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BSG Tech LLC v. BuySeasons, Inc.

United States Court of Appeals, Federal Circuit

August 15, 2018

BSG TECH LLC, Plaintiff-Appellant
v.
BUYSEASONS, INC., Defendant-Appellee RAKUTEN COMMERCE, LLC, Defendant

          Appeal from the United States District Court for the Eastern District of Texas in Nos. 2:16-cv-00529-RWS, 2:16-cv-00530-RWS, Judge Robert Schroeder, III.

          David R. Bennett, Direction IP Law, Chicago, IL, argued for plaintiff-appellant.

          Ricardo Bonilla, Fish & Richardson PC, Dallas, TX, argued for defendant-appellee. Also represented by David Brandon Conrad, Neil J. McNabnay.

          Before Reyna, Wallach, and Hughes, Circuit Judges.

          HUGHES, CIRCUIT JUDGE.

         BSG Tech LLC sued BuySeasons, Inc. for infringement of several patents related to systems and methods for indexing information stored in wide access databases. BuySeasons sought dismissal of the suit based on its contention that none of the asserted patent claims were patent-eligible under 35 U.S.C. § 101. The district court ultimately agreed with BuySeasons and held all asserted claims invalid as ineligible under § 101. We agree with the district court that the asserted claims are ineligible and, thus, affirm.

         I

         All three of BSG Tech's asserted patents, U.S. Patent Nos. 6, 035, 294, 6, 243, 699, and 6, 195, 652, have substantially overlapping specifications and are directed to a "self-evolving generic index" for organizing information stored in a database. '294 patent col. 3 ll. 24-25. This indexing software organizes information about various items using classifications, parameters, and values. Id. at col. 4 ll. 28-42, col. 6 ll. 38-61. For example, information about a car could be organized as a series of classifications, such as a first "Automobile" classification, a second "Used Vehicle" classification, and a third "Sports Utility Vehicle" classification. Id. at col. 4 ll. 31-34. Alternatively, items could be described using parameters and values. A parameter is a set of qualities that an item could possess, while a value is the specific quality that the item possesses. For instance, items in the database could be classified using the "color" parameter, while each item in the database will have a specific color value like "red" or "blue." Id. at col. 3 ll. 30-45.

         Prior art indices also organized information using classifications, parameters, and values. According to the patents' specifications, prior "specialty indices" organized information about specific types of products or services. For example, a real estate specialty index could use property classifications like commercial or residential; organize properties using parameters like location or square footage; and store data corresponding to the values of those parameters. Id. at col. 1 ll. 49-57. Database users could more finely control their searches for particular data entries by using parameters and values to limit search results. Id. at col. 2 ll. 60-62. The specifications also describe "hierarchical indices" that sorted information about products and services by tiers of increasingly narrow classifications. Id. at col. 2 ll. 30-42. Using this type of index, a user searching for the geographical location of a service could find services in Los Angeles by continuously narrowing from broader categories like North America, United States, California, and Southern California. Id. at col. 2 ll. 39-42.

         BSG Tech alleges that these prior art indices suffered from several shortcomings. Specialty indices enabled refined searching through use of parameter combinations, but the parameters used to describe one item were often inapplicable to other items. Id. at col. 1 ll. 60-67. For example, parameters that helpfully differentiate real estate properties, like square footage, would be useless for categorizing cars. Id. at col. 1 ll. 53-67. As a result, these specialty indices could not handle information about wide ranges of products and services. Id. While hierarchical indices could organize information about wide ranges of products and services by sorting them into distinct categories, these indices did not allow users "to select small subsets of records, and to sort the selected records, based upon parameters." Id. at col. 2 ll. 30-48.

         The patents teach that the "self-evolving" aspect of the claimed invention addresses these shortcomings by enabling users to "add new parameters for use in describing items." Id. at col. 3 ll. 26-27. Although users are free to add any new parameter to the index, the claimed invention seeks to guide user inputs to maintain consistency in how different users describe items. To guide users, the system provides them with information about parameters and values that previous users chose when describing similar items. Id. at col. 5 ll. 21-25. For instance, a user inputting information about a car could be presented with historical usage information showing that prior users commonly described car items using year, model, and price parameters. The usage information would include information about the relative frequency at which various parameters or values were used. Id. at col. 5 ll. 25-30.

         The claims at issue are directed toward systems and methods of indexing that combine some or all of these features. In the Eastern District of Texas, BSG Tech sued BuySeasons for infringement of the '699, '294, and '652 patents. BSG Tech asserted four claims from the '699 patent. Claim 1 recites:

A method of indexing and retrieving data being posted by a plurality of users to a wide area network, comprising:
providing the users with a mechanism for posting the data as parametized items;
providing the users with listings of previously used parameters and previously used values for use in posting the data;
providing the users with summary comparison usage information corresponding to the previously used parameters and values for use in posting the data; and
providing subsequent users with the listings of previously used parameters and values, and corresponding summary comparison usage information for use in searching the network for an item of interest.

'699 patent col. 10 l. 64-col. 11 l. 10. Claims 2, 3, and 4 depend from claim 1 and further require, respectively, the user to add a new parameter, the user to add a new value, and providing the user with a classification system for ...


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