Authored by Alex Fields and Gabriel M. Ramsey
Order Denying Defendant's Motion to Dismiss, X One, Inc. v. Uber Technologies, Inc., Case No. 16-CV-06050-LHK (Judge Lucy H. Koh)
Uber Technologies, the transportation network giant, recently lost a motion to dismiss a two-patent infringement suit when the Court found that Plaintiff X One, Inc.'s patent claims are directed to patentable subject matter under 35 U.S.C. § 101. The Court held that the individual claim elements are conventional, but as an ordered combination provide an inventive concept sufficient to defeat a motion to dismiss.
X One's patents relate to a "system for exchanging GPS or other position data between wireless devices," thereby allowing multiple wireless devices to track each other. X One accused Uber's mobile device applications and its ride-sharing, carpooling, and delivery services of infringement. In defense, Uber asserted that X One's patents fail to claim patentable subject matter under § 101. The Court reiterated the categories of subject matter prohibited under § 101—laws of nature, natural phenomena, and abstract ideas are not patentable—but observed that all inventions, at some level, embody or apply laws of nature, natural phenomena, or abstract ideas. The Court then proceeded to apply the two-step analysis, laid out in Alice Corp. Pty. Ltd. v. CLS Bank International, to X One's patent claims, ultimately finding that the claims are directed to abstract ideas but provide an inventive concept as an ordered combination.
At step one, a court must determine the character of the claim as a whole. As the Court explained, this involves only claim limitations that are "part of the asserted claims' essential character." Here, the Court found that the claims at issue are primarily directed to the "gathering, transmission, and display of location information" (i) of a certain subset of individuals from a list, or (ii) to perform a service. The Court omitted certain claim limitations such as the "zoom" feature on the map display, the "self-updating map," and the ability to track people for a "limited time period" because those features do not affect the character of the claims as a whole.
Next, the Court turned to whether the character of the claims as a whole are directed to abstract ideas. Courts generally compare the claims at issue to those claims already found to be directed to an abstract idea in previous cases. Here, it noted that the Federal Circuit's decision in Electric Power Group, LLC v. Alstom S.A. held that gathering, transmitting, and displaying information is an abstract idea, even if limited to "particular content." 830 F.3d 1350, 1353 (Fed. Cir. 2016). The Court further explained that although the Federal Circuit has not addressed a claim involving GPS location tracking, multiple district courts have found that functions pertaining to obtaining and displaying location information are not patentable.
Turning to the "brick-and-mortar" test, the Court reasoned that before GPS tracking and cell phones, people could track the locations of individuals on a map. Thus, the Court explained, while using GPS and wireless devices makes it more efficient to locate someone on a map, an improvement in efficiency created by moving to a new technological environment fails to render a patent non-abstract.
Finally, the Court explained that a claim is not abstract if it improves the functioning of the computer itself. For example, the claims at issue in Enfish, LLC v. Microsoft Corp. improved the way a computer stores and retrieves data in memory, and the claims at issue in McRo v. Bandai Namco Games Am. Inc. disclosed a method for automating animated facial expressions—in those cases the claims improved the functioning of the computer itself. Here, the Court explained that the claims are not directed to improving the functioning of a computer because the claims simply describe the result produced, not how to implement the desired result, as evidenced by the claims' functional language. X One argued that the Court should look to particular claim limitations as part of the step-one analysis. But the Court explained that such an analysis is only appropriate when the claims are "unambiguously directed to improvement in computer capabilities." Thus, it declined to consider claim features such as the "self-update" and "time-limit" until step two of the Alice analysis, instead holding that X One's patent claims were directed to abstract ideas.
At step two of the Alice framework, also known as the search for an "inventive concept," courts consider whether a claim's limitations transform it into a patent-eligible application of the abstract idea by examining whether the claim involves more than the performance of well-understood, routine, and conventional activities previously known to the industry. The Court first addressed X One's claim limitations individually and explained that simply reciting functions like "request and store position information" does not provide an inventive concept. Moreover, the Court observed that neither (i) the use of a zoomable map; (ii) the gathering, transmitting, and displaying of location information; nor (iii) the use of "buddy lists" and "use specific groups" provides an inventive concept individually.
Luckily for X One, the Court found an inventive concept upon analyzing the claim limitations as an ordered combination. X One's patent specifications describe particular unsolved issues in conventional GPS tracking technology: there was no mechanism to add groups and members of groups, and there was no mechanism to set up "instant buddies," i.e. temporary location sharing between mobile devices. Instead, the pairing between tracker and trackee had to be permanently set at the time of manufacture. The Court explained the claim limitations "buddy list" and "use specific group" refer to a specific means of dynamically adding people that can be tracked. The Court concluded that combining the buddy list and use specific group systems with GPS tracking "constitutes a non-conventional and non-generic arrangement of known, conventional pieces." The Court further elaborated that because X One's invention allows for two-way sharing of information and user-initiated temporary tracking, the patent claims disclose the requisite inventive concept required to survive a § 101 motion to dismiss.
In a last ditch effort to invalidate X One's patents, Uber argued that the prior art contained an invention that allows users to "identify the locations of select individuals" on a "friends list." The Court rejected this argument observing that the novelty of an element or process is of no relevance to the § 101 inquiry—novelty and obviousness are examined under separate provisions of the Patent Act. However, the Court acknowledged that in light of the aforementioned prior art, it was a close call as to whether the claims involved more than the performance of well-understood, routine, and conventional activities. But on a motion to dismiss courts must construe the pleadings in the light most favorable to the nonmoving party. Thus, the Court denied Uber's motion to dismiss.
Judge Koh's decision illustrates how the novelty and obviousness analyses inevitably bleed into the § 101 analysis as a result of Alice. Unless and until the Supreme Court shines a light on the concrete differences between the various tests for patentability, patentees and potential infringers will remain shrouded in § 101 uncertainty.
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