“VoIP-Pal explained that district courts across the country still erroneously look to Bancorp to ‘circumvent formal claim construction in deciding Rule 12 eligibility motions” without regard for MyMail’s holding.’”
Last week, VoIP-Pal.com, Inc. filed a combined petition for panel rehearing and rehearing en banc with the U.S. Court of Appeals for the Federal Circuit (CAFC) asking for review of a Rule 36 judgment in VoIP-Pal.Com, Inc. v. Twitter, Inc. That judgment affirmed a decision of the U.S. District Court for the Northern District of California that resolved a claim construction dispute in the context of a motion to dismiss under Section 101 as per Rule 12(b)(6) of the Federal Rules of Civil Procedure prior to claim construction. In the petition, VoIP-Pal asserted that the Rule 36 judgment conflicted with CAFC precedent and “the time has come for this court to reconsider whether a Rule 12 motion based on §101 should be decided before claim construction.”
VoIP-Pal outlined three reasons why the CAFC should rehear the case: 1) the CAFC’s affirmance of the district court’s decision conflicts with the Court’s precedent in MyMail Ltd. v. Oovoo, LLC; 2) the CAFC erroneously placed the burden on the non-moving party to propose terms for claim construction in opposing a Rule 12 motion to dismiss under 35 U.S.C.§101; and 3) the district court erroneously refuted a non-moving party’s plausible factual allegations that the claims recite an inventive concept based merely on a facial review of the asserted claims at the pleadings stage.
The Court’s Decision Conflicts with MyMail
With respect to the question of whether the CAFC’s affirmance of the district court’s decision conflicts with the Court’s precedent in MyMail, VoIP-Pal noted that the Court in MyMail stated, “if the parties raise a claim construction dispute at the [Rule 12] stage, the district court must either  adopt the non-moving party’s constructions or  resolve the dispute to whatever extent is needed to conduct the §101 analysis.” According to VoIP-Pal, the district court did not follow the guidance of MyMail, but rather “conducted a perfunctory facial review of the asserted claims” without consideration of the patents-in-suit’s specification, the prosecution history, or extrinsic evidence. On this point, the brief quoted IPWatchdog’s article, “Is the Federal Circuit Closer to Requiring a Real Claim Construction for Patent Eligibility?”, by Gene Quinn, in which Quinn explained that, “Sadly, a perfunctory facial review of claims has become the norm on motions to dismiss filed challenging claims as invalid under 35 U.S.C. 101.”
VoIP-Pal also noted that the district judge in MyMail was the same as the judge in the present case, with the district court’s decision in MyMail issuing five months prior to the present case. VoIP-Pal noted that in both cases the district court relied on the outdated law of Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada, which was decided two years prior to Alice v. CLS Bank, for the proposition that “claim construction is not an inviolable prerequisite to a validity determination under § 101.” However, contrary to the present case, the CAFC in MyMail found that the district judge erred by failing to address the claim construction dispute prior to holding the patents-in-suit ineligible. VoIP-Pal also explained that district courts across the country still erroneously look to Bancorp to “circumvent formal claim construction in deciding Rule 12 eligibility motions” without regard for MyMail’s holding. Thus, VoIP-Pal urged that, without clear guidance from the CAFC, such inconsistent and erroneous district court practices would continue.
Burden to Raise Claim Construction Dispute
Regarding the second point, that the CAFC erroneously placed the burden on VoIP-Pal to propose terms for claim construction, VoIP-Pal noted that Apple made the “plainly untenable” argument that it was VoIP-Pal’s “obligation to put forward . . . a disputed limitation and explain why it matters for the 101 structure.” VoIP-Pal argued that the approach suggested by Apple improperly shifted the burden of proving ineligibility to VoIP-Pal where the “Appellees plainly had the burden to show that there was no plausible reading of the patents-in-suit under which the asserted claims satisfied the eligibility requirement.” VoIP-Pal also explained that it specifically argued that certain claims required construction under 35 U.S.C. § 112(6), but the district court did not construe any of the claims noted by VoIP-Pal in its eligibility analysis. Thus, according to VoIP-Pal, guidance is needed to explain to litigants what needs to be done to raise a claim construction dispute under a Rule 12 eligibility challenge.
Plausible Factual Allegations
Lastly, VoIP-Pal asked the CAFC to rehear this case in order to address the question of whether a patentee’s plausible factual allegations that the asserted claims recite an inventive concept can be refuted at the Rule 12 stage solely by a facial review of the claims. Citing Cellspin Soft, VoIP-Pal noted that “allegations in the complaint are sufficient to overcome a Rule 12 eligibility challenge as long as what makes the claims inventive is recited by the claims.” The district court rejected VoIP-Pal allegations that the claims of the patent-in-suit contained an inventive concept because specific language, such as the words “user-specific calling”, did not appear in the claims. According to VoIP-Pal, the “district court unfairly held VoIP-Pal to an impossible standard— requiring that the claims contain the alleged inventive concept yet refusing to construe the claims to determine if they do.” Explaining that it demonstrated a need for claim construction, VoIP-Pal concluded that the CAFC should rehear the case “to hold that VoIP-Pal’s plausible allegations cannot be trumped by a facial review of the asserted claims.”