Broadcom Corporation v. Netflix, Inc.

Background

Broadcom Corporation and Avago Technologies sued Netflix, Inc. for allegedly infringing twelve patents related to video streaming. This order concerns the twelfth claim, which alleged infringement of U.S. Patent No. 8,365,183, the ’183 patent.

The court had previously dismissed the twelfth claim after granting Netflix’s motion for judgment on the pleadings. The court ruled that the ’183 patent claimed patent-ineligible subject matter under 35 U.S.C. § 101 and allowed Broadcom to file a third amended complaint. Netflix again moved to dismiss the twelfth claim under Rule 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim.

The parties agreed that Claim 1 was representative of the ’183 patent’s claims.

The Court’s Analysis

The court applied the two-step test for patent eligibility. First, it asked whether the claim was directed to an abstract idea. Second, if it was, the court asked whether the claim contained an “inventive concept”—a feature or combination of features that added significantly more than the ineligible idea itself.

At the first step, the court ruled that Claim 1 was directed to the abstract idea of allocating tasks across a system of servers. The claim used rule statements and user-defined parameters to identify suitable computer devices and distribute work and resources among them. The court rejected Broadcom’s argument that the claim instead improved computer functionality. Although the specification said the system could improve operational efficiency, the court found that the claim did not identify specific computer structures that improved the operation of the computer system itself. In the court’s view, the claimed efficiency came from general task management and allocation implemented on computers, not from a specific improvement to computer processing.

At the second step, the court found no inventive concept. It relied on its earlier conclusion that Claim 1 merely described ordinary steps, performed in a conventional order, using conventional computer technology. Broadcom pointed to a “funnel approach” that sequentially identified computer devices that were available, suitable, and underused for a particular job. The court found Broadcom’s allegations that this approach was unconventional and novel conclusory because they did not explain what made it unconventional. The court also found no other non-conclusory allegations or patent language establishing an inventive concept.

Disposition

The court granted Netflix’s motion to dismiss. The twelfth claim of the third amended complaint was dismissed with prejudice because Broadcom had received more than one opportunity to amend and had the benefit of the court’s earlier guidance. Judge Donato entered the order on August 8, 2022.