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By Peter Leung
Jan. 20 — CafePress Inc. has prevailed on a motion to dismiss after a court found that the plaintiff's patent covering methods for facilitating sales on the Internet was patent-ineligible subject matter (Am. Needle, Inc. v. Cafe Press Inc., N.D. Ill., 1:15-cv-03968, 1/19/16).
In applying the controversial Alice Supreme Court decision, the U.S. District Court for the Northern District of Illinois found that the patent covered ineligible subject matter because it was an abstract idea not necessarily rooted in computer technology. In an order issued Jan. 19, it also said that there is no presumption that an issue patent is subject-matter eligible, even though the patent is presumed valid.
By prevailing at the motion-to-dismiss stage, the defendants were able to head off the case before having to engage in the costlier aspects of patent litigation, such as construction of patent claims.
American Needle Inc. sued Internet retailers CafePress and Zazzle Inc. in separate cases for allegedly infringing U.S. Patent No. 7,319,980, which covers a method for facilitating Internet sales by displaying a picture of a product and allowing users to input information that changes how that product looks on the screen.
In a motion to dismiss filed by Zazzle and joined by CafePress, the defendants argued that the asserted patent covers ineligible subject matter in light of the Alice decision, which held that inventions claiming abstract ideas are unpatentable unless additional elements transform them into patent-eligible inventions.
The court agreed with the defendants. Applying the two-step test from Alice, it first found that the patent covered an abstract concept—namely that of promoting sales by giving visual aides to shoppers. Furthermore, it rejected American Needle's argument that it is not abstract because it's necessarily rooted in computer technology.
American Needle's argument was an attempt to tie the patent to the invention at issue in DDR Holdings v. Hotels.com, one of the few Federal Circuit cases where a patent was found to survive the Alice test. There, the Federal Circuit found that the patent was not on an abstract concept because it dealt with a problem specific to the Internet, relating to making third-party websites look and feel like the host website.
By contrast, the court here found that American Needle's patent covers the concept of presenting shoppers with different versions of products to encourage a purchase, a concept that has long existed. Merely using a computer network does not make it a problem unique to the Internet.
Applying the second step of the Alice test, the court found no additional elements, such as an inventive concept, that would render the patent eligible subject matter. Applying the so-called “machine or transformation test,” it found that the patent isn't tied to a particular machine, nor does it transform an article into a different state.
The court also rejected the plaintiff's argument that there is a presumption of subject-matter eligibility for issued patents, since there is a presumption of validity. It pointed out that the Supreme Court has not applied a presumption of eligibility, noting that the question of subject-matter eligibility is a question of law and, as such, should not be reviewed under the higher clear and convincing standard wanted by American Needle.
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