United States District Court, D. New Jersey, Camden Vicinage
Eagle View Technologies, Inc. et al., Plaintiffs,
Xactware Solutions, Inc. et al., Defendants.
B. KUGLER UNITED STATES DISTRICT COURT JUDGE
a patent infringement action brought by Eagle View
Technologies and Pictometry International [together
“Plaintiffs”] against Xactware Solutions and
Verisk Analytics [together “Defendants”]. Before
the Court is Defendants' summary judgment motion
[“the motion”] (ECF Doc. 467) under Federal Rule
of Civil Procedure [“Fed. R. Civ. P.” or
“Rule”] 56(a) that the relevant patent claims are
unpatentable under 35 U.S.C. § 101. For the reasons
below, this motion is DENIED.
appropriate Order accompanies this Opinion.
Background and Procedure
are the owners of the patents at issue that recite,
among other things, business methods, systems, and computer
readable storage media for providing a roof repair
estimate. The claimed invention applies
photogrammetric methods, that is, trigonometric calculations,
to images of rooves in aerial photographs to compute roof
measurements, in particular, roof pitch. Defendant Xactware
Solutions, Inc., is a subsidiary of Defendant Verisk
Analytics, and provides online technology tools and systems
to insurance carriers, remodelers and construction service
providers for determining replacement-cost. The parties have
asserted they are competitors to each other (ECF Doc.
Court assumes the parties' familiarity with the
procedural history of this litigation and points to only
those events relevant to the motion. On 23 September 2015,
plaintiffs filed their original complaint against defendants
and on 30 November 2015, an amended complaint. Both of these
(ECF Docs. 1 and 30) allege direct and indirect infringement
under 35 U.S.C. § § 271(a) and (b) of at least one
claim of each patent at issue. The case has proceeded through
various milestones, including the Markman hearing
and the Markman opinion (ECF Doc. 332). The parties
have completed discovery, exchanged expert reports and
disclosures, and submitted summary judgment motions aiming to
dispose of certain issues or of the case itself, as well as
motions in limine to exclude experts' testimony
(“Daubert motions”). ECF Doc. 459 - 474.
This is one of the summary judgment motions.
contend there is no dispute of material fact that the
relevant claims are unpatentable as a matter of law in light
of the Supreme Court's two-step test set forth in
Alice Corp. v CLS Bank Int'l., 134 S.Ct. 2347,
2350 (2014). In particular, defendants assert the patent
claims fail step 1 of Alice for reciting the
abstract idea of using photogrammetry to calculate roof slope
(pitch) and other geometric measurements of a building and
then to generate a roof report from the calculations. ECF
Doc. 468:6-9, 17-19. They further assert the claims also fail
Alice step two, and specifically, no material fact
dispute exists as to whether the claims recite computer
elements operating in a manner that is well-understood,
conventional, and routine. ECF Doc. 468:19-27-30.
counter that defendants' analysis of Alice step
one is incorrect. Since the human mind cannot perform the
claimed steps, in particular, the generation of a three-
dimensional model of two or more correlated but different
views of a roof, the recited method is not merely a
computerized replacement of mental activity, but a new,
computerized method of generating roof reports, improved over
manual report creation. ECF Doc. 504: 19-20, 39-41.
also argue defendants' analysis of Alice step
two is likewise incorrect. The specific improvements recited
in the claims, in particular, the use of non-stereoscopic
images of roofs, was neither known nor routine and is an
inventive step over the prior art. ECF Doc. 504: 19-26,
Summary Judgment Generally
judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is entitled
to judgment as a matter of law.” Fed. R. Civ.
P. 56(c). An issue is “genuine” if the
evidence is such that a reasonable jury could return a
verdict for the non-moving party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute
is “material” if it might affect the outcome of
the case under governing law. Id.
movant bears the initial burden of proof to present those
portions of the record it believes demonstrate the absence of
a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d
265 (1986). After the moving party has met its initial
burden, “the adverse party's response, by
affidavits or otherwise as provided in this rule, must set
forth specific facts showing that there is a genuine issue
for trial.” Fed. R. Civ. P. 56(e).
judgment is appropriate if the non-moving party fails to
rebut by making a factual showing “sufficient to
establish the existence of an element essential to that
party's case, and on which that party will bear the
burden of proof at trial.” Celotex, 477 U.S.
at 322. The evidence introduced to defeat or support a motion
for summary judgment must be capable of being admissible at
trial. Callahan v. AEV, Inc., 182 F.3d 237, 252 n.
11 (3d Cir.1999) (citing Petruzzi's IGA Supermarkets,
Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1234 n. 9
evaluating whether there is a genuine dispute of material
fact, the court looks at the evidence in the light most
favorable to the non-movant and draws all reasonable
inferences in their favor (Burns v. Pa. Dep't of
Corr., 642 F.3d 163, 170 (3d Cir.2011)) but neither
weighs the evidence nor makes credibility determinations,
which are tasks for the fact finder. Petruzzi's IGA
Supermarkets, 998 F.2d at 1230. Speculation, conclusory
allegations, suspicions, or mere denials do not rise to the
level of evidence that suffices to raise a genuine dispute of
material fact. Jutrowski v. Township of Riverdale,
904 F.3d 280, 288-289 (3d Cir. 2018). Nor does reliance on
the pleadings; rather the non-moving party “must
present affirmative evidence … from which a jury might
return a verdict in his favor.” Anderson, 477
U.S. at 256.
Invalidity Standard Generally
preliminary matter, defendants style this motion as seeking
summary judgment of the unpatentability of the relevant
claims. Although the statutory standards under 35 U.S.C.
§§ 101, 102, 103, and 112 are the same for
determining the unpatentability of the patent claims as well
as their invalidity, the term patentability better describes
an inquiry regarding not-yet- granted claims, while
invalidity applies to an inquiry for claims already issued in
U.S. patents, i.e., to the inquiry in this motion.
linguistic distinction is important in order to apply the
correct burden of proof. Under 35 U.S.C. §282, a U.S.
patent is afforded a statutory presumption of validity. A
party seeking to prove an invalidity defense to
infringement-such as patent ineligibility under §
101-can overcome this presumption only by clear and
convincing evidence. Microsoft Corp. v. i4i Ltd.
Partnership, 564 U.S. 91, 97 (2011). Thus, the motion
seeks to have this Court determine whether the relevant
granted claims are patent ineligible under 35 U.S.C.
§101, and thus invalid. The Federal Circuit has
clarified the clear and convincing burden applies to all
invalidity arguments (Sciele Pharma Inc. v. Lupin
Ltd., 684 F.3d 1253, 1260 (Fed. Cir. 2012)) whether
previously raised before the U.S. Patent and Trademark Office
[“USPTO”] or newly raised during litigation.
Invalidity Standard Under 35 U.S.C. 101
[“§101” or “101”]
to the U.S. Patent Act under the America Invents Act of 2011
did not change 35 U.S.C. §101, which provides four broad
categories of patentable subject matter: any new and useful
process, machine, manufacture, or composition of matter as
well as any new and useful improvement of these. Id.
The Supreme Court recognizes three exceptions to the
statutory categories: “law of nature, physical
phenomena, and abstract ideas”. Bilski v.
Kappos, 561 U.S. 593, 601 (2010) [“Bilski
the Supreme Court in Alice Corp. Pty. Ltd. v. CLS Bank
Intern, 573 U.S. 208, 217 (2014) has articulated a
two-step analysis [“§101 inquiry”] to
identify whether claims are patent eligible (i.e., valid) or
patent ineligible as a statutory exception (i.e., invalid).
In step one of the §101 inquiry, the “abstract
idea step”, a court analyzes whether the claims are
directed to a patent-ineligible concept (law of nature,
naturally occurring phenomena, or abstract idea).
Id. If so, the court in step two considers the
elements of each claim both individually and as an ordered
combination to determine if additional elements in each claim
“transform the nature of the claim” into a
patent-eligible invention. Id. [quoting Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S.
66, 78-79 (2012)].
one is a meaningful first-stage filter and requires
considering whether the character of the claims as a whole is
directed to excluded subject matter. Internet Patents
Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed.
Cir. 2015). For claims that recite a computerized
method, the step one inquiry focuses on “whether the
claims are directed to an improvement to computer
functionality versus being directed to an abstract
idea.” Visual Memory LLC, 867 F.3d at 1258
[quoting Enfish, LLC v. Microsoft Corp., 822 F.3d
1327, 1335 (Fed. Cir. 2016). Moreover, at step one, the court
also reflects on the specifically recited elements in the
claim to avoid characterizing the invention too generally.
McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d
1299, 1313 (Fed. Cir. 2016).
stage, if the court finds the claims recite a patent eligible
invention, the § 101 inquiry ends. However, if a claim
is found to recite a law of nature, a naturally occurring
phenomenon, or an abstract idea, the court moves to step two,
the “inventive concept” step. This inquiry looks
at what else is recited in the claim besides the patent
ineligible idea, and particularly for an inventive ...