Cisco Sys., Inc. v. Uniloc United States, Inc.
This text of 386 F. Supp. 3d 1185 (Cisco Sys., Inc. v. Uniloc United States, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
SUSAN ILLSTON, United States District Judge
Now before the Court is plaintiff/counter-defendant's motion for judgment on the pleadings, which seeks a finding that
BACKGROUND
On August 15, 2018, plaintiff/counter-defendant Cisco Systems, Inc. ("Cisco") filed this action against Uniloc USA, Inc., Uniloc 2017 LLC, and Uniloc Licensing USA LLC (collectively, "Uniloc" or "defendants/counter-claimants") seeking a declaration of non-infringement of
The '522 patent, titled "Ad Hoc Radio Communication System," contains the following abstract:
In an ad-hoc radio communication system comprising a plurality of stations formed into at least one network, each station is assigned a rank representative of its suitability for performing the role of master station in a network. The rank may for example be assessed depending on the performance of the station's antenna or its access to mains power. It is arranged that the station having the highest rank in a network performs the role of master for that network, thereby improving the efficiency of communication in the network.
FAC, Ex. A ("Patent") at cover page.1 The patent "relates to a radio communication system comprising a plurality of stations capable of forming an ad-hoc network" as typified in a Bluetooth system.
According to the specification, a problem with the prior art "is that it is possible for a station having an inefficient antenna to operate as the master."
Figure 3 of the patent "is a flow chart illustrating a method in accordance with the present invention for a new station joining an ad-hoc wireless network."
*1190Claim 6 of the '522 patent reads as follows:
A method of operating an ad-hoc radio communication system having a plurality of stations formed into at least one network, the method comprising the step of:
determining a master/slave rank of each station in the network representative of the station's suitability for acting as master in the network using antenna performance characteristics of each station in view of the antenna's local environment; and enabling a station with the highest rank to be master.
In its counter-claim, Uniloc alleges that Cisco infringed at least claim 6 of the '522 patent.
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SUSAN ILLSTON, United States District Judge
Now before the Court is plaintiff/counter-defendant's motion for judgment on the pleadings, which seeks a finding that
BACKGROUND
On August 15, 2018, plaintiff/counter-defendant Cisco Systems, Inc. ("Cisco") filed this action against Uniloc USA, Inc., Uniloc 2017 LLC, and Uniloc Licensing USA LLC (collectively, "Uniloc" or "defendants/counter-claimants") seeking a declaration of non-infringement of
The '522 patent, titled "Ad Hoc Radio Communication System," contains the following abstract:
In an ad-hoc radio communication system comprising a plurality of stations formed into at least one network, each station is assigned a rank representative of its suitability for performing the role of master station in a network. The rank may for example be assessed depending on the performance of the station's antenna or its access to mains power. It is arranged that the station having the highest rank in a network performs the role of master for that network, thereby improving the efficiency of communication in the network.
FAC, Ex. A ("Patent") at cover page.1 The patent "relates to a radio communication system comprising a plurality of stations capable of forming an ad-hoc network" as typified in a Bluetooth system.
According to the specification, a problem with the prior art "is that it is possible for a station having an inefficient antenna to operate as the master."
Figure 3 of the patent "is a flow chart illustrating a method in accordance with the present invention for a new station joining an ad-hoc wireless network."
*1190Claim 6 of the '522 patent reads as follows:
A method of operating an ad-hoc radio communication system having a plurality of stations formed into at least one network, the method comprising the step of:
determining a master/slave rank of each station in the network representative of the station's suitability for acting as master in the network using antenna performance characteristics of each station in view of the antenna's local environment; and enabling a station with the highest rank to be master.
In its counter-claim, Uniloc alleges that Cisco infringed at least claim 6 of the '522 patent. Cisco now moves for judgment on the pleadings, arguing that claim 6 of the '522 patent is invalid under
LEGAL STANDARD
I. Judgment on the Pleadings
Rule 12(c) of the Federal Rules of Civil Procedure permits a party to move to dismiss a suit "[a]fter the pleadings are closed ... but early enough not to delay trial." Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings is "functionally identical" to a Rule 12(b)(6) motion to dismiss for failure to state a claim. Dworkin v. Hustler Magazine, Inc. ,
Under § 282 of the Patent Act, issued patents are presumed to be valid.
II. Subject Matter Eligibility Under § 101
Under Section 101 of Title 35 of the United States Code, the scope of patentable subject matter encompasses "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." Bilski v. Kappos ,
Alice provides the relevant analytical framework for "distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts."
The Federal Circuit has recently held that "[w]hether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination." Berkheimer v. HP Inc. ,
DISCUSSION
Cisco seeks judgment on the pleadings, arguing that claim 6 of the '522 patent claims patent-ineligible subject matter, namely, that it is directed to an abstract *1192idea that lacks an inventive concept. Uniloc contests Cisco's characterization, arguing the patent "departs from the prior art with a specific technique to improve the functionality of radio communications systems that form ad-hoc networks[,]" that the patent is among those that "solve computer related problems by improving the functionality of computers[,]" and that recent Federal Circuit cases confirm that claim 6 is patent-eligible. Defs.' Opp'n at 1. Whether the patent is directed towards ineligible subject matter and whether there is nonetheless an inventive concept that transforms otherwise unpatentable subject matter are discussed in turn below. First, however, the Court discusses whether judgment on the pleadings is appropriate under the circumstances of this case.
I. Rule 12 Motion
Uniloc argues that Cisco's motion must fail because, at this stage, all of the allegations in Uniloc's counter-claim must be taken as true. Id. at 16-17. In particular, Uniloc cites to the portions of its counter-claim that allege that "[a] person of ordinary skill in the art reading the '522 patent and its claims would understand that the patent's disclosure and claims are drawn to solving a specific, technical problem arising from the evolution of ad-hoc radio communication systems[,] ... would understand that the claimed subject matter of the '522 patent presents advancements in the operation efficiency of ad-doc [sic] wireless networks[, and] ... would understand that claim 6 of the '522 patent contains the inventive concept of operating an ad-hoc radio communication system by determining a master/slave rank of each station in the network representative of the station's suitability for acting as master in the network using antenna performance characteristics of each station in view of the antenna's local environment and enabling a station with the highest rank to be master." See Suppl. Countercl. ¶¶ 13-14. As support for these statements, the counter-claim cites back to the patent specification.
Although it is correct that the Court must take the allegations in a well-pleaded complaint as true at this stage, the Court is not required to accept as true "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig. ,
Nor does Uniloc argue that the Court must conduct claim construction to determine the validity of the patent-in-suit. Although the Federal Circuit has stated "that it will ordinarily be desirable-and often necessary-to resolve claim construction disputes prior to a § 101 analysis, for the determination of patent eligibility requires a full understanding of the basic character of the claimed subject matter[,]" it has also stated that "claim construction is not an inviolable prerequisite to a validity determination under § 101." Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.) ,
*1193No. 44, the Court finds that construction of these terms would not aid or alter the Court's determination today regarding the subject matter eligibility of the '522 patent.2
The Court finds that in the circumstances of this case it is appropriate to resolve the question of patent eligibility under § 101 on a Rule 12(c) motion for judgment on the pleadings.
II. Abstract Idea
At step one of the Mayo / Alice test, a court must evaluate the patent claims "[o]n their face" and determine if the claims are directed to one of the three "patent-ineligible concepts": laws of nature, natural phenomena, or abstract ideas. Alice ,
For the reasons discussed below, the Court finds that claim 6 of the '522 patent is directed to the abstract idea of ranking stations based on antenna performance characteristics and selecting the station with the highest rank to act as master in a network.
Cisco argues that the asserted claim is directed to an abstract idea and cites to other Federal Circuit and district court cases that it states establish that "claims attempting to capture the organizing of data, e.g. , ranking stations according to a criterion, are abstract." Pl.'s Mot. at 7. Cisco asserts that two cases recently decided by Judge Koh and Judge Tigar of this district "are particularly instructive[.]" See
In Twilio , Judge Koh found a claim to be directed to an abstract idea where the patent-in-suit (the "Delivery Receipts Patent") related to "controlling messaging routing in the telephony messaging field."
courts will generally compare the claims at issue to prior § 101 cases, as well as consult several guideposts, including: (1) whether the claims are directed to an "improvement to computer functionality;" (2) whether the claims are directed to a "new and useful technique;" (3) whether the claims have an analogy to the brick-and-mortar world; and (4) whether the claims are directed to a mental process or a process that can be performed with a pen and paper.
Shortly thereafter, Judge Tigar examined a patent related to "a method for routing a call to a customer service representative at a call center based on information about the caller and the available representatives." 24/7 Customer ,
A method for routing an incoming call to a customer service representative comprising the steps of:
identifying the caller of the incoming call;
retrieving a profile on the caller;
comparing the caller profile with stored customer service representative profiles *1195to determine which customer service representatives are more qualified to handle the incoming call;
ranking the customer service representatives that can best meet the caller's needs;
routing the incoming call to a selected highest ranked customer service representative; and
automatically updating, at the completion of the call, the caller profile and the selected customer service representative profile with information regarding the success of the call.
This Court agrees with Cisco that the claims in Twilio and 24/7 Customer are analogous to the claim at issue here. The claims in those cases, as is the claim here, were directed to abstract ideas related to the ranking of information (whether message routing data, customer service representative profiles, or antenna performance) and taking subsequent action (whether routing of a delivery receipt, the selection of a customer service representative, or the selection of a master station) based on those rankings. As in Twilio , the patent here finds analogy in the brick and mortar world. Using the analogies that Judge Koh employed, the '522 patent purports to rank stations based on antenna performance, just as a prospective diner could rank restaurant choices based on the numbers of stars awarded by online reviewers.
Additionally, the example of ranking antenna performance that the specification uses could be performed by a mental process. The specification gives the following "example of a system in accordance with the present invention":
a Bluetooth piconet comprising three devices: a laptop PC using antennas located in a slot-in PC card; a wireless headset; and a home telephony base station. The base station has the highest ranking antenna system, because of its size, possibly diversity, and a position that is not badly shadowed. The PC card has a miniature antenna and is shadowed by the PC, and therefore has a lower ranking antenna. The headset includes a very small and inefficient antenna with losses to the user's head, significant shadowing and poorly defined polarisation, and therefore has the lowest ranking antenna.
Initially the network begins with communication between the PC and the headset. Because of its higher antenna ranking the PC becomes master in this piconet. When the base station joins the network, for example to enable Internet access by the PC, the base station will become master because it has the highest ranking antenna.
'522 patent at 3:38-50. Nothing in the patent's process for ranking the antennas of the various devices or for making one of them the master describes anything that *1196cannot be done manually or with a mental process. Even to a lay user, the superiority of the PC's antenna to that of the headset would be obvious. The fact that ranking the antennas and preferencing the one with the highest performance could be done by a human performing a mental process thus further supports a finding that the '522 patent is directed to an abstract idea. See Intellectual Ventures I LLC v. Symantec Corp. ,
The Court finds further support in the Federal Circuit cases on which Twilio and 24/7 Customer rely. For instance, in In re TLI Commc'ns, LLC Patent Litig. ,
Where in TLI Communications the claim was directed to the abstract idea of classifying and storing digital images in an organized manner, here the claim relates to classifying (or ranking) stations in an organized manner (i.e., based on antenna performance). As in TLI Communications , the patent-in-suit utilizes "physical components [that] merely provide a generic environment in which to carry out the abstract idea." See TLI Commc'ns ,
A basic ad-hoc network configuration is illustrated in FIG. 1. Such a configuration would typically begin with two connected host devices, for example a portable PC and a cellular phone, and grow to include additional connected devices. A wide range of additional host devices may be included, for example wireless headsets, personal organisers and home entertainment equipment.
Id. at 2:16-22 (emphases added). None of these components represents an inventive solution, nor is any one of them even necessary to the patent-they are already existing devices used simply to show how the abstract idea may be carried out. See Uniloc ,
Uniloc states that Cisco ignores binding precedent from the Federal Circuit, some of which post-dates the district court decisions in Twilio and 24/7 Customer , and that those cases show that claim 6 of the '522 patent is patent-eligible. In particular, Uniloc focuses on four cases: SRI Int'l, Inc. v. Cisco Sys., Inc. ,
Uniloc first argues that Finjan supports the patent eligibility of claim 6. Defs.' Opp'n at 6-7. There, the Federal Circuit affirmed the district court's finding that a patent was not directed to an abstract idea where it was "directed to a method of providing computer security by scanning a downloadable and attaching the results of that scan to the downloadable itself in the form of a 'security profile.' " Finjan ,
1. A method comprising:
receiving by an inspector a Downloadable;
generating by the inspector a first Downloadable security profile that identifies suspicious code in the received Downloadable; and
linking by the inspector the first Downloadable security profile to the Downloadable before a web server makes the Downloadable available to web clients.
At the hearing in this case, Uniloc likened claim 6 of the '522 patent to the claim found eligible in Finjan by arguing that claim 6 represents a technological solution to a technological problem. When asked to identify the technological solution, Uniloc stated that it is "the using of antenna performance characteristics in view of the local environment" as the method for determining a station's rank. But unlike in Finjan , where the Federal Circuit found that the method of the claim "employ[ed] a new kind of file," Uniloc has been unable to identify any technological solution beyond the idea of using antenna performance characteristics as a way of ranking stations. Finjan ,
The Court disagrees with Uniloc that "Claim 6 explains exactly how to achieve the desired result of a more operationally efficient ad-hoc network[.]" See Defs.' Opp'n at 7. Claim 6 recites the functions of "determining a master/slave rank of each station in the network ... using antenna performance characteristics" and "enabling a station with the highest rank to be master" but fails to provide any technical details on how this is achieved. See '522 Patent at 6:8-13. Claim 6 is more like the line of cases that the Finjan court distinguished and that stand for a "foundational patent law principle: that a result, even an innovative result, is not itself patentable." See
The remainder of the cases Uniloc cites are of little assistance to the Court's § 101 analysis, as the claims in those cases are directed to entirely different subject matters than the one at issue here. In SRI International , the Federal Circuit affirmed the district court's denial of summary judgment to a competitor (Cisco) challenging under § 101 the eligibility of patents related to monitoring and surveillance of computer networks for intrusion detection.
Uniloc also relies on the Data Engine decision, but as Cisco notes, Uniloc omits the portion of the decision finding some of the patents-in-suit ineligible under § 101 because they failed the two-step Alice test. See Defs.' Opp'n at 11-12; Pl.'s Reply at 8-10. In Data Engine , the Federal Circuit found that claims "directed to a specific improved method for navigating through complex three-dimensional electronic spreadsheets," specifically by the creation of "notebook tabs" located along the bottom edge of the page, were not abstract under Alice step one.
Instead, the Court agrees with Cisco that claim 6 bears more similarity to one of the claims that the Data Engine court found directed to an abstract idea. That claim at heart embodied the concept of "manually tracking modifications across multiple spreadsheets[,]" and "[t]he mere automation of this process [did] not negate its abstraction."
*1200This claim is far more like the one the Data Engine court found ineligible than it is like the "notebook tab" patent that the court found eligible. Notably, of all the cases that Uniloc cites as demonstrating the patent eligibility of claim 6, none involve sorting information, ranking information, or selecting an option based on ranked information such as antenna performance.
For all of the above reasons, the Court finds that claim 6 is directed to an abstract idea and therefore proceeds to step two of the Mayo / Alice test.
III. Inventive Concept
At step two of the Alice framework, the court considers the elements of each claim and asks, "what else is there in the claims before us?" Alice ,
Uniloc argues that the specification "reveals the inventive concept: forming an ad-hoc network that enables the station in the piconet with the highest rank based on antenna performance characteristics to act as master." Defs.' Opp'n at 17. But this is nothing more than a restatement of the idea of ranking and selecting devices based on antenna performance characteristics that the Court found to be abstract at step one. Uniloc says the appropriate inquiry "is whether the claimed technique for forming an ad-hoc network is conventional." Id. The problem here is that nothing in the claim or the specification explains the technique in anything more than broad, generalized, functional terms. In this way, claim 6 "do[es] not recite anything more than simply stating the abstract idea while adding the words 'apply it.' " See Data Engine ,
Uniloc disputes Cisco's attack that claim 6 fails because it doesn't explain how the antenna performance is measured or how those measurements are used to determine the highest ranking station. See Pl.'s Mot. at 11-12; Defs.' Opp'n at 18. Uniloc states that claim 6 "details exactly 'how' to form an ad-hoc network more efficiently-enable the station in the piconet with the highest rank based on antenna performance characteristics to act as master." Defs.' Opp'n at 18. But claim 6 does not detail "how" to do this, beyond reciting the general steps of "determining" (or ranking) stations based on antenna performance *1201characteristics and "enabling" (or selecting) the station with the highest rank to be master. None of these claim elements, viewed individually or as an ordered combination, provide an inventive concept. See Two-Way Media Ltd. v. Comcast Cable Commc'ns, LLC ,
Moreover, neither the claim nor the specification provides for implementation of the abstract idea using anything other than existing, conventional technology. The specification describes the invention in this way:
The selection of master station requires the stations to compare their rankings. One way in which this can be accomplished is for the master station to request each of the other stations to provide their rankings, using standard Bluetooth communication protocols. If the master station determines that its ranking is lower than one of its slave stations then it hands over the master role to that station, using the normal methods defined in the Bluetooth specification.
'522 Patent at 3:24-32 (emphases added). The specification also relies on conventional and generic hardware to carry out the method: for instance, a laptop PC, a wireless headset, and a home telephony base station; or a mobile phone and a UMTS (Universal Mobile Telecommunication System) enabled laptop computer. See, e.g., id. at 3:38-42, 4:23-26.
But, "after Alice , there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible." DDR Holdings LLC v. Hotels.com, L.P. ,
What is needed to pass muster at step two of Alice is something "significantly more" than a description of the abstract idea itself, as the Federal Circuit explained in Affinity Labs. 838 F.3d at 1262. That case involved a patent with two independent claims "directed to streaming regional broadcast signals to cellular telephones located outside the region served by the regional broadcaster." Id. at 1255. After finding the claims were directed to an abstract idea at step one, the court went on to find no inventive concept at step two. The court explained, "The claim simply recites the use of generic features of cellular telephones, such as a storage medium and a graphical user interface, as well as routine functions, such as transmitting and *1202receiving signals, to implement the underlying idea." Id. at 1262. So too here, where claim 6 and the specification as a whole simply use existing Bluetooth technology and existing hardware as the generic environment for implementing the abstract idea of ranking and selecting stations based on antenna performance characteristics. See Uniloc ,
As in Affinity Labs , the claim here is "so result-focused, so functional, as to effectively cover any solution to an identified problem[.]" See 838 F.3d at 1265 (citing Elec. Power Grp. ,
Accordingly, the Court concludes that claim 6 of the '522 patent is invalid under § 101.
CONCLUSION
For the foregoing reasons and for good cause shown, the Court hereby GRANTS Cisco's motion for judgment on the pleadings. The parties are directed to file a joint statement identifying the issues which remain to be decided in this case and proposing a schedule for same. Such joint statement must be filed no later than May 15, 2019.
IT IS SO ORDERED.
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386 F. Supp. 3d 1185, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cisco-sys-inc-v-uniloc-united-states-inc-cand-2019.