Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 1 of 36 PageID #: 137
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`
`
`Civil Action No.:
`2:16-cv-741[JRG]
`
`PATENT CASE
`
`
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`DEFENDANT ADP, LLC’S MOTION TO DISMISS THE COMPLAINT
`FOR FAILURE TO STATE A CLAIM
`
`UNILOC USA, INC. and
`UNILOC LUXEMBOURG, S.A.
`
`Plaintiffs,
`
`v.
`
`ADP, LLC,
`
`Defendant.
`
`
`
`
`
`

`

`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 2 of 36 PageID #: 138
`
`TABLE OF CONTENTS
`
`PAGE
`
`I. FACTUAL BACKGROUND ............................................................................................... 1
`
`A. The ’578 Patent................................................................................................................. 2
`
`B. The ’466 Patent ................................................................................................................. 3
`
`C. The ’293 Patent................................................................................................................. 4
`
`D. The ’766 Patent................................................................................................................. 5
`
`E. Disclosed Hardware ......................................................................................................... 6
`
`II. THE PATENTS-IN-SUIT ARE INVALID UNDER 35 U.S.C. § 101 .............................. 7
`
`A. Statement of Law ............................................................................................................. 7
`
`B. Alice Step One: The Patents-In-Suit Are Directed To Abstract Ideas ........................ 9
`1.
`The claims of the ’578 Patent are directed to the idea of
`providing two-tiered customization ........................................................................ 9
`The claims of the ’466 Patent are directed to the idea of
`centralized offering of products ............................................................................ 14
`The claims of the ’293 Patent are directed to the idea of
`on-demand distribution of information ................................................................. 16
`The claims of the ’766 Patent are directed to the idea of
`centralized management of permissions ............................................................... 19
`
`2.
`
`3.
`
`4.
`
`C. Alice Step Two: The Claims Fail to Recite Innovative Concepts .............................. 21
`
`III. CLAIMS FOR INFRINGEMENT OF THE ’293 PATENT SHOULD BE
`DISMISSED UNDER IQBAL AND TWOMBLY FOR FAILURE TO PLEAD
`
`
`SUFFICIENT FACTUAL ALLEGATIONS ................................................................ 27
`
`A. Statement of Law ........................................................................................................... 27
`
`B. The ’293 Patent Is Directed To Two-Server Interaction, But The Complaint Fails
`To Identify Two ADP Servers ............................................................................................ 29
`
`IV. CONCLUSION ............................................................................................................... 30
`
`- i -
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`

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`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 3 of 36 PageID #: 139
`
`CASES
`
`TABLE OF AUTHORITIES
`
`PAGE
`
`Accenture Global Servs., GmbH v. Guidewire Software, Inc.,
`728 F.3d 1336 (Fed. Cir. 2013)........................................................................................ passim
`
`Affinity Labs of Tex. v. Amazon.com Inc.,
`No. 2015-2080 (Fed. Cir. Sept. 23, 2016) ...............................................................................25
`
`Affinity Labs of Tex. v. DirecTV, LLC,
`No. 2015-1845 (Fed. Cir. Sept. 23, 2016) ...........................................................................9, 23
`
`Alice Corp. Pty. v. CLS Bank Int’l,
`134 S. Ct. 2347 (2014) ..................................................................................................... passim
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) .................................................................................................1, 27, 28, 29
`
`Bancorp Servs., LLC v. Sun Life Assurance Co. of Can.,
`687 F.3d 1266 (Fed. Cir. 2012)................................................................................................24
`
`Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC,
`827 F.3d 1341 (Fed. Cir. 2016)......................................................................................8, 26, 27
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ......................................................................................................... passim
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) .................................................................................................................12
`
`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014)................................................................................................23
`
`Clear with Computers LLC v. Altec Indus.,
`No. 6:14-cv-79, 2015 WL 993392 (E.D. Tex. Mar. 3, 2015) .......................................... passim
`
`Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n,
`776 F.3d 1343 (Fed. Cir. 2014)........................................................................................ passim
`
`DDR Holdings, LLC v. Hotels.com,
`773 F.3d 1245 (Fed. Cir. 2014)..........................................................................................26, 27
`
`Dealertrack, Inc. v. Huber,
`674 F.3d 1315, 1333 (Fed. Cir. 2012)......................................................................................24
`
`Device Enhancement LLC. v. Amazon.com, Inc.,
`--- F. Supp. 3d ----, 2016 WL 2899246 (D. Del. May 17, 2016) ..................................... passim
`
`- ii -
`
`

`

`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 4 of 36 PageID #: 140
`
`Doe v. MySpace, Inc.,
`528 F.3d 413 (5th Cir. 2008) ...................................................................................................28
`
`Elliot v. Foufas,
`867 F.2d 877 (5th Cir.1989) ....................................................................................................28
`
`Enfish, LLC v. Microsoft Corp.,
`822 F.3d 1327 (Fed. Cir. 2016)......................................................................................8, 26, 27
`
`In re Bill of Lading Transmission & Processing Sys. Patent Litig.,
`681 F.3d 1323 (Fed. Cir. 2012)................................................................................................28
`
`In re TLI Commc’ns LLC Patent Litig.,
`823 F.3d 607 (Fed. Cir. 2016)................................................................................15, 20, 22, 25
`
`Intellectual Ventures I LLC v. Capital One Bank (USA),
`792 F.3d 1363 (Fed. Cir. 2015)....................................................................................12, 15, 23
`
`Internet Patents Corp. v. Active Network, Inc.,
`790 F.3d 1343 (Fed. Cir. 2015)..................................................................................................9
`
`Loyalty Conversion Sys. Corp. v. Am. Airlines, Inc.,
`66 F. Supp. 3d 829 (E.D. Tex. 2014) ...................................................................................9, 24
`
`Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit,
`369 F.3d 464 (5th Cir. 2004) ...................................................................................................28
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) .....................................................................................................7, 8, 22
`
`McRO, Inc. v. Bandai Namco Games Am. Inc.,
`--- F.3d ----, 2016 WL 4896481 (Fed. Cir. Sept. 13, 2016) ...............................................26, 27
`
`McZeal v. Sprint Nextel Corp.,
`501 F.3d 1354 (Fed. Cir. 2007)................................................................................................28
`
`Mortg. Grader, Inc. v. First Choice Loan Servs. Inc.,
`811 F.3d 1314 (Fed. Cir. 2016)..........................................................................................22, 23
`
`NexusCard, Inc. v. Kroger Co.,
`--- F. Supp. 3d ----, 2016 WL 1162180 (E.D. Tex. 2016) .......................................7, 18, 20, 27
`
`OIP Techs., Inc. v. Amazon.com, Inc.,
`788 F.3d 1359 (Fed. Cir. 2015)........................................................................................7, 9, 24
`
`Rembrandt Patent Innov’ns LLC v. Apple Inc.,
`No. 14-cv-05093, 2015 WL 8607390 (N.D. Cal. Dec. 13, 2015) ............................................28
`
`- iii -
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`

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`
`Rothschild Location Techs. LLC v. Geotab USA, Inc.,
`No. 6:15-CV-682-RWS-JDL, 2016 WL 3584195, at *7 (E.D. Tex. Jan. 4,
`2016), report and recommendation adopted, No. 6:15-CV-682-RWS-JDL,
`2016 WL 2847975 (E.D. Tex. May 16, 2016) .........................................................................22
`
`Ruby Sands LLC v. Am. Nat’l Bank of Texas,
`No. 2:15-cv-1955-JRG, 2016 WL 3542430 (E.D. Tex. June 28, 2016) ............................29, 30
`
`Sound View Innov’ns, LLC v. Facebook, Inc.,
`No. 16-116-RGA, 2016 WL 4535345 (D. Del. Aug. 30, 2016) ...................................... passim
`
`Tannerite Sports, LLC v. Jerent Enters., LLC,
`No. 6:15-cv-00180, 2016 WL 1737740 (D. Or. May 2, 2016) ................................................28
`
`Tranxition, Inc. v. Lenovo (US) Inc.,
`No. 3:12–cv–01065–HZ, 2015 WL 4203469 (D. Or. July 9, 2015) ..................................12, 23
`
`Ultramercial, Inc. v. Hulu, LLC,
`772 F.3d 709 (Fed. Cir. 2014) ...........................................................................................21, 22
`
`Vstream Techs., LLC v. PLR IP Holdings, LLC,
`No. 6:15-cv-974-JRG-JDL, D.I. 153 (E.D. Tex. Aug. 24, 2016) ............................................29
`
`STATUTES
`
`35 U.S.C. § 101 ...................................................................................................................... passim
`
`OTHER AUTHORITIES
`
`Fed. R. Civ. P. 8 .......................................................................................................................27, 28
`
`Fed. R. Civ. P. 12(b)(6)..........................................................................................................7, 9, 28
`
`Fed. R. Civ. P. 84 (abrogated) .......................................................................................................28
`
`- iv -
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`

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`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 6 of 36 PageID #: 142
`
`Plaintiffs Uniloc USA, Inc. and Uniloc Luxembourg, S.A. (“Uniloc”) assert four patents
`
`against Defendant ADP, LLC (“ADP”). Each patent purports to claim configurations of servers
`
`and clients in a networked environment. Each in fact claims a known, abstract, and conventional
`
`technique for information management, merely redrafted for the computer arts. The Supreme
`
`Court in Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) made clear that such claims
`
`are unpatentable as a matter of law, and numerous decisions (including decisions of this Court)
`
`have applied Alice at the pleading stage to dismiss cases asserting similar patents.
`
`Because all claims of the asserted patents are invalid under 35 U.S.C. § 101, ADP moves
`
`this court for dismissal of the complaint under Fed. R. Civ. P. 12(b)(6) for failure to state a
`
`claim. ADP also moves in the alternative to dismiss Uniloc’s claim asserting U.S. Patent No.
`
`7,069,293 for failure to meet the pleading requirements set forth in Ashcroft v. Iqbal, 556 U.S.
`
`662, 663 (2009) and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
`
`I.
`
`FACTUAL BACKGROUND
`
`ADP is a US-based provider of cloud-based Human Capital Management (HCM)
`
`solutions for human resources, payroll, talent, time, tax and benefits administration. Uniloc is a
`
`Luxembourg-based patent assertion entity. It purchased the Patents-in-Suit in 2016, and is
`
`asserting one or more of them against nearly 20 unrelated companies, including ADP.
`
`On July 8, 2016, Uniloc sued ADP for allegedly infringing U.S. Patent Nos. 6,324,578
`
`(the “’578 Patent”, D.I. 1 Ex. A); 6,510,466 (the “’466 Patent”, D.I. 1 Ex. C); 7,069,293 (the
`
`“’293 Patent”, D.I. 1 Ex. B); and 6,728,766 (the “’766 Patent”, D.I. 1 Ex. D, and collectively, the
`
`“Patents-in-Suit”). All four patents claim a priority date of December 14, 1998, and were
`
`allegedly assigned to Uniloc from original owner IBM in 2016. Uniloc asserts that ADP
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`infringes a subset of the claims of each patent. The present motion addresses all claims of all four
`
`Patents-in-Suit.1
`
`A. The ’578 Patent
`
`The claims of the ’578 Patent relate to two-tiered customization—in particular, to
`
`executing an application program on a server using two sets of preferences at once, where one
`
`set is associated with a user and the other set is associated with an administrator. The ’578 Patent
`
`contains seven independent claims and thirty-nine dependent claims. Claim 1 is representative:
`
`A method for management of configurable application programs on a network
`comprising the steps of:
`
`installing an application program having a plurality of configurable preferences
`and a plurality of authorized users on a server coupled to the network;
`
`distributing an application launcher program associated with the application program
`to a client coupled to the network;
`
`obtaining a user set of the plurality of configurable preferences associated with one
`of the plurality of authorized users executing the application launcher program;
`
`obtaining an administrator set of the plurality of configurable preferences from an
`administrator; and
`
`executing the application program using the obtained user set and the obtained
`administrator set of the plurality of configurable preferences responsive to a request
`from the one of the plurality of authorized users. (Emphasis added).
`
`The dependent claims of claim 1 specify: where the configurable preferences come from
`
`(claims 2, 3, 10); where the preferences are stored (claims 6, 9); where the command to execute
`
`the application program comes from (claims 4, 5, 7); whether default preferences should be used
`
`(claim 8); and whether multiple user sets and application programs may be used (claims 11-14).
`
`
`1 A fully-briefed motion asserting that the ’766 and ’466 Patents lack patentable subject matter is already pending in
`this District. See Uniloc USA, Inc. v. BitDefender Holding BV et al., 2:16-cv-394 (E.D. Tex.), D.I. 23, 26, 29, 32.
`However, that motion is not directed to all the claims of the ’766 and ’466 Patents asserted by Uniloc in this action,
`and does not address the ‘578 or ‘293 Patents, which were not asserted against BitDefender.
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`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 8 of 36 PageID #: 144
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`The remaining claims mirror claim 1 and its dependent claims. Independent claim 15 is a
`
`method claim which recites the features of claim 1 as executed at a client, not at a server.
`
`Independent claims 17 and 31 are system claims which recite the limitations of claims 1 and 15
`
`in means-plus-function language. Independent claim 16 is a combined server-client system
`
`which combines the limitations of claims 17 and 31. Independent claims 32 and 46 claim
`
`“computer readable code means” for performing the same functions identified in claims 1 and
`
`15. The remaining dependent claims repeat the limitations of claims 2-14.
`
`B. The ’466 Patent
`
`The claims of the ’466 Patent relate to the centralized offering of products—in particular,
`
`to managing the distribution of software over a network. The ’466 Patent contains three
`
`independent claims and thirty-nine dependent claims. Claim 1 is representative:
`
`A method for management of application programs on a network including a server and a
`client comprising the steps of:
`
`installing a plurality of application programs at the server;
`
`receiving at the server a login request from a user at the client;
`
`establishing a user desktop interface at the client associated with the user
`responsive to the login request from the user, the desktop interface including a
`plurality of display regions associated with a set of the plurality of application
`programs installed at the server for which the user is authorized;
`
`receiving at the server a selection of one of the plurality of application
`programs from the user desktop interface; and
`
`providing an instance of the selected one of the plurality of application
`programs to the client for execution responsive to the selection. (Emphasis
`added).
`
`The dependent claims of claim 1: specify the data used by the server to determine the
`
`applications for which the user is authorized (claim 2); specify how the user desktop interface is
`
`established (claims 3, 6, 7, 8); add that configurable preferences may be used (claims 4, 5); add
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`that license management may be performed (claims 9-11); specify where the application
`
`programs are to be installed (claim 12); and add that the distributed applications may perform
`
`event-logging (claims 13-14).
`
`The remaining claims mirror claim 1 and its dependent claims. Independent claim 15 is a
`
`system claim which recites the limitations of claim 1 in means-plus-function language.
`
`Independent claim 16 claims “computer readable program code means” for performing the
`
`functions in claim 1. The remaining dependent claims repeat the limitations of claims 2-14.
`
`C. The ’293 Patent
`
`The claims of the ’293 Patent relate to “on demand” distribution of information—in
`
`particular, to pre-configuring two servers so that applications can be thereafter distributed from a
`
`centralized server to a remote server on demand. The ’293 Patent is a continuation of the ’466
`
`Patent and shares its specification. The ’293 Patent contains three independent claims and
`
`eighteen dependent claims. Claim 1 is representative:
`
`A method for distribution of application programs to a target on-demand server on a
`network comprising the following executed on a centralized network management server
`coupled to the network:
`
`providing an application program to be distributed to the network
`management server;
`
`specifying a source directory and a target directory for distribution of the
`application program;
`
`preparing a file packet associated with the application program and including a
`segment configured to initiate registration operations for the application
`program at the target on-demand server; and
`
`distributing the file packet to the target on-demand server to make the
`application program available for use by a user at a client. (Emphasis added).
`
`The dependent claims of claim 1: identify a brand-name management server to be used
`
`(claim 2); identify particular mechanisms for registering applications at the on-demand server
`
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`(claims 3-7); and add the use of “pre-distribution” or “after-distribution” programs to facilitate
`
`application distribution (claims 8-11).
`
`The remaining claims mirror claim 1 and its dependent claims. Independent claim 12 is a
`
`system claim which recites the limitations of claim 1 in means-plus-function language.
`
`Independent claim 17 claims “computer readable program code means” for performing the
`
`functions in claim 1. The other dependent claims repeat the limitations of claims 2, 3, 6, and 7.
`
`D. The ’766 Patent
`
`The claims of the ’766 Patent relate to centralized management of permissions—in
`
`particular, to the management of permissions in software licenses. The ’766 Patent is a
`
`continuation of the ’578 Patent and shares its specification. The ’766 Patent contains three
`
`independent claims and fifteen dependent claims. Claim 1 is representative:
`
`A method for management of license use for a network comprising the steps of:
`
`maintaining license management policy information for a plurality of
`application programs at a license management server, the license management
`policy information including at least one of a user identity based policy, an
`administrator policy override definition or a user policy override definition;
`
`receiving at the license management server a request for a license availability
`of a selected one of the plurality of application programs from a user at a client;
`
`determining the license availability for the selected one of the plurality of
`application programs for the user based on the maintained license management
`policy information; and
`
`providing an unavailability indication to the client responsive to the selection
`if the license availability indicates that a license is not available for the user or
`an availability indication if the licensed availability indicates that a license is
`available for the user. (Emphasis added).
`
`The dependent claims of claim 1: specify where the license request may come from
`
`(claim 2); add that, when a license is available for an application, the license management server
`
`also provides an instance of the application (claim 3); specify that default license management
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`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 11 of 36 PageID #: 147
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`policies should be used (claim 4), add that the license management policy is associated with a
`
`group of users (claim 5); and identify particular features managed by the license management
`
`policy (claim 6).
`
`The remaining claims mirror claim 1 and its dependent claims. Independent claim 7 is a
`
`system claim which recites the limitations of claim 1 in means-plus-function language.
`
`Independent claim 13 claims “computer readable program code means” for performing the
`
`functions in claim 1. The remaining dependent claims repeat the limitations of claims 2-6.
`
`E. Disclosed Hardware
`
`The specifications of the Patents-in-Suit specify that conventional servers, clients,
`
`networks, and network management software are all that is needed to perform the claimed
`
`inventions.
`
`The Patents-in-Suit each acknowledge that “operations according to the present invention
`
`may be realized in the hardware of existing on-demand servers,” ’578 Patent 14:51-53, ’293
`
`Patent 21:10-12 (emphasis added).2 The term “on-demand” sounds specialized, but merely refers
`
`to any server delivering applications (i.e., data) “as needed responsive to user requests as
`
`requests are received.” ’578 Patent 6:51-53, ’293 Patent 6:65-67. The claimed clients “may be
`
`hardware from a variety of designers operating a variety of different operating systems.” ’578
`
`Patent 6:60-62, ’293 Patent 7:7-9. The claimed networks are not described beyond a statement
`
`that they “may be separate physical networks, separate partitions of a single physical network or
`
`may be a single network.” ’578 Patent 7:3-5, ’293 Patent 7:17-19. The claims can be
`
`implemented using various, unspecified “client/server and network management environments.”
`
`’578 Patent 7:23-24; see also ’293 Patent 17:33-37 (invention can be implemented on “any
`
`
`2 As the ’578 Patent and ’766 Patent share a common specification and the ’293 Patent and the ’466 Patent share a
`common specification, only citations to the ’578 Patent and ’293 Patent specifications are provided in this section.
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`network management application having the ability to pass file packets” and “commence
`
`initiation of operations on a remote workstation by information included in the distributed file
`
`packet.”).
`
`II.
`
`THE PATENTS-IN-SUIT ARE INVALID UNDER 35 U.S.C. § 101
`
`A. Statement of Law
`
`Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must be
`
`dismissed for failure to state a claim upon which relief can be granted for two reasons: (1) the
`
`lack of a cognizable legal theory, or (2) insufficient facts under a cognizable legal theory. See
`
`Twombly, 550 U.S. at 555; see also NexusCard, Inc. v. Kroger Co., --- F. Supp. 3d ----, 2016 WL
`
`1162180, at *6 (E.D. Tex. 2016) (dismissing with prejudice complaint because asserted patent
`
`claims were drawn to ineligible subject matter under 35 U.S.C. § 101). When a complaint asserts
`
`a patent that claims ineligible subject matter, it fails to state a plausible claim for relief and
`
`should be dismissed on the pleadings. See OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359,
`
`1360 (Fed. Cir. 2015); Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l
`
`Ass’n, 776 F.3d 1343, 1345 (Fed. Cir. 2014).
`
`Patent eligibility is decided under 35 U.S.C. § 101, which embodies the cornerstone
`
`prohibition against patenting ideas. Section 101 permits issuance of a patent only for a “new and
`
`useful process, machine, manufacture, or composition of matter, or any new and useful
`
`improvement thereof.” 35 U.S.C. § 101. Laws of nature, natural phenomena, and—importantly
`
`for this case—abstract ideas are each excluded by Section 101. Mayo Collaborative Servs. v.
`
`Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012). As the Supreme Court noted, allowing
`
`patents for subject matter like abstract ideas “impede[s] innovation more than it … tend[s] to
`
`promote it,” effectively frustrating the very objective of the patent laws. Id.
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`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 13 of 36 PageID #: 149
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`In Alice, the Supreme Court announced a two-prong framework for determining whether
`
`claimed subject matter is patentable under Section 101. In step one, the Court determines
`
`whether a claim is directed to an abstract idea or other ineligible concept. Abstract ideas include
`
`“method[s] of organizing human activity” or “longstanding commercial practice[s]” like
`
`intermediated settlement or risk hedging. Alice, 134 S. Ct. at 2356. In step two, the Court
`
`determines whether the claims add an “inventive concepti.e., an element or a combination of
`
`elements that is sufficient to ensure that the patent in practice amounts to significantly more than
`
`a patent upon the [ineligible concept] itself.” See Alice, 134 S. Ct. at 2355 (quotations omitted).
`
`The second step requires more than stating the abstract idea and adding the words “apply it,”
`
`Alice, 134 S. Ct. at 2357, and must include additional features that amount to more than “well-
`
`understood, routine, conventional activity.” Mayo, 132 S. Ct. at 1298.
`
`Recently, the Federal Circuit provided additional guidance for assessing the patentability
`
`of claims directed to improvements in computer-related technology. At step one, the Court must
`
`determine “whether the focus of the claims is on the specific asserted improvement in computer
`
`capabilities . . . or, instead, on a process that qualifies as an ‘abstract idea’ for which computers
`
`are invoked merely as a tool.” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335–36 (Fed.
`
`Cir. 2016). Unless the claims (in view of the specification) “describe a problem and solution
`
`rooted in computer technology” and the solution is “specific enough to preclude the risk of pre-
`
`emption,” the claims are potentially invalid and the Court proceeds to step two. See Device
`
`Enhancement LLC v. Amazon.com, Inc., --- F. Supp. 3d ----, 2016 WL 2899246, at *7 (D. Del.
`
`May 17, 2016). At step two, the court must ask whether the claims implement the abstract idea in
`
`a conventional, generic arrangement of known, conventional pieces. Bascom Glob. Internet
`
`Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350–52 (Fed. Cir. 2016). If so, the claims
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`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 14 of 36 PageID #: 150
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`are invalid. See Affinity Labs of Tex. v. DirecTV, LLC, No. 2015-1845, slip op. at 21 (Fed. Cir.
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`Sept. 23, 2016) (“Affinity-DirecTV”) (provided as Ex. 1); see, e.g., Sound View Innov’ns, LLC v.
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`Facebook, Inc., No. 16-116-RGA, 2016 WL 4535345, at *6 (D. Del. Aug. 30, 2016) (applying
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`Bascom and dismissing complaint asserting seven computer-based patents where claims recited
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`only “generic computer components” and did not “describe how the components function”).
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`“[C]laim construction is not an inviolable prerequisite to a validity determination under
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`§ 101.” Content Extraction, 776 F.3d at 1349; see, e.g., Internet Patents Corp. v. Active Network,
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`Inc., 790 F.3d 1343 (Fed. Cir. 2015) (affirming invalidity of patents under Section 101 resolved
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`on Rule 12(b)(6) motion to dismiss); OIP Techs., 788 F.3d 1359 (same). If no disputed issues of
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`claim construction will affect the proper analysis of the patentability of the asserted claims,
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`Section 101 may be addressed at the pleading stage. See Loyalty Conversion Sys. Corp. v. Am.
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`Airlines, Inc., 66 F. Supp. 3d 829, 835 (E.D. Tex. 2014). This protects the parties from
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`“expend[ing] significant resources which will not impact or aid the Court in reaching [its]
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`decision.” Clear with Computers LLC v. Altec Indus., No. 6:14-cv-79, 2015 WL 993392, at *3
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`(E.D. Tex. Mar. 3, 2015), aff’d, 636 F. App’x 1015 (Fed. Cir. 2016).
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`B. Alice Step One: The Patents-In-Suit Are Directed To Abstract Ideas
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`1. The claims of the ’578 Patent are directed to the idea of providing two-tiered
`customization
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`Each claim of the ’578 Patent, including representative claim 1, is invalid under 35
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`U.S.C. § 101, because it claims an abstract idea. The claims are directed to the abstract idea of
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`providing two-tiered customization, a method of organizing human activity and a long-standing
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`commercial practice which well predates the Patents-in-Suit.
`
`Consider the following example: A supplier offers to provide supplies to two employees
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`of a business. The following actions mirror the steps claimed in claim 1 of the ’578 Patent.
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`- 9 -
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`

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`Case 2:16-cv-00741-RWS Document 17 Filed 09/29/16 Page 15 of 36 PageID #: 151
`Case 2:16-cv-00741—RWS Document 17 Filed 09/29/16 Page 15 of 36 PageID #: 151
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`
`
`The ’578 Patent Claim 1
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`Conventional Activity
`
`A method for management of configurable
`application programs on a network
`comprising the steps of:
`
`A supplier manages supply distribution to
`businesses and their employees.
`
`installing an application program having a
`plurality of configurable preferences and a
`plurality of authorized users on a server
`coupled to the network;
`
`The supplier offers a supply service. The service
`maintains records of business customers and their
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`preferences, the businesses’ employees, and the
`employees’ preferences.
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`distributing an application launcher program
`associated with the application program to a
`client coupled to the network;
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`The supplier distributes order forms to the
`businesses’ employees.
`
`
`
`The supplier obtains individual employee
`obtaining a user set of the plurality of
`preferences. For example, John prefers blue pens
`configurable preferences associated with
`and legal pads, while Maria prefers black pens
`one of the plurality of authorized users
`and bound notebooks.
`executing the application launcher program;
`
`
`obtaining an administrator set of the
`plurality of configurable preferences from
`an administrator; and
`
`The supplier obtains business preferences. For
`example, the business will not pay for bound
`notebooks and wants its logo printed on all pens.
`
`executing the application program using the
`obtained user set and the obtained
`
`administrator set of the plurality of
`configurable preferences responsive to a
`request from the one of the plurality of
`authorized users.
`
`The supplier receives an order from John for
`“pens and paper.” The supplier retrieves John’s
`preferences and applies them in view of John’s
`employer’s preferences. It sends John blue pens
`with the company logo and yellow legal pads.
`
`The supplier receives an order from Maria for
`pens and paper. The supplier retrieves Maria’s
`preferences and applies them in View of Maria’s
`employer’s preferences. It sends Maria black pens
`with the company logo, but not bound notebooks.
`
`Similar scenarios exist in other contexts. For example, travel agencies have long been
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`known to use two sets of preferences when booking business travel, one for the traveler (aisle
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`over window, redeye over day flight) and another for the traveler’s employer (coach over first
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`class, must