The Software IP Report

Another Motion to Dismiss Denied by Alleging Inventive Concept: Nice Ltd. v. Callminer, Inc.

Once again, a court has denied a motion to dismiss a patent infringement suit, holding that the question of patent-eligibility under 35 U.S.C. § 101 could not be decided on a Rule 12(b)(6) motion. The Court held that the pleadings alleged an unresolved question of fact of whether the asserted claims contain inventive concepts sufficient to transform an abstract idea into a patent-eligible invention. Nice Ltd. v. Callminer, Inc., No. 18-cv-2024-RGA (D. Del. March 30, 2020).

Plaintiff Nice asserted fourteen patents against Defendant Callminer, the patents directed to data collection and classification from phone calls between customers and salespeople. Defendant filed a motion to dismiss under Rule 12(b)(6) on nine of the patents as ineligible under § 101. A Magistrate Judge considered the motion and recommended to deny it because Plaintiffs had pled sufficient facts to present a factual dispute of whether the claims recited an inventive concept, and thus the claims were eligible under § 101. The Court followed the recommendation of the Magistrate Judge.

The analysis for all nine patents is nearly identical, so this post will focus on the analysis of U.S. Patent No. 8,611,523. Claim 1 of the ‘523 patent recites:

1. A system for analyzing a telephonic communication between one or more customers and a contact center having one or more agents, the system comprising:

a first server for recording a telephonic communication between a customer and an agent;

a module for processing said telephonic communication into a plurality of computer telephony interpretation events; and

a module for analyzing said plurality of computer telephony interpretation events and classifying said plurality of computer telephony interpretation events into a first type and a second, different type.

The Court reviewed the claims under the two-part Alice test. For step one, Plaintiff argued that claim 1 recited a specific improvement of classifying “computer telephony interpretation events” into different types. The Court disagreed, holding that claim 1 was directed to the abstract idea of “collecting and classifying data from a customer-salesperson interaction.” The Court analogized claim 1 to the claims of Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, which claimed “functional results of converting, routing, controlling, monitoring, and accumulating records.” 874 F.3d 1329 (Fed. Cir. 2017). We’ve discussed how claims live and die by analogy, and here the Court held that, like in Two-Way, claim 1 of the ‘523 patent recited an abstract idea.

For step two of the Alice test, Defendant argued that claim 1 lacked a technical solution and that Plaintiff’s factual allegations did not show an inventive concept. The Court disagreed, noting that the Specification “describes a system for objectively analyzing audio segments based on objects formed from voice data and classified into types, when prior systems relied on subjective determinations,” and that these improvements are captured in claim 1. The Court discussed that a factual dispute does not “require the claims to completely describe the purported improvements or solutions,” but simply that the claim “captures” them. In particular, the Court noted that an objective analysis of a telephone call that replaces a subjective analysis may be inventive, and this sufficed to present a factual dispute about whether claim 1 recited well-understood, routine, and conventional activities.

Lessons for Practice

As in California and in Texas, Delaware has joined the trend to delay deciding § 101 eligibility on the pleadings. It has been suggested that dismissal on § 101 should be rare, though dismissal was common event in the immediate aftermath of Berkheimer. It is still a bit early to consider this trend a new normal, but it is worth considering how to incorporate more factual allegations of inventive concepts in pleadings. Litigants can strengthen initial filings in a Complaint with a close analysis of inventive concepts in the asserted patents, and patent prosecutors can highlight inventive concepts when drafting specifications of software patent applications.