Polaris Innovations Ltd. v. Kingston Tech. Co.

223 F.Supp.3d 1026

POLARIS INNOVATIONS LIMITED, an Irish limited company, Plaintiff,

v.KINGSTON TECHNOLOGY COMPANY, INC., a Delaware Corporation, Defendant.

Case No.: SACV 16–00300–CJC(RAOx)

United States District Court, C.D. California, Southern Division.

Signed July 21, 2016

Alex H. Chan, Azra M. Hadzimehmedovic, Jonathan Gordon Tamimi, Robert Lewis Gerrity, Steven S. Cherensky, Yi Chen, Matthew Douglas Powers, Tensegrity Law Group LLP, Redwood Shores, CA, Quincy Justin Chuck, Sterling Arthur Brennan, Maschoff Brennan Laycock Gilmore Israelsen and Wright PLLC, Irvine, CA, Richard A. Ripley, Pro Hac Vice, Robert F. Ruyak, Pro Hac Vice, RuyakCherian LLP, Washington, DC, for Plaintiff.

Christopher Kao, Brock S. Weber, Vinson and Elkins LLP, San Francisco, CA, Christine Hwang Yang, Law Offices of S. J Christine Yang, Fountain Valley, CA, David C. Smith, Pro Hac Vice, Lindsey R. Vaala, Pro Hac Vice, William R. Vigdor, Pro Hac Vice, Vinson and Elkins LLP, Washington, DC, Jeffrey T. Han, Pro Hac Vice, Vinson and Elkins LLP, Austin, TX, for Defendant.

ORDER DENYING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS

CORMAC J. CARNEY, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION AND BACKGROUND

Plaintiff Polaris Innovations Limited filed suit against defendant Kingston Technology Company, Inc. on the basis that a Kingston-produced computer memory card—model number KVR16R11D4/16—infringes on two Polaris patents, U.S. Patent No. 6,850,414 (the 414 Patent) and U.S. Patent No. 7,315,454 (the 454 Patent). Count III of Polaris's Complaint asserts infringement of the 414 Patent and Count V of the Complaint asserts infringement of the 454 Patent. (Dkt. 1.) Kingston has now moved for judgment on the pleadings, (Dkt. 79), pursuant to Rule 12(c), on Counts III and V of the Complaint, alleging that the asserted claims of the 414 Patent and 454 Patent are facially invalid, as they fail to claim patentable subject matter under 35 U.S.C. § 101.

Section 101 indicates that machines are patentable subject matter, and a long line of caselaw makes it clear that "abstract ideas" are not patentable subject matter. Here, both the 414 Patent and the 454 Patent pertain to the arrangement of memory chips on a computer card that fits a standard dock: by rotating some or all of the memory chips on the card 90 degrees, (1) memory chips are able to be mounted on a card with a slimmer profile (in the case of the 414 Patent ), or (2) a greater number of memory chips than would otherwise be possible fit on a particular card (in the case of the 454 Patent ).

The crux of the issue raised in Kingston's motion is whether the 414 Patent and the 454 Patent concern patent-eligible machines or patent-ineligible abstract ideas. Kingston argues that the patents are invalid because they merely involve the abstract idea of "adjusting the orientation of physical objects," a practice that "is part of our everyday lives and has been for millennia." Polaris counters that there is nothing at all abstract about these patents, as their claims concern particular, specific configurations of memory chips on memory cards. Having considered the parties' respective positions, the court DENIES Kingston's motion for judgment on the pleadings.¹

II. ANALYSIS

A. Addressing § 101 Subject Matter Eligibility at the Pleading Stage

"After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). A Rule 12(c) motion asserting failure to state a claim is governed by the same standard as a Rule 12(b)(6) motion to dismiss. See United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc. , 637 F.3d 1047, 1054 n.4 (9th Cir. 2011). "Patent eligibility under § 101 is a question of law that may, in appropriate cases, be decided on the pleadings without the benefit of a claim construction hearing." Modern Telecom Sys. LLC v. Earthlink, Inc. , No. CV 14-0347 DOC, 2015 WL 1239992, at *6 (C.D. Cal. Mar. 17, 2015) (citing Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass'n , 776 F.3d 1343, 1349 (Fed. Cir. 2014) ).

In cases where claim construction is necessary to understand the subject matter of a given patent, it is proper to resolve claim construction prior to § 101 analysis. See Bancorp Services, L.L.C. v. Sun Life Assurance Co. of Canada , 687 F.3d 1266, 1273–74 (Fed. Cir. 2012). But in cases where the issues can be understood prior to claim construction, courts have regularly decided patent eligibility under § 101 prior to claim construction. See, e.g., Internet Patents Corp. v. Active Network, Inc. , 790 F.3d 1343, 1348 (Fed. Cir. 2015) ; OIP Techs., Inc. v. Amazon.com, Inc. , 788 F.3d 1359, 1360–62 (Fed. Cir. 2015). Here, neither party has argued that it is necessary to defer this decision on eligibility under § 101 until after claim construction, and given the parties' framing of the issues, it is possible to proceed with the § 101 analysis without first addressing claim construction.

B. The § 101 Analysis the Supreme Court Set Forth in Alice and Mayo

Section 101"defines the subject matter that may be patented under the Patent Act." Bilski v. Kappos , 561 U.S. 593, 601, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010). It 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. " Section 101 thus specifies four independent categories of inventions or discoveries that are eligible for patent protection: processes, machines, manufactures, and compositions of matter." Bilski , 561 U.S. at 601, 130 S.Ct. 3218.

The Supreme Court found that "[i]n choosing such expansive terms ... Congress plainly contemplated that the patent laws would be given wide scope," but notwithstanding this scope, the Supreme Court also identified three exceptions to § 101's broad categories of patent-eligible subject matter: "laws of nature, physical phenomena, and abstract ideas." Diamond v. Chakrabarty , 447 U.S. 303, 308–09, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980). These exceptions are not mentioned in the statutory text, but they are consistent with the idea that certain discoveries "are part of the storehouse of knowledge of all men" and are "free to all men and reserved exclusively to none." Bilski , 561 U.S. at 602, 130 S.Ct. 3218 (quoting Funk Bros. Seed Co. v. Kalo Inoculant Co. , 333 U.S. 127, 130, 68 S.Ct. 440, 92 L.Ed. 588 (1948) ).

In Alice Corp. Pty. Ltd. v. CLS Bank Int'l , ––– U.S. ––––, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014), the Supreme Court further explained a two-step approach for resolving § 101 issues that it had earlier articulated in Mayo Collaborative Servs. v. Prometheus Laboratories, Inc. , 566 U.S. 66, 132 S.Ct. 1289, 1296–97, 182 L.Ed.2d 321 (2012). First, a court must "determine whether the claims at issue are directed to one of those patent-ineligible concepts." Alice , 134 S.Ct. at 2355 (citing Mayo , 132 S.Ct. at 1296–97 ). For example, in Bilski , the Supreme Court rejected as patent-ineligible two claims in the petitioner's application because the claims merely "explain[ed] the basic concept of hedging, or protecting against risk," which it found to be "an unpatentable abstract idea." Bilski , 561 U.S. at 611, 130 S.Ct. 3218 ; Alice , 134 S.Ct. at 2355–56.

Second, if the court finds that claims at issue are directed to patent-ineligible concepts, the court must ask "[w]hat else is there in the claims," which requires consideration of "the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application." Alice , 134 S.Ct. at 2355 (citing Mayo , 132 S.Ct. at 1297–98 ). A court applies this second step of the Mayo /Alice analysis only if it finds in the first step that the claims are directed to a law of nature, natural phenomenon, or abstract idea. Alice , 134 S.Ct. at 2355. The second step requires the court to determine if the elements of the claim individually, or as an ordered combination, "transform the nature of the claim" into a patent-eligible application. Id . A claim may become patent-eligible when the "claimed process include[s] not only a law of nature but also several unconventional steps ... that confine[ ] the claims to a particular, useful application of the principle." Mayo , 132 S.Ct. at 1300.

C. The Language of the Patents

The 414 Patent and 454 Patent claim purportedly novel layouts for computer memory cards. Polaris alleges that a particular Kingston memory module, model number KVR16R11D4/16, infringes on both patents. (Compl. ¶¶ 54, 55, 80.)

1. The 414 Patent

The 414 Patent, (Dkt. 1, Ex. 3), is titled "Electronic Circuit Board Having a Plurality of Identically Designed, Housing–Encapsulated Semiconductor Memories." It claims a particular type of computer memory card, and indicates that it solves the problem of reducing the height of the card while not diminishing the amount of storage available. As the 414 Patent explains, reducing the height of the cards is desirable because the cards are intended to be inserted into network computers with a slim profile. (414 Patent at 1.) The 414 Patent asserts that conventional memory cards have multiple rectangular chips mounted on them, with the long side of the rectangle perpendicular to the long edge of the card, and notes that:

In the case of this conventional arrangement, in which the edges of the memory housings lined up along the contact strip are aligned, there is no more leeway for a further reduction of the circuit board height (the height of the printed circuit board perpendicular to the contact strip).

(414 Patent at 1–2.)

The inventors of the 414 Patent realized that the memory board height could be reduced if the memory chips on the board were oriented on the memory card horizontally rather than vertically. This horizontal...