Press Release December 18, 2019

CarMax Wins Dismissal of Patent Infringement Claims

Alston & Bird client CarMax Auto Superstores Inc. won a significant victory when the U.S. District Court for the District of Massachusetts dismissed with prejudice a claim for patent infringement by KCG Technologies LLC.

The complaint alleged that CarMax infringed U.S. Patent No. 9,671,955. Entitled “Virtual Smart Phone,” the patent applies to a mounted touchscreen that emulates a smartphone interface to give the driver a simple way of using his or her phone or other handheld device while driving. 

CarMax moved to dismiss the complaint on the grounds that the ‘955 patent is directed to patent-ineligible subject matter and that plaintiff allegations of direct, indirect, and willful infringement failed to meet the pleading requirements and therefore failed to state a claim for which relief can be granted.

In finding for CarMax, the court followed the U.S. Patent and Trademark Office’s interpretation of patent subject-matter eligibility arising from the U.S. Supreme Court decision in Alice Corp v CLS Bank. Under that construct, the court applied a two-step process: first, whether the claim was directed to a patent-ineligible concept – for example, a law of nature, a natural phenomenon, or an abstract idea – and if so, second, whether the elements of the claim, considered both individually and as an ordered combination, add enough to transform the nature of the claim into a patent-eligible application. 

Regarding step one, the court found that the “‘955 patent is drawn to the abstract idea of emulating the features of a smartphone or other handheld device on another screen.” The claims recited only the functionality of emulating a smartphone without, the court stated, describing or claiming “the means by which its desired function is to be achieved or implemented.” 

In step two of the patent ineligibility analysis, the court determined that the ‘955 patent claims “contain no inventive concept that would transform the abstract idea to which it is direct into patentable subject matter.” For that reason, the court found that the ‘955 patent did not claim any technological improvement or unconventional use.

Having determined that the claims of the ‘955 patent were drawn to ineligible subject matter, the court did not address CarMax’s argument that the plaintiff’s allegations of direct, indirect, and willful infringement failed to meet the pleading requirements and therefore failed to state a claim for which relief can be granted.

Representing CarMax in the matter is an Alston & Bird team led by partner Bob Lee and associate Ana Kim of the firm’s Patent Litigation Group.

The case is KCG Technologies LLC v. CarMax Auto Superstores Inc., et al., No. 1:19-cv-11101, in the U.S. District Court for the District of Massachusetts.
 
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