Court Opinion

ID: 4015300
Source: CourtListenerOpinion
Date Created: 2016-07-13 15:01:23.985071+00
Date Added: 2024-06-11T12:49:04.539765
License: Public Domain

NOTE: This disposition is nonprecedential.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.
                 ______________________
2                  SHORTRIDGE   v. FOUNDATION CONSTRUCTION

    Before O’MALLEY, LINN, and STOLL, Circuit Judges.
PER CURIAM.
     Douglas M. Shortridge appeals the United States Dis-
trict Court for the Northern District of California’s deter-
mination 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 pa-
tent, which relates generally to:
    [a] computer implemented business method and
    process directed to enabling a public works con-
    tractor employer . . . to[] generate certified payroll
    records . . . ; provide alerts and reports . . . ; pro-
    vide evidence of meeting and exceeding govern-
    ment 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 de-
pending 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
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 employ-
ees work across public works projects in different jurisdic-
tions, 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 juris-
diction(s) are generated “in conjunction with and simulta-
neous 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 com-
   puter implemented core payroll calculation and
   processing engine, the processing including:
       sharing between conjoined computer processor
   components, input data stored in a relational da-
   tabase, 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 juris-
   diction-specific rules drawn from a plurality of
   stored rules;
       distinguishing between public works projects
   and private sector projects based on the input da-
   ta and identifying the project as a public works
   project based on the input data;
       verifying input data is compliant with re-
   quirements of the core payroll processing and cal-
   culation engine and the requirements of the CPR;
4                   SHORTRIDGE   v. FOUNDATION CONSTRUCTION

        processing the verified input data to produce
    calculated core payroll data, the calculated core
    payroll data used for core payroll processing, pro-
    duction of core payroll processing reports, and
    production of the CPR;
        sharing, between conjoined computer proces-
    sor components, the calculated core payroll data;
        sharing, between the conjoined computer pro-
    cessor 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 pro-
    duced in conjunction with and simultaneously
    with core payroll processing; and
         producing public works contractor manage-
    ment supporting reports using the input data only
    if the input data identifies the project as a public
    works project, the public works contractor man-
    agement supporting reports indicating whether
    the contractor is in compliance with the jurisdic-
    tion-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 con-
    tractor payroll processing comprising:
        a computer processor, or a networked plurali-
    ty of computer processors, configured with:
        computer readable instructions;
SHORTRIDGE   v. FOUNDATION CONSTRUCTION                     5

         at least one data base application;
         at least one user interface;
         binary and application programming interfac-
   es;
        a core payroll calculation and processing en-
   gine configured to perform payroll calculation and
   processing and produce calculated core payroll da-
   ta; and
        an augmentation and supporting engine for
   public works payroll processing operating in con-
   junction with the core payroll calculation and pro-
   cessing engine and configured to produce
   certifiable public works payroll records and re-
   ports in conjunction with and simultaneously with
   the payroll calculation and processing performed
   by the core payroll calculation and processing en-
   gine, the augmentation and supporting engine in-
   cluding a plurality of relational tables, at least
   one relational table configured to distinguish be-
   tween private sector and public works projects,
   the augmentation and supporting engine config-
   ured 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 support-
   ing engine is configured to produce the certifiable
   public works payroll records and reports for a pro-
   ject only if the at least one relational table identi-
   fies 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 plu-
   rality of stored rules.
6                     SHORTRIDGE       v. FOUNDATION CONSTRUCTION

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 judg-
ment 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-cv-
4850-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 in-
ventive concept that transforms the claims into patent-
eligible 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 pur-
suant 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 inde-
pendent claims 1 and 12 as representative.
SHORTRIDGE   v. FOUNDATION CONSTRUCTION                   7

                       DISCUSSION
                             I.
    We review de novo whether a claim is drawn to pa-
tent-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 sub-
ject 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.
8                 SHORTRIDGE   v. FOUNDATION CONSTRUCTION

                           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 pro-
cessing 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 calcula-
tions 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.”
SHORTRIDGE   v. FOUNDATION CONSTRUCTION                     9

ness method does not in and of itself render it patent-
eligible. 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 lan-
guage, the ’933 patent claims generating CPRs in con-
junction 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 simul-
taneously 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 electron-
ic records, track multiple transactions, and issue simulta-
neous instructions” was not an inventive concept. Alice,
134 S. Ct. at 2359 (emphasis added). This same logic
applies to the claims at issue here.
10                 SHORTRIDGE   v. FOUNDATION CONSTRUCTION

     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 unper-
suasive because “[w]ithout additional limitations, a pro-
cess 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 multi-
ple 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 Dig-
itech, 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 simi-
lar 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
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 ar-
guments 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 dismis-
sal of Mr. Shortridge’s infringement suit.
                      AFFIRMED
                          COSTS
   No costs.