Plausible Factual Allegations Regarding Inventive Concept Preclude Dismissal at the Rule 12(b)(6) Stage

In Cooperative Entertainment, Inc. v. Kollective Technology, Inc., No. 2021-2167 (Fed. Cir. Sept. 28, 2022), the Federal Circuit reversed a Northern District of California decision granting Kollective’s motion to dismiss and remanded for further proceedings.

Cooperative sued Kollective for infringement of U.S. Patent No. 9,432,452 (“the ’452 patent), which claims systems and method of structuring a peer-to-peer dynamic network for distributing large files. Kollective filed a motion to dismiss, arguing that the claims of the ’425 were directed to patent ineligible subject matter under 35 U.S.C. § 101. After Cooperative filed an amended complaint, Kollective refiled its motion to dismiss. The district court granted Kollective’s motion and Cooperative appealed.

On appeal, the Federal Circuit found that Cooperative’s complaint plausibly alleges the claims of the ’452 patent recite inventive concepts, which the specification explains is different from and superior to the prior art. The Court also noted that the claims recite a specific type of network and delineate the required structure and function. The Federal Circuit also found that determining whether the claimed network of the ’452 patent is well understood, routine, or conventional is a question of fact in this particular case that should not have been resolved at the Rule 12(b)(6) stage, and the district court erred in resolving this particular factual issue against Cooperative.