Court Opinion

ID: 4524468
Source: CourtListenerOpinion
Date Created: 2020-04-10 16:00:37.303196+00
Date Added: 2024-06-11T12:11:03.885457
License: Public Domain

Case: 19-2240   Document: 37     Page: 1   Filed: 04/10/2020

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                   WHITSERVE LLC,
                   Plaintiff-Appellant

                            v.

           DONUTS INC., NAME.COM, INC.,
                Defendants-Appellees
               ______________________

                       2019-2240
                 ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:18-cv-00193-CFC, United
 States District Judge Colm F. Connolly.

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

                   WHITSERVE LLC,
                   Plaintiff-Appellant

                            v.

                      ENOM, LLC,
                   Defendant-Appellee
                 ______________________

                       2019-2241
                 ______________________
Case: 19-2240    Document: 37     Page: 2   Filed: 04/10/2020

 2                              WHITSERVE LLC   v. DONUTS INC.

     Appeal from the United States District Court for the
 District of Delaware in No. 1:18-cv-00194-CFC, United
 States District Judge Colm F. Connolly.
                   ______________________

                  Decided: April 10, 2020
                  ______________________

    MICHAEL JOSEPH KOSMA, Whitmyer IP Group LLC,
 Stamford, CT, for plaintiff-appellant. Also represented by
 STEPHEN BALL.

    SHARON DAVIS, Rothwell, Figg, Ernst & Manbeck, PC,
 Washington, DC, for defendants-appellees. Also repre-
 sented by NICOLE DEABRANTES.
                 ______________________

     Before PROST, Chief Judge, O’MALLEY and TARANTO,
                      Circuit Judges.
 TARANTO, Circuit Judge.
      WhitServe LLC owns U.S. Patent Nos. 5,895,468 and
 6,182,078, both of which describe and claim systems and
 methods by which providers of professional services, using
 the Internet, send reminders to clients and obtain re-
 sponses from them. We addressed these patents in
 WhitServe LLC v. Computer Packages, Inc., 694 F.3d 10
 (Fed. Cir. 2012) (WhitServe I), where we resolved questions
 of infringement and anticipation, among other issues. This
 case involves an issue not previously presented: the eligi-
 bility of the ’468 and ’078 patent claims under 35 U.S.C.
 § 101.     The district court held all claims ineligible.
 WhitServe LLC v. Donuts Inc., 390 F. Supp. 3d 571, 574–
 75 (D. Del. 2019). We affirm.
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 WHITSERVE LLC   v. DONUTS INC.                               3

                                  I
     WhitServe’s ’468 and ’078 patents, in relevant part,
 share a specification. The patents describe software that
 runs on a professional service provider’s computer to help
 professionals, e.g., attorneys, perform functions for clients
 that “involve a series of deadlines” but cannot be performed
 without client authorization or input. ’468 patent, col. 1,
 lines 11–16; id., col. 2, lines 39–45. The computer, running
 the software, automatically queries a database of client
 deadlines and both sends due-date reminders to clients and
 obtains client responses over the Internet. Id., col. 1, lines
 6–9; id., col. 2, lines 39–45. As a client deadline ap-
 proaches, the system sends a notice to the client—via the
 Internet—that includes a client response form; the client
 provides a response via the form; the system returns the
 form to the professional service provider; and either the
 system or the professional takes an action based on the cli-
 ent’s response. Id., col. 3, lines 17–67; see also id., col. 5,
 lines 8–56 (describing an alternative embodiment using a
 webpage to collect and route client responses).
     In February 2018, WhitServe filed two complaints—
 one against Donuts Inc. and Name.com, Inc., and another
 against Enom, LLC (together, Donuts)—in the United
 States District Court for the District of Delaware, alleging
 infringement of selected claims of the two patents. Donuts
 moved to dismiss the complaints under Federal Rule of
 Civil Procedure 12(b)(6), arguing that all the claims of the
 patents are invalid because their subject matter is ineligi-
 ble for patenting under § 101. In ruling on the motion to
 dismiss, the district court treated claim 1 of the ’468 patent
 as representative of the claims at issue in the cases. J.A.
 6–7. WhitServe does not now challenge that determina-
 tion.
     Claim 1 of the ’468 patent recites:
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 4                                WHITSERVE LLC   v. DONUTS INC.

        1. A device for automatically delivering profes-
     sional services to a client comprising:
         a computer;
         a database containing a plurality of client
            reminders, each of the client reminders
            comprising a date field having a value
            attributed thereto;
         software executing on said computer for
             automatically querying said database
             by the values attributed to each client
             reminder date field to retrieve a client
             reminder;
         software executing on said computer for
             automatically generating a client re-
             sponse form based on the retrieved cli-
             ent reminder;
         a communication link between said com-
            puter and the Internet;
         software executing on said computer for
             automatically transmitting the client
             response form to the client through said
             communication link; and,
         software executing on said computer for
             automatically receiving a reply to the
             response form from the client through
             said communication link.
 ’468 patent, col. 6, line 56, through col. 7, line 8.
     The district court concluded that the claims are di-
 rected to “the abstract idea of preparing, sending, and re-
 ceiving responses to due-date reminders for clients of
 professional-service [providers].” WhitServe, 390 F. Supp.
 3d at 577. The district court then determined that the
 claim elements, either individually or as an ordered
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 WHITSERVE LLC   v. DONUTS INC.                              5

 combination, recite “nothing more than generic computer
 components employed in a customary manner,” and there-
 fore do not transform the abstract idea into patent-eligible
 subject matter. Id. at 579–80 (quotation marks omitted).
 On that basis, the district court granted Donuts’ motion to
 dismiss the complaints with prejudice and entered final
 judgments in Donuts’ favor.
     WhitServe timely appealed to this court. We have ju-
 risdiction under 28 U.S.C. § 1295(a)(1).
                               II
     Subject-matter eligibility under § 101 is a question of
 law, resolved based on underlying facts. Aatrix Software,
 Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125
 (Fed. Cir. 2018) (Aatrix I). “Like other legal questions
 based on underlying facts, this question may be, and fre-
 quently has been, resolved on a Rule 12(b)(6) . . . motion
 where the undisputed facts, considered under the stand-
 ards required by that Rule, require a holding of ineligibility
 under the substantive standards of law.” SAP America,
 Inc. v. InvestPic, LLC, 898 F.3d 1161, 1166 (Fed. Cir. 2018);
 see ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759,
 765 (Fed. Cir. 2019); Aatrix Software, Inc. v. Green Shades
 Software, Inc., 890 F.3d 1354, 1356, 1358–59 (Fed. Cir.
 2018) (Aatrix II). We review the Rule 12(b)(6) dismissal de
 novo. Ancora Techs., Inc. v. HTC America, Inc., 908 F.3d
 1343, 1347 (Fed. Cir. 2018); Newark Cab Ass’n v. City of
 Newark, 901 F.3d 146, 151 (3d Cir. 2018).
     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. But there are several “implicit
 exception[s]” to this statutory grant—laws of nature, natu-
 ral phenomena, and abstract ideas are not patent-eligible
 subject matter. Mayo Collaborative Services v. Prometheus
 Labs., Inc., 566 U.S. 66, 70 (2012). The Supreme Court in
 Alice Corp. v. CLS Bank International set forth a two-step
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 6                                 WHITSERVE LLC   v. DONUTS INC.

 analysis to determine whether patent claims fall outside
 § 101. 573 U.S. 208, 217–18 (2014). Under that frame-
 work, we ask (1) whether the claim, as a whole, is “directed
 to” patent-ineligible subject matter and (2) if so, whether
 the elements of the claim, considered individually or as an
 ordered combination, “‘transform the nature of the claim’
 into a patent-eligible application.” Id. (quoting Mayo, 566
 U.S. at 78).
                               A
     Proceeding within the two-step framework of Alice, we
 examine the patent’s “‘claimed advance’ to determine
 whether the claims are directed to an abstract idea.” Fin-
 jan, Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299, 1303
 (Fed. Cir. 2018). When the claims involve “software inno-
 vations, this inquiry often turns on whether the claims fo-
 cus 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. (quoting Enfish LLC v. Microsoft Corp., 822
 F.3d 1327, 1335–36 (Fed. Cir. 2016)); see also Customedia
 Techs., LLC v. Dish Network Corp., 951 F.3d 1359, 1364
 (Fed. Cir. 2020) (“[I]t is not enough, however, to merely im-
 prove a fundamental practice or abstract process by invok-
 ing a computer merely as a tool.”); BSG Tech LLC v.
 Buyseasons, Inc., 899 F.3d 1281, 1285–86 (Fed. Cir. 2018);
 CoreWireless Licensing S.A.R.L. v. LG Electronics, Inc., 880
 F.3d 1356, 1361–62 (Fed. Cir. 2018). Under this frame-
 work, we conclude, WhitServe’s claims are directed to an
 abstract idea.
     Claim 1 of the ’468 patent describes querying a data-
 base of client reminders having associated date infor-
 mation; sending, via the Internet, reminders to clients with
 approaching deadlines; including within those reminders a
 form for clients to give approval or further instructions to
 the professional regarding the approaching deadline; and
 receiving back, via the Internet, a client response. ’468
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 WHITSERVE LLC   v. DONUTS INC.                                7

 patent, col. 6, line 56, through col. 7, line 8. The focus is on
 the idea of keeping track of deadlines for clients and carry-
 ing out two-way communications with clients relevant to
 meeting those deadlines, using computers and networks to
 do so. The ’468 patent specification confirms this focus,
 stating that the objects of the invention are to “improve[]
 the speed, efficiency, and reliability of performing services
 for clients” and to provide a system that “automatically
 prepares reminders and solicits replies for client due
 dates.” Id., col. 2, lines 16–22.
     The focus of the claims is simply to use computers and
 a familiar network as a tool to perform a fundamental eco-
 nomic practice involving simple information exchange.
 Carrying out fundamental economic practices involving
 simple information exchange is an abstract idea. See, e.g.,
 BSG, 899 F.3d at 1286; SAP America, 898 F.3d at 1167–68;
 Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d
 1253, 1261–62 (Fed. Cir. 2016). And use of standard com-
 puters and networks to carry out those functions—more
 speedily, more efficiently, more reliably—does not make
 the claims any less directed to that abstract idea. See Alice,
 573 U.S. at 222–25; Customedia, 951 F.3d at 1364; Trading
 Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1092–93 (Fed.
 Cir. 2019); SAP America, 898 F.3d at 1167; Intellectual
 Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1314
 (Fed. Cir. 2016); Electric Power Grp., LLC v. Alstom S.A.,
 830 F.3d 1350, 1353, 1355 (Fed. Cir. 2016); Intellectual
 Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363,
 1367, 1370 (Fed. Cir. 2015); buySAFE, Inc. v. Google, Inc.,
 765 F.3d 1350, 1355 (Fed. Cir. 2014).
     Nothing in WhitServe’s claims transforms the abstract
 idea that is the focus of its claims into a patent-eligible in-
 vention. WhitServe describes the inventive concept as im-
 proving docketing systems through the use of databases,
 specific types of reminders, and software to generate client
 reminders and receive client responses. Appellant’s Br.
 30–31. But the specification itself states that “send[ing] a
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 8                               WHITSERVE LLC   v. DONUTS INC.

 client a reminder, obtain[ing] authorization or possibly ex-
 ecuted documents from the client, and then tak[ing] some
 action based on the client’s response” were “oftentimes”
 practiced by professionals. ’468 patent, col. 1, lines 12–16.
 It adds that these steps were “typically” aided by the use of
 a database of client due dates. Id., col. 1, lines 30–35. And
 nothing in the claims points to any improvement in off-the-
 shelf computers and existing communication networks.
      WhitServe’s claims require only generic components—
 “a computer,” “a database,” “software executing on said
 computer,” and “a communication link between said com-
 puter and the Internet”—to perform their routine and con-
 ventional functions. Id., col. 6, line 56, through col. 7, line
 8. The specification describes the network-connected com-
 puter only as a “professional computer” capable of execut-
 ing software. E.g., id., col. 3, line 18. The specification
 describes communication between the professional and the
 client simply as occurring “through an Internet communi-
 cation link,” an existing technology whose mechanisms of
 operation WhitServe’s patents do not propose to alter. Id.,
 col. 4, line 35. The specification likewise makes clear that
 docketing systems commonly employed a database and
 software that “notifie[d] the professional of each upcoming
 deadline a preset time period before the deadline by . . .
 networked computer.” Id., col. 1, lines 30–35. These ge-
 neric computer and communications components provide
 no eligibility-transformative inventive concept. And the
 specific ordered combination of these generic components
 is likewise insufficient, as it does nothing more than “spell
 out what it means to apply [the abstract idea] on a com-
 puter.” Capital One, 792 F.3d at 1370 (quotation marks
 omitted).
      WhitServe argues that the district court failed to con-
 sider the perspective of the relevant artisan in making its
 patent-ineligibility determination. We disagree. The dis-
 trict court noted what the patent itself teaches about the
 routine use of docketing systems by professionals and the
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 WHITSERVE LLC   v. DONUTS INC.                             9

 conventionality of the various claimed components, includ-
 ing the Internet and web pages, at the time of invention.
 WhitServe, 390 F. Supp. 3d at 574, 577–79; see ’468 patent,
 col. 1, lines 12–16, 29–35; id., col. 5, lines 22–26. The de-
 scription of “already-available computers that are not
 themselves plausibly asserted to be an advance . . .
 amounts to a recitation of what is ‘well-understood, rou-
 tine, [and] conventional.’” SAP, 898 F.3d at 1170 (quoting
 Mayo, 566 U.S. at 73). In this case, therefore, the district
 court did not have to look beyond the specification to make
 its patent-eligibility determination.
     WhitServe also points to alleged licensing of its patents
 as evidence of an inventive concept. We have held, how-
 ever, that “[c]ommercial success is not necessarily a proxy
 for an improvement in a technology nor does it necessarily
 indicate that claims were drawn to patent eligible subject
 matter.” Versata Dev. Grp., Inc. v. SAP America, Inc., 793
 F.3d 1306, 1335 (Fed. Cir. 2015). After all, ineligible ideas
 can be valuable. See Bancorp Servs., L.L.C. v. Sun Life As-
 surance Co. of Can. (U.S.), 687 F.3d 1266, 1278–79
 (Fed. Cir. 2012). That the market found WhitServe’s prod-
 ucts or ideas desirable—and took licenses—does not over-
 ride the now-straightforward conclusion that the patents
 claim no improvement in computer functionality or other
 eligible matter. 1

     1   WhitServe argues that our analysis should account
 for agency and judicial rulings that upheld its patents
 against various challenges. But patent eligibility under
 § 101 was not at issue in any of those earlier rulings. Thus,
 none either addressed or decided whether the claims at is-
 sue are eligible under the Supreme Court’s Alice frame-
 work. Indeed, though the question was not presented to
 this court in Whitserve I, Judge Mayer suggested in dissent
 that the court should address it sua sponte and find the
 claims ineligible. 694 F.3d at 40–42 (Mayer, J., dissenting).
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 10                                WHITSERVE LLC   v. DONUTS INC.

                               B
     WhitServe argues that the district court should not
 have resolved this case at the pleading stage. But we have
 repeatedly made clear that “patent eligibility can be deter-
 mined at the Rule 12(b)(6) stage” if there are no plausible
 factual allegations to impede such a resolution. Aatrix I,
 882 F.3d at 1125; see, e.g., SAP America, 898 F.3d at 1166.
 Factual questions relevant to the § 101 analysis, “[l]ike
 other legal questions based on underlying facts,” do not
 prevent a judgment on the pleadings when the pleadings
 and exhibits attached thereto show that there are no plau-
 sible factual disputes. SAP America, 898 F.3d at 1166. In
 the § 101 context, “the specification alone” may suffice to
 resolve the patent-eligibility inquiry. Aatrix II, 890 F.3d at
 1356; see SAP America, 898 F.3d at 1166. That is the case
 here, for the reasons we have already explained.
     WhitServe next argues that its patent claims do not fall
 outside the text of § 101 or come within the statement in
 Le Roy v. Tatham that “[a] principle, in the abstract, is a
 fundamental truth; an original cause; a motive; these can-
 not be patented.” 55 U.S. 156, 175 (1852). But as discussed
 above, later Supreme Court decisions and our applications
 of those decisions have held that ineligible subject matter
 also includes fundamental economic practices involving
 simple information exchange implemented on off-the-shelf
 computers and networks. Those precedents control.
     WhitServe finally argues that its due process rights
 were violated when the district court denied its request for
 an oral argument on the motion to dismiss. We disagree.
 The right to be heard in the context of a motion to dismiss
 is satisfied where the plaintiff receives an “opportunity to
 present legal arguments either orally, in writing, or both
 at the District Court’s discretion.” Dougherty v. Harper’s
 Magazine Co., 537 F.2d 758, 761 (3d Cir. 1976). Here,
 WhitServe had a full opportunity to oppose Donuts’
 12(b)(6) motion in writing. WhitServe has not pointed to
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 WHITSERVE LLC   v. DONUTS INC.                            11

 any limitation that prevented it from giving full substan-
 tive expression to its argument. The district court acted
 well within its discretion in not holding an oral argument
 on the motion to dismiss.
                              III
     For the forgoing reasons, we affirm the district court’s
 judgment.
                         AFFIRMED