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`Doc. 291
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`Comcast IP Holdings I, LLC,
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`Plaintiff,
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`v.
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`Sprint Communications Company L.P.,
`Sprint Spectrum L.P., and Nextel
`Operations, Inc.,
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`Defendants.
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`Civil Action No. 12-205-RGA
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`MEMORANDUM OPINION
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`Ryan P. Newell, Esq., Connolly Gallagher LLP, Wilmington, DE; Antony I. Fenwick, Esq.
`(argued), Davis Polk & Wardwell, LLP, Menlo Park, CA; David Lisson, Esq., Davis Polk &
`Wardwell, LLP, Menlo Park, CA, attorneys for Plaintiff.
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`Richard K. Herrmann, Esq., Morris James LLP, Wilmington, DE; Brian C. Riopelle, Esq.
`(argued), McGuire Woods LLP, Richmond, VA; David E. Finkelson, Esq., McGuireWoods LLP,
`Richmond, VA; Robert H. Reckers, Esq., Shook, Hardy & Bacon LLP, Houston, TX, attorneys
`for Defendants.
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`July liz_ , 2014
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`Dockets.Justia.com
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`SAMSUNG-1058
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`Presently before the Court is Sprint's Motion for Partial Summary Judgment that the
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`Asserted Claims of U.S. Patent No. 6,873,694 are Invalid Under 35 U.S.C. § 101 (D.I. 151) and
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`related briefing. (D.I. 152, 190, 208). On May 15, 2014, the Court heard oral argument on this
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`motion. (D.I. 239).
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`I.
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`BACKGROUND
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`This is a patent infringement action. Plaintiff Comcast IP Holdings ("Comcast") currently
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`alleges that Defendant Sprint infringes U.S. Patent No. 6,873,694 ("the '694 patent"), U.S.
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`Patent No. 7,012,916 ("the '916 patent"), U.S. Patent No. 8,170,008 ("the '008 patent"), and
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`U.S. Patent No. 8,204,046 ("the '046 patent"). Sprint contends that the asserted claims of the
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`'694 patent are invalid because they are not patentable subject matter under 35 U.S.C. § 101.
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`II.
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`LEGAL STANDARD
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`"The court shall grant summary judgment ifthe movant shows that there is no genuine
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`dispute as to any material fact and the movant is entitled to judgment as a matter of law."
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`FED.R.CIV.P. 56( a). The moving party has the initial burden of proving the absence of a
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`genuinely disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477
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`U.S. 317, 330 (1986). Material facts are those "that could affect the outcome" of the proceeding,
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`and "a dispute about a material fact is 'genuine' ifthe evidence is sufficient to permit a
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`reasonable jury to return a verdict for the nonmoving party." Lamont v. New Jersey, 637 F.3d
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`177, 181 (3d Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The
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`burden on the moving party may be discharged by pointing out to the district court that there is
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`an absence of evidence supporting the non-moving party's case. Celotex, 477 U.S. at 323.
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`The burden then shifts to the non-movant to demonstrate the existence of a genuine issue
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`for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986);
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`Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460-61 (3d Cir. 1989). A non-moving
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`party asserting that a fact is genuinely disputed must support such an assertion by: "(A) citing to
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`particular parts of materials in the record, including depositions, documents, electronically stored
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`information, affidavits or declarations, stipulations ... , admissions, interrogatory answers, or
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`other materials; or (B) showing that the materials cited [by the opposing party] do not establish
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`the absence ... of a genuine dispute .... " FED. R. CIV. P. 56(c)(l). 1
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`When determining whether a genuine issue of material fact exists, the court must view
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`the evidence in the light most favorable to the nonmoving party and draw all reasonable
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`inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 380 (2007); Wishkin v. Potter, 476
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`F.3d 180, 184 (3d Cir. 2007). A dispute is "genuine" only ifthe evidence is such that a reasonable
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`jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 247-49; see
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`Matsushita Elec. Indus. Co., 475 U.S. at 586-87 ("Where the record taken as a whole could not
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`lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for
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`trial."'). If the non-moving party fails to make a sufficient showing on an essential element of its
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`case with respect to which it has the burden of proof, the moving party is entitled to judgment as
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`a matter oflaw. See Celotex Corp., 477 U.S. at 322.
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`Section 101 provides that, "Whoever invents or discovers any new and useful process,
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`machine, manufacture, or composition of matter, or any new and useful improvement thereof,
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`1 There is an extensive record in this case. To the extent a party does not properly oppose factual
`assertions, the Court considers the factual assertion to be undisputed and a basis on which to
`grant summary judgment. FED. R. CIV. P. 56(e)(2) & (3).
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`may obtain a patent therefor, subject to the conditions and requirements of this title." 35 U.S.C. §
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`101. However, the Supreme Court "has recognized ... three narrow categories of subject matter
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`outside the eligibility bounds of§ 10 I-laws of nature, physical phenomena, and abstract ideas."
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`Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1341 (Fed. Cir. 2013). The purpose of these
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`carve outs are to protect the "basic tools of scientific and technological work." Mayo
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`Collaborative Servs. v. Prometheus Labs, Inc., 132 S. Ct. 1289, 1293 (2012). However, "a
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`process is not unpatentable simply because it contains a law of nature or a mathematical
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`algorithm," but "an application of a law of nature or mathematical formula to a known structure
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`or process may well be deserving of patent protection." Id. at 1293-94 (quotation marks and
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`italics omitted). The "[Supreme Court] has ... made clear [that] to transform an unpatentable law
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`of nature into a patent-eligible application of such a law, one must do more than simply state the
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`law of nature while adding the words 'apply it."' Id. at 1294 (italics omitted).
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`In determining whether an abstract idea is patent eligible, the Supreme Court has
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`determined that the patent must contain an "inventive concept." Id. at 1299. This "inventive
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`concept" must do more than add a "well-understood, routine, conventional activity, previously
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`engaged in by those in the field." Id. Furthermore, "the prohibition against patenting abstract
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`ideas cannot be circumvented by attempting to limit the use of the formula to a particular
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`technological environment or adding insignificant postsolution activity." Bilski v. Kappas, 130 S.
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`Ct. 3218, 3230 (2010) (internal quotation marks omitted).
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`The Federal Circuit has identified a two-step approach to determining whether something
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`is patent eligible under § 101. Accenture Global Servs, GmbH v. Guidewire Software, Inc., 728
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`F.3d 1336, 1341 (Fed. Cir. 2013). "First, the court must identify whether the claimed invention
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`fits within one of the four statutory classes set out in § 101. Second, one must assess whether any
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`of the judicially recognized exceptions to subject-matter eligibility apply, including whether the
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`claims are to patent-ineligible abstract ideas." Id. (internal citations and quotation marks
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`omitted).
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`If the court determines that the claim embodies an abstract idea, the Federal Circuit has
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`instructed that:
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`[T]he court must determine whether the claim poses any risk of preempting an
`abstract idea. To do so the court must first identify and define whatever fundamental
`concept appears wrapped up in the claim. Then, proceeding with the preemption
`analysis, the balance of the claim is evaluated to determine whether additional
`substantive limitations narrow, confine, or otherwise tie down the claim so that, in
`practical terms, it does not cover the full abstract idea itself.
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`Id. at 11 (internal citations and quotation marks omitted).
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`III. DISCUSSION
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`Claim 21 is currently the only asserted claim of the '694 patent. (D.I. 228). It claims:
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`A telephony network optimization method, comprising:
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`receiving a request from an application to provide to the application service on a
`telephony network; and
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`determining whether a telephony parameter associated with the request requires
`acceptance of a user prompt to provide to the application access to the telephony
`network.
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`(Claim 21 of the '694 patent). The only disputed term in this claim is "telephony parameter." The
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`Court construed the term according to its plain and ordinary meaning. (D.I. 123 at 16). The
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`patent describes the invention as:
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`A telephony network optimization system and method comprises rece1vmg a
`request from an application to provide to the application service on a telephony
`network. The method also comprises automatically allocating to the application a
`channel on the telephony network to provide balanced network service in response
`to telephony parameters.
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`(Abstract of the '694 patent). The specification describes that:
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`The availability of at least one of these parameters allows the present invention to
`optimize the usage of the telephony network by controlling multiple applications.
`For example, in a particular embodiment, a priority parameter determines whether
`a request is immediate, in which case the request is immediately allocated a channel
`and a connection established if needed; or deferrable, in which case the request is
`processed with a next immediate request. Other examples of telephony parameters
`include a dial-up prompting parameter, which allows a requesting application, or
`requester, to give a user of an appliance control over an Internet connection.
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`(Col 211. 48-59 of the '694 patent). The Defendant moves to dismiss on grounds that the patent
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`claims an abstract idea and thus that the patent is directed to ineligible subject matter under 35
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`u.s.c. § 101.
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`1. Fundamental Concept
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`Claim 21 is a method claim, and therefore falls within the statutory class of processes.
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`See 35 U.S.C. § lOO(b) (defining a process as a "process, art or method"). Defendants argue that
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`Claim 21 is "drawn to the abstract, and fundamental, idea of a conditional decision." (D .I. 152 at
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`16). In support ofthis, Defendants point out that claim 21 only has two limitations: "receiving a
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`request," and "determining" a response to that request. (D.I. 152 at 14). Once the determination
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`is made, no further action is required. (D.I. 152 at 15). Furthermore, Defendants argue that the
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`claim does not specify who or what is receiving the request or making the determination. (D.I.
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`152 at 14).
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`Conversely, Plaintiff argues that "the claims cover methods performed by a device in a
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`telephony network, not a human," and that "[t]he claims do not simply recite making a
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`conditional decision, but are narrowly directed to overcoming a specific problem of telephony
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`networks by using telephony parameters to optimize bandwidth allocation on such networks."
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`(D.I. 190 at p. 8). The Plaintiff maintains that it would be "nonsensical if it were interpreted to
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`mean that a human could perform the steps." Id. While the Court recognizes that the claim is
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`drawn to a telephony network optimization method, and as such would likely be performed by a
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`telephony network, the question for the Court at this juncture is not to determine whether there
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`are sufficient limitations, but instead to determine whether and what is "the abstract idea at the
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`heart" of the claim. Accenture, 728 F.3d at 1344.
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`Here, the Court agrees with Defendants that the abstract idea at the heart of the claim is
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`the very concept of a decision. 1 The Court finds that claim 21 of the '694 patent generally seeks
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`to:
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`(1) Receive a request;
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`(2) Determine whether that request requires a user prompt.
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`These two steps describe the simple concept of determining if a decision is required. Other than
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`determining that a decision should be made, the claim does not require any further action. Thus,
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`the claim itself is simply an embodiment of the abstract idea.
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`A decision is a basic mental process upon which everyone relies. A decision may be
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`performed, and generally is performed, entirely in the human mind. Such processes are
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`"unpatentable not because there is anything wrong with claiming mental method steps as part of
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`a process containing non-mental steps, but rather because computational methods which can be
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`performed entirely in the human mind are the types of methods that embody the 'basic tools of
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`scientific and technological work' that are free to all men and reserved exclusively to none."
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`CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011) (emphasis in
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`original).
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`1 While Defendant phrases it as a "conditional decision," the term "conditional" is redundant. Because the phrase
`"conditional action" is commonly used in§ 101 analyses, I will simply use the term "decision."
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`Furthermore, a decision is more abstract than other ideas that the Federal Circuit and the
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`Supreme Court have previously held to be unpatentable. For example the Supreme Court in
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`Bilski found that hedging was an abstract idea, Bilski v. Kappas, 130 S. Ct. 3218, 3231 (2010),
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`the Federal Circuit in Dealertrack found that processing information through a clearinghouse
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`was an abstract idea, Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1334 (Fed. Cir. 2012), and, most
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`recently, the Supreme Court found that the concept of intermediated settlement was an abstract
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`idea. Alice Corp. v. CLS Bank Int'!, 573 U.S._, at_, 2014 WL 2765283, *6 (June 19, 2014).
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`A decision is a more fundamental concept than hedging, processing information through a
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`clearinghouse, or intermediated settlement, as it is a required step of each of these processes. A
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`decision is a basic tool of scientific and technological work, and is therefore a patent ineligible
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`abstract idea.
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`2. Preemption Analysis
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`Once an abstract idea is identified the Court must perform a preemption analysis and
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`determine whether the remainder of the claim includes limitations that "narrow, confine, or
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`otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea
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`itself." Accenture, 728 F.3d at 1341. "[T]he relevant inquiry is whether a claim, as a whole,
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`includes meaningful limitations restricting it to an application, rather than merely an abstract
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`idea." Ultramercial, 722 F.3d at 1344 (citing Mayo, 132 S. Ct. at 1297) (internal quotation marks
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`and italics omitted). Here, after analyzing the additional limitations imposed by claim 21 of the
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`'694 patent, the idea of a decision has not been sufficiently limited by the claim to prevent the
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`claim from "cover[ing] the full abstract idea itself." Accenture, 728 F.3d at 1341.
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`The Patentee attempts to limit claim 21 of the patent by confining it to the field of
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`telephony. Specifically, the claim concerns a "telephony network optimization method," a
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`request from an "application" for "service," and a "telephony parameter associated with the
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`request." The Plaintiff argues that because the claim is directed to the optimization of a telephony
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`network, it "must be performed by a device in such a network." (D.I. 190 at p. 13). The Plaintiff
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`contends that because there are substantive and meaningful limitations which restrict the claim to
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`a particularized application, there is no risk of preempting the underlying abstract idea. (D.I. 190
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`atp.13).
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`Conversely, Defendants convincingly argue that the claim does not specify whom or what
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`receives the request or makes the determination. (D.I. 208 at p. 1). Defendants point out that
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`even ifthe claim were limited to optimizing a telephony network via a computer, it would still be
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`invalid because "the prohibition against patenting abstract ideas cannot be circumvented by
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`attempting to limit the use of the formula to a particular technological environment." (D.I. 208 at
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`p. 2) (quoting Bilski v. Kappas, 130 S. Ct. at 3230). The Court agrees.
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`The Plaintiff argues that it would not make sense for a user to perform the process
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`because the "very determination being made in [the] claim is whether human input will be
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`required." (D.I. 190 at p. 14). This assumes that the user who makes the determination and the
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`user to whom the prompt is directed are the same person. Yet there is no reason for this
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`assumption. The person who makes the decision to optimize the telephony network need not be
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`the user of the telephony network. However, even assuming that the claimed method must take
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`place on a computerized telephony network, and a computer is the one that makes the decision,
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`the claim is still not patentable.
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`Claim 21 merely covers the application of what has for a long time been conducted solely
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`in the mind to modern, computerized, telephony networks. For instance, rather than an
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`"application" requesting "service," we can think of a "person" requesting a "telephone call." The
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`"person" makes a request through a telephone operator. The operator then looks to a "telephony
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`parameter" associated with that request. Let us assume that the parameter is whether the call is
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`"collect" or whether it is a standard call. If the call is a standard call, the operator puts it through
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`without a user prompt.2 If the call is collect, the operator "determines" that the recipient will be
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`asked to accept the charges. The operator has "determined" whether a "request" requires
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`"acceptance of a user prompt." The only difference is the identity of the requester. Here, the
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`generic references to a telephony network and an application are not sufficient to render the
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`claim patentable.
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`The Federal Circuit has previously determined that abstract claims, which included a
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`"routing system ... [containing] a central processor coupled to a communications medium ... ,
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`remote credit bureau terminal devices, and remote funding source terminal devices," were
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`nevertheless unpatentable. Dealertrack, 674 F.3d at 1319, 1333-34. The Federal Circuit
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`explained that "[s]imply adding a 'computer aided' limitation to a claim covering an abstract
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`concept, without more, is insufficient to render the claim patent eligible." Id. at 1333. This is
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`because, "To salvage an otherwise patent-ineligible process, a computer must be integral to the
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`claimed invention, facilitating the process in a way that a person making calculations or
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`computations could not." Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (US.), 687
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`F.3d 1266, 1278 (Fed. Cir. 2012).
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`2 Of course, claim 21 requires no action.
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`The key to this inquiry is whether the claims tie the otherwise abstract idea to a
`specific way of doing something with a computer, or a specific computer for doing
`something; if so, they likely will be patent eligible, unlike claims directed [to]
`nothing more than the idea of doing that thing on a computer. While no particular
`type of limitation is necessary, meaningful limitations may include the computer
`being part of the solution, being integral to the performance of the method, or
`containing an improvement in computer technology.
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`Netgear, Inc. v. Ruckus Wireless, Inc., 2013 WL 5436641 at *7 (D. Del. Sept. 30, 2013) (quoting
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`CLS Bank Int'/. v. Alice Corp. Pty. Ltd, 717 F.3d 1269, 1302 (Fed. Cir. 2013) (en bane) (Rader,
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`C.J., concurring and dissenting) (emphasis omitted), ajj'd, 573 U.S._, 2014 WL 2765283
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`(June 19, 2014)). Furthermore, even ifthe patent requires "some physical steps ... (e.g., entering
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`a query via a keyboard, clicking a mouse)," that alone will also not confer patentability.
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`CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 2011). Here, a
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`computer is not an integral part of the claim. A person can easily perform the claimed steps.
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`The Plaintiff argues that the cases to which Defendants cite are primarily business
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`method patents, whereas claim 21 is grounded in a particular technological context. (D.I. 190 at
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`p. 16). The Plaintiff, citing Ultramercial, contends that the '694 patent is "quintessentially a
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`telecommunications patent, and the fact that the claims include making a conditional decision
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`does not render them patent ineligible." (D.1. 190 at p. 17). As an initial matter, claim 21 does not
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`"include making a conditional decision;" it is "making a conditional decision." There is nothing
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`else that claim 21 requires. In any event, in Ultramercial the Federal Circuit found that the claim
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`was patentable in part because the patent claimed a "particular internet and computer-based
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`method for monetizing copyrighted products." Ultramercial, 722 F.3d at 1350. Furthermore, the
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`Federal Circuit found that "the claim [in Ultramercial] appears far from over generalized, with
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`eleven separate and specific steps with many limitations and sub-steps in each category." Id at
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`1352-53. Finally, the steps recited in Ultramercial were more than "token pre- or post-solution
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`steps," i.e., "they are central to the solution itself." Id. at 1347, 1352. Here the patent fails to limit
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`claim 21 beyond the abstract idea, other than vaguely referring to a "telephony network" and an
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`"application." This is not a practical application with concrete steps, and thus is far less
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`patentable then what was claimed in Ultramercial.
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`I would be remiss if I did not mention the Supreme Court's latest ruling on this issue.
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`While I do not believe that Alice Corp. v. CLS Bank Int'!, 573 U.S._, 2014 WL 2765283 (June
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`19, 2014), substantively changed any of the legal rules I have applied, I believe it further
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`supports my conclusion that claim 21 is unpatentable. After invalidating the method claims, the
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`Court turned to the corresponding system claims, which recited "specific hardware configured to
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`perform specific computerized functions." Alice Corp. v. CLS Bank Int'!, 573 U.S._, at_,
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`2014 WL 2765283, *12. The Court was not persuaded that the hardware was sufficient to confer
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`patentability because "what petitioner characterizes as specific hardware-a 'data processing
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`system' with a 'communications controller' and 'data storage unit,' ... is purely functional and
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`generic. Nearly every computer will include a 'communications controller' and 'data storage
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`unit,' capable of performing the basic calculation, storage, and transmission functions required
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`by the method claims. As a result, none of the hardware recited by the system claims 'offers a
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`meaningful limitation beyond generally linking the use of the method to a particular
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`technological environment,' that is, implementation via computers." Id. If specific hardware was
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`not enough to transform system claims into patentable subject matter, then the reference to a
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`"telephony network" in claim 21 is insufficient to transform a decision into a patentable idea.
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`Thus claim 21 of the '694 patent is directed towards an unpatentable abstract idea. The
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`evidence is clear and convincing that claim 21 is invalid under 35 U.S.C. § 101.
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`IV.
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`CONCLUSION
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`For the reasons above, Sprint's Motion for Partial Summary Judgment that the Asserted
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`Claims of U.S. Patent No. 6,873,694 are Invalid Under 35 U.S.C. § 101 (D.I. 151) is granted. An
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`appropriate order will be entered.
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