Wireless Discovery LLC v. Eharmony, Inc.

654 F.Supp.3d 360

WIRELESS DISCOVERY LLC, Plaintiff, v. EHARMONY, INC., Defendant.

Wireless Discovery LLC, Plaintiff, v. The Meet Group, Inc., Defendant.

C.A. No. 22-480-GBW

C.A. No. 22-484-GBW

United States District Court, D. Delaware

Filed February 6, 2023

Jimmy C. Chong, Chong Law Firm, PA, Wilmington, DE, William P. Ramey, III, Pro Hac Vice, Houston, TX, for Plaintiff.

Jeffrey J. Lyons, Baker & Hostetler, Wilmington, DE, Andrew E. Samuels, Pro Hac Vice, Columbus, OH, Douglas A. Grady, Pro Hac Vice, Seattle, WA, Kevin P. Flynn, Pro Hac Vice, Cincinnati, OH for Defendant.

MEMORANDUM ORDER

GREGORY B. WILLIAMS, UNITED STATES DISTRICT JUDGE

Presently before this Court is Defendant eHarmony, Inc.'s ("eHarmony") and Defendant The Meet Group, Inc.'s ("The Meet Group") Motions to Dismiss for Failure to State a Claim under Federal Rule of Civil Procedure 12(b)(6). C.A. No. 22-480, D.I. 30; C.A. No. 22-484, D.I. 12. The Court has reviewed the parties' briefing, No. 22-480, D.I. 31, D.I. 39, D.I. 40; No. 22-484, D.I. 13, D.I. 20, D.I. 23,¹ and heard oral argument on December 14, 2022.² ("Tr. ___"). For the reasons below, the Court GRANTS-IN-PART and DENIES-IN-PART eHarmony's Motion to Dismiss, No. 22-480, D.I. 30, and GRANTS The Meet Group's Motion to Dismiss, No. 22-484, D.I. 12.

I. BACKGROUND

On April 13, 2022, Plaintiff Wireless Discovery LLC ("Wireless Discovery") sued eHarmony and The Meet Group in separate patent infringement cases asserting infringement of U.S. Patent No. 9,264,875 ("the '875 patent"). No. 22-480, D.I. 1; No. 22-484, D.I. 1. Wireless Discovery amended its complaint in the eHarmony case on July 18, 2022, asserting three additional patents: U.S. Patent Nos. 9,357,352 (the "'352 patent"), 10,321,267 (the "'267 patent"), and 10,334,397 (the "'397 patent"). No. 22-480, D.I. 21.

The asserted patents are all from the same patent family and are continuations-in-part of U.S. Patent No. 8,914,024, which is not asserted in either case. The asserted patents all relate generally to the idea of social networking, i.e., discovering members of the same social network in the same vicinity and exchanging member's personal information. See No. 22-480, D.I. 21-5 at 1:16-22 ("The invention relates to discovering members of a social network by associating their personal attributes to the mobile device for the purpose of exchanging information using mobile communication devices and, in particular, exchanging personal information between one or more mobile communication devices."); No. 22-484, D.I. 1-3 at 1:16-22 (same).

Individuals can "use their mobile phones to discover others by personal attributes, such as by photos and names, after which, the two parties can exchange information over the internet." No. 22-480, D.I. 21-5 at 2:4-7; No. 22-484, D.I. 1-3 at 2:4-7. These individuals can discover other members who are located "within a vicinity." No. 22-480, D.I. 21-5 at 4:4-6; No. 22-484, D.I. 1-3 at 4:4-6. The "vicinity" is determined by a location that was reported to the server, in the geographic area specified by a user's "search criteria," or by a location recorded in a database. No. 22-480, D.I. 21-5 at 5:4-15; No. 22-484, D.I. 1-3 at 5:4-15.

Individuals can send "invitations" to other members in the vicinity. No. 22-480, D.I. 21-5 at 5:14-22; No. 22-484, D.I. 1-3 at 5:14-22. "The invitation may take the form of a social card, VCard, or other manner of engaging another person in a social atmosphere, or even a business setting such as a meeting, trade show, conference, etc." No. 22-480, D.I. 21-5 at 5:18-22; No. 22-484, D.I. 1-3 at 5:18-22. If a user accepts the "invitation," "members can elect to exchange or send personalized, intimate contact information over the internet after the users have discovered each other." No. 22-480, D.I. 21-5 at 4:10-12; No. 22-484, D.I. 1-3 at 4:10-12. The invention "provides a system and method that enables free discovery of others who also desire social interaction, but without being constrained by hardware compatibility issues inherent in mobile devices by different manufacturers." No. 22-480, D.I. 21-5 at 2:20-24; No. 22-484, D.I. 1-3 at 2:20-24.

II. LEGAL STANDARD

a. Motion to Dismiss Under Rule 12(b)(6)

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. Collateral Estoppel

Collateral estoppel (i.e., issue preclusion) precludes parties from relitigating an issue that they previously had a full and fair opportunity to litigate. See Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979). Regional circuit law governs the general procedural question of whether collateral estoppel applies. See ArcelorMittal Atlantique et Lorraine v. AK Steel Corp., 908 F.3d 1267, 1274 (Fed. Cir. 2018). "However, for any aspects that may have special or unique application to patent cases, Federal Circuit precedent is applicable." Aspex Eyewear, Inc. v. Zenni Optical Inc., 713 F.3d 1377, 1380 (Fed. Cir. 2013) (citation omitted).

Under Third Circuit law, collateral estoppel applies when "(1) the identical issue [was] previously adjudicated; (2) the issue [was] actually litigated; (3) the previous determination of the issue [was] necessary to the decision; and (4) the party being precluded from relitigating the issue [was] fully represented in the prior action." Stone v. Johnson, 608 F. App'x 126, 127 (3d Cir. 2015); Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244, 249 (3d Cir. 2006). "The party seeking to effectuate an estoppel has the burden of demonstrating the propriety of its application." Suppan v. Dadonna, 203 F.3d 228, 233 (3d Cir. 2000).

c. Attorney Fees

Under 35 U.S.C. § 285, "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." An "exceptional" case under § 285 is "one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated." Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554, 134 S.Ct. 1749, 188 L.Ed.2d 816 (2014). "The party seeking fees must prove that the case is exceptional by a preponderance of the evidence, and the district court makes the exceptional-case determination on a case-by-case basis considering the totality of the circumstances." Energy Heating, LLC v. Heat On-The-Fly, LLC, 15 F.4th 1378, 1382 (Fed. Cir. 2021), cert. denied, — U.S. —, 142 S. Ct. 1367, 212 L.Ed.2d 325 (2022) (citation omitted). "[A] case presenting either subjective bad faith or exceptionally meritless claims may sufficiently set itself apart from mine-run cases to warrant a fee award." Octane Fitness, 572 U.S. at 555, 134 S.Ct. 1749.

d. 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 subject matter. It states, "[w]hoever 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. The Supreme Court has held that there are exceptions to § 101. "Laws of nature, natural phenomena, and abstract ideas are not patentable." Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208, 216, ...