Sunoco Partners Marketing & Terminals L.P. v. Powder Springs Logistics, LLC et al

Filing 354

REPORT AND RECOMMENDATIONS re D.I. 138 MOTION to Dismiss for Failure to State a Claim filed by Magellan Midstream Partners, L.P., Powder Springs Logistics, LLC as it relates to the assertion that certain claims of the patents-in-su it are patent ineligible pursuant to Section 101. For the reasons herein, the Court recommends that the Motion be DENIED in that respect. Please note that when filing Objections pursuant to Federal Rule of Civil Procedure 72(b)(2), briefing consists solely of the Objections (no longer than ten (10) pages) and the Response to the Objections (no longer than ten (10) pages). No further briefing shall be permitted with respect to objections without leave of the Court. Objections to R&R due by 10/2/2019. Signed by Judge Christopher J. Burke on 9/18/2019. (dlb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
SUNOCO PARTNERS MARKETING &
TERMINALS L.P. ,
Plaintiff,
V.

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POWDER SPRINGS LOGISTICS , LLC,
and MAGELLAN MIDSTREAM
PARTNERS, L.P. ,
Defendants.

Civil Action No. 17-1390-LPS-CJB

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REPORT AND RECOMMENDATION
Pending before the Court in this patent infringement case is Defendants Powder Springs
Logistics, LLC ("Powder Springs") and Magellan Midstream Partners, L.P. 's ("Magellan," and
collectively with Powder Springs, "Defendants") motion to dismiss for failure to state a claim
pursuant to Federal Rule of Civil Procedure 12(b)(6) (the "Motion") . (D.I. 138; October 11 ,
2018 Oral Order) With the Motion, Defendants argue that the patents asserted by Plaintiff
Sunoco Partners Marketing & Terminals L.P. ("Sunoco" or "Plaintiff') are directed to patentineligible subject matter pursuant to 35 U.S.C. § 101 ("Section 101") and that Plaintiffs
allegations of willful infringement fail to meet the Twombly/Iqbal pleading standard. The Court
has previously issued a Report and Recommendation addressing the Motion with regard to
Plaintiffs claims of willful infringement. (D.I. 322) This Report and Recommendation will
address the Motion as it relates to the assertion that certain claims of the patents-in-suit are patent
ineligible pursuant to Section 101 . For the reasons that follow, the Court recommends that the
Motion be DENIED in that respect.

I.

BACKGROUND
In this patent case, Plaintiff alleges that Defendants infringe five of Plaintiffs patents.

Those patents are United States Patent Nos. 9,494,948 (the '"948 patent"), 9,606,548 (the "'548

patent"), 9,207,686 (the '"686 patent"), 6,679,302 (the '"302 patent") and 7,032,629 (the '"629
patent") (collectively, "the asserted patents" or "the patents-in-suit"). The patents-in-suit relate
to systems and methods for the automated blending of butane and gasoline.
The Court hereby incorporates its summary of the technology at issue and its summary of
the patents-in-suit set out in the Court' s January 8, 2018 Report and Recommendation, (D.I. 68
at 1-8); further information about these subjects relevant to the pending Motion will be set out in
Section III below. Additionally, the Court also incorporates its summary of the procedural
background of this matter, which was set out in the Court' s August 7, 2019 Report and
Recommendation. (D.I. 322 at 2-3)

II.

STANDARD OF REVIEW
This portion of the instant Rule 12(b)( 6) Motion asserts that certain claims of the patents-

in-suit are directed to patent-ineligible subject matter. The Court has often set out the relevant
legal standards for review of such a motion, including in Genedics, LLC v. Meta Co., Civil
Action No. 17-1062-CJB, 2018 WL 3991474, at *2-5 (D. Del. Aug. 21 , 2018). The Court
hereby incorporates by reference its discussion in Genedics of these legal standards and will
follow those standards herein. To the extent consideration of this portion of Defendants' Motion
necessitates discussion of other, related legal principles, the Court will set out those principles in
Section III below.

III.

DISCUSSION
The five patents-in-suit share two specifications. The '629 patent and the '302 patent (the

"generation-I patents") share a specification and the '948 patent, '548 patent, and '686 patent (the

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"generation-2 patents") also share a specification. 1 The generation-2 specification explicitly
incorporates the generation- I specification by reference. ('686 patent, col. 1:7-18)
In assessing the eligibility of the challenged claims of the patents, the Court will first
discuss which of these claims will be addressed herein as representative. Thereafter, it will
analyze the relevant claims under the test for patent eligibility set out in Alice Corp. Pty. Ltd. v.

CLS Bank Int '!, 573 U.S . 208 (2014).

A.

Representative Claims at Issue

In their opening briefs, Defendants put at issue the eligibility of certain claims of the
generation-I patents (claims 17-33 of the '629 patent and claims 18-35 of the '302 patent)2 and
all of the claims of the generation-2 patents. (D.I. 139 at 1-2) In doing so, Defendants made
arguments as to why each of these claims are patent ineligible. (See generally D.l. 29; D.I. 139)
That said, Defendants tended to focus their eligibility arguments as to all claims on a few
purportedly representative claims: claim 17 of the '629 patent, claims 18, 23 and 27 of the '302
patent, claim 1 of the '548 patent, claim 7 of the '948 patent and claim 1 of the '686 patent. (D.I.
29 at 4-6; D.I. 139 at 5-11)
In its answering briefs, with regard to the generation- I patents, Plaintiff did not explain
why the above-referenced, assertedly-representative claims were, in fact, not representative.

(See, e.g. , D.I. 145 at 5) Nor did Plaintiff, in pushing back on Defendants' arguments,
specifically address the content of any other challenged claim of the generation- I patents. Thus,

As a result, the Court will herein make reference only to the '629 patent
specification and the '686 patent specification unless otherwise noted.
2

Defendants are not challenging the eligibility of claims 1-16 of the '629 patent and
claims 1-17 and 36-41 of the '302 patent.
3

the Court can treat claim 17 of the '629 patent, and claims 18, 23 , and 27 of the '302 patent, as
representative; it will therefore refer to the content of those claims below in assessing the
arguments for and against the eligibility of the generation-I patent claims. See Berkheimer v. HP

Inc., 881 F.3d 1360, 1365-66 (Fed. Cir. 2018) (noting that courts "may treat a claim as
representative . . . if the patentee does not present any meaningful argument for the distinctive
significance of any claim limitations not found in the representative claim or if the parties agree
to treat a claim as representative"); TM! Sols. LLC v. Bath & Body Works Direct, Inc., C.A. No.
17-965-LPS-CJB, 2018 WL 4660370, at *6 (D. Del. Sept. 28, 2018) (same).
With regard to the generation-2 patents, Plaintiff did make distinct arguments in its
answering briefs regarding eligibility as to claims beyond those called out as representative by
Defendants (e.g., as to claim 7 of the '548 patent, claims 1 and 3 of the '948 patent3 and claim 7
of the '686 patent). (D.I. 45 at 11 ; D.I. 145 at 4-5) Thus, normally the Court would be required
to separately assess each of these additional claims in its eligibility analysis. See Berkheimer,
881 F.3d at 1365-66. Yet in light of the nature of the decision here, the Court will not need to
address all of these additional claims; instead it will primarily focus on the purportedlyrepresentative generation-2 patent claims identified by Defendants.
Below, the Court sets out the text of each of the claims Defendants described as being
representative, as well as claim 7 of the '686 patent, which was also discussed at length at the
second oral argument, (see, e.g. , D.I. 197 at 39, 42, 64, 74-75):

Claim 17 of the '629 patent:

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The Court notes that Plaintiff likely intended to cite claims 1 and 7 (not 3) of the
'948 patent and claim 3 (not 7) of the '548 patent; those claims recite the "tangible and concrete
things" that Plaintiff points to. ('948 patent, col. 18:16-25 (claim 7 reciting a "butane reservoir,"
etc.); '548 patent, col. 17:32-33 (claim 3 reciting a "plurality of gasoline streams"))
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17. A computer-implemented method for blending a butane stream
with a gasoline stream comprising the steps of:
receiving a first measurement indicating a vapor pressure of the
gasoline stream;
receiving a second measurement indicating a vapor pressure of the
butane stream;
calculating a blend rate at which the butane stream can be blended
with a gasoline stream; and
transmitting an instruction to a programmable logic controller for
adjusting the butane stream to the calculated blend rate for
blending with the gasoline stream and distributing at a rack.
('629 patent, col. 14:38-49)

Claim 18 of the '302 patent:
18. A method for optimizing butane purchase decisions for a
petroleum products tank farm comprising:
a) in an information processing unit, setting a value for the quantity
of butane in a tank at time zero;
b) drawing a butane stream from the tank of butane;
c) blending the butane stream with gasoline for a first interval of
time from time zero until time one;
d) monitoring the consumption of butane blended with the gasoline
during the frrst interval of time, and transmitting data regarding the
consumption during the first interval of time to the information
processing unit; and
e) transforming the consumption data during the first interval of
time, and the butane quantity at time zero, to an output of data
comprising the butane consumption rate during the first interval of
time, and the quantity of butane in the tank at time one.
('302 patent, col. 14:51-67)

Claim 23 of the '302 patent:

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23. A method for simplifying record keeping requirements for
butane use at a petroleum products tank farm comprising:
a) drawing a gasoline stream from a tank of gasoline;
b) drawing a butane stream from a tank of butane;
c) blending the butane stream and the gasoline stream to form a
blend;
d) monitoring the volatility of the gasoline stream and the butane
stream;
e) monitoring the rate at which the butane stream is blended with
the gasoline stream;
f) inputting the monitored volatilities and monitored blend rate to
an information processing unit; and
g) generating a report that tabulates the monitored volatilities and
monitored blend rate, or a summary thereof.
('302 patent, col. 15 :31-46)

Claim 27 of the '302 patent:
27. A method for blending butane and gasoline using a processor
compnsmg:
a) receiving a gasoline volatility measurement at the processor;
b) receiving a butane volatility measurement at the processor;
c) receiving a target gasoline volatility value at the
processor; and
d) calculating a butane blend rate from the gasoline volatility
measurement, the butane volatility measurement, and the target
gasoline volatility value.
('302 patent, col. 15 :54-65)

Claim 1 of the '548 patent:

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1. A system for blending butane with a gasoline stream having a
gasoline flow rate, comprising[:]

an injection device injecting the butane into the gasoline stream at
a butane flow rate;
a volatility measurement device in communication with the
gasoline stream, the volatility measurement device configured to
output data representative of a volatility measurement; and
a processor in connection with the injection device and the
volatility measurement device, the processor configured to:
receive the volatility measurement; receive a target volatility value;
determine an adjustment to the butane flow rate based on the
volatility measurement and the target volatility value; and
output a signal representative of the adjustment to the injection
device.
('548 patent, col. 17:11-28)
Claim 7 of the '948 patent:
7. A system for blending butane with gasoline in a pipe to form a
blend of butane and gasoline, wherein the gasoline and the blend of
gasoline and butane each have a vapor pressure, comprising:
a) a butane reservoir in fluid connection with said gasoline;
b) an injector valve for discharging butane into said gasoline;
c) a vapor pressure analyzer connected to said pipe, said analyzer
configured to determine the vapor pressure of the blend of gasoline
and butane, and to transmit said vapor pressure to a processor;
d) a programmable logic controller governing the flow of butane
through said injector valve; and
e) a processor programmed to receive the vapor pressure from the
analyzer, calculate an amount of butane to inject into the gasoline
based on a maximum preprogrammed volatility limit, and provide
a control signal to said programmable logic controller according to
said maximum preprogrammed volatility limit;
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wherein the programmable logic controller is configured to adjust
the injector valve to govern the flow of butane through said
injector valve into said gasoline based on the signal from the
processor.
('948 patent, col. 18:12-35)

Claim 1 of the '686 patent:
1. A method for in-line blending of gasoline and a volatility
modifying agent comprising:

a) providing a continuously flowing gasoline stream that
comprises:
i) a plurality of batches of different gasoline types ;
ii) a gasoline flow rate that varies over time; and
iii) a plurality of gasoline vapor pressures;
b) providing an allowable vapor pressure;
c) providing a stream of said agent that comprises an agent
vapor pressure;
d) periodically determining said gasoline vapor pressure;
e) periodically determining said gasoline flow rate;
f) calculating a blend ratio based upon said agent vapor pressure,
said gasoline vapor pressure, and said allowable vapor pressure;
and
g) blending said agent stream and said gasoline stream at a
blending unit at said blend ratio to provide a blended gasoline
stream having a blended vapor pressure less than or equal to said
allowable vapor pressure.
('686 patent, cols. 15 :62-16 :13)

Claim 7 of the '686 patent:
7. A system for in-line blending of gasoline and a volatility

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modifying agent comprising:
a) a continuously flowing gasoline stream that comprises:
i) a plurality of batches of different types of gasoline;
ii) a gasoline flow rate that varies over time; and
iii) a plurality of gasoline vapor pressures;
b) an agent stream that comprises an allowable agent vapor
pressure;
c) a blending unit for blending said gasoline stream and
said agent stream at an actual blend ratio and an actual
blend rate to yield a blended gasoline stream;
d) an upstream vapor pressure sensor in sensory communication
with said gasoline stream upstream of said blending unit; and
e) one or more information processing units (IPU s) in
informational communication with said upstream vapor
pressure sensors, logically programmed to calculate a
calculated blend ratio and calculated blend rate based
upon vapor pressure and volumetric flow rate of said
gasoline stream, and for communicating said calculated
blend ratio and calculated blend rate to said blending
unit;
f) wherein said blending unit periodically accesses said
calculated blend ratio and calculated blend rate from
said one or more IPUs, and adjusts the actual blend ratio
and actual blend rate to coincide with said calculated
blend ratio and calculated blend rate.
('686 patent, cols. 16:44-17:3)

B. Alice's Step One
At step one, Defendants assert that the challenged claims of the patents-in-suit are
directed to abstract ideas of "gathering and processing data" or "gathering and
analyzing/calculating data" or "gathering data" or "data gathering and processing" or "gathering

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and processing intangible data." (See D.I. 29 at 4-6, 9-12; D.I. 139 at 5-11 ) (For simplicity' s
sake below, the Court will refer to the proffered abstract idea generally as "data gathering and
processing."). In response, Plaintiff does not contest that "data gathering and processing" is an
abstract idea; instead, it argues that the claims, when examined as a whole, are directed to much
more than that. (D.I. 145 at 4-10; see also D.I. 45 at 16) According to Plaintiff, the claims are
directed at least to "butane blending[,]" (D.I. 45 at 8-9), and, more specifically, to "patenteligible processes and machines for blending butane with gasoline that involve concrete, tangible
components[,]" (D.I. 145 at 4). In reply, Defendants argue that even if the claims could be said
to be directed to more than just the concept of "data gathering and processing," and instead were
"directed to ' butane blending"'-a proposition Defendants label as "incorrect[,]" (D.I. 29 at 10
n.3)- the claims would still fail step one. This is assertedly because: (1) "butane blending was
' known' as of the filing of the patents" and was "a fundamental practice in the petroleum
industry"; or (2) butane blending amounts to only the "specific [technological] context of the
claims[.]" (Id. at 10 n.3 (emphasis omitted); D.I. 56 at 1 n.1 , 2-3 ; D.I. 153 at 1-4 & n.1; see also
D.I. 139 at 9)
The Court rejects Defendants' argument at step one that the purportedly-representative
claims are directed to only the concept of "data gathering and processing." Below, the Court will
first set out how the intrinsic record shows that the claims must be described as being directed to
something more than this-i.e. , why the claims' focus has to at least include reference to the
process or mechanics of blending butane with gasoline. Next, it will explain why Defendants are
wrong as a legal matter when they argue that the Court should ignore the claims ' reference to
blending butane and gasoline. And lastly, the Court will describe how Defendants ' failure to

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properly articulate an asserted abstract idea that the claims are directed to is fatal to their Motion,
even if there are indicators that at least some of the challenged claims might be patent ineligible.
1. The Intrinsic Record Does Not Support Defendants' Contention that

the Purportedly-Representative Claims are Directed Only to "Data
Gathering and Processing."

In Alice's first step, the " ' directed to' inquiry applies a stage-one filter to claims,
considered in light of the specification, based on ' whether their character as a whole is directed
to excluded subject matter."' Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir.
2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir.
2015) (emphasis added)). That inquiry "cannot simply ask whether the claims involve a
patent-ineligible concept, because essentially every routinely patent-eligible claim" does so at
some level. Id. (emphasis in original). Moreover, the Federal Circuit has cautioned district
courts not to "describ[ e] the claims at such a high level of abstraction" so that the description is
"untethered from the language of the claims" in a way that "all but ensures that the exceptions to
[Section] 101 swallow the rule." Id. at 1337; see also Thales Visionix Inc. v. United States, 850
F.3d 1343, 1349 (Fed. Cir. 2017) ("At step one, it is not enough to merely identify a patentineligible concept underlying the claim; [the court] must determine whether that patent-ineligible
concept is what the claim is directed to.") (internal quotation marks and citation omitted).
With this step one guidance firmly in mind, when the Court assesses the intrinsic record
here, it just seems fundamentally wrong to conclude that the purportedly-representative claims
are directed to nothing more than "data gathering and processing." Of course, at some level the
claims involve that concept. All of the claims-at-issue, in one way or another, make some
reference to monitoring/transmitting/receiving certain measurement data and to performing
either a subsequent calculation based on that data or to transforming that data. For example,
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claim 17 of the '629 patent, a generation-! patent, describes "receiving" measured vapor
pressures of the gasoline and butane streams and then "calculating a blend rate[.] " ('629 patent,
col. 14:38-49) Similarly, claim 18 of the '302 patent (the other generation-I patent) recites
"monitoring" butane consumption and then "transforming" that consumption data. ('302 patent,
col. 14:51-67) Likewise, each of the generation-2 patent claims include some reference to this
concept, such as in claim 7 of the '686 patent, where an information processing unit
"calculate[s]" a blend ratio and rate based certain measurements from a "sensor[.]" ('686 patent,
cols. 16:44-17:3) Yet in light of the intrinsic record, it is hard to credibly assert that the
"character as a whole" of the challenged claims is directed only to this narrow concept-as
opposed to an articulation that includes reference to the mechanics or process of blending butane
and gasoline. If these patents are about anything, they are about that.
In part, this can be seen by reference to the patent specifications. 4 The specifications are
replete with references to how the invention is focused on improvements to the process of
blending butane with gasoline in particular ways.
The generation- I patents, after all, are titled "Method and System for Blending Gasoline
and Butane at the Point of Distribution[,]" ('629 patent; '302 patent); and the generation-2 -patents
are titled "Versatile Systems for Continuous In-line Blending of Butane and Petroleum[,]" ('548
patent; '948 patent; '686 patent). The words "data gathering and processing" are nowhere to be

4

Cf Enjish, 822 F.3d at 1337 (indicating that it is appropriate to look to a patent's
specification to determine whether a claim of the patent is "directed to" a particular concept, and
that if a claim contains a particular element that is described by the patent's specification as what
the "present invention comprises[,]" this suggests that the claim is directed to that element or
concept) (internal quotation marks and citation omitted); Internet Patents, 790 F.3d at 1348
(same, and noting that if a concept is described in the patent as being "the innovation over the
prior art" or the "the essential, most important aspect" of the patented invention, that suggests
that the claim is directed to that concept) (internal quotation marks and citation omitted).

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found in those titles. Additionally, every single one of the representative claims of all five
patents are to systems or methods for blending butane and gasoline.
Moreover, throughout the remainder of the patent specifications, the patentee otherwise
made clear that the blending of these two substances at particular points in the distribution
system is at least part of what the claims are all about. (See, e.g., '629 patent at Abstract ("A
system and method is provided for blending butane with gasoline .... "); id. , col. 3:21-22 ("The
present invention is a system and method for blending butane with gasoline .... "); '686 patent at
Abstract ("A system and method are provided for in-line processes of blending butane into
gasoline streams .... "); id., col. 1:22-25 ("The present invention relates to in-line processes for
blending butane into a gasoline stream ... .")) This is even more clear when one examines the
portion of the specifications that describe how the claimed inventions filled certain needs that
existed in the art in the relevant timeframes.
For example, the generation-I patents' specification explains that although instruments
had previously been used at a refinery to more accurately assess the volatility of gasoline, "a
need exists for precise measurements at the final distribution point, which is the tank farm" and
that the "present invention is a system and method for blending butane with gasoline at the tank
farm[ .]" ('629 patent, cols. 2:59-3:8, 3:21-22) The specification indicates that "blending occurs
downstream of the gasoline and butane storage tanks on the tank farm . . . but before the gasoline
is actually dispensed to the tanker truck at the rack." (Id. , col. 3:23-28) It explains that by
"blending gasoline and butane immediately before the gasoline is dispensed to a tanker truck,
and by continuously controlling the ratio .. . a number of significant advantages are attained[.]"
(Id., cols. 3:51-4: 6) And it notes how the invention utilizes an "apparatus for blending" that is
under the "continuous control of a process control unit" that varies the blend ratio to achieve a
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targeted volatility. (Id. , col. 3 :28-50) Moreover, the specification also explains that "a need
exists for the ability to blend butane with reformulated gasoline more accurately[,]" and that the
"data required for the process control unit to properly blend butane and gasoline to prescribed
conditions ... can also be used to generate useful operational data" such as that allowing one to
"better . . . predict when butane must next be purchased" or to "generate reports for gasoline sold
from a particular tank farm" as required by law. (Id. , cols. 3:16-17, 4:7-23) 5 Surely, some of
those assertedly key portions of the invention involve collecting measurements, (see, e.g., id. ,
cols. 7:19-8 :10), and performing a calculation, (se e, e.g., id. , cols. 6:34-7:18). But as can be seen
above, the patentees' focus was on doing so in the specific context of blending butane and
gasoline, and doing so at precise locations in the chain of distribution. (D.I. 197 at 56)
Similarly, the shared specification of the generation-2 patents shows that the focus there
is not just on the abstract concept of "data gathering and processing." Instead, the heart of the
invention is a versatile butane blending system that is composed of several physical components
that allow for in-line blending "at any point along a petroleum pipeline." ('686 patent, col. 1:2225; see also id. , cols. 3: 15-6:62 ("Summary of the Invention" section)) The specification
explains that the inventors had developed a "tightly controlled butane blending system with
surprising versatility"--one that could perform as intended even with "variations in the flow rate
of gasoline," differences in the "time of year" in which the gasoline is delivered (which can
affect federally-mandated volatility limits), or regional variations in volatility limits. (Id. , col.
3:15-28 ; see also id., col. 6:30-33) Thus, " [f]or the first time, petroleum vendors and distributors

5

Each of these previously-described aspects of the invention appear to be captured
by at least one or more of the purportedly representative claims of the '629 patent and '302
patent.
14

are able to take optimum advantage of the many cost saving and performance benefits that
butane blending offers ... without regard to the location where the blending occurs along the
pipeline." (Id., col. 3:23-28) Again, although these systems are able to accomplish all of this in
part through data gathering and processing, it is clear from the specifications that the invention is
directed to much more than just that.
The Court has also considered the language of the purportedly-representative claims.
The claim language also indicates that it is too simplistic to say that the claims are directed solely
to "data gathering and processing."
With regard to the generation-I patents, look for example at claim 17 of the '629 patent.
('629 patent, col. 14:38-49) The preamble begins by noting the claim involves a "computerimplemented method for blending a butane stream with a gasoline stream[,]" (id.) , not just any
"computer implemented method" involving data. The body of the claim requires receiving
particular measurements specific to the butane/gasoline blending process (i.e., volatility
measurements of the two components to be blended). (Id.) And although the claim facially
involves "calculating," it is calculating a particular butane "blend rate" based on the
measurements of these two components. (Id.) Finally, the claim recites "adjusting the butane
stream" and "distributing at a rack[,]" which are non-data gathering and processing steps. (Id. )
The claims of the generation-2 patents make this point to an even greater degree. Take
claim 7 of the '686 patent-a claim that Plaintiff focused on in its briefing and during the second
oral argument. The preamble of the claim first explains that it is directed to " [a] system for inline blending of gasoline and a volatility modifying agent [e.g., butane.]" ('686 patent, col.
16:44-45) Then, the claim particularly describes the first component of this system in detail: a
"gasoline stream" that is "continuously flowing[,]" that is made up of "different types of
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gasoline" having a varying "flow rate[,] " and that has a "plurality of gasoline vapor pressures[.]"
(Id., col. 16:46-49) The claim next recites a second component, a volatility-modifying agent
stream (e.g., butane). (Id. , col. 16:50-51) Then the claim recites a "blending unit[.]"6 (Id. , col.
16:52-54) Further, the claim requires a "vapor pressure sensor" that is "in sensory
communication with said gasoline stream" (i.e., an in-line sensor) particularly placed "upstream
of said blending unit[.]" (Id. , col. 16:55-57) The claim then describes "information processing
units" used to calculate the blend ratio and blend rate based on the properties of the gasoline
stream, the "information processing units" then communicating this blend ratio and rate to the
blending unit which adjusts the blend accordingly. (Id. , col. 16:58-65) To be sure, this claim
and other challenged claims in the generation-2 patents do involve the gathering and processing
of data (here, claim 7 gathers data about the "vapor pressure and volumetric flow rate" of the
gasoline stream and uses that data to calculate a "blend ratio" and a "blend rate"). (Id., col.
16:60-65) But the bulk of claim 7 is to a specific, physical, multi-part system that allows for inline blending of gasoline and butane and adjustments thereto. Clearly the focus of this claim is
to much more than merely "data gathering and processing."

6

The Court has determined that "blending unit" should be construed (as
Defendants proposed) as "any conventional apparatus that achieves blending of two or more
separate streams into one." (D.I. 321) The Court also recommended that the claim term
"gasoline" be given its plain and ordinary meaning; again there, it did not accept Plaintiffs
argument as to what was the appropriate construction of the term. (D.I. 332) Thus, although
Plaintiff has suggested that adoption of its proposed constructions of "blending unit" and
"gasoline" might affect the Section 101 calculus, (D.I. 197 at 67, 80), because the Court has
waited to resolve this portion of the Motion until after claim construction, and because it has not
adopted Plaintiffs' proposals as to these two terms, claim construction did not play a meaningful
role in the Court' s eligibility analysis here.
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In short, the above evidence strongly indicates that in determining what the purportedly
representative claims are "directed to," it would be error to completely ignore any reference to
the blending of butane and gasoline and to focus exclusively on "data gathering and processing."
2. Defendants' Arguments About Why the Court Should Ignore
References to Blending Butane and Gasoline in Articulating What the
Claims Are "Directed To" Are Not Persuasive.

Another problem for Defendants at step one is their explanations for why the Court
should ignore all references to blending butane and gasoline when formulating the abstract ideaat-issue. In this regard, as was previously noted above, Defendants made two primary
arguments. First, Defendants asserted that one need not include these concepts at step one
because butane blending was "known" or was a "fundamental practice in the petroleum industry"
as of the time of the patents' filing. Second, they argued that references to blending butane and
gasoline were of no import at step one because butane blending simply amounts to the specific
technological "context" of the claims, nothing more. Both arguments are faulty as a legal matter.
First, the Court disagrees with Defendants' suggestion that the Court should ignore the
claims' reference to the blending of butane and gasoline at step one because butane blending was
"known" and a "fundamental practice" at the time of the patents' filing. As the Supreme Court
of the United States noted in Diamond v. Diehr, 450 U.S. 175 (1981 ), " [i]t is inappropriate to
dissect the claims into old and new elements and then to ignore the presence of the old elements
in the analysis." Diehr, 450 U.S. at 188; see also (D.I. 145 at 7-8). Whether or not the claimed
components and their configurations were "known" or "conventional" is not the proper inquiry at
step one. Instead, the analysis is to whether the claims as a whole are "directed to" an abstract
idea (whether known or unknown, conventional or unconventional in the art). Diehr, 450 U.S. at
188-89 ("The 'novelty' of any element or steps in a process, or even of the process itself, is of no
17

relevance in determining whether the subject matter of a claim falls within the [Section] 101
categories of possibly patentable subject matter."); see also Timeplay, Inc. v. Audience Entm 't
LLC, CV 15-05202 SJO (JCx), 2015 WL 969532 1, at *6 (C.D. Cal. Nov. 10, 2015) (noting that
although a '" recitation of generic computer limitations does not make an otherwise ineligible
claim patent-eligible,"' Section 101 precedent "do[es] not broadly hold that courts must ' strip
away' each claim element that recites hardware containing computing elements ... when
performing step one of the Alice /Mayo test. ") (emphasis omitted) (quoting DDR Holdings, LLC
v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)).7 A claim can be directed to
something that is not an abstract idea, yet is "known" and "fundamental" in the art. Or a claim

7

Indeed, at times, both Defendants' argument against patent eligibility and
Plaintiffs argument for it sound much more like obviousness arguments made pursuant to 35
U.S.C. § 103 . Often in the briefing, the parties seemed to be speaking less to Section 101-related
concerns and more to the question of validity- i.e., arguing whether the patent claims are invalid
because they amount to a combination of known elements, or whether the claims are valid in
light of the prior art, or about the impact of secondary considerations of non-obviousness. (See,
e.g. , D.I. 145 at 15-16 (Plaintiff asserting that Defendants have failed to "identify a single piece
of prior art that discloses anything similar to Sunoco' s claimed invention" and that "secondary
considerations" regarding Plaintiffs patented technology are relevant to the eligibility question))
The Court acknowledges that some of the analytical questions regarding Section 101 's
"conventionality" assessment at step two can seem similar to the questions one would ask in
assessing obviousness under Section 103. See Internet Patents Corp., 790 F.3d at 1347. But
whether a patent is non-obvious in light of prior art is, in the end, a separate and distinct inquiry
from whether it passes muster under Section 101 . See BASCOM Glob. Internet Servs., Inc. v.
A T&T Mobility LLC, 827 F.3d 1341 , 1350 (Fed. Cir. 2016) (rejecting the district court' s step two
analysis of the ordered combination of claim limitations, where that analysis "look[ ed] similar to
an obviousness analysis under [Section] 103, except lacking an explanation of a reason to
combine the limitations as claimed" and noting that " [t]he inventive concept inquiry [pertinent to
Section 101] requires more than recognizing that each claim element, by itself, was known in the
art"); Iron Gate Sec., Inc. v. Lowe 's Cos., Inc., 15-cv-8814 (KBF), 2016 WL 4146140, at *13
(S.D.N.Y. Aug. 3, 2016) (rejecting the defendant' s argument at step two where the defendant
"essentially asks this Court to peek at whether the claimed invention is novel and non-obvious by
asking the Court to compare the [asserted] [p ]atent to prior art in the field of multimedia data
indexing" and noting that the proper question on "this threshold [Section] 101 eligibility
challenge ... is instead whether the claims contain an inventive concept beyond any abstract
idea to which they are purportedly directed").
18

can be directed to an abstract idea, but one that is a novel abstract idea. See Netjlix, Inc. v. Ravi
Corp., 114 F. Supp. 3d 927, 937 (N.D. Cal. 2015) ("A novel abstract idea is still an abstract idea,
and is therefore unpatentable."); Money Suite Co. v. 21st Century Ins. & Fin. Servs., Inc., C.A.
No. 13-984-GMS, 2015 WL 436160, at *4 (D. Del. Jan. 27, 2015) ("new ideas may be similarly
abstract and invalid under [Section] 101.") (citing Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709,
714-15 (Fed. Cir. 2014)). Here, Defendants' suggestion that if any portion of the claims is said
to be "known" or "fundamental in the industry" then the Court should simply not consider such
portions in the step one analysis is incorrect as a matter of law. 8
Second, the Court also rejects Defendants' suggestion that, in determining the focus of
the claims at step one, the Court should ignore all butane blending steps and components set out
in the claims because they are merely the "technological environment" of the claims. (D.I. 153
at 4) In support of this argument, Defendants cited prominently to the Federal Circuit's decision
in Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016), and asserted that
"the [technological] context of the process is irrelevant to the first step under Alice" and that
"'limiting the claims to the particular technological environment ... is, without more,

8

It is worth noting that even in the cases that Defendants cite in support of their
argument here, (D.I. 139 at 6 & n.3), the courts did not exclude the assertedly "fundamental
practice" in question from the articulation of the abstract idea, as Defendants attempt to do here.
Instead, the "fundamental practice" was considered at step one and was found to be the abstract
idea that the claims were directed to. See, e.g., Alice, 573 U.S. at 220 (at step one, finding the
claims to be directed to the "fundamental economic practice" of "intermediated settlement")
(internal quotation marks and citation omitted); Voter Verified, Inc. v. Election Sys. & Software
LLC, 887 F.3d 1376, 1385 (Fed. Cir. 2018) (finding at step one that the claims were directed to
the "fundamental activity" of "voting, verifying the vote, and submitting the vote for
tabulation") ; Align Tech. , Inc. v. 3Shape AIS, 339 F. Supp. 3d 435,455 (D. Del. 2018) (finding at
step one that the claim was directed to the abstract idea of "describing an orthodontic treatment
plan"). In other words, the courts in those cases did not say at step one: "What other than
intermediated settlement/voting/orthodontic treatment plans is recited in the claims?" or "What
other than such concepts is the focus of the claims?"

19

insufficient to transform them into patent-eligible applications of the abstract idea at their core. "'
(D.I. 153 at 4 (quoting Elec. Power, 830 F.3d at 1354); see also D.I. 56 at 3) Yet the quoted
portion of the analysis from Electric Power was from a portion of the Federal Circuit' s opinion
where that Court was assessing "stage two of the Alice analysis[.]" Elec. Power, 830 F.3d at
1354.9 Indeed, taken to its extreme, Defendants' analytical method would render nearly any
patent claim involving a computer calculation subject to categorization as being directed to mere
"data manipulation" at step one-once the bulk of the other technological aspects of the claim
are ignored as simply the surrounding "technological context" or "technological environment."
Cf Diehr, 450 U.S. at 187 (regarding a claim for a process for curing synthetic rubber, noting
that " [o]bviously, one does not need a ' computer' to cure natural or synthetic rubber, but if the
computer use incorporated in the process patent significantly lessens the possibility of
' overcuring ' or ' undercuring,' [i.e., benefits the process,] the process as a whole does not thereby
become unpatentable subject matter"); Thales, 850 F.3d at 1349 ("That a mathematical equation
is required to complete the claimed method and system does not doom the claims to
abstraction.").
For all of these reasons, Defendants' arguments for why their purported abstract idea did
not include reference to the process or mechanics of blending butane and gasoline do not hold
up.

9

Similarly, in other portions of their briefing, when Defendants cite to other cases
for the proposition that one may not circumvent Section 101 by attempting to limit the use of the
idea to a particular "technological environment," the cases cited were analyzing the relevant
claims at step two of Alice' s inquiry. See Alice, 134 S.Ct. at 2358 (cited in D.I. 29 at 13);
Ultramercial, 772 F.3d at 716 (cited in D.I. 29 at 13).
20

3. Why Defendants' Failure to Properly Articulate an Abstract Idea that
the Claims are Directed to Must Lead to Denial of the Motion as to All
of the Claims.
So, at this point, the Court has determined that the purportedly-representative claims
simply cannot be (contrary to Defendants' suggestion) described as being directed merely to
"data gathering and processing." 10 Does this mean that none of the challenged claims are
actually patent ineligible?
To be sure, there are some claims-particularly some of the challenged claims of the
generation-I patents-that seem vulnerable to a Section 101 challenge. Claim 27 of the '302
patent, for example, is probably the best example of such a claim. Each of the four steps of that
claim is set out in functional language, and each recites data manipulation steps performed on a
generic "processor": "receiving" a gasoline volatility measurement, a butane volatility
measurement and a target gasoline volatility measurement at the processor (steps a, band c) and
"calculating" a butane blend rate (step d). ('302 patent, col. 15 :54-65) The Court certainly
acknowledges that this claim is framed at a dangerously-high level of generality.

10

The Court also notes that, even to the extent that Defendants might otherwise
suggest that the claims are directed to "butane blending," that would appear to be an
overgeneralization of at least some of the claims-at-issue. For example, some number of the
challenged claims are explicit that they are to a particular form of blending butane with gasoline:
in-line blending. (See, e.g., '686 patent, cols. 15:62-16:14 (claim 1 reciting "a method for in-line
blending"); '948 patent, col. 18:12-35 (claim 7 reciting a "system for blending butane with
gasoline in a pipe" and a "vapor pressure analyzer connected to said pipe")) And there is
evidence in the relevant patents that this feature of such claims was important to the invention
disclosed therein. (See '629 patent, col. 2:30-50 (describing and disparaging in-tank butane
blending as, among other things, "labor intensive and imprecise"); '686 patent, cols. 1:7-25
(incorporating the '629 patent specification by reference, and emphasizing that the invention is to
"in-line processes for blending butane into a gasoline stream")) It is hard to see how such claims
would not be directed to, inter alia, "in-line butane blending" of some type.
21

It might be that, had Defendants at step one better articulated what the challenged claims
were really directed to (i.e. , to include some reference to blending butane and gasoline), then
they might have still been able to explain why that concept amounts to an abstract idea-and
why claims like claim 27 are actually directed to such an abstract idea. But Defendants chose to
aim for a much broader and much more vague articulation of what the claims were purportedly
directed to. Cf CoolTVNetwork.com, Inc. v. Facebook, Inc., C.A. No . 19-292-LPS-JLH, 2019
WL 4415283 , at *11 (D. Del. Sept. 16, 2019) (rejecting defendants ' description of the "focus of
the [challenged] claim" for being "at too high a level of abstraction[,]" and thus recommending
denial of the motion to dismiss, but not excluding the possibility that the challenged claim is
"directed to some other abstract idea yet to be articulated").
With that being the case, the Court is uncomfortable attempting to come up with the
"right" articulation of what claims like claim 27 are really "directed to" on its own, and then
trying to determine if that leads to patent ineligibility. Because Defendants brought this Motion,
it is their burden to show at step one that the claims they chose to challenge are directed to an
abstract idea; they have not sufficiently done that here. See 3G Licensing, S A. v. HTC Corp.,
C.A. No. 17-83-LPS, 2019 WL 2904670, at *2 (D. Del. July 5, 2019) ("While it may be possible
that claim 1 could be accurately characterized as directed to some abstract idea, all I need to
decide today [at the motion to dismiss stage] is that the claim is not directed to the abstract idea
articulated by defendant."); SimpleAir, Inc. v. Google Inc. , 136 F. Supp. 3d 745, 750 (E.D. Tex.
2015) (finding that the defendants did not meet their burden of showing the asserted patents were
directed to an abstract idea at step one after rejecting defendants ' characterization of the abstract
idea because it "ignore[ d] significant claim limitations"); see also Int 'l Bus. Machs. Corp. v.

Groupon, Inc., 289 F. Supp. 3d 596, 606 (D. Del. 2017) (finding " [t]he Court need not continue
22

to step 2" after concluding that the claims were not directed to an abstract idea at step one). For
that reason as well, the remaining portion of the Motion should not be granted.

IV.

CONCLUSION
For all of the above reasons, the Court recommends that the District Court DENY the

remaining portion of Defendants' Motion as it relates to Section 101, without prejudice to
Defendants' ability to raise section 101 issues at the summary judgment stage of the case. See

CoolTVNetwork.com, Inc., 2019 WL 4415283 , at *11.
This Report and Recommendation is filed pursuant to 28 U.S.C. § 636(b)(l)(B), Fed. R.
Civ. P. 72(b)(l), and D. Del. LR 72.1. The parties may serve and file specific written objections
within fourteen (14) days after being served with a copy of this Report and Recommendation.
Fed. R. Civ. P. 72(b)(2). The failure of a party to object to legal conclusions may result in the
loss of the right to de novo review in the district court. See Henderson v. Carlson, 812 F.2d 874,
878-79 (3d Cir. 1987); Sincavage v. Barnhart, 171 F. App' x 924, 925 n.1 (3d Cir. 2006).
The parties are directed to the Court' s Standing Order for Objections Filed Under Fed. R.
Civ. P. 72, dated October 9, 2013 , a copy of which is available on the District Court' s website,
located at http://www.ded.uscourts.gov.
Dated: September 18, 2019
Christopher J. Burke
UNITED STATES MAGISTRATE JUDGE

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