Whitserve LLC v. Donuts Inc.

• Decision Date: 08 July 2019
• Docket Number: Civ. No. 18-193-CFC, Civ. No. 18-194-CFC
• Parties: WHITSERVE LLC, Plaintiff, v. DONUTS INC. and Name.com, Inc., Defendants. WhitServe LLC, Plaintiff, v. eNom, LLC, Defendant.
• Court: U.S. District Court — District of Delaware

390 F.Supp.3d 571

WHITSERVE LLC, Plaintiff,

v.DONUTS INC. and Name.com, Inc., Defendants.

WhitServe LLC, Plaintiff,

v.eNom, LLC, Defendant.

Civ. No. 18-193-CFC

Civ. No. 18-194-CFC

United States District Court, D. Delaware.

Signed July 8, 2019

Stamatios Stamoulis, Stamoulis & Weinblatt LLC, Wilmington, DE, Michael J. Kosma, Pro Hac Vice, St. Onge Steward Johnston & Reens LLC, Stamford, Connecticut, for Plaintiff.

Jack B. Blumenfeld, Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE, for Defendants.

MEMORANDUM

Colm F. Connolly, UNITED STATES DISTRICT JUDGE

In February 2018, plaintiff WhitServe LLC ("WhitServe") brought separate patent infringement actions against Donuts Inc., along with its subsidiary Name.com, Inc., and eNom, LLC (collectively, the "Defendants"). C.A. No. 18-193 at D.I. 1; C.A. No. 18-194 at D.I. 1. WhitServe alleges that Defendants infringe U.S. Patent Nos. 5,895,468 ("the #468 patent") and 6,182,078 ("the #078 patent") which are titled, respectively, "System Automating Delivery of Professional Services" and "System for Delivering Professional Services Over the Internet." The Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a). Defendants have moved to dismiss the complaints pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that the patents recite patent ineligible subject matter under 35 U.S.C. § 101. C.A. No. 18-193 at D.I. 12; C.A. No. 18-194 at D.I. 10. For the reasons discussed below, I will grant Defendants' motions.

I. BACKGROUND¹

The complaints allege that Defendants infringe claims 1 and 24 of the #468 patent and claims 1, 3, 9, and 11 of the #078 patent. D.I. 1 at ¶¶ 22, 31. Only claims 3 and 11 of the #078 patent are dependent. D.I. 1-2. All the remaining claims are independent. Id. ; D.I. 1-1. The #468 and #078 patents share a common written description that was first filed on October 7, 1996. D.I. 1 at ¶ 13.

As the patents-in-suit explain, attorneys and other professionals have to perform many functions that "involve a series of deadlines" and these functions cannot be completed without client authorization or action. D.I. 1-1 at 1:11-16. Before the invention disclosed in the patents-in-suit, professionals relied on a docketing system, "which typically contains a database of deadlines," that "notifies the professional of each upcoming deadline a preset time period before the deadline by printout, attached terminal, or networked computer." Id. at 1:28-35. A disadvantage of the docketing system, however, was that it provided "aid in only one of the many steps which the professionals must perform." Id. at 1:36-38. Professionals still had to spend "countless hours attempting to contact busy clients by telephone or by writing multiple letters attempting to elicit a response from the client." Id. at 1:21-23, 40-53. The entire process of sending clients a reminder and obtaining a timely response is "often time-intensive, costly, and tedious." Id. at 1:19-20.

The patents-in-suit purport to solve these problems by disclosing "an automated system for obtaining authorizations from clients prior to deadlines which will improve the speed, efficiency, and reliability of performing professional services for clients." Id. at 2:6-9. The system is comprised of a computer, a database, software, and a communication link with the Internet. Id. at 6:54-7:8. As the patents-in-suit explain, the advantage of a system "in which communications between the professional and the client take place over the Internet" is that "[t]hese technologies greatly decrease the costs and increase the timeliness of communication." Id. at 1:58-2:14.

Claim 1 of the #468 patent, which may be considered representative of all claims in the #468 patent family, recites:²

A device for automatically delivering professional services to a client comprising:

a computer;

a database containing a plurality of client reminders, each of the client reminders comprising a date field having a value attributed thereto;

software executing on said computer for automatically querying said database by the values attributed to each client reminder date field to retrieve a client reminder;

software executing on said computer for automatically generating a client response form from the retrieved client reminder;

a communication link between said computer and the Internet; software executing on said computer for automatically transmitting the client response form to the client through said communication link; and

software executing on said computer for automatically receiving a reply to the response form from the client through said communication link.

D.I. 1-1 at 6:54-7:8.

The other independent claims asserted against Defendants are, with a few caveats, essentially identical to claim 1 of the #468. The only meaningful difference between claim 1 of the #468 patent and claim 1 of #078 patent is that claim 1 of the #078 patent does not include the last limitation of claim 1 of the #468 patent regarding "automatically receiving a reply to the response form from the client." D.I. 1-2 at 8:4-22. Claim 24 of the #468 patent and claim 9 of the #078 patent are, in all meaningful respects, the same as claim 1 of the #468 patent, except directed towards a "method" instead of a "device." D.I. 1-1 at 10:8-24; D.I. 1-2 at 9:13-10:9. Finally, dependent claim 3 in the #078 patent narrows the device of claim 1 by limiting the form of the device to a webpage. D.I. 1-2 at 8:24. Similarly, claim 11 of #078 patent narrows the method in claim 9 by requiring that the step for generating a client response form comprises "generating of a webpage." D.I. 1-2 at 10:12-13.

II. STANDARD OF REVIEW

Under Rule 12(b)(6), a party may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To survive the motion to dismiss, the complaint need not contain "detailed factual allegations," but it must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp v. Twombly , 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In assessing the plausibility of a claim, the Court must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. In re Rockefeller Ctr. Prop., Inc. Sec. Litig. , 311 F.3d 198, 215 (3d Cir. 2002). The Court's review is limited to the allegations in the complaint, exhibits attached to the complaint, and documents incorporated by reference. Mayer v. Belichick , 605 F.3d 223, 230 (3d Cir. 2010) ; El-Hewie v. Bergen Cty. , 348 F. App'x 790, 794 (3d Cir. 2009).

It is well-settled that courts may determine patent eligibility under § 101 at the Rule 12(b)(6) stage. SAP Am., Inc. v. InvestPic, LLC , 898 F.3d 1161, 1166 (Fed. Cir. 2018) (stating that patent eligibility "may be, and frequently has been, resolved on a Rule 12(b)(6) or (c) motion"); FairWarning IP, LLC v. Iatric Sys., Inc. , 839 F.3d 1089, 1097 (Fed. Cir. 2016) (stating that "it is possible and proper to determine patent eligibility under 35 U.S.C. § 101 on a Rule 12(b)(6) motion" (quoting Genetic Techs. Ltd. v. Merial L.L.C. , 818 F.3d 1369, 1373–74 (Fed. Cir. 2016) ); see also Voter Verified, Inc. v. Election Sys. & Software LLC , 887 F.3d 1376, 1379 (Fed. Cir. 2018) (affirming Rule 12(b)(6) dismissal based on § 101 patent ineligibility); Maxon, LLC v. Funai Corp. , 726 F. App'x 797, 798 (Fed. Cir. 2018) (same). Determining eligibility at the pleadings stage is possible, however, "only when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law." Aatrix Software, Inc. v. Green Shades Software, Inc. , 882 F.3d 1121, 1125 (Fed. Cir. 2018).

III. DISCUSSION

Defendants have moved to dismiss the complaint on the grounds that the #468 and #078 patents are directed to an abstract idea and, therefore, ineligible for patent protection under 35 U.S.C. § 101. In opposing Defendants' motion, WhitServe has raised three arguments: First, the #468 and #078 patents are not ineligible under § 101 ; second, a motion to dismiss based on § 101 is inappropriate at this stage of the proceedings; and, third, the validity of the claims has already been upheld by other courts and the United States Patent and Trademark Office ("USPTO"). Each argument is addressed in turn.

A. Patent Eligibility under Alice

Section 101 of the Patent Act defines patent-eligible subject matter. It provides: "Whoever invents or discovers 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 and requirements of this title." 35 U.S.C. § 101.

There are three judicially-created limitations on the literal words of § 101. The Supreme Court has long held that laws of nature, natural phenomena, and abstract ideas are not patentable subject matter. Alice Corp. Pty. v. CLS Bank Int'l , 573 U.S. 208, 216, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014). These exceptions to patentable subject matter arise from the concern that the monopolization of "these basic tools of scientific and technological work" "might tend to impede innovation more than it would tend to promote it." Id. (internal quotation marks and citations omitted).

"[A]n invention is not rendered ineligible for patent [protection] simply because it involves an abstract concept[.]" Id. at 217, 134 S.Ct. 2347. "[A]pplication[s] of such concepts to a new and useful end ... remain eligible for patent protection." Id. (internal quotation marks and citations omitted). But in order "to transform an unpatentable law of nature [or abstract idea] into a patent-eligible application of such law [or abstract idea], one must do more than simply state the law of nature [or abstract idea] while adding the words ‘apply it.’ " Mayo Collaborative Servs. v....