Case 1:19-cv-00859-RTH Document 27 Filed 08/07/20 Page 1 of 36
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` In the United States Court of Federal Claims
`
`No. 19-859
` (Filed: 7 August 2020)
`
`
`
`
`
`***************************************
`E-NUMERATE SOLUTIONS, INC. et al,
`
`*
`
`
`
`*
`Patent Infringement; RCFC 12(b)(6);
`
`Plaintiffs,
`*
`
`
`* Motion to Dismiss; 35 U.S.C. § 101;
`v.
`
`*
`Patent-ineligible Subject Matter;
`
`
`* Abstract Idea.
`THE UNITED STATES,
`*
`
`
`
`*
`
`
`Defendant.
`*
`
`
`*
`***************************************
`
`
`Sean T. O’Kelly, of O’Kelly Ernst & Joyce, LLC, with whom was Gerard M. O’Rourke,
`of O’Rourke Law Office, LLC, both of Wilmington, DE, for plaintiffs.
`
`
`Scott D. Bolden, Deputy Director, Commercial Litigation Branch, Civil Division,
`Department of Justice, with whom were Joseph H. Hunt, Assistant Attorney General, Gary L.
`Hausken, Director, Shahar Harel, of counsel, Department of Justice, and Richard M. Humes,
`Assistant General Counsel, George C. Brown, Assistant General Counsel, Nelson Kuan, Senior
`Counsel, Office of the General Counsel, U.S. Securities and Exchange Commission, all of
`Washington, DC, for defendant.
`
`
`OPINION AND ORDER
`
`
`HOLTE, Judge.
`
`
`Plaintiffs accuse the government of infringing seven United States patents through
`various agencies, including the Securities and Exchange Commission (“SEC”). The government
`filed a motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Rules of the Court
`of Federal Claims (“RCFC”), alleging the asserted patents are invalid under 35 U.S.C. § 101 for
`claiming patent-ineligible subject matter. This case was transferred to the undersigned Judge on
`9 December 2019. After briefing concluded, the Court held oral argument on the government’s
`motion to dismiss on 5 May 2020. For the following reasons, the Court DENIES the
`government’s motion to dismiss under RCFC 12(b)(6).
`
`
`I. Overview and Procedural History
`
`
`
`Plaintiffs e-Numerate Solutions, Inc. (“ESI”) and e-Numerate, LLC (“e-Numerate”) bring
`this patent infringement action against the government under 28 U.S.C. § 1498(a). Compl. ¶ 7,
`ECF No. 1. “ESI is the owner of record and assignee” of the following United States patents:
`7,650,355 (“the '355 patent” or “'355 Patent”); 8,185,816 (“the '816 patent”); 9,262,383 (“the
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`'383 patent”); 9,262,384 (“the '384 patent”); 9,268,748 (“the '748 patent”); 9,600,842 (“the '842
`patent”); and 10,223,337 (“the '337 patent”). Id. ¶ 3. These seven patents belong to two separate
`patent families: the '355, '816, '383, '384, '784, and '337 patents all claim priority to provisional
`patent application numbers 60/135,525 and 60/183,152 (“the '355 patent family”); and the '842
`patent claims priority to provisional patent application number 60/263,518 (“the '842 patent
`family”). Def. United States of America’s Mot. to Dismiss Under Rule 12(b)(6) at 6–8, ECF No.
`8 (“Gov’t MTD”). The seven patents assigned to ESI are hereinafter collectively referred to as
`“the asserted patents.” “Plaintiff e-Numerate, LLC is the exclusive licensee of the Asserted
`Patents.” Compl. ¶ 4. ESI and e-Numerate are hereinafter collectively referred to as “plaintiffs.”
`
`The asserted patents relate generally to improvements in computer software and data
`markup language. Id. ¶ 13. “A markup language is a system for inserting information about the
`formatting and display of a group of text characters by placing non-displayed ‘markup’ text
`before and after the group of text characters.” Id. ¶ 15b. The asserted patents introduced
`Reusable Data Markup Language (“RDML”) as an alternative to the two commonly-used prior
`art methods: Hyper Text Markup Language (“HTML”) and Extensible Markup Language
`(“XML”). Id. ¶16. According to plaintiffs, the improvements associated with RDML “allowed
`numbers to be substantively treated as the numerical values they represent” resulting in vast
`improvement to “a user’s ability to identify, manipulate, compare, convert and process numbers
`in software like never before.” Id. ¶ 14.
`
`Plaintiffs previously “filed a lawsuit in the United States District Court for the District of
`Delaware against Mattress Firm Holding Corp. (“Mattress Firm”)” on 11 July 2017. Compl. ¶ 8.
`Plaintiffs alleged infringement of the '355, '816, '383, and '748 patents (hereinafter the “Delaware
`district court litigation”). Id. Plaintiffs filed an amended complaint adding allegations against
`Merrill Communications LLC and Merrill Corporation (collectively, “Merrill”) as defendants.
`Id. ¶ 9. According to plaintiffs, various private parties either used eXtensible Business Reporting
`Language (“XBRL”) to file reports with the SEC or developed software to assist others in filing
`reports in XBRL with the SEC. Id. Specifically, plaintiffs allege Merrill “marketed [a] product
`to assist companies in filing reports in [XBRL] with the SEC.” Compl. ¶ 28. Plaintiffs further
`allege “Mattress Firm uses [XBRL] to routinely file documents with [the SEC].” Id. ¶ 30. “The
`Merrill Bridge product is representative of software and services provided by various service
`providers to assist their customers with SEC filings . . . [and] [t]he Mattress Firm SEC filing is
`representative of filings made by SEC filers.” Id. ¶¶ 31, 32.
`
`On or about 12 July 2018, “Merrill filed petitions for inter partes review (‘IPR’) at the
`Patent Trial and Appeal Board (‘PTAB’) . . . against claims of the four patents asserted in the
`[Delaware district court litigation].” Gov’t MTD at 3. The government, through the Department
`of Justice at the request of the SEC, filed a “Statement of Interest” in the Delaware district court
`litigation on 19 October 2018. Id. at 2; Compl. ¶ 10. The PTAB instituted a series of IPRs as to
`the challenged claims on 13 February 2019. Gov’t MTD at 3. After Merrill withdrew their
`petition from the IPR proceedings, however, “[t]he PTAB terminated the IPRs” on 25 July 2019.
`Id. Though the IPRs were instituted against claims not asserted in the present litigation,
`plaintiffs indicated they “intend[] to amend [their] Complaint to assert the claims involved in the
`IPRs against the Government now that the IPRs have been dismissed with prejudice.” Pls.’ Brief
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`in Opp’n to the United States’ Motion to Dismiss Under Rule 12(b)(6) at 5–6, ECF No. 15
`(“Pls.’ Opp’n to MTD”).
`
`The government’s statement of interest confirms the government “granted its
`authorization and consent to the extent the Defendants use XBRL to file documents with the
`SEC pursuant to federal regulation.” Compl. ¶ 10. “XBRL is the open international standard for
`digital business reporting, managed by a global not for profit consortium.” An Introduction to
`XBRL, https://www.xbrl.org/the-standard/what/an-introduction-to-xbrl/ (last visited August 7,
`2020). The non-government plaintiffs in the district court action either “marketed [a] product to
`assist companies in filing reports in the [XBRL] with the SEC” or “use[] the [XBRL] standard to
`routinely file documents with [the SEC].” Compl. ¶¶ 28, 30. Plaintiffs assert the government’s
`statement of interest thus “assumed all liability for patent infringement by third-party vendors . . .
`that use, sell, provide third party services and/or host software used to assist companies that file
`documents using XBRL with the SEC.” Id. ¶ 12. The Delaware district court litigation was
`dismissed 19 November 2018 as a result of the government’s statement of interest. Gov’t MTD
`at 2.
`
`
`Plaintiffs filed the complaint in the present case on 11 June 2019. See Compl. The
`government responded by filing a motion to dismiss on 11 October 2019. See Gov’t MTD. The
`government’s motion seeks to dismiss plaintiff’s complaint for failure to state a claim upon
`which relief can be granted under RCFC 12(b)(6), alleging the asserted patents are invalid as a
`matter of law under 35 U.S.C. § 101 for being directed to an abstract idea. See Gov’t MTD at 1.
`This case was transferred to the undersigned judge on 9 December 2019. See Order, ECF No.
`11. Plaintiff filed an opposition to the government’s motion to dismiss on 20 December 2019.
`See Pls.’ Opp’n to MTD. The government filed its reply brief in support of its motion to dismiss
`on 24 January 2020. See Def.’s Reply in Supp. of Mot. to Dismiss Under Rule 12(b)(6), ECF
`No. 19 (“Gov’t Reply”). The Court held oral argument on the government’s motion to dismiss
`on 5 May 2020. See Tr., ECF No. 26.
`
`
`II. Factual History and Technology1
`
`
`a. Prior Art Systems
`
`
`
`Plaintiffs began developing computer software technology in the late 1990s addressing an
`alleged “need for the intelligent identification and processing of numerical information on the
`Internet.” Compl. ¶ 14. According to plaintiffs, prior art systems at the time, including HTML
`and XML, faced three key limitations: (1) “there was no way of distinguishing . . . numerical
`data from text;” (2) “data and analytic routines were not standardized;” and (3) “calculations
`occurred at too low a conceptual level.” Id. at ¶ 15. Plaintiffs’ technology “allowed numbers to
`
`
`1 The Court draws the following facts from plaintiffs’ complaint and the asserted patents and assumes for the
`purposes of this motion all alleged facts are true. See, e.g., Boyle v. United States, 200 F.3d 1369, 1372 (Fed. Cir.
`2000) (stating when ruling on a motion to dismiss for failure to state a claim, this Court “must accept all well-
`pleaded factual allegations as true and draw all reasonable inferences in [the nonmovant’s] favor”).
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`be substantively treated as the numerical values they represent.” Id. at ¶ 14. Plaintiffs provide
`the following overview of how data markup language generally operates:
`
`Internet browsers interpret and display documents formatted in HTML. In order to
`distinguish the text characters to be displayed from the information describing how
`the text characters are to be formatted, “annotations” that are not visible to the
`viewer of the displayed document are added to the document. The HTML
`specification describes the use of a markup language to include these non-displayed
`annotations. A markup language is a system for inserting information about the
`formatting and display of a group of text characters by placing non-displayed
`“markup” text before and after the group of text characters. These markups,
`commonly known as “tags” in online and other documents in digital format,
`describe the structure and formatting of digital documents and instruct computer
`systems on how to display them.
`
`
`Id. ¶ 15.b.
`
`
`As HTML only works with text and images, “[t]here is no HTML tag capable of
`annotating the context or meaning of numerical data appearing in a markup document for
`computer systems to interpret these numerical data as numbers representing a particular type of
`information instead of a simple string of text characters.” Id. ¶ 15.c. This results in certain
`setbacks when using HTML for specific applications, such as preparation of a financial
`disclosure. For example, web browsers utilizing HTML tags may “display documents containing
`numbers, but the HTML tags do not enable computer systems to run analytical applications that
`read, manipulate, combine, compare, transform or analyze the numbers, load them into a
`spreadsheet, or display them in a graph, directly from multiple online sources.” Id. ¶ 15.c.
`
`XML was originally designed “to help overcome some of HTML’s limitations.” Compl.
`¶ 15.d. Rather than include sets of “pre-defined tags,” XML “is a specification that governs the
`creation of tags by particular users or groups.” Id. Functionally, XML gives individual
`developers the ability “to create their own individual markup languages.” Id. At the time of the
`inventions embodied in the asserted patents, “no set of XML tags had been promulgated for
`general use, so any XML tag taxonomy created by one user would not be compatible with the
`taxonomies created by other users.” Id. The lack of standardization in XML “left users with no
`way to manipulate, combine, compare, transform or analyze numerical data from singular or
`multiple online sources using differing custom-created XML tag taxonomies.” Id. “Prior art at
`the time of filing of the [asserted patents] did not provide a mechanism to identify numerical data
`element attributes, characteristics, formats or relationships.” Id. ¶ 18.a.
`
`
`b. Prosecution History
`
`
`In response to these apparent shortcomings in the prior art, plaintiffs developed Reusable
`Data Markup Language (“RDML”). Compl. ¶ 16. RDML “allow[s] users for the first time to
`easily view, compare and analyze numerical data on the Internet.” Id. Among the specific
`technical advantages supplied by RDML are: (1) “[p]airing the metadata directly with the
`numerical data in machine-readable form so the numerical data could be easily identified and
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`used in different program applications;” (2) “[d]efine[d] standards for both data formats and
`analytic routines;” (3) “[e]nhanced analytical calculation power by creating data objects at the
`line item and document levels;” and (4) “provid[ing] RDML tags for data characteristics that
`HTML lacked and suppl[lying] a set of tags for content and meaning of numbers for general use
`missing in XML.” Id. Accompanying the invention of RDML was a “suite of software
`applications . . . developed to create documents with RDML tag markups” and manipulate and
`display the data. Id. The result of these improvements in the aggregate was a tool “that could
`automatically associate individual accounting data items with the appropriate sections of the
`organization’s financial statements.” Id. ¶ 17.a.
`
`All of the patents in the '355 patent family claim priority to two provisional patent
`applications: application no. 60/135,525, filed 21 May 1999; and application no. 60/183,152,
`filed 17 February 2000. See, e.g., U.S. Patent No. 7,650,355 to Davis at Cover Page. The '355
`patent, filed 18 May 2000, was the first patent filed and granted in either of the asserted patent
`families. Id. The '355 patent underwent nearly 10 years of prosecution with the United States
`Patent and Trademark Office (“USPTO”). Id. During the majority of this time, from 1998 to
`2008, the § 101 patent eligibility standard was governed by the Federal Circuit’s decision in
`State Street Bank & Tr. Co. v. Signature Fin. Grp., 149 F.3d 1368 (Fed. Cir. 1998). The State
`Street standard for § 101 patent-eligible subject matter was historically broad, with the Federal
`Circuit noting “the Supreme Court has acknowledged that Congress intended § 101 to extend to
`‘anything under the sun that is made by man.’” Id. at 1373 (quoting Diamond v. Chakrabarty,
`447 U.S. 303, 309 (1980)).
`
`Under the State Street standard, the '355 patent was initially rejected for attempting to
`claim patent-ineligible subject matter, with the patent examiner finding: “the language of the
`claim raises a question as to whether the claim is directed merely to an abstract idea that is not
`tied to a technological art, environment or machine which would result in a practice application
`producing a concrete, useful, and tangible result to form the basis of statutory subject matter
`under 35 U.S.C. [§] 101.” Gov’t MTD at A104 (non-final office action of 21 December 2005
`rejecting claims of the '355 patent). Plaintiffs relied on the broad State Street standard of patent-
`eligible subject matter to overcome the examiner’s rejections, adopting the examiner’s
`suggestion to add the following language to claim 1: “[a] computer-implemented method of
`processing tagged numerical data . . . .” Id. at A128 (response to non-final office action dated 28
`March 2006). Plaintiffs then further amended claim 1 by adding the following language:
`“displaying the results of the operation.” Id. at A148 (response to final office action dated 30
`August 2006). In addition to other amendments made to claim 1 during prosecution, the '355
`patent eventually issued on 19 January 2010.2 See '355 Patent at Cover Page. The '816 patent
`subsequently issued while the § 101 patent eligibility framework was in flux: after the Supreme
`Court’s decision in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012),
`but prior to the most recent decision in Alice Corp. Pty. v. CLS Bank Int’l, 573 U.S. 208 (2014).
`
`
`2 Although the '355 patent did not issue until early 2010, by which time the Federal Circuit had abrogated the State
`Street standard for patent eligibility through the 2008 In re Bilski decision, the office action and claim amendments
`pertinent to the Court’s § 101 analysis occurred in 2005 and 2006, while State Street was still controlling law
`regarding § 101 patent eligibility. 545 F.3d 943 (Fed. Cir. 2008).
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`Pls.’ Opp’n to MTD at 9. The remaining five asserted patents, however, “were all prosecuted
`and allowed by the USPTO after Alice and Mayo were issued.” Id. (emphasis omitted).
`
`The remaining patents, both in the '355 patent family and the '842 patent family,
`introduced further technological limitations and adaptations to RDML. For example, the '816
`and '383 patents introduced the ability to combine multiple data sets by way of converting the
`numerical values to a common format. See U.S. Patent No. 8,185,816 to Davis at col. 55:5–32;
`U.S. Patent No. 9,262,383 to Davis at col. 143:1–41. Certain claims of the '748 and '842 patents
`introduced data validation steps based on a series of predefined rules. See U.S. Patent No.
`9,268,748 to Davis at col. 141:1–57; U.S. Patent No. 9,600,842 to Davis at col. 83:28–84:35.
`Finally, the '384 and '337 patents, in addition to certain claims of the '748 patent, introduced a
`report generating function to RDML. See U.S. Patent No. 9,262,384 to Davis at col. 93:25–
`94:32; U.S. Patent No. 10,223,337 to Davis at col. 111:10–112:15; U.S. Patent No. 9,268,748 to
`Davis at col. 143:5–144:6.
`
`
`c. Alleged Improvements Over the Prior Art
`
`
`
`At a high level, RDML “provided RDML tags for data characteristics that HTML lacked
`and supplied a set of tags for content and meaning of numbers for general use missing in XML.”
`Compl. ¶ 16.c.i. The asserted patents claim to “solve[] these HTML- and XML-related problems
`with unique tools that allowed users for the first time to easily view, compare, and analyze
`numerical data on the Internet.” Id. ¶ 16. RDML was designed to function through
`
`[a] suite of software applications . . . developed to create documents with RDML
`tag markups, read or parse the RDML documents, display them as graphs or in tree
`views, combine and compare data from multiple online sources, and manipulate,
`transform and analyze numerical data from multiple online sources. RDML
`permits the browsing and manipulation of numbers, and allows the “RDML Data
`Viewer” to act as a combination Web browser and spreadsheet/analytic application
`that automatically read numbers from multiple online sources, understand their
`meaning, and manipulate them without human intervention.
`
`
`Id. ¶ 16.c.ii. The tags operate by encoding information about the respective numbers. Id. ¶
`16.c.iii. “The encoded information is connected with the numbers themselves and the tags move
`with the numbers when the numbers are ported.” Id. The asserted patents implemented a
`“dramatically different approach than previously used, which was to keep document metadata
`and data itself separate from each other,” by “[p]airing the metadata directly with the numerical
`data in machine-readable form so the numerical data could be easily identified and used in
`different program applications.” Id. ¶ 16.a. This allowed plaintiffs’ technology to “overcome
`the limitations of traditional spreadsheets which operate only at the cell (single number) level”
`by “[e]nhanc[ing] analytical calculation power by creating data objects at the line item and
`document levels.” Compl. ¶ 16.c. The invention embodied in the asserted patents was
`
`invented prior to the creation of the XBRL standard. Prior art, as embodied in
`HTML and XML at the time of the filing of the [asserted patents], did not provide
`any metadata . . . beyond simple display formatting. Without these attributes and
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`characteristics, it was not possible for a human or a computer to select, process,
`combine or output data elements without resorting to human intervention to find,
`associate and take into account how the appropriate attributes and characteristics
`would affect the selection, processing, combination and outputting activities.
`
`
`Id. ¶ 17.a. This “provide[s] a mechanism to capture and utilize” the “automated display of
`structured data using HTML or XML.” Id. ¶ 17.c. Additionally, it “provide[s] the ability to
`analyze and share [the semantic meaning of the numerical data elements] among manual and
`automated information systems by recording both semantic meaning and macros that embody
`logical tests to select the appropriate processing based on this and other data elements contained
`in the document.” Id. ¶ 19. “RDML standardizes the recording of [computational steps] in a
`‘macro’ that includes the identification of the specific data items that these steps apply to by
`specifying the data element metadata needed to determine which data elements are to be selected
`and how they are to be processed given their individual attributes and characteristics.” Id. ¶ 20.
`RDML then “stores this information in a ‘Second Document’ (i.e., external file) that is accessible
`on the Internet so that it can be used by any process related to the specific data elements
`involved.” Id.
`
`The government notes on several occasions “[t]he specification explain[s] that the
`
`purported invention would typically replace data manipulations done ‘by hand.’” Gov’t MTD at
`7 (quoting '355 Patent at col. 12:27–30). Such “hand calculations” are noted in plaintiffs’
`complaint: “[b]efore the introduction of the inventions contained in the [asserted patents], the
`preparation of financial statements involved the manual selection, analysis, combination and
`outputting of numerical data items based on the best efforts of the organization’s senior
`accountants and later accepted as appropriate by Certified Public Accountants.” Compl. ¶ 17.b.
`The specification of the asserted patents address this, providing:
`
`
`a mechanism to capture the metadata required to identify the attributes and
`characteristics of each numerical data element, and thereby allow the automated
`selection of the appropriate analytic routines based on the metadata associated with
`those analytical routines. . . . Just as the “dial telephone” enhanced the efficiency
`and ease of use of the telephone system beyond that experienced when human
`operators were necessary to make a telephone call, the RDML Data Viewer
`provides for the automated creation and sharing of the metadata necessary for
`information systems (manual or computerized) to more efficiently share and use
`complex structured information without the necessity for manual creation of
`“mappings” each time a new pair of information systems need to share information.
`
`
`Id. ¶ 17.b, 18.b.
`
`
`The complaint, however, further discusses specific technological limitations of such hand
`calculations. For example, “[p]rior art before the filing of the [asserted patents] would not
`encode the metadata necessary for a human or automated process to unambiguously identify the
`attributes and characteristics of similarly named numerical data elements so that these differing
`data elements could be combined to yield an identified result.” Id. ¶ 21. “Without defined
`standards for capturing and accessing both numerical data attributes and characteristics, the
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`selection of appropriate data formats and analytic routines could not be performed automatically
`by either human or machine.” Id. ¶ 17.b. Additionally,
`
`[w]ithout the semantic relationship capabilities invented by the [asserted patents],
`a human could not unambiguously locate these recorded steps by hand. Even if a
`human was provided with a document containing the processing steps, prior art did
`not provide for the encoding of the necessary metadata needed to ensure that, based
`on the attributes and characteristics of the data elements to be combined, they would
`qualify for the application of the selected process.
`
`
`Id. ¶ 21.
`
`
`The role of the “semantic tags” in the asserted patents, according to plaintiffs, plays an
`important role in processing necessary metadata because:
`
`the term “semantic tags” indicates that, in addition to the association of a
`descriptive “name” with a data item . . . , additional attributes and characteristics
`information is recorded. These additional attributes and characteristics provide
`semantic meaning, allowing the RDML Data Viewer to select, analyze, process and
`output results based on information stored in universally accessible “Second
`Documents” stored on the Internet.
`
`
`Id. ¶ 22. Though noting the importance of the semantic tags, plaintiffs are clear that “the
`[asserted patents] do not claim the invention of semantic tags.” Compl. ¶ 22. Rather, “RDML
`invented the use of semantic tags to enable the unambiguous selection, analysis, processing and
`outputting of information based on the information contained in the semantic tags.” Id.
`(emphasis added).
`
`Plaintiffs further identify certain differences between RDML and XML. The asserted
`patents “are not simply a ‘dialect’ of XML, rather they utilize the XML-compliant document
`format as a platform for deploying the inventive concepts in a manner that is universally
`accessible on the Internet.” Id. ¶ 24. “Without the [asserted patents’] claimed invention to
`semantically link the XML ‘character data entities’ . . . to external ‘Second Documents,’ a
`human would not have access to the selection, macro, output and document combination
`information contained in the ‘Second Documents’ needed to be able to perform these inventions
`by hand.” Id. ¶ 27.
`
`III. Applicable Law
`
`
`a. Standard of Review for Motion to Dismiss Pursuant to RCFC 12(b)(6)
`
` A
`
` defendant may seek dismissal of an action for failure to allege “enough facts to state a
`claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
`(2007). Facial plausibility requires the plaintiff to plead “factual content that allows the court to
`draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft
`v. Iqbal, 556 U.S. 662, 678 (2009). This requires “more than a sheer possibility that a defendant
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`has acted unlawfully.” Id. “Threadbare recitals of the elements of a cause of action, supported
`by mere conclusory statements, do not suffice.” Id. When deciding a motion to dismiss under
`RCFC 12(b)(6) for failure to state a claim upon which relief can be granted, the Court “must
`accept well-pleaded factual allegations as true and must draw all reasonable inferences in favor
`of the claimant.” Athey v. United States, 908 F.3d 696, 705 (Fed. Cir. 2018) (quoting Bell/Heery
`v. United States, 739 F.3d 1324, 1330 (Fed. Cir. 2014)). However, the Court is “not required to
`accept the asserted legal conclusions.” Am. Bankers Ass’n v. United States, 932 F.3d 1375, 1380
`(Fed. Cir. 2019) (citing Iqbal, 556 U.S. at 678).
`
`
`b. Patent Eligibility Pursuant to 35 U.S.C. § 101
`
`
`
`“A patent shall be presumed valid. . . . The burden of establishing invalidity of a patent or
`any claim thereof shall rest on the party asserting such invalidity.” 35 U.S.C. § 282(a). Issued
`patents grant the patentee “certain exclusive rights,” which may be enforced through civil actions
`for infringement pursuant to 35 U.S.C. § 271. Microsoft Corp. v. I4I Ltd. P’ship, 564 U.S. 91,
`96 (2011). Patent-eligible subject matter is prescribed in 35 U.S.C. § 101: “any new and useful
`process, machine, manufacture, or composition of matter, or any new and useful improvement
`thereof.” Additionally, there are important implicit exceptions to § 101: “Laws of nature, natural
`phenomena, and abstract ideas are not patentable.” Alice, 573 U.S. at 216 (quoting Ass’n for
`Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)). To allow the
`patentability of such “basic tools of scientific and technological work” would run the risk of
`“‘inhibit[ing] further discovery by improperly tying up the future use of’ these building blocks of
`human ingenuity.” Id. (first quoting Myriad, 569 U.S. at 576; then quoting Mayo, 566 U.S. at
`85).
`
`
`When the accused patent infringer is the United States, the action is brought under 28
`U.S.C. § 1498, which waives the government’s sovereign immunity for claims of patent
`infringement. See Zoltek Corp. v. United States, 672 F.3d 1309, 1315–17 (Fed. Cir. 2012).
`Alleged infringers, including the United States, may assert various defenses to patent
`infringement, such as asserting the invalidity of a patent. See Microsoft Corp., 564 U.S. at 96.
`When challenging the validity of an issued patent, the alleged infringer must overcome the
`statutory presumption of validity.3 Id. at 97. Attempts to overcome the presumption of validity
`must be shown by “clear and convincing evidence.” Id.
`
`
`“Patent eligibility under § 101 presents an issue of law,” Accenture Glob. Servs., GmbH
`v. Guidewire Software, Inc., 728 F.3d 1336, 1340 (Fed. Cir. 2013), which can therefore “be
`determined at the Rule 12(b)(6) stage.” Aatrix Software, Inc. v. Green Shades Software, Inc.,
`882 F.3d 1121, 1125 (Fed. Cir. 2018). When evaluating claims for patent-eligible subject matter,
`the Court uses a two-part test established by the Supreme Court, commonly referred to as the
`
`
`3 Issued patents receive the benefit of a “presumption recogniz[ing] the deference that is due to a qualified
`government agency presumed to have performed its job correctly. In this context, for example, the court presumes
`that examiners have some expertise in interpreting the prior art and are familiar with the level of skill in the art.”
`David O. Taylor, Clear But Unconvincing: The Federal Circuit’s Invalidity Standard, 21 Fordham Intell. Prop.
`Media & Ent. L.J. 293, 312 (2011) (citing Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1323 (Fed. Cir. 1999)
`(“The presumption of validity under 35 U.S.C. § 282 carries with it a presumption that the Examiner did his duty
`and knew what claims he was allowing.”) (internal quotation marks omitted)).
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`Case 1:19-cv-00859-RTH Document 27 Filed 08/07/20 Page 10 of 36
`
`“Alice/Mayo” test for the two cases from which it was derived. Step one determines “whether
`the claims at issue are directed to one of [the] patent-ineligible concepts.” Alice, 573 U.S. at 217
`(citing Mayo, 556 U.S. at 76–78). Step two considers “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.” Id. (quoting Mayo, 566
`U.S. at 78–79). The Supreme Court describes step two as the search for an “inventive concept.”
`Id. (quoting Mayo, 566 U.S. at 72).
`
`When addressing the patent eligibility of multiple asserted claims, the Court may
`designate a representative claim or claims where the parties are unable to reach an agreement.
`Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir. 2018) (citing Elec. Power Grp. v. Alstom
`S.A., 830 F.3d 1350, 1352 (Fed. Cir. 2016)) (“Courts may treat a claim as representative in
`certain situations, such as if the patentee does not present any meaningful arg