A court has declined at the pleadings stage to hold patent-ineligible, under 35 U.S.C. § 101, patent claims directed to software controlling communications between a user modem and a telephone company modem. The court in Modern Telecom Sys. LLC v. Juno Online Servs., Case No. SA CV 14-0348-DOC (ANx) (C.D. Cal. Mar. 17, 2015), denied a motion under FRCP 12(c) for judgment on the pleadings alleging Section 101 invalidity with respect to U.S. Patents Nos. 6,504,886, 6,332,009, 6,570,932, 6,163,570, 7,062,022, and 5,970,100.
Claims of the various patents-in-suit were categorized as follows:
The court explained that it would hew to the framework set out by the Supreme Court in Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). Under this framework, if claims are directed to a non-patentable abstract idea, then it is necessary to determine if the claims contain an “inventive concept” – in other words, “an element or 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.’” Id. at 2355 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012)).
As an interesting threshold issue, the parties disagreed concerning the defendants’ burden in bringing the motion. The Plaintiff, relying upon 35 U.S.C. § 282(a), argued that “its patents are presumed valid” and that the defendants “bear the burden of proving by clear and convincing evidence that the patents claim patent-ineligible subject matter.” The court, however, agreed with the defendant that the “clear and convincing evidence standard” is a question of fact, and is not “necessarily applicable in the context of determining patent-eligibility under § 101, which is a question of law.” Ordinarily, evidence outside of the pleadings is not used to resolve a motion for judgment on the pleadings, and the court stated that it “makes little sense to apply a ‘clear and convincing evidence’ standard – a burden of proof – to such motions.” Nevertheless, the defendants as the moving party “still bear the burden of establishing” patent-ineligibility under § 101, and the court would construe the patent claims “in a manner most favorable to the Plaintiff.”
Here, the court thought that each of the methods described in six patents were be “conceptual in nature.” However, the court did not have to determine whether the patents were “‘directed to’ an abstract idea” because the defendants failed “to meet their burden of establishing that the patents” lacked an “inventive concept.”
That is, the defendants used general and conclusory descriptions when arguing the lack an inventive concepts for the representative claims. Claim characterizations such as “unlimited,” “so abstract and sweeping as to cover any and all uses of them,” and “recit[ing] nothing more than an ineligible concept” were given. The court concluded that the defendants failed to show “that the specific steps recited in the patents preempt all inventions concerning communicating between two modems.” Moreover, the claims here were like the claims in DDR Holdings, LLC v. Hotels.Com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014), that is, “necessarily rooted in computer technology” and solving a “problem specifically arising in the realm of computer networks.”
Lastly, the “software focus” of the patents was emphasized in efforts to direct attention to recent Federal Circuit cases where it might be construed that a rule had been established that “software is categorically patent-ineligible.” The court did not “interpret the cases” in that manner, and agreed with the court in California Inst. of Tech. v. Hughes Commc’ns Inc. (C.D. Cal. Nov. 3, 2014), that “software must be eligible under § 101.”
In sum, the court held that the Defendants failed “to meet their burden . . . [u]nder the current procedural posture.” The motion for judgment on the pleadings was denied without prejudice.
This case provides several good lessons. First, a motion for invalidity under 35 U.S.C. § 101 is like any other motion – the more it is supported with specific analysis, the better chance it has of success. Second, despite a general willingness of district judges to grant motions for patent-ineligibility under Section 101, such motions are not granted with a rubber stamp, and are certainly not granted just because patent claims cover computer software.
Thanks to law clerk Robert Billings for his first draft of this post.