1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 SMART AUTHENTICATION IP, LLC, Case No. 19-cv-01994-SI
10 Plaintiff, ORDER GRANTING DEFENDANT’S 11 v. MOTION TO DISMISS
12 ELECTRONIC ARTS INC., Re: Dkt. No. 21 13 Defendant.
14 15 Before the Court is a motion to dismiss brought by defendant Electronic Arts Inc. (“EA”), 16 which seeks a finding that U.S. Patent No. 8,082,213 (the “‘213 patent”) is invalid and patent- 17 ineligible under 35 U.S.C. § 101. Dkt. No. 21 (Motion to Dismiss). This matter came on for hearing 18 on August 9, 2019. Having read the papers and heard the parties’ arguments the Court hereby 19 GRANTS defendant’s motion, finding the ‘213 patent invalid under § 101 and dismisses the 20 complaint with prejudice. 21 22 BACKGROUND 23 On December 20, 2011, the ‘213 patent, entitled “Method and System for Personalized 24 Online Security,” was duly and lawfully issued by the U.S. Patent and Trademark Office. Compl. 25 ¶ 7. Plaintiff, Smart Authentication, is the assignee and owner of the right, title and interest in and 26 to the ‘213 patent. Compl. ¶ 8. The inventions of the ‘213 patent generally relate to methods and 27 systems for multi-factor authentication of users over multiple communications media. Compl. ¶ 9. Various embodiments of the present invention provide strong authentication of users 1 on behalf of commercial entities and other parties to electronic transactions. In these embodiments of the present invention, a user interacts with an authentication service 2 provider [“ASP”] to establish policies for subsequent authentication of the user. Thus, in these embodiments of the present invention, a user controls the level and 3 complexity of authentication processes carried out by the authentication service provider on behalf of both the user and commercial entities and other entities seeking 4 to authenticate the user in the course of conducting electronic transactions, electronic dialogues, and other interactions for which user authentication is needed. The 5 policies specified by a user may include specification of variable-factor authentication, in which the user, during the course of an authentication, provides 6 both secret information as well as evidence of control of a tangible object. 7 Dkt. No. 25-2 at 16 (‘213 Patent).! Figure 3 of the ‘213 patent provides a helpful illustration of 8 || one of the patent’s potential uses. Specifically, it models an interaction between a user, an ASP 9 client, and an ASP. /d. at 5. 10 11 12 ASP 310 308 L& 13 authorization request
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1 The ‘213 patent contemplates a user trying to login to the user’s account on a website, for 2 example. In order to strengthen the security of the user’s login credentials and protect the user’s 3 information, the user could be prompted to select an alternative form of authorization confirmation. 4 The user could select to confirm her authorization via a secondary medium, including, but not 5 limited to, a text message on her cell phone or an email. The secondary authenticating medium 6 would occur outside the purview of the initial login credentials. This second form of authentication 7 confirms the user’s identity. 8 Prior to filing the instant action, Smart Authentication was engaged in proceedings before 9 the Patent Trial and Appeal Board. Claim 11 emerged as the sole remaining claim following an 10 inter partes review (IPR). Dkt. No. 21 at 10, Footnote 2 (Motion to Dismiss); see also Dkt. Nos. 11 25-3 and 25-4 (Decision on Appeal and Final Written Decision, respectively, attached to the Shekhar 12 Vyas Declaration in Support of Opposition). Claim 11 is dependent upon claims 1, 9, and 10 (all of 13 which were invalidated in the IPR). The relevant claims read: 14 1. A user-authentication service implemented as routines that execute one or more computer systems interconnected by two or more communications media with both 15 an authentication-service client, and a user, the user-authentication service comprising: 16 the one or more computer systems; 17 stored user-authentication policies specified by the user; 18 stored user information; 19 account interface routines that implement an account interface by which the user 20 specifies, modifies, adds, and deletes user-authentication policies; and 21 authentication-interface routines that implement an authentication interface by which, following initiation of a transaction by the user with the authentication service 22 client, the authentication-service client submits an authentication request, through the first communications medium or through a second communications medium, to 23 authenticate the user, the authentication interface routines employing a variable- factor authentication, when specified to do so by stored user-authentication policies, 24 to authenticate the user on behalf of the authentication-service client during which the user communicates with the user-authentication service through a third 25 communications medium different from the first and second communications media and a user device different from that employed by the user to initiate the transaction 26 with the authentication-service client. 27 9. The user-authentication service of claim 1 wherein a user-authentication policy authentication processes carried out by the user-authentication service on behalf of 1 one or more, specified authentication-service clients. 2 10. The user-authentication service of claim 9 wherein constraints include one or more of: 3 geographical constraints; 4 time-of-day constraints; 5 date constraints; 6 communications -medium-related constraints; 7 user-authentication service actions; and 8 event constraints. 9 11. The user-authentication service of claim 10 wherein user-authentication service 10 actions include one or more of: 11 halting authorization service after detecting a specified event; 12 employing particular types of user-authentication procedures; and 13 providing alerts upon detecting specified events. 14 Dkt. No. 25-2 at 16-17 (‘213 Patent). 15 Plaintiff’s complaint, filed in April 2019, alleges a single cause of action for direct 16 infringement against defendant EA. Specifically, plaintiff alleges: 17 Without license or authorization and in violation of 35 U.S.C. § 271(a), Defendant is liable for infringement of claim 11 of the ‘213 patent by making, using, importing, 18 offering for sale, selling and/or hosting a method for authenticating a user that requires two-factor authentication, including, but not limited to Login Verification, 19 because each and every element is met either literally or equivalently. 20 Compl. ¶ 16. 21 22 LEGAL STANDARD 23 I. Motion to Dismiss 24 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if 25 it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 26 dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” 27 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard requires 1 unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While courts do not require “heightened 2 fact pleading of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the 3 speculative level.” Twombly, 550 U.S. at 555, 570. 4 To state a claim for patent infringement, “a patentee need only plead facts sufficient to place 5 the alleged infringer on notice. This requirement ensures that the accused infringer has sufficient 6 knowledge of the facts alleged to enable it to answer the complaint and defend itself.” 7 Phonometrics, Inc. v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 794 (Fed. Cir. 2000). The 8 Federal Circuit has “repeatedly recognized that in many cases it is possible and proper to determine 9 patent eligibility under 35 U.S.C. § 101 on a Rule 12(b)(6) motion.” Genetic Techs. Ltd. v. Merial 10 L.L.C., 818 F.3d 1369, 1373 (Fed. Cir. 2016). 11 12 II. Subject Matter Eligibility Under § 101 13 Under 35 U.S.C. § 101, the scope of patentable subject matter encompasses “any new and 14 useful process, machine, manufacture, or composition of matter, or any new and useful improvement 15 thereof.” Bilski v. Kappos, 561 U.S. 593, 601 (2010) (quoting 35 U.S.C. § 101). Section 101 16 “contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas 17 are not patentable.” Alice Corp. v. CLS Bank Int'l, 573 U.S. 208, 216 (2014) (quoting Ass'n for 18 Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)). They are not patent- 19 eligible because “they are the basic tools of scientific and technological work,” which are “free to 20 all men and reserved exclusively to none.” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 21 566 U.S. 66, 71 (2012) (citations omitted). The United States Supreme Court has explained that 22 allowing patents for such purported inventions “might tend to impede innovation more than it would 23 tend to promote it[,]” thereby thwarting the primary objective of patent laws. Id. 24 Alice provides the relevant analytical framework for “distinguishing patents that claim laws 25 of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications 26 of those concepts.” Alice, 573 U.S. at 217. First, the court must determine whether the claims at 27 issue are directed to one of the patent-ineligible concepts. Id. Second, if the claims are directed to 1 claim both individually and as an ordered combination to determine whether the additional elements 2 transform the nature of the claim into a patent-eligible application.” Id. (citation and quotation 3 marks omitted). Step two is often described “as a search for an 'inventive concept[.]’” Id. at 217- 4 18. “When viewing claim elements individually, the court must remember that recitation of 5 conventional, routine, or well-understood activity will not save an abstract claim.” California Inst. 6 of Tech. v. Hughes Commc'ns, Inc., 59 F. Supp. 3d 974, 980 (citing Alice, 573 U.S. at 223). 7 However, “[w]hen viewing claim elements as an ordered combination, the court should not ignore 8 the presence of any element, even if the element, viewed separately, is abstract.” Id. “If the ordered 9 combination of elements constitutes conventional activity, the claim is not patentable, but courts 10 should remember that a series of conventional elements may together form an unconventional, 11 patentable combination.” Id. 12 The Federal Circuit has recently held that “[w]hether something is well-understood, routine, 13 and conventional to a skilled artisan at the time of the patent is a factual determination.” Berkheimer 14 v. HP Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018). However, the Berkheimer court also clarified that 15 “[n]othing in this decision should be viewed as casting doubt on the propriety of those cases” 16 resolving § 101 inquiries on motions to dismiss or summary judgment, where there is no genuine 17 dispute over the underlying material facts. Id. “When there is no genuine issue of material fact 18 regarding whether the claim element or claimed combination is well-understood, routine, 19 conventional to a skilled artisan in the relevant field, this issue can be decided . . . as a matter of 20 law.” Id. “To the extent that the Court must resolve underlying questions of fact related to 21 eligibility, they must be proven by clear and convincing evidence.” Broadband iTV, Inc. v. Oceanic 22 Time Warner Cable, LLC, 135 F. Supp. 3d 1175, 1188 (D. Haw. 2015), aff'd sub nom. Broadband 23 iTV, Inc. v. Hawaiian Telcom, Inc., 669 F. App’x 555 (Fed. Cir. 2016) (citations omitted). 24 25 DISCUSSION 26 EA requests the Court dismiss this action, arguing that claim 11, the only claim that survived 27 the ‘213 patent IPR proceeding, claims patent-ineligible subject matter. Specifically, EA argues 1 Plaintiff opposes defendant’s motion on three grounds, namely: (1) unresolved issues of 2 claim construction and underlying factual disputes preclude summary disposition; (2) claim 11 of 3 the ‘213 patent is not abstract because “[i]t is directed to a computer-centric problem of reliable 4 authentication of remote users involved in electronic transactions to improve network security,” and 5 solves problems associated with the prior art; and (3) claim 11 “reflects an inventive concept, as it 6 provides a specific technological way to improve network security by reliably authenticating remote 7 users involved in electronic transactions,” and discloses “a specific, inventive combination of 8 elements to address known problems in prior art authentication systems.” Dkt. No. 25 at 5 9 (Opposition) ( bolding in original). 10 The parties’ arguments are discussed in turn below. 11 12 I. No Issues of Fact Preclude Summary Determination of Eligibility 13 Plaintiff argues the following issues of fact preclude summary determination: (1) paragraphs 14 9-12 of the complaint (Dkt. No. 25 at 11 (Opposition)); (2) the ‘213 patent’s specification, 15 explaining the shortcomings of prior authentication systems and how the alleged non-conventional 16 arrangement of the claimed invention solves these problems (Dkt. No. 25 at 10 (Opposition)); and 17 (3) claim construction (Id.). During the August 9, 2019 oral argument, when asked what, if any, 18 factual disputes existed precluding summary determination of eligibility, plaintiff again cited 19 paragraphs 9-12 of the complaint and stated claim construction would create issues of fact. 20 Transcript of August 9, 2019 Hearing at 8:16-25. The Court disagrees. 21 First, paragraphs 9-12 of the complaint merely summarize the ‘213 patent’s functionality, 22 stating in total: 23 9. The inventions of the ‘213 patent generally relate to methods and systems for multi-factor authentication of users over multiple communications mediums. 24 10. The ‘213 patent discloses an Authentication Service Provider (“ASP”), which “is 25 generally implemented above a software and hardware platform or platforms . . . that include operating systems, lower-level applications, and computer-server hardware." 26 Ex. A at col. 4, ll. 13-16. “In many embodiments, the ASP . . . is a software implemented service that runs on one or more computer systems interconnected by 27 various communications media with both ASP clients and users.” Id. at col. 2, ll. 47- communications media, such as a combination of the Internet and a cell phone.” Id. 1 at col. 3, ll. 23-25. 2 11. In another example of disclosed embodiments, “[t]he [] third interface 208 allows the ASP to interface with user devices through alternative communications media, 3 such as a cell phone, fax machine, telephone, or other communications devices. The third interface 208 allows the ASP to interface with virtually any network enabled 4 resource through an appropriate medium, including both physical devices such as a cell phone, fax machine, telephone, or other communications devices, and also soft 5 devices, such as an instant messaging account, or an email account.” Id. at col. 3, ll. 37-46. 6 12. As one example of the asserted claim, the ‘213 patent recites a novel method 7 of providing a user-authentication policy that specifies constraints associated with user authentication processes carried out by the user authentication service. The 8 constraints include different user-authentication service actions, such as 1) halting authorization service after detecting a specified event; 2) employing particular types 9 of user-authentication procedures; or 3) providing alerts upon detecting specified events. (bolding added) 10 The closest any language in paragraphs 9-12 comes to raising an issue of fact is the bolded language 11 in paragraph 12 above. But this is not enough. Although the Court must take the allegations in a 12 well-pleaded complaint as true at this stage, the Court is not required to accept as true “allegations 13 that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re 14 Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008); see also Uniloc USA Inc. v. LG Elecs. 15 USA Inc., 379 F. Supp. 3d 974, 986-87 (N.D. Cal. 2019) (finding § 101 issues properly addressed 16 in Rule 12 motion to dismiss where “[p]laintiffs’ second amended complaint features nothing but 17 conclusions by, for instance, calling the ‘049 Patent ‘novel and inventive.’”). 18 For the same reason, the patent’s specification—explaining shortcomings of prior 19 authentication systems and alleging that the non-conventional arrangement of the claimed invention 20 solves these problems—does not raise an issue of fact. In Cisco Sys. v. Uniloc USA, Inc., 386 F. 21 Supp. 3d 1185, 1192 (N.D. Cal. 2019), this Court rejected a nearly identical argument, and it does 22 so again here. 23 Finally, plaintiff’s claim construction argument also fails. Although the Federal Circuit has 24 stated “that it will ordinarily be desirable—and often necessary—to resolve claim construction 25 disputes prior to a § 101 analysis, for the determination of patent eligibility requires a full 26 understanding of the basic character of the claimed subject matter[,]” it has also stated that “claim 27 construction is not an inviolable prerequisite to a validity determination under § 101.” Bancorp 1 Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1273-74 (Fed. Cir. 2012). In 2 any event, looking to the proposed terms and proposed construction in plaintiff’s brief (see Dkt. No. 3 25 at 10 (Opposition)), the Court finds that construction of these terms would not aid or alter the 4 Court’s determination today regarding the subject matter eligibility of the ‘213 patent.2 5 The Court finds that in the circumstances of this case it is appropriate to resolve the question 6 of patent eligibility under § 101 on a Rule 12(b)(6) motion to dismiss. 7 8 II. Step 1: Abstraction 9 The Supreme Court has not articulated a definitive rule to determine what constitutes an 10 “abstract idea” sufficient to satisfy the first step of the Mayo/Alice inquiry. Rather, both the Federal 11 Circuit and the Supreme Court have compared the claims at issue to claims already found to be 12 directed to an abstract idea in previous cases. Alice, 527 U.S.. at 221 (“[The Court] need not labor 13 to delimit the precise contours of the ‘abstract ideas’ category in this case. It is enough to recognize 14 that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept 15 of intermediated settlement at issue here.”); see also Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 16 1334-1335 (Fed. Cir. May 12, 2016). Fundamental economic and conventional business practices 17 are often found to be abstract ideas, even if performed on a computer. See, e.g., OIP Techs., Inc. v. 18 Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015). Furthermore, a new application or 19 computer-implemented function that simply utilizes a computer generally as a tool to conduct a 20 known or obvious process will likely be considered abstract, whereas an application or computer- 21 implemented function that improves the capability of the system, will overcome or avoid 22 abstraction. Trading Techs. Int’l, Inc. v. CQG, Inc., 675 F. App’x 1001, 1005 (Fed. Cir. 2017). 23 For the action at bar, there are several cases directly on point to guide the analysis of the 24 ‘213 patent’s eligibility under § 101. First, in Asghari-Kamrani v. United Servs. Auto. Ass’n, No. 25
26 2 For purposes of the motion to dismiss, defendant accepted plaintiff’s proposed claim constructions as correct. Dkt. No. 26 at 18 (Reply Brief). Defendant points out, and the Court 27 agrees, that plaintiff’s claim constructions do not transform claim 11 into patentable subject matter. 1 2:15cv478, 2016 U.S. Dist. LEXIS 87065, at *3 (E.D. Va. July 5, 2016), affirmed by the Federal 2 circuit,3 the district court found a patent invalid where the patent was generally described as an 3 “invention relat[ing] to a system and method provided by a Central-Entity for centralized 4 identification and authentication of users and their transactions to increase security in e-commerce.” 5 The ‘213 patent—described by plaintiff as generally relating to “methods and systems for multi- 6 factor authentication of users over multiple communications mediums”—is very similar. Compl. 7 ¶ 9. The representative claim in the Asghari case stated: 8 A method for authenticating a user during an electronic transaction between the user and an external-entity, the method comprising: 9 receiving electronically a request for a dynamic code for the user by a computer 10 associated with a central-entity during the transaction between the user and the external-entity; 11 generating by the central-entity during the transaction a dynamic code for the user in 12 response to the request, wherein the dynamic code is valid for a predefined time and becomes invalid after being used; 13 providing by the computer associated with the central-entity said generated dynamic 14 code to the user during the transaction; 15 receiving electronically by the central-entity a request for authenticating the user from a computer associated with the external-entity based on a user-specific 16 information and the dynamic code as a digital identity included in the request which said dynamic code was received by the user during the transaction and was provided 17 to the external-entity by the user during the transaction; and 18 authenticating by the central-entity the user and providing a result of the authenticating to the external-entity during the transaction if the digital identity is 19 valid. 20 Id. at 5-6. With respect to the first Alice step, the court in Asghari ultimately concluded 21 [a]ll of the claims in the ‘432 patent require the use of a computer. … However, despite the electronic setting and purportedly Internet specific problem addressed, 22 the patent claims are directed to a common method for solving an old problem. The claims are directed to the abstract idea of using a third party and a random, time- 23 sensitive code to confirm the identity of a participant to a transaction. This formulation is admittedly verbose. It is verbose because the patent claims combine 24 two abstract ideas: the use of a third party intermediary to confirm the identity of a participant to a transaction and the use of a temporary code to confirm the identity 25 of a participant to a transaction. It is an obvious combination, and nothing about the combination removes the patent claims from the realm of the abstract. 26 Id. at 11 (emphasis added). The Asghari court’s reasoning is relevant to the case at bar. The ‘213 27 1 patent is highly similar to the abstract ideas emphasized in the quote above. The Asghari court 2 distinguished the patent there from patents that were not found to be abstract because the other 3 patents “were directed to an improvement in computer technology.” Id. at 14. Here, there is no 4 evidence that the ‘213 patent improves computer technology by making it faster, cheaper, or more 5 efficient. 6 The second case particularly on point is Strikeforce Techs., Inc. v. SecureAuth Corp., No. 7 LA CV17-04314 JAK (SKx), 2017 U.S. Dist. LEXIS 222516, at *4 (C.D. Cal. Dec. 1, 2017), aff’d, 8 753 F. App’x 914 (Fed. Cir. 2019). In that case, the patents in dispute were directed 9 to multichannel security systems and methods for authenticating a user seeking to gain access to a secure network. Such networks include those used for online 10 banking, social networking and business activities. This field of technology is related to “out-of-band” authentication, or “two-factor” or “multi-factor” authentication. 11 Id. (citations omitted). Again, this case involved highly similar subject matter to the ‘213 patent. 12 The plaintiff in Strikeforce made the same argument Smart Authentication makes here: that the 13 patent in question addressed a technology-specific problem by providing a technology-specific 14 solution. Dkt. No. 25 at 9 (Opposition) (“Thus, claim 11 provides a solution that is necessarily 15 rooted in computer technology to overcome a problem specific to electronic communications.”); 16 Strikeforce Techs., Inc., 2017 U.S. Dist. LEXIS 222516, at *9 (“Plaintiff argues that the Asserted 17 Claims address a technology-specific problem by providing a technology-specific solution.”). This 18 Court reaches the same conclusion as the court in Strikeforce: plaintiff has simply applied “familiar 19 processes in the context of the use of computers that are connected to the internet.” Strikeforce 20 Techs., Inc., 2017 U.S. Dist. LEXIS 222516, at *17. The ‘213 patent, like those in both Asghari 21 and Strikeforce, is abstract. 22 The third analogous case is Prism Technologies LLC v. T-Mobile USA, Inc., 696 Fed. Appx. 23 1014 (Fed. Cir. 2017). Generally, the patent there related to “systems and methods [controlling] access 24 to protected computer resources by authenticating identity data, i.e., unique identifying information of 25 computer components.” Id. at 1016. The Federal Circuit found Prism’s patent abstract, and because it 26 was directed to the abstract process of “(1) receiving identity data from a device with a request for access 27 to resources; (2) confirming the authenticity of the identity data associated with that device; (3) 1 determining whether the device identified is authorized to access the resources requested; and (4) if 2 authorized, permitting access to the requested resources.” Id. at 117. While Smart Authentication’s 3 patent involves authentication using two electronic media, and Prism’s used different servers, the 4 underlying principle is the same. 5 The ‘213 patent lacks specificity and amounts to generalized steps using generic computer 6 functionality. The patent describes a functional system and method that is not special in its 7 composition or unique in terms of its result. There are no technical details; rather, the ‘213 patent 8 offers a “myriad of software implementation choices” and a “wide variety” of communication 9 channels to implement claim 11. Dkt. No. 25-2 at 16 (‘213 Patent). The patent does not state how 10 it should be implemented. To the contrary, the ‘213 patent’s specification states: 11 [T]he ASP can be implemented in an almost limitless number of different ways, using different control structures, data structures, hardware and software platforms, 12 modular organizations, protocols, and any of various other myriad software implementation choices and parameters …. ASPs may run on single server 13 computers, on multi-processor systems, or on distributed computer systems. Multiple, geographically dispersed ASPs may be employed to efficiently handle 14 ASP-client-transaction requests received through any of a wide variety of different types of communications media. 15 Id. Thus, the ‘213 patent recites a method for authenticating a user in more than one way over 16 multiple electronic mediums but does not provide any “unconventional, patentable combination,” 17 such that straightforward steps to be done on a computer are transformed into something non- 18 abstract. California Inst. of Tech. v. Hughes Commc'ns, Inc., 59 F. Supp. 3d at 980. 19 Because the ‘213 patent is directed to the abstract idea of verifying the identify of a user in 20 more than one way over multiple communications mediums, the Court must proceed to Step 2 of 21 the Alice inquiry. 22
23 III. Step 2: Inventive Concept 24 At step two of the Alice framework, the court considers the elements of each claim and asks, 25 “what else is there in the claims before us?” Alice, 573 U.S. at 217. The Supreme Court describes 26 this process as searching for an “‘inventive concept’—i.e., an element or combination of elements 27 that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent 1 upon the [ineligible concept] itself.’” Id. at 217-18. For an abstract idea involving a computer to 2 be patent-eligible, “the claim ha[s] to supply a ‘new and useful’ application of the idea.” Id. at 222 3 (quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)); see also Diamond v. Diehr, 450 U.S. 175, 4 177 (1981) (validating a claim employing a mathematical equation used in a larger process designed 5 to solve a technological problem in the molding of rubber products). An inventive concept occurs 6 when the claims are “more than a drafting effort designed to monopolize the [abstract idea]” and 7 “claims may be read to ‘improve[ ] an existing technological process.’” Bascom Glob. Internet 8 Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1351 (Fed. Cir. 2016) (quoting Alice, 573 U.S. 9 at 221-23). The court’s task at step two “is to ‘determine whether the claims do significantly more 10 than simply describe [the] abstract method’ and thus transform the abstract idea into patentable 11 subject matter.” Affinity Labs of Tex. v. DIRECTV, LLC, 838 F.3d 1253, 1262 (Fed. Cir. 2016) 12 (citation omitted). 13 In its briefing and during the August 9, 2019 hearing, plaintiff argued its inventive concept 14 is “the arrangement of the claimed combination in order to have multiple devices and multiple 15 communications media in order to reliably authenticate remote users of electronic transactions.” 16 Dkt. No. 25 at 16 (Opposition); August 9, 2019 Trial Transcript 15:8-13. Thus, the purported 17 inventive concept simply restates the abstract idea the patent is directed to: verifying the identify of 18 a user in more than one way over multiple communications media. What is needed to pass muster 19 at step two of Alice is something “significantly more” than a description of the abstract idea itself, 20 as the Federal Circuit explained in Affinity Labs. 838 F.3d at 1262. That case involved a patent with 21 two independent claims “directed to streaming regional broadcast signals to cellular telephones 22 located outside the region served by the regional broadcaster.” Id. at 1255. After finding the claims 23 were directed to an abstract idea at step one, the court went on to find no inventive concept at step 24 two. The court explained, “The claim simply recites the use of generic features of cellular 25 telephones, such as a storage medium and a graphical user interface, as well as routine functions, 26 such as transmitting and receiving signals, to implement the underlying idea.” Id. at 1262. Using 27 well-known computer technology to authenticate a user – even using multiple electronic media to 1 Plaintiff makes three overarching arguments with respect to the ‘213 patent’s inventiveness: 2 (1) plaintiff argues that defendant’s “‘generic computer functionality’ test” fails because the ‘213 3 patent’s specific combination of multiple user devices and communications media allegedly 4 “transforms” the claim into a patent eligible application; (2) the ‘213 patent is inventive because it 5 addresses the problem of “eavesdropping in communications networks”; and (3) claim 1, upon 6 which claim 11 depends, “recites significant structural elements” that, according to plaintiff, amount 7 to an inventive concept. Dkt. No. 25 at 16-18 (Opposition). The Court disagrees. 8 First, the combination articulated in the patent is not transformative – especially because it 9 can be applied in a “limitless number of different ways.” Dkt. No. 25-2 at 16 (‘213 Patent). Second, 10 while the ‘213 patent very well may address a problem unaddressed by prior art, that alone does not 11 make the patent inventive. See Market Track, LLC v. Efficient Collaborative Retail Mktg., LLC, 12 No. 14 C 4957, 2015 U.S. Dist. LEXIS 75916, *23-25 (citing Parker v. Flook, 437 U.S. at 595 n.18 13 (“When evaluating inventiveness, ‘[t]he mere fact that a patent asserts that it represents an 14 improvement on prior art does not, of course, suffice. And ‘improvement,’ standing alone, is not in 15 any event the sine qua non of patentability … improvements must be the product of an inventive 16 concept.’”)). 17 Third, plaintiff’s structural elements argument fails – indeed, it is made half heartedly by 18 simply listing/quoting various portions of claim 1 and 11 without stating why or how these structural 19 elements amount to an inventive concept. Dkt. No. 25-2 at 16-17 (‘213 Patent). All the structural 20 elements listed (computer systems, interface routines, user devices, etc.) were well-known and 21 common place at the time the patent issued, and none provides a meaningful limitation. Alice, 527 22 U.S. at 226 (“As a result, none of the hardware recited by the system claims offers a meaningful 23 limitation beyond generally linking the use of the method to a particular technological environment, 24 that is, implementation via computers.”) (internal quotation omitted). Plaintiff argues that the 25 structural elements “even if determined to be ‘conventional,’ provide an ordered combination that 26 is significantly more technical than” defendant argues. Dkt. No. 25 at 17 (Opposition). Again, this 27 does not establish inventiveness, which seeks uniqueness and transformation, of which there is none 1 Plaintiff submitted Cellspin Soft Inc. v. Fitbit, Inc., No. 2018-1817 (Fed. Cir. June 25, 2019) 2 as supplemental authority, in support of its inventiveness argument. In Cellspin, the Federal Circuit 3 affirmed the district court’s finding of the patent’s abstraction, but reversed the district court on step 4 || 2, finding the patent at issue was in fact inventive. However, Cellspin does not advance plaintiffs 5 case in the action at bar. In that case, Cellspin argued its patent was inventive because it 6 || contemplated a less bulky and less expensive apparatus in terms of hardware — making it cheaper to 7 build — and was also less expensive for the user. Cellspin Soft Inc. v. Fitbit, Inc., No. 2018-1817 8 (Fed. Cir. June 25, 2019) at 18. Cellspin is also distinguished from the facts at bar because the 9 || ordered combination of elements was found to be inventive due to the combination fundamentally 10 || improving functionality. Smart Authentication has made no such showing here. 11 The Court finds no inventive concept such that the ‘213 patent, despite being directed to an 12 abstract idea, is transformed into patentable subject matter. Accordingly, the Court concludes that 5 13 claim 11 of the ‘213 patent is invalid under § 101. 14 CONCLUSION 16 For the foregoing reasons and for good cause shown, the Court hereby GRANTS EA’s 3 17 motion to dismiss with prejudice. IT IS SO ORDERED. 19 Dated: September 11, 2019 Site WU tee 20 SUSAN ILLSTON United States District Judge 22 23 24 25 26 27 28