ORDER
This patent case presents the abstract question of whát is meant by the word “abstract.” Plaintiff Mobile Telecommunications Technologies, LLC (“Mtel”) alleges that Defendant United Parcel Service, Inc, (“UPS”) infringed on Mtel’s patented method for “provid[ing] -prompt notification of delivery of an express mailing to the addressee thereof.” (Doe.1-1.) UPS filed a Motion for Judgment on the Pleadings [Doc. 145] arguing that Mtel has attempted to impermissibly patent' the abstract idea of “notifying the recipient of an express mailing that the mailing is late” or that “it has been, delivered.” (Doc. 145-2 at 1 (“Motion”).) For the following reasons, UPS’s Motion is GRANTED.
I. STANDARD
“Judgment on the pleadings is appropriate when there are no material facts in dispute, and judgment may be rendered by considering the substance of the pleadings and any judicially noticed facts.” Hawthorne v. Mac Adjustment, Inc.,
This Court may dismiss a pleading for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A pleading fails to state a claim if it does not contain allegations that support recovery under any recognizable legal theory. 5 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1216 (3d ed.2002); see also Ashcroft v. Iqbal,
II. BACKGROUND
Mtel owns United States Patent No. 5,786,748 (the “ ’748 patent”), titled “Method and Apparatus for Giving Notification of Express Mail Delivery.” The patent covers, “inter alia, methods for providing notification of an' express mail delivery to an addressee via wireless page messages.” (Comply 13.) More specifically, the patent claims the following:
1.A method for providing notification of an express mail delivery to an addressee thereof, comprising the steps of:
(a) sending to an express mail tracking service an ID number assigned to an express mailing and a page number of a delivery notification recipient;
(b) relaying the ID page number and an appointed time to a paging operations center;
(c) providing a first indication to the paging operations center that the express mailing has been delivered to the addressee;
(d) providing a second indication to the paging operations center that the express mailing has not .been delivered to the addressee by the appointed time;
(e) transmitting, responsive to the first indication a wireless page message to the recipient as notification of the express mailing delivery; and
(f) transmitting, responsive to the second indication a wire-less page message to the recipient notifying recipient that the express mailing has not been delivered by the appointed time.
2. The method according to claim 1 wherein the step of transmitting a wireless page message responsive to the first indication includes the step of transmitting a wireless page message that indicates a time that the express mailing was delivered.
3. The method according to claim 1 wherein the step of transmitting a wireless page message responsive to the first indication includes the step of transmitting a wireless page message that indicates a name of a person that signed for the express mailing.
(’748 Patent, Compl. Ex. A at 6.)
On September 14, 2012, Mtel filed suit against UPS, alleging that UPS “practices the methods claimed in the ’748 patent.” (ComplJ 15.) Specifically, Mtel alleges that UPS infringed on the ’748 patent by assigning identification -numbers to packages it ships and then using said numbers to both “offer[ ] package tracking services that provide information on the status of a shipment via Short Message Service (SMS),” (ComplJ 16), and provide “information to an intended*, package recipient including whether there has been a delivery exception, such as when a package delivery has been delayed.” (Comply 23.)
The Parties proceeded to claim construction, and the Court held a Markman hearing on July 3, 2013. On March 17, 2014, the Court issued its claim construction order. UPS then filed its motion for summary judgment on October 30, 2014, and the Special Master for this case issued
III. DISCUSSION
The Patent Act provides protection for those who “discover[] any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. This statute has long contained an important exception: “Laws of nature, natural phenomena, and abstract ideas are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bcmk Int'l — U.S. —-,
Of course, “too broad an interpretation of this exclusionary principle [might] eviscerate patent law” because “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature ... or abstract ideas.” Mayo Collaborative Svcs. v. Prometheus Laboratories, Inc., — U.S. -,
Striking the proper balance in identifying those “abstract ideas” that are too ephemeral to be patentable is not an easy task, as courts have repeatedly observed. E.g., Bilski v. Kappos,
In Alice Corp., the Supreme Court identified a two’ part test to determine patent .eligibility under Section 101. First, a court must first identify if the claim is directed at an abstract -idea or other patent-ineligible concept.
Next, the Court must determine if the remainder of the claim adds an “inventive concept” that includes an element or combination of elements that is “sufficient to ensure that the patent 'in practice amounts to' significantly more” than the abstract idea itself. Alice Corp.,
A. Abstract Idea
The Court first addresses whether the ’748 patent is directed at an abstract idea. Method patents like the one at issue
For example, in Alice Corp., the Supreme Court found that “a method of exchanging financial obligations between two parties using a third party intermediary to mitigate settlement risk” (in essence, using a form of escrow) was a fundamental economic practice “long prevalent in our system of commerce,” and therefore an abstract idea that was unpatentable under § 101.
The Federal Circuit and district , courts have quickly fallen in line with Alice Corp. and its. sister cases, and have regularly invalidated a variety of method patents under § 101. In Intellectual Ventures I LLC v. Capital One Bank, the Federal Circuit found that a patent for a method of “storing, in a database, a profile keyed to a user identity and containing one or more user-selected categories to track transactions associated with said user identity ... and causing communication, over a communication medium and to a receiving device, of transaction summary data in the database for at least one or more user-selected categories” was directed towards the abstract idea of budgeting.
And in Ultramercial, Inc. v. Hulu, LLC, the Federal Circuit found a patent that recited the process of “receiving copyrighted media, selecting an ad, offering media in exchange for watching the selected ad, displaying the ad, allowing the consumer access to the media, and receiving payment from the sponsor of the ad” all described the “abstract idea of showing an advertisement before delivering free content” which was a long-used conventional business practice and therefore unpatentable.
Finally, a number of recent persuasive district court cases have struck down patents under § 101 that are strikingly similar to this one. For example, in Wireless Media Innovations, LLC v. Maher Terminals, LLC,
Those few eases cited by the Parties that upheld a method patent typically involved a method whose primary concern (or beating heart) was a specific piece of technology or technological problem. For example, in SiRF Technology, Inc. v. Int’l Trade Comm.,
There are eases where the distinction between a patent aimed at an abstract idea and one aimed at a specific technological problem will be difficult.. But this is not one of them. The: method described by the patent has, at its core, one animating goal: .notifying customers that their package is late, or that it has arrived. But business practices designed to advise customers of the status of delivery of their goods have existed at least for several decades, if not longer. Delivery notification is therefore the kind of conventional business practice long “prevalent in our system of commerce” that Alice Corp. found unpatentable. The fact that Mtel has automated the process of delivery notification in a particular way does not, under the circumstances of this case, render the ultimate idea behind its patent different or unique- in substance from the general idea itself.
As in Alice Corp., Mtel’s patent concerns a longstanding “method of organizing human-activity.” There it was using an escrow; here it is telling someone when their package has arrived. And so the “abstract idea here is -not meaningfully different from the ideas found to be abstract in other cases before the Supreme Court and [the Federal Circuit] involving methods of organizing human activity.” Intellectual Ventures,
B. Inventive Concept
Because the Court finds that the ’748 patent concerns the abstract idea of providing delivery notification for' express packages, it turns to the second part of the Alice Corp. test: whether or not the patent contains an “inventive concept” (the “special sauce” of the patent world) that carries it across the threshold of patenta-bility. Unfortunately for Mtel, it does not.
Under Alice Corp. and its predecessors, a “claim that recites an abstract idea must include additional features to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea.”
Virtually every case discussed above in Section III.A involved a. patent implemented on a computer or in a particular technological environment. And by and large, those “limitations” did not save the patents from ineligibility. Alice Corp. ’s patent for an intermediated settlement process involved a “substantial and meaningful role for the computer.” Specifically, the claimed method used a computer to “create ' electronic records, track multiple transactions, and issue simultaneous instructions.”
The Court in Intellectual Ventures applied Alice Carp, ’s reasoning to claims for a method for (1) budgeting notifications using “the Internet and telephone networks” and (2) tailoring online advertising content, and rejected both those methods’ patentability.
And in Ultramercial, the addition of eleven individual steps to a “method of using advertising as an exchange for currency,” including “updating an activity log, requiring a request from the consumer to view the ad, restrictions on public access, and use of the internet” were not enough to transform the abstract idea at the heart of the patent to a patentable method. The Ultramercial court made sure to emphasize that attempting to limit the usé of an abstract idea to a “particular technological environment” (namely, the internet) was insufficient to preserve patent’ eligibility. And the fact that “sortie of the eleven steps were not previously employed [in that art was] not enough” to confer patent eligibility. " Id. at 716. Judge Mayer’s concurrence in Ultramercial sums up perhaps the central reason why the Supreme Court has frowned on the patentability of abstract ideas and methods implemented on computers: generic computers and the internet are “the basic tools of modern-day commercial and social interaction,” and their use should remain “free to all men and reserved exclusively to none.”
As discussed above, the only time that in recent cases that courts have upheld a method patent was when the overarching aim of the patent was to solve a specific technical problem, not to implement an abstract idea. E.g., SiRF,
Thus whether or not MTEL has added that special “something more” to this conventional business practice is determined by the quality, not the quantity, of its specific adornments and limitations. Mtel argues that its claims require “specific structures and data elements” such as the “paging operations center,” “express mail tracking service,” “ID number”, and “wireless page message[s],” (Doc. 155 at 18), but it offers little in the way of explanation as to how these limitations are actually limiting. For example, it asserts that its method uses a-connectionless network, and so excludes “voice communications” — thus “conclusively removing] any preemption concern.” (Doc. 155 at 18.) It further objects that its patent does not preempt all delivery status notifications, because UPS could provide those notifications by “having a UPS customer representative call the package recipients on the telephone.” (Doc. 155 at 19.) But the implication of Mtel’s example is that it has patented a method of delivery notification that is the equivalent of a method implemented “through a computer” or “over the internet.” Under this argument, UPS could call customers to advise them of the delivery status of their packages, but could not text them.
The Complaint and Mtel’s briefing confirms as much. Mtel alleges that UPS practices the methods specified in the ’748 patent by offering “package tracking services that provide information [updates] via Short Message Service (SMS).” (Comply 16.) It also argues that “a wireless page message is a specific data format — such- ‘as a SMS message or email message — that is transmitted via a connectionless framework.” (Doc. 155 at 23.) It insists that this is not “generic data of any form communicated by any means.”
But it is hard to understand how a “wireless page message” — like a “SMS message or email, message” — sent over a “connectionless framework” — like a cellular network or the internet — is anything but generic. (Id.) Arguing that something is specific does not make it so. These technologies and forms of communications are all ubiquitous.
This case presents claims that are functionally no different from the invalid claims that used the internet in Ultramercial and Intellectual Ventures.
And unlike DDR Holdings and SiRF, Mtel’s claims are not directed at a particular technological problem — instead, the claim utilizes technology to achieve its abstract end of delivery notification.
Accordingly, Mtel’s patent claims cannot escape the gravity of the pre-emption concerns that figure prominently in Alice Corp. and its kin.
C. Waiver or Delay
Mtel also argues that UPS waived its assertion of’ Section 10T invalidity because it failed to include its Section 101 contentions in'its respónses to Mtel’s interrogatories. Mtel cites case authority for the proposition that a Section 101 invalidity challenge riot disclosed early enough during the' case is waived. (Pl.’s Resp., Doc. 155 at 7.) But its out-of-district (and out-of-circuit) case authority relied on local rules requiring disclosure of Section 101 challenges near the outset of the case. See Good Technology Corp. v. Mobileiron, Inc., No. 12-cv-5826,
The other case relied upon by Mtel, Woods v. DeAngelo Marine Exhaust, Inc., is also inapposite.
Woods was thus different from this case in both posture and underlying substance. It dealt with the review of a district court’s discretionary discovery ruling, and that ruling concerned a prior art inquiry that was factual in nature. Interconnect Planning Corp. v. Fell,
Finally, the Court declines to otherwise bar UPS’s motion because of its alleged tardiness, because it already determined it would entertain UPS’s motion in its August 4, 2015 Order. This is because the Motion “raises threshold question of patent validity" that would undoubtedly arise at trial.” (Doc. 148 at 2.) The Court understands Mtel’s frustrations at having to deal with this “threshold” question near' the end of its case, but this matter was likely to be heard no matter what, because validity is fundamental to Mtel’s ability to recover. '
The Court does note, however, that UPS’s motion presents a difficult issue on whether to award costs. Both Parties expended significant sums litigating this case, including the expense of paying for a Special Master to issue a Report and Recommendation on summary judgment. Some of those expenses could have been avoided had UPS been quicker to file its Motion. The Court notes that it. retains significant discretion to award costs in patent litigation. Manildra Mill. Corp. v. Ogilvie Mills, Inc.,
IY. Conclusion
For the foregoing reasons, the Court GRANTS UPS’s Motion for Judgment on the Pleadings [Doc; 145]. The Court DENIES UPS’s Motion for Oral Argument [Doc. 146]. Because the Court is granting UPS’s Motion for Judgment on the Plead
The Parties previously requested that the Court grant them an extension to engage in a post-discovery settlement conference after the Court ruled on UPS’s motion(s). The Court DIRECTS the Parties to discuss in the next twenty (20) days whether or 'not they wish to engage in further settlement discussions. The Parties are DIRECTED to file a status report (“Status Report”) on the docket within twenty (20) days of the entry of this Order indicating whether or not they wish to have extra time to discuss settlement (which should include discussing whether or not UPS will seek costs, given the Court’s concerns outlined above). The Court ADMINISTRATIVELY CLOSES
IT IS SO ORDERED this 24th day of March, 2016.
Notes
. The court also held that a patent for tailoring web content based on a viewer's location or address was unpatentable, as targeted advertising has long been a conventional business practice.
. Courts still consider the pre-Alice Corp. "machine or transformation" test as a part of Alice Corp.’s second step, but it is no longer sufficient by itself to argue that a claimed method is tied to a particular machine to save a patent from invalidity under Section 101. Vehicle Intelligence and Safety, LLC v. Mercedes-Benz USA, LLC,
. In a physical “store-within-a-store,” a customer remains within the larger’ store even after they enter the smaller, contained store. In the web context, clicking a link takes the customer away from the original web page— in essence, forcing the customer to walk outside.
. Mtel also argues that its business leaders’ excited “initial reception to the invention” indicates that the limitations in the patent are non-conventional. This argument is not supportable. Great ideas and discoveries are not always (or even often) patentable. Someone could construct a unified theory of quantum gravity tomorrow to great fanfare and excitement, but that would not make the discovery patentable. •
. Mtel argues that patents in the same subclass as the ’748 category have rarely been invalidated in the wake of Alice Corp. Although it is obvious that business method and software patents form the biggest categories of patents invalidated in the wake of Alice Corp., this does not eliminate the fact that Section 101 applies to all patents and is a “threshold” inquiry of eligibility. ‘
. Administrative closure of a case is a docket control device used by the Court for statistical purposes. Administrative closure of a case does not prejudice the rights of the parties to litigation in any manner. The Parties may move to re-open an administratively closed case at any time.
. Although the Court indicated earlier that it would automatically reopen the case thirty (30) days after issuing an order on UPS’s Motion, the Court will decline to do £o until it has heard from the- Parties on the status of ,(heir settlement talks.