Cellwitch Inc. v. Tile, Inc., No. 4:2019cv01315 - Document 119 (N.D. Cal. 2023)
Court Description: ORDER DENYING 114 MOTION FOR RECONSIDERATION, LIFTING STAY, AND SETTING CASE MANAGEMENT CONFERENCE by Judge Jeffrey S. White. Joint Case Management Statement due by 3/3/2023. Initial Case Management Conference set for 3/10/2023 11:00 AM - Videoconference Only. (kkp, COURT STAFF) (Filed on 1/13/2023) Modified on 1/13/2023 (kkp, COURT STAFF).
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Cellwitch Inc. v. Tile, Inc. Doc. 119 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CELLWITCH INC., Plaintiff, 8 9 10 ORDER DENYING MOTION FOR RECONSIDERATION, LIFTING STAY, AND SETTING CASE MANAGEMENT CONFERENCE v. TILE, INC., Defendant. 11 United States District Court Northern District of California Case No. 19-cv-01315-JSW Re: Dkt. No. 114 12 13 Now before the Court is the motion filed by Defendant Tile, Inc. (“Defendant”) for 14 reconsideration of the Court’s order dated November 21, 2019 (“Order”), denying Defendant’s 15 motion to dismiss and request for judicial notice. (Dkt. No. 57.) The Court granted leave to file 16 the motion for reconsideration which is now fully briefed. For the reasons stated herein, the Court 17 DENIES the motion and LIFTS the stay and SETS a case management conference. 18 BACKGROUND 19 In May 2019, Defendant moved to dismiss on the basis that Plaintiff Cellwitch, Inc. 20 (“Plaintiff”)’s patent claim failed as a matter of law because the asserted patent, U.S. Patent No. 21 8,872,655 (“the ’655 Patent”) was invalid pursuant to 35 U.S.C. section 101 (“Section 101”) for 22 lack of patent-eligible subject matter. The ’655 Patent entitled “System, Method and Network for 23 Monitoring of Location of Items” describes a process in which a user can attach a small disc or 24 patch to personal items in order to track those items. (Dkt. No. 32, Amended Complaint (“Am. 25 Compl.”) ¶ 19.) 26 On November 21, 2019, this Court denied Defendant’s motion to dismiss on the basis that, 27 despite finding the patent claims are directed to an abstract idea, based on Defendant’s factual 28 allegations, the abstract claims contained limiting inventive concepts which precluded dismissal. Dockets.Justia.com United States District Court Northern District of California 1 The Court found that at that procedural posture, the Court must accept the factual recitation 2 that the “claimed invention represents an improvement over the prior art because it offered a 3 solution ‘that used a network of personal wireless communications terminals to monitor and notify 4 a particular user to when an item was no longer within a set range of the user.’” (Id. at 11-12 5 (citing Am. Compl. at ¶ 32).) This provision in the independent claims has been referred to as the 6 “Buddy Limitation.” 7 Based on this representation and at that procedural posture, the Court found that Plaintiff 8 had created enough of a factual dispute to defeat a Rule 12(b)(6) motion in that the company had 9 “adequately alleged that it ordered the components recited in claim one in a non-conventional 10 manner.” (See id. at 11 (citing BASCOM Glob. Internet Servs. Inc. v. AT&T Mobility LLC, 827 11 F.3d 1341, 1351 (Fed. Cir. 2016).) The Court found that the allegations, taken as true, “claimed a 12 process that ‘address[ed] the moment of loss itself,’ and this process was not well-known, routine, 13 conventional at the time of issuance of the ’655 Patent.” (Id. at 12 (citing Am. Compl. at ¶ 32).) Thereafter, Defendant filed a petition before the Patent Trial and Appeal Board (“PTAB”) 14 15 for inter partes review of the ’655 Patent and the Court stayed this matter. The PTAB issued a 16 Final Written Decision on May 13, 2021, finding that claims 1-3, 10-15, 22, and 23 of the ’655 17 Patent were unpatentable and specifically finding that prior art “teaches all of the limitations 18 recited in claims 1 and 12, including the ‘buddy’ limitation.” (Dkt. No. 103-2, PTAB Order at 37- 19 49, 86.) The Federal Circuit affirmed the PTAB and issued a mandate. (Dkt. Nos. 103-3, 103-4.) The Court shall address other relevant facts in the remainder of the order. 20 ANALYSIS 21 22 A. Standard of Review. 23 A motion for reconsideration may be made on one of three grounds: (1) a material 24 difference in fact or law exists from that which was presented to the Court, which, in th 11 (citing BASCOM, 827 F.3d at 1351).) The Court 12 found that “[f]or example, Plaintiff alleges that [the] claimed invention represents an improvement 13 over the prior art because it offered a solution ‘that used a network of personal wireless 14 communication terminals to monitor and notify a particular user to when an item was no longer 15 with a set range of the user.’” (Id. at 11-12 (citing Am. Compl. at ¶ 30) (emphasis added.) “The 16 allegations in the complaint indicate that Plaintiff’s patent claimed a process that ‘address[ed] the 17 moment of loss itself,’ and this process was not well-known, routine, conventional at the time of 18 issuance of the as’655 Patent.” (Id. at 12 (citing Am. Compl. at ¶ 32).) 19 Defendant now seeks to have the Court reconsider the finding of possible, claimed 20 inventiveness based on the PTAB’s finding that the Buddy Limitation is not patentable in view of 21 prior art. Defendant contends that the Court’s original finding of sufficient pleading of 22 inventiveness is no longer valid. The Court does not agree with Defendant that the only 23 outstanding issue underlying the original motion to dismiss – whether the Buddy Limitation was 24 an inventive concept – is the precise issue decided by the PTAB. The PTAB decision was 25 rendered pursuant to Sections 102 and 103, not Section 101. 26 In this matter, the PTAB was limited to its review of whether the claims were novel 27 (pursuant to Section 102) and non-obvious (pursuant to Section 103) and found by a 28 preponderance of the evidence that the combination of two prior art iterations “teaches the [Buddy 4 1 United States District Court Northern District of California 2 Limitation of the ’655 Patent].” (Dkt. No. 103-2, PTAB Order at 39.) “Given the many moving parts at work in the Patent Act, there is a risk of merely 3 conforming our preconceived notions of what should be patentable or of seeing common attributes 4 that track ‘the familiar issues of novelty and obviousness’ that arise under other sections of the 5 statute but are not relevant to § 101.” Bilski v. Kappos, 561 U.S. 593, 623-24 (2010) (citing 6 Parker v. Flook, 437 U.S. 584, 588 (1978)). The “’novelty’ of any element or steps in a process, 7 or even of the process itself, is of no relevance in determining whether the subject matter of a 8 claim falls with the § 101 categories of possibly patentable matter.” Intellectual Ventures I v. 9 Symantec Corp., 838 F.3d 1307, 1315 (Fed. Cir. 2016 (quoting Diamond v. Diehr, 450 U.S. 175, 10 188-89 (1981)). A “rejection on either [§§ 102 or 103] grounds does not affect the determination 11 that respondents’ claims recited subject matter which was eligible for patent protection under § 12 101.” Diamond, 450 U.S. at 191. 13 The PTAB opinion, as required by statute, did not make a determination of inventiveness 14 as required under Section 101. The Court finds that the issues decided by the PTAB are not 15 identical to the determination made in this Court’s prior order and those findings not made under 16 the same standard of proof. “The doctrine [of issue preclusion] applies only to issues that are 17 identical in both actions. Issues are not identical if the second action involves application of a 18 different legal standard, even though the factual setting of both suits be the same.” Peterson v. 19 Clark Leasing Corp., 451 F.21d 1291, 1292 (9th Cir. 1971) (citation omitted). Here, the decision 20 by the PTAB invalidated different claims, based on different legal standards, and under different 21 statutes. Although the determinative finding of obviousness in view of prior art will be limiting to 22 the claims going forward, the Court does not find that the PTAB decision precludes the Court’s 23 earlier finding of possible inventiveness based on the pleadings. The patent’s subject matter can 24 be “eligible under § 101 to be considered for patenting, [even if] the claims may not meet the 25 substantive criteria of patentability as set forth in § 102, § 103, and § 112 of Title 35.” Classen 26 Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057, 1059 (Fed. Cir. 2011). The factual and 27 legal bases for the PTAB’s conclusion are simply not identical to the issue of inventiveness before 28 this Court. Further, the Court does not find that Plaintiff’s arguments on the motion to dismiss 5 1 prevents them from pursuing their claims after the PTAB’s decision under a theory of judicial 2 estoppel. The Court specifically found that Plaintiff’s contention that the claimed invention 3 represents an improvement over the prior art was only an example of the bases for the Court’s 4 finding of pleading inventiveness. Obviousness and non-inventiveness are different analyses 5 employing different standards of proof and at different stages of this litigation. 6 Accordingly, the Court DENIES Defendant’s motion for reconsideration. CONCLUSION 7 United States District Court Northern District of California 8 For the foregoing reasons, the Court DENIES Defendant’s motion for reconsideration. 9 The Court ORDERS that the stay of this case be lifted. Lastly, a case management conference is 10 HEREBY SET for March 10, 2023, at 11:00 a.m. The parties are ORDERED to file a joint case 11 management statement by no later than March 3, 2023. 12 13 14 15 16 IT IS SO ORDERED. Dated: January 13, 2023 ______________________________________ JEFFREY S. WHITE United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 6
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