UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF TENNESSEE
`KNOXVILLE DIVISION
`
`
`
`
`PROCON ANALYTICS, LLC,
`
`
`Plaintiff,
`
`v.
`
`SPIREON, INC.,
`
`
`Defendants.
`
`
`
`
`Case No. 3:19-cv-201
`
`JURY DEMAND
`
`)
`)
`)
`)
`)
`)
`)
`)
`
`
`
`ORDER GRANTING PLAINTIFF’S MOTION FOR JUDGMENT ON THE PLEADINGS
`
`
`
`Before the Court is Plaintiff Procon Analytics, LLC’s (“Procon”) Motion for Judgment on
`
`the Pleadings (“§ 101 Motion”), filed on September 9, 2021. (ECF No. 40.) For the following
`
`reasons, the Court GRANTS the motion.
`
`I.
`
`BACKGROUND
`
`A.
`
`Factual Background
`
`Plaintiff Procon is a Tennessee limited liability company with a principal place of business
`
`in Irvine, California (ECF No. 9 ¶ 1), and Defendant Spireon, Inc. (“Spireon”) is a Tennessee
`
`corporation with offices in Irvine, California and Knoxville, Tennessee (ECF No. 9 ¶ 2). Both
`
`parties are competitors in the connected car and vehicle management fields. Procon “offers a suite
`
`of connected-car products and services, including vehicle inventory management and service
`
`retention products, fleet-management tools, and other aftermarket solutions packaged for
`
`automotive retailers.” These products include both hardware and software solutions. (ECF No. 9
`
`¶¶ 22–26.) One such product is a software that helps new car automotive dealerships manage their
`
`inventory. (Id. ¶ 23.) Another product that Procon sells is a device that connects to the “on-board
`
`1
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 1 of 18 PageID #: 2737
`
`

`

`diagnostics (OBDII) port (or a panel attached thereto) of a vehicle.” (Id. ¶ 25.) This device is
`
`enabled to “transmit information to the cloud over a wireless network.” (Id.) Similarly, Spireon
`
`purports to be an “industry leader in Mobile Resource Management, offering lot management
`
`solutions to [the] automotive dealer industry.” (ECF No. 1-1 at PageID 9.) Spireon asserts that it
`
`is a “leader in the field of connected vehicle intelligence” and sells products that “facilitate[] the
`
`tracking, management, and protection of vehicles in various commercial applications and
`
`industries.” (ECF No. 10 at PageID 197.) It is Spireon’s contention that Procon continues
`
`“making, selling, and offering for sale products and services for managing vehicle inventory for
`
`dealerships that infringe on certain claims of the ’598 Patent[.]” (ECF No. 10 at PageID 198.)
`
`U.S. Patent No. 10,089,598 (the “’598 Patent”) is entitled “Methods and Apparatus for
`
`Monitoring and Control of Electronic Devices” and primarily discloses a method for machine to
`
`machine telemetry. The patent defines “telemetry” as “a technology that allows the remote
`
`measurement and reporting of information of interest to the system designer or operator.” (’598
`
`Patent, col. 1 l. 19–21.)
`
`At its heart, the ’598 Patent discloses an “inventory management system” that “may be
`
`configured to provide machine-to-machine network connectivity” and “may be used in conjunction
`
`with a location device configured to transmit a vehicle identification number (VIN) and a device
`
`identifier of the location device.” ’598 Patent at Abstract. The technology of the ’598 Patent boils
`
`down to methods of communicating and gathering information from vehicles. As described in the
`
`abstract of the patent, “the inventory management system may be configured to: (1) track whether
`
`the location device is located within a predetermined perimeter; (2) provide current inventory and
`
`ownership status associated [with] the location device; and/or (3) place the location device in a
`
`sleep and/or passive state with periodic check-ins.” ’598 Patent at Abstract. The disclosure and
`
`2
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 2 of 18 PageID #: 2738
`
`

`

`claims also provide additional capabilities, such as receiving signals if the car’s battery is depleted
`
`or storing additional information about the vehicle in the data base. (See generally, ’598 Patent
`
`col. 15, l. 28–32; col. 16, l. 43–48.)
`
`In this case, all of the independent claims begin with “[a] method for managing a vehicle
`
`inventory.” (’598 Patent, cols. 27, 28.) Claim 1 is the basis for most discussion on claim terms
`
`and provides as follows:
`
`1. A method for managing a vehicle inventory for a dealer implemented by a computer
`having a processor and a memory, the method comprising:
`while a location is not communicatively coupled with a vehicle, associating the
`location device with a dealer’s group of available location devices in the memory,
`wherein the dealer’s group of available location devices comprises location devices
`owned by the dealer that are not coupled with any vehicle;
`communicatively coupling the location device with a vehicle;
`in response to the location device becoming communicatively coupled with the
`vehicle, the location device transmitting a connection notice over a network, the
`connection notice comprising a vehicle identifier and a location device identifier;
`receiving, by the computer, the connection notice from the location device over the
`network;
`in response to the connection notice received by the computer, the processor:
`associating the location device identifier with the vehicle identifier in the
`memory; and
`disassociating the location device from the dealer’s group of available
`location devices in the memory; and
`receiving, by the computer, current location information from the location
`device.
`
`B.
`
`Procedural Background
`
`On April 2, 2019, Procon was served with a letter from Defendant Spireon, Inc.
`
`(“Spireon”), accusing it of infringement of the ’598 Patent. (ECF No. 1-1.) On April 25, 2019,
`
`Spireon followed up its first letter with a cease and desist demand with respect to any products that
`
`allegedly infringe the ’598 Patent. (ECF No. 1-2.) Following the second cease and desist demand,
`
`Procon filed a Petition requesting Post-Grant Review of Claims 1–14 of the ’598 Patent on May
`
`3
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 3 of 18 PageID #: 2739
`
`

`

`30, 2019. (ECF No. 12 ¶ 5.) Additionally, on June 3, 2019, Procon brought this claim for
`
`declaratory judgment of noninfringement and invalidity of the ’598 Patent, and filed an Amended
`
`Complaint on August 6, 2019. (ECF No. 9.) Spireon filed an Answer and Counterclaims on
`
`August 26, 2019. (ECF No. 10.) On November 22, 2019, the Patent Trial and Appeal Board
`
`(“PTAB”) declined to institute proceedings against the challenged claims based on the plain and
`
`ordinary meaning of the claim terms. (ECF No. 17-1.) Plaintiff filed a Motion for Judgment on
`
`the Pleadings (“§ 101 Motion”) on September 9, 2020. (ECF No. 40.) Spireon filed a Response
`
`in Opposition on September 30, 2020. (ECF No. 45.) Procon filed a Reply to Spireon’s Response
`
`on October 7, 2020. Procon filed a Supplement to its § 101 Motion on February 16, 2021 (ECF
`
`No. 63), to which Spireon filed a Response in Opposition on February 23, 2021. (ECF No. 65.)
`
`Following briefing from the parties and a Markman hearing, the Court also entered its Claim
`
`Construction Order on February 19, 2021. (ECF No. 64.) The Court held a hearing on the pending
`
`§ 101 Motion on March 2, 2021.
`
`II.
`
`LEGAL STANDARD
`
`Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed –- but
`
`early enough not to delay trial –- a party may move for judgment on the pleadings.” Since the
`
`grant or denial of judgment on the pleadings is not uniquely a patent issue, the law of the regional
`
`circuit is applied. See Allergan, Inc. v. Athena Cosmetics, Inc., 640 F.3d 1377, 1380 (Fed. Cir.
`
`2011).
`
`A motion for judgment on the pleadings under Rule 12(c) is analyzed under the same
`
`standard as a motion to dismiss under Rule 12(b)(6). Sensations, Inc. v. City of Grand Rapids,
`
`526 F.3d 291, 295 (6th Cir. 2008) (citing Penny/Ohlmann/Nieman, Inc. v. Miami Valley Pension
`
`Corp., 399 F.3d 692, 697 (6th Cir. 2005)); see also Lindsay v. Yates, 498 F.3d 434, 437 n.5
`
`4
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 4 of 18 PageID #: 2740
`
`

`

`(6th Cir. 2007). Under Rule 12(b)(6), a court must “construe the complaint in the light most
`
`favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor
`
`of the plaintiff.” DirecTV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). The court, however,
`
`“need not accept as true legal conclusions or unwarranted factual inferences.” Id. (quoting Gregory
`
`v. Shelby Cnty., 220 F.3d 433, 446 (6th Cir. 2000)). “Conclusory allegations or legal conclusions
`
`masquerading as factual allegations will not suffice.” Bishop v. Lucent Techs., Inc., 520 F.3d 516,
`
`519 (6th Cir. 2008).
`
`A Rule 12(c) motion that seeks a determination of invalidity must be supported by clear
`
`and convincing evidence appearing in the patent. Vehicle Intelligence & Safety LLC v.
`
`Mercedes-Benz USA, LLC, 78 F. Supp. 3d 884, 887 (N.D. Ill. 2015) (citing Microsoft Corp. v. i4i
`
`Ltd. P’ship, 131 S. Ct. 2238, 2242 (2011)), aff’d per curiam, 2015 WL 9461707 (Dec. 28, 2015).
`
`“A Rule 12(c) motion is appropriately granted ‘when no material issue of fact exists and the party
`
`making the motion is entitled to judgment as a matter of law.’” Stafford v. Jewelers Mut. Ins. Co.,
`
`554 F. App’x 360, 370 (6th Cir. 2014) (quoting Tucker v. Middleburg-Legacy Place, LLC, 539
`
`F.3d 545, 549 (6th Cir. 2008)).
`
`
`
`“If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented
`
`to and not excluded by the court, the motion must be treated as one for summary judgment under
`
`Rule 56.” Fed. R. Civ. P. 12(d). “In ruling on a motion for judgment on the pleadings, . . . the
`
`Court may consider the complaint as well as (1) documents that are referenced in the plaintiff’s
`
`complaint or that are central to plaintiff’s claims and (2) matters of which a court may take judicial
`
`notice.” Wrobel v. Huron-Clinton Metro. Auth., No. 13-cv-13168, 2014 WL 1460305, at *6
`
`(E.D. Mich. Apr. 15, 2014) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322
`
`(2007)); see also KRS Int’l Co. v. Delphi Auto. Sys., LLC, 523 F. App’x 357, 359 (6th Cir. 2013)
`
`5
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 5 of 18 PageID #: 2741
`
`

`

`(“[A] court ‘may consider the Complaint and any exhibits attached thereto, public records, items
`
`appearing in the record of the case and exhibits attached to defendant’s motion to dismiss so long
`
`as they are referred to in the Complaint and are central to the claims contained therein,’ without
`
`converting the motion to one for summary judgment.” (quoting Bassett v. Nat’l Collegiate Athletic
`
`Ass’n, 528 F.3d 426, 430 (6th Cir. 2008))). In addition, “documents ‘integral’ to the complaint”
`
`may be relied upon, “even if [they are] not attached or incorporated by reference . . . [when] there
`
`exist no material disputed issues of fact regarding the relevance of the document.” Mediacom Se.
`
`LLC v. BellSouth Telecomms., Inc., 672 F.3d 396, 400 (6th Cir. 2012) (citations and internal
`
`quotation marks omitted)).
`
`III. ANALYSIS
`
`Thirty-five U.S.C. § 101 sets forth that “[w]hoever invents or discovers any new and useful
`
`process, machine, manufacture, or composition of matter, or any new and useful improvement
`
`thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
`
`“Eligibility under 35 U.S.C. § 101 is a question of law, based on underlying facts.” SAP America,
`
`Inc. v. InvestPic, LLC, 898 F.3d 1161, 1166 (Fed. Cir. 2018) (internal citations omitted). “Like
`
`other legal questions based on underlying facts, this question may be, and frequently has been,
`
`resolved on a Rule 12(b)(6) or (c) motion where the undisputed facts, considered under the
`
`standards required by that Rule, require a holding of ineligibility under the substantive standards
`
`of law.” Id.; see also generally, Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, 874
`
`F.3d 1329, 1341 (Fed. Cir. 2017) (affirming district court’s finding of §101 ineligibility at 12(c)
`
`stage); WhitServe LLC v. Donuts, Inc., 809 F. App’x 929, 935 (Fed. Cir. 2020) (“But we have
`
`repeatedly made clear that ‘patent eligibility can be determined at the Rule 12(b)(6) stage’ if there
`
`are no plausible factual allegations to impede such a resolution.”) (internal citations omitted);
`
`6
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 6 of 18 PageID #: 2742
`
`

`

`Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018) (“We
`
`have held that patent eligibility can be determined at the Rule 12(b)(6) stage.…This is true
`
`only when there are no factual allegations that, taken as true, prevent resolving the eligibility
`
`question as a matter of law.”)
`
`
`
`It is well-settled that “[l]aws of nature, natural phenomena, and abstract ideas are not
`
`patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l., 134 S. Ct. 2347, 2354 (2014) (quoting Ass’n
`
`for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013)). An invention,
`
`however, “is not rendered ineligible for patent simply because it involves an abstract concept.” Id.
`
`There is an exception under § 101 for patents that apply an abstract concept “to a new and useful
`
`end.” Id. (quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)).
`
`The unanimous Supreme Court decision in Alice provided a two-part analysis for
`
`determining whether the application of an abstract idea would be patent-eligible: (1) “whether the
`
`claims at issue are directed to one of those patent-ineligible concepts;” and (2) “whether the
`
`additional elements [of a claim] ‘transform the nature of the claim’ into a patent-eligible
`
`application.” Id. at 2355 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.
`
`Ct. 1289, 1294 (2012). The first stage of the Alice inquiry looks “at the ‘focus’ of the claims” and
`
`their “ ‘character as a whole.’ ” Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed.
`
`Cir. 2016) (citing Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335–36 (Fed. Cir. 2016).
`
`When reached, the second stage inquiry looks “more precisely at what the claim elements add—
`
`specifically, whether, in the Supreme Court’s terms, they identify an “ ‘inventive concept’ ” in the
`
`application of the ineligible matter to which (by assumption at stage two) the claim is directed.”
`
`Id. at 1353 (internal citations omitted).
`
`7
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 7 of 18 PageID #: 2743
`
`

`

`A.
`
`First Alice Step: “Directed To” a Patent-Ineligible Concept
`
`The first part of a patentability analysis under Alice requires the Court to “determine
`
`whether the claims as a whole are directed to an abstract idea.” Alice, 134 S. Ct. at 2355. Procon
`
`argues that the claims in the ’598 Patent “are directed to the abstract idea of managing an
`
`inventory” and that “[b]usiness practices designated to manage inventory—and particularly a
`
`vehicle inventory for a dealer—have existed for several decades.” (ECF No. 41 at PageID 1336.)
`
`In response, Spireon asserts that “the ’598 Patent does not address management of just any
`
`‘inventory;’ it addresses management of a ‘vehicle inventory.’” (ECF No. 45 at PageID 2501
`
`(internal citations omitted) (emphasis in original).) Spireon also stresses that the ’598 Patent is
`
`not directed to generic inventory management, but specifically inventory management for a dealer
`
`using sets of available location devices owned by the dealer. (Id. at PageID 2501.) The Court
`
`finds Spireon’s arguments unconvincing and finds that the claims in the ’598 Patent are directed
`
`to the abstract idea of vehicle inventory management.
`
`Managing a Vehicle Inventory is an Abstract Idea
`
`Abstract ideas have long been deemed patent-ineligible because “no one can claim in . . .
`
`them an exclusive right.” Alice, 134 S. Ct. at 2355 (quoting Le Roy v. Tatham, 55 U.S. (14 How.)
`
`156, 175 (1853)). In recent years, the Federal Circuit has further clarified what constitutes an
`
`abstract idea by focusing on the presence of a “technological improvement.” See In re TLI
`
`Communications LLC Patent Litigation, 823 F.3d 607, 612 (Fed. Cir. 2016) (“We recently
`
`clarified that a relevant inquiry at step one is ‘to ask whether the claims are directed to an
`
`improvement to computer functionality versus being directed to an abstract idea.”) (citing Enfish,
`
`LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (contrasting claims “directed to an
`
`improvement in the functioning of a computer” with claims “simply adding conventional computer
`
`8
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 8 of 18 PageID #: 2744
`
`

`

`components to well-known business practices.”)).
`
`Accordingly, the inquiry in front of this court is whether the ’598 Patent simply adds
`
`conventional computer components to the field of vehicle inventory management, or is instead
`
`directed to the improvement in the functioning of a computer. See, e.g., Simil, LLC v. Flexsim
`
`Software Products, Inc., 983 F.3d 1353, 1360–61 (Fed. Cir. 2020) (“To be sure, ‘software can
`
`make patent-eligible improvements to computer technology, and related claims are eligible as long
`
`as they are directed to non-abstract improvements to the functionality of a computer…itself.’”)
`
`(internal citation omitted).
`
`Procon argues that the purported advance of the ’598 Patent is a “process of manipulating
`
`information of a specified content—gathering, storing, transmitting, receiving, and presenting
`
`information about a vehicle—and not any particularly assertedly inventive technology for
`
`performing those functions.” (ECF No. 41 at PageID 1340.) To support this contention, Procon
`
`points to the abstract of the ’598 Patent, which recites that “the inventory management system may
`
`be configured to: (1) track whether the location device is located within a predetermined perimeter;
`
`(2) provide current inventory and ownership status associated the location device; and/or (3) place
`
`the location device in a sleep and/or passive state with periodic check-ins.” ’598 Patent at Abstract.
`
`Plaintiffs further add that “the generically claimed location device could be used to carry out the
`
`same steps to manage an inventory of anything—trailers, shipping containers, construction
`
`equipment, etc.” (ECF No. 41 at PageID 1342.)
`
`Spireon instead focuses on the “owned by the dealer” portions of the claims, arguing that
`
`that this language “remains a key component and a significant aspect of claim 1 which shows that
`
`the claims of the ’598 Patent go to a particular method of ‘managing a dealer’s inventory,’ well
`
`beyond the abstract ‘managing an inventory.’” (ECF No. 45 at PageID 2503.) Spireon stresses
`
`9
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 9 of 18 PageID #: 2745
`
`

`

`the importance of managing inventory for a dealer repeatedly in its briefing, noting that the “claims
`
`of the ’598 Patent are not directed to the generic ‘managing an inventory’ but are specific steps of
`
`a particular method of managing ‘a vehicle inventory for a dealer.’” (See generally id. at PageID
`
`2501–502.) This argument fails. The Supreme Court and the Federal Circuit “have repeatedly
`
`made clear that merely limiting the field of use of the abstract idea to a particular existing
`
`technology environment does not render the claims any less abstract.” Affinity Labs of Texas,
`
`LLC v. DIRECTV, LLC, 838 F.3d 1253, 1259 (Fed. Cir. 2016).
`
`The Federal Circuit’s recent decision in cXLoyalty, Inc. is also informative here. In
`
`cXLoyalty, Inc. v. Maritz Holdings Inc., the Federal Circuit held both the original and substitute
`
`patent claims of U.S. Patent 7,134,087 (the “’087 Patent”) to be ineligible under § 101. 986 F.3d
`
`1367 (Fed. Cir. 2021). The ’087 Patent was directed towards “a system and method for permitting
`
`a customer of a loyalty program to redeem loyalty points for rewards offered by vendors without
`
`the need for human intervention.” (Id.) At step one, the Federal Circuit agreed that the ’087 Patent
`
`was directed to “facilitating, or brokering, a commercial transaction (i.e., the sale and purchase of
`
`goods and services) between a purchaser using a first form of value (i.e., a rewards program
`
`participant using points in whole or in in part) and a seller transacting in a second form of value
`
`(i.e., a vendor system which transacts purchases in currency).” Id. at 1376–77 (internal citations
`
`and quotations omitted). The court added that “[h]umans have long intermediated these very
`
`transactions by collecting and relaying the very same information.” Because the claims in the ’087
`
`Patent were “directed to transfers of information relating to a longstanding commercial practice,”
`
`the Federal Circuit in cXLoyalty found that they were directed to patent-ineligible subject matter
`
`under step 1 of Alice. Id. at 1377.
`
`Here, the claims of the ’598 Patent are not different from the conventional business
`
`10
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 10 of 18 PageID #: 2746
`
`

`

`practices or transfers of data that the Federal Circuit has found to lack muster under Alice step 1.
`
`For example, in Electric Communication Technologies, the court found that the functions of
`
`“monitoring the location of a mobile thing and notifying a party in advance of arrival of that mobile
`
`thing” amounted to “nothing more than the fundamental business practice of providing advance
`
`notification of the pickup or delivery of a mobile thing.” Elec. Comm. Techs., LLC v.
`
`Shopperschoice.com, LLC, 958 F.3d 1178, 1181 (Fed. Cir. 2020). It further restated the lower
`
`court’s findings that “business practices designed to advise customers of the status of delivery of
`
`their goods have existed at least for several decades, if not longer.” Id. at 1181 (internal citations
`
`and quotations omitted); see also Elec. Power Grp., 830 F.3d 1350, 1353 (Fed. Cir. 2016) (“The
`
`focus of the asserted claims…is on collecting information, analyzing it, and displaying certain
`
`results of the collection and analysis…and hence require stage-two analysis under § 101.”)
`
`Furthermore, “[t]he test for patent-eligible subject matter is not whether the claims are
`
`advantageous over the previous method.” Tenstreet, LLC v. DriverReach, LLC, 826 F. App’x
`
`925, 926 (Fed. Cir. 2020). In Tenstreet, the Federal Circuit ruled that even if the patent at issue
`
`“provide[d] advantages over manual collection of the data, the patent claim[ed] no technological
`
`improvement beyond the use of a generic computer network.” Id. at 926. Here, the ’598 Patent
`
`purports to “transmit the physical location of the device, relative location information such as
`
`whether inside or outside a geo-fence, information about vehicle speed, cornering, braking, and/or
`
`acceleration, information corresponding to an impact, information about airbag status, and the
`
`like.” ’598 Patent, col. 7, l. 25–30. Notably, such “location device may be an off-the-shelf
`
`tracking device for a vehicle, for example for use by an end user, for user-based insurance, for
`
`fleet management, for managing driver behavior, and/or the like.” Id., col 8, l. 24–27. Spireon
`
`does not contend that it has invented an improvement in the location device, and instead focuses
`
`11
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 11 of 18 PageID #: 2747
`
`

`

`on the presence of “specific steps of a particular method[.]” (ECF No. 45 at PageID 2503.) This
`
`argument fails at step 1, because the claims are nonetheless directed to the gathering and sharing
`
`of information. Such “claims focused on ‘collecting information, analyzing it, and displaying
`
`certain results of the collection and analysis’ are directed to an abstract idea.” Elec. Power Grp.,
`
`830 F.3d at 1355.
`
`The ’598 Patent is directed to tasks inherent to the business practice and process of vehicle
`
`inventory management that have been available as long as the existence of car dealerships.
`
`Therefore, it is directed to an abstract idea under step 1 of Alice.
`
`B.
`
`Second Alice Step: Transforming the Nature of the Claim Into a
`Patent-Eligible Application
`
`Having found that the ’598 Patent is directed to the abstract idea of vehicular inventory
`
`management, the Court moves on to stage 2 of the Alice analysis. At this stage, the Court must
`
`consider the “transformative” aspects of the claims and whether they are inventive so as to make
`
`the patent eligible under § 101. See Alice, 134 S. Ct. at 2355. A claim’s elements, taken both
`
`individually and in concert as an ordered combination, must be “sufficient to ensure that the patent
`
`in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” Id.
`
`(quoting Mayo, 132 S. Ct. at 1294) (alteration in original); see also Mayo, 132 S. Ct. at 1297 (“If
`
`a law of nature is not patentable, then neither is a process reciting a law of nature, unless that
`
`process has additional features that provide practical assurance that the process is more than a
`
`drafting effort designed to monopolize the law of nature itself.”). “An inventive concept reflects
`
`something more than the application of an abstract idea using well-understood, routine, and
`
`conventional activities previously known to the industry.” Cellspin Soft, Inc. v. Fitbit, Inc., 927
`
`F.3d 1306, 1316 (Fed. Cir. 2019) (internal quotation marks omitted).
`
`12
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 12 of 18 PageID #: 2748
`
`

`

`1.
`
`The ’598 Patent Does Not Provide a Technological Solution
`
`Procon argues that “Spireon’s contention that the ’598 [P]atent ‘provide[s] a unique,
`
`undisclosed, and unconventional solution in the industry’[] merely points to claim language reciting
`
`high level functions of transmitting, receiving, associating, disassociating, and determining.”
`
`(ECF No. 63 at PageID 2698.) Procon further argues that the “claim limitations Spireon quotes
`
`(and even the specification) fail to provide useful guidance as to how to achieve these purported
`
`functions” and instead “recite the desired result rather than a specific way to accomplish that
`
`result[.]” (Id.) (emphasis in original).
`
`Indeed, the Federal Circuit has increasingly focused on how a technological solution is
`
`achieved. For example, in cXLoyalty, Inc., the Federal Circuit ruled that a patent directed to
`
`“format conversion” did not “improve[] the use of computers as a tool by reciting a new way for
`
`computers to conduct format conversion,” and added that the claims failed to “provide any
`
`guidance as to how this purported function [was] achieved.” cXLoyalty, 986 F.3d at 1379.
`
`Accordingly, the Federal Circuit rejected the patent under § 101, stating that it did not “claim a
`
`patent-eligible technological solution to a technological problem.” Id.
`
`The focus of Federal Circuit jurisprudence in recent years has emphasized technical details
`
`and useful guidance in functionally claimed patents. See, e.g., Univ. of Fla. Res. Found., Inc. v.
`
`Gen. Elec. Co., 916 F.3d 1363, 1368–69 (Fed. Cir. 2019) (“[N]either the ’251 patent, nor its claims,
`
`explains how the drivers do the conversion that UFRF points to. That is, the drivers are described
`
`in purely functional terms: they ‘facilitate data exchanges,’ ‘convert received data streams to a
`
`format independent of any particular bedside machine,’ ‘translate the data stream,’ ‘interpret data
`
`streams,’ ‘facilitate communications with the bedside machine,’ and ‘interpret [discrete] segments’
`
`in a ‘data stream for the machine.’”) (emphasis in original) (citations omitted); Adaptive
`
`13
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 13 of 18 PageID #: 2749
`
`

`

`Streaming, Inc. v. Netflix, Inc., 836 F. App’x 900, 903 (Fed. Cir. 2020) (“The focus is not any
`
`specific advance in coding or other techniques for implementing that idea; no such specific
`
`technique is required.”); Affinity Labs of Texas, 838 F.3d at 1258 (“There is nothing in claim 1
`
`that is directed to how to implement out-of-region broadcasting on a cellular telephone. Rather,
`
`the claim is drawn to the idea itself.”).
`
`Here, the Court is unconvinced by Spireon’s argument that “the claims of the ’598 Patent
`
`recite specific methods for managing vehicle inventory for a dealer using a location device in a
`
`specific way that allows dealers to associate and disassociate the location devices with and from
`
`groups of the location devices that are owned by the dealer and that the dealer may
`
`communicatively couple with the dealer’s vehicles.” (ECF No. 45 at PageID 2504.) For one, the
`
`’598 Patent merely describes the functions of associating, disassociating, and communicative
`
`coupling, without providing how those functions are achieved. See, e.g., ’598 Patent at col. 7, l.
`
`44–60 (“The location device may be configured to communicatively couple with a vehicle, such
`
`as via the vehicle’s on-board diagnostic interface (e.g., OBD-II)…The location device may
`
`comprise one or more sensors…Further, the location device may be configured to determine a
`
`state, voltage, and/or current of the vehicle battery, to determine a state, voltage, and/or current of
`
`the vehicle battery, to determine if the location device is connected…The location device may
`
`comprise a memory and may be configured to store sensed, received, or otherwise determined
`
`data.”).
`
`At the § 101 Motion hearing, the Court repeatedly gave Spireon’s counsel the opportunity
`
`to identify any disclosures in the ’598 Patent that go beyond functional language and explain how
`
`the functions are achieved. See Hearing Tr. at 24:7–22 (“They are concrete and tangible steps that
`
`are performed by the location device, which include communicative coupling of the device to the
`
`14
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 14 of 18 PageID #: 2750
`
`

`

`vehicle through the OBD port and concrete steps that occur in response to cumulative coupling of
`
`that location device.…There are a specific series of steps that outline a specific process of
`
`connecting the device to the vehicle, the device sending the connection notice, including the
`
`vehicle identifier, and the location device identifier…certain steps being taken to associate that
`
`device with the vehicle in the memory.”) Spireon’s counsel stated that “almost every limitation of
`
`the claim recites a concrete step where the location device performs a specific action or that
`
`something happens in response to the specific action being performed by the location
`
`device.…These are specific steps that involve the hardware doing specific things.” Hearing Tr. at
`
`25:17–24 (emphasis added). But simply repeating the word specific does not change the disclosure
`
`of the ’598 Patent. Despite using terms such as “associating,” “disassociating,” “connection
`
`notice,” and “communicative coupling,” these steps do not actually disclose how the result is
`
`achieved. The ’598 Patent does not disclose the parameters, coding language, or otherwise tell the
`
`user how to manage the vehicle inventory—it merely provides functional language for doing so.
`
`“[T]he claims provide no useful guidance as to how this purported function is achieved and thus
`
`cannot be directed to a technological solution.” cXLoyalty, Inc. v. Maritz Holdings, Inc., 986 F.3d
`
`at 1378. Accordingly, the ’598 Patent does not pass muster under step 2 of Alice because it does
`
`not provide technological solution. Next, the Court addresses whether the methods utilized were
`
`routine and conventional at the time of the patent.
`
`2. The ’598 Patent Utilizes Routine and Conventional Methods and No Factual
`Disputes Preclude Finding the ’598 Patent to be Ineligible Under § 101
`
`In addition to not providing sufficient disclosure on how to achieve the functional results
`
`
`
`highlighted in the ’598 Patent, Spireon also relies on routine and conventional methods for doing
`
`so. A claim that “contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract
`
`idea into a patent-eligible application.… must include ‘additional features’ to ensure ‘that the
`
`15
`
`Case 3:19-cv-00201-JPM-HBG Document 66 Filed 04/06/21 Page 15 of 18