SkillSurvey, Inc. v. Checkster LLC

• Decision Date: 31 March 2016
• Docket Number: CIVIL ACTION NO. 15–1766
• Parties: SkillSurvey, Inc., Plaintiff, v. Checkster LLC, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

178 F.Supp.3d 247

SkillSurvey, Inc., Plaintiff,

v.Checkster LLC, Defendant.

CIVIL ACTION NO. 15–1766

United States District Court, E.D. Pennsylvania.

Signed March 31, 2016

Robert M. Goldich, Greenberg Traurig PA, Philadelphia, PA, Jonathan Ball, Justin A. MacLean, Richard C. Pettus, Greenberg Traurig, LLP, New York, NY, for Plaintiff.

Michele D. Hangley, Hangley Aronchick Segal & Pudlin, Jessica R. O'Neill, Hangley Aronchick Segal Pudlin & Schiller, Philadelphia, PA, Adam M. Lewin, Laurence F. Pulgram, Fenwick & West LLP, San Francisco, CA, for Defendant.

MEMORANDUM

Jones, II

, District Judge.

Pending before the Court is Defendant's Motion to Dismiss this suit on the basis that Plaintiff's patent infringement claims fail as a matter of law because the asserted patent, United States Patent No. 8,894,416 (the “ '416 Patent”)

entitled “SYSTEM AND METHOD FOR EVALUATING JOB CANDIDATES” is invalid under 35 U.S.C. § 101 for lack of patent–eligible subject matter. For the foregoing reasons, this Court agrees. This matter is dismissed.

I. Standard of Review

a. Motion to Dismiss

In deciding a motion to dismiss pursuant to Rule 12(b)(6), courts must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. County of Allegheny , 515 F.3d 224, 233 (3d Cir.2008)

(internal quotation and citation omitted). After the Supreme Court's decision in Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “A claim has factual plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). This standard, which applies to all civil cases, “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678, 129 S.Ct. 1937 ; accord

Fowler v. UPMC Shadyside , 578 F.3d 203, 210 (3d Cir.2009) (“[A]ll civil complaints must contain more than an unadorned, the–defendant–unlawfully–harmed–me accusation.”) (internal quotation marks omitted).

b. Patent Eligibility

Under § 101

, the scope of patentable subject matter includes “any new and useful process, machine, manufacture or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions of this title.” 35 U.S.C. § 101

. Eligible subject matter does not include “laws of nature, natural phenomena, and abstract ideas.” Diamond v. Diehr , 450 U.S. 175, 185, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981). These exclusions should not be construed too broadly however, because all inventions “at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Mayo Collaborative Services v. Prometheus Labs., Inc. , ––– U.S. ––––, 132 S.Ct. 1289, 1293, 182 L.Ed.2d 321 (2012) (“Mayo ”). Thus, courts are tasked with differentiating between patents that attempt to monopolize the “building blocks” of human ingenuity and those that transform the building blocks into something more. Alice Corp. Pty. v. CLS Bank Int'l , ––– U.S. ––––, 134 S.Ct. 2347, 2354, 189 L.Ed.2d 296 (2014) (“Alice ”) (citing Mayo , 132 S.Ct. at 1303 ). Validity under § 101 is a question of law. Fort Properties, Inc. v. Am. Master Lease LLC , 671 F.3d 1317, 1320 (Fed.Cir.2012).

In Mayo

, the Supreme Court developed a two–step “framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent–eligible applications of those concepts.” Alice , 134 S.Ct. at 2355. First, the Court must determine if the patent is based on one of the patent–ineligible concepts (e.g. laws of nature, natural phenomena or an abstract idea). Id. (citing Mayo , 132 S.Ct. at 1296–97 ). If so, second, the Court must consider “the elements of each claim both individually and 'as an ordered combination' to determine whether the additional elements transform the nature of the claim into a patent–eligible application.” Id. (quoting Mayo , 132 S.Ct. at 1297–98 ). This second step is a “search for an 'inventive concept'—i.e. , an element or combination of elements that is 'sufficient to ensure that a patent in practice amounts to significantly more than a patent upon the [ineligible] concept itself.' ” Alice , 134 S.Ct. at 2355 (quoting Mayo , 132 S.Ct. at 1294 ).

It is appropriate to address a § 101

challenge at the pleading stage. See, e.g. , OIP Technologies, Inc. v. Amazon.com Inc. , 2012 WL 3985118, at *5 (N.D.Cal.2012) (“OIP ”) (collecting cases); see also

Bancorp Servs., LLC v. Sun Life Assurance Co. of Can. , 687 F.3d 1266, 1273 (Fed.Cir.2012) (“Bancorp ”) (“[C]laim construction is not an inviolable prerequisite to a validity determination under § 101.”). Where, as here, “the basic character of the claimed subject matter is readily ascertainable from the face of the patent, the Court finds that it may determine patentability at the motion to dismiss stage.” Internet Patents Corp. v. Gen. Auto. Ins. Servs., Inc. , 29 F.Supp.3d 1264, 1268 (N.D.Cal.2013) ( “Internet Patents ”) aff'd sub nom.

Internet Patents Corp. v. Active Network, Inc. , 790 F.3d 1343 (Fed.Cir.2015) (“Internet Patents ”); see id. (Mayer, J. concurring) (“Addressing 35 U.S.C. § 101 at the outset not only conserves scarce judicial resources and spares litigants the staggering costs associated with discovery and protracted claim construction litigation, it also works to stem the tide of vexatious suits brought by the owners of vague and overbroad business method patents.”).

II. Background

When deciding a motion to dismiss under 12(b)(6), the “court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainants claims are based upon these documents.” Mayer v. Belichick , 605 F.3d 223, 230 (3d Cir.2010)

. “[A] court may consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document.” Pension Ben. Guar. Corp. v. White Consol. Industries, Inc. , 998 F.2d 1192, 1196 (3d Cir.1993).

a. The '416 Patent

SkillSurvey, Inc. (“Plaintiff”) filed an Amended Complaint against Checkster LLC¹ (“Defendant”) for violating their United States Patent No. 8,894,416 (“'416 Patent”)

under 35 U.S.C. § 1 et seq . (Dkt No. 8 [hereinafter AC] ¶ 1.) The '416 Patent “relates to a human resource management system, and more particularly to a system for collecting and analyzing information from references identified by job candidates.” '416 Patent cols. 1–2.

This patent comprises:

A system for collecting and analyzing survey data from reference providers identified by a job candidate for use by an employer...The system includes a candidate database that stores survey data which are provided by the reference providers. A collection module running in the system sends an electronic communication to the reference providers requesting them to complete the survey questions and electronically receives the survey data. The electronic communication preferably contains a URL link that takes the reference provider to a dynamically generated webpage through which the survey data are entered. An analysis module running in the system combines the received survey data from the reference providers and generates a candidate report. In one aspect, the candidate report is a confidential report which excludes identification of any rating or comments by any reference providers. In another aspect, the system also generates customized interview probe questions for use after the hiring, based on the weak area that have been identified from the completed surveys in order to assist the hiring manager to bring the new hires up to speed quickly and effectively.

'416 Patent

cols. 1–2. The “Background of the Invention” section explains that the '416 Patent differs from “traditional reference checking methods such as telephone interviews,” because the '416 Patent process is less costly, is done earlier in the hiring process, is “substantially automated,” is anonymized, and provides “guidance for the hiring manager to further explore areas of weakness in the candidate during the hiring process.” '416 Patent cols. 1–2.

In granting the '416 Patent

, the United States Patent and Trademark Office stated that the examiner allowed the patent because it was an “improved computer system programmed for reference checking.” (Not. Of Allowance and Fee(s) Due, Dkt No. 18, Ex. 4 [hereinafter Not.] at 2.) The Notice further noted that the method/system was patented because it provided position specific surveys, calculated statistical scores in competency skill groups, kept the data confidential, and created statistical benchmarking scores. (Not. at 2.) The Notice specifically mentioned that the application was also allowed “for the order/steps in which these limitations take place,” including that “all the limitations take place before the interview is conducted.” (Not. at 3.)

The '416 Patent

asserts twenty claims constituting method and system claims. '416 Patent cols. 10–16. Method claims are within the statutory class of processes. 35 U.S.C. § 100(b). Claims 1 and 11 are independent claims. Claim 1 explains a computer–implemented method that sets up initial job specific survey questions for an applicant's references, connects with the references, collects the survey data provided by the references, anonymizes the survey data, analyzes the survey data, and generates reports for the hiring manager based on a comparison of the candidate's survey...