Didomi Obtains Dismissal By US Court of Nuisance Patent Infringement Suit By Veripath Over "User Opt-in and Data Privacy" Patent
The Paris-based technology company Didomi has successfully obtained dismissal of a nuisance patent infringement lawsuit by Veripath, Inc., filed in US federal court in New York. Veripath claimed that cookie consent notices on websites - a ubiquitous and well known pre-existing method of complying with the privacy regulations - violated its patent called “Methods and Systems for User Opt-In to Data Privacy Agreements” (U.S. Patent No. 10,075,451). The Court agreed with Didomi and found the patent invalid as being directed merely to an abstract idea and nothing more.
On March 30th, 2020, Judge Daniels issued an Order granting Didomi's motion to dismiss Veripath's claims as patent-ineligible pursuant to 35 U.S.C. § 101. The Order agreed with Didomi’s arguments and rejected as unpersuasive the tenuous and unsupported arguments advanced by Veripath.
Thus, the Court agreed with Didomi that Veripath’s claims are merely "directed to the abstract idea of granting permission to access personal information in exchange for enhanced functionality via the API, a routine piece of software." The Order further confirmed that "the '451 Patent is no more than an improvement to the abstract notion of exchanging privacy for functionality utilizing a piece of software to achieve the desired result."
At step two of the Alice analysis, the Court again was unconvinced by Veripath's arguments and found that the '451 Patent lacked any "inventive concept" that would save it from invalidity: "It is not enough to merely state that the claims [to] teach a technology-based solution, which improves the functionality of the prior art systems and methods, without identifying an inventive concept other than the abstract idea to which claim 1 is directed. Moreover, mere recitation of the use of a generic computer or adding the words 'apply it' - here, the API - cannot transform the abstract idea into a patent-eligible invention."
Didomi is very happy that our motion to dismiss this lawsuit was granted by the Court, setting a very important precedent in our industry. We at Didomi were stunned when we first heard of this lawsuit, not only because we have never infringed any intellectual property anywhere in the world, but because Veripath was claiming to own all uses of standard pre-existing APIs used in consent management and otherwise! Our counsel at Amster, Rothstein & Ebenstein LLP helped us build a very strong case, and we are relieved that the road is clear again for us. But more importantly, we feel that this ruling will benefit the industry as a whole, because we cannot let anyone stifle innovation unlawfully.
Timeline of the case
On February 22, 2019, Veripath filed a complaint against Didomi in the instant suit for patent infringement of U.S. Patent No. 10,075,451 (“the ‘451 Patent”). At the time, the Electronic Frontier Foundation (“EFF”) called out the ‘451 Patent as the “Stupid Patent of the Month,” observing that its claims were “clearly ineligible for patent protection” under Alice, a two-part test to determine whether a software patent was unpatentable under US Patent Law (35 USC Section 101) for claiming ineligible subject matter.
On April 3, 2019, Didomi sent a Letter to Veripath’s original counsel pursuant to Fed. R. Civ. P. 11 requesting that Veripath withdraw its assertion and pointing out many failures in the original complaint, including, among other things, that the claims were not patent-eligible. After receiving no response, Didomi sent a follow-up letter on April 15, 2019 to Veripath’s original counsel advising that Didomi still had not heard back and to update them on relevant recent case law that supported Didomi’s position. Rather than substantively respond themselves to defend their dubious assertion, Veripath’s original counsel withdrew from this case to be substituted by new counsel. Veripath’s original counsel also withdrew from the pending prosecution of a continuation application to the ‘451 Patent.
On April 24, 2019, Veripath’s new (and current) counsel responded to Didomi’s Rule 11 Letter and Follow-Up Letter. In the response, Veripath’s new counsel attempted to address the patent-eligibility challenge with insufficient arguments and lack of any particulars necessary to justify the alleged eligibility of Claim 1 (or any other claim in the ‘451 Patent). New counsel essentially confirmed that the claims are directed to the same abstract idea as identified by Didomi’s counsel, the IP law firm Amster, Rothstein & Ebenstein LLP, and failed to identify any particular aspects of Claim 1 (or any other claim) that would constitute an inventive concept sufficient to justify the alleged eligibility of the issued claims. Thereafter, on June 6, 2019, Veripath filed an Amended Complaint.
The Amended Complaint reinforced the abstract nature of Claim 1, by again characterizing it as being directed to the same abstract idea identified by Didomi in the original letter, and stated by Veripath’s new counsel in its April 24th Letter. While it included additional description of alleged problems and solutions addressed by the patent, it failed to tie any of those alleged problems to the actual language of the asserted Claim 1.
On August 16, 2019, when it became clear that the parties would not be able to amicably resolve the dispute, Didomi’s counsel responded to the April 24th Letter with its own letter (“the August 16th Letter”). In the August 16th Letter, as detailed further in the argument below, Didomi addressed, among other things,
- how the ‘451 Patent merely claims an abstract idea;
- how the ‘451 Patent fails to describe an additional inventive concept that renders it patent-eligible; and
- how the presumption of validity of the ‘451 Patent will be easily overcome.
The order by the Court on March 30, 2020 vindicated Didomi’s view that this case should never have been brought, and will send a message not to bring nuisance suits.
Download PDFDownload PDF
Didomi builds technology that allows organizations to place customer consent at the core of their strategy. By making consent and preferences easily accessible, companies benefit from compliant customer data while seeing higher engagement and increased user trust. Consumers, on their side, are free to choose what data to share and how to stay connected to their favorite brands across touchpoints. Our products include a globally adopted Consent Management Platform (CMP), which collects billions of consents every month, a highly popular Preference Management Platform (PMP), and a powerful suite of bespoke solutions to build better consent and preference management. Find out more at www.didomi.io.