Patent for Insurance Claim Processing Held Invalid Under Bilski

June 10, 2011

In a recent decision from the United States District Court for the District of Delaware, the district court considered defendant's motion for summary judgment of invalidity. The plaintiff's patent is directed to a computer program for developing a component based software for the insurance industry. The patent contained both method and system claims.

Defendant's moved for summary judgment on the grounds that the patent was invalid under Bilski v. Kappos, 130 S. Ct. 3218 (2010), contending "that the claims of the [patents] contain abstract ideas and fail the machine or transformation test." Defendant contended that the plaintiff's patents failed the "machine" prong of the Bilski test because the claims only require aspects of a general purpose computer. In addition, the defendant contended that the transformation test also could not be met because the transfer of data regarding insurance cases from one electronic file to another does not transform physical objects to another state or thing. According to the defendant, all of the claims reflect field of use restrictions or insignificant post-solution activity and, therefore, constitute unpatentable abstract ideas under ยง 101.

In response, the plaintiff contended that the Supreme Curt specifically recognized computer software as patent-eligible subject matter and questioned the utility of the machine or transformation test as applied to Information Age inventions. The plaintiff then argued that the claims are not abstract ideas, but rather specific applications in computer software directed to teaching a human how to build the software, not how to process an insurance claim.

After noting that the district court had previously found the patents invalid prior to Bilski, the district court noted that, although the Supreme Court suggested the machine or transformation test is of dubious utility in the Information Age, the Supreme Court acknowledged that the test remains an "important clue" in determining patentability. The district court then went on to use the machine or transformation test as an "important clue." "Using the court's previous machine or transformation determination as an 'important clue' in the analysis, the court must now determine whether the claims as a whole convey an unpatentable, abstract idea."

The district court focused the inquiry on whether the application of the abstract idea in the patent is specific and/or limited because inventions with specific applications are less likely to be abstract. The district court then found that the patents "are directed to abstract and, therefore, unpatentable, methods and systems for generating file notes and tasks to be performed for insurance claims. . . . The patents are directed to concepts for organizing data rather than to specific devices or systems, and limiting the claims to the insurance industry does not specify the claims sufficiently to allow for their survival."
Accordingly, the district court granted summary judgment and found that the patents were invalid.

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This decision is notable in that it shows the district courts are not necessarily changing their analysis after the Bilski decision. The district courts appear willing to continue to employ the machine or transformation test and to use it to invalidate patents after Bilski, despite the Supreme Court's caution regarding the limitations of the test in the Information Age. The decision here is also notable in focusing on whether the patent's abstract idea can be limited or is specific in application. It is likely that other patent holders will now attempt to argue that their abstract ideas are limited and specific and, therefore, patentable under Bilski. We can expect that there will more decisions and more law from the Federal Circuit as this issue develops in the future.

Accenture Global Services GmbH, et. al. v. Guidewire Software Inc., Case No. 1-07-cv-00826 (D. Del. May 31, 2011)

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The authors of www.PatentLawyerBlog.com are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.