IP Law Daily, PATENT—W.D.N.C.: ‘Alice’ test could not be applied to security system patents before claim construction, (Apr 15, 2016)

By Peter Reap, J.D., LL.M.

Claim construction of plaintiff InVue Security Product’s asserted patents was necessary in order to determine the merits of defendant Mobile Tech’s motion to dismiss InVue’s patent infringement suit on the grounds that the asserted patents failed the Supreme Court’s “Alice” test for patent subject-matter eligibility, the federal district court in Charlotte has decided (InVue Security Products Inc. v. Mobile Tech, Inc., April 14, 2016, Cogburn, M.). Thus, the motion to dismiss was denied without prejudice, subject to renewal upon completion of claim construction, or at an earlier stage if InVue provided its proposed constructions of terms and Mobile Tech accepted those constructions for purposes of non-patentability analysis.

InVue alleged Mobile Tech’s infringement of U.S. Patent Nos. 9,269,247, 9,135,800, and 8,884,762. InVue stated that the patents-in-suit describe and claim, inter alia, security systems and methods for protecting items of merchandise. Each of the patents-in-suit is entitled “Programmable Security System and Method for Protecting Merchandise.”

According to the complaint, the patents InVue’s patents describe inventions that advanced the art and relate to methods of protecting merchandise and programmable security systems that can include in certain embodiments, for example, one or more of a programmable security device configured for attachment to merchandise, a programmable key that can be used to arm or disarm the security device, and a programming station that can be used to provide a security code for use with one or more programmable keys and security devices.

Mobile Tech filed the instant motion to dismiss, asserting that all of the claims in the patents-in-suit are directed to unpatentable subject matter and that the patents are invalid under 35 U.S.C. §101.

The inquiry before the court in determining whether subject matter is patent-eligible under Section 101 is twofold, the court noted. First, the court must determine whether the claims at issue are directed to a patent-ineligible concept such as an abstract idea. Second, the court must examine the elements of the claim to determine whether it contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application.

While the court was cognizant of the fact that it could determine Mobile Tech’s invalidity arguments prior to a claim construction hearing, it would not do so if the record before it did not allow for a full understanding of the basic character of the claimed subject matter, the court explained.

Mobile Tech’s central contention was that the three patents-in-suit are directed to the abstract idea of protecting merchandise from theft with a lock and key by taking security systems that have long been used in society with mechanical keys, and then “computerizing” those keys and their corresponding locks. Mobile Tech argued that such a process is an “abstract idea” not subject to patent protection under 35 U.S.C. §101 and Supreme Court precedent. It further contended that the asserted patents fail to provide any inventive concept that would make them patent eligible.

In response, InVue contended that Mobile Tech’s “abstract idea” argument mischaracterized the scope and content of the patent and fails to properly address the numerous claim limitations found among the 113 claims of the patents-in-suit.

Having considered the parties’ contentions, resolution of Mobile Tech’s invalidity contentions would be inappropriate at this stage in the proceedings, the court determined. As the parties were well aware, patent law is a highly fact-specific field and the facts in this case, as they currently stand, must be more fully developed before the court could conclusively determine Mobile Tech’s invalidity contentions.

Here, the parties disputed the nature and scope of the claims, the construction of the claims, and the basic character of the patents. Despite Mobile Tech’s suggestion that the court simply construe the terms “in the manner most favorable to Plaintiff” and then declare the patent invalid, the parties have not set forth stipulated representative claims or proposed constructions for the court to review. Additionally, the record in this case was far from developed and additional discovery would aid in the decision-making process.

The case is No. 3:15-cv-00610-MOC-DSC.

Attorneys: Steven R. Leblanc (Dority & Manning, PA) and J. Mark Wilson (Moore & Van Allen PLLC) for InVue Security Products Inc. Alan H. Norman (Thompson Coburn LLP) and Richard Stanley Glaser, Jr. (Parker Poe Adams & Bernstein LLP) for Mobile Tech, Inc. d/b/a Mobile Technologies Inc. d/b/a MTI f/k/a Merchandising Technologies Inc.

Companies: InVue Security Products Inc.; Mobile Tech, Inc. d/b/a Mobile Technologies Inc. d/b/a MTI f/k/a Merchandising Technologies Inc.

Cases: Patent NorthCarolinaNews