Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 1 of 36 PageID #: 747
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`
`
`
`
`
`Case No. 2:16-cv-741-JRG
`(Lead)
`
`JURY TRIAL REQUESTED
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`
`
`
`
`No.
`Case
`(Consolidated)
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`
`2:16-cv-863-JRG
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`§
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`§ §
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`§ §
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`§
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`§ §
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`§
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`UNILOC USA, INC. and
`UNILOC LUXEMBOURG, S.A.,
`
`
`Plaintiffs,
`
`
`v.
`
`ADP, LLC,
`
`
`Defendant.
`
`v.
`
`
`
`
`
`ZENDESK, INC.
`
`
`
`
`
`
`Defendant.
`
`ZENDESK, INC.’S MOTION TO DISMISS THE AMENDED COMPLAINT FOR
`FAILURE TO STATE A CLAIM
`
`
`
`
`
`

`

`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 2 of 36 PageID #: 748
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`INTRODUCTION ...............................................................................................................1
`
`FACTUAL AND PROCEDURAL BACKGROUND.........................................................2
`
`A.
`
`B.
`
`The Asserted Patents Recognize That Networked Computing Already
`Existed at the Time of the Alleged Invention ..........................................................2
`
`Plaintiffs Offer Only Non-Particularized Infringement Allegations in the
`Amended Complaint ................................................................................................5
`
`III.
`
`LEGAL STANDARD ..........................................................................................................6
`
`A.
`
`B.
`
`Patent Eligibility Is Properly Decided Upon a Motion To Dismiss.........................6
`
`35 U.S.C. § 101 Bars Claims That Recite Abstract Ideas and Lack an
`Inventive Concept ....................................................................................................7
`
`IV.
`
`ARGUMENT .......................................................................................................................9
`
`A.
`
`Step One of the Alice Framework—All of the Asserted Patents Claim
`Abstract Ideas.........................................................................................................10
`
`1.
`
`2.
`
`3.
`
`4.
`
`The ‘466 Patent Claims the Abstract Idea of Providing Customers
`with a List of Available Offerings .............................................................10
`
`The ‘578 Patent Claims the Abstract Idea of Customizing a
`Product To Suit a Customer’s Preferences ................................................15
`
`The ‘293 Patent Claims the Abstract Idea of Centralized
`Distribution of a Product or Service ..........................................................18
`
`The Asserted Patents Are Not Directed to a Specific Improvement
`in Computer Technology ...........................................................................21
`
`B.
`
`Step Two of the Alice Framework—The Asserted Patents Lack an
`Inventive Concept ..................................................................................................22
`
`V.
`
`CONCLUSION ..................................................................................................................28
`
`
`
`
`
`
`
`
`i
`
`

`

`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 3 of 36 PageID #: 749
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Page
`
`Affinity Labs of Tex. v. Amazon.com Inc.,
`No. 2015-2080 (Fed. Cir. Sept. 23, 2016) ...............................................................................28
`
`Affinity Labs of Tex. v. DirecTV, LLC,
`No. 2015-1845 (Fed. Cir. Sept. 23, 2016) .................................................................................8
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int'l,
`134 S. Ct. 2347 (2014) ..................................................................................................... passim
`
`American Needle, Inc. v. Cafe Press Inc.,
`No. 15-cv-3968, 2016 WL 232438 (N.D. Ill. Jan. 19, 2016) ...................................................25
`
`Bascom Global Internet Servs, Inc. v. AT&T Mobility LLC,
`827 F.3d 1341 (Fed. Cir. 2016)........................................................................................2, 8, 28
`
`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014)......................................................................................9, 23, 25
`
`In re Bilski,
`545 F.3d 943 (Fed. Cir. 2008) aff'd, 130 S. Ct. 3218 (2010) .....................................................6
`
`Clear with Computers, LLC v. Altec Indus., Inc.,
`No. 6:14-CV-79, 2015 WL 993392 (E.D. Tex. Mar. 3, 2015),
`aff'd, 636 F. App'x 1015 (Fed. Cir. 2016) ................................................................9, 13, 15, 17
`
`Clear with Computers, LLC v. Dick's Sporting Goods, Inc.,
`21 F. Supp. 3d 758 (E.D. Tex. 2014) .....................................................................................6, 9
`
`Cloud Satchel, LLC v. Amazon.com, Inc.,
`76 F. Supp. 3d 553 (D. Del. 2014), aff'd sub nom. Cloud Satchel, LLC v. Barnes & Noble,
`Inc., 626 F. App'x 1010 (Fed. Cir. 2015) ...................................................................................8
`
`Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat'l Ass'n,
`776 F.3d 1343 (Fed. Cir. 2014)..................................................................................................6
`
`DDR Holds., LLC v. Hotels.com, L.P.,
`773 F.3d 1245 (Fed. Cir. 2014)................................................................................................28
`
`Digitech Image Techs., LLC v. Electronics for Imaging, Inc.,
`758 F.3d 1344 (Fed. Cir. 2014)................................................................................................17
`
`eDekka LLC v. 3Balls.com, Inc.,
`No. 2:15-CV-541 JRG, 2015 WL 5579840 (E.D. Tex. Sept. 21, 2015) ..............................9, 11
`
`Elec. Power Grp., LLC v. Alstom S.A.,
`No. 2015-1778, 2016 WL 4073318 (Fed. Cir. Aug. 1, 2016) ...........................................27, 28
`
`
`
`ii
`
`

`

`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 4 of 36 PageID #: 750
`
`Enfish, LLC v. Microsoft Corp,
`822 F.3d 1327 (Fed. Cir. 2016)..........................................................................................21, 22
`
`GT Nexus, Inc. v. Inttra, Inc., No. C 11-02145,
`2015 WL 6747142 (N.D. Cal. 2015) .......................................................................................20
`
`Gonzalez v. Infostream Grp., Inc.,
`No. 2:14-CV-906-JRG, 2016 WL 1643313 (E.D. Tex. Apr. 26, 2016) ....................................9
`
`Intellectual Ventures I LLC v. Capital One Bank (USA),
`792 F.3d 1363 (Fed. Cir. 2015)........................................................................................7, 8, 25
`
`Intellectual Ventures I LLC v. J. Crew Group, Inc.,
`No. 6:16-CV-196-JRG, 2016 WL 4591794 (E.D. Tex. Aug. 24, 2016)....................................9
`
`Internet Patents Corp. v. Active Network, Inc.,
`790 F.3d 1343 (Fed. Cir. 2015)................................................................................................25
`
`Kaavo Inc. v. Cognizant Tech. Solutions Corp., No. CV 14-1192-LPS-CJB,
`2016 WL 1268308 (D. Del. Mar. 31, 2016) ................................................................25, 26, 27
`
`Kroy IP Holds., LLC v. Safeway, Inc.,
`107 F. Supp. 3d 677 (E.D. Tex. 2015) .......................................................................................9
`
`Loyalty Conversion Sys. Corp. v. Am. Airlines, Inc.,
`66 F. Supp. 3d 829 (E.D. Tex. 2014) ...................................................................................9, 11
`
`Lumen View Tech. LLC v. Findthebest.com, Inc.,
`984 F. Supp. 2d 189 (S.D.N.Y. 2013)........................................................................................7
`
`McRO, Inc. v. Bandai Namco Games Am. Inc.,
`No. 2015-1080, 2016 WL 4896481 (Fed. Cir. Sept. 13, 2016) .........................................21, 22
`
`Morales v. Square, Inc.,
`75 F. Supp. 3d 716 (W.D. Tex. 2014) aff'd 621 F. App'x 660 (Fed. Cir. 2015) ........................6
`
`Mortg. Grader, Inc. v. First Choice Loan Servs. Inc.,
`811 F.3d 1314 (Fed. Cir. 2016)..........................................................................................12, 23
`
`Network Apparel Grp., LP v. Airwave Networks Inc.,
`No. 6:15-CV-00134, 2016 WL 4718428 (W.D. Tex. Mar. 30, 2016) ...................10, 15, 18, 20
`
`NexusCard, Inc. v. Kroger Co.,
`No. 2:15-cv-968-JRG-RSP, 2016 WL 1162180 (E.D. Tex. Mar. 24, 2016) ...12, 14, 18, 23, 27
`
`Open Parking, LLC v. ParkMe, Inc.,
`No. 2:15-cv-976, 2016 WL 3547957 (W.D. Penn. June 30, 2016) .........................................10
`
`Orostream LLC v. ABS-CBN Int'l,
`No. 2:15-CV-248-JRG, 2015 WL 5836949 (E.D. Tex. Oct. 1, 2015) .......................................9
`
`Open Text S.A. v. Box, Inc.,
`78 F. Supp. 3d 1043 (N.D. Cal. 2015) .....................................................................................20
`
`
`
`iii
`
`

`

`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 5 of 36 PageID #: 751
`
`OpenTV, Inc. v. Netflix Inc.,
`76 F. Supp. 3d 886 (N.D. Cal. 2014) .................................................................................13, 17
`
`Personalized Media Commc'ns, LLC v. Amazon.com, Inc.,
`161 F. Supp. 3d 325 (D. Del. 2015) .........................................................................................18
`
`Preservation Wellness Techs. LLC v. Allscripts Healthcare Sols.,
`No. 2:15-CV-1559-WCB, 2016 WL 2742379 (E.D. Tex. May 10, 2016) ....................9, 10, 12
`
`Protegrity USA, Inc. v. Netskope, Inc.,
`No. 15-cv-02515, 2015 WL 6126599 (N.D. Cal. Oct. 19, 2015) ............................................14
`
`Rothschild Location Techs. LLC v. Geotab USA, Inc.,
`No. 6:15-CV-682-RWS-JDL, 2016 WL 3584195 (E.D. Tex. Jan. 4, 2016) ...........................23
`
`In Re TLI Commc'n LLC Patent Litig.,
`823 F.3d 607 (Fed. Cir. 2016)..........................................................................................2, 7, 21
`
`Telinit Techs., LLC v. Alteva, Inc.,
`No. 2:14-CV-369, 2015 WL 5578604 (E.D. Tex. Sept. 21, 2015) ............................................9
`
`Tenon & Grove, LLC v. Plusgrade S.E.C.,
`2015 WL 1133213 (D. Del. Mar. 11, 2015) ............................................................................17
`
`Tuxis Techs., LLC v. Amazon.com, Inc.,
`Case No. 13-1771-RGA, No. CV 13-1771-RGA, 2015 WL 1387815
`(D. Del. Mar. 25, 2015)............................................................................................................17
`
`Ultramercial, Inc. v. Hulu, LLC,
`772 F.3d 709 (Fed. Cir. 2014)..........................................................................................6, 8, 14
`
`Uniloc USA, Inc. v. E-MDS, Inc.,
`No. 6:14-CV-00625-RWS, 2015 WL 10791906 (E.D. Tex. Aug. 19, 2015) ......................9, 26
`
`Uniloc USA, Inc. v. salesforce.com, inc.,
`No. 2:16-cv-00744-JRG, Dkt No. 24 (E.D. Tex. Sept. 30, 2016) .......................................1, 14
`
`Versata Dev. Grp., Inc. v. SAP Am., Inc.,
`793 F.3d 1306 (Fed. Cir. 2015)................................................................................................23
`
`VideoShare, LLC v. Google, Inc.,
`No. 13-cv-990 (GMS), 2016 WL 4137524 (D. Del. Aug. 2, 2016) ............................15, 18, 20
`
`Voxathon LLC v. Alpine Elecs. of Am., Inc.,
`No. 2:15-CV-562-JRG, 2016 WL 260350 (E.D. Tex. Jan. 21, 2016) .......................................9
`
`Statutes
`
`35 U.S.C. § 101 ......................................................................................................1, 6, 7, 10, 11, 28
`
`Fed. R. Civ. P. 12(b)(6)..............................................................................................................1, 28
`
`
`
`
`
`iv
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`

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`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 6 of 36 PageID #: 752
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`Pursuant to Federal Rule of Civil Procedure 12(b)(6) and 35 U.S.C. § 101, Defendant
`
`Zendesk, Inc. (“Zendesk”) moves to dismiss the patent infringement Complaint of Plaintiffs
`
`Uniloc USA, Inc. and Uniloc Luxembourg, S.A. (collectively, “Uniloc” or “Plaintiffs”) for
`
`failure to state a claim upon which relief can be granted.1 Pursuant to L.R. CV-7(a)(1), the
`
`issues to be decided by the court in connection with this motion are (1) whether the claims of
`
`U.S. Patent Nos. 6,510,466, 6,324,578, and 7,069,293 asserted in Plaintiffs’ Amended Complaint
`
`(collectively, the “asserted patents” or “patents in suit”) (defined below) are drawn to patent-
`
`ineligible subject matter under 35 U.S.C. § 101, and (2) whether Plaintiffs’ Amended Complaint
`
`should be dismissed pursuant to Fed. R. Civ. P. 12(b)(6) in view thereof.
`
`I.
`
`INTRODUCTION
`
`Plaintiffs’ asserted patents should be found subject matter ineligible because they attempt
`
`to monopolize, without contributing any technical innovation, longstanding ideas about how
`
`businesses manage and interact with their customers. Businesses have long presented their
`
`multiple offerings to customers, catered to customer preferences, maintained and enforced
`
`company policies, and granted or denied access to their offerings. The asserted patents are
`
`drawn to precisely these concepts.
`
`Specifically, the ‘466 patent is directed to providing customers with a list of available
`
`products or services from which the customer can select which product or service it wants; the
`
`‘578 patent is drawn to tailoring a product or service to each customer’s preferences; and the
`
`
`1 For the Court’s reference and ease of consideration, this Motion adopts the arguments
`set forth in Salesforce’s Motion to Dismiss the Complaint for Failure to State a Claim, in Uniloc
`USA, Inc. v. salesforce.com, inc., No. 2:16-cv-00744-JRG, Dkt No. 24 (E.D. Tex. Sept. 30,
`2016) to the extent that motion addresses the patents and claims also asserted against NetSuite
`(i.e., claims 1-2, 7, 15-17, 22, 30, and 35 of the ‘466 patent; claims 1-8, 10-11, 13-24, 26-39, and
`41-46 of the ‘578 patent; and claims 1, 12, and 17 of the ‘293 patent). Due to differences in
`asserted patents, NetSuite’s Motion does not address U.S. Patent No. 6,728,766.
`
`
`
`1
`
`

`

`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 7 of 36 PageID #: 753
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`‘293 patent is directed to centralized distribution of a product or service. Accordingly, none of
`
`the patents in suit is “directed to an improvement in the functioning of a computer,” but rather,
`
`they are drawn to “well-known business practices.” See In Re TLI Commc’n LLC Patent Litig.,
`
`823 F.3d 607, 612 (Fed. Cir. 2016) (internal quotation marks omitted). As such, each one of the
`
`patents in suit is directed to an abstract idea.
`
`Moreover, the patents in suit couch these abstract ideas in generic software and computer
`
`networking technology; however, simply reciting in the claims such generic computing
`
`technology is insufficient to confer subject matter eligibility. See Alice Corp. Pty. Ltd. v. CLS
`
`Bank Int’l, 134 S. Ct. 2347, 2358 (2014) (“[T]he mere recitation of a generic computer,” or
`
`“limiting the use of an abstract idea to a particular technological environment,” cannot
`
`“transform a patent-ineligible abstract idea into a patent-eligible invention.” (internal citations
`
`omitted)). Here, none of the patents in suit claim “a technical improvement over prior art ways
`
`of” implementing the business practices they describe, and therefore do not transform these
`
`abstract ideas into patentable technological applications. See Bascom Global Internet Servs, Inc.
`
`v. AT&T Mobility LLC, 827 F.3d 1341, 1351 (Fed. Cir. 2016) (emphasis added). Uniloc’s
`
`amended complaint against Zendesk should therefore be dismissed.
`
`II.
`
`FACTUAL AND PROCEDURAL BACKGROUND
`
`A.
`
`The Asserted Patents Recognize That Networked Computing Already
`Existed at the Time of the Alleged Invention
`
`The patents in suit do not purport to make technical improvements to computers or
`
`conventional client server computer networking. Indeed, they recognize that modern computer
`
`networks, and the accompanying expectations and actions of their end users and administrators,
`
`already existed at the time of the alleged invention:
`
`In the modern distributed processing computer environment, control over
`software, such as application programs, is more difficult than where a mainframe
`
`
`
`2
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`

`

`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 8 of 36 PageID #: 754
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`operated by an administrator is used, particularly for large organizations with
`numerous client stations and servers distributed widely geographically and
`utilized by a large number of users. Furthermore, individual users may move
`from location to location and need to access the network from different client
`stations at different times.
`
`See ‘466 patent2 at col. 1:44-52 (emphasis added). Indeed, the asserted patents explicitly note
`
`that “operations according to the present invention may be realized in the hardware of existing
`
`on-demand servers,” ’578 patent at col. 14:51-53, ’293 patent at col. 21:10-12 (emphasis
`
`added).3 Similarly, the clients that are recited in the claims of the asserted patents “may be
`
`hardware from a variety of designers operating a variety of different operating systems.” ’578
`
`patent at col. 6:60-62, ’293 patent at col. 7:7-9. Thus, the patents both acknowledge that the
`
`named inventors did not create “the modern distributed processing computer environment,” and
`
`describe that certain outcomes, all of which are desirable in other contexts, are also desirable for
`
`this technological environment: managing a large number of diverse users, providing easy
`
`access and personalized options to authorized users, keeping out unauthorized users, and doing
`
`all of this in a convenient manner.
`
`The asserted patents do not describe or claim any technical improvements over prior art
`
`systems for achieving these desirable outcomes. Instead, the patents only reiterate these desired
`
`outcomes without describing any technical solutions. For instance, the asserted patents state that
`
`one of “the challenges for a network administrator [is] in maintaining proper licenses for existing
`
`software” (‘466 patent at col. 1:52-56) and purport to “provide for license use management by
`
`
`2 The ‘466 and ‘293 patents share the same specification. In addition, the ‘578 patent
`incorporates by reference the ‘466 and ‘293 patents in their entirety, and vice versa. ‘578 patent
`at col. 7:17-21; ‘466 patent at col. 7:41-48. Accordingly, even though citations herein may be to
`only one of the asserted patents, this is for readability only, since the same disclosure is found in
`all three patents.
`
`3 While the term “on-demand” may sound specialized, it merely refers to any server
`delivering applications (i.e., data) “as needed responsive to user requests as requests are
`received.” ’578 patent at col. 6:51-53, ’293 patent at col. 6:65-67.
`
`
`
`3
`
`

`

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`determining license availability before initiating execution of the application program” (‘466
`
`patent, at Abstract). The patents, however, provide no details of how this is accomplished, and
`
`instead only disclose, for example in relation to Figure 7 of the ‘466 and ‘293 patents, that “the
`
`server system accepts a license request from the application” and either displays an error
`
`message or executes the application. ‘466 patent at col. 16:43-56.
`
`The patents’ only arguably technical contribution is to identify commercially-available
`
`software (which the named inventors do not purport to have invented) to perform the process
`
`described in FIG. 7. See ‘466 patent, col. 16:56-60 (“Server system 22, as described previously,
`
`may be configured to operate in a TivoliTM environment . . . .”), col. 2:7-11 (“[T]he Tivoli
`
`Management Environment (TME) 10™ system from Tivoli Systems, Inc. provides a software
`
`distribution feature which may be used to transmit a file package to client and server stations on
`
`a network from a central Tivoli™ server”).
`
`This approach repeats itself across all of the asserted patents: the named inventors
`
`identify an overarching desirable outcome that is applicable to modern computer networks,
`
`purport to disclose and claim this outcome, but then fail to disclose or claim any specific
`
`technical improvements over the prior art for how this outcome can be achieved. In accordance
`
`therewith, the claims of the ‘466 patent are directed to “establishing a user desktop interface . . .
`
`including a plurality of display regions” reflecting “application programs installed at the server
`
`for which the user is authorized.” See ‘466 patent, claim 1. Again, however, neither the claims
`
`of the ‘466 patent nor its specification describe a technical improvement over the prior art for
`
`accomplishing this, and instead merely indicate that “currently available web browser
`
`applications are known to those of skill in the art which provide a user interface.” See ‘466
`
`patent, col. 9:43-48.
`
`
`
`4
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`

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`The ‘578 patent is no different: its claims require “obtaining . . . configurable
`
`preferences” (see ‘576 patent, claim 1), but the specification’s description of the corresponding
`
`steps in the figures (blocks 56 and 58 of FIG. 2; and blocks 76, 82, and 84 of FIG. 3) only
`
`indicates that “preferences [are] obtained” using software, without any details of what this
`
`involves or what this software does (see ’578 patent, col. 8:55-9:4, 9:66-10:10:5, 10:19-10:29).
`
`Finally, the ‘293 patent claims “preparing a file packet associated with the application
`
`program[,] including a segment configured to initiate registration operations” and “distributing
`
`the file packet.” See ‘293 patent, claim 1. As with the other asserted patents, however, the ‘293
`
`patent does not claim or disclose a technical improvement over the prior art for implementing
`
`this feature, and instead merely directs the reader to acquire two publicly-available prior art
`
`products: “the TME 10™ package,” which “distribut[es] a software package” and “run[s] pre-
`
`and post-processing commands during the software distribution process”; and “the PMImport
`
`applet of the eNetwork On-demand server (version 1.0) from IBM,” which “ register[s] a
`
`transferred file packet containing an application program . . . in a manner which makes it . . .
`
`available to users at clients.” See ‘293 patent, col. 17:38-54.
`
`B.
`
`Plaintiffs Offer Only Non-Particularized Infringement Allegations in the
`Amended Complaint
`
`Uniloc’s litigation conduct underscores its own belief that the patents in suit claim
`
`outcomes that are desirable across a variety of business contexts, and not any particular technical
`
`solutions for achieving these outcomes. First, Uniloc has filed more than twenty lawsuits this
`
`year in this District on the patents in suit, alleging that businesses in a wide variety of industries
`
`infringe Uniloc’s patents. Across the board, these complaints fail to identify specific accused
`
`products or infringing acts. Uniloc’s amended complaint against Zendesk is exemplary of this
`
`deficiency. It does not identify any products by name, but instead alleges that Zendesk infringes
`
`
`
`5
`
`

`

`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 11 of 36 PageID #: 757
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`the asserted patents through the “Zendesk software distribution and management system.”
`
`Amended Complaint ¶ 42. The amended complaint lacks any discussion of how this vaguely
`
`defined “system” is implemented (i.e., any sort of technical solution), but instead entirely relies
`
`on screen-shots of user interfaces of Zendesk’s products (i.e., desirable outcomes). Amended
`
`Complaint ¶¶ 11-40. Uniloc alleges infringement of claims 1-5, 7-9, 13, 15-20, 22-24, 28-33,
`
`35-37, and 41-42 of the ‘466 patent; claims 1-8, 10-11, 13-39, and 41-46 of the ‘578 patent; and
`
`claims 1, 12, and 17 of the ‘293 patent, but it provides no particularized infringement allegations
`
`for any of these claims.
`
`III. LEGAL STANDARD
`
`A.
`
`Patent Eligibility Is Properly Decided Upon a Motion To Dismiss
`
`Patent eligibility under 35 U.S.C. § 101 is a question of law and is a threshold legal
`
`inquiry properly considered in a Rule 12 motion to dismiss. In re Bilski, 545 F.3d 943, 950-951
`
`(Fed. Cir. 2008) (en banc) aff’d, 130 S. Ct. 3218 (2010); Clear with Computers, LLC v. Dick’s
`
`Sporting Goods, Inc., 21 F. Supp. 3d 758, 762 (E.D. Tex. 2014) (“[T]he Court determines
`
`whether the complaint alleges ‘enough facts to state a claim to relief that is plausible on its
`
`face.’”) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Indeed, the Federal
`
`Circuit frequently affirms patent ineligibility at the pleading stage. Content Extraction &
`
`Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347-49 (Fed. Cir. 2014)
`
`(affirming lower court holding that abstract software claims were unpatentable at the pleading
`
`stage under Rule 12(b)(6)); see also Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 717 (Fed.
`
`Cir. 2014) (same).
`
`Moreover, claim construction is not required for the § 101 analysis. Content Extraction
`
`& Transmission, 776 F.3d at 1349; see also Morales v. Square, Inc., 75 F. Supp. 3d 716, 721-22
`
`(W.D. Tex. 2014) (“Given the absence of [any] dispute [requiring resolution] and the ‘salutary
`
`
`
`6
`
`

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`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 12 of 36 PageID #: 758
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`effects’ of addressing § 101 at the outset of litigation, the Court finds that neither separate claim
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`construction proceedings nor further development of the factual record is required before
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`addressing the § 101 issue.” (internal citations omitted)) aff’d 621 F. App’x 660 (Fed. Cir. 2015);
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`Lumen View Tech. LLC v. Findthebest.com, Inc., 984 F. Supp. 2d 189, 205 (S.D.N.Y. 2013)
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`(“[T]he Federal Circuit has said that conducting a claim construction analysis before addressing
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`§ 101 is not required.” (quotations marks omitted)).
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`B.
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`35 U.S.C. § 101 Bars Claims That Recite Abstract Ideas and Lack an
`Inventive Concept
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`To be subject matter eligible for patenting, a patent must claim a “new and useful
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`process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. Excluded from the
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`scope of patentable inventions are “[l]aws of nature, natural phenomena, and abstract ideas”
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`because they “are the basic tools of scientific and technological work.” Alice, 134 S. Ct. at 2354
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`(internal quotation marks omitted). To determine patent eligibility under 35 U.S.C. §101, Alice
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`set forth a two-step test:
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`First, the Court must determine whether the claims at issue are directed to an abstract
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`idea or other patent-ineligible concept. Id. at 2355. Abstract ideas ineligible for patenting
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`include at least fundamental business practices, Alice, 134 S. Ct. at 2357, and methods for
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`organizing human activity, Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d
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`1363, 1367 (Fed. Cir. 2015). Here, the identification of abstract ideas can be facilitated by
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`“contrast[ing] claims ‘directed to an improvement in the functioning of a computer’ with claims
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`‘simply adding conventional components to well-known business practices.’” TLI Commc’n,
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`823 F.3d at 612. Ideas deemed abstract by the Federal Circuit have included tailoring a
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`website’s content to a user’s personal profile, because tailoring content based on a user’s identity
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`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 13 of 36 PageID #: 759
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`is a fundamental practice “long prevalent in our system.” Intellectual Ventures I, 792 F.3d at
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`1369. As the Federal Circuit explained:
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`[A] newspaper might advertise based on the customer’s location. Providing this
`minimal tailoring—e.g., providing different newspaper inserts based upon the
`location of the individual—is an abstract idea.
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`Id. Likewise, the Federal Circuit held that a patent claiming “[a] distributed system for accessing
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`and distributing electronic documents” was an abstract idea because it was drawn to the idea of
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`cataloguing implemented on a generic computer. Cloud Satchel, LLC v. Amazon.com, Inc., 76 F.
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`Supp. 3d 553, 562 (D. Del. 2014), aff’d sub nom. Cloud Satchel, LLC v. Barnes & Noble, Inc.,
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`626 F. App’x 1010 (Fed. Cir. 2015). Similarly, a system that forbade access to data unless
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`specified conditions were met was found to be a patent ineligible abstract idea. Ultramercial,
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`772 F.3d at 714-15.
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`Second, if a patent claims an abstract idea, the court must consider whether the claims
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`include additional elements, i.e., an inventive concept, sufficient to “‘transform the nature of the
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`claim’ into a patent-eligible application.” Alice, 134 S. Ct. at 2350 (quoting Mayo Collaborative
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`Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012)). An inventive concept cannot be
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`supplied by limiting an abstract idea “to a particular technological environment” or adding “well-
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`understood, routine, conventional activities previously known to the industry.” Id. at 2358-59
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`(internal quotation marks omitted). Instead, the asserted claims must “describe[] how [their]
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`particular arrangement of elements is a technical improvement over prior art ways of”
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`accomplishing the abstract ideas identified in step one of the Alice framework. Bascom, 827
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`F.3d at 1351.
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`Accordingly, simply using a computer “does not alter the analysis” in step two of the
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`Alice inquiry, as “the mere recitation of a generic computer cannot transform a patent-ineligible
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`abstract idea into a patent-eligible invention.” Alice, 134 S. Ct. at 2357-58; see also Affinity Labs
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`8
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`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 14 of 36 PageID #: 760
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`of Tex. v. DirecTV, LLC, No. 2015-1845 (Fed. Cir. Sept. 23, 2016) (“simply recit[ing] the user of
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`generic features . . . is not enough” to satisfy step two). Similarly, “merely disclos[ing] the use
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`of generic computer network technology to achieve an online variation of a well-established,
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`real-world practice” does not transform an abstract idea into a patent-eligible invention.
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`Intellectual Ventures I LLC v. J. Crew Group, Inc., No. 6:16-CV-196-JRG, 2016 WL 4591794,
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`at *4 (E.D. Tex. Aug. 24, 2016); see also buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355
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`(Fed. Cir. 2014) (“That a computer receives and sends the information over a network—with no
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`further specification—is not even arguably inventive.”).
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`Courts in this District have found numerous patents ineligible under the Alice
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`framework.4
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`IV. ARGUMENT
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`All of the asserted patents are patent ineligible because each fails the two-part Alice
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`framework, namely, each is directed to an abstract idea and lacks an inventive concept that can
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`transform any claim into a patent-eligible application. See Alice, 134 S. Ct. at 2350.
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`4 See J. Crew Group., Inc., 2016 WL 4591794; Preservation Wellness Techs. LLC v.
`Allscripts Healthcare Sols., No. 2:15-CV-1559-WCB, 2016 WL 2742379 (E.D. Tex. May 10,
`2016); Gonzalez v. Infostream Grp., Inc., No. 2:14-CV-906-JRG, 2016 WL 1643313 (E.D. Tex.
`Apr. 26, 2016); NexusCard, Inc., 2016 WL 1162180 (E.D. Tex. Mar. 24, 2016); Voxathon LLC
`v. Alpine Elecs. of Am., Inc., No. 2:15-CV-562-JRG, 2016 WL 260350 (E.D. Tex. Jan. 21, 2016);
`Orostream LLC v. ABS-CBN Int'l, No. 2:15-CV-248-JRG, 2015 WL 5836949 (E.D. Tex. Oct. 1,
`2015); eDekka LLC, 2015 WL 5579840 (E.D. Tex. Sept. 21, 2015); Telinit Techs., LLC v.
`Alteva, Inc., No. 2:14-CV-369, 2015 WL 5578604 (E.D. Tex. Sept. 21, 2015); Uniloc USA, Inc.
`v. E-MDS, Inc., No. 6:14-CV-00625-RWS, 2015 WL 10791906 (E.D. Tex. Aug. 19, 2015); Kroy
`IP Holds., LLC v. Safeway, Inc., 107 F. Supp. 3d 677 (E.D. Tex. 2015); Clear with Computers,
`LLC v. Altec Indus., Inc., No. 6:14-CV-79, 2015 WL 993392 (E.D. Tex. Mar. 3, 2015), aff'd, 636
`F. App'x 1015 (Fed. Cir. 2016); Loyalty Conversion Sys. Corp. v. Am. Airlines, Inc., 66 F. Supp.
`3d 829 (E.D. Tex. 2014); Clear with Computers, LLC, 21 F. Supp. 3d 758.
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`9
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`Case 2:16-cv-00741-RWS Document 70 Filed 11/07/16 Page 15 of 36 PageID #: 761
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`A.
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`Step One of the Alice Framework—All of the Asserted Patents Claim
`Abstract Ideas
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`The asserted patents should be found subject matter ineligible because they are directed
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`to fundamental business practices regarding providing tailored offerings to customers and
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`preventing non-customers from