Perry St. Software, Inc. v. Jedi Techs., Inc.

• Decision Date: 13 July 2021
• Docket Number: No. 20-cv-04539 (CM),20-cv-04539 (CM)
• Citation: 548 F.Supp.3d 418
• Parties: PERRY STREET SOFTWARE, INC., Plaintiff, v. JEDI TECHNOLOGIES, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

548 F.Supp.3d 418

PERRY STREET SOFTWARE, INC., Plaintiff,

v.JEDI TECHNOLOGIES, INC., Defendant.

No. 20-cv-04539 (CM)

United States District Court, S.D. New York.

Signed July 13, 2021

Steven Chase Callahan, McKool Smith, P.C., John Charles Heuton, Brett Charhon, Mitchell Reed Sibley, Charhon Callahan Robson & Garza, PLLC, Dallas, TX, for Plaintiff.

Ashley E. LaValley, Dragan Gjorgiev, Brian Erik Haan, Lee Sheikh Megley & Haan LLC, Chicago, IL, for Defendant.

ORDER AND DECISION GRANTING PERRY STREET'S MOTION FOR JUDGMENT ON THE PLEADINGS

McMahon, United States District Judge.:

Plaintiff Perry Street Software, Inc. originally sued defendant Jedi Technologies, Inc. seeking a declaratory judgment that Perry Street's "SCRUFF" dating app did not infringe on Jedi's ’918 patent as a matter of law. Jedi has since counterclaimed against Perry Street for infringement. Perry Street now moves for a judgment on the pleadings, arguing that the ’918 patent is ineligible for patent protection under 35 U.S.C. § 101 because it is directed at a non-patentable abstract idea, and that it does not otherwise recite an inventive concept that saves it from invalidation. See Alice Corp. Pty. v. CLS Bank Int'l , 573 U.S. 208, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014).

Perry Street's motion is granted.

Although Perry Street invites the Court to decide this case on collateral estoppel grounds, the Court declines to do so, because it is not necessary to try to parse the differences between the patent-in-suit and certain predecessor patents that have already been invalidated, under Alice , by another court. It is cleaner simply to decide this motion on the merits. The ’918 patent is directed toward the abstract idea of automated matchmaking, and the patent's claimed five-step process for matching compatible chatroom users does not contain any " ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application." Id. at 221, 134 S.Ct. 2347 (quoting Mayo Collaborative Servs. v. Prometheus Lab'ys, Inc. , 566 U.S. 66, 72, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012) ). This renders the ’918 patent – just like the Jedi patents in prior litigation – ineligible for protection under § 101.

The patent is declared invalid, and Jedi's counterclaim for infringement is dismissed.

I. BACKGROUND

A. The Parties

Plaintiff Perry Street Software, Inc. ("Perry Street") is a company incorporated and headquartered in New York. Perry Street makes mobile apps, including SCRUFF and Jack'd, two online-dating apps that run on the iOS and Android platforms.

Defendant and counterclaimant Jedi Technologies, Inc. ("Jedi") is an Arizona-based corporation that holds Patent No. 10,164,918 (the "’918 patent") from the United States Patent and Trademark Office ("PTO").

Jedi, in a "lawyer's letter" sent on May 28, 2020, accused Perry Street's SCRUFF app of infringing the ’918 patent. (Dkt. No. 21, Ex. C). Perry Street subsequently filed this lawsuit on June 12, 2020, asking the Court to hold, under the Declaratory Judgment Act and 35 U.S.C. § 1 et seq. , that its SCRUFF app did not infringe on the ’918 patent as a matter of law. (Dkt. No. 6).

On August 7, 2020, Jedi filed a counterclaim against Perry Street, formally accusing it of patent infringement.

B. The Patent

Jedi's ’918 patent is titled "System and Method for the Automated Notification of Compatibility Between Real-Time Network Participants." Its application was first filed on August 21, 2016 but claimed priority to a long line of patents dating all the way back to 2000. The PTO granted the patent on December 25, 2018. ( ’918 patent, Dkt. No. 78, Ex. 1).

The patent states that it "is related to computer Chat Room systems or similar network-based systems providing services to network users, specifically, the automated process of paging a chatter or other network participant." (Id. at 3:8–11). The patent is "directed to a new system designed to unite chatters for the purpose of creating new interpersonal relationships" and refers to the process described in its claims as an "Intelligence Driven Paging Process." (Id. at 5:62–65).

The patent contains four independent claims. Claim 1 is representative. It recites:

An improved method over traditional real-time internet-based communication networks for improving the ability for a participant to identify unknown yet compatible network participants to communicate in real-time where the network is configured to provide network services for at least 300,000 network participants and where at least a portion of the participants determined to be compatible use the network in real-time at random times, the improved method comprising:

collecting human participant-specific data for at least one participant of a real-time internet-based communication network having at least 300,000 network participants, wherein said step of collecting ... data includes presenting to a human participant an on-line survey comprising a plurality of questions, and detecting and recording the human participant responses to the questions;

storing , in memory, the human participant specific data collected, wherein said step ... includes creating at least one data table within a database that includes data for a plurality of human participants, and within said table storing at least one record containing information indicative of the human participant response to the questions;

processing the stored human participant specific data, using compatibility criteria, to determine interpersonal compatibility between at least two network participants, wherein said step of processing ... includes retrieving at least one compatibility criteria for the network participants ... and applying the compatibility criteria to a plurality of network participant records ... to determine the compatibility of the human participants;

sorting said human participant specific data from a plurality of network participants by interpersonal compatibility wherein sorting further includes identifying participants who are logged into the network, providing the ability to identify compatible participants currently using the network; and

directing data for display in a window region of a graphical user-interface of a display device associated with a first compatible participant, including ... by automatically directing for display only a portion of the human participant specific data of the first compatible participant to at least a second compatible participant ... wherein the displayed human participant specific data includes an indication that said first participant is currently using said network.

The ’918 patent asserts three other independent claims.

Claim 4:

A method for displaying a graphical user interface for increasing a real-time network participant's opportunities to identify and communicate, in real-time, with unknown yet interpersonally and geographically compatible participants of the network and improving the participant's usability of the network, where the unknown compatible participants interact with the real-time network at random times ....

Claim 6:

A method for the automated display of a prompt of unknown human participant-specific data of a compatible network participant engaged on a real-time network to a compatible network participant who is not engaged on the real-time network and increasing the opportunity to identify and communicate in the real-time network with a compatible participant ....

Claim 9:

A method for displaying a graphical user-interface for increasing a network participant's ability to identify other unknown but compatible network participants’ availability to chat in a real-time network and improving usability of the network, where the network is configured to provide network services for at least 300,000 network participants and where at least a portion of the participants determined to be compatible use the network in real-time at random times ....

Significantly, the "method" mentioned in each of these three independent claims is essentially the same five-step process as described in Claim 1 – the collecting, storing, processing, and sorting of user data, before notifying users of a potential match.¹ (Dkt. No. 78, Ex. 1).

In its briefs, Jedi clarifies that the patent's claims are directed to improving "network chat systems, including improved user interfaces and other chatroom functionalities, and solve problems that exist only in network-based chatrooms with a large number (i.e., over 300,000) of participants." (Dkt. No. 80 at 10). For example, Jedi points out that, when chatrooms get crowded, it may be difficult, if not impossible to find compatible users with whom to chat. The ’918 patent attempts to solve this problem.

C. Jedi's Prior Patents and the Delaware Litigation

This is not the first time that Jedi has been embroiled in litigation over its patents. In 2017, it sued several related companies (collectively "Spark") in the District of Delaware alleging infringement of four of the ’918 patent ’s predecessor patents: U.S. Patent Nos. 7,885,977 (the "’977 patent"), 8,417,729 (the "’729 patent"), 8,930,406 (the "’406 patent"), and 9,432,315 (the "’315 patent"). The cases were assigned to The Honorable Gregory Sleet.

Spark moved to dismiss Jedi's infringement action under Fed. R. Civ. P. 12(b)(6), arguing that Jedi's four patents were directed at patent-ineligible subject matter under 35 U.S.C. § 101 – the same basis on which Perry Street now moves to dismiss this case.

All four of the patents-in-suit in the Delaware litigation were entitled "System and Method for the Automated Notification of Compatibility between Real-Time Network Participants" – the same name as the ’918 patent. All four of the patents-in-suit in the Delaware litigation also contained claims similarly worded to the claims of the patent-in-suit in this litigation.

For example, Claim 1 of the ’977 patent recited:

A method for automatically prompting compatible users of a network of their compatibility with at least another user,

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