The Software IP Report

Decision on Patent-Eligibility of Real Estate Valuation Claims Deferred Until After Claim Construction

Noting the ambiguity of the Federal Circuit’s recent CLS Bank and Ultramercial decisions, a district court has denied without prejudice a defendant’s motion to dismiss. Zillow, Inc. v. Trulia, Inc., No. C12-1549JLR (W. D. Wash. Sept. 6, 2013). The motion had been brought seeking a ruling that claims that United States Patent No. 7,970,674 did not recite patent-eligible subject matter. The claims of the ’674 patent, as its title suggests, were directed to “[a]utomatically determining a current value for a real estate property, such as a home, that is tailored to input from a human user, such as its owner.”

The defendant had originally brought its motion about a year ago. The court had deferred its ruling, hoping that, in rendering an en banc decision in CLS Bank, the Federal Circuit “would provide guidance in resolving” this case. The defendant now claimed that the plurality opinion in CLS Bank, combined with concurring opinions, would allow the court to decide the patent-eligibility question now. The plaintiff, on the other hand, argued that the recent panel decision holding claims patent-eligible in the Ultramercial should govern the court’s analysis. The court decided to analyze and compare these two cases because they were “written largely by the same two Federal Circuit judges” and “come to opposite results with respect to the application of the subject matter requirements for patent eligibility.”

However, after discussing the cases, the court simply concluded “that the patent claims at issue fall somewhere in between the spectrum of patentability represented by Federal Circuit’s decisions CLS Bank and Ultramercial.” Both Chief Judge Rader, and Judge Lourie, authors of the recent Federal Circuit opinions, agreed that claim construction could be useful for Section 101 analysis. Therefore, the court denied the defendant’s motion without prejudice to raise it again after claim construction.

One wonders whether the district court is also hoping for further guidance from the Federal Circuit, or even the Supreme Court, in the meantime.