Scibetta et al v. Slingo, Inc. et alREPLY BRIEF to Opposition to MotionD.N.J.February 27, 2017134498739.7 Jeffrey D. Vanacore (#4104444) PERKINS COIE LLP 30 Rockefeller Plaza, 22nd Floor New York, NY 10112-0085 212.262.6900 William C. Rava (pro hac vice forthcoming) Ryan J. McBrayer (pro hac vice forthcoming) PERKINS COIE LLP 1201 Third Avenue, Suite 4900 Seattle, WA 98101 206.359.8000 Attorneys for Defendants IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY JOSEPH SCIBETTA and JOSEPH SCIBETTA, a/k/a BANKERS & BROKERS, a sole proprietorship, Plaintiffs, v. SLINGO, INC., and REALNETWORKS, INC., Defendants. Civil Action No. 16-cv-8175-JMZ-MF REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS UNDER FRCP 12(b)(6) Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 1 of 21 PageID: 521 TABLE OF CONTENTS Page -i- 134498739.7 I. INTRODUCTION .......................................................................................... 1 II. THE PATENT CLAIMS COVER A PATENT-INELIGIBLE WAGERING CARD GAME AND SHOULD BE DISMISSED NOW ....... 2 A. Claim Construction Is Not Necessary .................................................. 2 B. The Patent Claims Are Properly Grouped ........................................... 4 C. Defendants Meet Their Burden to Establish Patent-Ineligibility ......... 6 D. The ’580, ’044 and ’314 Patents Do Not Contain an “Inventive Concept” and Are Directed to Patent-Ineligible Subject Matter ......... 6 E. The ’433 Patent Is Directed to a Patent-Ineligible Abstract Idea ........ 8 F. The ’597 Patent Is Directed to a Patent-Ineligible Abstract Idea ...... 10 III. PLAINTIFFS FAIL TO ESTABLISH TRADEMARK RIGHTS THROUGH FIRST AND CONTINUOUS USE OF THE B&B MARK .......................................................................................................... 11 IV. PLAINTIFFS’ STATE LAW CLAIMS ARE DERIVATIVE OF THEIR IP CLAIMS AND SHOULD BE DISMISSED .............................. 14 V. CONCLUSION ............................................................................................. 15 Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 2 of 21 PageID: 522 TABLE OF AUTHORITIES Page -i- 134498739.7 CASES Advanced Baseball Academy, LLC v. Google, Inc., No. 14-2461-CM, 2015 WL 1440656 (D. Kan. Mar. 30, 2015) ..............................................12 Affinity Labs of Texas, LLC v. Amazon.com Inc., 838 F.3d 1266 (Fed. Cir. 2016)..................................................................................................4 Alice Corp. v. CLS Bank Int’l, 134 S.Ct. 2347(2014) ....................................................................................................... passim Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (US.), 687 F.3d 1266 (Fed. Cir. 2012)..................................................................................................3 Bascom Global Internet Servs., Inc.. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016)..............................................................................................7, 8 Becton, Dickinson & Co. v. Baxter Int'l, Inc., 127 F. Supp. 3d 687 (W.D. Tex. 2015) ......................................................................................4 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................................................................12 Bilski v. Kappos, 599 U.S. 593 (2010) ...................................................................................................................7 Callano v. Oakwood Park Homes, Corp., 91 N.J. Super. 105, 219 A.2d 332 (N.J. 1966) .........................................................................15 Content Extraction & Trans. LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343 (Fed. Cir. 2014)..............................................................................................4, 5 Cyberfone Sys., LLC v. CNN Interactive Grp., Inc., 558 F. App'x 988 (Fed. Cir. 2014) .............................................................................................3 Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016)........................................................................................4, 8, 10 Food Sciences Corp. v. Nagler, Civ. No. 09-1798, 2010 WL 4226531 (D.N.J. 2010) ..............................................................12 Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 3 of 21 PageID: 523 TABLE OF AUTHORITIES (continued) Page(s) - ii- 134498739.7 Ford Motor Co. v. Summit Motor Prods., 930 F.2d 277 (3d Cir. 1991).....................................................................................................12 Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009).....................................................................................................12 Genetic Tech. Ltd. v. Lab. Corp. of Am., 2014 WL 4379587 (D. Del. Sept. 3, 2014) ................................................................................3 Hana Financial, Inc. v. Hana Bank, 735 F.3d 1158 (9th Cir. 2013), aff’d 135 S. Ct. 907 ................................................................13 In re Smith, 815 F.3d 816 (Fed. Cir. 2016)......................................................................................2, 7, 8, 10 In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607 (Fed. Cir. 2016)..................................................................................................10 Intellectual Ventures I LLC v. Mfrs. and Traders Trust Co., 76 F. Supp. 3d 536, 547 (D. Del. 2014) .....................................................................................9 Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307 (Fed. Cir. 2016)..................................................................................................7 Material Techs. v. Carpenter Tech. Corp., Civ. No. 01-2965(SRC), 2004 U.S. Dist. LEXIS 28892 (D.N.J. Dec. 14, 2004) ....................14 Money Suite Co. v. 21st Century Ins. & Fin. Servs., Inc., No. 13-984-GMS, 2015 WL 436160 (D. Del. Jan. 27, 2015) ...................................................6 Parus Holdings, Inc. v. Sallie Mae Bank, 137 F. Supp. 3d 660, 672-675 (D. Del. 2015) .....................................................................5, 10 Planet Bingo, 576 Fed. Appx. 1005 (Fed. Cir. 2014) ......................................................................9 Read v. Profeta, No. 15-cv-2637(KM), 2016 U.S. Dist. LEXIS 51305 (D.N.J. Apr. 15, 2016) ........................14 Rodime PLC v. Seagate Tech., Inc., 174 F.3d 1294 (Fed. Cir. 1999)................................................................................................14 Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 4 of 21 PageID: 524 TABLE OF AUTHORITIES (continued) Page(s) - iii- 134498739.7 Stewart v. Beam Global Spirits & Wine, Inc., 877 F. Supp. 2d 192 (D.N.J. 2012) ....................................................................................14, 15 Swift v. Pandey, No. 13-650 (JLL), 2013 WL 6054853 (D.N.J. Nov. 13, 2013) ...............................................13 Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369 (Fed. Cir. 2016)..................................................................................................3 Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (Fed. Cir. 2013), vacated sub nom, 134 S. Ct. 2870 (2014) ..............................6 Wireless Media Innovations, LLC v. Maher Terminals, LLC, 100 F. Supp. 3d 405, 410, 417 (D.N.J. 2015) ....................................................................3, 6, 9 RULES FRCP 8(a) ......................................................................................................................................12 FRCP 9(b) ......................................................................................................................................12 FRCP 12(b)(6) .................................................................................................................................1 Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 5 of 21 PageID: 525 134498739.7 I. INTRODUCTION Plaintiffs fail to state any claims for relief: their patents are directed to an abstract card game that is not eligible for patent protection; their trademark allegations do not establish any rights in the B&B Mark; and their state law claims make little sense, and find no support in New Jersey case law. Accordingly, Defendants’ motion to dismiss (the “Motion”)1 should be granted. In Opposition,2 Plaintiffs barely defend any specific patent claim despite a legal standard that requires it. Instead, Plaintiffs tout the sheer number of claims involved, as if that equates to patent eligibility. To the extent Plaintiffs offer any theory as to why their patent claims are valid, it is that the simple concept of wagering becomes patent-eligible through repetition. But courts, including the Federal Circuit, routinely reject patents covering abstract concepts like wagering card games, even at the motion to dismiss stage. This Court should too. Plaintiffs’ trademark allegations, closely studied, fail to allege any facts that support Plaintiffs’ claimed trademark rights. Indeed, Plaintiffs concede that defendant Slingo was the first party to use the B&B Mark in commerce, but then attempt to amend the Complaint to allege that Slingo’s use establishes Plaintiffs’ rights due to a licensing agreement. Plaintiffs attempt another amendment to address the nine different versions of the B&B Mark alleged in the Complaint. Plaintiffs cannot amend their Complaint through motion briefing, however, and 1 Brief in Support of Defendants’ Motion to Dismiss Under FRCP 12(b)(6), ECF No. 9-1. 2 Plaintiffs’ Opposition to Defendants’ Motion to Dismiss Under FRCP 12(b)(6), ECF No. 15. Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 6 of 21 PageID: 526 -2- 134498739.7 their efforts merely underscore the inadequacy of the trademark allegations. Plaintiffs’ shifting theories also cannot save their unjust enrichment claim. Although initially based on the sale of Slingo’s business, Plaintiffs now say the unjust enrichment claim is based on revenues Slingo received from offering the game online, making the claim completely derivate of Plaintiffs’ patent and trademark claims. It should therefore be dismissed for the same reasons. Finally, Plaintiffs’ “patent misappropriation” claim fails for the same reasons as its patent infringement claims, and New Jersey does not recognize such a claim. II. THE PATENT CLAIMS COVER A PATENT-INELIGIBLE WAGERING CARD GAME AND SHOULD BE DISMISSED NOW The issue of patent eligibility is ripe, and can and should be decided now. All of the claims are directed to a patent-ineligible card game, and Plaintiffs’ arguments fail to establish that the claims are somehow not abstract or that the Court should wait to find them abstract until claim construction is complete. As discussed in the Motion, in In re Smith, 815 F.3d 816, 818-819 (Fed. Cir. 2016), the Federal Circuit already found claims remarkably similar to those at issue here to be patent-ineligible. Although Plaintiffs are correct that In re Smith leaves open the possibility that other games might be patent eligible, Plaintiffs do not and cannot deny In re Smith’s central holding-patent claims directed to wagering card games that employ only conventional techniques are not patent-eligible. That holding applies here and precludes the patent claims at issue. A. Claim Construction Is Not Necessary Plaintiffs first response is an attempt to delay the Court’s consideration of Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 7 of 21 PageID: 527 -3- 134498739.7 the issues by suggesting the Court and the parties should first proceed through an entire claim construction process. This is unsupported and unnecessary. Courts need not conduct formal claim construction to resolve the issue of patent-eligibility at the pleading stage. See Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1373-74 (Fed. Cir. 2016); Wireless Media Innovations, LLC v. Maher Terminals, LLC, 100 F. Supp. 3d 405, 410, 417 (D.N.J. 2015) (“Courts may properly decide the question of patent eligibility at the pleading stage and without first construing the claim terms”). Courts also are not required to construe claims where the claims’ basic character is readily ascertainable from the patents, as here. Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (US.), 687 F.3d 1266, 1273-74 (Fed. Cir. 2012). This is especially true where a patentee merely asserts a need for claim construction without identifying specific claim terms or explaining how those terms would affect the analysis. See, e.g., Cyberfone Sys., LLC v. CNN Interactive Grp., Inc., 558 F. App'x 988, 991-93 & n.1 (Fed. Cir. 2014) (finding no requirement for district court to engage in claim construction where plaintiff “d[id] not explain which terms require construction or how the analysis would change”). Here, for 92 of the 94 claims at issue, there is no claim construction dispute because Plaintiffs have not identified a single term that needs to be construed. For the remaining two claims-which Plaintiffs argue require construction because they are written in means-plus-function form, not because the basic character is not readily ascertainable-the Court may adopt Plaintiffs’ proposed construction and proceed with the Alice analysis at the pleading stage. See Genetic Tech. Ltd. v. Lab. Corp. of Am., 2014 WL 4379587, at *6 (D. Del. Sept. 3, 2014) (“to the extent Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 8 of 21 PageID: 528 -4- 134498739.7 the plaintiff asserted there was any need for claim construction, . . . courts have adopted the meaning proposed by the plaintiff for the terms in question for purposes of addressing the motion”) (citing cases). Even if the Court adopts Plaintiffs’ proposed construction, the results should not change: the patent claims are directed to an abstract idea and are patent-ineligible. As such, claim construction is not necessary. B. The Patent Claims Are Properly Grouped Plaintiffs next protest that Defendants “lump together ninety-four patent claims recited in five distinct patents, without giving each claim the attention it deserves.” Opp. at 14. They are wrong. Defendants analyzed the five asserted patents and their claims separately and in detail. Mot. at 9-29. In each case, Defendants demonstrated how the claims are drawn to an abstract wagering game and do nothing more than apply that abstract idea using conventional components such as cards, tables, and computers. This is entirely proper. The Federal Circuit and other courts often apply Alice to claims grouped by subject matter. See, e.g., Content Extraction & Trans. LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343, 1348 (Fed. Cir. 2014) (grouping 242 claims in 4 patents and finding ineligible based on one representative claim); Affinity Labs of Texas, LLC v. Amazon.com Inc., 838 F.3d 1266, 1268, 1272, & n.2 (Fed. Cir. 2016) (grouping 20 claims and finding ineligible based on one representative claim); Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1351 & n.1 (Fed. Cir. 2016) (grouping 16 claims in 3 patents and finding ineligible based on one representative claim); see also Becton, Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 9 of 21 PageID: 529 -5- 134498739.7 Dickinson & Co. v. Baxter Int'l, Inc., 127 F. Supp. 3d 687, 689 n.3 (W.D. Tex. 2015) (“Where claims are substantially similar and linked to the same abstract idea, the court may dispose of the other claims in the patent with less detail.”) (internal quotation marks omitted). Plaintiffs also do not identify any substantive deficiencies in Defendants’ grouping. Plaintiffs point out that the dependent claims for the ’044 and ’314 patents were grouped in footnotes, but Plaintiffs fail to explain why that is deficient or why the grouping might be incorrect. See Opp. at 14. In contrast, Defendants illustrated how the dependent claims of the ’580 patent were abstract and then identified that the ’044 and ’314 patent dependent claims recite subject matter that is materially similar to the demonstrated claims, using the footnotes to identify that subject matter. See, e.g., Mot. at 14-16 (explaining how dependent claims in the ’580 patent are similar and abstract); id. at 16-18 (explaining how all claims of the ’580 patent , including dependent claims, fail Alice step two); see also id. at 20 and n.6 (addressing dependent claims of ’044 patent); id. at 23 and n.7 (addressing dependent claims of ’314 patent). Plaintiffs also cite the “large” number of claims at issue, but do not explain how the mere number of claims (most of which are materially similar, and almost all of which Plaintiffs do not bother to defend) makes them somehow more concrete. The fact there are a “large” number of claims is irrelevant, as courts regularly grant motions to dismiss involving similar or higher numbers of claims. See, e.g., Content Extraction 776 F.3d at 1348 (invalidating 4 patents with 242 claims); Parus Holdings, Inc. v. Sallie Mae Bank, 137 F. Supp. 3d 660, 672-675 Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 10 of 21 PageID: 530 -6- 134498739.7 (D. Del. 2015) (invalidating 86 claims in 4 patents); Money Suite Co. v. 21st Century Ins. & Fin. Servs., Inc., No. 13-984-GMS, 2015 WL 436160, at *1 (D. Del. Jan. 27, 2015) (invalidating 887 claims). C. Defendants Meet Their Burden to Establish Patent-Ineligibility Plaintiffs are also incorrect to assert that Defendants must establish by “clear and convincing” evidence that the patent claims are directed to patent ineligible subject matter. Courts in this District have rejected this standard. See Wireless Media, 100 F. Supp. 3d at 411, 417 (declining to adopt “clear and convincing” evidence standard because it is based on the now-vacated Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (Fed. Cir. 2013), vacated sub nom, 134 S. Ct. 2870 (2014), and finding claims directed to patent-ineligible subject matter). D. The ’580, ’044 and ’314 Patents Do Not Contain an “Inventive Concept” and Are Directed to Patent-Ineligible Subject Matter The Plaintiffs’ arguments fare no better when the claims are examined on their merits against the Alice test. As set forth in the Motion, under the Alice two- step test, every claim of the ’580, ’044, and ’314 patents is directed to an abstract wagering card game and does not add anything beyond conventional, well-known components. This makes the claims ineligible for patent protection under the law. Plaintiffs do not contradict the asserted law and do not substantively challenge the Alice step one analysis of these patents. Nor could they have, as the Federal Circuit has confirmed that similar claims directed to a wagering card game are abstract because they are no different than the “method of exchanging and resolving financial obligations based on probabilities” that the Supreme Court has Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 11 of 21 PageID: 531 -7- 134498739.7 repeatedly found to be abstract. See In re Smith, 815 F.3d at 818-819, citing Bilski v. Kappos, 599 U.S. 593 (2010), and Alice Corp. v. CLS Bank Int’l, 134 S.Ct. 2347(2014)). Plaintiffs thus effectively concede that the claims of the ’580, ’044, and ’314 patents are directed to an abstract card game and fail Alice step one. Plaintiffs contend instead that these patents pass Alice step two “because the claims add limiting, inventive concepts.” Opp. at 22. Specifically, Plaintiffs argue that the claims of the ’580, ’044, and ’314 provide benefits because they are directed to resolving multiple wagers. Opp. at 24. But so did the invalidated claims in Alice (134 S.Ct. U.S. at 2349 (claims directed to multiple transactions)), and Bilski (561 U.S. at 599 (claims directed to a “series of transactions”)), and Smith (815 F.3d at 817 (claims directed to card game wagers for multiple players)). Repeating an abstract concept does not make the concept less abstract. Moreover, Plaintiffs’ argument is irrelevant. The claims must do more than merely apply “routine, conventional” activities. See, e.g., Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1313 (Fed. Cir. 2016). Here, the patents admit, as they must, that placing multiple wagers was conventional. See, e.g., ’314(1:41-42, 1:62-63, 2:3-5) (discussing prior art). Plaintiffs contend that their game provides benefits “of simple, easy-to-learn rules enabling rapid play and higher volumes of wagering, while maintaining a level of interest and excitement in play.” Opp. at 24. But this is unsupported attorney argument. The claims do not contain such requirements. Finally, Plaintiffs’ reliance on Bascom Global Internet Servs., Inc.. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) is misplaced because the claims Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 12 of 21 PageID: 532 -8- 134498739.7 there are materially different than the ones here. In Bascom, the court found eligible claims related to “the installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user.” 827 F.3d at 1350. The court emphasized that “[t]he claims do not merely recite the abstract idea of filtering content along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components,” and that “[s]uch claims would not contain an inventive concept.” Id. Unlike the claims in Bascom, the claims here merely recite the abstract idea of a wagering game with the requirement to perform it with cards and other conventional components. The Plaintiffs are thus left with no argument under Alice step two. To pass step two, the claims must do more than implement an abstract concept using conventional components. See Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d at 1355 (patent claims must add more than “off-the-shelf, conventional” components). Whether the abstract concept is implemented with a conventional computer, as in Alice, or with conventional cards as in In re Smith, patent claims that add only generic, well known components to an abstract idea are unpatentable. And here, the patent claims implement the card game with nothing more than conventional cards and other ordinary components. E. The ’433 Patent Is Directed to a Patent-Ineligible Abstract Idea As set forth in the Motion, the 22 claims (five of which are independent) of the ’433 patent are directed to a patent-ineligible abstract wagering card game. Mot. at 23-25. Of these, Plaintiffs contest only two claims-independent claim 14 and its dependent claim 15, which are means-plus-function claims. Thus, Plaintiffs Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 13 of 21 PageID: 533 -9- 134498739.7 concede that the other 20 claims of the ’433 patent are directed to abstract ideas. With respect to claims 14 and 15, Plaintiffs contend they have a distinct “form and scope” because the claims are directed to a “card game,” whereas claim 1 of the ’433 patent is directed to “a method for playing a game.” Opp. at 17. Claiming an invention as a system instead of a method, however, does not change the patent-eligibility analysis. See Planet Bingo, 576 Fed. Appx. 1005, 1007 (Fed. Cir. 2014) (finding method and system claims directed to the same abstract concept patent-ineligible where “there is no meaningful distinction between the method and system claims”). The limitations of claim 14 are substantially similar to those of claim 1, and describe the same abstract wagering game. Plaintiffs next contend that because claims 14 and 15 are means-plus- function claims, they need to be construed and necessarily contain structural limitations that make them non-abstract. Opp. at 17. Not so. First, means-plus- function form does not take claims out of the purview of Alice even at the pleading stage. See, e.g., Intellectual Ventures I LLC v. Mfrs. and Traders Trust Co., 76 F. Supp. 3d 536, 547 (D. Del. 2014) (means-plus-function claims found patent- ineligible on motion to dismiss); Wireless Media, 100 F. Supp. 3d 405 (same). Second, although no claim construction is required, even if the Court were to adopt Plaintiffs’ proposed construction for claims 14 and 15, the claims would still be directed to an abstract idea. Plaintiffs contend that construction requires “structural” elements that would make the claims non-abstract, such as either a table with “betting spots” and a “shuffling machine positioned on the table,” or a video game with “soft buttons” and a microprocessor with a payout table. Opp. at Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 14 of 21 PageID: 534 -10- 134498739.7 17-20. All of these elements, however, are generic, conventional components. Tables with betting spots and shuffling machines were well known, and Plaintiffs do not claim to have invented any of them.3 Similarly, the patent acknowledges that “soft buttons” and the use of microprocessor-based circuits are not new.4 The patent also acknowledges that pay tables are generic.5 Reciting generic, conventional components does not make a claim any less abstract. See In re Smith, 815 F.3d at 819 (claims reciting deck of playing cards abstract); In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 612 (Fed. Cir. 2016); Elec. Power Grp., 830 F.3d at 1355. Thus, even if the Court were to adopt Plaintiffs’ proposed construction, the two challenged claims are still directed to an abstract idea. In addition, the inclusion of generic, conventional components, such as those proposed by Plaintiffs, is insufficient to confer patentability at Alice step two.6 Id. F. The ’597 Patent Is Directed to a Patent-Ineligible Abstract Idea Plaintiffs present no argument as to the patent-eligibility of claim 1 of the 3 See, e.g., ’433(1:25-39) (describing prior art where “Player positions are located in a semicircle around the dealer position [on a playing surface], each including a location at which wagers are placed.”). The patent says a croupier uses a “shuffling machine” but does not claim to have invented one. See ’433(2:63-66). 4 See, e.g., ’433(7:49-54); ’433 (8:9-15). 5 See, e.g., ’433(12:37-41) (“Any suitable pay table can be used.”). 6 Plaintiffs’ “expert” opinion does not affect the result. Defendants do not now challenge the opinion, so there is no factual dispute. Plus, although he purports to support Plaintiffs’ proposal that claims 14 and 15 recite physical features, it is the Court that decides whether such features confer patent-eligibility (they do not). See, e.g., Parus Holdings, 137 F. Supp. 3d at 673, 675 (granting motion to dismiss and finding patents ineligible despite declaration that claim features not generic). Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 15 of 21 PageID: 535 -11- 134498739.7 ’597 patent and thus concede that it is patent-ineligible. Instead, Plaintiffs contend that the dependent claims 2-5 of the ’597 patent recite “structural” components. Opp. at 20-22. Plaintiffs do not identify any components or otherwise argue that any component is not generic or conventional. As discussed in the Motion, Mot. at 25-29, and as discussed above with respect to claims 14 and 15 of the ’433 patent, see supra Part II.E, the specification merely sets forth generic, conventional components, such as a table or computer, to carry out the claimed abstract wagering game. This does not pass muster under either step of Alice. III. PLAINTIFFS FAIL TO ESTABLISH TRADEMARK RIGHTS THROUGH FIRST AND CONTINUOUS USE OF THE B&B MARK Plaintiffs trademark claims should also be dismissed because Plaintiffs fail to allege any facts supporting their conclusory allegation that they established rights in the unregistered B&B Mark through first and continuous use in commerce. See Mot. at 29-33. Plaintiffs’ Opposition on this claim, such as it is, swings at shadows, addressing issues that Defendants did not raise in the Motion. To avoid the arguments Defendants did make-that the Complaint-based facts suggest Slingo used the B&B Mark first-Plaintiffs attempt to amend the Complaint to allege that Slingo’s use was under a licensing agreement with Plaintiffs and therefore can be attributed to Plaintiffs. Plaintiffs cannot amend the Complaint in their briefing, and as pled, Plaintiffs trademark claims fail and must be dismissed. To state a claim for trademark infringement, Plaintiffs must plead facts that, if proven true, would establish they (1) were the first to use the mark in commerce, Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 16 of 21 PageID: 536 -12- 134498739.7 and (2) have continuously used the mark in commerce since its adoption. See Mot. at 29-33 (citing Ford Motor Co. v. Summit Motor Prods., 930 F.2d 277, 292 (3d Cir. 1991)); Opp. at 28 (also citing Ford Motor Co. for this proposition). Plaintiffs fail to satisfy these factors. To establish first use, Plaintiffs point to their allegation that they “used the B&B Mark in U.S. interstate commerce prior to Defendants’ first use of the mark.” Id. at 28 (citing Compl. ¶ 76). But such unsupported repetition of the required element is exactly the sort of “formulaic recitation of the elements of a cause of action” that offers no more than conclusions. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint must “show” entitlement to relief “with its facts.” Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009). Plaintiffs’ Complaint is devoid of such facts.7 Conclusory allegations of first use are especially inadequate where the conclusion is not a reasonable inference from the alleged facts in the first place. See, e.g., Food Sciences Corp. v. Nagler, Civ. No. 09-1798 (JBS/KMW), 2010 WL 4226531, at *2 (D.N.J. 2010) (“if the conclusion is not a reasonable inference from the alleged facts, it may be disregarded”). Because there’s nothing actually in the 7 Plaintiffs attempt to argue they are not required to plead facts because Federal Rule of Civil Procedure (“Rule”) 9(b) does not apply. Opp. at 29. Defendants never argued that Rule 9(b) applies, and the Twombly standard requiring a plaintiff to allege a claim’s factual underpinnings applies under Rule 8(a). Plaintiffs’ citation to Advanced Baseball Academy, LLC v. Google, Inc., No. 14-2461-CM, 2015 WL 1440656 (D. Kan. Mar. 30, 2015), also misses the mark, as that case involved a defendant’s effort to “assert a ‘prior use’ affirmative defense in support of the motion to dismiss.” Id. at *4. Defendants here are not attempting to assert an affirmative defense-instead, Plaintiffs must plead facts to support first use in commerce in order to establish threshold common law trademark rights, Ford Motor Co., 930 F.2d at 292, and the Complaint contains no such allegations. Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 17 of 21 PageID: 537 -13- 134498739.7 Complaint contradicting Defendants’ argument that “the pleaded facts in the Complaint suggest that Slingo, not Plaintiffs, used the B&B Mark first,” Mot. at 31, Plaintiffs are left to claim, in a footnote, that Slingo used the B&B Mark according to a “license agreement” that was “later revoked,” Opp. at 28 n.8. It is black-letter law, though, that Plaintiffs cannot cure their defective Complaint in opposition to a motion to dismiss. E.g., Swift v. Pandey, No. 13-650 (JLL), 2013 WL 6054853, at *3 (D.N.J. Nov. 13, 2013) (“a complaint cannot be amended (or supplemented) by way of an opposition brief”) (internal citations omitted). Plaintiffs’ trademark infringement claims also fail because they do not allege any facts to support their continuous use of a protectable mark in commerce. Mot. at 32-33. Again, Plaintiffs must stray from their actual Complaint-based allegations, arguing they can “properly rely on authorized licensee uses to demonstrate continuity,” Opp. at 28 n.8, or can unify the nine different versions of the B&B Mark mentioned in the Complaint “under the doctrine of tacking,” Opp. at 29. The Complaint contains no allegations related to either licenses or tacking, however, and courts allow parties to utilize “tacking” only in “exceptionally narrow circumstances.” Hana Financial, Inc. v. Hana Bank, 735 F.3d 1158, 1160, 1165 (9th Cir. 2013), aff’d 135 S. Ct. 907. Plaintiffs plead no facts supporting their conclusory allegations that they established rights in the B&B Mark through first and continuous use in commerce. Accordingly, Plaintiffs’ trademark claims should be dismissed. Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 18 of 21 PageID: 538 -14- 134498739.7 IV. PLAINTIFFS’ STATE LAW CLAIMS ARE DERIVATIVE OF THEIR IP CLAIMS AND SHOULD BE DISMISSED Plaintiffs do not and cannot cite any authority recognizing their purported claim for patent misappropriation under New Jersey law. The Rodime, Material Techs, and Read cases do not recognize such a claim. In all events, such a claim would presumably require, at a minimum, establishing federal patent infringement, and since Plaintiffs fail to allege valid patents, their patent misappropriation claim must fail as well. See Mot. at 2-29; infra Part II. Plaintiffs’ claim for unjust enrichment fares no better. Plaintiffs’ theory in the Complaint-that defendant Slingo was unjustly enriched “[h]aving been paid by Defendant RealNetworks for the purported sale of BANKERS & BROKERS and/or the B&B Mark,” Compl. ¶ 92, fails because the unnamed seller of Slingo- and not any defendant-received that payment, see Mot. at 35. 8 Plaintiffs now concede that no defendant was unjustly enriched by the sale but explain that they intend to seek relief from the “unnamed seller” after they “obtain evidence sufficient to pierce the corporate veil” though discovery. Opp. at 36. Even if Plaintiffs do not already know who sold Slingo, their purported desire to know does not justify a defective unjust enrichment claim against Defendants.9 8 Plaintiffs’ argument that “Plaintiffs’ unjust enrichment claim depends not on the price RealNetworks paid but on the fact that Defendant Slingo had no ownership or other rights to sell” is nonsensical. Opp. at 35 (emphasis in Opp.). If anyone was “enriched” by the sale of rights, that enrichment would have come in the form of the price paid for those rights. 9 Plaintiffs’ argument that “if the true facts were known,” they “would have expected remuneration from defendant” does not support either of their unjust enrichment theories. See Opp. at 34 (quoting Stewart v. Beam Global Spirits & Wine, Inc., 877 F. Supp. 2d 192, 196 (D.N.J. 2012)). Again, the seller of Slingo- Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 19 of 21 PageID: 539 -15- 134498739.7 Plaintiffs now argue that Slingo was unjustly enriched because it received “years of revenue and site visits due to the unauthorized posting of Plaintiffs’ game and related IP on www.slingo.com.” Opp. at 35-36 (citing Compl. ¶ 29). Put this way, Plaintiffs’ unjust enrichment claim is completely derivative of its patent and trademark claims: both depend on allegations that Defendants were enriched due to improper use of Plaintiffs’ intellectual property. But unjust enrichment is not intended to mimic other claims (many of which include allegations that a defendant was unlawfully enriched)-instead, it “was developed under the law to provide a remedy where none existed.” Stewart v. Beam Global Spirits & Wine, Inc., 877 F. Supp. 2d 192, 198 (D.N.J. 2012) (quoting Callano v. Oakwood Park Homes, Corp., 91 N.J. Super. 105, 219 A.2d 332, 335 (N.J. 1966)). Further, since Plaintiffs are unable to allege the existence of any patent or trademark rights, they cannot allege any purported enrichment Defendants received was unjust. V. CONCLUSION For the reasons set forth above and in Defendant’s Motion, this Court should dismiss the Complaint with prejudice. and not any defendant-received the remuneration from the sale. Nor are Plaintiffs correct on the law: Beam Global involved the very narrow issue of whether “retail sales by liquor stores cut off any relationship between the consumers and the manufacturer.” 877 F. Supp. 2d at 200. Rather than creating any exception that would apply here, the Beam Global court reiterated the normal rule that unjust enrichment is “a form of quasi-contractual liability,” and that “‘some direct relationship’ should exist between the parties to an unjust enrichment claim” in order “to prevent a finding of liability in cases where the defendant had absolutely no course of dealings with, and no other demonstrated connection to, the plaintiff.” Id. at 196, 200. Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 20 of 21 PageID: 540 -16- 134498739.7 DATED: February 27, 2017 PERKINS COIE LLP By: /s/ Jeffrey D. Vanacore Jeffrey D. Vanacore JVanacore@perkinscoie.com 30 Rockefeller Plaza, 22nd Floor New York, NY 10112-0085 Telephone: 212.262.6900 William C. Rava (pro hac vice forthcoming) Ryan J. McBrayer (pro hac vice forthcoming) WRava@perkinscoie.com 1201 Third Avenue, Suite 4900 Seattle, WA 98101 Telephone: 206.259.8000 Attorneys for Defendants Case 2:16-cv-08175-JMV-MF Document 17 Filed 02/27/17 Page 21 of 21 PageID: 541
