In a CBM petition filed by petitioners PNC Bank, U.S. Bank, and Bancorp, the petitioners sought review of U.S. Patent No. 7,631,191, which claims a method of authenticating a web page. The petition challenged the validity of claims under Section 101, 103 and 112.
After finding that the '191 patent was a covered business method patent, the Board turned to the challenge under Section 101. Reciting the well-known categories of patentable subject matter under Section 101, including "process, machine, method of manufacture, or composition of matter," the Board further explained that "[t]here are, however, three limited, judicially-created exceptions to the broad categories of patent-eligible subject in § 101: laws of nature; natural phenomena; and abstract ideas. Mayo Collaborative Servs. V. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012)." Citing Bilski v. Kappos, 130 S. Ct. 3218, 3222, the Board explained that this test for patent-eligible under § 101 is "not amenable to bright-line categorical rules."
The Board began its analysis by reciting the Supreme Court's test for analyzing this issue:
In Alice Corp. Pty, Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014), the Supreme Court reiterated the framework set forth previously in Mayo, "for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of these concepts." Alice, 134 S. Ct. at 2355. The first step in the analysis is to "determine whether the claims at issue are directed to one of those patent-ineligible concepts." Id. If they are directed to a patent-ineligible concept, the second step in the analysis is to consider the elements of the claims "individually and 'as an ordered combination'" to determine whether there are additional elements that "'transform the nature of the claim' into a patent-eligible application." Id. (quoting Mayo, 132 S. Ct. at 1291, 1297). In other words, the second step is to "search for 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 on the [ineligible concept] itself.'" Id. (alteration in original) (quoting Mayo, 132 S. Ct. at 1294).
Turning to the claims at issue, the Board first noted that the claims as a whole must be examined to determine whether a method or process recites an abstract idea. The Board stated that "[c]laim 1, as a whole as a whole, relates to a computer-implemented method to transform data in a particular manner--by inserting an authenticity key to create formatted data, enabling a particular type of computer file to be located and from which an authenticity stamp is retrieved." The Board concluded that "[o]n its face, there is nothing immediately apparent about these physical steps that would indicate the claim is directed to an abstract idea."
The petitioner argued that claim 1 was nothing more than an abstract idea because it does nothing more than computerizing a "centuries old practice of placing a trusted stamp or seal on a document to indicate the authenticity of the document." The Board rejected petitioner's argument because it did not "tie adequately the claim language to the purported abstract concept of placing a trusted stamp or seal on a document." The Board further explained that "[a]lthough the claim recites retrieving an authenticity stamp, the claim does not recite placing the stamp, much less doing so on a paper document, presumably as 'centuries-old' practices have done. Similarly, the claim does not recite a paper document. Moreover, claim 2, which depends from claim 1, additionally recites that the formatted data is a web page, not a paper document." The Board also found that, unlike Alice, there was insufficient evidentiary support that placing of a trusted stamp or seal on a document is "a fundamental economic practice" or a "building block of the modern economy." (citing Alice, 134 S. Ct. at 2356).
The Board also rejected the petitioner's argument, based on the Federal Circuit's CyberSource and Grams decisions, that claim 1 relates to nothing more than manipulating and collecting data. In doing so, the Board distinguished claim 1 from the claims in CyberSource and Grams:
The Federal Circuit concluded, however, that the claims at issue were to a patent- ineligible abstract idea, not merely because of the collection, organization, and manipulation of data, but because all the claimed steps could be performed in the human mind, which is not the case here. See id. at 1373, 1376-77. Rather, the challenged claims specifically recite "transforming . . .received data by inserting an authenticity key to create formatted data," thereby authenticating a web page with an authenticity stamp. Thus, the claims require a fundamental change to the data; a change that cannot be performed in the human mind.
The Board concluded that it did not have to address the second prong of Mayo because it determined that the claims were drawn to patent eligible subject matter.
Finally, the Board turned to the petitioner's second argument that the claims were ineligible because they did not satisfy the machine or transformation test. That is, the petitioner argued that the transforming limitation in claim 1 was merely manipulation or reorganization of data, which is not patent eligible. In rejecting this argument, the Board first noted that the machine or transformation test is only a useful tool and not the sole test for whether an invention is patent eligible. Turning to the claim language, the Board then held that "[w]e are not persuaded that "transforming . . . received data by inserting an authenticity key to create formatted data" fails to satisfy the transformation prong. The claim language recites "transforming" one thing ("received data") "to create" something else ("formatted data") and further recites a particular manner of transforming ("by inserting an authenticity key"). Because the Board found that the claim satisfied the transformation test, it did not find it necessary to address the machine test.
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This decision highlights that in determining the subject matter eligibility under § 101, it is important to focus on the claim as a whole. And, in doing so, it is important to tie the claim language to purported abstract idea when determining whether the claim is nothing more than an unpatentable fundamental concept. Claims drawn to computer-implemented methods that transform data or information in a specific way would suggest that the claim is not directed to an abstract idea, and thus is patentable. PNC Bank, National Association, U.S. Bank, National Association, and U.S. Bancorp v. Secure Axcess, LLC., Case IPR2014-00100 (PTAB Sept. 9, 2014) (Paper 10) (A.P.J. Benoit)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. The authors represent inventors, patent owners and technology companies in patent licensing and litigation in U.S. District Courts and in the United States Patent and Trademark Office, including numerous IPRs currently pending before the PTAB. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Greg Cordrey at 949.623.7236 or GCordrey@jmbm.com.