Intellectual Ventures I LLC v. Erie Indem. Co.

• Decision Date: 25 September 2015
• Docket Number: 2:14–CV–01131.,2:14–CV–01130,Civil Action Nos. 1:14–cv–00220
• Parties: INTELLECTUAL VENTURES I LLC, et al., Plaintiffs, v. ERIE INDEMNITY COMPANY, et al., Defendants. Intellectual Ventures I LLC, et al., Plaintiffs, v. Old Republic General Insurance Group, Inc., et al., Defendants. Intellectual Ventures I LLC, et al., Plaintiffs, v. Highmark, Inc., et al., Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

134 F.Supp.3d 877

INTELLECTUAL VENTURES I LLC, et al., Plaintiffs,

v.ERIE INDEMNITY COMPANY, et al., Defendants.

Intellectual Ventures I LLC, et al., Plaintiffs,

v.Old Republic General Insurance Group, Inc., et al., Defendants.

Intellectual Ventures I LLC, et al., Plaintiffs,

v.Highmark, Inc., et al., Defendants.

Civil Action Nos. 1:14–cv–00220

2:14–CV–01130

2:14–CV–01131.

United States District Court, W.D. Pennsylvania.

Signed Sept. 25, 2015.

Henry M. Sneath, Kelly A. Williams, Robert L. Wagner, Picadio, Sneath, Miller & Norton, Pittsburgh, PA, Christian J. Hurt, Edward K. Chin, Kirk A. Voss, Ross Leonoudakis, Nix, Patterson & Roach, LLP, Robert Cutler, Irving, TX, Derek T. Gilliland, Nix, Patterson & Roach, LLP, Daingerfield, TX, for Plaintiffs.

David C. Marcus, Wilmer Cutler Pickering Hale and Dorr LLP, Los Angeles, CA, Gregory H. Lantier, Wilmerhale LLP, Washington Dc, John G. Ebken, Alexander W. Saksen, Gordon & Rees, LLP, Pittsburgh, PA, Leslie Stierman Pearlson, Monica Grewal, Wilmer Cutler Pickering Hale and Dorr, Boston, MA, for Defendants.

OPINION

MARK R. HORNAK, District Judge.

These are a patent infringement cases filed by Intellectual Ventures I LLC and Intellectual Ventures II LLC ("Intellectual Ventures," "IV," or "Plaintiffs") against three separate groups of Defendants: the Erie Defendants,¹ the Highmark Defendants,² and the Old Republic Defendants³ (collectively "Defendants"). Now before the Court in these cases⁴ are Motions to Dismiss the respective Complaints filed by all Defendants.

The Erie and Highmark Defendants have moved to dismiss for lack of subject matter jurisdiction as to one patent (the ′581 Patent), Dkt. No. 14–220, ECF No. 74, for failure to state a claim as to two patents (the ′581 Patentand the ′434 Patent) based on allegations that the patents are directed to patent ineligible subject matter, and also for failure to state a claim or, alternatively, to require a more definite statement with regard to the alleged claims. Dkt. No. 14–220, ECF No. 46; Dkt. No. 14–1131, ECF No. 47. The Erie and Highmark Defendants have also moved to strike a declaration relied upon by Plaintiffs in support of subject matter jurisdiction. Dkt. No. 14–220, ECF No. 82.

The Old Republic Defendants have moved to dismiss all claims against them, alleging that three patents (the ′581 Patent, the ′434 Patent, and the ′ 002 Patent) are directed to patent-ineligible subject matter, and have requested that the Court take judicial notice of certain documents submitted in support of their Motion. Dkt. No. 14–1130, ECF Nos. 30, 33.

After reviewing the papers filed by all parties and the relevant law, and after extensive, day-long oral argument on April 14, 2015, the Court will grant the Motions to Dismiss for the reasons that follow.⁵

I. BACKGROUND

The patents at issue in these suits are: (a) U.S. Patent No. 6,519,581 B1 ("′581 Patent"), entitled "Collection of Information Regarding a Device or a User of a Device Across a Communication Link," (b) U.S. Patent No. 6,510,434 B1 ("′434 Patent"), entitled "System and Method for Retrieving Information From a Database Using an Index of XML Tags and Metafiles," (c) U.S. Patent No. 6,546,002 B1 ("′002 Patent"), entitled "System and Method for Implementing an Intelligent and Mobile Menu–Interface Agent," and (d) U.S. Patent No. 7,757,298 ("′298 Patent"), entitled "Method and Apparatus for Identifying and Characterizing Errant Electronic Files."⁶

The Erie and Highmark Defendants have moved to dismiss infringement claims relating to the ′581 Patenton the grounds that this Court lacks subject matter jurisdiction over Plaintiffs' infringement claims as to that Patent because Intellectual Ventures does not own the Patent and therefore lacks standing to assert infringement of it.⁷ Dkt. No. 14–220, ECF No. 74. They also argue that the ′581 and the ′434 Patentsare not directed to patent eligible subject matter, and thus no viable legal claim as to those Patents can be stated in the Complaints. Dkt. No. 14–220, ECF No. 46; Dkt. No. 14–1131, ECF No. 47. Alternatively, they argue that all claims of direct and indirect infringement should be dismissed under Rule 12(b)(6)or alternatively that this Court should order Plaintiffs to provide a more definite statement as to all such claims. The Old Republic Defendants challenge the ′581, ′434, and ′002 Patentsby arguing that each is directed to patent-ineligible subject matter.⁸ Dkt. No. 14–1130, ECF No. 30.

II. SUBJECT MATTER JURISDICTION OF INFRINGEMENT CLAIMS AS TO THE ′ 581 PATENT

Whether this Court has subject matter jurisdiction over the instant action as to the ′581 Patentis determined by the law of the Third Circuit because it is a procedural question "not unique to patent law." Univ. of Utah v. Max–Planck–Gesellschaft Zur Forderung Der Wissenschaften E.V., 734 F.3d 1315, 1319 (Fed.Cir.2013)cert. denied sub nom. Caret v. Univ. of Utah, –––U.S. ––––, 134 S.Ct. 2819, 189 L.Ed.2d 785 (2014). "A motion to dismiss for want of standing is properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter." Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir.2014)(internal quotation marks and citation omitted).

The Third Circuit would categorize the challenge here as a factual one⁹ because it does not simply attack the sufficiency of the ′581 Complaints, but rather attacks assertions supporting jurisdiction in those Complaints as factually inaccurate. Id. at 358. When factual challenges are lodged, a court is not bound to accept the truthfulness of the allegations in a complaint and may consider evidence outside the pleadings to satisfy itself of its jurisdiction. Id. It is a plaintiff's burden to prove that a court has subject matter jurisdiction. Mortensen v. First Fed. & Ass'n, 549 F.2d 884, 891 (3d Cir.1977). If a plaintiff lacks standing when the suit is brought, the Court lacks subject matter jurisdiction. Aichele, 757 F.3d at 357.

In the patent context, plaintiffs suing for infringement bear "the burden to show necessary ownership rights to support standing to sue." Abbott Point of Care Inc. v. Epocal, Inc., 666 F.3d 1299, 1302 (Fed.Cir.2012). To successfully assert standing, a plaintiff "must demonstrate that it held enforceable title to the patent at the inception of the lawsuit" or the infringement claims will be dismissed for lack of jurisdiction. Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1364 (Fed.Cir.2010). Patent assignments must be in writing, 35 U.S.C. § 261, and the writing "must show a clear and unmistakable intent to transfer ownership." Univ. Patents, Inc. v. Kligman, 762 F.Supp. 1212, 1219 (E.D.Pa.1991)(citing McClaskey v. Harbison–Walker Refractories Co., 138 F.2d 493 (3d Cir.1943)). Courts interpreting assignment contracts to decide ownership matters look to state law to determine and apply the appropriate rules of interpretation. Abbott, 666 F.3d at 1302.

A. The Contentions of The Parties

The Patent Assignment ("Assignment Agreement") at issue here contains a list of seventeen (17) enumerated "patents and patent applications" owned by AllAdvantage.com¹⁰ and then states:

Assignor [AllAdvantage], does hereby assign unto the Assignee [Alset, Inc.], all right, including common law rights, title and interest in the United States of America, Canada, the European Union, and all other countries and jurisdictions of the world in and to said patents together with the goodwill of the business symbolized by said patents and applications and registrations thereof.

Dkt. No. 14–220, ECF No. 76–1, at 5–6 (emphasis added).

The Erie and Highmark Defendants have moved to dismiss all claims relating to the ′581 patent, arguing that the Court lacks subject matter jurisdiction because IV cannot carry its burden of showing ownership, and thus has no standing to sue.¹¹ Dkt. No. 14–220, ECF No. 74. The Old Republic Defendants have joined that Motion. Dkt. No. 14–220, ECF No. 77. Defendants essentially contend that the assertions in Plaintiffs' Complaints that "Intellectual Ventures I is the owner and assignee of all right, title, and interest in and to the ′581 ... Patent[ ] and holds the right to sue and recover damages for infringement thereof, including past damages" are not true. E.g., Dkt. No. 14–220, ECF No. 1 ¶ 22. Specifically, those Defendants argue that the chain of title for the ′581 patentconsists of six (6) transfers, and that while certain transfers contained language that unequivocally included the ′581 Patentor its application, the fourth transfer in the chain enumerated certain specific patents and applications subject to that transfer, but omitted the '581 Patentor its then-pending application. Dkt. No. 14–220, ECF No. 75, at 9.¹² Because a plain reading of the Assignment Agreement shows no conveyance of, or even an intent to convey, the ′581 Patentor its application, Defendants contend the Court should not review any extrinsic evidence pertaining to that Agreement in support of ownership and should instead dismiss all claims pertaining to the ′ 581 Patentfor want of subject matter jurisdiction.

IV counters by arguing that in the first place, a presumption of validity applies to the Assignment Agreement because it was recorded with the U.S. Patent and Trademark Office ("USPTO"), and Defendants have not met their burden of disproving ownership. Dkt. No. 14–220, ECF No. 81, at 8, 9. Moreover, Plaintiffs contend that the involved Assignment Agreement by its terms is sufficient to show a transfer of title to the ′581 Patent's application (the ′858 application) for either of two (2) reasons. First, because the ′ 581 Patent's parent (the ′983 Patent), was specifically listed in the Assignment Agreement, and because the ′858 application was a direct continuation of that patent, the future patent right in the ′581 Patentwas contained within the ′983 Patent, thus automatically bringing the application within the scope of "said patents" listed in the Assignment Agreement. at 11. Second, the fact that...