Hitkansut LLC v. United States, 12-303C

HITKANSUT LLC, a Michigan corporation, & ACCELEDYNETECHNOLOGIES, LTD., LLC, a Michigan corporation, Plaintiffs, v. UNITED STATES, Defendant.

No. 12-303C

United States Court of Federal Claims

Filed Under Seal: April 25, 2014

Reissued: May 2, 2014

Patent case; eligibility for patent

protection under 35 U.S.C. § 101;

application of the Larson-Miller variant

of the Arrhenius equation; ineligibility

of mathematical formulae for patent

protection; eligibility of novel means

of applying a natural law to obtain more

efficient and beneficial results

John S. Artz, Dickinson Wright, PLLC, Troy, Michigan, for plaintiffs. With him on the briefs were John A. Artz, and Bryan J. Schomer, Dickinson Wright, PLLC, Troy, Michigan.

Gary L. Hausken, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him on the briefs were Stuart F. Delery, Acting Assistant Attorney General, and John Fargo, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C. Of counsel was Benjamin S. Richards, United States Department of Justice, Washington, D.C.

OPINION AND ORDER¹

LETTOW, Judge.

Following claim construction in this patent case, the government has moved for summary judgment, asserting that the claims, as construed, are ineligible for patent protection because they relate to nonstatutory subject matter. Def.'s Mot. for Summary Judgment of Invalidity of U.S. Patent No. 7,175,722 as Claiming Nonstatutory Subject Matter Under 35 U.S.C. § 101 ("Def.'sMot."), ECF No. 42. Plaintiffs Hitkansut LLC and Acceledyne Technologies, Ltd. LLC (collectively, "Hitkansut") resist this motion and defend the patentability of their claims for structural processing methods in U.S. Patent No. 7,175,722 ("the '722 patent"). See Pls.' Opp'n to Def.'s Mot. for Summary Judgment & Cross-Mot. for Summary Judgment ("Pls.' CrossMot."), ECF No. 43.²

BACKGROUND

Hitkansut asserts that the patent applicant, Ms. Donna Walker, invented

a unique method for improving the mechanical and physical properties of manufactured metal parts (strength, durability, longevity, etc.) and to do so in a much faster way (minutes vs. hours; hours vs. days) and with much less use of energy (tens of BTUs vs. thousands of BTUs). The method generally includes subjecting the manufactured metal parts ("structures") to two separate and overlapping energy sources [e.g.,] heat and vibration, or heat and magnetism) under certain conditions until the state of activation energy of the metals parts ha[s] been met.

Pls.' Cross-Mot. at 3. Ms. Walker was granted the '722 patent on February 13, 2007.³ The patent consists of fourteen claims, seven of which are in dispute in this case. See Hitkansut LLC v. United States, 114 Fed. Cl. 410, 413 (2013) ("Hitkansut II") (claim construction opinion). Of those seven claims, Claims 1, 7, 11, and 14 are independent claims, while Claims 2, 6, and 8 are dependent claims. Id. at 413 n.3. Hitkansut alleges that Oak Ridge and its partners are using the method and thus infringing the process set forth in the claims of the patent. See Compl. ¶¶ 22, 45.⁴

On July 9, 2012, the government responded to the complaint by denying the infringement allegations in Hitkansut's complaint. Def.'s Answer, ECF No. 7. Discovery was then undertaken, and in due course, the parties filed briefs regarding disputed terms of the claims at issue. On May 2, 2013, this court held a claim-construction hearing, and on July 31, 2013, it issued its resulting constructions of the pertinent claim terms. See Hitkansut II, 114 Fed. Cl. 410. On September 13, 2013, the government filed its motion for summary judgment, asserting that the '722 patent is invalid because its claims seek to patent nonstatutory subject matter under 35 U.S.C. § 101. Hitkansut's cross-motion seeks a declaration that the claims are eligible for patent protection. A hearing on the merits was held on January 14, 2014.⁵

STANDARD FOR DECISION

RCFC 56 states that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." RCFC 56(a). A fact is material if it "might affect the outcome of the suit under governing law," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and an issue is genuine if it "may reasonably be resolved in favor of either party," id. at 250. The moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party may discharge its burden by "pointing out . . . that there is an absence of evidence to support the nonmoving party's case." Id. at 325.

Fundamentally, "[p]atent eligibility under [Section] 101 presents an issue of law," Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1340 (Fed. Cir. 2013), but "[t]his legal conclusion may contain underlying factual issues," id. at 1341 (citing Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1339 (Fed. Cir. 2013) ("[T]he analysis under [Section] 101, while ultimately a legal determination, is rife with underlying factual issues.").Further, in Ultramercial, the Federal Circuit explained that "every issued patent is presumed to have been issued properly, absent clear and convincing evidence to the contrary." 722 F.3d at 1338 (citing CLS Bank Int'l v. Alice Corp., 717 F.3d 1269, 1304-05 (Fed. Cir. 2013) (Rader, C.J., and Linn, Moore, & O'Malley, JJ., concurring in part and dissenting in part) ("[A]ny attack on an issued patent based on a challenge to the eligibility of the subject matter must be proven by clear and convincing evidence."), cert. granted sub nom. Alice Corp. v. CLS Bank Int'l, No. 13-298, __ U.S. __, 134 S. Ct. 734 (Dec. 6, 2013)). In Ultramercial, the trial court had granted the defendant's motion to dismiss for failure to claim statutory subject matter without first conducting claim construction because there was no "reasonable construction that would bring the patent within patentable subject matter." Id. at 1349 (internal citations and quotations omitted). The Federal Circuit disagreed with the standard applied by the trial court, stating that to grant a motion to dismiss for failure to claim statutory subject matter, "the only plausible reading of the patent must be that there is clear and convincing evidence of ineligibility." Id. at 1339 (emphasis omitted). Thus in a motion to dismiss, the burden rests on the defendant to show by clear and convincing evidence that the claims are patent ineligible. Id. at 1349 ("The district court erred in requiring the patentee to come forward with a construction that would show the claims were eligible." (emphasis in original)).

The clear and convincing standard of proof also applies on summary judgment. See Liberty Lobby, 477 U.S. at 254 (holding that when deciding a motion for summary judgment, a court must bear in mind the applicable evidentiary burden under the substantive law); Laughing Rabbit, Inc. v. National Auto. Parts Ass'n, No. C12-0402JLR, 2014 WL 556007, at *3 (W.D. Wash. Feb. 11, 2014); Ariosa Diagnostics, Inc. v. Sequenom, Inc., __ F. Supp. 2d __, No. C11-06391 SI, 2013 WL 5863022, at *4 (N.D. Cal. Oct. 30, 2013); Island Intellectual Prop. LLC v. Deutsche Bank AG, No. 09 Civ. 2675 (KBF), 2012 WL 386282, at *2 (S.D.N.Y. Feb. 6, 2012); Medicis Pharm. Corp. v. Acella Pharms. Inc., No. CV 10-1780-PHX-JAT, 2011 WL 5321007, at *4 (D. Ariz. Nov. 3, 2011). Generally, "[a] patentee has no burden to present factual evidence affirmatively establishing the validity of its patent, even in support of its own motion for summary judgment on the validity issue." Laughing Rabbit, 2014 WL 556007, at *3 (citing Massey v. Del Labs., Inc., 118 F.3d 1568, 1573 (Fed. Cir. 1997)). But, to withstand a motion for summary judgment brought after claim construction and after some showing of ineligibility by the moving party, the patent holder may be required to come forward with a construction supporting the eligibility of the claims. See Accenture Global Servs., GmbH v. Guidewire Software, Inc., 800 F. Supp. 2d 613, 618 (D. Del. 2011), aff'd, 728 F.3d 1336. Nonetheless, the defendant (here the government) challenging patentability under Section 101, retains the burden of proving the defense by clear and convincing evidence, see Laughing Rabbit, 2014 WL 556007, at *6, particularly as to the underlying factual underpinnings related to statutory subject matter, see Ariosa Diagnostics, 2013 WL 5863022, at *4 ("[A]n alleged infringer must prove invalidity by clear and convincing evidence. . . . In this connection, it is the factual evidence itself which must be clear and convincing."); see also Microsoft Corp. v. i4i Ltd. P'ship, ___ U.S. ___, ___, 131 S. Ct. 2238, 2253 (Breyer, J. concurring) ("[T]he evidentiary standard of proof applies to questions of fact and not to questions of law. . . . Thus a fact finder must use the 'clear and convincing' standard where there are [factual] disputes." (internal citation omitted)).

ANALYSIS

Section 101 concisely states,

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

35 U.S.C. § 101. Unfortunately, this brevity has led to murky jurisprudence. Generally, Section 101 has been interpreted broadly in accord with perceived congressional intent. See Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) ("In choosing such expansive terms as 'manufacture' and 'composition of matter,' modified by the comprehensive 'any,' Congress plainly contemplated that the patent laws would be given wide scope."). That said, the Supreme Court has developed three categories of subject matter that are patent ineligible under Section 101, viz., laws of nature, natural...