IQS US INC et al v. Calsoft Labs Incorporated et al
OPINION AND ORDER Signed by the Honorable Joan H. Lefkow on 8/18/2017: Defendants' motion to dismiss 27 is granted. Counts I and II are dismissed with prejudice. Case dismissed with prejudice. Civil case terminated. Mailed notice(mad, )
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS
IQS US INC. AND I.Q.S. SHALEV LIMITED, )
CALSOFT LABS INCORPORATED AND
Case No. 16 CV 7774
Judge Joan H. Lefkow
OPINION AND ORDER
IQS US Inc. and I.Q.S. Shalev Limited filed suit against Calsoft Labs Incorporated and
Prometric Inc., alleging infringement of U.S. Patent No. 7,773,779 (the ’779 patent) against each
defendant (counts I and II). Calsoft and Prometric have moved to dismiss the complaint under
Federal Rule of Civil Procedure 12(b)(6). (Dkt. 28.) For the reasons stated below, the motion is
IQS US Inc. and I.Q.S. Shalev Limited are corporations that deal in biometric
identification and verification systems. (Dkt. 1 ¶ 3.) I.Q.S. Shalev owns the ’779 patent and
licenses it exclusively to IQS US. (Id. ¶¶ 13–14.) The ’779 patent relates to “[a] system for
providing global biometric identification services to a plurality of remote parties . . . .” (Dkt. 1-1
Col. 1:7–8.) It issued in August 2010. (Dkt. 1 ¶ 12.)
The court has jurisdiction under 28 U.S.C. § 1338(a). Venue is proper under 28 U.S.C.
Unless otherwise noted, the following facts are taken from plaintiff’s complaint and are
presumed true for the purpose of resolving the pending motion. Active Disposal, Inc. v. City of Darien,
635 F.3d 883, 886 (7th Cir. 2011) (citation omitted).
Calsoft deals in “enterprise information technology and product engineering services.”
(Dkt. 1 ¶ 4.) At some point, Calsoft built a cloud-based biometric fingerprint authentication
system (the BAS). (Id. ¶¶ 4, 17.) Prometric runs testing centers where it administers a variety of
tests. (Id. ¶ 19.) Calsoft has provided Prometric with the BAS, thereby allowing Prometric to
confirm a test-taker’s identity. (Id. ¶¶ 8, 18.) As used by Prometric, the BAS first scans a testtaker’s fingerprint to create an enrolled template. (Id. ¶ 18.) The template is then transferred to
and stored by a third-party vendor. (Id. ¶ 19.) As the test-taker moves throughout the testing
center, she (presumably) has her fingerprint scanned again to create a verification template. The
verification template is compared to the enrolled template to confirm the test-taker’s identity. (Id.
Plaintiffs allege that the BAS infringes claims 1, 2–6, 10, 11, and 14–18 of the ’779
patent. Calsoft and Prometric move to dismiss the complaint, arguing that the asserted claims of
the ’779 patent are invalid and unenforceable because they are directed to an abstract idea that is
not eligible for patent protection under 35 U.S.C. § 101.
A motion to dismiss under Rule 12(b)(6) challenges a complaint for failure to state a
claim on which relief may be granted. In ruling on such a motion, the court accepts as true all
well-pleaded facts in the plaintiff’s complaint and draws all reasonable inferences from those
facts in the plaintiff’s favor Active Disposal, Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir.
2011) (citation omitted). To survive a Rule 12(b)(6) motion, the complaint must not only provide
the defendant with fair notice of a claim’s basis but must also establish that the requested relief is
plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d
868 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929
(2007). The allegations in the complaint must be “enough to raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555. At the same time, the plaintiff need not plead legal
theories; it is the facts that count. Hatmaker v. Mem’l Med. Ctr., 619 F.3d 741, 743 (7th Cir.
2010); see also Johnson v. City of Shelby, 574 U.S. ----, 135 S. Ct. 346, 346, 190 L. Ed. 2d 309
(2014) (per curiam) (“Federal pleading rules call for ‘a short and plain statement of the claim
showing the pleader is entitled to relief’; they do not countenance dismissal of a complaint for
imperfect statement of the legal theory supporting the claim asserted.” (citations omitted)).
Because subject matter eligibility is a question of law, In re Bilski, 545 F.3d 943, 951 (Fed. Cir.
2008), the issue may be decided on a motion to dismiss. See, e.g., Content Extraction and
Transmission LLC v. Wells Fargo Bank, Nat. Ass'n, 776 F.3d 1343, 1348 (Fed. Cir. 2014).
Defendants argue that the ’779 patent is directed to a patent-ineligible abstract idea:
comparing one thing to another. Section 101 of the Patent Act defines the subject matter eligible
for patent protection. This section provides that “[w]hoever invents or discovers any new and
useful process, machine, manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of
this title.” 35 U.S.C. § 101. The Supreme Court has long held that there are implicit exceptions to
this provision: “[l]aws of nature, natural phenomena, and abstract ideas are not patentable.” Alice
Corp. Pty. v. CLS Bank Int’l, --- U.S. ---, 134 S. Ct. 2347, 2354, 189 L. Ed. 2d 296 (2014)
(quoting Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569U.S.---, 133 S. Ct. 2107,
2116, 186 L. Ed. 2d 124 (2013)).
Alice applied the framework set forth in Mayo Collaborative Servs. v. Prometheus
Laboratories, Inc., 566 U.S. 66, 132 S. Ct. 1289, 182 L. Ed. 2d 321 (2012), “for distinguishing
patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim
patent-eligible applications of those concepts,” 134 S. Ct. at 2355, to the question of patentability
of a computer system and program code configured to carry out a method for intermediated
settlement of financial transactions. As described in Alice, a court “must first determine whether
the claims at issue are directed to a patent-ineligible concept.” Id. If the patent is directed at a law
of nature, natural phenomena, or abstract idea, the court must next consider whether the claims
contain an “inventive concept” that “transform[s] the nature of the claim” into patent-eligible
subject matter. Id. at 2357.
A. Whether the Claims of the ’779 Patent Are Directed to an Abstract Idea
“The abstract ideas category embodies the longstanding rule that an idea of itself is not
patentable.” Alice, 134 S. Ct. at 2355 (citations and brackets omitted). “[W]ell-understood,
routine, conventional activit[ies]” applying a law of nature are not patentable. Mayo, 132 S. Ct.
at 1298. Further, “tying an abstract idea to a general purpose computer or to the Internet, without
more, is generally insufficient to make an abstract idea patentable.” In re TLI Commc’ns LLC
Patent Litig., 87 F. Supp. 3d 773, 784 (E.D. Va. 2015) (citing Ultramercial, Inc. v. Hulu, LLC,
772 F.3d 709, 715–17 (Fed. Cir. 2014)).
Calsoft argues that the ’779 patent is directed toward the abstract idea of comparing one
thing to another. Claim 1 of the ’779 patent (which is representative 3) recites
1. System for providing global biometric identification services to a plurality of
remote parties, the system comprising:
a template receiver, comprising
a) a registration input configured to receive from at least one remote party
communicating with said template receiver, at least one registration template
complete as originally extracted from a respective biometric sample of an end
After examining the claims at issue, the court determines that all asserted claims are
substantially similar and linked to the same idea and declines to discuss each individually. See Content
Extraction, 776 F.3d at 1348.
user of said remote registering party, associated with a tag relating said
registration template to said end user; and
b) an enquiry input, configured to receive from a remote inquiring party
communicating with said template receiver, at least one test template complete
as originally extracted from a respective biometric sample of a person; and
a verifier, associated with said template receiver, configured to determine a
degree of match between said registration template and said test template, by
directly comparing the registration template complete as originally extracted
with the test template complete as originally extracted, thereby to verify said
person as an end user, using said determined degree of match.
(Dkt. 1-1 Col. 19:12–34.)
At base, claim 1 recites a system with two components: a template receiver and a verifier,
both of which are configured to receive templates. The templates at issue are “binary record[s]
created from distinctive information from a biometric sample such as a fingerprint image, a face
image, an iris image, etc.” (Dkt. 1-1 Col. 7:16–18.) A registration template, which is linked to a
specific person, is compared to a test template for the purposes of determining or confirming an
individual’s identity. This is not a new process. For instance, humans have long compared
images of faces they have seen previously (an old-fashioned registration template) to faces they
encounter in the world to determine or confirm an individual’s identity. Plaintiffs argue that the
patent is not directed to an abstract idea in part because a condensed-form template, whose
smaller size is easier to transmit, “may be generated using an algorithm, which analyzes
locations of minutia [sic] contained in fingerprints or a mathematical summary of the patterns of
an iris image . . . .” (Dkt. 1-1 Col. 7:22–25.) But this does not change the court’s perspective, as
the Federal Circuit continues to treat “analyzing information . . . by mathematical algorithms,
without more, as essentially mental processes within the abstract-idea category.” Synopsys, Inc.
v. Mentor Graphics Corp., 839 F.3d 1138, 1146–47 (Fed. Cir. 2016) (citation omitted).
Calsoft and Prometric also cite several decisions where a court has found similar
concepts to be abstract ideas. For example, in Content Extraction and Transmission LLC v. Wells
Fargo Bank, National Association, the Federal Circuit found that claims drawn to the abstract
idea of “1) collecting data, 2) recognizing certain data within the collected data set, and
3) storing that recognized data in a memory” are not patent-eligible under § 101. 776 F.3d 1343,
1347 (Fed. Cir. 2014). Additionally, a district court in the Northern District of California recently
found that claims “generally directed to the abstract concept of comparing one thing to another”
are similarly patent-ineligible. Blue Spike, LLC v. Google Inc., No. 14-CV-01650-YGR, 2015
WL 5260506, at *5 (N.D. Cal. Sept. 8, 2015), aff'd, 669 F. App'x 575 (Fed. Cir. 2016), cert.
denied, No. 16-1223, 2017 WL 1365602 (U.S. June 12, 2017). Plaintiffs do not address either
case in their response.
Instead, they cite to Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed.
Cir. 2016), where the Federal Circuit found a claim was not directed at an abstract idea because
it “entail[ed] an unconventional technological solution (enhancing data in a distributed fashion)
to a technological problem (massive record flows which previously required massive
databases).” Id. at 1300. That is not the situation here. Plaintiffs argue that the ’779 patent
“focus[es] on a specific means or method that improves the relevant technology of a global
biometric authentication system.” (Dkt. 36 at 2). But neither the template receiver nor the verifier
has any relation to the creation of a template; the plain language of claim 1 states that the system
components only receive and compare the templates. Indeed, the ’779 patent makes clear that the
templates are created outside of the claimed system, submitted by a registration party and an
inquiring party. (See dkt. 1-1 Col. 7:36–8:6.) Nor does the patent discuss how the templates are
compared. And even though part of the system operates remotely, that does not evidence a nonabstract concept. See, e.g., Joao Control & Monitoring Sys., LLC v. Telular Corp., 173 F. Supp.
3d 717, 727 (N.D. Ill. 2016), on reconsideration in part, No. 14-C-9852, 2017 WL 1151052
(N.D. Ill. Mar. 28, 2017) (“[A] claimed invention's ability to operate remotely has played little to
no role in other courts’ § 101 analyses.”) (collecting cases). Instead, the ’779 patent is directed to
a “well-known” concept that “humans have always performed.” Content Extraction, 776 F.3d at
Whether the Claims of the ’779 Patent Contain an Inventive Concept
Section 101 analysis next requires the court to determine whether a claim directed at an
abstract idea contains an “inventive concept.” See Alice, 134 S. Ct. at 2355. In this step, the court
looks for “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.” Id.
(citations and brackets omitted). “A claim that recites an abstract idea must include additional
features to ensure that the [claim] is more than a drafting effort designed to monopolize the
[abstract idea].” Id. (citations omitted) (quoting Mayo, 132 S. Ct. at 1297) (alterations in Alice
not Mayo). Those additional features must be more than “well-understood, routine, conventional
activity.” Mayo, 132 S. Ct. at 1298. Claims must do more than simply instruct the practitioner to
implement the abstract idea on a generic computer. Alice, 134 S. Ct. at 2359–60.
Alice provides no bright line for patentability under § 101, and lower courts have
endeavored to draw one in cases presenting Alice-based challenges to patentability. One
well-considered decision is Market Track, LLC v. Efficient Collaborative Retail Marketing, LLC,
No. 14-C-4957, 2015 WL 3637740 (N.D. Ill. June 12, 2015), in which the court examined postAlice opinions from the Federal Circuit. The court inferred from the decisions that it is important
to consider (1) whether the claims attempt “to transform an abstract idea to patentable subject
matter simply by limiting the method to a particular industry or to a particular technological
context;” (2) “the nature of the problem to be solved; problems that arise uniquely in computing
or in an internet context weigh in favor of finding an ‘inventive concept;’” and (3) “whether
claim elements using procedures that pre-date the filing of the patent provide the ‘inventive
concept.’” 4 Id.at *5. Since Market Track, the Federal Circuit has also instructed courts to
examine whether a claim would monopolize or preempt implementation of an abstract idea. See,
e.g., Amdocs, 841 F.3d at 1299 (citing Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC,
827 F.3d 1341, 1350 (Fed. Cir. 2016)) (finding an inventive concept in part because “the claims
did not preempt all ways” of implementing an abstract idea); compare with Ariosa Diagnostics,
Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015), cert. denied, 136 S. Ct. 2511, 195
L. Ed. 2d 841 (2016) (“While preemption may signal patent ineligible subject matter, the
absence of complete preemption does not demonstrate patent eligibility.”)
Applying these criteria here points toward unpatentability. First, the claims are limited to
a particular industry: “biometric identification services.” (Dkt. 1-1 Abstract). Second, the ’779
patent is not directed at a problem unique to computing or related to the internet. 5 The
specification explains that “[a] complete biometric system may be too expensive to buy and
maintain, specifically for a relatively small business, which may not have experienced IT
workers, and cannot finance the development of a complete biometric system which suits the
needs of the business.” (Dkt. 1-1 Col. 3:7–11.) According to plaintiffs, the ‘779 patent
“overcomes the challenges associated with those limitations by ‘allowing small businesses,
organizations, etc[.], which lack a full end-to-end biometric system of their own’ to employ
“Although patentable subject matter under § 101 follows a separate test from novelty or
obviousness, under § 102(a) and § 103, respectively, certain facts that are relevant to novelty or
obviousness are also relevant to Mayo step two.” Mkt. Track, 2015 WL 3637740, at *5.
In an attempt to show a technical improvement over the prior art, plaintiffs highlight a preferred
embodiment of the ’779 patent that states “there is carried out a multi-step interaction with an inquiring
party, for providing a more accurate and reliable biometric identification.” (Dkt. 36 at 7.) As defendants
point out, this embodiment is not found in the asserted claims. It therefore has no bearing on the motion.
high-security biometric identification technology.” (Dkt. 36 at 2 (alteration in original) (quoting
dkt. 1-1 Col. 6:64–66).) But the ‘779 patent does not describe a technological improvement of
any kind. Rather, it focuses on making a biometric identification system more affordable by
making part of the system remote and allowing users to access it through a subscription service.
(See dkt. 1-1 Col. 5:64–68.)
Third, the ’779 patent’s use of existing technology provides no inventive concept. For
example, “[i]mplementation of the method and system . . . involves performing or completing
certain selected tasks or steps manually, automatically, or a combination thereof.” (Dkt 1-1 Col.
4:51–54.) Implementation by hardware could take the form of a chip or circuit; implementation
by software could be a plurality of software instructions “executed by a computer using any
suitable operating system.” Id. Col. 4:55–67. These are nothing more than invocations of generic
descriptions of computer components that do not rise to the level of inventive concept. Content
Extraction, 776 F.3d at 1347–48 (quoting Alice, 134 S. Ct. at 2357) (“For the role of a computer
in a computer-implemented invention to be deemed meaningful in the context of this analysis, it
must involve more than performance of ‘well-understood, routine, [and] conventional activities
previously known to the industry.’”). Although plaintiffs assert that “distributed, Internet-based,
remote authentication architecture” makes security breaches and “hacks” more difficult, there is
nothing in the ’779 patent that references increased security. Regardless, even accepting
plaintiffs’ assertion, storing data on the cloud as opposed to locally is not an inventive concept.
Similarly, plaintiffs’ references to claims 18 and 19’s “allowing remote parties to identify and
remove duplicate templates from the system’s database” likewise fail to demonstrate an
Finally, the ’779 patent threatens broad preemption. There is nothing unique about the
arrangement of the receiver and verifier; any system providing global biometric identification
services to remote parties would have to receive and compare templates from those remote
parties. 6 The claimed system is readily comparable to the system found unpatentable in Blue
Spike. The court there explained that the patent merely described the use of routine computer
components and methods, including general-purpose computers and databases, to implement the
conventional activity of comparing one thing to another. 2015 WL 5260506, at *6. Similarly, the
’779 patent describes the use of widely-used and well-known tools (basic chips, circuitry,
computers, and databases) to implement the same conventional activity.
Accordingly, defendants’ motion to dismiss (dkt. 27) is granted. Counts I and II are
dismissed with prejudice. This case is terminated.
Date: August 18, 2017
U.S. District Judge Joan H. Lefkow
The section of IQS’s brief discussing this issue is heavy on citations but light on application of
those cases to the claims at issue. (Dkt. 36 at 8–9.)
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