Torus Ventures LLC v. Dallas Capital Bank, N.A.
2:24-cv-00570
| E.D. Tex. | Jun 30, 2025Background
- Torus Ventures LLC sued Dallas Capital Bank, N.A., alleging infringement of U.S. Patent No. 7,203,844 (“the ’844 Patent”), which covers a method for a recursive security protocol for digital copyright control via encryption.
- Dallas Capital moved to dismiss under Rule 12(b)(6), arguing that the ’844 Patent is invalid under 35 U.S.C. § 101 because it is directed to an abstract idea without an inventive concept.
- The case turned on whether the patent claim described eligible subject matter—specifically, whether multiple layers of encryption with associated decryption algorithms were patentable.
- The court addressed the motion on the pleadings, finding no need for claim construction or further factual development.
- Torus Ventures had already amended its complaint once and sought leave to amend again if the court found the patent ineligible.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Whether claim construction is needed | Construction may be helpful, not necessary | No terms require construction to assess § 101 eligibility | No construction needed |
| Whether Claim 1 is directed to abstract idea | It is a specific, inventive recursive security protocol | Claim is just abstract multilevel encryption of data | It is directed to an abstract idea |
| Presence of an inventive concept | Recursive protocol architecture is unconventional | Steps are conventional, using generic hardware and processes | No inventive concept; just adds abstraction |
| Dismissal at pleading stage appropriate | Factual dispute exists re: conventionality | No real factual dispute; even novel abstract ideas are abstract | Dismissal appropriate at this stage |
| Leave to amend warranted | Amendment could allege facts showing inventiveness | Prior amendment, no factual/proposed change to alter analysis | Leave to amend denied as futile |
Key Cases Cited
- Alice Corp. Pty. v. CLS Bank Int’l, 573 U.S. 208 (2014) (establishes the two-step framework for determining patent eligibility under § 101)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for facial plausibility at motion to dismiss)
- Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) (directs courts to look at the 'focus' of the claimed advance when assessing patent eligibility)
- McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016) (eligibility requires a specific means that improves technology, not functional abstraction)
- Universal Secure Registry LLC v. Apple Inc., 10 F.4th 1342 (Fed. Cir. 2021) (claims that merely combine known methods in conventional ways with expected results are abstract)
- Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) (inventive concept can be found in non-generic arrangement of conventional parts)