United States: D. Delaware Invalidates Patent Directed To Onsite Data Backup; Discusses Role Of Evidence, USPTO And Preemption

Anthony Fuga is a Partner in Holland & Knight's Chicago office

The District of Delaware recently found a patent directed to onsite data backup to be abstract and ineligible for patent protection. The court's discussion went beyond the standard Alice inquiry, and touched on the roles of preemption, prior decisions from the United States Patent and Trademark Office (USPTO), and deciding Section 101 motions without evidence.

The Alice inquiry

Plaintiff WhitServe sued Dropbox in Delaware, alleging infringement of a patent titled "Onsite Backup for Third Party Internet-Based Systems." The patent stated that one problem with outsourcing data processing to third parties that use internet-based systems is the safeguarding and protection of client data. The patent purported to solve this problem by disclosing the claimed system, which comprises a central computer, a client computer, a communications link between the computers and the internet, and a database containing data records.

Dropbox moved to dismiss the complaint and argued that the patent was directed to the abstract idea of backing up data. And while the patent provided technical details, Dropbox argued that the components were described in terms of routine, conventional functions.

WhitServe, on the other hand, argued that the patent claims were directed to "a specific improvement over the prior art in the field of data storage and data processing," namely "offering multiple users at various locations internet-based data processing capabilities while allowing the ability to edit and modify and transmit data records and further safeguard the data at a location without internet."

The court was unconvinced by WhitServe and stated that the claims did not discuss this purported specific improvement. "Instead, the claims rely on the ordinary storage and transmission capabilities of computers within a network and apply that ordinary functionality."

At step two of the Alice inquiry, the court reiterated that an inventive concept "must be evident in the claims." WhitServe suggested that backup data was traditionally stored offsite and the patent improved on this arrangement by taking the nonconventional step of storing backup data offsite.

But, again, the court was not convinced and found that backing up copies of information at a location separate and distinct from the original location is a well-understood practice. "It is conventional for the backup location to be offsite. This is the common scenario for companies that create disaster recovery plans for critical data."

The opposite is also true. When the original storage location is offsite, it is common for the backup to be located onsite. The court provided the example of attorneys downloading documents from a case docket: "every lawyer who has downloaded a document from the court's case docket on CM/ECF and saved the copy to their local computer has used the internet to create an onsite backup copy of offsite data that comes in handy on those days when CM/ECF is not accessible or convenient."

The patent, accordingly, was not eligible for patent protection under Section 101.

Preemption

WhitServe also argued that Dropbox's motion to dismiss should be denied because Dropbox failed to address the issue of preemption. The court acknowledged that preemption is a concern that "undergirds" the court's Section 101 jurisprudence, but preemption is not a separate and independent test under Alice. Accordingly, Dropbox was not required to raise and address the issue of preemption.

Lack of evidence

Dropbox, in its motion, did not discuss or provide any evidence (e.g., inventor testimony, expert declarations) to support its argument that the claims were well-understood, routine, or conventional at the time of the patent. WhitServe argued that this lack of evidence doomed the motion to dismiss.

This argument also failed with the court, noting that the Federal Circuit has repeatedly affirmed Section 101 rejections at the motion to dismiss stage before discovery.

The court recognized that improvements in technology described in the complaint or the patent may create fact questions that preclude resolving the eligibility question as a matter of law, but there were no concrete or specific allegations in the complaint or discussions in the specification of the patent regarding improvements in technology. Instead, as the court had already discussed, the claims of the patent were not directed to an improvement in computer functioning.

Prior decisions by the USPTO

Lastly, WhitServe asked the court to defer to the decision of the USPTO that had, according to WhitServe, already found the patent not abstract. The court again disagreed with WhitServe. Even assuming the USPTO subjected the patent to an Alice review, such a review did not resolve the issue.

The court found that the USPTO's decision is not binding on the district court, and courts "regularly find patents ineligible under Section 101 even though those patents had been previously examined and allowed by the USPTO."

The mere fact that the USPTO allowed the patent did not affect the court's analysis, and the court granted Dropbox's motion to dismiss.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.