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Avoiding the “Judicial Morass” of Section 101 in MySpace, Inc. v. GraphOn Corp.

The judges of the U.S. Court of Appeals for the Federal Circuit are again bickering among themselves about when Section 101 (patent eligible subject matter) should be considered.  In MySpace, Inc. v. GraphOn Corp., Judge Plager steered the court clear of “the murky morass that is § 101 jurisprudence.”  No. 2011-1149, slip op. at 17 (Fed. Cir. Mar. 2, 2012).  The court instead disposed of the patents-in-suit under 35 U.S.C. 102 (novelty) and 35 U.S.C. 103 (obviousness).  Much like the patents at issue in Eolas, the patents-in-suit here encompass technology that is widely used by many popular Internet sites.  And, also like Eolas, this case was disposed of without reaching the Section 101 issue.

MySpace, Inc. and craigslist, Inc. (collectively, the “Plaintiffs”) each filed declaratory judgment suits, which were consolidated, that certain patents (the “Patents”) owned by GraphOn Corporation (“GraphOn”) were invalid and, accordingly, not infringed by Plaintiffs.  Id. at 2.  These patents “relate[] to the ability to create, modify, and store database records over a computer network.”  Id. at 3; see also MySpace, Inc. v. GraphOn Corp., 756 F. Supp. 2d 1218 (N.D. Cal. 2010); U.S. Patent 6,324,538 (July 7, 1998); U.S. Patent 6,850,940 (Sept. 14, 2001); U.S. Patent 7,028,034 (May 11, 2004); U.S. Patent 7,269,591(May 11, 2004).  Each of the Patents claims “priority to a parent application, filed on December 14, 1995, and subsequently issued as U.S. Patent No. 5,778,367.”   MySpace at 5; see also U.S. Patent No. 5,778,367 (Dec. 14, 1995).  The idea of allowing a user to create records in a database via website certainly seems obvious and commonplace in 2012.  Bear in mind, however, that in 1995 manually curated web indexes were a common mechanism for finding information on the web.  The inventors of the Patents set out to address problems relating to typos and mischaracterization of sites in those indexes.  See MySpace at 5.  The invention described in the Patents allows users to “create a database entry with their own text and graphics and then choose or create searchable categories that best matched the information.”  Id.

Unfortunately for GraphOn, the Mother of all Bulletin Boards (“MBB”), which “was first made available for public use in November 1993[,] . . . provided the ability to have online Internet catalogues that could grow through user input without the need for intervention by a webmaster or administrator.”  Id. The MBB stored all of its entries in a hierarchical file system.  Id. Accordingly, the novelty and obviousness of the Patents must be considered in light of the MBB.

Since each of the claims in the Patents include the term database, if that term is constructed to include hierarchical file systems then those claims would as a matter-of-law be invalidated “as either anticipated under 35 U.S.C. § 102 or obvious under § 103.”  Id. at 7.  GraphOn argued that the term database is limited to relational databases.  Id. A relational database “separates the stored data into multiple relations or ‘tables’ and connects them through the use of identification . . . fields.”  Id. at 4.   If database covers only relational databases, however, summary judgment would be inappropriate because “there would be a genuine issue of disputed fact on the question of invalidity.”  Id. at 7.

After de novo review, the court affirmed the construction of database as “a collection of data with a given structure that can be stored and retrieved.”  Id. In reaching this conclusion, the court noted that the “Background of the Invention” section of the Patents mentioned “databases of various kinds,” which suggested a non-limiting interpretation was appropriate.  Id. at 8.  It also noted that the preferred embodiment discussed a “tree structure,” which it concluded was “more consistent with the organizational structure of a hierarchical database rather than a relational database.”  Id. In light of this construction of database, the court affirmed the district court’s grant of summary judgment of invalidity. Id. at 12.

The court’s disposition of the case without considering patent eligibility under Section 101 elicited a fiery separate opinion from Judge Mayer.  It argues that “the subject matter eligibility requirements contained in 35 U.S.C. § 101 is an ‘antecedent question’ that must be addressed before this court can consider whether particular claims are invalid as obvious or anticipated.”  MySpace, slip op. at 1–2 (Mayer, J., dissenting).  But it also apparently agreed that the Patents are invalid, calling the scope of the Patents staggering.  Id. at 3.

The court defended its avoidance of the Section 101, noting that the Section 101 issue was not “raised by the parties or decided by the trial court.”  MySpace at 13.  It also referred to Section 101 as “the patent law analogy to the Bill of Rights of the Constitution” and explained that “[t]he Supreme Court has wisely adopted a policy of not deciding cases on broad constitutional grounds when they can be decided on narrower, typically statutorily limited, grounds.”  Id. at 18–19.   And much like addressing Constitutional issues, “every time [Section 101] is presented as a defense . . . each case requires the search for a universal truth.”  In essence, the court chose not to contribute another Section 101opinion in “the face of what has become a plethora of opinions” in the Section 101 jurisprudence.  Id. at 13.

This back-and-forth between judges is reminiscent of Dealertrack, Inc. v. Huber.  In that decision, Judge Plager wrote a separate opinion that argued that “as a matter of efficient judicial process” litigants and courts should consider the “conditions of patentability” in Sections 102, 103, 112, and 251 before “foray[ing] into the jurisprudential morass of § 101.”  Dealertrack, Inc. v. Huber, Nos. 2009-1566, 2009-1588, slip op. at 2 ( Fed. Cir. Jan. 20, 2012) (Plager, J., concurring-in-part and dissenting-in-part).

Here, unlike in DealerTrack, Judge Plager is in the majority.  Although seeming to reach opposite procedural conclusions, these decisions are consistent because both address the issue that was appealed.  On appeal in DealerTrack, was a summary judgment motion of invalidity as patent ineligible subject matter.  DealerTrack at 5–6.  Here, a “summary judgment that all of the claims were invalid as anticipated or obvious” was appealed.  MySpace at 6.

One is left to wonder whether Judge Plager’s approach (avoid, if possible, the murky morass of Section 101), Judge Mayer’s approach (Section 101 is an “antecedent question”), or the court’s flexible approach (address the issue that has been raised on appeal) will be applied in future decisions.  There is certainly wisdom in avoiding the tough questions (i.e., Section 101 interpretation) until they are presented squarely.  Here, however, it was easy to avoid Section 101 because it was not the issue being appealed.  There will be future cases where the Section 101 issue cannot be avoided as easily.  If a factual question must be answered before a judgment may be reached under Sections 102 and 103, a party may seek summary judgment under Section 101 to avoid the time and expense of trial.  Under Dealertrack, the court would certainly consider the Section 101 issue.  It remains to be seen whether this decision will change that.

[Brian Wallenfelt contributed to this posting.]

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