December 1, 2021

D. Ariz.: Exchanging Geographic and Demographic Data is not Patent Eligible under Section 101

Holland & Knight Section 101 Blog
Anthony J. Fuga
Section 101 Blog

In the case USADATA Inc. v. DataWidget LLC, No. CV-21-00526-PHX-DLR, 2021 WL 5084283 (D. Ariz. Nov. 1, 2021), the patent at issue is titled, "System and Method for Selling Customer-Specific Data Subsets on a Third-Party Website Using a Web Widget." Like the title suggests, the claims recite a "system for searching and purchasing data subsets from a data seller," which comprises three main components: 1) an e-commerce vendor, 2) a data seller and (3) a data extraction widget.

The patent explains how the system works with a sandwich shop/web-to-print example:

A sandwich shop owner wants to run a targeted mail campaign by designing and sending postcards to all residents within five miles of the sandwich shop. The owner finds an e-commerce vendor selling printing services, but the vendor lacks its own database of residents within five miles of the sandwich shop. However, a third-party data seller has a database that can be searched to obtain that specific data subset.

Using the data seller widget, the customer [sandwich shop] accesses the data seller's database via server, obtains a list of residents within a five mile radius of the customer's shop and then uses that mailing list to send out custom postcards through the web-to-print site. Preferably, the customer pays for the data subset (in this case the names and addresses) during checkout at the web-to-print site and the data seller and web-to-print vendor can settle their accounts at the same or subsequent time. Throughout the process, the customer need not know that a third-party data seller is involved.

The plaintiff filed a Rule 12(c) motion for judgment on the pleadings, arguing that the patent is ineligible under Section 101. (The plaintiff filed a declaratory judgment action, so the defendant is the patent holder.)

At step one of the Alice inquiry, the U.S. District Court for the District of Arizona found the patent to be directed to an abstract idea: "functionally, the data extraction widget exchanges information with and between a vendor of geographic and demographic data and a printing service … As far back as the pre-Civil War era, humans have acquired geographic and demographic and used a printing service to reach a targeted audience."

The court, in summary, found that the patent "essentially computerizes a longstanding economic practice … and mere information exchange is an abstract idea, even when performed by computers or otherwise technologically restricted."

At step two, the court found that none of the components are inventive because they implement conventional protocols. "The patent claims a system that employs a database, servers, processors, and memory, all of which the patent describes as 'well-known in the art.'" The court concluded that such generic language does not reveal an inventive concept.

Accordingly, the court found that the patent claims are ineligible under Section 101 and granted the plaintiff's motion for judgement on the pleadings.

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