Order Denying Motion for Judgment on the Pleadings, Cave Consulting Group, Inc. v. Truven Health Analytics Inc., Case No. 15-cv-02177-SI (Judge Susan Illston)
It has been just over a year since Judge Illston last decided a motion asserting a patent is invalid under 35 U.S.C. § 101. Last time, Judge Illston's order in in Bascom Research v. LinkedIn was part of an initial wave of post-Alice ND Cal decisions invalidating claims that covered abstract ideas. This time, the patent defendant didn't fare as well. Although Judge Illston had rejected Bascom's argument that claim construction was necessary, here she found that "claim construction will aid the Court's Section 101 analysis in a number of respects, including with regard to determining the scope of preemption and whether the claims contain an inventive concept." In a brief decision that barely discussed the patent at issue, Judge Illston denied Truven's motion "without prejudice to renewal after claim construction and on a fuller factual record."
Judge Illston's recent decision to defer a § 101 issue until after claim construction seems hard to square with her ruling in Bascom. In both cases, the patentee argued that claim construction was necessary but without many specifics. In both cases, the defendant argued that claim construction wouldn't make a difference and offered, for purposes of the § 101 motion, not to dispute the patentee's constructions. Truven even pointed out in its reply brief that CCGroup had proposed a construction for only one term. Nonetheless, Judge Illston concluded, without further explanation, that claim construction would aid her § 101 analysis in Cave Consulting.
Reading between the lines, there are a few factors that may have contributed to the different outcomes between Bascom and Cave Consulting. First, Judge Illston's reference to a "fuller factual record" may reflect the fact that Truven did not submit any evidence in support of its motion. (Indeed, since Truven raised the issue in a motion for judgment on the pleadings, it couldn't go beyond the allegations in the complaint.) In contrast, Judge Illston's order in Bascom cites extrinsic evidence in several places, including examples from the defendants of how the alleged abstract idea had been used for thousands of years and literature showing even the claimed computer implementation of the idea was known prior to the patent. Second, Judge Illston's reference to "determining the scope of preemption" may reflect the fact that CCGroup's patent claims (at least on the surface) seem more specific – they recite more steps and are directed to a specific application, determining physician efficiency. It may all boil down to Judge Illston simply being unpersuaded that the patent claims were truly abstract.
Whatever the underlying reasoning, Judge Illston's decision in Cave Consulting serves as a reminder that § 101 is not always a quick way out of a patent case. While ND Cal is still more willing than some jurisdictions to entertain early § 101 motions, patent defendants should be careful to make as compelling an argument as they can given the state of their record. And if extrinsic evidence would be helpful, an early summary judgment motion may be preferable to a pleadings motion.
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