Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 1 of 16 PageID #: 750
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`PAYRANGE INC.,
`
`Plaintiff,
`
`v.
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`CSC SERVICEWORKS, INC.,
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`Defendant.
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`Civil Action No. 1:23-cv-00278-MN
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`JURY TRIAL DEMANDED
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`CSC SERVICEWORKS, INC.’S REPLY BRIEF IN SUPPORT OF ITS PARTIAL MOTION
`TO DISMISS PAYRANGE’S AMENDED COMPLAINT
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`
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`Date: June 23, 2023
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`John C. Phillips, Jr. (# 110)
`Megan C. Haney (#5016)
`PHILLIPS, MCLAUGHLIN & HALL, P.A.
`1200 North Broom Street
`Wilmington, DE 19806
`(302) 655-4200
`jcp@pmhdelaw.com
`mch@pmhdelaw.com
`
`Attorneys for Defendant
`CSC ServiceWorks, Inc.
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`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 2 of 16 PageID #: 751
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`TABLE OF CONTENTS
`
`I.
`
`THE ‘772 PATENT FAILS TO CLAIM PATENT-ELIGIBLE SUBJECT MATTER .......... 1
`
`A.
`
`The ‘772 Patent Fails Alice Step One .......................................................................... 1
`
`1.
`
`2.
`
`3.
`
`Claim 1 is representative of the dependent claims, which only add
`abstract information and conventional components and features. ................... 1
`
`PayRange’s alleged “technological improvements” are neither recited
`in claim 1, nor are they more than features of the abstract idea itself. ............ 3
`
`PayRange’s arguments as to the novelty and non-obviousness of the
`‘772 Patent claims are irrelevant to the § 101 inquiry. .................................... 6
`
`B.
`
`The ‘772 Patent Fails Alice Step Two.......................................................................... 6
`
`II.
`
`PAYRANGE HAS NOT ADEQUATELY PLED INDIRECT OR WILLFUL
`INFRINGEMENT OF THE ‘208, ‘608, AND ‘772 PATENTS ............................................. 9
`
`
`
`i
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`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 3 of 16 PageID #: 752
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Aatrix Software, Inc. v. Green Shades Software, Inc.,
`890 F.3d 1354 (Fed. Cir. 2018) (Moore, J., concurring in the denial of the
`petition for rehearing en banc) ...................................................................................................8
`
`Am. Axle & Mfg., Inc. v. Neapco Holdings LLC,
`967 F.3d 1285 (Fed. Cir. 2020)..................................................................................................4
`
`Atos, LLC v. Allstate Ins. Co.,
`No. 20-CV-06224, 2021 WL 6063963 (N.D. Ill. Dec. 22, 2021) ..............................................2
`
`In re AuthWallet, LLC,
`2023 WL 3330298 (Fed. Cir. 2023)...........................................................................................5
`
`Aylus Networks, Inc. v. Apple, Inc.,
`856 F.3d 1353 (Fed. Cir. 2017)..................................................................................................4
`
`Bridge & Post, Inc. v. Verizon Commc'ns, Inc.,
`778 F. App'x 882 (Fed. Cir. 2019) .............................................................................................8
`
`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014)..................................................................................................5
`
`ChargePoint v. SemaConnect, Inc.,
`920 F.3d 759 (Fed. Cir. 2019)................................................................................................4, 5
`
`Diamond v. Diehr,
`450 U.S. 175 (1981) ...................................................................................................................6
`
`Elec. Power Grp., LLC v. Alstom S.A.,
`830 F.3d 1350 (Fed. Cir. 2016)..................................................................................................3
`
`GeoComply Sol’ns. Inc. v. Xpoint Svcs. LLC,
`2023 WL 1927393 (D. Del. 2023) .............................................................................................9
`
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) .................................................................................................................10
`
`ICON Health & Fitness, Inc. v. Polar Electro Oy,
`243 F. Supp. 3d 1229 (D. Utah 2017), aff’d, 717 F. App’x 1005 (Fed. Cir. 2018) ...................2
`
`In Helios Streaming, LLC v. Vudu, Inc.,
`CV 19-1792-CFC-SRF, 2020 WL 2332045 (D. Del. May 11, 2020) .....................................10
`
`
`
`ii
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`

`

`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 4 of 16 PageID #: 753
`
`Intell. Ventures I LLC v. Cap. One Bank,
`792 F.3d 1363 (Fed. Cir. 2015)..................................................................................................3
`
`Intl. Bus. Machines Corp. v. Zillow Grp.,
`50 F.4th 1371 (Fed. Cir. 2022) ..................................................................................................9
`
`Jackson v. Seaspine Holdings Corp.,
`No. CV 20-1784-RGA, 2022 WL 610703 (D. Del. Feb. 14, 2022) ..........................................9
`
`Kaempe v. Myers,
`367 F.3d 958 (D.C. Cir. 2004) ...................................................................................................4
`
`MONEC Holding AG v. Motorola Mobility, Inc.,
`897 F. Supp. 2d 225 (D. Del. 2012) ...........................................................................................9
`
`Riggs Technology Holdings, LLC v. Cengage Learning, Inc.,
`2023 WL 193162 (Fed. Cir. 2023).............................................................................................8
`
`Robocast, Inc. v. YouTube, LLC,
`CV 22-304-RGA, 2022 WL 16922035 (D. Del. Nov. 14, 2022) ..............................................9
`
`Sanderling Mgt. Ltd. v. Snap Inc.,
`65 F.4th 698 (Fed. Cir. 2023) ....................................................................................................3
`
`SAP Am., Inc. v. InvestPic, LLC,
`898 F.3d 1161 (Fed. Cir. 2018)..................................................................................................6
`
`Secured Mail Sols. LLC v. Universal Wilde, Inc.,
`873 F.3d 905 (Fed. Cir. 2017)....................................................................................................9
`
`Synopsys, Inc. v. Mentor Graphics Corp.,
`839 F.3d 1138 (Fed. Cir. 2016)..................................................................................................6
`
`TDE Petroleum Data Sols., Inc. v. AKM Enterprise, Inc.,
`657 F. App’x 991 (Fed. Cir. 2016) ............................................................................................7
`
`Two-Way Media Ltd. v. Comcast Cable Commun., LLC,
`874 F.3d 1329 (Fed. Cir. 2017)..................................................................................................7
`
`Uniloc USA, Inc. v. ADP, LLC,
`772 F. App'x 890 (Fed. Cir. 2019) .....................................................................................4, 5, 6
`
`Uniloc USA, Inc. v. LG Elecs. USA, Inc.,
`957 F.3d 1303 (Fed. Cir. 2020)..............................................................................................5, 6
`
`Statutes
`
`35 U.S.C. § 101 ....................................................................................................................1, 2, 4, 6
`
`
`
`iii
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`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 5 of 16 PageID #: 754
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`Other Authorities
`
`U.S. Patent No. 10,891,614..............................................................................................................4
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`
`
`iv
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`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 6 of 16 PageID #: 755
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`PayRange’s opposition underscores why the Court should dismiss the ‘772 Patent from
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`this case: PayRange cannot rebut that the claims are purely functional, results-oriented abstract
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`ideas ineligible for patent protection under 35 U.S.C. § 101. Ignoring CSC’s ample case law in
`
`support of ineligibility, PayRange asserts the ‘772 Patent claims are directed to “technological
`
`improvements.” But these “improvements” are (1) implemented using generic, conventional
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`computer technologies, and (2) untethered to the ‘772 Patent claim language. Furthermore, while
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`PayRange contends that the claims supply an inventive concept by pointing to allegations in its
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`Amended Complaint, the Court need not credit those allegations because they are conclusory,
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`unclaimed, contradict the intrinsic evidence, or are otherwise directed to the abstract idea itself.
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`Second, PayRange’s willful blindness argument seeking to establish CSC’s knowledge of
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`the ‘208, ‘608, and ‘772 Patents for indirect infringement is unavailing. PayRange fails to plead
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`facts plausibly suggesting “active efforts” by CSC to avoid knowledge of alleged infringement.
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`Finally, PayRange does not even rebut CSC’s challenge to the sufficiency of PayRange’s
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`threadbare willfulness claims for those same patents. The Court should dismiss them as well.
`
`I.
`
`THE ‘772 PATENT FAILS TO CLAIM PATENT-ELIGIBLE SUBJECT
`MATTER
`
`A.
`
`The ‘772 Patent Fails Alice Step One
`
`1.
`
`Claim 1 is representative of the dependent claims, which only add
`abstract information and conventional components and features.
`
`In its opposition, PayRange claims that CSC characterizes claim 1 of the ‘772 Patent as
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`exemplary “[w]ithout any analysis” of the dependent claims. D.I. 16 at 4. This assertion is
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`incorrect. In its Amended Complaint, PayRange asserted only claims 1 and 4 of the ‘772 Patent
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`against CSC. As such, CSC addressed both claims 1 and 4 in its Motion to Dismiss under 35.
`
`U.S.C. § 101. See D.I. 15 at 13.
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`
`
`1
`
`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 7 of 16 PageID #: 756
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`PayRange now identifies two dependent claims—claims 7 and 9—which it argues are
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`materially distinct from claim 1, such that claim 1 is not representative for the purpose of the
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`Section 101 analysis. But PayRange’s argument is conclusory and based exclusively on attorney
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`argument—PayRange cites neither the Amended Complaint nor case law to support its argument.
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`Neither claim 7 nor 9 meaningfully adds to the abstract idea recited in claim 1—indeed,
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`PayRange does not cite any case law to the contrary. For example, the accelerometer in claim 7 is
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`not unconventional—it is used in precisely the way accelerometers are designed to work. Indeed,
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`the specification of the ‘772 Patent makes clear that the collection and analyzation of accelerometer
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`data (i.e., to determine whether the user is “moving or stationary”), is already a function of the
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`user’s mobile device and operating in its conventional manner to detect motion. ‘772 Patent at
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`21:11-16 (using “accelerometer data from the mobile device 150 . . . the mobile device 150 can
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`determine whether the user is standing relatively still in front of the payment accepting unit 120,
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`or if the user is in motion”). The accelerometer is simply a “conventional sensor[] being used
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`conventionally” and is therefore “insufficient to transform the abstract idea into patent-eligible
`
`subject matter.” ICON Health & Fitness, Inc. v. Polar Electro Oy, 243 F. Supp. 3d 1229, 1239 (D.
`
`Utah 2017), aff’d, 717 F. App’x 1005 (Fed. Cir. 2018); Atos, LLC v. Allstate Ins. Co., No. 20-CV-
`
`06224, 2021 WL 6063963, at *9-10 (N.D. Ill. Dec. 22, 2021) (finding on a motion to dismiss
`
`claims directed to using preexisting smartphone sensors to detect a change speed and direction and
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`take an action based on that detection to be an abstract idea).
`
`Likewise, the addition of coupons targeted to the user of the mobile device based on the
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`transaction, as recited in dependent claim 9, fails to transform the abstract idea of claim 1 into
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`patent-eligible subject matter. This additional limitation is directed to the abstract idea “of
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`providing information—in this case, a processing function—based on meeting a condition.”
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`
`
`2
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`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 8 of 16 PageID #: 757
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`Sanderling Mgt. Ltd. v. Snap Inc., 65 F.4th 698, 703 (Fed. Cir. 2023) (finding claims based on
`
`distributing information based on GPS location directed to an unpatentable abstract idea of
`
`providing information); see also Intell. Ventures I LLC v. Cap. One Bank, 792 F.3d 1363, 1369
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`(Fed. Cir. 2015) (providing different newspaper inserts based on the location of the individual is
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`an abstract idea). In particular, it is directed to “providing information” (targeted coupons) based
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`on “meeting a condition” (performing a transaction)—exactly the type of idea that the Federal
`
`Circuit has repeatedly found to be abstract.1
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`2.
`
`PayRange’s alleged “technological improvements” are neither recited
`in claim 1, nor are they more than features of the abstract idea itself.
`
`At step 1 of the Alice inquiry, PayRange asserts that the ‘772 claims are not directed to an
`
`abstract
`
`idea, but
`
`rather
`
`improvements
`
`in computer
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`technology. The
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`technological
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`“improvements” PayRange identifies, however, are (1) untethered to the claim language; and (2)
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`features of the abstract idea itself.
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`PayRange cites the ‘772 Patent specification for the premise that the ‘772 Patent claims are
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`directed to the technological improvement of facilitating transactions without a persistent network
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`connection between the payment accepting unit and the server. But this alleged technological
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`improvement is unclaimed by the ‘772 Patent, which merely recites that interaction with the user
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`interface of the mobile payment application to complete the transaction is “enabled” “after” the
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`wireless communication path “including” the mobile device and payment accepting unit is
`
`
`1 Nor do the other dependent claims transform the abstract idea of claim 1 into patent-eligible
`subject matter. They merely recite displaying particular types of messages or information (claims
`2, 3, 5, 6, 8, 10, 16, 17, 18, 19), or specify a type of payment accepting unit that, as discussed in
`CSC’s opening brief, the specification acknowledges has long-existed (claims 14, 20). They are
`immaterial to the eligibility analysis of claim 1. See Elec. Power Grp., LLC v. Alstom S.A., 830
`F.3d 1350, 1353 (Fed. Cir. 2016) (“[W]e have treated collecting information, including when
`limited to particular content (which does not change its character as information), as within the
`realm of abstract ideas.”) (citing cases with similar holdings).
`3
`
`
`
`

`

`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 9 of 16 PageID #: 758
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`established. See ‘772 Patent at Claim 1. Nowhere does claim 1 teach the use of a non-persistent
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`network connection between a remote server and payment accepting unit. Nor does claim 1 recite
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`facilitating a transaction without the use of a mobile device, in the absence of a network at the
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`payment accepting unit, or in the absence of a remote server, as PayRange suggests. Therefore,
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`any such technological improvements recited in the ‘772 Patent specification, even if true, are
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`irrelevant because they are embodiments lacking connection to the claims. See Am. Axle & Mfg.,
`
`Inc. v. Neapco Holdings LLC, 967 F.3d 1285, 1293 (Fed. Cir. 2020) (“Features not claimed are
`
`irrelevant as to step 1 or step 2 of the Alice analysis [as] any reliance on the specification must
`
`always yield to the claim language.”) (cleaned up); ChargePoint v. SemaConnect, Inc., 920 F.3d
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`759, 766 (Fed. Cir. 2019) (same).
`
`In addressing the patent eligibility of strikingly similar claims, the PTAB rejected a nearly
`
`identical argument advanced by PayRange and found the claims unpatentable under Section 101.
`
`Specifically, in Post-Grant Review proceedings involving the ‘772 Patent’s parent, U.S. Patent
`
`No. 10,891,614, the PTAB found a claim nearly identical to independent claim 1 of the ‘772 Patent
`
`to be directed to an abstract idea. Ex. A at 5-6, 16-17.2 There, PayRange argued the “challenged
`
`claims focus on improving the functional capabilities of a computer network platform arising in
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`the particular technological architecture of machine-to-machine payment systems for the
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`unattended retail space . . . especially over a non-persistent network connection.” Id. at 21. In
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`
`2 The Court may take judicial notice of these post-grant proceedings as public records of the
`USPTO. See Uniloc USA, Inc. v. ADP, LLC, 772 F. App'x 890, 898 n.3 (Fed. Cir. 2019) (“The
`prosecution history is part of the intrinsic record of the patent and is a matter of public record. It is
`thus subject to judicial notice and may be considered in our de novo review of the district court's
`eligibility analysis.”) (citations omitted); Aylus Networks, Inc. v. Apple, Inc., 856 F.3d 1353, 1362
`n.3 (Fed. Cir. 2017) (“The prosecution history also includes proceedings before the Patent Trial
`and Appeal Board (the ‘PTAB’), such as inter partes review.”); Kaempe v. Myers, 367 F.3d 958,
`965 (D.C. Cir. 2004) (documents recorded by the Patent and Trademark office “are public records
`subject to judicial notice”).
`
`4
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`
`
`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 10 of 16 PageID #: 759
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`rejecting this argument, the PTAB reasoned that PayRange’s stated technological improvements
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`“are not tied to the claimed subject matter” because they do “not require a non-persistent network
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`nor [are they] so narrow as to preclude the use of a persistent network connection.” Id. at 21-22.
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`Moreover, as is the case with claim 1 of the ‘772 Patent, the PTAB found that while the
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`specification of that patent “does describe a solution to a non-persistent network connection
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`problem, independent claim 1 was drafted in such a way as to not embody that solution” because
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`it merely concerns the “interactions between the [payment accepting unit] and the mobile device.”
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`Id. at 23. That is precisely the situation here.
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`Even if these “improvements” were embodied by the claims, they are features of the
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`abstract idea itself. The use of a mobile device for making payments on a machine is simply a
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`digital implementation of a longstanding economic practice that is performed ordinarily in the
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`stream of commerce, and is therefore an abstract idea. See In re AuthWallet, LLC, 2023 WL
`
`3330298, *3 (Fed. Cir. 2023). The idea is implemented with the use of only “conventional
`
`computer technology.” buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1352 (Fed. Cir. 2014); see
`
`also ChargePoint, 920 F.3d at 774 (finding claims that “merely add generic networking” to
`
`transactions
`
`to be abstract). PayRange has not—and cannot—distinguish
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`the alleged
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`“improvements” of the ‘772 Patent from the benefits of using generic network technology like
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`Bluetooth or Wifi to connect devices. Rather, the claims fall squarely within the categories of
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`subject matter that the Federal Circuit has consistently found patent ineligible. See D.I. 15 at 8-10.
`
`The sole case upon which PayRange relies to support its argument that the ‘772 claims
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`satisfy Alice step 1 is inapposite. In Uniloc, the Federal Circuit found that the patent claims at issue
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`were directed to an improvement in computer functionality—namely, reducing latency
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`experienced by parked secondary stations in communication systems. See Uniloc USA, Inc. v. LG
`
`
`
`5
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`

`

`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 11 of 16 PageID #: 760
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`Elecs. USA, Inc., 957 F.3d 1303, 1307-08 (Fed. Cir. 2020). Unlike in Uniloc, PayRange has cited
`
`nothing—including in the specification—to suggest that the ‘772 Patent improves the functionality
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`of any of the generic computer components and network protocols used to implement the
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`functional, results-oriented ideas taught by the ‘772 Patent claims. Furthermore, unlike Uniloc, the
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`‘772 Patent specification does not describe improvements to the functionality of the technology
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`actually claimed by the ‘772 Patent. See Uniloc, 957 F.3d at 1305. Accordingly, the claims fail
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`step 1 of the Alice analysis.
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`3.
`
`PayRange’s arguments as to the novelty and non-obviousness of the
`‘772 Patent claims are irrelevant to the § 101 inquiry.
`
`PayRange also argues that because the USPTO found the independent claims of the ‘772
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`Patent to be novel and non-obvious over prior art references, that renders these claims patent
`
`eligible under Section 101. Opp. Br. at 7. PayRange’s assertion is wrong as a legal matter and
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`invites the Court to commit error. The fact that the USPTO found the ‘772 Patent claims novel and
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`non-obvious over prior art references has no bearing on the eligibility analysis. Diamond v. Diehr,
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`450 U.S. 175, 188-89 (1981) (“The ‘novelty’ of any element or steps in a process, or even of the
`
`process itself, is of no relevance in determining whether the subject matter of a claim falls within
`
`the § 101 categories of possibly patentable subject matter.”). PayRange cites no case law to the
`
`contrary, and its argument fails as a matter of law. See Synopsys, Inc. v. Mentor Graphics Corp.,
`
`839 F.3d 1138, 1151 (Fed. Cir. 2016) (the search for an inventive concept is distinct from
`
`demonstrating novelty); SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018)
`
`(“We may assume that the techniques claimed are groundbreaking, innovative, or even brilliant,
`
`but that is not enough for eligibility.”).
`
`B.
`
`The ‘772 Patent Fails Alice Step Two
`
`For step two of the Alice framework, PayRange contends that the conventional components
`
`
`
`6
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`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 12 of 16 PageID #: 761
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`recited in the claims nonetheless supply an inventive concept sufficient to confer patentability
`
`because the components are combined in an unconventional order. PayRange’s argument is
`
`unavailing. The steps of the ‘772 Patent claims are conventionally ordered. For example, claim 1
`
`requires identifying a payment accepting unit by a mobile device, displaying the information
`
`associated with the payment accepting unit, establishing a wireless connection between the mobile
`
`device and payment accepting unit, and then enabling user interaction with the mobile payment
`
`application. ‘772 Patent at 47:2-41. PayRange makes no specific claim that this order of steps is
`
`unconventional. Indeed, the logical order of steps would include establishing a wireless
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`communication between the machine and the user’s mobile device before completing a transaction
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`on that machine. Such a conventional ordering of steps cannot form the basis for an “inventive
`
`concept.” Two-Way Media Ltd. v. Comcast Cable Commun., LLC, 874 F.3d 1329, 1339 (Fed. Cir.
`
`2017) (no inventive concept where claim “use[d] a conventional ordering of steps—first
`
`processing the data, then routing it, controlling it, and monitoring its reception—with conventional
`
`technology to achieve its desired result”); see also TDE Petroleum Data Sols., Inc. v. AKM
`
`Enterprise, Inc., 657 F. App’x 991, 993 (Fed. Cir. 2016) (no inventive concept where steps were
`
`“the most ordinary of steps in data analysis and were recited in the ordinary order.”) (cleaned up).
`
`Even if the use of a “non-persistent” network connection were recited in claim 1, it would
`
`not be an “improvement,” as it would be accomplished using conventional and previously-known
`
`protocols. According to the ‘772 Patent specification, “non-persistent” network technologies
`
`include conventional technologies such as “Bluetooth . . . Near-field communication (NFC), Ultra
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`Wideband (UWB), radio frequency identification (RFID), infrared wireless, induction wireless.”
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`‘772 Patent at 9:65-10:11. The specification also states that “any wired or wireless technology that
`
`could be used to communicate a small distance” can be used. Id. (emphasis added). Because the
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`
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`7
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`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 13 of 16 PageID #: 762
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`specification itself admits that “non-persistent” network connections consist of generic
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`technologies, this concept is not an “inventive step” rendering the ‘772 Patent eligible under the
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`Alice inquiry, even if this step were recited in the claim language. See Aatrix Software, Inc. v.
`
`Green Shades Software, Inc., 890 F.3d 1354, 1356 (Fed. Cir. 2018) (Moore, J., concurring in the
`
`denial of the petition for rehearing en banc) (“where the specification admits the additional claim
`
`elements are well-understood, routine, and conventional, it will be difficult, if not impossible, for
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`a patentee to show a genuine dispute.”); Riggs Technology Holdings, LLC v. Cengage Learning,
`
`Inc., 2023 WL 193162, *4 (Fed. Cir. 2023) (affirming dismissal where the specification admits
`
`that the claim elements are well-understood, routine, and conventional).
`
`PayRange also attempts to generate a factual dispute by providing in its Amended
`
`Complaint conclusory allegations of inventiveness. For instance, PayRange’s Amended Complaint
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`lists “inventive concepts” such as: the ability for the mobile device to identify payment accepting
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`units in close proximity, the ability to use a long-range transceiver for sending transaction
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`information to a server, and the fact that payment is supposedly triggered before a wireless
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`communication path is established D.I. 12, ¶¶ 84-86. But, as discussed above, each of these
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`concepts is either unclaimed by the ‘772 Patent or an implementation of the abstract idea using
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`generic technology. ‘772 Patent at 9:65-10:11 (reciting using known short-range communications
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`to identify payment accepting units by the mobile device); 9:46-10:16; 38:66-39:8 (describing the
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`“long-range transceiver” communication as known GSM, CDMA, or Wi-Fi protocols—not any
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`new protocol or improvement in long-range communication).
`
`The Court should therefore not credit PayRange’s allegations at Alice step two because
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`they either state legal conclusions, contradict the claims and specification, or simply recite the
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`abstract idea found at step one. See Bridge & Post, Inc. v. Verizon Commc'ns, Inc., 778 F. App'x
`
`
`
`8
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`

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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 14 of 16 PageID #: 763
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`882, 894 (Fed. Cir. 2019) (district court “was not required to accept [the plaintiff]’s legal
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`conclusions as true,” including “repeated characterizations of its inventions as ‘technical
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`innovations’”); Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905, 913 (Fed. Cir.
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`2017) (At the pleadings stage, “a court need not accept as true allegations that contradict matters
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`properly subject to judicial notice or by exhibit, such as the claims and the patent specification.”);
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`Intl. Bus. Machines Corp. v. Zillow Grp., 50 F.4th 1371, 1379 (Fed. Cir. 2022) (claims to “an
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`abstract idea implemented on generic computer components, without providing a specific technical
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`solution beyond simply using generic computer concepts in a conventional way” do not suffice at
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`step two); GeoComply Sol’ns. Inc. v. Xpoint Svcs. LLC, 2023 WL 1927393, *13 (D. Del. 2023).
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`PayRange should not be permitted to delay resolution of the eligibility determination by
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`manufacturing factual assertions in its Amended Complaint rooted in legal conclusions or that
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`contradict the intrinsic record. The Court should dismiss the ‘772 Patent as directed to patent
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`ineligible subject matter.
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`II.
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`PAYRANGE HAS NOT ADEQUATELY PLED INDIRECT OR WILLFUL
`INFRINGEMENT OF THE ‘208, ‘608, AND ‘772 PATENTS
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`To support its pleading of indirect infringement, PayRange continues to rely on factual
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`allegations that cannot establish pre-suit knowledge of the ‘208, ‘608, and ‘772 Patents as a matter
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`of law. See Jackson v. Seaspine Holdings Corp., No. CV 20-1784-RGA, 2022 WL 610703, at *5
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`(D. Del. Feb. 14, 2022); MONEC Holding AG v. Motorola Mobility, Inc., 897 F. Supp. 2d 225 (D.
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`Del. 2012). Notably, these include factual allegations pre-dating the issuance of the ‘208, ‘608,
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`and ‘772 Patents and are therefore irrelevant to the pre-suit knowledge inquiry. Robocast, Inc. v.
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`YouTube, LLC, CV 22-304-RGA, 2022 WL 16922035, at *3 (D. Del. Nov. 14, 2022).
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`Unable to plead factual allegations supporting pre-suit knowledge of the ‘208, ‘608, and
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`‘772 Patents, PayRange continues to allege that CSC was willfully blind to the existence of these
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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 15 of 16 PageID #: 764
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`patents. D.I. 16, p. 11. But, as outlined in more detail in CSC’s Opening Brief on this issue (D.I.
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`15 at 19-20), willful blindness requires “active efforts” by CSC “to avoid knowing about the
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`infringing nature of the activities.” Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 770
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`(2011). PayRange has failed to allege any “deliberate action” to avoid such knowledge. See In
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`Helios Streaming, LLC v. Vudu, Inc., CV 19-1792-CFC-SRF, 2020 WL 2332045, *8-9 (D. Del.
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`May 11, 2020), report and recommendation adopted, CV 19-1792-CFC/SRF, 2020 WL 3167641
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`(D. Del. June 15, 2020). The factual allegations cited by PayRange allege only that CSC was aware
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`that PayRange’s products were patented generally when it released its own products—not that
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`CSC took some “deliberate action” to avoid knowing about the ‘208, ‘608, and ‘772 Patents. D.I.
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`12 at ¶¶ 8-12, 17, 20. In fact, the allegations in PayRange’s Amended Complaint suggest the
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`opposite—that CSC did purportedly perform some investigation. D.I. 12 at ¶¶ 21-22.
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`Likewise, PayRange has not plausibly pled pre-suit knowledge with its allegations that it
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`sent PayRange “a detailed presentation discussing its intellectual property” twelve days before it
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`filed this lawsuit. This timing stands in stark contrast to the single case cited by PayRange on this
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`issue, Bench Walk Lighting LLC v. LG Innotek Co., where a pre-suit letter was sent over seven
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`months before commencing the lawsuit. No. CV 20-51-RGA, 2022 WL 606287, *2 (D. Del. Jan.
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`4, 2022). Rather, PayRange’s March 3 letter was sent in direct anticipation of the litigation that
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`began twelve days later—not as a genuine notification of purported infringement to CSC.
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`Finally, CSC is not seeking to dismiss the willful infringement allegations regarding the
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`‘045 patent on the pleadings. PayRange, however, makes no arguments seeking to uphold its
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`threadbare allegations of willful infringement regarding the ‘208, ‘608, and ‘772 Patents, and thus
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`apparently concedes that its willfulness claims for those patents fail on the pleadings. The Court
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`should dismiss them.
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`Case 1:23-cv-00278-MN Document 18 Filed 06/23/23 Page 16 of 16 PageID #: 765
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`Date: June 23, 2023
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`Respectfully submitted,
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`/s/ John C. Phillips, Jr.
`John C. Phillips, Jr. (# 110)
`Megan C. Haney (#5016)
`PHILLIPS, MCLAUGHLIN & HALL, P.A.
`1200 North Broom Street
`Wilmington, DE 19806
`(302) 655-4200
`jcp@pmhdelaw.com
`mch@pmhdelaw.com
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`Attorneys for Defendant CSC ServiceWorks, Inc.
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`11
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