Hantz Software, LLC v. Sage Intacct, Inc.

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 HANTZ SOFTWARE, LLC, Case No. 21-cv-01987-HSG 8 Plaintiff, ORDER GRANTING MOTION TO DISMISS AND DENYING AS FUTILE 9 v. MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT 10 SAGE INTACCT, INC., Re: Dkt. Nos. 47, 56 11 Defendant. [12] 13 Before the Court is Defendant Sage Intacct, Inc.’s motion to dismiss Plaintiff Hantz 14 Software, LLC’s complaint, for which briefing is complete. See Dkt. Nos. 47 (“Mot.”), 50 15 (“Opp.”), 51 (“Reply”). The Court heard oral argument on the motion on October 14, 2021. See 16 Dkt. No. 55. For the reasons explained below, the Court GRANTS Defendant’s motion to 17 dismiss. 18 I. BACKGROUND 19 On March 22, 2021, Plaintiff Hantz Software, LLC brought this patent infringement action 20 against Defendant Sage Intacct, Inc. See Dkt. No. 1. The operative complaint asserts 21 infringement of United States Patent Nos. 8,055,559 (“the ’599 Patent”) and 8,055,560 (“the ’560 22 Patent”) (collectively, “the Asserted Patents”). Dkt. No. 41 (“Compl.”) ¶ 1. The Asserted Patents 23 relate to computer-implemented accounting methods or systems for accounts receivable and 24 accounts payable within a multi-company system. See id. 25 The operative complaint recites allegations that “[p]rior to the inventions claimed in the 26 [Asserted Patents], conventional approaches to financial accounting methods and solutions for 27 multi-company enterprises were far too time consuming and inefficient, especially where accurate 1 inefficiencies and delays” in performing these “conventional” approaches created a “long felt need 2 in the marketplace” for patented, computer-implemented methods that “enhance[d] and 3 streamline[d]” the approaches. Id. ¶¶ 18-20. To solve this problem, beginning in 2006, Roy 4 Gelerman reviewed the existing landscape of multi-company accounting platforms, including 5 those offered by Defendant. Id. ¶¶ 22, 23, 25, 26. During a February 2008 demonstration of 6 Defendant’s multi-company accounting product, Mr. Gelerman identified the products’ 7 shortcomings in accuracy, speed, and completeness. Id. ¶ 27. At this demonstration, Defendant 8 personnel confirmed to Mr. Gelerman “that the [Defendant’s] accounting products did not include 9 features and functions capable of creating an [accounts receivable invoice or accounts payable 10 bill] with detail lines from multiple companies.” Id. ¶ 28. Defendant personnel believed “that 11 would be too hard.” Id. After his competitive research, Mr. Gelerman confirmed that: 12 none of the commercially available accounting products included the functions and features that allow a payment for a multi-company AP 13 bill, or AR invoice, to be recorded in the accounting system to reduce the outstanding AP or AR balances of each company and the system 14 automatically adds a pair of multi-company generated “Due To/Due From” lines as “Due To/Due From” entries to balance the money 15 owed between the distinct companies” [sic] and to keep each companies’ balance sheet in balance. [16] 17 Id. ¶ 30. Plaintiff and Mr. Gelerman then sought patent protection for a solution incorporating Mr. 18 Gelerman’s findings and drafted the patent applications that would issue as the ’559 and ’560 19 Patents. Id. ¶ 32. 20 The ’559 Patent and the ’560 Patent are related and claim priority to the same parent 21 application. The two patents share near identical titles. Compare ’559 Patent (“Multi-Company 22 Business Accounting System And Method For Same Including Account Receivable” (emphasis 23 added)) with ’560 Patent (“Multi-Company Business Accounting System And Method For Same 24 Including Account Payable” (emphasis added)). While the ’559 Patent refers to “invoices” for 25 accounts receivable and the ’560 Patent refers to “vouchers” for accounts payable, both patents 26 share substantially the same written description. The patents’ specifications identify problems in 27 multi-company business accounting systems that record and organize company financial activity. 1 To/Due From’ entries to keep each company in balance.” See, e.g., ’559 Patent, 2:14-16. “This is 2 a huge burden, as nearly 30% of the accounting entries are inter-company balancing entries.” Id. 3 at 2:16-18. To remedy this gap, the Asserted Patents use “balancing lines” to “automatically add” 4 “input invoice detail lines” and “define an outstanding balance associated with each of the distinct 5 companies.” Id. at 2:46-50. This claimed invention allows the user to “accurately report the 6 Accounts Receivable for each of the distinct companies,” “provid[ing] results that were not 7 possible in conventional methods and systems.” Opp. at 9. 8 The ’559 Patent and the ’560 Patent each have four independent claims: claims 1, 31, 32, 9 and 33. Claim 1 of the ’559 Patent recites: 10 1. A computer implemented method for Account Receivable (AR) accounting for use within a multi-company accounting system that 11 operates on a computer arrangement and which is accessible by one or more persons defining an interface user, the method comprising: 12 at a processor, creating a multi-company invoice with the multicompany accounting system, the interface user entering financial data 13 into the multi-company accounting system via the computer arrangement including: 14 entering an invoice total money amount; and entering input invoice detail lines, each of the input invoice detail 15 lines having an entered account associated with one of a plurality of companies of a multi-company group and an amount of money, at 16 least two of the input invoice detail lines being associated with two distinct companies of the multi-company group, wherein the distinct 17 companies are affiliated with each other and wherein each uses the multi-company accounting system for tracking money flow and 18 balancing balance sheets for their respective accounting operations; at the processor, automatically adding via the multi-company 19 accounting system at least a pair of multi-company generated balancing lines associated with the multi-company invoice for 20 balancing money owed to each of the distinct companies to define an outstanding balance associated with each of the distinct companies, 21 thereby keeping Accounts Receivable for each of the distinct companies in balance; 22 at the processor, entering a payment for paying the multi-company invoice including the interface user entering an amount of the 23 payment into the multi-company accounting system via the computer arrangement; and 24 at the processor, applying the payment to the multi-company invoice to reduce the outstanding balances for the distinct companies 25 including the multi-company accounting system automatically adding at least a pair of multi-company generated Due To/Due From lines as 26 Due To/Due From entries to balance the money owed between the distinct companies, thereby keeping the Accounts Receivable for each 27 of the distinct companies in balance. 1 Claim 31 of the ’559 Patent recites: 2 31. A multi-company accounting system for providing a computer implemented method for Account Receivable (AR) accounting and 3 which is accessible by one or more persons defining an interface user, the system comprising: 4 a computer arrangement including at least one processor operative to: create a multi-company invoice within the multi-company accounting 5 system, wherein the interface user enters financial data into the multicompany accounting system via the computer arrangement including: 6 enters an invoice total money amount; and enters input invoice detail lines, each of the input invoice detail lines 7 having an entered account associated with one of a plurality of companies of a multi-company group and an amount of money, at 8 least two of the input invoice detail lines being associated with two distinct companies of the multi-company group, wherein the distinct 9 companies are affiliated with each other and wherein each uses the multi-company accounting system for tracking money flow and 10 balancing balance sheets for their respective accounting operations; automatically add at least a pair of multi-company generated 11 balancing lines associated with the multi-company invoice for balancing money owed to each of the distinct companies to define an 12 outstanding balance associated with each of the distinct companies, thereby keeping Accounts Receivable for each of the distinct 13 companies in balance; enter a payment for paying the multi-company invoice including the 14 interface user entering an amount of the payment into the multicompany accounting system via the computer arrangement; and 15 apply the payment to the multi-company invoice to reduce the outstanding balances for the distinct companies including the multi16 company accounting system automatically adding at least a pair of multi-company generated Due To/Due From lines as Due To/Due 17 From entries to balance the money owed between the distinct companies, thereby keeping the Accounts Receivable for each of the 18 distinct companies in balance. 19 ’559 Patent, 54:39-55:12. Claim 32 similarly recites a process for using balancing lines to define 20 an outstanding balance associated with each distinct company in a multi-company business, but 21 does so as a computer-implemented method claim. Id. at 55:13-56:4. Claim 33 does the same, but 22 instead as a computer-readable storage medium claim. Id. at 56:5-46. 23 On July 8, 2021, Defendant moved to dismiss the Complaint because the asserted claims 24 are invalid as a matter of law under Section 101. Defendant seeks a declaration that the patents-in25 suit are invalid. 26 // 27 // II. LEGAL STANDARD [1] A. Motion to Dismiss [2] Rule 8(a) requires that a complaint contain “a short and plain statement of the claim [3] showing that the pleader is entitled to relief[.]” Fed. R. Civ. P. 8(a)(2). A defendant may move to [4] dismiss a complaint for failing to state a claim upon which relief can be granted under Rule [5] 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a [6] cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. [7] Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) [8] motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” [9] Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when a [10] plaintiff pleads “factual content that allows the court to draw the reasonable inference that the [11] defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In [12] reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as [13] true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. [14] St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, courts do not [15] “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or [16] unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). [17] “[W]hether a claim recites patent eligible subject matter is a question of law which may [18] contain underlying facts.” Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018); Akzo [19] Nobel Coatings, Inc. v. Dow Chem. Co., 811 F.3d 1334, 1343 (Fed. Cir. 2016) (“Indefiniteness is [20] a question of law that we review de novo . . . subject to a determination of underlying facts.”). [21] Claim construction is not required prior to a ruling on Defendant’s motion. See Content [22] Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d 1343, 1349 (Fed. Cir. 2014) [23] (affirming grant of dispositive motion prior to claim construction); accord Ultramercial, Inc. v. [24] Hulu, LLC, 772 F.3d 709, 718-20 (Fed. Cir. 2014). [25] B. Section 101 Patent-Eligible Subject Matter [26] Section 101 of the Patent Act describes the scope of patentable subject matter as [27] encompassing “any new and useful process, machine, manufacture, or composition of matter, or 1 any new and useful improvement thereof.” 35 U.S.C. § 101 . It is well settled that “laws of nature, 2 natural phenomena, and abstract ideas are not patentable.” See Alice Corp. Pty. v. CLS Bank Int’l, [3] 573 U.S. 208 , 216 (2014). These categories are not patent-eligible because “they are the basic 4 tools of scientific and technological work,” which are “free to all men and reserved exclusively to 5 none.” Mayo Collaborative Servs. v. Prometheus Labs., 566 U.S. 66, 71 (2012) (citations 6 omitted). Allowing patent claims for laws of nature, natural phenomena, and abstract ideas would 7 “tend to impede innovation more than it would tend to promote it,” thereby thwarting the primary 8 object of the patent laws. Id. However, the Supreme Court has also recognized the need to “tread 9 carefully in construing this exclusionary principle lest it swallow all of patent law.” Alice, 573 10 U.S. at 217. 11 The Supreme Court and Federal Circuit have articulated a two-part test for determining 12 whether a claim’s subject matter is patent-eligible. First, the Court “determine[s] whether a claim 13 is ‘directed to’ a patent-ineligible abstract idea.” Content Extraction, 776 F.3d at 1346 -47 14 (citation omitted). If so, the Court then “consider[s] the elements of the claim—both individually 15 and as an ordered combination—to assess whether the additional elements transform the nature of 16 the claim into a patent-eligible application of the abstract idea.” Id. at 1347 . “This is the search 17 for an ‘inventive concept’—something sufficient to ensure that the claim amounts to ‘significantly 18 more’ than the abstract idea itself.” Id. (quotation omitted). 19 In its analysis, the Court “examine[s] earlier cases in which a similar or parallel descriptive 20 nature can be seen—what prior cases were about, and which way they were decided.” Amdocs 21 (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016). The question of 22 eligibility may be determined at the pleadings stage “only when there are no factual allegations 23 that, taken as true, prevent resolving the eligibility question as a matter of law.” Aatrix Software, 24 Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018). 25 III. ANALYSIS 26 Defendant moves to dismiss Plaintiff’s claims under Rule 12(b)(6), arguing that the 27 Asserted Patents fail at both steps of the Alice inquiry. See generally Mot. At step one, Defendant 1 ‘balancing lines’ to reconcile accounts receivable (’559 patent) or accounts payable (’560 patent) 2 across related companies.” Id. at 16-17. At step two, Defendant argues that the Asserted Patents 3 fail to recite a saving inventive concept that transforms the claimed method into a patentable 4 application of the abstract idea. See id. at 24-29. Plaintiff counters that Defendant oversimplifies 5 the Asserted Patents by analyzing the claims individually and not as a whole. See Opp. at 13-22. 6 The Court proceeds under the two-part test outlined in Alice.1 7 A. Alice Step One 8 The Court finds that the Asserted Patents are directed to an abstract idea: improving 9 financial recordkeeping for multi-company businesses via balancing lines. The claimed method 10 recites steps to gather and enter financial data, and organize that data using mathematical 11 calculations. The Court finds no meaningful distinction between this type of financial economic 12 practice and “the concept of intermediated settlement” held to be abstract in Alice, 573 U.S. at 13 219, or the “basic concept of hedging” held to be abstract in Bilski v. Kappos, 561 U.S. 593 , 611 14 (2010). 15 The Federal Circuit treats the “collecti[on of] information, including when limited to 16 particular content (which does not change its character as information), as within the realm of 17 abstract ideas.” Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016). It 18 further “recognize[s] that merely presenting the results of abstract processes of collecting and 19 analyzing information, without more (such as identifying a particular tool for presentation), is 20 abstract as an ancillary part of such collection and analysis.” Id. at 1354 . The asserted claims are 21 directed precisely to what the Federal Circuit has held to be an abstract idea. “The advance they 22 purport to make is a process of gathering and analyzing [financial transaction] information [], then [23] 1 Defendant argues that “the difference among the independent claims is formal” and that no [24] “minor distinctions in phrasing or claiming affect patent-eligibility.” Mot. at 30. Defendant contends that Plaintiff’s “independent claims should rise or fall together.” Id. While Plaintiff [25] disputes Defendant’s characterization, Plaintiff submits independent claims 1 and 31 of either patent as representative of the claimed method. Opp. at 11. The Court agrees with Defendant that [26] the differences among the independent claims in either Asserted Patent do not affect the patenteligibility of the claimed invention. It finds independent claims 1 and 31 of the ’559 Patent [27] representative of the claimed invention and concludes that it can properly rely on these claims in 1 displaying the results, and not any particular assertedly inventive technology for performing those 2 functions.” Id. “The claims thus fit squarely within the line of precedent that . . . classifies data 3 collection, organization, and analysis as abstract—even where that produces new data—in the 4 absence of a claimed technological improvement.” Software Rts. Archive, LLC v. Facebook, Inc., [5] 485 F. Supp. 3d 1096 , 1105 (N.D. Cal. 2020) (quotation omitted) (collecting cases). 6 When analyzing whether a claim is directed to an abstract idea, some courts ask whether 7 the claims’ steps “can be performed in the human mind, or by a human using a pen and paper.” 8 OpenTV, Inc. v. Apple, Inc., 2015 WL 1535328 , at *4 (N.D. Cal. Apr. 6, 2015) (quoting 9 CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 2011); Brightedge 10 Techs., Inc. v. Searchmetrics, GmbH, 304 F. Supp. 3d 859 , 866 & n.6 (N.D. Cal. 2018). 11 Defendant argues that “the claims’ steps of adding balancing lines (and utilizing them to create 12 related ‘Due To/Due From’ entries) could be equally performed in a pen-and-paper environment 13 as in an automated one.” Mot. at 19. Plaintiff responds that “humans cannot perform the specific 14 features of the Claims” “because of the complicated recording of financial activity that must occur 15 when a partial (i.e., short) payment is received for an AR Invoice, or when an AP check is issued 16 to pay an AP bill, or when a credit memo is issued.” Opp. at 22. The Court finds Plaintiff’s 17 argument unpersuasive. Financial transactions like partial payments, use of a check as payment, 18 or issuance of a credit memo are all types of financial activity that were recorded and analyzed 19 long before computers existed. With pen and paper, a person could record invoice inter-company 20 “Due To/Due From” entries onto a balance sheet (step 1), add the entries associated with each 21 company (step 2), and total the amounts owed among the distinct companies (step 3). The fact 22 that the claims of the Asserted Patents can be accomplished without modern technology is 23 indicative that they “are the types of methods that embody the basic tools of scientific and 24 technological work that are free to all men and reserved exclusively to none, and therefore 25 comprise a non-patent-eligible abstract idea.” OpenTV, Inc., 2015 WL 1535328 , at *4 (quotation 26 marks omitted). 27 Defendant argues that the claimed invention is directed to an abstract idea because the 1 independently abstract ideas that use computers as tools.” Mot. at 23. The Court agrees. The 2 “mere automation of manual processes using generic computers does not constitute a patentable 3 improvement in computer technology.” Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 4 1044, 1055 (Fed. Cir. 2017); see also Elec. Power Grp., 830 F.3d at 1354 (finding claims directed 5 to abstract idea where “focus . . . is not on such an improvement in computers as tools, but on 6 certain independently abstract ideas that use computers as tools”); OIP Techs., Inc. v. 7 Amazon.com, Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (“At best, the claims describe the 8 automation of the fundamental economic concept of offer-based price optimization through the 9 use of generic-computer functions.”). Claims 1 and 31 invoke computer technology to store and 10 organize financial transactions across multiple companies in a single business. This is not an 11 improvement to computer technology or computer capabilities. Plaintiff submits that the Asserted 12 Patents purportedly address the problem of “accurately and always reporting the actual current 13 status of each entity’s accounts receivable and accounts payables of a multi-entity organization.” 14 Opp. at 17. But this is not a technical issue. Inaccurate and inefficient accounting systems predate 15 the invention of the computer. The claimed advance does not amount to an improvement in 16 computer technology: the invention neither addresses a problem unique to computer technology 17 nor announces an improvement in computer operation. 18 For the above reasons, the Court finds that the Asserted Patents are directed to an abstract 19 idea at Alice’s first step. 20 B. Alice Step Two 21 The Court next considers “whether the claimed elements—‘individually or as an ordered 22 combination’—recite an inventive concept.” Cellspin Soft, Inc. v. Fitbit, Inc., 927 F.3d 1306 , 23 1316 (Fed. Cir. 2019) (quoting Alice, 573 U.S. at 217). To constitute an inventive concept, the 24 claim limitations must “involve more than performance of well-understood, routine, [and] 25 conventional activities previously known to the industry.” Aatrix, 882 F.3d at 1128 (quotation 26 omitted). “Whether a combination of claim limitations supplies an inventive concept that renders 27 a claim ‘significantly more’ than an abstract idea to which it is directed is a question of law.” BSG 1 limitation or combination of limitations is well-understood, routine, and conventional is a factual 2 question,” and the Court must take as true Plaintiff’s factual allegations at this stage. Id. Still, 3 Plaintiff must include “plausible and specific factual allegations that aspects of the claims are 4 inventive.” Cellspin, 927 F.3d at 1317 . “Any allegation about inventiveness, wholly divorced 5 from the claims or the specification,” will not defeat a motion to dismiss. Id. 6 Claims 1 and 31 generally claim a method for accomplishing an abstract idea through 7 conventional computer functions: entering invoice amounts, adding up the invoice amounts, and 8 displaying outstanding balances. These steps recite “basic functions of a computer” and set forth a 9 result-focused and functional method. They do not impart an inventive concept. Alice, 573 U.S. 10 at 225. 11 Courts have consistently held that patents that merely set forth a “conventional process for 12 collecting and analyzing information via a mathematical process” do not impart an inventive 13 concept. See, e.g., Brightedge Techs., Inc., 304 F. Supp. 3d at 872 (holding that a method for 14 assessing website entities’ marketing efforts by calculating and displaying specific numerical 15 scores “d[oes] not impart an inventive concept”); Intell. Ventures I LLC v. Erie Indem. Co., 850 16 F.3d 1315 , 1328 (Fed. Cir. 2017) (concluding that a method to create an index-searchable database 17 defined by “a plurality of XML tags” failed to impart an inventive concept). Similarly, the 18 Asserted Patents use computer balancing lines to balance the accounts payable and accounts 19 receivable of multiple companies in a single business. At its core, the invention is nothing more 20 than an abstract idea: the collection and organization of financial data. This does not establish 21 any inventive concept. 22 Plaintiff confuses inventive concept with novelty, which does not necessarily transform an 23 abstract idea into a patentable one. See, e.g., SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161 , 24 1163 (Fed. Cir. 2018) (“We may assume that the techniques claimed are groundbreaking, 25 innovative, or even brilliant, but that is not enough for eligibility.”); Ultramercial, Inc., 772 F.3d 26 at 715 (“We do not agree . . . that the addition of merely novel or non-routine components to the 27 claimed idea necessarily turns an abstraction into something concrete.”). The operative complaint 1 problems inherent in the existing multi-company accounting platform landscape. However, 2 “[t]hese benefits amount to nothing more than improved efficiency, not an inventive concept.” 3 Coop. Ent., Inc. v. Kollective Tech., Inc., 2021 WL 2531069 , at *6 (N.D. Cal. June 21, 2021). “An 4 improved result, without more stated in the claim, is not enough to confer eligibility to an 5 otherwise abstract idea.” Id. (quotation omitted). 6 Plaintiff attempts to analogize the Asserted Patents to the patent at issue in DDR Holdings, 7 LLC v. Hotels.com, L.P. 773 F.3d 1245, 1257 (Fed. Cir. 2014). But DDR Holdings is readily 8 distinguishable. The patent in DDR Holdings was directed to the technical problem of how to 9 retain website visitors who clicked on links to third-party advertisements. Id. at 1257 . The patent 10 used an “outsource provider” to incorporate the “look and feel” elements from the host website 11 and provide visitors with the opportunity to purchase products from the third-party merchant 12 without actually entering that merchant’s website. Id. at 1258 . The Federal Circuit found that the 13 claimed solution was “necessarily rooted in computer technology in order to overcome a problem 14 specifically arising in the realm of computer networks.” Id. at 1257 . It held that although “the 15 claims involve both a computer and the Internet,” “these claims stand apart because they do not 16 merely recite the performance of some business practice known from the pre-Internet world along 17 with the requirement to perform it on the Internet.” Id. 18 Applying the reasoning in DDR Holdings, Plaintiff argues that the Asserted Patents 19 address the “technical problem” that “conventional accounting systems do not provide a method 20 for ‘keeping Accounts Payable [or Accounts Receivable] for each of the distinct companies in 21 balance.’” Opp. at 20. In contrast to DDR Holdings, Plaintiff’s “technical problem” is not, in fact, 22 a technical one. As explained above, the longstanding problem of maintaining “accounts payable 23 or accounts receivable for each of the distinct companies in balance” can be performed with pen 24 and paper. Plaintiff’s analogy fails to demonstrate that the Asserted Patents contain an inventive 25 concept; instead, it highlights the Asserted Patents’ lack of an inventive concept and shows that 26 the patents simply describe execution of an abstract idea using a computer. 27 Plaintiff further argues that when considered “as an ordered combination,” the claims of 1 claims to BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2 2016). However, the comparison of Claims 1 and 31 against the ones at issue in BASCOM again 3 underscores the claims’ failure at Alice’s second step. A recitation of the facts in BASCOM is 4 helpful here. In BASCOM, the asserted patent was directed to filtering content on the Internet. [5] 827 F.3d at 1348 . The patent claimed “the installation of a filtering tool at a specific location, 6 remote from the end-users, with customizable filtering features specific to each end user.” Id. at 7 1350. The Federal Circuit found that the patent’s claim limitations, when “taken individually, 8 recited generic computer, network and Internet components, none of which is inventive itself.” Id. 9 at 1349. However, when viewed as a whole, the patent’s claims “recite[d] a specific, discrete 10 implementation of the abstract idea of filtering content.” Id. at 1350 . While “[f]iltering content on 11 the Internet was already a known concept, . . . the patent describes how its particular arrangement 12 of elements is a technical improvement over prior art ways of filtering such content.” Id. 13 Concluding that the patent had recited a specific technical solution that added to the abstract idea, 14 the BASCOM court found an inventive concept “in the ordered combination of [its] claim 15 limitations that transform the abstract idea of filtering content into a particular, practical 16 application of that abstract idea.” Id. at 1352 . 17 Plaintiff contends that claims 1 and 31 “recite an inventive and specific combination . . . 18 because they solve the problem of conventional systems that were unable to accurately and 19 always reporting [sic] the actual current status of each entity’s accounts receivable and accounts 20 payables in a multi-entity organization accounting system.” Opp. at 21 (emphasis added). Here, 21 the similarities and differences between the Asserted Patents and the patent of issue in BASCOM 22 show why the Asserted Patents fail at Alice step two. Like the claim limitations of the patent in 23 BASCOM, when analyzed individually, the claim limitations of the Asserted Patents “recite 24 generic computer, network and Internet components, none of which is inventive by itself.” 827 25 F.3d at 1349. But unlike the BASCOM patent claims, the claim limitations of the Asserted 26 Patents, when considered in ordered combination, do not identify a “specific application[] or 27 improvement[] to technology.” Id. at 1350 (quotation omitted). Claims 1 and 31 merely recite the 1 computer components. See Enco Sys., Inc. v. DaVincia, LLC, 845 F. App’x 953 , 958 (Fed. Cir. 2 2021), cert. denied, 142 S. Ct. 435 (2021) (“The claims do not incorporate anything more beyond 3 conventional computing hardware and software, which do not transform the subject matter into an 4 eligible application of the abstract idea.”). The fact that a computer can carry out the abstract idea 5 faster and more efficiently than a person can makes no difference. See id. at 957 (“[C]laiming the 6 improved speed or efficiency inherent with applying the abstract idea on a computer is insufficient 7 to render the claims patent eligible.” (internal quotation marks omitted)). Such claims simply “do 8 not set forth an inventive concept that would transform their subject matter into something more 9 than the abstract idea.” Id. at 958 . 10 Whether considered in isolation or as an ordered combination, neither Claim 1 or Claim 11 31, or their various recited elements, transforms the core abstract idea into patent-eligible subject 12 matter. There is no inventive concept contained within the claims. The Asserted Patents therefore 13 fail both prongs of the Alice test.2 14 C. Motion for Leave to Amend 15 On October 22, 2021, Plaintiff filed a motion for leave to file a second amended complaint. 16 Dkt. No. 56. The Court finds that motion appropriate for disposition without oral argument and 17 deems the motion submitted. See Civil L.R. 7-1(b). 18 The Court concludes that no additional allegations can establish that the asserted claims are 19 directed to patent eligible subject matter. The asserted claims set forth a “conventional process for 20 collecting and analyzing information via a mathematical process” and, on their own or as an 21 ordered combination, do not transform the instant invention into patentable subject matter. See 22 Brightedge Techs., Inc., 304 F. Supp. 3d at 872 . Moreover, dependent claims 2 and 7 of the ’560 [24] 2 Plaintiff makes a perfunctory argument that claim construction is necessary before the Court can consider the issue of invalidity. Opp. at 24. But Plaintiff has not identified (either in its papers or [25] in response to the Court’s question at oral argument) a single disputed claim term, and has offered no proposed construction that could change the Court’s § 101 analysis. In line with the Federal [26] Circuit and several other courts in this district, the Court finds that this motion thus can be resolved on the pleadings prior to claim construction on this record. See Content Extraction, 776 [27] F.3d at 1349 (affirming grant of motion to dismiss prior to claim construction); see also OpenTV, 1 Patent, which Plaintiff raises for the first time in its reply in support of its motion for leave (Dkt. 2 || No. 64 at 13), are only variations on the abstract idea of the collection and organization of 3 financial data. See °560 Patent, 49:30-37 (claim 2 disclosing that the method occurs before 4 || payment is recorded); id. at 50:5-37 (claim 7 disclosing that each distinct company in the multi5 company accounting platform may be categorized by “segment’’). 6 No well-pled factual allegations could possibly identify the claimed activity of electronic 7 financial recordkeeping as anything “more than [the] performance of well-understood, routine, 8 [and] conventional activities previously known to the industry.” Aatrix, 882 F.3d at 1128 9 || (quotation omitted). Accordingly, the Court DENIES Plaintiff's motion for leave to file a Second 10 || Amended Complaint as futile. 11 || Iv. CONCLUSION 12 The Court GRANTS Defendant’s motion to dismiss without leave to amend and DENIES 5 13 Plaintiff's motion for leave to file a Second Amended Complaint as futile. 14 The Clerk is directed to enter judgment in accordance with this order in Defendant’s favor 15 and close the case. [16] 17 IT IS SO ORDERED. S 18 || Dated: 12/20/2021 19 Abespred 5 Mb □ HAYWOOD S. GILLIAM, JR. 20 United States District Judge