Case: 19-2334 Document: 48 Page: 1 Filed: 04/26/2021
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`NOTE: This disposition is nonprecedential.
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`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`WHITSERVE LLC,
`Plaintiff-Appellant
`
`v.
`
`DROPBOX, INC.,
`Defendant-Appellee
`______________________
`
`2019-2334
`______________________
`
`Appeal from the United States District Court for the
`District of Delaware in No. 1:18-cv-00665-CFC, Judge
`Colm F. Connolly.
`______________________
`
`Decided: April 26, 2021
`______________________
`
`MICHAEL JOSEPH KOSMA, Whitmyer IP Group LLC,
`Stamford, CT, for plaintiff-appellant. Also represented by
`STEPHEN BALL.
`
` GREGORY H. LANTIER, Wilmer Cutler Pickering Hale
`and Dorr LLP, Washington, DC, for defendant-appellee.
`Also represented by CLAIRE HYUNGYO CHUNG; ELIZABETH
`BEWLEY, Boston, MA.
` ______________________
`
`
`ironSource Exhibit 1018
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`WHITSERVE LLC v. DROPBOX, INC.
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`Before REYNA, SCHALL, and WALLACH, Circuit Judges.
`REYNA, Circuit Judge.
`Appellant WhitServe LLC appeals from the United
`States District Court for the District of Delaware.
`WhitServe brought an infringement action against Drop-
`box. Dropbox moved to dismiss WhitServe’s complaint
`with prejudice on grounds that the patent claims asserted
`by WhitServe are directed to patent ineligible subject mat-
`ter. The district court granted Dropbox’s motion to dis-
`miss, and WhitServe appeals. We affirm the judgment of
`the district court.
`
`BACKGROUND
`WhitServe LLC (“WhitServe”) filed suit on May 1, 2018
`alleging that Dropbox, Inc. (“Dropbox”) infringes at least
`claims 10 and 19 of U.S. Patent No. 8,812,437 (“the ’437
`patent”). The ’437 patent, entitled “Onsite Backup for
`Third Party Internet-Based Systems,” generally relates to
`“safeguarding customer/client data when a business out-
`sources data processing to third party Internet-based sys-
`tems,” by backing up the internet-based data to a client’s
`local computer. ’437 patent col. 1 ll. 6–9. The specification
`discloses a “central computer,” a “client computer,” a “com-
`munications link” between each computer and the Inter-
`net, and a “database” containing a plurality of data records.
`Id. at col. 2 ll. 34–52; col. 4 ll. 4–13. The specification fur-
`ther discloses software that is capable of “modifying” the
`data records by “updating and deleting” data in the data
`records. Id. at col. 4 ll. 26–30. In sum, the disclosed com-
`puters can send a request for a copy of data records over
`the Internet, receive the request, and transmit a copy of the
`requested data. See, e.g., id. at col. 4 ll. 31–41.
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`Claim 10 is representative of the ’437 patent’s claims
`for purposes of this appeal.1 Claim 10 recites:
`A system for onsite backup for internet-based data
`processing systems, comprising:
`a central computer accessible by at least one client
`computer at a client site via the Internet for out-
`sourced data processing;
`at least one database containing a plurality of data
`records accessible by said central computer, the
`plurality of data records including internet-based
`data that is modifiable over the Internet from the
`client computer;
`data processing software executing on said central
`computer for outsourcing data processing to the In-
`ternet from the at least one client computer, said
`data processing software modifying the internet-
`based data in the plurality of data records accord-
`ing to instructions received from the at least one
`client computer, the modifying including updating
`
`
`1 On appeal, WhitServe contests the district court’s
`treatment of claim 10 as representative. See Appellant’s
`Br. 17. However, the district court determined that
`“WhitServe did not challenge Dropbox’s treatment of claim
`10 as representative or present any meaningful argument
`for the distinctive significance of any claim limitation not
`found in claim 10.” J.A. 9. In addition, Whitserve’s open-
`ing brief on appeal does not address any claim of the ’437
`patent other than claim 10 and thus WhitServe has waived
`the argument that claim 10 is not representative, and
`waived argument as to the patent eligibility of other claims
`in the ’437 patent. SmithKline Beecham Corp. v. Apotex
`Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006).
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`and deleting the internet-based data in the plural-
`ity of data records;
`a client data request, sent from at least one client
`computer via the Internet to said central computer,
`the client data request comprising a request for a
`backup copy of at least one of the plurality of data
`records;
`software executing on said central computer to re-
`ceive, via the Internet from the at least one client
`computer, the request for a backup copy of at least
`one of the plurality of data records including the
`internet-based data in the at least one of the plu-
`rality of data records that has been modified by
`said data processing software; and
`software executing on said central computer to
`transmit the backup copy of the at least one of the
`plurality of data record [sic] including the internet-
`based data in the at least one of the plurality of
`data records that has been modified by said data
`processing software to the client site for storage of
`the internet-based data from the at least one of the
`plurality of data record [sic] in a location accessible
`via the at least one client computer;
`wherein the location is accessible by the at least
`one client computer without using the Internet.
`Id. at col. 4 ll. 14–50.
`Dropbox moved to dismiss WhitServe’s complaint pur-
`suant to Federal Rule of Civil Procedure 12(b)(6) on
`grounds that the ’437 patent’s claims recite patent ineligi-
`ble subject matter pursuant to 35 U.S.C. § 101. On July
`25, 2019, the district court granted Dropbox’s motion to dis-
`miss, concluding that the claims are directed to an abstract
`idea and fail to supply an inventive concept that trans-
`forms the abstract idea into a patent-eligible application.
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`WhitServe LLC v. Dropbox, Inc., No. CV 18-665-CFC, 2019
`WL 3342949, at *1, *5–6 (D. Del. July 25, 2019).
`Specifically, the district court agreed with Dropbox
`that the ’437 patent is directed to the abstract idea of “back-
`ing up data records,” and concluded that the claims are not
`directed to an improvement in computer functionality. Id.
`at *4–5. In addition, the district court found that repre-
`sentative claim 10 “recites only generic computer compo-
`nents performing routine computer functions.” Id. at *4.
`The district court found “nothing inventive in how the
`[’]437 patent arranges the storage of backup data,” reason-
`ing that “[i]t is a well-understood practice of human organ-
`ization that backup copies are stored in a location separate
`and distinct from the original location.” Id. at *5. The dis-
`trict court reasoned that if the original location was onsite,
`the conventional backup location would be offsite, or vice
`versa. Id. at *5–6. The district court reasoned that the
`claims were similar to when “humans secure critical docu-
`ments, such as wills . . . in a bank safe deposit box, but keep
`a copy at home for quick reference when needed.” Id. at *6.
`Further, the district court observed that, contrary to
`WhitServe’s argument, Dropbox was not required to sepa-
`rately address the patent’s preemptive scope in order to
`prevail on its motion to dismiss, because preemption “is not
`a separate and independent test under Alice,” but rather is
`a “concern that undergirds [] § 101 jurisprudence.” Id.
`The district court rejected WhitServe’s contention that
`factual issues precluded dismissal, noting that this court
`has “repeatedly affirmed § 101 rejections at the motion to
`dismiss stage, before claim construction or significant dis-
`covery has commenced,” id. (quoting Cleveland Clinic
`Found. v. True Health Diagnostics LLC, 859 F.3d 1352,
`1360 (Fed. Cir. 2017)). The court stated that nothing in the
`allegations set forth in WhitServe’s complaint or in the
`specification of the ’437 patent would create a factual issue
`regarding patent eligibility. Id. at *7.
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`The district court also rejected WhitServe’s argument
`that the claims were patent eligible because the United
`States Patent and Trademark Office (“PTO”) issued the pa-
`tent and an issued patent is presumed to be valid, and be-
`cause this court had determined previously, in another
`action, that the patent claimed eligible subject matter. Id.
`The district court concluded it was not bound by PTO’s de-
`cisions and the agency’s allowance of the ’437 patent did
`not dictate the eligibility analysis. Id. In response to
`WhitServe’s argument concerning the applicability of a
`prior decision by this court, the district court observed that
`this court’s decision in WhitServe LLC v. Computer Pack-
`ages, Inc., 694 F.3d 10 (Fed. Cir. 2012), did not address the
`eligibility of the ’437 patent, but rather the dissent ad-
`dressed the eligibility of its family member, and therefore
`did not constitute a prior decision of this court on the eligi-
`bility of the ’437 patent. Id.
`The district court dismissed WhitServe’s complaint
`with prejudice and entered judgment in favor of Dropbox.
`WhitServe appeals this decision. We have jurisdiction pur-
`suant to 28 U.S.C. § 1295(a)(1).
`DISCUSSION
`We review a district court’s dismissal for failure to
`state a claim under the law of the regional circuit, here, the
`Third Circuit. BASCOM Glob. Internet Servs., Inc. v.
`AT&T Mobility LLC, 827 F.3d 1341, 1347 (Fed. Cir. 2016).
`The Third Circuit reviews the grant of a motion to dismiss
`de novo. Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d
`153, 154 n.1 (3d Cir. 2014). Patent eligibility under § 101
`is ultimately a question of law, reviewable de novo, which
`may contain underlying issues of fact. Synchronoss Techs.,
`Inc. v. Dropbox, Inc., 987 F.3d 1358, 1365 (Fed. Cir. 2021).
`The Supreme Court has long held that “abstract ideas,”
`such as “a fundamental economic practice long prevalent
`in” our society are patent ineligible subject matter. Alice
`Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216, 219
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`(2014) (internal quotation marks and citation omitted).
`The Supreme Court established a two-step inquiry to de-
`termine whether a patent covers patent ineligible subject
`matter, such as an abstract idea. At Alice step one, the
`court decides whether the claims are “directed to” patent
`ineligible subject matter. Id. at 217. To determine whether
`a claim is directed to patent ineligible subject matter, we
`may consider whether any claimed advance over the prior
`art alleged in the written description demonstrates more
`than an abstract idea, such as an improvement of a tech-
`nological process, or merely enhances an ineligible concept.
`In re: Bd of Trustees of the Leland Stanford Junior Univ.,
`991 F.3d 1245, 1250–51 (Fed. Cir. 2021); see, e.g., Athena
`Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915
`F.3d 743, 750 (Fed. Cir. 2019), cert. denied, 140 S. Ct. 855,
`205 L. Ed. 2d 460 (2020).
`If the claims are not directed to patent ineligible sub-
`ject matter, the Alice inquiry ends. If the claims are di-
`rected to patent ineligible subject matter, the Alice inquiry
`advances to step two. In step two, the court determines
`whether the claims contain an “inventive concept,”—i.e.,
`an element or a combination of elements that transforms
`the nature of the claim into a patent-eligible application.
`Id. at 217–18. To uphold a patent at step two, an inventive
`concept “must be evident in the claims.” Two-Way Media
`Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1338
`(Fed. Cir. 2017). We begin our review with Alice step one.
`I
`WhitServe argues on appeal that claim 10 is not di-
`rected to an abstract idea. Rather, claim 10 is directed to
`a technological improvement comprising “a system for on-
`site storage of a backup copy of Internet-based data that
`has been updated or deleted over the Internet by the client,
`which improves the storage, access, flexibility, and security
`of data processing.” Appellant’s Br. 24. WhitServe relies
`on Enfish, and argues that the ’437 patent is not “simply
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`directed to storing any data in a general form, but instead
`is directed to a specific form of storing a specific type of
`data . . . .” See Appellant’s Br. 26 (citing Enfish, LLC v. Mi-
`crosoft Corp., 822 F.3d 1327, 1337 (Fed. Cir. 2016) (“the
`claims are not simply directed to any form of storing tabu-
`lar data, but instead are specifically directed to a self-ref-
`erential table
`for a computer database.”)(emphasis
`omitted)). According to WhitServe, claim 10 is directed to
`a practical solution to an internet-based problem. We dis-
`agree.
`Claim 10 is directed to a system for maintaining data
`records, in particular, backing up data records. Claim 10
`recites a “computer,” a “database,” “data processing soft-
`ware,” and communication via the Internet. ’437 patent
`col. 4 ll. 14–50. The specification explained that, the “com-
`puter is described as being “central” or belonging to a “cli-
`ent,” id. at col. 2 ll. 40–43, the “database” merely
`“contain[s] a plurality of data records,” id. at Abstract, and
`the “software” is capable of “displaying” the data records by
`“updating” and “deleting” the data, id. at col. 2 ll. 37–43.
`Finally, the claimed computers are described as being ca-
`pable of sending, over the Internet, a request for a copy of
`data records, receiving the request, and transmitting a
`copy of the requested data. Id. at col. 4 l. 31–49. In other
`words, the system is for requesting, transmitting, receiv-
`ing, copying, deleting, and storing data records. Such
`transmitting, saving, and storing of client records is a fun-
`damental business practice that “existed well before the
`advent of computers and the Internet,” Intellectual Ven-
`tures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1327 (Fed.
`Cir. 2017); see, e.g., Content Extraction & Transmission
`LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343, 1347
`(Fed. Cir. 2014) (“The concept of data collection, recogni-
`tion, and storage is undisputedly well-known.”). Independ-
`ent claim 10 is, therefore, directed to an abstract idea.
`WhitServe argues that, because the claims require a
`particular form of storage, namely “onsite” instead of
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`“offsite,” they are directed to a specific improvement of a
`technological process. Whether the records are stored on-
`site of offsite does not alter the conclusion that the claims
`are directed to the abstract idea of maintaining data rec-
`ords, even if storage of the records is limited to the client’s
`computer, rather than a web server. See Intellectual Ven-
`tures I, 838 F.3d at 1319.
`WhitServe also argues that the claimed advance
`demonstrates a patent eligible improvement of a technolog-
`ical process. We disagree. Here, the claimed advance over
`the prior art, as stated in the specification and in claim 10,
`is the “onsite backup of data” and a “system for onsite
`backup of internet-based data processing systems.” ’437
`patent col. 2 ll. 62–63; col. 4 ll. 13–14. The specification
`does not, however, explain the technological processes un-
`derlying the purported technological improvement. In-
`stead, as the district court correctly explained, the claims
`“rely on the ordinary storage and transmission capabilities
`of computers within a network and apply that ordinary
`functionality in the particular context of onsite backup.”
`WhitServe, 2019 WL 3342949, at *5. As we have previously
`noted, claims reciting computer function, or the mere ma-
`nipulation of data, are directed to an abstract idea. See,
`e.g., Digitech Image Techs., LLC v. Elecs. for Imaging, Inc.,
`758 F.3d 1344, 1351 (Fed. Cir. 2014) (finding that a claim
`recited an ineligible abstract process of gathering and com-
`bining data that did not require input from a physical de-
`vice). Here the system disclosed in claim 10 claims the
`computer function of maintaining data records, including
`storing records at different sites for added protection. This
`is an abstract idea. Accordingly, we conclude that claim 10
`of the ’437 patent is directed to an abstract idea.
`II
`Step two of the Alice inquiry is a lifeline by which
`claims that are deemed to be directed to patent ineligible
`subject matter may be saved. At step two, we ask whether
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`the claim recites an inventive concept that transforms the
`abstract idea into patent eligible subject matter.
`WhitServe contends that an inventive concept lies in
`the way the client is able to control and modify data—
`namely, “by offering users Internet-based data processing
`capabilities while allowing [for] the ability to edit and mod-
`ify and transmit data records and further safeguard the
`data at a location without Internet access.” Appellant’s Br.
`17, 29. WhitServe asserts that the patent takes the uncon-
`ventional step of storing backup data onsite (i.e., a partic-
`ular form of storage).
`WhitServe also argues that the claim’s recitation of an
`internet-based data processing software that allows the
`ability to “edit and modify” is an inventive concept that
`transforms the claims into something other than an ab-
`stract idea. We disagree. The patent itself discloses that
`companies were “increasingly moving their data processing
`systems onto the Internet and providing web interfaces for
`their customers to see and manipulate their own data.”
`’437 patent at col. 1 ll. 13–16. Thus, the ability to edit and
`modify data was well known and cannot constitute an in-
`ventive concept.
`As this court has explained, storing data is a “generic
`computer function[].” In re TLI Commc’ns LLC Patent
`Litig., 823 F.3d 607, 612 (Fed. Cir. 2016). We have also
`noted that “sending and receiving information” over a net-
`work are “routine computer functions.” Intellectual Ven-
`tures I LLC v. Erie Idemnity Co., 850 F.3d 1315, 1329 (Fed.
`Cir. 2017); see also Intellectual Ventures I LLC v. Capital
`One Bank (USA), 792 F.3d 1363, 1367–68 (Fed. Cir. 2015)
`(finding that “database” and “communication medium” (in-
`cluding the Internet) are generic computer components);
`buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed.
`Cir. 2014) (finding that “receiv[ing] and send[ing] the infor-
`mation over a network” is generic).
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`The claims recite generic computer components per-
`forming routine conventional functions. Viewing claim 10’s
`elements in combination does not alter our conclusion be-
`cause the claims lack a non-conventional and non-generic
`arrangement. BASCOM, 827 F.3d at 1350. Accordingly,
`we conclude that the ’437 patent does not disclose an in-
`ventive concept and, as a result, does not transform claim
`10 into patent eligible subject matter.
`III
`WhitServe alleges that certain factual questions pre-
`cluded a finding of ineligibility at the pleading stage. Spe-
`cifically, WhitServe contends that whether the claims
`present an improvement to software and computer func-
`tionality is a disputed factual issue. Appellant’s Br. 36–37.
`WhitServe adds that the question of what constitutes a
`well-known business practice or is well-understood, rou-
`tine and conventional technology at the time of the inven-
`tion are also disputed factual issues. Id. WhitServe
`asserts that the district court failed to analyze the claims
`from the perspective of one skilled in the art at the time of
`the invention, failed to consider certain objective indicia of
`nonobviousness (i.e., commercial success), failed to conduct
`claim construction, and failed to give WhitServe the statu-
`tory presumption of validity that exists once a patent is-
`sued. Id. at 37–44.
`These purported factual questions do not preclude dis-
`missal of this case at the pleadings stage, nor do they pre-
`clude a finding of ineligibility. Although a § 101 inquiry
`may implicate underlying factual questions in some cases,
`“not every § 101 determination contains genuine disputes
`over the underlying facts material to the § 101 inquiry.”
`Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir.
`2018); see also BSG Tech LLC v. Buyseasons, Inc., 899 F.3d
`1281, 1290–91 (Fed. Cir. 2018) (distinguishing Berkheimer
`and affirming judgment of invalidity under § 101). Dismis-
`sal is appropriate where factual allegations are not
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`“plausible” or are “refute[d]” by the record. Aatrix Soft-
`ware, Inc. v. Green Shades Software, Inc., 882 F.3d 1121,
`1125 (Fed. Cir. 2018) (citation omitted). The district court
`found that there were “no concrete or specific allegations in
`WhitServe’s complaint or discussions in the specification”
`regarding any improvements in technology, and thus there
`was “no factual issue that would preclude [it] from decid-
`ing . . . patent eligibility of the [’]437 patent on a motion to
`dismiss.” 2019 WL 3342949, at *6–7. We agree.
`As noted above, we determine that the ’437 patent is
`patent ineligible on the basis that the claimed systems ap-
`ply a fundamental business concept of backing up records
`and provide a generic environment to carry out the abstract
`idea of obtaining and storing backup copies. Patent eligi-
`bility may be determined on the intrinsic record alone
`where, as here, the specification provides that the relevant
`claim elements are well-understood, routine and conven-
`tional. See Berkheimer v. HP Inc., 890 F.3d at 1371 (Moore,
`J., concurring in the denial of en banc rehearing).
`WhitServe argues that the district court erred by fail-
`ing to consider objective criteria of non-obviousness as part
`of the Alice inquiry. We disagree. Objection indicia of non-
`obviousness are relevant in a § 103 inquiry, but not in a
`§ 101 inquiry. Finally, as to claim construction, WhitServe
`waived any such argument by failing to request claim con-
`struction below, and by failing to explain how a different
`construction of any claim term would lead to a different re-
`sult. See Abbott Labs. v. Syntron Bioresearch, Inc., 334
`F.3d 1343, 1357 (Fed. Cir. 2003) (determining that a liti-
`gant who “d[oes] not urge a particular claim construction
`of the disputed language before the district court[] . . .
`waive[s] the right to do so on appeal”).
`CONCLUSION
`The court has considered WhitServe’s additional argu-
`ments and finds them unpersuasive. We affirm the judg-
`ment of the district court.
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`AFFIRMED
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