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Microstrategy Inc. v. Apttus Corp.

United States District Court, E.D. Virginia, Richmond Division

July 17, 2015

MICROSTRATEGY INCORPORATED, Plaintiff,
v.
APTTUS CORPORATION, Defendant

Page 889

For Microstrategy Incorporated, Plaintiff: Daniel Robert Gopenko, LEAD ATTORNEY, Fish & Richardson PC (DC), Washington, DC; Andrew Robert Kopsidas, John Wesley Samples, PRO HAC VICE, Fish & Richardson PC (DC-NA), Washington, DC; William Rueger Poynter, Kaleo Legal, Virginia Beach, VA.

For Apttus Corporation, Defendant: Ryan Ronald Smith, LEAD ATTORNEY, PRO HAC VICE, Wilson Sonsini Goodrich & Rosati PC (CA-NA), Palo Alto, CA; Veronica Susana Ascarrunz, LEAD ATTORNEY, Adam William Burrowbridge, Wilson Sonsini Goodrich & Rosati PC (DC), Washington, DC.

OPINION

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John A. Gibney, Jr., United States District Judge.

MicroStrategy brought suit against Apttus claiming infringement on three of MicroStrategy's patents. Based upon 35 U.S.C. 101,[1] the Court finds that the patents

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at issue claim patent-ineligible subject matter. The three patents are directed at the abstract ideas of report generation and data storage. Looking to the claims themselves, the Court finds nothing to transform these abstract ideas into patent-eligible subject matter under the Supreme Court's Alice decision. Consequently, the Court will GRANT the defendant's motion.

I. Background

MicroStrategy is a worldwide provider of enterprise software platforms for business intelligence and analytics, including mobile applications, offered in the cloud and on business' premises. MicroStrategy owns the three patents at issue, patents '798, '577, and '303.[2] Apttus Corporation provides business intelligence systems including software, web based services, and software as-a-service applications, including contract management, contract compliance, and contract lifecycle management.

In this action, MicroStrategy alleges Apttus is " directly infringing on the patents by using, offering to sell, and/or selling, and/or importing, infringing products in violation of 35 U.S.C. § 271." [3] MicroStrategy insists that Apttus directs and/or controls its employees, executives, customers, and agents to use the infringing products in the United States. The plaintiff alleges three counts in the complaint: count one, infringement of the '798 patent, count two, infringement of the '577 patent, and count three, infringement of the '303 patent.

The first patent, '798, is an " intelligence server system." The second patent at issue, '577, is a " method and system for providing business intelligence web content with reduced client-side processing." Lastly, the '303 patent is a " system and method for remote manipulation of analytic reports."

II. Standard[4]

Apttus claims that the patents at issue are directed at patent-ineligible subject matter under 35 U.S.C. § 101 and thus the Court should dismiss the complaint. This statute defines the subject

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matter eligible for patent protection.[5] The statute provides that:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.

35 U.S.C. § 101.

Section 101 " contains an important implicit exception." Alice Corp. v. CLS Bank Int'l, 134 S.Ct. 2347, 2354, 82 L.Ed.2d 296, 189 L.Ed.2d 296 (2014) (quoting Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2116, 186 L.Ed.2d 124 (2013)). There are three patent-ineligible concepts: (1) laws of nature, (2) natural phenomena, and (3) abstract ideas. Id. [6] Although laws of nature, natural phenomena, and abstract ideas are not patentable, inventions that " integrate" such laws, phenomena, or ideas " into something more" qualify for patent protection. Alice, 134 S.Ct. at 2354. Two recent Supreme Court cases, Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 182 L.Ed.2d 321 and Alice Corp. v. CLS Bank Int'l, 134 S.Ct. 2347, 82 L.Ed.2d 296, 189 L.Ed.2d 296 (2014), have substantially altered the § 101 landscape. Patentability under § 101 is now a higher bar. Enfish, LLC v. Microsoft Corp., 56 F.Supp.3d 1167, 1170 (C.D. Cal. Nov. 3, 2014).

A § 101 analysis begins by identifying whether the claims at issue are directed to one of the aforementioned patent-ineligible concepts. Then, if the Court determines that the claims at issue are directed to one of the patent-ineligible concepts (like an abstract idea), the Court must determine whether the claims contain " an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'" Id. (quoting Mayo, 132 S.Ct. at 1294) (alterations in original). Courts analyzing software and computer-related inventions have rejected the inventions based upon the " abstract idea" exception.

If the Court finds the claims are directed at an abstract idea, the Court moves to the second step of the analysis. The Court must determine whether the

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claims contain an " inventive concept" to " transform" the abstract idea into patent-eligible subject matter. Alice, 134 S.Ct. at 2357 (quoting Mayo, 132 S.Ct. at 1294, 1298). The transformation of an abstract idea into patent-eligible subject matter requires more than simply stating the abstract idea while adding the words " apply it." Id. (quoting Mayo, 132 S.Ct. at 1294). 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 that abstract idea. Id. Those additional features must be more than " well-understood, routine, conventional activity." Mayo, 132 S.Ct. at 1298.[7]

III. Analysis[8]

The Court looks to the claims themselves to determine whether the patents at issue are patent-ineligible. Apttus argues that the claims demonstrate that the patent is directed at the abstract idea of report generation. MicroStrategy, on the other hand, states that the inventions allow businesses to look at data in new ways. The Court will look at each of the three patents individually.

A. '798 Patent -- " Intelligence Server System"

Claim 1 of the '798 patent is:

1. A reporting system comprising:
o A report initiating means for generating a request for a report;
o One or more data storage devices for holding the data used for ...

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