United States District Court, C.D. California
ORDER:
(1) DENYING DEFENDANT'S MOTION FOR RECONSIDERATION OF THE
COURT'S FEBRUARY 27, 2018 SUMMARY JUDGMENT ORDER; [DOC.
NO. 183.] (2) DENYING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT OF NON-INFRINGEMENT AND GRANTING DEFENDANT'S
MOTION FOR SUMMARY JUDGMENT OF NO WILLFUL INFRINGEMENT; AND
[DOC. NO. 178.] (3) GRANTING PLAINTIFF'S MOTION FOR
PARTIAL SUMMARY JUDGMENT OF OBVIOUSNESS BASED ON IPR ESTOPPEL
[DOC. NO. 179.]
MARILYN L. HUFF, UNITED STATES DISTRICT COURT DISTRICT JUDGE
On
November 12, 2019, Defendant Snap Inc. filed: (1) a motion
for summary judgment of non-infringement and no willful
infringement; and (2) a motion for reconsideration of the
Court's February 27, 2018 order denying Snap's motion
for summary judgment that the patents-in-suit are invalid
under 35 U.S.C. § 101. (Doc. Nos. 178, 183.) On November
12, 2019, Plaintiff Vaporstream, Inc. filed a motion for
partial summary judgment of Snap's obviousness defense
based on inter partes review estoppel under 35
U.S.C. § 315(e)(2). (Doc. No. 179.) On November 26,
2019, the parties filed their respective responses in
opposition to the motions for summary judgment. (Doc. Nos.
190, 193, 194.) On December 6, 2019, the parties filed their
respective replies. (Doc. Nos. 202, 203, 205.) On January 9,
2020, the Court issued a tentative supplemental claim
construction order. (Doc. No. 220.)
The
Court held a hearing on the matter on January 10, 2020. Meng
Xi appeared for Plaintiff Vaporstream. Heidi L. Keefe,
Michael A. Attanasio, Reuben H. Chen, Elizabeth L.
Stameshkin, and Lam K. Nguyen appeared for Defendant Snap.
For the reasons below, the Court: (1) denies Snap's
motion for reconsideration of the Court's February 27,
2018 summary judgment order; (2) denies Snap's motion for
summary judgment of non-infringement; (3) grants Snap's
motion for summary judgment of no willful infringement; and
(4) grants Vaporstream's motion for partial summary
judgment of no obviousness based on IPR estoppel.
Background
I.
Procedural Background
On
January 10, 2017, Plaintiff Vaporstream filed a complaint for
patent infringement against Defendant Snap, alleging
infringement of U.S. Patent Nos. 8, 886, 739, 8, 935, 351, 9,
306, 885, 9, 306, 886, 9, 313, 155, 9, 313, 156, 9, 313, 157,
9, 338, 111, and 9, 413, 711. (Doc. No. 1.) On June 26, 2017,
Snap filed an answer to the complaint. (Doc. No. 61.)
On
February 27, 2018, the Court issued a claim construction
order. (Doc. No. 118.) On February 27, 2018, the Court also
denied Snap's motion for summary judgment that the
patents-in-suit are invalid under 35 U.S.C. § 101. (Doc.
No. 117.)
Starting
on June 6, 2018, the Patent Trial and Appeal Board instituted
inter partes review of the challenged claims for
each of the patents-in-suit. See Snap Inc. v.
Vaporstream, Inc., Nos. IPR2018-00200, IPR2018-00312,
IPR2018-00369, IPR2018-00397, IPR2018-00404, IPR2018-00408,
IPR2018-00416, IPR2018-00439, IPR2018-00455, IPR2018-00458.
On June 12, 2018, the parties filed a joint motion to stay
the action pending the IPR proceedings as to the
patents-in-suit. (Doc. No. 148.) On June 13, 2018, the Court
granted the parties' joint motion and stayed the action
pending the last final written decision by the PTAB in the
IPR proceedings for the patents-in-suit. (Doc. No. 150.)
Between
June 4, 2019 and August 30, 2019, the PTAB issued final
written decisions in each of the IPR proceedings for the
patents-in-suit. In those decisions, the PTAB held that the
challenged claims from the '739 patent, the '885
patent, the '155 patent, the '351 patent, and the
'156 patent are all unpatentable, and the PTAB held that
the challenged claims from the '886 patent, the '111
patent, the '711 patent, and the '157 patent had not
been shown to be unpatentable. (Doc. Nos. 156-1, 157-1,
158-1, 158-2, 158-3, 158-4, 159-1.)
In
light of this, on September 13, 2019, the Court partially
lifted the stay of the action. (Doc. No. 160.) The Court
lifted the stay as to the '886 patent, the '111
patent, the '711 patent, and the '157 patent.
(Id. at 3.) The Court continued the stay of the
action as to the '739 patent, the '885 patent, the
'155 patent, the '351 patent, and the '156
patent. (Id.)
By the
present motions for summary judgment: (1) Snap moves for
summary judgment of non-infringement and of no willful
infringement; and (2) Vaporstream moves for partial summary
judgment of Snap's obviousness defense based on IPR
estoppel under 35 U.S.C. § 315(e)(2). (Doc. No. 178-1 at
1; Doc. No. 179 at 1-2, 21.) In addition, Snap moves for
reconsideration of the Court's February 27, 2018 order
denying Snap's motion for summary judgment that the
patents-in-suit are invalid under 35 U.S.C. § 101. (Doc.
No. 183-1 at 4.)
II.
The Patents-In-Suit
The
patents-in-suit are closely related, claim priority to the
same July 28, 2005 provisional application, and share a
substantially identical specification. (Doc. No. 23 at 2.)
The patents-in-suit relate generally to systems and methods
for “reducing the traceability” of electronic
messages. See U.S. Patent No. 9, 306, 886, at
18:57-19 (filed Apr. 5, 2016).
The
common Background section of the specification explains some
perceived problems with conventional email messaging:
Typically, an electronic message between two people is not
private. It may travel along a public network, such as the
Internet, and be susceptible to interception by unintended
third parties. Messages are also logged and archived by the
communication systems themselves. They may also be copied,
cut, pasted, printed, forwarded, blind copied, or otherwise
manipulated. This may give a message a
“shelf-life” that is often uncontrollable by the
sender or even the recipient. Surreptitious logging (e.g., by
keystroke and message recording software) may occur by third
parties that have gained authorized access to either the
computer of the sender and/or the recipient. Electronic
messages include the message content itself coupled to
identifying information regarding the sender, the recipient,
the location of the message, times and dates associated with
the message, etc. This allows a third party that is logging
messages, intercepting messages, or simply gaining access to
the messaging system's logs or inbox archives to
associate the potentially important identifying information
(typically referred to as header information) with the
message content. These are only some of the ways in which
electronic messages can be misused. There is a demand for a
system and method for reducing the traceability of electronic
messages.
'886 Patent at 2:7-29. To address these problems, the
claimed inventions disclose systems and methods purporting to
reduce the traceability of electronic messages. See
id. at 3:48-4:6.
In the
present action, Vaporstream asserts infringement of claims 1,
5, 9, 10, 11, and 13 of the '886 patent; claims 1, 4, 5,
9, 10, and 11 of the '111 patent; and claims 1, 4, 5, 6,
11, 13, 15, and 16 of the '711 patent.[1] Independent claim
1 of the '886 patent, independent claim 1 of the '111
patent, and independent claim 1 of the '711 patent are
the only asserted independent claims from the
patents-in-suit.
Independent
claim 1 of the '886 patent recites:
1. A computer-implemented method of handling an electronic
message at a recipient user device in a networked
environment, the electronic message including a message
content and a header information that corresponds to the
message content, the recipient user device having access to
electronic instructions, the method comprising:
providing a plurality of reduced traceability displays via
the recipient user device using a display generator that acts
upon a display element of the recipient user device to
provide the plurality of reduced traceability displays, the
display generator including the electronic instructions, the
plurality of reduced traceability displays including a first
display presenting a header information of an electronic
message received at the recipient user device and a second
display presenting a message content of the electronic
message, the message content including a media component, the
message content and the header information having been
related to each other using a correlation previously assigned
to each of the message content and the header information;
receiving a selection by the recipient user via the first
display, the selection directed to a portion of a message
list corresponding to the header information; and in response
to the selection, providing the second display via the
recipient user device such that the second display does not
include a display of the header information via the second
display such that a single screen capture of both the header
information and the media component is prevented.
'886 Patent at 18:57-19.
Independent
claim 1 of the '111 patent recites:
1. A computer-implemented method of handling an electronic
message at a recipient user mobile device in a networked
environment, the electronic message including a message
content and a header information that corresponds to the
message content, the recipient user mobile device having
access to electronic instructions, the electronic
instructions being stored at the recipient user mobile device
and/or at a server, the method comprising:
providing a plurality of reduced traceability displays via
the recipient user mobile device using a display generator
that acts upon a display element of the recipient user mobile
device to provide the plurality of reduced traceability
displays, the display generator including the electronic
instructions, the plurality of reduced traceability displays
including a first display presenting a header information of
an electronic message received at the recipient user mobile
device and a second display presenting a message content of
the electronic message, the message content including a media
component, the first display being generated by the display
generator such that the first display does not include a
display of the media component via the first display such
that a single screen capture of both the header information
and the media component is prevented, the first and second
displays not being displayed to the user at the same time;
receiving a selection by the recipient user via the first
display, the selection directed to a portion of a message
list corresponding to the header information; and in response
to the selection, providing a second display via the
recipient user device, the second display displaying the
message content including the media component.
U.S. Patent No. 9, 338, 111, at 18:58-19:21 (filed May 10,
2016).
Independent
claim 1 of the '711 patent recites:
1. A method of handling an electronic message between a
sending user device and a recipient user device in a
networked environment, the method comprising:
providing a first reduced traceability electronic messaging
application program to a sending user device, the first
reduced traceability electronic messaging application program
including instructions executable by a first processor of the
sending user device to provide a first plurality of reduced
traceability displays via the sending user device; providing
a second reduced traceability electronic messaging
application program to a recipient user device, the second
reduced traceability electronic messaging application program
including instructions executable by a second processor of
the recipient user device to provide a second plurality of
reduced traceability displays via the recipient user device;
receiving an electronic message at a server via a first
network, the electronic message sent from the sending user
device, wherein the electronic message received at the server
includes an identifier of a recipient and a message content
including a media component, the first plurality of reduced
traceability displays including a first display and a second
display, the first display configured to allow a user of the
sending user mobile device to associate the message content
including a media component with the electronic message, the
second display configured to allow the user of the sending
user mobile device to associate the identifier of a recipient
with the electronic message, the instructions executable by
the first processor providing the first and second displays
such that the identifier of the recipient is not displayed
with the media component via the first display preventing a
single screen capture of both the identifier of a recipient
and the media component; and transmitting th/e electronic
message from the server to the recipient user device via a
second network that includes a wireless communications
portion, wherein the electronic message transmitted to the
recipient user device includes an identifier of a sending
user and the message content including a media component, the
second plurality of reduced traceability displays including a
third display and a fourth display, the third display
presenting the identifier of a sending user, the fourth
display presenting the media component, the instructions
executable by the second processor providing the third and
fourth displays such that the identifier of a sending user is
not displayed with the media component via the fourth display
preventing a single screen capture of both the identifier of
a sending user and the media component, wherein the
identifier of a recipient and the message content received at
the server each optionally include a correlation to allow the
server to receive the identifier of a recipient and the
message content separately and to relate the identifier of a
recipient to the message content if the identifier of a
recipient is received separately from the message content at
the server, and wherein the identifier of a recipient and the
message content transmitted from the server each optionally
include a correlation to allow the identifier of a recipient
and the message content to be related to each other by the
second reduced traceability electronic messaging application
program if the identifier of a recipient and the message
content are transmitted from the server separately.
U.S. Patent No. 9, 413, 711, at 24:8-25:4 (filed Aug. 9,
2016).
Discussion
I.
Legal Standards for Summary Judgment
Summary
judgment is appropriate under Rule 56 of the Federal Rules of
Civil Procedure if the moving party demonstrates that there
is no genuine issue of material fact and that it is entitled
to judgment as a matter of law. Fed.R.Civ.P. 56(a);
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material when, under the governing substantive law,
it could affect the outcome of the case. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);
Fortune Dynamic, Inc. v. Victoria's Secret Stores
Brand Mgmt., Inc., 618 F.3d 1025, 1031 (9th Cir. 2010).
“A genuine issue of material fact exists when the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Fortune
Dynamic, 618 F.3d at 1031 (internal quotation marks and
citations omitted); accord Anderson, 477 U.S. at
248. “Disputes over irrelevant or unnecessary facts
will not preclude a grant of summary judgment.”
T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors
Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).
A party
seeking summary judgment always bears the initial burden of
establishing the absence of a genuine issue of material fact.
Celotex, 477 U.S. at 323. The moving party can
satisfy this burden in two ways: (1) by presenting evidence
that negates an essential element of the nonmoving
party's case; or (2) by demonstrating that the nonmoving
party failed to establish an essential element of the
nonmoving party's case that the nonmoving party bears the
burden of proving at trial. Id. at 322-23; Jones
v. Williams, 791 F.3d 1023, 1030 (9th Cir. 2015). Once
the moving party establishes the absence of a genuine issue
of material fact, the burden shifts to the nonmoving party to
“set forth, by affidavit or as otherwise provided in
Rule 56, ‘specific facts showing that there is a
genuine issue for trial.'” T.W. Elec.
Serv., 809 F.2d at 630 (quoting former Fed.R.Civ.P.
56(e)); accord Horphag Research Ltd. v. Garcia, 475
F.3d 1029, 1035 (9th Cir. 2007). To carry this burden, the
non-moving party “may not rest upon mere allegation or
denials of his pleadings.” Anderson, 477 U.S.
at 256; see also Behrens v. Pelletier, 516 U.S. 299,
309 (1996) (“On summary judgment, . . . the plaintiff
can no longer rest on the pleadings.”). Rather, the
nonmoving party “must present affirmative evidence . .
. from which a jury might return a verdict in his
favor.” Anderson, 477 U.S. at 256.
When
ruling on a summary judgment motion, the court must view the
facts and draw all reasonable inferences in the light most
favorable to the non-moving party. Scott v. Harris,
550 U.S. 372, 378 (2007). The court should not weigh the
evidence or make credibility determinations. See
Anderson, 477 U.S. at 255. “The evidence of the
non-movant is to be believed.” Id. Further,
the court may consider other materials in the record not
cited to by the parties, but it is not required to do so.
See Fed.R.Civ.P. 56(c)(3); Simmons v. Navajo
Cnty., 609 F.3d 1011, 1017 (9th Cir. 2010).
II.
Snap's Motion for Reconsideration of the Court's
February 27, 2018 Summary Judgment Order
On
February 27, 2018, the Court denied Snap's motion for
summary judgment that the patents-in-suit fail to claim
patent-eligible subject matter and, therefore, are invalid
under 35 U.S.C. § 101. (Doc. No. 117.) Snap argues that
the Court should reconsider its February 27, 2018 summary
judgment order in light of the Federal Circuit's
subsequent decisions in Interval Licensing LLC v. AOL,
Inc., 896 F.3d 1335 (Fed. Cir. 2018), and BSG Tech
LLC v. Buyseasons, Inc., 899 F.3d 1281 (Fed. Cir. 2018).
(Doc. No. 183-1 at 1.) In response, Vaporstream argues that
Snap's motion should be denied because Interval
Licensing and BSG do not present a material
difference in law, and because both cases are distinguishable
from the facts of this case. (Doc. No. 193 at 1-3.)
A.
Legal Standards for a Motion for Reconsideration
A
district court has inherent jurisdiction to modify, alter, or
revoke a prior order. United States v. Martin, 226
F.3d 1042, 1049 (9th Cir. 2000). “Reconsideration [of a
prior order] is appropriate if the district court (1) is
presented with newly discovered evidence, (2) committed clear
error or the initial decision was manifestly unjust, or (3)
if there is an intervening change in controlling law.”
School Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255,
1263 (9th Cir. 1993); see C.D. Cal. Civ. L.R. 7-18.
Reconsideration
should be used conservatively, because it is an
“extraordinary remedy, to be used sparingly in the
interests of finality and conservation of judicial
resources.” Carroll v. Nakatani, 342 F.3d 934,
945 (9th Cir. 2003); see also Marlyn Nutraceuticals, Inc.
v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th
Cir. 2009) (“‘[A] motion for reconsideration
should not be granted, absent highly unusual circumstances .
. . .'”). A motion for reconsideration may not be
used to relitigate old matters, or to raise arguments or
present evidence for the first time that reasonably could
have been raised earlier in the litigation. Exxon
Shipping Co. v. Baker, 554 U.S. 471, 486 n.5 (2008);
see Kona Enterprises, Inc. v. Estate of Bishop, 229
F.3d 877, 890 (9th Cir. 2000) (“A [motion for
reconsideration] may not be used to raise arguments or
present evidence for the first time when they could
reasonably have been raised earlier in the
litigation.”). “A party seeking reconsideration
must show more than a disagreement with the Court's
decision.” United States v. Westlands Water
Dist., 134 F.Supp.2d 1111, 1131 (E.D. Cal. 2001);
accord Huhmann v. FedEx Corp., No. 13-CV-00787-BAS
NLS, 2015 WL 6128494, at *2 (S.D. Cal. Oct. 16, 2015);
Franklin v. Madden, No. CV 17-4281 DSF(JC), 2018 WL
6038332, at *2 (C.D. Cal. July 18, 2018).
B.
Legal Standards for Patent Eligibility under §
101
Section
101 of the Patent Act defines patent-eligible subject matter
as “any new and useful process, machine, manufacture,
or composition of matter, or any new and useful improvement
thereof.” 35 U.S.C. § 101. The Supreme Court has
“‘long held that this provision contains an
important implicit exception[:] Laws of nature, natural
phenomena, and abstract ideas are not patentable.'”
Ass'n for Molecular Pathology v. Myriad Genetics,
Inc., 133 S.Ct. 2107, 2116 (2013). “The concern
underlying these judicial exclusions is that ‘patent
law not inhibit further discovery by improperly tying up the
future use of these building blocks of human
ingenuity.'” Rapid Litig. Mgmt. Ltd. v.
CellzDirect, Inc., 827 F.3d 1042, 1047 (Fed. Cir. 2016).
“The
Supreme Court has devised a two-stage framework to determine
whether a claim falls outside the scope of section
101.” Affinity Labs of Texas, LLC v. DIRECTV,
LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016); see
Alice, 134 S.Ct. at 2355. “The prescribed approach
requires a court to determine (1) whether the claim is
directed to a patent-ineligible concept, i.e., a law
of nature, a natural phenomenon, or an abstract idea, and if
so, (2) whether the elements of the claim, considered both
individually and as an ordered combination, add enough to
transform the nature of the claim' into a patent-eligible
application.” Affinity Labs, 838 F.3d at 1257
(internal quotation marks omitted) (citing Alice,
134 S.Ct. at 2355). “In the context of claims that are
challenged as containing only abstract ideas, those two
stages are typically referred to as the ‘abstract
idea' step and the ‘inventive concept'
step.” Id.
“The
‘abstract idea' step of the inquiry” requires
courts “to look at the ‘focus of the claimed
advance over the prior art' to determine if the
claim's ‘character as a whole' is directed to
excluded subject matter.” Id. at 1257.
“The ‘inventive concept' step requires
[courts] to look with more specificity at what the claim
elements add, in order to determine ‘whether they
identify an “inventive concept” in the
application of the ineligible subject matter' to which
the claim is directed.” Id. at 1258.
“This inventive concept must do more than simply recite
‘well-understood, routine, conventional
activity.'” FairWarning IP, LLC v. Iatric Sys.,
Inc., 839 F.3d 1089, 1093 (Fed. Cir. 2016).
“Patent
eligibility under 35 U.S.C. § 101 is ultimately an issue
of law.” Berkheimer v. HP Inc., 881 F.3d 1360,
1365 (Fed. Cir. 2018). But “[t]he patent eligibility
inquiry may contain underlying issues of fact.”
Id. “The accused infringer bears the burden of
proof on both steps” of the Alice inquiry.
InsideSales.com, Inc. v. SalesLoft, Inc., No.
2:16CV859DAK, 2017 WL 2559932, at *2 (D. Utah June 13, 2017);
see Microsoft Corp. v. i4i Ltd. P'ship, 564 U.S.
91, 95 (2011) (“[T]he burden of establishing
in-validity of a patent or any claim thereof shall rest on
the party asserting such invalidity.” (quoting 35
U.S.C. § 282)). Patent ineligibility must be proven by
clear and convincing evidence. See Berkheimer, 881
F.3d at 1368; Microsoft, 564 U.S. at 95.
C.
Analysis
i.
Alice Step One
In the
Court's February 27, 2018 summary judgment order, the
Court held under step one of the Alice inquiry that
the asserted claims are directed to an abstract idea. (Doc.
No. 117 at 9; see also Doc. No. 59 at 10-11 (quoting
Bascom Global, 827 F.3d at 1349).) Snap does not
move for reconsideration of this part of the Court's
prior order. As such, the Court turns to step two of the
Alice inquiry.
ii.
Alice Step Two
Snap
argues that the asserted claims fail to recite an inventive
concept under Alice step two in light of the Federal
Circuit's decisions in Interval and
BSG. (Doc. No. 183-1 at 2-4.) In response,
Vaporstream argues that Interval and BSG do
not represent a material difference in the law warranting
reconsideration. (Doc. No. 193 at 1.) Vaporstream further
argues that even if Interval and BSG
represent a material change in the law, the two decisions do
not alter the Court's prior conclusion that Snap failed
to conduct a proper ordered combination analysis.
(Id. at 2.)
At
Alice step two, the Court “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 patent-eligible
application.” Berkheimer, 881 F.3d at 1366
(internal quotation marks omitted) (quoting Alice,
134 S.Ct. at 2355); accord Interval, 896 F.3d at
1342; BSG, 899 F.3d at 1289. “The second step
of the Alice test is satisfied when the claim
limitations ‘involve more than performance of
“well-understood, routine, [and] conventional
activities previously known to the
industry.”'” Berkheimer, 881 F.3d at
1367 (quoting Content Extraction & Transmission LLC
v. Wells Fargo Bank, Nat. Ass'n, 776 F.3d 1343,
1347-48 (Fed. Cir. 2014)); see Aatrix Software, Inc. v.
Green Shades Software, Inc., 882 F.3d 1121, 1128 (Fed.
Cir. 2018) (“If the elements involve
‘well-understood, routine, [and] conventional activity
previously engaged in by researchers in the field,' they
do not constitute an ‘inventive concept.' ...