Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01898/USCOURTS-ca13-15-01898-0/pdf.json

Parties Involved:
Associated Builders and Contractors, Inc.
Appellee
Foundation Construction Payroll Service, LLC
Appellee
Foundation Software, Inc.
Appellee
Douglas Maurice Shortridge
Appellant

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

DOUGLAS MAURICE SHORTRIDGE,

Plaintiff-Appellant

v.

FOUNDATION CONSTRUCTION PAYROLL 

SERVICE, LLC, DBA 

PAYROLL4CONSTRUCTION.COM, FOUNDATION 

SOFTWARE, INC., ASSOCIATED BUILDERS

AND CONTRACTORS, INC.,

Defendants-Appellees

______________________ 

2015-1898

______________________ 

Appeal from the United States District Court for the 

Northern District of California in No. 3:14-cv-04850-JCS, 

Magistrate Judge Joseph C. Spero.

______________________ 

Decided: July 13, 2016

______________________ 

 DOUGLAS MAURICE SHORTRIDGE, Napa, CA, pro se.

 DANIEL MCMULLEN, Calfee, Halter & Griswold LLP, 

Cleveland, OH, for defendants-appellees. Also represented 

by VERONICA LAMBILLOTTE, JENNIFER BUCKEY WICK. 

______________________ 

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2 SHORTRIDGE v. FOUNDATION CONSTRUCTION

Before O’MALLEY, LINN, and STOLL, Circuit Judges.

PER CURIAM. 

Douglas M. Shortridge appeals the United States District Court for the Northern District of California’s determination that U.S. Patent No. 8,744,933 claims ineligible 

subject matter under 35 U.S.C. § 101. Because 

Mr. Shortridge concedes that the ’933 patent claims are

directed to an abstract idea and because the claims recite 

nothing more than conventional steps beyond the abstract 

idea, we affirm.

BACKGROUND

Mr. Shortridge is the named inventor of the ’933 patent, which relates generally to: 

[a] computer implemented business method and 

process directed to enabling a public works contractor employer . . . to[] generate certified payroll 

records . . . ; provide alerts and reports . . . ; provide evidence of meeting and exceeding government objectives in order to establish a record and 

reputation of compliance; and generate reports for 

managing the assignment of personnel to enhance 

worker cooperation, spirit, and morale.

’933 patent Abstract. The ’933 patent explains how many 

jurisdictions mandate that public works construction 

contractors pay their workers certain minimum wages, 

but that the exact amount that must be paid varies depending on work location and the specific type of work 

performed. Contractors must verify to the governing 

jurisdiction(s) that they have paid these wages using 

“certified payroll records” (“CPRs”). “CPRs are intended 

to serve as prima facie evidence of the wages paid and any 

fringe benefit contributions made, to or on behalf of each 

worker on the project, broken down by craft, type, or 

classification of work, per hour, and per day, along with 

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SHORTRIDGE v. FOUNDATION CONSTRUCTION 3

various information items related to the project, the 

awarding body, and the employees working thereupon.” 

Id. col. 1 ll. 41–48. The content, format, and configuration 

requirements of CPRs may vary by jurisdiction, which can 

complicate CPR generation for contractors whose employees work across public works projects in different jurisdictions, or between public works and private projects, in a 

given pay period. The ’933 patent claims a method of 

processing payroll such that CPRs for the relevant jurisdiction(s) are generated “in conjunction with and simultaneous with core payroll processing.” Id. col. 18 ll. 62–63. 

The ’933 patent has three independent claims—claims

1, 12, and 20. Claim 1 of the ’933 patent recites: 

1. A method of public works construction payroll 

processing for a contractor comprising:

processing payroll related data with a computer implemented core payroll calculation and 

processing engine, the processing including:

sharing between conjoined computer processor 

components, input data stored in a relational database, said input data required for core payroll 

processing and calculation, said input data also 

required for production of at least one certifiable 

public works construction payroll record report 

(CPR), the CPR defined in accordance with jurisdiction-specific rules drawn from a plurality of 

stored rules;

distinguishing between public works projects 

and private sector projects based on the input data and identifying the project as a public works 

project based on the input data;

verifying input data is compliant with requirements of the core payroll processing and calculation engine and the requirements of the CPR;

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processing the verified input data to produce 

calculated core payroll data, the calculated core 

payroll data used for core payroll processing, production of core payroll processing reports, and 

production of the CPR;

sharing, between conjoined computer processor components, the calculated core payroll data; 

sharing, between the conjoined computer processor components, non-calculated payroll related 

data as required for production of the CPR;

storing the non-calculated payroll related data 

and the calculated core payroll data redundantly 

or individually;

producing the CPR based on the calculated 

core payroll data and the non-calculated payroll 

related data only if the input data identifies the 

project as a public works project, the CPR produced in conjunction with and simultaneously 

with core payroll processing; and

producing public works contractor management supporting reports using the input data only 

if the input data identifies the project as a public 

works project, the public works contractor management supporting reports indicating whether 

the contractor is in compliance with the jurisdiction-specific rules of a jurisdiction to which the 

public works construction contractor is subject.

Id. col. 18 l. 27 – col. 19 l. 4. Claim 12 recites:

12. A system for public works construction contractor payroll processing comprising:

a computer processor, or a networked plurality of computer processors, configured with:

computer readable instructions;

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at least one data base application;

at least one user interface;

binary and application programming interfaces;

a core payroll calculation and processing engine configured to perform payroll calculation and 

processing and produce calculated core payroll data; and

an augmentation and supporting engine for 

public works payroll processing operating in conjunction with the core payroll calculation and processing engine and configured to produce 

certifiable public works payroll records and reports in conjunction with and simultaneously with 

the payroll calculation and processing performed 

by the core payroll calculation and processing engine, the augmentation and supporting engine including a plurality of relational tables, at least 

one relational table configured to distinguish between private sector and public works projects, 

the augmentation and supporting engine configured to receive the calculated core payroll data 

and use the calculated core payroll data in the 

production of the certifiable public works payroll 

records, wherein the augmentation and supporting engine is configured to produce the certifiable 

public works payroll records and reports for a project only if the at least one relational table identifies the project as one of the public works projects, 

the certifiable public works payroll records and 

reports for the project produced in accordance 

with jurisdiction-specific rules drawn from a plurality of stored rules.

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Id. col. 19 l. 60 – col. 20 l. 26.1 

Mr. Shortridge asserted the ’933 patent against 

Foundation Construction Payroll Service, LLC in the 

district court. In response, Foundation moved for judgment on the pleadings pursuant to Rule 12(c) of the 

Federal Rules of Civil Procedure, arguing that the ’933 

patent is not eligible for patent protection under § 101 of 

the Patent Act. The district court first determined that 

the ’933 patent fails step one of the § 101 eligibility test 

articulated by the Supreme Court in Mayo Collaborative 

Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 

(2012), and Alice Corp. v. CLS Bank International, 134 S. 

Ct. 2347 (2014), as the claims are directed to the abstract 

idea of “cataloging labor data.” Shortridge v. Found. 

Constr. Payroll Serv., LLC (Dist. Ct. Op.), No. 3:14-cv4850-JCS, 2015 WL 1739256, at *10 (N.D. Cal. Apr. 14, 

2015). The district court second found that the claims fail 

step two of the Alice test as they do not contain an inventive concept that transforms the claims into patenteligible subject matter. Having determined that the ’933 

patent claims fail to satisfy the two-step test for § 101 

eligibility, the district court dismissed Mr. Shortridge’s 

infringement suit. 

Mr. Shortridge appeals, and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

 

1 We do not reproduce claim 20, as Mr. Shortridge 

concedes that it “cover[s] the same scope” as claim 1. 

Appellant Br. 21. Also, Mr. Shortridge has not argued 

any of the dependent claims separately, so we treat independent claims 1 and 12 as representative.

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DISCUSSION

I.

We review de novo whether a claim is drawn to patent-ineligible subject matter. Enfish, LLC v. Microsoft 

Corp., No. 15-1244, 2016 WL 2756255, at *3 (Fed. Cir. 

May 12, 2016) (citing OIP Techs., Inc. v. Amazon.com, 

Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015), cert. denied, 

136 S. Ct. 701 (2015)). Section 101 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.” 

Mayo, 132 S. Ct. at 1293 (2012) (internal quotation 

marks, brackets, and citations omitted). 

To determine whether a patent claims ineligible subject matter, we apply the now-familiar two-step test 

introduced in Mayo, id. at 1296–97, and further explained 

in Alice, 134 S. Ct. at 2355. First, we determine whether 

the claims at issue are directed to a patent-ineligible 

concept such as an abstract idea. Alice, 134 S. Ct. at 

2355. Second, we look at the claims for “something more” 

by “examin[ing] 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. at 2354, 2357 (quoting Mayo, 132 S. Ct. 

at 1294, 1298). This inventive concept must do more than 

simply recite “well-understood, routine, conventional 

activity.” Mayo, 132 S. Ct. at 1298.

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II.

The district court determined that the ’933 patent is 

directed to the abstract idea of “cataloging labor data.”2 

Appearing at a hearing before the district court, 

Mr. Shortridge did not dispute that the ’933 patent is 

directed to “one or more” abstract idea(s) and instead 

argued that step two of the Alice inquiry is “where the 

whole question is, and that’s what the whole argument is 

about.” Tr. of 12(c) Mot. Hr’g at 5, Shortridge v. Found. 

Constr. Payroll Serv., LLC, No. 3:14-cv-4850-JCS 

(N.D. Cal. Apr. 3, 2015), ECF No. 80. Thus, as

Mr. Shortridge has conceded that the ’933 patent is 

directed to an abstract idea (or ideas) and has not urged 

our adoption of a different abstract idea (or ideas), we 

begin our analysis at step two of the Alice framework.

The ’933 patent describes “a computer implemented 

business method.” ’933 patent Abstract. Mr. Shortridge

acknowledges that generation of CPRs using core processing data is a business method predating the ’933 

patent: “CPRs can always be created after the core payroll 

process is 100% complete.” Appellant Br. 14. Indeed, the 

’933 patent itself explains that often “multiple calculations involving varying time and hourly rate of pay . . . 

must be manually tracked and reported by [a contractor]

in order to meet government requirements for creating 

and submitting CPRs on Public Works projects when 

CPRs are required at the highest CPR-criteria content 

standard.” ’933 patent col. 4 ll. 28–49. The ’933 patent’s 

use of a general purpose computer to perform this busi-

 

2 Mr. Shortridge asserts that the district court 

found the ’933 patent directed to several varying abstract 

ideas, which he argues was improper. We disagree. The 

district court’s opinion merely uses slightly different 

wording to refer consistently to the same basic abstract 

idea of “cataloging labor data.” 

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SHORTRIDGE v. FOUNDATION CONSTRUCTION 9

ness method does not in and of itself render it patenteligible. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 

709, 717 (Fed. Cir. 2014), cert. denied, 135 S. Ct. 2907 

(2015) (“[A]dding a computer to otherwise conventional 

steps does not make an invention patent-eligible.”) (citing 

Alice, 134 S. Ct. at 2357); Bancorp Servs., L.L.C. v. Sun 

Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1279 

(Fed. Cir. 2012) (“Using a computer to accelerate an 

ineligible mental process does not make that process 

patent-eligible.”).

What Mr. Shortridge relies on most heavily as the 

step-two inventive concept is the generation of CPRs “in 

conjunction with and simultaneous with” core payroll 

processing. Appellant Br. 11–13 (quoting ’933 patent 

col. 18 ll. 62–63, col. 20 ll. 8–9, col. 22 l. 4). We disagree

that this feature imparts patent eligibility. As disclosed 

in the specification and recited in the plain claim language, the ’933 patent claims generating CPRs in conjunction with and simultaneous with core payroll 

processing simply by applying computer elements such as 

relational databases. The district court found, and 

Mr. Shortridge does not argue to the contrary, that the 

computer components contemplated by the ’933 patent 

were conventional and known to the industry at the time 

of the patent. Dist. Ct. Op., 2015 WL 1739256, at *12. 

While it may be true that, as Mr. Shortridge argues, a 

human could not easily process core payroll while simultaneously generating CPRs, “relying on a computer to 

perform routine tasks more quickly or more accurately is 

insufficient to render a claim patent eligible.” OIP, 788 

F.3d at 1363 (citing Alice, 134 S. Ct. at 2359). Further, 

when faced with the claims at issue in Alice, the Supreme 

Court indicated that “use of a computer to create electronic records, track multiple transactions, and issue simultaneous instructions” was not an inventive concept. Alice, 

134 S. Ct. at 2359 (emphasis added). This same logic 

applies to the claims at issue here.

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Mr. Shortridge also argues that the ’933 patent’s “‘one 

size fits all’ algorithm constitutes the inventive concept in 

this case” and that “[t]his is the ‘something more’ under 

Alice.” Reply Br. 8. We also find this argument unpersuasive because “[w]ithout additional limitations, a process that employs mathematical algorithms to manipulate 

existing information to generate additional information is 

not patent eligible.” Digitech Image Techs., LLC v. Elecs. 

for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014). It 

is also not enough that the claims specifically describe the 

algorithm as being for public works projects across multiple jurisdictions because “limiting an abstract idea to one 

field of use . . . d[oes] not make the concept patentable.” 

Bilski v. Kappos, 561 U.S. 593, 612 (2010); see also Digitech, 758 F.3d at 1351 (“If a claim is directed essentially 

to a method of calculating, using a mathematical formula, 

even if the solution is for a specific purpose, the claimed 

method is nonstatutory.” (quoting Parker v. Flook, 437 

U.S. 584, 595 (1978))). 

Finally, Mr. Shortridge argues that his patent is similar to the patent we held to be subject matter eligible in

DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 

(Fed. Cir. 2014). Specifically, Mr. Shortridge notes that 

the ’933 patent claims recite the use of a “relational 

database,” e.g., ’933 patent col. 18 l. 33, and, similarly,

that the claims at issue in DDR recite a “data store,” 773 

F.3d at 1250. But as the similarities between the patents 

end there, so too does Mr. Shortridge’s argument. Our 

decision in DDR did not hinge on the patent’s recitation of 

a data store, but rather on the notion that the “claimed 

solution [was] necessarily rooted in computer technology 

in order to overcome a problem specifically arising in the 

realm of computer networks.” DDR, 773 F.3d at 1257. 

Here, Mr. Shortridge does not argue, and the ’933 patent 

written description does not support, that the claimed 

“relational database” is used to solve a uniquely technical 

problem. Rather, the ’933 patent claims are akin to those 

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SHORTRIDGE v. FOUNDATION CONSTRUCTION 11

DDR describes as “directed to nothing more than the 

performance of an abstract business practice . . . using a 

conventional computer.” DDR, 773 F.3d at 1256; see ’933 

patent Abstract (describing patent as “[a] computer 

implemented business method”). As DDR instructs, 

“[s]uch claims are not patent-eligible.” DDR, 773 F.3d at 

1256. 

Thus, after examining the claims of the ’933 patent in 

search of an inventive concept adding “something more” to 

the underlying abstract idea of “cataloging labor data,” we 

conclude that there is no such inventive concept claimed 

in the patent either by considering the claim limitations 

individually or as an ordered combination.

CONCLUSION

We have considered Mr. Shortridge’s remaining arguments and find them unpersuasive. For the forgoing 

reasons, we affirm both the decision of the district court 

that the claims of the ’933 patent recite patent-ineligible 

subject matter under § 101 and the district court’s dismissal of Mr. Shortridge’s infringement suit. 

AFFIRMED

COSTS

No costs.

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