Court Opinion

ID: 4648175
Source: CourtListenerOpinion
Date Created: 2020-12-31 16:02:25.949021+00
Date Added: 2024-06-11T08:01:12.322289
License: Public Domain

Case: 20-1195       Document: 47           Page: 1       Filed: 12/31/2020

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                      ______________________

                          NETSOC, LLC,
                         Plaintiff-Appellant

                                     v.

   MATCH GROUP, LLC, PLENTYOFFISH MEDIA
         ULC, HUMOR RAINBOW, INC.,
              Defendants-Appellees
             ______________________

                            2020-1195
                      ______________________

    Appeal from the United States District Court for the
 Northern District of Texas in No. 3:18-cv-01809-N, Judge
 David C. Godbey.

      -----------------------------------------------------------------

                          NETSOC, LLC,
                         Plaintiff-Appellant

                                     v.

                          QUORA, INC.,
                        Defendant-Appellee
                      ______________________

                            2020-1430
                      ______________________
Case: 20-1195    Document: 47      Page: 2     Filed: 12/31/2020

2                              NETSOC, LLC   v. MATCH GRP., LLC

    Appeal from the United States District Court for the
 Northern District of California in No. 3:19-cv-06518-VC,
 Judge Vince Chhabria.
                 ______________________

                Decided: December 31, 2020
                  ______________________

    WILLIAM PETERSON RAMEY, III, Ramey & Schwaller,
 LLP, Houston, TX, argued for plaintiff-appellant.

     ROBERT L. GREESON, Norton Rose Fulbright US LLP,
 Dallas, TX, argued for defendants-appellees in 2020-1195.
 Also represented by STEPHANIE DEBROW, Austin, TX; ERIK
 OWEN JANITENS, Houston, TX.

     STEVEN MOORE, Kilpatrick Townsend & Stockton LLP,
 San Francisco, CA, argued for defendant-appellee in 2020-
 1430. Also represented by RICHARD W. GOLDSTUCKER, At-
 lanta, GA; JORDAN TRENT JONES, Menlo Park, CA; MEGAN
 ELIZABETH BUSSEY, New York, NY.
                 ______________________

    Before TARANTO, CHEN, and STOLL, Circuit Judges.
 STOLL, Circuit Judge.
      NetSoc, LLC appeals the United States District Court
 for the Northern District of Texas’s dismissal of certain pa-
 tent infringement allegations against Match Group, LLC,
 PlentyofFish Media ULC, and Humor Rainbow, Inc. (col-
 lectively, “Match”), and the United States District Court for
 the Northern District of California’s dismissal of certain
 patent infringement allegations against Quora, Inc. The
 Texas district court held the asserted claims of NetSoc’s
 U.S. Patent No. 9,978,107 ineligible under 35 U.S.C. § 101,
 and the California district court similarly held the asserted
 claims of NetSoc’s related U.S. Patent No. 9,218,591
Case: 20-1195      Document: 47      Page: 3   Filed: 12/31/2020

 NETSOC, LLC   v. MATCH GROUP, LLC                            3

 ineligible under 35 U.S.C. § 101. We conclude that the
 claims of both the ’107 and ’591 patents are directed to pa-
 tent-ineligible subject matter. Accordingly, we affirm the
 decisions of both district courts.
                         BACKGROUND
                               I
     NetSoc sued Match for infringing all claims of the
 ’107 patent and sued Quora for infringing all claims of the
 ’591 patent. The ’107 patent is a continuation of the
 ’591 patent (collectively, the “asserted patents”), and the
 asserted patents share a common specification. 1 The as-
 serted patents relate to “a system and method for estab-
 lishing and using a social network to facilitate people in life
 issues.” ’107 patent col. 1 ll. 40–41. For example, the in-
 vention of the asserted patents addresses “problems and
 concerns that arise when individuals or families travel or
 relocate,” such as “logistic problems, problems arising with
 assimilating family members in a community, and . . .
 roommate pairings.” Id. at col. 2 ll. 6–12.
      The specification discloses a computer system and
 methods that maintain a list “of participants who can as-
 sist in resolving issues at [a] particular geographic loca-
 tion.” Id. at col. 2 ll. 21–23. A user may submit an inquiry
 related to a selected category of those issues. Id. at col. 2
 ll. 24–30. That inquiry can be sent as a message to partic-
 ipants either through a service or directly to a participant
 selected by the user. Id. at col. 2 ll. 28–47. Users are “en-
 abled to communicate with the selected participant(s) over
 an online medium,” such that contact information of the
 participants “may be shielded from the user,” id. at col. 8
 ll. 50–58, or “blind” connections may be formed between

     1   When referencing the common specification, we cite
 to the ’107 patent.
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4                                NETSOC, LLC   v. MATCH GRP., LLC

 users and participants, id. at col. 13 ll. 18–20. The perfor-
 mance of participants may be tracked by:
     (i) timing how long it takes for the identified issue
     resolver [(i.e., a participant)] to get back to the user,
     (ii) if subsequent communications are exchanged
     between user and issue resolver, timing the respon-
     siveness of the issue resolver to each user commu-
     nication, (iii) receiving feedback from the user on
     how well the issue resolver resolved the user’s is-
     sue, [or] (iv) other objective or subjective criteria for
     determining the effectiveness of the issue resolver
     for the user.
 Id. at col. 9 ll. 60–67.
                                II
      Match moved the Texas district court to dismiss
 NetSoc’s complaint, arguing that the ’107 patent claimed
 patent-ineligible subject matter under § 101. The district
 court granted Match’s motion, concluding that the claims
 of the ’107 patent are directed to an abstract idea, and that
 they fail to articulate an inventive concept. NetSoc, LLC
 v. Match Grp., LLC, No. 3:18-CV-01809-N, 2019 WL
 3304704, at *3 (N.D. Tex. July 22, 2019). Particularly, the
 district court explained that the claims “are predicated on
 presenting results of data collection and analysis” and do
 not “require[] anything other than conventional computer
 hardware.” Id. at *2–3. Similarly, Quora moved the Cali-
 fornia district court to dismiss NetSoc’s complaint, arguing
 that the ’591 patent claimed patent-ineligible subject mat-
 ter under § 101. There, the district court granted Quora’s
 motion, determining that the claims of the ’591 patent are
 directed to “the abstract idea of a social network,” and that
 the claims’ purported improvements to that social network
 “do not transform the idea into a patent-eligible applica-
 tion.” NetSoc, LLC v. Quora, Inc., No. 19-CV-06518-VC,
 2020 WL 415919, at *1 (N.D. Cal. Jan. 27, 2020).
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 NETSOC, LLC   v. MATCH GROUP, LLC                           5

     NetSoc appeals both decisions. These cases were con-
 solidated on appeal for oral argument. We have jurisdic-
 tion pursuant to 28 U.S.C. § 1295(a)(1).
                          DISCUSSION
     We apply regional circuit law when reviewing a district
 court’s dismissal for failure to state a claim. XY, LLC
 v. Trans Ova Genetics, LC, 968 F.3d 1323, 1329 (Fed. Cir.
 2020). Both the Fifth Circuit and the Ninth Circuit review
 such dismissals de novo, accepting all well-pleaded facts as
 true and viewing those facts in the light most favorable to
 the plaintiff. Shakeri v. ADT Sec. Servs., Inc., 816 F.3d
 283, 290 (5th Cir. 2016); Yagman v. Garcetti, 852 F.3d 859,
 863 (9th Cir. 2017).
                               I
     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 held
 that this provision contains an important exception: “Laws
 of nature, natural phenomena, and abstract ideas are not
 patentable.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
 216 (2014) (quoting Ass’n for Molecular Pathology v. Myr-
 iad Genetics, Inc., 569 U.S. 576, 589 (2013)).
      “[T]he Supreme Court articulated a two-step test for
 examining patent eligibility when a patent claim is alleged
 to involve one of these three types of subject matter.” Car-
 dioNet, LLC v. InfoBionic, Inc., 955 F.3d 1358, 1367
 (Fed. Cir. 2020); see Alice, 573 U.S. at 217–18. The first
 step of the Alice test requires a court to “determine whether
 the claims at issue are directed to a patent-ineligible con-
 cept.” Alice, 573 U.S. at 218. “[T]he claims are considered
 in their entirety to ascertain whether their character as a
 whole is directed to excluded subject matter.” McRO, Inc.
 v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1312
 (Fed. Cir. 2016) (quoting Internet Pats. Corp. v. Active
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6                              NETSOC, LLC   v. MATCH GRP., LLC

 Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). If the
 claims are directed to a patent-ineligible concept, the sec-
 ond step of the Alice test requires a court to “examine the
 elements of the claim to determine whether it contains an
 ‘inventive concept’ sufficient to ‘transform’ the claimed ab-
 stract idea into a patent-eligible application.” Alice,
 573 U.S. at 221 (quoting Mayo Collaborative Servs. v. Pro-
 metheus Labs., Inc., 566 U.S. 66, 72, 78–79 (2012)). “This
 inventive concept must do more than simply recite ‘well-
 understood, routine, conventional activity.’” FairWarning
 IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093 (Fed. Cir.
 2016) (quoting Mayo, 566 U.S. at 79–80).
                              II
    We first consider the claims of the ’107 patent. Though
 we consider each claim for purposes of our § 101 analysis,
 we duplicate claim 1 here as an illustrative claim.
     1. A method for establishing a social network, the
     method being implemented on a network computer
     system and comprising:
     maintaining a list comprising a plurality of partic-
     ipants, wherein each participant in the plurality of
     participants corresponds to one or more individu-
     als, wherein the list also includes information as-
     sociated with at least one of each participant or the
     one or more individuals that correspond to each
     participant;
     presenting a user with an interface from which the
     user makes a selection of a category from a plural-
     ity of categories;
     in response to receiving the selection of the cate-
     gory by the user,
     displaying, for the user, some of the information as-
     sociated with each of multiple participants from
     the plurality of participants which match the
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 NETSOC, LLC   v. MATCH GROUP, LLC                           7

     selection of the category by the user, while shield-
     ing contact information associated with each of the
     multiple participants;
     wherein displaying some of the information associ-
     ated with each of the multiple participants is based
     at least in part on a rating of individual partici-
     pants in the plurality of participants;
     enabling the user to send an inquiry message to one
     or more of the multiple participants, while shield-
     ing the contact information from the user, the con-
     tact information including any messaging
     identifier that is associated with each of the one or
     more participants;
     tracking a response time of each of the one or more
     participants who received the message from the
     user; and
     updating the rating associated with each of the one
     or more participants based at least in part on the
     tracked response time.
 ’107 patent col. 17 ll. 15–48.
     We determine that, under Alice step one, the claims of
 the ’107 patent are directed to the abstract idea of automat-
 ing the conventional establishment of social networks to al-
 low humans to exchange information and form
 relationships. The ’107 patent claims recite steps for es-
 tablishing a social network on a computer. The ’107 patent
 specification acknowledges that social networks are a
 longstanding practice and that, “[u]nder a current ap-
 proach, . . . a human resource department, or other inter-
 nal relocation departments,” may “facilitate the entire
 arduous process of relocation.” Id. at col. 10 ll. 16–19. It
 goes on to explain that without support from these depart-
 ments, someone “may spend a great deal of time conducting
 research through generic sources,” but would ultimately
 have “no assistance, or guidance, other than other general
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8                               NETSOC, LLC   v. MATCH GRP., LLC

 non-personal assistance.” Id. at col. 11 ll. 6–17. Thus, in
 providing “access to a software suit[e]” to overcome not
 having this assistance in the relocation process, id.
 at col. 11 ll. 20–21, the invention claimed in the ’107 patent
 “qualifies as an ‘abstract idea’ for which computers are in-
 voked merely as a tool,” Enfish, LLC v. Microsoft Corp.,
 822 F.3d 1327, 1336 (Fed. Cir. 2016); see also Credit Ac-
 ceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1055
 (Fed. Cir. 2017) (“[M]ere automation of manual processes
 using generic computers does not constitute a patentable
 improvement.”).
      Moreover, the claimed invention of establishing a social
 network is an abstract idea “pertaining to methods of or-
 ganizing human activity.” In re TLI Commc’ns LLC Pat.
 Litig., 823 F.3d 607, 613 (Fed. Cir. 2016) (citing Intellectual
 Ventures I LLC v. Cap. One Bank (USA), 792 F.3d 1363,
 1367 (Fed. Cir. 2015) (finding the claim at issue “not mean-
 ingfully different from the ideas found to be abstract in
 other cases before the Supreme Court and our court involv-
 ing methods of organizing human activity”)). Namely,
 “maintaining” a list of participants, “presenting” a user
 with selectable categories, “displaying” participant infor-
 mation based on the selected category, “shielding” contact
 information, “enabling” the user to send a message to par-
 ticipants, “tracking” a response time of participants, and
 “updating” participant ratings are all human activities
 that the claims more efficiently organize by applying them
 to a “network computer system.” ’107 patent col. 17
 ll. 15–48.
     At Alice step two, we do not discern “an ‘inventive con-
 cept’ sufficient to ‘transform’ the claimed abstract idea into
 a patent-eligible invention.” Alice, 573 U.S. at 221 (quoting
 Mayo, 566 U.S. at 72, 78–79). The claim limitations fail to
 add a technological improvement to the computer or other-
 wise provide “something more” to “transform” the claims.
 See id. at 217. Rather, the ’107 patent claims are quintes-
 sential “apply it with a computer” claims. See id. at 223
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 NETSOC, LLC   v. MATCH GROUP, LLC                           9

 (“Stating an abstract idea while adding the words ‘apply it
 with a computer’ simply combines those two steps, with the
 same deficient result.”).
      We find unpersuasive NetSoc’s arguments that the
 “rating” limitations—“tracking a response time of each of
 the one or more participants who received the message
 from the user” and “updating the rating associated with
 each of the one or more participants based at least in part
 on the tracked response time,” ’107 patent col. 17
 ll. 43–48—render the claims patent eligible. Neither track-
 ing a participant’s response time nor using that response
 time to update a participant’s rating represents a techno-
 logical improvement that would render the claims non-ab-
 stract. Indeed, the specification discloses that, without the
 invention, a “human resource department” can handle the
 “entire arduous process of relocation,” see id. at col. 10
 ll. 17–19, which would include making judgments about
 who might be a good source of information based on re-
 sponse time. Nor do the “rating” limitations, or any other
 limitation, otherwise provide an inventive concept that
 transforms the claims into an eligible application.
                               II
    We next consider the claims of the ’591 patent. Again,
 though we consider each claim for purposes of our § 101
 analysis, we duplicate claim 1 here as an illustrative claim.
     1. A method for establishing a social network, the
     method comprising:
     maintaining a list comprising a plurality of partic-
     ipants, wherein each participant in the plurality of
     participants corresponds to one or more individu-
     als, wherein the list also includes information as-
     sociated with at least one of each participant or the
     one or more individuals that correspond to each
     participant;
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 10                              NETSOC, LLC   v. MATCH GRP., LLC

      presenting a user with a plurality of categories
      from which the user may make a selection of a cat-
      egory from the plurality of categories;
      receiving the selection of the category by the user;
      in conjunction with the selection of the category, re-
      ceiving an electronic communication from the user
      for an unidentified respondent, wherein the elec-
      tronic communication contains an inquiry of the
      user;
      after receiving the selection of the category by the
      user, selecting one or more participants from the
      list to receive the electronic communication,
      wherein selecting is based at least in part on the
      selection of the category or the information associ-
      ated with at least one of each participant or the one
      or more individuals that correspond to each partic-
      ipant;
      sending the inquiry to the selected one or more par-
      ticipants;
      receiving a response to the inquiry from the se-
      lected one or more participants, the response from
      each of the one or more participants including bio-
      graphical information about that participant;
      publishing at least a portion of the response from
      each of the selected one or more participants for
      other users to view, wherein publishing is per-
      formed without identifying the user but includes
      providing biographical information about the par-
      ticipant who provided the response;
      tracking feedback for each of the selected one or
      more participants based at least in part on the pub-
      lished portion of the response, including determin-
      ing a rating from the user for at least one of the
      selected one or more participants.
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 NETSOC, LLC   v. MATCH GROUP, LLC                             11

 ’591 patent col. 16 l. 63–col. 17 l. 34.
      We conclude that the claims of the ’591 patent are also
 directed to an abstract idea under Alice step one. As with
 the claims of the related ’107 patent, the ’591 patent claims
 are directed to automating the longstanding practice of es-
 tablishing a social network to allow humans to exchange
 information and form relationships. The claim limitations
 of “maintaining” a list of participants, “presenting” a user
 with selectable categories, “receiving” the user’s category
 selection, “receiving” an inquiry from the user, “selecting”
 a participant to receive the user’s inquiry, “sending” the in-
 quiry to the participant, “receiving” a response to the in-
 quiry from the participant, “publishing” the response, and
 “tracking” feedback of the participants, ’591 patent col. 16
 l. 63–col. 17 l. 34, are directed to automating a longstand-
 ing, well-known method of organizing human activity, sim-
 ilar to concepts previously found to be abstract. See In re
 TLI Commc’n LLC Pat. Litig., 823 F.3d at 613; see also In-
 tellectual Ventures I LLC, 792 F.3d at 1367.
      Turning to Alice step two, we also do not discern “an
 ‘inventive concept’ sufficient to ‘transform’ the claimed ab-
 stract idea into a patent-eligible application.” Alice,
 573 U.S. at 221 (quoting Mayo, 566 U.S. at 72). As with
 the ’107 patent claims, the ’591 patent claims are quintes-
 sential “apply it with a computer” claims. See id. at 223.
 We are unpersuaded by NetSoc’s arguments that the “rat-
 ing” limitation in the ’591 patent recites an improvement
 to the underlying technology and thus renders the claims
 patent eligible. Contrary to NetSoc’s contention, the limi-
 tation “tracking feedback for each of the selected one or
 more participants based at least in part on the published
 portion of the response, including determining a rating
 from the user for at least one of the selected one or more
 participants,” ’591 patent col. 17 ll. 30–34, is itself directed
 to an abstract idea. As we have held, “[t]he abstract idea
 itself cannot supply the inventive concept.” Trading Tech.
 Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1385 (Fed. Cir. 2019)
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 12                              NETSOC, LLC   v. MATCH GRP., LLC

 (citing SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161,
 1171 (Fed. Cir. 2018)).
                        CONCLUSION
      We have considered NetSoc’s remaining arguments, in-
 cluding its arguments that the district courts erred by ig-
 noring factual issues precluding a determination of
 ineligibility at the Rule 12(b)(6) stage, and find them un-
 persuasive. For the foregoing reasons, we affirm both dis-
 trict courts’ decisions to dismiss, as the asserted patents
 claim unpatentable subject matter.
                        AFFIRMED
                           COSTS
      No costs.