Splunk Inc. v. Cribl, Inc.

Background

Splunk Inc. alleged that Cribl, Inc. and Clint Sharp infringed Splunk’s patents and copyrights and used misappropriated information to compete unfairly. The complaint asserted five patents: U.S. Patent Nos. 9,208,206; 9,762,443; 10,805,438; 10,255,312; and 9,838,467.

In an earlier order, the court granted the defendants’ motion to dismiss as to Splunk’s direct patent-infringement claims against Cribl based on patent ineligibility. It also granted the motion as to Splunk’s willful and indirect patent-infringement claims against Cribl on separate grounds. The court denied the motion as to Splunk’s indirect copyright-infringement claims against Cribl and Sharp and as to Splunk’s claim against Sharp under Section 1202 of the Digital Millennium Copyright Act.

The earlier order allowed Splunk to seek permission to amend its complaint. Splunk then proposed adding factual allegations about the alleged technological improvements associated with each patent.

Analysis

Federal Rule of Civil Procedure 15(a)(2) generally calls for permission to amend a complaint to be granted freely, but a court may deny amendment for reasons including undue delay, bad faith, repeated failure to fix deficiencies, undue prejudice, or futility. Amendment is futile when the proposed complaint still could not legally survive dismissal.

Splunk argued that its proposed allegations would prevent dismissal of its direct patent-infringement claims under Section 101 of the Patent Act and its willful and indirect patent-infringement claims. The court disagreed. Under the Supreme Court’s two-step test for patent eligibility, a claim is ineligible if it is directed to an ineligible concept, such as an abstract idea, and lacks additional elements that transform it into a patent-eligible application.

The court held that the proposed allegations did not alter the patent claims themselves. For the ’206 patent, Splunk’s allegations described improvements involving data indexing and a graphical user interface, but the claims did not recite those improvements. For the ’443 and ’438 patents, Splunk emphasized dynamic, user-modifiable configuration information and other network-capture improvements, but the court found that those features were not required by the claims. For the ’312 patent, Splunk identified improvements involving the indexing of raw time-series data, but the claims did not include the alleged technique. For the ’467 patent, Splunk described improvements involving efficient management of dual-queue systems and avoiding over-instantiation, but the claims did not provide those solutions.

The court explained that factual allegations in a complaint cannot import technical details from a patent’s specification or elsewhere when those details are not included in the patent claims. Because the alleged improvements were not captured in the claim language, the proposed allegations did not create factual disputes that prevented resolution of patent eligibility at the pleading stage.

The court also rejected the defendants’ separate argument that amendment would cause undue prejudice because Cribl had not filed petitions for inter partes review of the patents and had only a few months remaining to do so. The court stated that Cribl’s decision not to file those petitions was not legally cognizable prejudice.

Disposition

The court concluded that Splunk’s amended allegations did not prevent dismissal of its direct patent-infringement claims and that amendment would be futile. Because the patent claims remained ineligible, the court did not reach Splunk’s new arguments concerning willful and indirect patent infringement.

The court denied Splunk’s motion for leave to file an amended complaint. Judge William Alsup signed the order.