Indianapolis, Indiana – Attorneys for Plaintiff, Tenstreet, LLC (“Tenstreet”) of Tulsa, Oklahoma, filed suit in
Tenstreet develops products for the transportation industry such as its XchangeTM network to help share job applicant verification data between employers, past and present, for commercial truck drivers. The ‘575 Patent, obtained by Tenstreet on March 27, 2012, claims to streamline the verification process between past and prospective employers while giving the drivers a chance to review and correct information before it is sent to the prospective employer. DriverReach allegedly sells its own employment verification product, VOE Plus Solutions. Tenstreet claimed VOE Plus Solutions infringed on the ‘575 Patent. DriverReach moved the Court to dismiss Tenstreet’s claims “on the ground that the ‘575 patent is patent-ineligible subject matter under 35 U.S.C. § 101.”
Pursuant to 35 U.S.C. § 101, patentable subject matter is “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” However, the Supreme Court has held “that this provision contains an important implicit exception[:] Laws of nature, natural phenomena, and abstract ideas are not patentable.” Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013) (quoting Mayo Collaborative Servs. V. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012)). In this case, the Court discusses the abstract idea exception. When determining if a patent claims an abstract idea, the Court first looks to whether the claims are directed to a patent-ineligible concept. Second, the Court looks for an “inventive concept” which transforms the claim into a patent-eligible application.
Here, the Court found when construing the claim elements in the light most favorable to Tenstreet, “that the claims are directed to the abstract idea of collecting, organizing, and storing data on a generic computer and fail to add an inventive concept sufficient to transform the abstract idea into patent-eligible subject matter.” Further, the Court found that while the XchangeTM software reduces errors and saves time, that is not due to the patent method, but because the process uses a general-purpose computer. The Court also held that even though “the automated process now allows providers to manage requests through one web-based channel, rather than through multiple channels, [it] is not an inventive concept that makes any improvement to existing computer technology.” When looking at the claims separately, the Court further found the functions to be performed by the computer to be routine and conventional. Due to the foregoing, the Court granted DriverReach’s Motion to Dismiss and held the claims of the ‘575 Patent to be invalid.
Update: On October 17, 2019, about two weeks after the District Court dismissed Tenstreet’s suit, the US Patent Office issued an Update on “Subject Matter Eligibility.” These Guidelines are used by the Patent Office to determine whether patent claims are eligible for protection under 35 USC 101. That update is available here: https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.pdf
Update No. 2: On October 30, 2019, Tenstreet appealed the dismissal of its Complaint to the Court of Appeals for the Federal Circuit.
The case was assigned to Judge James R. Sweeney II and Magistrate Judge Tim A. Baker in the Southern District and assigned Case 1:18-cv-03633-JRS-TAB.