Integrated Tech. Sols. v. iRacing.com Motorsport Simulations

• Decision Date: 20 September 2022
• Docket Number: Civil Action 1:21-cv-11477-IT
• Parties: INTEGRATED TECHNOLOGY SOLUTIONS, LLC, Plaintiff, v. IRACING.COM MOTORSPORT SIMULATIONS, LLC, Defendant.
• Court: U.S. District Court — District of Massachusetts

INTEGRATED TECHNOLOGY SOLUTIONS, LLC, Plaintiff, v. IRACING.COM MOTORSPORT SIMULATIONS, LLC, Defendant.

Civil Action No. 1:21-cv-11477-IT

United States District Court, D. Massachusetts

September 20, 2022

MEMORANDUM & ORDER

Indira Talwani United States District Judge

Plaintiff Integrated Technology Solutions, LLC (“ITS”) alleges that products manufactured and distributed by Defendant iRacing.com Motorsport Simulations, LLC (“iRacing”) infringe on Plaintiff's patent U.S. Patent Number 10,046,241 (“the '241 Patent”). Am. Compl. ¶¶ 55-80 [Doc. No. 20]. iRacing moves to dismiss, arguing that the '241 Patent is invalid under 35 U.S.C. § 101 as construed by Alice Corp. Pty. Ltd. v. CLS Bank Int'l., 573 U.S. 208 (2014), and its progeny because the asserted claims are directed to an abstract idea and are patent-ineligible. Mot to Dismiss 1 [Doc. No. 26]. Finding that the claims at issue are directed at patent-ineligible concepts, and that the elements of each claim do not transform the claim into patent-eligible application, the court GRANTS Defendant's Motion to Dismiss [Doc. No. 26].

I. Factual Background

The '241 Patent, entitled “Output Production,” was issued to ITS on August 14, 2018. Am. Compl. ¶¶ 10-14 [Doc. No. 20]. The patent relates to “systems, methods, and other embodiments associated with output production.” Am. Compl. Ex. A ('241 Patent) col. 3: 43-44 [Doc. No. 20-1]. It is described as an “in-game modifier for racetrack videogames whereby evaluations of both simulated environmental conditions and player actions change the performance of the system during game play.” Am. Compl. ¶ 13 [Doc. No. 20]. The patented methods involve multiple systems comprised of identification components, check components, determination components, and modification components. Am. Compl. Ex. A ('241 Patent) col. 1:23-67 [Doc. No. 20-1].^[1] ITS asserts that iRacing's non-downloadable online competitive racing simulation software infringes on one or more claims of the '241 Patent, including at least Claim 15. Am. Compl. ¶¶ 55-65 [Doc. No. 20]. ITS further asserts that iRacing's subscription service to use the non-downloadable online simulation software induces infringement on the '241 Patent. Id. at ¶¶ 66-72. Finally, ITS asserts a claim of contributory infringement based on iRacing's continued sale of the subscription service for the software. Id. at ¶¶ 73-80.

II. Standard of Review

In evaluating a motion to dismiss for failure to state a claim, the court assumes “the truth of all well-pleaded facts” and draws “all reasonable inferences in the plaintiff's favor.” Nisselson v. Lernout, 469 F.3d 143, 150 (1st Cir. 2006). To survive dismissal, a complaint must contain sufficient factual material to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations . . . [f]actual allegations must be enough to raise a right to relief above the speculative level . . . .” Id. at 555 (internal citations omitted). “A claim has facial plausibility when the plaintiff pleads 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). The court must “begin by identifying and disregarding statements . . . that merely offer ‘legal conclusions] couched as . . . fact[].'” Occasion-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011) (alteration in original) (quoting Ashcroft, 556 U.S. at 668). Nonconclusory factual statements contained in the pleadings must then be viewed as true, and the court must view these facts in the light most favorable to the nonmovant and draw all reasonable inferences therefrom to the nonmovant's behalf. Id. at 12, 17.

“While most Rule 12(b)(6) motions are premised on a plaintiff's putative failure to state an actionable claim, such a motion may sometimes be premised on the inevitable success of an affirmative defense.” Nisselson, 469 F.3d at 150. “Dismissing a case under Rule 12(b)(6) on the basis of an affirmative defense requires that ‘(i) the facts establishing the defense are definitively ascertainable from the complaint and the other allowable sources of information, and (ii) those facts suffice to establish the affirmative defense with certitude.'” Id. (quoting Rodi v. S. New Eng. Sch. of Law, 389 F.3d 5, 12 (1st Cir. 2004)); see Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018) (“patent eligibility can be determined at the Rule 12(b)(6) stage . . . only when there are no [plausible] factual allegations that . . . preclude dismiss[al]”).

III. Discussion

“Whether a claim is drawn to patent-eligible subject matter under 35 U.S.C. § 101 is an issue of law.” Content Square SAS v. Decibel Insight Ltd., 552 F.Supp.3d 165, 172 (D. Mass. 2021). An inventor or discoverer may generally patent “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. A patent is invalid if the subject matter of the patent is not patentable under 35 U.S.C. § 101. See Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass'n, 776 F.3d 1343, 1346 (Fed. Cir. 2014). The Supreme Court has held that this section contains an “implicit exception” that “[l]aws of nature, natural phenomena, and abstract ideas are not patentable.” Alice, 573 U.S. at 216 (quoting Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013)). Although “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,” these patent-ineligible exceptions prevent “monopolization” of the “basic tools of scientific and technological work,” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012), and the “inhibition of] further discovery by improperly tying up the future use of these building blocks of human ingenuity.” Alice, 573 U.S. at 216 (internal quotation marks omitted) (quoting Mayo, 566 U.S. at 85).

“[I]n applying the § 101 exception, [the court] must distinguish between patents that claim the ‘building[g] block[s]' of human ingenuity and those that integrate the building blocks into something more, thereby ‘transforming] them into a patent-eligible invention.'” Id. at 217 (quoting Mayo, 566 U.S. at 85). To do so, the court must perform a two-step analysis. First, under Alice step one, the court must determine whether the claims at issue are directed to laws of nature, natural phenomena, or abstract ideas. Id. Claims are directed to a patent-ineligible concept if, “considered in light of the specification, . . . ‘their character as a whole is directed to'” an abstract idea. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). “The ‘abstract ideas' category embodies ‘the longstanding rule that [a]n idea of itself is not patentable.'” Alice, 573 U.S. at 218 (internal quotation marks omitted) (alteration in original) (quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). In Gottschalk, for example, the court rejected claims involving an algorithm that “convert[ed] [binary-coded decimal] numerals to pure binary form,” because the claimed patent was “in practical effect . . . a patent on the algorithm itself.” 409 U.S. at 71-72. Similarly, in Parker v. Flook, the court held a mathematical formula for computing “alarm limits” in a well-known catalytic conversion process was an unpatentable idea under § 101. 437 U.S. 584, 594-95 (1978).

If the claims at issue are directed to laws of nature, natural phenomena, or abstract ideas, the court then considers, under Alice step two, 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 78-79). The Supreme Court has “described step two of this analysis as a search for an ‘inventive concept' - i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'” Id. (alteration in original) (quoting Mayo, 566 U.S. at 73). “Purely ‘conventional or obvious' ‘[pre]-solution activity' is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law.” Mayo, 566 U.S. at 79 (quoting Flook, 437 U.S. at 590); see also Bilski v. Kappos 561 U.S. 593, 610-11 (2010) (“[T]he prohibition against patenting abstract ideas ‘cannot be circumvented by' . . . adding ‘insignificant postsolution activity.'” (quoting Diamond v. Diehr, 450 U.S. 175, 191-92 (1981))). To survive step two, the additional activity must “transform the claim into ‘significantly more than a patent upon the' ineligible concept itself.” Rapid Litig. Mgmt., Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1047 (Fed. Cir. 2016) (quoting Mayo, 566 U.S. at 73).

A. Alice Step One: Are Claims Directed to a Patent Ineligible Concept?

1. Recitation of Abstract Ideas

ITS asserts that [t]he '241 Patent's claims are directed at more than just an abstract idea, see Am. Compl. ¶ 43-51 [Doc. No. 20], because the “patent describes improved rendering techniques for maps,” that “provide greater accuracy in game mechanics and allow for indirect player interaction as the rendered maps are continually modified,” Pl.'s Opp'n 5-6 [Doc No. 30]. ITS further asserts that the temperature and tire elements in racing games are “only two of...