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Whitepages, Inc. v. Isaacs

United States District Court, N.D. California

July 25, 2016

WHITEPAGES, INC., Plaintiff,
v.
JEFFREY ISAACS, et al., Defendants.

          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 ...

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