Wanker v. United States

In the United States Court of Federal Claims

No. 18-1660

(Filed: 31 January 2020)

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WILLIAM PAUL WANKER, *

*

Plaintiff, * Patent Infringement; RCFC 12(b)(6);

* Motion to Dismiss; 35 U.S.C. § 101;

v. * Patent-ineligible Subject Matter;

* Abstract Idea.

THE UNITED STATES, *

*

Defendant. *

*

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Cabrach J. Connor, of Connor Kudlac Lee PLLC, with whom was Jennifer Tatum Lee,

both of Austin, TX, for plaintiff.

Alex Hanna, Trial Attorney, Commercial Litigation Branch, Civil Division, Department

of Justice, with whom were Joseph H. Hunt, Assistant Attorney General, Gary L. Hausken,

Director, and Scott Bolden, of counsel, all of Washington, DC, for defendant.

OPINION AND ORDER

HOLTE, Judge.

Plaintiff accuses the government of infringing four United States patents. The

government filed a motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Rules

of the Court of Federal Claims (“RCFC”), alleging the asserted patents are invalid under 35

U.S.C. § 101 for claiming patent-ineligible subject matter. This case was transferred to the

undersigned Judge on 29 July 2019. After the parties submitted their respective briefs, the Court

permitted plaintiff to file a supplemental paper addressing specific claim language and claim

elements relevant to the patent-ineligibility inquiry under 35 U.S.C. § 101. The government was

permitted to file a response paper. Oral argument was held 6 November 2019. For the following

reasons, the Court DENIES the government’s motion to dismiss under Rule 12(b)(6).

I. Overview

The Court draws the following facts from plaintiff’s complaint and assumes for the

purposes of this motion all alleged facts are true. See, e.g., Boyle v. United States, 200 F.3d

1369, 1372 (Fed. Cir. 2000) (stating when ruling on a motion to dismiss for failure to state a

claim, this Court “must accept all well-pleaded factual allegations as true and draw all reasonable

inferences in [the nonmovant’s] favor”).

Plaintiff William Paul Wanker is the “inventor and sole owner” of four U.S. patents:

7,302,429 (the '429 patent); 8,126,779 (the '779 patent); 8,204,797 (the '797 patent); and

9,595,041 (the '041 patent) (collectively, “the asserted patents”). Compl. ¶¶ 2, 10, ECF No. 1.

The asserted patents are all part of a single patent family, with the '429 patent serving as the

parent application. See id. ¶ 39. The '797 and '041 patents are each divisional applications of the

'429 patent, while the '779 patent is a continuation-in-part of the '429 patent. Id.

The asserted patents relate generally to consumer information systems, providing a

method for comparing products and services through the use of various weighting factors to

assign each merchant a relative ranking. U.S. Pat. No. 7,302,429 to Wanker, at Abstract

(hereinafter “'429 Patent”). This allows for easier comparison and contrasting of various

merchants according to weighted factors specific to the consumer, resulting in the presentation of

a ranking relative to other merchants. See Compl. ¶ 49. Plaintiff commercializes technology

covered by the asserted patents through his company, Legit Services Corporation, to “design[],

manufacture[], and sell[] online software solutions to aid product and service purchasing analysis

using selection criteria with variable weighting factors.” Id. ¶ 9.

The government uses the Past Performance Information Retrieval System (“PPIRS”), a

web-based enterprise application for gathering, processing, and displaying data regarding the

performance of entities and organizations supplying goods and services to the United States. Id.

¶ 11. Plaintiff alleges various government agencies, including the Department of Defense

(“DoD”) and General Services Administration (“GSA”), infringe the asserted patents through

their use of PPIRS. See id. ¶¶ 4, 97, 100. According to plaintiff, “[t]he GSA directs and controls

PPIRS.” Id. ¶ 97. The DoD E-Business Office sponsors PPIRS, which is then “administered by

the Naval Sea Logistics Center Detachment Portsmouth.” Id. ¶ 100. PPIRS is used for “ranking

merchants that sell products and services to the United States Government,” by “stor[ing] in a

database information regarding individual government contractors, the products and services

offered by each contractor, and the corresponding contract performance data for each

contractor.” Compl. ¶¶ 109, 115.

II. Procedural History

Plaintiff filed his complaint on 26 October 2018. See Compl. The government

responded by filing a motion to dismiss on 1 April 2019. See Defendant United States of

America’s Motion to Dismiss Under Rule 12(b)(6) (“Gov’t’s MTD”), ECF No. 11. The

government’s motion seeks to dismiss plaintiff’s complaint for failure to state a claim upon

which relief can be granted under RCFC 12(b)(6), alleging the asserted patents are invalid as a

matter of law under 35 U.S.C. § 101 for being directed to patent-ineligible subject matter. See

Gov’t’s MTD. Plaintiff responded to the government’s motion to dismiss on 10 May 2019. See

Plaintiff’s Response in Opposition to Defendant’s Motion to Dismiss Under Rule 12(b)(6) (“Pl.’s

Opp’n to Gov’t’s MTD”), ECF No. 14. The government filed its reply brief on 24 May 2019.

See Defendant United States of America’s Reply to Plaintiff’s Opposition to Motion to Dismiss

Under Rule 12(b)(6) (“Gov’t’s Reply”), ECF No. 15. This case was transferred to the

undersigned Judge on 29 July 2019. See Order, ECF No. 17.

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The Court held a status conference on 26 September 2019, after which the Court

permitted plaintiff to file a supplemental paper addressing “specific claim language and claim

elements relevant to patent eligibility under 35 U.S.C. § 101.” Order, ECF No. 21. The

government was permitted to respond to any such filing by plaintiff. See id. Plaintiff filed a

supplemental paper on 7 October 2019. See Plaintiff’s Supplemental Response in Opposition to

Defendant’s Motion to Dismiss Under Rule 12(b)(6) (“Pl.’s Suppl. Resp.”), ECF No. 22.1 The

government responded on 23 October 2019. See Defendant United States of America’s

Supplemental Reply to Plaintiff’s Supplemental Response in Opposition to Motion to Dismiss

Under Rule 12(b)(6) (“Gov’t’s Suppl. Reply”), ECF No. 25. Oral argument was held 6

November 2019. See Order, ECF No. 21.

III. Factual History and Technology

Plaintiff filed the '429 patent, the parent application of plaintiff’s asserted patent family,

on 11 April 1999. See '429 Patent at Cover Page. Originally filed as application number

09/290,006, the '429 patent does not claim priority to any previously filed applications. See id.

Plaintiff asserts infringement of 61 total claims: 15 claims of the '429 patent, including

independent claims 1, 8, 17, and 18; 2 claims of the '779 patent, including independent claim 1;

28 claims of the '797 patent, including independent claims 1, 8, and 9; and 16 claims of the '041

patent, including independent claims 1, 14, 25, and 29.

“The Asserted Patents are directed to an online information system and methods of

collecting, processing and analyzing information regarding merchants and the products and

services offered to establish a weighting of comparison information.” Compl. ¶ 49. The

merchant information is then presented to the consumer “in the form of a ranking based on

multiple, independently definable criteria.” Id.

Both parties agree claim 1 of the '429 patent serves as a representative claim of the

asserted claims. See Tr. at 10:3–16, ECF No. 27.

Claim 1 of the '429 patent recites:

1. In an online comparison system, a method of ranking merchants, comprising:

entering by a consumer a set of weighting factors prior to receiving query

information related to a potential consumer purchase, the weighting factors

corresponding to categories of merchant comparison information data;

1

Plaintiff submitted four exhibits with his supplemental response pursuant to the Court’s 26 September 2019 Order:

Exhibit A, an article discussing Alice and § 101 cases; Exhibit B, an amendment entered during prosecution of the

'041 patent discussing § 101; Exhibit C, an article discussing technology allegedly related to the patented

technology; and Exhibit D, an amendment entered during prosecution of the '429 patent in response to an examiner

interview and discussing § 103. The government objected to the inclusion of these exhibits as “these new exhibits

were not expressly authorized by the Court’s September 26, 2019 order,” while also emphasizing the government’s

“motion seeks dismissal on the pleadings.” Gov’t’s Suppl. Reply at 1–2. The Court does not consider these exhibits

when deciding the government’s motion to dismiss pursuant to Rule 12(d). RCFC 12(d) (“If, on a motion under

RCFC 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 RCFC 56.”).

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receiving the query information related to the potential consumer purchase;

receiving a plurality of merchant comparison information data for a

plurality of merchants related to completing the potential consumer

purchase, the merchant comparison information data for a merchant

organized into a plurality of categories, wherein the merchant comparison

information data includes non-opinion data from at least two categories

from price category, product availability category, product inventory

category, time to deliver product category, payment terms category,

payment method category, merchant creditworthiness category, and

inventory category information;

calculating a plurality of respective merchant data weight resultant values

for each merchant of the plurality of merchants by multiplying each

weighting factor from the entered set of weighting factors by a data value

of the merchant comparison information data from a corresponding

merchant data category;

calculating an aggregate score for each merchant by summing the plurality

of calculated merchant data weight resultant values;

ranking the merchants based on the aggregate scores to produce a ranking

result; and

returning the ranking result to the consumer, the ranking result

corresponding to the received query information.

'429 Patent at col. 22:25–56.

Figure 1, reproduced below, provides an “illustrative block diagram of the comparison

shopping system.” Id. at col. 2:66–67.

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Id. at Fig. 4.

The database stores information “relating to products offered by merchants, . . .

information on the merchants[,] . . . [and] an initial set of weighting factors.” Id. at col. 4:5–8.

The server connects the database to the consumer by receiving “queries from consumers [sic] []

who are located at remote locations and access the server through the internet.” Id. at col. 4:9–

11. “In response to a query forwarded by the consumer the server requests comparison

information from the database relating to both the product specified in the query and the

merchants offering the specified product.” Id. at col. 4:29–32. Additionally, the server

“retrieves weighting factor information from the database” and “applies the weighting factor

information to the merchant information and the comparison information on the specified

product to calculate weighted comparison factors relating to product and merchant information.”

'429 Patent at col. 4:33–37.

The weighting factors are “arranged into four categories: product information;

merchant’s business information; merchant specific information on the specified product; and

merchant specific information on the merchant’s business history.” Id. at col. 4:48–52 (reference

numerals omitted). The weighted comparison factors are “summed to an aggregate score for

each merchant.” Id. at col. 4:40–41. The aggregate score is used to rank the various merchants

being analyzed. Id. at col. 4:41–43. The consumer then receives the ranking of merchants from

the server “through the internet as a response to the consumer’s query.” Id. at col. 4:43–45.

Figure 3, reproduced below, shows a “flow diagram illustrating the process of applying

the weighting factors to calculate the ranking of merchants.” Id. at col. 3:22–24.

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'429 Patent at Fig. 3.

Viewed in connection with Figure 1, Figure 3 illustrates the process beginning with the

server’s request for comparison information in response to a consumer’s query. Id. at col. 6:36–

40. “The server checks whether comparison information is available on the product specified in

the consumer’s query.” Id. at col. 6:40–42. If comparison information is not available, the query

is returned. See id. at Fig. 3.

When comparison information is available, the “process proceeds [to the next step] where

the database [] responds to the server’s request by providing the comparison information,

including weighting factors.” Id. at col. 6:43–46. When comparison information is not available

or is insufficient to perform a ranking, the server returns the query to the consumer for

modification. Id. at col. 6:53–59. If the information is sufficient to calculate a ranking, the

system proceeds to a final series of steps. Id. at col. 6:63–64. This final series of steps: screens

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merchants not meeting selected criteria via a filter; screens comparison information not common

to all surviving merchants; calculates an aggregate score for each merchant as a sum of applied

weighting factors; and ranks the merchants based upon their aggregate score. See '429 Patent at

col. 6:64–8:14. A “ranking of the merchants who are offering the [specified] goods” is finally

returned to the consumer. Id. at col. 8:10–14.

The asserted patents identify certain shortcomings in the prior art regarding the inability

to “provide a ranking based on a wide variety of factors related to consumer purchasing habits

and decisions.” Compl. ¶ 50 (citing '429 Patent at col. 2:44–47). At the time of filing the '429

patent in April 1999, plaintiff asserts that “then-existing online shopping systems and ‘shop bots’

provided a price comparison tool with product or service ranking based only on the offered price

of the product or service.” Id. ¶ 53 (citing '429 Patent at col. 1:13–20). By focusing only on

price, previous systems were susceptible to merchants’ manipulation of the rankings. See id. ¶

54 (citing '429 Patent at col. 1:39–48). For example, merchants could lower the price of a

product, resulting in a higher ranking, but then simultaneously add “large shipping and handling

surcharges for final product delivery.” Id. ¶ 54 (citing '429 Patent at col. 1:39–48). Without the

ability to customize the search results, consumers were unable “to compare product and service

offerings from different vendors.” Id. ¶ 55 (citing '429 Patent at col. 2:13–15). The need for a

more comprehensive information comparison tool led to plaintiff’s design of “systems and

methods us[ing] information associated with two or more information comparison categories.”

Id. ¶ 52.

Plaintiff argues the asserted patents add a step to the functionality of the database, not

present in the prior art: the pre-query entering (i.e., inputting or transcribing) of information

before the database begins generating results. Compl. ¶ 57 (“systems and methods to define,

prior to data analysis, consumer-modifiable weighting factors”). Plaintiff further argues the

present technology makes “significant improvement in online product purchasing systems by

providing automated product or service comparison that simultaneously improved computer

processing efficiency.” Id. ¶ 58. The improvements in computer processing efficiency include

reduction in processing time and increased processor efficiency. Id. ¶ 59. These improvements

were implemented through “unconventional user interface and data processing technology”

which were “not well-understood, routine, or conventional” at the time of invention. Id. ¶ 62.

As a result, consumers receive an improved “user-interface design and data processing

technology” providing “functionality, cost-effective use, and usability that was unavailable in

routine use by conventional online product comparison tools and/or systems at the time [of

invention].” Id. ¶ 64.

IV. Applicable Law

a. Standard of Review for Motion to Dismiss Pursuant to RCFC 12(b)(6)

A defendant may seek dismissal of an action for failure to allege “enough facts to state a

claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007). Facial plausibility requires the plaintiff to plead “factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009). This requires “more than a sheer possibility that a defendant

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has acted unlawfully.” Id. “Threadbare recitals of the elements of a cause of action, supported

by mere conclusory statements, do not suffice.” Id. When deciding a motion to dismiss under

RCFC 12(b)(6) for failure to state a claim upon which relief can be granted, the Court “must

accept well-pleaded factual allegations as true and must draw all reasonable inferences in favor

of the claimant.” Athey v. United States, 908 F.3d 696, 705 (Fed. Cir. 2018) (quoting Bell/Heery

v. United States, 739 F.3d 1324, 1330 (Fed. Cir. 2014)). However, the Court is “not required to

accept the asserted legal conclusions.” Am. Bankers Ass’n v. United States, 932 F.3d 1375, 1380

(Fed. Cir. 2019) (citing Iqbal, 556 U.S. at 678).

b. Patent Eligibility Pursuant to 35 U.S.C. § 101

“A patent shall be presumed valid. . . . The burden of establishing invalidity of a patent or

any claim thereof shall rest on the party asserting such invalidity.” 35 U.S.C. § 282(a).

Congress, pursuant to its authority under U.S. Const., Art. I, § 8, cl. 8, commonly referred to as

the “Patent Clause,” established the United States Patent and Trademark Office (“USPTO”) for

the purpose of examining and issuing patents. 35 U.S.C. § 2(a)(1); see also Microsoft Corp. v.

i4i Ltd. P’ship, 564 U.S. 91, 95 (2011). Congress promulgated the requirements for issuing a

patent, which patent examiners evaluate during the examination process. Microsoft, 564 U.S. at

96. Patent examiners make “various factual determinations” during the patent examination

process to ensure the various patentability requirements are met. Id. at 96. Among these factual

determinations are “the state of the prior art in the field and the nature of the advancement

embodied in the invention.” Id. Issued patents grant the patentee “certain exclusive rights,”

which may be enforced through civil actions for infringement pursuant to 35 U.S.C. § 271. Id. at

96. Patent-eligible subject matter is prescribed in 35 U.S.C. § 101: “any new and useful process,

machine, manufacture, or composition of matter, or any new and useful improvement thereof.”2

Additionally, there are important implicit exceptions to § 101. “Laws of nature, natural

phenomena, and abstract ideas are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573

U.S. 208, 216 (2014) (quoting Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S.

576, 589 (2013)). To allow the patentability of such “basic tools of scientific and technological

work” would run the risk of “‘inhibit[ing] further discovery by improperly tying up the future

use of’ these building blocks of human ingenuity.” Id. at 216 (quoting Mayo Collaborative

Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 85 (2012)).

When the accused patent infringer is the United States, the action is brought under 28

U.S.C. § 1498, which waives the government’s sovereign immunity for claims of patent

infringement. Zoltek Corp. v. United States, 672 F.3d 1309, 1315–17 (Fed. Cir. 2012). Alleged

infringers, including the United States, may assert various defenses to patent infringement, such

as asserting the invalidity of a patent. Microsoft, 564 U.S. at 96. When challenging the validity

of an issued patent, the alleged infringer must overcome the statutory presumption of validity.

2

Issued patents receive the benefit of a “presumption recogniz[ing] the deference that is due to a qualified

government agency presumed to have performed its job correctly. In this context, for example, the court presumes

that examiners have some expertise in interpreting the prior art and are familiar with the level of skill in the art.”

David O. Taylor, Clear But Unconvincing: The Federal Circuit’s Invalidity Standard, 21 Fordham Intell. Prop.

Media & Ent. L.J. 293, 312 (2011) (citing Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1323 (Fed. Cir. 1999)

(“The presumption of validity under 35 U.S.C. § 282 carries with it a presumption that the Examiner did his duty

and knew what claims he was allowing.”) (internal quotation marks omitted)).

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Id. at 97. Attempts to overcome the presumption of validity must be shown by “clear and

convincing evidence.” Id.

“Patent eligibility under § 101 presents an issue of law,” Accenture Global Servs., GmbH

v. Guidewire Software, Inc., 728 F.3d 1336, 1340 (Fed. Cir. 2013), which can therefore “be

determined at the Rule 12(b)(6) stage.” Aatrix Software, Inc. v. Green Shades Software, Inc.,

882 F.3d 1121, 1125 (Fed. Cir. 2018). When evaluating claims for patent-eligible subject matter,

the Court uses a two-part test established by the Supreme Court, commonly referred to as the

“Alice/Mayo” test for the two cases from which it was derived. Step one determines “whether

the claims at issue are directed to one of [the] patent-ineligible concepts.” Alice, 573 U.S. at 217.

Step two considers “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.” Id. (quoting Mayo, 566 U.S. at 78–79). The Supreme Court

describes step two as the search for an “inventive concept.” Id. (quoting Mayo, 566 U.S. at 72).

The two steps of the Alice/Mayo test “are plainly related.” Elec. Power Grp., LLC v.

Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). Step one, however, “is a meaningful one

sometimes ending the § 101 inquiry.” Id. (citing Alice, 573 U.S. at 217). It is not sufficient to

“simply ask whether the claims involve a patent-ineligible concept.” Enfish, LLC v. Microsoft

Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). Rather, step one requires an examination focusing

on the “claimed advance over the prior art to determine if the claim’s character as a whole is

directed to excluded subject matter.” Affinity Labs of Tex., LLC v. DIRECTV LLC, 838 F.3d

1253, 1257 (Fed. Cir. 2016) (internal quotation marks omitted). The Federal Circuit provides

helpful guidance for performing the step one inquiry. First, the claims are “considered in light of

the specification.” Enfish, 822 F.3d at 1335. Second, any advances or advantages over the prior

art may be considered. See Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1375 (Fed. Cir.

2016). Finally, a comparison to claims found eligible or ineligible in prior cases may be useful.

See Enfish, 822 F.3d at 1334 (“[B]oth [the Federal Circuit] and the Supreme Court have found it

sufficient to compare claims at issue to those claims already found to be directed to an abstract

idea in previous cases.”); see also Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288,

1294 (Fed. Cir. 2016) (“[T]he decisional mechanism courts now apply is to examine earlier cases

in which a similar or parallel descriptive nature can be seen—what prior cases were about, and

which way they were decided.”).

At step two, the claims are analyzed for any “additional features” constituting an

“inventive concept,” despite being “directed to an abstract idea.” Affinity Labs, 838 F.3d at 1262

(quoting Alice, 573 U.S. at 221). Any “additional features” identified “must be more than ‘well-

understood, routine, conventional activity.’” Id. (quoting Mayo, 566 U.S. at 79). “[S]imply

appending conventional steps, specified at a high level of generality, to laws of nature, natural

phenomena, and abstract ideas cannot make those laws, phenomena, and ideas patentable.”

Mayo, 566 U.S at 82. If the “only ‘inventive concept’ is the application of an abstract idea using

conventional and well-understood techniques, the claim has not been transformed into a patent-

eligible application of an abstract idea.” Cellspin Soft, Inc. v. Fitbit, Inc., 927 F.3d 1306, 1316

(Fed. Cir. 2019) (quoting BSG Tech. LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290–91 (Fed. Cir.

2018)).

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“Determining patent eligibility requires a full understanding of the basic character of the

claimed subject matter.” MyMail, Ltd. v. ooVoo, LLC, 934 F.3d 1373, 1379 (Fed. Cir. 2019)

(citing Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1273–74

(Fed. Cir. 2012)). Although “claim construction is not an inviolable prerequisite to a validity

determination under § 101 . . . it will ordinarily be desirable—and often necessary—to resolve

claim construction disputes prior to a § 101 analysis, for the determination of patent eligibility

requires a full understanding of the basic character of the claimed subject matter.” Bancorp

Servs., 687 F.3d at 1273–74.3 Where the parties raise a claim construction dispute, the Court

“must either adopt the non-moving party’s constructions or resolve the dispute to whatever

extent is needed to conduct the § 101 analysis.” MyMail, 934 F.3d at 1379. The Federal Circuit

has, however, affirmed dismissals under Rule 12(b)(6) motions prior to any substantive claim

construction where the parties did not dispute the construction of any claim terms. See

Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 719 (Fed. Cir. 2014) (quoting Ultramercial, LLC

v. Hulu, LLC, No. 09-cv-6918, 2010 WL 3360098, at *6 (C.D. Cal. Aug. 13, 2010)) (“No formal

claim construction was required because the asserted claims disclosed no more than ‘an abstract

idea garnished with accessories’ and there was no ‘reasonable construction that would bring

[them] within patentable subject matter.’”).4

While determining patent eligibility is a matter of law, it may “contain disputes over

underlying facts.” Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018). “Whether the

claim elements or the claimed combination are well-understood, routine, conventional is a

3

The relationship between claim construction and early § 101 determinations has also garnered the attention of

certain scholars:

[A] claim construction ruling from the district court has been recognized as “the single most

important event in the course of a patent litigation [because] [i]t defines the scope of the property

right being enforced, and is often the difference between infringement and non-infringement, or

validity and invalidity.” As such, the Federal Circuit recently explained that claims should be

construed to the extent needed to resolve the § 101 dispute at the 12(b)(6) stage but left open the

possibility that claim construction may not be required in some cases.

Daniel Harris Brean, Business Methods, Technology, and Discrimination, 2018 Mich. St. L. Rev. 307, 335 (2018)

(quoting Retractable Techs. v. Becton, Dickinson and Co., 659 F.3d 1369, 1370 (Fed. Cir. 2011) (Moore, J.,

dissenting). While recognizing this trend is not always followed by the district courts, the author further observed

the impact of the Federal Circuit’s decisions in both Berkheimer and Aatrix: “For these reasons, most early

dispositive motions in patent cases should ordinarily be denied or deferred pending claim construction and the close

of discovery. Not so for § 101 motions after Alice, at least thus far.” Id. at 336. The author also noted “[t]he

Federal Circuit has very recently attempted to undermine this practice, holding that ‘[w]hether something is well-

understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.’ The

court separately held that the patent specification and the allegations in the patentee’s civil complaint are capable of

creating factual disputes that would preclude a pretrial judgment of ineligibility.” Id. at 335.

4

See also ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759, 767 (Fed. Cir. 2019) (“In this case, ChargePoint

has not expressed a need for claim construction, so we need not look to the specification for that purpose.”); Univ. of

Fl. Research Found., Inc. v. Gen. Elec. Co., No. 17-171, 2017 WL 5502940, at *3 (N.D. Fl. Nov. 16, 2017) (“A

claim construction hearing is not necessary here. . . . [A]ny claim-construction-related disputes are over how broad

or narrow these terms should be construed. Based on the procedural posture of a motion to dismiss, this Court

construes these terms narrowly and within their ordinary meaning to a skilled individual familiar with the art.”),

aff’d, 916 F.3d 1363 (Fed. Cir. 2019); and Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 275 F.3d

306, 308 (D. Mass. 2017) (“In applying § 101 at the pleading stage, the court construes the patent claims in a

manner most favorable to the non-moving party.”), aff’d, 915 F.3d 743 (Fed. Cir. 2019).

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question of fact.” Aatrix, 882 F.3d at 1128. “Any fact, such as this one, that is pertinent to the

invalidity conclusion must be proven by clear and convincing evidence.” Berkheimer, 881 F.3d

at 1368 (citing Microsoft Corp., 564 U.S. at 95). “Patent eligibility has in many cases been

resolved on motions to dismiss.” Id. at 1368. However, the Federal Circuit has restricted the

invalidation of patents on a 12(b)(6) motion to dismiss to instances when “there are no factual

allegations that, taken as true, prevent resolving the eligibility question as a matter of law.”

Aatrix, 882 F.3d at 1125. At this stage, “not every § 101 determination contains genuine

disputes over the underlying facts material to the § 101 inquiry.” Berkheimer, 881 F.3d at 1368.

As one scholar succinctly stated, “[patent] eligibility should be understood to present a question

of law based on underlying facts.” Paul R. Gugliuzza, The Procedure of Patent Eligibility, 97

Tex. L. Rev. 571, 601 (2019). “[A]t the pleading stage, eligibility is not the yes-or-no question it

would be in a court that viewed eligibility to present a pure question of law. Rather, any factual

issues should be resolved by reference to the Supreme Court’s decisions in Twombly and Iqbal,

which read Civil Rule 8(a)(2) to mandate that the complaint contain factual allegations sufficient

to justify a plausible inference of liability.” Id. at 612 (citing Iqbal, 556 U.S. at 678; Twombly,

550 U.S. at 557).

While not all allegations regarding inventiveness are sufficient to defeat a motion to

dismiss, such as those “wholly divorced from the claims or the specification, . . . plausible and

specific factual allegations that aspects of the claims are inventive are sufficient.” Cellspin, 927

F.3d at 1317. “As long as what makes the claims inventive is recited by the claims, the

specification need not expressly list all the reasons why this claimed structure is

unconventional.” Id. “[C]oncrete allegations in the . . . complaint that individual elements and

the claimed combination are not well-understood, routine, or conventional activity” are sufficient

to deny a motion to dismiss under § 101. Aatrix, 882 F.3d at 1128.

Challenging invalidity early in a case, such as at the Rule 12 stage, has a significant

impact on the analysis of whether the steps are merely conventional, or instead amount to an

inventive concept. See Timothy R. Holbrook & Mark D. Janis, Patent-Eligible Processes: An

Audience Perspective, 17 Vand. J. Ent. & Tech. L. 349, 362–63 (2015). “[T]he Supreme Court

has made it clear that the use of merely conventional steps is not sufficient to create a patent-

eligible inventive concept.” Id. at 362. In particular, when analyzing claims for an inventive

concept under § 101 at the motion to dismiss stage under Rule 12, a finding of merely

conventional steps indicates no factual disputes are present in making the determination. Id. To

answer the question of patent-eligibility at this early stage, the Court must be able to base its

decision “on the sources properly considered on a motion to dismiss, such as the complaint, the

patent, and materials subject to judicial notice.” Aatrix, 882 F.3d at 1128.

In recent years, “[d]istrict courts have resolved the majority of § 101 controversies early

in case management—on the pleadings, motion to dismiss, and summary judgment stages.”

Jeffrey A. Lefstin, Peter S. Menell & David O. Taylor, Final Report of the Berkeley Center for

Law & Technology Section 101 Workshop: Addressing Patent Eligibility Challenges, 33

Berkeley Tech. L.J. 551, 579 (2018). Since the Supreme Court decisions in both Mayo and

Alice, “the rate at which patents were found invalid [under § 101] increased significantly.” Id. at

576. From June 2014 to February 2017, district courts rendered 157 decisions regarding patent

invalidity under § 101 at the motion to dismiss stage. Id. at 578. Of those 157 decisions, 94 of

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them, or 60%, found the claims invalid. Id. “A motion to dismiss based on [an insufficient

allegation of facts], however, directly raises the issue of whether the factual allegations in the

complaint, if proven, would allow a court to infer liability.” Gugliuzza, supra, at 614. Such

circumstances require the relevant factual allegations to be assumed as true, causing the

“plausibility standard of Twombly and Iqbal” to become “crucial to the analysis.” Id.

V. Discussion

a. Alice/Mayo Step One

The Court begins the patent-ineligibility inquiry by analyzing the claims under step one

of the Alice/Mayo test: “whether the claims at issue are directed to one of [the] patent-ineligible

concepts.” Alice, 573 U.S. at 217. At the outset, the Court notes the parties have yet to

exchange proposed claim constructions; however, neither plaintiff nor defendant raised

arguments regarding disputed claim terms. See Tr. at 11:1–11, ECF No. 27. Thus, to the extent

claim terms do require any baseline level of construction by the Court for purposes of resolving

the present motion, the Court will use the plain and ordinary meaning of those terms. See

Phillips v. AWH Corp., 415 F.3d 1303, 1312–13 (Fed. Cir. 2005) (quoting Vitronics Corp. v.

Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996)) (“[T]he words of a claim ‘are generally

given their ordinary and customary meaning.’”); Univ. of Fl. Research Found., 2017 WL

5502940, at *3 (finding a claim construction hearing unnecessary as the court was able to

“construe the terms using their plain and ordinary meaning”), aff’d, 916 F.3d 1363 (Fed. Cir.

2019).

The government alleges the claims are directed to the abstract idea of “comparing

merchants offering a specified product/service by weighing certain factors.” Gov’t’s MTD at 27.

“[T]he ‘invention’ is nothing more than routine data processing and calculations capable of being

performed by hand or in the mind that are performed on a generic computer system(s), using the

Internet for communication.” Id. at 10. This is accomplished through “recit[ing] conventional

elements or generalized steps to be performed using conventional elements.” Id. at 27. Plaintiff

counters the government’s assertion, stating the patents “are directed to solutions that are

necessarily rooted in computer network shopping systems to overcome a problem arising in that

field.” Pl.’s Opp’n to Gov’t’s MTD at 16. The “asserted claims are directed to solving problems

particular to computer network shopping portals and do not preempt all applications of the idea

behind the solution to that problem.” Id.

At step one, the Court must analyze the claims, focusing on the “claimed advance over

the prior art to determine if the claim’s character as a whole is directed to excluded subject

matter.” Affinity Labs, 838 F.3d at 1257 (internal quotation marks omitted). Claim 1 of the '429

patent relates to a “method of ranking merchants,” comprising a series of steps for performing

the method. See '429 Patent at col. 22:25–56. The merchants are ranked by a series of

“weighting factors.” See id. The “weighting factors” are used to calculate an aggregate score for

each merchant, which is returned to the consumer for comparison purposes. See id.

The Federal Circuit has repeatedly held claims for “collecting, analyzing, manipulating,

and displaying data” are directed to an abstract idea. Univ. of Fl. Research Found., Inc. v. Gen.

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Elec. Co., 916 F.3d 1363, 1367 (Fed. Cir. 2019); Intellectual Ventures I LLC v. Capital One Fin.

Corp., 850 F.3d 1332, 1340 (Fed. Cir. 2017) (“We conclude that the patent claims are, at their

core, directed to the abstract idea of collecting, displaying, and manipulating data.”); Elec. Power

Grp., 830 F.3d at 1351 (“[T]he claims do not go beyond requiring the collection, analysis, and

display of available information in a particular field, stating those functions in general terms,

without limiting them to technical means for performing the functions that are arguably an

advance over conventional computer and network technology.”). Here, “non-opinion data” is

compiled for a series of merchants, the data is then manipulated by “multiplying each weighting

factor . . . by a data value of the merchant comparison information data,” and the resulting list of

merchants is displayed to the consumer. '429 Patent at col. 22:38, 46–48. On its face, claim 1 of

the '429 patent is directed to the abstract idea of collecting, analyzing, manipulating, and

displaying data.

Plaintiff, however, further alleges the claims of the asserted patents are “directed to

improvements in the relevant technology.” Pl.’s Suppl. Resp. at 11. When the technology at

issue concerns purported improvements to computer technology, the Federal Circuit has added

clarity to the Alice/Mayo step one inquiry: “whether the claims are directed to an improvement

to computer functionality versus being directed to an abstract idea.” In re TLI Commc’ns LLC

Patent Litig., 823 F.3d 607, 612 (Fed. Cir. 2016) (quoting Enfish, 822 F.3d at 1335) (internal

quotation marks omitted). This results in a sharp contrast of claims “directed to an improvement

in the functioning of a computer” and claims “simply adding conventional computer components

to well-known business practices.” Id. (quoting Enfish, 822 F.3d at 1335). Rather than being

directed to “specific improvement[s] to computer functionality,” claims “directed to the use of

conventional or generic technology in a nascent but well-known environment, without any claim

that the invention reflects an inventive solution to any problem presented by combining the two,”

fail Alice/Mayo step one. Id. However, improvements to the functioning of the computer itself

need not be “defined by reference to ‘physical’ components. . . . Much of the advancement made

in computer technology consists of improvements to software that, by their very nature, may not

be defined by particular physical features but rather by logical structures and processes.” Enfish,

822 F.3d at 1339.

As stated on numerous occasions throughout the specification of the '429 patent, the

problem facing the inventor was to overcome the shortcomings of “then-existing online shopping

systems and ‘shop bots’ provid[ing] a price comparison tool with product or service ranking

based only on the offered price of the product or service.” Compl. ¶ 53. Neither the

specification nor the claims themselves provide support for “improvement[s] to computer

functionality.” Enfish, 822 F.3d at 1335. While the specification describes the various

components of the system in functional terms, claim 1 of the '429 patent does not improve the

functioning of the computer. Despite plaintiff’s assertions to the contrary, the language of claim

1 of the '429 patent does not appear to contain “advancements in the field of user-interface

design and data processing technology.” Pl.’s Opp’n to Gov’t’s MTD at 17.

A comparison of similar claims previously analyzed under the Alice/Mayo test can prove

helpful. See Enfish, 822 F.3d at 1335. An analysis of two Federal Circuit cases, Enfish, LLC v.

Microsoft Corp. and Versata Development Group, Inc. v. SAP America, Inc., further clarifies the

distinction between claims directed to the improvement of the computer itself and those adding

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conventional components to known business practices. In Enfish, the specification of the patents

indicated the technology was directed to the creation of a “self-referential” database, or a logical

model “explaining how the various elements of information are related to one another.” Enfish,

822 F.3d at 1330. The “self-referential property” of the database referred to the inclusion of “all

data entities in a single tab, with column definitions provided by rows in that same table.” Id.

The self-referential model included two functions not found in the prior art: the ability to “store

all entity types in a single table,” and the capability to “define the table’s columns by rows in that

same table.” Id. at 1332.5

In finding the Enfish patent passed step one of the Alice/Mayo test, the Federal Circuit

focused on whether the claims were on a “specific asserted improvement in computer

capabilities (i.e., the self-referential table for a computer database) or, instead, on a process that

qualifies as an ‘abstract idea’ for which computers are invoked merely as a tool.” Id. at 1336.

The focus of the claims was not “economic or other tasks for which a computer is used in its

ordinary capacity,” but rather presented “an improvement to computer functionality itself.” Id.

“[T]he self-referential table function[ed] differently than conventional database structures,”

eliminating the need for a “programmer to preconfigure a structure to which a user must adapt

data entry.” Id. at 1337. Not only was operation of previous relational models inferior to the

self-referential model, but the specification taught other benefits as well, including “increased

flexibility, faster search times, and smaller memory requirements.” Enfish, 822 F.3d at 1337.

Thus, the claims in Enfish specifically address improvements to the “way a computer stores and

retrieves data in memory.” Id. at 1339. This presents a stark contrast to the claims at issue in

Versata, which failed Alice/Mayo step one.

In Versata, the technology at issue involved a method for pricing products based upon the

organization of customers into customer groups and products into product groups. Versata Dev.

Grp., Inc. v. SAP America, Inc., 793 F.3d 1306, 1312 (Fed. Cir. 2015). According to the

specification of the patent at issue in Versata, U.S. Patent No. 6,553,350, pricing information is

associated with the various customer and product groups, which are organized according to a

hierarchical structure and then sorted according to various objective factors. Id. The various

functions performed include: “arranging a hierarchy of organizational and product groups,

storing pricing information, retrieving applicable pricing information, sorting pricing

information, eliminating less restrictive pricing information, and determining the price.” Id. at

1334.6

5

Claim 17 of U.S. Patent No. 6,151,604 in Enfish, reproduced below, is illustrative of claim language that improves

the computer itself:

17. A data storage and retrieval system for a computer memory, comprising:

means for configuring said memory according to a logical table, said logical table including:

a plurality of logical rows, each said logical row including an object identification number

(OID) to identify each said logical row, each said logical row corresponding to a record

of information;

a plurality of logical columns intersecting said plurality of logical rows to define a plurality

of logical cells, each said logical column including an OID to identify each said logical

column; and

means for indexing data stored in said table.

Enfish, 822 F.3d at 1336.

6

Claim 17 of U.S. Patent No. 6,553,350, which failed Alice/Mayo step one in Versata, is representative of the

technology:

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Similar to the use of “organizational and product group hierarchies to determine a price”

in Versata, id. at 1333, in this case claim 1 of the '429 patent uses weighting factors applied to

“categories of merchant comparison information data.” '429 Patent at col. 22:27–30. While the

specification discusses possible increases in computer efficiency associated with the calculation

of an aggregate score for each merchant and subsequent ranking thereof, such increases in

efficiency as to the process itself do not amount to the “improved computer capabilities” plaintiff

alleges. Pl.’s Opp’n to Gov’t’s MTD at 18; see also '429 Patent at col. 21:47–50 (“The ability of

the present invention to allow the consumer to customize the ranking gives the consumer the

tools to increase the accuracy, reliability and relevance of the ranking.”).

During oral argument, plaintiff’s counsel attempted to distinguish claim 1 of the '429

patent from the claims in Versata. Plaintiff’s counsel characterized the technology in Versata as

simply the process “of performing the pricing algorithm. It was taking information, organizing

it, performing some mathematical operation on it, . . . and then outputting a result.” Tr. at 30:21–

24, ECF No. 27. In contrast, claim 1 of the '429 patent “change[s] the way the database query is

constructed and applied.” Id. at col. 31:6–7. What distinguishes claim 1 of the '429 patent from

the claims at issue in Versata is the system “defining how the process is performed, not what

information is being put through.” Id. at col. 34:9–10. Despite plaintiff’s characterization of

claim 1 of the '429 patent, like Versata, the system is directed to the “basic conceptual

framework for organizing information.” Versata, 793 F.3d at 1334. While the pre-query input

of information may constitute a modification to the business practice known at the time the

applications were filed, the computer is nevertheless invoked as nothing more than a tool for the

application of the process itself. Enfish, 822 F.3d at 1336. The consumer uses the computer to

enter the weighting factors “prior to receiving query information.” '429 Patent at col. 22:27–28.

This reordering of the steps within the process does not represent a “specific improvement to the

way computers operate.” Enfish, 822 F.3d at 1336. Claim 1 of the '429 patent is thus much

more akin to the claims discussed in Versata than those discussed in Enfish.

17. A method for determining a price of a product offered to a purchasing organization comprising:

arranging a hierarchy of organizational groups comprising a plurality of branches such that an

organizational group below a higher organizational group in each of the branches is a

subset of the higher organizational group;

arranging a hierarchy of product groups comprising a plurality of branches such that a product

group below a higher product group in each of the branches in a subset of the higher product

group;

storing pricing information in a data source, wherein the pricing information is associated, with

(i) a pricing type, (ii) the organizational groups, and (iii) the product groups;

retrieving applicable pricing information corresponding to the product, the purchasing

organization, each product group above the product group in each branch of the hierarchy

of product groups in which the product is a member, and each organizational group above

the purchasing organization in each branch of the hierarchy of organizational groups in

which the purchasing organization is a member;

sorting the pricing information according to the pricing types, the product, the purchasing

organization, the hierarchy of product groups, and the hierarchy of organizational groups;

eliminating any of the pricing information that is less restrictive; and determining the product

price using the sorted pricing information.

Versata, 793 F.3d at 1312–13.

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Plaintiff, however, further attempts to draw similarities between claim 1 of the '429

patent and those the Federal Circuit discussed in DDR Holdings, LLC v. Hotels.com, L.P., which

passed Alice/Mayo step one. 773 F.3d 1245 (Fed. Cir. 2014). The technology in DDR Holdings

involved “systems and methods of generating a composite web page that combines certain visual

elements of a ‘host’ website with content of a third-party merchant.” DDR Holdings, 773 F.3d at

1248. The claims in DDR Holdings required a “data store . . . associated with a host web page

having a link correlated with a commerce object” coupled with “a computer processor . . . to

serve a composite web page.”7 Id. at 1249.

While it is true the claims in DDR Holdings were found to be drawn to a “challenge

particular to the Internet,” the Federal Circuit made clear “these claims stand apart because they

do not merely recite the performance of some business practice known from the pre-Internet

world along with the requirement to perform it on the Internet.” Id. at 1257. Rather, the claims

in that case were “necessarily rooted in computer technology in order to overcome a problem

specifically arising in the realm of computer networks.” Id. (emphasis added). Despite

plaintiff’s arguments, the Court finds the claims of the '429 patent dissimilar to those in DDR

Holdings because they are not “necessarily rooted in computer technology.” Id. At step one of

the Alice/Mayo analysis, the claims of the '429 patent are more akin to those discussed Versata.

Whether the claims of the '429 patent are directed to an abstract idea under step one of

the Alice/Mayo framework is a “close call.” See Bascom Global Internet Services., Inc. v. AT&T

Mobility LLC, 827 F.3d 1341, 1349 (Fed. Cir. 2016) (finding the claims directed to an abstract

idea at Alice/Mayo step one, but noting the asserted patent presented a “close call” as “the claims

and their specific limitations do not readily lend themselves to a step-one finding that they are

directed to a non[-]abstract idea” and deferring “consideration of the specific claim limitations’

narrowing effect for step two.”). The Court finds the concept of ranking merchants according to

a series of weighting factors is “directed to the abstract idea of collecting, analyzing,

manipulating, and displaying data.” Univ. of Fl. Research Found., 916 F.3d at 1368 (internal

quotation marks omitted). Accordingly, the Court finds claim 1, designated by the parties as the

representative claim of the '429 patent, directed to an abstract idea under step one of the

Alice/Mayo test. After finding the claims directed to an abstract idea, the Court turns to step two

of the Alice/Mayo test to determine whether “the claims have sufficient additional limitations to

transform the nature of any claim into a patent-eligible application of an abstract idea.” Versata,

793 F.3d at 1306.

7

Claim 13 of U.S. Patent No. 6,993,572, passing Alice/Mayo step one, serves as a representative claim of the

technology:

13. An e-commerce outsourcing system comprising:

a) a data store including a look and feel description associated with a host web page having a

link correlated with a commerce object; and

b) a computer processor coupled to the data store and in communication through the Internet

with the host web page and programmed, upon receiving an indication that the link has

been activated by a visitor computer in Internet communication with the host web page, to

serve a composite web page to the visitor computer wit[h] a look and feel based on the look

and feel description in the data store and with content based on the commerce object

associated wit[h] the link.

DDR Holdings, 773 F.3d at 1249.

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b. Alice/Mayo Step Two

The Court searches for an “inventive concept” by analyzing “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, 573 U.S. at 217

(quoting Mayo, 566 U.S. at 79, 78). The government argues there is no such “inventive concept”

as the claims merely “recite standard components and data processing steps.” Gov’t’s MTD at

38. The claims “add nothing more than steps to carry-out the abstract idea – i.e.,

requesting/receiving/summing/excluding various information.” Id. at 39. Plaintiff rebuts these

arguments, asserting the government’s application of a “piecemeal approach of isolating claim

terms and steps” is an improper application of step two of the Alice/Mayo test because it does not

consider “the claims as a whole.” Pl.’s Opp’n to Gov’t’s MTD at 21. Plaintiff argues the

claimed combination of elements “would not be viewed as well-understood, routine, or

conventional to a person having ordinary skill in the art,” thereby supplying the “inventive

concept” required under Alice/Mayo step two. Id. at 22.

“Whether the claim elements or the claimed combination are well-understood, routine,

conventional is a question of fact.” Aatrix, 882 F.3d at 1128. Plaintiff alleges the claims provide

an “automated product or service comparison that simultaneously improved computer processing

efficiency,” including reduction in processing time and increased processor efficiency. Compl.

¶¶ 58–59. Consumers were provided improved “user-interface design and data processing

technology” resulting in “functionality, cost-effective use, and usability that was unavailable in

routine use by conventional online product comparison tools and/or systems at the time [of

invention].” Id. ¶ 64. While it is true at the RCFC 12(b)(6) stage the Court “must accept as true

all the factual allegations in the complaint,” Sommers Oil Co. v. United States, 241 F.3d 1375,

1378 (Fed. Cir. 2001), not all allegations regarding inventiveness are sufficient to defeat a

motion to dismiss. See Cellspin, 927 F.3d at 1317. Factual allegations “wholly divorced from

the claims or the specification” are insufficient; they must be “plausible and specific factual

allegations that aspects of the claims are inventive.” Id. The government argues plaintiff’s

statements attempting to show the claims are not “well-understood, routine, conventional” are

nothing more than “‘mere conclusory statements’ that can be disregarded and do not preclude

dismissal.” Gov’t’s Reply at 8 (quoting Berkheimer, 890 F.3d at 1372–73).

Some of plaintiff’s allegations in the complaint may be dismissed as “mere conclusory

statements.” Berkheimer, 890 F.3d at 1372; see also Iqbal, 556 U.S. at 678 (quoting Twombly,

550 U.S. at 555) (“A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of

the elements of a cause of action will not do.’”). For example, at paragraph 68 of the complaint,

plaintiff alleges the “claimed subject matter of the '429 patent marks a significant technological

improvement over the prior art.” Compl. ¶ 68. At paragraph 70 of the complaint, plaintiff

alleges the “technological solution disclosed and claimed in the '429 Patent was not well-

understood, routine, or conventional activity at the time of the invention of the '429 patent.” Id. ¶

70. Plaintiff does not link these statements to the technology, nor attempt to tie such allegations

to the claims. These specific allegations may be disregarded as “mere conclusory statements”

insufficient to support a “legally cognizable claim for relief.” Berkheimer, 890 F.3d at 1372

(quoting 5B Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure § 1357

(3d ed. 2018)); see also Iqbal, 556 U.S. at 678.

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In contrast to these conclusory statements, plaintiff does, however, make concrete factual

allegations in the complaint regarding functional improvements considered to be unconventional

at the time of invention, with such improvements being tied specifically to the claims. First,

plaintiff alleges the systems and methods covered by the asserted patents add a step to the

functionality of the database by allowing the pre-query entering of information before the

database begins generating results. Compl. ¶ 57 (“Mr. Wanker invented systems and methods to

define, prior to data analysis, consumer-modifiable weighting factors for different categories of

merchant and product information.”); see also Tr. at 44:23–45:1, ECF No. 27 (“[W]hether

generating the paradigm prior to the analysis of the data is . . . the important, inventive

concept[].”). Plaintiff asserts this “paradigm” was an entirely new introduction to systems at the

time of invention. Pl.’s Suppl. Resp. at 15 (“At the time of the invention, this was not available.

Consumers were unable to select weighting factors to apply to merchant information [prior to

receiving the query information].”); see also Tr. at 45:20–22, ECF No. 27 (“The prior art was

serial filtering, which, of course, by its nature happens after the query results have been

returned.”). This functional improvement is specifically recited in Claim 1 of the '429 patent, as

the consumer enters a set of weighting factors “prior to receiving query information related to a

potential consumer purchase.” '429 Patent at col. 22:27–29.

The significance of introducing this additional functional step to the operation of the

database is better understood in relation to Cellspin Soft, Inc. v. Fitbit, Inc., 927 F.3d 1306 (Fed.

Cir. 2019). The technology in Cellspin involved transferring and uploading data “automatically

or with minimal user intervention using a data capture device and a mobile device.” Id. at 1310

(internal quotation marks omitted). The patentee alleged the “specific ordered combination of

elements was inventive,” focusing on the introduction of an additional step: “a paired

connection between the mobile device and the data capture device before data is transmitted.”

Id. at 1317 (emphasis in original). The Federal Circuit recognized this allegation as a “specific,

plausible factual allegation[] about why aspects of [the] claimed inventions were not

conventional, e.g., its two-step, two-device structure requiring a connection before data is

transmitted.” Id. at 1317–18 (emphasis in original). Here, plaintiff’s introduction of an

additional step to the functionality of the database, e.g., “entering by a consumer a set of

weighting factors prior to receiving query information related to a potential consumer purchase,”

'429 Patent at col. 22:27–29, presents similar “specific, plausible factual allegations about why

aspects of [the] claimed invention[] [are] not conventional.” Id.

The system performing the method of claim 1 of the '429 patent further provides for the

inclusion of “[i]nformation from multiple merchants.” Pl.’s Suppl. Resp. at 18. The ability to

include information from multiple merchants marked a “significant improvement over single-

vendor systems” in the prior art. Id. Plaintiff further states at the time of invention, prior art

systems were “unable to select weighting factors to apply to merchant information.” Id. at 15.

Claim 1 of the '429 patent addresses this limitation in the prior art by “receiving a plurality of

merchant comparison information data for a plurality of merchants related to completing the

potential consumer purchase.” '429 Patent at col. 22:33–35; see also Pl.’s Suppl. Resp. at 13

(allowing consumers to select “weighting factors corresponding to categories of merchant

comparison information data”). According to plaintiff, this marked a drastic improvement over

the prior art, as “many of the prior art systems provid[ed] ranking based solely on price or were

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not customizable.” Pl.’s Suppl. Resp. at 9 (internal citations omitted). Plaintiff presented these

factual allegations throughout the complaint. For example, at paragraph 50, plaintiff states the

“inventions of the Asserted Patents overcame the limitations of prior systems that did not have

the capacity to provide a ranking based on a wide variety of factors related to consumer

purchasing habits and decisions.” Compl. ¶ 50; see also id. ¶ 57 (“In looking to solve this

problem of comparing different products and multiple categories of information about each

product, Mr. Wanker invented systems and methods to define, prior to data analysis, consumer-

modifiable weighting factors for different categories of merchant and product information.”).

At paragraph 60 of the complaint, plaintiff further addresses the one-dimensional ranking

present in the prior art: “[t]hose of ordinary skill in the art in 1999 understood that conventional

online shopping systems could not deliver consumer-defined product or service ranking for

different products from different vendors based on anything other than a simple price

comparison which is unlike the inventions described, enabled, and claimed in the Asserted

Patents.” Compl. ¶ 60. Plaintiff addressed this deficiency in the prior art yet again at paragraph

61: “[t]he technical solutions of the Asserted Patents eliminate the need for consumers of

products and/or services to make purchasing (or contract award) decisions based on price alone.”

Id. ¶ 61. As stated by plaintiff’s counsel during oral argument, there is a sharp contrast between

“filtering,” which was done in the prior art, and performing a weighted-factor analysis pre-query,

as claimed in the patents. See id. ¶¶ 56–57 (discussing plaintiff’s recognition of the prior art’s

inability to rank merchants according to any other factor besides price, and in response

developing “systems and methods to define, prior to data analysis (emphasis added), consumer-

modifiable weighting factors for different categories of merchant and product information”); see

also Tr. at 45:20–22, ECF No. 27.

Next, plaintiff asserts the database system becomes “more efficient and requires less

computing power” as a consequence of the organizational implementation of merchant

comparison information data. Pl.’s Suppl. Resp. at 18; see also '429 Patent at col. 22:33–43.

Execution across merchants and merchant data categories results in a relational database with

“more efficient retrieval operation.” Pl.’s Suppl. Resp. at 19. This results in a system operating

only on data relevant to the query, thereby “improving the speed and efficiency.” Id. at 19.

Plaintiff presented factual allegations regarding these improvements to the operation of the

database system in the complaint at paragraph 58. “Those of skill in the art at the time of the

Plaintiff’s inventions would recognize that the claimed subject matter marks significant

improvement in online product purchasing systems by providing automated product or service

comparison that simultaneously improved computer processing efficiency.” Compl. ¶ 58.

Plaintiff further addressed the increases in processor efficiency at paragraph 59 of the complaint.

“Persons of skill in the art would recognize that the claimed consumer-definable, multi-category

comparison information reduces processing time and increases processor efficiency.” Id. ¶ 59.

This resulted in a “novel technological solution to combine consumer-definable category

weighting factors and information from multiple merchants for multiple products and services

into a product comparison ranked list.” Id. ¶ 69.

The government rebuts plaintiff’s arguments regarding improvements to the operation of

the database, labeling the arguments as “mere attorney argument.” Gov’t’s Suppl. Reply at 12

n.9. The government asserts the claims “do not improve the way a computer operates nor are

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they a technical improvement[,] . . . amount[ing] to nothing more than an abstract idea

implemented on a computer.” Id. The Court disagrees. While plaintiff’s specific factual

allegations do not rise to the level of suggesting the “claimed combination improves the

functioning and operation of the computer itself,” plaintiff’s allegations of increased speed and

efficiency and less computing power, when accepted as true as required at the Rule 12(b)(6)

stage, do create at least a factual dispute as to whether “the claimed combination was

conventional or routine.” Aatrix, 882 F.3d at 1127–28. Similar to the proposed second amended

complaint in Aatrix, plaintiff here has “describe[d] the development of the patented invention,

including the problems present in prior art [systems]. [Plaintiff] then presents specific

allegations directed to improvements and problems solved by [plaintiff’s] patented inventions.”

Id. at 1127 (internal quotation marks omitted). A factual dispute regarding conventional or

routine claim combinations “survive[s] a § 101 eligibility analysis under Rule 12(b)(6).” Id. at

1126–27.

Plaintiff’s invention further identifies another problem in the prior art specifically

regarding merchants’ ability to skew search results in their favor. See Pl.’s Suppl. Resp. at 17.

To combat this perceived deficiency in the prior art, plaintiff designed a new system whereby

“query information is designed by the consumer and reflects the consumer’s, not merchants’,

values.” Id. Plaintiff similarly presented factual allegations to this effect in the complaint. See

Compl. ¶ 54 (“Mr. Wanker recognized that the existing prior art systems led merchants to hide

the actual cost of the product by offering a product at a lower price to reach a higher rank in the

returned ranking list presented to consumers, while simultaneously adding large shipping and

handling surcharges for final product delivery because the sole criterion to achieving a higher

rank was the offering price. The existing prior art ignored total purchase price.”) (internal

citations omitted). Claim 1 of the '429 patent enacts this improvement over the prior art systems

by requiring the weighting factors to be “enter[ed] by a consumer.” '429 Patent at col. 22:27.

Reading these factual allegations recited in the complaint in conjunction with both the

specification and the claims, plaintiff has, at the very least, raised a factual dispute as to whether

the claimed combination of elements was “well-understood, routine, or conventional” at the time

of filing. Aatrix, 882 F.3d at 1128. Unless shown by clear and convincing evidence that the

claim elements or the claimed combination were “well-understood, routine, or conventional” at

the time of filing, plaintiff’s concrete factual allegations in the complaint are sufficient to

preclude a finding of invalidity at the Rule 12(b)(6) stage. Id. The government does not attempt

to rebut these allegations. Instead, the government characterizes the allegations as “conclusory,”

and urges the Court to not consider the allegations pursuant to Berkheimer. Gov’t’s Reply at 8;

see also Berkheimer, 890 F.3d at 1372 (“A motion to dismiss for failure to state a claim must be

denied if ‘in the light most favorable to the plaintiff and with every doubt resolved in the

pleader’s favor—but disregarding mere conclusory statements—the complaint states any legally

cognizable claim for relief.”).

Contrary to the government’s assertions of conclusory allegations, plaintiff pled concrete,

factual allegations as to why the claimed combination of elements was not well-understood,

routine, or conventional. Conclusory allegations would be similar to those recited by plaintiff at

paragraphs 68 and 70 of the complaint. See Compl. ¶¶ 68, 70 (“The claimed subject matter of

the '429 patent marks a significant technological improvement over the prior art. . . . The

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technological solution disclosed and claimed in the '429 Patent was not well-understood, routine,

or conventional activity at the time of the invention of the '429 patent.”). Had plaintiff’s

complaint stopped at only these allegations, the government’s argument would be more

persuasive. However, based upon the Federal Circuit’s line of cases stemming from both

Berkheimer and Aatrix, plaintiff’s submission of concrete, factual allegations regarding the

inventive concepts disclosed in the asserted patents render a finding of invalidity under § 101

improper at this early stage of the proceedings. Aatrix, 882 F.3d at 1126–27 (“[P]atentees who

adequately allege their claims contain inventive concepts survive a § 101 eligibility analysis

under Rule 12(b)(6).”).

Lastly, regarding Alice/Mayo step two, the government argues “other than the abstract

idea, the claims recite standard components and data processing steps . . . add[ing] nothing more

than steps to carry-out the abstract idea.” Gov’t’s MTD at 38–39. The government relies on the

Federal Circuit’s decision in ChargePoint, Inc. v. SemaConnect, Inc. for the premise that “the

abstract idea itself, and ‘a claimed invention’s use of the ineligible concept to which it is directed

cannot supply the inventive concept that renders the invention significantly more than that

ineligible concept.’” ChargePoint, 920 F.3d at 774 (quoting BSG Tech. LLC v. Buyseasons, Inc.,

899 F.3d 1281, 1290 (Fed. Cir. 2018)). The government uses this line of reasoning to conclude

“[b]ecause there is no ‘inventive concept’ in [plaintiff’s] claims that is not itself also directed to

an abstract idea, there is no fact question precluding a finding of ineligibility on the ultimate

question of law under § 101.” Gov’t’s Suppl. Reply at 14. As the government contends here, the

abstract idea is “no more than mere collection, organization and manipulation of data, followed

by displaying results, using a generic computer.” Gov’t’s MTD at 35.

A better understanding of the technology involved in ChargePoint helps to distinguish

those facts from the present case. In ChargePoint, the technology involved “electric vehicle

charging stations that are connected to a network.” ChargePoint, 920 F.3d at 764. The claims

were directed to “individual charging stations . . . networked together to allow site hosts, drivers,

and utility companies to communicate in real time to address the needs and preferences of each

constituency.” Id. at 763–64.8 The Federal Circuit discussed two key aspects of the

ChargePoint technology and patents in ultimately finding the inventive concept to be nothing

more than the abstract idea itself.

First, the plaintiff in ChargePoint argued “the combination of connecting generic

networking equipment to a charging device to carry out a demand response plan” was not well-

understood, routine, or conventional. Id. at 774. The “Background of the Invention” section of

8

While the parties in ChargePoint did not designate a representative claim, claim 1, reproduced below, generally

covers the technology at issue:

1. An apparatus, comprising:

a control device to turn electric supply on and off to enable and disable charge transfer for

electric vehicles;

a transceiver to communicate requests for charge transfer with a remote server and receive

communications from the remote server via a data control unit that is connected to the

remote server through a wide area network; and

a controller, coupled with the control device and the transceiver, to cause the control device to

turn the electric supply on based on communication from the remote server.

ChargePoint, 920 F.3d at 766.

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the specification of the patents at issue, however, proved otherwise: “[D]emand response [had]

been in use in other consumer services, such as with air conditioning and lighting, which may be

reduced during periods of high demand.” Id. Accordingly, the Federal Circuit deemed the

demand response aspects of the claims “simply a familiar business choice” unable to “supply an

inventive concept.” Id. The ChargePoint patents specifically contradicted the patentee’s

assertions that the claims were “well-understood, routine, and conventional.” Id. In this case,

there is nothing in the record before the Court demonstrating the pre-query entering of

information before the database begins generating results was being used as a “familiar business

choice” in any other applications. All discussion of the prior art, both in the specification and the

complaint, refer to prior art systems performing filtering functions after the generation of results.

See Compl. ¶ 57; '429 Patent at col. 1:54–57 (“The disadvantage of such [prior art] web sites is

that they only present data to the consumer and then let the consumer perform the difficult task

of making a comparison.”); id. at col. 2:13–15 (“Consumers lack the ability to customize the site

to their needs or to rank competing products based on more than just offered price.”).

Second, in ChargePoint, the Federal Circuit found the claims did “nothing to improve

how charging stations function; instead, the claims merely add generic networking capabilities to

those charging stations and say ‘apply it.’” ChargePoint, 920 F.3d at 774–75. In this case,

taking plaintiff’s allegations in the complaint as true, the systems disclosed in the asserted

patents provide an online product purchasing system with increased functionality over those

available in the prior art. See Pl.’s Suppl. Resp. at 18 (“[T]he database system is more efficient

and requires less computing power. By organizing merchant information into categories, the

relational database system will operate only on the data relevant to the query, improving the

speed and efficiency of the database and computerized systems.”); Pl.’s Suppl. Resp. at 19

(discussing the use of a relational database “results in a more efficient retrieval operation because

the resultant values [] accurately target relevant results”). Again, these allegations do not amount

to improvements to the “functioning and operation of the computer itself.” Aatrix, 882 F.3d at

1127 (emphasis added). They do, however, provide increased functionality to the specific

system itself, which rises above the threshold of factual allegations discussed in ChargePoint.

ChargePoint, 920 F.3d at 774–75 (“[T]he claims do nothing to improve how charging stations

function.”). As the asserted patents here do not present either of the deficiencies discussed in

ChargePoint, the Court finds plaintiff plausibly alleged factual allegations that, when taken as

true, present an inventive concept divorced from the abstract idea itself. See Iqbal, 556 U.S. at

678 (“A claim has facial plausibility when the plaintiff pleads factual content that allows the

court to draw the [necessary inferences].”).

VI. Conclusion

The parties designated claim 1 of the '429 patent as the representative claim. At step one

of the Alice/Mayo test, the Court finds claim 1 of the '429 patent directed to an abstract idea. At

step two, despite the claims being directed to an abstract idea, plaintiff pleads sufficient factual

allegations at this early stage of the proceedings to maintain a factual dispute regarding whether

the additional claim elements transform the nature of the claim into one that is patent-eligible.

As claim 1 of the '429 patent, serving as the representative claim, passes § 101 muster at

this early stage of proceedings, the Court need not consider the remaining claims of the asserted

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patents with regards to the government’s motion to dismiss. For the reasons set forth above, the

government’s Motion to Dismiss Under Rule 12(b)(6) is hereby DENIED.

IT IS SO ORDERED.

s/ Ryan T. Holte

RYAN T. HOLTE

Judge

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