Broadcom Corporation v. Netflix, Inc.

Background

Broadcom Corporation and Avago Technologies sued Netflix Inc. for infringement of twelve patents related to video streaming. Netflix moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) as to the twelfth claim for relief, which concerned U.S. Patent No. 8,365,183, the ’183 patent. Netflix argued that the asserted patent claims covered subject matter that is not eligible for patent protection under 35 U.S.C. § 101.

The ’183 patent describes a method for dynamically assigning jobs to computers in a distributed computing system. Claim 1 requires receiving a job request, identifying the job’s operational and utilization criteria, listing available computers, identifying suitable computers by comparing their characteristics with the job criteria, determining whether a suitable computer is underused, and forwarding the job to one of those computers. The parties agreed that Claim 1 was representative. The court therefore did not review the dependent claims independently.

Legal Standard

A Rule 12(c) motion allows a party to seek judgment based on the pleadings after the pleadings are closed. The court applies standards similar to those used for a Rule 12(b)(6) motion and generally considers the complaint, materials incorporated into it, and the patent itself. At this stage, a patent-eligibility issue may be decided only when the pleadings do not contain factual allegations that prevent resolution as a matter of law.

The court applied the two-step test from Alice Corp. v. CLS Bank International. First, it asked whether the claim was directed to an abstract idea or another excluded category, such as a law of nature or natural phenomenon. If so, it asked whether the claim contained an “inventive concept”—an element or combination of elements that added significantly more than the ineligible concept itself.

Court’s Analysis

The court concluded that Claim 1 was directed to the abstract idea of allocating tasks across a system of servers. In the court’s view, the claim’s steps amounted to applying rules to decide which computer should perform a particular job based on the computer’s capabilities and availability. The court compared this process to ordinary human activities such as a manager assigning tasks based on people’s abilities and availability.

The court rejected Broadcom’s argument that the claim instead described a specific improvement to computer functionality. Although the patent said that the method could improve system reliability and efficiency by balancing workloads, the court found that the claim did not identify a specific technique that departed from earlier approaches to solve a specific computer problem.

The court also concluded that Claim 1 lacked an inventive concept. The claim used a conventional sequence of receiving a request, determining criteria, selecting a suitable computer, and forwarding the job. The patent did not show that the system performing these steps was anything other than a generic computer system carrying out ordinary computer functions. The court found that Broadcom’s arguments about utilization values, metrics, and user-defined parameters merely restated the abstract idea rather than adding a patent-eligible innovation.

Disposition

The court held that the ’183 patent was directed to an abstract idea and lacked an inventive concept. It dismissed Broadcom’s twelfth claim for relief. The court allowed Broadcom to file an amended complaint by May 4, 2022. It stated that failure to meet that deadline would result in dismissal with prejudice under Rule 41(b), but the order itself dismissed the claim with leave to amend. Judge James Donato entered the order on April 13, 2022.