Page 1
`
` 170BXVII(K)2 Standard of Review
` 170Bk3576 Procedural Matters
` 170Bk3604 Judgment
` 170Bk3604(4) k. Summary
`judgment. Most Cited Cases
` (Formerly 170Bk776)
`
`
`324.5
`
`Court of Appeals reviews grants of summary
`judgment de novo. Fed.Rules Civ.Proc.Rule 56, 28
`U.S.C.A.
`
`[2] Patents 291
`
`291 Patents
` 291XII Infringement
` 291XII(B) Actions
` 291k324 Appeal
` 291k324.5 k. Scope and extent of review
`in general. Most Cited Cases
`
`
`7.14
`
`Issues of patent-eligible subject matter are ques-
`tions of law and are reviewed without deference by
`Court of Appeals. 35 U.S.C.A. § 101.
`
`[3] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7.14 k. Particular processes or methods
`as constituting invention. Most Cited Cases
`
`
`Method claim for verifying the validity of a credit
`card transaction over the Internet was drawn to un-
`patentable mental processes and was therefore invalid;
`all of claim's method steps could be performed in the
`human mind, or by a human using a pen and paper,
`claim's scope was not limited to any particular fraud
`detection algorithm, and no algorithms were disclosed
`
`
`
`West Headnotes
`
`3604(4)
`
`
`[1] Federal Courts 170B
`
`170B Federal Courts
` 170BXVII Courts of Appeals
` 170BXVII(K) Scope and Extent of Review
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`
`
`
`
`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`
`
`
`United States Court of Appeals,
`Federal Circuit.
`CYBERSOURCE CORPORATION, Plain-
`tiff–Appellant,
`v.
`RETAIL DECISIONS, INC., Defendant–Appellee.
`
`No. 2009–1358.
`Aug. 16, 2011.
`
`
`Background: Assignee of patent for method and
`system for detecting fraud in credit card transaction
`between consumer and merchant over Internet brought
`infringement action against competitor. Competitor
`moved for summary judgment of invalidity. The
`United States District Court for the Northern District
`of California, Marilyn H. Patel, J., 620 F.Supp.2d
`1068, granted motion. Assignee appealed.
`
`Holdings: The Court of Appeals, Dyk, Circuit Judge,
`held that:
`(1) claimed method for verifying the validity of credit
`card transaction over the Internet was drawn to un-
`patentable mental process, and
`(2) claim reciting computer readable medium con-
`taining program instructions for executing verification
`method was drawn to unpatentable mental process.
`
`
`Affirmed.
`
`
`
`
`
`
`
`1
`
`SAMSUNG-1031
`
`

`
`
`
`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`in patent's specification, rather, the broad scope of
`claim extended to essentially any method of detecting
`credit card fraud based on information relating past
`transactions to a particular Internet address. 35
`U.S.C.A. § 101.
`
`[4] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7 k. Process or methods in general.
`Most Cited Cases
`
`
`7
`
`7
`
`A method that can be performed by human
`thought alone is merely an abstract idea and is not
`patent-eligible. 35 U.S.C.A. § 101.
`
`[5] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7 k. Process or methods in general.
`Most Cited Cases
`
`
`Methods which can be performed entirely in the
`human mind are unpatentable not because there is
`anything wrong with claiming mental method steps as
`part of a process containing non-mental steps, but
`rather because computational methods that can be
`performed entirely in the human mind are the types of
`methods that embody the basic tools of scientific and
`technological work that are free to all men and re-
`served exclusively to none. 35 U.S.C.A. § 101.
`
`[6] Patents 291
`
`291 Patents
` 291IV Applications and Proceedings Thereon
` 291k101 Claims
`
`101(11)
`
`Page 2
`
` 291k101(11) k. Process or method claims.
`Most Cited Cases
`
`
`A “Beauregard claim” is a claim to a computer
`readable medium, such as a disk, hard drive, or other
`data storage device, containing program instructions
`for a computer to perform a particular process. 35
`U.S.C.A. § 101.
`
`[7] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7.14 k. Particular processes or methods
`as constituting invention. Most Cited Cases
`
`
`7.14
`
`Claim reciting computer readable medium con-
`taining program instructions for executing method for
`verifying the validity of a credit card transaction over
`the Internet was drawn to unpatentable mental process
`and was therefore invalid; verification method was
`itself an unpatentable abstract idea, and merely re-
`quiring a computer to perform the method did not
`change method's basic character. 35 U.S.C.A. § 101.
`
`Patents 291
`
`291 Patents
` 291XIII Decisions on the Validity, Construction,
`and Infringement of Particular Patents
` 291k328 Patents Enumerated
` 291k328(2) k. Original utility. Most Cited
`Cases
`
`
`328(2)
`
`6,029,154. Invalid.
`
`
`*1367 J. Michael Jakes, Finnegan, Henderson,
`Farabow, Garrett & Dunner, LLP, of Washington, DC,
`argued for plaintiff-appellant. With him on the brief
`were Erika H. Arner and Justin R. Lowery. Of counsel
`on the brief was Marc J. Pernick, Morrison & Forester,
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`2
`
`

`
`
`
`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`LLP, of Palo Alto, CA.
`
`Scott J. Bornstein, Greenberg Traurig, LLP, of New
`York, NY argued for defendant-appellee. With him on
`the brief was Allan A. Kassenoff. Of counsel was
`James W. Soong, of E. Palo Alto, CA.
`
`Before BRYSON, DYK, and PROST, Circuit Judges.
`
`DYK, Circuit Judge.
`Plaintiff-appellant CyberSource Corporation
`(“CyberSource”) appeals from a decision of the
`United States District Court for the Northern District
`of California. The district court granted summary
`judgment of invalidity of claims 2 and 3 of U.S. Patent
`No. 6,029,154 (“'154 patent”) under 35 U.S.C. § 101
`for failure to recite patent-eligible subject matter. See
`CyberSource Corp. v. Retail Decisions, Inc., 620
`F.Supp.2d 1068 (N.D.Cal.2009). We affirm.
`
`
`BACKGROUND
`CyberSource is the owner by assignment of the
`'154 patent, which recites a “method and system for
`detecting fraud in a credit card transaction between [a]
`consumer and a merchant over the Internet.” '154
`patent, at [57]. The ' 154 patent's specification ex-
`plains that prior art credit card fraud detection sys-
`tems—which generally rely on billing addresses and
`personal identification information—work well for
`“face-to-face” transactions and transactions where
`“the merchant is actually shipping a package ... to the
`address of a customer.” Id. col.1 ll.21–24. But for
`online sales where the product purchased is down-
`loadable content, the patent explains, “address and
`identity information are not enough to adequately
`verify that the customer who is purchasing the goods
`is actually the owner of the credit card.” Id. col.1
`ll.28–30.
`
`
`The '154 patent purports to solve this problem by
`using “Internet address” information (IP addresses,
`MAC addresses, e-mail addresses, etc.) to determine
`
`Page 3
`
`whether an Internet address relating to a particular
`transaction “is consistent with other Internet addresses
`[that have been] used in *1368 transactions utilizing
`[the same] credit card.” Id. col.3 ll.15–16. As we
`discuss in detail below, the claims of the '154 patent
`are broad and essentially purport to encompass any
`method or system for detecting credit card fraud which
`utilizes information relating credit card transactions to
`particular “Internet address [es].” FN1
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`FN1. Claim 3, as amended during reexami-
`nation, reads:
`
`3. A method for verifying the validity of a
`credit card transaction over the Internet
`comprising the steps of:
`
`information about other
`a) obtaining
`transactions that have utilized an Internet
`address that is identified with the [ ] credit
`card transaction;
`
`b) constructing a map of credit card num-
`bers based upon the other transactions and;
`
`c) utilizing the map of credit card numbers
`to determine if the credit card transaction is
`valid.
`
`J.A. 32 ('154 Patent Reexamination Cer-
`tificate), col.2 ll.38–47.
`
`Claim 2, as amended during reexamina-
`tion, reads:
`
`2. A computer readable medium contain-
`ing program instructions for detecting
`fraud in a credit card transaction between a
`consumer and a merchant over the Internet,
`wherein execution of the program instruc-
`tions by one or more processors of a
`computer system causes the one or more
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`3
`
`

`
`
`
`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`processors to carry out the steps of:
`
`
`
`a) obtaining credit card information relat-
`ing to the transactions from the consumer;
`and
`
`b) verifying the credit card information
`based upon values of plurality of parame-
`ters, in combination with information that
`identifies the consumer, and that may
`provide an indication whether the credit
`card transaction is fraudulent,
`
`wherein each value among the plurality of
`parameters is weighted in the verifying
`step according to an importance, as de-
`termined by the merchant, of that value to
`the credit card transaction, so as to provide
`the merchant with a quantifiable indication
`of whether the credit card transaction is
`fraudulent,
`
`wherein execution of the program instruc-
`tions by one or more processors of a
`computer system causes that one or more
`processors to carry out the further steps of;
`
`[a] obtaining information about other
`transactions that have utilized an Internet
`address that is identified with the credit
`card transaction;
`
`[b] constructing a map of credit card
`numbers based upon the other transactions;
`and
`
`[c] utilizing the map of credit card numbers
`to determine if the credit card transaction is
`valid.
`
`Id. col.2 ll.9–37.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Page 4
`
`
`
`CyberSource brought suit against Retail Deci-
`sions, Inc. (“Retail Decisions”) on August 11, 2004,
`alleging infringement of the '154 patent. Retail Deci-
`sions thereafter initiated an ex parte reexamination of
`the '154 patent, and the district court stayed its pro-
`ceedings while the U.S. Patent and Trademark Office
`(“PTO”) conducted the examination. The district court
`resumed proceedings after the PTO reissued the '154
`patent with amended claims on August 5, 2008. On
`October 30, 2008, this court decided In re Bilski, 545
`F.3d 943 (Fed.Cir.2008) (en banc). Retail Decisions
`thereafter moved for summary judgment of invalidity
`under 35 U.S.C. § 101. After briefing and a hearing,
`the district court found that claim 3 recited “an un-
`patentable mental process for collecting data and
`weighing values,” which did “not become patentable
`by tossing in references to [I]nternet commerce.”
`CyberSource, 620 F.Supp.2d at 1077. The court fur-
`ther found with respect to claim 2 that “simply ap-
`pending ‘A computer readable media including pro-
`gram instructions ...’ to an otherwise non-statutory
`process claim is insufficient to make it statutory.” Id.
`at 1080. The district court thus granted summary
`judgment of invalidity. Id. at 1078.
`
`
`CyberSource appealed to this court in April 2009.
`After
`the Supreme Court granted certiorari
`in
`*1369Bilski v. Doll, 556 U.S. 1268, 129 S.Ct. 2735,
`174 L.Ed.2d 246 (2009), we granted CyberSource's
`motion to stay the proceedings. Briefing was resumed
`on October 28, 2010, following the Supreme Court's
`decision. See Bilski v. Kappos, ––– U.S. ––––, 130
`S.Ct. 3218, 177 L.Ed.2d 792 (2010). We have juris-
`diction pursuant to 28 U.S.C. § 1295(a)(1).
`
`
`DISCUSSION
`[1][2] We review grants of summary judgment de
`novo. Tokai Corp. v. Easton Enters., Inc., 632 F.3d
`1358, 1366 (Fed.Cir.2011). Issues of patent-eligible
`subject matter are questions of law and are reviewed
`without deference. Research Corp. Techs., Inc. v.
`Microsoft Corp., 627 F.3d 859, 867 (Fed.Cir.2010).
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`4
`
`

`
`
`
`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`
`
`I
`Two claims of the '154 patent are at issue in this
`case. Claim 3 recites a process for verifying the va-
`lidity of credit card transactions over the Internet. See
`J.A. 32 ('154 Patent Reexamination Certificate), col.2
`ll.38–47. Claim 2 recites a computer readable medium
`containing program instructions for executing the
`same process. See id. col.2 ll.9–37.
`
`
`The categories of patent-eligible subject matter
`are set forth in § 101, which provides:
`
`
`Whoever invents or discovers any new and useful
`process, machine, manufacture, or composition of
`matter, or any new and useful improvement thereof,
`may obtain a patent therefor, subject to the condi-
`tions and requirements of this title.
`
`
`
`35 U.S.C. § 101. Section 100(b) of the Patent Act
`defines the “process” category tautologically, stating
`that:
`The term “process” means process, art or method,
`and includes a new use of a known process, ma-
`chine, manufacture, composition of matter, or ma-
`terial.
`
`
`
`35 U.S.C. § 100(b). “In choosing such expansive
`terms ... modified by the comprehensive ‘any,’ Con-
`gress plainly contemplated that the patent laws would
`be given wide scope.” Bilski, 130 S.Ct. at 3225
`(quoting Diamond v. Chakrabarty, 447 U.S. 303, 308,
`100 S.Ct. 2204, 65 L.Ed.2d 144 (1980)).
`
`
`In interpreting § 101, this court concluded in
`Bilski that the “machine-or-transformation” test was
`the appropriate test for the patentability of process
`claims. 545 F.3d at 943. Thus, we held that a claimed
`process would only be “patent-eligible under § 101 if:
`(1) it is tied to a particular machine or apparatus; or (2)
`it transforms a particular article into a different state or
`thing.” Id. at 954. We further held that, to satisfy the
`
`Page 5
`
`machine prong of the test, the use of a machine “must
`impose meaningful limits on the claim's scope.” Id. at
`961. Applying this test, we found that Bilski's claimed
`“method of hedging risk in the field of commodities
`trading” was unpatentable under § 101. Id. at 949,
`963–66. The Supreme Court affirmed our Bilski deci-
`sion, but in doing so it rejected use of the ma-
`chine-or-transformation test as the exclusive test for
`the patentability of a claimed process. See Bilski, 130
`S.Ct. at 3226. While the “machine-or-transformation
`test is a useful and important clue,” the Court stated, it
`“is not the sole test for deciding whether an invention
`is a patent-eligible ‘process.’ ” Id. at 3227. The Court
`declined to “define further what constitutes a patent-
`able ‘process,’ beyond pointing to the definition of
`that term provided in § 100(b) and looking to the
`guideposts in [the Court's precedents].” Id. at 3232.
`“The Court's precedents provide three specific excep-
`tions to § 101's broad patent-eligibility principles:
`‘laws of nature, physical phenomena, and abstract
`ideas.’ ” Id. at 3225 (quoting Diamond, 447 U.S. at
`309, 100 S.Ct. 2204). The Court noted that these ju-
`dicially created*1370 exceptions “have defined the
`reach of the statute as a matter of statutory stare de-
`cisis going back 150 years,” and are “ ‘part of the
`storehouse of knowledge of all men ... free to all men
`and reserved exclusively to none.’ ” Id. (quoting Funk
`Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127,
`130, 68 S.Ct. 440, 92 L.Ed. 588 (1948)). In holding
`that the machine-or-transformation test is not the ex-
`clusive test for a process's patent-eligibility, the Su-
`preme Court expressly left open the door for “the
`Federal Circuit's development of other limiting criteria
`that further the purposes of the Patent Act and are not
`inconsistent with its text.” Id. at 3231.
`
`
`II
`[3] We first address claim 3 of the '154 patent,
`which recites a method for verifying the validity of a
`credit card transaction over the Internet. Claim 3, as
`amended during reexamination, reads in its entirety:
`
`
`3. A method for verifying the validity of a credit
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`5
`
`

`
`
`
`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`card transaction over the Internet comprising the
`steps of:
`
`
`
`a) obtaining information about other transactions
`that have utilized an Internet address that is iden-
`tified with the [ ] credit card transaction;
`
`b) constructing a map of credit card numbers
`based upon the other transactions and;
`
`c) utilizing the map of credit card numbers to
`determine if the credit card transaction is valid.
`
`
`
`
`
`
`
`J.A. 32 ('154 Patent Reexamination Certificate),
`col.2 ll.38–47. CyberSource acknowledges that the
`“Internet address” recited in step (a) of claim 3 “may
`be, for example, an Internet protocol (IP) address or an
`e-mail address for the particular credit card transac-
`tion.” Appellant's Br. 7. CyberSource further concedes
`that the “map of credit card numbers” recited in step
`(b) can be as simple as a list of credit card transactions
`relating to a particular IP address. See Appellant's Br.
`9. Finally, step (c) does not limit claim 3 to any spe-
`cific fraud detection formula or mathematical algo-
`rithm, but rather broadly purports to encompass any
`means of “utilizing the map of credit card numbers to
`determine if the credit card transaction is valid.” J.A.
`32, col.2 ll.46–47.
`
`
`The district court found that claim 3 fails to meet
`either prong of the machine-or-transformation test.
`CyberSource, 620 F.Supp.2d at 1078. We agree. As
`the district court correctly held, the method of claim 3
`simply requires one to “obtain and compare intangible
`data pertinent to business risks.” Id. at 1073. The mere
`collection and organization of data regarding credit
`card numbers and Internet addresses is insufficient to
`meet the transformation prong of the test, and the plain
`language of claim 3 does not require the method to be
`performed by a particular machine, or even a machine
`at all.
`
`
`Page 6
`
`We are not persuaded by the appellant's argument
`that the claimed method is tied to a particular machine
`because it “would not be necessary or possible without
`the Internet.” Appellant's Br. 42. Regardless of
`whether “the Internet” can be viewed as a machine, it
`is clear that the Internet cannot perform the fraud
`detection steps of the claimed method. Moreover,
`while claim 3 describes a method of analyzing data
`regarding Internet credit card transactions, nothing in
`claim 3 requires an infringer to use the Internet to
`obtain that data (as opposed to obtaining the data from
`a pre-compiled database). The Internet is merely de-
`scribed as the source of the data. We have held that
`mere “[data-gathering] step[s] cannot make an oth-
`erwise nonstatutory claim statutory.” In re Grams, 888
`F.2d 835, 840 (Fed.Cir.1989) (quoting In re Meyer,
`688 F.2d 789, 794 (CCPA 1982)).
`
`
`*1371 Thus, the district court did not err in
`holding
`that claim 3 fails
`to meet
`the ma-
`chine-or-transformation test. However, our analysis
`does not end
`there. In holding
`that
`the ma-
`chine-or-transformation test “is not the sole test for
`deciding whether an invention is a patent-eligible
`process,” Bilski, 130 S.Ct. at 3227, the Supreme Court
`has made clear that a patent claim's failure to satisfy
`the machine-or-transformation test is not dispositive
`of the § 101 inquiry. Nonetheless, we find that claim 3
`of the '154 patent fails to recite patent-eligible subject
`matter because it is drawn to an unpatentable mental
`process—a subcategory of unpatentable abstract ide-
`as.
`
`
`The Supreme Court has stated that “[p]henomena
`of nature, though just discovered, mental processes,
`and abstract intellectual concepts are not patentable, as
`they are the basic tools of scientific and technological
`work.” Gottschalk v. Benson, 409 U.S. 63, 67, 93 S.Ct.
`253, 34 L.Ed.2d 273 (1972) (emphasis added). In
`Benson, the patent at issue claimed a method of pro-
`gramming a general-purpose computer to convert
`binary-coded decimal (“BCD”) numbers into pure
`binary through the use of a mathematical algorithm.
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`6
`
`

`
`
`
`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`Id. at 65, 93 S.Ct. 253. The Court focused in part on
`the mental character of the claimed process, stating:
`
`
`The conversion of BCD numerals to pure binary
`numerals can be done mentally.... The method
`sought to be patented varies the ordinary arithmetic
`steps a human would use by changing the order of
`the steps, changing the symbolism for writing the
`multiplier used in some steps, and by taking subto-
`tals after each successive operation. The mathe-
`matical procedures can be carried out in existing
`computers long in use, no new machinery being
`necessary. And, as noted, they can also be per-
`formed without a computer.
`
`
`
` Id. at 67, 93 S.Ct. 253. Thus, in finding that the
`process in Benson was not patent-eligible, the Su-
`preme Court appeared to endorse the view that
`methods which can be performed mentally, or which
`are the equivalent of human mental work, are un-
`patentable abstract ideas—the “basic tools of scien-
`tific and technological work” that are open to all. Id.
`
`
`The Supreme Court reaffirmed and extended its
`Benson holding in the case of Parker v. Flook, 437
`U.S. 584, 98 S.Ct. 2522, 57 L.Ed.2d 451 (1978). The
`patent in Flook claimed a method for calculating and
`updating the values of “alarm limits” for alarms that
`monitor process variables (such as temperature) dur-
`ing
`the catalytic chemical conversion of hy-
`dro-carbons. Id. at 585–86, 98 S.Ct. 2522. The “alarm
`limits” were threshold values which, if exceeded,
`would trigger a warning alarm to sound. The Court
`characterized the invention as “simply provid[ing] a
`new and presumably better method for calculating
`alarm limit values.” Id. at 594–95, 98 S.Ct. 2522. The
`Court noted that the calculations, while “primarily
`useful for computerized [applications],” could still “be
`made [using a] pencil and paper.” Id. at 586, 98 S.Ct.
`2522. The Court rejected the notion that the recitation
`of a practical application for the calculation could
`alone make the invention patentable, stating that any
`“competent draftsman could attach some form of
`
`Page 7
`
`post-solution activity to almost any mathematical
`formula.” Id. at 590, 98 S.Ct. 2522. The Court thus
`found the claimed invention unpatentable.
`
`
`Following the Supreme Court, we have similarly
`held that mental processes are not patent-eligible
`subject matter because the “application of [only] hu-
`man intelligence to the solution of practical problems
`is no more than a claim to a fundamental principle.”
`Bilski, 545 F.3d at 965 (quotation marks omitted); see
`also *1372id. at 952, 960–61. After our en banc deci-
`sion in Bilski, this court—relying on Benson, Flook,
`and our prior decisions—noted that we have consist-
`ently “refused to find processes patentable when they
`merely claimed a mental process standing alone and
`untied to another category of statutory subject mat-
`ter[,] even when a practical application was claimed.”
`In re Comiskey, 554 F.3d 967, 980 (Fed.Cir.2009). FN2
`We concluded:
`
`
`FN2. See also In re Schrader, 22 F.3d 290,
`291 (Fed.Cir.1994) (holding unpatentable a
`“method constitut[ing] a novel way of con-
`ducting auctions” to maximize total sales
`revenue); In re Warmerdam, 33 F.3d 1354,
`1355, 1360 (Fed.Cir.1994) (holding un-
`patentable a process for controlling objects to
`avoid collisions which described “nothing
`more than the manipulation of basic mathe-
`matical constructs, the paradigmatic ‘abstract
`idea’ ”); Grams, 888 F.2d at 836, 840–41
`(holding unpatentable “a method of diag-
`nosing an abnormal condition in an individ-
`ual” that comprised performing clinical tests
`and thinking about the results); Meyer, 688
`F.2d at 795–96 (holding unpatentable “a
`mental process that a neurologist should
`follow”); In re Maucorps, 609 F.2d 481, 482,
`486 (CCPA 1979) (holding unpatentable a
`method of “optimizing the organization of
`sales representatives in a business”).
`
`[T]he patent statute does not allow patents on par-
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`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`ticular systems that depend for their operation on
`human intelligence alone, a field of endeavor that
`both the framers and Congress intended to be be-
`yond the reach of patentable subject matter.... [I]t is
`established that the application of human intelli-
`gence to the solution of practical problems is not in
`and of itself patentable.
` Id. Thus, because the method of arbitration claims
`in Comiskey essentially sought “to patent the use of
`human intelligence in and of itself,” the claims were
`drawn to abstract ideas and were invalid under §
`101. Id. at 981.
`
`
`
`It is clear that unpatentable mental processes are
`the subject matter of claim 3. All of claim 3's method
`steps can be performed in the human mind, or by a
`human using a pen and paper. Claim 3 does not limit
`its scope to any particular fraud detection algorithm,
`and no algorithms are disclosed in the ' 154 patent's
`specification. Rather, the broad scope of claim 3 ex-
`tends to essentially any method of detecting credit
`card fraud based on information relating past transac-
`tions to a particular “Internet address,” even methods
`that can be performed in the human mind.
`
`
`First, step (a)—which requires “obtaining infor-
`mation about other transactions that have utilized an
`Internet address that is identified with the [ ] credit
`card transaction”—can be performed by a human who
`simply reads records of Internet credit card transac-
`tions from a preexisting database. J.A. 32, col.2
`ll.40–42. While the '154 patent's specification dis-
`cusses referencing “a database of Internet addresses,”
`'154 patent, col.3 ll.13–14, CyberSource concedes that
`claim 3 does not cover the initial creation of the da-
`tabase. Oral Arg. at 1:15–1:30, available at http://
`www. cafc. uscourts. gov/ oral- argument- recordings/
`all/ cybersource. html. Moreover, as discussed above,
`even if some physical steps are required to obtain
`information from the database (e.g., entering a query
`via a keyboard, clicking a mouse), such data-gathering
`steps cannot alone confer patentability. Grams, 888
`F.2d at 839–40.
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`Second, a person may “construct[ ] a map of
`credit card numbers” as required by step (b) by writing
`down a list of credit card transactions made from a
`particular IP address. J.A. 32, col.2 ll.43–44. There is
`no language in claim 3 or in the '154 patent's specifi-
`cation that requires the constructed “map” to consist of
`anything more than a list of a few credit card transac-
`tions. This is readily apparent from the appellant's
`brief, in which CyberSource *1373 provides a sample
`“map” that merely consists of four listed credit card
`transactions denoted by their dates, times, cardholder
`names, card numbers, IP addresses, transaction
`amounts, and shipping addresses. See Appellant's Br.
`9.
`
`
`Finally, step (c)—which requires “utilizing the
`map of credit card numbers to determine if the credit
`card transaction is valid”—is so broadly worded that it
`encompasses literally any method for detecting fraud
`based on the gathered transaction and Internet address
`data. J.A. 32, col.2 ll.45–46. This necessarily includes
`even logical reasoning that can be performed entirely
`in the human mind. For example, a person could lit-
`erally infringe step (c) by identifying a likely instance
`of fraud based on the simple observation that numer-
`ous transactions using different credit cards, having
`different user names and billing addresses, all origi-
`nated from the same IP address. Indeed, Cyber-
`Source's CEO admitted that, before CyberSource
`created a computer implemented fraud detection sys-
`tem, “[w]e could see just by looking that more than
`half of our orders were fraudulent.” J.A. 375.
`
`
`[4][5] Thus, claim 3's steps can all be performed
`in the human mind. Such a method that can be per-
`formed by human thought alone is merely an abstract
`idea and is not patent-eligible under § 101. Methods
`which can be performed entirely in the human mind
`are unpatentable not because there is anything wrong
`with claiming mental method steps as part of a process
`containing non-mental steps,FN3 but rather because
`computational methods which can be performed en-
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`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`tirely in the human mind are the types of methods that
`embody the “basic tools of scientific and technologi-
`cal work” that are free to all men and reserved exclu-
`sively to none. Benson, 409 U.S. at 67, 93 S.Ct. 253.
`
`
`FN3. See In re Abele, 684 F.2d 902, 908
`(CCPA 1982) (finding a claim patentable that
`included both mental steps and physical
`steps).
`
`
`
`III
`[6][7] We turn next to claim 2 of the '154 patent,
`which recites a so-called “Beauregard claim.” A
`Beauregard claim—named after In re Beauregard, 53
`F.3d 1583 (Fed.Cir.1995)—is a claim to a computer
`readable medium (e.g., a disk, hard drive, or other data
`storage device) containing program instructions for a
`computer to perform a particular process. Claim 2, as
`amended during reexamination, reads in its entirety:
`
`
`2. A computer readable medium containing pro-
`gram instructions for detecting fraud in a credit card
`transaction between a consumer and a merchant
`over the Internet, wherein execution of the program
`instructions by one or more processors of a com-
`puter system causes the one or more processors to
`carry out the steps of:
`
`a) obtaining credit card information relating to the
`transactions from the consumer; and
`
`b) verifying the credit card information based
`upon values of plurality of parameters, in com-
`bination with information that identifies the
`consumer, and that may provide an indication
`whether the credit card transaction is fraudulent,
`
`wherein each value among the plurality of pa-
`rameters is weighted in the verifying step ac-
`cording to an importance, as determined by the
`merchant, of that value to the credit card transac-
`tion, so as to provide the merchant with a quanti-
`
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`fiable indication*1374 of whether the credit card
`transaction is fraudulent,
`
`wherein execution of the program instructions by
`one or more processors of a computer system
`causes that one or more processors to carry out the
`further steps of;
`
`[a] obtaining information about other transac-
`tions that have utilized an Internet address that
`is identified with the credit card transaction;
`
`[b] constructing a map of credit card numbers
`based upon the other transactions; and
`
`[c] utilizing the map of credit card numbers to
`determine if the credit card transaction is valid.
`
`
`
`
`
`
`
`
`
`
`
`J.A. 32 ('154 Patent Reexamination Certificate),
`col.2 ll.9–37 (emphases added). While claim 2 con-
`tains somewhat redundant language, it is clear from
`the emphasized text that claim 2 recites nothing more
`than a computer readable medium containing program
`instructions for executing the method of claim 3.
`
`
`As discussed above, we found claim 3 to be un-
`patentable because it is drawn to a mental pro-
`cess—i.e., an abstract idea. The method underlying
`claim 2 is clearly the same method of fraud detection
`recited in claim 3. Nonetheless, CyberSource contends
`that claim 2 should be patentable. CyberSource's main
`argument is that coupling the unpatentable mental
`process recited in claim 3 with a manufacture or ma-
`chine renders it patent-eligible.
`
`
`CyberSource argues that claim 2 is patent-eligible
`per se because it recites a “manufacture,” rather than a
`“process,” under the statutory language of § 101.
`CyberSource contends that, by definition, a tangible,
`man-made article of manufacture such as a “computer
`readable medium containing program instructions”
`cannot possibly fall within any of the three pa-
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`654 F.3d 1366, 99 U.S.P.Q.2d 1690
`(Cite as: 654 F.3d 1366)
`tent-eligibility exceptions the Supreme Court has
`recognized for “laws of nature, physical phenomena,
`[or] abstract ideas.” Appellant's Br. 47–48 (quoting
`Bilski, 130 S.Ct. at 3225). We disagree.
`
`
`Regardless of what statutory cate