ContourMed Inc. v. American Breast Care L.P.
Filing
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MEMORANDUM OPINION AND ORDER DENYING 11 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM . (Signed by Judge Gray H. Miller) Parties notified.(rkonieczny, 4)
United States District Court
Southern District of Texas
ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
CONTOURMED INC.,
Plaintiff,
v.
AMERICAN BREAST CARE L.P.,
Defendant.
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March 17, 2016
David J. Bradley, Clerk
CIVIL ACTION H-15-2769
MEMORANDUM OPINION & ORDER
Pending before the court is a motion to dismiss filed by defendant American Breast Care L.P.
(“ABC”). Dkt. 11. After considering the motion, response, reply, and applicable law, the court is
of the opinion that the motion should be DENIED.
I. BACKGROUND
Plaintiff ContourMed Inc. (“ContourMed”) is the owner of all rights, title, and interests in
United States Patent No. 7,058,439 (the “‘439 Patent”), titled “Methods of Forming Prostheses.”
Dkt. 1, Ex. 1. The Abstract of the ‘439 Patent reads in part:
A breast prosthesis may be formed by forming an outer layer on a mold, and filling
the mold with a polymerizable foaming composition. The mold may be formed by
forming a computer model of the prosthesis based on scanning a patient. The
computer model may be used to form a solid model.
Id. ContourMed uses the technology disclosed and claimed in the ‘439 Patent to provide custom
prosthesis-forming services to patients who have had a mastectomy. Dkt. 1 at 2.
ContourMed filed this lawsuit on September 22, 2015, alleging that ABC infringed and
continues to infringe the ‘439 Patent by practicing methods of forming breast prostheses in violation
of 35 U.S.C. § 271. Id. at 1. ContourMed seeks damages for lost profits and royalties of an amount
no less than a reasonable royalty under 35 U.S.C. § 284. Id. at 3, 5. ContourMed contends that it
has suffered irreparable harm from ABC’s actions and will continue to suffer unless ABC is
permanently enjoined from infringing the ‘439 Patent under 35 U.S.C. § 283. Id. Additionally,
ContourMed asserts both entitlement to enhanced damages under 35 U.S.C. § 284 because of ABC’s
alleged willful infringement and an award of attorneys’ fees because of the exceptional nature of the
case under 35 U.S.C. § 285. Id. at 6.
ABC now moves to dismiss the lawsuit under Federal Rule of Civil Procedure 12(b)(6),
asserting that the ‘439 Patent claims ineligible subject matter directed to the abstract idea of generic
computer modeling with data collected from a generic scanner. Dkt. 11 at 11. In making its
argument for subject matter ineligibility, ABC references both the prosecution history of the ‘439
Patent and prior art references, attaching these documents as exhibits to its motion to dismiss and
requesting that the court take judicial notice of these matters of public record. Dkt. 11, Exs. B–E.
ContourMed contends that the consideration of the prosecution history and prior art is premature at
this stage of litigation. Dkt. 14 at 9. Further, ContourMed argues that the ‘439 Patent does not claim
an abstract idea because the scanning system is not generic, and that even if the court considered the
patent directed to an abstract idea, the use of novel, non-abstract components transforms the
invention into patent-eligible subject matter. Id. at 5.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires only that the pleading contain “a short and
plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
In considering a 12(b)(6) motion to dismiss a complaint, courts generally must accept the factual
allegations contained in the complaint as true. Kaiser Aluminum & Chem. Sales, Inc. v. Avondale
Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982). “[A] complaint attacked by a Rule 12(b)(6)
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motion to dismiss does not need detailed factual allegations, [but] a plaintiff’s obligation to provide
the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555, 127 S. Ct. 1955 (2007) (citations omitted). And, “[f]actual allegations must be
enough to raise a right to relief above the speculative level.” Id. The supporting facts must be
plausible—enough to raise a reasonable expectation that discovery will reveal further supporting
evidence. Id. at 556. The court does not look beyond the face of the pleadings in determining
whether the plaintiff has stated a claim under Rule 12(b)(6) unless those materials are subject to
judicial notice or central to plaintiff’s claim and referred to in the complaint. Norris v. Hearst Trust,
500 F.3d 454, 461 (5th Cir. 2007) (“[I]t is clearly proper in deciding a 12(b)(6) motion to take
judicial notice of matters of public record.”); Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498–99 (5th Cir. 2000) (“We note approvingly, however, that various other circuits have specifically
allowed that ‘[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the
pleadings if they are referred to in the plaintiff’s complaint and are central to her claim.’” (quoting
Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993))).
III. ANALYSIS
A.
Judicial notice of exhibits attached to defendant’s motion to dismiss
Judicial notice applies to indisputable facts that are “generally known” or “can be accurately
and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R.
Evid. 201. ABC contends that the court may take judicial notice of the prosecution history and prior
art references of the ‘439 Patent to decide the motion to dismiss because both are matters of public
record. Dkt. 11 at 9. However, judicial notice of matters of public record is limited to materials like
general historical observations, court orders, administrative publications, and dictionary definitions.
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E.g., Papasan v. Allain, 478 U.S. 265, 268 n.1, 106 S. Ct. 2932 (1986) (taking judicial notice of the
history of lands allocated to public schools by the government); Refac Int’l, Ltd. v. Lotus Dev. Corp.,
81 F.3d 1576, 1584 n.2 (Fed. Cir. 1996) (taking judicial notice of the Manual of Patent Examining
Procedure published by the USPTO); Davis v. Bayless, 70 F.3d 367, 372 (5th Cir. 1995) (taking
judicial notice of state court orders); Clark v. Walt Disney Co., 642 F. Supp. 2d 775, 782 (S.D. Ohio
2009) (taking judicial notice of dictionary definitions).
ContourMed rightly asserts that
consideration of prosecution history and prior art references is misplaced and premature at this stage
in the pleadings. Dkt. 14 at 9. Accordingly, judicial notice of prosecution history and prior art,
while publicly available, is not appropriate because the facts asserted in those documents could be
disputed by the plaintiff, if given the opportunity.
B.
Subject matter eligibility of the ‘439 Patent
Under Section 101 of the Patent Act, “[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 (2012). While the Supreme Court interprets the statutory language to “include anything
under the sun that is made by man,” long-standing precedent bars the grant of a patent directed to
“laws of nature, physical phenomena, or abstract ideas,” except for certain circumstances. Diamond
v. Chakrabarty, 447 U.S. 303, 309, 100 S. Ct. 2204 (1980). However, courts should be mindful that
“all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural
phenomena, or abstract ideas.” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct.
1289, 1293 (2012).
In Alice Corp. v. CLS Bank International, the Supreme Court set out a two-part test for
determining whether a patent claim is directed toward ineligible subject matter. 134 S. Ct. 2347,
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2355 (2014). First, the court must determine “whether the claims at issue are directed to one of those
patent-ineligible concepts.” Id. Second, if the patent is directed to a patent-ineligible concept, the
court then “consider[s] the elements of each claim both individually and ‘as an ordered combination’
to determine whether the additional elements ‘transform the nature of the claim’ into a patenteligible application.” Id. (quoting Mayo, 132 S. Ct. at 1297–98).
Thus, the court first asks whether the claims at issue in the ‘439 Patent are directed to an
abstract idea. ContourMed argues that the claims of the ‘439 Patent are directed to patent-eligible
subject matter as opposed to an abstract idea because the claimed “scanning system” includes an
imaging device and “expressly requires ‘one or more alignment markers,’” adhesive tape placed on
the subject prior to imaging that aids the 3D modeling process. Dkt. 14 at 5; Dkt. 1, Ex. 1.
Conversely, ABC argues that the ‘439 Patent is directed to an abstract idea because the patent claims
the creation of a “computer model on a generic computer using data collected conventionally using
a generic scanner system.” Dkt. 11 at 11. ABC further contends that claim 1 of the ‘439 Patent “is
logically indistinguishable from the claims held invalid in Alice.” Id.
Abstract ideas generally encompass concepts like mathematical equations and business
methods, though not all inventions claiming these abstract ideas are held invalid. Compare Diamond
v. Diehr, 450 U.S. 175, 188, 101 S. Ct. 1048 (1981) (holding that a patent claiming a mathematical
equation used to improve the process of curing rubber was abstract but still patent-eligible), with
Bilski v. Kappos, 561 U.S. 593, 609, 130 S. Ct. 3218 (2010) (holding that a patent claiming a method
to hedge risk in financial transactions was an invalid abstract idea). Courts preclude patent
protection for inventions that merely conceptualize an abstract idea out of fear that a patent on such
an idea would “pre-empt use of [the] approach in all fields, and would effectively grant a monopoly
over [the] abstract idea.” Bilski, 561 U.S. at 612. In Alice, the patent at issue claimed a method of
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using a third party to mitigate settlement risks. 134 S. Ct. at 2356. The Court analogized this
intermediated settlement to the risk-hedging patent in Bilski, reasoning that both patents
conceptualize “‘a fundamental economic practice long prevalent in our system of commerce.’” Id.
(quoting Bilski, 561 U.S. at 611). The Court reasoned that both the Bilski patent and the patent at
issue in Alice are abstract because they are drawn to “building block[s] of the modern economy.”
Id. Unlike the patents at issue in Alice and Bilski, the ‘439 Patent does not claim a “building block
of the modern economy.” Id.
The other cases used by ABC to argue that the ‘439 Patent is directed to an abstract idea all
lack physical components, merely beginning with data collection and ending with data storage. See
e.g., Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343,
1347 (Fed. Cir. 2014) (holding a method of collecting data with a scanner, recognizing certain data,
and storing data on a computer to be abstract); Amdocs (Isr.) Ltd. v. Openet Telecom, Inc., 56 F.
Supp. 3d 813, 823 (E.D. Va. 2014) (holding a database that compiles data and reports network usage
information abstract). While the process claimed in the ‘439 Patent does employ software to process
images and perform 3D modeling, the underlying concept involves substantial tangible components.
Dkt. 1, Ex. 1. The patent claims imaging of the breast to the ultimate end of creating a breast
prosthetic, using alignment markers placed on the breast and captured in the image to aid in the
computer modeling. Id. In determining whether an invention encompasses an abstract idea, courts
caution against an approach that focuses only on physical or tangible results of an invention because
it “inappropriately focuses on the result of the claimed invention rather than the invention itself.”
In re Ferguson, 558 F.3d 1359, 1364 (Fed. Cir. 2009). Even taking this cautionary note into
consideration, the ‘439 Patent still falls outside of the abstract ideas in the precedent because the
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concept of the invention involves substantially more than mere data collection and storage and does
not threaten to pre-empt the use of scanners and computer modeling in other fields.
Therefore, the ‘439 Patent is not directed to an abstract idea and does not need to be
examined under the second step of the Alice framework. ContourMed has shown a plausible
entitlement to relief and dismissal at this stage would be improper.
IV. CONCLUSION
ABC’s motion to dismiss (Dkt. 11) is DENIED.
Signed at Houston, Texas on March 17, 2016.
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Gray H. Miller
United States District Judge
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