Control v. Telular Corp.
| Decision Date | 28 March 2017 |
| Docket Number | No. 14 C 9852,14 C 9852 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | JOAO CONTROL & MONITORING SYSTEMS, LLC, Plaintiff, v. TELULAR CORPORATION, Defendant. |
MEMORANDUM OPINION AND ORDER
Plaintiff Joao Control & Monitoring System brought this lawsuit against Defendant Telular Corporation, alleging that Telular had infringed two of Joao's patents for systems designed to provide security for vehicles and premises through a network connected to the Internet. Telular moved for judgment on the pleadings under FED. R. CIV. P. 12(c). On March 23, 2016, the court granted that motion, concluding that both patents were invalid because they were directed to abstract ideas and thus were not patent-eligible. Joao has moved for reconsideration of that ruling. Joao notes that it asserted only some, but not all, of the patents' claims in its infringement contentions pursuant to this court's local patent rules. Accordingly, Joao urges, the court's ruling was properly limited only to those asserted claims, and the court lacked jurisdiction to consider the validity of any claims Joao did not assert. Joao further asks the court to limit its ruling to the asserted patent claims that the court specifically analyzed in its opinion and order. For the reasons explained below, the motion is granted in part and denied in part.
The facts of this case are recited in detail in this court's March 23, 2016 Opinion and Order, Joao Control & Monitoring Sys., LLC v. Telular Corp., 173 F. Supp. 3d 717 (N.D. Ill. 2016). Joao received United States Patent No. 6,587,046 (the "'046 patent") in July 2003 and United States Patent No. 7,397,363 (the "'363 patent") in July 2008. Id. at 719-20. Both patents describe a system for remotely monitoring property using a network of devices connected to the Internet. Id. at 720-23. Joao filed this suit against Telular on December 8, 2014, alleging that Telular had infringed "one or more claims" in each of the patents. (See generally Compl. [1].) On December 31, 2014, Telular counterclaimed, alleging, among other things, that both patents were invalid and seeking a declaratory judgment to that effect. (See generally Def.'s Answer to Compl. and Countercl. [10].)
In a report filed with the court on January 13, 2015, Joao agreed to limit its asserted claims to twelve claims total across the two patents (though it had not yet identified which twelve claims it would assert). (Pl.'s Report of Rule 26(f) Planning Meeting [16] at 3.) On February 18, 2015, Joao served Telular with its initial infringement contentions pursuant to this District's local patent rules.1 (See Pl.'s Mot. for Recons. [92] at 3.) The parties then initiated discovery, and Joao served supplemental infringement contentions on July 20, 2015. (See Pl.'s Mot. for Recons. [92] at 4.) On August 21, 2015, Telular moved for judgment on the pleadings, arguing that "the asserted claims of the patents-in-suit are patent-ineligible" as abstract ideas. (Def.'s Mot. for J. on Pleadings [45] at 1.) The court entered and continued the motion pending completion of discovery. (Minute Order [50].) Joao served its final infringement contentions on October 15, 20152 (See Pl.'s Mot. for Recons. [92] at 4), and responded to Telular's motion on December 15, 2015, pursuant to the court's scheduling order. (See Pl.'s Opp. to Def.'s Mot. for J. on Pleadings [60]; Minute Orders [57], [59].) The Asserted Claims are claims 33, 45, 53, and90 of the '046 patent and claims 3, 4, 6, 8, 9, 16, 20, and 46 of the '363 patent. (See Pl.'s Mot. for Recons. [92] at 4; Def.'s Mot. for J. on Pleadings [45] at 5.)
On March 23, 2016, the court granted Telular's motion for judgment on the pleadings, finding all of the patent claims invalid as non-patentable subject matter under 35 U.S.C. § 101. The court held that the '046 and '363 patents were directed to an abstract idea, specifically, the idea of monitoring and controlling property. Joao Control & Monitoring Sys., 173 F. Supp. 3d at 726-27. The '046 patent covers "[a] monitoring apparatus and method including a processing device for receiving video information recorded [by a camera] located at a vehicle or a premises [while] the processing device is at [another location]" ('046 Patent, at [57], Joint Appendix to Claim Construction Briefs ("JA") [66] at 000001), while the '363 patent describes an apparatus where a network of similar processing devices transmit signals "for activating, de-activating, disabling, re-enabling, and/or controlling an operation of a system, device, equipment, equipment system, component, and appliance, of the premises or vehicle." ('363 Patent, at [57], JA at 000084.) The fact that such monitoring was done over a computer network did not rescue these claims, the court concluded, nor did the fact that the equipment could be turned on and off remotely, because such functionality is found in generic electronic devices. Joao Control & Monitoring Sys., 173 F. Supp. 3d at 727-28. The court also determined that the patents did not set forth an inventive concept because they required only basic computing functions. Id. at 729-30.
In reaching this conclusion, the court noted that the 112 claims in the '046 patent and the 88 claims in the '363 patent "contain[ed] only slight variations" from one another, and therefore analyzed only a selection of the claims from each patent. Id. at 721-23. In particular, the court identified claims 1 and 30 of the '046 patent, and explained how claims 6, 17, 35, 46, 58, 85, 111, and 112 were similar representative claims. Id. at 720-21. For the '363 patent, the court analyzed claims 1, 9, 21, 29, 33, 42, 68, 84, 87, and 88 as representative claims. Id. at 721-23.
Joao has moved for reconsideration. Joao argues that the court lacked jurisdiction to rule on the validity of any claims other than the twelve asserted claims that Joao identified pursuant to the local patent rules. (See generally Pl.'s Mot. for Recons. [92].) Joao contends, further, that the court's ruling should be limited to those claims over which it has jurisdiction and which it actually analyzed in its order (the representative claims the court identified)—doing so would limit the court's ruling to claim 9 of the '363 patent. (See id. at 6-7.) For the reasons explained here, the court agrees with Joao that it has jurisdiction only over the asserted claims, but holds that its order applies to all the asserted claims, not merely to claim 9 of the '363 patent.
The court will grant a motion for reconsideration when "the [c]ourt has patently misunderstood a party, or has made a decision outside the adversarial issues presented to the [c]ourt by the parties, or has made an error not of reasoning but of apprehension." Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990) (internal citations and quotation marks omitted). Although a party moving for reconsideration may not present arguments that were previously available to it, Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 529 (7th Cir. 2000), a party can raise the issue of lack of subject-matter jurisdiction at any time. See FED. R. CIV. P. 12(h)(3). When a party challenges the court's jurisdiction, the party seeking to invoke jurisdiction bears the burden of demonstrating that the jurisdictional requirements are met. See Smart v. Local 702 Int'l Bhd. of Elec. Workers, 562 F.3d 798, 803 (7th Cir. 2009).
The crux of Joao's argument is that by asserting only a limited number of patent claims, Joao limited its complaint, effectively withdrawing any portion of its complaint that alleged infringement of the unasserted claims of the two patents-in-suit. Telular challenges this, and contends that the court maintains jurisdiction over all of the patent claims, for two reasons.First, Telular notes that Joao's original complaint alleges infringement of the entire patents, thus establishing jurisdiction over every claim in those patents. Second, Telular argues that its declaratory judgment counterclaim gives the court jurisdiction over the entire patents, even after Joao limited its infringement contentions to the asserted claims.
Joao's original complaint alleged that Telular had infringed "one or more claims" of both of the patents-in-suit. Those allegations amply support the court's jurisdiction over all of the patents' claims. Joao asserts, however, that Joao effectively withdrew the portion of its complaint that alleged infringement of "one or more" (or potentially all) of the claims. The circumstances are not on all fours with Jervis B. Webb Co. v. Southern Systems, Inc., 742 F.2d 1388, 1399 (Fed. Cir. 1984) and Sloan Valve Co. v. Zurn Industries, Inc., 712 F. Supp. 2d 743, 750 (N.D. Ill. 2010), as corrected (May 6, 2010), relied on by Joao. In those cases, the plaintiffs' original complaint alleged infringement of only some, but not all, claims of the patents in suit. Jervis, 742 F.2d at 1391, 1399; Sloan, 712 F. Supp. 2d at 750. Those courts never had jurisdiction over certain unasserted claims. In this case, in contrast, the questions are whether, by withdrawing several claims, Joao effectively withdrew those claims from the court's consideration.
The issue is not free from doubt, but Streck, Inc. v. Research & Diagnostic Systems, Inc., 665 F.3d 1269 (Fed. Cir. 2012) is instructive. In that case, the plaintiff's June 2006 complaint alleged that the defendant had infringed the patents-in-suit, and the defendants counterclaimed, seeking a declaratory judgment that the asserted claims were invalid and not infringed. Id. at 1275. The case was filed in Nebraska, but the parties agreed to follow the local patent rules of the Northern District of California and identify which claims they considered infringed and invalid,...
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