VOIT Technologies, LLC v. DEL-TON, INC.

Filing 46

ORDER granting 23 Motion to Dismiss for Failure to State a Claim, denying as moot 13 Motion to Dismiss for Failure to State a Claim, 15 Motion for Bond, and 21 Motion to Strike. Signed by US District Judge Terrence W. Boyle on 1/10/2018. (Stouch, L.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:17-CV-259-BO
VOIT TECHNOLOGIES, LLC,

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Plaintiff,

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DEL-TON, INC.,
Defendant.

ORDER

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This cause comes before the court on defendant's motion to dismiss [DE 13] for failure to
state a claim under Federal Rule of Civil Procedure 12(b)(6). Plaintiffs have responded,
defendants have replied, and the matter is ripe for ruling. For the reasons discussed below,
defendant's motion is granted.
BACKGROUND
Del-Ton, Inc. is a firearms manufacturer based in Elizabethtown, North Carolina. They
sell gun supplies and accessories over the internet using an online portal run by a third-party
named Volusion. Plaintiff, VOIT Technologies, LLC, is a Florida company. Plaintiff has owned
the patent in question, U.S. Patent No. 6,226,412 (abbreviated as the '412 Patent), since 2012.
The patent was granted on May 1, 2001, with a priority date of March 24, 1995, and has since
expired. On May 26, 2017, Plaintiff filed the instant lawsuit, alleging that Del-Ton's online
shopping portal infringed on its patent, which patents "a method of buying and selling an item"
through the internet. '412 Patent at 11 :5. This is one of several lawsuits plaintiff has filed around
the country alleging infringement of this patent, including in Texas, Colorado, and Florida. This

is the first suit it has filed in this district. Defendant has moved to dismiss on the grounds that
what plaintiff claims to have patented cannot be patented, and so the patent is invalid.
DISCUSSION
A motion to dismiss tests the legal sufficiency of the complaint. See Papasan v. Allain,
478 U.S. 265, 283 (1986). When acting on a motion to dismiss under Rule 12(b)(6), "the court
should accept as true all well-pleaded allegations and should view the complaint in a light most
favorable to the plaintiff." Mylan Labs., Inc.

v.

Matkari, 7 F.3d 1130,' 1134 (4th Cir. 1993). A

motion will be granted when it "appears certain that the plaintiff cannot prove any set of facts in
support of his claim entitling him to relief." Edwards v. City of Goldsboro, 178 F.3d 231, 244
(4th Cir. 1999). Whether something is patentable is a question oflaw. OIP Techs, Inc. v.

Amazon.com, Inc. 788 F.3d 1359, 1362 (Fed. Cir. 2015). Therefore, patent eligibility can be
evaluated at the motion to dismiss stage. buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1352
(Fed. Cir. 2014).

I.

Claim Construction
A preliminary issue is whether a claim construction hearing is necessary here before

determining the validity of the patent. This Court finds that it is not. "[C]laim construction is not
an inviolable prerequisite to a [patent's] validity determination." Content Extraction & Trans.,

LLC v. Wells Fargo Bank NA., 776 F.3d 1343, 1349 (Fed. Cir. 2014). When there are claim
construction disputes, it is generally preferable to resolve them prior to determining eligibility.

Bankcorp Servs., LLC v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1273-74 (Fed.
Cir. 2012). A claim construction hearing brings qlarity by developing further evidence to resolve
the disputes. See In Vue Sec. Prods. v. Mobile Tech, Inc., 2016 WL 1265263 at *2-3 (W.D.N.C.
Apr. 14, 2016). Plaintiff argues that there are "glaring disputes as to the meaning of the '412

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Patent's claims and the general nature of the invention itself." [DE 32 at 9]. Not all disputes in
patent litigation are claim construction disputes. That the dispute here is not one to be resolved
by claim construction is indicated by defendant's Reply, in which it argues that plaintiffs patent
would be invalid even if this Court adopted all of plaintiffs constructions. [DE 24 at 7-8].
Because of this, this Court finds that claim construction is not needed, and will proceed
immediately to the issue of whether plaintiffs patent is valid under 35 U.S.C. § 101.
II.

· Patent Validity
A patent may be granted to a "new and useful process, machine, manufacture, or

composition of matter, or any new and useful improvement thereof." 35 U.S.C. § 101. If the
patent in question is not eligible for patenting, a dismissal of a patent infringement claim is
appropriate. E.g., Mankes v. Fandango, LLC, 2017 WL 782291 at *4-5 (E.D.N.C. Feb. 28,
2017). The burden of establishing invalidity is on the party asserting that invalidity. 35 U.S.C. §
282.
The Supreme Court has articulated a two-part test for determining whether a concept is
patentable. Alice Corp. Pty. Ltd. V. CLS Bank Intern., 134 S.Ct. 2347, 2355 (2014). The first
question is "whether the claims at issue are directed to a patent-ineligible concept," such as a
natural phenomenon or an abstract idea. Id. If so, the inquiry moves to step two: whether there is
an "inventive concept-Le., 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.
A. Patent-Eligible Concepts
Here, then, the first issue is whether what plaintiff has in its '412 patent is patent-eligible
or not. This Court finds that it describes an abstract idea, and so it is not.

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Abstract ideas, principles, fundamental truths, original causes, or motives cannot be
patented. Le Roy v. Tatham, 14 How. 156, 175 (1853). The distinction separates the descriptive
from the generative. This is because patents are designed to protect that which an individual can
lay claim to. Id. If a creator is articulating something that already existed, there is no novelty
there, and patents exist to protect the new and useful. See 35 U.S.C. § 101.
Entrepreneurial innovations are distinguished from technological innovations.

Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014). When an ordered
combination of steps recites an abstraction, it simply delivers the idea of that process, nothing
more. Id. Describing a procedure is an abstract idea, and is not a patent-eligible concept. Bilski v.

Kappas, 561 U.S. 593, 599 (2010). Nor do concepts become eligible merely by being a solution
to a known problem. Id. at 599-601. The fact that a claim references "concrete, tangible
components" does not on its own µlean that the claim is not abstract. In re TL! Communications

LLC Patent Litigation, 823 F.3d 607, 611 (Fed. Cir. 2016). When a methodology is being
considered as a patent, the narrowness and specificity of application of the methodology aids its
case. DDR Holdings, LLC v. Hotels.com L.P., 773 F.3d 1245, 1259 (2014). "The claims at issue
d[id] not attempt to preempt every application of the idea." Id. The use of conventional
technology in a "nascent but well-known environment," however, is not specific or narrow. See

in re TL! Communications, 823 F.3d at 612. A business, or other, idea does not become patent
eligible because it is about computers. Technological innovations must be innovations as well as
technological. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d at 715. A series of steps describing an
abstract idea is just that, nothing more.
Plaintiffs patent describes the idea of transmitting compressed images from one
computer to another in order to facilitate the buying and selling of goods. But plaintiff was

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unable to articulate at the hearing, and does not attempt to do so in its briefing, what it is that it
has actually invented. Instead, the patent strings together a description of things that already
existed, and calls that series of steps patent.,.eligible. It is not.
The patent repeatedly discusses image compression, but its text explains that "actual data
compression methods employed could include the industry standard JPEG format ... or other
proprietary or commercially available techniques." '412 Patent at col. 6, 11 :60-64; [DE 1 Ex. A].
Similarly, the relational databases mentioned were well-established at the time of the patent
application, and plaintiff makes no attempt to claim this patent is for the invention of a relational
database. See Enjish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) (discussing an
attempt to improve relational databases by a patent contemporary to the one at issue here).
"Creating multiple sets of unique records managed in a unique way" is unexplained, but that may
be for the best, as making copies is not an invention. [DE 32 at 12]. Finally, as plaintiff
concedes, the method described is done on general equipment. [DE 32 at 20].
What's left is the idea of using these concepts in order to sell products. That is to say,
rather than being an "asserted improvement in computer capabilities," the patent deals with an
"abstract idea for which computers are invoked merely as a tool." Enjish, LLC v. Microsoft
Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016). Plaintiffs patent, then, is an abstract idea and falls
within step one of Alice.
B. Inventive Concept
Once it is established that a patent is of an abstract idea, the inquiry moves to whether
there is a saving element: the presence of an inventive concept. Some abstract ideas will result in
a patentable claim, if the claims "do significantly more than simply describe that abstract
method." Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 721 (Fed. Cir. 2014). Detailing the

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results of the idea is not sufficient. See Intellectual Ventures I, LLC v. Capital One Bank (USA),
792 F.3d 1363, 1367 (Fed. Cir. 2015) ("[C]laiming the improved speed or efficiency inherent
with applying the abstract idea on a computer" is not enough). Nor is the addition of generic
steps, or applying the idea to a particular technological environment. Internet Patents Corp. v.

Active Network, Inc., 790 F.3d 1343, 1349 (Fed. Cir. 2015).
The "machine-or-transformation test" plaintiff discusses predates Alice, but can be used
as evidence that a patent of an abstract idea meets step two. See Intellectual Ventures I LLC v.

Symantec Corp., 100 F. Supp. 3d 371, 403 (D. Del. 2015), afj'd in part, rev'd in part, 838 F.3d
1307 (Fed. Cir. 2016). Essentially, patented processes that are housed in specific technological
devices are more likely to contain inventive concepts under step two of Alice than those that are
not. Even if this test were dispositive, Plaintiff's process references nothing more specific than a
"uniquely identifiable remote data terminal" or "a telephone." '412 Patent 11 :5-12:24; [DE 32 at
21-22].
Plaintiff's claim proceeded from step one because it described an abstract idea. The fact
that it implements this abstract idea through a series of steps is not enough to find that it has an
inventive concept. Plaintiff has pointed to problems with image storage and transmission at the
time of the patent's application and priority date, and argues that improved image compression is
the inventive concept. But image compression as utilized by this process predated the '412
patent, as discussed above. Plaintiff's reference to its "unconventional central relational
database" is also not enough to sustain a finding of an inventive concept, as it does not explain
what is unconventional about it. [DE 32 at 28].
The additional features required by step two are not present here. Accordingly, this Court
finds that the '412 patent describes a process that cannot be patented. When a patent

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infringement claim is brought on the basis of a patent that fails as a matter of law, dismissal of
the claim is appropriate.
CONCLUSION

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For the foregoing reasons, defendant's motion is GRANTED [DE 14]. As this closes the case, all
other active motions are DENIED AS MOOT.

SO ORDERED, this }t2day of January, 2018

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TERRENCE W. BOYLE
UNITED STATES DISTRICT JUDGE

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