Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 1 of 9 PageID #: 18559
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`YODLEE, INC.,
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`Plaintiff,
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`v.
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`Civil Action No. 14-1445-LPS-CJB
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`PLAID TECHNOLOGIES INC.,
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`Defendant.
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`·MEMORANDUM ORDER
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`. At Wilmington this 27th day of January, 2017:
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`1.
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`_This is a patent infringement case. ·On December 1, 2014, plaintiff Y odlee, Inc.
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`("Yodlee") filed a complaint alleging infringement of U.S. Patent Nos~ 6,199,077 (the "'077
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`patent"), 6,317~783 (the "'783 patent"), 6,510,451 (the "'451 patent"), 7,263,548 (the "'548
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`patent"), 7,424,520 (the "'520 patent"), 7,752,535 (the "'535 patent"), and 8,266;515 (the "'515
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`patent").
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`2.
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`On January 23, 2015, defendant Plaid Technologies, Inc. ("Plaid") moved to
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`dismiss under Federal Rule of Civil Procedure ("Rule(s")) 12(b)(6). (D.I. 11) Plaid contends
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`that all ofthe asserted claims are directed to patent-ineligible subject matter. Plaid's motion to
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`dismiss was referred to United States Magistrate Judge Christopher J. Burke for a report and
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`recommendation. (See generally D .I. 7)
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`3.
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`On May 23, 2016, Judge Burke issued a 65-page Report and Recommendation,
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`concludingthat Plaid's motion to dismiss should be granted in part and denied in part. (See D.I.
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`185 ("R&R")) The parties filed their objections to the R&R on June 9,.2016 (see D.I. 198, 199),
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`and their responses on June 27, 2016 (see D.I. 210, 211).
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`Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 2 of 9 PageID #: 18560
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`4.
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`On October 12, 2016, Plaid filed a motion for summary judgment. (D.I. 264)
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`Among other requested relief, Plaid seeks judgment of patent ineligibility wi~h respect to. all
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`asserted claims of the seven patents in suit. (See D.I. 265 at 3-18)1
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`5.
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`Evaluating a motion to dismiss under Rule l 2(b )( 6) requires the Court tb accept as
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`true all material allegations of the complaint. See Spru(ll v. Gillis, 372 F.3d 218, 223 (3d Cir.
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`2004). The Court may grant such a motionto dismiss only if, after·"accepting all well-pleaded
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`allegations in the complaint as true, and viewing them in the light most favorable to plaintiff,
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`plaintiff is not entitled to relief." Maio v. Aetna, Inc., 221 F.3d 472, 482 (3d Cir. 2000) (internal
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`quotation marks omitted).
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`6.
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`Summary judgment is appropriate if "there is no genuine dispute as to any
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`material fact and the movant is entitled to judgment as a matter oflaw." Rule 56(a). The
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`moving party bears the burden of demonstrating the absence of a genuine issue of material fact.
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`See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986).
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`7~
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`Pursuant to 35 U.S.C. § 101, "[w]hoever invents or discovers any new and useful
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`process, machine, manufacture, or composition of matter, or any new and-useful improvement
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`thereof, may obtain a patent therefor." There are three exceptions to§ 101 's broad patent-
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`eligibility principles: "laws of nature, physical phenomena, and abstract ideas." Diamond v.
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`Chakrabarty, 447 U.S. 303, 309 (1980). Relevant here is the third category, "abstract ideas,"
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`which "embodies the longstanding rule that an idea of itself is not patentable." Alice Corp. Pty.
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`Ltd. v. CLS Bank Int'!, 134 S. Ct. 2347, 2355 (2014) (internal quotation marks omitted). In
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`1_The Court will address the remainder of the issues presented in Plaid's motion for
`summary judgment at a later time, in one or more separate opinions and/or orders.
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`2
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`Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 3 of 9 PageID #: 18561
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`Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), the
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`Supreme Court set out a two-step "frameworkfor distinguishing patents that claim· laws of·
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`nature, natural phenomena, and abstract ideas from those that claii;n patent-eligible applications
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`of those concepts." Alice, 134 S. Ct. at 2355. First, courts must determine if the claims at issue
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`are directed at a patent-ineligible concept- in this case, an abstract idea ("step l"). See id. If so,
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`the next step is to look for an "'inventive concept' - i.e., an element or combination of elements
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`that is sufficient to ensure that the patent in practice amounts to significantly more than a patent
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`upon the [ineligible concept] itself' ("step 2"). Id. The two steps are "plainly related" and
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`"involve overlapping scrutiny of the content of the claims." Elec. Power Grp., LLC v. Alstom
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`S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016).
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`8.
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`The Court has carefully reviewed the R&R and all rele~ant filings and has
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`evaluated Plaid's motion to dismiss de novo. See Masimo Corp. v. Philips Elec. N Am. ·corp.,
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`62 F. Supp. 3d 368, 379 (D. Del. 2014); 28 U.S.C. § 636(b)(l); Rule 72(b)(3). For the reasons
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`given in Judge Burke's detailed§ 101 analysis and further explained below, IT IS HEREBY
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`ORDERED THAT:
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`· (a)
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`both parties' objections to the R&R (see D.l. 198, 199) are
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`(b)
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`(c)
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`OVERRULED;
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`the R&R (D.I. 185) is ADOPTED in full; and
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`Plaid's motion to dismiss (D.I. 11) is GRANTED in part and DENIED in
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`part.
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`9.
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`Plaid's motion for summary judgment as it relates to ineligibility (D.I. 264; see
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`D.I. 265 at 3-18) is GRANTED in part, DENIED in part, and DENIED AS MOOT in part.
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`3
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`Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 4 of 9 PageID #: 18562
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`10.
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`As an initial matter, the Court is unpersuaded by Plaid'.s argument that Judge
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`. Burke incorrectly interpreted and applied Enjish, LLC v. Mtcrosoft Corporation, 822F.3d 1327
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`(Fed. Cir. 2016). (See generally D.I. 199 at 5-12) The Court does not read the R&R to "require .
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`every important aspect of the claim to be captured in the asserted abstract idea," as Plaid
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`suggests. (D.I. 199 at 5 (internal quotation marks omitted)) Rather, Judge Burke's analysis
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`properly considered, for example, "the key concept in the claim" and the "rationale for the
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`invention" underlying the '783 patent. (R&R at 27 (emphasis added)) An invention's
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`underlying motivation (as incorporated by and expressed in the claim language) is an important .
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`factor in the step 1 analysis of whether a claim is "directed to an improvement to computer
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`functionality:" Enjish, 822 F.3d at 1335.
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`11.
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`'077 patent. The Court agrees with Judge Burke's analysis and.recommendation
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`that Plaid's motion to dismiss be denied as to claim 7 of the '077 patent. (See R&R at 10-24)
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`With respect to Y odlee' s contention that Judge Burke should have found the claim patent eligible
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`based on Mayo step 1 alone (see D.I. 198 at 2-5), and Plaid's related objection to the R&R's
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`omission of a firm step 1 conclusion (see D.I. 199 at 8), the Court finds no error in the R&R's
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`reliance on the step 2 "inventive concept" analysis as the basis to resolve the issue of daim 7' s
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`eligibility.2 The Court also overrules Plaid's objection as it pertains to the R&R's step 2 analysis
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`of the same claim. The Court is not persuaded by Plaid's assertion that the '"site-specific script'
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`·element adds nothing more than the general-idea of having some script ... for each site." (D.I.
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`2The Court disagrees with Plaid's assertion that the R&R inappropriately "stop[ped] short
`of considering whether the concept to which it finds the '077 patent to actually be directed ... is
`abstract." (D.I. 199 at 8) The Court further finds Plaid's similar objections with respect to the
`R&R's analysis of the '783, '535, and '515 patents unavailing.
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`4
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`Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 5 of 9 PageID #: 18563
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`199 at 9 (emphasis omitted)) Although the claim language at issue in DDR Holdings, LLC v.
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`Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), was more detailed than the language at issue
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`here, Plaid's objection does not account fully for this site-specific script's operation by
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`"extract[ion of] data values ... based on the site's logic and structure," upon which the R&R
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`relied. (D.I. 96 at 14; see R&R at 20, 23 n.13)
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`Nor does the record developed in connection with the summaryjudgment motion warrant
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`a different result. Even assuming Plaid has shown the claim is directed to an abstract idea at step
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`1, the record reflects a genuine ·factual dispute over whether the software gathering agent as
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`· construed was "well-understood, routine, [or] conventional" at the time of the invention.
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`Bascom Glob. Internet Servs., Inc. v. AT&T MobilityLLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016)
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`-(internal quotation marks omitted). The Court is unconvinced by Plaid's attempt to brush this
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`difference aside as immaterial. (See D.I. 300 at 2-3)
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`Therefore, Plaid's Rule 12(b)(6) and Rule 56 challenges to the asserted '077 patent
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`claims' § 101 eligibility are both DENIED.
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`12.
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`'783 patent. The Court agrees with Judge Burke's analysis and recommendation
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`that Plaid's motion to dismiss be denied with respect to claim 1 of the '783 patent. (See R&R at
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`24-33) First, the Court agrees with the R&R's conclusion that Plaid failed to carry its burden at
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`step 1 because its proposed abstract idea ("retrieving and storing personal information from
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`multiple sources") failed to capture a key concept of the claim. (See, e.g., R&R at 28 ("[T]he
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`claim ... is directed to a method of retrieving a particular type of personal information: that
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`which would otherwise be blocked off behind a wall of security, such that verification of one's
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`identity was necessary to access it.")) Second, the Court finds no error in the R&R's step 2
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`5
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`Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 6 of 9 PageID #: 18564
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`conclusion or its reliance on DDR Holdings in reaching that condusion.
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`·In addition, as with the '-077 patent, the summary judgment record does not compel a
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`different outcome. Plaid has not shown lack of a genuine, material factual dispute over whether
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`the asserted claims' limitations, "taken together as· an ordered combination, ... recite an
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`· invention that [was] not merely the routine or conventional use of the Internet." DDR Holdings,
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`773 F.3d at 1259. It remains a close question whether claim 1 sufficiently "speciflies] how" the
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`inventive outcome is achieved, id. at 1258; a reasonable juror.could find for either side on this
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`dispute. Even Plaid's expert, Dr. Mowry, opined that the claim's use of a "protocol" (or a
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`"software script" under the Court's construction) is "nearly inherent." (D.I. 266-2 at 117of259
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`if 272) See generally Intellectual Ventures L LLC v. Motorola Mobility LLC, 81 F. Supp. 3d 356,
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`369 (D. Del. 2015) ("Even though claim 1 itself does not provide a detailed explanation of how
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`packet headers are used to allocate the bandwidth, the inventive concept lies in the limitation of
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`using packet headers to allocate bandwidth, not in the details of implementation.").
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`Plaid's Rule 12(b)(6) and Rule 56 challenges to the§ 101 eligibility of the asserted claims
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`of the '783 patent are both DENIED.
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`13.
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`'451 patent. The Court agrees with Judge Burke's analysis and recommendation
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`that Plaid's motion to dismiss be granted as to the sole asserted claim of the '451 patent. (See
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`R&R at 33-44, 64) The Court is unpersuaded by Yodlee's assertion that Plaid's proffered
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`abstract idea is "untethered from explicit claim elements." (D.I. 198 at 6) For the reasons
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`outlined in the R&R, the Court is also unpersuaded by Y odlee' s argument that claim 8 of the
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`'451 patent meets the specificity standards set out in DDR Holdings and other relevant cases.
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`While preemption is an underlying "concern that drives the exclusionary principle," Alice, 134 S.
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`6
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`Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 7 of 9 PageID #: 18565
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`Ct. at 2354, Yodlee's contention that the R&R "did not properly consider" the issue is unavailing
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`(D.I. 198 at 8). See generally Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379
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`(Fed. Cir. 2015), cert. denied, 136 S. Ct. 2511 (2016) ("Where a patent's claims are deemed only
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`·to disclose patent ineligible subject matter under the Mayo framework ... preemption concerns
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`are fully addressed and made moot.").
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`For at least these reasons, as to the§ 101 subject matter eligibility of claim 8 of the '451
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`patent, Plaid's motion to dismiss is GRANTED and its summary judgment motion is DENIED
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`AS MOOT.
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`14.
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`'548 and '520 patents. For at least the reasons given in the R&R, the Court
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`agrees with Judge Burke's recommendation that Plaid's motion to dismiss be granted as to claim
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`20 of the '548 patent (see R&R at 44-54, 64), and overrules Yodlee's objections (which bear
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`similarities to its objections relating to the '451 patent, which the Court has also overruled).3
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`Accordingly, as to claim 20 of the '548 patent, Plaid's motion to dismiss is GRANTED and its
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`motion for summary judgment of ineligibility is DENIED AS MOOT.
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`Dependent claims 36 of the '548 patent and 38 of the '520 patent4 add aggregation and
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`synchronization limitations to the independent claims from which they depend. The patents'
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`3The Court overrules Plaid's objection to the R&R's refusal to address the eligibility of
`claims 36 of the '548 patent and 38 of the '520 patent. (See D.l. 199 at 3-5) As the R&R noted,
`the briefing on Plaid's motion to dismiss contained little substantive analysis addressing the
`additional limitations appearing in these dependent claims. (See R&R at 64)
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`4The R&R also found claim 21 of the '520 patent ineligible. However, as ofYodlee's ·
`March 4; 2016 Election of Asserted Claims (see D.I. 153-2 at 146-48of149), that claim was no
`longer asserted. (See also D.I. 265 at 14 ("Yodlee asserts independent method claim 20 of the·
`'548 Patent, along with dependent claims 36 of the '548 Patent and 38 of the '520 patent."))
`Therefore, the Court need not determine the patent eligibility of claim 21.
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`7
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`Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 8 of 9 PageID #: 18566
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`specifications disclose the possibility of a "synchronization service" using an "algorithm enabled
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`to adaptively minimize round trip messages" by computing Cyclic Redundancy Check codes.
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`(E.g., '548 patent at 4:19-34) But the claims themselves are not so limited. Like the independent
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`claims from which they depend, the asserted dependent claims use "broad, functional language"
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`and remain largely "focused on the idea of translating data into a new form" while providing
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`little guidance as to "how that translation must occur." (R&R at 51 (emphasis omitted)) The
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`Court, therefore, finds that claim 36 of the '548 patent and claim 38 of the '520 patent are
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`directed to an abstract idea under step 1.
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`The difficult question at step 2 is whether the aggregation and synchronization limitations
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`describe something more than a "procedure or structure common to every means of
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`accomplishing a given result." Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841F.3d1288,
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`1311 (Fed. Cir. 2016). On this point, Plaid has not met its burden of showing that the
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`synchronization limitations are not inventive (due to inherency). See generally id. While Plaid
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`makes a strong showing, the Court cannot conclude at this point that no reasonable juror could
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`find against Plaid on this (and potentially other) disputes.
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`Accordingly, Plaid's motion for summary judgment of ineligibility of claim 36 of the
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`'548 patent and claim 38 of the '520 patent is DENIED.
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`15.
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`'535 and '515 patents. The Court agrees with Judge Burke's analysis and
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`recommendation that Plaid's motion to dismiss be denied as to claim 6 of the '535 patent and
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`claim 7 of the '515 patent. (See R&R at 54-63) Specifically, the Court agrees with the R&R's
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`conclusion that Plaid failed to meet its burden at step 1 because its proposed abstract idea fails to
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`capture key aspects of the claims. (See R&R at 61)
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`8
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`Case 1:14-cv-01445-LPS Document 332 Filed 01/27/17 Page 9 of 9 PageID #: 18567
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`The factual record and more developed arguments presented to the Court at the summary .
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`judgment stage do not merit a different result. Instead, the Court agrees with Yodlee that Plaid's
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`alternative formulation5 is not abstract. The claims are directed tobuilding upon-the '077
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`patent's claimed technological improvement through a transaction categorization system that
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`shows probabilistic growth and improvement. As Judge Burke observed, it is difficult to identify
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`a real-world analogue to the claimed subject matter, particularly when the limitations are
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`considered in combination, which supports a conclusion that the claims are not patent ineligible.
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`(SeeR&R at 61)
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`Plaid's Rule 12(b)(6) and Rule 56 challenges to the asserted '-535 and '515 patent claims'
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`§ 101 subject matter eligibility are DENIED.
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`HON. LEONARD P. STXRK
`UNITED STATES DISTRICT COURT
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`5"[I]n the alternative, the '535.and '515 Patents are directed to the abstract idea of
`categorizing and summarizing past transactions, and using past transaction information to predict
`future transactions, wherein the categorization system grows and improves its ability to do its
`job, based on the consistent incorporation of new information." (D.I. 265 at 16-17 (emphasis
`omitted))
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`9
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