Case 5:19-cv-00036-RWS Document 452-2 Filed 07/29/20 Page 1 of 13 PageID #: 25390
`Case 5:19-cv-00036—RWS Document 452-2 Filed 07/29/20 Page 1 of 13 PageID #: 25390
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`EXHIBIT N
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`EXHIBIT N
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`Case 2:17-cv-00660-WCB-RSP Document 96 Filed 10/31/18 Page 1 of 12 PageID #: 936Case 5:19-cv-00036-RWS Document 452-2 Filed 07/29/20 Page 2 of 13 PageID #: 25391
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`IDB VENTURES, LLC,
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`Plaintiff,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`§
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`MEMORANDUM OPINION AND ORDER
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`CHARLOTTE RUSSE HOLDINGS, INC.,
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`v.
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`Defendant.
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`Case No. 2:17-CV-660-WCB-RSP
`LEAD CASE
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`Before the Court is Defendant Academy, Ltd.’s Motion to Dismiss for Failure to State a
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`Claim, Case No. 2:17-cv-523, Dkt. No. 58, and Defendant The Buckle, Inc.’s Motion to Dismiss
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`for Failure to State a Claim, Case No. 2:17-cv-659, Dkt. No. 7. On October 17, 2018, the Court
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`held a hearing on various motions in this case, including the two motions to dismiss. After
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`considering the arguments made in the parties’ briefs and during the hearing, the Court DENIES
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`the motions.
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`BACKGROUND
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`Plaintiff IDB Ventures, LLC, owns U.S. Patent No. 6,216,139 (“the ’139 patent”), which
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`is entitled “Integrated Dialog Box for Rapidly Altering Presentation of Parametric Text Data
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`Objects on a Computer Display.” IDB has asserted claims 1, 2, and 19 of the ’139 patent against
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`defendants Academy, Ltd. (“Academy”), Case No. 2:17-cv-523, Dkt. No. 50, at ¶ 10, and The
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`Buckle, Inc. (“Buckle”), Case No. 2:17-cv-659, Dkt. No. 1, at ¶ 9. Claims 1 and 19 are
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`independent claims. Claim 2 depends from claim 1.
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`Claim 1 provides as follows:
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`1. A method for using a computer system to sort and display text data
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`objects, comprising the steps of:
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`a. imaging, on a display device controlled by the computer system, a
`query dialog box,
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`wherein the query dialog box displays each of a plurality of parameters
`associated with each of the text data objects, forms a plurality of spaces for listing
`values associated with each displayed parameter, and further forms a space for
`selecting a sort order;
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`b. designating, for each displayed parameter, a parameter value;
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`c. constructing a sort order from the displayed parameters in the space for
`selecting a sort order;
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`d. selecting, using the computer system, text data objects satisfying the
`designated values; and
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`e. sorting, using the computer system, the selected text data objects
`according to the constructed sort order.
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`Claim 2 adds the step of “imaging on the display device controlled by the computer a list
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`of the sorted text data objects.”
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`Claim 19 is similar to claim 1 but is set forth in means-plus-function form, see 35 U.S.C.
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`§ 112(f). Except for being directed to an apparatus rather than a method, the preamble and the
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`means-plus-function limitations of claim 19 correspond closely to the five steps of claim 1.
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`Claim 19 provides as follows:
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`19. A computer memory storage device encoded with a computer
`program for using a computer system to sort and display text data objects,
`comprising:
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`a. means for imaging, on a display device controlled by the computer
`system, a query dialog box,
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`wherein the query dialog box displays each of a plurality of parameters
`associated with each of the text data objects, forms a plurality of spaces for listing
`values associated with each displayed parameter, and further forms a space for
`selecting a sort order;
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`b. means for designating, for each displayed parameter, a parameter
`value;
`c. means for constructing a sort order from the displayed parameters in
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`the space for selecting a sort order;
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`d. means for selecting, using the computer system, text data objects
`satisfying the designated values; and
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`2
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`e. means for sorting, using the computer system, the selected text data
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`objects according to the constructed sort order.
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`The defendants have filed motions under Fed. R. Civ. P. 12(b)(6) to dismiss IDB’s
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`complaints for failure to allege infringement of a patentable claim.1 The defendants first contend
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`that the claims of the ’139 patent are directed to patent-ineligible subject matter “relating to the
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`abstract concept of obtaining user parameters for selection and sorting data, then selecting and
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`sorting data using those parameters.” Case No. 2:17-cv-523, Dkt. No. 58, at 1.2 In addition, the
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`defendants contend that IDB’s complaints fail to state a claim that the defendants’ websites
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`infringe the ’139 patent and that IDB’s failure to plead joint infringement is fatal to its
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`infringement claims. Id. at 2.
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`DISCUSSION
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`A. The motion to dismiss for failure to claim patent-eligible subject matter
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`The defendants contend that the claims of the ’139 patent “relate to the purely abstract
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`idea of obtaining user parameters for selecting and sorting data, then selecting and sorting data
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`using those parameters.” Case No. 2:17-cv-523, Dkt. No. 58, at 1. The Court disagrees.
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`Section 101 of the Patent Act, 35 U.S.C. § 101, states that “[w]hoever invents or
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`discovers any new and useful process, machine, manufacture, or composition of matter, or any
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`new and useful improvement thereof, may obtain a patent.” However, “[b]ecause patent
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`protection does not extend to claims that monopolize the ‘building blocks of human ingenuity,’
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`1 Defendant Academy’s motion, Case No. 2:17-cv-523, Dkt. No. 58, and defendant
`Buckle’s motion, Case No. 2:17-cv-659, Dkt. No. 7, are quite similar. While there are minor
`differences between the two motions, the defendants’ arguments addressed in sections A and B.1
`of this order are substantively identical. In those sections of this order, the Court will therefore
`refer to Academy’s motion as representative of both defendants’ arguments.
`2 Although the defendants challenge the patent eligibility of all the claims of the ’139
`patent, IDB has asserted only claims 1, 2, and 19. Therefore, only those claims are properly
`before the Court with respect to the issue of patent eligibility.
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`3
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`claims directed to laws of nature, natural phenomena, and abstract ideas are not patent eligible.”
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`Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356, 1361 (Fed. Cir. 2018) (citing
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`Alice Corp. Pty. v. CLS Bank Int'l, 134 S. Ct. 2347, 2354 (2014)). In order to determine whether
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`the claims of the ’139 patent are patent-eligible under section 101, the court “must first
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`determine whether the claims at issue are directed to a patent-ineligible concept,” such as an
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`abstract idea. Alice Corp., 134 S. Ct. at 2355. If the court finds that the claims are directed to an
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`abstract idea, the court must then examine the elements of the claims to determine whether they
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`contain “an inventive concept sufficient to transform the claimed abstract idea into a patent-
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`eligible application.” Id. at 2357 (internal quotations and citation omitted). If, instead, the court
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`determines that “the claims are directed to a patent-eligible concept, the claims satisfy § 101 and
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`[the court] need not proceed to the second step.” Core Wireless, 880 F.3d at 1361.
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`“The abstract ideas category embodies the long-standing rule that an idea of itself is not
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`patentable.” Data Engine Techs. LLC v. Google LLC, No. 2017-1135, 2018 WL 4868029, at *5
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`(Fed. Cir. Oct. 9, 2018) (internal quotations and citations omitted). In the context of computer-
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`related technology, the Federal Circuit has generally found inventions not to be abstract if they
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`are directed to specific improvements to computer functionality. See Enfish, LLC v. Microsoft
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`Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (“[W]e find it relevant to ask whether the claims are
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`directed to an improvement to computer functionality versus being directed to an abstract idea”);
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`see also Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1260 (Fed. Cir. 2017) (“The
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`claims in [Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Assn., 776 F.3d
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`1343 (Fed. Cir. 2014)] and [In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607 (Fed. Cir.
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`2016)] were not directed to an improvement in computer functionality, which separates the
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`claims in those cases from the claims in the current case”); Intellectual Ventures I LLC v. Erie
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`4
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`Indem. Co., 850 F.3d 1315, 1328 (Fed. Cir. 2017) (“[T]he claims are not focused on how usage
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`of the XML tags alters the database in a way that leads to an improvement in the technology of
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`computer databases”). The Federal Circuit has characterized the principle underlying that
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`distinction as embodying a requirement that a patent be directed to “specific technologic
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`modifications to solve a problem or improve the functioning of a known system.” Trading
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`Techs. Int'l, Inc. v. CQG, INC., 675 F. App'x 1001, 1004–05 (Fed. Cir. 2017).
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`In a series of cases, the Federal Circuit has applied that principle in finding specific user
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`interfaces in computer-related inventions to be patent-eligible and not abstract. In Core Wireless
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`Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356 (Fed. Cir. 2018), for example, the claims at
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`issue were related to “improved display interfaces, particularly for electronic devices with small
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`screens.” Id. at 1359. The court held that, as in the case of claims directed to an improvement in
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`computer functionality, the asserted claims were directed to “an improved user interface for
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`computing devices.” Id. at 1362. As opposed to prior art interfaces that “required users to drill
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`down through many layers to get to desired data or functionality,” the court found that the
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`invention “improve[d] the efficiency of using the electronic device by bringing together ‘a
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`limited list of common functions and commonly accessed stored data.’” Id. at 1363.
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`The Core Wireless court emphasized that the claims at issue in that case were directed to
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`“a particular manner of summarizing and presenting information in electronic devices.” Id. at
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`1362. The claimed manner of summarizing and presenting information included limitations on
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`the data listed in the application summary window, restraints on the type of data that can be
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`displayed in the summary window, and the particular state in which device applications must
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`exist. Id. at 1362–63. Based on that analysis, the court found the claims patent-eligible. The
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`court explained that “[l]ike the improved system[] claimed in Enfish . . . these claims recite a
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`specific improvement over prior systems, resulting in an improved user interface for electronic
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`devices.” Id. at 1363.
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`Similarly, in Data Engine Techs. LLC v. Google LLC, No. 2017-1135, 2018 WL 4868029
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`(Fed. Cir. Oct. 9, 2018), most of the claims before the court were directed to a specific method
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`enabling a user to navigate through three-dimensional electronic spreadsheets. The court held
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`that those claims were not directed to an abstract idea. Compared to the prior art, which
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`undercut the effectiveness of the computer, those claims in the Data Engine case were directed to
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`an interface that took the form of notebook tabs, which allowed users easy and intuitive access to
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`the electronic spreadsheet material. As the Data Engine court explained, the improvement
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`“allowed computers, for the first time, to provide rapid access to and processing of information
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`in different spreadsheets.” Data Engine, 2018 WL 4868029, at *6.
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`The court in Data Engine noted that representative claim 12 of one of the patents in suit
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`was “directed to more than a generic or abstract idea[,] as it claim[ed] a particular manner of
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`navigating
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`three-dimensional spreadsheets,
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`implementing an
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`improvement
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`in electronic
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`spreadsheet functionality.” Id. at *8. The court distinguished that claim from claim 1 of another
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`one of the patents in suit, which the court found to be directed to an abstract idea. The latter
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`claim, the court found, recited a more generic implementation of a user interface. See id. at *9
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`(“[I]t generically recites ‘associating each of the cell matrices with a user-settable page
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`identifier’ and does not recite the specific implementation of a notebook tab interface”) (citation
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`omitted). Thus, the court found claim 1 “not limited to the specific technical solution and
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`improvement in electronic spreadsheet functionality that rendered representative claim 12 . . .
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`patent eligible.” Id.
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`6
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`In Trading Technologies International, Inc. v. CQG, Inc., 675 F. App’x 1001 (Fed. Cir.
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`2017), the Federal Circuit addressed a patent that was designed to reduce the time it takes for a
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`securities or commodities trader to place a trade when electronically trading on an exchange. To
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`achieve that objective, the patent claimed a graphical user interface that included a dynamic
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`display for a plurality of bids and asks, as well as a static display of prices corresponding to the
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`bids and asks. The resulting interface displayed the bid and asked prices “dynamically along the
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`static display,” so that the display would “pair[] orders with the static display of prices and
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`prevent[] order entry at a changed price.” Id. at 1003. The court found the claims patent-eligible
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`because they provided a “specific . . . solution of a problem, or improvement in the functioning
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`of technology.” Id. at 1005.
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`Similarly, in DDR Holdings, Inc. v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), the
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`Federal Circuit encountered a patent directed to a computer system that made web pages look
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`alike in the display presented to the user, so that the user seeking to navigate from a host website
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`to a third-party website could instead be directed to a hybrid web page that contained product
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`information from the third-party website, but the visual “look and feel” from the host website.
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`The court held that the invention was patent-eligible, as it constituted an inventive solution for a
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`“particular Internet-centric problem.” Id. at 1259. The invention in DDR Holdings thus
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`provided a specific solution to a problem inherent in Internet marketing, i.e., generating a user
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`interface that achieved a technical objective with respect to user experience on a website.
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`By contrast, in Intellectual Ventures I LLC v. Erie Indemnity Co., the patent was directed
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`to “methods and apparatuses that use an index to locate desired information in a computer
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`database.” 850 F.3d at 1325. The court held that the invention was drawn to the abstract idea of
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`“creating an index and using that index to search for and retrieve data.” Id. at 1327 (internal
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`7
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`quotations and citation omitted). The court explained that “organizing and accessing records
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`through the creation of an index-searchable database [] includes longstanding conduct that
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`existed well before the advent of computers and the Internet.” Id. Importantly, as the Data
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`Engine court explained, the claims in Intellectual Ventures I “did not recite any specific structure
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`or improvement of computer functionality sufficient to render the claims not abstract.” Data
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`Engine, No. 2017-1135, 2018 WL 4868029, at *7.
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`Like the claims in Intellectual Ventures I, the claims at issue in Evolutionary Intelligence
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`LLC v. Sprint Nextel Corp., 677 F. App’x 679 (Fed. Cir. 2017), were merely “directed to
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`selecting and sorting information by user interest or subject matter.” Id. at 680. The Federal
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`Circuit in that case noted that “[w]hether analyzed individually or as an ordered combination, the
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`claims recite . . . conventional elements [of information containers, registers, and gateways] at
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`too high a level of generality to constitute an inventive concept.” Id.
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`The ’139 patent “relates generally to the field of information processing and display by
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`computers and, more particularly, to a computer-implemented method for sorting and displaying
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`text data objects that permits rapid re-sorting and re-formatting of displayed text data objects.”
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`’139 patent, col. 1, ll. 8-12. The defendants argue that the object of the invention “is to target the
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`generic concept of obtaining user parameters for selecting and sorting data, then selecting and
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`sorting data using those parameters.” Case No. 2:17-cv-523, Dkt. No. 58, at 6–7. IDB responds
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`that the defendants’ characterization of the ’139 patent “leaves out the crux of the invention—
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`that is the claims are direct[ed] to [a] specific implementation of a query dialog box.” Case No.
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`2:17-cv-660, Dkt. No. 44, at 9. The Court agrees with IDB.
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`The defendants ignore the specific improvement over prior systems, consisting of the use
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`of the query dialog box to facilitate the presentation, sorting, and selection of text data objects.
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`8
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`See ’139 patent, col. 13, ll. 43-47 (“the query dialog box displays each of a plurality of
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`parameters associated with each of the text data objects, forms a plurality of spaces for listing
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`values associated with each displayed parameter, and further forms a space for selecting a sort
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`order”). Rather than merely reciting a general method for selecting and sorting data (as in the
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`case of the generic claims in Intellectual Ventures I and Evolutionary Intelligence), claims 1 and
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`19 of the ’139 patent recite selecting and sorting data using a specific structure (i.e., a query
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`dialog box), which is designed in a particular manner to permit the construction of filters and sort
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`orders on the same screen. See Case No. 2:17-cv-660, Dkt. No. 72-7 (Appeal Br. to PTO) at 10
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`(“Unique data-modeling functionality . . . that arises when a user constructs filters and sort orders
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`on the same screen, and then is able to immediately review the filtered and sorted data”). Much
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`like the improved particular computer interface in Core Wireless and the improved particular
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`electronic spreadsheet functionality in Data Engine, the assignment of particular functions to the
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`query dialog box is specific enough to overcome the defendants’ contentions that the asserted
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`claims are so generic that they must be deemed to be directed to an abstract idea.
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`Because the defendants have failed to persuade the Court by the showing made in their
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`motion to dismiss that the asserted claims are directed to an abstract idea, the Court need not
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`proceed at this point to the second step of the Alice inquiry. See Core Wireless Licensing
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`S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356, 1363 (Fed. Cir. 2018). While further proceedings in
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`this case may shed additional light on this issue, for present purposes the Court concludes that
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`the defendants have not shown that the asserted claims are directed to patent-ineligible subject
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`matter. Accordingly, the Court DENIES the defendants’ motions to dismiss the complaints
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`based on patent ineligibility under 35 U.S.C. § 101.
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`9
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`B. The motion to dismiss for failure to state a claim for direct infringement
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`1. Whether the defendants’ websites infringe the ’139 patent turns on claim
`construction
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`The defendants argue that the asserted claims of the ’139 patent require that the
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`“displayed parameters” from which the patented invention constructs the “sort order” in “the
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`space for selecting a sort order” in limitation (c) must be the same as the “plurality of parameters
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`associated with each of the text data objects” in limitation (a) for each of which a parameter
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`value is designated in limitation (b). Case No. 2:17-cv-523, Dkt. No. 58, at 25–27. Because the
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`defendants assert that on their websites the sort order is constructed using parameters that differ
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`from the search parameters that are displayed in the query dialog box and are associated with
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`each of the text data objects, the defendants contend that the asserted claims, on their face, do not
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`read on defendants’ systems.
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`The Court previously addressed and rejected a similar motion by defendant DSW. Case
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`No. 2:17-cv-660, Dkt. No. 51. For the same reasons as set forth in that order, the Court rejects
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`the defendants’ arguments on this issue. As explained in the DSW case, the defendants’
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`argument depends on a claim construction issue that is not as clear-cut as the defendants suggest
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`and cannot be resolved based on the limited showing made in the motions to dismiss. See id.
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`2. Whether IDB must plead a joint infringement theory turns on claim
`construction
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`The defendants argue that IDB’s complaints should be dismissed because the complaints
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`do not adequately plead a claim of joint infringement. Case No. 2:17-cv-659, Dkt. No. 7, at 26–
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`27; Case No. 2:17-cv-523, Dkt. No. 58, at 27–29. IDB responds that it is not asserting a theory
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`of joint infringement, and that it does not need to rely on a theory of joint infringement in order
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`to prevail in this case. Case No. 2:17-cv-660, Dkt. No. 44, at 16.
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`10
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`The defendants’ argument that the asserted claims can be infringed only under a joint
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`infringement theory depends on a claim construction issue: whether “the ‘designating’ and
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`‘constructing’ steps (steps b and c) of claims 1 and 19 are performed by the end user of the
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`computer system.” Case No. 2:17-cv-659, Dkt. No. 7, at 26; Case No. 2:17-cv-523, Dkt. No. 58,
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`at 27–28. According to the defendants, because certain steps are performed by the end user and
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`others by the computer system, the plaintiff was required to plead joint infringement, and
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`because the plaintiff did not do so, the plaintiff’s infringement claims must be dismissed. In
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`addition, Academy argues that “IDB itself admits in the First Amended Complaint that this
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`dichotomy of agency exists.” Case No. 2:17-cv-523, Dkt. No. 58, at 28 (citing Case No. 2:17-
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`cv-523, Dkt. No. 50, at ¶ 9 (“When the user selects values for each parameter in the spaces
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`provided and constructs a sort order, the computer system then selects the text data objects”)).3
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`IDB disputes the defendants’ claim construction. Specifically, IDB contends that there is no
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`requirement that a user perform any step of any of the asserted claims. Case No. 2:17-cv-660,
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`Dkt. No. 44, at 16 (“It is IDB’s position that the claims are only directed [to] steps performed by
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`a computer”) (emphasis added).
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`This is clearly a claim construction issue. If the claims are construed to mean that an end
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`user is not required to perform certain steps (i.e., that all steps are performed by the computer
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`system), IDB would not be required to plead joint infringement. Alternatively, if the claims are
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`construed to require the end user to perform certain steps, IDB’s infringement pleadings—in
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`light of its disclaimer of intent to proceed on a joint infringement theory—would be deficient.
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`3 IDB’s complaint against Buckle does not include this language. See Case No. 2:17-cv-
`659, Dkt. No. 1, at 2. Although IDB has filed a motion to file an amended complaint against
`Buckle, Case No. 2:17-cv-660, Dkt. No. 90, that motion is opposed and has not yet been acted on
`by the Court.
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`11
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`As to the defendants’ reference to the role of the user in IDB’s First Amended Complaint,
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`the Court does not interpret that language as conceding that the user must perform certain steps
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`in order for Academy to infringe the asserted claims. Instead, paragraph 9 of IDB’s First
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`Amended Complaint against Academy merely summarizes a preferred embodiment of the
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`invention, in which a user is prompted to construct a sort order and select values for each
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`parameter. Importantly, IDB’s theory of infringement, discussed in paragraphs 13, 14, and 15 of
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`IDB’s First Amended Complaint, states that the Accused Instrumentality (i.e., Academy’s
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`website found at www.academy.com) performs each claim step. Case No. 2:17-cv-523, Dkt. No.
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`50, at ¶13–15. Accordingly, IDB does not concede a “dichotomy of agency” in paragraph 9 of
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`its First Amended Complaint against Academy.
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`The defendants’ motions to dismiss because IDB failed to state a claim for direct
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`infringement are therefore DENIED.
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`IT IS SO ORDERED.
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`SIGNED this 31st day of October, 2018.
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`_____________________________
`WILLIAM C. BRYSON
`UNITED STATES CIRCUIT JUDGE
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`12
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