Int'l Bus. Machs. Corp. v. Zillow Grp., Inc., 2021-2350

• Docket Number: 2021-2350
• Decision Date: 17 October 2022
• Parties: INTERNATIONAL BUSINESS MACHINES CORPORATION, Plaintiff-Appellant v. ZILLOW GROUP, INC., Zillow, Inc., Defendants-Appellees
• Court: U.S. Court of Appeals — Federal Circuit

50 F.4th 1371

INTERNATIONAL BUSINESS MACHINES CORPORATION, Plaintiff-Appellant

v.ZILLOW GROUP, INC., Zillow, Inc., Defendants-Appellees

2021-2350

United States Court of Appeals, Federal Circuit.

Decided: October 17, 2022

Goutam Patnaik, Desmarais LLP, Washington, DC, argued for plaintiff-appellant. Also represented by John M. Desmarais, William Findlay, Karim Zeddam Oussayef, New York, NY.

Katherine Marie Peaslee, Susman Godfrey LLP, Seattle, WA, argued for defendants-appellees. Also represented by Ian B. Crosby, Daniel J. Shih ; Shawn Daniel Blackburn, Houston, TX.

Before Reyna, Hughes, and Stoll, Circuit Judges.

Opinion dissenting-in-part filed by Circuit Judge Stoll.

Hughes, Circuit Judge.

International Business Machines Corporation sued Zillow Group, Inc. and Zillow, Inc. for infringement of several patents related to graphical display technology. The district court granted Zillow's motion for judgment on the pleadings, concluding that two of the asserted patents claimed ineligible subject matter under 35 U.S.C. § 101. Because we agree that the patents are directed to abstract ideas and lack an inventive concept, we affirm.

I

IBM owns U.S. Patent No. 9,158,789, which describes a method for "coordinated geospatial, list-based and filter-based selection." '789 patent, at title. A user draws a shape on a map to select that area of the map, and the claimed system then filters and displays data limited to that area of the map. It synchronizes which elements are shown as "selected" on the map and its associated list. Claim 8 is representative:

8. A method for coordinated geospatial and list-based mapping, the operations comprising:

presenting a map display on a display device, wherein the map display comprises elements within a viewing area of the map display, wherein the elements comprise geospatial characteristics, wherein the elements comprise selected and unselected elements;

presenting a list display on the display device, wherein the list display comprises a customizable list comprising the elements from the map display;

receiving a user input drawing a selection area in the viewing area of the map display, wherein the selection area is a user determined shape, wherein the selection area is smaller than the viewing area of the map display, wherein the viewing area comprises elements that are visible within the map display and are outside the selection area;

selecting any unselected elements within the selection area in response to the user input drawing the selection area and deselecting any selected elements outside the selection area in response to the user input drawing the selection area; and

synchronizing the map display and the list display to concurrently update the selection and deselection of the elements according to the user input, the selection and deselection occurring on both the map display and the list display.

'789 patent at 9:49–10:8. Figure 5 of the patent depicts an embodiment of claim 8:

?

'789 patent, Fig. 5.

IBM also owns U.S. Patent No. 7,187,389, which describes methods of displaying layered data on a spatially oriented display (like a map), based on nonspatial display attributes (like visual characteristics—color hues, line patterns, shapes, etc.). '389 patent at 6:5–10. Essentially, the '389 patent claims a method of displaying objects in visually distinct layers. Objects in layers of interest can be brought to and emphasized at the top of the display while other layers are deemphasized. Claim 1 is representative:

1. A method of displaying layered data, said method comprising:

selecting one or more objects to be displayed in a plurality of layers;

identifying a plurality of non-spatially distinguishable display attributes, wherein one or more of the non-spatially distinguishable display attributes corresponds to each of the layers;

matching each of the objects to one of the layers;

applying the non-spatially distinguishable display attributes corresponding to the layer for each of the matched objects;

determining a layer order for the plurality of layers, wherein the layer order determines a display emphasis corresponding to the objects from the plurality of objects in the corresponding layers; and

displaying the objects with the applied non-spatially distinguishable display attributes based upon the determination, wherein the objects in a first layer from the plurality of layers are visually distinguished from the objects in the other plurality of layers based upon the non-spatially distinguishable display attributes of the first layer.

'389 patent at 9:12–34. Dependent claim 2 adds method steps for rearranging layers and rematching objects in layers based on a user request. Id. at 9:35–44.

IBM's expert illustrated how the display attributes of color and opacity can be used to emphasize different layers in a data set. Darkly colored "A" objects are emphasized on the left and lightly colored "D" objects are emphasized on the right:

?

J.A. 20–21.

IBM filed this patent infringement suit against Zillow in 2019, alleging that Zillow infringed seven of IBM's patents. Zillow filed a motion for judgment on the pleadings, arguing that the claims of four of IBM's asserted patents were patent ineligible under § 101. The district court granted Zillow's motion as to both the '389 and '789 patents, concluding that both were "directed to abstract ideas, contain[ ] no inventive concept, and fail[ ] to recite patentable subject matter." Int'l Bus. Machs. Corp. v. Zillow Grp., Inc. , 549 F. Supp. 3d 1247, 1264, 1268 (W.D. Wash. 2021) ( Decision ). IBM appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

II

We review the grant of a Rule 12 motion under the law of the regional circuit. Cellspin Soft, Inc. v. Fitbit, Inc. , 927 F.3d 1306, 1314 (Fed. Cir. 2019). The Ninth Circuit reviews motions granted under Rule 12(c) de novo. Id. (citing Chavez v. United States , 683 F.3d 1102, 1108 (9th Cir. 2012) ). Under this standard, "we determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy." Cellspin , 927 F.3d at 1314 (internal quotation omitted). A district court's determination of patent eligibility under § 101 is a question of law that we review de novo, applying Federal Circuit law, though the inquiry may contain underlying issues of fact. Berkheimer v. HP Inc. , 881 F.3d 1360, 1365 (Fed. Cir. 2018). When considering eligibility under a Rule 12 motion, we take the facts alleged in the complaint as true. Cellspin , 927 F.3d at 1314.

Section 101 provides that a patent may be obtained for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C. § 101. This provision contains an implicit exception: "Laws of nature, natural phenomena, and abstract ideas are not patentable." Ass'n for Molecular Pathology v. Myriad Genetics, Inc. , 569 U.S. 576, 589, 133 S.Ct. 2107, 186 L.Ed.2d 124 (2013) (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc. , 566 U.S. 66, 70, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012) ). The Supreme Court has established a two-step framework for evaluating patent eligibility under § 101. Alice Corp. v. CLS Bank Int'l , 573 U.S. 208, 217, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014) ; Mayo , 566 U.S. at 70–73, 132 S.Ct. 1289. At step one, we determine whether a patent claim is directed to an unpatentable law of nature, natural phenomena, or abstract idea. Alice , 573 U.S. at 217, 134 S.Ct. 2347. If so, we proceed to step two and determine whether the claim nonetheless includes an "inventive concept" sufficient to " ‘transform the nature of the claim’ into a patent-eligible application." Id. (quoting Mayo , 566 U.S. at 72, 78, 132 S.Ct. 1289 ).

III

A

We first address the '789 patent, beginning with Alice step one. "In cases involving software innovations, [the step-one] inquiry often turns on whether the claims focus on specific asserted improvements in computer capabilities or instead on a process or system that qualifies [as] an abstract idea for which computers are invoked merely as a tool." TecSec, Inc. v. Adobe Inc. , 978 F.3d 1278, 1293 (Fed. Cir. 2020) (citation omitted). Furthermore, "improving a user's experience while using a computer application is not, without more, sufficient to render the claims" patent-eligible at step one. Customedia Techs., LLC v. Dish Network Corp. , 951 F.3d 1359, 1365 (Fed. Cir. 2020).

The district court concluded that "the '789 Patent is directed to the abstract idea of responding to a user's selection of a portion of a displayed map by simultaneously updating the map and a co-displayed list of items on the map." Decision , 549 F. Supp. 3d at 1266–67. It reasoned that claim 8's method "could be performed by hand, using a printed map and related list of items on the map, a transparent overlay, a wet-erase marker, a blank sheet of opaque paper, and a knife or scissors." Id. at 1267. The district court explained that one could put the transparent overlay on the map, draw on it with the marker, and then block off the "unselected area" of the map and corresponding list items with the opaque paper. Id. To choose a different "selection area," the user would erase the previous marking, remove the paper, and start over. The district court noted that "alterations to hardcopy materials were made or auditioned in this manner" long before the invention of the computer, and thus concluded that "[t]he '789 patent merely contemplates automation using a computer." Id.

We agree that the claims here fail to "recite any assertedly inventive technology for improving computers as tools," Interval Licensing LLC v. AOL, Inc. , 896 F.3d 1335, 1344 (Fed. Cir. 2018), and are instead directed to "an abstract idea for which computers are invoked merely as a tool," TecSec , 978 F.3d at 1293. The claims are directed to limiting and coordinating the display of information based on a user selection. IBM argues that the '789 patent is directed to patent-eligible "specific asserted...