Cellwitch Inc. v. Tile, Inc.

Background

Cellwitch asserted U.S. Patent No. 8,872,655, titled “System, Method and Network for Monitoring of Location of Items.” The patent describes attaching a small disc or patch to personal items so they can be tracked. Tile previously moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the patent was invalid under 35 U.S.C. § 101 because it claimed patent-ineligible subject matter.

In a November 21, 2019 order, the court found that the patent claims were directed to an abstract idea: using a computer to help locate lost personal items. But the court also found that Cellwitch had adequately alleged that the patent arranged its components in a nonconventional way. The court therefore denied Tile’s motion to dismiss because, at that stage, factual allegations had to be accepted as true and prevented deciding patent eligibility as a matter of law.

The case was then stayed while Tile pursued inter partes review before the Patent Trial and Appeal Board, the federal agency board that reviews certain patent disputes. The board found claims 1–3, 10–15, 22, and 23 unpatentable under 35 U.S.C. §§ 102 and 103. The Federal Circuit affirmed that decision and issued its mandate.

Motion for reconsideration

Tile sought reconsideration of the 2019 order based on the Patent Trial and Appeal Board’s decision. Because Tile had filed an answer after the original motion to dismiss, the court treated the motion as one for judgment on the pleadings under Rule 12(c). The court found no procedural bar to considering the motion in that form.

The court held that the later agency decision was a new difference in fact and law that could support reconsideration. However, it rejected Tile’s argument that the agency’s findings resolved the remaining patent-eligibility issue. The board reviewed novelty and obviousness under Sections 102 and 103. The court’s earlier ruling concerned eligibility under Section 101, including whether the claims contained an inventive concept after being directed to an abstract idea.

The court explained that novelty and obviousness are different legal inquiries from patent eligibility and use different standards. It also found that the board invalidated different claims under different statutes. As a result, the board’s decision did not preclude the court’s earlier finding that Cellwitch had adequately pleaded possible inventiveness under Section 101. The court noted that a patent’s subject matter can be eligible for consideration under Section 101 even if particular claims later fail other patentability requirements.

Disposition

The court DENIED Tile’s motion for reconsideration. It ORDERED that the stay be lifted and SET a case-management conference for March 10, 2023, at 11:00 a.m. The parties were ORDERED to file a joint case-management statement by March 3, 2023.