SUSAN ILLSTON, United States District Judge.
On December 2, 2014, the Court held a hearing on defendants' motions for summary judgment of invalidity of plaintiffs patents-in-suit under 35 U.S.C. § 101. For the reasons set forth below, the Court GRANTS defendants' motions for summary judgment.
On October 3, 2012, plaintiff Bascom Research, LLC ("Bascom") filed related actions for patent infringement against defendants Facebook, Inc. and LinkedIn Corporation under the Patent Act, 35 U.S.C. § 101 et seq.
Bascom accuses defendants of infringing four patents: U.S. Patent No. 7,389,241 (the '241 patent) (titled "Method for Users of a Network to Provide Other Users with Access to Link Relationships Between Documents"); U.S. Patent No. 7,111,232 (the '232 patent) ("Method and System for Making Document Objects Available to Users of a Network"); U.S. Patent No. 7,139,974 (the '974 patent) ("Framework for Managing Document Objects Stored on a Network"); and U.S. Patent No. 7,158,971 (the '971 patent) ("Method for Searching Document Objects on the Network"). FAC ¶¶ 6, 9, 12, 15. The '971 is a continuation-in-part of the '974, the '241 is a continuation-in-part of the '232, the '974 and '232 are both continuations-in-part of application No. 10/050/515, and all four patents claim priority to provisional applications filed in March 2001 and April 2001.
All four patents were issued to Thomas Layne Bascom. Id. The four patents-in-suit share substantially overlapping specifications. Each of the four patents contains summaries stating:
'974 at 3:30-52; '241 at 3:11-35; '971 at 4:36-58; '232 at 2:63-3:19. The following claim is representative:
'974 Claim '45.
During prosecution of the '971 patent, the Examiner rejected the claims based on 35 U.S.C. § 101 "because they merely recite a number of computing steps without producing any tangible result and/or being limited to a practical application within the technological arts." Dkt. 118-7 at 2-3. Bascom overcame these rejections by adding the words "computer-implemented" into the claims. Dkt. 118-22 at 10. In 2012, the Patent Office rejected all pending claims in a related Bascom patent application under § 101. Dkt. 118-23 at 2-3. The rejected claims were directed to selecting objects, creating link references, associating attributes, and storing them in link directories. Dkt. 118-24. Bascom did not challenge the PTO's rejection.
In the present cases, Bascom asserts claims for direct infringement under 35 U.S.C. § 271(a). FAC ¶ 33. Bascom alleges that defendants own and operate online social networking platforms that allow
FAC ¶¶ 31-32; LinkedIn FAC ¶¶ 32-33.
Bascom also alleges that defendants indirectly infringe the patents-in-suit pursuant to 35 U.S.C. § 271(b) "by instructing, directing and/or requiring others, including its users and developers, to perform all or some of the steps of the method claims, either literally or under the doctrine of equivalents, of the Patents-In-Suit." FAC ¶ 33.
Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party, however, has no burden to disprove matters on which the non-moving party will have the burden of proof at trial. The moving party need only demonstrate to the Court that there is an absence of evidence to support the non-moving party's case. Id. at 325, 106 S.Ct. 2548.
Once the moving party has met its burden, the burden shifts to the nonmoving party to "set forth, by affidavit or as otherwise provided in Rule 56, `specific facts showing that there is a genuine issue for trial.'" T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987) (citing Celotex, 477 U.S. at 324, 106 S.Ct. 2548). To carry this burden, the non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "The mere existence
In deciding a summary judgment motion, the Court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255, 106 S.Ct. 2505. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment." Id. However, conclusory, speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill Publ'g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir.1979).
Under § 282 of the Patent Act, issued patents are presumed to be valid. 35 U.S.C. § 282. As such, an alleged infringer asserting an invalidity defense pursuant to § 101 bears the burden of proving invalidity by clear and convincing evidence. Microsoft Corp. v. i4i L.P., ___ U.S. ___, 131 S.Ct. 2238, 2242, 180 L.Ed.2d 131 (2011).
As an initial matter, Bascom contends that the Court must conduct claim construction to determine the validity of the patents-in-suit. In response, defendants cite Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1273 (Fed.Cir.2012), for the proposition that "claim construction is not an inviolable prerequisite to a validity determination under § 101." Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1273 (Fed.Cir.2012). However, in Bancorp the Federal Circuit also stated "that 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 the claimed subject matter." Id. at 1273-74.
The Court finds that Bascom has not shown why claim construction is necessary to determine whether the patents claim patent-eligible subject matter. In any event, defendants state that they do not object to the Court assuming (for purposes of this motion only) the proposed constructions offered by Bascom. Bascom proposes the constructions of the following terms: "link relationship" means "a structure having one or more pointers connecting two or more document objects and identifying one or more link relationship attributes"; "link relationship attribute(s)" means "information describing ways in which two or more document objects are related"; "the link relationships are separate from the document objects" means "link relationships are stored in a different location from the document objects."
An invention is patent-eligible if it claims a "new and useful process, machine, manufacture, or composition of matter." 35 U.S.C. § 101. The Supreme Court has held that, by defining patentable subject matter with "such expansive terms ... Congress plainly contemplated that the patent laws would be given wide scope." Diamond v. Chakrabarty, 447 U.S. 303, 308, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980).
In Alice, the patents at issue "disclose[d] a computer-implemented system for mitigating `settlement risk' (i.e., the risk that only one party to a financial transaction will pay what it owes) by using a third-party intermediary." Alice, 134 S.Ct. at 2351-52.
The claims at issue relate to a computerized scheme for mitigating "settlement risk" — i.e., the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. In particular, the claims are designed to facilitate the exchange of financial obligations between two parties by using a computer system as a third-party intermediary. The intermediary creates "shadow" credit and debit records (i.e., account ledgers) that mirror the balances in the parties' real-world accounts at "exchange institutions" (e.g., banks). The intermediary updates the shadow records in real time as transactions are entered, allowing "only those transactions for which the parties' updated shadow records indicate sufficient resources to satisfy their mutual obligations." [CLS Bank Intern. v. Alice Corp. Pty.Ltd.] 717 F.3d 1269, 1285 (C.A.Fed.2013) (Lourie, J., concurring). At the end of the day, the intermediary instructs the relevant financial institutions to carry out the "permitted" transactions in accordance with the updated shadow records, ibid. thus mitigating the risk that only one party will perform the agreed-upon exchange.
Id. at 2352 (internal citation and footnote omitted). All of the claims were implemented using a computer. Id.
The Court set forth a two-step test for "distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts." Id. at 2355.
Id. at 2359.
Defendants move for summary judgment of invalidity pursuant to § 101. Defendants contend that Bascom's patents are invalid under the Alice framework because the claims (1) are directed to the abstract idea of identifying two documents and establishing a relationship between them, and (2) do not recite any transformative inventive concept beyond a generic computer implementation.
At step one of the Mayo/Alice test, a court must evaluate the patent claims "[o]n their face" and determine if the claims are "drawn" to one of the three "patent-ineligible concepts": laws of nature, natural phenomena, or abstract ideas. Alice, 134 S.Ct. at 2355. Defendants contend that Bascom's claims are drawn to the abstract idea of establishing relationships between document objects. According to defendants, establishing relationships between documents is a centuries-old concept that can also be performed by the human mind. Defendants argue that the idea of establishing relationships between documents dates back thousands of years as evidenced by the catalog system at the library of Alexandria and by Simon Greenleafs 1821 index that identified United States cases whose holdings had been overruled or limited by subsequent cases. See RUDOLF BLUM, KALLIMACHOS: THE ALEXANDRIAN LIBRARY AND THE ORIGINS OF BIBLIOGRAPHY 244 (1991) (describing Kallimachos' "catalog which, unlike a mere inventory, recorded not the scrolls available in the library, but all copies of works of Greek literature that were contained in them, with biographical data" on their authors) (Dkt.118-4); SIMON GREENLEAF, A COLLECTION OF CASES OVERRULED, DOUBTED, OR LIMITED IN THEIR APPLICATION (1821) (Dkt.118-6).
The "abstract ideas" exception to § 101 embodies "the longstanding rule that `[a]n idea of itself is not patentable.'" Alice, 134 S.Ct. at 2355; see also Le Roy v. Tatham, 55 U.S. (14 How.) 156, 175, 14 L.Ed. 367 (1852) ("A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented[.]"). For instance, in Bilski v. Kappos, 561 U.S. 593, 611, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010), the Supreme Court held that patent claims describing a method for hedging against the financial risk of price fluctuations were directed to an abstract idea. The claims recited "the basic concept of hedging, or protecting against risk[,] ... a fundamental economic practice long prevalent in our system of commerce." Id. The Court compared the Bilski patents to the patents invalidated in Gottschalk v. Benson, 409 U.S. 63, 72, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972), and Parker v. Flook, 437 U.S. 584, 594, 98 S.Ct. 2522,
Bascom attempts to distinguish its own patent claims by focusing on Bilski's "fundamental economic practice" language. Opp'n at 9. Bascom contends that the Supreme Court and the Federal Circuit have invalidated claims when they were directed to "building block[s] of the modern economy" or "squarely about creating a contractual relationship." Alice, 134 S.Ct. at 2350 (quoting Bilski, 561 U.S. at 599, 130 S.Ct. 3218); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed.Cir. 2014). Bascom argues that these types of claims are fundamentally different from Bascom's patents, which "narrowly claim a specific type of data structure for linking data," Opp'n at 8, namely the "link relationships" and "link directories" in which link relationships are stored separately from a document object and relate documents objects to one another.
Bascom likens its patents to the patents litigated in Helios Software, LLC v. SpectorSoft Corp., C.A. No. 12-081-LPS, 2014 WL 4796111, at *17 (D.Del. Sept. 18, 2014). In Helios, the District Court for the District of Delaware held that patents related to controlling computer network access and monitoring data associated with Internet sessions were not directed to an abstract idea. 2014 WL 4796111, at *17. The court found that the alleged infringer made "no effort to show that these ideas are fundamental truths or fundamental principles the patenting of which would pre-empt the basic tools of scientific and technological work." Id. Accordingly, Bascom asserts that there is no "fundamental truth," "fundamental economic practice," or "basic tool of scientific and technological work" at issue in its own patents. Opp'n at 9-10.
Bascom relies upon a narrow interpretation of the term "abstract idea." Abstract ideas are not limited to "fundamental truths," "fundamental economic practices," or "basic tools of scientific and technological work." See Alice, 134 S.Ct. at 2356 (rejecting the argument that abstract ideas are confined to "preexisting, fundamental truths"). While the Supreme Court has not precisely defined "abstract idea," lower courts since Alice have invalidated patents encompassing a broad range of abstract ideas beyond Bascom's proposed scope. See, e.g., Open Text S.A. v. Alfresco Software Ltd., No. 13-CV-04843-JD, 2014 WL 4684429, at *4 (N.D.Cal. Sept. 19, 2014) (invalidating computer patent based upon the abstract idea of "interacting with customers"); Comcast IP Holdings I, LLC v. Sprint Commc'ns Co. L.P., 55 F.Supp.3d 544, 547, No. CV 12-205-RGA, 2014 WL 3542055, at *3 (D.Del.2014) ("[T]he abstract idea at the heart of a [a patent for a telephony network optimization method] is the very concept of a decision"); Diet-Goal Innovations LLC v. Bravo Media LLC, 33 F.Supp.3d 271, 287, No. 13 CIV. 8391 PAE, 2014 WL 3582914, at *14 (S.D.N.Y.2014) (invalidating patent based upon "the abstract idea of meal planning"); see also Planet Bingo, LLC v. VKGS LLC, 576 Fed.Appx. 1005, 1008 (Fed.Cir.2014) (invalidating patent directed to "the abstract idea of managing/playing the game of Bingo").
The recent Ultramercial decision is instructive. In Ultramercial, the Federal Circuit affirmed the invalidity of a patent describing a method of distributing copyrighted media paid for by advertisers over the Internet. Ultramercial, 772 F.3d at 712. Applying Alice, the court held that
Id.; see also Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat. Ass'n, 776 F.3d 1343, 1347, 2014 WL 7272219, at *3 (Fed.Cir.2014) ("Applying Mayo/Alice step one, we agree with the district court that the claims of the asserted patents are drawn to the abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory. The concept of data collection, recognition, and storage is undisputedly well-known.").
Bascom's patents similarly describe "an abstraction" having no particular concrete or tangible form. Allowing users to generate relationships between document objects and storing those relationships separately from the document objects simply describes the abstract idea of creating, storing and using relationships between objects. As defendants illustrate at length, the concept of establishing and using relationships between documents is a common, age-old practice. Courts have found similar "commonplace and time-honored practices" to be abstract ideas. In Cogent Medicine, Inc. v. Elsevier Inc., 70 F.Supp.3d 1058, Case Nos. C-13-4479-RMW, C-13-4483, C-13-4486, 2014 WL 4966326 (N.D.Cal.2014), Judge Whyte recently invalidated a patent similar to the patents-in-suit. In Cogent, the representative claim recited:
A method for providing data to a user from one or more data sets, said method comprising:
Id. at 1061, 2014 WL 4966326 at *2. Judge Whyte found that the claims were directed to the "abstract idea of maintaining and searching a library of information. Given a database of information, the alleged invention catalogues the information and sets aside particular information that may be especially relevant based on the particular user." Id. at 1063, 2014 WL 4966326 at *4. Judge Whyte held that
Notably, the concept of establishing, storing and using associations between documents can also be performed mentally. The Supreme Court and the Federal Circuit have generally considered such "mental processes" to be unpatentable. See Benson, 409 U.S. at 67, 93 S.Ct. 253; CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1371 (Fed.Cir.2011) ("[M]ethods which can be performed mentally, or which are the equivalent of human mental work, are unpatentable abstract ideas[.]"). Bascom counters that its claims cannot be performed mentally because they require a computer network. However, "merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention." Alice, 134 S.Ct. at 2352.
The Court concludes that Bascom's patents are comparable to other computer-based patents involving the creation and organization of data that have been invalidated after Alice. Establishing relationships between document objects and making those relationships accessible is not meaningfully different from classifying and organizing data. In Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., the Federal Circuit invalidated a patent describing a "device profile" comprised of two sets of data (color information and spatial information) used to render a digital image. 758 F.3d 1344, 1349 (Fed.Cir. 2014). The court found that the method described in the patent claims was an abstract idea "because it describes a process of organizing information through mathematical correlations and is not tied to a specific structure or machine." Id. at 1350. "Without additional limitations, a process that ... manipulate[s] existing information to generate additional information is not patent eligible." Id. at 1351. Even Helios, upon which Bascom relies, suggested that the claims at issue may have described an abstract idea by encompassing "the ubiquitous use of the Internet or computers generally."
At step two of the Alice framework, the court considers the elements of
However, under Alice, implementation onto a generic computer alone "cannot transform a patent-ineligible abstract idea into a patent eligible invention." 134 S.Ct. at 2358. Thus, "if a patent's recitation of a computer amounts to a mere instruction to `implement' an abstract idea `on ... a computer,' that addition cannot impart patent eligibility." Id. (citing Mayo, 132 S.Ct. at 1301). Alice itself is instructive. After the Court held that patents describing a scheme for mitigating "settlement risk" were directed to an abstract idea, it also held that "[t]he introduction of a computer into the claims does not alter the analysis [of step two]." Id. at 2357. "Stating an abstract idea while adding the words `apply it' is not enough for patent eligibility." Id. at 2358. (Citations omitted.); see also Benson, 409 U.S. at 71-72, 93 S.Ct. 253 (merely implementing a mathematical formula on a digital computer is not a patentable application); Flook, 437 U.S. at 596, 98 S.Ct. 2522 (limiting an abstract idea to one field through a "post-solution application" does not make the claim patentable). This same principle is true for claims applying abstract ideas to the Internet. See Ultramercial 772 F.3d at 716 ("The claims' invocation of the Internet also adds no inventive concept[.]"); CyberSource, 654 F.3d at 1370 (implementation onto the Internet was not sufficient to transform an "unpatentable mental process" into patent-eligible subject matter).
Bascom contends that its claims "improve the operation of a computer" and "perform a transformation." Opp'n at 10, 12. However, considered individually and as an ordered combination, Bascom's claims amount to instructions to apply an abstract idea — i.e., the concept of establishing relationships between documents and making those relationships accessible to other users. See Digitech, 758 F.3d at 1349; Cogent, 70 F.Supp.3d at 1063, 2014 WL 4966326, at *4. The first step of representative claim 45 of the '974 patent is "creating one or more link directories for storing link relationships between document objects located on the network, wherein the one or more link relationships are separate from the document objects." '974 Claim 45. This is the abstract idea of organizing a set of relationships between documents and storing that information separate from the documents. The specifications describe the "link directories" as conventional tables or relational databases, which were known prior to Bascom's patents. See '974 at 11:34-12:35, 14:10-33; '971 at 12:65-17:49, '232at 11:11-40, 13:53-14:59; '241 at 11:11-40, 13:52-14:59; see also Microsoft Computer Dictionary (1991), at 295-96 ("a relational database uses matching values in two tables to relate information in one to information in the other. Microcomputer database products typically are relational databases.") (Dkt.122-2); "A Timeline of Database History" available at http://quickbase.intuit. com/articles/timeline-of-database-history, (Dkt.118-16); DietGoal Innovations LLC v. Bravo Media LLC, 33 F.Supp.3d at 286, No. 13 Civ. 8391(PAE), 2014 WL 3582914, at *13 ("a stored database" is "one of the
The remaining steps of '974 Claim 45 do not add anything to transform the abstract idea into a patent-eligible application. The second step of "creating a link relationship between a first document object located on the network and a second document object located on the network," recites the abstract concept of relating two documents applied in a generic and conventional network context. The third step, "assigning attributes describing the link relationship, wherein the attributes are stored with the link relationship," simply describes storing information about the link relationships, and the final step, "presenting the link relationship with one or more of the attributes describing the link relationship," only adds the act of "presenting." The other asserted claims similarly do not add transformative elements.
Bascom relies on a declaration from its expert, Dr. Craig Wills, to argue that the patents-in-suit claim more than an abstract idea. Dr. Wills states, inter alia,
Dkt. 121-2.
As an initial matter, the Court finds that Dr. Wills' analysis is largely conclusory. However, even accepting Dr. Wills' conclusions, they do not demonstrate that the asserted claims contain inventive elements that transform the abstract idea into a patent-eligible invention. Dr. Wills states that separating link relationships from documents allows the documents to be "more easily located." Id. ¶ 26.). However, "[e]fficient location of data is an unremarkable feature of a data storage system, especially in the computing age." Enfish v. Microsoft Corp., 56 F.Supp.3d 1167, 1176, No. 12-cv-07360-MRP-MRW, 2014 WL 5661456, at *7 (C.D.Cal.2014) (invalidating two patents for information management and database system because the "claims are addressed to the abstract purpose of storing, organizing, and retrieving memory in a logical table. This abstract purpose does not become tangible because it is necessarily limited to the technological environment of computers."). Dr. Wills does not show that the patents improve the functioning of any computer. Cf. Alice, 134 S.Ct. at 2359-60 ("the claims do not, for example, purport to improve the functioning of the computer itself. Nor do the effect an improvement in any other technology or technical field. Instead, the claims at issue amount to nothing significantly more than the instruction to apply the abstract idea using some unspecified generic computer.").
Bascom has also not shown that the patents require anything beyond generic and conventional computer structures and unspecified software programming. Dr. Wills' statement that the patents could not be implemented on a "standard computer" (Wills Decl. ¶ 29) is both unsupported by any evidence and directly contradicted by the patents themselves, which define a "computer" as a "general purpose digital computing device," as well as "any other device with a microprocessor and an operating system enabling the device to be connected to a network of other information processing and communications devices." '971 at 1:63-2:6. These devices include "mainframe computers, server computers, minicomputers, personal computers, laptop portable computers, handheld computers, personal digital assistants, intelligent wireless phones." Id. Further, even if Dr. Wills is correct that
The Court also notes that although Bascom argues that the Court must construe the claims prior to determining validity, Bascom has not shown why this is so, nor has Bascom advanced any argument showing why its proposed constructions are relevant to the validity analysis. Even if the Court adopted Bascom's proposed constructions, those constructions do not demonstrate that the patents are not directed to the abstract idea of establishing relationships between documents or that the patents contain transformative elements.
The Court rejects Bascom's assertion that additional limitations within its claims "meaningfully limits the invention." Opp'n at 19. Bascom argues that these limitations depend on the "context of the field and the invention at issue." Id. However, the mere implementation of an abstract idea to a computer or computer network does not supply a sufficient inventive concept. See Alice, 134 S.Ct. 2357; Benson, 409 U.S. at 71-72, 93 S.Ct. 253. In particular, the Supreme Court has explicitly warned against defining computer-based patents according to their usage. See Bilski, 561 U.S. at 610-11, 130 S.Ct. 3218 ("The prohibition against patenting abstract ideas `cannot be circumvented by attempting to limit the use of the formula to a particular technological environment' or adding `insignificant postsolution activity.'") (quoting Diehr, 450 U.S. at 191-92, 101 S.Ct. 1048). That computer-based limitations exist does not demonstrate an "inventive concept" that transforms Bascom's claims into patentable subject matter.
Accordingly, the Court concludes that the patents-in-suit are invalid under § 101.
For the foregoing reasons, the Court hereby GRANTS defendants' motions for summary judgment.