Cellspin Soft, Inc. v. Fitbit, Inc.
Opinion
*1309
Cellspin Soft, Inc. ("Cellspin") sued Fitbit, Inc. ("Fitbit"), Moov, Inc. ("Moov"), Nike, Inc. ("Nike"), Fossil Group, Inc. and Misfit, Inc. ("Fossil"), Garmin International, Inc. and Garmin U.S.A., Inc. ("Garmin"), Canon U.S.A., Inc. ("Canon"), GoPro, Inc. ("GoPro"), Panasonic Corporation of America ("Panasonic"), and JK Imaging LTD ("JKI") (collectively "Appellees") for infringing various claims of four different patents. Appellees moved to dismiss, arguing that the patents are ineligible for patent protection under
I. BACKGROUND
A. The Asserted Patents
All four asserted patents- U.S. Pat. No. 8,738,794 ("the '794 patent"), U.S. Pat. No. 8,892,752 ("the '752 patent"), U.S. Pat. No. 9,258,698 ("the '698 patent"), and U.S. Pat. No. 9,749,847 ("the '847 patent") -share the same specification and generally relate to connecting a data capture device, e.g. , a digital camera, to a mobile device so that a user can automatically publish content from the data capture device to a website. Each patent is described in more detail below.
1. The '794 Patent
According to the '794 patent, which issued May 2014, prior art devices could digitally capture images, video, or other types of content. To upload that content on the Internet, however, users had to transfer *1310 their content onto a personal computer using a memory stick or cable.
The '794 patent teaches a way to transfer and upload data "automatically or with minimal user intervention" using a "data capture device" and a "mobile device." '794 patent, col. 1, ll. 64 - col. 2, ll. 1. These two devices communicate via short-range wireless communication protocols such as Bluetooth.
Cellspin asserts claims 1-4, 7, 9, 16-18, and 20-21 of the '794 patent. On appeal, Cellspin does not agree that any of its claims are representative of the '794 patent or the asserted patents as a whole. Even so, Cellspin offers separate arguments only as to independent claims 1 and 16. The remaining claims depend from these two independent claims.
Claim 1 recites:
1. A method for acquiring and transferring data from a Bluetooth enabled data capture device to one or more web services via a Bluetooth enabled mobile device, the method comprising:
providing a software module on the Bluetooth enabled data capture device;
providing a software module on the Bluetooth enabled mobile device;
establishing a paired connection between the Bluetooth enabled data capture device and the Bluetooth enabled mobile device;
acquiring new data in the Bluetooth enabled data capture device, wherein new data is data acquired after the paired connection is established;
detecting and signaling the new data for transfer to the Bluetooth enabled mobile device, wherein detecting and signaling the new data for transfer comprises:
determining the existence of new data for transfer, by the software module on the Bluetooth enabled data capture device; and
sending a data signal to the Bluetooth enabled mobile device , corresponding to existence of new data, by the software module on the Bluetooth enabled data capture device automatically, over the established paired Bluetooth connection, wherein the software module on the Bluetooth enabled mobile device listens for the data signal sent from the Bluetooth enabled data capture device, wherein if permitted by the software module on the Bluetooth enabled data capture device, the data signal sent to the Bluetooth enabled mobile device comprises a data signal and one or more portions of the new data;
transferring the new data from the Bluetooth enabled data capture device to the Bluetooth enabled mobile device automatically over the paired Bluetooth connection by the software module on the Bluetooth enabled data capture device;
receiving, at the Bluetooth enabled mobile device, the new data from the Bluetooth enabled data capture device;
applying, using the software module on the Bluetooth enabled mobile device, a user identifier to the new data for each destination web service, wherein each user identifier *1311 uniquely identifies a particular user of the web service;
transferring the new data received by the Bluetooth enabled mobile device along with a user identifier to the one or more web services , using the software module on the Bluetooth enabled mobile device;
receiving, at the one or more web services, the new data and user identifier from the Bluetooth enabled mobile device, wherein the one or more web services receive the transferred new data corresponding to a user identifier; and
making available, at the one or more web services, the new data received from the Bluetooth enabled mobile device for public or private consumption over the internet, wherein one or more portions of the new data correspond to a particular user identifier.
'794 patent, col. 11, ll. 48 - col. 12, ll. 38 (emphases added).
As relevant here, claim 1 requires establishing a paired connection between the data capture device and the mobile device
before
data is transmitted between the two. The claim also describes a "push" mode for sending files in which a "data signal" is sent from the data capture device to the mobile device to initiate a data transfer.
Claim 16 is essentially the same as claim 1, but instead of reciting a "push" mode it describes a "pull" mode in which the mobile device "poll[s] the Bluetooth enabled data capture device" to ask whether the data capture device has files to upload.
2. The '752 Patent
The '752 patent, which issued November 2014, shares its specification with the '794 patent. Cellspin asserts claims 1, 2, 4-5, and 12-14 of the '752 patent, but only offers separate arguments as to eligibility with respect to claim 1.
Claim 1 of the '752 patent includes limitations that are substantially similar to the limitations of claim 1 of the '794 patent, but the patents differ in two important respects. First, the '752 patent requires the mobile device and data capture device to establish a connection using a "cryptographic encryption key." '752 patent, col. 11, ll. 54-56. This allows each device to "authenticate the identity" of the other so the data capture device can "trust[ ]" that its data is being securely transmitted to the right mobile device.
3. The '698 Patent
The '698 patent, which issued February 2016, also shares its specification with the '752 patent and the '794 patent. Cellspin asserts claims 1, 3-5, 7-8, 10-13, 15-20 of the '698 patent, but it only offers separate arguments as to claim 5.
Unlike the '794 and the '752 patents, claim 5 of the '698 patent does not claim a generic data capture device nor does it mention Bluetooth. Instead, the claim recites a "digital camera" that communicates with a cellular phone using "short-range wireless" signals.
4. The '847 Patent
The '847 patent, which issued August 2017, shares its specification with the other three asserted patents. Cellspin asserts claims 1-3 of the '847 patent, but it only offers separate arguments as to claim 1.
Claim 1 of the '847 patent includes limitations that are substantially similar to the limitations of claim 1 of the '752 patent. For example, claim 1 of the '847 patent recites "a Bluetooth enabled data capture device" that can establish a connection with a mobile device after "cryptographically authenticat[ing] [the] identity of the Bluetooth enabled cellular phone" and before transmitting data. '847 patent, col. 12, ll. 14-25. Claim 1 also requires the mobile device to include "a mobile application" that "listen[s] for the event notification, sent from the Bluetooth enabled data capture device ... wherein the event notification corresponds to the acquired new-data."
B. Procedural History
1. Pretrial Disputes
Cellspin filed more than a dozen cases alleging infringement of the asserted patents.
101 Order
,
On January 16, 2018, Appellees, except for Garmin, filed an omnibus motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the asserted patents are ineligible for patent protection under
On February 16, 2018, Cellspin filed a notice of supplemental authority citing
Aatrix Software, Inc. v. Green Shades Software, Inc.
,
After the March 6, 2018 hearing on Appellees' motions, the district court ordered Appellees to file supplemental briefing addressing Cellspin's amended complaints.
101 Order
,
2. The District Court's 101 Order
The district court granted Appellees' motions based on the two-step framework
*1313
for analyzing patent eligibility articulated in
Mayo Collaborative Services v. Prometheus Laboratories, Inc.
,
As to step one, the district court concluded that the asserted claims of the '794 patent are directed to the abstract idea of "acquiring, transferring, and publishing data and multimedia content on one or more websites."
As to step two, the district court found that the asserted claims of the '794 patent do not recite an "inventive concept."
Id.
at 1152. In particular, the district court concluded that the various claim elements,
e.g.
, the data capture device and Bluetooth enabled mobile device, represent generic computer components performing "as expected according to their ordinary use."
Id.
(quoting
TLI
,
The district court also concluded that the remaining asserted claims from the other asserted patents were all directed to a "substantially similar abstract idea" as the '794 patent. Id. at 1155. And, while the court recognized various differences between the asserted claims across the different patents, it explained that none of these differences evidenced an inventive concept. Id. The district court therefore concluded that none of the asserted claims, from any of the asserted patents, were patent eligible. Id.
3. The District Court's Attorney Fees Order
After the district court granted the motions to dismiss, Appellees Fitbit, Moov, Nike, Fossil, Canon, and GoPro moved for attorney fees under
In finding that the case was "exceptional" under § 285, the district court found that Cellspin's claims were "manifestly directed to an abstract idea."
Id.
at *3 (quoting
Inventor Holdings, LLC v. Bed Bath & Beyond, Inc.
,
The district court also criticized Cellspin for a "refusal to analyze its patents critically" before filing suit.
Id.
at *4. According to the district court, Cellspin "could have litigated a test case but instead chose to file and pursue aggressively fourteen lawsuits simultaneously."
Id.
While Cellspin argued that it did not need to file a test case because its patents were presumptively valid, the district court concluded that Cellspin's patents "are not presumed eligible under Section 101."
Id.
at *3-4 (citing
UltramercIal, Inc. v. Hulu, LLC
,
The district court ultimately awarded fees for the entire case because "the exceptionally meritless nature of this case extend[ed] well beyond the [motions to dismiss] and applie[d] to Cellspin's decision to bring these actions in the first place." Id. at *5. Even so, the district court found that the fee requests by Nike, Fossil, and Canon were "excessive." Id. It therefore capped their fee awarded at $ 180,000, $ 100,000, and $ 100,000 respectively. Id.
Cellspin timely appealed the district court's dismissal and attorney fees orders. We have jurisdiction with respect to both under
II. DISCUSSION
Cellspin argues that its asserted claims are patent eligible and so we should reverse the district court's dismissal and attorney fees awards. We address each argument below.
A. Patent Eligibility
We review the grant of a motion to dismiss under applicable regional circuit law.
OIP Techs., Inc. v. Amazon.com, Inc.
,
Under § 101, patents may be granted for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."
To distinguish between eligible and ineligible patent claims, the Supreme Court has fashioned a two-step test.
Id.
at 217-18,
Applying this two-step framework, we agree with the district court that the asserted claims are directed to an abstract idea.
101 Order
,
1. Step One
Alice
did not establish any "precise contours" for defining whether claims are directed to "abstract ideas" or something else.
According to Cellspin, the asserted claims are directed to improving Internet-incapable data capture devices and mobile networks. We disagree. The asserted claims are drawn to the idea of capturing and transmitting data from one device to another.
See, e.g.
, '794 patent, col. 1, ll. 32-36 ("This invention, in general, relates to distribution of multimedia content. More particularly, this invention relates to pairing a digital data capture device in conjunction with a mobile device for automatically publishing data ... on one or more websites simultaneously."). As the district court recognized, we have consistently held that similar claims reciting the collection, transfer, and publishing of data are directed to an abstract idea.
See, e.g.
,
Elec. Power
,
Cellspin argues that these cases are distinguishable because its claims recite "technological improvements." Appellant's Br. at 25. For example, Cellspin argues that its claims improve data capture devices
*1316
by allowing even "Internet-incapable capture device[s]" to "transfer[ ] newly captured data to the internet" via an "internet capable mobile device."
Id.
at 26, 54-58. But the patents' shared specification acknowledges that users could already transfer data from a data capture device-even an Internet-incapable device-to a website. '794 patent, col. 1, ll. 42-45 (describing how users can "transfer the image off-line to [a] PC, us[ing] a cable such as a universal serial bus (USB)"). What the patents offered was a way to automate this process.
Id.
at col. 1, ll. 48-54 ("[T]here is a need for a method and system to utilize a digital data capture device ... with a mobile device for automatically detecting capture of data ..., transferring the captured data ... to the mobile device, and publishing the data ... on one or more websites automatically ...."). But the need to perform tasks automatically is not a unique technical problem.
OIP Techs.
,
Cellspin also faults the district court for adopting an "overly simplistic characterization" of the claims that ignores important limitations. Appellant's Br. at 46. We are not persuaded. While some of the limitations noted by Cellspin- e.g. , using HTTP-may evidence an inventive concept, as explained below, none of them change the fact that the claims as a whole, across all four patents, are directed to an abstract idea.
2. Step Two
Having concluded that the claims are directed to an abstract idea, we next consider whether the claimed elements-"individually and as an ordered combination"-recite an inventive concept.
Alice
,
Cellspin's allegations identify several ways in which its application of capturing, transferring, and publishing data was unconventional. For example, Cellspin's amended complaints noted that prior art devices included "a capture device with built in mobile wireless Internet." J.A. 2290.
3
But these devices were "inferior," Cellspin alleged, "because, especially at the time of the patent priority date ... the combined apparatus [was] bulky, expensive in terms of hardware, and expensive in terms of requiring a user to purchase an extra and/or separate cellular service for the data capture device."
Cellspin also alleged that its specific ordered combination of elements was inventive. For example, Cellspin alleged that "inferior" prior art data capture devices "forward[ed] data to a mobile device as captured." J.A. 2290. By contrast, the claimed inventions require establishing a paired connection between the mobile device and the data capture device before data is transmitted. '794 patent, col. 11, ll. 60-61. According to Cellspin, this ensures that data is only transmitted if the mobile device is capable of receiving it. J.A. 2290 ("[H]av[ing] the capture device simply forward data to a mobile device as captured ... is inferior because, without a paired connection, there is no assurance that the mobile device is capable ( e.g. , on and sufficiently near) of receiving the data."). Cellspin also pointed to its use of HTTP, by an "intermediary device" and while the data is "in transit," as being inventive. J.A. 2293-2294. Indeed, it specifically alleged that "HTTP transfers of data received over [a] paired wireless connection to web services [were] non-existent" prior to its inventions. J.A. 2289; see also '794 patent, col. 10, ll. 4-9 (discussing the use of HTTP); '752 patent, col. 12, ll. 16-36 (reciting the use of HTTP); '698 patent, col. 13, ll. 8-22 (same); '847 patent, col. 12, ll. 62-67 (same).
The district court discounted these allegations in granting Appellees' motions to dismiss because Cellspin "fail[ed] to cite to support in the [shared specification]" for its allegations.
101 Order
,
The district court also decided that it need not credit Cellspin's allegations because the case Cellspin relied on for that proposition,
Berkheimer
, could be distinguished because it arose in the context of a motion for summary judgment.
101 Order
,
Accepting the allegations stated above as true, we cannot conclude that the asserted claims lack an inventive concept.
4
BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC
is particularly instructive on this point.
Appellees distinguish
BASCOM
by arguing that the asserted claims simply "replace a USB or similar cable with Bluetooth." Appellees' Br. at 33. But even assuming that Bluetooth was conventional at the time of these inventions, implementing a well-known technique with particular devices in a specific combination, like the two-device structure here, can be inventive.
Cf.
Richdel, Inc. v. Sunspool Corp.
,
Appellees argue that the limitations relied on by Cellspin "amount to nothing more than minor variations in the technological environment in which the abstract ideas are implemented." Appellees' Br. at 37-38. We disagree. In
Electric Power
, we explained that merely applying an abstract idea to a "particular technological environment," there "power-grid monitoring," was not enough to transform the underlying idea into something patent eligible.
Accordingly, the district court erred by granting the motions to dismiss.
B. Attorney Fees
The district court's error in granting the motions to dismiss necessitates vacatur of its attorney fees award.
See, e.g.
,
Mankes v. Vivid Seats Ltd.
,
According to the district court, Cellspin should have filed a "test case" before asserting its patents here.
Attorney Fees Order
,
The district court also faulted Cellspin for amending its complaint just a few days before the scheduled hearing on Appellees' motions to dismiss.
Attorney Fees Order
,
III. CONCLUSION
The district court erred by not accepting Cellspin's well-pleaded allegations as true with respect to whether its patents capture, transfer, and publish data in a way that is plausibly inventive. And, accepting those allegations as true, we cannot say that the asserted claims are ineligible under § 101 as a matter of law. The district court erred in holding otherwise. We therefore vacate the district court's dismissal and vacate its subsequent award of attorney fees. We remand this case for further proceedings consistent with this opinion.
VACATED AND REMANDED
COSTS
No costs.
Several other defendants dropped out of the case before the district court reached a decision on the merits.
101 Order
,
The district court entered individual but essentially identical orders in each related case. We will refer to a single order throughout.
Cellspin filed separate amended complaints with respect to each Appellee. In relevant part, however, the amended complaints are essentially identical. We will therefore refer to a single amended complaint throughout.
Given the similarities between the asserted claims, our eligibility analysis applies equally to all claims asserted across all four patents.
Reference
- Full Case Name
- CELLSPIN SOFT, INC., Plaintiff-Appellant v. FITBIT, INC., Moov, Inc., Dba Moov Fitness, Inc., Nike, Inc., Fossil Group, Inc., Misfit, Inc., Garmin International, Inc., Garmin USA, Inc., Canon U.S.A., Inc., GoPro, Inc., Panasonic Corporation of North America, JK Imaging Ltd., Defendants-Appellees Cellspin Soft, Inc., Plaintiff-Appellant v. Fitbit, Inc., Moov, Inc., Dba Moov Fitness, Inc., Nike, Inc., Fossil Group, Inc., Misfit, Inc., Canon U.S.A., Inc., GoPro, Inc., Defendants-Appellees
- Cited By
- 177 cases
- Status
- Published