Software Claim Addressing Concepts Long Known in Other Fields and Lacking Other Inventive Concept Is Not Patent Eligible

Intellectual Ventures I LLC v. Capital One Bank (USA), N.A., ___F.3d ___ (Fed. Cir. July 6, 2015) (DYK, Reyna, Chen) (E.D. Va.: Trenga) (5 of 5 stars)

Federal Circuit affirms judgment that two patents' claims were unpatentable under § 101, and affirms a third patent's claim construction (and the resulting noninfringement judgment).

The first patent's claims were to a method of determining if a user has reached a pre-set spending limit and notifying them if so. Under the first step of Alice Corp. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014), these claims recited an abstract idea because they addressed the basic concept of budgeting. Under Alice's second step, the claims contained no inventive concept because they merely recited performance of generic computer tasks to apply the idea and the calculations could be done with pencil and paper.

The second patent's claims were to customizing web pages "as a function of navigation history and information known about the user." Slip op. at 10. Under Alice's first step, this addressed an abstract idea because it would cover "a fundamental practice long prevalent in our system." Id. at 11 (quoting Alice). Tailoring information based on customer characteristics (e.g., the customer's location) is an abstract idea seen, for example, in the tailoring of newspaper inserts. Similarly, tailoring based on the time of day (which Intellectual Ventures did not dispute was a species of "navigation data") is another abstract idea, as such techniques have long been used to tailor television advertising. Under Alice's second step, the claims had no inventive concept to support patent eligibility, as they did no more than add computer functionality. Though Intellectual Ventures contended that the claims required potentially-inventive "real time" presentation of data, the claims recited no such limitation. A claimed "interactive interface" also did not confer patent eligibility, as it addressed merely a generic web server. Thus, the claims addressed patent-ineligible subject matter. Unlike DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), where the claims "provided an Internet-based solution to solve a problem unique to the Internet that (1) did not foreclose other ways of solving the problem, and (2) recited a specific series of steps that resulted in a departure from the routine and conventional sequence of events after the click of a hyperlink advertisement," the claims here "do not address problems unique to the Internet, so DDR has no applicability." Slip op. at 15.

The third patent was to a method of organizing digital images that came from hard copy prints. The claim required scanning prints grouped into categories, "each category separated by an associated machine readable instruction form." This phrase required forms in a hard-copy format, for three reasons. First, the claim language itself suggested physical separation of the prints with the forms. Second, the specification consistently described the form as a hard-copy document. Though there was a reference in the specification to providing users with the form "via HTML," the description later described printing that form to hard-copy. Third, during prosecution the applicant described the scanning step as "clearly a physical step." Under that construction, the plaintiff had stipulated to noninfringement.