3G Licensing, S.A. et al v. Blackberry Limited et al

Filing 87

MEMORANDUM OPINION re motion for judgment on the pleadings. Signed by Judge Leonard P. Stark on 3/22/18. Associated Cases: 1:17-cv-00082-LPS et al. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
30 LICENSING, S.A., KONINKLIJKE KPN
N.V., and ORANGES.A.,
Plaintiffs,
C.A. No. 17-82-LPS-CJB

V.

BLACKBERRY LIMITED and BLACKBERRY
CORPORATION,
Defendants.
30 LICENSING, S.A., KONINKLIJKE KPN
N.V., and ORANGE S.A.,
Plaintiffs,
C.A. No. 17-84-LPS-CJB

V.

LENOVO GROUP LTD., LENOVO HOLDING
CO., INC., LENOVO (UNITED STATES) INC.
and MOTOROLA MOBILITY LLC,
Defendants.
30 LICENSING, S.A. , KONINKLIJKE KPN
N.V., and ORANGE S.A.,
Plaintiffs,
C.A. No. 17-85-LPS-CJB

V.

LG ELECTRONICS INC. , LG ELECTRONICS,
U.S.A., INC. and LG ELECTRONICS
MOBILECOMM U.S.A., INC. ,
Defendants.

KONINKLIJKE KPN N.V. ,
Plaintiffs,
C.A. No. 17-86-LPS-CJB

V.

GEMALTO IOT LLC, GEMALTO M2M GMBH,
and GEMALTO INC. ,
Defendants.
KONINKLIJKE KPN N.V.,
Plaintiffs,
C.A. No. 17-90-LPS-CJB

V.

SIERRA WIRELESS, INC. and SIERRA
WIRELESS AMERICA, INC. ,
Defendant.
KONINKLIJKE KPN N.V.,
Plaintiff,
V.

TCL COMMUNICATION, INC. , TCL
COMMUNICATION TECHNOLOGY HOLDING
LIMITED, TCT MOBILE, INC. , TCT MOBILE
(US) INC., and TCT MOBILE (US) HOLDINGS ,
INC.,

C.A. No. 17-91-LPS-CJB

Defendants.
KONINKLIJKE KPN N.V. ,
Plaintiff,
C.A. No. 17-92-LPS-CJB

V.

TELIT WIRELESS SOLUTIONS, INC. ,
Defendant.

Joseph J. Farnan, Jr., Brian E. Farnan, Michael J. Farnan, FARNAN LLP, Wilmington, DE
Alexandra G. White, Jeffrey S. David, Hunter Vance, Rocco Magni, SUSMAN & GODFREY,
Houston, TX
Andres C. Healy, SUSMAN & GODFREY, Seattle, WA
Attorneys for Plaintiffs 3G Licensing, S.A., Koninklijke KPN N .V ., and Orange S.A.
Colm F. Connolly, MORGAN, LEWIS & BOCKIUS LLP, Wilmington, DE
Amy M. Dudash Eric Kraeutler, John V. Gorman, MORGAN, LEWIS & BOCKIUS LLP,
Philadelphia, PA
Robert C. Bertin, MORGAN, LEWIS & BOCKIUS LLP, Washington, DC
Attorneys for Defendants Blackberry Limited and Blackberry Corporation.
Jack B. Blumenfeld, MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE
Jonathan E. Retsy, Kathleen B. Barry, James Winn, WINSTON & STRAWN LLP, Chicago, IL
Andrew R. Sommer, WINSTON & STRAWN LLP, Washington, DC
Attorneys for Defendants Lenovo Holding Co. Inc. , and Lenovo (United States) Inc.
Roger D. Smith, II, MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE
Peter H. Kang, Ashish Niigdev, Jingyung Lee, SIDLEY AUSTIN LLP, Palo Alto, CA
Ryan M. Sandrock, SIDLEY AUSTIN LLP, San Francisco, CA
Attorneys for Defendants LG Electronics Inc., LG Electronics U .S.A ., Inc. , and LG
Electronics MobileComm U.S.A. , Inc. ,
David E. Moore, Bindu A. Palapura, Stephanie E. O ' Byrne, POTTER ANDERSON &
CORROON, LLP, Wilmington, DE
Brian A. Rosenthal, GIBSON, DUNN & CRUTCHER, New York, NY
Colby A. Davis, GIBSON, DUNN & CRUTCHER, Los Angeles, CA
Brian K. Andrea, GIBSON, DUNN & CRUTCHER, Washington, DC
Attorneys for Defendants Gemalto IOT LLC, Gemalto M2M GMBH and Gemalto Inc.
Jack B. Blumenfeld, MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE
Adam Alper, Eric Cheng, Sarah L. Forney, KIRKLAND & ELLIS LLP, San Francisco, CA
Michael W. De Vries, KIRKLAND & ELLIS LLP, Los Angeles, CA
Attorneys for Defendants Sierra Wireless America, Inc. , and Sierra Wireless, Inc.

Jody Barillare, MORGAN LEWIS & BOCKIUS LLP, Wilmington, DE
William P. Quinn, Jr. , MORGAN LEWIS & BOCKIUS LLP, Philadelphia, PA
Bradford A. Cangro, Hang Zheng, MORGAN LEWIS & BOCKIUS LLP, Washington, DC
Attorneys for Defendants TCL Communication Technology Holding Ltd., TCL
Communication, Inc. , TCL Mobile, Inc. , TCT Mobile (US) Inc. , and TCT Mobile (US)
Holdings, Inc.
Jack B. Blumenfeld, MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE
David A. Loewenstein, Guy Yonay, Clyde A. Shuman, PEARL COHEN ZEDEK LATZER
BARATZ LLP, New York, NY
Attorneys for Defendant Telit Wireless Solutions, Inc.

MEMORANDUM OPINION

March 22, 2018
Wilmington, Delaware

U.S. District Judge:
Plaintiff Koninklijke KPN N.V. ("KPN") sued multiple defendants in numerous related
actions for alleged infringement of KPN' s U.S. Patent No. 6,212,662 ("'662 patent"). Pending
before the Court is Defendants ' motion under Federal Rule of Civil Procedure 12(c) for judgment
on the pleadings that all the claims of the ' 662 patent are invalid under 35 U.S.C. § 101. (C.A.
No. 17-28 D.I. 28) 1 For the reasons below, the Court will grant Defendants' motion.

I.

BACKGROUND
KPN asserts the ' 662 patent in a total of eleven cases against Defendants; in seven of

those cases it is the only asserted patent, while in the remaining cases it is one of five patents-insuit. 2 (See D.I. 29 at 1) The '662 patent is entitled "Method and Devices for the Transmission of
Data with Transmission Error Checking." (D.I. 29-1 Ex. A) As the title suggests, the '662
patent is related to the "detection of errors, in particular transmission errors, in data streams
and/or data packets." '662 patent at Abstract; see also id. at 1: 10-11 ("The invention relates to a
method for the transmission of data with transmission error checking.").
The patent explains that errors may occur when data is transmitted, for example, "through
electromagnetic radiation, inadequacies in a storage medium (transmission in time), and errors in
switching and transmission equipment." Id. at 1:31-34. The claimed invention allows for
checking such errors by first generating supplementary data at the transmitting and receiving end

'Unless otherwise noted, all references to the docket index (D.I.) are to C.A. No. 17-82.
2

The '662 patent is the only asserted patent against Gemalto (C.A. No. 17-86), Kyocera (C.A.
No. 17-87), NEC (C.A. No. 17-88), Sierra (C.A. No. 17-90), TCL (C.A. No. 17-91), Telit (C.A.
No. 17-92), and OnePlus (C.A. No. 17-89). It is one of five patents asserted against Blackberry
(C.A. No. 17-82), HTC (C.A. No. 17-83), Lenovo (C.A. No. 17-84), and LG (C.A. No. 17-85).
1

of a transmission channel using a first and a second function, respectively. Id. at 1: 10-20. The
supplementary data that is generated at each end is then compared to see if they correspond with
each other. Id. If they do not, then a transmission error may have occurred and the relevant data
can be re-transmitted, if necessary. Id. at 1:43-46.
The '662 patent also generally describes the principles of data transmission and error
correction in the prior art. Id. at Fig. 1; 3 :32-56. According to the patent, the concept of
generating supplementary data to check for errors in data during transmission was already
known. Id. at 1:21-22, 34-3 7. The patent provides examples of prior art methods for generating
supplementary data like using parity bits and a cyclic redundancy code (CRC) generator. Id. at
1:37-46, 60-67.

However, as the patent explains, these prior art systems and methods were not completely
effective because transmission errors were sometimes not detected. The patent provides two
specific instances when this occurred. One, referred to as "systematic errors," is when the errors
repeat themselves, and the other is when the data is altered, for example, compressed or encoded,
during transmission. Id. at 1:47-2:15. According to the "object of the invention," the claimed
method "allows data to be checked for e1Tors in a better way, and thus considerably increases the
probability of transmission errors being detected," is well-suited "for application to compressed
data," and can be "applied in a simple manner." Id. at 2: 18-26.
To achieve this objective, the ' 662 patent, unlike the prior art methods, varies the original
data to create supplementary data. See id. at 2:30-41. By varying the original data, the patent
explains, the probability of detecting "systematic errors in particular increases considerably." Id.
at 2:42-47.

2

The four claims of the '662 patent are reproduced below:
1.

A device for producing error checking based on original data
provided in blocks with each block having plural bits in a
particular ordered sequence, comprising:
a generating device configured to generate check data; and
a varying device configured to vary original data prior to supplying
said original data to the generating device as varied data;
wherein said varying device includes a permutating device
configured to perfonn a pennutation of bit position relative to said
particular ordered sequence for at least some of the bits in each of
said blocks making up said original data without reordering any
blocks of original data.

2.

The device according to claim 1, wherein the varying device is
further configured to modify the pennutation in time.

3.

The device according to claim 2, wherein the varying is fmiher
configured to modify the permutation based on the original data.

4.

The device according to claim 3, wherein the pe1mutating device
includes a table in which subsequent pennutations are stored.

As can be seen, claim 1 claims a device having three components: a generating device, a
varying device, and a permutating device. The generating device generates "check data," which
the specification also refers to as supplementary data. See '662 patent at 3:32-34, 37-39. The
varying device varies the original data to create "varied data" and then sends the varied data to
the generating device. To vary the data, the varying device uses a permutating device, which
permutates the data by changing one or more bit positions in each data block without reordering
the blocks. All three dependent claims recite devices that claim additional features of either the
varying device or the pennutating device. The devices in the dependent claims are designed to
modify the permutation based on time (claim 2) and the original data (claim 3) and also include a

3

table in which later permutations can be stored (claim 4).
II.

RECENT § 101 DECISIONS

The parties completed briefing on the motion on October 4, 2017. (D.I. 29, 37, 45) The
Court of Appeals has subsequently issued multiple opinions considering challenges to
patentability pursuant to § 101.
On November 3, 2017, Defendants notified the Court of the Federal Circuit' s decision in
Two-Way Media Ltd. v. Comcast Cable Commc 'ns, LLC, 874 F.3d 1329 (Fed. Cir. 2017). (D.I.

51) Two-Way Media affirmed a decision from Judge Andrews of this Court finding that the
claims of the asserted patents were not patent eligible under§ 101. Id. at 1332. When the Court
heard oral argument on December 8, 2017 (see D.I. 66 ("Tr.")), the parties were able to address
the application of Two-Way Media to the pending motion. (See e.g., id. at 11, 32, 46, 65)
On February 20, 2018, KPN notified the Court of the opinion in Aatrix Software, Inc. v.
Green Shades Software, Inc., 882 F.3d 11 21 (Fed. Cir. 2018). (D.I. 77) As KPN noted, Aatrix

states with respect to the second step of the Alice/Mayo test (described further below) that
"[w]hether the claim elements or the claimed combination are well-understood, ro utine [and]
conventional is a question of fact. " Id. at 1128. Defendants, in their response two days later,
further advised the Court of the appellate court' s decision in Automated Tracking Sols., LLC v.
Coca-Cola Co., 2018 WL 935455, at *5-6 (Fed. Cir. Feb. 16, 2018), which affirmed the grant of

a motion for judgment on the pleadings finding that the asserted patent claims were ineligible.
(D.I. 78)
The Court is also aware of other recent § 101 opinions. See, e.g., Intellectual Ventures I
LLC v. Symantec C01p., 2018 WL 1324863 (Fed. Cir. Mar. 15, 2018) (affirming this Court's

4

grant of summary judgment of invalidity due to lack of patentable subject matter); Exergen Corp.

v. Kaz USA, Inc., 2018 WL 1193529, *4 (Fed. Cir. Mar. 8, 2018) ("The district court's
conclusion that these claim elements were not well-understood, routine, and conventional is a
question of fact to which we must give clear error deference. Like indefiniteness, enablement, or
obviousness, whether a claim is directed to patentable subject matter is a question of law based
on underlying facts . .. . [N]ot every § 101 determination contains disputes over the underlying
facts .") (internal citations omitted); Zuilli v. Google LLC, 2018 WL 798666 (Fed. Cir. Feb. 9,
2018) (affirming PTAB decision that claims were directed to patent-ineligible subject matter);

Berkheimer v. HP Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018) (affirming grant of motion for
judgment on pleadings while stating, "Whether something is well-understood, routine, and
conventional to a skilled artisan at the time .of the patent is a factual determination"); Move, Inc.

v. Real Estate Alliance Ltd. , 2018 WL 656377 (Fed. Cir. Feb. 1, 2018) (affirming grant of
summary judgment finding patent invalid for claiming ineligible subject matter); Core Wireless

Licensing S.A.R.L. v. LG Electronics, Inc. , 880 F.3d 1356 (Fed. Cir. 2018) (affinning denial of
summary judgment that claims are directed to patent ineligible subject matter); Finjan, Inc. v.

Blue Coat Systems, Inc. , 879 F.3d 1299 (Fed. Cir. 2018) (affirming district court's conclusion
following bench trial that patent claims were directed to patent-eligible subject matter).
Even though the parties have not provided their specific analyses of all of these recent
decisions, the Court has considered each of them in reaching its decision here.

Ill.

LEGAL ST AND ARDS

A.

Motion for Judgment on the Pleadings

Pursuant to Federal Rule of Civil Procedure 12(c), a party may move for judgment on the

5

pleadings "[a]fter pleadings are closed - but early enough not to delay trial." When evaluating a
motion for judgment on the pleadings, the Court must accept all factual allegations in a
complaint as true and view them in the light most favorable to the non-moving party. See

Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008); see also Maio v. Aetna, Inc., 221
F.3d 472,482 (3d Cir. 2000). This is the same standard that applies to a Rule 12(b)(6) motion to
dismiss. See Turbe v. Gov 'tofVirgin Islands, 938 F.2d 427, 428 (3d Cir. 1991).
A Rule 12(c) motion will not be granted "unless the movant clearly establishes that no
material issue of fact remains to be resolved and that he is entitled to judgment as a matter of
law." Rosenau, 539 F.3d at 221. "The purpose of judgment on the pleadings is to dispose of
claims where the material facts are undisputed and judgment can be entered on the competing
pleadings and exhibits thereto, and documents incorporated by reference." Venetec Int 'l, Inc. v.

Nexus Med., LLC, 541 F. Supp. 2d 612, 617 (D. Del. 2008); see also In re Burlington Coat
Factory Sec. Litig. , 114 F.3d 1410, 1426 (3d Cir. 1997) (explaining that any documents integral
to pleadings may be considered in connection with Rule 12(c) motion). "The issue is not
whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to
support the claims." Burlington Coat Factory, 114 F.3d at 1420. Thus, a court may grant a
motion for judgment on the pleadings (like a motion to dismiss) only if, after "accepting all wellpleaded allegations in the complaint as true, and viewing them in the light most favorable to
plaintiff, plaintiff is not entitled to relief." Maio , 221 F.3d at 482.
B.

Patentable Subject Matter

Under 35 U.S.C. § 101 , "[w]hoever invents or discovers any new and useful process,
e
machine, manufacture, or composition of matter, or any new and useful improvem_nt thereof,

6

may obtain a patent therefor, subject to the conditions and requirements of this title." There are
three exceptions to§ 101 ' s broad patent-eligibility principles: "laws of nature, physical
phenomena, and abstract ideas." Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980). "Whether
a claim recites patent eligible subject matter is a question of law which may contain disputes over
underlying facts. " Berkheimer, 881 F.3d at 1368.
In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289

(2012), the Supreme Court set out a two-step "framework for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts." Alice Corp. Pty. Ltd. v. CLS Bankint 'l, 134 S. Ct. 2347, 2355
(2014). First, courts must determine if the claims at issue are directed to a patent-ineligible
concept ("step one"). See id. If so, the next step is to look for an '" inventive concept' - i.e., an
element or combination of elements that is sufficient to ensure that the patent in practice amounts
to significantly more than a patent upon the [ineligible concept] itself' ("step two"). Id.
(alteration in original). The two steps are "plainly related" and "involve overlapping scrutiny of
the content of the claims." Elec. Power Grp., LLC v. Alstom S.A ., 830 F.3d 1350, 1353 (Fed.
Cir. 2016).
At step one, "the claims are considered in their entirety to ascertain whether their
character as a whole is directed to excluded subject matter." Internet Patents Corp. v. Active
Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015) (emphasis added); see also Affinity Labs of
Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016) ("Affinity Labs I") (stating

first step "calls upon us to look at the 'focus of the claimed advance over the prior art' to
determine if the claim's ' character as a whole ' is directed to excluded subject matter").
7

In conducting the step one analysis, courts should not "oversimplifTy]" key inventive
concepts or "downplay" an invention's benefits. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327,
1337-38 (Fed. Cir. 2016); see also McRO, Inc. v. Bandai Namco Games Am. Inc. , 837 F.3d 1299,
1313 (Fed. Cir. 2016) ("[C]ourts ' must be careful to avoid oversimplifying the claims' by
looking at them generally and failing to account for the specific requirements of the claims.")
(quoting In re TL! Commc 'ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016)).
At step two, courts must "look to both the claim as a whole and the individual claim
elements to determine whether the claims contain an element or combination of elements that is
sufficient to ensure that the patent in practice amounts to significantly more than a patent upon
the ineligible concept itself." McRO, 837 F.3d at 1312 (internal brackets and quotation marks
omitted). The "standard" step two inquiry includes consideration of whether claim elements
"simply recite 'well-understood, routine, conventional activit[ies)."' Bascom Glob. Internet

Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 , 1350 (Fed. Cir. 2016) (quoting Alice, 134 S.
Ct. at 2359). "Simply appending conventional steps, specified at a high level of generality, [is]
not enough to supply an inventive concept." Alice, 134 S. Ct. at 2357 (internal quotation marks
omitted; emphasis in original).
However, " [t)he inventive concept inquiry requires more than recognizing that each claim
element, by itself, was known in the aii." Bascom, 827 F.3d at 1350. In Bascom, the Federal
Circuit held that "the limitations of the claims, taken individually, recite generic computer,
network and Internet components, none of which is inventive by itself," but nonetheless
dete1mined that an ordered combination of these limitations was patent-eligible under step two.

Id. at 1349.

8

The Federal Circuit recently elaborated on the step two standard, stating that "[t]he
question of whether a claim element or combination of elements is well-understood, routine and
conventional to a skilled artisan in the relevant field is a question of fact. Any fact, such as this
one, that is pertinent to the invalidity conclusion must be proven by clear and convincing
evidence." Berkheimer, 881 F.3d at 1368; see also Aatrix, 882 F.3d at 1128 ("While the ultimate
determination of eligibility under§ 101 is a question ofl aw, like many legal questions, there can
be subsidiary fact questions which must be resolved en route to the ultimate legal
detem1ination."); Automated Tracldng, 2018 WL 935455, at *5 ("We have held that 'whether a
claim element or combination of elements is well-understood, routine and conventional to a
skilled artisan in the relevant field is a question of fact. "') (quoting Berkheimer, 881 F.3d at
1368).
"Whether a particular technology is well-understood, routine, and conventional goes
beyond what was simply known in the prior art. The mere fact that something is disclosed in a
piece of prior art, for example, does not mean it was well-understood, routine, and conventional."

Berkheimer, 881 F.3d at 1369; see also Exergen Corp. , 2018 WL 1193529, at *4 ("Something is
not well-understood, routine, and conventional merely because it is disclosed in a prior art
reference. There are many obscure references that nonetheless qualify as prior art.").
As part of the step two "inventive concept" inquiry, the Federal Circuit has looked to the
claims as well as the specification. See Affinity Labs of Texas, LLC v. Amazon.com Inc., 838
F.3d 1266, 1271 (Fed. Cir. 2016) ("Affinity Labs IF') ("[N]either the claim nor the specification
reveals any concrete way of employing a customized user interface."). Still, it is not enough just
to disclose the improvement in the specification; instead, the Court' s task becomes to "analyze

9

the asserted claims and detennine whether they capture these improvemeuts." Berkheimer,881
F.3d at 1369 (emphasis added). In other words, " [t]o save a patent at step two, an inventive
concept must be evide11t in the claims." RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322,
1327 (Fed. Cir. 2017) (emphasis added); see also Alice, 134 S.Ct. at 2357 (" [W]e must examine
the elements of the claim to detennine whether it contains an 'inventive concept."') ( emphasis
added); Synopsys, Inc. v. Mentor Graphics Corp ., 839 F.3d 1138, 1149 (Fed. Cir. 2016) ("The
§ 101 inquiry must focus on the language of the Asserted Claims themselves.").
At both steps one and two, it is often useful for the Court to compare the claims at issue
with claims that have been considered in the now considerably large body of decisions applying

§ 101. See Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016).
Finally, as a procedural matter, the Federal Circuit has observed frequently that
§ 101 disputes may be amenable to resolution on motions for judgment on the pleadings, motions ·
to dismiss, or summary judgment. See, e.g., Berkheimer, 881 F.3d at 1368 (" Whether a claim
recites patent eligible subject matter is a question oflaw which may contain disputes over
underlying facts . Patent eligibility has in many cases been resolved 011 motions to dismiss or

summa,y judgment. Nothi11g in this decision should be viewed as casting doubt on the
propriety of those cases. When there is no genuine issue of material fact regarding, whether the
claim element or claimed combination is well-understood, routine, conventional to a skilled
artisan in the relevant field , this issue can be decided on summary judgment as a matter oflaw.")
(emphasis added) ; buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014) (affirming
grant of Rule 12(c) motion for judgment on pleadings for lack of patentable subject matter).

10

IV.

DISCUSSION
A.

Step One

At step one of the Alice/Mayo test, the question is whether the asserted claims are
directed to a patent-ineligible concept. " [A]ll inventions at some level embody, use, reflect, rest
upon, or apply laws of nature, natural phenomena, or abstract ideas." May o, 132 S. Ct. at 1293.
Thus, "an invention is not rendered ineligible for patent simply because it involves" a patentineligible concept. Alice, 134 S. Ct. at 2354. "Indeed, to preclude the patenting of an invention
simply because it touches on something natural would ' eviscerate patent law. "' Rapid Litig.

Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1050 (Fed Cir. 2016) (quoting Mayo, 132 S. Ct.
at 1293). "At step one, therefore, it is not enough to merely identify a patent-ineligible concept
underlying the claim; we must detennine whether that patent-ineligible concept is what the claim
is ' directed to."' Id.
Applying this analysis, the Court agrees with Defendants that the claims of the '662
patent are directed to the abstract idea ofreordering data and generating additional data. (D.I. 29
at 10-12; see also Tr. at 70 (KPN seemingly agreeing that ' 662 patent at its core relates to data
manipulation in form ofreordering and generating data))
The Federal Circuit has found other claims reciting similar steps of manipulating data
invalid under§ 101. See Two-Way Media , 874 F.3d at 1337 (claim requiring "converting,"
"routing," "controlling," "monitoring" and "accumulating records" relate to "manipulat[ing] data
but fail[] to do so in a non-abstract way"); RecogniCorp, 855 F.3d at 1326 (claim is "directed to
the abstract idea of encoding and decoding image data"); Intellectual Ventures I LLC v. Capital

One Fin. Corp. , 850 F.3d 1332, 1340 (Fed. Cir. 2017) (" [A]t their core, [claims are] directed to
11

the abstract idea of collecting, displaying, and manipulating data."); Digitech Image Techs., LLC

v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014) (" [W]ithout additional
limitations, a process that employs mathematical algorithms to manipulate existing information
to generate additional information is not patent eligible."). In Digitech, 758 F.3d at 1351 , the
Federal Circuit stated that a "process that started with data, added an algorithm, and ended with a
new form of data was directed to an abstract idea."
On this same reasoning, the claims here - which do not say how data is reordered, how to
use reordered data, how to generate additional data, how to use additional data, or even that any
data is transmitted - are directed to an abstract idea. Simply "reciting . .. data manipulation
steps" without additional limitations, constitutes, at step one, an abstract idea. Capital One, 850
F.3d 1332, 1340.
The dependent claims are also abstract. The additional limitations of these claims do not
say how the permutations are modified in time or modified based on the data, and but indicate
(for Claim 4) that the pennutations are stored in a generic table.
The Court is not persuaded by KPN' s contrary view. KPN contends that the claims are
directed to a specific implementation of a solution to a problem in the computer field rather than
an abstract idea. (D.I. 37 at 6-12) But all of the components of the claims are generic devices.
As the specification explains, the functions used to generate data in the claimed device "can be
implemented in software as well as hardware (for example as an ASIC)." ' 662 patent at 4:8-10;

see also id. at 6: 14-24 None of those features - functions , software, and hardware - are
characterized as anything other than conventional. Generic devices do not make a claim nonabstract (as that concept is applied at step one). See Alice, 134 S.Ct. at 2347 (holding that
12

"purely functional and generic" devices do not save abstract claim); Capital One, 850 F.3d 1332
(finding apparatus claim abstract as it contained only generic components, e.g. , "processor,"
"component that organizes data," and "component that organizes"); Affinity Labs II, 838 F.3d
1266 (finding system claim abstract that contained "storage medium" and "wireless cellular
telephone device").
Accordingly, the Court must tum to step two of the analysis.

B.

Step two

At step two, the Court looks at "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; see also Mayo, 566 U.S. at
73 (explaining that steps of claim must amount to more than "well-understood, routine,
conventional activity"). "To save a patent at step two, an inventive concept must be evident in

the claims." RecogniCorp, 855 F.3d at 1327 (emphasis added); Alice, 134 S.Ct. at 2357 (" [W]e
must examine the elements of the claim to determine whether it contains an 'inventive
concept. "') (emphasis added).
Defendants argue that the claimed devices are generic devices that perfonn the customary
computer functions ofreordering and generating data. (D.I. 29 at 18) Defendants further
contend that the patent's intended use of error checking merely restates the express goal of the
patent and does nothing more than limit the technology to a particular field of use. (Id. at 18)
Finally, Defendants assert that there is nothing inventive about the data itself that is generated
(blocks consisting of bits) or the process of permutating the data (changing bit position without
reordering the blocks making up the data). (Id. at 19)

13

KPN responds that " [n]othing more is needed to refute Defendants' motion" than the
"specification' s statements about the purp01ted invention." (D.I. 37 at 18) (citing MAZ

Encryption Techs. LLC v. Blackberry Corp., 2016 WL 5661981 , at *5 (D. Del. Sept. 29, 2016))
In KPN's view, the patent' s statements show the "inventiveness" of the claimed components,
both individually and as an ordered combination. (Id.) KPN points to a portion of the
specification purportedly explaining that the claimed devices disclose a "new, non-conventional
way of generating check data that represented a marked improvement over the prior art." Id. at
18-19) (citing ' 662 patent at 2:41-62, 6:30-35).
The Court agrees with Defendants. No "saving inventive concept," Two-Way Media, 874
F.3d at 1336, is evident in the claims. Claiin 1, the only independent claim of the '662 patent,
contains essentially three limitations: a generating device that generates data, and a varying
device that varies the original data by permutating the data using a permutating device. '662
patent at 7:4-8:3. These device limitations contain no inventive concept that transforms the
abstract idea ofreordering and generating data into patent-eligible application of the abstract
idea. Instead, claim 1 broadly recites generic functions, which encompass the abstract idea itself,
without providing any details. Reciting limitations using such broad functional language without
adequately explaining "how the desired result is achieved" is not enough at step two. See Elec.

Power, 830 F.3d at 1355 (emphasis added).
Even accepting, arguendo, KPN's contention that the specification discloses an inventive
way of checking errors in transmitted data, the patent still fails at step two because that purported
inventive concept is not captured in the claims. See, e.g., Two-Way Media, 874 F.3d at 1338-39
("The main problem that Two-Way Media cannot overcome is that the claim - as opposed to

14

something purportedly described in the specification - is missing an inventive concept."). "The
improvements in the specification" are relevant at step two "to the extent they are captured in the
claims." Berkheimer, 881 F.3d at 1369. Here, any improvements disclosed in the ' 662 patent are
not captured in the claims of the patent.
As KPN observes, the specification explains that the "object of the invention" is met "by
a method for the transmission of data between a transmitting end and a receiving end of a
transmission channel while providing an ell'or check." ' 662 patent at 2:18, 27-30. According to
the specification, the method is performed by generating supplementary data at the transmitting
end and regenerating the supplementary data at the receiving end using certain functions . Id. at
2:31-38. The specification then explains how ell'or checking is done: "by comparing the
regenerated supplementary data with the transmitted supplementary data." Id. at 2:39-41.
These particular features of the purported inventive concept, however, are not recited in
Claim 1. While the claim recites various device limitations to generate, vary, and permutate data,
there is no reference in the claim to a transmission channel, a transmitting end, a receiving end,
or even to data transmission. Without such limitations, the other aspects of the purported
inventive concept are also absent from the claim: the process of generating supplementary data at
the transmitting end of a transmission channel and regenerating the supplementary data at
receiving end of the channel, id. at 2:30-38; the requirement for "a form of synchronization" to
exist between the user data and the supplementary data, id. at 2:59-62; and the process of
"comparing the regenerated supplementary data with the transmitted supplementary data," id. at
2:39-41 , which is how error checking is accomplished, according to the patent.
Additionally, none of the capabilities or functions disclosed in the specification are

15

described as anything other than conventional. This applies to: (i) the patent's central concept of
generating supplementary data to check for errors in transmitted data, which was already known,
see '662 patent at 3: 32-56; Fig 1; (ii) the data structure used to generate supplementary data, see
id. at 3: 12-19 (describing conventional data structures); (iii) how the permutation is done, see id.

at 5:58-65 (simply interchanging bit positions in a conventional manner); (iv) the permutation
functions used to vary the data, see id. at 5:37-38, 41-42, 6:12-13 (using conventional linear and
non-linear functions); and (v) software and hardware used to implement the functions, see id. at
4:8-11 , 6:14-30; see also 3:66-4:1 ; 4:46-48 (using conventional adder and random number
generator known in prior art). That the patent uses terms like "generating device,""varying
device," "permutating device," "check data," and "varied data" does not save it because those
terms simply refer to generic computer structures and functions . See Capital One, 850 F.3d at
1342 ("The mere fact that the inventor applied coined labels to conventional structures does not
make the underlying concept inventive."). "Mere recitation of concrete, tangible components is
insufficient to confer patent eligibility to an otherwise abstract idea. Rather, the components
must involve more than performance of well-understood, routine, conventional activit[ies)
previously known to the industry." Automated Tracking, 2018 WL 935455, at *5 (internal
quotation marks omitted; alteration in original).
The dependent claims recite no additional features that capture an inventive concept.
Claim 2 recites a device that is able "to modify the permutation in time." ' 662 patent at 8:5-6.
Claim 3 recites a device that is able "to modify the permutation based on the original data." Id.
at 8:8-9. The device in Claim 4 includes "a table in which subsequent permutations are stored."
Id. at 8:11-12. KPN has not persuaded the Court how modifying the permutation based on time

16

or the original data, or storing permutations in a table, go beyond conventional computer
operations and qualify for eligibility under § 101.
The cases on which KPN primarily relies in urging the Court to reach a contrary
conclusion are unavailing. (See D.I. 37 at 1, 6-8, 11-1 2) KPN contends that the Federal Circuit's
Amdocs case is most analogous. (See Tr. at 92) But there, unlike here, the claims being

challenged captured the inventive concept. In Amdocs, 841 F.3d at 1301 , the Federal Circuit held
that claims relating to solutions for managing accounting and billing data over large, disparate
networks recited an inventive concept because they contained "specific enhancing limitation[ s]
that necessarily incorporate[d] the invention' s distributed architecture." See also id. at 1300
("[T]he claim's enhancing limitation necessarily requires that [the] generic components operate
in an unconventional manner to achieve an improvement in computer functionality."). In
particular, the Court construed the term "enhance" in a manner that integrated the inventive
concept - the systems ' s distributed architecture that the specification described as an important
advance over prior art - into the claim language. See id. at 1300-02. 3 Here, as already explained,
the inventive concept is not captured in the claims.
Similarly, in MAZ Encryption, 2016 WL 5661981 , at *5, this Court held, at step one, that
a patent related to data encryption was directed to a technological improvement in the way

3

KPN does not contend that the Court must conduct claim construction before making a decision
on the § 101 issues. (Tr. at 66) KPN previously asse1ied the ' 662 patent against Samsung
Electronics Co., Ltd. in a case filed December 30, 2014 in the Eastern District of Texas (C.A.
No. 2-14-cv-01165-JRG). That court issued a claim construction opinion. (D.I. 29-1 Ex. D)
KPN disputes that the previous court' s constructions are the most favorable constructions
available to it and reserves the right to propose different constructions as this case proceeds.
(See D.I. 37 at 6) The Court finds that in the instant case claim construction is not a prerequisite
for determining the patent' s subject matter eligibility. See Bancorp Servs. , L.L. C. v. Sun Life
Assur. Co. of Canada (US.) , 687 F.3d 1266, 1273-74 (Fed. Cir. 2012).
17

computers operate rather than an abstract idea. While the Court viewed the claim in light of the
specification and the record before it, the Court ultimately concluded that the patent's claim - not
just the specification - recited features (use of two separate tables) that provided a technical
solution to problems in prior art encryption methods. See id. at *5-7.

In sum, evaluating the claims both individually and as an ordered combination, the Court
finds that they recite no more than the routine steps of reordering data and generating data using
generic components and conventional computer operations. While the ' 662 patent purports to
have met a need the in prior art for "a method which allows data to be checked for errors in a
better way, and thus considerably increases the probability of transmission errors being detected,"
' 662 patent, 2:20-23, the claims recite no inventive step to achieve this stated goal. At bottom,
even though the ' 662 patent may in its specification disclose a solution to a technological
problem, its claims fail to claim one. See A lice, 134 S. Ct. at 2357-58 (explaining that "claim
had to supply a 'new and useful ' application of the [abstract] idea in order to be patent eligible")
(emphasis added). Accordingly, the ' 662 patent is not patent eligible. 4

V.

CONCLUSION
For the reasons stated above, on the record before the Court, the claims of the ' 662 patent

are directed to an abstract idea and are not directed to patent-eligible subject matter. Therefore,

the Court will grant Defendants' motion. An order follows .

4

The Court has considered the other issues raised by the parties - including (i) whether the ' 662
patent claims survive the machine or transformation test (see D.I. 37at 10); (ii) whether the
claims can be performed in the human mind (see D.I. 29 at 12-13; D.l. 37 at 12-13);
(iii) preemption concerns (see D.I. 29 at 16-17; D.I. 37 at 16; D.I. 45 at 8); and (iv) the relevancy
of the Patent Trial and Appeal Board' s decision not to institute inter partes review on some
claims of the '662 patent (see D.I. 37 at 19; D.I. 45 at 10) - and has found none of them alters the
outcome here. None warrants further discussion.
18