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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`Case No. 16-CV-06925-LHK
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`ORDER GRANTING IN PART
`DEFENDANT'S MOTION TO DISMISS
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`Re: Dkt. No. 31
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`TWILIO, INC.,
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`Plaintiff,
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`v.
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`TELESIGN CORPORATION,
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`Defendant.
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`Plaintiff Twiilio, Inc. (“Twilio” or “Plaintiff”) filed a patent infringement suit against
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`Defendant Telesign Corporation (“Telesign” or “Defendant”) and alleged that Defendant infringed
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`the claims of U.S. Patent Nos. 8,306,021 (“the ’021 Patent”), 8,837,465 (“the ’465 Patent”),
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`8,755,376 (“the ’376 Patent”), 8,738,051 (“the ’051 Patent”), 8,737,962 (“the ’962 Patent”),
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`9,270,833 (“the ’833 Patent”), and 9,226,217 (“the ’217 Patent”) (collectively, the “Asserted
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`Patents”). Before the Court is Defendant’s Motion to Dismiss, which seeks to dismiss all seven
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`Asserted Patents. ECF No. 31 (“Mot.”). The Court issued its decision on the ’962, ’833, ’021,
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`’465, and ’376 patents on March 31, 2017. ECF No. 57. The present order covers the ’051 and
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`’217 patents. Having considered the submissions of the parties, the relevant law, and the record in
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`this case, the Court GRANTS Defendant’s Motion to Dismiss with respect to the ’051 and ’217
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`Case 5:16-cv-06925-LHK Document 64 Filed 04/17/17 Page 2 of 54
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`patents.
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`I. BACKGROUND
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`A. Factual Background
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`1. The Parties
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`Plaintiff Twilio is a Delaware corporation with its primary place of business in San
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`Francisco, California. ECF No. 1 (“Compl.”) ¶ 1. Plaintiff’s co-founder, Jeffrey Lawson, is a co-
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`inventor on three of the Asserted Patents. ECF No. 45 at 1. Defendant Telesign is a California
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`corporation with its principal place of business in Marina Del Rey, California. Compl. ¶ 15.
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`2. The Twilio Patents
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`Plaintiff’s complaint and the parties’ briefing divides the asserted patents into four
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`families: (1) the ’962 and ’833 patents (the “Score Patents”), (2) the ’051 patent (the “Delivery
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`Receipts Patent”), (3) the ’021, ’465, and ’376 patents (the “Platform Patents”), and (4) the ’217
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`patent (the “Path Selection Patent”). As mentioned above, this order covers the ’051 and ’217
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`patents, which are the Delivery Receipts Patent and the Path Selection Patent, respectively. An
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`overview of the two patents follows.
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`a. Delivery Receipt Patent (The ’051 Patent)
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`i. Specification
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`The ’051 patent is titled “Method and System for Controlling Message Routing.” Compl.,
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`Ex. D (’051 patent). It was filed on July 25, 2013 and issued on May 27, 2014. It claims priority
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`to several provisional applications, the earliest of which was filed on July 26, 2012.
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`The ’051 patent generally relates to “controlling message routing in the telephony
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`messaging field.” ’051 patent at col. 1:17-18. In general, when a message is sent from one
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`machine (or “node”) to another, it passes through a series of intermediate machines (or “nodes”)
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`before it reaches its final destination. See id. at col. 1:40-42, 2:55-65. The process of determining
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`the path that the message takes through these intermediate nodes is often referred to as “routing.”
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`See id. at col. 1:40-60.
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`In modern networks, the sender or the recipient of a message does not retain control over
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`Case 5:16-cv-06925-LHK Document 64 Filed 04/17/17 Page 3 of 54
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`the route that a message takes through these intermediate nodes. Id. at col. 1:47-49, 2:55-65. This
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`is due in part to the fact that the intermediate nodes are often controlled by third-parties who are
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`not affiliated with the sender or the recipient of the message. See id. at col. 1:29-35. As a result,
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`the sender or the recipient of the message cannot always trust that an intermediate node will
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`reliably pass a message along to the next intermediate node on its route. See id. at col. 1:37-39.
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`Messages can get “altered, delayed dropped, split into multiple messages, suffer from character
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`encoding issues, or have any number of issues due to the message handling of an encountered
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`node on the message’s way to the destination.” Id. at col. 1:50-54. This “makes it extremely
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`difficult for a party wishing to send and/or receive a message to ensure the integrity and reliability
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`of communicating a message.” Id. at col. 1:55-57.
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`One prior art solution for ensuring that messages have been reliably delivered is using a
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`delivery receipt, which is an indication sent by the recipient that the message was received. Id. at
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`col. 1:46-47. However, a delivery receipt also has reliability problems. Because it also passes
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`through the same third-party, intermediate nodes, there is also no guarantee that it will be reliably
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`transmitted. See id. at col. 1:37-39. Thus, at the time of invention, “there remain[ed] a need in the
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`telephony field to create a new and useful method and system for controlling message routing.”
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`Id. at col. 1:57-59.
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`The ’051 patent purports to solve this problem through one primary modification to
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`delivery receipt usage: sending the delivery receipt through a “second channel,” which is different
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`from the one that the original message was sent through. Id. at col. 2:53-55, 3:14-15. For
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`example, if a message is sent as a text message over an “SMS message routing channel,” the
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`delivery receipt could be sent through an “internet network channel.” Id. at col. 3:14-17.
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`The ’051 patent integrates this “second channel” feature into a larger method for
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`monitoring and adjusting routing options for sending a message. Id. at col. 2:53-55. Figure 1
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`illustrates this method:
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`Case 5:16-cv-06925-LHK Document 64 Filed 04/17/17 Page 4 of 54
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`At step S110, the message is sent through a “first channel” using a “routing option selected
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`from a plurality of routing options.” Id. at col. 3:31-32. In the patent, “[r]outing options are
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`preferably different initial nodes to which a message may be initially sent.” Id. at col. 3:35-37. As
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`discussed above, a message will generally pass through a series of intermediate nodes before it
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`reaches its destination, and the sender of the message does not retain control over the path that the
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`message takes through these intermediate nodes. See id. at col. 1:40-42, 1:47-49, 2:55-65. Thus,
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`the sender’s selection of an initial node “functions as the fundamental point of control to the full
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`route a message will take to arrive at a destination.” Id. at col. 3:65-67. After the message is
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`passed off to the initial node, it will then get passed off to a series of intermediate nodes that lie
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`between the initial node and the message’s destination. See id. at col. 1:47-49, 2:55-65.
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`Eventually, the message will either reach its destination or the destination will determine,
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`Case 5:16-cv-06925-LHK Document 64 Filed 04/17/17 Page 5 of 54
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`after waiting for a certain period of time, that delivery was unsuccessful. See id. at col. 4:23-38.
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`Once either of these events occurs, at step S120, the destination will send a “message delivery
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`report” (i.e., a delivery receipt) to the sender through a “second channel” that is different from the
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`“first channel.” Id. at col. 4:19-20. The message delivery report provides feedback on the
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`message’s delivery, such as whether delivery succeeded or failed and/or what condition the
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`message arrived in (e.g., if it was “altered, censored, truncated, encoded improperly, split into
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`multiple messages, or otherwise not conforming to the original outgoing message”). Id. at col.
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`4:25-31, 4:38-44.
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`At step S130, the information in the message delivery report is used to “adjust the criteria
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`used in selecting routing options” for future messages. Id. at col. 6:32-33. The specification refers
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`to this step as “updating message routing data.” Id. at col. 6:31-32. For example, “[u]pdating the
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`message routing data can include ranking routing options based at least in part on delivery success
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`rates.” Id. at col. 6:42-43. At step S140, this adjusted criteria is put into practice: a “second
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`routing option” is selected for a “second outgoing message.” Id. at col. 7:1-5.
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`Neither the claims nor the specification provides much limitation on how this process must
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`be implemented, or the contexts in which it can be deployed. Instead, the specification makes a
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`number of non-limiting statements, including that: Messages can include “SMS, multimedia
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`messaging service (MMS), image messaging, animation messaging, video messaging, audio/music
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`messaging, internet protocol (IP) messaging, push notifications, and/or any suitable messaging
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`technique.” Id. at col. 3:4-9; see also id. at col. 11:3-4 (“the messages are preferably SMS or
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`MMS, but can be any suitable type of message”). “There may . . . be a plurality of types of
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`channels available for sending a message such as SMS or MMS, push notifications, or any suitable
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`messaging channel.” Id. at col. 4:9-12. “Generating a delivery report may include a number of
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`various implementations,” including “providing a user feedback interface [], redirecting internet
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`and app links through a monitored system [], providing a monitored pin code service [],
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`monitoring a user-reply signal [], and/or using any suitable alternative technique.” Id. at col. 4:66-
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`5:7. “The routing options may be characterized by different service providers, networks,
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`geographic locations, physical machines, resource addresses, contractual agreements,
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`communication protocols, time-dependent quality/performance properties, and/or any other
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`suitable distinguishing characteristics of message routing node.” Id. at col. 3:37-42. The
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`“message routing data” can be any collection of data from the message delivery reports or other
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`data sources, including “[d]ata or parameters from routing option contracts, data from message
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`routing infrastructure such as Signaling System No. 7 (SS7), or any other resource that may be
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`used in determining an optimality assessment.” Id. at col. 6:50-55.
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`ii. Asserted Claims
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`Twilio currently asserts claims 1-8, 11-20, and 22 of the Delivery Receipt Patent. ECF No.
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`55. Independent claims 1 and 18 recite:
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`1. A method for transmitting telephony messages comprising:
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`transmitting a first outgoing telephony message through a first channel using a
`first routing option selected from a plurality of routing options;
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`receiving a message delivery report through at least a second channel, wherein
`the second channel is different from the first channel;
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`updating message routing data in response to the message delivery report;
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`selecting a second routing option for at least a second outgoing message, the
`second routing option selected from the plurality of routing options prioritized
`by the updated message routing data; and
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`transmitting the second outgoing telephony message through the first channel
`using the selected second routing option.
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`18. A method comprising:
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`providing a message delivery system with at least two message delivery channel
`options;
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`sending a message through the message delivery system with a coded identifier
`in the content of the message, the message sent through one of the message
`delivery channel options, and wherein the coded identifier is mapped to the
`message delivery channel option used in sending the message;
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`at a code identifier service, tracking use of the coded identifier;
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`in response to the tracked use of the coded identifier, generating a score of the
`message delivery channel option based on results of the tracked message
`delivery.
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`Case 5:16-cv-06925-LHK Document 64 Filed 04/17/17 Page 7 of 54
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`’051 patent at col. 11:43-59, 12:63-13:9.
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`b. The Path Selection Patent (The ’217 Patent)
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`i. Specification
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`The ’217 patent is titled “System and Method for Enabling Multi-Modal Communication.”
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`Compl., Ex. G (’217 patent). It was filed on April 17, 2015 and issued on December 29, 2015. It
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`claims priority to a provisional application, which was filed on April 17, 2014.
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`The ’217 patent generally relates to “enabling multi-modal communication in the
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`telecommunication field.” ’051 patent at col. 1:16-17. In modern mobile devices, multiple modes
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`of communication are possible, such as “SMS, MMS, and PSTN voice calls, as well as IP based
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`communication such as client application messaging and VoIP.” Id. at col. 1:23-25. For example,
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`a user can wish a friend “good morning” from his mobile device by sending a text message (SMS
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`or MMS communication), sending an email (IP based communication), or calling the friend (a
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`PTSN voice call). See id. In addition to these options, a user can also communicate with his
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`mobile device using “over the top (OTT) communication” services like WhatsApp. See id. at col.
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`1:27-32, 2:23-27.
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`However, use of OTT services has a downside: it “can fragment the communication
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`channels so that only those within an OTT provider can communicate.” Id. at col. 1:33-34. For
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`example, if a user wishes to send a message through WhatsApp, the recipient must also use
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`WhatsApp to receive this message and send a response. See id. The recipient cannot receive the
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`message through a different OTT service, SMS, MMS, or some other mode of communication.
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`See id.
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`The ’217 patent purports to address this problem through a method for enabling
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`“transparent multi-modal communication” on a “communication platform” such that users can
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`transparently send and receive communications through different modes. Id. at col. 2:9-19. For
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`example, the method enables a user to send a text message and have it be received by another user
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`as a WhatsApp message, and vice versa. See id at col. 2:9-19, 2:38-45.
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`Case 5:16-cv-06925-LHK Document 64 Filed 04/17/17 Page 8 of 54
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`Figure 1 illustrates this method:
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` message sent through one of the modes of communication on the left (i.e., “SMS,” “MMS,” “IP
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` A
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`App,” “PSTN,” “SIP,” “Fax,” “Email,” “OTT Comm 1,” “OTT Comm 2”) is transmitted to the
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`communication platform (i.e., “communication service” at 110). Id. at col. 3:14-4:15, 8:5-9:34.
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`The communication platform then chooses an appropriate mode of communication that suits the
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`message’s intended destination (i.e., “SMS,” “MMS,” “IP App,” “PSTN,” “SIP,” “Fax,” “Email,”
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`“OTT Comm 1,” “OTT Comm 2” at 112), and then sends the message to that destination using
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`that mode of communication. Id. at col. 4:16-54, 9:35-12:35. For example, if a user sends a
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`Case 5:16-cv-06925-LHK Document 64 Filed 04/17/17 Page 9 of 54
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`message through WhatsApp to a destination device that only accepts SMS (i.e., text) messages,
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`the communication platform selects an SMS service as the appropriate mode of communication
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`and sends the message using that SMS service. See id.
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`Figure 10 illustrates the process of selecting the appropriate mode of communication in
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`more detail:
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`When a user sends a message, this is transmitted to the communication platform as a
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`“communication request.” See id. at col. 3:14-4:15, 17:23-30. The “communication request”
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`identifies the “communication destination” for the message, which can be a phone number, an
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`email address, an IP address, or “any suitable communication endpoint.” Id. at col. 3:17-21,
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`18:55-58. The “communication request” also includes “account information,” which can include
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`“an account identifier of the external system and an authentication token associated with the
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`account identifier.” Id. at col. 18:4-6. For example, the “account identifier of the external system”
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`could be an identifier for a user’s WhatsApp account. See id. at col. 18:4-14.
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`After the “communication request” is received, the communication platform determines
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`whether the “communication request” is authenticated. Id. at col. 18:4-14. This “includes
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`authenticating the communication request by using the authentication token, and determining that
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`the communication request is permitted for an account identified by the account identifier.” Id. at
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`col. 18:8-14.
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`Next, the communication platform determines which modes of communication are
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`available for the “communication destination.” Id. at col. 17:60-20:50. It does this through a
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`simple database-style lookup: the communication platform stores “routing address records” in an
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`“endpoint information repository.” Id. at col. 19:48-50. “[E]ach routing address record . . .
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`associates a communication destination with at least one external communication provider.” Id. at
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`col. 18:42-45. For example, a “routing address record” could associate a phone number (the
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`“communication destination”) with an SMS service provider, a PTSN service provider, and an
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`OTT communication service provider (the several “external communication provider[s]”). See id.
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`at col. 18:32-20:50. Then, to determine which modes of communication are available for the
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`“communication destination,” the communication platform simply locates the “routing address
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`record” for that “communication destination.” Id. at col. 19:44-20:50.
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`After the communication platform locates the “routing address record” for the
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`“communication destination,” it selects one or several “external communication providers”
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`through which to transmit the message. Id. at col. 20:51-23:9. This can be done using a
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`“communications profile,” which specifies a “priority” and a “weight” for various “external
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`communication providers.” See id. at col. 20:62-22:3. However, “any suitable parameter”
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`(instead of or in addition to “priority” and “weight”) can be “used in selecting [an external]
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`communication provider.” Id. at col. 22:1-3.
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`Finally, after the “external communication provider(s)” have been selected, the
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`communication platform “provide[s] a request to establish communication with the
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`communication destination to each selected [external] communication provider.” Id. at col. 23:10-
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`12. The “external communication provider(s)” then transmit the message to the “communication
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`destination.” See id. at col. 23:17-30.
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`Neither the claims nor the specification provide much restriction on how this process must
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`be implemented, or the contexts in which it can be deployed. Instead, the specification makes a
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`number of non-limiting statements, including that: “The telephony platform can be . . . any
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`suitable network accessible computing infrastructure. The system may . . . be used in combination
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`with . . . any suitable communication platform.” Id. at col. 2:53-3:4. “Routing options . . . can
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`include . . . any suitable communication service.” Id. at col. 4:16-27. “The communication
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`destination can be . . . any suitable communication endpoint.” Id. at col. 3:17-21. “The
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`communication platform can . . . use any suitable logic to determine a content and destination of a
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`communication.” Id. at col. 4:10-13. “The account information can include . . . any suitable
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`source information.” Id. at col. 13:29-31.
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`ii. Asserted Claims
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`Twilio currently asserts claims 1-12 and 15-19 of the Path Selection Patent. ECF No. 55.
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`Independent claims 1 and 15 recite:
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`1. A method comprising: at a multi-tenant communication platform:
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`receiving a request to establish communication, the request being provided by
`an external system and specifying a communication destination and an account
`identifier of the external system;
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`determining whether the account identifier is a valid account identifier of an
`account
`that
`is permitted
`to establish communication by using
`the
`communication platform;
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`responsive to a determination that the account identifier is a valid account
`identifier of an account that is permitted to establish communication by using
`the communication platform:
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`determining at least one communication provider for the communication
`destination based on an a [sic] routing address record matching the
`communication destination, the matching routing address record associating
`the communication destination with one or more communication providers,
`the routing address record being stored at the communication platform, each
`communication provider being external to the communication platform;
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`selecting one or more of the determined at least one communication
`provider; and
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`providing a request to establish communication with the communication
`destination to each selected communication provider,
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`wherein the communication platform generates the matching routing
`address record based on registration information provided to the
`communication platform for the communication destination by each
`determined communication provider, and wherein the communication
`destination matches at least one of a routing address identifier and a
`deterministic endpoint address specified in the matching routing address
`record.
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`15. A method comprising:
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`at a multi-tenant communication platform, and responsive to authentication of
`a communication request provided by an external system, the communication
`request specifying a communication destination and account information:
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`determining a routing address record of the communication platform that
`matches the communication destination of the communication request, the
`matching routing address record associating the communication destination
`with a plurality of external communication providers;
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`selecting at least one communication provider associated with the matching
`routing address record; and
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`providing a request to establish communication with the communication
`destination to each selected communication provider.
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`’217 patent at col. 29:35-30:3, 31:21-27.
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`B. Procedural History
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`On December 1, 2016, Plaintiff filed the instant patent infringement suit. In its complaint,
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`Plaintiff alleged that Defendant “has infringed and continues to infringe one or more claims of the
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`[Asserted Patents].” Compl. ¶¶ 75, 91, 106, 135, 156, 169, 184. The products accused included
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`“Defendant’s Smart Verify product,” “Auto Verify product,” “SMS Verify product,” “Voice
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`Verify Product,” “Push Verify product,” and “Score and Phone ID products.” Id. ¶¶ 40-45.
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`On January 25, 2017, Defendant filed the instant Motion to Dismiss, ECF No. 31 (“Mot.”).
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`On February 9, 2017, Plaintiff filed an opposition to Defendant’s Motion to Dismiss, ECF No. 37
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`(“Opp’n”), and on February 15, 2017, Defendant filed a reply, ECF No. 39 (“Reply”).
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`On March 30, 2017, the Court ordered the parties to disclose the asserted claims and
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`accused products identified in Plaintiff’s infringement contentions. ECF No. 53. On March 31,
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`2017, the parties disclosed these asserted claims and accused products. ECF No. 55.
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`On March 31, 2017, the Court issued its first order on Defendant’s Motion to Dismiss and
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`found that the asserted claims of the Score Patents were invalid because they were directed to
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`patent-ineligible subject matter under § 101, but that the asserted claims of the Platform Patents
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`were not invalid because they were not directed to patent-ineligible subject matter under § 101.
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`II. LEGAL STANDARD
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`A. Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6)
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`Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an
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`action for failure to allege “enough facts to state a claim to relief that is plausible on its face.” Bell
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`Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the
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`plaintiff pleads factual content that allows the court to draw the reasonable inference that the
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`defendant is liable for the misconduct alleged. The plausibility standard is not akin to a
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`‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted
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`unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted). For
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`purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the
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`complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving
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`party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
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`Nonetheless, the Court is not required to “‘assume the truth of legal conclusions merely
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`because they are cast in the form of factual allegations.’” Fayer v. Vaughn, 649 F.3d 1061, 1064
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`(9th Cir. 2011) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Mere
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`“conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to
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`dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); accord Iqbal, 556 U.S. at 678.
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`Furthermore, “‘a plaintiff may plead [him]self out of court’” if he “plead[s] facts which establish
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`that he cannot prevail on his . . . claim.” Weisbuch v. Cty. of L.A., 119 F.3d 778, 783 n.1 (9th Cir.
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`1997) (quoting Warzon v. Drew, 60 F.3d 1234, 1239 (7th Cir. 1995)).
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`B. Motions to Dismiss for Patent Validity Challenges Under 35 U.S.C. § 101
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`Defendant’s Motion asserts that the Asserted Patents fail to claim patent-eligible subject
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`matter under 35 U.S.C. § 101 in light of the United States Supreme Court’s decision in Alice Corp.
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`Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014). Whether a claim recites patent-
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`eligible subject matter under § 101 is a question of law. In re Roslin Inst. (Edinburgh), 750 F.3d
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`1333, 1335 (Fed. Cir. 2014) (“Section 101 patent eligibility is a question of law[.]”); Dealertrack,
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`Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012) (same). Accordingly, a district court may
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`resolve the issue of patent eligibility under § 101 by way of a motion to dismiss. See, e.g.,
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`Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343, 1345
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`(Fed. Cir. 2014) (affirming determination of ineligibility made on 12(b)(6) motion); Ultramercial,
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`Inc. v. Hulu, LLC, 772 F.3d 709, 713 (Fed. Cir. 2014) (same); see also buySAFE, Inc. v. Google,
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`Inc., 765 F.3d 1350, 1351 (Fed. Cir. 2014) (affirming determination of ineligibility made on
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`motion for judgment on the pleadings).
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`Although claim construction is often desirable, and may sometimes be necessary, to
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`resolve whether a patent claim is directed to patent-eligible subject matter, the Federal Circuit has
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`explained that “claim construction is not an inviolable prerequisite to a validity determination
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`under § 101.” Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1273-
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`74 (Fed. Cir. 2013). Where the court has a “full understanding of the basic character of the
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`claimed subject matter,” the question of patent eligibility may properly be resolved on the
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`pleadings. Content Extraction, 776 F.3d at 1349; see also Cardpool, Inc. v. Plastic Jungle, Inc.,
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`2013 WL 245026, at *4 (N.D. Cal. Jan. 22, 2013) (same), aff’d, 817 F.3d 1316 (Fed. Cir. 2016).
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`C. Substantive Legal Standards Applicable Under 35 U.S.C. § 101
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`1. Patent-Eligible Subject Matter Under 35 U.S.C. § 101
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`Section 101 of Title 35 of the United States Code “defines the subject matter that may be
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`patented under the Patent Act.” Bilski v. Kappos, 561 U.S. 593, 601 (2010). Under § 101, the
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`scope of patentable subject matter encompasses “any new and useful process, machine,
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`manufacture, or composition of matter, or any new and useful improvement thereof.” Id. (quoting
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`35 U.S.C. § 101). These categories are broad, but they are not limitless. Section 101 “contains an
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`important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not
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`patentable.” Alice, 134 S. Ct. at 2354 (quotation marks omitted). These three exceptions are not
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`patent-eligible because “they are the basic tools of scientific and technological work,” which are
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`“free to all men and reserved exclusively to none.” Mayo Collaborative Servs. v. Prometheus
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`Labs., Inc., 566 U.S. 66, 70 (2012) (quotation marks omitted). The United States Supreme Court
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`has explained that allowing patent claims for