United States Court of Appeals 

for the Federal Circuit ______________________ 

SANDERLING MANAGEMENT LTD.,

Plaintiff-Appellant

v.

SNAP INC.,

Defendant-Appellee

______________________ 

2021-2173

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 2:21-cv-02324-GW-JC, 

Judge George H. Wu.

______________________ 

Decided: April 12, 2023

______________________ 

LAURA A. WYTSMA, Venable LLP, Los Angeles, CA, argued for plaintiff-appellant. Also represented by TIMOTHY 

J. CARROLL, Chicago, IL. 

 STEVEN SCHORTGEN, Sheppard Mullin Richter & 

Hampton LLP, Dallas, TX, argued for defendant-appellee. 

Also represented by JENNIFER AYERS; TODD E. LUNDELL, 

Costa Mesa, CA; JESSE A. SALEN, KARIN DOUGAN VOGEL, 

San Diego, CA. 

 ______________________ 

Before CHEN, CUNNINGHAM, and STARK, Circuit Judges.

Case: 21-2173 Document: 49 Page: 1 Filed: 04/12/2023
2 SANDERLING MANAGEMENT LTD. v. SNAP INC. 

STARK, Circuit Judge. 

Sanderling Management Ltd. (“Sanderling”) appeals 

from the district court’s dismissal of Sanderling’s patent 

infringement suit against Snap Inc. (“Snap”) due to the asserted claims’ lack of patent-eligible subject matter under 

35 U.S.C. § 101 (“Section 101”). Sanderling also asks us to 

review the district court’s denial of its motion for leave to 

amend its complaint. We affirm.

I 

Sanderling owns U.S. Patent Nos. 9,355,412 (the “’412 

patent”), 9,639,866 (the “’866 patent”), and 10,108,986 (the 

“’986 patent”). The ’412, ’866, and ’986 patents, all sharing 

the title “Dynamic Promotional Layout Management and 

Distribution Rules,” are directed to a method using distribution rules to load digital image branding functions to users when certain conditions are met. The patents share a 

common specification, which describes the digital image 

branding function as a transformation, using, for example, 

an icon or a filter, that displays in a client terminal for the 

user to apply to a digital image. See ’412 patent 5:64-67; 

’866 patent 6:7-10; ’986 patent 6:7-10. A distribution rule 

“is a rule used in determining how to target a group of end 

users, for instance, a rule that determines that only a group 

of end users having certain characteristics and/or match a 

certain requirement.” ’412 patent 6:3-8; ’866 patent 6:13-

16; ’986 patent 6:13-16. 

The district court viewed claim 1 of each patent as representative of all the claims in that entire patent. Although Sanderling initially objected to treating any claims 

as representative, it has not appealed the district court’s 

decision on this issue.1 For our purposes, claim 1 of the 

1 As we have previously stated, “[c]ourts may treat a 

claim as representative in certain situations, such as if the 

patentee does not present any meaningful argument for 

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SANDERLING MANAGEMENT LTD. v. SNAP INC. 3

’412 patent is representative of all the claims involved in 

this appeal, and it recites the following: 

A computerized method of distributing a digital 

image processing function, said computerized 

method comprising:

using at least one server having at least one 

hardware processor and over a network to access 

a database storing at least one digital image processing function associated with at least one distribution rule defining a geographic location; 

receiving, over said network, a Global Positioning System (GPS) location indication from each 

of a plurality of mobile devices, each said location indication is determined according to a GPS 

module executed by one of said plurality of mobile devices; 

the distinctive significance of any claim limitations not 

found in the representative claim or if the parties agree to 

treat a claim as representative.” Berkheimer v. HP, Inc., 

881 F.3d 1360, 1365 (Fed. Cir. 2018). Here, the district 

court rejected Sanderling’s “generalized objections” to 

Snap’s representative claim contentions, objections which 

consisted of nothing more than assertions that Snap’s approach was “improper” and “premature” because “[t]here 

are likely to be [unspecified] claim construction arguments” later in the litigation. Appx8, 237. District courts 

have discretion to require parties litigating Section 101 motions to identify representative claims and to articulate 

why (or why not) claims are representative (including by 

explaining how a limitation missing from a purportedly 

representative claim could make a material impact to the 

Section 101 analysis). 

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4 SANDERLING MANAGEMENT LTD. v. SNAP INC. 

matching, using said at least one hardware processor, each said GPS location indication with 

said geographic location; and 

automatically forwarding, over said network 

and in response to receiving said Global Position 

System (GPS) location indication, said at least 

one digital image processing function to at least 

one mobile device of said plurality of mobile devices, said at least one mobile device having a 

respective said GPS location indication which 

matches said geographic location; 

wherein said at least one image processing function is set to be used by an application executed 

on said at least one mobile device to process a 

digital image designated at said at least one mobile device to create an output digital image.

’412 patent cl. 1; see also Appellee Resp. Br. at 6-8 (showing 

similarity of claim 1 of ’412, ’866, and ’986 patents). 

Sanderling sued Snap in the Northern District of Illinois, alleging infringement of every claim of the three asserted patents. Snap moved to transfer and to dismiss 

under Federal Rule of Civil Procedure 12(b)(6). The Illinois 

district court’s standing order – which has not been challenged in either the district court or here – put Sanderling 

to the choice of either amending its complaint or responding to the motion. Sanderling chose to respond to the motion, and thereafter the court transferred the case to the 

Central District of California. That court ultimately 

granted Snap’s motion to dismiss with prejudice and denied Sanderling’s request for leave to amend its complaint, 

a request Sanderling made for the first time at the hearing 

on Snap’s motion. Sanderling moved for reconsideration, 

which the district court denied. The district court entered 

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SANDERLING MANAGEMENT LTD. v. SNAP INC. 5

its judgment on July 21, 2021, and Sanderling timely appealed.2

II

When reviewing a district court decision on a motion to 

dismiss or a motion to amend, we apply the same standard 

of review as the applicable regional circuit. See Nalco Co. 

v. Chem-Mod, LLC, 883 F.3d 1337, 1346 (Fed. Cir. 2018)

(motion to dismiss); Simio, LLC v. FlexSim Software 

Prods., 983 F.3d 1353, 1358 (Fed. Cir. 2020) (motion to 

amend). The Ninth Circuit reviews Rule 12(b)(6) dismissals for failure to state a claim de novo, construing all allegations of material fact in the light most favorable to the 

nonmoving party. See OIP Techs., Inc. v. Amazon.com, 

Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015); McShannock v. 

JP Morgan Chase Bank NA, 976 F.3d 881, 886-87 (9th Cir. 

2020). The Ninth Circuit reviews “the denial of leave to 

amend for an abuse of discretion, but [it] reviews the question of futility of amendment de novo.” B&G Foods N. Am., 

Inc. v. Embry, 29 F.4th 527, 534 (9th Cir. 2022). 

Patent eligibility is governed by 35 U.S.C. § 101, which 

provides that “[w]hoever 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.” “Laws of nature, natural phenomena, and abstract ideas” are, however, “an important 

implicit exception” to Section 101. Alice Corp. Pty. Ltd. v. 

CLS Bank Int’l, 573 U.S. 208, 216 (2014). Accordingly, Alice directs us to determine whether a patent claims patentineligible subject matter in two steps: first we “determine 

whether the claims at issue are directed to one of those 

2 The district court had jurisdiction pursuant to 28 

U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. 

§ 1295(a)(1).

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6 SANDERLING MANAGEMENT LTD. v. SNAP INC. 

patent-ineligible concepts” (“step one”); and, if so, we next 

search for an “inventive concept” by “consider[ing] the elements of each claim both individually and as an ordered 

combination to determine whether the additional elements 

transform the nature of the claim into a patent-eligible application” (“step two”). Id. at 217 (internal quotation marks 

omitted). 

“Patent eligibility under 35 U.S.C. § 101 is ultimately 

an issue of law we review de novo,” although “[t]he patent 

eligibility inquiry may contain underlying issues of fact.” 

Berkheimer v. HP, Inc., 881 F.3d 1360, 1365 (Fed. Cir. 

2018). Section 101 disputes “may be resolved on a Rule 

12(b)(6) [or Rule 12(c)] motion when there are no factual 

allegations that, taken as true, prevent resolving the eligibility as a matter of law.” Uniloc USA, Inc. v. LG Elecs. 

USA, Inc., 957 F.3d 1303, 1306 (Fed. Cir. 2020) (internal 

quotation marks omitted). In particular, at step two of the 

Alice test, “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.” 

Berkheimer, 881 F.3d at 1368. However, of course, “not 

every § 101 determination contains genuine disputes over 

the underlying facts material to the § 101 inquiry.” Id.

III

A 

Considering the claims as a whole at step one of the

Alice test, we reach the same conclusion as the district 

court: the claims are directed to an abstract idea. Typically, as is true here, the step one analysis for computerrelated inventions requires us to “ask whether the claims 

are directed to an improvement to computer functionality 

versus being directed to an abstract idea.” Enfish, LLC v. 

Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). The 

claims of the asserted patents are not directed to a specific 

improvement in computer functionality but, instead, to the 

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SANDERLING MANAGEMENT LTD. v. SNAP INC. 7

use of computers as a tool; here, a tool to identify when a 

condition is met and then to distribute information based 

on satisfaction of that condition. As the district court articulated, in a formulation we agree with, the claims are 

directed to the abstract idea “‘of providing information – in 

this case, a processing function – based on meeting a condition,’ e.g., matching a GPS location indication with a geographic location.” Appx11. Even though the information 

being distributed is of a particular variety – here, digital 

imaging processing based on a distribution rule that determines when a condition is met – distribution of information 

is an abstract idea. See Intell. Ventures I LLC v. Cap. One 

Bank, 792 F.3d 1363, 1369 (Fed. Cir. 2015) (“Providing this 

minimal tailoring – e.g., providing different newspaper inserts based on the location of the individual – is an abstract 

idea.”).

Sanderling argues that the district court erred in reading the claims “at such a high level of abstraction . . . untethered from the [claim] language.” Appellant Br. at 27. 

Sanderling analogizes its claims to those we upheld in 

McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 

1299, 1313 (Fed. Cir. 2016), where we cautioned that courts 

“‘must be careful to avoid oversimplifying the claims’ by . . . 

failing to account for the[ir] specific requirements.” We do 

not agree with Sanderling’s criticism of the district court 

nor with its comparison. In McRO, we found that patents 

for automatic animation of lip synchronization and facial 

expressions of 3D animated characters were not directed to 

an abstract idea. Those claims were, instead, directed to 

eligible subject-matter because they provided “a combined 

order of specific rules that render[ed] information into a 

specific format.” Id. at 1315. The claims of the asserted 

patents here, by contrast, have a “distribution rule” that

merely receives, matches, and then distributes the corresponding function based on the user’s location, a much 

more generic set of steps than McRO’s specific claim language. 

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8 SANDERLING MANAGEMENT LTD. v. SNAP INC. 

Sanderling also argues that the district court erred at 

step one by failing to construe claim terms. “[C]laim construction is not an inviolable prerequisite to a validity determination under § 101.” Bancorp Servs. L.L.C. v. Sun 

Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1273 (Fed. 

Cir. 2012). If claims are directed to ineligible (or eligible) 

subject matter under all plausible constructions, then the 

court need not engage in claim construction before resolving a Section 101 motion.3 In aid of determining whether 

a particular motion requires claim construction before disposition of the motion, a district court is free to require the 

party asking for construction to provide an actual proposed 

construction, to demonstrate that its construction is not 

frivolous, and to articulate how adoption of the construction would materially impact the analysis at step one 

(and/or at step two). Here, while Sanderling identified 

terms it wanted the district court to construe before deciding Snap’s motion, Sanderling failed to provide proposed 

constructions for those terms.4 Sanderling also failed to 

explain why any proposed constructions were not frivolous 

or how its constructions would make any difference to the 

Alice analysis. Thus, the district court did not err by 

3 When a non-moving party proposes a construction,

“the court must proceed by adopting the non-moving 

party’s constructions, or the court must resolve the disputes to whatever extent is needed to conduct the § 101 

analysis, which may well be less than a full, formal claim 

construction.” Aatrix Software, Inc. v. Green Shades Software Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018) (internal 

citation omitted). 

4 Sanderling sought construction of “distribution 

rule” and “few seconds or less” (which does not appear in 

claim 1 of any of the asserted patents). It also now contends that the term “dynamic” needs construction, a term 

that does not appear in any of the claims. 

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resolving the motion to dismiss without first undertaking 

claim construction. See Cleveland Clinic Found. v. True 

Health Diagnostics LLC, 859 F.3d 1352, 1360 (Fed. Cir. 

2017) (affirming grant of motion to dismiss not preceded by 

claim construction where patentee “provided no proposed 

construction of any terms or proposed expert testimony 

that would change the § 101 analysis”).5

Accordingly, we conclude that the claims at issue in 

this appeal are directed to an abstract idea within the 

meaning of Alice. We will proceed to step two. 

B 

At the second step of the Alice inquiry, we must “look 

to see whether there are any ‘additional features’ in the 

claims that constitute an ‘inventive concept.’” Intell. Ventures I LLC v. Cap. One Fin. Corp., 850 F.3d 1332, 1341

(Fed. Cir. 2017). Such inventive features must be more 

than “well-understood, routine, conventional activity.” Id. 

Having undertaken this effort, we again agree with the district court: the elements of the representative claim, individually and as an ordered combination, do not constitute 

an inventive concept. 

“If a claim’s only ‘inventive concept’ is the application 

of an abstract idea using conventional and well-understood 

techniques, the claim has not been transformed into a patent-eligible application of an abstract idea.” BSG Tech 

5 Sanderling states that the day before argument on 

Snap’s motion, Snap “accused plaintiff of relying on ‘phantom unclaimed limitations,’” such as “dynamic loading,” 

and “[t]his argument alone should have precluded consideration of the motion to dismiss.” Appellant Br. at 41. 

Sanderling is wrong. The district court correctly concluded 

that Sanderling failed to “explain where [‘dynamic loading’] is found in the claims or why it would not just be more 

of the same abstract idea.” Appx27. 

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10 SANDERLING MANAGEMENT LTD. v. SNAP INC. 

LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290-91 (Fed. Cir. 

2018). The distribution rule is just that: the application of 

the abstract idea using common computer components. 

See, e.g., ’412 patent 7:30-34 (“[T]he term client terminal 

refers to any network connected device, including, but not 

limited to, personal digital assistants (PDAs), tablets, electronic book readers, handheld computers, cellular phones, 

personal media devices (PMDs), smart phones, and/or the 

like.”); id. 12:54-55 (noting that client terminal may include processor and main memory); id. cl. 1 (claiming use 

of “server,” “hardware processor,” and “mobile device”). 

“[T]he invocation of ‘already-available computers that are 

not themselves plausibly asserted to be an advance . . . amounts to a recitation of what is well-understood, routine, and conventional.’” Customedia Techs., 

LLC v. Dish Network Corp., 951 F.3d 1359, 1366 (Fed. Cir. 

2020). Sanderling’s contention that the claims improve 

“scalability and speed” is unavailing; even if true, “claiming 

the improved speed or efficiency inherent with applying the 

abstract idea on a computer [does not] provide a sufficient 

inventive concept.” Intell. Ventures I, 792 F.3d at 1367.

Sanderling argues that fact disputes should have precluded the district court from granting Snap’s motion to 

dismiss. Sanderling failed, however, to timely identify, 

prior to the district court’s ruling on the motion, any specific fact disputes. The district court was correct to conclude that it “is not required to accept Plaintiff’s 

generalized assertions that factual considerations about 

the state of the art preclude a decision at the pleadings 

stage.” 6 Appx26.

6 It is within a district court’s discretion to require a 

party opposing a Rule 12 motion based on Section 101 to 

identify, and articulate the significance of, specific fact disputes that purportedly make granting the motion improper. A patentee’s failure to do so should, as here, 

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Finally, Sanderling contends that the prosecution histories of the three patents-in-suit demonstrate that the 

claims contain an inventive concept. For instance, Sanderling points to evidence that the Patent Office concluded, in 

allowing the ’866 patent, that the claimed inventions improve mobile device technology itself. Appellant Br. at 29-

30 (citing Appx465). Sanderling further suggests that the 

district court’s “marginaliz[ation]” of the prosecution history deprived its patents of their statutory presumption of 

validity and improperly put the burden of proof on Sanderling, the party opposing the motion to dismiss. Our review 

of the record persuades us that the district court committed 

none of these alleged errors. There is no indication the district court failed to presume the patents were valid. And 

courts are not required to defer to Patent Office determinations as to eligibility. See OIP Techs., 788 F.3d at 1362 

(“Patent eligibility under 35 U.S.C. § 101 is an issue of law 

reviewed de novo.”).

Thus, the asserted claims fail both steps of the Alice

inquiry. The claims are patent ineligible. 

IV 

In the Ninth Circuit, “[a]lthough leave to amend should 

be given freely, a district court may dismiss without leave 

where a plaintiff’s proposed amendments would fail to cure 

the pleading deficiencies and amendment would be futile.” 

Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 

1041 (9th Cir. 2011). The Ninth Circuit reviews a district 

court’s conclusion that amendment would be futile de novo. 

See Juniper Networks, Inc. v. Shipley, 643 F.3d 1346, 1352 

(Fed. Cir. 2011) (“Under Ninth Circuit law, dismissal with 

prejudice is only appropriate when it is clear on de novo 

preclude the court from denying the motion simply based 

on a vague pronouncement to the effect that “a factual dispute exists.”

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12 SANDERLING MANAGEMENT LTD. v. SNAP INC. 

review that the complaint could not be saved by amendment.”) (internal quotation marks omitted).

Applying de novo review, we agree with the district 

court that Sanderling’s proposed amendment (which was 

only submitted after the court granted the motion to dismiss, and done so only in connection with the motion for 

reconsideration) would have been futile. No amendment to 

a complaint can alter what a patent itself states. In this 

case, then, our agreement with the district court as to what 

the patent discloses, and our agreement with the court’s 

application of the Alice test, leads inexorably to the conclusion that amendment of the complaint would have been futile. Sanderling’s proposed amendment merely sought to 

add conclusory statements that the claimed steps were not 

well-known, routine, and conventional. The district court 

was not required to credit such conclusory allegations. See 

In re Tracht Gut, LLC, 836 F.3d 1146, 1150 (9th Cir. 2016) 

(“[T]he trial court does not have to accept as true conclusory allegations in a complaint . . . .”).

Nothing about the proposed amendment would have 

cured the deficiencies in the original complaint. Therefore, 

the district court did not err in finding amendment futile 

and denying Sanderling’s motion for reconsideration. 

V 

We have considered Sanderling’s remaining arguments 

and find them unpersuasive. For the foregoing reasons, we 

affirm the district court’s decision.

AFFIRMED

COSTS

No costs.

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