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Tenstreet, LLC v. Driverreach, LLC

United States District Court, S.D. Indiana, Indianapolis Division

September 30, 2019

TENSTREET, LLC, an Oklahoma limited liability company, Plaintiff,
DRIVERREACH, LLC, an Indiana limited liability company, Defendant.



         Defendant DriverReach, LLC moves to dismiss Plaintiff Tenstreet, LLC’s complaint for failure to state a claim upon which relief can be granted. (ECF No. 14.) The motion, now fully briefed and ripe for decision is granted for the following reasons.

         I. Background[1]

         Plaintiff Tenstreet, LLC (“Tenstreet”) develops and sells software products and services for the transportation industry. (Compl. ¶ 7, ECF No. 1.) One such product, XchangeTM, is a network that facilitates the sharing of job applicant verification data between past and prospective employers of commercial truck drivers. (Id.) Tenstreet acquired a patent for XchangeTM on March 27, 2012, U.S. Patent No. 8, 145, 575 (the “’575 patent”), entitled “Peer to Peer Sharing of Job Applicant Information.” (Compl. ¶ 8, ECF No. 1.)

         The ‘575 patent explains that federal regulations require employers of commercial truck drivers to complete a verification process before hiring a driver. (‘575 Patent, ECF No. 1-1 at 1:18-20.) Part of this process involves verifying the driver’s employment history from the preceding three years. (Id. at 1:20-21.) Before Tenstreet’s product, XchangeTM, was created, employers would verify this data by contacting the driver’s previous employer via fax, phone, or through a commercial employment history database. (Id. at 1:21-24.) The ‘575 patent alleges that this method was “time consuming” and “expensive” for the employers and often resulted in errors that drivers were unable to correct. (Id. at 1:25-29.)

         XchangeTM sought to streamline this process by creating a “method for peer-to-peer sharing of job applicant data over a network.” (Id. at 5:42-43.) Claim 1 of the ‘575 patent is representative and dispositive of the asserted claims.[2] It describes the network as a “computerized central exchange that interfaces with requesters, providers, and job applicants.” (Id. at 1:40-42.) Requesters are prospective employers who seek verification data about a job applicant. (Id. at 1:42-44.) Providers are former employers who possess the verification data of a job applicant. (Id. at 1:44-46.) The exchange manages the interactions of each participant by providing access to a communication channel depending on the classification of the requester, provider, or job applicant seeking access to the exchange. (Id. at 1:48-51.) The communication channel may be an online interface, a facsimile interface, or an electronically stored data interface. (Id. at 1:52-54.)

         Typically, the exchange will receive a request from a prospective employer, a requester, to verify the employment data of a job applicant. (Id. at 1:58-60.) The job applicant must then authorize this verification. (Id. at 1:60-61.) Next, the request is routed to the past employer, the provider, through the communication channel of that provider. (Id. at 1:63-65.) The provider then submits the verification data to the exchange, which then routes the completed verification data to the requester. (Id. at 1:66-67; 2:1.)

         Additionally, job applicants and providers can store the verification data in a centralized database to complete subsequent requests. (Id. at 2:11-13.) Requesters, providers, and job applicants may check the status of a verification transaction with the exchange. (Id. at 2:16-18.)

         The ‘575 patent alleges that this network improves upon the previous verification process by managing “the complexity associated with different parties participating in different ways with the network so that individual partners do not have to manage it for themselves.” (Id. at 2:64-67.) Moreover, the patent claims that the software provides additional protections for drivers against inaccurate data being shared with prospective employers, beyond what the regulations provide. (Id. at 3:56-63.) By using XchangeTM, drivers can review and correct information before it is sent to the prospective employer. (Id. at 2:7-10.)

         Tenstreet alleges that Defendant DriverReach, LLC (“DriverReach”) has infringed the ‘575 patent by selling its own employment verification product, VOE Plus Solutions. (Compl. ¶ 2, ECF No. 1.) DriverReach has moved to dismiss on the ground that the ‘575 patent is patent-ineligible subject matter under 35 U.S.C. § 101. (Def.’s Motion to Dismiss, ECF No. 14.)

         II. Legal Standard

         To survive a motion to dismiss for failure to state a claim, a plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In considering a Rule 12(b)(6) motion to dismiss, the court takes the complaint’s factual allegations as true and draws all reasonable inferences in the plaintiff’s favor. Orgone Capital III, LLC v. Daubenspeck, 912 F.3d 1039, 1044 (7th Cir. 2019). The court need not “accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986).

         In addition to the allegations in the complaint, on a motion to dismiss, the court may consider “documents that are attached to the complaint, documents that are central to the complaint and are referred to in it, and information that is properly subject to judicial notice.” Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013). “[D]oc-uments attached to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff’s complaint and are central to his claim.’” McCready v. eBay, Inc., 453 F.3d 882, 891 (7th Cir. 2006) (quoting 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir. 2002)). Thus, the court may consider such a document “without converting a motion to dismiss into a motion for summary judgment.” Id. at 891–92.

         “[I]f a plaintiff pleads facts that show its suit [is] barred . . ., it may plead itself out of court under a Rule 12(b)(6) analysis.” Orgone Capital, 912 F.3d at 1044 (quoting Whirlpool Fin. Corp. v. GN Holdings, Inc., 67 F.3d 605, 608 (7th Cir. 1995)); Bogie v. Rosenberg, 705 F.3d 603, 609 (7th Cir. 2013) (quoting Hamilton v. O’Leary,976 F.2d 341, 343 (7th Cir. 1992)) (on a motion to dismiss “district courts are free to consider ‘any facts set forth in the complaint that undermine the plaintiff’s claim’”). “When a complaint fails to state a claim for relief, the plaintiff should ordinarily be given an opportunity . . . to amend the complaint to correct the ...

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