Teradata US, Inc. v. SAP SE

• Court: District Court, N.D. California
• Decided: February 1, 2021
• Docket: 3:20-cv-06127
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 TERADATA US, INC., Case No. 20-cv-06127-WHO

8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS

10 SAP SE, et al., Re: Dkt. No. 34 Defendants. 11

12 Defendants SAP SE, SAP America, Inc., and SAP Labs, LLC (SAP) move to dismiss the 13 patent infringement claims brought by plaintiff Teradata US, Inc. (Teradata) under U.S. Patent No. 14 ʼ7,185,000 (ʼ000 Patent) under Alice Corp. Pty. Ltd. v. CLS Bank Intern., 573 U.S. 208 (2014) 15 (Alice), arguing that the ʼ000 Patent is directed to abstract mental processes or mathematics and 16 therefore fails to claim patent-eligible subject matter under 35 U.S.C. § 101.1 SAP contends that 17 the claims of the ʼ000 Patent are aimed at the “abstract idea” of providing a graphical display of 18 selected information when creating and analyzing queries produced by massively parallel 19 databases having multiple virtual processors. This graphical display was meant to assist database 20 administrators who were formally using textual representations that were dense and hard to parse. 21 SAP argues that the invention is simply a method of graphically displaying information and is 22 patent-ineligible. Teradata responds that the ʼ000 Patent is not limited to the presenting and 23 display innovations – that standing alone would not be protected from an Alice challenge – but 24 covers innovative steps to determine the query execution plans and running of the queries on 25

26 1 In its First Amended Complaint (FAC), Teradata alleges SAP infringes five patents. Dkt. No. 32 (alleging infringement of United States Patent No. 6,763,357 (the ’357 Patent), United States 27 Patent No. 7,185,000 (the ’000 Patent), United States Patent No. 7,904,419 (the ’419 Patent), 1 parallel systems using virtual processors. 2 For the reasons, discussed below, I agree with SAP and GRANT the motion to dismiss 3 under Alice. I DENY the other part of SAP’s motion that Teradata’s allegations of indirect 4 infringement are insufficient for each of the five patents at issue. As discussed below, Teradata’s 5 allegations regarding SAP’s knowledge and intent are sufficient at this juncture. 6 BACKGROUND 7 The ʼ000 Patent is titled “Method And Apparatus For Presenting Query Plans.” Dkt. No. 8 32-2. Claim 1 describes: 9 1. A method of presenting an execution plan for a query, 10 comprising: determining steps of the query execution plan for a parallel 11 database system; displaying the steps of the query execution plan in a graphical 12 user interface; and depicting parallel execution of steps of the query execution 13 plan in the graphical user interface, wherein depicting the parallel execution of steps comprises 14 displaying plural elements corresponding to concurrently executing plural steps on respective processors of the parallel database system; 15 and wherein determining the steps comprises determining steps of 16 the query execution plan for the parallel database system running in a platform having plural virtual processors to handle access to data in 17 the parallel database system. 18 Claim 1, ʼ000 Patent. 19 Claims 19-25 describe:

20 19. A system comprising: a graphical user interface; and a controller to determine an execution plan of a query based 21 on emulation data that emulates an environment of a target system in which a parallel database system is implemented, 22 the controller to display a representation of the execution plan in the graphical user interface. 23 20. The system of claim 19, wherein the emulation data comprises cost-related information including a number of nodes in 24 the target system and a number of CPUs in each node. 21. The system of claim 19, wherein the emulation data 25 comprises cost-related information including a number of virtual processors running in the target system. 26 22. The system of claim 19, wherein the emulation data comprises cost-related information relating to costs of doing 27 operations in the target system. system. 1 24. The system of claim 19, wherein the emulation data represents a target system running plural virtual processors for 2 handling access to the parallel database system. 25. An article comprising one or more storage media 3 containing instructions that when executed cause a controller to: determine an execution plan of a query for a parallel database 4 system; display the steps of the execution plan in a graphical user interface; and depict parallel execution of steps of the execution plan 5 in the graphical user interface, wherein depicting the parallel execution of steps comprises 6 displaying plural elements corresponding to concurrently executing plural steps on respective processors of the parallel database system; 7 and wherein the instructions when executed cause the controller to 8 receive environment information to emulate a target database system. 9 Claims 19-25 ʼ000 Patent. 10 LEGAL STANDARD 11 I. MOTION TO DISMISS 12 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint 13 if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 14 dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its 15 face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). A claim is facially plausible 16 when the plaintiff pleads facts that “allow the court to draw the reasonable inference that the 17 defendant is liable for the misconduct alleged.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 18 (2009) (citation omitted). There must be “more than a sheer possibility that a defendant has acted 19 unlawfully.” Id. While courts do not require “heightened fact pleading of specifics,” a plaintiff 20 must allege facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550 21 U.S. at 555, 570. 22 In deciding whether the plaintiff has stated a claim upon which relief can be granted, a 23 court accepts the plaintiff’s allegations as true and draws all reasonable inferences in favor of the 24 plaintiff. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court 25 is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of 26 fact, or unreasonable inferences.” See In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 27 2008). 1 place the alleged infringer on notice. This requirement ensures that the accused infringer has 2 sufficient knowledge of the facts alleged to enable it to answer the complaint and defend 3 itself.” Phonometrics, Inc. v. Hospitality Franchise Sys., Inc., 203 F.3d 790, 794 (Fed. Cir. 2000). 4 The Federal Circuit has “repeatedly recognized that in many cases it is possible and proper to 5 determine patent eligibility under 35 U.S.C. § 101 on a Rule 12(b)(6) motion.” Genetic Techs. 6 Ltd. v. Merial L.L.C., 818 F.3d 1369, 1373 (Fed. Cir. 2016). 7 II. PATENT ELIGIBILITY UNDER 35 U.S.C. § 101 8 Under Section 101 of the Patent Act, “Whoever invents or discovers any new and useful 9 process, machine, manufacture, or composition of matter, or any new and useful improvement 10 thereof, may obtain a patent therefor . . . .” 35 U.S.C. § 101. The Supreme Court has long held 11 “that this provision contains an important implicit exception: Laws of nature, natural phenomena, 12 and abstract ideas are not patentable.” Alice Corp. Pty. Ltd., 573 U.S. at 216 (internal quotation 13 omitted). The reason for the exception is clear enough – “such discoveries are manifestations of . . 14 . nature, free to all men and reserved exclusively to none.” Mayo Collaborative Servs. v. 15 Prometheus Labs., Inc., 566 U.S. 66, 71 (2012) (citations and internal quotation marks omitted). 16 The boundaries of the exception, however, are not so clear. 17 The Alice court highlighted “the concern that drives this exclusionary principle as one of 18 preemption.” Alice, 573 U.S. at 216 (noting the delicate balance inherent in promoting progress, 19 the primary object of patent law, and granting a monopoly, the means for accomplishing that 20 goal). In other words, patents that seek to wholly preempt others from using a law of nature or an 21 abstract idea – “the basic tools of scientific and technological work” – are invalid. Id. 22 “Accordingly, in applying the § 101 exception, we must distinguish between patents that claim the 23 buildin[g] block[s] of human ingenuity and those that integrate the building blocks into something 24 more, thereby transform[ing] them into a patent-eligible invention.” Id. (internal citations and 25 quotation marks omitted). 26 The Alice Court laid out a two-step process for assessing whether claims are patent 27 eligible. Under Alice step one, a court must first “determine whether the claims at issue are 1 inquiry applies a stage-one filter to claims, considered in light of the specification, based on 2 whether their character as a whole is directed to excluded subject matter.” Enfish, LLC v. 3 Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (internal quotation marks omitted). 4 Although there is no bright-line rule for determining whether a claim is directed to an abstract 5 idea, courts have articulated some guiding principles. When evaluating computer-related claims, 6 courts may look at whether the claims “improve the functioning of the computer itself,” Alice, 7 573 U.S. at 225, or whether “computers are invoked merely as a tool” to implement an abstract 8 process. Enfish, 822 F.3d at 1336. 9 If claims are directed to a patent-ineligible concept, under Alice step two courts must 10 “consider the elements of each claim both individually and as an ordered combination to 11 determine whether the additional elements transform the nature of the claim into a patent-eligible 12 application.” Id. at 1334 (internal quotation marks and citations omitted). This step entails the 13 “search for an inventive concept—i.e., an element or combination of elements that is sufficient to 14 ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible 15 concept] itself.” Alice, 573 U.S. at 218 (internal quotation marks and citations omitted). “For the 16 role of a computer in a computer-implemented invention to be deemed meaningful in the context 17 of this analysis, it must involve more than performance of well-understood, routine [and] 18 conventional activities previously known to the industry.” Content Extraction & Transmission 19 LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343, 1347-48 (Fed. Cir. 2014). “[T]he mere recitation 20 of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible 21 invention.” Id. at 1348. However, “an inventive concept can be found in the non-conventional 22 and non-generic arrangement of known, conventional pieces.” BASCOM Glob. Internet Servs., 23 Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016). 24 DISCUSSION 25 I. ALICE CHALLENGE 26 Under the first step of the Alice framework, SAP argues that the ʼ000 Patent is directed to a 27 patent-ineligible concept; namely the display of data. SAP contends that the ʼ000 Patent claims 1 environment of “massively parallel databases having multiple virtual processors.” As support, 2 SAP relies on the language of claim 1 discussing the “method of presenting an execution plan for 3 a query” comprising “displaying the steps of the query execution plan in a graphical user 4 interface” and “depicting parallel execution of steps of the query execution plan in the graphical 5 user interface,” wherein “depicting the parallel execution of steps comprises displaying plural 6 elements corresponding to concurrently executing plural steps on respective processors of the 7 parallel database system.” ʼ000 Patent 12:60-66 (emphasis added). 8 SAP also points to the title and “technical field” descriptions of the Patent (“Method And 9 Apparatus For Presenting Query Plans”) and the abstract (focusing on the “visual explain and 10 compare module to display the steps of the execution plan in a graphical user interface,” parallel 11 execution of steps “can be depicted in the graphical user interface,” “plural execution plans for a 12 given query under different conditions may be displayed for comparison”) (emphasis added). ʼ000 13 Patent 1:1-6; Abstract. SAP highlights the Patent figures’ almost sole focus on the “visual explain 14 and compare” function and points to the text in the specification explaining the problem solved by 15 the ʼ000 Patent (“However, as the complexity of the execution plans grows, a more sophisticated 16 mechanism is needed to depict query execution plans” (emphasis added)), a well as the Patent’s 17 summary emphasizing the “display” and “depiction” of plans as the identified features of 18 embodiments disclosed in the Patent. Id. 1:57-63; 2:10-29. 19 Teradata does not dispute that if the inventive concept of the ʼ000 Patent was only the 20 graphic display or depiction of optimized query results, it would be directed to a patent-ineligible 21 concept. Instead, it argues that the inventive aspects of the ʼ000 Patent go beyond the graphical 22 display of data and include the elements of “determining steps of the query execution plan for a 23 parallel database system” and then displaying those results, performing this while the database is 24 running on parallel nodes of a system with virtual processors. Opposition [Dkt. No. 39] at 2.2 25 Teradata contends that these added elements – determining the execution plan and the required use 26

27 2 Both sides agree that claims 4-9, 11, 13-18, and 27 rise and fall with the analysis of claim 1. 1 of virtual processors on massive parallel systems – were necessary to improve database 2 functionality and enable a larger amount of parallelism in the parallel system.3 3 Other than this limited aspect of claim 1’s language and one quote from the specification 4 regarding the use of virtual processors in an embodiment, Teradata relies on one portion of the 5 patent prosecution history. It points to the history where the USPTO Board of Patent Appeals 6 concluded that the claim that eventually issued as claim 1 was not obvious over prior art because 7 its last “wherein determining” step specifically required a parallel database running in a platform 8 having “plural virtual processors.” 2006 Pat. App. LEXIS 2411, *14 (Comm’r Pat. & Trademarks 9 April 28, 2006). However, the claim that issued – as shown by its language as well as the 10 supporting evidence from the title, summary, and specification – was directed to the display of 11 information generated by the systems having virtual processors. That virtual processors were 12 required in the parallel database as used here to generate the data for the inventive graphical 13 display, therefore surviving a prior art challenge, does not make the inventive concepts patentable 14 under Alice. 15 Consideration of the elements identified in claims 19-25 of the Patent does not change the 16 outcome. Those claims describe a system adding further additional elements of implementing the 17 graphical display when “emulating” a “target” system (to assist in testing) and then displaying 18 those results graphically. The added elements, like claim 1, all rest on the innovation of using the 19 display of graphical information to explain and allow testing of the query plans. 20 The inventive concept at issue, therefore, is abstract under Alice step one. 21 At step two, SAP argues that Teradata has failed to identify any novel structures or acts for 22 performing the graphical display of information claimed. More specifically, SAP contends that 23 Teradata cannot rely on the claim language providing for a “visual explain and compare” of the 24 query results because there is no explanation of how that is effectuated. It is, according to SAP, an 25 impermissible “black box” reciting only a generic method for graphically displaying specific 26 information in a specific technical environment. 27 1 Teradata responds that because the USPTO rejected the obviousness challenge to the 2 eventual claim 1 in the ʼ000 Patent, factual findings it contends I must accept as true on this 3 motion, Alice step two is satisfied as a matter of law: Claim 1 relies on a non-obvious innovative 4 combination of computer elements, specifically the combination of “displaying information with 5 the inventive concepts of employing a parallel database system having virtual processors to 6 increase parallelism in the database [ ] and determining query execution plans that concurrently 7 run on multiple processors in that system to identify processor nodes that are performing sub- 8 optimally, in order to troubleshoot query performance” and doing the same with emulated data for 9 a target database. Oppo. at 12-13. The structures to be used are, according to Teradata, the 10 database servers programmed to use virtual processors and “displays” for the required content for 11 claim 1and “specialized controllers” to perform the emulation required by claims 19-25. Oppo. at 12 13. 13 SAP responds that the “innovative” structures that Teradata is relying on under step two 14 are the same as Teradata relied on at step one and, as discussed above, are not the inventions 15 covered by the claim language but inventions otherwise existing at the time. SAP argues that the 16 use of virtual processors was not innovative. The “controller” is a generic data object extractor 17 and itself is not innovative and whose functionality is not otherwise adequately described. As to 18 the language in the USPTO’s appeal finding the use of the “virtual processors” and “emulated 19 data” innovative (and not obvious under prior art), SAP notes that those elements were being 20 interpreted within a patent whose aim was the “graphical display” of the query plan information 21 and that the Board was not considering the concerns of Alice (which was issued many years later). 22 I agree with SAP. The issuance of the ‘000 Patent against an obviousness challenge does 23 not resolve the Alice issue or otherwise bind my determination here. The problem remains that the 24 inventive concepts Teradata itself points to – the use of the virtual processors and the “controller” 25 – are not themselves captured by the claim language or described in the specification. The use of 26 these devices to source the information for the inventive concept of the graphical display does not 27 save this Patent from the Alice challenge. 1 relies on DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). There, the 2 Federal Circuit found that despite an “abstract idea” under step one of Alice, step two was satisfied 3 where “patent claims call for an ‘outsource provider’ having a web server which directs the visitor 4 to an automatically-generated hybrid web page that combines visual ‘look and feel’ elements from 5 the host website and product information from the third-party merchant's website related to the 6 clicked advertisement.” Id. at 125. Because the patent’s claims include “additional features” that 7 ensure the claims are “more than a drafting effort designed to monopolize the [abstract idea],” 8 under Alice, the court concluded “[t]he claimed solution amounts to an inventive concept for 9 resolving this particular Internet-centric problem, rendering the claims patent-eligible.” Id. at 10 1259. 11 But DDR helps Teradata only if the Patent’s claim themselves describe a particular 12 solution that is itself innovative or an application of an abstract idea that is innovative and whose 13 innovative application is implemented through the claim language (as shown by the embodiments) 14 with sufficient description. See, e.g., Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350, 15 1354 (Fed. Cir. 2016) (“we have recognized that merely presenting the results of abstract 16 processes of collecting and analyzing information, without more (such as identifying a particular 17 tool for presentation), is abstract as an ancillary part of such collection and analysis.”). 18 Looking at the claim language, and then the specification including the figures and 19 descriptions of the embodiments, the innovation is the use of the graphical interface to improve 20 the ease of development, testing, and running of the massively parallel databases using virtual 21 processors. While that interface was deployed to help develop and analyze information running in 22 the massively parallel databases using virtual processors, the operation of the virtual processors 23 and controllers are not explained and demonstrated in this patent, they are assumed. Nor is the 24 particular operation of the graphical interface itself anything more than a generic description or 25 “black box” requiring the display of the information. This case, therefore, is more like Electric 26 Power Group, LLC. There, the patent covered a method for gathering, analyzing, and displaying 27 power-grid information but because the claims did not “include any requirement for performing 1 entirely conventional, generic technology,” they were patent-ineligible. Electric Power Group, 2 LLC, 830 F.3d at 1356; see also id. at 1355 (“The claims at issue here do not require an arguably 3 inventive device or technique for displaying information, unlike the claims at issue in DDR 4 Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014) (at JMOL stage finding 5 inventive concept in modification of conventional mechanics behind website display to produce 6 dual-source integrated hybrid display).”). 7 Finally, Teradata argues that the question of the inventiveness of the Patent should not be 8 decided now, at the motion to dismiss stage, relying on Cellspin Soft, Inc. v. Fitbit, Inc., 927 F.3d 9 1306 (Fed. Cir. 2019), cert. denied sub nom. Garmin USA, Inc. v. Cellspin Soft, Inc., 140 S. Ct. 10 907 (2020). There, the federal circuit noted that “[a]s long as what makes the claims inventive is 11 recited by the claims, the specification need not expressly list all the reasons why this claimed 12 structure is unconventional. In this case, Cellspin made specific, plausible factual allegations 13 about why aspects of its claimed inventions were not conventional, e.g., its two-step, two-device 14 structure requiring a connection before data is transmitted. The district court erred by not 15 accepting those allegations as true.” Id. at 1317-18. There is a different problem here. The 16 stretched innovative concepts Teradata is claiming on this motion extends beyond and are not 17 captured by the claim language and are without support in the specification. 18 SAP’s motion to dismiss based on Alice is GRANTED. 19 II. INDIRECT INFRINGEMENT 20 SAP also challenges the adequacy of Teradata’s indirect infringement allegations with 21 respect to all five patents in suit, arguing that Teradata fails to adequately allege SAP’s 22 “knowledge” that the accused actions infringe Teradata’s patents and that SAP “specifically 23 intended” to induce infringement of the patents. See Global-Tech Appliances, Inc. v. SEB S.A., 24 563 U.S. 754, 763, 765–66 (2011) (“[A] violator of § 271(c) must know ‘that the combination for 25 which his component was especially designed was both patented and infringing’” and “induced 26 infringement under § 271(b) requires knowledge that the induced acts constitute patent 27 infringement”) (quoting Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 488 1 2012) (requiring specific intent to induce infringement). 2 SAP points out that for the ʼ419 and ʼ623 patents, the FAC does not allege that SAP knew 3 of them before the filing of the original Complaint, and therefore the knowledge and intent 4 allegations are missing. For the ʼ357 and ʼ000 patents, SAP argues the FAC’s “thin allegations of 5 possible pre-suit knowledge” are insufficient to show both the knowledge and intent elements. 6 For the ʼ932 patent, SAP admits knowledge is adequately alleged but contends the specific intent 7 allegations are lacking. 8 Teradata responds that it has adequately alleged SAP had pre-suit knowledge of the ʼ357 9 and ʼ000 patents because those patents were cited by SAP as prior art (albeit to a SAP subsidiary 10 and predecessor in interest, respectively) and notes the ʼ923 patent because it was cited in SAP’s 11 own litigation against Teradata. I conclude that these allegations – along with Teradata’s specific 12 allegations regarding SAP’s general knowledge of Teradata’s technology given the parties’ 13 business relationship as partners in the Bridge Project through which SAP allegedly stole 14 Teradata’s trade secrets—are sufficient to plead pre-suit knowledge for the ʼ357, ʼ000, and ʼ923 15 patents. See FAC ¶¶ 18-20, 24, 58, 77. 16 Teradata also contends that, under caselaw from this District (including my prior 17 opinions), post-suit knowledge of all five of the asserted patents is established by the original 18 complaint filed in this action in August 2020. See, e.g., Illumina, Inc. v. BGI Genomics Co., Ltd., 19 19-CV-03770-WHO, 2020 WL 571030, at *7 (N.D. Cal. Feb. 5, 2020). SAP asks me to 20 reconsider this position, but I decline to do so. Pre-suit knowledge has been adequately alleged 21 for the ʼ357, ʼ000, and ʼ923 patents and post-suit knowledge has been alleged for all of the patents 22 at issue. 23 As to specific intent, Teradata points to its allegations that SAP instructed its users to run 24 and test SAP Hana consistent with SAP’s manuals, thereby performing the claimed methods and 25 that SAP encouraged its customers to run SAP Hana in the United States through advertisements, 26 marketing, and product support efforts. FAC ¶¶ 28, 59, 67, 81, 95. These specific allegations are 27 sufficient. See id., 2020 WL 571030 at *6 (party allegedly “provides customers with marketing 1 use,” and “Courts have regularly found such allegations to be adequate”). 2 The motion to dismiss the indirect infringement allegations in the FAC is DENIED. 3 CONCLUSION 4 SAP’s motion to dismiss the claims of the ’000 Patent as patent-ineligible is GRANTED. 5 SAP’s motion to dismiss the indirect infringement claims is DENIED. 6 7 IT IS SO ORDERED. 8 Dated: February 1, 2021 . \f 9 ® William H. Orrick 10 United States District Judge 11 a 12 15 16

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