Windy City Innovations, LLC v. Facebook, Inc.

CourtDistrict Court, N.D. California
DecidedSeptember 24, 2019
Docket4:16-cv-01730
StatusUnknown

This text of Windy City Innovations, LLC v. Facebook, Inc. (Windy City Innovations, LLC v. Facebook, 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.

Bluebook
Windy City Innovations, LLC v. Facebook, Inc., (N.D. Cal. 2019).

Opinion

4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6

7 WINDY CITY INNOVATIONS, LLC, Case No.: 16-CV-1730 YGR 8 Plaintiff, ORDER GRANTING FACEBOOK’S MOTION 9 FOR SUMMARY JUDGMENT; DENYING AS v. MOOT MOTIONS TO STRIKE AND EXCLUDE 10 EXPERT OPINIONS FACEBOOK, INC., 11 DKT. NOS. 153, 155, 160 Defendant, 12

13 Plaintiff Windy City Innovations, LLC brings this patent infringement action against 14 defendant Facebook, Inc. stemming from alleged infringement of Windy City’s U.S. Patent No. 15 8,458,245 (the “’245 patent”) entitled “Real Time Communications System” issued June 4, 2013.1 16 Presently before the Court are three motions. Facebook moves for summary judgment (Dkt. No. 17 160) on the grounds that: (1) Windy City lacks standing; (2) Claim 19 and its dependent claims of 18 the ’245 Patent are invalid under 35 U.S.C. section 101; and (3) Facebook does not infringe the 19 ’245 patent directly or indirectly. In addition, both Facebook and Windy City have moved to strike 20 or exclude certain opinions of their opposing experts. (Dkt. Nos. 153, 155.) 21 The Court, having duly considered the pleadings and papers in support of and in 22 opposition to the motion for summary judgment, along with the admissible evidence, rules as 23 follows: Facebook’s Motion for Summary Judgment is GRANTED on grounds of invalidity under 24 Section 101. In light of the Court’s ruling on summary judgment the motions to strike or 25 exclude expert opinions are DENIED AS MOOT. 26

27 1 All other patent issues originally raised in the complaint have been resolved through the IPR process. The ’245 Patent is a continuation of earlier applications in the patent family of U.S. 28 Patent No. 5, 956,491, filed April 1, 1996. 1 I. APPLICABLE STANDARDS 2 Summary judgment is appropriate when “there is no genuine dispute as to any material 3 fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is 4 “material” if it “might affect the outcome of the suit under the governing law,” and a dispute as 5 to a material fact is “genuine” if there is sufficient evidence for a reasonable trier of fact to 6 decide in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 7 (1986). The moving party bears the initial burden of demonstrating the absence of a genuine 8 issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). For issues where the 9 opposing party has the burden of proof, the moving party need only point out “that there is an 10 absence of evidence to support the nonmoving party’s case.” Id. at 325. The burden then shifts to 11 the nonmoving party to set forth, by affidavit or as otherwise provided in Rule 56, “specific facts 12 showing that there is a genuine issue for trial.” Liberty Lobby, 477 U.S. at 250 (internal 13 quotation marks omitted). Summary judgment is mandated “against a party who fails to make a 14 showing sufficient to establish the existence of an element essential to that party’s case, and on 15 which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 16 322 (1986). 17 A moving party defendant bears the burden of specifying the basis for the motion and the 18 elements of the causes of action upon which the plaintiff will be unable to establish a genuine issue 19 of material fact. Id. at 323. The burden then shifts to the plaintiff to establish the existence of a 20 material fact that may affect the outcome of the case under the governing substantive law. Anderson 21 v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In the summary judgment context, a court 22 construes all disputed facts in the light most favorable to the non-moving party. Ellison v. 23 Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). 24 II. STANDING 25 As a first basis for summary judgment, Facebook argues that Windy City does not have 26 standing to bring this action because it never acquired ownership rights in the ‘245 Patent or 27 ‘491 patent family. The Court’s jurisdiction is a prerequisite to consideration of the merits of a 28 case. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 93-102 (1998). Because the 1 question of standing is jurisdictional, the Court addresses Facebook’s standing arguments as a 2 threshold matter. See Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 3 2010) (“A court may exercise jurisdiction only if a plaintiff has standing to sue on the date it 4 files suit.”) (citing Keene Corp. v. United States, 508 U.S. 200, 207 (1993)). 5 1. Factual Background2 6 The online chat system software that is the subject of the ’245 Patent was developed 7 under a Work for Hire Agreement between UtiliCorp, an energy company, and American 8 Information Systems, Inc. (“AIS”). Daniel L. Marks is listed as the sole inventor on the ’245 9 Patent. Marks was an employee of AIS from approximately March 1995 through December 10 1995. 11 On May 17, 1995, AIS sent a Work for Hire Agreement to Brian Spencer and Tony Fung 12 of Utilicorp. The Work for Hire Agreement represented AIS’s offer of a “revised contract 13 regarding development of the chat forum software” and detailed the services to be provided for 14 UtiliCorp by AIS. The Work for Hire Agreement stated, in part, that it was a “revised contract 15 regarding development of the chat forum software.” (Declaration of Phillip E. Morton In 16 Support of Motion, Exh. 2 [“Work for Hire Agreement”].) It stated that AIS would provide 17 services to UtiliCorp, as follows: (1) TelnetD server modification to allow immediate entry to a 18 moderated, interactive chat session with features as listed in Appendix A; (2) moderated store- 19 and-forward messaging system with threading capabilities for articles. (Id.) Appendix A stated:

20 Chat server features: (1) user/password authentication system 21 (2) telnet vt100 textual based interface (3) no less than 20 moderated channel capabilities 22 (4) no less than 20 unmoderated channel capabilities (5) remote account maintenance capabilities 23 (6) logging of basic user transactions (7) online help 24 (8) who’s online feature (9) rotating messages feature 25 (10) online profile/authentication form 26 27

28 2 Unless otherwise stated, these facts are undisputed. 1 (Id.) In addition, the Work for Hire Agreement specified that the intellectual property created 2 was assigned to UtiliCorp as follows:

3 All software, data, technology, designs or innovations which are made, conceived, reduced to practice, designed or developed by AIS for the purpose of 4 fulfilling its obligations under this Agreement shall be and remain the sole property of Client [UtiliCorp]. AIS hereby assigns to [UtiliCorp] all such 5 materials and all related copyrights or other intellectual property rights pending a fair-market-value joint licensing agreement between [UtiliCorp] and AIS. 6 7 (Id.

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Windy City Innovations, LLC v. Facebook, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/windy-city-innovations-llc-v-facebook-inc-cand-2019.