Court Opinion

ID: 4680992
Source: CourtListenerOpinion
Date Created: 2021-04-26 15:01:07.997768+00
Date Added: 2024-06-11T08:03:58.607709
License: Public Domain

Case: 19-2334    Document: 48     Page: 1   Filed: 04/26/2021

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                   WHITSERVE LLC,
                   Plaintiff-Appellant

                             v.

                    DROPBOX, INC.,
                    Defendant-Appellee
                  ______________________

                        2019-2334
                  ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:18-cv-00665-CFC, Judge
 Colm F. Connolly.
                 ______________________

                  Decided: April 26, 2021
                  ______________________

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

     GREGORY H. LANTIER, Wilmer Cutler Pickering Hale
 and Dorr LLP, Washington, DC, for defendant-appellee.
 Also represented by CLAIRE HYUNGYO CHUNG; ELIZABETH
 BEWLEY, Boston, MA.
                 ______________________
Case: 19-2334     Document: 48      Page: 2     Filed: 04/26/2021

 2                              WHITSERVE LLC   v. DROPBOX, INC.

     Before REYNA, SCHALL, and WALLACH, Circuit Judges.
 REYNA, Circuit Judge.
     Appellant WhitServe LLC appeals from the United
 States District Court for the District of Delaware.
 WhitServe brought an infringement action against Drop-
 box. Dropbox moved to dismiss WhitServe’s complaint
 with prejudice on grounds that the patent claims asserted
 by WhitServe are directed to patent ineligible subject mat-
 ter. The district court granted Dropbox’s motion to dis-
 miss, and WhitServe appeals. We affirm the judgment of
 the district court.
                         BACKGROUND
     WhitServe LLC (“WhitServe”) filed suit on May 1, 2018
 alleging that Dropbox, Inc. (“Dropbox”) infringes at least
 claims 10 and 19 of U.S. Patent No. 8,812,437 (“the ’437
 patent”). The ’437 patent, entitled “Onsite Backup for
 Third Party Internet-Based Systems,” generally relates to
 “safeguarding customer/client data when a business out-
 sources data processing to third party Internet-based sys-
 tems,” by backing up the internet-based data to a client’s
 local computer. ’437 patent col. 1 ll. 6–9. The specification
 discloses a “central computer,” a “client computer,” a “com-
 munications link” between each computer and the Inter-
 net, and a “database” containing a plurality of data records.
 Id. at col. 2 ll. 34–52; col. 4 ll. 4–13. The specification fur-
 ther discloses software that is capable of “modifying” the
 data records by “updating and deleting” data in the data
 records. Id. at col. 4 ll. 26–30. In sum, the disclosed com-
 puters can send a request for a copy of data records over
 the Internet, receive the request, and transmit a copy of the
 requested data. See, e.g., id. at col. 4 ll. 31–41.
Case: 19-2334     Document: 48      Page: 3   Filed: 04/26/2021

 WHITSERVE LLC   v. DROPBOX, INC.                           3

     Claim 10 is representative of the ’437 patent’s claims
 for purposes of this appeal. 1 Claim 10 recites:
    A system for onsite backup for internet-based data
    processing systems, comprising:
    a central computer accessible by at least one client
    computer at a client site via the Internet for out-
    sourced data processing;
    at least one database containing a plurality of data
    records accessible by said central computer, the
    plurality of data records including internet-based
    data that is modifiable over the Internet from the
    client computer;
    data processing software executing on said central
    computer for outsourcing data processing to the In-
    ternet from the at least one client computer, said
    data processing software modifying the internet-
    based data in the plurality of data records accord-
    ing to instructions received from the at least one
    client computer, the modifying including updating

    1    On appeal, WhitServe contests the district court’s
 treatment of claim 10 as representative. See Appellant’s
 Br. 17. However, the district court determined that
 “WhitServe did not challenge Dropbox’s treatment of claim
 10 as representative or present any meaningful argument
 for the distinctive significance of any claim limitation not
 found in claim 10.” J.A. 9. In addition, Whitserve’s open-
 ing brief on appeal does not address any claim of the ’437
 patent other than claim 10 and thus WhitServe has waived
 the argument that claim 10 is not representative, and
 waived argument as to the patent eligibility of other claims
 in the ’437 patent. SmithKline Beecham Corp. v. Apotex
 Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006).
Case: 19-2334      Document: 48     Page: 4    Filed: 04/26/2021

 4                             WHITSERVE LLC   v. DROPBOX, INC.

     and deleting the internet-based data in the plural-
     ity of data records;
     a client data request, sent from at least one client
     computer via the Internet to said central computer,
     the client data request comprising a request for a
     backup copy of at least one of the plurality of data
     records;
     software executing on said central computer to re-
     ceive, via the Internet from the at least one client
     computer, the request for a backup copy of at least
     one of the plurality of data records including the
     internet-based data in the at least one of the plu-
     rality of data records that has been modified by
     said data processing software; and
     software executing on said central computer to
     transmit the backup copy of the at least one of the
     plurality of data record [sic] including the internet-
     based data in the at least one of the plurality of
     data records that has been modified by said data
     processing software to the client site for storage of
     the internet-based data from the at least one of the
     plurality of data record [sic] in a location accessible
     via the at least one client computer;
     wherein the location is accessible by the at least
     one client computer without using the Internet.
 Id. at col. 4 ll. 14–50.
     Dropbox moved to dismiss WhitServe’s complaint pur-
 suant to Federal Rule of Civil Procedure 12(b)(6) on
 grounds that the ’437 patent’s claims recite patent ineligi-
 ble subject matter pursuant to 35 U.S.C. § 101. On July
 25, 2019, the district court granted Dropbox’s motion to dis-
 miss, concluding that the claims are directed to an abstract
 idea and fail to supply an inventive concept that trans-
 forms the abstract idea into a patent-eligible application.
Case: 19-2334     Document: 48      Page: 5    Filed: 04/26/2021

 WHITSERVE LLC   v. DROPBOX, INC.                             5

 WhitServe LLC v. Dropbox, Inc., No. CV 18-665-CFC, 2019
 WL 3342949, at *1, *5–6 (D. Del. July 25, 2019).
      Specifically, the district court agreed with Dropbox
 that the ’437 patent is directed to the abstract idea of “back-
 ing up data records,” and concluded that the claims are not
 directed to an improvement in computer functionality. Id.
 at *4–5. In addition, the district court found that repre-
 sentative claim 10 “recites only generic computer compo-
 nents performing routine computer functions.” Id. at *4.
 The district court found “nothing inventive in how the
 [’]437 patent arranges the storage of backup data,” reason-
 ing that “[i]t is a well-understood practice of human organ-
 ization that backup copies are stored in a location separate
 and distinct from the original location.” Id. at *5. The dis-
 trict court reasoned that if the original location was onsite,
 the conventional backup location would be offsite, or vice
 versa. Id. at *5–6. The district court reasoned that the
 claims were similar to when “humans secure critical docu-
 ments, such as wills . . . in a bank safe deposit box, but keep
 a copy at home for quick reference when needed.” Id. at *6.
     Further, the district court observed that, contrary to
 WhitServe’s argument, Dropbox was not required to sepa-
 rately address the patent’s preemptive scope in order to
 prevail on its motion to dismiss, because preemption “is not
 a separate and independent test under Alice,” but rather is
 a “concern that undergirds [] § 101 jurisprudence.” Id.
     The district court rejected WhitServe’s contention that
 factual issues precluded dismissal, noting that this court
 has “repeatedly affirmed § 101 rejections at the motion to
 dismiss stage, before claim construction or significant dis-
 covery has commenced,” id. (quoting Cleveland Clinic
 Found. v. True Health Diagnostics LLC, 859 F.3d 1352,
 1360 (Fed. Cir. 2017)). The court stated that nothing in the
 allegations set forth in WhitServe’s complaint or in the
 specification of the ’437 patent would create a factual issue
 regarding patent eligibility. Id. at *7.
Case: 19-2334     Document: 48      Page: 6    Filed: 04/26/2021

 6                             WHITSERVE LLC   v. DROPBOX, INC.

      The district court also rejected WhitServe’s argument
 that the claims were patent eligible because the United
 States Patent and Trademark Office (“PTO”) issued the pa-
 tent and an issued patent is presumed to be valid, and be-
 cause this court had determined previously, in another
 action, that the patent claimed eligible subject matter. Id.
 The district court concluded it was not bound by PTO’s de-
 cisions and the agency’s allowance of the ’437 patent did
 not dictate the eligibility analysis. Id. In response to
 WhitServe’s argument concerning the applicability of a
 prior decision by this court, the district court observed that
 this court’s decision in WhitServe LLC v. Computer Pack-
 ages, Inc., 694 F.3d 10 (Fed. Cir. 2012), did not address the
 eligibility of the ’437 patent, but rather the dissent ad-
 dressed the eligibility of its family member, and therefore
 did not constitute a prior decision of this court on the eligi-
 bility of the ’437 patent. Id.
     The district court dismissed WhitServe’s complaint
 with prejudice and entered judgment in favor of Dropbox.
 WhitServe appeals this decision. We have jurisdiction pur-
 suant to 28 U.S.C. § 1295(a)(1).
                          DISCUSSION
     We review a district court’s dismissal for failure to
 state a claim under the law of the regional circuit, here, the
 Third Circuit. BASCOM Glob. Internet Servs., Inc. v.
 AT&T Mobility LLC, 827 F.3d 1341, 1347 (Fed. Cir. 2016).
 The Third Circuit reviews the grant of a motion to dismiss
 de novo. Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d
 153, 154 n.1 (3d Cir. 2014). Patent eligibility under § 101
 is ultimately a question of law, reviewable de novo, which
 may contain underlying issues of fact. Synchronoss Techs.,
 Inc. v. Dropbox, Inc., 987 F.3d 1358, 1365 (Fed. Cir. 2021).
     The Supreme Court has long held that “abstract ideas,”
 such as “a fundamental economic practice long prevalent
 in” our society are patent ineligible subject matter. Alice
 Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216, 219
Case: 19-2334     Document: 48      Page: 7   Filed: 04/26/2021

 WHITSERVE LLC   v. DROPBOX, INC.                           7

 (2014) (internal quotation marks and citation omitted).
 The Supreme Court established a two-step inquiry to de-
 termine whether a patent covers patent ineligible subject
 matter, such as an abstract idea. At Alice step one, the
 court decides whether the claims are “directed to” patent
 ineligible subject matter. Id. at 217. To determine whether
 a claim is directed to patent ineligible subject matter, we
 may consider whether any claimed advance over the prior
 art alleged in the written description demonstrates more
 than an abstract idea, such as an improvement of a tech-
 nological process, or merely enhances an ineligible concept.
 In re: Bd of Trustees of the Leland Stanford Junior Univ.,
 991 F.3d 1245, 1250–51 (Fed. Cir. 2021); see, e.g., Athena
 Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915
 F.3d 743, 750 (Fed. Cir. 2019), cert. denied, 140 S. Ct. 855,
 205 L. Ed. 2d 460 (2020).
     If the claims are not directed to patent ineligible sub-
 ject matter, the Alice inquiry ends. If the claims are di-
 rected to patent ineligible subject matter, the Alice inquiry
 advances to step two. In step two, the court determines
 whether the claims contain an “inventive concept,”—i.e.,
 an element or a combination of elements that transforms
 the nature of the claim into a patent-eligible application.
 Id. at 217–18. To uphold a patent at step two, an inventive
 concept “must be evident in the claims.” Two-Way Media
 Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1338
 (Fed. Cir. 2017). We begin our review with Alice step one.
                               I
     WhitServe argues on appeal that claim 10 is not di-
 rected to an abstract idea. Rather, claim 10 is directed to
 a technological improvement comprising “a system for on-
 site storage of a backup copy of Internet-based data that
 has been updated or deleted over the Internet by the client,
 which improves the storage, access, flexibility, and security
 of data processing.” Appellant’s Br. 24. WhitServe relies
 on Enfish, and argues that the ’437 patent is not “simply
Case: 19-2334     Document: 48      Page: 8    Filed: 04/26/2021

 8                             WHITSERVE LLC   v. DROPBOX, INC.

 directed to storing any data in a general form, but instead
 is directed to a specific form of storing a specific type of
 data . . . .” See Appellant’s Br. 26 (citing Enfish, LLC v. Mi-
 crosoft Corp., 822 F.3d 1327, 1337 (Fed. Cir. 2016) (“the
 claims are not simply directed to any form of storing tabu-
 lar data, but instead are specifically directed to a self-ref-
 erential table for a computer database.”)(emphasis
 omitted)). According to WhitServe, claim 10 is directed to
 a practical solution to an internet-based problem. We dis-
 agree.
      Claim 10 is directed to a system for maintaining data
 records, in particular, backing up data records. Claim 10
 recites a “computer,” a “database,” “data processing soft-
 ware,” and communication via the Internet. ’437 patent
 col. 4 ll. 14–50. The specification explained that, the “com-
 puter is described as being “central” or belonging to a “cli-
 ent,” id. at col. 2 ll. 40–43, the “database” merely
 “contain[s] a plurality of data records,” id. at Abstract, and
 the “software” is capable of “displaying” the data records by
 “updating” and “deleting” the data, id. at col. 2 ll. 37–43.
 Finally, the claimed computers are described as being ca-
 pable of sending, over the Internet, a request for a copy of
 data records, receiving the request, and transmitting a
 copy of the requested data. Id. at col. 4 l. 31–49. In other
 words, the system is for requesting, transmitting, receiv-
 ing, copying, deleting, and storing data records. Such
 transmitting, saving, and storing of client records is a fun-
 damental business practice that “existed well before the
 advent of computers and the Internet,” Intellectual Ven-
 tures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1327 (Fed.
 Cir. 2017); see, e.g., Content Extraction & Transmission
 LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343, 1347
 (Fed. Cir. 2014) (“The concept of data collection, recogni-
 tion, and storage is undisputedly well-known.”). Independ-
 ent claim 10 is, therefore, directed to an abstract idea.
     WhitServe argues that, because the claims require a
 particular form of storage, namely “onsite” instead of
Case: 19-2334     Document: 48      Page: 9    Filed: 04/26/2021

 WHITSERVE LLC   v. DROPBOX, INC.                             9

 “offsite,” they are directed to a specific improvement of a
 technological process. Whether the records are stored on-
 site of offsite does not alter the conclusion that the claims
 are directed to the abstract idea of maintaining data rec-
 ords, even if storage of the records is limited to the client’s
 computer, rather than a web server. See Intellectual Ven-
 tures I, 838 F.3d at 1319.
      WhitServe also argues that the claimed advance
 demonstrates a patent eligible improvement of a technolog-
 ical process. We disagree. Here, the claimed advance over
 the prior art, as stated in the specification and in claim 10,
 is the “onsite backup of data” and a “system for onsite
 backup of internet-based data processing systems.” ’437
 patent col. 2 ll. 62–63; col. 4 ll. 13–14. The specification
 does not, however, explain the technological processes un-
 derlying the purported technological improvement. In-
 stead, as the district court correctly explained, the claims
 “rely on the ordinary storage and transmission capabilities
 of computers within a network and apply that ordinary
 functionality in the particular context of onsite backup.”
 WhitServe, 2019 WL 3342949, at *5. As we have previously
 noted, claims reciting computer function, or the mere ma-
 nipulation of data, are directed to an abstract idea. See,
 e.g., Digitech Image Techs., LLC v. Elecs. for Imaging, Inc.,
 758 F.3d 1344, 1351 (Fed. Cir. 2014) (finding that a claim
 recited an ineligible abstract process of gathering and com-
 bining data that did not require input from a physical de-
 vice). Here the system disclosed in claim 10 claims the
 computer function of maintaining data records, including
 storing records at different sites for added protection. This
 is an abstract idea. Accordingly, we conclude that claim 10
 of the ’437 patent is directed to an abstract idea.
                               II
     Step two of the Alice inquiry is a lifeline by which
 claims that are deemed to be directed to patent ineligible
 subject matter may be saved. At step two, we ask whether
Case: 19-2334    Document: 48      Page: 10    Filed: 04/26/2021

 10                            WHITSERVE LLC   v. DROPBOX, INC.

 the claim recites an inventive concept that transforms the
 abstract idea into patent eligible subject matter.
     WhitServe contends that an inventive concept lies in
 the way the client is able to control and modify data—
 namely, “by offering users Internet-based data processing
 capabilities while allowing [for] the ability to edit and mod-
 ify and transmit data records and further safeguard the
 data at a location without Internet access.” Appellant’s Br.
 17, 29. WhitServe asserts that the patent takes the uncon-
 ventional step of storing backup data onsite (i.e., a partic-
 ular form of storage).
     WhitServe also argues that the claim’s recitation of an
 internet-based data processing software that allows the
 ability to “edit and modify” is an inventive concept that
 transforms the claims into something other than an ab-
 stract idea. We disagree. The patent itself discloses that
 companies were “increasingly moving their data processing
 systems onto the Internet and providing web interfaces for
 their customers to see and manipulate their own data.”
 ’437 patent at col. 1 ll. 13–16. Thus, the ability to edit and
 modify data was well known and cannot constitute an in-
 ventive concept.
     As this court has explained, storing data is a “generic
 computer function[].” In re TLI Commc’ns LLC Patent
 Litig., 823 F.3d 607, 612 (Fed. Cir. 2016). We have also
 noted that “sending and receiving information” over a net-
 work are “routine computer functions.” Intellectual Ven-
 tures I LLC v. Erie Idemnity Co., 850 F.3d 1315, 1329 (Fed.
 Cir. 2017); see also Intellectual Ventures I LLC v. Capital
 One Bank (USA), 792 F.3d 1363, 1367–68 (Fed. Cir. 2015)
 (finding that “database” and “communication medium” (in-
 cluding the Internet) are generic computer components);
 buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed.
 Cir. 2014) (finding that “receiv[ing] and send[ing] the infor-
 mation over a network” is generic).
Case: 19-2334    Document: 48       Page: 11   Filed: 04/26/2021

 WHITSERVE LLC   v. DROPBOX, INC.                           11

     The claims recite generic computer components per-
 forming routine conventional functions. Viewing claim 10’s
 elements in combination does not alter our conclusion be-
 cause the claims lack a non-conventional and non-generic
 arrangement. BASCOM, 827 F.3d at 1350. Accordingly,
 we conclude that the ’437 patent does not disclose an in-
 ventive concept and, as a result, does not transform claim
 10 into patent eligible subject matter.
                              III
      WhitServe alleges that certain factual questions pre-
 cluded a finding of ineligibility at the pleading stage. Spe-
 cifically, WhitServe contends that whether the claims
 present an improvement to software and computer func-
 tionality is a disputed factual issue. Appellant’s Br. 36–37.
 WhitServe adds that the question of what constitutes a
 well-known business practice or is well-understood, rou-
 tine and conventional technology at the time of the inven-
 tion are also disputed factual issues. Id. WhitServe
 asserts that the district court failed to analyze the claims
 from the perspective of one skilled in the art at the time of
 the invention, failed to consider certain objective indicia of
 nonobviousness (i.e., commercial success), failed to conduct
 claim construction, and failed to give WhitServe the statu-
 tory presumption of validity that exists once a patent is-
 sued. Id. at 37–44.
     These purported factual questions do not preclude dis-
 missal of this case at the pleadings stage, nor do they pre-
 clude a finding of ineligibility. Although a § 101 inquiry
 may implicate underlying factual questions in some cases,
 “not every § 101 determination contains genuine disputes
 over the underlying facts material to the § 101 inquiry.”
 Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir.
 2018); see also BSG Tech LLC v. Buyseasons, Inc., 899 F.3d
 1281, 1290–91 (Fed. Cir. 2018) (distinguishing Berkheimer
 and affirming judgment of invalidity under § 101). Dismis-
 sal is appropriate where factual allegations are not
Case: 19-2334     Document: 48      Page: 12    Filed: 04/26/2021

 12                             WHITSERVE LLC   v. DROPBOX, INC.

 “plausible” or are “refute[d]” by the record. Aatrix Soft-
 ware, Inc. v. Green Shades Software, Inc., 882 F.3d 1121,
 1125 (Fed. Cir. 2018) (citation omitted). The district court
 found that there were “no concrete or specific allegations in
 WhitServe’s complaint or discussions in the specification”
 regarding any improvements in technology, and thus there
 was “no factual issue that would preclude [it] from decid-
 ing . . . patent eligibility of the [’]437 patent on a motion to
 dismiss.” 2019 WL 3342949, at *6–7. We agree.
      As noted above, we determine that the ’437 patent is
 patent ineligible on the basis that the claimed systems ap-
 ply a fundamental business concept of backing up records
 and provide a generic environment to carry out the abstract
 idea of obtaining and storing backup copies. Patent eligi-
 bility may be determined on the intrinsic record alone
 where, as here, the specification provides that the relevant
 claim elements are well-understood, routine and conven-
 tional. See Berkheimer v. HP Inc., 890 F.3d at 1371 (Moore,
 J., concurring in the denial of en banc rehearing).
      WhitServe argues that the district court erred by fail-
 ing to consider objective criteria of non-obviousness as part
 of the Alice inquiry. We disagree. Objection indicia of non-
 obviousness are relevant in a § 103 inquiry, but not in a
 § 101 inquiry. Finally, as to claim construction, WhitServe
 waived any such argument by failing to request claim con-
 struction below, and by failing to explain how a different
 construction of any claim term would lead to a different re-
 sult. See Abbott Labs. v. Syntron Bioresearch, Inc., 334
 F.3d 1343, 1357 (Fed. Cir. 2003) (determining that a liti-
 gant who “d[oes] not urge a particular claim construction
 of the disputed language before the district court[] . . .
 waive[s] the right to do so on appeal”).
                          CONCLUSION
    The court has considered WhitServe’s additional argu-
 ments and finds them unpersuasive. We affirm the judg-
 ment of the district court.
Case: 19-2334    Document: 48       Page: 13   Filed: 04/26/2021

 WHITSERVE LLC   v. DROPBOX, INC.                          13

                         AFFIRMED