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Data Distribution Technologies, LLC v. Brer Affiliates, Inc.

United States District Court, D. New Jersey

August 19, 2014

BRER AFFILIATES, INC., et al., Defendants.

Stephen F. Roth, Esq. Alexander Solo, Esq. Lerner, David, Littenberg, Krumholz & Mentlik, LLP, Westfield, NJ, Attorneys for Plaintiff Data Distribution Technologies LLC

Michael P. Sandonato, Esq. Jason Dorsky, Esq. Fitzpatrick, Cella, Harper & Scinto, New York, NY Attorneys for Defendant Prudential Financial, Inc.

John J. Murphy, III, Esq. Stradley, Ronon, Stevens & Young, LLP, Libertyview Cherry Hill, NJ, Attorney for Defendant Prudential Financial, Inc.

Christopher H. Strate, Esq. James June-Ho Kang, Esq. David E. Delorenzi, Esq. Gibbons, PC Newark, NJ, Attorneys for Defendant Brer Affiliates Inc.


JEROME B. SIMANDLE, Chief District Judge.


Plaintiff Data Distribution Technologies LLC ("DDT") brought this action against Defendants BRER Affiliates, Inc., ("BRER")[1]and Prudential Financial, Inc., ("Prudential") alleging infringement of U.S. Patent No. 6, 529, 908 ("908 Patent"), which is titled "Web-Updated Database With Record Distribution By Email" and which DDT owns by assignment.

Defendants filed a joint motion to dismiss [Docket Item 35] asserting that the 908 Patent is ineligible for patent protection under 35 U.S.C. § 101 because it is directed at an abstract idea. The principal issues are whether the Court can assess invalidity under § 101 before formal claim construction, and, if so, whether the 908 Patent is, in fact, ineligible for patent protection according to the abstractness test articulated in Alice Corp. Pty. Ltd. v. CLS Bank Int'l , 134 S.Ct. 2347 (2014). For the reasons discussed herein, while Defendants persuasively argued that the 908 Patent is ineligible, the Court will deny Defendants' motion without prejudice. At this procedural posture, the Court cannot hold, based on clear and convincing evidence, that there is no plausible construction of the 908 Patent's claims that would satisfy the abstractness test. Defendants may resubmit their abstractness arguments at a later date, when there is a more complete record before the Court.


A. Factual Background

1. The 908 Patent

The 908 Patent was filed on May 28, 1998 and issued on March 4, 2003. (908 Patent [Docket Item 29-1] at [22]; Am. Compl. ¶ 5.) DDT owns this patent by assignment and, on March 6, 2013, DDT sent notices of infringement to Defendants. (Am. Compl. ¶¶ 6-7.)

The 908 Patent describes "[a] remotely updatable database system method and computer readable medium" that "includes a user interface, a database of information records, a database manager, and a message server." (908 Patent at [57].) The user interface communicates with subscriber systems to receive user input, associate records with users, amend records in response to user input, and send messages regarding the records. (Id.) Computer readable codes direct the computer to perform the method. (Id.) The invention "addresses the need for immediate access to database records and the need to notify users of changes to database records." (Id. col. 1 ll. 46-48.) It "provide[s] real estate agents access to real estate information...." (Id. col. 8 ll. 35-36.) Subscribers use the system to produce and update building information records, and then the patented system sends messages, which include building records. (Id. col. 8 ll. 41-44.) "[T]he invention is applicable whenever a dynamic database is to be disseminated down to a regular user group, on a frequent basis." (Id. col. 1 ll. 56-58.)

The invention remedies inefficiencies including: "real time limitations associated with the Internet, " "time lag, " "a relatively large amount of time" required for "the transfer of relatively large files to a user's browser, " and "frustrati[on] especially if the user is attempting to provide information... while the customer or client is waiting." (Id. col. 1 ll. 12-32.)

The system uses a simple mail transfer protocol, which "allows the database system to send a message containing any type of file, " "allows users to receive and accumulate messages at a predefined message server and to retrieve such messages at any time or at their discretion, " and "allows a user to selectively review messages received over a period of time." (Id. col. 6 ll. 43-51.) "[T]he use of the simple mail transfer protocol gives the database system the ability to target all users or as few as a single user, each with a unique message." (Id. col. 6 ll. 52-54.)

Claim 22 describes "[a] method of maintaining and distributing database information, " which includes "communicating with at least one subscriber system to receive user input..."; "maintaining a database of information records"; "maintaining user records in said database and linking said user records with said information records"; "controlling said database such that each information record is associated with at least one user..."; "amending said information records in response to user input..."; "serving said message... to said at least one user associated with said information record." (Id. col. 26 ll. 1-19.)

The 908 Patent's "technology... is adaptable to any number of software platforms." (Id. col. 23 ll. 49-50.) The 908 Patent does not explain how a software platform would be programmed.

2. Defendants' Alleged Conduct

Plaintiff alleges that Defendant Prudential previously operated and Defendant BRER currently operates an online real estate system ("Prudential System") that maintains records about real estate properties. (Am. Compl. ¶ 10.) The Prudential System allows potential buyers to create profiles and to conduct searches, which are saved in a database. (Id. ¶¶ 11-12.) The Prudential System emails potential buyers if a new real estate listing matches their profiles or their searches. (Id. ¶ 13.) It also permits users to make and save notes regarding listings. (Id. ¶ 14.)

Plaintiff alleges that the Prudential System performs the patented method of maintaining and distributing database information, including communicating with systems to receive user input, maintaining user records, sending messages with information relating to users' records, and amending information records in response to user input. (Id. ¶ 15.)

Plaintiff alleges the Prudential System directly infringes the 908 Patent by maintaining, updating, and emailing real estate information corresponding to buyers' profiles and saved searches. (Id. ¶ 16.)

Plaintiff also alleges indirect patent infringement because Defendants encouraged potential buyers to violate the 908 Patent, including claim 22 specifically, by instructing users to create profiles, save searches, add comments, and sign up for email alerts. (Id. ¶ 21.)

Plaintiff alleges that Defendants caused irreparable harm, their infringement is willful and deliberate, and this case is exceptional. (Id. ¶¶ 23-24.)

Plaintiff seeks an order adjudging Defendants to have infringed the 908 Patent, a permanent injunction, damages, and costs, while in this motion the Defendants seek a declaration that the 908 Patent, including its 100 claims, is directed at an abstract idea and therefore is not patentable under § 101.

B. Jurisdiction

The Court has original jurisdiction pursuant to 28 U.S.C. § 1338(a).

C. Procedural History

After Defendants filed their motion [Docket Item 35], Plaintiff filed a letter [Docket Item 38] asking the Court to adjourn the motion to dismiss as premature and improper. Defendants responded via letter [Docket Item 39] that their motion was proper and meritorious and asked the Court to consider the two letters as the parties' respective opposition and reply briefs. The Court informed counsel that it would "adjudicate this motion on the merits as filed. If it is premature or otherwise meritless, then I will deny the motion...." [Docket Item 40 at 1.]

The Court originally scheduled oral argument for January 31, 2014. On December 6, 2013, the Supreme Court granted certiorari in Alice Corp. Pty. Ltd. v. CLS Bank Int'l , 134 S.Ct. 734 (2013), to address the question of "[w]hether claims to computer-implemented inventions-including claims to systems and machines, processes, and items of manufacture-are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101...." Petition for Writ of Certiorari, Alice, 2013 WL 4768483, at *i (No. 13-298). Plaintiff asked the Court to adjourn the oral argument pending the Supreme Court's decision in Alice. [Docket Item 49.] The Court granted Plaintiff's request and directed the parties to submit supplemental briefs discussing Alice's import after the Supreme Court's decision. [Docket Item 52 at 6-7.]

The Court's Order staying adjudication of the motion also noted that "a petition for certiorari has been filed in Ultramercial, Inc. v. Hulu, LLC , 722 F.3d 1335, 1342 (Fed. Cir. 2013), " and that, "[i]f the Supreme Court grants certiorari, it may clarify the circumstances under which a district court can adjudicate subject matter eligibility at the pleading stage." [Docket Item 52 at 5-6.] The Court directed that, if the ...

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