International Business Machines Corporation v. Priceline Group Inc. et al

Filing 73

MEMORANDUM ORDER re 60 REPORT AND RECOMMENDATION is ADOPTED in all respects; 18 MOTION to Dismiss is DENIED without prejudice to renew in the form of a summary judgment motion. Signed by Judge Leonard P. Stark on 3/30/16. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
Plaintiff,
Civil Action No. 15-137-LPS-CJB

v.
THE PRICELINE GROUP INC.,
KAY AK SOFTWARE CORPORATION,
OPENTABLE, INC., and
PRICELINE.COM LLC,
Defendants.

MEMORANDUM ORDER
WHEREAS , Magistrate Judge Burke issued a 53-page Report and Recommendation (the
"Report") (D.I. 60), dated February 16, 2016, recommending that Defendants The
Priceline Group Inc. , Kayak Software Corporation, OpenTable, Inc. , and priceline.com LLC ' s
(collectively, "Defendants") Motion to Dismiss for Failure to State a Claim ("Motion to
Dismiss") (D.I. 18) be denied, "without prejudice to Defendants ' ability to later renew a Section
101 challenge in the form of a summary judgment motion" (D.I. 60 at 53);
WHEREAS , on March 4, 2016, Defendants objected to the Report ("Objections") (D.I.
66), and specifically objected to (1 ) the Report' s conclusion that Defendants have failed to show
that claim 1 of each of U.S. Patent Nos. 7,631 ,346 ('" 346 patent") and 5,961 ,601 ("' 601 patent")
are directed to patent-ineligible abstract ideas under Step 1 of the test for patent eligibility
prescribed in Alice Corp. Pty. Ltd. v. CLS Bank Int 'l, 134 S. Ct. 2347 (2014) and Mayo

Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012) ("A lice test"); and (2) the

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Report's conclusion that Defendants have failed to show that claim 1 of each of the '346 and
'601 patents as well as claim 1 of the other patents-in-suit - U.S. Patent Nos. 5,796,967 ("'967
patent") and 7,072,849 ("'849 patent") (collectively, "Asserted Patents")- are patent-ineligible
as failing to recite any inventive concepts sufficient to make the claims patent-eligible under Step
2 of the Alice test;
WHEREAS , on March 21 , 2016, Plaintiff International Business Machines Corporation
("Plaintiff') responded to the Objections ("Response") (D.I. 72), arguing that the Report
correctly analyzed the representative claims 1 under Steps 1 and 2 of the Alice test;
WHEREAS , the Court has considered Defendants ' Motion to Dismiss de nova, as it
presents case-dispositive issues, see 28 U.S.C. § 636(b)(l); Fed. R. Civ. P. 72(b)(3), and has
further reviewed all of the pertinent filings;
NOW THEREFORE, IT IS HEREBY ORDERED that:
1.

Defendants ' Objections (D.I. 66) are OVERRULED and Judge Burke ' s Report

(D.I. 60) is ADOPTED in all respects . Defendants ' Motion to Dismiss (D.I. 18) is DENIED
WITHOUT PREJUDICE to renew in the form of a summary judgment motion.

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Regarding representativeness of the claims, the Report states: "The Court will focus its
discussion on the claims of the patents that received the lion' s share of attention by the parties.
Below, the Court concludes that at this stage, Defendants have not met their burden of
demonstrating the patent-ineligibility of each of these assertedly representative claims. Thus, it
is not necessary at this time for the Court to expend additional resources assessing the remaining
claims of the Asserted Patents." (Report at 8 n.3 ) Defendants appear to agree that claim 1 in
each of the Asserted Patents is representative. (See Objections at 1) Plaintiff does not dispute
the representativeness of claim 1 of each of the Asserted Patents. (See generally Response)
Nonetheless, depending on how disputed claim terms are construed and what comes out in
discovery (which may have implications relating to, for example, issues of preemption and
inventiveness), both sides will be permitted to reevaluate their position on representative claims
should the § 101 issue be raised again later in this case.

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2.

The Court agrees with the Report that there are issues of claim construction that

must be briefed and resolved before Defendants should be permitted to file a renewed motion
under 35 U.S.C. § 101. (See, e.g. , Report at 39-40) In reaching the conclusions he did, Judge
Burke at various points assumed certain potential constructions, which, as he explained, may or
may not ultimately be adopted by the Court as the correct constructions to apply. The Court
further agrees with the Report that, although patent eligibility is a question oflaw, there may be
subsidiary factual disputes here (e.g., relating to preemption and inventiveness) which may need
to be resolved before the § 101 issues can be finally determined. If so, such a resolution must
await the completion of pertinent discovery. Thus, any summary judgment motion raising a
§ 101 challenge in this case shall be filed in accordance with the requirements for dispositive
motions set forth in the Scheduling Order (D .I. 65), including, in particular, paragraph 18 of the
Scheduling Order (prescribing timing and pages limits for dispositive motions).
3.

Given the detailed reasoning provided in the Report, and given that Defendants

have not raised any arguments that are not adequately addressed in the Report, the Court finds it
unnecessary to address Defendants ' Motion to Dismiss (D.I. 18) or Defendants ' Objections (D.I.
66) any further.

HON.LEONARD P. STARK
UNITED STATES DISTRICT JUDGE

March 30, 2016
Wilmington, Delaware

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