Case 2:14-cv-00061-JRG Document 299 Filed 08/06/15 Page 1 of 7 PageID #: 17702
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`MEMORANDUM OPINION AND ORDER
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`Case No. 2:13-CV-1112-JRG
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`Case No. 2:14-CV-61-JRG
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`CONTENTGUARD HOLDINGS, INC.,
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`Plaintiff,
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`v.
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`AMAZON.COM, INC., et al.,
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`Defendants.
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`Plaintiff,
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`GOOGLE, INC.,
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`v.
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`Defendant.
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`CONTENT GUARD HOLDINGS, INC.,
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`Before the Court is the Joint Renewed Motion for Judgment on the Pleadings Declaring
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`All Asserted Patent Claims Invalid Pursuant to 35 U.S.C. § 101 (Dkt. No. 539) (“Motion”) filed
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`by Defendants Motorola Mobility, LLC, Amazon.com, Inc., Apple Inc., Huawei Technologies
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`Co., Ltd., Huawei Device USA, Inc., HTC Corp., HTC America, Inc., Samsung Electronics Co.,
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`Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC
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`(collectively, “Defendants”). Plaintiff ContentGuard Holdings, Inc. (“ContentGuard”) filed a
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`Response in Opposition to the Motion (Dkt. No. 597) (“Response”). For at least the reasons
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`stated below, the motion is DENIED.
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`Case 2:14-cv-00061-JRG Document 299 Filed 08/06/15 Page 2 of 7 PageID #: 17703
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`I.
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`Background
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`On December 18, 2013, ContentGuard filed suit against Amazon, Apple, Blackberry,
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`Huawei, and Motorola Mobility asserting claims of patent infringement of the patents in this suit.
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`(Dkt. No. 1). On January 17, 2014, ContentGuard filed an amended complaint also bringing suit
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`on the same patents against HTC and Samsung. (Dkt. No. 22).
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`Defendants Motorola and Amazon each separately filed motions requesting dismissal
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`pursuant to 35 U.S.C. § 101. (Dkt. Nos. 298 and 390). The Court held a Markman hearing on
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`February 6, 2015, and issued a 144-page Claim Construction Order on March 20, 2015. The
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`Court then, on April 9, 2015, denied Defendants’ pending § 101 motions without prejudice to re-
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`filing, and directed that the parties re-brief the issue in accordance with the Court’s Claim
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`Construction Order. On April 24, 2015, Defendants filed this Joint Motion to Dismiss on the
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`Pleadings Under Federal Rule of Civil Procedure (“F.R.C.P.”) 12(c) re-raising the § 101 issue.
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`Because both Defendants and Plaintiff submitted evidence outside the scope of what can
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`properly be considered under F.R.C.P. 12(c)1, pursuant to Rule 12(d), the Court converted the
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`motion to a motion for summary judgment under F.R.C.P. 56. (Dkt. No. 669). The Court heard
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`oral argument from the parties on July 29, 2015.
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`ContentGuard has asserted the following twenty claims from six related patents issued to
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`Mark Stefik: Claims 1, 3, 6, 8, 11, and 13 from U.S. Patent No. 8,393,007 (“the ’007 patent”);
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`Claims 1, 7, and 13 from U.S. Patent No. 8,370,956 (“the ’956 patent”); Claims 1 and 8 from
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`U.S. Patent No. 7,523,072 (“the ’072 patent”); Claims 18, 21, and 34 from U.S. Patent No.
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`7,269,576 (“the ’576 patent”); and Claims 1, 21, and 58 from U.S. Patent No. 6,963,859 (“the
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`’859 patent”) (collectively, the “Stefik Patents”). ContentGuard has also asserted the following
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`five claims from two related patents issued to Mai Nguyen: Claims 1 and 5 of U.S. Patent No.
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`1 See, e.g., (Mot., Ex. 3, Dkt. 539-3; Resp., Ex. 6, Dkt. No. 597-6.)
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`Case 2:14-cv-00061-JRG Document 299 Filed 08/06/15 Page 3 of 7 PageID #: 17704
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`7,774,280 (“the ’280 patent”); and Claims 1, 3, and 5 from U.S. Patent No. 8,001,053 (“the ’053
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`patent”) (collectively, the “Nguyen Patents”).
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`At a high level, the Stefik Patents are generally directed toward systems and methods for
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`controlling the use and distribution of digital works in accordance with “usage rights” through
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`the use of “trusted” systems. See claim 1 of the ’007 Patent (“sending the digital content . . . to
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`the at least one recipient computing device only if the at least one recipient device has been
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`determined to be trusted”). The Court construed “trusted” to require that three types of
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`“integrities”—physical, communication, and behavioral—be maintained. See (Dkt. No. 459, at
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`15). Similarly, the Nguyen Patents are generally directed toward systems and methods for
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`controlling the use and distribution of digital works in accordance with “usage rights”—and
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`more particularly, “meta-rights”—through the use of “trusted” systems.
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`Defendants contend that the above claims are directed to patent-ineligible subject matter
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`and therefore are invalid under 35 U.S.C. § 101. More specifically, Defendants argue that the
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`Stefik Patents address nothing more than the “abstract idea of enforcing usage rights and
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`restrictions on digital content.” (Motion at 8). Similarly, Defendants argue that the Nguyen
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`Patents address nothing more than the “abstract idea of enforcing sublicensing rights and
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`restrictions (which the patents name ‘meta-rights’) on digital content.” (Motion at 28).
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`II.
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`LEGAL STANDARD
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`A.
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`Summary Judgment Under Rule 56
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`Federal Rule of Civil Procedure 56(c) authorizes a Court to grant summary judgment
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`where “there is no genuine issue as to any material fact and . . . the moving party is entitled to a
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`judgment as a matter of law.” A party moving for summary judgment can satisfy its initial
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`burden of establishing its right to judgment by showing that “there is an absence of evidence to
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`support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–25 (1986).
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`3
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`Case 2:14-cv-00061-JRG Document 299 Filed 08/06/15 Page 4 of 7 PageID #: 17705
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`B.
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`Patent Eligibility under 35 U.S.C. § 101
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`35 U.S.C. § 101 provides that:
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`Whoever invents or discovers any new and useful process, machine, manufacture,
`or composition of matter, or any new and useful improvement thereof, may obtain
`a patent therefor, subject to the conditions and requirements of this title.
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`In deciding Alice Corporation Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014)
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`(“Alice”), the Supreme Court addressed a series of cases concerning the patent eligibility of
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`software claims under 35 U.S.C. § 101. See Ass’n for Molecular Pathology v. Myriad Genetics,
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`Inc., 133 S. Ct. 2107, 2116 (2013) (“Myriad”); Mayo Collaborative Servs. v. Prometheus Labs.,
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`Inc., 132 S. Ct. 1289 (2012) (“Mayo”); Bilski v. Kappos, 561 U.S. 593, 130 S. Ct. 3218 (2010)
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`(“Bilski”). In Alice, the Court reiterated that the right of inventors to obtain patents, as codified
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`in § 101, “contains an important implicit exception: Laws of nature, natural phenomena, and
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`abstract ideas are not patentable.” 134 S. Ct. at 2354 (citing Myriad, 133 S. Ct. at 2116).
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`In determining whether to apply this exception under § 101, courts “must distinguish
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`between patents that claim the ‘buildin[g] block[s]’ of human ingenuity and those that integrate
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`the building blocks into something more, thereby ‘transform[ing]’ them into a patent-eligible
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`invention.” Alice, 134 S. Ct. at 2354. To make that distinction, courts apply a two-step test
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`originally articulated in Mayo, and reaffirmed in Alice. This test requires the Court to
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`“determine whether the claims at issue are directed to one of those patent-ineligible concepts,”
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`e.g., an abstract idea. Id. at 2355. If the challenged claims satisfy this “ineligible concept” step,
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`the court must then “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 1296–97). In this
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`second, “inventive concept” step, the Court considers the elements of each claim both
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`individually and “as an ordered combination” in order to determine if an element or combination
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`Case 2:14-cv-00061-JRG Document 299 Filed 08/06/15 Page 5 of 7 PageID #: 17706
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`of elements within the claims are “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.
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`The Federal Circuit has issued numerous opinions since Alice discussing the contours of
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`the § 101 analysis in relation to computer-related patents. See, e.g., Intellectual Ventures I LLC
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`v. Capital One Bank, No. 2014-1506, 2015 WL 4068798 (Fed. Cir. July 6, 2015); Internet
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`Patents Corp. v. Active Network, Inc., No. 2014-1048, 2015 WL 3852975 (Fed. Cir. June 23,
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`2015); OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015); Content Extraction
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`and Transmission LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343 (Fed. Cir. 2015); DDR
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`Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2015); Ultramercial, Inc. v. Hulu,
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`772 F.3d 709 (Fed. Cir. 2015); buySafe, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2015);
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`Planet Bingo, LLC v. VKGS LLC, 576 Fed. App’x. 1005 (Fed. Cir. 2015); I/P Engine, Inc. v.
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`AOL Inc., 576 Fed. App’x 982 (Fed. Cir. 2015); Digitech Image Techs., LLC v. Elecs. For
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`Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2015). The Court has considered these authorities and
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`their application in this case.
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`III. DISCUSSION
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`In order to prevail on a § 101 challenge, the movant must show that the challenged claims
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`first fail the “ineligible concept” step and then fail the “inventive concept” steps of the Alice test.
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`In this case, Defendants contend the Patents-in-Suit fail both steps. For example, Defendants
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`contend claim 1 of the ’007 Patent fails the first step of the Alice test because it is directed to an
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`abstract idea and “recites elements of a process that can be, and has been, performed by humans
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`without computers.” See, e.g., (Motion at 8). Defendants also argue that claim 1 of the ’007
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`Patent fails the second, “inventive concept” step because “[t]here is no inventive element that
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`renders [it] patentable.” See, e.g., (Motion at 18).
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`5
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`Case 2:14-cv-00061-JRG Document 299 Filed 08/06/15 Page 6 of 7 PageID #: 17707
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`After consideration of all the evidence and the arguments presented, the Court finds that
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`the Patents-in-Suit are directed toward patent-eligible subject matter. In particular, the Patents-
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`in-Suit are not directed toward an abstract idea, at least because they are directed toward patent-
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`eligible methods and systems of managing digital rights using specific and non-generic “trusted”
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`devices and systems. See, e.g., (Response at 13 (“This is significant because it underscores that
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`the subject matter of the Trusted Repository Patents is narrow, i.e., limited to devices that
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`maintain physical, communications, and behavioral integrity, rather than all devices that are
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`capable to receive content via the Internet.”)). Further, even arguendo, if the Court found that
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`the patents are simply directed toward the “abstract idea of enforcing usage rights and
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`restrictions on digital content” as Defendants propose, which it does not, the claim limitations,
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`individually and “as an ordered combination,” are sufficient to ensure that the Patents-in-Suit
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`amount to “significantly more” than a patent simply on that abstract idea. See Alice, 134 S. Ct. at
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`2355. For example, the claims require that the “repository” be a “trusted system” which the
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`Court construed as “maintain[ing] physical, communications, and behavioral integrity in the
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`support of usage rights,” in order to manage digital rights. At the very least, the Patents-in-Suit
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`disclose particular solutions for the problem of “enforcing usage rights and restrictions on digital
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`content” that “(1) [do] not foreclose other ways of solving the problem, and (2) recite[] a specific
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`series of steps that result[] in a departure from the routine and conventional” way of managing
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`digital rights. Internet Patents Corp. v. Active Network, Inc., No. 2014-1048, 2015 WL
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`3852975, at *6 (Fed. Cir. June 23, 2015).
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`IV.
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`CONCLUSION
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`Accordingly, Defendants’ Motion for Judgment on the Pleadings and having been
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`converted into a motion for summary judgment (Dkt. No. 539) is DENIED. The Court will, at a
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`Case 2:14-cv-00061-JRG Document 299 Filed 08/06/15 Page 7 of 7 PageID #: 17708
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`later date, supplement this order and the opinions herein with a more detailed analysis in regard
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`to the above ruling.
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`7