Appistry, Inc. v. Amazon.Com, Inc.

Citations: 195 F. Supp. 3d 1176; 2016 U.S. Dist. LEXIS 94167; 2016 WL 3906905Docket: CASE NO. C15-1416RAJ

Court: District Court, W.D. Washington; July 19, 2016; Federal District Court

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Defendants Amazon.com, Inc. and Amazon Web Services, Inc. filed a Motion to Dismiss, asserting that the patents held by Plaintiff Appistry, Inc. are invalid under 35 U.S.C. § 101 due to ineligible subject matter. The court granted Amazon's motion, focusing on U.S. Patent Nos. 8,682,959 (the '959 Patent) and 9,049,267 (the '267 Patent), both of which relate to systems for processing information via networked computers and share inventors and descriptions with previously invalidated patents (U.S. Patent Nos. 8,200,746 and 8,341,209). The court established that the claims of the '959 and '267 Patents, specifically claim 29 of the '959 Patent and claim 1 of the '267 Patent, are necessary to assess patent eligibility, despite Appistry's contention that all claims should be independently evaluated. The court noted the substantial similarities between the claims, indicating that they could be considered representative for the evaluation of patent eligibility. The legal standard for dismissal under Fed. R. Civ. P. 12(b)(6) requires the court to accept the factual allegations in the complaint as true but allows for the rejection of conclusory claims not supported by factual content.

The claims in question utilize nearly identical language, specifically referencing “request handlers,” “process handlers,” and “task handlers” for work distribution. The Court determines that these claims are representative for analysis under Section 101 of the Patent Act, which outlines patent-eligible subject matter. This section allows patents for new and useful processes, machines, or improvements while excluding laws of nature, natural phenomena, and abstract ideas, as established in landmark cases like Alice Corp. v. CLS Bank Int’l and Mayo Collaborative Servs. v. Prometheus Labs, Inc. 

To differentiate between patent-ineligible concepts and patent-eligible applications, courts apply a two-step test: first, they assess if the claims are directed to a patent-ineligible concept; if so, they evaluate whether additional elements transform the claim into a patent-eligible application, seeking an “inventive concept.” The Court's analysis begins by examining whether the claims are directed to a patent-ineligible concept, often referred to as distilling the claim's essence.

In this instance, the Court finds the claims in the '959 and '267 Patents are directed to the abstract idea of distributed processing, similar to those in the Appistry I case, which involved the military's command and control system. The Plaintiff fails to articulate how these claims differ from those in Appistry I, noting only minor distinctions. Specifically, the '959 and '267 Patents stipulate that “process handlers” and “task handlers” must be on different networked computers, unlike the '209 and '746 Patents, which do not impose this requirement.

The ’959 and ’267 Patents include a claim element regarding processing jobs with associated process flows that define relationships between tasks. However, this element appears to merely describe a task delegation sequence, utilizing a hierarchy of hive engines for administrative tasks. The claim elements related to data receiving, storage, or communication are deemed "undisputably well-known" and fail to distinguish these patents from those deemed abstract ideas, as established in prior case law (e.g., Content Extraction, buySAFE). The mere act of a computer receiving and sending information over a network lacks inventiveness. Although the Plaintiff argues that the claims pertain to a new, more efficient computer configuration, the Court finds this assertion unconvincing. The specification of the ’959 Patent, cited by the Plaintiff, was previously included in invalidated patents, indicating a lack of novelty. Furthermore, the networked computers described in the patents are generic and serve generic functions, with the term "computer" applied broadly to various types of systems. The claims do not address specific technological problems nor do they introduce a novel computer type. The Court dismisses the Plaintiff's argument that the claims avoid abstraction by not addressing mathematical or business problems, as this has been previously rejected in Appistry I.

The key issue is whether the patent claims are directed toward an abstract idea, rather than their classification into specific categories. The plaintiff argues that the claims are not abstract because they cannot be performed by humans; however, the implementation on computers does not exempt them from being considered abstract. The court references various cases, emphasizing that abstract ideas are not limited to those that can be performed mentally. 

Having found the claims of the ’959 and ’267 Patents to be directed to an abstract idea, the court must determine if they contain an "inventive concept" that transforms them into patent-eligible applications. This involves analyzing the elements of the claims both individually and in combination, while disregarding conventional activities that are well-known in the industry. A conventional element is defined as ubiquitous, insignificant, or obvious, and may include necessary steps to implement the abstract idea. 

The court concludes that the claims, whether viewed individually or as a combination, lack an inventive concept, as they primarily assign generic functions to generic computers. The use of a "network" of computers is described generically, and the claims involve distributing tasks through a hierarchical series of handlers across a generic network, which is deemed non-inventive. The plaintiff's assertion that the claims improve computer function by enhancing availability, scalability, performance, and reliability does not change the analysis, as merely limiting the abstract idea to a specific technological field or employing generic computer implementation does not suffice to establish an inventive concept.

The court in Appistry I rejected the argument that the claimed inventions provided technological improvements to distributed computing, emphasizing that the methods and systems described were conventional and well-understood. Specifically, the ’267 Patent's claims involve a system with tiered "handlers" for processing tasks, but the operations of receiving, storing, and sending job data are routine and do not offer an inventive concept beyond the abstract idea of distributed processing. The court referenced previous cases to support this view, noting that merely applying known processes using a computer does not constitute an inventive step. 

Additionally, the court addressed procedural arguments raised by the Plaintiff, particularly the reliance on Dr. Matthew Green's declaration asserting the novelty of the patents. The court clarified that legal conclusions in complaints are not automatically accepted as true and that conclusory allegations are insufficient for defeating a motion to dismiss. The Plaintiff also contended that a "clear and convincing" standard should apply to the Section 101 inquiry. While this position is not inherently incorrect, the court acknowledged the existing split in authority regarding the applicable standard.

Defendants have established that the claims in the ’959 and ’267 Patents are directed to an abstract idea, rendering the standard for patent eligibility irrelevant as the outcome remains unchanged under any standard. The Court rejects Plaintiff’s assertion that claim construction is necessary prior to deciding the motion, citing Federal Circuit precedent that allows for determining patent eligibility at the pleading stage without such construction or discovery. The Court grants Amazon’s motion to dismiss Appistry’s complaint with prejudice. Although Appistry, LLC has substituted as Plaintiff during the motion, the Court notes that independent claims containing additional elements do not significantly alter the representative nature of claims 29 of the ’959 Patent and 1 of the ’267 Patent, as they essentially cover systems utilizing different “handlers” for processing tasks. The Federal Circuit has ruled that courts do not need to analyze every claim if they are substantially similar in addressing the same abstract idea. The Court also dismisses Plaintiff's argument regarding the machine or transformation test, stating that mere recitation of generic computer limitations does not confer patent eligibility. Furthermore, even if the inventions do not preempt the entire abstract idea, this does not affect their patent eligibility status. The Court finds Plaintiff’s position illogical, asserting that accepting such claims would allow plaintiffs to bypass the patent eligibility inquiry by merely stating their invention's novelty.