Bascom Research, LLC v. LinkedIn, Inc., --- F.Supp.3d ---- (2015)
`2015 WL 149480
`
`2015 WL 149480
`Only the Westlaw citation is currently available.
`United States District Court,
`N.D. California.
`
`Bascom Research, LLC, Plaintiff,
`v.
`LinkedIn, Inc., Defendants.
`Bascom Research, LLC, Plaintiff,
`v.
`Facebook, Inc., Defendants.
`
`Case No. 12–cv–06293–SI; Case No.
`12–cv–06924 SI
` | Signed January
`2, 2015 | Filed January 5, 2015
`
`Synopsis
`Background: Patentee brought action alleging infringement
`of patents related to the creation of link relationships
`between documents located on computer networks or the
`Internet. Alleged infringers moved for summary judgment of
`invalidity.
`
`Holdings: The District Court, Susan Illston, J., held that:
`
`[1] patents were directed to a patent-ineligible abstract idea,
`and
`
`[2] patents did not contain an inventive concept.
`
`Motion granted.
`
`West Headnotes (11)
`
`[1]
`
`Patents
`Degree of proof
`
`An alleged infringer asserting an invalidity
`defense bears the burden of proving invalidity by
`clear and convincing evidence. 35 U.S.C.A. §§
`101, 282.
`
`2 Cases that cite this headnote
`
`[2]
`
`Patents
`Laws of nature, natural phenomena, and
`abstract ideas; fundamental principles
`
`The purpose of excepting laws of nature, natural
`phenomena, and abstract ideas from patent
`eligibility is to protect the basic tools of scientific
`and technological work that lie beyond the
`domain of patent protection. 35 U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[3]
`
`Patents
`Laws of nature, natural phenomena, and
`abstract ideas; fundamental principles
`
`Courts apply a two-step test for distinguishing
`patents that claim laws of nature, natural
`phenomena, and abstract ideas from those
`that claim patent-eligible applications of those
`concepts: the court must first determine whether
`the claims at issue are directed to one of those
`patent-ineligible concepts, and if they are not, the
`claims past muster; however, if the claims are
`directed to a patent-ineligible concept, the court
`must then search for an inventive concept, that
`is, an element or combination of elements that
`is sufficient to ensure that the patent in practice
`amounts to significantly more than a patent upon
`the ineligible concept itself. 35 U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[4]
`
`Patents
`Laws of nature, natural phenomena, and
`abstract ideas; fundamental principles
`
`In searching for an inventive concept for
`purposes of determining the eligibility of a patent
`directed to laws of nature, natural phenomena, or
`abstract ideas, the court considers the elements
`of each claim both individually and as an ordered
`combination. 35 U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[5]
`
`Patents
`Laws of nature, natural phenomena, and
`abstract ideas; fundamental principles
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`1
`
`Ocean Tomo Ex. 1012-001
`
`

`
`Bascom Research, LLC v. LinkedIn, Inc., --- F.Supp.3d ---- (2015)
`2015 WL 149480
`
`Patent-ineligible abstract ideas are not limited
`to fundamental truths, fundamental economic
`practices, or basic tools of scientific and
`technological work. 35 U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[6]
`
`Patents
`Use or operation of machine or apparatus as
`affecting process; ‘machine or transformation‘
`test
`
`computer
`generic
`requiring
`Merely
`implementation fails to transform an abstract
`idea into a patent-eligible invention. 35 U.S.C.A.
`§ 101.
`
`2 Cases that cite this headnote
`
`[7]
`
`Patents
`Business methods; Internet applications
`
`link
`the creation of
`to
`related
`Patents
`relationships between documents located on
`computer networks or
`the
`Internet were
`directed to the patent-ineligible abstract idea
`of creating, storing, and using relationships
`between objects, since establishing relationships
`between document objects and making those
`relationships accessible was not meaningfully
`different from classifying and organizing data,
`which was a common, age-old practice that could
`be performed mentally. 35 U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[8]
`
`Patents
`Computers and Software
`
`For an abstract idea involving a computer to be
`patent-eligible, the claim has to supply a new and
`useful application of the idea. 35 U.S.C.A. § 101.
`
`2 Cases that cite this headnote
`
`[9]
`
`Patents
`Laws of nature, natural phenomena, and
`abstract ideas; fundamental principles
`
`Stating an abstract idea while adding the words
`“apply it” is not enough for patent eligibility. 35
`U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[10]
`
`Patents
`Business methods; Internet applications
`
`link
`the creation of
`to
`related
`Patents
`relationships between documents located on
`computer networks or the Internet did not
`contain inventive elements that could transform
`the abstract idea of creating, storing, and
`using relationships between objects into a
`patent-eligible application, where the claims
`did not require anything beyond generic
`and conventional computer structures and
`unspecified software programming, and they did
`not improve the functioning of any computer. 35
`U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[11]
`
`Patents
`In general; utility
`
`US Patent 7111232, US Patent 7139974, US
`Patent 7158971, US Patent 7389241. Invalid.
`
`1 Cases that cite this headnote
`
`Attorneys and Law Firms
`
`John A.C. Keith, William Boyle Porter, Blankingship & Keith
`PC, Fairfax, VA, Marc Aaron Fenster, Brian David Ledahl,
`Dorian Seawind Berger, Russ, August & Kabat, Los Angeles,
`CA, for Plaintiff.
`
`Heidi Lyn Keefe, Elizabeth Lee Stameshkin, Erin Emily
`Pritchard, Lowell D. Mead, Mark R. Weinstein, Cooley LLP,
`Palo Alto, CA, Michael Graham Rhodes, Cooley LLP, San
`Francisco, CA, Stephen R. Smith, Cooley LLP, Washington,
`DC, Jeffrey Thomas Norberg, Norberg Law, Chicago, IL,
`Scott Allen Cole, Cooley LLP, Reston, VA, for Defendants.
`
`ORDER GRANTING DEFENDANTS'
`MOTIONS FOR SUMMARY JUDGMENT
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`2
`
`Ocean Tomo Ex. 1012-002
`
`

`
`Bascom Research, LLC v. LinkedIn, Inc., --- F.Supp.3d ---- (2015)
`2015 WL 149480
`
`Re: Dkt. No. 117 in C 12–cv–6293 SI
`and Dkt. No. 141 in C 12–cv–6294
`
`SUSAN ILLSTON, United States District Judge
`
`*1 On December 2, 2014, the Court held a hearing on
`defendants' motions for summary judgment of invalidity of
`plaintiff's patents-in-suit under 35 U.S.C. § 101. For the
`reasons set forth below, the Court GRANTS defendants'
`motions for summary judgment.
`
`BACKGROUND
`
`On October 3, 2012, plaintiff Bascom Research, LLC
`(“Bascom”) filed related actions for patent infringement
`against defendants Facebook, Inc. and LinkedIn Corporation
`under the Patent Act, 35 U.S.C. § 101 et seq. 1 Bascom
`Research LLC v. Facebook, Inc., No. 12–cv–06293 SI, Dkt.
`No. 73, First Am. Compl. (“FAC”) ¶ 3; Bascom Research
`LLC v. LinkedIn Corporation, No. 12–cv–06294 SI, Dkt.
`No. 92, First Am. Compl. (“LinkedIn FAC”) ¶ 3. 2 Bascom
`accuses defendants of directly and indirectly infringing four
`of its patents. FAC ¶¶ 35–106.
`
`On September 26, 2014, defendants filed motions for
`summary judgment of patent invalidity pursuant to 35 U.S.C.
`§ 101. Defendants contend that Bascom's patent claims are
`invalid under the recent U.S. Supreme Court decision in Alice
`Corp. Pty. v. CLS Bank Int'l, ––– U.S. ––––, 134 S.Ct. 2347,
`189 L.Ed.2d 296 (2014), because the claims (1) are directed
`to an “abstract idea,” and (2) “do not recite any transformative
`elements beyond a generic computer implementation.” Id.
`
`Bascom accuses defendants of infringing four patents: U.S.
`Patent No. 7,389,241 (the ′241 patent) (titled “Method for
`Users of a Network to Provide Other Users with Access to
`Link Relationships Between Documents”); U.S. Patent No.
`7,111,232 (the ′232 patent) (“Method and System for Making
`Document Objects Available to Users of a Network”); U.S.
`Patent No. 7,139,974 (the ′974 patent) (“Framework for
`Managing Document Objects Stored on a Network”); and
`U.S. Patent No. 7,158,971 (the ′971 patent) (“Method for
`Searching Document Objects on the Network”). FAC ¶¶ 6,
`9, 12, 15. The ′971 is a continuation-in-part of the ′974, the
`′241 is a continuation-in-part of the ′232, the ′974 and ′232
`are both continuations-in-part of application No. 10/050/515,
`
`and all four patents claim priority to provisional applications
`filed in March 2001 and April 2001.
`
`All four patents were issued to Thomas Layne Bascom.
`Id. The four patents-in-suit share substantially overlapping
`specifications. Each of the four patents contains summaries
`stating:
`
`The systems, apparatus and methods of the present
`invention (hereinafter “Linkspace”)
`incorporate and
`provide many improvements on existing methods for
`publishing, distributing, relating and searching document
`objects on computer networks, including the Internet.
`
`*2 Linkspace operates to provide many beneficial
`improvements in searching, identifying, and publishing
`information over computer networks.
`
`Linkspace permits a user of a computer network or
`the Internet to establish relationships between document
`objects located on the network or the Internet. Those
`relationships may comprise link relationships and link
`references and are maintained by Linkspace in one or more
`link directories. The contents of link directories may be
`organized, categorized, sorted and filtered in groupings
`based on various criteria relating to, among other things,
`user interests and attributes, the types of document objects
`and the nature of the content of those document objects.
`Linkspace allows a network user to be presented with
`a selection of links to document objects related to the
`document object the user is currently accessing based
`upon the URL of the current document object, and link
`relationships created by the user and other users of the
`network stored in the link directories.
`
`′974 at 3:30–52; ′241 at 3:11–35; ′971 at 4:36–58; ′232 at
`2:63–3:19. The following claim is representative:
`
`A method for providing a framework for document objects
`located on a network, the method comprising:
`
`creating one or more link directories for storing link
`relationships between document objects located on the
`network, wherein the one or more link relationships are
`separate from the document objects;
`
`creating a link relationship between a first document object
`located on the network and a second document object
`located on the network;
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`3
`
`Ocean Tomo Ex. 1012-003
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`

`
`Bascom Research, LLC v. LinkedIn, Inc., --- F.Supp.3d ---- (2015)
`2015 WL 149480
`
`assigning attributes describing the link relationship,
`wherein the attributes are stored with the link relationship;
`
`presenting the link relationship with one or more of the
`attributes describing the link relationship.
`
`′974 Claim 45. 3 The other asserted claims similarly recite
`“link relationships” between document objects and different
`types of features involving link relationships. See′974 Claims
`1, 2, 5, 7–9, 31, 34, 44; ′232 Claims 4–6, 12, 14; ′971 Claims
`14, 19–21; and ′241 Claims 1, 2, 4, 17, 24, 55, 61–63, 73, 74,
`78. The link relationships are described by attributes that are
`“descriptive, temporal, spatial, or quantitative in nature, i.e.,
`describe the link reference in terms of who or what, when,
`where, or how much.” ′974 at 8:49–52; ′971 at 10:12–15;
`′232 at 8:26–29; ′241 at 8:32–34. Attributes “may include
`descriptions of the content of either of the document objects
`[ ] related by the link relationship [ ] wherein that content
`may be described to include a product review, news article,
`product information page, competitor's product information,
`or product order forms, among other types of content.” ′974 at
`13:17–22; ′971 at 14:46–53; ′232 at 12:59–65; ′241 at 12:58–
`64. The link relationships may be stored in a “link directory,”
`which the specifications describe as a “table” or a set of
`“relational database records.” ′974 at 11:34–12:35; ′971 at
`12:6517:49; ′232 at 11:11–40, 13:53–14:59; ′241 at 11:11–
`40, 13:52–14:59. The specifications state that these features
`are implemented over a system that includes a network,
`“such as the Internet or other network of interconnected
`computers or a combination of networks and the Internet”;
`“client devices”; servers; “first document objects”; “second
`document objects”; “link references ... corresponding to the
`first document objects 40 and the second document objects”;
`and “link relationships.” ′971 at 6:53–8:30, 47:56–48:8; ′232
`at 4:66–6:44, 30:46–63; ′974 at 5:22–6:67, 34:35–52; ′241 at
`5:9–6:52, 39:8–25.
`
`*3 During prosecution of the ′971 patent, the Examiner
`rejected the claims based on 35 U.S.C. § 101“because
`they merely recite a number of computing steps without
`producing any tangible result and/or being limited to a
`practical application within the technological arts.” Dkt. 118–
`7 at 2–3. Bascom overcame these rejections by adding the
`words “computer-implemented” into the claims. Dkt. 118–22
`at 10. In 2012, the Patent Office rejected all pending claims
`in a related Bascom patent application under § 101. Dkt.
`118–23 at 2–3. The rejected claims were directed to selecting
`objects, creating link references, associating attributes, and
`
`storing them in link directories. Dkt. 118–24. Bascom did not
`challenge the PTO's rejection.
`
`In the present cases, Bascom asserts claims for direct
`infringement under 35 U.S.C. § 271(a). FAC ¶ 33. Bascom
`alleges that defendants own and operate online social
`networking platforms that allow users “to create their own
`personal profiles, link with their friends, acquaintances,
`co-workers, etc., join common-interest user groups, and
`share a variety of content.” FAC ¶ 21; see also LinkedIn
`FAC ¶ 20. Bascom alleges that both websites are built on
`social graphs accessible via Application Program Interfaces
`(APIs), which present objects in the graphs (e.g., people,
`groups, photos, etc.) and the connections between them (e.g.,
`friend relationships, colleagues, shared content). FAC ¶ 21;
`LinkedIn FAC ¶ 20. Bascom claims that the objects and
`connections in the graphs can be manipulated and generated
`by user interaction. FAC ¶ 25; LinkedIn FAC ¶ 24. Bascom
`asserts that the Facebook and LinkedIn platforms infringe its
`four patents by:
`
`making, using, and operating the
`claimed system and methods on the
`[Facebook or LinkedIn] Platform....
`By way of non-limiting example,
`as discussed above, the [Facebook
`and LinkedIn Platforms] include[ ]
`a number of document objects
`that represent various entities and
`things. The [Facebook and LinkedIn
`Platforms] also contain[ ] a number
`of linking relationships that logically
`connect
`the document objects
`to
`each other. These linking relationships
`contain a variety of attributes that
`describe the linking relationship. By
`way of non-limiting example, these
`attributes may be
`found
`in
`the
`social graph[s] of
`the [Facebook
`and LinkedIn Platforms] which may
`be represented using the [Facebook
`and LinkedIn] API[s] and may be
`manipulated [by user interaction] ...
`Each of the elements of the social
`graph, including the link relationships,
`may be retrieved using a unique
`identifier and presented based on
`the particular implementation of the
`application. Furthermore, users of the
`[Facebook and LinkedIn Platforms]
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`4
`
`Ocean Tomo Ex. 1012-004
`
`

`
`Bascom Research, LLC v. LinkedIn, Inc., --- F.Supp.3d ---- (2015)
`2015 WL 149480
`
`are given the ability to access objects
`based on their relationship to other
`objects.
`
`FAC ¶¶ 31–32; LinkedIn FAC ¶¶ 32–33.
`
`Bascom also alleges that defendants indirectly infringe the
`patents-in-suit pursuant to 35 U.S.C. § 271(b)“by instructing,
`directing and/or requiring others, including its users and
`developers, to perform all or some of the steps of the method
`claims, either literally or under the doctrine of equivalents, of
`the Patents–In–Suit.” FAC ¶ 33.
`
`LEGAL STANDARD
`
`Summary judgment is proper “if the movant shows that there
`is no genuine dispute as to any material fact and the movant is
`entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
`The moving party bears the initial burden of demonstrating
`the absence of a genuine issue of material fact. Celotex Corp.
`v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d
`265 (1986). The moving party, however, has no burden to
`disprove matters on which the non-moving party will have
`the burden of proof at trial. The moving party need only
`demonstrate to the Court that there is an absence of evidence
`to support the non-moving party's case. Id. at 325, 106 S.Ct.
`2548.
`
`*4 Once the moving party has met its burden, the burden
`shifts to the nonmoving party to “set forth, by affidavit or
`as otherwise provided in Rule 56, ‘specific facts showing
`that there is a genuine issue for trial.’ ”T.W. Elec. Serv.,
`Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th
`Cir.1987) (citing Celotex, 477 U.S. at 324, 106 S.Ct. 2548).
`To carry this burden, the non-moving party must “do more
`than simply show that there is some metaphysical doubt as to
`the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith
`Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d
`538 (1986). “The mere existence of a scintilla of evidence ...
`will be insufficient; there must be evidence on which the jury
`could reasonably find for the [non-moving party].” Anderson
`v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91
`L.Ed.2d 202 (1986).
`
`In deciding a summary judgment motion, the Court must view
`the evidence in the light most favorable to the non-moving
`party and draw all justifiable inferences in its favor. Id. at 255,
`106 S.Ct. 2505. “Credibility determinations, the weighing
`
`of the evidence, and the drawing of legitimate inferences
`from the facts are jury functions, not those of a judge ...
`ruling on a motion for summary judgment.” Id. However,
`conclusory, speculative testimony in affidavits and moving
`papers is insufficient to raise genuine issues of fact and defeat
`summary judgment. Thornhill Publ'g Co., Inc. v. GTE Corp.,
`594 F.2d 730, 738 (9th Cir.1979).
`
`[1] Under § 282 of the Patent Act, issued patents are
`presumed to be valid. 35 U.S.C. § 282. As such, an alleged
`infringer asserting an invalidity defense pursuant to § 101
`bears the burden of proving invalidity by clear and convincing
`evidence. Microsoft Corp. v. i4i L.P., –––U.S. ––––, 131 S.Ct.
`2238, 2242, 180 L.Ed.2d 131 (2011).
`
`DISCUSSION
`
`As an initial matter, Bascom contends that the Court must
`conduct claim construction to determine the validity of the
`patents-in-suit. In response, defendants cite Bancorp Servs.,
`L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d
`1266, 1273 (Fed.Cir.2012), for the proposition that “claim
`construction is not an inviolable prerequisite to a validity
`determination under § 101.” Bancorp Servs., L.L.C. v. Sun
`Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1273
`(Fed.Cir.2012). However, in Bancorp the Federal Circuit
`also stated “that it will ordinarily be desirable—and often
`necessary—to resolve claim construction disputes prior to
`a § 101 analysis, for the determination of patent eligibility
`requires a full understanding of the basic character of the
`claimed subject matter.” Id. at 1273–74.
`
`The Court finds that Bascom has not shown why claim
`construction is necessary to determine whether the patents
`claim patent-eligible subject matter. In any event, defendants
`state that they do not object to the Court assuming (for
`purposes of this motion only) the proposed constructions
`offered by Bascom. Bascom proposes the constructions
`of the following terms: “link relationship” means “a
`structure having one or more pointers connecting two or
`more document objects and identifying one or more link
`relationship attributes”; “link relationship attribute(s)” means
`“information describing ways in which two or more document
`objects are related”; “the link relationships are separate from
`the document objects” means “link relationships are stored
`in a different location from the document objects.” 4 Bascom
`proposes to construe all other terms solely by their plain and
`ordinary meaning. As the Court discusses below, adopting
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
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`

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`Bascom Research, LLC v. LinkedIn, Inc., --- F.Supp.3d ---- (2015)
`2015 WL 149480
`
`Bascom's proposed constructions does not alter the Court's
`conclusion that the patents-in-suit claim ineligible subject
`matter.
`
`*5 An invention is patent-eligible if it claims a “new and
`useful process, machine, manufacture, or composition of
`matter.” 35 U.S.C. § 101. The Supreme Court has held that,
`by defining patentable subject matter with “such expansive
`terms ... Congress plainly contemplated that the patent laws
`would be given wide scope.” Diamond v. Chakrabarty, 447
`U.S. 303, 308, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980).
`
`[2] However, the Supreme Court has also held that § 101
`contains an important implicit exception for three “patent-
`ineligible concepts”: laws of nature, natural phenomena,
`and abstract ideas. Alice, 134 S.Ct. at 2355 (citing Mayo
`Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S.
`––––, 132 S.Ct. 1289, 1296–97, 182 L.Ed.2d 321 (2012)).
`The purpose of these exceptions is to protect “the basic
`tools of scientific and technological work that lie beyond the
`domain of patent protection.” Ass'n for Molecular Pathology
`v. Myriad Genetics, Inc., ––– U.S. ––––, 133 S.Ct. 2107,
`2116, 186 L.Ed.2d 124 (2013) (Citations omitted.).
`
`In Alice, the patents at issue “disclose[d] a computer-
`implemented system for mitigating ‘settlement risk’ (i.e., the
`risk that only one party to a financial transaction will pay what
`it owes) by using a third-party intermediary.” Alice, 134 S.Ct.
`at 2351–52.
`
`The claims at issue relate to a computerized scheme for
`mitigating “settlement risk”—i.e., the risk that only one
`party to an agreed-upon financial exchange will satisfy
`its obligation. In particular, the claims are designed to
`facilitate the exchange of financial obligations between
`two parties by using a computer system as a third-party
`intermediary. The intermediary creates “shadow” credit
`and debit records (i.e., account ledgers) that mirror the
`balances in the parties' real-world accounts at “exchange
`institutions” (e.g., banks). The intermediary updates the
`shadow records in real time as transactions are entered,
`allowing “only those transactions for which the parties'
`updated shadow records indicate sufficient resources to
`satisfy their mutual obligations.” [CLS Bank Intern. v.
`Alice Corp. Pty.Ltd.] 717 F.3d 1269, 1285 (C.A.Fed.2013)
`(Lourie, J., concurring). At the end of the day, the
`intermediary instructs the relevant financial institutions to
`carry out the “permitted” transactions in accordance with
`the updated shadow records, ibid. thus mitigating the risk
`that only one party will perform the agreed-upon exchange.
`
`Id. at 2352 (internal citation and footnote omitted). All of the
`claims were implemented using a computer. Id.
`
`[4] The Court set
`[3]
`for
`test
`two-step
`forth a
`
`“distinguishing patents that claim laws of nature, natural
`phenomena, and abstract ideas from those that claim patent-
`eligible applications of those concepts.” Id.at 2355. 5 First, a
`court must determine whether the claims at issue are “directed
`to one of those patent-ineligible concepts.” Id. “If not, the
`claims pass muster under § 101.” Ultramercial, Inc. v. Hulu,
`LLC, 772 F.3d 709, 714 (Fed.Cir.2014). If the claims are
`directed to a patent-ineligible concept, the court then searches
`for an “ ‘inventive concept’—i.e., an element or combination
`of elements that is ‘sufficient to ensure that the patent in
`practice amounts to significantly more than a patent upon
`the [ineligible concept] itself.’ ” Alice, 134 S.Ct. at 2355.
`In doing so, the court considers the elements of each patent
`claim “both individually and ‘as an ordered combination[.]’ ”
`Id.(citing Mayo, 132 S.Ct. at 1297). At the first step, the Court
`held that the Alice claims were drawn to the abstract idea of
`intermediated settlement, “a fundamental economic practice
`long prevalent in our system of commerce.” Id. at 2356. At
`the second step, the Court concluded that the claims, “which
`merely require generic computer implementation, fail to
`transform that abstract idea into a patent-eligible invention.”
`Id. at 2357.
`
`*6 Using a computer to create and maintain “shadow”
`accounts amounts to electronic recordkeeping—one of the
`most basic functions of a computer. See, e.g.,Benson,
`409 U.S. at 65, 93 S.Ct. 253 (noting that a computer
`“operates ... upon both new and previously stored data”).
`The same is true with respect to the use of a computer to
`obtain data, adjust account balances, and issue automated
`instructions; all of these computer functions are “well-
`understood, routine, conventional activit[ies]” previously
`known to the industry. Mayo, 566 U.S. at ––––, 132 S.Ct.
`at 1294. In short, each step does no more than require a
`generic computer to perform generic computer functions.
`
`Id. at 2359.
`
`Defendants move for summary judgment of invalidity
`pursuant to § 101. Defendants contend that Bascom's patents
`are invalid under the Alice framework because the claims (1)
`are directed to the abstract idea of identifying two documents
`and establishing a relationship between them, and (2) do not
`recite any transformative inventive concept beyond a generic
`computer implementation.
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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`6
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`Ocean Tomo Ex. 1012-006
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`

`
`Bascom Research, LLC v. LinkedIn, Inc., --- F.Supp.3d ---- (2015)
`2015 WL 149480
`
`I. Abstract Idea
`At step one of the Mayo/Alice test, a court must evaluate the
`patent claims “[o]n their face” and determine if the claims
`are “drawn” to one of the three “patent-ineligible concepts”:
`laws of nature, natural phenomena, or abstract ideas. Alice,
`134 S.Ct. at 2355. Defendants contend that Bascom's claims
`are drawn to the abstract idea of establishing relationships
`between document objects. According
`to defendants,
`establishing relationships between documents is a centuries-
`old concept that can also be performed by the human mind.
`Defendants argue that the idea of establishing relationships
`between documents dates back thousands of years as
`evidenced by the catalog system at the library of Alexandria
`and by Simon Greenleaf's 1821 index that identified United
`States cases whose holdings had been overruled or limited by
`subsequent cases. See RUDOLF BLUM, KALLIMACHOS:
`THE ALEXANDRIAN LIBRARY AND THE ORIGINS
`OF BIBLIOGRAPHY 244 (1991) (describing Kallimachos'
`“catalog which, unlike a mere inventory, recorded not
`the scrolls available in the library, but all copies of
`works of Greek literature that were contained in them,
`with biographical data” on their authors) (Dkt.118–4);
`SIMON GREENLEAF, A COLLECTION OF CASES
`OVERRULED, DOUBTED, OR LIMITED IN THEIR
`APPLICATION (1821) (Dkt.118–6).
`
`The “abstract ideas” exception to § 101 embodies “the
`longstanding rule that ‘[a]n idea of itself is not patentable.’
`” Alice, 134 S.Ct. at 2355; see alsoLe Roy v. Tatham, 55
`U.S. (14 How.) 156, 175, 14 L.Ed. 367 (1852) ( “A principle,
`in the abstract, is a fundamental truth; an original cause; a
`motive; these cannot be patented[.]”). For instance, in Bilski v.
`Kappos, 561 U.S. 593, 611, 130 S.Ct. 3218, 177 L.Ed.2d 792
`(2010), the Supreme Court held that patent claims describing
`a method for hedging against the financial risk of price
`fluctuations were directed to an abstract idea. The claims
`recited “the basic concept of hedging, or protecting against
`risk[,] ... a fundamental economic practice long prevalent in
`our system of commerce.” Id. The Court compared the Bilski
`patents to the patents invalidated in Gottschalk v. Benson,
`409 U.S. 63, 72, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972), and
`Parker v. Flook, 437 U.S. 584, 594, 98 S.Ct. 2522, 57 L.Ed.2d
`451 (1978), which were based upon mathematical formulas.
`Bilski, 561 U.S. 593 at 611–12, 130 S.Ct. 3218. The Bilski
`Court found that validating the patents at issue would preempt
`the use of basic concepts or algorithms in all fields, “and
`would effectively grant a monopoly over an abstract idea.” Id.
`
`*7 Bascom attempts to distinguish its own patent claims
`by focusing on Bilski's “fundamental economic practice”
`language. Opp'n at 9. Bascom contends that the Supreme
`Court and the Federal Circuit have invalidated claims
`when they were directed to “building block[s] of the
`modern economy” or “squarely about creating a contractual
`relationship.” Alice, 134 S.Ct. at 2350 (quoting Bilski, 561
`U.S. at 599, 130 S.Ct. 3218); buySAFE, Inc. v. Google,
`Inc., 765 F.3d 1350, 1355 (Fed.Cir.2014). Bascom argues
`that these types of claims are fundamentally different from
`Bascom's patents, which “narrowly claim a specific type
`of data structure for linking data,” Opp'n at 8, namely the
`“link relationships” and “link directories” in which link
`relationships are stored separately from a document object
`and relate documents objects to one another.
`
`Bascom likens its patents to the patents litigated in Helios
`Software, LLC v. SpectorSoft Corp., C.A. No. 12–081–
`LPS, 2014 WL 4796111, at *17 (D.Del. Sept. 18, 2014).
`In Helios, the District Court for the District of Delaware
`held that patents related to controlling computer network
`access and monitoring data associated with Internet sessions
`were not directed to an abstract idea. 2014 WL 4796111,
`at *17. The court found that the alleged infringer made “no
`effort to show that these ideas are fundamental truths or
`fundamental principles the patenting of which would pre-
`empt the basic tools of scientific and technological work.” Id.
`Accordingly, Bascom asserts that there is no “fundamental
`truth,” “fundamental economic practice,” or “basic tool of
`scientific and technological work” at issue in its own patents.
`Opp'n at 9–10.
`
`[5] Bascom relies upon a narrow interpretation of the term
`“abstract idea.” Abstract ideas are not limited to “fundamental
`truths,” “fundamental economic practices,” or “basic tools
`of scientific and technological work.” SeeAlice, 134 S.Ct. at
`2356 (rejecting the argument that abstract ideas are confined
`to “preexisting, fundamental truths”). While the Supreme
`Court has not precisely defined “abstract idea,” lower courts
`since Alice have invalidated patents encompassing a broad
`range of abstract ideas beyond Bascom's proposed scope.
`See, e.g., Open Text S.A. v. Alfresco Software Ltd., No. 13–
`CV–04843–JD, 2014 WL 4684429, at *4 (N.D.Cal. Sept.
`19, 2014) (invalidating computer patent based upon the
`abstract idea of “interacting with customers”); Comcast IP
`Holdings I, LLC v. Sprint Commc'ns Co. L.P., –––F.Supp.2d
`––––, ––––, No. CV 12–205–RGA, 2014 WL 3542055, at
`*3 (D.Del.2014) ( “[T]he abstract idea at the heart of a
`[a patent for a telephony network optimization method] is
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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`Ocean Tomo Ex. 1012-007
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`

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`Bascom Research, LLC v. LinkedIn, Inc., --- F.Supp.3d ---- (2015)
`2015 WL 149480
`
`the very concept of a decision”); DietGoal Innovations LLC
`v. Bravo Media LLC, ––– F.Supp.2d ––––, ––––, No. 13
`CIV. 8391 PAE, 2014 WL 3582914, at *14 (S.D.N.Y.2014)
`(invalidating patent based upon “the abstract idea of meal
`planning”); see alsoPlanet Bingo, LLC v. VKGS LLC, 576
`Fed.Appx. 1005, 1008 (Fed.Cir.2014) (invalidating patent
`directed to “the abstract idea of managing/playing the game
`of Bingo”).
`
`In
`instructive.
`is
`recent Ultramercial decision
`The
`Ultramercial, the Federal Circuit affirmed the invalidity of
`a patent describing a method of distributing copyrighted
`media paid for by advertisers over the Internet. Ultramercial,
`772 F.3d at 712. Applying Alice, the court held that the
`claims “recite[ ] an abstraction—an idea, having no particular
`concrete or tangible form.” Id. at 715 (italics added.). The
`court added,
`
`The process of receiving copyrighted
`media, selecting an ad, offering the
`media
`in exchange for watching
`the selected ad, displaying the ad,
`allowing the consumer access to the
`media, and receiving payment from
`the sponsor of the ad all describe an
`abstract idea, devoid of a concrete
`or
`tangible application. Although
`certain additional limitations, such
`as consulting an activity log, add a
`degree of particularity, the concept
`embodied by the majority of the
`limitations describes only the abstract
`idea of showing an advertisement
`before delivering free content.
`
`*8 Id.; see alsoContent Extraction and Transmission LLC
`v. Wells Fargo Bank, Nat. Ass'n, ––– F.3d ––––, ––––, 2014
`WL 7272219, at *3 (Fed.Cir.2014) (“Applying Mayo/Alice
`step one, we agree with the district court that the claims of the
`asserted patents are drawn to the abstract idea of 1) collecting
`data, 2) reco