Dynamic Applet Technologies, LLC v. Urban Outfitters, Inc.

Filing 32

MEMORANDUM ADOPTING 31 REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE. Mattress Firm Defendants' Rule 12(b)(6) Motion to Dismiss (Case No. 4:17cv860, Dkt. #15) is DENIED; Defendant PetSmart's Motion to Dismiss for Failure to State a Claim (Case No. 4:17-cv-861, Dkt. #9) is DENIED; Defendant Urban Outfitters' Motion to Dismiss (Case No. 4:17-cv-862, Dkt. # 13 ) is DENIED; and Defendant Hollister's Motion to Dismiss (Case No. 4:17-cv-878, Dkt. #11) is DENIED.. Signed by District Judge Amos L. Mazzant, III on 9/18/2018. (rpc, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

DYNAMIC APPLET TECHNOLOGIES,
LLC,
Plaintiff,
v.
MATTRESS FIRM, INC. and SLEEPY’S,
LLC,
Defendants.
DYNAMIC
LLC,

APPLET

TECHNOLOGIES,

Plaintiff,
v.
PETSMART, INC.,
Defendant.
DYNAMIC
LLC,

APPLET

TECHNOLOGIES,

Plaintiff,
v.
URBAN OUTFITTERS, INC,,
Defendant.

DYNAMIC
LLC,

APPLET

Plaintiff,
v.
HOLLISTER CO.,
Defendant.

TECHNOLOGIES,

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CIVIL ACTION NO. 4:17-CV-860-ALM-KPJ
(LEAD)

CIVIL ACTION NO. 4:17-CV-861-ALM-KPJ

CIVIL ACTION NO. 4:17-CV-862-ALM-KPJ

CIVIL ACTION NO. 4:17-CV-878-ALM-KPJ

MEMORANDUM ADOPTING REPORT AND
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Came on for consideration the report of the United States Magistrate Judge in this action,
this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636.
On August 29, 2018, the report of the Magistrate Judge (the “Report”) (Dkt. #53) was entered,
containing proposed findings of fact and recommendations that the following motions be denied:
1) Defendants Mattress Firm, Inc. and Sleepy’s, LLC’s (collectively, “Mattress Firm
Defendants”) Rule 12(b)(6) Motion to Dismiss (Case No. 4:17cv860, Dkt. #15);
2) Defendant PetSmart, Inc.’s (“PetSmart”) Motion to Dismiss for Failure to State a
Claim (Case No. 4:17-cv-861, Dkt. #9);
3) Defendant Urban Outfitters, Inc.’s (“Urban Outfitters”) Motion to Dismiss (Case
No. 4:17-cv-862, Dkt. #13); and
4) Defendant Hollister Co.’s (“Hollister”) Motion to Dismiss (Case No. 4:17-cv-878,
Dkt. # 11).
These cases were consolidated on June 7, 2018, with Case No. 4:17cv860, designated as
the lead case. Hereinafter, all defendants shall be referred to collectively as “Defendants,” and the
above-referenced motions will be referred to collectively as the “Motions.” Defendants
filed objections to the Report (the “Objections”) (Dkt. #55). The Court has made a de novo
review of the Objections and is of the opinion that the findings and conclusions of the Magistrate
Judge are correct and the Objections are without merit as to the ultimate findings of the
Magistrate Judge. The Court hereby adopts the findings and conclusions of the Magistrate Judge
as the findings and conclusions of the Court.
I.

DISCUSSION

The Motions argue that Plaintiff’s claims should be dismissed for failure to state a claim
upon which relief can be granted because all of the asserted claims are directed to the abstract idea
of bundling and sending information responsive to a request. See, e.g., Dkt. 15 at 16. The Supreme

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Court has set forth a two-part test for patent eligibility. Alice Corp. Pty. v. CLS Bank Int’l, 134
S.Ct. 2347, 2354 (2014). Defendants argue the claims fail both prongs of the Alice test. See Dkt.
15. Defendants’ Objections are essentially the same arguments presented in their briefing on the
Motions, arguments which were extensively addressed in the Magistrate Judge’s Report. The
Objections chiefly challenge the Magistrate Judge’s findings and conclusions regarding the
technical advantages and specific improvements over prior technology recited in the claims of the
patent-in-suit. However, Defendants fail to point out how there was any error in the Magistrate
Judge’s analysis; they merely disagree with her conclusion, which is insufficient to sustain the
asserted Objections.
Defendants also argue that even “if the Court were to adopt [Plaintiff’s] proposed
constructions for all of the disputed claim terms, Rule 12(b)(6) dismissal would still be appropriate
as there is no plausible reading of the ’111 patent that would enable [Plaintiff] to satisfy the
threshold inquiry under § 101.” Dkt. #55 at 4. The Court disagrees. Defendants have failed to
adequately demonstrate the absence of fact and claim construction issues such that the only
plausible reading is that of patent-ineligibility. Without a determination of how the Court should
construe the claims in this case, the issue of whether there is a transformative element of the claims
is premature. See Alice, 134 S. Ct. at 2354. As the Magistrate Judge noted, “[i]n order for the Court
to determine whether the patents contain an inventive concept, it is necessary for there to be a
settled interpretation of the claim language.” Dkt. #53 at 13.
Further, the Court finds no error in the Magistrate Judge’s conclusion that “a careful
reading of the claims themselves—does not clearly reveal that the patents are abstract . . . , [ ]
which further prevents the Court from summarily finding the claims to be abstract prior to claim
construction.” Id. (citing Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014)).

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Because the Court finds that the Magistrate Judge correctly analyzed the issue of patentability
based on her careful review of the briefing and the evidence, as well as oral argument, Defendants’
Objections are OVERRULED.
II.

CONCLUSION

Based on the foregoing, the Mattress Firm Defendants’ Rule 12(b)(6) Motion to Dismiss
(Case No. 4:17cv860, Dkt. #15) is DENIED; Defendant PetSmart’s Motion to Dismiss for

. Failure to State a Claim (Case No. 4:17-cv-861, Dkt. #9) is DENIED; Defendant Urban
Outfitters’ Motion to Dismiss (Case No. 4:17-cv-862, Dkt. #13) is DENIED; and Defendant
Hollister’s Motion to Dismiss (Case No. 4:17-cv-878, Dkt. #11) is DENIED.
IT IS SO ORDERED.

SIGNED this 18th day of September, 2018.

___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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