United States District Court, C.D. California
ORDER ON MOTIONS TO DISMISS [Dkt. Nos. 34 & 35]
DEAN D. PREGERSON, District Judge.
Presently before the Court are two motions to dismiss portions of Plaintiff's First Amended Complaint ("FAC"), which alleges patent infringement. The motions argue invalidity of the asserted patents under 35 U.S.C. § 101 and failure to state a claim for infringement under 35 U.S.C. § 271. (Respectively, Dkt. Nos. 34 (the "Sec. 101 Motion") and 35 (the "Sec. 271 Motion").) Having heard oral arguments and reviewed the parties' submissions, the Court adopts the following order.
Plaintiff holds United States patents numbered 6, 636, 894 ("the 894 patent"), 6, 226, 677 ("the 677 patent"), 6, 868, 399 ("the 399 patent"), 8, 156, 246 ("the 246 patent"), 8, 266, 266 ("the 266 patent"), 8, 266, 266 ("the 266 patent"), 8, 364, 806 ("the 806 patent"), 8, 788, 690 ("the 690 patent"). (FAC at 3-4.) These patents - especially 399 and 690 - disclose methods for charging internet users in places like hotels by redirecting them to a webpage that can interface with a "property management system" ("PMS"), which is a kind of legacy computer system that charges for things like phone calls. (Opp'n to Sec. 101 Mot. at 1-2.) The hotel (or other internet-providing venue) can charge customers for internet service using their traditional PMS, in a manner that is "transparent" to the end user, without the customer having to install special billing software. (Id.)
These methods involve the use of pre-existing or "off-the-shelf" components whose patents are not necessarily owned by Plaintiff, with the exception of a "gateway device" manufactured by Plaintiff. (See, e.g., Decl. Alan Laquer, Ex. 1, U.S. Patent No. 8, 788, 690, fig. 3 (showing the "Nomadic router, " a gateway device, integrated into a larger system that uses a generic "host device" and "communications device" and implements "standard" interfaces and network algorithms).)
Defendant manufactures gateway devices in the United States and sells them in the United States and abroad. (FAC, ¶ 34-36.) The thrust of Plaintiff's infringement allegations appears to be that Defendant makes its gateway devices with the intention that they be slotted into systems that infringe on Plaintiff's patented systems, in the place where the "Nomadic router" or other device manufactured by Plaintiff would normally be. (E.g., FAC, ¶ 57 ("[W]ith knowledge of the 894 patent, Blueprint RF has provided products and components knowing that they, alone or as material components in combination with other components, infringe the 894 patent, and contributed to others' infringement....").) Plaintiff also alleges that Defendant directly infringes the patents when it uses such systems in the course of testing the installation of its gateway devices. (E.g., Id. at ¶ 58.)
Defendant brings these motions to dismiss arguing that the 399 and 690 patents are invalid, and that the claims FAC as a whole should be dismissed as either inadequately pleaded or not possible as a matter of law. (Respectively, Dkt. Nos. 34 (the "Sec. 101 Motion") and 35 (the "Sec. 271 Motion").)
II. LEGAL STANDARD
An order to survive a motion to dismiss for failure to state a claim, a complaint need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 55 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint must include "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000).
A. Motion to Dismiss on Grounds of Invalidity (the "Sec. 101 Motion")
The Court acknowledges the arguments Defendant has advanced in the Sec. 101 Motion. However, patent law is a fact-intensive field. Although the Court has the patents in question before it right now, (Dkt. Nos. 39-1, 39-2), the exact functioning of the patented systems has not yet been fully briefed. Patents are entitled to a presumption of validity, and individual claims in a patent are presumed valid even if other claims in the same patent are ruled invalid. 35 U.S.C. § 282(a). Moreover, while "claim construction is not an inviolable prerequisite to a validity determination under § 101, " usually it will "be desirable - and often necessary - to resolve claim construction disputes prior to a § 101 analysis, for the determination of patent eligibility requires a full understanding of the basic character of the claimed subject matter." Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1273-74 (Fed. Cir. 2012). For this reason, "it will be rare that a patent infringement suit can be dismissed at the pleading stage for lack of patentable subject matter." Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1338 (Fed. Cir. 2013) cert. granted, judgment vacated sub nom. WildTangent, Inc. v. Ultramercial, LLC, 134 S.Ct. 2870 (2014).
The Court therefore declines, at this stage in the litigation, to declare the 399 and 690 patents invalid.
B. Motion to Dismiss on Grounds of Failure to Adequately Plead Infringement Claims ...