when, taking all of the pleaded material facts as true, the moving party is entitled to judgment as a matter of law. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). The standard for judgment under Rule 12(c) is essentially the same as under Rule 12(b)(6). See Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012).
In patent infringement actions, an accused infringer may move to dismiss under 35 U.S.C. § 101 on the basis that the claimed invention is ineligible for patent protection and thus the patent is invalid. In this context, the moving party "bear[s] the burden of establishing that the claims are patent-ineligible under § 101." Modern Telecom Sys. LLC v. Earthlink, Inc., No. SA CV 14-0347 DOC, 2015 WL 1239992, at *7 (C.D. Cal. Mar. 17, 2015). "[I]n applying § 101 jurisprudence at the pleading stage, the Court construes the patent claims in a manner most favorable to Plaintiff." Id. at *8 (citing Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass'n, 776 F.3d 1343, 1349 (Fed. Cir. 2014)).
III. DISCUSSION
A. Section § 101 Analytical Framework
Under 35 U.S.C. § 101, Congress granted broad patent eligibility to inventions or discoveries including "processes, machines, manufactures, and compositions of matter." See Bilski v. Kappos, 561 U.S. 593, 601, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010). These broad categories notwithstanding, the Supreme Court has carved out three exceptions to patent eligibility under § 101: " 'laws of nature, physical phenomena, and abstract ideas.' " Id. (quoting Diamond v. Chakrabarty, 447 U.S. 303, 309, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980)). The last exception, abstract ideas, is relevant here.
"[A]n invention is not rendered ineligible for [a] patent simply because it involves an abstract concept. Applications of such concepts to a new and useful end . . . remain eligible for patent protection." Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208, 217, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014) (does the invention "claim the 'buildin[g] block[s]' of human ingenuity" or "integrate the building blocks into something more"). In Alice, the Supreme Court set forth a two-step framework for determining patent eligibility under § 101. A claim is ineligible under § 101 if "(1) it is 'directed to' a patent-ineligible concept, i.e., a law of nature, natural phenomenon, or abstract idea, and (2), if so, the particular elements of the claim, considered 'both individually and as an ordered combination,' do not add enough to 'transform the nature of the claim' into a patent-eligible application.' " Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016) (quoting Alice, 573 U.S. at 217, 134 S.Ct. 2347 (internal quotations omitted)).
Patent eligibility is a question of law that may include underlying questions of fact. Aatrix Software, Inc. v. Green Shades Software, Inc., No. 2017-1452, 882 F.3d 1121, 1128 (Fed. Cir. 2018) ("While the ultimate determination of eligibility under § 101 is a question of law, like many legal questions, there can be subsidiary fact questions which must be resolved en route to the ultimate legal determination."); accord Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir. 2018). Patent eligibility can be determined at the pleading stage "only when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law." Aatrix Software, 882 F.3d at 1125.
Under step one, "courts may ask whether the claims 'focus on a specific means or method that improves the relevant technology' or are 'directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery.' " Nagravision SA v. NFL Enterprises, LLC, No. CV 17-03919-AB (SKX), 2018 WL 1807285, at *3 (C.D. Cal. Mar. 9, 2018) (quoting McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016)). In the software context, this step often "turns on whether the claims focus on specific asserted improvements in computer capabilities or instead on a process or system that qualifies as an abstract idea for which computers are invoked merely as a tool." Uniloc USA, Inc. v. LG Elecs. USA, Inc., 957 F.3d 1303, 1306 (Fed. Cir. 2020) (quotation marks omitted).
If the claims fail step one, under step two, "the court must search for 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." accord Timeplay, Inc. v. Audience Entm't LLC, No. CV 15-05202 SJO, 2015 WL 9695321, at *3 (C.D. Cal. Nov. 10, 2015). This step is satisfied when the claim limitations "involve more than performance of 'well-understood, routine, [and] conventional activities previously known to the industry.' " Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass'n, 776 F.3d 1343, 1347-48 (Fed. Cir. 2014). "Whether the claim elements or the claimed combination are well-understood, routine, conventional is a question of fact." Aatrix Software, 882 F.3d at 1128.
B. Applying Alice to the Asserted Patents
1. Step One
The Federal Circuit has cautioned that "[t]he § 101 inquiry must focus on the language of the Asserted Claims themselves." Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1149 (Fed. Cir. 2016). Based on the claim language, Defendant argues that the asserted patents are invalid because they "are directed to the abstract idea of generating and presenting images to a user in order to determine the user's interest, which is a longstanding human activity." Mot. at 1; see also id. at 9-10. Defendant likens the claimed inventions to the age-old practice of "merchants [ ] show[ing] samples of products to gauge a customer's reaction and then updat[ing] their recommendations based on that reaction." Id. at 1; see also id. at 10. Defendant contends that "using generic 'tags' and 'weightings' " does not offer "any technological improvement," but rather carries out this longstanding practice "on a conventional computer." Id.
Plaintiff responds that the asserted patents are not directed to abstract subject matter because they "teach the claimed solution for a procedure that was unavailable prior to the invention of the subject matter of the Patents-in-Suit claims," which offers "a technical solution not solved by prior art." Opp. at 3-4.
A review of Claim 1 in each asserted patent shows that the claims are "directed to an abstract idea," not "an improvement to computer functionality." In re TLI Commc'ns LLC Patent Litig., 823 F.3d 607, 612 (Fed. Cir. 2016) (citing Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016)).
Defendant contends, and Plaintiff does not dispute, that Claim 1 in each patent is representative.
Claim 1 of the '786 Patent discloses "a computer-implemented method" that includes the following steps: (1) receiving an indication that a user initiates an application "to direct the user to a current interest associated with a category of physical objects;" (2) "determining" "a plurality of tags specific to the user;" (3) "transmitting" an "electronic image" to the user where the image represents "a physical object" associated with a category of tags "specific to the user;" (4) presenting the image on the electronic device; (5) receiving user input regarding a preference for the image; (6) processing the plurality of tags based on the expressed preference to determine the next set of tags specific to the user; (7) if the response was negative, remove that image from the session; (8) if the response was positive, determine at least one additional tag based on tag weights relating to user preference; (9) determining the next electronic image to present; and (10) generating a sequence of images according to this method. '786 Patent, Claim 1.
Claim 1 of the '705 Patent discloses "[a] computer-implemented image search method filtered by multiple human-machine inputs on images presented to a user of the image search method," which follows a list of steps similar to those set forth in Claim 1 of the '786 Patent (i.e., displaying images, receiving user preference input, and displaying further images based on tag weighting deriving from expressed user preference). See '705 Patent, Claim 1.
The Court agrees with Defendant's analogy that this process is similar to the age-old process of how a customer interacts with a shoe salesperson. The salesperson may offer options to the customer based on the customer's past shoe purchases, but if the salesperson displays a shoe the customer dislikes, the salesperson will offer a different shoe based on that updated preference. The asserted patents claim the abstract idea of implementing this process on a computer. The Federal Circuit has made clear that a "computer-implemented" method is directed to an abstract idea if it "consist[s] only of 'generalized steps to be performed on a computer using conventional computer activity.' " Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1260 (Fed. Cir. 2016) (citing TLI, 823 F.3d at 612).
Plaintiff provides no explanation concerning how the asserted claims provide "specific asserted improvements in computer capabilities" rather than disclose that "computers are invoked merely as a tool." Uniloc, 957 F.3d at 1306; see also Relevant Holdings, LLC v. MindGeek USA Inc., No. 2:21-CV-03174-MCS-KES, 2021 WL 6103350, at *6 (C.D. Cal. Aug. 30, 2021) (claims for a "computer-implemented method of ranking categories" based on "a weighted relationship" and other variables to present content to user invalid under § 101). Plaintiff also does not respond to the persuasive authority cited by Defendant. Based on a review of the claim language and controlling authority, the Court concludes that Defendant has met its burden at step one to show that the claimed method is directed to an abstract idea.
In the context of step two, Plaintiff argues that because the claimed "processing involves removing tags from a plurality of tags that are specific to a user, for a remainder of a session of directing a user to a current interest," Claim 1 "provides an objective basis for the user to arrive at a subjective interest through the method manipulating the plurality of tags and directing a user to a current interest," which shows the claimed method "improves the functionality of the computer by determining what the user's implicit interests are without the user cognitively knowing or being able to describe such interests." Opp. at 6-7. Plaintiff's arguments restate how the abstract idea is performed on a computer, however; they do not provide an explanation for how the claims improve computer functionality.
2. Step Two
Because the asserted claims disclose an abstract idea implemented on a computer, the Court next examines whether the claims disclose an inventive concept. This step asks "whether the claims do significantly more than simply describe [the] abstract method and thus transform the abstract idea into patentable subject matter." Affinity Labs, 838 F.3d at 1262 (citing Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (internal quotation marks omitted)). The inventive concept "may arise in one or more of the individual claim limitations or in the ordered combination of the limitations." Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1349 (Fed. Cir. 2016). But "[i]t is well-settled that mere recitation of concrete, tangible components is insufficient to confer patent eligibility to an otherwise abstract idea." TLI, 823 F.3d at 613.
Defendant argues the claims "recite no inventive concept outside the abstract realm," which is apparent where "the specification repeatedly admits that any computer technology required to implement the claimed invention is entirely 'conventional.' " Mot. at 13-14. Defendant argues the patent examiner who allowed these patents was incorrect in concluding that the patents survived Alice step two because the "weights" and "tags" do not solve a technological problem. Id. at 15-16.
Relying on the patent examiner's Alice step two determination, and an order from the Western District of Texas incorporating that determination, Plaintiff responds that the asserted patents survive Alice step two because they include an inventive concept. Opp. at 1 (citing Ask Sydney, LLC v. Amazon.com Servs., LLC, No. W-23-CV-00108-XR, 688 F.Supp.3d 403, 418-21 (W.D. Tex. Aug. 14, 2023) (ECF No. 52-1)). Plaintiff contends that because "Snap offers § 101 invalidity arguments that were already considered and rejected at the USPTO," these arguments "do not rise to the clear and convincing standard." Id. at 2. Further, Plaintiff contends that the inventive concept is evident where the patents offer "a filtering tool that provides additional benefits to a computerized system." Id. at 5.
Plaintiff appears to have copied portions of its brief from a pleading in an unrelated case. See, e.g., Opp. at 2 ("Google has failed to consider the claims as a whole and has over generalized the Patents-in-Suit.").
First, Plaintiff's argument that the claims provide a "filtering tool" is unpersuasive because Plaintiff cites no claim language supporting this contention and the Court has found none.
Second, the Court has reviewed the Notice of Allowance in which the examiner concluded that the claims disclose an inventive concept and finds it unpersuasive because it does not provide any reasoning for its conclusion. In the NOA, the examiner cited the following elements as supporting an inventive concept:
determining weightings of the tags within the plurality of tags specific to the user based at least in part, on (i) a number of times each tag of the plurality of tags specific to the user appears with at least one of the one or more tags of the one set of tags for the plurality of electronic images, and (ii) a number of times each tag of the plurality of tags specific to the user is associated with a positive and/or a negative preference by the user: and determining the at least one additional tag based on the at least one additional tag having a highest weighting among the plurality of tags specific to the user.See ECF No. 50-2 at pp. 5-6 ('786 Patent). In view of these elements, the examiner concluded that "[a]djusting weights of tags and including the weighting of tags on an image to be included in the next set of images as claimed moves the claim as a whole beyond the abstract idea by solving a technical problem rooted in technology," and "[i]t is unreasonable to expect the subject matter as a whole to be applied outside the realm of computer technology." Id. at 6-7; see also ECF No. 50-3 at 3 (same regarding '705 Patent). No evidence was cited to support the conclusion that the claims solve a technical problem rooted in technology.
The Court is "not required to defer to Patent Office determinations as to eligibility," Sanderling Mgmt. Ltd. v. Snap Inc., 65 F.4th 698, 705 (Fed. Cir. 2023), and will not do so here. The crux of the examiner's conclusion is that, because the claimed abstract idea can be accomplished more efficiently on a computer, it therefore discloses an inventive concept. This is not the law. Rather, claims must do more than describe a computer-implementation of the abstract method. See Affinity Labs, 838 F.3d at 1262; Bascom, 827 F.3d at 1349; see also BSG Tech, LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018) ("It has been clear since Alice that a claimed invention's use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention 'significantly more' than that ineligible concept."). Post-Alice, the Federal Circuit "has ruled many times that such invocations of computers and networks that are not even arguably inventive are insufficient to pass the test of an inventive concept in the application of an abstract idea." SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1170 (Fed. Cir. 2018) (quotation marks and citation omitted). Applying this clear precedent to the asserted claims, even considering the presumption of validity, the Court concludes that no inventive concept is present. Defendant has carried its burden at step two.
Because the asserted claims, each of which is representative, fail at both Alice step one and step two, the asserted patents claim ineligible subject matter and the Court GRANTS the motion.
3. Further Proceedings
Defendant contends that no factual allegations appear in the Complaint that weigh against invalidating the asserted patents at this stage. Opp. at 14. Further, Plaintiff "does not contend that any claim construction or discovery is needed to decide this motion." Reply at 1. Plaintiff did not suggest any amendments or request leave to amend as to patent eligibility. Accordingly, the Court grants the motion with prejudice.
C. Motion to Dismiss
Because the Court resolves the motion under 35 U.S.C. § 101, Defendant's pleading deficiency arguments are MOOT.
IV. CONCLUSION
The Court GRANTS the motion for judgment on the pleadings based on patent ineligibility under 35 U.S.C. § 101.
Although the motion only concerns the claims in the Complaint, the invalidity ruling here likely has dispositive implications for Defendant's counterclaims. The Court orders the parties to file within 14 days either a stipulated proposed judgment as to all claims and counterclaims in this action, without waiver of Plaintiff's right to appeal the ineligibility determination, or a status report proposing a schedule for further proceedings consistent with this Order.