DCT

2:13-cv-00011

Virtualagility Inc v. Salesforcecom Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:13-cv-00011, E.D. Tex., 01/04/2013
  • Venue Allegations: Venue is alleged to be proper in the Eastern District of Texas because Defendants conduct business, solicit online relationships, and commit acts of infringement within the district.
  • Core Dispute: Plaintiff alleges that Defendant Salesforce.com's cloud-based software, and its use by the other named defendants, infringes a patent related to processing and managing information for collaborative business activities.
  • Technical Context: The technology relates to enterprise software systems designed to model, manage, and track strategic business goals and their associated projects across an organization.
  • Key Procedural History: The complaint asserts that the patent was issued after a "full and fair examination." Subsequent to the filing of this complaint, Defendant Salesforce.com, Inc. initiated a Covered Business Method (CBM) post-grant review proceeding (CBM2013-00024) against the patent-in-suit. That proceeding concluded with a determination that all claims of the patent (1-21) are cancelled, as reflected in a Post-Grant Review Certificate issued on April 22, 2016.

Case Timeline

Date Event
1999-05-07 ’413 Patent Priority Date (Provisional 60/133,152)
2012-01-10 ’413 Patent Issue Date
2013-01-04 Complaint Filing Date
2013-05-24 Post-Grant Review Petition filed by Salesforce.com
2016-04-22 Post-Grant Review Certificate issued cancelling all claims

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,095,413 - "Processing Management Information," issued January 10, 2012

The Invention Explained

  • Problem Addressed: The patent's background section describes the difficulty organizations face in successfully implementing strategic plans and initiatives, noting that existing strategic planning and project management processes are often separate and ineffective in rapidly changing environments (U.S. Patent No. 8,095,413, col. 1:12-36). It identifies frustrations from executives unable to manage proliferating initiatives and the lack of connection between local projects and overall corporate goals (col. 1:21-44).
  • The Patented Solution: The invention proposes a computer-implemented framework that models an organization's activities and goals within a single, cohesive system (’413 Patent, col. 2:7-16). It acquires a "first set of computer data representing a model of an organization of people" and associates it with a "second set of computer data that represents a portfolio of management concepts, such as management goals" (’413 Patent, Abstract). This integrated system allows users to link strategic goals to specific projects and view them in various hierarchical arrangements (e.g., by business domain, cost, priority) to facilitate decision-making and track progress across the enterprise (’413 Patent, col. 5:48-67).
  • Technical Importance: The described technology aimed to bridge the gap between high-level strategic planning and on-the-ground project execution by using a unified, web-accessible software platform for enterprisewide visibility and management (’413 Patent, col. 2:7-20).

Key Claims at a Glance

  • The complaint asserts infringement of at least independent claim 1 (Compl. ¶29).
  • Independent Claim 1 requires:
    • A system for supporting management of a collaborative activity.
    • A processor and a storage device.
    • A representation of a "model of the collaborative activity" in the storage device, with the model including "model entities."
    • The model entities are organized into a "plurality of hierarchies having a plurality of types," where a given entity can belong to hierarchies of different types simultaneously.
    • A graphical user interface provided by the processor for a person to perform operations on the model entities.
    • These operations include creating, modifying, or deleting model entities, assigning entities to a location in a hierarchy, and viewing the entities ordered by hierarchy or by a value in the information.
  • The complaint states infringement of "other claims" but does not specify them (Compl. ¶29).

III. The Accused Instrumentality

Product Identification

The complaint identifies Salesforce.com's cloud-based software, including but not limited to its "Sales Cloud" Customer Relationship Management (CRM) software-as-a-service, as the "Accused Instrumentalities" (Compl. ¶15, ¶29). The other defendants are accused of infringing by using this software (Compl. ¶30-36).

Functionality and Market Context

The complaint alleges the Accused Instrumentalities are designed to "enable users ... to autonomously access, assemble, share, and modify strategic and tactical information regardless of institutional boundaries" (Compl. ¶15). Specifically, the Sales Cloud CRM application is alleged to help customers "track, manage, analyze, and share information regarding sales and sales prospects, customer service, support, and marketing operations" (Compl. ¶15). The complaint also notes that Salesforce.com provides tools for users to build their own "collaborative software platform" (Compl. ¶15).

IV. Analysis of Infringement Allegations

The complaint alleges that the Accused Instrumentalities are "systems for supporting management of collaborative activities that embody every element of claim 1" but does not provide a detailed, element-by-element infringement theory (Compl. ¶29). The following chart summarizes the likely infringement theory based on the complaint's general allegations.

No probative visual evidence provided in complaint.

'413 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
a representation of a model of the collaborative activity in the storage device, the model of the collaborative activity including model entities... Salesforce's software allegedly enables users to build a "collaborative software platform" and its CRM applications help customers "track, manage, analyze, and share information" regarding various business operations, which collectively form a model of the collaborative activity. ¶15, ¶29 col. 17:64-18:4
the model entities ... being organized into a plurality of hierarchies having a plurality of types, and a given model entity being capable of simultaneously belonging to a hierarchy having one of the types and a hierarchy having another of the types... The complaint does not provide sufficient detail for analysis of this element, beyond the general assertion that the accused systems embody every element of the claim. ¶29 col. 18:5-11
said processor being configured to provide a graphical user interface to a person ... for providing outputs to the person and responding to inputs from the person by performing operations on a model entity... The Accused Instrumentalities are cloud-based software with user interfaces that allow users to "access, assemble, share, and modify" information and "build their own collaborative software platform." ¶15 col. 18:12-18
the operations including ... creating, modifying, and/or deleting the model entity, assigning the model entity to a location in a hierarchy, accessing and/or modifying the information... The accused software allegedly enables users to "track, manage, analyze, and share information," which implies the ability to create, modify, delete, and organize that information within the system's structure. ¶15 col. 18:19-27
  • Identified Points of Contention:
    • Scope Questions: A central question is whether a standard CRM system, which organizes customer and sales data, constitutes a "model of the collaborative activity" with a "plurality of hierarchies" of different "types," as those terms are used in the patent. The defense may argue that the patent describes a specific type of strategic project management tool, distinct from a general-purpose CRM.
    • Technical Questions: The complaint's allegations are conclusory and lack specific technical details mapping product features to claim limitations. A key question for discovery will be whether the Salesforce platform actually allows a single data object (a "model entity") to be organized and viewed within different hierarchical structures (e.g., a goal-based hierarchy and a domain-based hierarchy) simultaneously, as required by the claim.

V. Key Claim Terms for Construction

  • The Term: "model of the collaborative activity"
  • Context and Importance: This term appears in the preamble and body of claim 1 and defines the core subject matter of the invention. The outcome of the case may depend on whether Salesforce's CRM system, which models customer relationships and sales pipelines, falls within the scope of this term. Practitioners may focus on this term because its construction will determine whether the patent covers general-purpose business software or is limited to the specific strategic management tools described in the specification.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The Summary of the Invention describes "a model of an organization of people, the model having fundamental components" and defines "organization of people" broadly to include "any group of people, businesses, or other entities that are associated for one or more purposes" (’413 Patent, col. 2:21-27, col. 2:39-41). This could support an argument that any system modeling a business's operations is covered.
    • Evidence for a Narrower Interpretation: The Detailed Description repeatedly frames the invention in the context of linking "strategic corporate goals and Information Technology initiatives" and managing a "portfolio of strategic goals and initiatives" (’413 Patent, col. 10:1-10, col. 10:33-37). Specific examples focus on creating "goal hierarchy," performing "gap analysis," and linking projects to strategic domains, suggesting the "model" is one of strategic management, not general data management.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges that Salesforce.com induces infringement by "actively marketing to, encouraging use by, and instructing consumers, businesses, ... and the Customer Defendants to use, promote, market, distribute, and/or sell the Accused Instrumentalities" (Compl. ¶41). It also alleges contributory infringement, stating the accused products "are not staple articles of commerce and have no substantial non-infringing uses" (Compl. ¶39).
  • Willful Infringement: Willfulness is alleged based on notice provided by the filing and service of the complaint itself, for any infringement occurring post-filing (Compl. ¶43). No pre-suit knowledge is alleged.

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of definitional scope: can the term "model of the collaborative activity," which is described in the patent's specification in the context of strategic goal and project portfolio management, be construed broadly enough to read on the data structures of a general-purpose CRM system like Salesforce Sales Cloud?
  • A second key issue, intertwined with the first, is one of patent eligibility: do the claims, which recite a system for organizing, modeling, and presenting business information, cover a patent-ineligible abstract idea under 35 U.S.C. § 101? The subsequent CBM review that cancelled all claims indicates this was the dispositive question for the patent.
  • An evidentiary question, had the patent remained valid, would have been one of technical proof: what evidence exists that the accused Salesforce platform organizes data into the specific "plurality of hierarchies of a plurality of types" and allows a "given model entity" to simultaneously exist in different types of hierarchies, as strictly required by claim 1?