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Judge Stark adopts in part defendants’ objections to report and recommendation recommending denial of motions to dismiss for failure to claim patentable subject matter

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In a recent Memorandum Order, Chief Judge Leonard P. Stark adopted in part defendants’ objections to Magistrate Judge Burke’s Report and Recommendation (“the Report”) dated July 15, 2015 (discussed here), which recommended that defendants’ motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to claim patentable subject matter under 35 U.S.C. § 101 should be denied. Execware, LLC v. BJ’s Wholesale Club, Inc., C.A. Nos. 14-233, 14-234, 14-235, 14-240-LPS (D. Del. Sept. 30, 2015). Judge Stark explained that defendants’ objections are sustained to the extent “they challenge Judge Burke’s conclusions that claim 1 is not directed to an abstract idea and that claim 1 contains an ‘inventive concept.’” Id. at 3. Judge Stark first disagreed with the Report’s approach of “presum[ing] that the claims are to be construed in the manner most favorable to Plaintiff.” Judge Stark found the approach improper in this particular instance because defendants’ motions could be denied based on constructions “that . . . turn out to be incorrectly less favorable to Defendants than the constructions that will ultimately be adopted after formal claim construction takes place.” Id. at 4-5.

Judge Stark also found that “[c]laim construction is necessary in this case before determinations can be made under either step of the Alice inquiry.” Id. at 6. Judge Stark noted that the Report invoked the “most favorable” standard four times in its “step-1 analysis under Alice.” Id. at 7. Judge Stark thus found “[b]ecause the claim meaning is apparently uncertain enough to turn on multiple uses of this standard, and because the parties were not afforded an opportunity to explain why it may or may not be appropriate to read in limitations from the specification into certain of the steps comprising claim 1, . . . formal claim construction is necessary before deciding whether claim 1 is directed to an abstract idea.” Id. As to the second step of Alice, Judge Stark noted, among other things, that “the Report does not give any reasons why, when this claim term is eventually construed, it will be construed with limitations read into it from the specification.” Id. at 9-10. Judge Stark ultimately denied defendants’ motions to dismiss without prejudice to renew as summary judgment motions after claim construction and discovery have taken place. Id. at 11.

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