zillow patent suit

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT Case No. 2:12-cv-01549-JLR

Susman Godfrey LLP1201 Third Avenue, Suite 3800

Seattle WA 98101-3000

Honorable James L. Robart

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

ZILLOW, INC.,

Plaintiff, v. TRULIA, INC.

Defendant.

Case No. 2:12-cv-01549-JLR ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT NOTED ON THE MOTION CALENDAR: January 25, 2013

Case 2:12-cv-01549-JLR Document 22 Filed 01/21/13 of 31

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT – Page i Case No. 2:12-cv-01549-JLR



TABLE OF CONTENTS

I. The ‘674 Patent ................................................................................................................... 2 II. Motions to Dismiss on Patent Eligibility Are Disfavored and Rarely Granted .................. 5 III. The ‘674 Patent Covers Patentable Subject Matter Because it Passes the Machine- or-Transformation Test and Does not Preempt the Basic Tools of Scientific or

Technological Work ............................................................................................................ 7

A. The ‘674 Patent Meets the Machine-or-Transformation Test Because it Is Tied to a Particular Machine ................................................................................. 10

1. Zillow’s Claimed Invention Imposes Meaningful Limits ......................... 11 2. Zillow’s Claims Do Not Patent Meaningless Post-Solution Activity ....... 12 3. The Cases Trulia Cites are Distinguishable: They all Involve Attempts to Patent Broad Concepts That Were Only Incidentally Tied to Computers ..................................................................................... 13

B. The ‘674 Patent Does not Preempt any Basic Tools of Scientific or Technological Work .............................................................................................. 16

IV. The Court Should Not Stay This Case Pending the Federal Circuit’s Resolution of CLS Bank ................................................................................................................... 18 A. The Federal Circuit CLS Bank Opinion ............................................................... 18 B. Trulia Has Failed to Justify a Stay ........................................................................ 19 V. Zillow Adequately Pled Contributory Infringement and Inducement .............................. 20 A. Zillow’s Complaint Satisfies the Elements of Indirect Infringement ................... 21 1. Knowledge and Specific Intent ................................................................. 21 2. Direct Infringement by a Third Party ........................................................ 22 3. Lack of Noninfringing Uses ...................................................................... 23 B. Zillow’s Complaint Need Not Recite the Formal Legal Elements of a Claim ..... 24 VI. Conclusion ....................................................................................................................... 24


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT – Page ii Case No. 2:12-cv-01549-JLR



TABLE OF AUTHORITIES

Cases

Alvarez v. Hill, 518 F.3d 1152 (9th Cir. 2008) ............................................................................................ 24

Ashcroft v. Iqbal, 556 U.S. 662 (2009) ..................................................................................................... 23, 24

Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266 (Fed. Cir. 2012) ...................................................................................... 6, 14

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ..................................................................................................... 20, 24

Bilski v. Kappos, 130 S. Ct. 3218 (2010) ................................................................................................ passim

Cal. Inst. of Computer Assisted Surgery, Inc. v. Med-Surgical Servs., Inc., No. 10-05067-CW, 2011 WL 672709 (N.D. Cal. Feb. 16, 2011) ..................................... 22

Carolina Cas. Ins. Co. v. Ott, No. 09-cv-5540-RJB, 2010 WL 1286821, (W.D. Wash. Mar. 26, 2010) .................... 19, 20

CLS Bank Int’l v. Alice Corp. Pty. Ltd., 685 F.3d 1341 (Fed. Cir. 2012) ................................................................................ 2, 18, 19

Conley v. Gibson, 355 U.S. 41 (1957) ............................................................................................................. 20

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242 (9th Cir. 1990) .............................................................................................. 24

Crull v. GEM Ins. Co., 58 F.3d 1386 (9th Cir. 1995) .............................................................................................. 24

CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) .............................................................................. 14, 15, 18

Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012) ................................................................................ 8, 13, 18

Diamond v. Chakrabarty, 447 U.S. 303 (1980) ............................................................................................................. 7

Diamond v. Diehr, 450 U.S. 175 (1981) ....................................................................................................... 9, 17

DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293 (Fed. Cir. 2006) .......................................................................................... 22

Global-Tech Applicances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011) ....................................................................................................... 21

Gottschalk v. Benson, 409 U.S. 63 (1972) ............................................................................................. 8, 10, 16, 18

Hall v. City of Santa Barbara, 833 F.2d 1270 (9th Cir.1986) ............................................................................................... 5

In re Bill of Lading Transmission and Processing Sys. Patent Litig., 681 F.3d 1323 (Fed. Cir. 2012) .............................................................................. 21, 22, 23

In re Bilski (“Bilski I”), 545 F.3d 943 (Fed. Cir. 2008) ................................................................................ 10, 11, 14


ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT - Page iii Case No. 2:12-cv-01549-JLR



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

J.E.M. Ag Supply, Inc. v. Pioneer Hi–Bred Int'l, Inc., 534 U.S. 124 (2001) ............................................................................................................. 7

Keniston v. Roberts, 717 F.2d 1295 (9th Cir.1983) ............................................................................................... 5

Landis v. N. Am. Co., 299 U.S. 248 (1936) ..................................................................................................... 19, 20

Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005) ............................................................................................ 20

Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 130 (Fed. Cir. 2009) ............................................................................................ 22

Mayo Collaborative Servs. v. Prometheus Labs., 132 S. Ct. 1289 (2012) ............................................................................................. 8, 10, 17

Medtrica Solutions, Ltd. v. Cygnus Med., LLC, No. 12-cv-538-RSL, 2012 WL 5726799 (W.D. Wash. Nov. 15, 2012) ............................ 22

Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) ........................................................................................................... 22

MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250 (Fed. Cir. 2012) ............................................................................................ 7

Nw. Coal. for Alts. to Pesticides v. U.S. Envtl. Prot. Agency, 2012 WL 2343279 (W.D. Wash. June 20, 2012) ............................................................... 20

OIP Tech. v. Amazon, 2012 WL 3985118 (N.D. Cal. Sept. 11, 2012) .................................................................. 15

O'Reilly v. Morse, 56 U.S. 62 (1853) ......................................................................................................... 16, 18

Parker v. Flook, 437 U.S. 584 (1978) ......................................................................................... 12, 13, 16, 18

Regal W. Corp. v. Grapecity, Inc., 2011 WL 4102088 (W.D. Wash. Sept. 14, 2011) ................................................................ 5

Research Corp. Technologies, Inc. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010) .............................................................................................. 8

SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319 (Fed. Cir. 2010) .......................................................................................... 11

Symantec Corp. v. Veeam Software Corp., No. 12-cv-00700-SI, 2012 WL 1965832 (N.D. Cal. May 31, 2012) ................................. 21

Turner Broad. Sys., Inc. v. Tracinda Corp., 175 F.R.D. 554 (D. Nev. 1997) .......................................................................................... 20

Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323 (Fed. Cir. 2011) ............................................................................................ 6

Weiland Sliding Doors and Windows, Inc. v. Panda Windows and Doors, LLC, No. 10-cv-677-JLS, 2012 WL 202664 (S.D. Cal. Jan. 23, 2012) ................................ 21, 23

WildTangent, Inc. v. Ultramercial, LLC, 132 S. Ct. 2431 (2012) ......................................................................................................... 6

Statutes

35 U.S.C. § 101 ....................................................................................................................... passim


ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT - Page iv Case No. 2:12-cv-01549-JLR



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Rules

Federal Rule of Civil Procedure 12 .................................................................................................. 5


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT – Page 1 Case No. 2:12-cv-01549-JLR



Plaintiff Zillow, Inc. (“Zillow”) respectfully submits the following arguments and

authorities in opposition to Trulia, Inc.’s (“Trulia”) Motion to Dismiss (Dkt. No. 19) (“Motion”).

Trulia principally argues the Court should dismiss Zillow’s complaint because the patent-

in-suit, U.S. Patent No. 7,970,674 (“the ‘674 Patent”), claims an abstract idea ineligible for patent

protection under Section 101 of the Patent Act. But Trulia’s arguments commit three basic errors

that the Supreme Court and Federal Circuit have warned against expressly.

First, Trulia brings its motion as a 12(b)(6) motion to dismiss, attempting an end-around

of discovery and claim construction proceedings. In doing so, Trulia conveniently ignores the

Federal Circuit’s express warnings that: (1) such early resolution of Section 101 issues is unusual

and often impossible; (2) claim construction can enlighten, or even answer, questions about

subject-matter abstractness; and (3) courts should resolve the validity of a patent by looking at

concrete prior art rather than eligibility questions.

Second, Trulia’s analysis of the subject matter claimed by the ‘674 Patent consists of

parsing and dissecting the various components of the claimed invention and making conclusory

assertions that the particular components could not, on their own, satisfy Section 101. This

analysis violates clear Supreme Court’s Section 101 precedent dictating that the Court examine

claimed inventions as a whole.

Third, Trulia fails to heed the Supreme Court’s recent holding in Bilski that the machine-

or-transformation test is not dispositive and ignores repeated holdings from the Supreme Court

emphasizing the concept of preemption and the degree to which claimed patents foreclose

innovation and the basic tools of scientific or technological work. Thus, even overlooking the

fact that the ‘674 Patent passes the machine-or-transformation test, the preemption analysis

demonstrates that the ‘674 Patent fits within the wide scope of patent-eligible subject matter.


ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT - Page 2 Case No. 2:12-cv-01549-JLR



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Additionally, Trulia’s request for a stay in light of the CLS en banc hearing fails to meet

the substantial burden required to justify a delay in competitor Zillow’s infringement suit. And

Trulia’s request for dismissal of Zillow’s claims for indirect and contributory infringement

ignores precedent and Zillow’s factual allegations.

I. The ‘674 Patent

Prior to Zillow and its imitators, real estate professionals, buyers, and sellers, estimated

the value of real estate by using professional appraisals or automatic valuations that were based

solely on information in a public database. Dkt. No. 1-1 (“‘674 Patent”) at 1:24-56. These

appraisals were generally expensive, significantly inaccurate, or both. Id. Zillow’s introduction

of its patented Zestimate service, and Zillow’s ensuing meteoric rise, fundamentally challenged

these traditional methods by offering automatic real estate valuations that solicited and relied on

input from homeowners, through a specific computer program and method. Dkt. No. 1 ¶¶ 7-8.

The ‘674 Patent discloses Zillow’s innovative computer program and method, and

provides Zillow constitutionally conferred protection against competitors seeking to copy or

employ Zillow’s technology. Dkt. No. 1 (“Complaint”) ¶ 8. Zillow applied for the ‘674 Patent

on February 3, 2006, more than four years before Trulia launched its version of Zestimates, called

“Trulia Estimates,” and the United States Patent and Trademark Office (“PTO”) issued the ‘674

Patent on June 28, 2011, after the Bilski v. Kappos decision. Id. ¶¶ 8-9.1

The ‘674 Patent recites three independent claims and thirty-seven dependent claims. ‘674

Patent at 19:28-24:47. Claim 1 recites a specific sixteen-step method for automatically refining a

home valuation in response to owner input. See Motion at 3-4 (citing ‘674 Patent at 19:29-67).

1 In fact, the PTO issued its Notice of Allowance of the ‘674 Patent almost one year after Bilski and nine months after the PTO issued its interim guidance on § 101 eligibility to patent examiners in view of Bilski. See Declaration of Jordan Connors, Exh. 1 (April 18, 2010 PTO Notice of Allowance); and Exh. 2 (July 27, 2010 PTO Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos).





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Claim 2, an independent medium claim, recites:

2. A computer readable medium for storing contents that causes a computing system to perform a method for procuring information about a distinguished property from its owner that is usable to refine an automatic valuation of the distinguished property, the method comprising:

displaying at least a portion of information about the distinguished property used in the automatic valuation of the distinguished property;

obtaining user input from the owner adjusting at least one aspect of information about the distinguished property used in the automatic valuation of the distinguished property; and

displaying to the owner a refined valuation of the distinguished property that is based on the adjustment of the obtained user input.

Id. at 20:18-32. Claim 15 is a third independent claim, which discloses a “method in a computing

system.” ‘674 Patent at 21:49-59. Claim 15 contains similar language to claim 2, except that the

capabilities of the “computer readable medium for storing contents” of claim 2 are presented as

steps to the “method in a computing system” disclosed in claim 15.

All three claims require a computer display that presents particular information. Claim 2

discloses displaying “at least a portion of information about the distinguished property used in the

automatic valuation of the distinguished property” and, following the calculation of a refined

valuation, displaying “a refined valuation of the distinguished property that is based on the

adjustment of the obtained user input.” ‘674 Patent at 20:23-25. Both claim 1 and claim 15

require that the “method in a computing system include various steps in which information is

“display[ed]” or “present[ed].” Id. at 19:29-20:17; 21:49-59.

The thirty-seven dependent claims of the ‘674 Patent disclose further components of

Zillow’s invention, including particular methods and displays used to obtain input from

homeowners, specific types of input to obtain, and ways in which the inputs refine the automatic

valuation of the distinguished property. See, e.g., ‘674 Patent at 20:63-21:12. For example:

11. The computer-readable medium of claim 8, the method further comprising displaying a map showing properties in a geographic region surrounding the distinguished property, and wherein the owner identifies the recent sales of nearby properties regarded by the owner as similar to the distinguished property by





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

selecting them on the displayed map. 12. The computer-readable medium of claim 8, the method further comprising

displaying a map showing properties in a geographic region surrounding the distinguished property, and wherein the owner identifies each recent sale of a nearby property regarding by the owner as similar to the distinguished property by selecting a control in a popup balloon associated with its location on the displayed map.

13. The computer-readable medium of claim 8, the method further comprising

displaying a table comprising rows each containing textual information about a different one of a plurality of recent sales of nearby properties, and wherein the owner identifies each recent sale of a nearby property regarded by the owner as similar to the distinguished property by interaction with the row containing information about the sale.

20. The method of claim 18 wherein the geographically-specific home valuation

model is a linear regression model constructed from information about recent sales of homes near the distinguished home.

21. The method of claim 18 wherein the geographically-specific home valuation

model is a hybrid model, utilizing both a forest of classification trees and a linear regression-derived function, both constructed from information about recent sales of home near distinguished home.

The specification explains that the ‘674 Patent pertains to the narrow field of “electronic

commerce techniques relating to real estate.” Id. at 1:9-13. The specification also describes

various embodiments of the invention, including embodiments of the computer display, which

comprises a limitation on the computer-medium claims. Id. at 13:29-16:62. The specification

even includes screenshots from Zillow’s Zestimate feature on Zillow.com, which is one

embodiment of the ‘674 Patent. See, e.g., Id. at Sheet 10, 14:





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The ‘674 Patent is not an “idea,” it is a computer program, computer display, and interface

that displays to homeowners inputs used in an automatic valuation of their homes, solicits and

obtains revised inputs from homeowners, calculates a refined valuation based on those inputs, and

then displays the refined valuation. This computer program, computer display, and interface has

given Zillow a significant advantage over its competitors, as it has been used to refine the

valuations of more than 33 million homes in Zillow’s database, which has made Zillow’s

database “substantially more useful and accurate” and has “played a major role in Zillow’s

success and growth into the largest real estate website, and most popular suite of mobile real

estate applications for smartphones and tablet computers.” Complaint ¶ 7.

II. Motions to Dismiss on Patent Eligibility Are Disfavored and Rarely Granted

Trulia’s motion to dismiss, brought prior to any discovery or claim-construction

proceedings in this case, argues that the Court should dismiss Zillow’s complaint under Federal

Rule of Civil Procedure 12(b)(6). Motion at 5. In ruling on such a motion, “[m]aterial

allegations are taken as admitted and the complaint is construed in the plaintiff's favor.” Regal W.

Corp. v. Grapecity, Inc., 2011 WL 4102088, at *1 (W.D. Wash. Sept. 14, 2011) (citing Keniston

v. Roberts, 717 F.2d 1295 (9th Cir.1983)). Moreover, “[i]t is axiomatic that the motion to dismiss

for failure to state a claim is viewed with disfavor and is rarely granted.” Hall v. City of Santa

Barbara, 833 F.2d 1270, 1274 (9th Cir.1986) (internal quotation and citation omitted).

The crux of Trulia’s motion argues that the subject matter of the ‘674 Patent is not patent-

eligible under Section 101 of the Patent Act. While Trulia is correct that patent eligibility is a

question of law, the Federal Circuit has advised that district courts should ordinarily resolve

questions of patent eligibility after claim construction proceedings: “it will ordinarily be

desirable—and often necessary—to resolve claim construction disputes prior to a § 101 analysis,

for the determination of patent eligibility requires a full understanding of the basic character of





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the claimed subject matter.” Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada (U.S.),

687 F.3d 1266, 1273-74 (Fed. Cir. 2012); see also Ultramercial, LLC v. Hulu, LLC, 657 F.3d

1323, 1325 (Fed. Cir. 2011) (“[C]laim meaning may clarify the actual subject matter at stake in

the invention and can enlighten, or even answer, questions about subject matter abstractness.”),

vacated on other grounds by WildTangent, Inc. v. Ultramercial, LLC, 132 S. Ct. 2431 (2012).

Claim construction in this case will not only shed light on “the basic character of the

claimed subject matter,” but it will illuminate limitations of the asserted claims that further

demonstrate the ‘674 Patent meets the requirements of Section 101. For example, Zillow intends

to propose the following construction of the term “automatic valuation,” which is present in

independent claims 2 and 15: “a valuation generated by a computer program without the need for

human intervention.”2 Such a construction finds support in the specification (see, e.g., ‘674

Patent at 1:33-51; 1:63-65; 5:37-65; 13:47-51), and clarifies the reliance of the disclosed

invention on a particular machine—a computer that is programmed to calculate a valuation and

then facilitate the display interface described by the claims. This Court has adopted local patent

rules specifically so the parties could identify the terms that require construction. Local Patent

Rule D. Trulia’s effort to short-circuit this thoughtful approach is not supported by the case law.

The Federal Circuit recently advised district courts to defer questions of Section 101

patentability, even when presented at a much later stage of a case:

Adopting this practice would also preclude § 101 claims from becoming the next toss-in for every defendant's response to a patent infringement suit, particularly in business method litigation. . . . More often, when the question of abstractness is presented in its usual abstract terms, the trial court could as a matter of case management summarily put aside the § 101 defense on whatever grounds seem applicable in the case. The litigants will then be left to address the invalidity defenses of §§ 102, 103, and 112, as the statute provides, and the litigants, the trial court, and this court on review would have some semblance of a chance at arriving at a predictable and understandable result.

2 This proposed construction is preliminary and is subject to change during the course of the Court’s claim construction proceedings, which have not yet begun. See Local Patent Rule D.





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250, 1261-62 (Fed. Cir. 2012) (refusing to reach §

101 issue even following claim construction and summary judgment and instead affirming

summary judgment on § 102 and § 103 grounds). This Court should follow the Federal Circuit’s

guidance and defer the Section 101 question until after it determines whether the case can be

resolved on other grounds.

At this early stage in the case, the Court should only grant Trulia’s motion if it meets an

extremely steep burden. As the Federal Circuit recently explained, even at the summary

judgment stage, only “if it is clear and convincing beyond peradventure—that is, under virtually

any meaning of ‘abstract’—that the claim at issue is well over the line, then a case could be made

for initially addressing the § 101 issue in the infringement context.” MySpace, 672 F.3d at 1261.

Trulia’s motion falls well short of this steep burden. If the Court has any doubt about the

patentability of the claimed subject matter, it should follow the Federal Circuit’s directive and

defer resolution of Trulia’s motion until after claim construction and discovery are complete.

III. The ‘674 Patent Covers Patentable Subject Matter Because it Passes the Machine-or-

Transformation Test and Does not Preempt the Basic Tools of Scientific or Technological Work The Patent Act defines patent-eligible subject matter broadly: “Whoever invents or

discovers any new and useful process, machine, manufacture, or composition of matter, or any

new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and

requirements of this title.” 35 U.S.C. § 101. Section 101 is a “dynamic provision designed to

encompass new and unforeseen inventions.” J.E.M. Ag Supply, Inc. v. Pioneer Hi–Bred Int'l,

Inc., 534 U.S. 124, 135 (2001). As the Supreme Court has recognized, “Congress plainly

contemplated that the patent laws would be given wide scope,” as “Congress intended statutory

subject matter to ‘include anything under the sun that is made by man,’” Diamond v.

Chakrabarty, 447 U.S. 303, 308-09 (1980) (citing S.Rep. No. 82–1979, at 5 (1952); H.R.Rep. No.





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

82–1923, at 6 (1952)).

The Supreme Court has articulated only three exceptions to the Patent Act’s broad patent-

eligibility principles: “laws of nature, physical phenomena, and abstract ideas.” Bilski v. Kappos,

130 S. Ct. 3218, 3225 (2010). The Court cautioned that “too broad an interpretation of” these

exceptions “could eviscerate the patent law. For all inventions at some level embody, use, reflect,

rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Mayo Collaborative

Servs. v. Prometheus Labs., 132 S. Ct. 1289, 1293 (2012). Moreover:

any invention within the broad statutory categories of § 101 that is made by man, not directed to a law of nature or physical phenomenon, and not so manifestly abstract as to preempt a fundamental concept or idea is patent eligible. . . . The vast number of claims pass this coarse eligibility filter. Their patentability is properly measured against other provisions of Title 35.

Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1331 (Fed. Cir. 2012) (emphasis added) (citations

omitted).

The Supreme Court has further explained that a “principle, in the abstract, is a

fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in

either of them an exclusive right.” Id. (quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972))

(quotation marks omitted). The Federal Circuit, following the Supreme Court’s most recent

discussion of the “abstract idea” exception in Bilski, further clarified:

[T]his court also will not presume to define ‘abstract’ beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.

Research Corp. Technologies, Inc. v. Microsoft Corp., 627 F.3d 859, 868 (Fed. Cir. 2010)

(emphasis added) (reversing district court’s grant of summary judgment on Section 101 grounds,

following claim construction and discovery).

Trulia’s motion concerns the Supreme Court’s “abstract ideas” exception to patent





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

eligibility. But Trulia’s presentation of the legal standard and analysis of the issue (Motion at 6-

12) is misleading and incomplete. Trulia’s motion has two chief failings with regard to the law:

(1) it fails to consider the claims of the ‘674 Patent as a whole and instead improperly dissects the

claims into old and new elements and then ignores the presence of the old elements, and (2) it

wholly ignores Supreme Court holdings about the “preemption” test for patent eligibility and the

purpose of the “abstract idea” exception to the broad categories of patent-eligible subject matter.

First, Trulia’s motion breaks the ‘674 Patent into old and new components, and then

disregards any old components that existed in the prior art in order to conclude that the ‘674

Patent only claims “the idea of allowing a homeowner to input information about a house that is

considered in the valuation of the property.” Motion at 4. This approach violates the clear dictate

of the Supreme Court:

In determining the eligibility of respondents' claimed process for patent protection under section 101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. This is particularly true in a process claim because a new combination of steps may be patentable even though all the constituents of the combination were well known and in common use before the combination was made. The ‘novelty’ of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter.

Diamond v. Diehr, 450 U.S. 175, 188-89 (1981) (emphasis added). Trulia’s failure to consider

the ‘674 Patent as a whole pervades its motion and dooms its analysis, as it argues in succession

that (1) merely applying an abstract idea to a particular field does not render an invention patent

eligible, (2) merely utilizing an algorithm does not render an invention patent eligible, (3) merely

including steps whereby an invention obtains and organizes data does not render an invention

patent eligible, and (4) merely identifying general machine elements does not render an invention

patent eligible. Motion at 7-11. These general principles may be true in isolation, but Trulia’s

analysis fails to consider the ‘674 Patent as a whole—which discloses an invention that includes





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

all of these various components as steps in its method patent and capabilities in its computer

medium patent, and discloses a particular programmed computer and display.

Second, while Trulia employs a conclusory and incorrect analysis of the Federal Circuit’s

“machine-or-transformation test,” it also fails altogether to consider the concept of “preemption,”

which the Supreme Court has repeatedly and recently emphasized in its Section 101 analysis.

Trulia notes that the Supreme Court, in Bilski v. Kappos, found that the Federal Circuit’s

machine-or-transformation test was not dispositive (Motion at 10), but then Trulia confines its

analysis to this non-dispositive issue (which favors Zillow) and fails to acknowledge the

substantial body of Supreme Court and Federal Circuit law that emphasizes preemption—namely,

supporting patent eligibility unless the patent would “inhibit further discovery by improperly

tying up the future use of laws of nature,” Mayo Collaborative Servs. v. Prometheus Labs., Inc.,

132 S. Ct. 1289, 1301 (2012), or preempt “the basic tools of scientific and technological work.”

Bilski, 130 S. Ct. at 3231 (quoting Benson, 409 U.S. at 67). Applying the Supreme Court’s

holdings to the multiple steps involved in the ‘674 Patent as a whole, the patent meets the

requirements for eligibility under Section 101, satisfies the machine-or-transformation test, and

does not implicate any of the preemption concerns the Supreme Court has articulated.

A. The ‘674 Patent Meets the Machine-or-Transformation Test Because it Is Tied to a Particular Machine

Trulia correctly acknowledges that the Supreme Court in Bilski held that, while the

machine-or-transformation test “is not the sole test for deciding whether an invention is a patent-

eligible ‘process,’” it “is a useful and important clue, an investigative tool, for determining

whether some claimed inventions are processes under § 101.” 130 S. Ct. at 3227. Under the test,

“an invention is a ‘process’ only if: ‘(1) it is tied to a particular machine or apparatus, or (2) it

transforms a particular article into a different state or thing.’” Id. at 3225 (quoting In re Bilski

(“Bilski I”), 545 F.3d 943, 954 (Fed. Cir. 2008)) (emphasis added).





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The ‘674 Patent meets the first prong of this test, as it is tied to a particular machine or

apparatus—a computer and display programmed to solicit information from the home owner and

automatically refining the valuation as displayed through that interface to the home owner and

other users. The Federal Circuit has “defined a ‘machine’ as ‘a concrete thing, consisting of

parts, or of certain devices and combination of devices. This includes every mechanical device or

combination of mechanical powers and devices to perform some function and produce a certain

effect or result.’” SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1332 (Fed. Cir. 2010).

In analyzing whether the reliance on a computer satisfies this test, the Federal Circuit has

articulated two considerations: (1) “[T]he use of a specific machine or transformation of an

article must impose meaningful limits on the claim’s scope to impart patent-eligibility” and (2)

“the involvement of the machine or transformation in the claimed process must not merely be

insignificant extra-solution activity.” Bilski I, 545 F.3d at 961-62 (citation omitted)(quotation

marks omitted). Under both of these considerations, the programmed computer, display, and

revised valuation based on user input disclosed by the ‘674 Patent satisfies this test.

1. Zillow’s Claimed Invention Imposes Meaningful Limits

The programmed computer, display, and refined automatic valuation, imposes meaningful

limits on the ‘674 Patent, as it limits the invention to a particular computer program and display

interface that can perform a series of steps. The ‘674 Patent does not cover “the abstract idea of

allowing a homeowner to adjust information regarding a house that is subsequently factored into

a refined valuation of the home,” as Trulia suggests. Motion at 8. If a real estate agent were to

solicit information from homeowners of a property, and then use that information to refine his

estimate of the value of a home, he would not violate the ‘674 Patent, even if he calculated the

refined valuation on a general purpose computer, unless he used the particular display interface

described by the patent. See, for example, ‘674 Patent, Claim 1 requiring “presenting a display





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

that solicits input from the owner that updates one or more of the indicated attributes”; “receiving

first input from the owner”; “applying by a computer the tailored valuation model to the updated

attributes” and “displaying the fifth valuation based on the application of the tailored valuation

model.” Thus, the machine at issue is not simply “a computer” used “for no more than its basic

function—making calculations or computations,” Motion at 11, it is a programmed computer with

a particular display interface, as exemplified by the screenshots of Zillow’s Zestimates included

in the specification. Id. at Sheet 10, 14. Zillow’s patented method presents a unique interface for

users to update the facts about their homes and generate a refined valuation for themselves and

others. In other words, Zillow is suing Trulia for copying and infringing Zillow’s programmed

computer with the capacity to provide the same disclosed display interface to generate a refined

valuation—not merely the “idea” of soliciting information from homeowners.

2. Zillow’s Claims Do Not Patent Meaningless Post-Solution Activity

Zillow’s computer, display interface, and revised valuation based on user input also

satisfy the second consideration: they are not meaningless post-solution activity. The post-

solution activity consideration derives from Parker v. Flook, in which the Supreme Court ruled

that a patent disclosing a particular algorithm used to “update alarm limits” did not meet the

requirements of patentable subject matter. 437 U.S. 584, 585-86, 595-96 (1978). The Court

described the patent at issue as follows: “All that it provides is a formula for computing an

updated alarm limit. Although the computations can be made by pencil and paper calculations,

the abstract of disclosure makes it clear that the formula is primarily useful for computerized

calculations producing automatic adjustments in alarm settings.” Id. at 586. The Court relied on

earlier precedents that invalidated patents covering mathematical formulas, and held that “post-

solution” activity, such as using a computer to calculate an adjustment to the alarm limit, cannot

“transform an unpatentable principle into a patentable process.” Id. at 590. Here, the display





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

interface is not post-solution activity that Zillow is attempting to use in order to patent a

mathematical algorithm or formula—the display interface incorporating user input to produce a

revised valuation is the solution. If Zillow were merely seeking to patent an algorithm or a

mathematical principle to use to calculate a “Zestimate,” the post-solution addition of a computer

might implicate Flook. But the ‘674 Patent discloses more than the performance of a calculation;

it discloses and describes a particular user interface that requires a specifically programmed

computer and a computer display. Thus, the ‘674 Patent passes the “machine” prong of the

Federal Circuit test, and does not implicate the narrow “abstract idea” exception.

3. The Cases Trulia Cites are Distinguishable: They all Involve Attempts to Patent Broad Concepts That Were Only Incidentally Tied to Computers

Trulia cites several cases purportedly supporting its argument that the ‘674 Patent fails the

machine prong of the machine-or-transformation test. But the patents-in-suit in these cases are all

distinguishable from the ‘674 Patent, as they attempted to patent extremely broad concepts (e.g.,

processing information through a clearinghouse, detecting credit card fraud over the Internet,

hedging risk, and price optimization), and their use of computers or the Internet was only

incidental to these broad, field preempting concepts.

In Dealertrack, Inc. v. Huber, cited by Trulia, the patent-in-suit claimed the concept of

processing data through a clearinghouse. Dealertrack, Inc., 674 F.3d at 1333 (quoting Bilski, 130

S. Ct. at 3231). The Federal Circuit affirmed a grant of summary judgment (following claim

construction and discovery) based on Section 101 because “[n]either Dealertrack nor any other

entity is entitled to wholly preempt the clearinghouse concept.” Id. Moreover, while the claims

purported that the method was “computer aided,” the claims were “silent as to how the computer

aids the method, the extent to which a computer aids the method, or the significance of the

computer to the performance of the method.” Id. The ‘674 Patent, to the contrary, claims

concrete steps requiring a computer display and interface to accept the user input to generate the





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

revised valuation, rather than a broad concept tied incidentally to a general-purpose computer.

Likewise, in CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011),

the asserted claims were “broad and essentially purport[ed] to encompass any method or system

for detecting credit card fraud which utilize[d] information relating credit card transactions to

particular ‘Internet address.’” CyberSource, 654 F.3d at 1368. The plaintiff’s purported link to a

machine was simply that “it ‘would not be necessary or possible without the Internet.’” Id. at

1370. The Federal Circuit affirmed a grant of summary judgment (following the parties’

submission of a joint claim-construction statement) invalidating the patent under Section 101. Id.

at 1372 (holding that claim’s “method steps can be performed in the human mind, or by a human

using a pen and paper.”)3. In contrast, the steps of the ‘674 Patent cannot be performed in the

human mind, because some of the steps involve a particular interface on a computer display that

solicits user input and then displays the revised valuation to the home owner and to the public.

Also, while the patent at issue in CyberSource failed to disclose particular fraud-detection

algorithms in the specification that would explain how the patent intended to accomplish the

broad fraud-detection idea disclosed, id., the ‘674 Patent includes detailed descriptions of

techniques for using the obtained user inputs to refine home valuations in the dependent claims.

See, e.g., Claim 9 (“The computer-readable medium of claim 8 wherein the adjustment of the

obtained user input further includes identifying a scoring of the properties sold in the identified

sales reflecting the relative level of similarity of the sold properties to the distinguished property,

and wherein the displayed refined valuation is based at least in part on a repetition of the

automatic valuation of the distinguished property in which the influence of the identified sales is

3 Accord, Bilski I, 545 F.3d at 965 (finding patent claiming “mental process” of “hedging” “without aid of a computer or any other device” to fail the machine-or-transformation test); Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) (affirming grant of summary judgment invalidating patent, under Section 101, that claimed “the use of the abstract idea of managing a stable value protected life insurance policy,” using a computer merely to perform calculations).





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

magnified in a manner consistent with the identified scores.”).4

And in the final case cited by Trulia, OIP Tech. v. Amazon, the plaintiff attempted to

patent “price optimization,” as the patent disclosed the business method of sending sale offers

over emails to potential customers, recording statistics generated by the response of the

customers, and then using those statistics to determine an optimized pricing strategy. 2012 WL

3985118, at *1 (N.D. Cal. Sept. 11, 2012). The plaintiff argued that the computer used to

calculate the optimized pricing strategy caused the patent to meet the Federal Circuit’s machine-

or-transformation test. Id. at *12-16. The district court disagreed, stating that: “While running a

particular process on a computer undeniably improves efficiency and accuracy, cloaking an

otherwise abstract idea in the guise of a computer-implemented claim is insufficient to bring it

within section 101.” Id. at *15 (quotation marks and citations omitted). Here, the ‘674 Patent is

not aimed at an abstract concept such as price optimization and the use of a computer is not

merely to perform calculations. While the ‘674 Patent in fact uses a computer to perform

calculations, it also discloses a particular display interface that the computer must be programmed

and equipped to perform.

Accordingly, the ‘674 Patent claims patentable subject matter because it passes the

machine prong of the machine-or-transformation test. Unlike patents that have been invalidated

using this test, the programmed computer and display interface of the ‘674 patent is not incidental

to a broad concept claimed by the patent. Rather, the display interface soliciting user input to

generate a revised valuation, as limited by the steps and capabilities that make up the claims, and 4 The specification adds further technical detail and further distinguishes the ‘674 Patent from the patent invalidated in CyberSource. See, e.g., ‘674 Patent at 12:35-61 (“In some embodiments, the facility constructs and applies compound valuation models to one or more geographic areas. A compound valuation model includes two or more separate classification tree forests, some or all of which may be applied to the attributes of a particular home in order to value it. As one example, in some embodiments, the facility constructs a compound model including both a forest constructed as described above . . . as well as a separate “high-end” forest constructed from basis sales having a selling price above the 97.5 percentile selling price in the geographic area. In these embodiments, the compound model is applied as follows. . . .”).





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

as embodied by the further detailed descriptions in the specification and Zillow’s Zestimate

feature, is integral to the claimed invention itself.

B. The ‘674 Patent Does not Preempt any Basic Tools of Scientific or Technological Work

Trulia’s motion neglects to include any discussion of the Supreme Court’s analysis of

preemption, which the Court frequently emphasizes to determine patent subject matter eligibility

under Section 101. There is an obvious explanation for Trulia’s omission—the Supreme Court’s

preemption analysis demonstrates that the ‘674 Patent claims patent-eligible subject matter. The

patent is a directed solution in a narrow field, not a broad concept that would preempt innovation

or any basic tool of scientific or technological work.

The Supreme Court has frequently emphasized the concept of preemption in analyzing

whether a patent claims patent-eligible subject matter. In cases where the Court has found patent-

ineligible subject matter, the Court has held that the claims improperly limit innovation in a field

because they preempt the use of basic tools of scientific or technological work. For example, in

O'Reilly v. Morse, 56 U.S. 62, 112-13 (1853), the Supreme Court held that a claim to

electromagnetism was not eligible for patent protection because it would effectively “shut [ ] the

door against inventions of other persons . . . in the properties and powers of electro-magnetism”

because “it matters not by what process or machinery the result is accomplished.” Again, in

Gottschalk v. Benson, 409 U.S. 63, 93 (1972), the Supreme Court emphasized the concept of

“pre-emption,” holding that a claim directed to a mathematical formula with “no substantial

practical application except in connection with a digital computer” was directed to an

unpatentable abstract idea because “the patent would wholly pre-empt the mathematical formula

and in practical effect would be a patent on an algorithm itself.” Id. at 71-72. See also Parker v.

Flook, 437 U.S. 584, 591 (1978) (emphasizing importance of claims not “preempting” “basic

tools of scientific and technological work”). In contrast, in Diehr, the Court held that the claims





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

at issue did not “preempt” the use of a particular equation used for curing rubber because the

claims “only foreclose[d] from others the use of that equation in conjunction with all of the other

steps in the [ ] claimed process.” Diamond v. Diehr, 450 U.S. 175, 187 (1981).

The Court emphasized preemption again in Bilski II when it held that the Federal Circuit’s

machine-or-transformation test was not dispositive in determining whether claimed subject matter

was patent eligible. The Court explained: “Allowing petitioners to patent risk hedging would

preempt use of this approach in all fields, and would effectively grant a monopoly over an

abstract idea.” 130 S.Ct. at 3231. The Court recently described the policy interests involved in

the determination of patent subject matter eligibility, stating: “[T]here is a danger that the grant

of patents that tie up their use will inhibit future innovation premised upon them, a danger that

becomes acute when a patented process amounts to no more than an instruction to ‘apply the

natural law,’ or otherwise forecloses more future invention than the underlying discovery could

reasonably justify.” Mayo Collaborative Servs., 132 S. Ct. at 1301.

Analyzing the ‘674 Patent with these principles in mind, the Court’s concern about

foreclosing innovation in a broad field and preempting “basic tools of scientific and technological

work” are not implicated by the ‘674 Patent. The ‘674 Patent applies expressly to the narrow

field of electronic real estate commerce (see ‘674 Patent at 1:10-13), claiming a particular

solution, in the form of a specific computer display interface, to solve a concrete problem in that

field: incorporating home owner input to generate and display a revised valuation. The ‘674

Patent does not claim a basic tool or algorithm. Trulia—or anyone else—can display automatic

valuations of properties without a license to the ‘674 Patent; they are only precluded from the

concrete steps of the Zillow claims. Zillow’s targeted and precise solution is not remotely similar

to the broad concepts and scientific tools that would be foreclosed and preempted by the patents

found to be ineligible under Supreme Court and Federal Circuit precedent, such as





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

electromagnetism (Morse), hedging (Bilski), detecting credit-card fraud (CyberSource),

processing data through a clearinghouse (Dealertrack), managing a stable value protected life

insurance policy (Benson), or particular algorithms or equations (Benson, Flook).

Accordingly, even if the Court were to find that the ‘674 Patent fails the machine prong of

the machine-or-transformation test (it doesn’t), the Court should still find that the ‘674 Patent

claims patent eligible subject matter because the preemption analysis—consistently emphasized

by the Supreme Court, but omitted from Trulia’s motion—demonstrates that the ‘674 Patent does

not claim a broad, abstract idea and would not stifle or preempt innovation.

IV. The Court Should Not Stay This Case Pending the Federal Circuit’s Resolution of CLS Bank

As an alternative to outright dismissal of Zillow’s complaint, Trulia asks the Court to stay

the case pending the Federal Circuit’s en banc decision in CLS Bank Int’l v. Alice Corp. Pty. Ltd.,

685 F.3d 1341 (Fed. Cir. 2012), vacated. Motion at 13.

A. The Federal Circuit CLS Bank Opinion

The Federal Circuit panel in CLS Bank dealt with “the question of patent eligibility under

35 U.S.C. § 101 of an invention implemented by computers.” CLS Bank Int’l, 685 F.3d at 1343.

The asserted claims in CLS Bank were “directed generally to the exchange of obligations between

parties using a computer.” Id. at 1353. In reviewing the district court’s summary judgment

ruling, the Federal Circuit concluded: “[T]his court holds that when—after taking all of the

claim recitations into consideration—it is not manifestly evident that a claim is directed to a

patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate

under § 101.” Id. at 1352. While the claimed invention used a general-purpose computer merely

to implement the steps of exchanging obligations, the Federal Circuit found that the asserted

claims satisfied the machine prong of the machine-or-transformation test because the claim

language and the patent specification indicated that the patent required computer implementation.





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Id. at 1353-54. The court also analyzed similar preemption jurisprudence presented in Section

III.B., supra, to conclude that the patent did “not appear to preempt much in the way of

innovation.” Id. at 1355-56. The Federal Circuit panel’s CLS Bank opinion was vacated pending

an en banc review, which is scheduled for February 8.

While the Federal Circuit’s en banc opinion may set forth relevant and useful standards in

this area, the Court can resolve Trulia’s motion to dismiss without waiting for the Federal Circuit.

As Part III of this brief makes clear, the ‘674 Patent satisfies the applicable tests for patent

eligibility regardless of the outcome in CLS Bank. Even if the Federal Circuit were to find the

asserted claims in CLS Bank ineligible for patent protection, the ‘674 Patent would still be

distinguishable because it requires a particular computer display and interface, while the asserted

claims in CLS Bank merely disclose a general purpose computer used to conduct transactions, and

the ‘674 Patent is directed to a targeted solution in a narrow field.

Nevertheless, should the Court decide that awaiting the Federal Circuit’s en banc ruling in

CLS Bank would aid its consideration of Trulia’s Motion to Dismiss, the appropriate course is

merely to defer ruling on the instant motion, not to stay the entire case, as Trulia requests.

B. Trulia Has Failed to Justify a Stay

District courts consider three primary factors—factors Trulia has failed to explain or

satisfy—in determining whether a stay is appropriate: (1) possible damage resulting from the

stay; (2) hardship to parties if the suit goes forward; and (3) delivering justice in an efficient

manner. Carolina Cas. Ins. Co. v. Ott, No. 09-cv-5540-RJB, 2010 WL 1286821, at *3 (W.D.

Wash. Mar. 26, 2010) (citing Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)). A brief review of

these factors shows that a stay would be completely unwarranted in this case.

First, Zillow and Trulia are direct competitors. Trulia’s ongoing and unlicensed use of

Zillow’s patented innovation is a blatant attempt to ride Zillow’s coattails and seek Zillow’s hard-





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

earned profits and market share. In the face of this continued harm—for which Zillow has sought

injunctive relief—a stay would only exacerbate Zillow’s injuries. See Lockyer v. Mirant Corp.,

398 F.3d 1098, 1112 (9th Cir. 2005) (rejecting defendant’s request for stay where plaintiff sought

“injunctive relief against ongoing and future harm”).

Second, “the party seeking the stay ‘must make out a clear case of hardship or inequity’”

in proceeding with the case. See id. (quoting Landis, 299 U.S. at 255). Trulia fails to allege any

hardship in the event a stay is denied, and “being required to defend a suit, without more, does not

constitute a ‘clear case of hardship or inequity.’” Id.; see also Turner Broad. Sys., Inc. v.

Tracinda Corp., 175 F.R.D. 554, 556 (D. Nev. 1997) (“[A] pending Motion to Dismiss is not

ordinarily a situation that in and of itself would warrant a stay . . . .”).

Finally, a stay of proceedings would not improve “the orderly course of justice.” Landis,

299 U.S. at 254. This Court has rejected similar requests for stays pending appellate decisions,

correctly reasoning that such stays have a negligible impact on case efficiency:

To the extent that conservation of judicial resources favors a continued stay, resources will only be conserved if the Court of Appeals decides in Defendants’ favor. In the event that the Court of Appeal’s decision is adverse to the Defendants, there would be no conservation of judicial or litigant resources.

Nw. Coal. for Alts. to Pesticides v. U.S. Envtl. Prot. Agency, 2012 WL 2343279, at *5 (W.D.

Wash. June 20, 2012). In light of the foregoing, the Court should deny Trulia’s request for a stay.

V. Zillow Adequately Pled Contributory Infringement and Inducement

Trulia moves to dismiss Zillow’s indirect infringement claims, arguing that the claims are

“conclusory” and “threadbare.” Motion at 13. To the contrary, Zillow’s complaint easily

satisfies Federal Rule of Civil Procedure 8(a), which requires only a “short and plain statement of

the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice

of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

A. Zillow’s Complaint Satisfies the Elements of Indirect Infringement

To properly allege inducement of infringement, Zillow’s complaint must merely allege

“facts plausibly showing that [defendant] specifically intended [a third party] to infringe the

[‘674] patent, and knew that the [third party’s] acts constituted infringement.” In re Bill of

Lading Transmission and Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012). In

addition, to show contributory infringement, Zillow’s complaint need only include “facts that

allow an inference” that the defendant’s accused product “has no substantial non-infringing use.”

Id. at 1377. Zillow’s complaint contains ample factual matter to satisfy these requirements.

1. Knowledge and Specific Intent

The Federal Circuit recently held that post-filing knowledge of the patent satisfies the

knowledge element of a claim for inducement. See In re Bill of Lading, 681 F.3d at 1345. Thus,

Zillow has, at the very least, adequately pled knowledge of alleged inducement as of the date of

the complaint in this case. See Symantec Corp. v. Veeam Software Corp., No. 12-cv-00700-SI,

2012 WL 1965832, at *4 (N.D. Cal. May 31, 2012) (same).

Moreover, Zillow’s complaint explains that Zillow and Trulia are direct competitors and

that Zillow’s Zestimate innovation helped drive its very public success. Complaint ¶¶ 7, 9. This

direct competition establishes a “likelihood that Defendants had knowledge of existing patents in

that industry, including [Plaintiff’s].” Weiland Sliding Doors and Windows, Inc. v. Panda

Windows and Doors, LLC, No. 10-cv-677-JLS, 2012 WL 202664, at *4 (S.D. Cal. Jan. 23, 2012)

(holding that plaintiff satisfied knowledge element of indirect-infringement claim); see also

Global-Tech Applicances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2070-71 (2011).

Zillow has also pled specific intent. Specific intent to encourage another’s infringement is

demonstrated by any “active steps taken to encourage direct infringement, such as advertising an

infringing use or instructing how to engage in an infringing use . . . .” DSU Med. Corp. v. JMS





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Co., Ltd., 471 F.3d 1293, 1305 (Fed. Cir. 2006) (quoting Metro-Goldwyn-Mayer Studios, Inc. v.

Grokster, Ltd., 545 U.S. 913, 936 (2005)); see also Cal. Inst. of Computer Assisted Surgery, Inc.

v. Med-Surgical Servs., Inc., No. 10-05067-CW, 2011 WL 672709, at *5 (N.D. Cal. Feb. 16,

2011) (denying defendant’s motion to dismiss, stating “one can infer from information on

[Defendant’s] website, publicizing the technologies, [and] offering brochures describing the

products” that defendants had specific intent to encourage another’s infringement.”). Indeed, as

this Court has explained, “the Court may infer specific intent here from the allegations regarding

[Defendant’s] website and marketing materials . . . .” Medtrica Solutions, Ltd. v. Cygnus Med.,

LLC, No. 12-cv-538-RSL, 2012 WL 5726799, at *2 (W.D. Wash. Nov. 15, 2012).

Zillow’s complaint includes detailed quotations from Trulia’s website and blog, as well as

Trulia’s representations to the Securities and Exchange Commission, all of which actively

advertise, publicize, and instruct users to utilize the Trulia Estimates feature. These facts

demonstrate an obvious intent on the part of Trulia to induce infringement.

2. Direct Infringement by a Third Party

Trulia also argues that Zillow “fail[s] to allege direct infringement by any third party.”

Motion to Dismiss at 15. To state a claim for indirect infringement, “a plaintiff need not identify

a specific direct infringer if it pleads facts sufficient to allow an inference that at least one direct

infringer exists.” In re Bill of Lading, 681 F.3d at 1336 (citing Lucent Techs., Inc. v. Gateway,

Inc., 580 F.3d 1301, 1318 (Fed. Cir. 2009)). To the extent that Trulia will argue that Zillow’s

claims are indirect infringement as opposed to direct infringement by Trulia, Zillow’s complaint

alleges that Trulia’s website also highlights “agents, buyers and owners” who infringe Zillow’s

patent by “claim[ing] their homes and enhanc[ing] the profiles for those homes on Trulia.”

Complaint at 3, 4 (quoting Trulia’s website). While Zillow’s complaint does not allege a specific

direct infringer, its identification of an entire class of homeowners using Trulia Estimates makes





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

plain that “at least one direct infringer exists.” In re Bill of Lading, 681 F.3d at 1336. Apart from

Trulia’s direct infringement, to the extent that the user input renders infringement indirect, these

users have been identified by Zillow’s Complaint.

3. Lack of Noninfringing Uses Finally, Trulia argues that Zillow has failed to allege that Trulia Estimates have no

substantial noninfringing use. Motion to Dismiss at 15. But so long as the complaint supports

the reasonable inference that there is no noninfringing use, it need not explicitly allege the same.

[N]either party directly addresses whether Defendants’ products are capable of substantial noninfringing uses. Accepting as true the allegations of the [complaint], however, the Court infers that because Defendants’ products are “identical” to the products protected by the patents, they are not capable of any noninfringing use.

Weiland Sliding Doors, 2012 WL 202664, at *4 n.6 (denying defendant’s motion to dismiss).

In this case, Zillow’s Complaint alleges that Trulia “copied” Zillow’s Zestimate feature,

and that the resulting Trulia Estimates feature “looks like exactly the same thing as a Zestimate.”

Complaint at 4. The only use of the patented feature is to obtain and utilize homeowner input

regarding “recent sales of similar homes and home facts like number of bedrooms and bathrooms,

square footage, and more” in order to refine an automatic valuation—uses protected by Zillow’s

patent. Because the complaint alleges that Trulia Estimates are identical to Zillow’s patented

Zestimates, and because Trulia offers no argument to the contrary, the Court can easily infer that

Trulia Estimates have no substantial noninfringing use.

Based on the foregoing, Zillow’s complaint contains “factual content that allows the court

to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009). The complaint includes detailed “quotations from

[Defendant’s] websites, advertising, and industry publications” to demonstrate Trulia’s blatant

infringement—the exact factual material approved by the Federal Circuit in indirect infringement

pleadings. In re Bill of Lading, 681 F.3d at 1330. Trulia’s motion should thus be rejected.





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

B. Zillow’s Complaint Need Not Recite the Formal Legal Elements of a Claim Because Trulia’s challenge to the complaint’s factual allegations falls flat, Trulia

creatively argues the complaint is deficient for failing to recite “the elements required to state a

claim” for indirect infringement. Motion to Dismiss at 14 (emphasis added). But neither the

Federal Rules of Civil Procedure nor binding case law requires such a formal recitation.

As the Ninth Circuit has reiterated after Twombley and Iqbal, “[n]otice pleading requires

the plaintiff set forth in his complaint claims for relief, not causes of action, statutes or legal

theories.” Alvarez v. Hill, 518 F.3d 1152, 1157 (9th Cir. 2008). Indeed, in this circuit, a

plaintiff’s complaint “need not identify any particular legal theory under which recovery is

sought.” Crull v. GEM Ins. Co., 58 F.3d 1386, 1391 (9th Cir. 1995) (emphasis added).

Because Zillow’s complaint provides ample factual matter supporting a claim to relief

without an unnecessary recitation of formal elements, the Court should reject Trulia’s attempted

return to “the hyper-technical, code-pleading regime of a prior era.” Iqbal, 556 U.S. at 678.5

VI. Conclusion

For the foregoing reasons, Zillow respectfully requests that the Court deny Trulia’s

Motion to Dismiss.

Dated this 21st day of January, 2013.

By: /s/ Jordan Connors

Brooke A. M. Taylor, WA Bar No. 33190 E-Mail: [email protected] Jordan Connors, WA Bar No. 41649 E-Mail: [email protected] Jordan Talge, WA Bar No. 45612 E-Mail: [email protected]

5 If the Court finds deficiencies in Zillow’s pleadings, however, Zillow seeks leave to amend its complaint. See Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990).





1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

SUSMAN GODFREY L.L.P. 1201 Third Ave, Suite 3800 Seattle, WA 98101 Telephone: (206) 516-3880 Facsimile: (206) 516-3883 Counsel for Zillow, Inc.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ZILLOW’S OPPOSITION TO TRULIA’S MOTION TO DISMISS COMPLAINT FOR PATENT INFRINGEMENT – Page 1 Case No. 2:12-cv-01549-JLR



CERTIFICATE OF SERVICE

I hereby certify that on January 21, 2013, I electronically filed the foregoing with the

Clerk of the Court using the CM/ECF system, which will send notification to counsel of record.

By: /s/ Jordan Connors


zillow patent suit

Documents