In one of the first post-Berkheimer decisions to invalidate patent claims on the pleadings, Judge Yvonne Gonzalez Rogers invalidated thirty-seven claims across four patents asserted in fourteen cases filed by Cellspin Soft, Inc. because the claims were patent-ineligible.  Her order makes clear that an invention’s benefits must be disclosed in the patent specification, and not just advocated by the party enforcing the patent.  While some initially saw the February 2018 Berkheimer decision from the Federal Circuit as a death knell for Rule 12(b)(6) motions under Section 101, Judge Gonzalez Rogers’ order demonstrates how courts and infringement defendants may use a broad patent specification’s failure to describe the claimed invention’s purported improvements and benefits to invalidate it at the pleadings stage.[1]

Case Background and Asserted Patents.  On October 16, 2017, Plaintiff Cellspin Soft, Inc., filed thirteen lawsuits against popular consumer electronics manufacturers and distributors, including Canon USA, GoPro, Inc., Fitbit, Inc., and NIKE, Inc.  The complaints allege that digital cameras, smart watches, fitness tracking wearables, and other popular devices infringe various claims in U.S. Patent Nos. 8,734,794, 8,892,752, 9,749,847, and 9,258,698.  On December 1, Cellspin Soft filed a fourteenth case against JK Imaging Ltd., a digital camera manufacturer.

The asserted claims cover the use of short-range wireless connections between data capture devices and Bluetooth-enabled mobile devices (e.g., cell phones).  Newly-captured data is automatically pushed to the mobile device via the short-range connection.  Then, the mobile device transmits the data to web services via the internet, where the data is made available for consumption.[2]  Other claim limitations include encrypted transmission of captured data, and mobile device polling.

According to the common specification, uploading data to the internet from data capture devices (e.g., digital cameras) was a cumbersome process in 2007.  The patents purportedly solved that problem by automatically transferring data using an internet-enabled intermediary.[3]

The Alice Two-Step Analysis.  Starting with the ’794 patent (the earliest in the set of four asserted patents), the Court at Alice step one determined that the asserted claims were directed to the abstract idea of “acquiring, transferring, and publishing data and multimedia content on one or more websites,”[4] implemented using “generic computer hardware and software components, namely a ‘ubiquitous mobile phone,’ paired Bluetooth connection, event notifications, ‘fairly widespread’ personal digital assistant, and ‘general purpose computers and computing devices.’”[5]  Cellspin Soft analogized the claims to those from Enfish and McRo, two Federal Circuit precedents finding claims covering improvements to the functioning of computer hardware as patentable.[6]  But the Court rejected the analogy because Cellspin Soft failed to show the claimed method “represented something more than a simple automation of the conventional (manual) process,” and required only conventional computer hardware and software to do so.[7]

At step two, the Court concluded that the claims failed to supply an inventive concept to render the abstract idea patent-eligible.[8]  While Cellspin Soft claimed at the hearing that the invention offered numerous benefits, the Court focused on the only one actually articulated in the specification:  improved efficiency in uploading data content to the internet.  Under Federal Circuit case law, making a process more efficient by having a generic computer perform the process does not transfigure an abstract idea into an invention.[9]  The Court declined to consider the other benefits articulated only by Cellspin Soft (both at oral argument and in its amended complaint) and not by the specification.

Having thus invalidated the asserted claims in the ’794 patent, the Court struck down the asserted claims from the three related patents, which were “substantially similar and linked to the same abstract idea.”[10]  Since Cellspin Soft did not articulate how any of the differences in the related patents’ asserted claims constitute an inventive concept, the Court found all asserted claims patent-ineligible.

Distinguishing Berkheimer.  In a brief footnote, the Court addressed Berkheimer procedurally and substantively.  First, the Court noted that Berkheimer was decided in the context of summary judgment which requires clear and convincing evidence.  But the motion to dismiss under consideration by the Court requires that, “[i]f the facts alleged do not support a reasonable inference of liability, stronger than a mere possibility, the claim must be dismissed.”  Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).  Second, the Court distinguished Berkheimer substantively.  Berkheimer involved a patent describing an “inventive feature” operating in “a purportedly unconventional manner,” and the panel concluded that the specification’s teaching of improvements from the purported invention created a genuine issue of material fact requiring consideration by the District Court.[11], [12]  But Cellspin Soft, the Plaintiff in the instant case, “fail[ed] to identify any portion of the specification which describes” the benefits it advocated beyond efficiency through conventional application in a computer.  In essence, the Court ruled that the claims do not pass muster under § 101 no matter the procedural posture.  Accordingly, Berkheimer did not prevent the Court from striking Cellspin Soft’s patents on the pleadings.

In light of Berkheimer and Aatrix Software, another recent decision reversing dismissal due to issues of fact at Alice step-two, members of the defense bar had cause to worry that the Federal Circuit neutralized the powerful and cost-efficient Section 101 motion to dismiss.[13]  But in the early aftermath of those cases, the Northern District of California has nonetheless found several patents invalid at the pleadings stage.  A few weeks prior to Judge Gonzalez Rogers’ order, Judge Tigar similarly distinguished Berkheimer, finding the asserted patent claims patent-ineligible based solely on patent owner’s “own descriptions of the patent.”[14]  And on the same day she issued Cellspin Soft, Judge Gonzalez Rogers found patent-ineligible one of two asserted patents in Supercell Oy v. Gree, Inc. without even mentioning Berkheimer in her order, despite having called for supplemental briefing about it.[15]

At least in the Northern District of California, rumors of the Alice 12(b)(6)’s death are, so far, greatly exaggerated.

[Update as of April 15, 2018]  Judgment was entered one week after Judge Gonzalez Rogers’ order and the case is on appeal to the Federal Circuit.

Cellspin Soft, Inc. v. Fitbit, Inc., Case No. 4:17-cv-05928-YGR (Dkt. 74, April 3, 2018); Cellspin Soft, Inc. v. Moov, Inc., Case No. 4:17-cv-05929-YGR (Dkt. 67, April 3, 2018); Cellspin Soft, Inc. v. NIKE, Inc., Case No. 4:17-cv-05931-YGR (Dkt. 67, April 3, 2018); Cellspin Soft, Inc. v. Fossil Group, Inc., et al., Case No. 4:17-cv-05933-YGR (Dkt. 85, April 3, 2018); Cellspin Soft, Inc. v. Garmin International Inc., et al., Case No. 4:17-cv-05934-YGR (Dkt. 65, April 3, 2018); Cellspin Soft, Inc. v. Cannon U.S.A., Inc., Case No. 4:17-cv-05938-YGR (Dkt. 73, April 3, 2018); Cellspin Soft, Inc. v. GoPro, Inc., Case No. 4:17-cv-05939-YGR (Dkt. 70, April 3, 2018); Cellspin Soft, Inc. v. Panasonic Corporation of North America, Case No. 4:17-cv-05941-YGR (Dkt. 71, April 3, 2018); Cellspin Soft, Inc. v. JK Imaging, Ltd., Case No. 4:17-cv-06881-YGR (Dkt. 74, April 3, 2018).


Endnotes

[1]  Berkheimer v. HP, Inc., 881 F.3d 1360 (Fed. Cir. 2018).

[2]  See generally ’794 patent at 11:48-12:39 (claim 1).

[3]  Cellspin Soft, Inc. v. Fitbit, Inc., No. 17-cv-05928-YGR, Dkt. 79, slip op. at 3-6, 18 (N.D. Cal. Apr. 3, 2018).

[4]  Slip op. at 11

[5]  Id. at 12.

[6]  Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016), McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016).

[7]  Slip op. at 13-14.

[8]  Id. at 14-15.

[9]  Id. at 15 (citing Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015) (“in addressing the second step of Alice, [] claiming the improved speed or efficiency inherent with applying the abstract idea on a computer [does not] provide a sufficient inventive concept.”).

[10]  Id. at 17-18.

[11]  See Berkheimer, 881 F.3d at 1369-70.

[12]  See slip op. at 18, n.12.

[13]  Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121 (Fed. Cir. 2018).

[14]  Supercell Oy v. Gree, Inc., No. 17-cv-05556-YGR, Dkt. 47 (N.D. Cal. Apr. 3, 2018).

[15]  Symantec Corp. v. Zscaler, Inc., No. 17-cv-04426-JST, Dkt. 155 (N.D. Cal. Mar. 23, 2018).