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  • District Of Delaware Magistrate Judge Recommends Denial Of Amazon’s Section 101 Motion To Dismiss

    On December 11, 2017, Magistrate Judge Christopher J. Burke of the United States District Court for the District of Delaware issued a report and recommendation to Chief Judge Leonard Stark recommending denial of defendant, Inc.’s (Amazon) Section 101 motion to dismiss for failure to state a claim.  M2M Sols. v. Amazon, Inc., case no. 17-cv-202.

    Since 2014, when the United States Supreme Court issued its decision in Alice Corp. v. CLS Bank Int’l, it has become commonplace for defendants accused of infringing a software patent to move to dismiss on the theory that the asserted patent claims are invalid because they claim unpatentable subject matter under 35 U.S.C. § 101. 134 S. Ct. 2347 (2014).  Under the two-step Alice inquiry, first, the claims are considered in their entirety to ascertain whether their character as a whole is directed to abstract ideas or other excluded subject matter, and, second, the claims are evaluated for an inventive concept, i.e., 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.

    Here, M2M Solutions LLC (M2M) sued Amazon on three patents that concern machine-to-machine communication systems.  The patents purport to disclose a system and method for providing a range of consumer services by autonomously monitoring and managing consumer devices.  The devices automatically communicate operational status information and consumer usage information to a remote computer server platform, which then automatically processes that information according to preprogrammed conditions and in response communicates management instructions that cause the stored data content files of one or more of the assets to be automatically modified.

    Amazon moved under Fed. R. Civ. P. 12(b)(6) to dismiss the lawsuit for lack of patentable subject matter, arguing that the patents were directed to the abstract idea of receiving, storing, processing, and modifying information.  Magistrate Judge Burke agreed, but, after moving on to the second step of the Alice test, found that Amazon had not met its burden of proving patent ineligibility.

    In making his determination, Judge Burke relied on, among other things, statements in the patents themselves that suggest that the claimed consumer usage information solution amounts to a specific technological step forward in the realm of machine-to-machine communication systems; that is, that the claimed solution was a palpable advance over the prior art.  Judge Burke noted that because the motion was made at the pleading stage, he must assume those statements to be true.

    The decision points to an emerging area of focus in § 101 jurisprudence:  can the result ever turn on an issue of fact?  In the M2M case, one result of Judge Burke’s reasoning may be that, assuming the patent owner can submit expert opinion or other evidence supporting the statements in its patents, the § 101 issue cannot be decided on summary judgment, leading to either a bench or jury trial on the issue and thus greatly reducing the power of the § 101 defense, which is generally assumed to be susceptible to early decision on a paper record.