IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`CIVIL ACTION NO. 2:19-CV-00395-JRG
`
`§§§§§§§§§§§
`
`LUMINATI NETWORKS LTD.,
`
`Plaintiff,
`
`v.
`
`TESO LT, UAB, METACLUSTER LT,
`UAB, OXYSALES, UAB,
`
`Defendants.
`
`MEMORANDUM OPINION AND ORDER
`
`Before the Court is Defendants Teso LT, UAB, Metacluster LT, UAB, and Oxysales,
`
`UAB s (collectively, Teso ) Motion for Judgment on the Pleadings Under Fed. R. Civ. P. 12(c)
`
`and 35 U.S.C. § 101 (the Motion ). (Dkt. No. 210). On February 4, 2021, the Court held a hearing
`
`on the Motion. Having considered the Motion, the parties arguments, related briefing, and relevant
`
`authority, the Court finds that the Motion should be DENIED.
`
`I.
`
`BACKGROUND
`
`Plaintiff Luminati Networks Ltd. ( Luminati ) alleges infringement of U.S. Patent Nos.
`
`,
`
`-in-
`
`(Dkt. No. 1). Luminati accuses Teso of infringing:
`
`Claims 1, 2, 14, 15, 17, 18, 21, 22, 24-
`
`-11, 13, 15, 16, 18-20,
`
`-6, 9-12, 15-20, 22, 23, 25, 26,
`
`Patent
`
`. (Dkt. No. 224 at 2).
`
`Previously, Teso filed a Rule 12(b)(6) Motion to Dismiss (the Motion to Dismiss )
`
`contending that the Asserted Claims were unpatentable under 35 U.S.C. § 101. (Dkt. No. 20 at 2
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`21). Noting that claim construction could be of benefit in addressing this issue as it is presented
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`in this case,
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`the Court denied Teso s Motion to Dismiss. (Dkt. No. 85 at 5). On December 7, 2020,
`
`Magistrate Judge Payne entered a Claim Construction Opinion and Order in this case. (Dkt. No.
`
`191). On December 30, 2020, Teso filed the instant Motion, re-raising the issue of patent-eligibility
`
`of the Patents-in-Suit under 35 U.S.C. § 101. (Dkt. No. 210).
`
`II.
`
`LEGAL STANDARD
`
`A. Rule 12(c)
`
`After the pleadings are closed, but early enough not to delay trial, a party may move for
`
`judgment on the pleadings. Fed. R. Civ. P. 12(c). The standard for deciding a Rule 12(c) motion
`
`is the same as a Rule 12(b)(6) motion to dismiss . . . [t]he plaintiff must plead enough facts to
`
`state a claim for relief that is plausible on its face. Guidry v. American Public Life Ins. Co., 512
`
`F.3d 177, 180 (5th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). In a
`
`patent case, the Federal Circuit reviews procedural aspects of motions for judgment on the
`
`pleadings using regional circuit law. RecogniCorp, LLC v. Nintendo Co., Ltd., 855 F.3d 1322,
`
`1325 26 (Fed. Cir. 2017).
`
`B. Patent Eligibility
`
`35 U.S.C. § 101. Since
`
`blocks of human ingen
`
`new and useful process, machine, manufacture, or
`
`ideas are not patent eligible.
`
`, 134 S. Ct. 2347, 2354 (2014).
`
`The Supreme Court instructs courts to distinguish between claims that set forth patent-ineligible
`
`Id.
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`First, the court
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`[s] whether the claims at issue are directed to a patent-ineligible
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`Id. at 2355. In doing so, the court must be wary not to over generalize the invention, as
`
`inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or
`
`abstract ideas
`
`Alice, 134 S. Ct. at 2354 (omission in original). In other words, the court must
`
`-idea-based solution[s] implemented with generic
`
`-
`
`nd
`
`-
`
`Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1299 (Fed. Cir. 2016) (quoting
`
`Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1351 (Fed. Cir. 2016))
`
`(alteration in original).
`
`If the challenged claims recite a patent-ineligible concept, the court then
`
`[s] the
`
`the additiona
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`o a patent eligible application
`
`Alice, 134 S. Ct. at 2355 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S.
`
`66, 78 79 (2012)). This
`
`olve more than
`
`-understood, routine, [and] conventional activities previously known to the
`
`industry. Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat
`
`n, 776 F.3d
`
`1343, 1347 48 (Fed. Cir. 2014) (quoting Alice, 134 S. Ct. at 2359). The Federal Circuit has
`
`101 is a question of law,
`
`like many legal questions, there can be subsidiary fact questions which must be resolved en route
`
`to the ultimate l
`
`Aatrix Software, Inc. v. Green Shades Software, Inc., 882
`
`combination of elements is well-understood, routine and conventional to a skilled artisan in the
`
`he question of whether a claim element or
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`relev
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`Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018).
`
`Something is not necessarily well-understood, routine, and conventional simply because it
`
`is disclosed in a prior art reference. Exergen Corp. v. KAZ USA, Inc.
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`(Fed. Cir. 2018). There are many obscure references that may qualify as prior art but are
`
`insufficient to establish something is a
`
`-understood, routine, and conventional activity
`
`Mayo, 566 U.S. at 79. Additionally,
`
`claims, create a factual dispute regarding whether the invention describes well-understood, routine,
`
`Berkheimer
`
`issue of material fact regarding whether the claim element or claimed combination is well-
`
`understood, routine, conventional to a skilled artisan in the relevant field, [patent eligibility] can
`
`Berkheimer, 881 F.3d at 1368.
`
`III.
`
`DISCUSSION
`
`A. Representativeness
`
`The Court first notes that Teso bears the burden of either addressing the eligibility of each
`
`Asserted Claim or making a showing of the representativeness of any claims asserted to be
`
`representative. See PPS Data, LLC v. Jack Henry & Assocs., Inc., 404 F. Supp. 3d 1021 (E.D. Tex.
`
`2019). Teso addresses each Asserted Claim in its Motion. (See Dkt. No. 210). The parties focused
`
`their argument at the hearing on the independent claims asserted from the Patents-in-Suit. (See
`
`Dkt. No. 293 at 6:6 23). Accordingly, the Court s analysis is likewise focused on Claim 1 of each
`
`Patent-in-Suit.
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`B. The Patents-in-Suit
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`recites:
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`A method for use with a first client device, for use with a first server that
`comprises a web server that is a Hypertext Transfer Protocol (HTTP) server that
`responds to HTTP requests, the first server stores a first content identified by a first
`content identifier, and for use with a second server, the method by the first client
`device comprising:
`receiving, from the second server, the first content identifier;
`sending, to the first server over the Internet, a Hypertext Transfer Protocol
`(HTTP) request that comprises the first content identifier;
`receiving, the first content from the first server over the Internet in response
`to the sending of the first content identifier; and
`sending, the first content by the first client device to the second server, in
`response to the receiving of the first content identifier.
`
`(Dkt. No. 1-2 at 19:16 32).
`
`, the only independent claim asserted from
`
`:
`
`A method for use with a web server that responds to Hypertext Transfer
`Protocol (HTTP) requests and stores a first content identified by a first content
`identifier, the method by a first client device comprising:
`establishing a Transmission Control Protocol (TCP) connection with a
`second server;
`sending, to the web server over an Internet, the first content identifier;
`receiving, the first content from the web server over the Internet in response
`to the sending of the first content identifier; and
`sending the received first content, to the second server over the established
`TCP connection, in response to the receiving of the first content
`identifier.
`
`(Dkt. No. 1-3 at 19:18 31). In the Claim Construction Order, the term client device
`
`and
`
`is construed as
`
`that is operating in the role of a client.
`
`(Dkt. No. 191 at 10 12). The term second server
`
`is construed as server that is not the client
`
`device.
`
`(Id. at 13 14).
`
`, the only independent claim asserted from the
`
`A method for use with a resource associated with a criterion in a client
`device that communicates with a first server over the Internet, the client device is
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`identified in the Internet using a first identifier and is associated with first and
`second state according to a utilization of the resource, the method comprising:
`initiating, by the client device, communication with the first server over the
`Internet in response to connecting to the Internet, the communication
`comprises sending, by the client device, the first identifier to the first
`server over the Internet;
`when connected to the Internet, periodically or continuously determining
`whether the resource utilization satisfies the criterion;
`responsive to the determining that the utilization of the resource satisfies the
`criterion, shifting to the first state or staying in the first state;
`responsive to the determining that the utilization of the resource does not
`satisfy the criterion, shifting to the second state or staying in the second
`state;
`responsive to being in the first state, receiving, by the client device, a
`request from the first server; and
`performing a task, by the client device, in response to the receiving of the
`request from the first server,
`wherein the method is further configured for fetching over the Internet a
`first content identified by a first content identifier from a web server that
`is distinct from the first server, and the task comprising:
`receiving, by the client device, the first content identifier from the
`first server;
`sending, by the client device, the first content identifier to the web
`server;
`receiving, by the client device, the first content from the web server
`in response to the sending of the first content identifier; and
`sending, by the client device, the received first content to the first
`server.
`
`(Dkt. No. 1-1 at 173:44 174:13). In the 614 Patent, client device is construed as device
`
`operating in the role of a client by requesting services, functionalities, or resources from the
`
`server.
`
`(Dkt. No. 191 at 14 15). The term first server
`
`is construed as server that is not the
`
`client device.
`
`(Id. at 16).
`
`C. The Parties Contentions
`
`Teso argues that the Court
`
`e claim
`
`construction hearing support Teso
`
`server terms merely refer to
`
`general purpose computers running software. (Dkt. No. 210 at 3 5). Since the Patents-in-Suit refer
`
`to software roles running on general purpose computers, Teso argues that they claim no more than
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`general purpose computers sending or receiving information over the Internet using an
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`intermediary device. (Id. at 5).
`
`Teso argues that Claim 1 of the 319 Patent and Claim 1 of the 510 Patent merely claim
`
`the sending and receiving of information over the Internet between client devices and servers, and
`
`are therefore abstract. (Id. at 15). The addition of the status determination step in Claim 1 of the
`
`614 Patent adds nothing beyond the routine and conventional step of indicating a device s
`
`availability based upon standard criteria such as its connectivity, battery power, or CPU usage.
`
`(Id. at 16). Further, Teso argues, the dependent claims asserted in this case do not add anything
`
`more than conventional steps recited at a high level, and thus fail for the same reasons. (Id. at 15,
`
`16) (citing Mayo, 566 U.S. at 82). In essence, Teso s argument is that the Asserted Claims are
`
`abstract because they describe the typical human interaction of communicating through an
`
`intermediary being performed by general purpose computers. (Id. at 17 18). Teso also argues that
`
`nothing in the Asserted Claims converts the abstract idea into an inventive concept under Step
`
`Two of Alice. (Id. at 19).
`
`Luminati argues that the claimed invention goes beyond mere communications between
`
`devices over the Internet, but that the Patents-in-Suit are directed to a new and improved network
`
`architecture that operates over the Internet. (Dkt. No. 224 at 12). The invention solves a technical
`
`problem with fetching Internet content, Luminati argues, and is therefore not abstract. (Id.) The
`
`traditional client-server architecture limited client devices to making requests and receiving
`
`content, but not acting as peer-proxies. (Id. at 13). Luminati argues that the situation is different
`
`from human interactions, in part because the Patents-in-Suit recite modifications to client devices,
`
`such as software installation, to allow client devices to perform in the recited roles. (Id. at 14).
`
`Should the Court reach Alice Step Two, Luminati argues that Step Two is satisfied because the
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`claims recite inventive concepts. (Id. at 20). Further, Luminati argues that judgment on the
`
`pleadings is an inappropriate disposition of the factual inquiry involved in Alice Step Two. (Id. at
`
`23).
`
`D. Alice Step One
`
`Teso cites Specialized Monitoring Solutions, LLC v. ADT LLC, in which the asserted
`
`patents claimed a database which stored coded messages and provided access to such messages
`
`over the Internet. 367 F. Supp. 3d 575, 585 (E.D. Tex. Feb. 7, 2019) (Bryson, Circuit Judge). In
`
`steps or describe[d] any means of accomplishing those steps other than through the use of a generic
`
`computer and commonplace communication networks . . .
`
`Id. In contrast, the methods claimed in
`
`this case, while including generic computers and common Internet communication protocols,
`
`recite a broader network that is itself the claimed improvement. Rather than a mere categorization
`
`of data, the pairing of servers and peer-proxies describes a network structure that improves the
`
`ability of those actors to communicate.
`
`Teso analogizes this case to Reese v. Sprint Nextel Corp., in which the Federal Circuit held
`
`that claims reciting methods for the sending and receiving of information were abstract. (Id. at 13)
`
`(citing 774 Fed. App
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`656 (Fed. Cir. 2019)). In Reese, the patent claims were directed to
`
`receiving information
`
`a calling phone number
`
`and sending information
`
`a tone. 774 Fed.
`
`App x. at 660. However, unlike in this case, the patents in Reese
`
`receiving and displaying (indicating) information . . . that fall into a familiar class of claims
`
`directed to
`
`Id. If the claimed methods in this case were simply the receipt and
`
`forwarding of information over the Internet, Teso might have a compelling argument. However, it
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`is the use of non-traditional client devices that transforms the Asserted Claims into non-abstract
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`subject matter.
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`Teso also compares this case to Elec. Pwr. Grp., LLC v. Alstom S.A., another case in which
`
`the Federal Circuit held that the act of collecting and receiving information, without more, is
`
`abstract. (Id. at 14) (citing 830 F.3d 1350, 1353 (Fed. Cir. 2016)). In Electric Power, the Federal
`
`Circuit categorized the collection of information, the mere analysis of information akin to mental
`
`steps or by algorithms, and the resulting presentation of that collection and analysis, as abstract.
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`830 F.3d at 1353 54. As noted above, it is not the individual steps of the method that render the
`
`Asserted Claims non-abstract, it is the network architecture as a whole.
`
`Teso argues that Ericsson Inc. v. TCL Commc n Tech. Holdings Ltd., 955 F.3d 1317 (Fed.
`
`Cir. 2020) is
`
`right on point.
`
`(Dkt. No. 293 at 29:19). In Ericsson, the claimed process of
`
`controlling access to resources was exactly the sort of process that can be performed in the human
`
`mind, or by a human using a pen and paper . . . .
`
`955 F.3d at 1327 (quoting CyberSource Corp.
`
`v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 2011). However, this case differs from
`
`Ericsson in that an improvement in network design that addresses the problem of congested
`
`networks goes beyond the mere control of access to resources. This is not something a human
`
`being can perform using a pen and pad.
`
`The Court finds the instant situation more comparable to SRI Int l, Inc. v. Cisco Sys., Inc.,
`
`in which the Federal Circuit concluded that the claimed invention was directed to an improvement
`
`in computer network technology. 930 F.3d 1295, 1303 (Fed. Cir. 2019). Although the purpose of
`
`the invention in SRI was to improve security by monitoring network traffic, and the Asserted
`
`Claims in this case are not designed to improve network security, the Court concludes that the
`
`Asserted Claims here are similarly directed to a technological solution to a technological
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`problem.
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`Id. The specifications of the Patents-in-Suit state that the inventions were designed to
`
`solve a technological problem: the increased use of bandwidth on the Internet, which slows down
`
`networks and increases costs for content providers and Internet Service Providers. (See, e.g., Dkt.
`
`No. 1-1 at 1:42 57; Dkt. No. 1-3 at 1:32 60). The use of a non-traditional network structure with
`
`a client device acting as a proxy is designed to produce
`
`faster and more efficient data
`
`communication within a communication network.
`
`(Dkt. No. 1-2 at 4:41 43).
`
`Even more analogous to this case is Packet Intelligence LLC v. NetScout Sys., Inc., 965
`
`F.3d 1299 (Fed. Cir. 2020). In Packet Intelligence, the Federal Circuit held that a method for
`
`monitoring a stream of packets (a connection flow ) exchanged over a computer network was not
`
`abstract. Id. at 1309 10. Affirming this Court s findings in that case, the Federal Circuit described
`
`the representative claim as meet[ing] a challenge unique to computer networks, identifying
`
`disjointed connection flows in a network environment.
`
`Id. at 1309. Here, as in Packet Intelligence,
`
`the Asserted Claims address a technological problem unique to computer networks. The Federal
`
`Circuit also found that the patent in Packet Intelligence
`
`solves a technological problem by
`
`identifying and refining a conversational flow such that different connection flows can be
`
`associated with each other and ultimately with an underlying application or protocol.
`
`Id.
`
`Likewise, the Asserted Claims here provide a technological solution by routing server requests
`
`and receipts through non-traditional client devices, and adding in the 614 Patent the additional
`
`step of determining whether the client device is available to perform that function.
`
`The Court is not persuaded that the use of general purpose computers transforms the idea
`
`into something abstract. Software can make non-abstract improvements to computer technology
`
`just as hardware improvements can, and sometimes the improvements can be accomplished
`
`through either route. Enfish, 822 F.3d at 1335. The Court here notes that in their claim
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`construction briefing, Teso specifically represented that they would not take the position that they
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`would later assert that client devices and servers are interchangeable general use computers. (See
`
`Dkt. No. 138 at 11). However, they appear to have taken that position anyway.1 (See id.). The
`
`Court finds that the Patents-in-Suit are not abstract because they make use of general-purpose
`
`computers, given that the specifications2 of the Patents-in-Suit describe the functionality as being
`
`provided by software stored within each communication device.
`
`(Dkt. No. 1-1 at 83:6 15; Dkt.
`
`No. 1-2 at 5:46 48; Dkt. No. 1-3 at 4:48 50). Teso s counsel acknowledged in the hearing that if
`
`the claims concerned a non-abstract software .
`
`. . that actually caused a technological
`
`improvement . . . putting it on a general purpose computer or using that does not . . . somehow
`
`cause it to become abstract.
`
`(Dkt. No. 293 at 16:14 18). Teso s counsel also acknowledged that
`
`a technological solution could be brought about through the sending and receiving of information
`
`through general purpose computers
`
`in other words, that the use of a general purpose computer
`
`sending and receiving information was not per se abstract. (Id. at 32:2 33:6). This reality aside,
`
`the Step One analysis leads the Court to conclude that these claims are not abstract but, in fact,
`
`bring a new technological solution to an existing technological problem.
`
`E. Alice Step Two
`
`Having concluded that the Asserted Claims are not abstract, the Court does not reach Alice
`
`Step Two. However, even if the Court reached the opposite conclusion regarding Step One, the
`
`question as to whether the Asserted Claims are well-understood, routine, and conventional would
`
`contain questions of fact. See Berkheimer, 881 F.3d at 1369. On the face of the pleadings, there
`
`are factual disputes between the parties on this issue. Accordingly, a judgment on the pleadings
`
`1 Notably, Magistrate Judge Payne took specific note of Teso s position in the Claim Construction Order.
`(Dkt. No. 191 at 15).
`2 When determining patent-eligibility, the Court considers the claims as a whole and reads the claims in
`light of the specification. Data Engine Techs. LLC. v. Google LLC, 906 F.3d 999, 1011 (Fed. Cir. 2018).
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`would be inappropriate, even if the Court had reached the opposite conclusion as to Step One and
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`found that the Asserted Claims are directed to an abstract concept.
`
`IV.
`
`CONCLUSION
`
`For the foregoing reasons, the Court finds that Teso’s Motion should be and hereby is
`
`DENIED.
`
`So ORDEREDand SIGNEDthis 12th day of February, 2021.
`
` RODNEY GILSTRAP
`
`UNITED STATES
`
`DISTRICT JUDGE
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