Judge Stark finds claims of patent invalid under 35 U.S.C. § 101, grants motion for judgment on the pleadings

In buySAFE, Inc. v. Google, Inc., C.A. No. 11-1282-LPS (D. Del. Jul. 29, 2013), Judge Leonard P. Stark recently granted defendant’s motion for judgment on the pleadings under Rule 12(c), concluding that the asserted claims of the patent-in-suit, U.S. Patent No. 7,644,019 (“the ‘019 Patent”), were not eligible for patent protection under 35 U.S.C. § 101.

The ‘019 Patent relates to providing a guaranty service for online transactions. One of the two independent claims was a process claim, and the second independent claim required a “machine readable medium” capable of performing the process of the first claim. Id. at 1. Defendant argued that the asserted claims of the ‘019 Patent failed to meet Section 101’s subject matter eligibility requirements because they were an abstract idea. Id. at 3. The Court first addressed whether the claims were “tied to a particular machine or apparatus,” as directed by the “machine-or transformation” test. Id. at 4 (quoting Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010)). The Court concluded that they were not because the claims were capable of being performed without a computer, and “[a] method that can be performed entirely in the human mind is an abstract idea and is not eligible for patent protection.” Id. at 5 (citing Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011)).

The Court rejected all of plaintiff’s arguments for validity. First, the fact that the patent was “limited to online transactions” did not save it; in Cybersource, “the patent was also limited to online transactions – ‘a method for verifying the validity of a credit card transaction over the Internet’ – yet the Federal Circuit found the patent invalid under Section 101.” Id. (quoting Cybersource, 654 F.3d at 1370). Second, while plaintiff argued that the patent’s process could not be done mentally, the Court explained that “[m]erely using a computer to perform more efficiently what could otherwise be accomplished manually does not confer patent-eligibility.” Id. at 6. Third, a patent did not become patent-eligible by “explicitly reciting a ‘computer’ in each independent claim,” and these “claims [did] not provide any details as to how the computer is involved in the claimed process, or describe the significance of the computer to that process. In fact, the patent’s process would be performed exactly the same way by a person and by a computer.” Id. at 6. Finally, the “temporal limitation” of the claims did not save their validity because “[t]he temporal limitation is not dependent on any specific programming, nor is it tied to any particular machine.” Id. at 7.

The parties had completed briefing last year and plaintiff had relied on the panel opinion in CLS Bank International v. Alice Corp. Pty Ltd., 685 F.3d 1341 (Fed. Cir. 2012), in which the Federal Circuit “reason[ed] that a claim that is drawn to a specific way of doing something with a computer is likely to be patent eligible whereas a claim to nothing more than the idea of doing that thing on a computer may not.” Id. at 7 (internal citations and quotation marks omitted). In May 2013 the Court ordered the parties to submit supplemental briefing on the effect of the en banc decision in this case, 717 F.3d 1269 (Fed. Cir. 2013), as that decision vacated and reversed the panel opinion. Id. at 1, 7. The en banc decision “reiterated the principle that simply appending generic computer functionality to lend speed or efficiency to the performance of an otherwise abstract concept does not meaningfully limit claim scope for purposes of patent eligibility.” Id. at 7-8 (internal citations and quotation marks omitted). The Court explained that “even under the reasoning of the CLS panel decision, the Court would have found the claims patent-ineligible because Plaintiff has not shown that the ‘019 patent claims are directed to any specific way of using a computer to guarantee a safe transaction. Rather, as described above, the claims are directed to a method that just happens to be performed by a computer. Under the now governing en banc decision in CLS, Defendant’s argument for patent-ineligibility is even stronger.” Id. at 8.

Having applied the machine-or-transformation test, the Court then “examined more generally the abstract nature of the claims” as directed by the Supreme Court. Id. at 8 (citing Cybersource, 654 F.3d at 1371). It concluded that the ‘019 Patent was directed to “an abstract . . . process,” pointing out that “[t]he claimed concept is not directed to any specific device or system, is not limited to a concrete application, and is not limited to any specific industry. Allowing Plaintiff to patent the general concept of performance guaranties would effectively grant a monopoly over an abstract idea.” Id. at 8-9.

The Court also issued a claim construction opinion on the same day in this case, but that opinion had no impact on the Rule 12(c) motion. Id. at 1 n.1.

buySAFE, Inc. v. Google, Inc., C.A. No. 11-1282-LPS (D. Del. Jul. 29, 2013)

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