Case: 20-1777 Document: 33 Page: 1 Filed: 02/08/2021
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
VERIPATH, INC.,
Plaintiff-Appellant
v.
DIDOMI,
Defendant-Appellee
______________________
2020-1777
______________________
Appeal from the United States District Court for the
Southern District of New York in No. 1:19-cv-01702-GBD,
Judge George B. Daniels.
______________________
Decided: February 8, 2021
______________________
JONATHAN K. WALDROP, Kasowitz Benson Torres LLP,
Redwood Shores, CA, for plaintiff-appellant. Also repre-
sented by HEATHER KIM.
CHARLES R. MACEDO, Amster Rothstein & Ebenstein
LLP, New York, NY, for defendant-appellee. Also repre-
sented by CHRISTOPHER LISIEWSKI.
______________________
Before LOURIE, CHEN, and HUGHES, Circuit Judges.
Case: 20-1777 Document: 33 Page: 2 Filed: 02/08/2021
2 VERIPATH, INC. v. DIDOMI
LOURIE, Circuit Judge.
VeriPath, Inc. (“VeriPath”) appeals from a decision of
the United States District Court for the Southern District
of New York holding that the claims of U.S. Patent
10,075,451 (“the ’451 patent”) are ineligible for patent un-
der
35 U.S.C. § 101. VeriPath, Inc. v. Didomi, No. 19 CIV.
1702 (GBD),
2020 WL 1503687 (S.D.N.Y. Mar. 30, 2020)
(“Decision”). Because we agree with the district court that
the patent claims patent-ineligible subject matter, we af-
firm.
BACKGROUND
VeriPath owns the ’451 patent, which is generally di-
rected to a data privacy system. ’451 patent, Abstract. The
patent describes that users can use mobile device applica-
tions to “socialize, bank, shop, [and] navigate.”
Id. col. 1 ll.
25–27. However, as users interact with the applications,
“information about [their] activities or status may be col-
lected automatically.”
Id. col. 1 ll. 38–41. The patent states
that “[b]ecause of the sensitivity of this personal infor-
mation, many states and countries” have enacted laws re-
quiring companies that collect such data to (1) present
users with a specific privacy disclosure explaining how
their personal information will be used and (2) obtain the
users’ consent before the information is collected.
Id. col 1
ll. 51–55. We are told that the laws governing privacy dis-
closures and consent requirements can differ from locality
to locality, requiring companies to present and collect dif-
ferent privacy disclosures and consents based upon the us-
ers’ location. See
id. col. 2 ll. 1–13.
The patent purports to address the drawbacks “of cur-
rent data collection/privacy schemes by providing an im-
proved, more transparent opt-in process.”
Id. col. 2 ll. 29–
31. Specifically, the patent describes an “arrangement
[that] allows a component of an application (e.g., a mobile
app), in conjunction with other components of a distributed
system, to determine what information is to be collected
Case: 20-1777 Document: 33 Page: 3 Filed: 02/08/2021
VERIPATH, INC. v. DIDOMI 3
from a user, how that information will be used, and what
permissions are required from that user for that user.”
Id.
col. 2 ll. 29–36. “In some embodiments, the user may be
presented with certain offers in exchange for the user’s con-
sent to a proposed use of certain personal information.”
Id.
col. 2 ll. 46–48.
Claim 1, which is representative of the claims before
us, reads as follows:
1. A method for controlling access to a user’s per-
sonal information comprising:
providing a software component for inclusion in an
application, the software component having an ap-
plication programming interface (API);
obtaining, from the application executing on a de-
vice of a user of the application, personal infor-
mation about the user of the application, the
personal information obtained via the API by the
software component executing on the device;
identifying the type of the obtained personal infor-
mation;
determining, based on at least the type of obtained
personal information, a required permission from
the user for at least one proposed use of the ob-
tained personal information;
presenting, to the user, a first offer to provide ac-
cess to at least one enhanced function of the appli-
cation in exchange for the required permission; and
responsive to the user providing the required per-
mission, providing the user with access to the at
least one enhanced function of the application.
Id. col. 16 ll. 7–28.
VeriPath sued Didomi, asserting that Didomi had in-
fringed “at least claim 1 of the ’451 Patent.” J.A. 276.
Case: 20-1777 Document: 33 Page: 4 Filed: 02/08/2021
4 VERIPATH, INC. v. DIDOMI
Didomi then filed a motion to dismiss the complaint for fail-
ure to state a claim pursuant to Federal Rule of Civil Pro-
cedure 12(b)(6), asserting that the claims of the ’451 patent
are ineligible for patent under
35 U.S.C. § 101. See J.A.
553–77.
The district court considered the claims under the Su-
preme Court’s two-step Alice framework for determining
patent eligibility. At Alice step one, the court observed that
claim 1 of the patent is directed to “the abstract idea of
granting permission to access personal information in ex-
change for enhanced functionality via the API, a routine
piece of software.” Decision,
2020 WL 1503687, at *3. At
Alice step two, the court determined that claim 1 lacks an
inventive concept sufficient to convert the abstract concept
into a patent-eligible application.
Id. at *4. Additionally,
the court asserted that the dependent claims are also inel-
igible because they are “considerably analogous to claim 1
and suffer from similar defects.”
Id. Having concluded
that the claims are ineligible for patent under § 101, the
court granted Didomi’s motion to dismiss. Id. at *5. Veri-
Path appealed to this court. We have jurisdiction pursuant
to
28 U.S.C. § 1295(a)(1).
DISCUSSION
We review the grant of a motion to dismiss under the
law of the regional circuit. OIP Techs., Inc. v. Amazon.com,
Inc.,
788 F.3d 1359, 1362 (Fed. Cir. 2015) (citing K–Tech
Telecomms., Inc. v. Time Warner Cable, Inc.,
714 F.3d
1277, 1282 (Fed. Cir. 2013)). In the Second Circuit, “grant
of a motion to dismiss is reviewed de novo to determine
whether the claim is plausible on its face, accepting the ma-
terial factual allegations in the complaint and drawing all
reasonable inferences in favor of the plaintiff.” Ottah v.
Fiat Chrysler,
884 F.3d 1135, 1141 (Fed. Cir. 2018) (citing
Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)); Bascuñan v.
Elsaca,
927 F.3d 108, 116 (2d Cir. 2019).
Case: 20-1777 Document: 33 Page: 5 Filed: 02/08/2021
VERIPATH, INC. v. DIDOMI 5
Patent eligibility under § 101 is an issue of law that
may contain underlying issues of fact. See Berkheimer v.
HP Inc.,
881 F.3d 1360, 1365 (Fed. Cir. 2018). We review
the district court’s ultimate conclusion on patent eligibility
de novo.
Id. To determine whether a patent claims eligible
subject matter, we follow the Supreme Court’s familiar
two-step framework. See Alice Corp. v. CLS Bank Int’l,
573
U.S. 208, 217 (2014); Mayo Collaborative Servs. v. Prome-
theus Labs., Inc.,
566 U.S. 66, 70–73 (2012). First, we de-
termine whether the claims are directed to a law of nature,
natural phenomenon, or abstract idea. See Alice, 573 U.S.
at 217. If so, we proceed to the second step and determine
whether the claims nonetheless include an “inventive con-
cept” sufficient to “‘transform the nature of the claim’ into
a patent-eligible application.” Id. (quoting Mayo,
566 U.S.
at 72, 78). To recite an “inventive concept,” at step two, a
patent must do more than recite an abstract idea “while
adding the words ‘apply it.’” Id. at 221 (quoting Mayo,
566
U.S. at 72). “[S]imply appending conventional steps, spec-
ified at a high level of generality, to laws of nature, natural
phenomena, and abstract ideas cannot make those laws,
phenomena, and ideas patentable.” Mayo,
566 U.S. at 82.
At Alice step one, VeriPath argues that claim 1 is
not directed to an abstract idea, but rather to “a patent-el-
igible improvement to computer functionality.” Appellant
Br. 25. Specifically, VeriPath asserts that the claimed sys-
tem (i) “can generate different privacy disclosures based on
a user’s location in real-time”; and (ii) the remote database
managing the “privacy disclosure policies upon which the
user-specific disclosure is generated can be regularly up-
dated without the need for users to agree to the updates.”
Id. at 32.
We disagree with VeriPath. As the district court cor-
rectly observed “[s]tripped of excess verbiage, at its most
basic level, claim 1 is anchored on the abstract idea of ex-
changing privacy for functionality.” Decision,
2020 WL
1503687, at *3 (citation omitted). Specifically, it describes
Case: 20-1777 Document: 33 Page: 6 Filed: 02/08/2021
6 VERIPATH, INC. v. DIDOMI
an agreement wherein (1) an API obtains personal infor-
mation, (2) the type information is identified, (3) a required
permission for use of the personal information is deter-
mined based on the type of personal information, (4) the
user is offered access to an enhanced function of an appli-
cation in exchange for permission to use the personal infor-
mation, and (5) the user gets access to the enhanced
function after consenting. See ’451 patent col. 16 ll. 8–28.
Moreover, claim 1 is not focused on any technological im-
provement to computer functionality. Rather, at most,
claim 1 is directed to no more than an improvement to the
abstract notion of exchanging privacy for functionality that
utilizes an API to achieve the desired result. “[I]t is not
enough, however, to merely improve a fundamental prac-
tice or abstract process by invoking a computer merely as
a tool.” Customedia Techs., LLC v. Dish Network Corp.,
951 F.3d 1359, 1364 (Fed. Cir. 2020) (citations omitted).
Accordingly, we conclude that claim 1 is directed to an ab-
stract idea.
At Alice step two, VeriPath contends that claim 1 co-
vers patent-eligible subject matter because it is directed to
a “distributed data privacy system” that allows for the
“generation of a user-specific privacy disclosure based on a
user’s personal information before presenting the user-spe-
cific privacy disclosure to the user, receiving the user’s opt-
in consent, collecting a user’s personal information, and
providing the user with the use of an enhance[d] function-
ality of the application in exchange for the consent.” Ap-
pellant Br. 39–40.
We disagree with VeriPath. None of these steps,
viewed “both individually and ‘as an ordered combination,’”
transform the nature of the claim into patent-eligible sub-
ject matter. Alice, 573 U.S. at 217 (quoting Mayo,
566 U.S.
at 78–79). Instead, claim 1 comprises implementing the
above-identified abstract idea using “conventional steps,
specified at a high level of generality.” Alice, 573 U.S. at
222 (quoting Mayo,
566 U.S. at 82). That is insufficient to
Case: 20-1777 Document: 33 Page: 7 Filed: 02/08/2021
VERIPATH, INC. v. DIDOMI 7
supply an “inventive concept.”
Id. For example, the claim
recites “identifying the type of the obtained personal infor-
mation” and “presenting, to the user, a first offer to provide
access to at least one enhanced function.” See ’451 patent
col. 16 ll. 8–28 (emphases added); BSG Tech LLC v.
Buyseasons, Inc.,
899 F.3d 1281, 1290 (Fed. Cir. 2018) (“It
has been clear since Alice that a claimed invention’s use of
the ineligible concept to which it is directed cannot supply
the inventive concept that renders the invention ‘signifi-
cantly more’ than that ineligible concept.”). VeriPath em-
phasizes that the order of the specific steps of the claim
constitutes inventive subject matter. See Appellant Reply
Br. 19 (“[T]he generation of a user-specific privacy disclo-
sure before presenting the user-specific privacy disclosure
to the user . . . transform[s] the claims into . . . patent-eli-
gible subject matter under this Court’s precedent.”) (em-
phasis in original). However, VeriPath fails to explain how
generating a disclosure before it is presented to the user is
anything but routine and conventional under Alice step
two.
We additionally conclude that the dependent claims
are directed to substantially similar subject matter as
claim 1 and are therefore ineligible under § 101. As the
district court observed, the dependent claims “are consid-
erably analogous to claim 1 and suffer from similar de-
fects.” Decision,
2020 WL 1503687, at *4. Specifically, the
dependent claims “merely use vague terms to implement
claim 1’s abstract concept.”
Id. For example, claim 2, re-
cites “[t]he method of claim 1, wherein the at least one en-
hanced function of the application is functionality not
available to at least one other group of users of the appli-
cation.” ’451 patent col. 16 ll. 29–32. Claim 3 recites “[t]he
method of claim 1, wherein the at least one enhanced func-
tion of the application is a reduced number of commercial
advertisements presented to the user in the application.”
Id. col. 16 ll. 33–36. Plainly, like claim 1, the dependent
Case: 20-1777 Document: 33 Page: 8 Filed: 02/08/2021
8 VERIPATH, INC. v. DIDOMI
claims are directed to the abstract idea of exchanging pri-
vacy for functionality.
Finally, we reject VeriPath’s argument that “the dis-
trict court erred by overlooking potentially narrowing
claim constructions.” Appellant Br. 35. Here, VeriPath
“did not raise any claim construction dispute and did not
provide any proposed construction” to the court. See Mortg.
Application Techs., LLC v. MeridianLink, Inc., No. 2020-
1504,
2021 WL 97347, at *3 (Fed. Cir. Jan. 12, 2021). Ra-
ther, it merely stated before the district court that there
are issues of fact that “may necessitate claim construction.”
J.A. 638–39 (emphasis added). We thus conclude that the
district court did not err in granting Didomi’s motion to dis-
miss.
CONCLUSION
We have considered VeriPath’s remaining arguments
but find them unpersuasive. For the foregoing reasons, the
judgment of the district court is affirmed.
AFFIRMED
