Perdiemco, LLC. v. Industrack LLC (E.D. Tex. 2016)

By Joseph Herndon --

In the U.S. District Court for the Eastern District of Texas, in a case captioned Perdiemco, LLC. v. Industrack LLC, the Court found some patents having method claims directed to "conveying user location" to be patent-eligible under 35 U.S.C. § 101.  Much of the reasoning was based on the recent Federal Circuit decision McRO, Inc. v. Bandai Namco Games America Inc., and even though the claims are generally broad and only include basic/generic computer components, the claims survived a § 101 challenge.  This is good for patentees and patent owners, as some Courts are now more willing to allow software patent claims to survive.

The defendants filed motions for judgment on the pleadings that the asserted patents claim ineligible subject matter under 35 U.S.C. § 101, and that the claims of the asserted patents are invalid under 35 U.S.C. § 112 ¶¶ 1 and 2.  The asserted patents include U.S. Patent Nos. 8,223,012; 8,493,207; 8,717,166; 9,003,499; and 9,071,931.  These patents share a common specification, and are generally directed to conveying location information by defining object location events relating object location information to user-defined zones and managing conveyance of object location event information based on user identification codes.  By using access codes, multiple users can collaboratively define and manage events and manage the conveyance of corresponding object location information, user-defined zone information, and/or object location event information among computing devices.  An example use case includes tracking pets, in which a pet has associated with it a location information source and the pet owner defines zones that the pet is supposed to stay in (e.g., a yard) and may define zones in which the pet is not allowed (e.g., a garden).  An object location event for leaving the yard sends an email and dials a phone of the pet owner.  An object location event for entering the garden might cause a siren to go off to scare the pet.  Thus, location information is used to trigger certain events.

Subject Matter Eligibility

Defendants contended that all asserted claims of all asserted patents embody an abstract idea of managing the dissemination of location and/or event information within a community, or at most, they recite different ways of organizing people into groups and managing the dissemination of location/event information through use of conventional computer and GPS technology.

Claim 6 of the '012 patent is representative and is reproduced below.

1.  A method for conveying user location information, comprising:
    interfacing with an administrator that authorizes a first user associated with a first user identification code to access an object location information from a location information source associated with a second user identification code that is different from the first identification code; and
    conveying the object location information to a third user based on an information access code specified by said first user, said information access code being associated with a third user identification code that is different from the first and second user identification codes.

5.  The method of claim 1, wherein the second user identification code is associated with a zone information comprising a coordinate on a map; and wherein at least one of the object location information or zone information is conveyed to the third user based on the information access code.

6.  The method of claim 5, wherein the second user identification code is associated with an object location event information that relates the object location information to the zone information; and wherein at least one of the object location information or the zone information or the object location event information is conveyed to the third user based on the information access code.

Defendants argued that representative claim 6 merely requires (1) interfacing with an administrator who (2) authorizes a first user to (3) access the location/zone/event information of a second user and (4) conveying that information to a third user.

Defendants constructed an analogy between claim 6 and a scenario in which steps of claim 6 could easily be performed by humans without the need for any computer or location tracking technology.  The scenario:  a mother desiring to track the location of her daughter who is traveling on a class field trip from Florida to Washington D.C., and the mother (administrator) may authorize a chaperone (first user) that has traveled with the daughter's (second user) class to supervise and track her daughter as well as have access to and convey the daughter's location (access object location information associated with the second user).  When the class arrives at their hotel in Washington (associating the second user with a zone and/or event), the chaperone is authorized to notify the mother and father (third user) that they have safely arrived at their destination (conveying location, zone and/or event information to a third user).

This example apparently confirms that claim 6 is directed to no more than the abstract idea of "managing the dissemination of location and/or event information within a community" and is therefore patent ineligible.

The Court, however, found a number of fatal problems with Defendants' analysis of claim 6.  First, it is improper to "simply ask whether the claims involve a patent-ineligible concept."  Instead, the analysis turns on "whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery."

Here, claim 6 requires a variety of computer-related components, including: "user identification code[s]," "a location information source," and "an information access code."  The claim then recites a specific structure of rules for providing information about the locations of objects to users and for managing user access to this information.  The Court found that it is therefore not apparent that claim 6 recites nothing significantly more than an instruction to apply an abstract idea using some unspecified, generic computer.

Instead, the Court found that claim 6 defines a set of rules for organizing and improving the behavior of a computerized location information system.  Here, as in McRO, the specific structure of the claimed rules would prevent broad preemption of all rules-based means for achieving the desired result.

The second problem with Defendants' argument, as noted by the Court, is the premise that analogizing the method of claim 6 to a class field trip confirms that claim 6 is directed to an abstract idea.  This fact is not necessarily dispositive -- "processes that automate tasks that humans are capable of performing are patent eligible if properly claimed," as noted in McRO.

More importantly, the Court found that the field trip analogy omits or glosses over many limitations of the claim, including the aforementioned "location information source" and access codes.  Managing the information provided by the location information source using a set of relationships defined in part by access codes is what the claim is all about.  The Court noted that the analogy also fails to capture another key feature of the claim:  centralization.  In the field trip analogy, a variety of independent actors (mother, father, chaperone) must coordinate with one another and no single actor performs all the claimed steps.  It is also not clear that any actor in the analogy performs the "interfacing" and "conveying" steps.  These deficiencies in the analogy help to illustrate why claim 6 is not merely a computerized version of conventional human activity, it is an improvement to a computer system that administers, manages, and conveys location information in a centralized way.

Accordingly, like the claims in Enfish and McRO, the Court found that claim 6 of the '012 Patent is not directed to an abstract idea and therefore survives step one of the Mayo eligibility analysis, and thus, satisfies section 101.

Written Description

Defendants also moved for judgment on the pleadings that the asserted patents are invalid under § 112(1) for failure to provide adequate written description.  Defendants contended that the common specification and prosecution history of the asserted patents unequivocally establishes that the inventor required user defined zones and user defined events to be essential to his purported invention, and because each of the asserted claims does not include both a user defined zone and user defined event, and are thus broader than the specification disclosure, the asserted claims are invalid for failing to comply with the written description requirement.

The test for the sufficiency of the written description is whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date.

In the context of a 12(c) motion, the Court may not consider expert testimony or any other evidence outside the pleadings.  Instead, the Court must draw all reasonable factual inferences in favor of the non-movant.  For this reason, the Court could not conclude that Defendants established their written description defense by clear and convincing evidence.  Even if the claims do not recite every "essential" technological feature discussed in the specification, this does not render them invalid as a matter of law.  Judgment on the pleadings is, therefore, not the proper way to resolve this fact-intensive defense.

Defendants further contended that the asserted patents are invalid under § 112(2) for failing to claim "what the patentee regarded as his invention."  This argument is based on the same premise as Defendants' § 112(1) defense, that "the inventor of the Asserted Patents unequivocally regarded user defined zones and user defined events as required features of his purported invention."

Unlike written description, validity under § 112(2) is a question of law.  However, the party asserting this defense must make a showing of a logical inconsistency or contradiction between the claims and the specification.  The fact that the asserted claims do not encompass every feature, or even every important feature, disclosed in the specification does not imply a logical contradiction.  Defendants cited no authority for the proposition that every feature disclosed in the specification must be claimed, and indeed the converse appears to be true.  The Court found no logical contradiction between the asserted claims and the common specification.

Report and Recommendation by Magistrate Judge Roy S. Payne

Comments

[EG]

Hey Joseph,

This case simply confirms that you can determine patent-eligibility better with a Ouija board than with the nonsensical and broken Mayo/Alice framework.

[Paul F. Morgan]

This kind of claim inevitably leads to rational wondering why such suits are now almost always being fought out on alleged 101 grounds, rather than on 103 grounds in an IPR with a one year stay of the litigation [which is far more than a year away from trial anyway]. Or even with a prompt 103 S.J. [if only the Fed. Cir. would not almost always overrule 102 or 103 S.J. motions notwithstanding KSR itself having been a 103 S.J. even if the D.C. judge would promptly consider it.]

[Scooby Don't]

"An object location event for leaving the yard sends an email and dials a phone of the pet owner."

I know this blog kissed its credibility goodbye a long time ago but anybody who recites junk like the quote above with a straight face is not worthy of being taken seriously about anything.

"the specific structure of the claimed rules would prevent broad preemption of all rules-based means"

Same with this. And that's setting aside the inherent ridiculous of rules having a "structure" that is meaningful in any sense other than an abstract one.

McRo is on the short wait list for termination. And you didn't hear it from anybody at "Patent Docs". Remember that.

[Scooby Don't]

"his case simply confirms that you can determine patent-eligibility better with a Ouija board than with the nonsensical and broken Mayo/Alice framework."

This isnt the Mayo/Alice framework.

This is the CAFC's McRo framework, which has been lauded here for its awesome "clarity."

Under Mayo/Alice, this case is disposed of in two seconds.

[Scooby Don't]

Is the "structure" of

If X, then authorized

different from the "stucture" of

If Y then authorized?

I can't wait until the CAFC picks an "expert" in "location content object attributes" to tell everybody the answer. They've only had twenty years to think about this, after all.

[skeptical]

Another meaningless post by the poster otherwise known as Malcolm Mooney....

Get well soon Patent Docs.