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Salesforce.com Gets PTAB To Nix Database Patent Under Alice
By Ryan Davis

Law360, New York (September 18, 2014, 8:45 PM ET) -- The Patent Trial and Appeal Board has found that a VirtualAgility Inc. patent on a project management method is invalid for claiming only an abstract idea under the U.S. Supreme Court's Alice Corp. ruling, in a win for accused infringer Salesforce.com Inc.

The board issued a final decision Tuesday in a proceeding under the American Invents Act's business method patent review program, ruling that VirtualAgility's patent, which describes a way of using a computer database to model and manage collaborative activity by multiple people, covers a "disembodied concept" that is not eligible for a patent.

"We find that the challenged claims are directed to an abstract idea, the creation and use of models to aid in processing management information by organizing and making the information readily accessible by the collaborators of the project," the board wrote.

VirtualAgility sued Salesforce.com and many of its customers, including Dell Inc. and Dr. Pepper Snapple Group Inc., in the Eastern District of Texas in January 2013. It claimed its patent was infringed by Salesforce.com's "Sales Cloud" software, which helps users track, manage and analyze sales data. Salesforce.com challenged the patent at the PTAB in May 2013.

In June, the Supreme Court held in Alice that patents involving an abstract idea must include limitations that narrow the patent so it does not cover the idea itself. At the PTAB, VirtualAgility said its patent met that test because it required that a computer processor carry out specific operations.

The board was not persuaded, writing that Alice made clear that simply executing an abstract concept on a computer does not transform a patent-ineligible claim into a patent-eligible one. Similarly, the part of the patent requiring that a computer database be created that represents a model of the collaborative activity also does not save the patent from being abstract, the board said.

That language "would preempt the entirety of [the] abstract idea (i.e., it would preclude individuals from using a model to organize and make available management information to collaborators jointly working on a project)," the board said.

Separately, the board found that the patent was invalid as anticipated by an earlier patent and denied VirtualAgility's motion to amend the claims. It said the company failed to show how the new claims would be patent-eligible.

The case has already produced a notable Federal Circuit decision that may lead more courts to stay cases when a challenge is filed under the AIA. After Salesforce.com challenged the patent, it sought a stay of the infringement case, but the district court judge denied the request, saying the review would not simplify the case.

The Federal Circuit reversed in July, holding that the judge "clearly erred" in denying the stay, citing provisions of the AIA that "weigh heavily in favor of a stay."

VirtualAgility asked the full Federal Circuit last month to review that decision en banc, but it has not yet made a decision.

Attorneys for the parties could not immediately be reached for comment on the ruling.

The patent-in-suit is U.S. Patent Number 8,095,413.

Salesforce.com is represented by Jose Villarreal, Michael Rosato, Steve Parmelee, Joel Boehm, Brian Range, Adam Burrowbridge and Paul McAdams of Wilson Sonsini Goodrich & Rosati PC.

VirtualAgility is represented by Gregory Gonsalves of the Gonsalves Law Firm and Jay Kesan of Key IP Law Group PLLC.

The case is Salesforce.com Inc. v. VirtualAgility Inc., case number CBM2013–00024, before the Patent Trial and Appeal Board.

The underlying case is VirtualAgility Inc v. Salesforce.com, Inc. et al., case number 2:13-cv-00011, in the U.S. District Court for the Eastern District of Texas.

--Editing by Kat Laskowski.

https://www.law360.com/ip/articles/578194/salesforce-com-gets-ptab-to-nix-database-patent-under-alice