Microsoft Corp. v. Geotag, Inc.

• Decision Date: 01 April 2016
• Docket Number: No. 2015–1140.,2015–1140.
• Citation: 817 F.3d 1305
• Parties: MICROSOFT CORPORATION, Taleo Corporation, Plaintiffs Google Inc., Plaintiff–Appellee v. GEOTAG, INC., Defendant–Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

817 F.3d 1305

MICROSOFT CORPORATION, Taleo Corporation, PlaintiffsGoogle Inc., Plaintiff–Appellee

v.GEOTAG, INC., Defendant–Appellant.

No. 2015–1140.

United States Court of Appeals, Federal Circuit.

April 1, 2016.

Daryl Joseffer, King & Spalding LLP, Washington, DC, argued for plaintiff-appellee. Also represented by Paul Alessio Mezzina ; Adam Conrad, Charlotte, NC; Robert A. Van Nest, Asim Bhansali, Matthias A. Kamber, Keker & Van Nest, LLP, San Francisco, CA.

Joel Wilson Reese, Reese Gordon, Dallas, TX, argued for defendant-appellant. Also represented by Adam Cooper Sanderson, Kendal Catherine Simpson.

Before LOURIE, WALLACH, and STOLL, Circuit Judges.

WALLACH, Circuit Judge.

Appellant GeoTag, Inc. ("GeoTag") appeals the decision of the United States District Court for the District of Delaware ("District Court") finding that it had subject matter jurisdiction over (1) Appellee Google Inc.'s ("Google") First Amended Complaint, which sought a declaratory judgment that U.S. Patent No. 5,930,474 ("the '474 patent") (J.A. 89–133) is invalid and not infringed by Google; and (2) GeoTag's counterclaims, which alleged that Google infringed the '474 patent. See Microsoft Corp. v. GeoTag, Inc., No. 11–175–RGA, 2014 WL 4312167 (D.Del. Aug. 29, 2014). GeoTag also challenges the District Court's decision granting summary judgment that Google did not infringe the '474 patent. See Microsoft Corp. v. GeoTag, Inc., No. 11–175–RGA, 2014 WL 7328279 (D.Del. Apr. 10, 2014) (J.A. 45–63). We affirm the District Court, although we find jurisdiction on different grounds.

BACKGROUND

I. The '474 Patent

The '474 patent claims systems and methods of searching online information within a geographically and topically organized database. '474 patent, Abstract. The specification describes a preferred embodiment that organizes websites and files within a directory-like structure of folders categorized by geography and topic. Id. col. 19 ll. 52–57; see also id. fig. 10. In that embodiment, an Internet user may navigate to a folder labeled for a particular geographic area and then conduct a topical search within that area, such as for "information about specific goods and services in the geographic location." Id., Abstract. Independent claim 1 is illustrative and describes

A system which associates on-line information with geographic areas, said system comprising:

a computer network wherein a plurality of computers have access to said network; and

an organizer executing in said computer network, wherein said organizer is configured to receive search requests from any one of said plurality of computers, said organizer comprising:

a database of information organized into a hierarchy of geographical areas wherein entries corresponding to each one of said hierarchy of geographical areas is further organized into topics; and

a search engine in communication with said database, said search engine configured to search geographically and topically, said search engine further configured to [s]elect one of said hierarchy of geographical areas prior to selection of a topic so as to provide a geographical search area wherein within said hierarchy of geographical areas at least one of said entries associated with a [broader] geographical area is dynamically replicated into at least o [n]e narrower geographical area, said search engine further configured to search said topics within said selected geographical search area.

Id. col. 38 ll. 36–58 (emphasis added to reflect disputed claim language).¹ Importantly, the "dynamically replicated" limitation occurs after the system conducts a search within a limited geographic area. Id. col. 38 ll. 47–58. Through that limitation, the system includes search results associated with the narrow geographic area and then automatically adds results associated with a broader geographic area. Id. col. 38 ll. 55–58.

II. Procedural History

This appeal is an outgrowth of litigation that began in the United States District Court for the Eastern District of Texas in December 2010. In the Texas actions, "GeoTag sued more than 300 entities in ten separate complaints ... based on store locator services used by the entities but, for some of the defendants, provided by Microsoft [Corporation ("Microsoft") ] and Google."²GeoTag, 2014 WL 4312167, at *1 (citation omitted). GeoTag alleged in those actions that Google's customers infringed the '474 patent. See, e.g., J.A. 5000.

"In response to GeoTag's suits [in Texas against Google's customers], Google ... filed a declaratory judgment action against GeoTag" in the District Court. GeoTag, 2014 WL 4312167, at *1 (citation omitted). The Complaint sought a declaratory judgment that the '474 patent"is invalid and is not infringed by the use of [Google's] web mapping services." J.A. 5192.

GeoTag answered Google's Complaint and counterclaimed that Google AdWords—an online platform for displaying advertisements to users that conduct a search on Google's website—directly infringes the '474 patent. GeoTag, 2014 WL 4312167, at *1 (citation omitted); J.A. 5577–87 (GeoTag's Answer and Counterclaims). In relevant part, AdWords runs a search against its "entire database" of ads, "yield[ing] all possible results" that are then "progressively filtered[ ] using factors such as geography." J.A. 61; see J.A. 59–60 (providing a technical description of the AdWords system).

Google moved for summary judgment that it did not infringe independent claims 1, 20, and 31 ("the asserted independent claims") and dependent claims 3, 5, 9–15, 18–19, 24–25, 32, and 36–38 of the '474 patent, which the District Court granted. J.A. 57, 63.³ The District Court held that AdWords does not practice the "dynamically replicated" limitation in claim 1 of the '474 patent because it does not search a narrow geographic area and automatically add results from a broader area; instead, it was "uncontested" that AdWords conducts a broad search for "all responsive ads" and then "consecutively filters" the results.⁴ J.A. 60–61; see J.A. 61 ("Therefore, Google's accused system does not trace up linkages in a hierarchy, or repeat the search in order to obtain results from a broader geographic area, as the claim limitation would require, and thus cannot meet the ‘dynamic replication’ requirement of the '474 [p]atent.")

Shortly before the District Court issued its summary judgment decision, this court addressed declaratory judgment relief in Microsoft Corp. v. DataTern, Inc., 755 F.3d 899 (Fed.Cir.2014). The District Court obtained additional briefing on DataTern from Google and GeoTag. J.A. 180–81 (oral order requesting additional briefing), 7103–06 (Google), 7791–93 (GeoTag). It subsequently permitted Google to file its First Amended Complaint. J.A. 7634–35 (Order), 7636–48 (First Amended Complaint).

GeoTag in turn filed a Motion to Dismiss the First Amended Complaint, asserting that the District Court lacked subject matter jurisdiction over the action. J.A. 7698–99. Specifically, GeoTag asserted that "[t]he minimal additional allegations" in the First Amended Complaint did not establish a substantial controversy between GeoTag and Google "of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." GeoTag, 2014 WL 4312167, at *1–2 (internal quotation marks and citation omitted). GeoTag also alleged its counterclaims against Google "were compulsory, [not permissive,] and therefore should be dismissed if the declaratory judgment action lacks subject matter jurisdiction."⁵ Id. at *3.

The District Court denied GeoTag's Motion, finding that Google's First Amended Complaint established a substantial controversy of sufficient immediacy to warrant declaratory relief and, thus, that it possessed subject matter jurisdiction over the action. Id. at *2–3. The District Court also held that, even if the First Amended Complaint did not establish sufficient grounds for declaratory relief, "there would still be an independent basis for subject matter jurisdiction over the counterclaims." Id. at *3 (footnote omitted). In reaching the conclusion that it possessed subject matter jurisdiction over GeoTag's counterclaims, the District Court found the counterclaims permissive, rather than compulsory, under Federal Circuit law and held that it retained subject matter jurisdiction over the counterclaims under Third Circuit law. Id. at *4 ("Whether I retain subject matter jurisdiction over a permissive counterclaim is a procedural issue to which Federal Circuit law does not apply." (citing Woods v. DeAngelo Marine Exhaust, Inc., 692 F.3d 1272, 1279 (Fed.Cir.2012) )).

Following the denial of its Motion to Dismiss Google's First Amended Complaint, GeoTag stipulated to the entry of final judgment based on the District Court's summary judgment ruling. J.A. 32–34. GeoTag timely appealed the District Court's final judgment. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (2006).⁶

DISCUSSION

I. Jurisdiction

A. Choice of Law

Before we address whether the District Court possessed subject matter jurisdiction over GeoTag's patent infringement counterclaims pursuant to 28 U.S.C. § 1338(a), we must first determine whether our law or that of the Third Circuit applies to the jurisdiction question. We find that the District Court erred in determining that Third Circuit law governs whether it had jurisdiction. See GeoTag, 2014 WL 4312167, at *4.

A "procedural question not unique to patent law" is governed by the law of the regional circuit. See, e.g., Madey v. Duke Univ., 307 F.3d 1351, 1358 (Fed.Cir.2002). The denial of a motion to dismiss normally raises a procedural question not unique to patent law. See, e.g., Intel Corp. v. Commonwealth Sci. & Indus. Research Org., 455 F.3d 1364, 1369 (Fed.Cir.2006). However, the motion to dismiss in this case requires the court to determine whether this dispute arises under 28 U.S.C. § 1338(a), for both Google's First Amended Complaint and GeoTag's counterclaims assert jurisdiction on the basis of that statute. J.A. 7638 (Google's...