Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 1 of 20 PageID #: 8706
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`CHRIMAR SYSTEMS, INC. d/b/a
`CMS TECHNOLOGIES AND
`CHRIMAR HOLDING COMPANY,
`LLC,
`
`
`
`vs.
`
`
`ALCATEL-LUCENT USA, INC. et al.,
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`§
`§
`§
`§
`§
`§
`§
`§
`§
`
`
`Civil No. 6:15-cv-163-JDL
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is Defendants Alcatel-Lucent Enterprise USA Inc. (“ALE”) and AMX
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`
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`
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`
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`LLC’s (“AMX”) (collectively “Defendants”) Motion for Summary Judgment of Invalidity. (Doc.
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`No. 207.) Plaintiffs Chrimar Systems, Inc. d/b/a CMS Technologies and Chrimar Holding
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`Company LLC (“Chrimar”) filed a Response (Doc. No. 214). Upon consideration, the Court
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`DENIES Defendants’ Motion (Doc. No. 207).
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`BACKGROUND
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`
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`In this action, Chrimar alleges infringement of U.S. Patent Nos. 8,115,012 (“the ’012
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`Patent”), 8,902,760 (“the ’760 Patent”), 8,942,107 (“the ’107 Patent”), and 9,019,838 (“the ’838
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`Patent”) (“patents-in-suit”)). On June 27, 2016, Defendants filed the instant motion for summary
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`judgment on the grounds that all of the asserted claims of the patents-in-suit are ineligible for
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`patentability under 35 U.S.C. § 101.
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`All four of the asserted patents are related; specifically, the ’107 Patent is a continuation
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`of the ’012 Patent, and the ’760 Patent and the ’838 Patent are continuations of the ’107 Patent.
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`The patents-in-suit share a common specification and disclose inventions related to managing
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`devices that connect to a wired network. For example, the ’012 Patent is titled “System and
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`Method for Adapting a Piece of Terminal Equipment,” and relates to tracking of devices that are
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`
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`1
`
`Chrimar Systems, Inc.
`Exhibit 2034-1
`IPR2016-01426 USPN 9,019,838
`
`

`
`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 2 of 20 PageID #: 8707
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`connected to a wired network. See generally ’012 Patent. More specifically, the ’012 Patent
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`describes permanently identifying an “asset,” such as a computer, “by attaching an external or
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`internal device to the asset and communicating with that device using existing network wiring or
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`cabling.” ’012 Patent at 1:67–2:2. The ’012 Patent refers to that device as the “remote module.”
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`Id. at 3:22–26. The asset can then be managed, tracked, or identified by using the remote
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`module to communicate a unique identification number, port ID, or wall jack location to the
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`network monitoring equipment, or “central module.” Id. at 6:7–13, 8:66–9:4. The ’012 Patent
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`further discloses that “asset identification” may be done in a way “that does not use existing
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`network bandwidth.” Id. at 3:10–12. Independent claim 31 is the subject of Defendants’ motion
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`and is set forth below:
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` An adapted piece of Ethernet data terminal equipment comprising:
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`an Ethernet connector comprising a plurality of contacts;
`and
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`
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`at least one path coupled across selected contacts, the selected contacts
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`comprising at least one of the plurality of contacts of the Ethernet
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`connector and at least another one of the plurality of contacts of the
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`Ethernet connector,
` wherein distinguishing information about the piece of Ethernet data
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`terminal equipment is associated to impedance within the at least
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`one path.
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`’012 Patent at 18:62–19:5 (Claim 31).
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`
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`The asserted claims of the remaining patents-in-suit are similar in content and are
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`discussed further herein. The instant motion challenges the validity of all of the claims of each
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`of the patents-in-suit under 35 U.S.C. § 101 as directed to patent-ineligible subject matter.
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`LEGAL STANDARD
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`A. Motion for Summary Judgment
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`Summary judgment should be granted “if the 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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`
`
`2
`
`Chrimar Systems, Inc.
`Exhibit 2034-2
`IPR2016-01426 USPN 9,019,838
`
`

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`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 3 of 20 PageID #: 8708
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`Fed. R. Civ. P. 56(a). All evidence must be viewed in the light most favorable to the non-moving
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`party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment is proper
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`when there is no genuine issue of material fact. Celotex v. Catrett, 477 U.S. 317, 322 (1986). “By
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`its very terms, this standard provides that the mere existence of some alleged factual dispute
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`between the parties will not defeat an otherwise properly supported motion for summary
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`judgment; the requirement is that there be no genuine issue of material fact.” Anderson, 477 U.S.
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`at 247–48. The substantive law identifies the material facts. Disputes over facts that are not
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`relevant or unnecessary will not defeat a motion for summary judgment. Id. at 248. A dispute
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`about a material fact is “genuine” when the evidence is “such that a reasonable jury could return
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`a verdict for the nonmoving party.” Id.
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`The moving party must identify the basis for granting summary judgment and identify the
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`evidence that demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S. at
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`323. If the moving party does not have the ultimate burden of persuasion, the party “must either
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`produce evidence negating an essential element of the nonmoving party’s claim or defense or
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`show that the nonmoving party does not have enough evidence of an essential element to carry
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`its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc.,
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`210 F.3d 1099, 1102 (9th Cir. 2000).
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`B. Patent-Eligible Subject Matter
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`A patent may be obtained for “any new and useful process, machine, manufacture, or
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`composition of matter, or any new and useful improvement thereof, may obtain a patent therefor,
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`subject to the conditions and requirements of this title.” 35 U.S.C. § 101. The Supreme Court
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`has long recognized three specific exceptions to § 101’s broad patentability principles: laws of
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`nature, physical phenomena, and abstract ideas. Bilski v. Kappos, 561 U.S. 593, 601 (2010);
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`
`
`3
`
`Chrimar Systems, Inc.
`Exhibit 2034-3
`IPR2016-01426 USPN 9,019,838
`
`

`
`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 4 of 20 PageID #: 8709
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`Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289, 1303 (2012);
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`Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2116 (2013).
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`The Supreme Court has set forth a two part test for patent eligibility. Alice Corp. Pty. v.
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`CLS Bank Int’l, 134 S.Ct. 2347, 2354 (2014). First, the court must determine “whether the
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`claims at issue are directed to a patent-ineligible concept,” such as an abstract idea. Id. at 2355.
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`If so, the court must then “consider the elements of each claim both individually and ‘as an
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`ordered combination’ to determine whether the additional elements ‘transform the nature of the
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`claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S.Ct. at 1298, 1297). The
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`Court has described the second step as a search for an “inventive concept”—“an element or
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`combination of elements that is ‘sufficient to ensure that the patent in practice amounts to
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`significantly more than a patent upon the [ineligible concept] itself.’” Id. (quoting Mayo, 132 S.
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`Ct. at 1298).
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`The first step of Mayo requires a court to determine if the claims are directed to a law of
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`nature, natural phenomenon, or abstract idea. Alice, 134 S. Ct. at 2355. “If not, the claims pass
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`muster under § 101.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 714 (Fed. Cir. 2014). In
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`making this determination, the court must look at what the claims cover. See Ultramercial, 772
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`F.3d at 714 (“We first examine the claims because claims are the definition of what a patent is
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`intended to cover.”); Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336,
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`1345 (Fed. Cir. 2013) (“[T]he important inquiry for a § 101 analysis is to look to the claim.”);
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`Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1369 (Fed. Cir. 2015)
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`(“At step one of the Alice framework, it is often useful to determine the breadth of the claims in
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`order to determine whether the claims extend to cover a ‘fundamental … practice long prevalent
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`in our system ….’”) (quoting Alice, 134 S. Ct. at 2356).
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`
`
`4
`
`Chrimar Systems, Inc.
`Exhibit 2034-4
`IPR2016-01426 USPN 9,019,838
`
`

`
`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 5 of 20 PageID #: 8710
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`A court applies the second step of Mayo only if it finds in the first step that the claims are
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`directed to a law of nature, natural phenomenon, or abstract idea. Alice, 134 S. Ct. at 2355. The
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`second step requires the court to determine if the elements of the claim individually, or as an
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`ordered combination, “transform the nature of the claim” into a patent-eligible application. Alice,
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`134 S. Ct. at 2355. A claim may become patent-eligible when the “claimed process include[s]
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`not only a law of nature but also several unconventional steps . . . that confine[] the claims to a
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`particular, useful application of the principle.” Mayo, 132 S. Ct. at 1300; see also DDR Holdings,
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`LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014) (“In particular, the ’399 patent’s
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`claims address the problem of retaining website visitors that, if adhering to the routine,
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`conventional functioning of Internet hyperlink protocol, would be instantly transported away
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`from a host’s website after ‘clicking’ on an advertisement and activating a hyperlink.”). A claim,
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`however, remains patent-ineligible if it describes “‘[p]ost-solution activity’ that is purely
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`‘conventional or obvious.’” Mayo, 132 S. Ct. at 1299.
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`DISCUSSION
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`
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`Defendants argue that the asserted claims of the patents-in-suit are directed to the abstract
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`idea of correlating information about a device based on a measurable electrical property of the
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`device. (Doc. No. 207, at 1.) Defendants contend that the patents-in-suit claim the ability “to
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`measure impedance (claimed in the ’012 patent)” or “a magnitude of direct current (claimed in
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`the ’107, ’838, and ’760 patents)” and “‘distinguish’ or ‘convey information’ about the device
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`based on the measured value.” Id. Defendants allege that “[t]he asserted claims do not recite an
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`‘inventive concept’ beyond the mental task of identifying a measurable circuit property as an
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`informative or differentiating feature” and none “of the other claim elements add ‘significantly
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`
`
`5
`
`Chrimar Systems, Inc.
`Exhibit 2034-5
`IPR2016-01426 USPN 9,019,838
`
`

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`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 6 of 20 PageID #: 8711
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`more’ that would transform the basic character of the asserted claims into patent-eligible subject
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`matter.” Id. at 2.
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`Chrimar argues that each of the asserted claims across all of the patents-in-suit recite
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`concrete devices with structures that are configured to perform specific functions. (Doc. No. 214,
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`at 1.) As Chrimar classifies it, the claimed invention “is a particular arrangement of physical
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`structures designed to allow two of those structures—the piece of BaseT Ethernet terminal
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`equipment and the piece of central BaseT Ethernet equipment—to perform specific functions in
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`a novel way.” Id. Chrimar argues that the claims are directed to patent-eligible machines and
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`question Defendants first bringing this motion now while the claims have been pending since
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`November 2013. Id. Chrimar also argues that Defendants fail to apply the correct two-part test
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`under Alice. Id. Chrimar contends the patented inventions cover novel ways to detect, identify,
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`manage, control, and communicate with distributed assets in a network, over existing network
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`wires, even when the assets are powered off. Id. at 4.
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`A. Patent Eligibility of the Asserted Claims of the ’012 Patent
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`Defendants argue that “[w]ith the asserted claims of the ’012 patent (claims 31, 35, 43, &
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`60), Chrimar seeks to preempt the abstract idea of using electrical properties (specifically
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`impedance) to distinguish Ethernet equipment.” (Doc. No. 207, at 11.) Defendants argue that
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`“the asserted claims recite no required structure for associating impedance to distinguishing
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`information and thus claim a mental act,” and “the only structure required by the asserted claims
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`consists of conventional prior art electrical equipment and components.” Id.
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`Specifically, with regard to claim 31 of the ’012 Patent, Defendants argue that claim 31 is
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`directed to the abstract idea of associating impedance to distinguish information. (Doc. No. 207,
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`at 12.) Defendants contend “[t]here is no structure required by claim 31 to perform the
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`
`
`6
`
`Chrimar Systems, Inc.
`Exhibit 2034-6
`IPR2016-01426 USPN 9,019,838
`
`

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`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 7 of 20 PageID #: 8712
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`association of the impedance within the claimed path to the distinguishing information about the
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`piece of Ethernet data terminal equipment,” and “therefore the claimed association could be
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`performed mentally,” which renders claim 31 abstract. Id. Chrimar contends that claim 31 of the
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`’012 Patent is “able to present distinguishing information about itself based on impedance in the
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`at least one path coupled between selected contacts of the Ethernet connector.” (Doc. No. 214, at
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`15.) Therefore, Chrimar contends the claim is directed to “a device that includes a path
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`specifically configured between selected contacts of an Ethernet connector to present
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`distinguishing information about the device using existing Ethernet wires,” which is not an
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`abstract idea. Id.
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`In determining patent eligibility under § 101, the court must first determine whether the
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`claims are directed to an abstract idea. Alice, 134 S.Ct. at 2355. The Court finds that claim 31 of
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`the ’012 Patent is not directed to an abstract idea. As an initial matter, claim 31 is an apparatus
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`claim that recites “[a]n adapted piece of Ethernet data terminal equipment.” ’012 Patent (Claim
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`31). This Court has construed the term “Ethernet data terminal equipment” to mean “device at
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`which data transmission can originate or terminate and that is capable of Ethernet
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`communication.” (6:13-cv-880, Doc. No. 99, at 13.) The remainder of the claim recites a path
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`configured in a specific manner across selected contacts of the Ethernet connector to distinguish
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`information about the device. ’012 Patent at 18:62–19:5 (Claim 31). Simply because the claims
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`require distinguishing information associated to impedance within the path does not mean the
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`claim is abstract or could be performed entirely by a mental act. Indeed, the distinguishing
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`information associated to impedance occurs over the claimed Ethernet wire path in the specific
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`manner claimed.
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`
`
`7
`
`Chrimar Systems, Inc.
`Exhibit 2034-7
`IPR2016-01426 USPN 9,019,838
`
`

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`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 8 of 20 PageID #: 8713
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`Defendants’ primary argument is that there is no structure recited to perform the
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`association of the impedance within the claimed path. (Doc. No. 207, at 12.) But Defendants fail
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`to explain how this portion of the claim renders the entire claim abstract. Claim 31 recites a
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`specifically adapted piece of Ethernet data terminal equipment that is uniquely configured in a
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`path (as claimed) across Ethernet connectors and selected contacts to present distinguishing
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`information about the Ethernet data terminal equipment associated to impedance within the path.
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`’012 Patent at 18:62–19:5 (Claim 31). Moreover, the claimed invention is directed to resolving
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`an Ethernet network specific problem—to provide a means for asset identification that does not
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`use existing network bandwidth and therefore allows identification even in the absence of power.
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`’012 Patent at 3:3–14; e.g., Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1339 (Fed. Cir.
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`2016) (finding the asserted claims were unambiguously directed to an improvement in computer
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`capabilities and therefore not directed to an abstract idea.) Thus, contrary to Defendants’
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`arguments, claim 31 is not directed merely to “the abstract idea of associating impedance to
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`distinguish information.”
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`For the reasons discussed herein, claim 31 of the ’012 Patent is not directed to an abstract
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`idea and is patent-eligible under § 101. Therefore, the Court need not reach Mayo step-two. See
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`Mortgage Grader, Inc. v. First Choice Loan Servs. Inc., No. 2015-1415, 2016 WL 362415, at *6
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`(Fed. Cir. Jan. 20, 2016) (“[C]ourts must determine if the claims at issue are directed to a patent-
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`ineligible concept. If not, the inquiry ends, as the claims are patent-eligible.”) (citation omitted).
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`However, even if claim 31 of the ’012 Patent is directed to an abstract idea, claim 31,
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`read as a whole, discloses an “inventive concept.” Mortgage Grader, 2016 WL 362415, at *8
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`(“[T]he next step is to look for an ‘‘inventive concept’— i.e., an element or combination of
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`elements that is sufficient to ensure that the patent in practice amounts to significantly more than
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`
`
`8
`
`Chrimar Systems, Inc.
`Exhibit 2034-8
`IPR2016-01426 USPN 9,019,838
`
`

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`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 9 of 20 PageID #: 8714
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`a patent upon the [ineligible concept] itself.’”) (citation omitted). As discussed above, the second
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`step in determining patent eligibility under § 101 requires the court to consider the elements of
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`the claim both individually and in an ordered combination to determine if they “transform the
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`nature of the claim” into a patent-eligible application. Alice, 134 S.Ct. at 2354.
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`Defendants argue that “Claim 31 merely recites prior art structural elements (e.g., an
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`Ethernet connector) without requiring any meaningful feature that is not already inherent in those
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`structural elements.” (Doc. No. 207, at 13.) Defendants further argue that distinguishing
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`information to be “associated to impedance” within the path may be a purely mental step. Id. at
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`14. Chrimar contends that Defendants are incorrect that the limitations were known in the prior
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`art. (Doc. No. 214, at 17.) Moreover, Chrimar argues that even if a claim’s individual limitations
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`may have been known independently in the art that does not make it unpatentable. Id. Chrimar
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`contends this situation is similar to Bascom, as Defendants “improperly attempt to bootstrap an
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`incomplete obviousness analysis (incomplete because, among other things, it lacks any
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`consideration of a motivation to combine) into step two of the patent-eligibility inquiry of §
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`101.” Id. at 18 (citing Bascom Global Internet Servs., Inc. v. AT&T Mobility LLC, No. 2015-
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`1763, 2016 WL 3514158, at *7 (Fed. Cir. June 27, 2016).)
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`In Bascom, the Federal Circuit disagreed with the district court’s step two analysis as
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`resembling closely “an obviousness analysis under 35 U.S.C. § 103,” and finding that “the
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`inventive concept inquiry requires more than recognizing that each claim element, by itself, was
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`known in the art.” Bascom, 2016 WL 3514158, at *6. Here, the Court finds Defendants’
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`arguments akin to those proffered by the Defendant-Appellee in Bascom. Defendants recite prior
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`art to suggest that the “Ethernet connectors” with “multiple contacts” were well known in the art
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`and therefore do not provide a transformative element. (Doc. No. 207, at 13.) However, these
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`
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`9
`
`Chrimar Systems, Inc.
`Exhibit 2034-9
`IPR2016-01426 USPN 9,019,838
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`

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`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 10 of 20 PageID #: 8715
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`individual components of the claim, even if known in the art, are recited in a specific manner for
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`a specifically configured path capable of presenting distinguishing information about the
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`Ethernet data terminal equipment associated to impedance within the path. ’012 Patent at 18:62–
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`19:5 (Claim 31). Indeed, Defendants do not cite any prior art to invalidate this claimed
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`configuration. Regardless, §101 analysis is not focused on whether the individual elements of the
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`claims were “known in the art.” To conflate § 101 and § 103 inquires and find the claim lacking
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`an inventive concept because certain individual claim limitations were known in the art would
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`effectively eviscerate the step two inquiry and implicitly make factual findings reserved for the
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`jury.
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`Here, while the claim recites certain components of an Ethernet data terminal device, the
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`ordered limitations recite a “path coupled across selected contacts” of the “Ethernet connector”
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`to present “distinguishing information about the piece of Ethernet data terminal equipment”
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`associated to impedance within the claimed path. ’012 Patent at 18:62–19:5 (Claim 31). This
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`ordered configuration, aimed at the presentation of distinguishing information of the device
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`associated to impedance, is a transformative inventive concept. Therefore, claim 31 of the ’012
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`Patent is directed to patent-eligible subject matter.
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`The remainder of the asserted claims of the ’012 Patent, claims 35, 43, and 60, are
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`dependent claims and the Court therefore similarly finds those claims directed to patent-eligible
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`subject matter.
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`For the reasons explained herein, the claims of the ’012 Patent are not directed toward
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`abstract ideas and therefore do not violate “the longstanding rule that ‘[a]n idea of itself is not
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`patentable.’’” Alice, 134 S. Ct. at 2355 (quoting Benson, 409 U.S. at 67). Even if the claims are
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`directed to abstract ideas, the additional elements of the claims “transform the nature of the
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`
`
`10
`
`Chrimar Systems, Inc.
`Exhibit 2034-10
`IPR2016-01426 USPN 9,019,838
`
`

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`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 11 of 20 PageID #: 8716
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`claim” into patent-eligible subject matter. Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at
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`1298).
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`B. Patent Eligibility of the Asserted Claims of the ’107 Patent
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`Defendants argue that the asserted claims of the ’107 Patent are directed to the abstract
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`idea of “using a magnitude of DC current to convey information about a piece of Ethernet
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`terminal equipment.” (Doc. No. 207, at 17.) Specifically, Defendants argue that “Claim 1 of the
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`’107 patent attempts to use that fundamental practice in a computer networking environment to
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`utilize a magnitude of DC current (which is dependent on the voltage applied and impedance in
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`the path measured pursuant to Ohm’s law) to convey information about a piece of Ethernet
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`terminal equipment.” Id. at 18. Chrimar contends that Defendants focus on a single limitation—
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`“wherein at least one of the magnitudes of the DC current flow to convey information about the
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`piece of Ethernet terminal equipment”—and ignore the other limitations that require physical
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`objects and structures. (Doc. No. 214, at 11.) Chrimar contends that “the claim is limited to a
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`specific device—a piece of Ethernet terminal equipment—that includes particular structures—an
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`Ethernet connector with first and second pairs of contacts and at least one path—that are
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`configured in a particular way—the path must be coupled across at least one contact of the first
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`pair of contacts and at least one contact of the second pair of contacts.” Id. at 12. Chrimar argues
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`that these structural limitations are necessary for achieving one of the patentees’ goals of
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`improving prior-art asset-management systems. Id.
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`Claim 1 of the ’107 Patent is similar to claim 31 of the ’012 Patent and recites:
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`A piece of Ethernet terminal equipment comprising:
`an Ethernet connector comprising first and second pairs of
`contacts used to carry Ethernet communication signals,
`at least one path for the purpose of drawing DC current,
`the at least one path coupled across at least one of the
`contacts of the first pair of contacts and at least one of the
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`
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`11
`
`Chrimar Systems, Inc.
`Exhibit 2034-11
`IPR2016-01426 USPN 9,019,838
`
`

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`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 12 of 20 PageID #: 8717
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`contacts of the second pair of contacts, the piece of
`Ethernet terminal equipment to draw different magnitudes
`of DC current flow via the at least one path, the
`different magnitudes of DC current flow to result from at
`least one condition applied to at least one of the contacts
`of the first and second pairs of contacts, wherein at least
`one of the magnitudes of the DC current flow to convey
`information about the piece of Ethernet terminal equipment.
`
`(’107 Patent at 17:11–25 (Claim 1).)
`
`
`
`Again, Defendants focus on one aspect of the claim to contend the claim is directed only
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`to the abstract idea of utilizing a magnitude of DC current to communicate information. Looking
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`at the entirety of the claim, it reveals that claim 1 of the ’107 Patent is similarly an apparatus
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`claim that recites “Ethernet terminal equipment,” and claims a “path” coupled across selected
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`“contacts” of the “Ethernet connector.” ’107 Patent at 17:11–25. It is the claimed Ethernet
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`terminal equipment that then must draw the different magnitudes of DC current via the claimed
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`path to convey information about the device. ’107 Patent at 17:11–25. Here again, while the
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`claim results in the conveyance of information via DC current, Defendants ignore the entirety of
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`the claimed path and structures to boil the claim down to a single purported abstract idea.
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`Moreover, as discussed above, because the claimed invention is directed to resolving an Ethernet
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`network specific problem—to provide a means for asset identification that does not use existing
`
`network bandwidth and therefore allows identification even in the absence of power—the
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`importance of the claimed path and corresponding structures cannot be ignored and provide more
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`than a mere abstract idea. ’107 Patent at 3:10–21. In other words, the specifically configured path
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`and corresponding structures claimed were not added post-hoc to a fundamental law of nature;
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`rather, these structures provide an Ethernet-specific solution to the conveyance of information in
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`a network. For these reasons, the Court similarly finds that claim 1 of the ’107 Patent is not
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`directed to an abstract idea. Thus, the Court need not reach Mayo step-two; however, even if
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`
`
`12
`
`Chrimar Systems, Inc.
`Exhibit 2034-12
`IPR2016-01426 USPN 9,019,838
`
`

`
`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 13 of 20 PageID #: 8718
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`claim 1 of the ’107 Patent is directed to an abstract idea, claim 1, read as whole, discloses an
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`“inventive concept.”
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`Similar to the ’012 Patent, Defendants argue that “the entire claim is directed at Ethernet
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`terminal equipment, which … was conventional in the art prior to the claimed priority date.”
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`(Doc. No. 207, at 18.) Defendants maintain that the recited “Ethernet connectors” and “pairs of
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`contacts” were known in the art at the time of the invention. Id. Defendants further argue that
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`“[t]he magnitude of DC current flow resulting from an electrical condition applied to such a path
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`(e.g., a voltage applied to a circuit) is dictated by Ohm’s law (V=IR)” and “therefore does
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`nothing more than use a law of nature, which is insufficient to supply an inventive concept.” Id.
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`at 19. Similarly, Defendants argue that “the wherein clause— is nothing more than the abstract
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`idea of using the resulting magnitude of DC current flow to convey information about the piece
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`of terminal equipment (e.g., attributing a resulting magnitude of current produced by the applied
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`voltage to some informational aspect about the terminal equipment).” Id. at 19. Chrimar contends
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`that Defendants are incorrect that the limitations were known in the prior art, and Defendants cite
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`no prior art that shows “a path configured to make an Ethernet device distinguishable from
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`another Ethernet device, such as by drawing different magnitudes to convey information about
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`the Ethernet device.” (Doc. No. 214, at 17.) Moreover, Chrimar argues that even if a claim’s
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`individual limitations may have been known independently in the art that does not make it
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`unpatentable. Id. at 18 (citing Bascom, 2016 WL 3514158, at *7.)
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`As discussed above, Defendants’ arguments regarding certain claimed structures being
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`known in the art are misplaced. Bascom, 2016 WL 3514158, at *6 (“the inventive concept
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`inquiry requires more than recognizing that each claim element, by itself, was known in the
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`art.”). While the claim recites certain components of Ethernet terminal equipment, the claim
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`
`
`13
`
`Chrimar Systems, Inc.
`Exhibit 2034-13
`IPR2016-01426 USPN 9,019,838
`
`

`
`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 14 of 20 PageID #: 8719
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`ultimately recites a specifically configured path coupled across certain contacts of the Ethernet
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`connector to “draw different magnitudes of DC current flow” and convey information via the
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`path. ’107 Patent at 3:10–21 (Claim 1).This ordered configuration, aimed at the drawing of
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`magnitudes of DC current to convey information via the path, is a transformative inventive
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`concept. Therefore, Claim 1 of the ’107 Patent is directed to patent-eligible subject matter.
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`The remainder of the asserted claims of the ’107 Patent, claims 5, 72, and 103, are
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`dependent claims and the Court therefore similarly finds those claims directed to patent-eligible
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`subject matter.
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`For the reasons explained herein, the claims of the ’107 Patent are not directed toward
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`abstract ideas and therefore do not violate “the longstanding rule that ‘[a]n idea of itself is not
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`patentable.’’” Alice, 134 S. Ct. at 2355 (quoting Benson, 409 U.S. at 67). Even if the claims are
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`directed to abstract ideas, the additional elements of the claims “transform the nature of the
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`claim” into patent-eligible subject matter. Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at
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`1298).
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`C. Patent Eligibility of the Asserted Claims of the ’838 Patent
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`Defendants argue that the asserted claims of the ’838 Patent are directed to “the abstract
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`idea of detecting signals (magnitudes of DC current) between pieces of networked equipment,
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`which is a function of Ohm’s law.” (Doc. No. 207, at 21.) Chrimar contends that claim 1 of the
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`’838 Patent is directed “to a central piece of network equipment that has structures configured to
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`enable it to (1) detect different magnitudes of DC current via a contact of the Ethernet connector
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`and (2) to control the application of an electrical condition to one of the contacts in response to a
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`magnitude of DC current.” (Doc. No. 214, at 15.)
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`Claim 1 of the ’838 Patent recites:
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`
`
`14
`
`Chrimar Systems, Inc.
`Exhibit 2034-14
`IPR2016-01426 USPN 9,019,838
`
`

`
`Case 6:15-cv-00163-JDL Document 223 Filed 07/29/16 Page 15 of 20 PageID #: 8720
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`A central piece of network equipment comprising:
`at least one Ethernet connector comprising first and second
`pairs of contacts used to carry BaseT Ethernet commu-
`nication signals; and
`the central piece of network equipment to detect different
`magnitudes of DC current flow via at least one of the
`contacts of the first and second pairs of contacts and to
`control application of at least one electrical condition to
`at least one of the contacts of the first and second pairs of
`contacts in response to at least one of the magnitudes of
`the DC current flow.
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`(’838 Patent at 17:13–23 (Claim 1).)
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`Again, Defendants focus on one aspect of the claim to contend the claim is directed only
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`to the abstract idea of detecting magnitudes of DC current between pieces of network
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`equipment. Looking at the entirety of the claim, it reveals that claim 1 of the ’838 Patent is
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`similarly an apparatus claim that recites a “central piece of network equipment,” and claims
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`“contacts” of the “Ethernet connector,” configured in the specific manner claimed to detect
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`different magnitudes of DC current via a contact of the Ethernet connector and to control the
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`application of an electrical condition to one of the contacts in response to a magnitude of DC
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`current. ’838 Patent at 17:13–23. Here again, while the claim results in the detection of
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`information magnitudes of DC current, Defendants ignore the entirety of the claimed
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`configuration and structures to boil the claim down to this single purported abstract idea.
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`Moreover, as discussed, because the claimed invention is directed to resolving an Ethernet
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`network specific problem—to provide a means for asset identification that does not use existing
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`network bandwidth and therefore allows identification even in the ab