FullView, Inc. v. Polycom, Inc.

485 F.Supp.3d 1156

FULLVIEW, INC., Plaintiff,

v.POLYCOM, INC., Defendant.

Case No. 18-cv-00510-EMC

United States District Court, N.D. California.

Signed September 10, 2020

Bruce J. Wecker, Hausfeld LLP, San Francisco, CA, for Plaintiff.

Jeffrey Rosenfeld, Blank Rome, David Paul Dalke, Joe Saratool Netikosol, Winston and Strawn LLP, Los Angeles, CA, Jonathan Alan Loeb, Blank Rome LLP, Santa Monica, CA, Katherine Vidal, Eimeric Reig-Plessis, Noorossadat Torabi, Winston & Strawn LLP, Menlo Park, CA, Domingo Manuel LLagostera, Pro Hac Vice, Munira Anwar Jesani, Pro Hac Vice, Blank Rome LLP, Houston, TX, Karalena M. Guerrieri, Pro Hac Vice, Samantha Maxfield Lerner, Pro Hac Vice, Winston and Strawn LLP, Chicago, IL, for Defendant.

ORDER GRANTING DEFENDANT'S PARTIAL MOTION TO DISMISS

EDWARD M. CHEN, United States District Judge

I. INTRODUCTION

Plaintiff FullView, Inc. ("FullView") filed this lawsuit against Defendant Polycom, Inc. ("Polycom") alleging patent infringement. FullView is the owner of a patent disclosing technology involving the creation of composite images—i.e. , a device capable of producing panoramic photographs. Pending before the Court is Polycom's partial motion to dismiss on the grounds that all claims in FullView's patent are nonpatentable. Polycom also argues that the complaint fails to state a claim for global infringement under 35 U.S.C. section 271(g). For the reasons discussed below, the Court GRANTS Polycom's motion to dismiss because the claims are directed at nonpatentable subject matter and seeks protection of an abstract idea without an inventive concept. Polycom's motion to dismiss FullView's Section 271(g) claim for failure to plead sufficient facts is therefore moot.

II. BACKGROUND

A. Factual Background

FullView's Second Amended Complaint alleges as follows. Dr. Nishvjit Singh Nalwa owns numerous patents and is the co-founder and current president of FullView. Docket No. 75 ("SAC") ¶ 7. FullView is the owner of U.S. Patent No. 6,700,711 ("’711 Patent"), which is entitled "Panoramic viewing system with a composite field of view ...." Id. ¶ 10. It is also the owner of U.S. Patent 6,128,143 ("’143 Patent") entitled "Panoramic viewing system with support stand ...." Id. ¶ 10. Polycom's motion only challenges the ’711 Patent.

The ’711 Patent is comprised of thirty-nine claims that covers "an omni-directional or panoramic viewer." In other words, "[i]t describes several cameras looking out in different directions off mirrors, from offset rather than coincident viewpoints, to provide the user with seamless 360° composite images to the view's eye that allow the user to look in any direction ...." Id. ¶ 12. The ’711 Patent is made up of the following claims:

• Claim 25 and its dependent claims—e.g. , 26. 28, 29, 33, 35, 37, and 39—are the "Composite Image Claims."

• Claim 1 and its dependent claims—e.g. , 2, 4, 5, 9, 11, 13, and 15—are the "Method Claims."

• Claim 16 and 18 are the "Apparatus Claims."¹

SAC ¶ 34 ("FullView asserts only the following 18 claims here: 1, 2, 4, 5, 9, 11, 13, 15, 16, 18, 25, 26, 28, 29, 33, 35, 37 and 39."); Mot. at 2. The ’143 Patent is made up of eighteen claims covering a "system and apparatus for a compact and non-instructive omni-directional or panoramic viewer in which several cameras look off a mirrored pyramid, this pyramid and these cameras secured to a support member that intersects an inner volume of the pyramid." Id. ¶ 13.

On April 1, 2011, FullView licensed the ’711 and ’143 Patents to Polycom, which allowed Polycom to manufacture its CX5000 camera that provides for 360° video conferencing. Id. ¶ 14. On July 2, 2012, Polycom gave notice to FullView that it intended to terminate their agreement; however, Polycom terminated the agreement earlier than required under the agreement's 90-day-notice provision. Id. ¶ 16. Although Polycom ceased manufacturing its CX5000, FullView alleges that Polycom continued to sell the CX5000 without reporting these sales and, thus, foregoing payment of royalties owed to FullView. See id. ¶¶ 20, 31.

B. Procedural Background

1. History of Inter Partes Reexamination ("IPR")

In January 2012, Polycom filed an IPR petition challenging the validity of the ’711 Patent. Id. ¶ 19. On January 4, 2017, the Patent Trial and Appeal Board ("PTAB") of the United States Patent and Trademark Office ("PTO") upheld each of the thirty-nine claims that make up the ’711 Patent. Id. ¶ 21. The Court of Appeals for the Federal Circuit affirmed the PTAB's decision on April 29, 2019. Id. ¶ 23. The narrow subject of this litigation was obviousness. See Polycom, Inc. v. Fullview, Inc. , 767 F. App'x 970, 983 (Fed. Cir. 2019) ("After careful analysis of the parties’ arguments and the Board's determination, we affirm the Board's finding that claims 1–21 and 25–39 of the ’711 patent would not have been obvious .... We also find that Polycom waived its argument regarding anticipation for failing to raise it below.").

On January 31, 2019, Polycom sought review of the ’143 Patent. Id. ¶ 24. The PTAB denied the petition, as well as Polycom's request for rehearing on September 10, 2019. Id. ¶ 25.

2. History of the Instant Litigation

On January 23, 2018, FullView filed its initial complaint. See Docket No. 1. On March 7, 2018, this Court stayed this action pending the resolution of the IPR of the ’711 Patent. Docket No. 16. Following the Federal Circuit's opinion upholding the PTAB's decision, FullView amended its complaint to include a fraudulent concealment allegation to toll the statute of limitations for an additional year of liability. Docket No. 51 ("FAC"). Polycom moved to partially dismiss the fraud allegations for failure to satisfy Rule 9(b). Docket No. 52. Before the parties fully briefed Polycom's motion, FullView sought leave to file an amended pleading in order to enhance its factual allegations with respect to the fraudulent concealment theory, as well as include a false marketing claim. Docket No. 68. This Court partially denied FullView's request for leave to amend because the fraudulent concealment and false marketing claims were futile, thereby rendering Polycom's then-pending motion to dismiss moot. Docket No. 72. The Court, however, permitted FullView to file the remainder of its proposed SAC, which contained unopposed amendments. Id.

FullView filed its SAC on July 2, 2020, alleging one claim for relief: infringement of the ’711 and ’143 Patents under 35 U.S.C. section 271 in the form of (1) direct infringement; (2) infringement by inducement; and (3) infringement via the doctrine of equivalents. SAC ¶¶ 59–66. Polycom moved to dismiss the SAC. See Mot. The Court heard oral argument on August 20, 2020, wherein counsel for FullView discussed a Federal Circuit decision not cited in the parties’ briefs. The Court permitted supplemental briefing on Thales Visionix Inc. v. United States , 850 F.3d 1343 (Fed. Cir. 2017). See Docket No. 101.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 8(a)(2) requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss after the Supreme Court's decisions in Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a plaintiff's "factual allegations [in the complaint] ‘must ... suggest that the claim has at least a plausible chance of success.’ " Levitt v. Yelp! Inc. , 765 F.3d 1123, 1135 (9th Cir. 2014). The court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co. , 519 F.3d 1025, 1031 (9th Cir. 2008). But "allegations in a complaint ... may not simply recite the elements of a cause of action [and] must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Levitt , 765 F.3d at 1135 (internal quotation marks omitted).² "A claim has facial plausibility when the Plaintiff pleads factual content that allows the court to draw the reasonable inference that the Defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted).

"Patent eligibility can be determined at the Rule 12(b)(6) stage ‘when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law.’ " Voter Verified, Inc. v. Election Sys. & Software LLC , 887 F.3d 1376, 1384 (Fed. Cir. 2018), cert. denied , ––– U.S. ––––, 139 S. Ct. 813, 202 L.Ed.2d 577 (2019) ; Aatrix Software, Inc. v. Green Shades Software, Inc. , 882 F.3d 1121, 1125 (Fed. Cir. 2018). Evaluation of a patent claim's subject matter eligibility under 35 U.S.C. section 101 can proceed even before a formal claim construction. Genetic Techs. Ltd. v. Merial L.L.C. , 818 F.3d 1369, 1373–74 (Fed. Cir. 2016) ; see also Aatrix , 882 F.3d at 1125.

IV. DISCUSSION

In its motion to dismiss, Polycom contends the Composite Image Claims are invalid because they are not directed at patent-eligible subject matter delineated in 35 U.S.C. section 101 (" Section 101"). It also contends the Asserted Claims seek to patent abstract ideas without an inventive concept. In response to Polycom's argument regarding failure to fit into statutory patent-eligible subject matter, FullView argues that Composite Image Claims fall under the "manufacture" category of Section 101. FullView also takes the position that every claim within the ’711 Patent contains an inventive concept...