adp, llc, civil action no. 2:16-cv-00741-rws (lead) defendant. · 3 uniloc has also asserted...

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

MARSHALL DIVISION

UNILOC USA, INC. AND UNILOC

LUXEMBOURG, S.A.,

Plaintiffs,

v.

ADP, LLC,

Defendant.

BIG FISH GAMES, INC.,

Defendant.

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CIVIL ACTION NO. 2:16-CV-00741-RWS

(LEAD)

CIVIL ACTION NO. 2:16-CV-00858-RWS

MEMORANDUM OPINION AND ORDER

Before the Court are Defendant ADP, LLC (“ADP”) and Big Fish Games, Inc.’s (“Big

Fish”) (collectively, “ADP Defendants”) Motions to Dismiss the Complaint for Failure to State a

Claim (Docket Nos. 17 and 80, respectively) against Uniloc USA, Inc. and Uniloc Luxembourg,

S.A.’s (“Uniloc”).1 Uniloc’s case against Big Fish is consolidated with its case against ADP for

pretrial purposes, with the exception of venue. Docket No. 25.2 The motions were originally filed

while the cases were pending before Judge Gilstrap. On March 28, 2017, while ADP and Big

1 Defendant Zendesk, Inc. was dismissed on August 11, 2017, and its motion to dismiss (Docket No. 70)

was terminated on August 16, 2017. Defendants Blackboard, Inc. and Box, Inc. were dismissed on August

16, 2017, and their respective motions to dismiss (Docket Nos. 58 and 89) were also terminated on August

16, 2017.

2 “Docket No.” refers to the docket in Lead Case No. 2:16-cv-741 unless otherwise indicated.

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Fish’s motions were still pending before Judge Gilstrap, this Court ruled on several motions to

dismiss in Lead Case No. 2:16-cv-393 (“AVG”). See Docket No. 129 in AVG (the “AVG Order”).

The AVG Order addressed claims 1, 2, 7, 15 and 22 of U.S. Patent No. 6,510,466 (“the

’466 Patent”) and claims 1, 3, 7, 9, 13 and 15 of U.S. Patent No. 6,728,766 (“the ’766 Patent”).

See Docket No. 129 in AVG at 2. Of those claims, the Court held that claims 1, 2 and 7 of the ’466

Patent and claims 1 and 3 of the ’766 Patent are drawn to ineligible subject matter. Id. at 20. The

remaining claims the Court considered are means-plus-function claims. The Court held that the

defendants had not sufficiently established that the means-plus-function claims are represented by

the allegedly representative non-means-plus-function claims and accordingly declined to decide

whether the means-plus-function claims are also directed to ineligible subject matter. Id. at 7.

After the ADP cases were reassigned to the undersigned (Docket No. 149), the Court

ordered the parties in this case to file supplemental briefing on the effects of the AVG Order on the

pending motions. Docket No. 160. Uniloc, ADP, and Big Fish each filed supplemental briefs

(respectively, Docket Nos. 190, 174, and 180).

The claims Uniloc asserts against the ADP Defendants are not limited to the ones that it

asserted against the defendants in AVG.3 Specifically, the claims asserted in this case but not

asserted in AVG include claims 5, 11 and 17 of the ’766 Patent and claims 3–5, 8, 9, 13, 16–20,

22–24, 28–33, 35–37, 41 and 42 of the ’466 Patent. See Compl. against ADP, Docket No. 1; Am.

Compl. against Big Fish, Docket No. 57; Uniloc Supp. Br., Docket No. 190 at 2. Uniloc also

asserts against the ADP Defendants two additional patents, U.S. Patent Nos. 6,324,578 (“the ’578

3 Uniloc has also asserted infringement of the Asserted Patents in Lead Case No. 2:16-cv-862 against

Defendants Netsuite, Inc. and Nutanix, Inc. Nutanix Inc. joins ADP’s motion to dismiss (2:16-cv-862,

Docket No. 39 at 2). Netsuite filed its own Motion to Dismiss the Amended Complaint for Failure to State

a Claim (2:16-cv-862, Docket No. 25).

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Patent”) and 7,069,293 (“the ’293 Patent”), that it did not assert against the defendants in AVG.

Specifically, Uniloc asserts claims 1–8, 10–39, 41–46 of the ’578 Patent, and claims 1, 12 and 17

of the ’293 Patent. 4 Docket No. 190 at 2.

The ’578 and ’293 Patents are related to the ’466 and ’766 Patents, with the ’578 and ’766

Patents sharing a common specification and the ’466 and ’293 Patents also sharing a common

specification.5

ADP Defendants challenge all claims of the four asserted patents, alleging that they are

invalid under 35 U.S.C. § 101. Docket No. 17 at 6.6 For the reasons that follow, ADP’s Motion

is GRANTED-IN-PART and DENIED-IN-PART.

I. BACKGROUND

The background of the ’466 and ’766 Patents is addressed in the AVG Order. See Docket

No. 129 in AVG, at 2–4. Like the ’466 and ’766 Patents, the ’578 and ’293 Patents address aspects

of application management in the client-server environment.

The ’578 Patent is directed to obtaining user and administrator sets of configuration

preferences for applications and then executing the applications using both sets of obtained

preferences. See ’578 Patent, col. 3:40–45. Claim 1 of the ’578 Patent provides:

4 In its supplemental briefing, Uniloc does not include claim 22 of the ʼ466 Patent and claim 12 of the ʼ578

Patent in its chart of asserted claims against ADP. As Uniloc has not indicated to the Court that it intended

to drop these two claims, the Court considers these two claims in this Order.

5 “[T]he Asserted Patents are all part of a family of patents drawn toward addressing the inefficiencies in

application management in client-server environment. Accordingly, they share similar specifications.”

Docket No. 64 at 5–6. “The ‘293 Patent is a divisional of the ‘466 Patent and shares its specification. The

‘578 Patent is a Parent to the ‘766 Patent and shares its specification. Further, each pair of Patents

incorporates by reference the other pair’s specification.” Docket No. 174 at 2 n.3.

6 ADP and Big Fish’s motions to dismiss for failure to state a valid claim are nearly identical with the

exception that Big Fish’s Motion does not address the ʼ766 Patent, as Uniloc has not asserted infringement

of this patent against Big Fish. See Am. Compl. against Big Fish, Docket No. 57. The Court primarily

discusses and cites to ADP’s motion (the “Motion,” Docket No. 17).

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1. A method for management of configurable application programs on a

network comprising the steps of:

installing an application program having a plurality of configurable preferences

and a plurality of authorized users on a server coupled to the network;

distributing an application launcher program associated with the application

program to a client coupled to the network;

obtaining a user set of the plurality of configurable preferences associated with

one of the plurality of authorized users executing the application launcher

program;

obtaining an administrator set of the plurality of configurable preferences from

an administrator; and

executing the application program using the obtained user set and the obtained

administrator set of the plurality of configurable preferences responsive to

a request from the one of the plurality of authorized users.

The ’293 Patent describes distributing applications to on-demand servers from a centralized

network management server. See ’293 Patent at col. 50–53. For example, Claim 1 of the ’293

Patent provides:

1. A method for distribution of application programs to a target on-demand

server on a network comprising the following executed on a centralized network

management server coupled to the network:

providing an application program to be distributed to the network management

server;

specifying a source directory and a target directory for distribution of the

application program;

preparing a file packet associated with the application program and including a

segment configured to initiate registration operations for the application

program at the target on-demand server; and

distributing the file packet to the target on-demand server to make the

application program available for use by a user at a client.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6)

Under Federal Rule of Civil Procedure 12(b)(6), the Court must dismiss a complaint that

does not state a claim for relief that is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To state a plausible claim,

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Plaintiffs must plead facts sufficient to allow the Court to draw a reasonable inference that

Defendants are liable for the alleged patent infringement. See id. (citing Twombly, 550 U.S. at

556). At this stage, the Court accepts all well-pleaded facts as true and views those facts in the

light most favorable to the Plaintiffs. Bustos v. Martini Club, Inc., 599 F.3d 458, 461 (5th Cir.

2010).

Eligibility Under 35 U.S.C. § 101

In determining whether a claim is patent-ineligible, the Court must “first determine whether

the claims at issue are directed to a patent-ineligible concept.” Alice Corp. Pty. v. CLS Bank Int’l,

134 S. Ct. 2347, 2355, (2014). Claims directed to software inventions do not automatically satisfy

this first step of the inquiry. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016).

Rather, “the first step in the Alice inquiry . . . asks whether the focus of the claims is on [a] specific

asserted improvement in computer capabilities . . . or, instead, on . . . an ‘abstract idea’ for which

computers are invoked merely as a tool.” Id. at 1335–36.

If the Court determines that the claims are directed to an abstract idea, it then determines

whether the claims contain an inventive concept sufficient to transform the claimed abstract idea

into a patent-eligible application. Alice, 134 S. Ct. at 2357. An inventive concept is “some element

or combination of elements sufficient to ensure that the claim in practice amounts to ‘significantly

more’ than a patent on an ineligible concept.” DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d

1245, 1255 (Fed. Cir. 2014). The Court “consider[s] 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.” Alice, 134 S. Ct. at 2355 (internal quotation

omitted). Even if each claim element, by itself, was known in the art, “an inventive concept can

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be found in the non-conventional and non-generic arrangement of known, conventional pieces.”

Bascom Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350.

III. ANALYSIS

A. Asserted and Challenged Claims

ADP challenges all claims of the Asserted Patents, even though Uniloc has not alleged

infringement of every claim of the Asserted Patents. Uniloc argues that it would be legally

improper for the Court to invalidate unasserted claims. Docket No. 64 at 6 n.1 (citing 800 Adept,

Inc. v. Murex Sec., Ltd., 539 F.3d 1354, 1367 (Fed. Cir. 2008)). ADP argues that its challenge to

all claims in the four asserted patents is appropriate. Docket No. 88 at 9–10 (citing A Pty Ltd. v.

Ebay, Inc., Case No. 1:15-cv-155-RP, 2015 WL 10990118 at *4 (W.D. Tex. Oct. 8, 2015)). In the

interest of judicial economy, the Court declines to consider arguments regarding unasserted claims

at this time. Accordingly, to the extent ADP challenges any claim not asserted in this action, the

Motion is DENIED without prejudice.

B. Representative Claims

In the AVG case, the Court denied the defendants’ motion to dismiss as to claims 7, 9, 13,

and 15 of the ʼ766 Patent and claims 15 and 22 of the 466 Patent on the basis that defendants had

failed to carry their burden of showing that these means-plus-function claims are similar in scope

to or represented by the non-means-plus-function claims. Docket No. 129 in AVG, at 7.

Here, however, ADP asserts that claim 1 of each of the four asserted patents is

representative of the remaining respective independent claims, and that the attendant dependent

claims are representative of similar dependent claims. Docket No. 17 at 8–11. ADP argues that

each of the following independent claims are system claims which recite “the limitations of claim

1 in a means-plus-function language”: claims 17 and 31 of the ʼ578 Patent, claim 15 of the ʼ466

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Patent, claim 12 of the ʼ293 Patent, and claim 7 of the ʼ766 Patent. Id. ADP further argues that

each of the following independent claims recites “computer readable program means” for

performing the functions of claim 1 of each Patent: claims 32 and 46 of the ʼ578 Patent, claim 16

of the ʼ466 Patent, claim 17 of the ʼ293 Patent, and claim 13 of the ʼ766 Patent. Id. As to the

remaining independent claims 15 and 16 of the ʼ578 Patent, ADP asserts that claim 15 is a method

claim “which recites the features of claim 1 as executed at a client, not a server,” and that claim

16 is “a combined server-client system which combines the limitations of claims 17 and 31.” Id.

at 8.

Uniloc does not refute or even acknowledge ADP’s assertions of representativeness in its

Opposition and instead argues only about claim 1 of each patent and the respective dependent

claims. See Docket No. 64 at 13–14, 16–18, 20, 22–23. In fact, nowhere in its Opposition does

Uniloc address or cite to any of the other claims. See id. Uniloc’s Opposition treats the claims of

each patent collectively, never indicating that an inventive concept might be found in a means-

plus-function claim that is not also found in a non-means-plus-function claim. E.g., Docket No.

64 at 27 (“For example, claims of the ’466 Patent recite . . .”); 29 (“Further, the claims of the ’578

Patent recite . . .”).

Moreover, after the Court denied the motion to dismiss in AVG as to the means-plus-

functions claims, the Court ordered the parties to submit supplemental briefing regarding the

effects of the AVG Order on the instant motions. Docket No. 160 at 2. In its supplemental briefing,

ADP reasserts that it has met its burden to show that the scope of the means-plus-function claims

are sufficiently similar to the scope of the non-means-plus-function claims. Docket No. 174 at 3–

4. ADP argues that it has demonstrated that the method claims are sufficiently representative of

the means-plus-function claims “because the system[s] claims were ‘mirror’ images reciting

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‘means for’ performing the exact method steps found in the representative claims.” Id. (citing

Motion, Docket No. 17 at 8–11). ADP also reasserts in its supplemental briefing that “where

method claims are invalid under Section 101, corresponding system claims that contain only

‘minor differences in terminology but require performance of the same basic process’ are equally

invalid.” Id. (citing to Motion, Docket No. 17 at 18 (quoting Accenture Global Servs., GmbH v.

Guidewire Software, Inc., 728 F.3d 1336, 1344 (Fed. Cir. 2013))).

In its supplemental brief, Uniloc again does not refute ADP’s assertion of

representativeness. Instead, Uniloc states that because “some of these [means-plus-function]

claims are common to both sets of cases, Uniloc submits that it makes sense to deal with those

claims at one time after the renewed motions are filed in the AVG cases.” Id. at 2.

The Court is unpersuaded by Uniloc’s decision to punt the issue of arguing the scope of

means-plus-function claims until after the defendants in AVG have renewed their motions. Only

three of the independent means-plus-function claims asserted in the AVG case overlap with the

claims asserted against the ADP Defendants. Uniloc does not address the additional 11

independent claims that it asserts against the ADP Defendants but that it did not assert in AVG.

See Docket Nos. 64 and 190.

For the reasons above, and having considered the parties’ original and supplemental

briefings, the Court finds that ADP has adequately shown that claim 1 of the ʼ466 Patent, claim 1

of the ʼ766 Patent, claim 1 of the ʼ578 Patent, and claim 1 of the ʼ293 Patent, and their dependent

claims, are representative. See Content Extraction and Transmission LLC v. Wells Fargo Bank,

Nat. Ass’n, 776 F.3d 1343, 1348 (Fed. Cir. 2014) (where the Federal Circuit found that claim 1 of

the asserted patents were representative because all of the claims were substantially similar and

linked to the same abstract idea); see also Bilski v. Kappos, 561 U.S. 593, 612 (2010).

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Having now found the previously invalidated claim 1 of the ʼ466 Patent and claim 1 of the

ʼ766 to be representative of the means-plus-function claims, the Court GRANTS ADP’s Motion

to Dismiss as to claims 15 and 22 of the ʼ466 Patent and claims 7, 9, 13, and 15 of the ʼ766 Patent

for the reasons set forth in the AVG Order. See Docket No. 129 in AVG.

C. Need for Claim Construction

The parties disagree on whether claim construction is necessary to inform the Court’s

analysis as to patentability. Uniloc identifies a number of terms for which it argues claim

construction is necessary including: “configurable preferences,” see Docket No. 64. at 15-16, “an

instance of the selected one of the plurality of the application programs,”7 see id. at 18, “file

packet” and “segment configured to initiate registration operations,” see id. at 21, and “license

management policy information,”8 see id. at 23. Defendants argue that claim construction is not

necessary and that, even under the definitions and constructions proposed by Uniloc, the

constructions “merely specify particular data to be manipulated by its methods, or particular

computer environments in which to apply those methods.” Docket No. 88 at 5.

The Court issued a Claim Construction Memorandum and Opinion in this case on August

16, 2017 (Docket No. 233). However, the Court did not construe the terms that Uniloc identified

above as needing construction. Even so, “claim construction is not an inviolable prerequisite to a

7 The Court invalidated claim 1 of the ʼ466 Patent in the AVG Order and therefore need not consider the

patentability of this term again. See Docket No. 129 in AVG. The Court notes, however, that Uniloc does

not provide a proposed construction for “an instance of the selected one of the plurality of application

programs,” but instead only states that it “is important to clarify the general character of the patent . . . .”

See Docket No. 64 at 18.

8 The Court also invalidated claim 1 of the ʼ766 Patent in the AVG Order. See Docket No. 129 in AVG.

Even if the Court was to accept Uniloc’s proposed construction of “license management policy

information,” as setting “policies, such as the limit of the number of users, whether crossing the limit of

users is allowed or not and how users are counted,” Uniloc does not show how the construction would save

its claim from being patent-ineligible. See Docket No. 103 at 7.

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validity determination under § 101.” Bancorp Servs., LLC v. Sun Life Assur. Co. of Canada (U.S.),

687 F.3d 1266, 1273-74 (Fed. Cir. 2012). As the Court discusses below, the Court does not require

claim construction to determine the patent-eligibility of the Asserted Patents.

The Court next considers whether the remaining claims of each Asserted Patent are patent-

eligible.

D. Alice Step 1

ʼ578 Patent, Claim 1

ADP argues that the claims of the ’578 Patent are directed to the abstract idea of providing

two-tiered customization. Docket No. 17 at 14. ADP analogizes claim 1 of the ’578 Patent to

“conventional activity” among a supplier, a business and individual employees of the business. Id.

at 9–10. ADP also analogizes the claims to non-computerized methods used by travel agencies or

medical providers. Id. at 14–15. ADP argues that the claims merely couch conventional activity

in computer-related terms, which cannot rescue the claims from abstraction. Id. at 16 (citing

Device Enhancement LLC v. Amazon.com, Inc., 189 F.Supp.3d 392 (D. Del. 2016)). ADP provides

the example of “configurable preferences,” a claim term ADP describes as “so broad as to be no

different than the conventional preferences by which conventional suppliers customize their

services to increase consumer satisfaction.” Id. at 16–17. ADP next argues that computerized

preference management is an unpatentable abstract concept. Id. at 17 (citing Clear with Computers

v. Altec Indus., No. 6:14-cv-79, 2015 WL 993392, at *4 (E.D. Tex. Mar. 3, 2015)).

Uniloc argues that “the Asserted Patents solve particular problems in the computer field,

thus rendering them patent eligible.” Docket No. 64 at 5 (citing Enfish LLC v. Microsoft Corp.,

822 F.3d 1327, 1336 (Fed. Cir. 2016)). “The ’578 Patent,” Uniloc argues, “seeks to reduce costs

and increase uniformity in managing software in a network environment by delivering configured

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applications when demanded by a user and provides ‘an essentially hardware transparent ability

for an individual user to interface to an on-demand server supported client station while

maintaining the user’s personal preferences for each application program.’ ” Id. at 8–9 (citing ’578

Patent, col. 6:2–9). Uniloc states, “[t]he ’578 Patent is directed to resolving that problem by

claiming a method for management of configurable programs on a network.” Id. at 9 (citing ’578

Patent, col. 14:65–67). Specifically, “[a]n application launcher program associated with the

application program is distributed to a client coupled to the network;” “[a] user set of the plurality

of configurable preferences associated with one of the plurality of authorized users executing the

application launcher program is obtained;” “an administrator set of the plurality of configurable

preferences is obtained from an administrator;” and “[t]he application program is then executed

using the obtained user set and the obtained administrator set of the plurality of configurable

preferences responsive to a request from the one of the plurality of authorized users.” Id. at 9

(citing ’578 Patent, col. 15:1–13). The specification states that the claimed invention “provides

for the desired reduced costs and increased uniformity in managing software in a network

environment by delivering configured application when demanded by a user.” Id. (citing ’578

Patent, col. 6:2–5).

Uniloc also argues that ADP’s supplier analogy is erroneous because the claimed client-

server environment and other computer-related limitations render the claimed steps “clearly not

tasks that can be completed by a supplier providing supplies to two employees of a business.” Id.

at 14–15. Uniloc states that the fact that the asserted claims cannot be performed by the human

hand or in the human mind without specific hardware or circuitry “negates ADP’s argument that

the claims are simply an abstract idea.” Id. at 15 (citing Genband US LLC v. Metaswitch Networks

Ltd., 211 F. Supp. 3d 858, 906 (E.D. Tex. 2016), vacated and remanded on other grounds). Uniloc

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also disputes ADP’s construction of “configurable preferences,” which Uniloc argues is

inconsistent with the disclosure of the ’578 specification. Id.

Turning first to “configurable preferences,” the Court notes that despite the term’s

appearance on a list of terms that Uniloc identified as necessary for construction prior to a Section

101 analysis, see id. at 15–16 (citing Docket No. 34-1), the term does not appear on the parties’

April 20, 2017 Joint Claim Construction and Prehearing Statement as a term requiring

construction.9 See Docket No. 148. Nor did the Court construe the term “configurable

preferences” in its Claim Construction Memorandum and Order. See Docket No. 233.

Accordingly, “configurable preferences” takes its plain and ordinary meaning—any preferences

pertaining to the claimed application program that may be configured.

The claims of the ’578 Patent involve computers but do nothing to improve their

functionality. The claims employ off-the-shelf computer components without modification. See

Elec. Power Grp. LLC v. Alstom S.A., 830 F.3d, 1350 1355 (Fed. Cir. 2016). The Court has already

held that the kind of benefits they provide—“increased efficiency” or “reduced costs”—are not

technological benefits. Docket No. 129 in AVG, at 11–12. As with the ’466 Patent, the claims of

the ’578 are overly vague in that they recite “executing the application program using the obtained

user set and the obtained administrator set [of preferences],” e.g., ’578 Patent, col. 15:10–12,

without claiming any “particular way of programming or designing the software” to facilitate

execution of the program according to the claim. See id. at 11 (citing Apple, Inc. v. Ameranth,

Inc., 842 F.3d 1229, 1241 (Fed. Cir. 2016)).

9 The Court encourages parties to resolve disputes throughout the litigation, and the construction of

“configurable preferences” may reflect one such successful resolution.

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ADP’s assertion that the ’578 Patent claims are directed to “two-tiered customization” is

well supported in the claims. The focus of claim 1 is obtaining user and administrator sets of

configuration preferences and then executing an application using those preferences. The

application launcher, which the specification teaches may be as simple as an icon that provides a

URL, see ’578 Patent, col. 8:6–20, is not the central focus of the claims; rather, it is a generic

means by which the claims execute applications in light of two sets of preferences. Accordingly,

the Court finds that the claims of the ’578 Patent are directed to the abstract idea of “providing

two-tiered customization” in a client-server environment.

ʼ293 Patent, Claim 1

ADP argues that the claims of the ’293 Patent are directed to the abstract idea of “providing

on-demand distribution of information.” Docket No. 17 at 21. ADP analogizes claim 1 of the

’293 Patent to a library implementing an inter-library loan system using a central repository. Id.

at 22–23. In ADP’s analogy, the claimed servers are like libraries, and the source and target

directories are like shelves. Id. (citing Clear with Computers, 2015 WL 993392, at *4). Moreover,

ADP argues, “specifying source and destination directories is a conventional and necessary step

for receiving or storing any file over a network, and therefore contributes no weight in the abstract

idea analysis.” Id. at 23 (citing NexusCard, Inc. v. Kroger Co., 173 F.Supp.3d 462, 467 (E.D. Tex.

2016)). As with the ’578 Patent, ADP alleges that the claims of the ’293 Patent merely “wrap []

conventional practices in generic computer terminology.” Id. at 23.

Uniloc argues that the “computer problem” solved by the ’293 Patent was “the limited

capabilities associated with centralized management of software.” Docket No. 64 at 9. Uniloc

states that the ’293 Patent addresses that problem by providing “a uniform framework for

deployment of new or updated application programs from different software designers.” Id.

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(quoting ’293 Patent, col. 3:32–34). Uniloc again disputes ADP’s analogy on the grounds that the

computer-related limitations of the claims render it not abstract. Id. at 20–21. Specifically, Uniloc

puts great weight on the claimed “segment configured to initiate registration operations,” which it

states should be construed to “include[ ] ‘an import data file and a call to an import program

executing on a target station.’ ” Id. at 21 (quoting ’293 Patent, col. 5:45–48).

The claims of the ’293 Patent also fail to improve the functioning of a computer. They

provide for off-the-shelf components, with claim 2 even specifying TivoliTM, a commercially-

available brand, as limiting the “network management server” in claim 1. ʼ293 Patent, col. 21:38–

39. The Court agrees with the ADP Defendants that the allegedly “uniform framework” provided

by the ’293 Patent includes only generic activities of servers. Docket No. 17 at 23. Even under

Uniloc’s proposed construction of “segment configured to initiate registration operations,” the

claim still does not amount to more than a routine activity of commercial network management

software as described by the specification itself, and is therefore directed to an abstract idea. See

’293 Patent, col. 17:20–54 (describing the TME 10TM network management software).

ADP’s assertion of the alleged abstract idea as “providing on-demand distribution of

information” is not a perfect fit for the claims, which use an on-demand server but do not distribute

the software “on-demand” in the sense of the distribution being responsive to a request from a

user. Rather, the claims are directed to the centralized distribution of software to a plurality of on-

demand servers from a central network management server. See Docket No. 64 at 9. Thus, the

Court finds that a better characterization of the abstract idea is “centralized distribution of

software.”10

10 An abstract idea can be described in different ways, and the Court describing the idea differently from

ADP is not fatal to its motion. See Docket No. 129 in AVG at 11 (citing Ameranth, 842 F.3d at 1240).

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In sum, the claims of the Asserted Patents are directed to abstract ideas. Because step one

of the Alice inquiry is satisfied, the Court proceeds to step two.11

E. Alice Step Two

Having concluded that claim 1 of the ʼ578 Patent and ʼ293 Patent are drawn to abstract

ideas, the next step is to determine whether the claims contain meaningful limitations that create

an inventive concept. Alice, 124 S. Ct. at 2359. The Court also considers whether the remaining

claims of the ʼ466 and ʼ766 Patents create an inventive concept.

Defendants generally argue that none of the claims of the Asserted Patents provide an

inventive concept because they recite generic computer equipment like “networks,” “clients,”

“servers,” and “remote workstations” for exchanging generic information. Docket No. 17 at 27.

Likewise, Defendants contend that the claimed steps of “install[ing],” “distribut[ing],” and

“executing” programs over a network are “standard computer functionality undertaken in any

client-server system.” Id. Defendants characterize limitations like “obtaining preferences” and

“preparing a ‘file packet’ ” as basic computer tasks that correspond to conventional information

management steps, and which are not activities unique to computer hardware. Id. at 28.

Defendants assert that any ordered combinations of these claim elements also fail because even

the claims that recite specific methods for performing computer tasks implement the above-listed

abstract ideas in generic server-client environments. Id.

Defendants distinguish the Asserted Patents, which they claim do not provide a unique

solution to a technical problem unique in the computer field, from the patents in DDR Holdings

which were found to provide a unique solution “rooted in computer technology” to retain visitors

11 The Court does not revisit its finding that the claims of the ’466 and ’766 Patents are directed to

abstract concepts. See Docket No. 129 in AVG, at 12. The Court addresses the remaining claims of the

’466 and ’766 Patents at step two of the Alice inquiry.

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to a website, and from the patent in Enfish, which improved computer software functionality itself

through use of a “self-referential table.” Id. at 30–31 (citing DDR Holding, 773 F.3d 1245; Enfish,

822 F.3d 1327). Defendants state that the Asserted Patents, instead, “centralize operations in order

to offer two-tiered customization services and centrally-distributed products, to distribute

information on-demand, and to manage permissions,” each of which is an abstract concept,

reflective of conventional solutions known outside the computer arts, and which provide the same

benefits of “reduced costs” and “increased uniformity” provided by conventional centralization.

Id. at 31–32.

Uniloc responds that Defendants ignore that “[t]he ‘inventive concept’ may arise in one or

more of the individual claim limitations or in the ordered combination of the limitations” and “[t]he

inventive concept inquiry requires more than recognizing that each claim element, by itself, was

known in the art.” Docket No. 64 at 27 (citing Bascom, 827 F.3d at 1350).

Uniloc asserts that the Court should reject Defendants’ argument that the Asserted Patents

recite generic computer equipment because these terms have specific meanings within the context

of application management in a client-server environment. Id. at 32–34 (citing Genband US LLC,

211 F. Supp. 3d at 904–05 (finding that the claims were patent-eligible, despite the claim relying

on generic IP protocols and devices, because the recited components and operations were

meaningless outside the context of a computer network that uses those specific protocols and

devices)). Uniloc argues, for example, that the term “application program” is defined in the patent

as referring “to the code associated with the underlying program functions, for example Lotus

Notes or a terminal emulator program.” Id. Uniloc argues as another example that “application

program launcher distributed to populate the user desktop may only include a URL and an

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associated ICON and, possibly, code to allow obtaining a user identification and password

information.” Id.

Moreover, Uniloc contends that the Asserted Patents and claimed inventions amount to

inventive concepts because they “resolve longstanding problems in the industry of network

management.” Docket No. 64 at 30–31 (citing DDR Holdings, 773 F.3d at 1258). Uniloc asserts

that the claimed inventions are “specifically tailored to solve discrete problems that existed at the

time.” Id. at 32 (citing Bascom, 827 F.3d 1341).

In their reply, Defendants argue that Genband does not apply in this case because there,

“the claimed operations were ‘meaningless outside the context of a computer network,’ while

Uniloc’s methods are just as advantageous when applied outside computer environments.” Docket

No. 88 at 14. Defendants further distinguish that in Bascom, “the ‘ordered combination’ of the

claimed generic components (a client computer, a remote server, computer networks, and filtering

software) held an inventive step because it provided more dynamic and efficient filtering than the

combinations of those elements known in the networking arts.” Docket No. 88 at 9. Defendants

argue that, here, “the order of Uniloc’s claim steps results in wholly predictable improvements,

because they reflect the conventional steps taken for centralized distribution of products and

information.” Id. Defendants also claim that Uniloc’s reliance on DDR Holdings is incorrect

because Uniloc’s patents apply well-known methods for distributing products and information not

specific to the internet or computers, whereas the technology in DDR Holdings “overrode the

‘routine and conventional sequence of events’ that would otherwise occur on the internet. Id.

(citing DDR Holding, 773 F.3d at 1258).

The Asserted Patents here do not provide for a unique solution rooted in computer

technology. See DDR Holdings, 773 F. 3d 1245. Nor do the claimed inventions improve computer

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software functionality itself, see Enfish, 822 F.3d at 1339, or are specifically tailored to solve

discrete problems that existed at the time, see Bascom, 827 F.3d at 1350. Defendants have met

their burden of showing that the claims of the Asserted Patents recite routine computer functions

for exchanging information using generic off-the-shelf computer components, see Elec. Power.

Grp., 830 F.3d at 1355, which are just as advantageous when applied outside of the computer

environment, see Genband, 211 F. Supp. 3d at 904–05. Though the Asserted Patents are all part

of the same family of patents and share similar specifications, see Docket No. 174 at 2 n.3, the

Court explains below why each of the remaining claims of the Asserted Patents specifically does

not create an inventive concept and is drawn to ineligible subject matter.

The ʼ466 Patent

Uniloc argues that the ʼ466 Patent “addresses the problem of seamless integration of

application access across heterogeneous networks, and, to that end, provides application programs

on-demand from a server to a user logging in to a client supported by the server.” Docket 64 at

31. According to Uniloc, the individual claim limitations of claim 1 of the ʼ466 Patent “allows for

an instance of an application program to be provided to the client in response to a selection of the

application program for which a user is authorized,” which “allows for instances of the programs

to be provided to the client as needed for execution.” Id. at 28. Uniloc states that “a customized

user interface desktop is provided at the client, which displays the applications the user is

authorized to access.” Id.

The Court has already explained why the individual limitations of claim 1 of the ʼ466

patent, separately or in ordered combination, fail to provide an inventive concept. Docket No. 129

in AVG, at 14. In AVG, the Court credited the specifications as listing purported advantages of the

claimed invention but found that Uniloc had not shown how these advantages constituted inventive

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concepts in themselves. Id. This Court also found that, unlike the claims in Bascom, the claims

of the ʼ466 Patent relied only upon generic computer components used in a routine arrangement.

Id. at 15. The Court further determined that the ʼ466 Patent claims shared more of the

characteristics with the invalid claims in Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir.

2014) than with the valid claims in DDR Holdings because the “display regions” operated in a

conventional manner. Id. The human performance example of distributing software by hand also

showed that a preexisting analog exists to the claimed invention of distributing software in a client-

server network environment. Id.

Though Uniloc asserts in its complaints (Docket Nos. 1, 57) dependent claims 3, 4, 5, 8, 9

and 13 of the ʼ466 Patent against the ADP Defendants, Uniloc does not identify in its response,

and the Court cannot find, any limiting language that could result in any of the elements of these

claims, or any combination thereof, amounting to more than an inventive concept. To the contrary,

ADP Defendants have met their burden of showing that each of the dependent claims either recites

conventional computer activity (see claim 3, “distributing application launcher programs” and

“receiving the selection,” and claim 9, “determining” license availability), recites generic

instruction to maintain and use a certain kind of information (see claim 4, “maintaining

configurable user preference,” claim 5, specifying that the user preference information are

configured and updated by the user or administrator, and claim 8, including “the step of

configuring the user desktop interface not to include display regions… for which the user is not

authorized”), or constitutes electronic recordkeeping (see claim 13, “logging information”). See

Docket No. 17 at 20–21, 27–29.

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The Court therefore finds that the additionally asserted dependent claims of the ̓ 466 Patent,

taken individually or as an ordered combination, do not provide for an inventive concept and are

drawn to ineligible subject matter.

The ʼ766 Patent

Uniloc next argues that the ʼ766 Patent provides for an inventive concept because

“[d]etermining license availability for a selected application program for a user allows the user to

move between different client stations when accessing the application program.” Docket No. 64

at 28–29. Uniloc states that “[m]obility is one of the issues identified in the patent that the art at

the time struggled with.” Id.

The Court has already explained that independent claim 1 and dependent claim 7 of the

ʼ766 Patent do not provide an inventive concept because the claims recite generic electronic

recordkeeping functions of maintaining, querying and relaying information. See Docket 129 in

AVG, at 18–19.

Uniloc asserts the additional dependent claim 5 of the ʼ766 Patent against ADP,12 and

again, Uniloc does not identify, and the Court cannot find, any limiting language in claim 5 that

could transform the claims of the ʼ766 Patent into an inventive concept. ADP has met its burden

of showing that claim 5, which limits claim 1 “wherein [sic] at least one of a user identify based

policy, an administrator policy override definition or a user policy override definition defines a

policy for managing at least one of a response time or a usage rate,” merely adds that the license

policy can be associated with a group when performing the electronic recordkeeping function of

maintaining this information at a license management server. ʼ766 Patent, col. 15:37–22:40; see

12 It appears from Uniloc’s supplemental briefing that the only non-means-plus-function claim of the ʼ766

Patent it asserts against ADP that it did not assert against defendants in AVG, and that has not been

invalidated thus far, is claim 5. Docket No. 190 at 2.

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also Docket No. 17 at 25–26. Accordingly, claim 5 does not contain an inventive concept and is

drawn towards patent-ineligible subject matter.

The ʼ578 Patent

Uniloc argues that the individual limitations of claim 1 of the ʼ578 Patent, or the ordered

combination of these limitations, provide for discrete inventive concepts because the claims

“provide[ ] for management of configurable application programs in a network environment from

a central on-demand server location while allowing for user preferences to be tracked independent

of the hardware location of the user.” Docket No. 64 at 29. According to Uniloc, the inventive

concept of the ʼ578 Patent lies in “enabling sharing of a storage device between computers or use

of separate but synchronized databases of preferences values at the computer,” providing an

unconventional technological solution to the technological problem of “roaming users within a

heterogeneous computer network.” Docket No. 103 at 3–4. Uniloc asserts that these limitations

“also provide for reduced costs and increased uniformity in managing software in a network

environment by delivering configured applications when demanded by a user.” Id.

Defendants argue that, like the other Asserted Patents, the ʼ578 Patent couches

conventional techniques in computer-specific terms. Docket No. 17 at 16. Defendants claim that

claim 1 of the ʼ578 Patent recites language, like “installing” applications on servers and clients

and “exchang[ing] data,” which are generic computer tasks. Id. As discussed above, Defendants

analogize that the claimed methods offer the same central management of multiple preferences

that exist in business practices, such as making procurement requests. Docket No. 17 at 15, 29.

Uniloc argues in its sur-reply that the language of the ʼ578 limitations “inherently requires

performance on a computer,” and therefore is not a function that could be performed by a librarian.

Docket No. 103 at 4.

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As the Federal Circuit stated in Enfish, “fundamental economic and conventional business

practices are often found to be abstract ideas, even if performed on a computer.” 822 F.3d at 1335.

The Court finds that the individual limitations of claim 1 of the ʼ578 Patent do not provide an

inventive concept. Each limitation of claim 1 relies upon generic computer components used in a

routine arrangement. See Bascom, 827 F.3d at 1346; see also Docket No. 17 at 27. The first step

of claim 1, “installing an application program having a plurality of configurable preferences and a

plurality of authorized users on a server coupled to a network” recites standard computer

functionality between client-server systems. ʼ578 Patent, col. 14:63–67. The second step of

“distributing the application launcher program” to a client on the network also recites a generic

computer function. ʼ578 Patent, col. 15:1–3; see also Alice, 134 S. Ct. at 2358. The third and

fourth steps of “obtaining” the configurable preferences from the users and administrators recite

generic electronic recordkeeping functions of querying and relaying information. ̓ 578 Patent, col.

15:4–9; see also Alice, 134 S. Ct. at 2359. Nothing in the claim or specification indicates how the

information is obtained. Moreover, the Federal Circuit has held that “merely selecting

information, by content or source, for collection, analysis, and display does nothing significant to

differentiate a process from ordinary mental processes.” Elec. Power Grp., 830 F.3d at 1355. The

fifth step of the claim, “executing the application program” using the obtained information from

the administrator and user, is also a generic function without claiming any “particular way of

programming or designing the software” to facilitate execution of the program according to the

claim, and “merely claim[s] the resulting systems.” ʼ578 Patent, col. 15:10–13; Apple, Inc. v.

Ameranth, Inc., 842 F.3d 1229, 1241 (Fed. Cir. 2016).

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Moreover, as discussed above and in the Court’s AVG Order, the benefits of reducing costs

or increasing uniformity or efficiency claimed by the ʼ578 Patent are not technological benefits or

improvements to a computer’s functionality. Docket No. 129 in AVG, at 11–12.

Finally, as with the ʼ466 and ʼ766 Patents, Uniloc does not identify any limiting language

to suggest that an inventive concept could exist as to dependent claims 2–8, and 10–14. See Docket

No. 64. Defendants, on the other hand, argue that these claims only specify where the configurable

preferences come from (claims 2, 3, 10), where the preferences are stored (claim 6), where the

command to execute the application program comes from (claims 4, 5, 7), whether to obtain default

preferences (claim 8), and whether multiple user sets and application programs may be used

(claims 11–14). See Docket No. 17 at 17–18. The Court agrees that these claims, individually and

in any ordered combination, recite conventional practices in generic computer technology, similar

to the ʼ766 Patent.13

Accordingly, the Defendants have met their burden of showing that the claims of the ʼ578

Patent do not provide an inventive concept and are drawn to ineligible subject matter.

The ʼ293 Patent

Uniloc claims that the individual limitations of claim 1 of the ʼ293 Patent, or the ordered

combination of these limitations contribute to the inventive concept of “enhancing installation and

registration of application programs on computers of the network” to solve the technological

problem of “limited capabilities associated with centralized management of software distribution.”

Docket No. 103 at 4.

In addition to arguing that the Asserted Patents recite generic computer equipment and

functions, and therefore do not provide for an inventive concept, see supra p. 15–16, Defendants

13 The ʼ578 and ʼ766 Patents share a common specification.

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assert that the claimed methods of the ʼ293 Patent are digital analogs to indexing and distributing

physical media, such as books. Docket No. 17 at 29. ADP Defendants analogize that the “file

packets” and “directories” of the claims perform the same functions as analog cards and shelves,

and that the claimed methods are “no more efficient or effective at distributing information than

their classical analogs[sic], save for the inherent speed of digital communication.” Id. at 29.

In its sur-reply, Uniloc argues that the ̓ 293 Patent specifications teaches that the limitations

of the ʼ239 claims includes programmed instructions for processing specific data, which can only

be performed by a computer, and is not performable by a librarian. Docket No. 103 at 3–4.

The Court agrees with Defendants that claim 1 of the ʼ293 Patent does not provide for an

inventive concept, similar to the ʼ466 Patent.14 The first step of claim 1 “provid[es] an application

program to be distributed to the network management server,” which recites a generic computer

function that existed at the time of the invention, and which is to be performed on a brand-name

server. ʼ239 Patent, col. 21:26–27; see also ʼ239 Patent, col. 7:26–27 (“TivoliTM server provides

a means for software distribution and management in computer network system.”). The second

step of the claim which “specif[ies] a source directory and a target directory” for distribution of

the application program amounts to electronic recordkeeping. ʼ239 Patent, col. 21:29–30; see also

Uniloc USA, Inc. v. E-MDS, Inc., 6:14-CV-00625-RWS, 2015 WL 10791906, at *4, 6 (E.D. Tex.

Aug. 19, 2015). The third and fourth steps of “preparing a file packet associated with the

application program and including a segment configured to initiate registration operations for the

application program at the target on-demand server” and distributing this file packet to the target

on-demand server also recite generic computer functions of indexing and distributing a program.

ʼ239 Patent, col. 21:31–37; see also Alice, 134 S. Ct. at 2358.

14 The ʼ293 and ʼ466 Patents share a common specification.

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Defendants have adequately shown that claim 1 of the ̓ 293 Patent recites generic computer

components, and provides for functions that are merely digital analogs to indexing and distributing

data. Accordingly, claim 1 of the ʼ293 Patent does not provide an inventive concept and is drawn

to ineligible subject matter.

IV. CONCLUSION

Defendants have shown that claims 3–5, 8, 9, 13, 15–20, 22–24, 28–33, 35–37, 41 and 42

of the ʼ466 Patent, claims 5, 7, 9, 11, 13, 15 and 17 of the ʼ766 Patent, claims 1–8, 10–39 and 41–

46 of the ʼ578, and claims 1, 12 and 17 of the ʼ293 Patent are drawn to ineligible subject matter

and, therefore, invalid. Accordingly, the Motion to Dismiss (Docket No. 17) is GRANTED as to

those claims. The Motion is DENIED as to any unasserted patent claims. The Motion is DENIED

AS MOOT as to Defendants’ motion to dismiss the claims for infringement of the ʼ293 Patent for

failure to plead sufficient factual allegations.

Defendant Big Fish’s Motion (Docket No. 80) is also GRANTED-IN-PART and

DENIED-IN-PART consistent with this Order.

It is therefore ORDERED that all claims asserted by Uniloc against Defendants in these

actions (2:16-cv-741; 2:16-cv-858) are DISMISSED WITH PREJUDICE.

Any motions remaining in these cases are DENIED AS MOOT.

The Clerk of the Court is directed to close these cases.

____________________________________ROBERT W. SCHROEDER IIIUNITED STATES DISTRICT JUDGE

So ORDERED and SIGNED this 28th day of September, 2017.

adp, llc, civil action no. 2:16-cv-00741-rws (lead) defendant. · 3 uniloc has also asserted...

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