Corpus: 543,223 opinions · 3,177 judges · newest 2026-06-23 · expanding Coverage ↗
Opinion

govinfo:USCOURTS-casd-3_26-cv-00738-0

U.S. District Court for the Southern District of California · 2026-06-15

· GavelSight synced 2026-09-06 03:18:59

1 
26-cv-00738-H-BJW 
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 
 
 
 
 
 
 
 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF CALIFORNIA 
 
HOT SYSTEMS, LLC, a Nevada limited 
liability company, 
Plaintiff, 
v. 
SAN DIEGO ASSOCIATION OF 
GOVERNMENTS, a California public 
agency; and NEOLOGY, INC., a 
Delaware corporation, 
Defendants. 

 
ORDER DENYING DEFENDANTS’ 
MOTION TO DISMISS 
 
[Doc. No. 12.] 
 
On April 20, 2026, Defendants San Diego Association of Governments and 
Neology, Inc. filed a motion to dismiss Plaintiff Hot Systems, LLC’s complaint pursuant 
to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Doc. No. 12.) On 
May 21, 2026, Plaintiff filed a response in opposition to Defendants’ motion to dismiss. 
(Doc. No. 19.) On May 29, 2026, Plaintiff filed an amended response in opposition. (Doc. 
No. 22.) On June 1, 2026, the Court took the motion to dismiss under submission. (Doc. 
No. 23.) On June 3, 2026, Defendants filed their reply. (Doc. No. 24.) For the reasons 
below, the Court denies Defendants’ motion to dismiss. 
/ / / 
/ / / 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
1 of 12
 
2 
26-cv-00738-H-BJW 
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 
Background 
 The following factual background is taken from the allegations in Plaintiff’s 
complaint. Plaintiff is the legal owner by assignment of U.S. Patent Nos. 10,810,578 (“the 
’578 patent”) and 11,270,182 (“the ’182 patent) (collectively, “the asserted patents”). 
(Doc. No. 1, Compl. ¶ 3.) Plaintiff’s founder and CEO is the inventor of switchable toll 
transponder technology, including the asserted patents. (Id. ¶¶ 2–3.) Plaintiff alleges that 
Defendants have infringed or have contributed to the infringement of the asserted patents 
by manufacturing, advertising, selling, and offering to sell switchable toll transponder 
products and/or services, including the FasTrak Flex. (Id. ¶¶ 2, 18–20, 37, 49, 59.) 
 The asserted patents are related, have nearly identical specifications, and are both 
entitled “RFID Financial Device Including Mechanical Switch.” U.S. Patent No. 
10,810,578, at [54] (filed Oct. 20, 2020); U.S. Patent No. 11,270,182, at [54] (filed Mar. 8, 
2022). The asserted patents generally relate to “ the field of communication devices 
including radio frequency identification (RFID) tags.” ’182 Patent col. 2 ll. 20–21. 
The specification explains: 
RFID tags are typically small, flexible, and low profile devices that can 
be affixed to items for electronic tracking and information storage purposes. 
An RFID tag can be read by an RFID reader when the RFID tag is brought 
within a certain vicinity of the reader while the reader is broadcasting an 
appropriate signal. . . . 
RFID tags generate a return radio frequency signal that may include an 
encoded copy of information stored within the RFID tag. As RFID tags 
achieve more wide spread use they will become ubiquitous on forms of 
tagging, labeling, identification, and be inclu ded in personal and business 
effects, such as passports, driver ’s licenses, keys, cell phones, credit cards, 
PDAs, and so forth. For example, an RFID tag may be incorporated in a 
driver’s license to store personal information about the licensee or in a product 
label to track inventory. 
A problem with using RFID tags to store security, confidential and/or 
personal information is that an RFID reader can read any RFID tags that pass 
within its range. Even if data is encrypted, this creates a possibility of 
unauthorized access to the personal data and other information stored in the 
RFID tag. 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
2 of 12
 
3 
26-cv-00738-H-BJW 
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 col. 2 ll. 25–59. 
The asserted patents attempt to solve that problem by disclosing “ a remotely 
powered RFID (radio frequency identity) tag having an electronically controlled switch. ” 
Id. at col. 4 ll. 22 –24. In some embodiments of the invention, “when the switch is in an 
off state, the RFID tag will not transmit and when the switch is in an on state the RFID tag 
will transmit in response to an RF (radio frequency) signal. In some embodiments, the 
switch includes multiple on states in which different information or signals are transmitted 
responsive to the state of the switch.” Id. at col. 4 ll. 25–31. 
As an exemplary claim, independent claim 1 of the ’182 patent recites: 
A radio frequency identification (RFID) system comprising: 
an antenna; 
a switchable RFID tag configured to operate in both a first ON state and a 
second ON state, and to transmit different information in the first ON state 
relative to the second ON state; and 
a mechanical switch configured to change the RFID tag from the first ON state 
to the second ON state, wherein the antenna is configured to transmit the 
different information via a first radio frequency (RF) signal in the first ON 
state and a second RF signal in the second ON state, wherein the information 
transmitted in the first ON state indicates that the RFID tag is in the first ON 
state. 
Id. at col. 33 ll. 38–52. 
 By the present motion, Defendants move pursuant to Federal Rule of Civil Procedure 
12(b)(6) to dismiss Plaintiff’s complaint for failure to state a claim. (Doc. No. 12-1 at 6–
7.) Specifically, Defendants assert that Plaintiff fails to state claims for patent infringement 
against them because all the asserted claims in the asserted patents are directed to patent 
ineligible subject matter and, thus, are invalid under 35 U.S.C. § 101. (Id.) 
Discussion 
I. Legal Standards for a Rule 12(b)(6) Motion to Dismiss 
 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal 
sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
3 of 12
 
4 
26-cv-00738-H-BJW 
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 
failed to state a claim upon which relief can be granted. See Conservation Force v. Salazar, 
646 F.3d 1240, 1241 (9th Cir. 2011) (citing Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 
2001)). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading that states a claim 
for relief contain “a short and plain statement of the claim showing that the pleader is 
entitled to relief.” The function of this pleading requirement is 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)). 
 A complaint will survive a Rule 12(b)(6) motion to dismiss if it contains “enough 
facts to state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 
plausibility when the plaintiff pleads 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). “A pleading that offers ‘labels and conclusions’ or ‘a 
formulaic recitation of the elements of a cause of action will not do.’” Id. (quoting 
Twombly, 550 U.S. at 555) . “ Threadbare recitals of the elements of a cause of action, 
supported by mere conclusory statements, do not suffice. ” Id. “While legal conclusions 
can provide the framework of a complaint, they must be supported by factual allegations.” 
Id. at 679. Accordingly, dismissal for failure to state a claim is proper where the claim 
“lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 
Mendiondo v. Centinela Hosp. Med. Ctr. , 521 F.3d 1097, 1104 (9th Cir. 2008) ; see Los 
Angeles Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). 
 In reviewing a Rule 12(b)(6) motion to dismiss, a district court must “‘accept the 
factual allegations of the complaint as true and construe them in the light most favorable 
to the plaintiff.’” Los Angeles Lakers, 869 F.3d at 800 (quoting AE ex rel. Hernandez v. 
Cty. of Tulare , 666 F.3d 631, 636 (9th Cir. 2012) ). But a court need not accept “legal 
conclusions” as true. Iqbal, 556 U.S. at 678. “Further, it is improper for a court to assume 
the claimant “can prove facts which it has not alleged or that the defendants have violated 
the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. 
v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
4 of 12
 
5 
26-cv-00738-H-BJW 
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 
In addition, a court may consider documents incorporated into the complaint by 
reference and items that are proper subjects of judicial notice. See Coto Settlement v. 
Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). If the court dismisses a complaint for 
failure to state a claim, it must then determine whether to grant leave to amend. See Doe 
v. United States, 58 F.3d 494, 497 (9th Cir. 1995); Telesaurus VPC, LLC v. Power , 623 
F.3d 998, 1003 (9th Cir. 2010). 
II. Analysis 
 Defendants argue that Plaintiff’s claims for patent infringement should be dismissed 
because all of the asserted claims are directed to patent- ineligible abstract ideas and are, 
thus, invalid under 35 U.S.C. § 101. (Doc. No. 12-1 at 6–7, 16–27.) Further, Defendants 
contend that independent claims 1 and 14 of the ’182 patent should be used as 
representative claims to assess the validity of the asserted claims under § 101. (See id. at 
12–16.) 
 In response, Plaintiff contends that the challenged claims are not directed to an 
abstract idea; rather, they are directed to a specific and concrete technology improvement: 
the integration of a mechanical switch into a RFID toll transponder. (Doc. No. 22 at 1, 10–
17.) Plaintiff also challenges Defendants’ attempt to use two representative claims to 
challenge the validity of all of the asserted claims. (See id. at 8–10.) 
 A. Legal Standards Governing Patent Eligibility Under 35 U.S.C. § 101 
Section 101 of the Patent Act defines patent-eligible subject matter as “any new and 
useful process, machine, manufacture, or composition of matter, or any new and useful 
improvement thereof.” 35 U.S.C. § 101. The Supreme Court has “‘long held that this 
provision contains an important implicit exception[:] Laws of nature, natural phenomena, 
and abstract ideas are not patentable.’” Ass’n for Molecular Pathology v. Myriad Genetics, 
Inc., 569 U.S. 576, 589 (2013) (quoting Mayo Collaborative Servs. v. Prometheus Lab’ys, 
Inc., 566 U.S. 66, 70 (2012)). “This exception reflects the concern that patent law not 
inhibit further discovery by improperly tying up the future use of these building blocks of 
human ingenuity.” PersonalWeb Techs. LLC v. Google LLC , 8 F.4th 1310, 1314 (Fed. 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
5 of 12
 
6 
26-cv-00738-H-BJW 
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 
Cir. 2021) (internal quotation marks omitted) (quoting Alice Corp. v. CLS Bank Int’l, 573 
U.S. 208, 216 (2014)); see also CareDx, Inc. v. Natera, Inc., 40 F.4th 1371, 1376 (Fed. Cir. 
2022) (“These exceptions exist because monopolizing the basic tools of scientific work 
‘might tend to impede innovation more than it would tend to promote it.’” (quoting Mayo, 
566 U.S. at 71)). 
“The Supreme Court has established a two-step framework for evaluating patent 
eligibility under § 101.” Int’l Bus. Machines Corp. v. Zillow Grp., Inc. , 50 F.4th 1371, 
1377 (Fed. Cir. 2022) (citing Alice, 573 U.S. at 217). Under step one, the court 
“determine[s] whether the claim is ‘directed to’ a ‘patent-ineligible concept,’ such as an 
abstract idea.” Coop. Ent., Inc. v. Kollective Tech., Inc., 50 F.4th 127, 130 (Fed. Cir. 2022) 
(quoting Alice, 573 U.S. at 217). If so, the court proceeds to step two and “examine[s] ‘the 
elements of the claim to determine whether it contains an “inventive concept” sufficient to 
“transform” the claimed abstract idea into a patent-eligible application.’” Id. (quoting 
Alice, 573 U.S. at 221). Specifically, the court determines “whether the claim elements, 
individually and as an ordered combination, contain an inventive concept, which is more 
than merely implementing an abstract idea using ‘well- understood, routine, [and] 
conventional activities previously known to the industry.’” Id. (quoting Content Extraction 
& Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347– 48 (Fed. 
Cir. 2014)). 
 “Patent eligibility is a question of law that may involve underlying questions of fact. 
PersonalWeb, 8 F.4th at 1314; see Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir. 
2018). “Thus, patent eligibility may be resolved at the Rule 12 stage only if there are no 
plausible factual disputes after drawing all reasonable inferences from the intrinsic and 
Rule 12 record in favor of the non-movant.” Coop. Ent., 50 F.4th at 130 (collecting cases). 
“But ‘not every § 101 determination contains genuine dispute s over the underlying facts 
material to the § 101 inquiry.’ Indeed, that inquiry ‘may be, and frequently has been, 
resolved on a Rule 12(b)(6) or (c) motion where the undisputed facts, considered under the 
standards required by that Rule, require a holdin g of ineligibility under the substantive 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
6 of 12
 
7 
26-cv-00738-H-BJW 
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 
standards of law.’” PersonalWeb, 8 F.4th at 1314 (citations omitted). 
 The party challenging the validity of the asserted patents bears the burden of proof 
under the § 101 two- step framework. See Illumina, Inc. v. Ariosa Diagnostics, Inc. , 967 
F.3d 1319, 1328 (Fed. Cir. 2020); see also Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 
95 (2011) (“‘[T]he burden of establishing invalidity of a patent or any claim thereof shall 
rest on the party asserting such invalidity.’” (quoting 35 U.S.C. § 282)). Further, any fact 
pertinent to the § 101 eligibility analysis must be proven by clear and convincing evidence. 
See Berkheimer, 881 F.3d at 1368; see also Microsoft, 564 U.S. at 95 (holding that § 282 
requires that an invalidity defense “be proved by clear and convincing evidence”). 
 B. Step One of the § 101 Eligibility Analysis 
The Court begins its analysis of Defendants’ challenge to the validity of the asserted 
claims of the patents by analyzing step one of the § 101 two-step inquiry. Under step one, 
the court determines whether the asserted claims are “‘directed to’ a ‘patent-ineligible 
concept,’ such as an abstract idea.” Coop. Ent., 50 F.4th at 130 (quoting Alice , 573 U.S. 
at 217). The Federal Circuit has “‘approached the Step 1 directed to inquiry by asking 
what the patent asserts to be the focus of the claimed advance over the prior art. In 
conducting that inquiry, [courts] must focus on the language of the asserted claims 
themselves, considered in light of the specification.’” Yu v. Apple Inc., 1 F.4th 1040, 1043 
(Fed. Cir. 2021) (cleaned up) (quoting TecSec, Inc. v. Adobe Inc. , 978 F.3d 1278, 1292 
(Fed. Cir. 2020)); see also CardioNet, LLC v. InfoBionic, Inc , 955 F.3d 1358, 1372– 73 
(Fed. Cir. 2020) (“In determining what the claims are directed to and whether they are 
directed to an abstract idea, a court may well consult the plain claim language, written 
description, and prosecution history.”). The step one inquiry “presents a legal question that 
can be answered based on the intrinsic evidence.” CardioNet, 955 F.3d at 1372. 
The Federal Circuit has cautioned that the step one “directed to” inquiry does not 
“simply ask whether the claims involve a patent-ineligible concept, because essentially 
every routinely patent-eligible claim involving physical products and actions involve s a 
law of nature and/or natural phenomenon— after all, they take place in the physical world.” 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
7 of 12
 
8 
26-cv-00738-H-BJW 
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 
Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). Thus, courts must 
“be careful to avoid oversimplifying the claims by looking at them generally and failing to 
account for the specific requirements of the claims.” CardioNet, 955 F.3d at 1371; see In 
re TLI Commc’ns LLC Pat. Litig. , 823 F.3d 607, 611 (Fed. Cir. 2016). “Rather, the 
‘directed to’ inquiry applies a stage -one filter to claims, considered in light of the 
specification, based on whether ‘their character as a whole is directed to excluded subject 
matter.’” Enfish, 822 F.3d at 1335 (quoting Internet Patents Corp. v. Active Network, Inc., 
790 F.3d 1343, 1346 (Fed. Cir. 2015)). “If the focus of the claim is a specific and concrete 
technological advance, for example an improvement to a technological process or in the 
underlying operation of a machine, [the court’s] inquiry ends and the claim is eligible.” 
Adasa Inc. v. Avery Dennison Corp., 55 F.4th 900, 908 (Fed. Cir. 2022). 
Defendants assert that the representative claims are directed to the abstract idea of 
“processing and communicating selected options based on a user’s selection, such as for a 
financial transaction.” (Doc. No. 12- 1 at 1.) A review of the intrinsic record for the 
asserted patents shows that Defendants are incorrect. Instead, the asserted patents are 
directed to a switchable RFID tag, which is a specific and concrete technological advance. 
 The Federal Circuit has explained that a patent’s specification is often helpful in 
illuminating what a claim is directed to and what is the claimed advance over the prior art. 
Chamberlain Grp., Inc. v. Techtronic Indus. Co. , 935 F.3d 1341, 1346 (Fed. Cir. 2019) . 
The asserted patents’ specification explains that a problem with using prior art RFID tags 
to store confidential or personal information “is that an RFID reader can read any RFID 
tags that pass within its range. Even if data is encrypted, this creates a possibility of 
unauthorized access to the personal data and other information stored in the RFID tag. ” 
’182 Patent col. 2 ll. 54–59. The asserted patents aim to solve this problem with the prior 
art by disclosing a switchable RFID tag. See id. at col. 4 l. 21 to col. 5 l. 36; see also id. at 
col. 9 ll. 62–64 (explaining that prior art RFID tags did not include a switch), at [54] (“RFID 
Financial Device Including Mechanical Switch”). Thus, the specification of the asserted 
patents illustrates that the claimed inventions are directed to a switchable RFID tag device. 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
8 of 12
 
9 
26-cv-00738-H-BJW 
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 the claims are directed to a switchable RFID tag device is also supported by a 
review of the claim language. Independent claim 1 of the ’182 Patent recites a RFID 
systems comprising “a switchable RFID” and “a mechanical switch.” Id. at col. 33 ll. 38–
52. Similarly, independent claim 14 of the ’182 Patent recites a method, including the step 
of “setting a mechanical switch” where the “switch” is configured to selected between a 
plurality of ON states of a RFID tag. Id. at col. 34 ll. 18–24. As such, the intrinsic record 
of the asserted patents makes clear that the challenged claims are directed to a switchable 
RFID tag. Further, a switchable RFID tag is a specific and concrete technological advance 
to a mechanical device – not an abstract idea. See Adasa, 55 F.4th at 908 (explaining that 
when the claims focus “on a specific and concrete technological advance,” they are not 
directed to a patent-ineligible concept). 
 Defendants contend that the asserted patents do not claim any improvements or 
advancements to RFID tags. (Doc. No. 12-1 at 6–7, 18, 25.) That is incorrect. The intrinsic 
record explains that prior art RFIDs did not include switches, and including a switch in a 
RFID tag helps alleviate the problem in the prior art of possible unauthorized access to 
confidential and/or personal data.
1 See ’182 Patent col. 2 ll. 54–59, col. 9 ll. 62–64. Thus, 
a switchable RFID tag is a concrete improvement/advancement in RFID tag devices, and 
the way they operate. 
 Further, all of the case law cited by Defendants is easily distinguishable from the 
asserted patents in this case . (See Doc. No. 12-1 at 23–24.) In Smart Sys. Innovations, 
LLC v. Chicago Transit Auth. , the challenged claims were directed to the formation of 
financial transactions and not any specific concrete or technology advance. 873 F.3d 1364, 
 
1 In the complaint, Plaintiff alleges that the claimed inventions include “a variety of 
improvements related to the security and versatility of RFID identification and payment 
device.” (Doc. No. 1, Compl. ¶ 14.) In its opposition, Plaintiff contends that the claim 
switchable RFID tags also improve upon the prior art by providing “the ability to charge 
different amounts based on the occupancy of the vehicle which changes traffic patterns.” 
(Doc. No. 22 at 11.) 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
9 of 12
 
10 
26-cv-00738-H-BJW 
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 
1371 (Fed. Cir. 2017). The Federal Circuit noted that the asserted claims were not “directed 
to a new type of bankcard, turnstile, or database.” Id. at 1372. Similarly, in ChargePoint, 
Inc. v. SemaConnect, Inc. , the Federal Circuit noted that the patent’s specification never 
suggested “the charging station itself is improved from a technical perspective, or that it 
would operate differently than it otherwise could.” 920 F.3d 759, 768 (Fed. Cir. 2019). In 
W. View Rsch., LLC v. Bayerische Motoren Werke AG , the district court found that the 
claims were directed to an abstract idea, in part, because “[t]he physical components of the 
claims, such as an antenna or interrogator apparatus, a radio frequency device, a processing 
apparatus, a personal electronic device are generic descriptions of well-known components 
used to carry out th [e] abstract function.” 226 F. Supp. 3d 1071, 1078 (S.D. Cal. 2016) 
(“the claims recite known RFID tag and reader systems”). In contrast to those cases, the 
asserted patents in this case are directed to a new type of physical RFID tag device – one 
with a switch – that operates differently from prior art RFID tags in light of the inclusion 
of that switch in order to achieve a better result than the prior art – better protection against 
unauthorized access to confidential and/or personal data. 
 In Chamberlain Grp., Inc. v. Techtronic Indus. Co., 935 F.3d 1341, 1347 (Fed. Cir. 
2019), the “ only described difference between the prior art movable barrier operator 
systems and the claimed movable barrier operator system wa s that the status information 
about the system is communicated wirelessly.” In contrast, here, the difference between 
challenged claims and the prior art RFID tags is the inclusion of a switch – a concrete and 
tangible advancement to the device. 
In sum, the challenged claims of the asserted patents are directed to a specific and 
concrete technological advance – a switchable RFID tag. As such, the claims are not 
directed to an abstract idea. See Adasa, 55 F.4th at 908. Further, because the challenged 
claims are not directed to a patent-ineligible concept under step one of the § 101 inquiry, 
“the claims satisfy § 101 and [the Court] need not proceed to the second step. The claims 
are patent eligible under § 101.” CardioNet, 955 F.3d at 1368 (citation omitted); see Rapid 
Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1047 (Fed. Cir. 2016) (“If the answer 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
10 of 12
 
11 
26-cv-00738-H-BJW 
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 
[to the step one inquiry] is no, the inquiry is over: the claim falls within the ambit of § 
101.”). 
C. Alice Step Two 
Although the Court need not address step two of the Alice test, see CardioNet, 955 
F.3d at 1368, the challenged claims are also valid under step two of the Alice test. Under 
step two, the Court asks “whether the claims do significantly more than simply describe 
the abstract method and thus transform the abstract idea into patentable subject matter.” 
Affinity Labs, 838 F.3d at 1262 (cleaned up). At step two, the court determines “whether 
the claim elements, individually and as an ordered combination, contain an inventive 
concept, which is more than merely implementing an abstract idea using ‘well-understood, 
routine, [and] conventional activities previously known to the industry.’” Coop. Ent., 50 
F.4th at 130. 
Even if the challenged claims were directed to an abstract idea, the claims do not 
merely implement an abstract idea using well understood, routine, and conventional 
activities. The specification of the asserted patents explains that switchable RFID tags 
were not known in the prior art. ’182 Patent col. 9 ll. 62– 64. Thus, at the time of the 
invention, use of a switchable RFID tags was not well understood, routine, or conventional 
activity.
2 As such, step two of the Alice test also demonstrates that the challenged claims 
 
2 Defendants contend that the switch that is added the claimed switchable RFID tags 
is “an off-the-shelf mechanical switch.” ECF No. 12-1 at 7. Defendants have not provided 
the Court with any evidence showing this is true. Cf Berkheimer v. HP Inc. , 881 F.3d 
1360, 1368 (Fed. Cir. 2018) (“The question of whether a claim element or combination of 
elements is well-understood, routine and conventional to a skilled artisan in the relevant 
field is a question of fact. ”). Nor could they because a court generally cannot consider 
matters beyond the pleadings in deciding a motion to dismiss. See Khoja v. Orexigen 
Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018) (“Generally, district courts may not 
consider material outside the pleadings when assessing the sufficiency of a complaint under 
Rule 12(b)(6) of the Federal Rules of Civil Procedure. ”); Am. Contractors Indem. Co. v. 
United States, 570 F.3d 1373, 1376 (Fed. Cir. 2009) (“On a motion to dismiss, the court 
generally may not consider materials outside the pleadings.”). Further, even if a 
mechanical switch is a conventional piece, the Federal Circuit has explained: “‘[A]n 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
11 of 12
 
12 
26-cv-00738-H-BJW 
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 
are patent eligible under § 101. 
In sum, Defendants have failed to demonstrate that the claims of the asserted patents 
are invalid under § 101. As a result, the Court denies Defendants’ motion to dismiss. 
Conclusion 
For the reasons above, the Court denies Defendants’ Rule 12(b)(6) motion to dismiss 
Plaintiff’s complaint. Defendants must file their answers to Plaintiff’s complaint within 
fourteen (14) days from the date this order is filed. See Fed. R. Civ. P. 12(a)(4)(A). 
 IT IS SO ORDERED. 
DATED: June 15, 2026 
 
 MARILYN L. HUFF, District Judge 
 UNITED STATES DISTRICT COURT 
 
inventive concept can be found in the non-conventional and non- generic arrangement of 
known, conventional pieces.’” Realtime Adaptive Streaming L.L.C. v. Sling TV, L.L.C., 
113 F.4th 1348, 1357 (Fed. Cir. 2024). 
Case 3:26-cv-00738-H-BJW Document 25 Filed 06/15/26 PageID.<pageID> Page
12 of 12

Passage view · GavelSight