Esignature Software, LLC v. Adobe Inc.

• Court: Court of Appeals for the Federal Circuit
• Decided: July 3, 2024
• Docket: 23-1711
• Status: Unpublished

Opinion

Case: 23-1711 Document: 33 Page: 1 Filed: 07/03/2024

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________

ESIGNATURE SOFTWARE, LLC, Plaintiff-Appellant

v.

ADOBE INC., Defendant-Appellee ______________________

2023-1711 ______________________

Appeal from the United States District Court for the Northern District of California in No. 3:22-cv-05962-JSC, Judge Jacqueline Scott Corley. ______________________

Decided: July 3, 2024 ______________________

WILLIAM PETERSON RAMEY, III, Ramey LLP, Houston, TX, for plaintiff-appellant.

MICHAEL BERTA, Arnold & Porter Kaye Scholer LLP, San Francisco, CA, for defendant-appellee. Also repre- sented by THOMAS T. CARMACK, Palo Alto, CA; NICHOLAS LEE, Los Angeles, CA; NICHOLAS M. NYEMAH, Washington, DC. ______________________ Case: 23-1711 Document: 33 Page: 2 Filed: 07/03/2024

Before PROST, SCHALL, and HUGHES, Circuit Judges. PROST, Circuit Judge. Esignature Software, LLC (“Esignature”) sued Adobe Inc. (“Adobe”) for infringing U.S. Patent No. 8,065,527 (“the ’527 patent”). The district court held the ’527 patent’s claims ineligible for patenting under 35 U.S.C. § 101 and, as a result, granted Adobe’s motion for judgment on the pleadings. Esignature appeals. We affirm. BACKGROUND I The ’527 patent is titled “System and Method for Em- bedding a Written Signature into a Secure Electronic Doc- ument.” The parties agree that claim 1 of the ’527 patent is representative for purposes of the § 101 eligibility anal- ysis in this case. See Appellant’s Br. 5; Appellee’s Br. 3, 9. Claim 1 recites: A method for embedding a written signature into a secure electronic document, comprising: forming a placeholder electronic document contain- ing content to be attested to by a signature; selecting a signing individual from a signer list; placing a signature tag into the placeholder elec- tronic document at a selected signature location, wherein the signature tag is associated with the signing individual and defines the signature loca- tion within the placeholder electronic document for the signing individual to sign; securing the placeholder electronic document to form the secure electronic document having con- tent configured to be uneditable; sizing an unsigned signature bounding box on a signature capture device based on a type of the Case: 23-1711 Document: 33 Page: 3 Filed: 07/03/2024

ESIGNATURE SOFTWARE, LLC v. ADOBE INC. 3

signature tag at the signature location, wherein the signature bounding box is displayed inde- pendently of a display of the secure electronic doc- ument; and capturing a signature with the signature capture device within the signature bounding box as the signature is written by the signing individual, the signature capture device being configured to enable the signing individual to write the signature to be embedded into the secure electronic document at the signature location indicated by the signature tag to mimic a real world experience of signing pa- per documents. ’527 patent claim 1. II Adobe moved for judgment on the pleadings under Fed- eral Rule of Civil Procedure 12(c), arguing that the ’527 pa- tent’s claims are ineligible for patenting under § 101. Esignature opposed, and the district court heard oral argu- ment on the motion. The district court evaluated the eligibility of the ’527 patent’s claims under the two-step framework set forth in Alice Corp. Pty. Ltd. v. CLS Bank International, 573 U.S. 208 (2014). See Esignature Software, LLC v. Adobe Inc., 656 F. Supp. 3d 1041, 1046–51 (N.D. Cal. 2023). In a well-reasoned opinion, it held the claims ineligible for patenting under § 101. Id. at 1051. At Alice step one, the district court concluded that rep- resentative claim 1 is directed to a “method to apply a sig- nature digitally, in a designated place, within a secure electronic document.” Id. at 1047. As the court observed, claims directed to longstanding business practices are di- rected to an abstract idea at Alice step one, see id. at 1048 (citing Elec. Commc’n Techs., LLC v. ShoppersChoice.com, LLC, 958 F.3d 1178, 1182 (Fed. Cir. 2020)), and the Case: 23-1711 Document: 33 Page: 4 Filed: 07/03/2024

’527 patent “itself recognizes that signatures have been used for centuries to notarize and authenticate docu- ments,” id. (cleaned up); see ’527 patent col. 1 ll. 7–8. The court concluded that claim 1 is directed to an abstract idea because it “simply recite[s] that existing business practice with the benefit of generic computing technology.” Esigna- ture, 656 F. Supp. 3d at 1048 (cleaned up); see also id. (“Ge- neric computer implementation of an abstract idea does not make an abstract idea any less abstract.”); id. at 1049 (“The ’527 patent’s claims focus on an abstract idea for which computers are invoked merely as a tool. For example, if one deletes the word ‘electronic’ from [c]laim 1 . . . , the method description would be indistinguishable from the process of signing a paper document.”). At Alice step two, the district court considered whether claim 1 contains an inventive concept sufficient to trans- form the claimed abstract idea into a patent-eligible appli- cation. Id. at 1050. The court found no such inventive concept. Rather, it determined that claim 1 simply recites the use of generic computer features to implement the un- derlying abstract idea. Id.; see also id. (“[T]he claims here provide little more to an age-old practice.”); id. at 1051 (“[T]his patent does not invent much of anything, but pur- ports to preempt all forms of digital signature capture.”). The district court thus concluded that the ’527 patent’s claims are ineligible for patenting under § 101. It accord- ingly granted Adobe’s Rule 12(c) motion for judgment on the pleadings. Id. Esignature timely appealed. We have jurisdiction un- der 28 U.S.C. § 1295(a)(1). DISCUSSION We review a district court’s grant of judgment on the pleadings under the regional circuit’s law. E.g., Smart Sys. Innovations, LLC v. Chi. Transit Auth., 873 F.3d 1364, 1367 (Fed. Cir. 2017). The Ninth Circuit reviews such Case: 23-1711 Document: 33 Page: 5 Filed: 07/03/2024

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decisions de novo and affirms if, assuming the truth of the allegations in the non-moving party’s pleadings, the mov- ing party is entitled to judgment as a matter of law. See, e.g., Rubin v. United States, 904 F.3d 1081, 1083 (9th Cir. 2018). Patent eligibility under § 101 is a question of law that may involve underlying questions of fact. Interval Licens- ing LLC v. AOL, Inc., 896 F.3d 1335, 1342 (Fed. Cir. 2018). We review the district court’s ultimate conclusion on pa- tent eligibility de novo. Id. To evaluate patent eligibility under § 101, we apply the familiar Alice two-step framework. At step one, we deter- mine whether the claim at issue is “directed to” an abstract idea. See Alice, 573 U.S. at 218. Under this directed-to inquiry, “we ask what the patent asserts to be the focus of the claimed advance over the prior art to determine whether the claim’s character as a whole is directed to in- eligible subject matter.” Simio, LLC v. FlexSim Software Prods., Inc., 983 F.3d 1353, 1359 (Fed. Cir. 2020) (cleaned up). If the claim is directed to an abstract idea at step one, we move to step two, “where we examine the elements of the claim to determine whether it contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application.” Id. (cleaned up). If the claim does not contain such an inventive concept at step two, it is ineligible for patenting. Esignature makes several arguments as to why the dis- trict court’s ineligibility conclusion was erroneous. None has merit. Regarding step one, although Esignature agrees with the district court’s articulation of what claim 1 is directed to—i.e., a “method to apply a signature digitally, in a des- ignated place, within a secure electronic document”—it dis- putes that this articulation is an abstract idea for § 101 purposes. It argues that, because secure electronic docu- ments were not digitally signed as claimed before the Case: 23-1711 Document: 33 Page: 6 Filed: 07/03/2024

’527 patent, the district court’s articulation was not a longstanding business practice, and therefore not an ab- stract idea. See Appellant’s Br. 12–13 (“There is no evi- dence . . . that the application of a digital signature to any form of document is a long-standing business practice or that electronic documents could receive handwritten signa- tures.”); id. at 13 (arguing that the district court “ignore[d] the significant limitation that the claims are digital signa- tures on secure electronic documents”); see also Appellant’s Reply Br. 1–2 (“These elements alone take the claimed in- vention from what people have been doing for centu- ries . . . .”). Esignature’s argument misunderstands both the dis- trict court’s analysis and governing case law. The district court did not conclude that applying digital signatures in an electronic document was, itself, a longstanding business practice. Nor did it need to. Instead, it concluded that ap- plying signatures in designated places on documents was a longstanding business practice—and that claim 1, due to its purely functional and generic implementation, amounts to little more than saying: do that on a computer. See Es- ignature, 656 F. Supp. 3d at 1049 (“This is the ‘do it on a computer flaw.’” (citing Univ. of Fla. Rsch. Found., Inc. v. Gen. Elec. Co., 916 F.3d 1363, 1367 (Fed. Cir. 2019))); id. at 1048–49. The district court’s reasoning accords with our precedent. See, e.g., Return Mail, Inc. v. USPS, 868 F.3d 1350, 1368 (Fed. Cir. 2017) (concluding that claims were directed to an abstract idea at step one when they “simply recite[d] [an] existing business practice with the benefit of generic computing technology”), rev’d and remanded on other grounds, 587 U.S. 618 (2019); Intell. Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1314 (Fed. Cir. 2016) (concluding that claims were directed to an abstract idea at Case: 23-1711 Document: 33 Page: 7 Filed: 07/03/2024

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step one when they “merely applie[d] a well-known idea us- ing generic computers”). 1 Esignature does not meaningfully develop any argu- ment that claim 1 is “directed to a specific improvement to computer functionality” or that it “reflects an inventive so- lution to any problem presented by” carrying out the longstanding business practice on a computer. See In re TLI Commc’ns LLC Pat. Litig., 823 F.3d 607, 612 (Fed. Cir. 2016). For example, while Esignature stresses that “[n]o one has ever manually inserted signatures into electronic documents,” Appellant’s Reply Br. 4, to the extent this as- sertion is meant to show that claim 1 solved some techno- logical problem of signing electronically (as opposed to just showing that signing electronically was not a “longstand- ing” business practice), both Esignature’s representations before the district court and the ’527 patent itself confirm that the claimed “signature capture device” is purely func- tional or generic. See J.A. 120–21 (colloquy with the dis- trict court, where Esignature confirmed that it is just “some sort of a capture device”); ’527 patent col. 6 ll. 27–29 (“The signature capture device . . . can be any type of elec- tronic signature capture device capable of communicating with a computer.”). The signature capture device is thus “merely a conduit” for carrying out the longstanding busi- ness practice and is insufficient to render claim 1 eligible at step one. See In re TLI Commc’ns, 823 F.3d at 612. At bottom, Esignature simply emphasizes the elec- tronic aspects of claim 1. But, at least here, this emphasis shows only that the longstanding business practice

1 To the extent Esignature’s argument is intended to show claim 1’s purported novelty—i.e., that applying a sig- nature digitally to an electronic document as claimed had never been done before—novelty alone “does not avoid the problem of abstractness.” See, e.g., Simio, 983 F.3d at 1364 (cleaned up). Case: 23-1711 Document: 33 Page: 8 Filed: 07/03/2024

happens on a computer—which hardly solves the claim’s “do it on a computer” problem. See Esignature, 656 F. Supp. 3d at 1049 (“[I]f one deletes the word ‘elec- tronic’ from [c]laim 1 . . . , the method description would be indistinguishable from the process of signing a paper doc- ument.”). We see no error in the district court’s step-one conclusion that claim 1 is directed to an abstract idea. Regarding step two, Esignature faults the district court for not considering purportedly “inventive aspects” re- flected in certain dependent claims—for example, facilitat- ing remote signatures (claims 18 and 19), capturing a signature at the time a transaction occurs (claim 10), and saving the embedded signature in a secure electronic docu- ment (claim 9). See Appellant’s Br. 17–18; Appellant’s Re- ply Br. 6–7. Yet, as Adobe observes—and as Esignature does not dispute—Esignature never raised these argu- ments before the district court. Indeed, Esignature agreed before the district court that claim 1 was a representative claim. See Esignature, 656 F. Supp. 3d at 1045; J.A. 116. We will not consider these forfeited arguments for the first time on appeal. See, e.g., In re Google Tech. Holdings LLC, 980 F.3d 858, 863 (Fed. Cir. 2020) (“We have regularly stated and applied the important principle that a position not presented in the tribunal under review will not be con- sidered on appeal in the absence of exceptional circum- stances.”). Finally, Esignature argues that the district court erred by not construing certain claim terms before holding the claims ineligible. Appellant’s Br. 16 (identifying as terms needing construction: “editing module,” “signer list mod- ule,” “tagging module,” “secure document signer module,” and “signature capture module”). This argument is unper- suasive—at least because, aside from identifying these terms, Esignature “has not explained how it might benefit from any particular term’s construction under an Alice § 101 analysis.” See Simio, 983 F.3d at 1365. We therefore Case: 23-1711 Document: 33 Page: 9 Filed: 07/03/2024

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see no error in the district court’s not construing these terms before holding the claims ineligible. CONCLUSION We have considered Esignature’s remaining argu- ments and find them unpersuasive. For the foregoing rea- sons, we affirm. AFFIRMED