The Software IP Report

Internet Data Backup Not Patent-Eligible under § 101: WhitServe LLC v. DropBox, Inc.

By Charles Bieneman

Categories: 35 U.S.C. § 101, Patent Eligibility, The Software IP Report

Patent claims directed to backing up data to a client’s computers where the data has been outsourced for processing via the Internet failed the patent-eligibility test under the Alice/Mayo test and 35 U.S.C. § 101. WhitServe LLC v. DropBox, Inc., No. 2019-2334 (Fed. Cir. April 26, 2021) (non-precedential; opinion by Judge Reyna, joined by Judges Schall and Wallach). Perhaps the most notable aspects of this opinion are that the Court was unmoved by the patent owner’s arguments that patent-eligibility should not have been decided at the pleadings stage, and that unresolved factual questions remained.

The Court’s opinion focused on independent claim 10 of US 8,812,437 B2, which recites “a system for on-site backup for Internet-based data processing systems,” in which data processing was performed on a central computer, and a backup was provided at a client computer and a location accessible without the Internet. The District Court had found “that the ’437 patent is directed to the abstract idea of ‘backing up data records,’” without improving “computer functionality.”

Under step one of the Alice test, the Federal Circuit agreed that the claims were directed to a fundamental business practice predating computers and the Internet, i.e., “requesting, transmitting, receiving, copying, deleting, and storing data records.” (Citing Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315 (Fed. Cir. 2017); and Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass’n., 776 F.3d 1343 (Fed. Cir. 2014) .)

The Court then turned to step two of the Alice test, which it characterized as “a lifeline by which claims that are deemed to be directed to patent ineligible subject matter may be saved.” The lifeline was not available here. The patent owner argued that backing data up onsite, or allowing users to edit and modify the data, transformed the claims into something other than an abstract idea, but the Court did not agree. Storing data as recited was simply a generic computer operation.

Further, the Court rejected the patent owner’s argument that alleged factual issues prevented dismissal at the pleading stage and precluded a finding of ineligibility. Even in the case oft-cited for a requirement to make factual findings in the § 101 inquiry, Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), the Federal Circuit stated that “not every § 101 determination contains genuine disputes over the underlying facts material to the § 101 inquiry.” (See also BSG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290–91 (Fed. Cir. 2018).) The patent claims here were directed to fundamental business concepts and patent eligibility could be “determined on the intrinsic record alone” because “the specification provides that the relevant claim elements are well-understood, routine and conventional.” The patent owner’s arguments that the District Court improperly ignored criteria of non-obviousness were even less relevant, because “indicia of non-obviousness are relevant in a § 103 inquiry, but not in a § 101 inquiry.”