Vineyard Investigations v. E. & J. Gallo Winery

• Decision Date: 30 December 2020
• Docket Number: No. 1:19-cv-01482-NONE-SKO,1:19-cv-01482-NONE-SKO
• Citation: 510 F.Supp.3d 926
• Court: U.S. District Court — Eastern District of California
• Parties: VINEYARD INVESTIGATIONS, Plaintiff, v. E. & J. GALLO WINERY, Defendant.

510 F.Supp.3d 926

VINEYARD INVESTIGATIONS, Plaintiff,

v.E. & J. GALLO WINERY, Defendant.

No. 1:19-cv-01482-NONE-SKO

United States District Court, E.D. California.

Signed December 30, 2020

Filed January 4, 2021

Corey Allen Johanningmeier, Brenda Helen Entzminger, Denise M. DeMory, Bunsow De Mory LLP, Redwood City, CA, for Plaintiff.

Darryl Michael Woo, Goodwin Procter LLP, San Francisco, CA, Shane Garrett Smith, Timothy John Buchanan, McCormick Barstow Sheppard Wayte & Carruth, LLP, Fresno, CA, Elizabeth J. Low, Julius J. Jefferson, Sanjeet Kumar Dutta, Goodwin Procter LLP, Redwood City, CA, for Defendant.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS

Dale A. Drozd, UNITED STATES DISTRICT JUDGE

INTRODUCTION

Plaintiff Vineyard Investigations initiated this action by filing a complaint on October 18, 2019 against defendant E. & J. Gallo Winery. (Doc. No. 1.) Therein, plaintiff alleges that defendant infringes upon U.S. Patent Nos. 8,528,834 ("’834 Patent") and 6,947,810 ("’810 Patent") (collectively, the "Asserted Patents") relating to the "intelligent monitoring and management of crops such as grapevines." (Id. ¶ 33.)

Plaintiff seeks: 1) judgment that the Asserted Patents have been and continue to be infringed by defendant; 2) an accounting of damages resulting from defendant's infringing acts; 3) a finding that defendant's infringement is willful and enhancement of damages under 35 U.S.C. § 284 ; 4) a mandatory future royalty on each and every future sale by defendant of grapes grown using technology that is found to infringe one or more of plaintiff's patents; 5) attorney's fees; 6) costs; and 7) any further relief the court deems proper. (Id. at 43–44.)

On December 27, 2019, defendant filed a motion to dismiss on the grounds that the Asserted Patents are patent-ineligible under 35 U.S.C. § 101 (" § 101"). (Doc. No. 13.) Plaintiff filed its opposition on January 24, 2020. (Doc. No. 17.) Defendant filed its reply on February 7, 2020. (Doc. No. 19.)

The court has determined the motion to dismiss is suitable for decision based on the papers under Local Rule 230(g) and, for the reasons explained below, will deny defendant's motion to dismiss.¹

BACKGROUND

A. The Parties

Plaintiff is a corporation organized under California law with its principal place of business in St. Helena, California. (Doc. No. 1 ¶ 4.) Dr. Paul W. Skinner founded plaintiff Vineyard Investigations, a consulting company formerly known as Terra Spase, Inc. (Id. ¶ 13.) Plaintiff "provides consulting and scientific expertise to the wine industry in California and worldwide" on matters relating to "soil management, irrigation requirements, canopy management, crop load, and fruit and wine quality management." (Id. ¶ 5.) Plaintiff "owns a portfolio of patents [including the Asserted Patents] and patent applications claiming inventions of Dr. Skinner in the field of intelligent automated monitoring and maintenance of growing crops." (Id. ¶¶ 6, 22.)

Each of plaintiff's patents and applications, including the Asserted Patents, "derives from, and shares patent specification disclosures with, parent United States Patent No. 6,874,707, which was filed on May 31, 2001 and was issued by the USPTO [United States Patent and Trademark Office] on April 5, 2005." (Id. ¶ 23.)

Defendant is a corporation organized under California law with its principal place of business in Modesto, California. (Id. ¶ 7.) "Defendant grows and sells grapes for use in its own and in others’ wines, in vineyards in California and in the Eastern District of California." (Id. )

B. The Idea

In 2000, while on a cross-country flight, Dr. Skinner arrived at an idea to design an automated system to "supply every vine with exactly what it needed from a nutrition, water, canopy vigor, and insect and disease prevention standpoint." (Id. ¶ 20.) "He began to develop a ‘smart’ drip irrigation system that would be controlled by an advanced system of sensing technology, along with vine growth and disease risk models, to apply water and potentially multiple other chemicals to individual vines when and where they needed them." (Id. ) "On that flight, Dr. Skinner began sketching his ideas for this automated vineyard management system, creating drawings and initial notes of the invention." (Id. ) "Dr. Skinner's original sketches contained core ideas that would eventually make up his invented system, including ... various sources for sensor and external data inputs on plant growth characteristics used to control the system." (Id. ) "Dr. Skinner's contemplated data sources included sensors for soil moisture, soil N (nitrogen) and K (potassium) status, soil pH, as well as vine canopy density (sun/shaded area, i.e. , NDVI), vine evapo-transpiration (ETo), vine microclimate (e.g. , temperature, relative humidity), vine insect populations, cluster volume, growing degree days (GDD), yield and harvest forecasts." (Id. )

C. The ’834 Patent

The ’834 Patent is entitled "Plant Growing System Using External Data and Having Sensors Associated with Plants." (Id. ¶ 24.) Plaintiff alleges the ’834 Patent "was duly and lawfully issued by the USPTO on September 10, 2013." (Id. ) Plaintiff avers it is the owner of all right, title, and interest in the ’834 Patent. (Id. )

The ’834 Patent claims a " ‘system for monitoring and managing plant growth’ in which: ‘Combinations of data from sensors local to a vineyard, and from optional remote stations and sensors, is combined with a control system to accurately control the dispensing of water and chemicals such as insecticides, disease prevention fungicides and fertilizers.’ " (Id. ¶ 25 (citing ’834 Patent at Abstract, 1:15–17, 3:9–15).)

Plaintiff alleges that while the innovative systems of the ’834 Patent could be applied to many different crops, "some applications of the system are particularly adapted to improve the growing of grapevines in a vineyard." (Id. (citing ’834 Patent at Abstract, 3:9–10, 3:52–55).) "The systems and methods disclosed and claimed in the ’834 patent provide significant advantages in such an environment, where smart automation reduces the high cost of vine growth management, and where soil and vine growth variability need to be addressed to improve yield and fruit quality." (Id. (citing ’834 Patent at Abstract, 6:19–26).)

An example configuration of the ’834 Patent "contains various types of in-field sensors ... and emitters ... for dispensing water and other materials. In addition to real-time data from the in-field sensors, the controller [ ] of the example system also can receive and utilize external data from a number of sources. " (Id. ¶ 26 (emphasis added).) The "external data" in the invented system can include "remotely sensed weather data, evapo-transpiration coefficients, crop development data, and other information." (Id. (citing ’834 Patent at Abstract, 5:1–9).) "Sensor and external data can be processed through a number of advanced modeling techniques described in the patent." (Id. (citing ’834 Patent at Abstract, 5:10–35).) "This data and modeling are then used as inputs into the automated, fine-grained control of the variable rate irrigation and nutrient application system." (Id. at Figure 1.)

Claim 1 of the ’834 Patent recites:

1. An apparatus for dispensing materials to vegetation, the apparatus comprising:

a conduit having a channel, wherein the channel is positioned in proximity to the vegetation;

an outlet coupled to the channel for conveying a material from the channel to the vegetation under the control of a central controller, wherein the central controller is responsive to external data for controlling material dispersing from one or more emitters in fixed proximity to the vegetation;

one or more sensors in fixed proximity to the vegetation, wherein each sensor is associated with one or more particular plan[t]² in the vegetation, wherein signals from me [sic] sensors are transmitted to a central control system and are used to control conveyance of the material to the vegetation.

’834 Patent at 8:62–9:10.

Claim 15 of the ’834 Patent recites:

15. A method for dispensing materials to vegetation, wherein one or more sensors for sensing a growth condition of the one or more plants are in fixed proximity to the one or more plants, wherein each sensor is associated with one or more particular plan[t] in the vegetation, the method comprising:

obtaining external data for controlling material dispensing;

using a controller to receive signals from at least one of the sensors; and

using the controller to control dispensing of a material via the one or more emitters in response to the external data.

Id. at 10:16–26.

Plaintiff alleges that the inventions of the ’834 Patent presented an "important advance from existing vineyard drip irrigation systems at the time, which were manually controlled or were automated in simplistic ways with a timer or computer." (Id. ¶ 27 (citing ’834 Patent at 1:29–38).) The existing systems "did not ‘provide a high level of automation’ like the systems of the [ ’834 Patent], and did not address soil variability problems by ‘selectively provid[ing] different amounts of water to different plants’ or plant areas." (Id. (citing ’834 Patent at 1:39–44).) Moreover, plaintiff contends the ’834 Patent provided "new and unconventional ways to automatically integrate ‘sophisticated information’ about plant sizes, weather conditions and forecasts, and soil conditions—which previously had only been used in the growing process, if at all, via ‘human intervention’ that was ‘prone to errors and inefficiencies.’ " (Id. (citing ’834 Patent at 1:44–57).) Plaintiff avers that "Dr. Skinner's patented innovations advanced the field and solves these and other problems in the prior art—including through his use of real-time sensor and external data, processed according to various agricultural models, as control inputs to a variable rate irrigation system." (Id. (citing ’834 Patent at 8:13–22).)

Plaintiff asserts that Dr. Skinner understood at the time he developed...