Eyetalk 365, LLC v. Bird Home Automation, LLC

Filing 29

ORDER denying without prejudice 12 Motion to Dismiss. Signed by Chief Judge Frank D. Whitney on 1/30/17. (mga)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:16-CV-00680-FDW-DCK
EYETALK 365, LLC,
Plaintiff,
vs.
BIRD HOME AUTOMATION, LLC,
Defendant.

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ORDER

THIS MATTER is before the Court on Defendant’s Motion to Dismiss (Doc. No. 12)
Plaintiff’s Patent Infringement Complaint (Doc. No. 1) pursuant to Rule 12(b)(6) of the Federal
Rules of Civil Procedure. Defendant requests this Court dismiss Plaintiff’s Complaint because the
claims of the patent-in-suit are invalid for claiming non-patentable subject matter. After careful
review, the Court DENIES Defendant’s Motion without prejudice.
Implicit in 35 U.S.C. § 101 of the Patent Act lies the well-settled exception that “‘laws of
nature, natural phenomena, and abstract ideas’ are not patentable.” Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012) (quoting Diamond v. Diehr, 450 U.S. 175,
185 (1981)). We must “tread carefully” in applying the exception, “lest is swallow all of patent
law,” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2346, 2354 (2014), because “all
inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural
phenomena, or abstract ideas.” Mayo, 132 S. Ct. at 1293-94.
Whether a claimed patent-in-suit falls within this exception “rests upon an examination of
the particular claims” using a two-step analysis. Mayo, 132 S. Ct. at 1294. First, the court must
determine whether the claims at issue are ‘directed to’ an abstract idea, a law of nature, or a natural

phenomenon. Alice, 134 S. Ct. at 2355 (citing Mayo, 132 S. Ct. at 1296-97). If not, the analysis
ends because the patent-in-suit satisfies § 101. Id. If so, then the court must apply step two. Id.
To overcome the second step, the claim or claims must contain an inventive concept sufficient to
‘transform the nature of the claim’ into patent-eligible subject matter. Id. In other words, the
patent-in-suit must do more than describe a natural law or abstract idea and instruct the reader to
“apply it.” Mayo, 132 S. Ct. at 1297. It must be “sufficient to ensure that the patent in practice
amounts to significantly more than a patent upon the [ineligible concept] itself.” Alice, 134 S. Ct.
at 2355 (quoting Mayo, 132 S. Ct. at 1294); see also Parker v. Flook, 437 U.S. 584 (1978).
When applying the test, courts engage in a fact-intensive inquiry often finding patent
eligibility in “new and useful concepts” that “improved on an existing process,” or “those that
were not well-known or obtainable in the specific industry,” E.g., Diehr, 450 U.S. at 177-78
(holding claim patent eligible because it employed a “well-known” equation designed to solve a
“conventional industry practice”); McRO, Inc. v. Bandai Namco Games Am., Inc., 837 F.3d 1299,
1316 (Fed. Cir. 2016) (reversing ineligibility where claimed process was “specifically designed to
achieve an improved result in conventional industry practice”); while finding ineligibility where a
claim or claims is well-understood, conventional, or the process has been previously engaged in
by members in the same field. E.g., Mayo, 1232 S. Ct. at 1298 (holding ineligibility where claims
“were already well-known in the art”); Bilski v. Kappos, 561 U.S. 593, 609 (2010) (holding
ineligibility where patent claimed a “fundamental economic practice long prevalent in our system
of commerce”); Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (holding ineligibility where claim
did not supply a “new and useful” application).
Even though the analysis is fact-intensive, a patent-eligibility challenge under § 101 can
be made prior to a formal claim construction. See Bilski, 561 U.S. at 593 (determining patent

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eligibility prior to claim construction). Indeed, courts have determined patent eligibility prior to
claim construction and even prior to discovery. E.g., Bilski, 561 U.S. at 593; Content Extraction
and Transmission, L.L.C. v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343 (Fed. Cir. 2014);
Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada, 687 F.3d 1266, 1273-74 (Fed. Cir. 2012).
In the instant case, however, a patent-eligibility determination is premature. A complaint,
answer, the patent-in-suit, and the parties’ memorandum in support of and against Defendant’s
Motion are insufficient to give the Court a “full understanding of the basic character of the claimed
subject matter.” Bancorp, 687 F.3d at 1273-74 (“We note, however, that it will ordinarily be
desirable—and often necessary—to resolve claim construction disputes prior to a § 101 analysis .
. . .”). Even further, the parties vigorously dispute the characterization of the claimed patent-insuit. (Docs. Nos. 13, 23). In the absence of stipulated constructions, this Court cannot fairly apply
§ 101. See Invue Sec. Prods., Inc. v. Mobile Tech, Inc., No. 3:15-CV-00610, 2016 WL 1465263,
at *3 (W.D.N.C. April 14, 2016).
Therefore, the Court DENIES Defendant’s Motion to Dismiss (Doc. No. 12) without
prejudice. Defendant is free to reassert its patent-ineligibility argument upon completion of claim
construction.
SO ORDERED.
Signed: January 30, 2017

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