BSG Tech LLC v. BuySeasons, Inc., Rakuten Commerce, LLC

Docket No. 2017-1980
REYNA, WALLACH, HUGHES
August 15, 2018

Brief summary: DC grant of SJ to BuySeasons because all of BSG’s asserted claims are invalid as ineligible under § 101 affirmed.

Summary: BSG appealed DC holding that all asserted claims of BSG’s US 6,035,294; 6,243,699; and 6,195,652 directed to organizing information stored in a database (a “self-evolving generic index” such as “Automobile…Used Vehicle…Sports Utility Vehicle…color”) invalid as patent ineligible under § 101. The FC panel explained that the “‘self-evolving’ aspect of the claimed invention addresses…[the] shortcomings” in the prior art “by enabling users to ‘add new parameters for use in describing items’” (“the claimed invention seeks to guide user inputs to maintain consistency in how different users describe items” by providing “them with information about parameters and values that previous users chose when describing similar items”). BuySeasons successfully requested the DC to grant SJ and dismiss BSG’s complaint for failure to state a claim, arguing ineligibility under §101. The DC concluded “that the asserted claims ‘are directed to the abstract idea of considering historical usage information while inputting data’ and lack an inventive concept sufficient to transform them into patent-eligible subject matter.” The FC panel reviewed the DC decision de novo (Enfish, FC 2016) using the Alice two-step test: “whether the claims at issue are directed to one of [the] patent-ineligible concepts” and, if yes, then “whether the elements of each claim, both individually and as an ordered combination, ‘transform the nature of the claim’ into a patent-eligible application” (Alice, US 2014). The FC panel agreed with the DC “that the asserted claims are directed to the abstract idea” described above, explaining that “[t]he ‘699 specification makes clear that” the “databases predate the claimed invention”, “the claim’s ‘focus’” being on “guiding database users by presenting summary comparison information to users before they input data” (Alice step one). This, the FC panel wrote, “is not a method ‘necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of’ wide access databases” (DDR Holdings, FC 2014; CyberSource, FC 2011 (“a claim whose ‘steps can be performed in the human mind, or by a human using a pen and paper’ is directed to an ‘unpatentable mental process[]’”)). Further, the FC panel explained, “claims are not saved from abstraction merely because they recite components more specific than a generic computer” and are not “patent eligible merely because it applies an abstract idea in a narrow way…the claim’s focus must be something other than the abstract idea itself” (TLI, FC 2016 (recitation of telephone units and servers); Content Extraction, FC 2014 (recitation of a scanner); Two-Way Media, FC 2017). And the FC found BSG’s alleged improvements “are not improvements to database functionality” but only “benefits that flow from performing an abstract idea in conjunction with a well-known database structure” (citing Visual Memory, FC 2017 (adaptable memory caches) and Enfish, FC 2016 (self-referential databases), both concerning “claims that focused on improved ways in which systems store and access data”). The FC panel was not persuaded by BSG’s arguments regarding step two of the Alice analysis (“inventive concept”) as BSG did “not argue that other, non-abstract features of the claimed inventions, alone or in combination, are not well-understood, routine and conventional database structures and activities” and “the absence of complete preemption does not demonstrate patent eligibility” (Ariosa, FC 2015; Berkheimer, FC 2018 (“in cases where the only issue at step two is whether claim limitations are well-understood, routine, and conventional, a genuine dispute over that issue will preclude summary judgment”)). Thus, the DC decision was affirmed.