Perry Street Software, Inc. v. Jedi Technologies, Inc.

Background

Perry Street Software sued Jedi Technologies seeking a declaration that its SCRUFF dating app did not infringe Jedi’s Patent No. 10,164,918, known as the ’918 patent. Jedi later filed a counterclaim accusing Perry Street of patent infringement. Perry Street moved for judgment on the pleadings, arguing that the ’918 patent was invalid under 35 U.S.C. § 101 because it covered an abstract idea and lacked an inventive concept.

The patent described a system for finding compatible users of real-time internet chat networks. Its independent claims generally involved five steps: collecting user information through surveys, storing that information, processing it under compatibility criteria, sorting users by compatibility, and displaying or notifying users about possible matches. Jedi argued that the patent improved large online chatrooms and user interfaces, including by identifying compatible users who were online or notifying users who were offline.

Prior Litigation and Collateral Estoppel

Perry Street argued that Jedi should be barred from contesting eligibility because another court had previously invalidated four related Jedi patents. Judge McMahon stated that collateral estoppel, also called issue preclusion, probably applied, but declined to decide the case on that basis. She concluded that it was cleaner to decide whether the ’918 patent was eligible on the merits rather than compare the similarities and differences among the five patents.

Legal Standard

A motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) uses the same standard as a motion to dismiss for failure to state a claim. In a patent case, the court may decide eligibility at this stage when the pleadings do not contain factual allegations that would prevent a legal decision. The court accepted Jedi’s factual allegations as true but did not accept its legal conclusion that the patent contained an inventive concept.

The court applied the two-step test from Alice Corp. v. CLS Bank. First, it asked whether the claims were directed to an abstract idea. If so, it asked whether the claims included an inventive concept—an element or combination of elements that transformed the abstract idea into a patent-eligible application.

Analysis

At the first step, the court held that the ’918 patent’s independent claims were directed to the abstract idea of finding and introducing people who might be compatible—in other words, matchmaking. The court reasoned that asking questions about people, evaluating their interests or characteristics, sorting the information, and notifying people about possible matches were longstanding activities that could be performed by people using paper and pen.

The court rejected Jedi’s argument that the claims were directed to a patentable improvement in chatroom interfaces. The claims did not specify a particular new way of presenting information. Instead, the claimed interface consisted of collecting, storing, processing, sorting, and displaying information. Applying those activities to internet chatrooms, including large networks and users who were online or offline, did not change the abstract character of the claims.

At the second step, the court held that the patent lacked an inventive concept. The claims used ordinary computer and display functions to automate matchmaking, but did not identify new compatibility criteria, a new sorting method, or a technological solution to a problem unique to computers or internet chatrooms. Displaying compatible matches to online and offline users likewise did not amount to a technological improvement.

Disposition

The court concluded that the ’918 patent’s independent claims were directed to the abstract idea of automated matchmaking and did not contain an inventive concept that made them patent-eligible under § 101. Judge McMahon granted Perry Street’s motion for judgment on the pleadings, declared the ’918 patent invalid, dismissed Jedi’s counterclaim for patent infringement, directed the clerk to remove the motion from the list of open motions, and ordered the case closed.