Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 1 of 54 PageID #: 17670
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`1
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`CA NO. 16-453-RGA,
`16-454-RGA, 16-455-RGA
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`July 10, 2017
`
`2:00 o'clock p.m.
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`: : : : : : : : : : :
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`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ACTIVISION BLIZZARD INC., et
`al.,
`
`Defendant.
`.............................
`
`TRANSCRIPT OF MOTION TO DISMISS
`BEFORE THE HONORABLE RICHARD G. ANDREWS
`UNITED STATES DISTRICT JUDGE
`
`APPEARANCES:
`
`For Plaintiff:
`
`POTTER, ANDERSON & CORROON
`BY: PHILIP A. ROVNER, ESQ
`BY: ALAN R. SILVERSTEIN, ESQ
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`1
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`CA NO. 16-453-RGA,
`16-454-RGA, 16-455-RGA
`
`July 10, 2017
`
`2:00 o'clock p.m.
`
`: : : : : : : : : : :
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ACTIVISION BLIZZARD INC., et
`al.,
`
`Defendant.
`.............................
`
`TRANSCRIPT OF MOTION TO DISMISS
`BEFORE THE HONORABLE RICHARD G. ANDREWS
`UNITED STATES DISTRICT JUDGE
`
`APPEARANCES:
`
`For Plaintiff:
`
`POTTER, ANDERSON & CORROON
`BY: PHILIP A. ROVNER, ESQ
`BY: ALAN R. SILVERSTEIN, ESQ
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 2 of 54 PageID #: 17671
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`For Defendant:
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`-and-
`KRAMER, LEVIN, NATALIS & FRANKEL
`BY: PAUL J. ANDRE, ESQ
`BY: JAMES R. HANNAH, ESQ
`BY: AARON M. FRANKEL, ESQ
`
`MORRIS, NICHOLAS, ARSHT & TUNNEL
`BY: JACK B. BLUMENFELD, ESQ
`-and-
`WINSTON & STRAWN LLP
`BY: MICHAEL A. TOMASULO, ESQ
`BY: MICHAEL M. MURRAY, ESQ
`BY: DAVID P. ENZIMINGER, ESQ
`BY: ANDREW R. SOMMER, ESQ
`BY: DAVID K. LIN, ESQ
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`Also Present:
`
`OMER SALIK
`JULIA KAZAKS
`Activision Blizzard Representatives
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`KERRY HOPKINS
`Electronic Arts Representatives
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 3 of 54 PageID #: 17672
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`LINDA ZABRISKIE
`Take 2 Interactive Software, Inc
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`Court Reporter:
`
`LEONARD A. DIBBS
`Official Court Reporter
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 4 of 54 PageID #: 17673
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`P R O C E E D I N G S
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`(The proceedings occurred at 2:00 o'clock p.m. as
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`follows:)
`
`THE COURT: All right. Please be seated.
`So this is an argument on the two Motions to Dismiss.
`We've got to be finished by 3:00 o'clock here.
`Who's arguing the motion? Which motion do you want to
`do first, defendants?
`MR. MURRAY: It's the 101 Motion, your Honor, is that
`
`okay?
`
`THE COURT: Yes.
`MR. MURRAY: Your Honor, I have some slides, okay?
`May I approach?
`THE COURT: Yes.
`(Pause)
`MR. MURRAY: Can I begin?
`THE COURT: Yes.
`MR. MURRAY: So I know that your Honor is very familiar
`with 101 and Alice. I'm just going to sort of dive right into
`the claims here and get to the issues that we need to address.
`So Alice Step 1, are the claims directed to an abstract
`
`method.
`
`For these particular claims, the answer to that is easy
`to determine and the answer is yes.
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 5 of 54 PageID #: 17674
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`The heart of the claim -- we have Claim 1 here -- on
`the slide from the '344 patent. It's a representative claim.
`You can see that literally everything in the claim,
`other than the preamble, and a wherein clause that comes at the
`end, puts the method into some sort of context in terms of the
`structure -- well, I'll talk about that. We addressed those
`terms this morning, of course, in our regular -- et cetera.
`But the rest of the claim is a straightforward abstract
`method. It's an originating participant sends data to the other
`participants by sending the data through each of its connections
`to its neighbor participants.
`So that's sort of a first step. It's a data
`transmission step.
`And wherein each participant sends data that it
`receives from a neighbor to its other neighbor participates.
`So you transmit the data, you receive, and then forward
`it on. That's really all that says. That's the abstract method
`under Alice Step 1.
`When you look at the specification about how they
`illustrate this abstract method, they illustrate it with
`abstract graphs, so that it's just a bunch of dots with lines
`between them.
`And that's the method of the claim.
`We've animated this a little bit.
`So if the originating participant is H, it transmits
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 6 of 54 PageID #: 17675
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`data to its neighbors. The neighbors receive the data. And it
`transmits the data to their neighbors.
`So it's just this two-step data transmission, and
`receipt and forwarding, and that's all that's required.
`The claim steps can clearly be implemented without
`computers, which is what a lot of Courts looked at in trying to
`address the Alice Step 1 inquiry.
`We've provided some examples.
`Phone-trees. An originating participant in a phone-
`tree sends data to other participants. Make a phone call, the
`school is closed tomorrow. Has tons of information. Whoever
`receives that phone call will then call their designated people
`and passes that information on to them.
`Data transmission. Receive and then forwarding.
`Chain letters have been around literally for centuries.
`They literally do the same thing.
`Even word of mouth. This is a -- some pictures here
`from a commercial from 35 years ago.
`I don't know if your Honor remembers, but Heather
`Locklear liked this shampoo so much that she told two friends,
`and they told two friends, and so on and so on. And the
`information was passed on. It was transmitted. It was received
`and then passed on.
`So Step 1 and Step 2, can and have been implemented
`without computers.
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 7 of 54 PageID #: 17676
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`Plaintiff's criticize the phone-tree with arguments
`like, well, in a phone-tree, the information doesn't flow in two
`directions.
`First of all, that's not in the claim. The claim just
`requires that the participant send the data. There is a receipt
`and forwarding. There is no requirement in the claim that that
`be two-way communication.
`Also, phones work in both directions in any event.
`It also criticized the phone-tree example is by saying
`that this is a single point of failure in a phone-tree.
`Again, there is no requirement in the abstract method
`of the claim that there be overlapping neighbors or that a
`neighbor is going to receive information from multiple sources
`or anything like that.
`So they are criticizing it by looking at a lot of
`functionality that's just not in the claim, not in the abstract
`method.
`
`They also talking about the flexibility to add drop
`nodes, which is not only not in the abstract method, it's not
`even in these claims. There's some added dropped patents that
`we'll get to maybe in another motion down the road.
`So data transmission and retransmission have
`specifically held to be abstract.
`Dealertrack is one example from the Federal Circuit
`where the Federal Circuit -- where the Federal Circuit broke it
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 8 of 54 PageID #: 17677
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`down into three steps; receiving data from one source,
`selectively forwarding it, and then forwarding reply data to the
`first source, so Dealertrack is very close.
`This Court, as your Honor knows, of course, has
`addressed very similar cases.
`The Pragmatus Telecom case, receiving and forwarding
`data to a call center through contact channels is abstract.
`The Callwave Communication cases, I'm sure your Honor
`will recall, were similar.
`Now, they -- they will stand up and argue -- they have
`in their briefs -- well, they are focused on a network, but
`limiting the claim to a particular field of use, does not make
`it nonabstract.
`The Federal Circuit has recently emphasized that an
`abstract idea does not become nonabstract by limiting the
`invention to a particular technological environment, such as the
`internet.
`
`So limiting the claims to a computer network, and
`regular networks, et cetera, do not make the claims nonabstract.
`It's just the environment in which the abstract method is being
`implemented.
`THE COURT: Does it make a difference if I think that
`the patentee said that this improves the function of the
`network?
`
`MR. MURRAY: Well, it doesn't improve the functioning
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 9 of 54 PageID #: 17678
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`of the network. The network is the underlying connections.
`It's really just the internet.
`When you look at the connections, remember the graphs
`that has all the lines there, those lines are the internet
`connections.
`So they are taking this abstract method and applying it
`to plain vanilla networking components. Computers connected
`together by the internet. That's literally all there is. They
`are not building a new network.
`Now, every plaintiff these days try to kind of shoehorn
`themselves into either Enfish or McRO. Those cases were
`markedly different.
`Enfish, I know your Honor is familiar with this case.
`This was a specific improvement to the way computers operate.
`This is a self-referential table, which is something really
`unique to computers.
`McRO was also -- and had these specific rules. And I
`have Claim 1 from McRO, actually, just as a comparison here.
`This was a very -- first of all, it's a method claim --
`and it has a very specific set of rules that had to do with
`controlling the facial expressions of animated characters, so
`that they would match a prerecorded audio.
`And there is this waiting, and morphed wait sets, and
`all of this sort of detailing these rules, as it applied to an
`animated character. Very different than anything we're dealing
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 10 of 54 PageID #: 17679
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`with here.
`Now, Alice Step 2, I want to talk about the additional
`elements of the claim. They do not provide any -- anything
`inventive.
`The additional elements merely describe a particular
`technical environment or add well-known networking components.
`Let's go back to Claim 1.
`When you look at what is in the claim, separate and
`apart from the abstract method in the sensor, you have things
`like a computer network for providing a game environment. You
`have -- you have m-regular, you have a non-complete graph.
`All of these things were well-known standard networking
`components at the time of these applications. There's nothing
`new about the any of the additional elements that were being
`added here.
`This Court has found no inventive step when the claims
`offered a meaningful limitation beyond linking the abstract idea
`to generally generic or functionally-described computer
`components.
`That's really what we've got. All of these things,
`m-regular, it sounds impressive, but it's all in the prior art.
`It's been around for many, many years.
`THE COURT: Well, so, you know, one of the things when
`I was reading your briefing was, it sounded like more like an
`obviousness argument. You know, were saying some master's
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 11 of 54 PageID #: 17680
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`thesis from a library somewhere. That doesn't sound to me like
`a 101 analysis.
`MR. MURRAY: Well, the second part of the 101 analysis,
`so, first, we've been through the first part. There is, I
`think, clearly in the center of this claim an abstract method.
`Transmit data, receive it, and forward it.
`So part 2 of the analysis is, is there anything
`additional in the claims that ads an inventive concept? Adds
`something inventive to the claim in the additional elements?
`So I think it's appropriate to look at whether the
`additional elements were well known in the industry at the time
`of the application. There certainly will be obviousness
`arguments down the road, based same on that same kind of prior
`art, your Honor.
`But when you look at each of the additional elements
`added to this claim beyond the abstract method, they are
`standard, generic computers things that were in existence. They
`didn't invent m-regular. They didn't invent incomplete.
`Just sort of looking at the language of the claim, game
`environment, information delivery service. That's just the
`environment in which the method is taking place.
`Non-routing table based computer network. Plenty of
`prior art shows that.
`They are taking standard networking features and adding
`them sort of around, what the center of the claim, which is an
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 12 of 54 PageID #: 17681
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`abstract method. And they don't get beyond Alice Step 2 by
`adding that kind of generic, well-known computer features or
`functions.
`So not using routing tables when you transmit data in a
`network was a standard networking technique.
`And we cited a couple of examples of that where they
`used even that exact language.
`This is a quote from Shoubridge.
`"Do not maintain routing tables. Bar and sell."
`Another reference.
`"No routing tables are necessary. That's how flooding
`works. You don't need to use routing tables."
`M-regularity and incompleteness also are very common at
`the time this was this was filed.
`We cited several references here, quote, Kuo-Jui Lin,
`was a -- or is an m-regular. And it talked about the advantages
`of using m-regular that reduces the probability of the
`occurrence of bottlenecks.
`Again, I know this is a little obviousness like. Alice
`Step 2, though, looks at the additional elements of whether
`there is anything new there that could be possibly be an
`inventive contribution beyond the abstract method.
`So when they have things like, you know, m-irregularity
`and incompleteness, there's just not anything there.
`Using just this figure, this is from the Baransal
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 13 of 54 PageID #: 17682
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`reference. These are networks. You can see in both of these
`graphs these are four regular networks. Each -- each node there
`represents a computer in the network. It's connected to four
`other nodes.
`This was so common that it was -- it was commonly
`called the Manhattan Street network, because it sort of
`resembled the Manhattan grid.
`So that's the language in the reference there. It's
`the Manhattan Street network.
`So a four regular network was nothing. So saying, you
`know, wherein, the network in which the abstract method is being
`implemented is m-regular or incomplete.
`This is incomplete. These nodes are not all connected
`to each other. They only each have four connections.
`Shoubridge is another example. Your Honor saw this
`this morning.
`So multiple examples from the prior art. I don't think
`there can even be a real dispute here. I don't think they can
`say that they invented m-regular networks, or they were the
`first to think of using an m-regular or incomplete network.
`They haven't said that and I don't think they will.
`Their position, Mr. Tomasulo talked about this earlier.
`They've taken vastly different positions when dealing with 101,
`and when dealing with claim construction.
`Here they say it was to be a set number of participants
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 14 of 54 PageID #: 17683
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`dealing with claim construction. They are a lot more vague
`about it and a lot more abstract about it, which makes the
`claims even less definite.
`THE COURT: Maybe the suggestion is that I shouldn't
`decide this until I've done the claim construction?
`MR. MURRAY: No, I don't think it -- I don't think it
`matters, your Honor.
`When you look at the additional elements here,
`m-regular -- I mean, there is no dispute that m-regular networks
`were well known. There's no dispute about that at all.
`So, their prior art shows that. So, you know, however
`you define it, it's going to apply to that prior art. It's
`going to be opposed. There is nothing new there in that
`concept. I don't think they are even saying there is anything
`new.
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`So here's what they're saying they think is there.
`So they say, using a broadcast channel that is overlaid
`on a point-to-point network, the claims provide a novel solution
`that provides for more efficient, reliable, and flexible
`delivery.
`
`So this is from their brief on Page 5.
`So they are not even taking the position that m-regular
`is something new. They know it isn't. So they have to try to
`go beyond that.
`They are saying, hey, we've got an overlay. We have an
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`overlay on a point-to-point network. That's their argument.
`The problem with that argument is that that's clearly
`not in the claim. And they're not even asking for a
`construction from your Honor that would put that into the claim.
`So you didn't hear about overlays this morning, because
`that's not one of the issues about m-regular or these terms, so
`the broadcast claims do not require an overlay on a
`point-to-point network.
`The other things that they talk about are low latency,
`and reliability, and scalability. None of that is in the
`claims.
`
`So the things that they point to in their briefing as
`being important or maybe --
`THE COURT: But if you had a claim that says, I
`invented a new kind of car that runs on sewage, and it had this
`advantage, it's environmentally friendly, and preserves this and
`that. You have like 46 different advantages.
`Then Claim 1 was, I claim a car that runs on sewage,
`period. That would still be a novel thing, even though it
`didn't recite all the different advantages it had.
`MR. MURRAY: Sure. If the claim -- if the claim
`recited a broadcast channel that's an overlay, then I think they
`would be in a better position to make the argument that that is
`something new.
`Of course, an overlay is nothing new. A phone-tree is
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 16 of 54 PageID #: 17685
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`an overlay, right, a phone-tree is nothing but information that
`says, I'm going to call you, and I'm going to call this other
`person.
`
`That is overlay on the underlying way they're actually
`connecting, which is maybe by telephone.
`So overlays are very old.
`So I -- you know, I think, frankly, they are struggling
`to find some novelty in this claim, so they are not even trying
`to say, hey, we're the first ones to come up with m-regular
`incomplete networks.
`So they are reaching here for something that they think
`is novel, which is this overlay idea.
`And overlays were not novel, number one.
`And, number two, they are not in the claim. There is
`nothing in that claim that talks about an overlay network.
`THE COURT: I can't remember. The word "overlay," does
`that appear actually even in the specification?
`MR. MURRAY: Sure. In -- in preferred embodiments they
`talk an overlay. They may show you that that is from part of
`the specification.
`They probably won't show you the couple of lines above
`that which says, preferred -- here's some preferred embodiments,
`they all confront that out.
`But, sure, in some preferred embodiments there's --
`there's discussion of an overlay. It was a standard networking
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 17 of 54 PageID #: 17686
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`too, so there was nothing sort of unusual about it, but they
`didn't claim it.
`THE COURT: Okay. I think I better push on over to the
`other side here, unless you have one more really good point you
`want to make?
`MR. MURRAY: Well, I don't know how fond your Honor is
`of the PTAB. I guess from that this morning.
`But --
`THE COURT: I have nothing against the PTAB. And
`certainly there are times where I read stuff they've written,
`and I say, hey, that's great, I agree, let's go.
`MR. MURRAY: So I would like to point out that they
`have repeatedly tried to convince the PTAB that their claims are
`limited to over an overlay network, and the PTAB keeps telling
`them no.
`
`So here's on Slide 20 -- we had this in our brief --
`we cited three of the final written decisions from the PTAB
`where they said, no, there's no overlay requirement in these
`claims. These claims are not directed to an overlay.
`So they've utterly failed to convince the PTAB on three
`separate occasions now that these claims were limited to an
`overlay network.
`They -- they've made -- just one last quick point, your
`Honor. They've admittedly said that the overlay network is not
`actually a physical network.
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 18 of 54 PageID #: 17687
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`So even if the claims are limited to an overlay
`network, they say, the overlay is not the physical components
`underneath. The overlay is sort of this information at a higher
`level about this computer is going to send to this computer.
`And it's not concerned about what is going on physically. You
`can't claim information like that.
`That's very similar to what happened in the Digitech
`case where the Federal Circuit said that claims to a device
`profile were not patent eligible. And that is --
`THE COURT: This is the argument that you appeared to
`have raised in your reply brief?
`MR. MURRAY: Right.
`So they said in their answer, hey, what is really
`important about this is that we have an overlay.
`So we said, well, wait a minute. An overlay is just --
`so we replied to that and said, an overlay is just information.
`If you think your claims are just about an overlay, and are not
`about the underlying network, which is what they said, then you
`have an even bigger problem than the Alice problem. You're not
`even in one of the statutory categories that -- where you can
`try to make your claim patent eligible.
`So what happened in Digitech, it's not even addressing
`Alice, it's saying, this is a device profile which is
`information. You can't patent information, right, it's not a
`method, and it doesn't fall into any of the other categories.
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 19 of 54 PageID #: 17688
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`It's not physical.
`So you have to have something physical except for
`process claims. The eligible subject matter must exist in some
`physical or tangible form.
`And information, this overlay thing, is just
`information. It doesn't exist in physical or tangible form.
`The physical thing is the underlying internet basically.
`So I think that if -- you know, it's their right, if
`their claims are limited to this overlay, and I don't think
`they're right.
`But if they are right about that, then their claim is
`invalid without even getting into Alice, because it's just
`information.
`Thank you.
`THE COURT: Thank you, Mr. Murray.
`MR. ANDRE: Your Honor, may I approach and pass up some
`
`slides?
`
`THE COURT: Sure.
`(Pause)
`MR. ANDRE: Your Honor, this the fourth and fifth Rule
`12 Motion that these defendants have filed in this case.
`As you're aware, under FRCP 12(g)(2), more than one is
`inappropriate on procedural grounds. I'm not going to hang my
`hat on that, but --
`THE COURT: Move on.
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 20 of 54 PageID #: 17689
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`MR. ANDRE: What was that?
`THE COURT: Move on.
`MR. ANDRE: Yeah, okay. I figured as much, but I did
`want to note that for the record.
`The defendants' contend there are three patents at
`issue from related applications filed on July 31st. This was
`question that you asked earlier.
`It's our position that these three patents on this
`motion are three separate applications that are not related.
`They have similar subject matter, substantially similar
`specification, and the same inventors. They're filed the same
`day, but legally they are different, and the claims are very
`different as well.
`So when they talk about their 101 Motion, they use one
`-- they actually use two -- two elements that cover all 54
`claims they are moving on. We think that's inappropriate,
`because the claims are very different.
`If you look at the '344 patent, there are 19 original
`claims in this patent. There is a pending amended claim as well
`from the IPR process.
`The '966 has 17 original claims, and a pending amended
`claim from the IPR process.
`The and '634 has 24 claims.
`Each one of those three patents are very different and
`claim different subject matters.
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 21 of 54 PageID #: 17690
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`They make a --
`THE COURT: Mr. Andre, I was trying to figure out when
`I was looking at this, which asserted claims there are in these
`three patents?
`MR. ANDRE: That's my next issue -- my next slide.
`THE COURT: Okay.
`MR. ANDRE: They make a statement that Claim 1 of each
`of the three patents is representative.
`THE COURT: Right, right.
`MR. ANDRE: Claim 1 is not being asserted.
`THE COURT: Yes, I see they are all unpatentable.
`MR. ANDRE: Well, yeah, under the IPR process.
`THE COURT: Right.
`MR. ANDRE: And, so, the one Claim 1 that they keep
`using for this motion, are not being asserted in this case.
`In the '344 there is Claims 12 through 15.
`In the '966 there's 12 and 13.
`In the '634, 19 and 22.
`We're not asserting Claim 1.
`On the '634, they are only moving on Claims 1 through
`18. We're not asserting those claims at all. We're asserting
`19 and 22, even on this motion.
`THE COURT: That's a point.
`MR. ANDRE: Yes.
`THE COURT: Mr. Murray, is that right?
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 22 of 54 PageID #: 17691
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`MR. MURRAY: I'm sorry, your Honor?
`THE COURT: Mr. Andre just said they're only asserting
`Claims 19 and 22 of the '634. You've moved to have 1 to 18
`declared unpatentable.
`Is that relatively moot?
`MR. MURRAY: Claim 12 is dependent on Claim 1. I think
`they're asserted claims.
`Not the '634.
`Well, this motion was filed --
`THE COURT: No, no, I understand. I'm not saying it
`didn't have a point at the time.
`MR. MURRAY: We don't have a covenant not to sue on
`these claims. I mean, I don't know that they are not going to
`ever assert them against us again. They didn't make any
`arguments in their briefing that the claims that we chose was
`not representative.
`They just addressed the merits of that claim, so this
`is kind of a new argument.
`THE COURT: All right.
`You can save that one.
`Go ahead.
`MR. ANDRE: Your Honor, this also brings up an
`interesting legal issue.
`They've yet to answer our Complaint in this case. They
`filed serial Rule 12. They don't have any counterclaims in this
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 23 of 54 PageID #: 17692
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`case.
`
`So they only have standing to go against all 54 claims
`that they filed here against. There is no claim.
`THE COURT: Okay.
`MR. ANDRE: So like I said, '634, the two claims that
`we're asserting, that is the subject of the motion.
`THE COURT: Well, certainly, it diminishes my
`enthusiasm for spending a lot of time on the '634.
`MR. ANDRE: Well, even to the '344, and '966, they've
`used in Claim 1 as a representative claim.
`And like I said, normally you use these Rule 12 Motions
`immediately after filing the case, before, you know, there is an
`election of claims. This case has been filed for over two
`years. We've had the election of claims. We've gone through
`the IPR process.
`I think procedurally they don't have standing to even
`bring this motion, as it stands right now, regarding the claims
`that are not being asserted.
`THE COURT: Right.
`But they do have it against the -- at least 36 claims
`that you are asserting from the '966 and the '344.
`MR. ANDRE: That would be correct, because even though
`we have asserted those claims, and what's interesting about that
`is, we spent a lot of time this morning on claim construction as
`well as those means-plus-function claims. We spent a lot of
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 24 of 54 PageID #: 17693
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`time this morning talking about the, you know, structure, and
`also our cut against the abstract idea -- I'll let Mr. Hannah
`talk about the technical side of that -- but we spent a lot of
`time this morning discussing very specific networks, and
`especially with the means-plus-function claims, so that would
`cut against the 101 Motion, Step 1 and Step 2 of Alice.
`THE COURT: I'm not sure I follow your logic on that.
`MR. ANDRE: We spent a lot of time talking about the
`actual structure of the network that goes along with the
`function in the means-plus-function.
`THE COURT: Yes, the structure is an algorithm, and
`generally speaking, that's a pretty abstract kind of thing,
`isn't it?
`
`MR. ANDRE: Not from our point of view.
`I mean, there is argument, and people will argue that,
`you know, software by itself is abstract in the nature, but the
`Supreme Court has said software is patentable.
`And structure and software is algorithms, is what it
`is. I mean, there is nothing you can say about it across the
`room, but that is structure.
`So, if there is nothing that's of tangible structure
`like that, it actually goes against Step 1 and Step 2 of Alice.
`And I do want to point out, as I said, that they refer
`to two elements; a message sending step and message forwarding
`step. That's only two elements in 54 claims. All of you have
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 25 of 54 PageID #: 17694
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`to do is read the claims. And there things that are in there
`long after, and that's the case. There are numerous --
`THE COURT: I'm sorry. You said they referred to two
`steps, and you said what they were.
`This is in what context?
`MR. ANDRE: This is in their motion at Page 4.
`They said, these patents -- these 54 claims only cover
`two steps; a message sending step and a message forwarding step.
`THE COURT: Okay. I followed what you said.
`MR. ANDRE: And, so, yeah -- and he said in oral
`argument those two steps are covered by all 54 claims. That is
`just not the case.
`There are numerous structural components. There are
`different steps that are covered. These are networks.
`You can look at the claim -- and Mr. Hannah will talk
`about this -- this is a network structure. This is what
`networks look like.
`What the defendants did was --
`THE COURT: Mr. Andre, in the interest of time, let's
`just assume for the sake of argument we are talking an abstract
`idea. I'm not asking you to concede that.
`But in terms of what is the -- if I get to Step 2, what
`is the inventive aspect of these patents?
`MR. ANDRE: I'll pass my slide and talk about the
`over-generalization, because that was actually my next slide.
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`Case 1:16-cv-00455-RGA Document 203 Filed 07/23/17 Page 26 of 54 PageID #: 17695
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`Their central theme, as it was this morning and in
`their brief, I read the same thing that your Honor read,
`
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