The Software IP Report

Another Delayed Patent Eligibility Decision

Once again, a district court in California urged parties to improve their pleadings before deciding patent eligibility under 35 U.S.C. § 101. In Kajeet v. Qustodio, CV18-01519 JAK (Feb. 28, 2019), the Central District of California granted, without prejudice, a motion to dismiss a complaint for patent infringement under F.R.C.P. 12(b)(6).

Plaintiff Kajeet, Inc. asserted U.S. Patent Nos. 8,712,371, 8,630,612, and 8,667,559, directed toward rule enforcement for mobile devices, against Defendant Qustodio, LLC. Defendant filed a motion to dismiss under Rule 12(b)(6), alleging that the claims of the asserted patents were ineligible under § 101. Defendant analogized the claims to those in Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, arguing that the concepts embodied in the claims were well-known and conventional, failing the second part of the two-part Alice v. CLS Banktest. Plaintiff provided an expert declaration to support that the claims were directed to a technical improvement that would satisfy the second part of the Alice test.

The Court relied on the Federal Circuit’s recent decisions in Berkheimer v. HP Inc.and Aatrix Software, Inc. v. Green Shades Software, Inc., noting two main points: (1) eligibility is a question of law that can contain underlying factual determinations, and (2) a complaint that properly alleges that elements of a claim are not well-understood, routine, or conventional may suffice to survive a motion to dismiss on the pleadings.  

In the Ninth Circuit, analysis of a motion to dismiss can only rely on “the complaint, the patent, and materials subject to judicial notice” and may not consider material outside of the pleadings. The Court noted that “the inquiry at Alicestep two may involve and require the assessment of underlying questions of fact” and that [i]f the statements in the [declaration] are accepted…it would be premature to determine that the asserted claims are drawn to patent-ineligible subject matter.” However, because the expert declaration was extrinsic to the pleadings (and thus unavailable for analysis), the Court granted the motion to dismiss. In particular, the Court felt that “it is not appropriate to make a determination regarding patent eligibility” until Plaintiff has had a chance to file an amended complaint to allege facts supporting eligibility of the asserted claims.

Lessons for Practice

Delaying determination of patent eligibility is a hot topic in California right now. In light of Berkheimer and Aatrix, courts want more facts to chew on before making a decision on patent eligibility, and they will offer parties ample opportunities to beef up their pleadings. Plaintiffs may see an opportunity to predict judges’ concerns and provide additional facts in the complaint to support patent eligibility.