Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 1 of 66 PageID: 1905
`
`
`Liza M. Walsh
`Hector D. Ruiz
`Eleonore Ofosu-Antwi
`CONNELL FOLEY LLP
`One Newark Center
`1085 Raymond Boulevard, 19th Floor
`Newark, New Jersey 07102
`(973) 757-1100
`
`OF COUNSEL:
`Adam R. Alper (admitted phv)
`KIRKLAND & ELLIS LLP
`555 California Street
`San Francisco, CA 94104
`(415) 439-1400
`
`Gianni Cutri (admitted phv)
`KIRKLAND & ELLIS LLP
`300 North LaSalle
`Chicago, IL 60654
`(312) 862-2000
`
`
`Michael W. De Vries (admitted phv)
`KIRKLAND & ELLIS LLP
`333 South Hope Street
`Los Angeles, CA 90071
`(213) 680-8400
`
`Jared Barcenas (admitted phv)
`KIRKLAND & ELLIS LLP
`601 Lexington Ave.
`New York, NY 10022
`(212) 446-4800
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`
`ORAL ARGUMENT
`REQUESTED
`
`
`Civil Action No.
`1:15-cv-07025-RBK-JS
`
`Filed Electronically
`
`
`
`
` )
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`
`EAGLE VIEW TECHNOLOGIES, INC.,
`and PICTOMETRY INTERNATIONAL
`CORP.,
`
`
`
`
`XACTWARE SOLUTIONS, INC., and
`VERISK ANALYTICS, INC.,
`
`
`
`
`Plaintiffs,
`
`Defendants.
`
`
`v.
`
`
`
`PLAINTIFFS’ BRIEF IN OPPOSITION TO DEFENDANTS’ MOTION TO
`DISMISS PLAINTIFFS’ COMPLAINT UNDER 35 U.S.C. §101
`
`
`
`

`

`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 2 of 66 PageID: 1906
`
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`INTRODUCTION ..................................................................................... 1
`STATEMENT OF FACTS ........................................................................ 4
`A.
`EV Pioneers The Field Of Rooftop Aerial Measurement ................... 4
`B.
`EV Launches In January 2008 To Immediate Success ....................... 5
`C.
`EV And Pictometry Merge In January 2013....................................... 6
`D.
`EV’s Relationship With Xactware And Verisk .................................. 6
`
`E.
`
`Verisk Recognizes The Value Of EV’s Technology And
`Unsuccessfully Tries To Acquire EV ................................................. 7
`III. ARGUMENT ............................................................................................. 9
`A.
`Legal Standard ................................................................................... 9
`B.
`Defendants’ Section 101 Challenge To 153 Claims Should Not
`Be Summarily Resolved On A Motion To Dismiss ...........................11
`The ‘436 Patent Claims Eligible Subject Matter ...............................13
`C.
`The ‘376, ‘770, And ‘840 Patents Claim Eligible Subject Matter ......28
`D.
`The ‘737, ‘454, And ‘152 Patents Claim Eligible Subject Matter ......42
`E.
`The ‘880 Patent Claims Eligible Subject Matter ...............................54
`F.
`The ‘732 Patent Claims Eligible Subject Matter ...............................57
`G.
`IV. CONCLUSION .........................................................................................60
`
`
`
`
`
`
`
`
`
`i
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`

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`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 3 of 66 PageID: 1907
`
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Affinity Labs of Texas, LLC v. DirectTV, LLC,
`109 F. Supp. 3d 916 (W.D. Tex. 2015) ..............................................................10
`Alice Corp. Pty. v. CLS Bank Int’l,
`134 S. Ct. 2347 (2014) ................................................................................ passim
`Ariosa Diagnostics, Inc. v. Sequenom, Inc.,
`788 F.3d 1371 (Fed. Cir. 2015) ..........................................................................49
`Bilski v. Kappos,
`561 U.S. 593 (2010) ...........................................................................................19
`Boar’s Head Corp. v. DirectApps, Inc.,
`No. 2:14-cv-01927, 2015 WL 4530596 (E.D. Cal. July 28, 2015)......................12
`Broadband iTV v. Oceanic Time Warner Cable, LLC,
`--- F. Supp. 3d ---, 2015 WL 5768943 (D. Haw. Sept. 29, 2015) .......................10
`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014) .............................................................. 25, 57, 60
`Cf Wireless Media Innovations, LLC v. Maher Terminals, LLC,
`100 F. Supp. 3d 405 (D.N.J. 2015) .....................................................................11
`Chamberlain Group, Inc. v. Linear LLC,
`114 F. Supp. 3d 614 (N.D. Ill. 2015) ........................................................... passim
`CMG Fin. Servs., Inc. v. Pac. Trust Bank, F.S.B.,
`50 F. Supp. 3d 1306 (C.D. Cal. 2014)
`aff’d sub nom. CMG Fin. Servs., Inc. v. Pac. Trust Bank,
`616 F. App’x 420 (Fed. Cir. 2015) .....................................................................26
`Content Extraction v. Wells Fargo Bank,
`776 F.3d 1343 (Fed. Cir. 2014) .................................................................... 33, 60
`ContourMed Inc. v. Am. Breast Care L.P.,
`No. 15-cv-2769, 2016 WL 1059531 (S.D. Tex. Mar. 17, 2016) .................. passim
`Data Distrib. Techs., LLC v. BRER Affiliates, Inc.,
`No. 12-cv-4878, 2014 WL 4162765 (D.N.J. Aug. 19, 2014) .................. 11, 12, 27
`DataTern, Inc. v. Microstrategy, Inc.,
`No. 11-cv-11-11970, 2015 WL 5190715 (D. Mass. Sep. 4, 2015).......... 30, 33, 55
`
`
`
`ii
`
`

`

`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 4 of 66 PageID: 1908
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`
`
`
`Diamond v. Diehr,
`450 U.S. 175 (1981) .................................................................................... passim
`Digitech Image Techs., LLC v. Electronics for Imaging, Inc.,
`758 F.3d 1344 (Fed. Cir. 2014) ..........................................................................25
`E. Coast Sheet Metal v. Autodesk, Inc.,
`Case No. 12-cv-517, 2015 WL 226084 (D.NH. Jan. 15, 2015) ..........................18
`Eagle View Technologies, Inc. v. Xactware Solutions, Inc.,
`W.D. Wash., Case No. 2:12-cv-01913-RSM ....................................................... 7
`Encyclopedia Britannica, Inc. v. Dickstein Shapiro LLP,
`No. 10-cv-454, 2015 WL 5093798 (D.D.C. Aug. 27, 2015) ...............................55
`Gottschalk v. Benson,
`409 U.S. 63 (1972) ................................................................................. 15, 19, 41
`Intellectual Ventures I LLC v. Erie Indem. Co.,
`No. 14-cv-220, 2015 WL 5686643 (W.D. Pa. Sept. 25, 2015) ...........................55
`Intellectual Ventures I v. Capital One,
`792 F.3d 1363 (Fed. Cir. 2015) .............................................................. 25, 56, 60
`Intellectual Ventures I, LLC v. Canon, Inc.,
`--- F. Supp. 3d ---, 2015 WL 6872446 (D. Del. Nov. 9, 2015) ............... 30, 33, 55
`Internet Patents Corp. v. Active Network, Inc.,
`790 F.3d 1343 (Fed. Cir. 2015) .................................................................... 26, 33
`Kickstarter, Inc. v. Fan Funded, LLC,
`No. 11-cv-6909, 2015 WL 3947178 (S.D.N.Y. June 29, 2015) ..........................10
`Mayo Collab. Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) ................................................................................... 9, 10
`OIP Techs., Inc. v. Amazon.com, Inc.,
`788 F.3d 1359 (Fed. Cir. 2015) .............................................................. 18, 31, 40
`Palomar Techs., Inc. v. MRSI Sys., LLC,
`No. 15-cv-1484, Dkt. No. 22 (Mar. 11, 2016) ....................................................12
`Parker v. Flook,
`437 U.S. 584 (1978) ...........................................................................................19
`Planet Bingo, LLC v. VKGS LLC,
`576 Fed. Appx. 1005 (Fed. Cir. 2014)................................................................40
`
`
`
`iii
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`

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`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 5 of 66 PageID: 1909
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`
`
`
`Shelcore, Inc. v. Durham Indus., Inc.,
`745 F.2d 621 (Fed. Cir. 1984) ............................................................................27
`StoneEagle Services, Inc. v. Pay-Plus Solutions, Inc.,
`113 F. Supp. 3d 1241 (M.D. Fla. 2015) ....................................................... passim
`Tuxis Techs., LLC v. Amazon.com, Inc.,
`No 13-cv-1771, 2014 WL 4382446 (D. Del. Sept. 3, 2014) ...............................22
`Ultramercial, Inc. v. Hulu, LLC,
`722 F.3d 1335 (Fed. Cir. 2013) ..........................................................................11
`WAG Acquisition, LLC v. Multi-Media, LLC,
`Case No. 2:14-cv-01661, Dkt. No. 66 (D.N.J. Sept. 10, 2015) ...........................12
`
`
`
`
`
`iv
`
`

`

`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 6 of 66 PageID: 1910
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`
`I.
`
`
`INTRODUCTION
`
`EV’s patented
`
`imaging, modeling, and rendering
`
`technologies have
`
`revolutionized the way roofers and insurance companies estimate the cost of roof
`
`repairs. 1 Before EV’s patented innovations, no one had combined the use of
`
`specific types of digitized aerial images, photogrammetry techniques, the creation
`
`of detailed 3-D models, and roof estimate outputs tailored to the needs of roofers
`
`and insurance companies. The product of substantial investments in engineering,
`
`EV’s patented technologies created an entirely new category of imaging and
`
`analytics products that simply did not exist before: “roof reports” generated from
`
`complex 3-D models based on analysis of particular types of high-resolution aerial
`
`photographs and new photogrammetry techniques. These patented innovations did
`
`not go unnoticed: EV’s annual revenue soared from $1.4 million the year of its
`
`2008 launch to $67 million in 2014, and within three years of its launch, EV’s
`
`technology was recognized in the financial media as having “change[d] the way
`
`the $30 billion roofing industry views America’s rooftops.” Ex. 1, Pershing Ex. A.
`
`
`
`Like the rest of the roof estimation community, Defendants took immediate
`
`note of how EV’s new technologies revolutionized the industry. Just two years
`
`ago, in 2014, Verisk agreed to pay $650 million for EV’s and its affiliate
`
`1 Plaintiffs Eagle View Technologies, Inc. and Pictometry International Corp. are
`abbreviated herein as “EV” and “Pictometry” respectively. Defendants
`Xactware Solutions, Inc. and Verisk Analytics, Inc. (Xactware’s parent) are
`abbreviated herein as “Xactware” and “Verisk” respectively.
`1
`
`
`
`

`

`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 7 of 66 PageID: 1911
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`
`
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`Pictometry’s business, technologies, and associated patent portfolios, stating
`
`publicly that the “strategic rationale” for acquiring EV was that its “[a]erial
`
`imagery [was] emerging as a disruptive innovation for insurance.” Ex. 2 at 12.
`
`Verisk’s President and CEO acknowledged EV’s ground-breaking work, telling
`
`investors that “this category [of analytics] has really only existed for about five
`
`years” – i.e., the time since EV introduced its technology to the field. See Ex. 3 at
`
`12. He also noted that one of the “special things” about EV was its 20 patents
`
`(many of which are asserted here), which cover and protect the technology Verisk
`
`wanted to buy. Id. at 17. Ultimately, Defendants decided not to pay EV for using
`
`these pioneering innovations, but instead chose to blatantly copy them without
`
`EV’s permission.
`
`
`
`Faced with the consequences of their choice – undeniable infringement of
`
`EV’s patents – Defendants now engage in an about-face, claiming that EV’s
`
`innovative technologies are “abstract,” and that they allegedly do not include even
`
`a single “inventive step.” What Defendants described only two years ago as
`
`“disruptive,” “special,” “very complex” and “sophisticated” are now merely “15th
`
`century navigation [principles]” and “geometry from the third century BCE.” D.I.
`
`50 (“Mot.”) at 1. These statements should be seen for what they are: a misguided
`
`effort to excuse Defendants’ taking of admittedly innovative technologies by
`
`arguing that the patents here are like those at issue in past Section 101 cases.
`
`
`
`2
`
`

`

`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 8 of 66 PageID: 1912
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`
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`
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`In truth, none of the patents-in-suit are like those found to be invalid in Alice
`
`Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) or other cases following
`
`that decision. The ‘436 patent, for example, is among EV’s core rooftop aerial
`
`measurement patents, and the inventions claimed therein are complex and multi-
`
`faceted, grounded in tangible inputs and outputs; these inventions are far from
`
`“abstract,” as Defendants contend. See Diamond v. Diehr, 450 U.S. 175, 184
`
`(1981). Indeed, Verisk’s CEO told investors that the same processes claimed in
`
`the ‘436 patent are “very complex” and lauded EV’s “unique” ability to span the
`
`worlds of 3-D imaging, analytics of aerial photographs, and roof reports,
`
`contradicting Defendants’ current positions. Ex. 3 at 14.
`
`
`
`The remaining eight patents-in-suit, issued after the ‘436 patent, likewise
`
`involve similar, overlapping tangible elements and also additional technological
`
`improvements that EV and Pictometry recognized were needed to solve problems
`
`unique to their underlying computerized roof reporting innovations.
`
`
`
`And while Defendants attempt to obscure the novelty of the patents by
`
`taking them out of order – beginning with the Pictometry patents, without first
`
`addressing EV’s core rooftop aerial measurement inventions in the ‘436 patent –
`
`there is no question the patents each reflect specific, inventive concepts, with the
`
`first of them revolutionizing the field, and each remaining patent addressing and
`
`solving specific problems arising in the context of that revolutionary new
`
`
`
`3
`
`

`

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`
`
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`technology. Defendants confirmed as much themselves, before this litigation was
`
`filed, when they attempted to acquire the patents and the actual, tangible, working
`
`technologies they embody. Indeed, since then, Defendants have even attempted to
`
`get their own patent on EV’s novel roof report technology – notwithstanding their
`
`current objections to its patentability.
`
`
`
`At bottom, this is a case about a competitor who, after lauding EV’s novel
`
`technology, took it without permission. Far from abstract, Defendants know
`
`exactly what the inventions at issue are, how to implement them, how to value
`
`them (at hundreds of millions of dollars), and even how to seek patent protection
`
`on them for themselves. While there certainly are circumstances these days where
`
`Section 101 should come into play, this is simply not one of them. Defendants’
`
`motion should be denied.
`
`II.
`
`STATEMENT OF FACTS
`A. EV Pioneers The Field Of Rooftop Aerial Measurement
`
`
`
`Mr. Pershing, the CTO of EV, began his groundbreaking work in rooftop
`
`aerial measurement in 2006. See Ex. 1 ¶¶ 1-2.2 A software engineer who had
`
`worked at Microsoft and Phillips Medical, Mr. Pershing began investigating ways
`
`of solving the problem of generating roof measurements and reports from aerial
`
`images. Id. He considered whether a solution might be found by utilizing aerial
`
`2 All exhibits and appendices referenced herein are attached to the Declaration of
`Liza Walsh, filed concurrently herewith.
`4
`
`
`
`

`

`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 10 of 66 PageID: 1914
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`
`
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`imagery involving orthogonal, top plan view images and oblique, angled view
`
`images of buildings. Id.
`
`
`
`As he worked through available images, Mr. Pershing understood the
`
`underlying image files lacked nearly all of the metadata necessary to determine
`
`roof pitch, and that without a determination of pitch, an accurate assessment of the
`
`surface area and the length of sloped edges and seams on the roof could not be
`
`achieved. Id. So, he sought to develop a technology that would rely on the images
`
`themselves to generate pitch and other roof measurements. Id. ¶ 4. After making
`
`substantial investments in researching and developing this technology, he created
`
`EV’s first rooftop aerial measurement technology system. Id. Recognizing the
`
`value of his invention, Mr. Pershing sought patent protection for it, leading to the
`
`issuance of seven of the patents-in-suit here (the ‘436, ‘376, ‘770, ‘840, ‘737, ‘454,
`
`and ‘152 patents).
`
`EV Launches In January 2008 To Immediate Success
`
`B.
`EV generates its roof reports using the inventions claimed in its patents, and
`
`
`
`those inventions have driven its success from the beginning. Id. ¶ 6. After EV
`
`launched in 2008, word of the high quality of its reports quickly spread throughout
`
`the roofing contractor community and soon caught the attention of insurance
`
`companies. Id. ¶ 8. Those companies recognized the value in utilizing aerial
`
`images to generate a highly accurate 3-D model and specific roof report. The roof
`
`
`
`5
`
`

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`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 11 of 66 PageID: 1915
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`
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`reports – which are claimed in the patents-in-suit – sell for up to $85 per report,
`
`and in 2012, generated approximately $45 million in revenue for EV, id. ¶ 13, and
`
`in 2014, revenue grew to $67 million with the sale of 1.78 million reports.
`
`According to CNN Finance, EV “change[d] the way the $30 billion roofing
`
`industry views America’s rooftops.” Ex. 1, Pershing Ex. A.
`
`C. EV And Pictometry Merge In January 2013
`A January 2013 merger brought together EV’s pioneering roof reporting
`
`
`
`technology with Pictometry’s unparalleled library of aerial images. Ex. 4 at 1.
`
`Pictometry’s roots date back to the 1980s, when John Ciampa, a professor at the
`
`Rochester Institute of Technology (RIT), recognized that aerial images of buildings
`
`should be obtained obliquely from all four cardinal directions, rather than just
`
`orthogonally, so that parcels of land could be better identified. Id. at 3. Pictometry
`
`captured its first imagery in 2001 and by the time of the merger, Pictometry was
`
`capturing over 30 million images per year, covering nearly 90% of U.S. homes. Id.
`
`at 4-5. Two of the asserted patents in this lawsuit are directed to inventions
`
`stemming from Pictometry’s own pre-merger work with a rooftop aerial
`
`measurement system called GeoEstimator: the ‘880 and ‘732 patents.
`
`D. EV’s Relationship With Xactware And Verisk
`EV’s relationship with Xactware began in 2008, shortly after EV launched.
`
`
`
`Ex. 1 ¶ 8. Xactware, with its parent company Verisk, services the insurance
`
`
`
`6
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`

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`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 12 of 66 PageID: 1916
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`
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`industry with products aimed at estimating all phases of building and repair. Ex. 5
`
`¶ 14. In particular, Xactware supplies insurers with its Xactimate software, which
`
`can be used to process insurance claims for rooftops. In November 2008, EV
`
`entered into a contract with Xactware. Under that contract, in exchange for certain
`
`payments to Xactware, EV’s data and roof reports would be transmitted through
`
`Xactware’s network
`
`to EV’s customers (“the 2008 Agreement”).
`
` This
`
`arrangement allowed EV to reach many insurance customers with its roof reports.
`
`See id. ¶¶ 14-15. In 2012, Xactware began to compete against EV by releasing
`
`Aerial Sketch®, a rooftop aerial measurement product, and informed EV of its
`
`intent to end the 2008 Agreement. That agreement is the subject of a pending
`
`breach of contract lawsuit in Seattle,3 and trial is scheduled for May 2016.
`
`E. Verisk Recognizes The Value Of EV’s Technology And
`Unsuccessfully Tries To Acquire EV
`
`
`
`In 2014, recognizing EV’s innovations and attendant success, Verisk agreed
`
`to acquire EV and its affiliate Pictometry – including their respective patent
`
`portfolios – for $650 million (the “Merger Agreement”). Ex. 3 at 3. The next day,
`
`Verisk executives touted the benefits of the transaction with investors on a
`
`conference call, noting that “[a]erial imagery [was] emerging as a disruptive
`
`innovation for insurance,” Ex. 2 at 12, and stating that EV’s use of imagery for
`
`
`3 Eagle View Technologies, Inc. v. Xactware Solutions, Inc., W.D. Wash., Case
`No. 2:12-cv-01913-RSM.
`
`
`
`7
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`

`

`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 13 of 66 PageID: 1917
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`
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`roof estimating was a “killer app.” Ex. 3 at 16. Verisk CEO acknowledged EV’s
`
`pioneering work in rooftop aerial measurement technology, describing EV’s
`
`“unique” ability to span two technologies: the “very complex” worlds of 3-D
`
`imaging, on the one hand, and analytics based on aerial photographs, on the other.
`
`Id. at 14. He complimented the combination of the imagery, analytics and roof
`
`reporting sides of the technologies, stating that “that really fused something” and
`
`“something very good happened when those two things were put together.” Id. at
`
`16. He also noted that one of the “special things” about EV was the “over 20
`
`patents that [EV] has,” id. at 17, and stated that “we had the opportunity to watch
`
`the growth of the business” and “we give the founders of both companies [i.e., EV
`
`and Pictometry] a lot of credit for what they built.” Id. at 16. The Merger
`
`Agreement remained in effect for nearly one year, finally being terminated in
`
`December 2014 only after the Federal Trade Commission challenged the
`
`transaction. Ex. 6.
`
`
`
`Unable to acquire EV’s technology, Defendants then resorted to simply
`
`copying it. As such, Plaintiffs filed the instant lawsuit.4
`
`
`4 Although certain facts set forth in this brief fall outside the four corners of
`Plaintiff’s complaint, many are drawn from a declaration of Chris Pershing that
`is part of the file history for the ‘436 patent, which is publicly available and
`should be considered here. See, e.g., Iconfind, Inc. v. Google, Inc., No. 2:11-
`cv-0319, 2012 WL 158366, at *1 (E.D. Cal. Jan. 18, 2012) (granting request to
`take judicial notice of file history). The Court should consider Xactware’s ‘325
`application file history, as well certain other publicly-available materials such
`8
`
`
`
`

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`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 14 of 66 PageID: 1918
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`
`
`
`III. ARGUMENT
`A. Legal Standard
`The Supreme Court in Alice described the concern driving the basis of the
`
`
`
`“abstract ideas” and other Section 101 exceptions to patent eligibility “as one of
`
`pre-emption.” Alice, 134 S. Ct. at 2354. Abstract ideas, along with laws of nature
`
`and natural phenomena, are “the basic tools of scientific and technological work.”
`
`Id. (internal citation omitted). “[M]onopolization of those tools through the grant
`
`of a patent might tend to impede innovation more than it would tend to promote
`
`it.” Mayo Collab. Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012).
`
`The Supreme Court acknowledged, however, that “[a]t some level, all inventions…
`
`embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or
`
`abstract ideas.” Alice, 134 S. Ct. at 2354 (internal quotations omitted).
`
`Accordingly, the Supreme Court in Alice built upon its past Section 101
`
`
`as the Amended Complaint from the Seattle contract litigation and the
`presentations and statements Verisk has made about EV’s patents and
`technology, which are publicly available and are offered to counter evidence
`cited by Defendants that is not found within the four corners of the complaint
`(e.g., Exhibits J and K). Additionally, these materials are “integral to”
`Plaintiffs’ First Amended Complaint and may be considered for that reason as
`well. Rutgers v. Qiagen, No. 15-cv-7187, 2016 WL 828101, at *2 (D.N.J. Feb.
`29, 2016). To the extent Defendants object to inclusion of these or any other
`facts herein, Plaintiffs request leave to file an Amended Complaint, as the
`Scheduling Order permits such amendments with leave until September 6,
`2016. See D.I. 38, ¶ 10.
`
`
`
`9
`
`

`

`Case 1:15-cv-07025-RMB-MJS Document 64 Filed 03/22/16 Page 15 of 66 PageID: 1919
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`
`
`
`jurisprudence and confirmed the two-step approach for deciding questions of
`
`patent-eligibility it had laid out in Mayo:
`
`First, we determine whether the claims at issue are directed to one of
`those patent-ineligible concepts. If so, we then ask, “[w]hat else is
`there in the claims before us?” To answer that question, we consider
`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.
`We have described step two of this analysis as a search for an
`“‘inventive concept’”—i.e., an element or combination of elements
`that is “sufficient to ensure that the patent in practice amounts to
`significantly more than a patent upon the [ineligible concept] itself.”
`
`Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1294-98).
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`
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`“A patent shall be presumed valid,” and on a motion to dismiss under
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`Section 101, “[t]he burden of establishing invalidity of a patent or any claim
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`thereof shall rest on the party asserting such invalidity.” See 35 U.S.C. § 282(a).
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`At a minimum, the clear and convincing standard applies to any underlying fact
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`issues relevant to Section 101. See, e.g., Broadband iTV v. Oceanic Time Warner
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`Cable, LLC, --- F. Supp. 3d ---, 2015 WL 5768943, at *3 (D. Haw. Sept. 29, 2015)
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`(“To the extent that the Court must resolve underlying questions of fact related to
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`eligibility, they must be proven by clear and convincing evidence.”); Affinity Labs
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`of Texas, LLC v. DirectTV, LLC, 109 F. Supp. 3d 916, 933-34 (W.D. Tex. 2015)
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`(same); Kickstarter, Inc. v. Fan Funded, LLC, No. 11-cv-6909, 2015 WL 3947178,
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`at *5 n.7 (S.D.N.Y. June 29, 2015) (same). This Court should likewise apply the
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`clear and convincing standard to the legal issues here, as numerous courts
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`including within this district have done. See, Ultramercial, Inc. v. Hulu, LLC, 722
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`F.3d 1335, 1338 (Fed. Cir. 2013) (“[E]very issued patent is presumed to have been
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`issued properly, absent clear and convincing evidence to the contrary”), judgment
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`vacated on other grounds; Data Distrib. Techs., LLC v. BRER Affiliates, Inc., No.
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`12-cv-4878, 2014 WL 4162765, at *5 (D.N.J. Aug. 19, 2014).5
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`
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`Where, as here, the claims at issue are not directed to ineligible concepts and
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`are inventive, they pass muster under both steps of the Alice framework. See Alice,
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`134 S. Ct. at 2355. Defendants have not and cannot meet their burden, under the
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`clear and convincing standard or under any lower standard, and this Court should
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`deny their motion in its entirety. Id.
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`B. Defendants’ Section 101 Challenge To 153 Claims Should Not Be
`Summarily Resolved On A Motion To Dismiss
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`
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`Defendants ask the Court to declare 153 claims from nine different patents
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`invalid through ruling on a motion to dismiss – without permitting any expert
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`discovery, fact discovery, or claim construction whatsoever. As the extensive
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`factual discussions in Defendants’ brief, and also above and below, make clear,
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`allowing the parties to develop a fulsome record of the facts and expert opinions
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`5 Cf Wireless Media Innovations, LLC v. Maher Terminals, LLC, 100 F. Supp. 3d
`405, 411 (D.N.J. 2015) (recognizing there is “no authoritative law binding the
`Court as to an applicable standard,” and applying lower standard).
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`underlying these issues before making a determination about Defendants’ Section
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`101 challenge would be prudent. See, e.g., Data Distrib. Techs., 2014 WL
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`4162765, at *8 (“Given the density of the [patent-in-suit] with its 100 claims, the
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`statutory presumption of validity. . . and the lack of Plaintiff’s proposed
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`constructions or any agreement about claim construction, the Court finds it is
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`advisable to postpone adjudication of the [patent-in-suit’s] eligibility under the
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`abstractness test.”); Palomar Techs., Inc. v. MRSI Sys., LLC, No. 15-cv-1484, Dkt.
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`No. 22 at 9 (S.D. Cal. Mar. 11, 2016) (Exhibit 7) (“The parties dispute the basic
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`character of the claimed subject matter. . . . Consequently, even construing the
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`claims in Plaintiff’s favor . . . as the Court must at this [motion to dismiss]
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`stage...the Court is unable to identify the purpose of the [patent-in-suit], a
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`necessary step in determining whether the [patent] claims are directed toward an
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`abstract idea.”) (internal citation omitted); WAG Acquisition, LLC v. Multi-Media,
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`LLC, Case No. 2:14-cv-01661, Dkt. No. 66 at 12 (D.N.J. Sept. 10, 2015) (Exhibit
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`8) (denying motion to dismiss on Section 101 grounds without prejudice where
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`“the parties disagree on key areas of interpretation, including the fundamental
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`question of what [patent owner’s] patents are about.”); Boar’s Head Corp. v.
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`DirectApps, Inc., No. 2:14-cv-01927, 2015 WL 4530596, at *7 (E.D. Cal. July 28,
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`2015). Indeed, to support their “inventive step” analysis, Defendants incorrectly
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`characterize numerous technical aspects of all the claims as allegedly providing
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`only “common place activity,” without any expert analysis or factual evidence in
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`support. As just one of many examples, Defendants claim that the use of aerial
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`photographs that are not “stereoscopic pairs” is not an “inventive step” and
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`irrelevant. See Mot. at 32. Plaintiffs disagree factually with those assertions, but
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`at a minimum, factual findings and expert analysis are required to inform the
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`Court’s decision, and raising an issue of this complexity and magnitude by way of
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`a motion to dismiss in a circumstance like this one – where the patentees’
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`inventive contribution revolutionized an entire field of endeavor – deprives the
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`Court of the necessary factual predicate on which to base its analysis. For this
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`reason alone, Defendants’ motion should be denied.
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`C. The ‘436 Patent Claims Eligible Subject Matter
`1.
`The ‘436 Patent Claims Are Not Directed To An Abstract
`Idea (Step 1)
`
`The ‘436 patent’s claims are not directed to an abstract idea. To the
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`
`
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`contrary, they cover complex technological systems and methods for generating
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`tangible outputs – roof estimate reports – from tangible, real-world inputs: certain
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`types of digitized aerial images of a roof structure taken from specified
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`perspectives. For example, claim 16 is directed to technological steps associated
`
`
`6 Defendants style claims 1 and 18 of the ‘436 patent as “representative,” Mot. at
`30, and use a similar approach for each of the patents-in-suit. Defendants did
`not confer with Plaintiffs regarding selection of representative claims prior to
`filing their motion, nor did Defendants provide a comprehensive analysis of all
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`with “generating a roof estimate report.” The first step in the process requires
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`receiving tangible inputs of aerial images where “each of the aerial images
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`provid[es] a different view of the roof of the building, wherein the first aerial
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`image provides a top plan view of the roof and the second aerial image provides an
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`oblique perspective view of the roof, and are not a stereoscopic pair.” See D.I. 30,
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`Ex. 4 at claim 1. Subsequently, the process requires the generation of a tangible
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`“three-dimensional model of the roof that includes a plurality of planar roof
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`sections that each have a corresponding slope, area, and edges.” See id. After that,
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`the claimed process further requires the generation and transmission of a tangible
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`roof estimate report, with detailed, enumerated contents, including “one or more
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`top plan views of the three-dimensional model annotated with numerical values
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`that indicate the corresponding slope, area, and length of edges of at least some of
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`the plurality of planar roof sections,” and wherein the roof estimate report includes
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`“at least two different indicia for different types of roof properties.” See id.
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`
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`Where, as here, the claimed processes are embodied in tan