HAYWOOD S. GILLIAM, JR., United States District Judge.
On March 4, 2014, Plaintiff BrightEdge Technologies, Inc. ("BrightEdge") brought this patent infringement action against Defendants Searchmetrics, GmbH. and Searchmetrics, Inc. (collectively, "Searchmetrics"). See Dkt. No. 1. The operative complaint asserts infringement of United States Patent Nos. 8,135,706 ("the '706 Patent"), 8,478,700 ("the '700 Patent"), 8,478,746 ("the '746 Patent"), 8,577,863 ("the '863 Patent"), and 8,671,089 ("the '089 Patent") (collectively, "the Asserted Patents"). Dkt. No. 154 ("Compl.") ¶ 5. The Asserted Patents relate to search engine optimization ("SEO"), a process by which an entity can enhance its online presence. See id.
On October 18, 2017, Defendants moved for judgment on the pleadings, asserting lack of patent-eligible subject matter under 35 U.S.C. § 101. Dkt. No. 173 ("Mot."). On November 8, 2017, Plaintiff responded. Dkt. No. 183 ("Opp."). Defendants replied on November 20, 2017. Dkt. No. 187 ("Reply"). The Court held a hearing on December 14, 2017. See Dkt. No. 201. After careful consideration, the Court
Under Federal Rule of Civil Procedure ("Rule") 12(c) a party may move for judgment on the pleadings "[a]fter the pleadings are closed — but early enough not to delay trial." "Judgment on the pleadings is proper when, taking all allegations in the pleading as true, the moving party is entitled to judgment as a matter of law." Stanley v. Trustees of Cal. State Univ., 433 F.3d 1129, 1133 (9th Cir. 2006). "Rule 12(c) is functionally identical to Rule 12(b)(6) and ... the same standard of review applies to motions brought under either rule." Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011) (quotation omitted). The Court will "accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
Patent invalidity under section 101 presents a question of law. In re Roslin Inst. (Edinburgh), 750 F.3d 1333, 1335 (Fed. Cir. 2014). "[A] district court may resolve the issue of patent eligibility under Section 101 by way of a motion for judgment on the pleadings." Papst Licensing GmbH & Co. KG v. Xilinx Inc., 193 F.Supp.3d 1069, 1078 (N.D. Cal. 2016), aff'd, 684 Fed.Appx. 971 (Fed. Cir. 2017). Accordingly, claim construction is not required prior to the disposition of Defendants' motion. See Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d 1343, 1349 (Fed. Cir. 2014) (affirming grant of dispositive motion prior to claim construction); accord Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 718-20 (Fed. Cir. 2014).
Plaintiff contends that Defendants must show patent-ineligibility by "clear and convincing" evidence. Opp. at 7. This Court and others have rejected that argument, noting the absence of Federal Circuit or Supreme Court authority applying that standard to section 101 validity issues. See OpenTV, Inc. v. Apple, Inc., No. 14-CV-01622-HSG, 2015 WL 1535328, at *3 (N.D. Cal. Apr. 6, 2015) (citing Alice Corp. Pty. v. CLS Bank Int'l, ___ U.S. ___, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014); Ultramercial, Inc., 772 F.3d at 709; DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014)); see also Papst Licensing GmbH & Co. KG, 193 F.Supp.3d at 1079 ("Several courts have concluded that a heightened burden of proof makes little sense in the context of a motion to dismiss or motion for judgment on the pleadings, and therefore declined to apply the clear and convincing evidence standard."). "[W]hile a presumption of validity attaches in many contexts, no equivalent presumption of eligibility applies in the section 101 calculus." Ultramercial, Inc., 772 F.3d at 721 (Mayer, J., concurring) (internal citation omitted). "Although the Supreme Court has taken up several section 101 cases in recent years, it has never mentioned — much less applied — any presumption of eligibility." Id. at 720-21.
Because the section 101 determination entails an examination of the claims on their face, rather than the weighing of evidence, it is unclear how a heightened evidentiary standard is applicable. Notwithstanding this arguable ambiguity, "[n]o Supreme Court or Federal Circuit post-Alice decision has definitively ruled on whether the clear and convincing standard applies when evaluating patent-eligible subject matter at the motion to dismiss stage." Huawei Techs., Co., Ltd. v. Samsung Elecs. Co., Ltd., No. 3:16-cv-02787, 2016 WL 6834614, at *5 (N.D. Cal. Nov. 21, 2016). Whichever standard applies, the Court finds for the reasons detailed below that Defendants have met their burden of proving invalidity.
Section 101 of the Patent Act describes the scope of patentable subject matter as encompassing "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C. § 101. It is well settled that laws of nature, natural phenomena, and abstract ideas are excluded from the universe of patentable subject matter. See Alice Corp. Pty., 134 S.Ct. at 2354. These categories are not patent-eligible because "they are the basic tools of scientific and technological work," which are "free to all men and reserved exclusively to none." Mayo Collaborative Servs. v. Prometheus Labs., 566 U.S. 66, 132 S.Ct. 1289, 1293, 182 L.Ed.2d 321 (2012) (citations omitted). Allowing patent claims for laws of nature, natural phenomena, and abstract ideas would "tend to impede innovation more than it would tend to promote it," thereby thwarting the primary object of the patent laws. Id. at 1293. However, the Supreme Court has also recognized the need to "tread carefully in construing this exclusionary principle lest it swallow all of patent law." Alice Corp. Pty., 134 S.Ct. at 2354.
The Supreme Court and Federal Circuit have articulated a two-part test for determining whether a claim's subject matter is patent-eligible. First, a court "determine[s] whether a claim is `directed to' a patent-ineligible abstract idea." Content Extraction & Transmission LLC, 776 F.3d at 1346-47 (citing Mayo Collaborative Servs., 132 S.Ct. at 1296-97). If so, the Court then "consider[s] the elements of the claim — both individually and as an ordered combination — to assess whether the additional elements transform the nature of the claim into a patent-eligible application of the abstract idea." Id. at 1347. "This is the search for an `inventive concept' — something sufficient to ensure that the claim amounts to `significantly more' than the abstract idea itself." Id. (quoting Mayo Collaborative Servs., 132 S.Ct. at 1294).
Two recent decisions of the Federal Circuit shed particular light on the Alice inquiry as applied to computer-related technology. In Enfish, LLC v. Microsoft Corp., the Federal Circuit found it "relevant to ask whether the claims are directed to an improvement in computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis." 822 F.3d 1327, 1335 (Fed. Cir. 2016). "[T]he `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.'" Id. (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). As set forth in Enfish, the key question is "whether the focus of the claims is on the specific asserted improvement in computer capabilities ... or, instead, on a process that qualifies as an `abstract idea' for which computers are invoked merely as a tool." Id. at 1335-36.
Published less than a week after Enfish, In re TLI Commc'ns LLC Patent Litig. ("TLI") emphasized that claims are drawn to an abstract idea if they are directed to "the use of conventional or generic technology in a nascent but well-known environment, without any claim that the invention reflects an inventive solution to any problem presented by combining the two." 823 F.3d 607, 612 (Fed. Cir. 2016). Thus, claims that describe "a new telephone, a new server, or a new physical combination of the two" are not abstract, but claims that describe a system and methods in "purely functional terms" without "any technical details for the tangible components" are abstract. Id.
Defendants argue that the Asserted Patents fail at both steps of the Alice inquiry. Defendants contend at step one that the Asserted Patents are directed to the abstract and longstanding concept of enhancing marketing effectiveness by "gathering data and performing mathematical calculations." Mot. at 11. At step two, Defendants argue that the Asserted Patents fail to recite a saving inventive concept that transforms the claimed method into a patentable application of the abstract idea. See id. at 21-25. Plaintiff asserts that Defendants oversimplify the Asserted Patents, and ignore crucial claim limitations reciting an inventive concept. Opp. at 10-25. Plaintiff divides the five Asserted Patents into three groups based on patent families. See id. at 2. The Court's analysis of the Asserted Patents tracks Plaintiff's division.
The '706 and '746 Patents (collectively, the "Group 1 Patents") share a common specification and are each entitled "Operationalizing Search Engine Optimization." These patents "claim a channel-centric solution" to "assessing the effectiveness of a website's marketing efforts." Opp. at 2-3. The channel-centric solution "focuses on analyzing the many possible channels that might lead a visitor to the website." Opp. at 3. That solution builds on the prior "website-centric" approach to evaluating search engine performance. See id. at 2-3. The website-centric approach "relied on a company's website determining the search term that led each visitor to visit the website." Opp. at 2; see '706 Patent, 1:25-32. That reliance made it difficult for web content owners and designers to discern how many visitors came to web page based on the search terms used and/or or the web page's rank on a search engine. '706 Patent, 1:27-29. These individuals would consequently "estimate how visitors come to the Web Page and what they do once they are on the Web Page." Id. at 1:42-46. That estimation obscured "which actions would present a better chance for success of the Web Page." Id.
The Group 1 Patents remedy this gap in data assessment by reciting "[s]ystems and methods for determining shares of voice, both for the entity and other entities, with respect to selected search terms across channels and over time." Id. at 2:53-55. Plaintiff explains that "shares of voice is a
Plaintiff highlights independent claim 1 of the '706 and '746 Patents as exemplifying the claimed method. See Opp. at 12-13. Defendant likewise cites these claims as representative. Mot. at 2-3. The Court agrees that independent claim 1 of each Group 1 Patent is representative, and that it can properly rely on these claims in assessing the patentee's invention. See Intellectual Ventures I LLC, 850 F.3d at 1330-32 & n.7.
`706 Patent, 14:17-38. Claim 1 of the '746 Patent sets forth the same "channel-centric" method, though it specifies that this method is computer implemented. See '746 Patent, 14:22-50 ("A computer implemented method of managing references to an entity on a network, the computer including a non-transitory computer storage medium, the method comprising ..."). By
The Group 1 Patents fail at Alice's first step. These patents are directed towards an abstract idea: improving market performance via data aggregation and analysis. The claimed method recites steps to gather and organize data, and analyze that data via mathematical calculation. These types of activities, i.e. data collection, modeling, and evaluation, constitute "longstanding conduct that existed well before the advent of computers and the Internet." See Intellectual Ventures I LLC, 850 F.3d at 1326-27 (finding methods reciting an index-searchable database abstract); BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1348 (Fed. Cir. 2016) (finding a filtering system for Internet content abstract); Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1350 (Fed. Cir. 2014) (finding a process to generate a device profile abstract because it "describe[d] a process of organizing information through mathematical correlations and is not tied to a specific structure or machine").
The Group 1 Patents, moreover, propose no new physical or technical improvement. The claims instead describe the "methods in purely functional terms." TLI, 823 F.3d at 612; see Alice Corp. Pty., 134 S.Ct. at 2351. The specification's emphasis on "managing" and "optimizing" web page performance underlines that conclusion. See id. The specification does not describe any new "tangible components"; instead, the Internet is merely a "conduit" for the abstract idea of data analysis to enhance market performance. Id.; see, e.g., '706 Patent, 4:1-6 ("In at least one example, the network 105 includes the Internet ... Alternatively or additionally, the network 105 includes one or more cellular RF networks...").
In concluding that the Group 1 Patents fail at this step, the Court is guided by the
Of the cases presented by Defendants, the Court finds particularly persuasive PUREPREDICTIVE, Inc. v. H20.AI, Inc., No. 17-CV-03049-WHO, 2017 WL 3721480 (N.D. Cal. Aug. 29, 2017). See Mot at 8-11. In PUREPREDICTIVE, a court in this District found a patent reciting a "predictive analysis factory" directed to an abstract idea. See PUREPREDICTIVE, Inc., 2017 WL 3721480, at *5. The patent recited the following three-step method:
Id. at *1. In addition to this three-step method, the PUREPREDICTIVE patents claimed "a computer program product to perform the operations of the predictive analytics factory." Id. The plaintiff and patent-owner was, as here, a technology company seeking to "provide insight into [a] business's data through the use of predictive modeling." Id. at *2.
The PUREPREDICTIVE court granted the defendant's motion to dismiss under section 101. Id. at *7. Specifically, the court concluded that the claims of the patent were "directed to a mental process and the abstract concept of using mathematical algorithms to perform predictive analytics." Id. at *5 (finding also that "[t]he method of the predictive analytics factory is directed towards collecting and analyzing information"). That the factory generated new data via "learned functions" did not alter the court's conclusion. These functions simply represented a "basic mathematical process of ... running data
Though not cited by the parties, the Court also finds instructive the Federal Circuit's decision in FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089 (Fed. Cir. 2016). There, the Federal Circuit addressed the issue of section 101 validity as applied to a patent disclosing "ways to detect fraud and misuse by identifying unusual patterns in users' access of sensitive data." 839 F.3d at 1092. The court described the patented method as:
Id. at 1093.
The FairWarning court found the claimed method was patent-ineligible. Specifically, the method was directed to a "combination" of two "abstract-idea categories": (1) "collecting information, including when limited to particular content"; and (2) "analyzing information by steps people go through in their minds, or by mathematical algorithms, without more, as essentially mental processes." Id. at 1093-94 (quotations omitted). The court distinguished the claimed rules from those held patent-eligible in McRO, explaining that the latter were "directed to `a specific asserted improvement in computer animation, i.e., the automatic use of rules of a particular type.'" Id. at 1094 (citing 837 F.3d at 1314). The claimed rules in Fair-Warning, in contrast, did not themselves purport to improve a technological process. Id. Instead, they relied on the use of a computer to enhance the existing technological infrastructure "by allowing the automation of further tasks." Id. The Fair-Warning court likewise found the claimed method before it distinct from the self-referential table in Enfish. See id. at 1095 (citing 822 F.3d at 1337). While the self-referential table in Enfish was "directed to a specific improvement to the way computers operate," the method before the Fair-Warning court was an abstract idea implemented on a computer. Id.
Apart from cursory references to Enfish and McRO, Plaintiff does not present a single case supporting a finding of patentability at step one. See Opp. at 10-19. For the reasons discussed, Enfish and McRO are distinguishable based principally on the absence of a specific asserted improvement to technology here. Plaintiff does argue that Two-Way Media Ltd. v. Comcast Cable Commc'ns, LLC is distinguishable at step two. See Opp. at 21 (citing 874 F.3d 1329 (Fed. Cir. 2017)). But Two-Way supports the Court's finding of an abstract idea at step one.
The claimed multicasting system failed at both steps of the Alice analysis. At step one, the Federal Circuit affirmed the district court's finding that that the patentee's "method for routing information" was directed to the abstract idea of "(1) sending information, (2) directing the sent information, (3) monitoring the receipt of the sent information, and (4) accumulating records about receipt of the sent information." Id. at 1337. The court highlighted that the patent used "result-based functional language" like "converting," "routing," "controlling," "monitoring," and "accumulating records," without "sufficiently describ[ing] how to achieve these results in a non-abstract way." Id. The court noted that the plaintiff's proposed constructions failed to indicate how the claimed scalable architecture "itself leads to an improvement in the functioning of the system." Id. at 1338 (emphasis in original).
These precedents belie Plaintiff's suggestion that the claimed method's application to the Internet removes it from the realm of the abstract. See Opp. at 13-14. "An abstract idea on `an Internet computer network' or on a generic computer is still an abstract idea." BASCOM Glob. Internet Servs., Inc., 827 F.3d at 1348; accord Ultramercial, Inc., 772 F.3d at 716 ("[T]he use of the Internet is not sufficient to save otherwise abstract claims from ineligibility under § 101."). That the underlying algorithm at some point requires that an individual access the Internet or another network does not alter that conclusion. See Opp. at 18.
The Court similarly rejects Plaintiff's representation that the Group 1 Patents are patent-eligible because they claim an "Internet-based solution to solve a problem unique to the Internet." Opp. at 14. For that proposition, Plaintiffs cite the portion of Intellectual Ventures I LLC v. Capital One Bank (USA) in which the Federal Circuit distinguished the claims before it from those in DDR Holdings. See 792 F.3d 1363, 1371 (Fed. Cir. 2015) (citing 773 F.3d at 1255). In so doing, Plaintiff elides a key distinction drawn by the Intellectual Ventures court between the patent-ineligible claims in that case and the claims presented in DDR Holdings. Namely, that the "claimed solution" in DDR Holdings "used a series of steps that created a hybrid web page incorporating `look and feel' elements from the host web site with commerce objects from the third-party web site." See id. Thus,
Id.
That distinction likewise applies here. To be sure, the Group 1 Patents may address a problem related to the Internet. But these patents do not create a specific technological improvement akin to a hybrid web page, i.e. a new digital pathway, triggered by a user's online activity. Indeed, Plaintiff does not dispute that the claimed calculations can be performed with a pen and paper. And it cannot be sufficient
The Group 1 Patents' recitation of "computer instructions" and "computer implementation" also fails to show a tangible technological improvement at step one. For instance, independent claim 11 of the '706 Patent recites: "A system for optimizing online references to an entity, the system comprising: a
So too with independent claim 1 of the '746 Patent. That claim states:
`746 Patent, 14:22-31. Again, the claimed "computer implemented method" does not recite a tangible technological improvement: it merely sets forth the remainder of the abstract method already discussed. Id. at 14:32-50. Other claim references to computer elements suffer from this same deficit. See id. at 15:14-19 (claiming "[a] computer readable medium encoded with a computer program fixed in a non-transitory computer storage medium having computer-executable instructions for causing a computing system to perform operations of optimizing online references to an entity" by performing the same data collection and analysis steps), 16:28-17:70 (claiming "[a] computer implemented method of managing references to an entity on a network" through the claimed method). The instruction to apply the abstract idea of data aggregation and market analysis "using some unspecified, generic computer is not `enough' to transform the abstract idea into a patent-eligible invention." Alice Corp. Pty., 134 S.Ct. at 2359 (internal citation omitted) (emphasis in original).
That analysis likewise applies to dependent claims 2-10 of the '706 Patent. These claims merely identify different ways to collect data (e.g., by accounting for variation over time, geographic location, and web source), and different ways of analyzing data (e.g., by "crawling" the data to identify keywords, "grouping keywords identified during the crawling step," and "performing a keyword frequency analysis on the pages crawled"). '706 Patent, 14:39-15:6. This does not winnow the claimed method to provide anything more than equally abstract variations on data collection and analysis. See Two-Way Media Ltd., 874 F.3d at 1337-39. For instance, the claims do not describe how "crawling" is performed or what a "keyword frequency analysis" comprises. While Plaintiff asserts that requiring claim specificity confuses the novelty and enablement inquiries, see Opp. at 19, "[t]he § 101 inquiry must focus on the language of the Asserted Claims" even at step one. Synopsys, Inc., 839 F.3d at 1149. In the absence of narrowing language, the Court finds that the Group 1 Patents are directed towards an abstract idea.
So finding, the Court proceeds to the "inventive concept" step. See Intellectual Ventures I LLC, 850 F.3d at 1325. "In applying step two of the Alice analysis, we must `determine whether the claims do significantly more than simply describe [the] abstract method' and thus transform the abstract idea into patentable subject matter." Id. at 1328 (quoting Ultramercial, Inc., 772 F.3d at 715). The inventive "additional features" must be more than "well-understood, routine, conventional activity" previously known in the industry. Mayo Collaborative Servs., 132 S.Ct. at 1298; Content Extraction & Transmission LLC, 776 F.3d at 1347-48.
Plaintiff argues that the Group 1 Patents, by elaborating a channel-centric approach, "identify and overcome specific problems with conventional, prior art solutions to assessing the effectiveness of a website's marketing efforts." Opp. at 20.
Claim 1 of the '706 Patent indicates that the shares of voice calculation includes (1) "determining rank positions for the search terms with respect to the entity and other entities"; and (2) "multiplying the rank positions by products of estimated click rates and volumes of traffic on the network for the entity and other entities." '706 Patent, 14:22-27. Shares of voice is then "correlate[d]" "with respect [to] the search terms to determine a relative change in share of voice for the entity and other entities." Id. at 14:28-31. The next step is to "correlat[e] shares of voice for the entity" across channels to determine relative share of voice changes within each channel. Id. at 14:32-34. Finally, the relative share of voice change is displayed with respect to performance across entities and channels. Id. at 14:35-38. Claim 1 of the '746 Patent recites a similar method for determining shares of voice, but specifies that the method is "computer implemented." Id. at 14:21-50.
These claims, on their own or as an ordered combination, do not transform the instant invention into patentable subject matter. The claims simply set forth a conventional process for collecting and analyzing information via a mathematical process. See, e.g., Collarity, Inc., 2015 WL 7597413, at *8-11 (holding that a method for "refining user Internet search queries" was not made patent-eligible by claims specifying keyword generation and suggestion based partly on past results); Intellectual Ventures I LLC, 850 F.3d at 1326, 1328-29 (concluding that a method to create an index-searchable database defined by "a plurality of XML tags" failed to impart an inventive concept). Plaintiff expressly states that "shares of voice"— a key difference over the prior art — is just a calculated measurement. Opp. at 12 n.3. And that measurement is itself a product of aggregating and organizing data using existing technology and source information. While claims of the Group 1 Patents refer to "computer implementation," or "computer instructions," those generic invocations do not impart an inventive concept. See Two-Way Media Ltd., 874 F.3d at 1338 ("Merely reciting the use of a generic computer or adding the words `apply it with a computer' cannot convert a patent-ineligible abstract idea into a patent-eligible invention."); Mortgag. Grader Inc. v. First Choice Loan Serv. Inc., 811 F.3d 1314, 1324-25 (Fed. Cir. 2016) (finding that claims disclosing a "network," "interface," and "database" added only generic computer components that did not impart an inventive concept).
At step two, Plaintiff does not present even a single dependent claim to cabin the scope of the patented method. See Opp. at 20-23. Instead, Plaintiff merely quotes verbatim claim 1 of each Group 1 Patent. See id. But those claims fail to state with sufficient specificity how a web content owner would, for instance, rank search terms, select channels from the plurality of channels, and correlate shares of voice. See Elec. Power Grp., LLC, 830 F.3d at 1356 (finding that claims failed to state an inventive concept where they "specif[ied] what information ... is desirable to gather, analyze, and display ... but they do not include any requirement for performing the claimed functions of gathering, analyzing, and displaying in real time by use of anything but entirely conventional, generic technology"). Again, the Two-Way court's analysis is instructive. In Two-Way, the Federal Circuit found "no saving
In its own review of the dependent claims, the Court finds nothing that narrows the representative claims to impart anything more than variations on the abstract idea of data collection and analysis. As discussed at step one, no inventive concept manifests in dependent claims 2-10 of the '706 Patent, or in dependent claim 8 of the '746 Patent, as these claims merely specify that the method accounts for (1) changes in search results based on geography and over time, and (2) the past behavior of a web page visitor. See '746 Patent, 14:51-58; '706 Patent, 14:39-15:6. In the absence of additional claim language, the "functional" and "result-focused" character of the claims renders the instant invention patent-ineligible. Elec. Power Grp., LLC, 830 F.3d at 1356.
Plaintiff stresses that the claimed method is innovative because it offers a more accurate way to assess web performance. But Plaintiff does not dispute that web content owners could already access all of the data sources cited in the claim language, e.g., blogs, social networks, and discussion forums, and analyze those sources over time. See Opp. at 21-22; '706 Patent, 14:47-54. The specification itself lays plain that the recited claims simply provide for the analysis of existing information, just in a more efficient way. See, e.g., '706 Patent, 1:42-44, 1:50-53 ("Currently, the Web Page owner must choose which strategy to follow with limited information on which would be more effective."). That the claimed method might be "effective" does not change that it recites a routine and conventional method of market analysis. See PUREPREDICTIVE, Inc., 2017 WL 3721480, at *5-7 ("[J]ust because a computer can make calculations more quickly than a human does not render a method patent eligible.").
Finally, Plaintiff contends that the Patent Trade and Appeals Board's (PTAB) decision not to institute inter partes review suggests an inventive concept. Opp. at 22-23. That argument fails. To begin, Plaintiff acknowledges that the issue before the PTAB was whether the asserted claims of the Group 1 and 2 Patents were "anticipated or obvious over the prior art." Opp. at 5-6. Plaintiff admits that the section 101 search for an "inventive concept" is "indisputably" distinct from assessing novelty under section 102. Id. at 22 (citing Synopsys, Inc., 839 F.3d at 1151). Federal Circuit precedent firmly supports that view. See Two-Way Media Ltd., 874 F.3d at 1339-40 ("Eligibility and novelty are separate inquiries."); Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1263 (Fed. Cir. 2016) (finding that "even assuming" that the plaintiff's invention was novel "does not avoid the problem of abstractness").
The '700 Patent is entitled "Opportunity Identification and Forecasting for Search Engine Optimization." Like the Group 1 Patents, the '700 Patent seeks to remedy shortcomings of the website-centric approach. See Opp. at 3-4. In particular, Plaintiff highlights that the prior approach lacked a method for comparing how a visitor arrived at a web page, and whether the visitor subsequently purchased something from that web page. See id. at 14; '700 Patent, 1:40-43. Owners and designers of web pages were consequently required to "estimate how visitors have come to the Web Page and what they do once they are on the Web Page." '700 Patent, 1:44-46.
The '700 Patent remedied this gap in data assessment by reciting a "correlator that `can determine how visitors are directed to the entity and how visitors behave once there.'" Opp. at 4 (citing '700 Patent, 5:2-5). In addition, the '700 Patent scores "the entity's references in search results using those terms, and correlat[es] that data with data related to visitors' behavior on the website, such as the value of resulting conversions." Id.
Claim 1 sets out a multistep "method for optimizing online references to an entity that are non-paid advertisements, the method comprising":
`700 Patent, 9:1-23. Independent claim 11 recites these same steps but specifies: "A non-transitory computer readable storage medium configured to cause a system to perform operations of optimizing online references to an entity that are non-paid
Like the Group 1 Patents, the '700 Patent is aimed at the abstract idea of improving business performance through data aggregation and analysis. The '700 Patent itself claims no technological improvement, and sets forth a result-focused and functional method. See TLI, 823 F.3d at 612; Elec. Power Grp., LLC, 830 F.3d at 1356. Those functions — using search terms to evaluate web references, comparing total web page visitors to online purchasers, and forecasting how a company can increase its market share based on that data — fall within the two abstract-idea categories of: (1) data gathering and analysis, and (2) mathematical calculation, without more. See FairWarning IP LLC, 839 F.3d at 1093-94. Term searching and performance forecasting are simply cosmetic variations of these abstract concepts. See Collarity, Inc. v. Google Inc., 2015 WL 7597413, at *8; PUREPREDICTIVE, Inc., 2017 WL 3721480, at *5. Plaintiff does not dispute that the '700 Patent's correlation function trades on a known probabilistic model that assumes "a higher ranked search result will lead to an increase of conversions." See Mot. at 16; Opp. at 4, 15. As discussed in Part II.A, that independent claim 11 recites generic computer implementation cannot save the '700 Patent under section 101. See TLI, 823 F.3d at 612.
Though overlapping with step two, Plaintiff argues at step one that Defendants ignore specific requirements set forth in dependent claim 4 of the '700 Patent. Dependent claim 4 states that keywords can be identified by "crawling previously returned search results and conducting a keyword frequency analysis to identify at least some of the plurality of keywords." '700 Patent, 9:32-34. As with the Group 1 Patents' recitation of "crawling," this patent likewise elides how "crawling" is performed, or what a "keyword frequency analysis" entails. See Two-Way Media Ltd., 874 F.3d at 1338-39; Elec. Power Grp., LLC, 830 F.3d at 1356. So too with claim 1, which does not explain how one selects terms, scores references, determines the value of "conversions," or "correlates" any of the above, as required for "forecasting." As to the claimed "correlator" that performs a "correlating" function, the claims omit what analytical procedure "correlating" requires. See GoDaddy.com LLC, 2016 WL 3165536, at *12 (finding that claims disclosing an "authenticator" did not save a patented message verification method because the claims failed to state "what the `authenticator' actually is" or how the device functioned beyond requiring that claimed steps "be performed by an amorphous `mathematical association method'").
Plaintiff does not offer any dependent claims that shed meaningful light on these functions. See Opp. at 23-24. At the "inventive concept" step, Plaintiff simply (1) quotes verbatim the language of independent claim 1, and (2) cites Defendants' "failed IPR petition" as a recognition of an inventive concept. See id. The Court finds these arguments unpersuasive for the reasons discussed. Nothing in the dependent claims, including dependent claim 4, recites a saving inventive concept. As with the Group 1 Patents, the asserted claims of the '700 Patent are therefore invalid under section 101.
The '089 and '863 Patents (collectively, "the Group 3 Patents") share a common specification and are entitled "Correlating Web Page Visits and Conversion with External References." Plaintiff explains that "[l]ike the '700 Patent, the '089 and '863 Patents address the shortcomings of the prior art" in part by disclosing a
'089 Patent, 6:43-48. Plaintiff highlights as exemplary independent claim 1 of the '089 Patent, which Defendants also identify as representative. See Opp. at 16-17; Mot. at 5.
'089 Patent, 16:41-17:6. According to Plaintiff, this claim describes a "very specific process for performing" an "analysis of the particular search results that led visitors the website and generated conversions." Opp. at 16. Plaintiff highlights that the process requires (1) "identifying an organic referral that directed each visitor to the web page by parsing a referral header"; (2) "requesting and analyzing search results from the search engine that originated the organic referral" by using keywords; and (3) "determining a correlation
As with the Group 1 and 2 Patents, the Group 3 Patents are directed to the abstract idea of improving market performance through data aggregation and analysis. Representative claim 1 shows that the claimed method is functional, and fails to effect a specific technological improvement. See, e.g., FairWarning IP, LLC, 839 F.3d at 1093-94. Courts have rejected similar variations of the claimed method, which reduces to considering a web user's past online activity and subsequent purchasing decisions. See id.; Collarity, Inc., 2015 WL 7597413, at *8; PUREPREDICTIVE, Inc., 2017 WL 3721480, at *5. While these patents may require the use of a computer to collect inputs for the method, that does not direct the patents away from an abstract idea. See BASCOM Glob. Internet Servs., Inc., 827 F.3d at 1348. Like the patents in Groups 1 and 2, the claims of the Group 3 Patents do not shed light on how to "identify[]," "request[]," "analyz[e]," and "correlat[e]" so as to impart an inventive concept. See Two-Way Media Ltd., 874 F.3d at 1338-39; Elec. Power Grp., LLC, 830 F.3d at 1356. Plaintiff fails to explain how independent claim 1's instruction to "pars[e] a referral header" adds meaningful specificity at step two. See Opp. at 24-25. The claim language itself does not specify how to identify an organic referral, or explain what "parsing" entails. Plaintiff fails to cite other dependent claim language that would meaningfully distinguish the Group 3 Patents from the other patents-in-suit. Absent those limitations, the Court likewise concludes that the asserted claims of the Group 3 Patents fail at Alice step two, and are thus invalid.
For the foregoing reasons, Defendants' motion for judgment on the pleadings is
To the extent Plaintiff wishes to assert new patents, it should file a new lawsuit. The clerk is directed to enter judgment in accordance with this order in favor of Defendants and to close the case.