Uniloc USA, Inc. v. ADP, LLC

279 F.Supp.3d 736

UNILOC USA, INC. and Uniloc Luxembourg, S.A., Plaintiffs,

v.ADP, LLC, Defendant.

Big Fish Games, Inc., Defendant.

CIVIL ACTION NO. 2:16–CV–00741–RWS (LEAD)

CIVIL ACTION NO. 2:16–CV–00858–RWS

United States District Court, E.D. Texas, Marshall Division.

Signed September 28, 2017

Charles Craig Tadlock, Tadlock Law Firm, Plano, TX, Paul J. Hayes, Aaron Seth Jacobs, Daniel James McGonagle, Dean G. Bostock, James John Foster, Kevin Gannon, Michael James Ercolini, Robert R. Gilman, Prince Lobel Tye LLP, Boston, MA, Anthony Michael Vecchione, Edward R. Nelson, III, Nelson Bumgardner PC, Ft. Worth, TX, for Plaintiffs.

William J. McCabe, Matthew J. Moffa, Perkins Coie LLP, David J. Ball, Bracewell & Giuliani LLP, New York, NY, Michael E. Jones, Patrick Colbert Clutter, IV, Potter Minton, a Professional Corporation, Tyler, TX, Victoria Quyen Smith, Perkins Coie LLP, Palo Alto, CA, Douglas F. Stewart, Bracewell & Giuliani, Seattle, WA, Timothy R. Geiger, Bracewell LLP, Houston, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT W. SCHROEDER III, UNITED STATES DISTRICT JUDGE

Before the Court are Defendant ADP, LLC ("ADP") and Big Fish Games, Inc.'s ("Big Fish") (collectively, "ADP Defendants") Motions to Dismiss the Complaint for Failure to State a Claim (Docket Nos. 17 and 80, respectively) against Uniloc USA, Inc. and Uniloc Luxembourg, S.A.'s ("Uniloc").¹ Uniloc's case against Big Fish is consolidated with its case against ADP for pretrial purposes, with the exception of venue. Docket No. 25.² The motions were originally filed while the cases were pending before Judge Gilstrap. On March 28, 2017, while ADP and Big Fish's motions were still pending before Judge Gilstrap, this Court ruled on several motions to dismiss in Lead Case No. 2:16–cv–393 ("AVG "). See Docket No. 129 in AVG (the "AVG Order").

The AVG Order addressed claims 1, 2, 7, 15 and 22 of U.S. Patent No. 6,510,466 ("the '466 Patent") and claims 1, 3, 7, 9, 13 and 15 of U.S. Patent No. 6,728,766 ("the '766 Patent"). See Docket No. 129 in AVG at 2. Of those claims, the Court held that claims 1, 2 and 7 of the '466 Patent and claims 1 and 3 of the '766 Patent are drawn to ineligible subject matter. Id. at 20. The remaining claims the Court considered are means-plus-function claims. The Court held that the defendants had not sufficiently established that the means-plus-function claims are represented by the allegedly representative non-means-plus-function claims and accordingly declined to decide whether the means-plus-function claims are also directed to ineligible subject matter. Id. at 7.

After the ADP cases were reassigned to the undersigned (Docket No. 149), the Court ordered the parties in this case to file supplemental briefing on the effects of the AVG Order on the pending motions. Docket No. 160. Uniloc, ADP, and Big Fish each filed supplemental briefs (respectively, Docket Nos. 190, 174, and 180).

The claims Uniloc asserts against the ADP Defendants are not limited to the ones that it asserted against the defendants in AVG.³ Specifically, the claims asserted in this case but not asserted in AVG include claims 5, 11 and 17 of the '766 Patent and claims 3–5, 8, 9, 13, 16–20, 22–24, 28–33, 35–37, 41 and 42 of the '466 Patent. See Compl. against ADP, Docket No. 1; Am. Compl. against Big Fish, Docket No. 57; Uniloc Supp. Br., Docket No. 190 at 2. Uniloc also asserts against the ADP Defendants two additional patents, U.S. Patent Nos. 6,324,578 ("the '578 Patent") and 7,069,293 ("the '293 Patent"), that it did not assert against the defendants in AVG. Specifically, Uniloc asserts claims 1–8, 10–39, 41–46 of the '578 Patent, and claims 1, 12 and 17 of the '293 Patent.⁴ Docket No. 190 at 2.

The '578 and '293 Patents are related to the '466 and '766 Patents, with the '578 and '766 Patents sharing a common specification and the '466 and '293 Patents also sharing a common specification.⁵

ADP Defendants challenge all claims of the four asserted patents, alleging that they are invalid under 35 U.S.C. § 101. Docket No. 17 at 6.⁶ For the reasons that follow, ADP's Motion is GRANTED–IN–PART and DENIED–IN–PART .

I. BACKGROUND

The background of the '466 and '766 Patents is addressed in the AVG Order. See Docket No. 129 in AVG , at 2–4. Like the '466 and '766 Patents, the '578 and '293 Patents address aspects of application management in the client-server environment.

The '578 Patent is directed to obtaining user and administrator sets of configuration preferences for applications and then executing the applications using both sets of obtained preferences. See '578 Patent, col. 3:40–45. Claim 1 of the '578 Patent provides:

1. A method for management of configurable application programs on a network comprising the steps of:

installing an application program having a plurality of configurable preferences and a plurality of authorized users on a server coupled to the network;

distributing an application launcher program associated with the application program to a client coupled to the network;

obtaining a user set of the plurality of configurable preferences associated with one of the plurality of authorized users executing the application launcher program;

obtaining an administrator set of the plurality of configurable preferences from an administrator; and

executing the application program using the obtained user set and the obtained administrator set of the plurality of configurable preferences responsive to a request from the one of the plurality of authorized users.

The '293 Patent describes distributing applications to on-demand servers from a centralized network management server. See '293 Patent at col. 50–53. For example, Claim 1 of the '293 Patent provides:

1. A method for distribution of application programs to a target on-demand server on a network comprising the following executed on a centralized network management server coupled to the network:

providing an application program to be distributed to the network management server;

specifying a source directory and a target directory for distribution of the application program;

preparing a file packet associated with the application program and including a segment configured to initiate registration operations for the application program at the target on-demand server; and

distributing the file packet to the target on-demand server to make the application program available for use by a user at a client.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6)

Under Federal Rule of Civil Procedure 12(b)(6), the Court must dismiss a complaint that does not state a claim for relief that is "plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). To state a plausible claim, Plaintiffs must plead facts sufficient to allow the Court to draw a reasonable inference that Defendants are liable for the alleged patent infringement. See id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). At this stage, the Court accepts all well-pleaded facts as true and views those facts in the light most favorable to the Plaintiffs. Bustos v. Martini Club, Inc. , 599 F.3d 458, 461 (5th Cir. 2010).

Eligibility Under 35 U.S.C. § 101

In determining whether a claim is patent-ineligible, the Court must "first determine whether the claims at issue are directed to a patent-ineligible concept."

Alice Corp. Pty. v. CLS Bank Int'l , ––– U.S. ––––, 134 S.Ct. 2347, 2355, 189 L.Ed.2d 296 (2014). Claims directed to software inventions do not automatically satisfy this first step of the inquiry. Enfish, LLC v. Microsoft Corp. , 822 F.3d 1327, 1335 (Fed. Cir. 2016). Rather, "the first step in the Alice inquiry ... asks whether the focus of the claims is on [a] specific asserted improvement in computer capabilities ... or, instead, on ... an ‘abstract idea’ for which computers are invoked merely as a tool." Id. at 1335–36.

If the Court determines that the claims are directed to an abstract idea, it then determines whether the claims contain an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application. Alice , 134 S.Ct. at 2357. An inventive concept is "some element or combination of elements sufficient to ensure that the claim in practice amounts to ‘significantly more’ than a patent on an ineligible concept." DDR Holdings, LLC v. Hotels.com, L.P. , 773 F.3d 1245, 1255 (Fed. Cir. 2014). The Court "consider[s] 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 (internal quotation omitted). Even if each claim element, by itself, was known in the art, "an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces." Bascom Global Internet Servs., Inc. v. AT & T Mobility LLC , 827 F.3d 1341, 1350 (Fed.Cir. 2016).

III. ANALYSIS

A. Asserted and Challenged Claims

ADP challenges all claims of the Asserted Patents, even though Uniloc has not alleged infringement of every claim of the Asserted Patents. Uniloc argues that it would be legally improper for the Court to invalidate unasserted claims. Docket No. 64 at 6 n.1 (citing 800 Adept, Inc. v. Murex Sec., Ltd. , 539 F.3d 1354, 1367 (Fed. Cir. 2008) ). ADP argues that its challenge to all claims in the four asserted patents is appropriate. Docket No. 88 at 9–10 (citing A Pty Ltd. v. eBay, Inc. , Case No. 1:15–cv–155–RP, 2015 WL 10990118 at *4 (W.D. Tex. Oct. 8, 2015) ). In the interest of judicial economy, the Court declines to consider arguments regarding unasserted claims at this time. Accordingly, to the extent ADP challenges any claim not asserted in this action, the Motion is DENIED without prejudice.

B. Representative Claims

In the AVG case, the Court denied the defendants' motion to dismiss as to...