Int'l Bus. Machs. Corp. v. Zynga Inc.

642 F.Supp.3d 481

INTERNATIONAL BUSINESS MACHINES CORP., Plaintiff, v. ZYNGA INC., and Chartboost, Inc., Defendants.

Civil Action No. 22-590-GBW

United States District Court, D. Delaware

Signed November 23, 2022

David E. Moore, Bindu A. Palapura, POTTER ANDRESON & CORROON LLP, Wilmington, Delaware; John M. Desmarais, Karim Z. Oussayef, Lindsey E. Miller, Edward Geist, Raymond N. Habbaz, William Vieth, Benjamin Rodd, Amy I. Wann, Jonas R. McDavit, Tamir Packin, DESMARAIS LLP, New York, New York, Counsel for Plaintiff.

Brian E. Farnan, Michael J. Farnan, FARNAN LLP, Wilmington, Delaware; Alyssa Caridis, Jack O'Neal, ORRICK, HERRINGTON & SUTCLIFFE LLP, Los Angeles, California; Clement S. Robert, ORRICK, HERRINGTON & SUTCLIFFE LLP, San Francisco, California; Evan D. Brewer, ORRICK, HERRINGTON & SUTCLIFFE LLP, Menlo Park, California; Richard F. Martinelli, ORRICK, HERRINGTON & SUTCLIFFE LLP, New York, New York, Counsel for Defendants.

MEMORANDUM OPINION

GREGORY B. WILLIAMS, UNITED STATES DISTRICT JUDGE

Plaintiff International Business Machines Corp. ("IBM") alleges that certain products of Defendant Zynga Inc. infringe United States Patent Nos. 7,072,849 (the "'849 patent"), 7,631,346 (the "'346 patent"), and 7,702,719 (the "'719 patent"), and certain products of Defendant Chartboost, Inc. infringe the '849 patent and United States Patent No. 8,315,904 (the "'904 patent"). D.I. 27 ¶ 15; see also id. ¶¶ 100-87. Defendants Zynga Inc. and Chartboost, Inc. (collectively, "Zynga") move to dismiss Count IV of IBM's First Amended Complaint (the "Motion"), which alleges infringement of the '904 patent, pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. D.I. 29. Zynga argues that none of the claims in the '904 patent claim patent-eligible subject matter under 35 U.S.C. § 101. Id. The Court heard oral argument on Zynga's Motion on November 15, 2022. D.I. 70. For the reasons stated below, the Court grants Zynga's Motion.

I. BACKGROUND

The '904 patent is entitled "Organization for Promotion Management." Promotions are "specific marketing communications that are typically provided in a marketing campaign." D.I. 27-1, Ex. C at 2:53-54. The '904 patent describes "[a] computer implemented method for producing a promotion list for a promotion management campaign . . . . The method includes assigning one or more promotion instances to the promotions list, and storing the promotion list in an electronic medium." Id. at Abstract. Prior to the '904 patent:

[M]arketers used a top-down system in order to create and distribute promotions . . . . Marketers would create a small number of standardized promotions and query a database for potential customers with particular attributes to find a group of targets who would receive the promotions. Marketers could modify basic information by completing fields in the standardized promotions, much like completing a form when going to the doctor's office. In this one-way process of distributing promotions, information was only received from the consumers after the promotions were already sent . . . . [M]arketers could use "mail merge" functionality to insert the customer's name, email, physical address, and other characteristics into preset fields on preexisting promotions. Using the mail merge technique, marketers could create the impression of personalized advertising—as long as the number of promotions remained manageable.

D.I. 27 ¶¶ 55, 56.

IBM states there were several challenges with this one-way process of distributing promotions:

First, existing software systems could only create static promotions, limiting marketers to similar promotions, which were then sent to large groups of target consumers. Marketers were unable to dynamically tailor advertisements for individual consumers and instead had to focus on finding the widest appeal for a single advertisement. This approach was rudimentary and inefficient, because each promotion was both time consuming to create and dubiously relevant to the consumer. Second, existing software systems were static and could not generate valuable analytics for improving current marketing campaigns. Prior art software could modify subsequent marketing campaigns. But it did not allow for dynamic modification of current promotions based on individual preferences or attributes. Marketers could only determine the general success of a marketing campaign after the campaign had already ended. Third, existing software systems could not effectively create, select, organize, and distribute tailored promotions to a wide variety of consumers. Online advertising dramatically increased the number of potential consumers and promotions, which prior art systems were ill-equipped to handle. The prior art top-down system could either: (1) send more targeted promotions to smaller groups; or (2) send less targeted promotions to large groups. Both options encountered efficiency and efficacy issues, respectively.

D.I. 40 at 2 (citations omitted) (emphasis in original); see also D.I. 27-1, Ex. C at 1:6-19.

According to IBM, the '904 patent overcomes these challenges. It "improve[s] how promotions were generated and how they were subsequently managed, organized, and distributed." D.I. 27 ¶ 53. "[T]he '904 patent employ[s] data science techniques in computer software whereby dynamically adjustable promotion templates and promotion instances are used to generate, distribute, and track digital promotions with the help of robust data mining and analytics, thereby increasing the effectiveness of a promotion campaign." Id.

Promotions are created by using a "promotion template" with fields (known as "attributes") to create different versions of the promotion (known as "promotion instances"). D.I. 27-1, Ex. C at 3:65-4:21. The '904 patent also allows marketers to search a database of existing promotion instances and assign certain promotions to a "promotion list." Id. at 16:17-20; see also Fig. 17. "Marketers could [ ] manipulate the promotion instances in the promotion list as a unit." D.I. 30 at 2 (citing D.I. 27-1, Ex. C at 16:18-20).

Claim 1 of the '904 patent recites:

A computer implemented method comprising:

producing, by one or more computers, a promotion list for a promotion management campaign by:

generating, by one or more computers, a promotion instance from a promotion template;

receiving, by one or more computers executing marketing campaign software, a search query that includes one or more attributes of a promotion instance;

searching one or more data repositories for promotion instances having attributes corresponding to the attributes specified in the search query;

returning a list including one or more promotion instances having the attributes corresponding to the attributes specified in the search query;

receiving, by the one or more computers, a selection of one or more promotion instances, from the returned list, to be included in the promotion list;

assigning the selected promotion instances to the promotions list; and

storing the promotion list in an electronic medium.

D.I. 27-1, Ex. Cat claim 1.

II. LEGAL STANDARD

a. Motion to Dismiss

To state a claim on which relief can be granted, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief . . . ." Fed. R. Civ. P. 8(a)(2). Such a claim must plausibly suggest "facts sufficient to 'draw the reasonable inference that the defendant is liable for the misconduct alleged.' " Doe v. Princeton Univ., 30 F.4th 335, 342 (3d Cir. 2022) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "A claim is facially plausible 'when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.' " Klotz v. Celentano Stadtmauer & Walentowicz LLP, 991 F.3d 458, 462 (3d Cir. 2021) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937). But the Court will " 'disregard legal conclusions and recitals of the elements of a cause of action supported by mere conclusory statements.' " Princeton Univ., 30 F.4th at 342 (quoting Davis v. Wells Fargo, 824 F.3d 333, 341 (3d Cir. 2016)). Under Rule 12(b)(6), the Court must accept as true all factual allegations in the Complaint and view those facts in the light most favorable to the plaintiff. See Fed. Trade Comm'n v. AbbVie Inc., 976 F.3d 327, 351 (3d Cir. 2020).

b. Patent Eligible Subject Matter

Patentability under 35 U.S.C. § 101 is a threshold legal issue. Bilski v. Kappos, 561 U.S. 593, 602, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010). Section 101 inquiry is properly raised at the pleading stage if it is apparent from the face of the patent that the asserted claims are not directed to eligible subject matter. Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 F.3d 1352, 1360 (Fed. Cir. 2017), cert. denied, — U.S. —, 138 S. Ct. 2621, 201 L.Ed.2d 1026 (2018); see also SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1166 (Fed. Cir. 2018) (stating that patent eligibility "may be, and frequently has been, resolved on a Rule 12(b)(6) or (c) motion"); FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1097 (Fed. Cir. 2016) (stating that "it is possible and proper to determine patent eligibility under 35 U.S.C. § 101 on a Rule 12(b)(6) motion" (quoting Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1373-74 (Fed. Cir. 2016))); Voter Verified, Inc. v. Election Sys. & Software LLC, 887 F.3d 1376, 1379 (Fed. Cir. 2018) (affirming Rule 12(b)(6) dismissal based on § 101 patent ineligibility). This is, however, appropriate "only when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law." Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1128 (Fed. Cir. 2018).

Section 101 of the Patent Act defines patent-eligible...