SP Plus Corporation v. IPT, LLC

Filing 88

ORDER AND REASONS granting 62 Motion for Judgment on the Pleadings; granting 67 Motion for Judgment on the Pleadings. Signed by Judge Martin L.C. Feldman on 5/19/2017. (clc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

SP PLUS CORPORATION

CIVIL ACTION

v.

NO. 16-2474

IPT, LLC, d/b/a PAYLOCK

SECTION "F"

ORDER AND REASONS
Before

the

Court

are

the

plaintiff’s

and

third-party

defendant’s motions for a judgment on the pleadings pursuant to
Federal Rule of Civil Procedure 12(c).

For the reasons that

follow, the motions are GRANTED.
Background
This declaratory judgment action arises out of the contention
by defendant IPT, LLC (“Paylock”) that the use of “self-release”
parking boot enforcement in the City of New Orleans (“City”)
infringes upon two of Paylock’s federally-registered patents.
On

May

Professional

16,

2014,

Account

the

City

Management,

awarded
LLC

a

prime

(“PAM”),

the

contract

to

third-party

defendant in this action, to handle the city’s parking ticket
processing operations.

Two months later, on July 17, 2014, PAM
1

entered a subcontract with SP Plus Corporation (“SP Plus”), the
plaintiff in this action.
PAM

in

overseeing

The subcontract binds SP Plus to assist

“vehicle

immobilization/release

functions,”

including the placement of immobilizing “boots” on vehicles parked
illegally or belonging to a driver with outstanding fines or
violations.

To remove the boot immobilizing the vehicle, the

driver must pay a fee as well as any outstanding fines.
Beginning in September 2014, SP Plus began attaching “selfrelease” boots 1 to infracting vehicles.

By calling a telephone

number left by SP Plus personnel, the driver of a booted vehicle
could pay the costs over the telephone and receive a code that
enabled the driver to immediately unlock and remove the boot before
returning it to a designated drop-off spot.

SP Plus offered this

self-release option for more than 16 months.
Paylock is the holder of U.S. Patent No. 7,950,570, titled
“Parking

Environment

Management

System

and

Method,”

and

U.S.

Patent No. 7,988,046, titled “Vehicle Violation Enforcement System
and Method” (the “570” and “046” patents).

Both the ‘570 and ‘046

patents describe the steps involved in and technology requisite

SP Plus acquired 108 patented “Titan Grip” boots from Universal
Boot, Inc. The Titan Grip Boots are manufactured and patented by
Team Manufacturing, Inc. Neither Universal nor Titan are parties
to this litigation.
2
1

for

a

particularized

process

of

enforcing

penalties through self-release booting.

parking

violation

Relying on “commercially

available” components such as a Personal Digital Assistant (PDA),
an immobilizing boot, an encoded lock, and a radio frequency
identification (RFID) receiver, the patents claim a method of
facilitating

vehicle

immobilization,

penalty

payment,

and

subsequent vehicle release without compelling the vehicle owner to
wait for a municipal or booting company employee to arrive on scene
and release the boot.
By

following

the

processes

outlined

in

the

patents,

an

individual authorized to issue tickets and summonses can use the
PDA to interact with a summons-issuing governing body database
(SDB)

to

determine

whether

a

vehicle

is

in

violation 2

and

subsequently attach an immobilizing boot with encoded lock and
RFID receiver if appropriate.

The individual responsible for the

booted vehicle can then pay all outstanding fines by telephone
before receiving the code -- identifiable by the centralized SDB
via the boot’s RFID receiver -- to unlock the immobilizing boot.
According to Paylock, its patents remedied an inefficiency that
had long maligned the parking violation enforcement industry.

The ‘570 patent specifically calls for an RFID-based “PermitView”
system enabling an issuing individual to scan a parked car to
ascertain whether the vehicle is parked in a permissible area.
3
2

Neither patent specifies the kind of PDA, RFID receiver, or encoded
lock that must be employed.
On February 4, 2016, Paylock informed PAM in a letter that
the

ongoing

self-release

booting

operations

in

New

Orleans

infringed upon at least claim 9 of the ‘570 patent and claim 1 of
the ‘046 patent. The letter threatened suit unless PAM immediately
ceased any and all infringing activities and confirmed to Paylock
within a month that its self-release booting days were over.
SP Plus claims to have learned about Paylock’s letter on or
around February 19, 2016. Out of an “abundance of caution,” SP
Plus

discontinued

later.

its

self-release

booting

a

week

SP Plus has since dispatched staff to manually unlock

parking boots on an around-the-clock basis.
response

operations

deadline,

SP

Plus

identified

On Paylock’s March 4
itself

as

PAM’s

subcontractor to Paylock, and requested an additional 30 days to
investigate and respond to Paylock’s allegations. PAM asked for
the same extension, which Paylock subsequently granted.
Instead of responding to Paylock, SP Plus filed a declaratory
judgment action with this Court on March 25, 2016.

SP Plus alleges

that both the ‘570 and ‘046 patents are facially invalid under the
requirements for patentable subject-matter in 35 U.S.C. § 101 or,

4

in the alternative, that its conduct infringes upon none of the
patents’ claims. 3
On August 25, 2016, Paylock filed an infringement suit against
PAM -- and PAM alone -- in the United States District Court for
the District of New Jersey.

There, Paylock alleges that PAM, with

either full awareness of or willful blindness to the existence of
Paylock’s patents, knowingly and intentionally infringed the ‘570
or ‘046 patents.

Paylock additionally accuses PAM of inducing the

City into infringement, selling and offering for sale the selfrelease

booting

operations,

and

“contracting

with

others

instructing others in connection with the infringement.”

and

Finally,

paragraph 11 of the complaint includes the allegation that PAM
“has contacted multiple municipalities in the United States with
the intent of engaging in booting operations,” without specifying
whether PAM offered to engage in self-release booting operations
for those other municipalities.
Because Paylock’s infringement suit arose largely out the
same nucleus of facts as SP Plus’s first-filed declaratory action,
this Court exercised its discretion to enjoin the prosecution of
the New Jersey infringement action while this declaratory action

SP Plus also asserted state law claims against Paylock, which
this Court subsequently dismissed. See Order and Reasons 12/12/16.
5
3

proceeds.

See Order and Reasons 12/12/16 (granting SP Plus’s

motion for preliminary injunction and denying Paylock’s motion to
dismiss, stay, or transfer federal patent law claims, but granting
Paylock’s

motion

to

dismiss

SP

Plus’s

state

law

claims). 4

Thereafter, Paylock answered SP Plus’s complaint and filed a thirdparty complaint against PAM in this Court.
SP Plus and PAM 5 now ask this Court to enter judgment on the
pleadings, pursuant to Rule of Federal Rule of Civil Procedure
12(c), and declare that the ‘570 and ‘046 patents are directed to
ineligible subject matter under 35 U.S.C. § 101.

SP Plus asserts

that the patents merely spell out a conventional, non-inventive
process for implementing the abstract idea of “self-service” in
the parking enforcement industry.
I.

Meanwhile, Paylock appealed to the U.S. Court of Appeals for the
Federal Circuit this Court’s December 12, 2016 ruling. That appeal
remains pending. Although this Court denied Paylock’s request to
stay these proceedings pending the outcome of its appeal, the Court
granted its request to modify the injunction to permit it leave to
request a stay from the District of New Jersey.
See Order and
Reasons 3/23/17. By “Letter Order,” Paylock’s informal motion to
stay proceedings in the District of New Jersey was granted. See
Letter Order in Civil Action Number 16-5200 (D. N.J.)(Bongiovanni,
M.J.).
5 PAM has adopted SP Plus’s memorandum in support of the motion in
its entirety.
6
4

Federal Rule of Civil Procedure 12(c) permits any party to
move for a judgment on the pleadings, provided the motion is made
early enough to avoid delaying trial.

A court may grant a Rule

12(c) motion only if the pleadings evince no disputes of genuine
material fact and questions of law alone remain.

Great Plains

Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 312
(5th Cir. 2002)(citations omitted).

Courts should thus adhere to

the same standard in reviewing a 12(c) motion as they do in
reviewing motions to dismiss under Rule 12(b)(6), accepting all
well-pleaded facts as true and drawing all factual inferences in
favor of the non-movant. See id. at 313 n.8; Thompson v. City of
Waco, Texas, 764 F.3d 500, 502 (5th Cir. 2014) (citing Doe ex rel.
Magee v. Covington Cnty. Sch. Dist. ex rel. Keys, 675 F.3d 849,
854 (5th Cir. 2012)(en banc)); Doe v. Myspace, Inc., 528 F.3d 413,
418 (5th Cir. 2008); 5C CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL
PRACTICE

AND

“‘[A]

PROCEDURE § 1368 (3d ed. 2004).
complaint

must

contain

sufficient

factual

matter,

accepted as true, to state a claim to relief that is plausible on
its

face.’”

2009)(quoting

Gonzalez

v.

Ashcroft

Kay,
v.

577

F.3d

Iqbal,

600,

556

603

U.S.

(5th

Cir.

662,

678

(2009))(internal quotation marks omitted). “Factual allegations
must be enough to raise a right to relief above the speculative
level, on the assumption that all the allegations in the complaint
7

are true (even if doubtful in fact).”

Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007)(citations and footnote omitted). “A claim
has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”

Iqbal, 556 U.S.

at 678 (“The plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer possibility that
a defendant has acted unlawfully.”).

“Where a complaint pleads

facts that are merely consistent with a defendant’s liability, it
stops short of the line between possibility and plausibility of
entitlement to relief.”

Id. at 679 (internal quotations omitted)

(citing Twombly, 550 U.S. at 557).
Finally, just like when it reviews a motion to dismiss under
Rule 12(b)(6), when reviewing a Rule 12(c) motion, “a district
court ‘must consider the [pleadings in their] entirety, as well as
other sources ordinarily examined when ruling on Rule 12(b)(6)
motions to dismiss, in particular, documents incorporated into the
complaint by reference, and matters of which a court may take
judicial notice.”

Funk v. Stryker Corp., 631 F.3d 777, 783 (5th

Cir. 2011)(quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007)).

8

Here, in addition to the pleadings, the Court may consider
the language of the ‘570 and ‘046 patents in reaching its decision.
See Anderson v. Kimberly-Clark Corp., 570 Fed. App’x 927, 932 (Fed.
Cir. 2014)(“[A] court may rely on documents outside the pleadings
if

they

are

integral

to

the

plaintiff’s

authenticity is not disputed.”).

claims

and

their

In reviewing this motion, then,

the Court will accept the well-pleaded factual allegations of
Paylock,

the

non-movant,

as

true,

and

draw

all

reasonable

inferences from the language of the claims of the ‘570 and ‘046
patents in Paylock’s favor.

This deference to the non-movant,

however, does not entail accepting as true “allegations that are
merely conclusory, unwarranted deductions of fact, or unreasonable
inferences.”

Iqbal, 556 U.S. at 678.
II.
A.

35 U.S.C. § 101 defines patentable subject matter:
Whoever invents or discovers any new and
machine, manufacture or composition of
new and useful improvement thereof, may
therefor, subject to the conditions and
this title.

35 U.S.C. § 101 (2012).

useful process,
matter, or any
obtain a patent
requirements of

This provision, the Supreme Court has

held, implicitly excepts “laws of nature, physical phenomena, and
9

abstract ideas” from these general parameters of eligibility.
Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct.
2107, 2116 (2013)(citation omitted); Diamond v. Chakrabarty, 447
U.S. 303, 309 (1980)(internal citations omitted).
In a seminal 2014 decision, the Supreme Court clarified the
standard courts should employ when assessing whether a patent is
directed to a subject matter-eligible invention or an abstract
idea.

Alice Corp. Party Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347

(2014).

The claims of the patents challenged in Alice described

a process by which two parties to a financial transaction could
mitigate “settlement risk” -- the risk that only one party will
fulfill its payment obligations -- using a computerized system as
a third-party intermediary.

See id. at 2352-53.

Although the

patents described how the intermediary computer updates “shadow
records” mirroring real-life accounts to assure each party that
the other has sufficient funds to pay what is owed, they did not
specify any computer or program requisite to complete the steps of
the patents.
The

See id.

Court

applied

the

two-part

patent

subject-matter

eligibility inquiry it had earlier fashioned in Mayo Collaborative
Servs. v. Prometheus Labs, Inc., 566 U.S. 66 (2012).

The test

first explores whether the challenged claims are directed to a
10

patent-ineligible

concept

such

phenomenon, or abstract idea.

as

a

law

of

nature,

physical

Alice, 134 S. Ct. at 2352-53.

If

and only if the patents at issue are directed to a patentineligible concept, a court moves to the second part of the
analysis: determining whether the elements of the claims, both
“individually and as an ordered combination,” supply a concept
sufficiently inventive “to ensure that the patent in practice
amounts to significantly more than a patent upon the [ineligible
concept]

itself.”

Id.

(quoting

Mayo,

566

U.S.

at

72-73);

RecogniCorp, LLC v. Nintendo, Ltd., --- F.3d ---, 2017 WL 1521590,
at *2 (Fed. Cir. Apr. 28, 2017)(“In other words, step two asks
whether the patent claims ‘an inventive concept sufficient to
transform

the

claimed

abstract

idea

into

a

patent-eligible

application.’”). 6
Applying this test, the Alice Court determined that the claims
were directed to a patent-ineligible concept and that the method
claims failed to transform the abstract idea into a patent-eligible
invention. Alice, 134 S. Ct. at 2355-2357. The Court acknowledged
that

all

inventions

“reflect,

rest

upon,

or

apply”

patent-

The Federal Circuit affirmed the district court’s grant of
judgment on the pleadings in favor of Nintendo because “[t]he
patent’s claims are directed to the abstract idea of encoding and
decoding image data[, an abstract concept long utilized to transmit
information], and the claims do not contain an inventive concept
sufficient to render the patent eligible.”
11
6

ineligible concepts.
at

their

heart,

Id. at 2354.

these

patents

However, the Court found that,
were

predicated

on

the

non-

patentable, abstract idea of using a third-party intermediary to
assuage the fears of parties to a financial transaction that the
other party will not make good on its promises.
The

patents

merely

embodied

the

basic,

concept of intermediated settlement.

See id. at 2356.

established

economic

Id.; see also Bilski v.

Kappos, 561 U.S. 593, 611 (2010)(characterizing a method for
financial risk-hedging as a process implementing a “fundamental
economic practice long prevalent in our system of commerce”).
Although the patent holders insisted that the central role of
a

computer

in

their

“settlement

risk”

process

supplied

a

sufficiently inventive concept, the Court disagreed. Id. at 2357.
What mattered, the Court explained, was not the mere presence of
a tangible system or machine such as a computer in a patent
process, but, whether the patents’ claims described how to use
that technology to apply an abstract idea in a novel, inventive
way.

See id. at 2358. “Stating an abstract idea while adding the

words ‘apply it,’” the Court held, “is not enough for patent
eligibility.” Id. (quoting Mayo, 566 U.S. at 72).

Because the

patents called only for the use of a computer and programming code
to implement their settlement risk management method, the Court
found that the patents were directed to patent-ineligible subject
12

matter.
the

Id. The Court did caution, however, against construing

exclusionary

principle

underlying

the

patent

eligibility

inquiry so liberally as to “swallow all of patent law.”

Id. at

2354.
In a torrent of post-Alice cases, the Federal Circuit further
expounded upon what should inform a court’s application of the
two-part test for subject matter eligibility.

When assessing

whether a patent is directed to an abstract idea, the Federal
Circuit has instructed courts to focus on the claims’ “character
as a whole,” focusing on the claims’ purported “advance over the
prior art.”

Electric Power Group, LLC v. Alstom S.A., 830 F.3d

1350, 1353 (Fed. Cir. 2016); Affinity Labs of Texas, LLC v.
DIRECTV,

LLC,

838

F.3d

1253,

1257

(Fed.

Cir.

2016).

Consequently, the determination that a patent or group of patents
is directed to an abstract idea can rest on the interpretation of
a

selection

of

representative

claims,

provided

the

remaining

claims in the challenged patent are “substantially similar and
linked to the same abstract idea.”

See Content Extraction and

Transmission LLC v. Wells Fargo Bank, National Ass’n, 776 F.3d
1343, 1348 (Fed. Cir. 2014)(citing Bilski, 561 U.S. at 612);
Becton, Dickinson & Co. v. Baxter Int’l, Inc., 127 F. Supp. 3d
687, 689 n.3 (W.D. Tex. 2015).

13

Guiding principles have emerged. “[M]ethods of organizing
human activity” are unsuitable patent subject matter.

In re TLI

Commc’ns, LLC Patent Litigation, 823 F.3d 607, 613 (Fed. Cir.
2016).

Claims “directed to the mere formation and manipulation of

economic relations,” for instance, are directed to an abstract
idea.

Content Extraction, 776 F.3d at 1347; see also Ultramercial

v. Hulu, LLC, 772 F.3d 709, 714-15 (Fed. Cir. 2014)(describing the
use of advertisements as “exchange or currency” as an abstract
idea).

In addition, reliance on a tangible component or device as

a vehicle for the implementation of an abstract idea does not
render a patent claim subject-matter eligible.
at 612.

See TLI, 823 F.3d

A patent does, by contrast, cover eligible subject matter

if directed to a specific improvement in the functionality of an
existing technological device or system.

See Enfish, LLC v.

Microsoft Corp., 822 F.3d 1327, 1335-36, 1338 (Fed. Cir. 2016).
If a court reaches step two of the analysis, it should
scrutinize not what a patent claim’s subject matter is but how the
patent’s claims achieve their professed goal.
F.3d at 1355.

Electric Power, 830

The inquiry should identify the pivotal distinction

“between patenting a particular concrete solution to a problem and
attempting to patent the abstract idea of a solution to a problem.”
Id. at 1356.

A patent’s claims do not supply an inventive concept

if they merely recite the implementation of an abstract idea with
14

“routine, conventional activity.”
Recitation

of

generic

functions

Ultramercial, 772 F.3d at 715.
of

existing

technology

are

similarly non-inventive. See Affinity Labs, 838 F.3d at 1263 (Fed.
Cir. 2016); TLI, 823 F.3d at 613-14; Content Extraction, 776 F.3d
at 1348.

Nevertheless, the “non-conventional and non-generic”

arrangement of otherwise conventional or generic components can
confer an inventive concept on a patent.

Bascom Global Internet

Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed.
Cir. 2016).
The

limitation

of

an

abstract

idea

to

a

“particular

technological environment” does not by itself salvage a patent
claim’s eligibility. Ultramercial, 772 F.3d at 716 (quoting Alice,
134 S. Ct. at 2358); but cf. DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245, 1258-59 (Fed. Cir. 2014) (holding that patent claims
recited

patent-eligible

subject

matter

by

“specify[ing]

how

interactions with the Internet are manipulated to yield a desired
result” rather than describing methods and functions commonplace
to the Internet).

Further, that some of the steps in a claim

previously had not been employed in the art related to the patent
does not suffice to supply an inventive concept.
838 F.3d at 1262.
B.
15

Affinity Labs,

Before applying these standards to the Paylock patent claims,
the Court must resolve a dispute between the parties over whether
this Court owes a presumption of validity to the patents.

Paylock

urges the Court require SP Plus and PAM to establish the invalidity
of the ‘570 and ‘046 patents by clear and convincing evidence.
The Supreme Court has not spoken as to whether a presumption
of

validity

should

inform

the

§

101

subject

matter

inquiry.

However, in a well-reasoned concurrence, Judge Mayer of the Federal
Circuit wrote that no presumption of subject matter eligibility
applies in the § 101 calculus, reasoning that the Supreme Court
has taken up several § 101 cases in recent years without mentioning
any presumption of eligibility.

See Ultramercial, 772 F.3d at

720-21 (Mayer, J., concurring)(noting that the rationale for the
presumption of validity -- that the U.S. Patent and Trademark
Office “in its expertise, has approved the claim” -- is especially
diminished for those patents approved before the flurry of recent
Supreme

Court

underscoring

cases

that

clarifying

“the

PTO

has

the
for

eligibility
many

years

standard,
applied

an

insufficiently rigorous subject matter eligibility standard”).
Because the Alice decision -- which the Paylock patents preceded
by almost three years -- has served as a touchstone in this realm
of

patent

law,

it

seems

incongruous

to

presume

the

patents’

validity rather than evaluating them under the new, ostensibly
16

more rigorous, standard espoused by the Supreme Court.

Moreover,

even if the presumption applied, as SP Plus points out, the clear
and convincing standard would govern only disputes of fact, not
the purely legal questions at issue here. See Nextpoint, Inc. v.
Hewlett-Packard Co., No. 15 C 8550, 2016 WL 3181705, at *6 (N.D.
Ill. June 8, 2016), aff’d, No. 2016-2312, 2017 WL 977036 (Fed.
Cir.

March

14,

2017)(quoting

Kaavo

Inc.

v.

Cognizant

Tech.

Solutions Corp., No. 14-cv-1192-LPS-CJB, 2016 WL 476730, at *3 (D.
Del. Feb. 5, 2016)); Listingbook, LLC v. Market Leader, Inc., 144
F. Supp. 3d 777, 785 (M.D.N.C. 2015).

Accordingly, the Court

affords the ‘570 and ‘046 patents no presumption of validity.
III.
A.

The parties agree that the ‘570 and ‘046 methods generally
describe a method of parking violation enforcement via a selfrelease booting system which enables the person responsible for a
vehicle to remove an immobilizing boot without waiting for an
enforcement company or municipal employee to arrive on the scene.
SP Plus proposes that the independent 7 claims of each patent
comprise the “representative claims” for the purpose of the Court’s

The claims in the patents which stand on their own, without
reference to other claims.
17
7

subject matter eligibility analysis because the independent claims
embody the patents’ “character as a whole.”
The independent claims of the ‘046 patent include:
1. A method for enforcing parking violations
comprising the steps of: communicating a
violation and a location and ID of a vehicle
locking boot attached to a vehicle to a host
system controlled by an entity representing a
summons issuing controlling governing body,
communicating the identification of the host
system to a person responsible for the
vehicle, receiving payment of an associated
fine, communicating a boot release code to the
person responsible for the vehicle upon
payment of the associated fine and receiving
from the person responsible for the vehicle a
deposit prior to the boot release code being
communicated, receiving the boot from the
responsible person and returning the deposit
to the person responsible for the vehicle
after receiving the boot.
…
7. A method of enforcing parking violations
comprising the steps of:
a. communicating a location and identification
information of a vehicle to a host system
operated by a controlling entity;
b. receiving instructions from the host
system;
c. attaching a locking boot to the vehicle;
d.
communicating
a
fine
and
contact
information of the controlling entity to a
person responsible for the vehicle;
e. receiving a payment of the fine from the
person responsible for the vehicle; and
f. communicating a boot release code to the
person responsible for the vehicle after
receipt of the payment, wherein the payment
includes a refundable boot deposit charge.
…
18

12. A method of enforcing parking violations
comprising the steps of:
a. communicating a location and identification
information of a vehicle to a host system
operated by a controlling entity:
b. receiving instructions from the host
system;
c. attaching a locking boot having a unique
code assigned thereto to the vehicle;
d. communicating unlocking instructions and
the unique code to a person responsible for
the
vehicle,
the
unlocking
locking
instructions including a fine;
e. receiving the unique code and a payment of
the fine from the person responsible for the
vehicle; and
f. communicating a combination code for the
locking boot to the person responsible for the
vehicle after receipt of a payment of the
fine,
wherein
the
payment
includes
a
refundable boot deposit charge.
…
15.
A
method
for
enforcing
violations
comprising the steps of: maintaining a
database containing serial numbers of vehicle
locking boots and corresponding boot release
codes,
the
boot
release
codes
being
periodically changed and updated in the
database
so
as
to
prevent
improper
distribution of the boot release codes,
communicating a violation and a location and
ID of the vehicle locking boot attached to a
vehicle to a host system controlled by an
entity
representing
a
summons
issuing
controlling governing body, communicating the
identification of the host system to a person
responsible for the vehicle, receiving payment
of an associated fine, communicating a boot
release code to the person responsible for the
vehicle upon payment of the associated fine.
The independent claims of the ‘570 patent consist of:
1. A parking management system comprising: a
detection
module
for
detecting
scofflaw
19

violations, the detection module receiving
data from a remote computer system and
capturing a unique identifier associated with
a parked vehicle, the detection module
analyzing the data and the unique identifier
in order to determine if a scofflaw violation
is occurring and for issuing at least one
enforcement action based upon the scofflaw
violation; an enforcement module for executing
the at [sic] least one enforcement action, the
at least one enforcement action including
immobilization of the parked vehicle via
placement of a locking boot utilizing a boot
release code on a tire of vehicle; and a
resolution
module
for
facilitating
performance
of
remedial
measures,
the
resolution module including a payment module
for receiving payment of a fine with the at
least one enforcement action by an operator of
the
vehicle,
a
release
module
for
communicating the boot release code to the
operator for releasing the parked vehicle from
immobilization upon payment of the fine and a
return module for communicating instructions
to the operator for return of the locking
boot. [W]herein the fine associated with the
at least one enforcement action further
comprises a deposit amount, returnable to the
operator, upon successful removal and return
by the operator, of the locking boot, to the
parking management system.
…
9. A method of managing a parking program, the
method comprising the steps of: receiving data
from
a
remote
computer
system
and
electronically reading a unique identifier
associated with a parked vehicle; analyzing
the data and the unique identifier in order to
determine
if
a
scofflaw
violation
is
occurring; issuing at least one enforcement
action based on the scofflaw violation;
executing the at least one enforcement action,
the at least one enforcement action including
immobilization of the parked vehicle via
placement of a locking boot utilizing a boot
20

release code on a tire of a vehicle; and
facilitating
performance
of
remedial
measures, the at least one remedial measure
including paying a fine associated with the at
least one enforcement action by an operator of
the vehicle, communicating the boot release
code to the operator for releasing the parked
vehicle from immobilization upon payment of
the fine and a return module for communicating
instructions to the operator for the return of
the locking boot, wherein the fine associated
with the at least one enforcement action
further comprises a deposit amount, returnable
to the operator, upon successful removal and
return by the operator, of the locking boot,
to the parking management system.
…
14. A parking management system comprising: a
detection
module
for
detecting
scofflaw
violations, the detection module receiving
data from a remote computer system and
capturing a unique identifier associated with
a parked vehicle, the detection module
analyzing the data and the unique identifier
in order to determine if a scofflaw violation
is occurring and for issuing at least one
enforcement action based upon the scofflaw
violation; an enforcement module for executing
the at least one enforcement action, the at
least
one
enforcement
action
including
immobilization of the parked vehicle and via
placement of a locking boot utilizing a boot
release code on a tire of a vehicle and
communicating an identification number of the
locking boot to a database; a resolution
module
for
facilitating
performance
of
remedial measures, the resolution module
including a payment module for receiving
payment of a fine associated with the at least
one enforcement action by an operator of the
vehicle, a release module for communicating
the boot release code to the operator for
releasing
the
parked
vehicle
from
immobilization upon payment of the fine and a
return module for communicating instructions
21

to the operator for return of the locking boot
and verifying the identification number of the
locking boot being returned matches the
identification number communicated to the
database.
In a footnote in its opposition papers, Paylock suggests, in
meek and conclusory fashion, that SP Plus has failed to show that
the aforementioned claims are “representative” of all the patents’
claims.

The Court disagrees.

Not only are the claims cited by SP

Plus representative of the sole claims which stand on their own,
but each describes the components and methods requisite to achieve
the

patents’

overarching

goal:

the

implementation

of

a

communication system enabling self-release booting. Every other
dependent claim in the patents refers to and describes how to
execute

the

steps

in

the

representative

claims.

Paylock

has

advanced no persuasive argument justifying the need to separately
analyze these dependent claims.
Newegg

Inc.,

728

F.3d

1332,

See Soverain Software LLC v.

1335

(Fed.

Cir.

2013)(citations

omitted)(holding that dependent claims “rise and fall together”
with independent claims if not separately argued before the court).
Accordingly, the Court finds that the non-representative dependent
claims are “substantially similar and linked to the same. . . idea”
as the proposed representative claims.
776 F.3d at 1348.

See Content Extraction,

The Court can and will conduct its analysis on

the basis of these representative claims.
22

B.
Step one of the Mayo/Alice patent eligibility test inquires
as to whether a patent’s claims are directed to a patent-ineligible
concept, such as an abstract idea.

The Court finds that the ‘570

and ‘046 patents are directed to the abstract idea of expediting
the vehicle immobilization process via self-service.
Paylock insists that its patents are “firmly rooted” in the
self-release boot apparatus and exhorts the Court to focus on the
“specific, novel and technical limitations” laid bare by the
patents’ language.
oversimplifying

Paylock rightly admonishes the Court to avoid

or

distorting

the

character

of

the

patents’

claims.
But a reading of the patents’ plain language only betrays
Paylock’s arguments.

It is telling, for instance, that for all

Paylock’s touting of the patents’ reliance on the “novel apparatus”
of the self-releasing boot, the patent claims themselves never
divulge the technical specifications of the “self-releasing boot”
Paylock insists is required to perform the patents’ steps. Instead,
the patent claims describe the actual boot with no greater degree
of specificity than as “a locking boot having a unique code.”

In

other words, rather than offering a specific, novel, or technical
improvement on the “self-releasing boot” apparatus, the claims
23

essentially instruct us to “Use a self-releasing boot.” 8

See TLI,

823 F.3d at 612 (holding that the characterization of a telephone
unit as a mere “conduit” for classifying and storing images,
without a more technical specification, did not confer patenteligibility under step one of the Alice test).

Similarly, while

the ‘570 and ‘046 patent claims feature other, specific limitations
and requirements, such as the use of RFID receivers and the need
for a “remote computer system” or PDA to identify vehicles and
communicate their scofflaw status to a centralized host system,
none are directed to a technological improvement in how each
component works, or in how the use of each component promotes a
technological advance.
contrast,

the

patents

See Enfish, 822 F.3d at 1335-36, 1338.
underscore

their

described

By

methods’

compatibility with existing, commercially available technology.
They describe the relevant components and methods “in purely
functional terms.”

See TLI, 823 F.3d at 612.

What Paylock has really patented -- its patents’ “character
as a whole” -- is a system which uses existing technology to
alleviate the annoyance of those who, likely already vexed by the
boot immobilizing their vehicle, must be more inconvenienced in

Consider the absurdity of a hypothetical inventor who claims to
have invented a patentable “method” for self-locking briefcases
but limits the description of the actual briefcase to “a briefcase
that locks itself.”
24
8

depending on and waiting for a service attendant to arrive on the
scene or else arrange for alternate transportation.

Assuming, as

the Court must at this stage, that Paylock’s patents were the first
to describe such a system, the claims do describe an improvement
over

the

prior

immobilization

art.
by

They

cutting

ease

out

the

the

rigmarole

physical

of

vehicle

middle-man

and

permitting a person responsible for an immobilized vehicle to
contact

the

booting

release the boot.

entity

and

expediently

and

autonomously

Nonetheless, this improvement embodies an

abstract idea: the basic economic concept of mitigating financial,
time-consuming, and even emotional cost by facilitating selfservice.

Just as self-service gas pumps allow drivers to quickly

fill up without burdening attendants, and self-service grocery
checkout stations allow shoppers to quickly pay without burdening
cashiers, the system described by these patents allows vehicle
owners

to

quickly

unshackle

their

cars

without

personally

interacting with or waiting for a municipality or enforcement
employee to be sent out to the vehicle.

It follows the trend of

facilitating customer service with the least amount of person to
person interaction, tailored to the parking enforcement industry.
The

streamlining

of

a

tedious

process

may

be

a

welcome

improvement, but it is, at its heart, an abstract one: a way of
more efficiently “organizing human activity.”
25

See TLI, 823 F.3d

at

613.

A

survey

of

post-Alice

precedent

reinforces

this

conclusion. See, e.g., FairWarning IP, LLC v. Iatric Sys., Inc.,
839 F.3d 1089, 1093-95 (holding that patent claims “purport[ing]
to accelerate the process of analyzing audit log data” with general
purpose computing technology did not describe patent eligible
subject matter); Electric Power, 830 F.3d at 1353 (holding that
claims directed to collecting and analyzing information directed
to an abstract idea); TLI, 823 F.3d at 611-12 (invalidating under
§ 101 a patent providing a method for classifying and storing
images with existing telephonic technology); Enfish, 822 F.3d at
1337-38 (reversing the district court’s finding of subject matter
ineligibility
referential
Content

specifically
database

Extraction,

because

table
776

the

F.3d

improved
at

1347

patent

computer
(holding

claims’

self-

functionality);
that

a

patent

directed toward collecting, recognizing, and storing data using
existing technology was directed toward an unpatentable economic
idea); Nextpoint, 2016 WL 3181705, at *4-5 (observing that patent
claims directed to using cloud technology to manage litigation
information

presented

no

“specific

technical

solution”).

Therefore, the Court finds that the ‘570 and ‘046 patents are
directed to patent-ineligible subject matter. 9

Given the bevy of Federal Circuit and district court cases
following Alice which have addressed similar issues under the §
26
9

C.
Under step two of the Alice test, the Court searches for an
inventive concept.

The ‘570 and ‘046 patents may nonetheless

survive if, both individually and as an ordered combination, their
claims supply an “inventive concept” to the abstract idea of
expediting the booting process via self-service. The Court finds
that they do not.
To be sure, the representative claims of the ‘570 and ‘046
patents

provide

for

an

elaborate,

facilitating self-release booting.

multifaceted

process

of

They require RFID, telephonic,

and computing technology to interface in a specific way that
allows: (1) parking enforcement employees to ascertain whether a
vehicle is in violation; (2) those same employees to, if necessary,
attach an identifiable immobilizing boot with a unique release
code to the vehicle; and (3) the person responsible for the
immobilized vehicle to call a centralized host system, pay a
deposit, and receive the correct code for the boot.
Ultimately,

however,

the

sundry

methods

and

components

described in the Paylock patents never transcend the generic. The
mere inclusion of several technological devices and recitation of

101 subject matter standard, the Court rejects Paylock’s argument
that SP Plus is conflating a nonobviousness inquiry under § 103
with the proper § 101 analysis.
27

their generic functions does not “transform” the abstract idea at
the heart of these patent claims.

There is nothing inherently

“inventive” about using an RFID device to communicate via radio
signal to a host system, or a centralized computer to store data,
or an immobilizing boot to immobilize a car, or a telephone to
place

a

call.

Each

claim,

analyzed

individually

and

in

combination, calls for the implementation of conventional, general
means of achieving the patents’ end: hastening the slog of the
parking

enforcement

identification
removal.

and

process
obviating

by
the

enabling
need

for

swift

vehicle

third-party

boot

See Ultramercial, 772 F.3d at 715.

In adhering to its duty to assess the “how” of the ‘570 and
‘046 patents at this stage, the Court simply cannot discern any
manner in which the representative claims add the non-generic,
transformative spark needed to pry them out of the doldrums of
subject matter ineligibility.

See Electric Power, Electric Power,

830 F.3d at 1355. The claims describe a detailed but predictable
and generic process of implementing a non-patentable abstract
idea. 10

Neither the limitation of the claims to the “particular

Paylock submits that its patents solved the problems and business
challenges attendant with prior inefficient booting operations by
“require[ing] self-release booting technology” in every claim of
their patents. But coupling generic communication techniques and
generic technological components with self-release booting
technology to effectuate the abstract idea of “self-release”
28
10

technological environment” of parking enforcement, nor the novelty
of these claims to the industry, can alter that reality.

See

Affinity Labs, 838 F.3d at 1262; Ultramercial, 772 F.3d at 716
(quoting Alice, 134 S. Ct. at 2358).
As was the case with step one of the Alice test, a comparative
analysis

of

the

conclusion.

jurisprudence

See,

e.g.,

supports

Affinity

Labs,

the

Court’s

838

F.3d

step

at

two

1262-63

(refuting that sequence of steps describing how to use cellular
devices to display out-of-region regional broadcasts provided an
inventive concept, notwithstanding claims that the processes were
“novel”

to

the

industry);

Electric

Power,

830

F.3d

at

1355

(“Nothing in the claims, understood in light of the specification,
requires anything other than off-the-shelf, conventional computer,
network,

and

display

technology

for

gathering,

sending,

and

presenting the desired information.”); Bascom, 827 F.3d at 134951

(finding

an

inventing

installation

of

a

features

describe

to

concept

filtering
a

tool

where
with

highly-specific

the

claims

harnessed

customizable

filtering

method

of

filtering

Internet content); Content Extraction, 776 F.3d at 1348 (holding
that the use of existing scanning technology did not embrace an
inventive

concept

to

patent

claims

directed

at

collecting,

booting in the parking enforcement industry does not transform its
abstract idea into a patent-eligible invention.
29

recognizing and storing data); Ultramercial, 772 F.3d at 715-16
(denying that the recitation of “routine additional steps” in
offering

media

advertisement

content

in

transformed

exchange
a

for

patent’s

the

abstract

viewing
idea

of
in

an
any

meaningful way); Apollo Finance, LLC v. Cisco Sys., Inc., 190 F.
Supp. 3d 939, 947 (C.D. Cal. 2016)(finding that no inventive
concept existed for patent claims on Internet learning where none
of the claims’ limitations “change[d] the purpose of the claims”).
Accordingly,
inventive

the

‘570

concept

and

‘046

sufficient

to

patent

claims

render

the

do

not

add

challenged

an

claims

something more than claims on the abstract idea itself.
Conclusion
Based on the foregoing analysis, the Court finds that the
‘570 and ‘046 patents are directed to ineligible subject matter
under 35 U.S.C. § 101. Accordingly, IT IS ORDERED: that the
plaintiff’s and third-party defendant’s motions for judgment on
the pleadings are hereby GRANTED and the Court hereby declares
that

Paylock’s

U.S.

Patent

No.

7,988,046

entitled

“Vehicle

Violation Enforcement System and Method” and U.S. Patent No.
7,950,570

entitled

“Parking

Environment

Management

System

and

Method are invalid under 35 U.S.C. § 101 because the patents are
directed to patent-ineligible subject matter.

30

Within seven days,

the plaintiff and third-party defendant shall submit a proposed
judgment consistent with this Order and Reasons.
New Orleans, Louisiana, May 19, 2017

_____________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

31