United States District Court, N.D. California
ORDER GRANTING MOTION FOR JUDGMENT ON THE
PLEADINGS
RICHARD SEEBORG UNITED STATES DISTRICT JUDGE
I.
INTRODUCTION
In this
patent infringement action, plaintiff Whitepages, Inc. seeks
judgment on the pleadings that the patent-in-suit discloses
only “abstract ideas” outside the permissible
scope of patent protection, and therefore is invalid under 35
U.S.C. § 101.[1] For the reasons explained below, the
motion is granted.
II.
FACTUAL BACKGROUND[2]
Plaintiff
Whitepages, Inc. is a leading source of contact information
in North America. It develops services to assist people with
finding, understanding, and verifying personal and business
identities. Whitepages developed a mobile application
(“app”) called “Whitepages Caller ID,
” which allows users to block calls, detect spam, and
identify (“ID”) incoming telephone calls.
Defendant Greenflight Venture Corporation is a startup
company founded by CEO Jeffrey Isaacs. Its technology allows
a mobile phone user to identify the name associated with a
phone number through a reverse lookup.[3] Greenflight has
an app entitled “Caller-ID” (“Greenflight
app”).
On
October 14, 2014, the United States Patent and Trademark
Office (“PTO”) issued U.S. Patent No. 8, 861, 698
(“the ’698 patent”) to inventor and
Greenflight CEO, Isaacs. According to Greenflight, the patent
“claims a novel convergence of two telephone network
related technologies, namely SS7 Caller Name ID
(“CNAM”) and internet based reverse telephone
number search.” Countercl. ¶ 11.
By way
of background, in the 1980s, telephone companies began
offering “Caller Name ID” as an add-on feature
for a landline telephone subscription. CNAMs allowed a
carrier to determine the name of a calling party and display
it to the called party for calls between landline telephones.
Prior to CNAMs, a called party could not trace the name of a
caller, so calls in general were completely anonymous. CNAMs
were stored in a relatively small number of databases managed
by “Baby Bells, ” the regional bell operating
companies which emerged from the antitrust suit against
AT&T.
Around
1997, Whitepages licensed the Baby Bell phonebooks and placed
their contents on its internet searchable database. This made
it possible for mainstream telecom customers to perform
reverse lookups using the internet. In other words, some
aspects of “Caller Name ID” became available
without a full CNAM subscription. The limitation of this
method was that it included listed numbers only for landlines
contained in public telephone books, and did not include
cellular telephone numbers, which increasingly were becoming
prevalent. It also relied on data from a single moment in
time and thus could not account for new telephone numbers or
changes to numbers as additions or changes occurred.
As the
years passed, mobile phone and smart phone technology
features proliferated, but cell phone Caller Name ID
technology did not. A number of factors contributed to that
result. The deregulation of telecommunications
(“telecom”) carriers resulted in a much larger
number of CNAM databases than the handful originally existing
in the era of the Baby Bells. Additionally, fierce
competition over basic monthly rates necessitated unbundling
Caller Name Id. The upshot is that most cell phones
today display “UNKNOWN CALLER” or a city name
like “PALO ALTO, ” as opposed to the name of the
person who owns the account for the calling number. Still,
even though Caller Name ID is not presently used on most
cellular phones, carriers nonetheless maintain CNAM databases
for all of their mobile phone subscribers. These CNAM
databases reside with the carriers and are accessed through
the “industry standard SS7 protocol.” Countercl.
¶ 17.
In
2013, Isaacs embarked on an effort to invent technology that
would bridge the gap “between CNAM and internet reverse
search.” Countercl. ¶ 18. The ’698 patent is
the result of that effort. It “describes a system and
method in which a user can input a telephone number into a
website or mobile phone interface, separate and apart from
end-user phone carrier feature subscriptions, and return the
name information associated with the queried phone
number.” Id. The technology uses an “SS7
query to a CNAM database to obtain the caller name
information.”[4]Id. Notably, Greenflight is
“unaware of any method other than SS7 for accessing a
carrier’s CNAM database.” Id. ¶ 20.
It therefore asserts “if name data originally derives
from a CNAM database, SS7 compatible protocols were
utilized.” Id. It also notes the “CNAM
SS7 query is such a common occurrence that the
telecom industry simply refers to it as a name
‘dip.’” Id. ¶ 20 (emphasis
added).
Greenflight
released its app on the Apple App Store in the summer of
2013. A year later, Whitepages introduced version 1.0 of its
“ID by Whitepages” app. Greenflight investigated
the Whitepages app and determined that, unlike previous
versions, it appeared to utilize new data
sources-specifically, CNAM databases. Believing Whitepages
was querying a CNAM database, and thus infringing the
’698 patent, Greenflight initiated Apple’s
dispute resolution process.
This
led Whitepages to file a complaint for a declaratory judgment
of non-infringement of the ’698 patent on January 11,
2016. Three days later, Greenflight sued Whitepages and
another company-True Software Scandinavia AB-in the United
States District Court for the Southern District of Florida.
Greenflight soon stipulated to dismissal of Whitepages and
its CEO from the Florida action, then asserted counterclaims
here for infringement of claim 1 and contributory
infringement of claims 1 and 5 of the ’698 patent.
Whitepages answered the counterclaims on April 21, 2016. It
subsequently filed the instant motion for judgment on the
pleadings.
III.
LEGAL STANDARD
Federal
Rule of Civil Procedure 12(c) provides that “[a]fter
the pleadings are closed-but early enough not to delay
trial-a party may move for judgment on the pleadings.”
A motion for judgment on the pleadings is “functionally
identical” to a Rule 12(b)(6) motion to dismiss for
failure to state a claim. See Dworkin v. Hustler
Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989).
“A judgment on the pleadings is properly granted when,
taking all the allegations in the pleadings as true, [a]
party is entitled to judgment as a matter of law.”
Lyon v. Chase Bank USA, N.A., 656 F.3d 877, 883 (9th
Cir. 2011) (quoting Dunlap v. Credit Protection
Ass’n, L.P., 419 F.3d 1011, 1012 n.1 (9th Cir.
2005)); see also Turner v. Cook, 362 F.3d 1219, 1225
(9th Cir. 2004) (explaining that all material allegations in
the complaint are accepted as true and construed in the light
most favorable to the non-moving party).[5]
IV.
DISCUSSION
Section
101 of the Patent Act defines the subject matter eligible for
patent protection. 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. Whitepages contends the ’698 patent fails
to qualify under this section.
The
Supreme Court’s decision in Alice Corp. Pty. Ltd.
v. CLS Bank International, 134 S.Ct. 2347 (2014),
provides the relevant framework. As explained in
Alice, the Court has “interpreted § 101
and its predecessors . . . for more than 150 years” to
“‘contain[] an important implicit exception: Laws
of nature, natural phenomena, and abstract ideas are not
patentable.’” 134 S.Ct. at 2354 (quoting
Ass’n for Molecular Pathology v. Myriad Genetics,
Inc., 133 S.Ct. 2107, 2116 (2013)).
The
Alice Court applied a two-step framework for
determining patent eligibility, previously articulated in
Mayo Collaborative Services v. Prometheus Laboratories,
Inc., 132 S.Ct. 1289 (2012):
First, we determine whether the claims at issue are directed
to one of those patent-ineligible concepts. If so, we then
ask, “[w]hat else is there in the claims before
us?” To answer that question, we 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. We have described step two of
this analysis as a search for an “inventive
concept”- i.e., an element or combination of elements
...