PTAB Finds Patent Claims Ineligible Under USPTO’s Revised Guidance On Section 101
04/30/2019On April 22, 2019, the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) made public its Final Written Decision on the patentability of challenged claims in a covered business method patent review (CBM) proceeding. Fidelity Information Services, LLC v. Mirror Imaging, LLC, CBM Case No. CBM2017-00064 (PTAB Apr. 22, 2019). The PTAB held the challenged claims were patent ineligible under 35 U.S.C. § 101, consistent with the USPTO’s 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019).
A CBM is an administrative procedure by which a party (termed, a Petitioner) that has been accused of infringement may challenge the patentability of patent claims on various grounds. A patent is eligible for CBM review only if it both (i) claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, and (ii) is not directed to a “technological invention.” The second prong, per 37 C.F.R. § 42.301(b), is a case-by-case determination based on “whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.”
Once the Petitioner has met these initial prongs, it may assert that the claims are invalid, for example, because they are directed to patent ineligible subject matter under Section 101 of the United States Code, which prescribes the categories of inventions and discoveries that can properly be the subject of a patent: “any new and useful process, machine, manufacture, or composition of matter.” These categories are limited by judicially-created proscriptions against patenting abstract ideas, laws of nature, and natural phenomena.
The Supreme Court has set out a two-step framework for determining patent eligibility:
- determine whether the claims at issue are directed to one of the patent-ineligible concepts (such as an abstract idea); and, if so, then:
- determine whether the elements of the claims, considered both individually and as an ordered combination, recite an “‘inventive concept’ – i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”
As part of its ongoing efforts to establish predictability in Section 101 determinations, the USPTO updated its Section 101 Guidance to establish its own interpretation of the Alice framework:
“Step 1” of the Guidance requires a determination of “whether the claim is directed to a statutory category” (i.e., a process, machine, manufacture or composition of matter).
“Step 2A” mandates determination of whether the otherwise statutory claim recites (i) any judicial exceptions, including certain groupings of abstract ideas (i.e., mathematical concepts, certain methods of organizing human activity such as a fundamental economic practice, or mental processes); and (ii) additional elements that integrate the judicial exception into a practical application.
If the answer to both is “no,” the evaluation proceeds to “Step 2B”: does the claim (iii) add a specific limitation beyond the judicial exception that is not “well-understood, routine, [and] conventional” in the field; or (iv) simply append well-understood, routine, and conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception?
In the instant CBM, the PTAB evaluated representative claim 1 of the challenged patent, which recited:
- A method of obtaining an electronically-stored financial document from a first storage system remotely-located from a second storage system wherein the first and second storage systems each include a plurality of financial documents stored therein and wherein each of the financial documents include at least one specific document parameter, said method comprising the steps of:
- storing a plurality of financial documents in a first fixed medium at the first storage system when the specific document parameter of the financial document is greater than a predetermined parameter; storing a plurality of financial documents in a second fixed medium at the second storage system when the specific document parameter of the financial document is less than or equal to the predetermined parameter;
- utilizing a computer terminal connected to the first and second storage systems through a processing unit;
- receiving a request for at least one of the stored financial documents;
- inputting the request into the computer terminal;
- comparing the specific document parameter of the requested financial document to the predetermined parameter to determine if the specific document parameter is greater than, less than, or equal to the predetermined parameter after the request has been inputted;
- automatically accessing the first storage system through the processing unit when the specific document parameter is greater than the predetermined parameter and automatically accessing the second storage system through the processing unit when the specific document parameter is less than or equal to the predetermined parameter; and
- retrieving the requested financial document, as defined by the inputted request, in the first fixed medium when the specific document parameter is greater than the predetermined parameter and in the second fixed medium when a specific document parameter of the financial document is less than or equal to the predetermined parameter.
According to the PTAB, at “Step 1,” the claim recites the statutory category of a “process” (i.e., it is a method claim).
At “Step 2A,” the PTAB found the claim directed to “organizing, storing, and retrieving financial documents,” such as checks or tax documents—“a long-established fundamental economic process” that can be performed in a person’s head.
With respect to “Step 2B,” the PTAB determined that the claim requires only well-understood, routine, and conventional technology—such as generic computer technology that was previously known and performs only its conventional functions, which fails to impart patentability under Alice and its progeny.
This decision may be a welcome sign that the PTAB, despite the Guidance arguably taking a narrow interpretation of Alice that may be inconsistent with Federal Circuit precedent, will nonetheless still find unpatentable claims that are rooted in fundamental economic processes that do no more than simply apply the processes to a generic computer.