687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`
`
`
`Page 1
`
`
`
`
`
`United States Court of Appeals,
`Federal Circuit.
`BANCORP SERVICES, L.L.C., Plaintiff–Appellant,
`v.
`SUN LIFE ASSURANCE COMPANY OF CANA-
`DA (U.S.), Defendant–Appellee,
`and
`Analect LLC, Defendant.
`
`
`
`No. 2011–1467.
`July 26, 2012.
`Rehearing and Rehearing En Banc Denied June 13,
`2013.
`
`
`Background: Suit was brought alleging infringement
`of patents describing a system for administering and
`tracking the value of separate-account life insurance
`policies issued pursuant to corporate owned life in-
`surance (COLI) and bank owned life insurance (BO-
`LI) plans. The district court, 2002 WL 32727071,
`granted summary judgment of invalidity for indefi-
`niteness. Patentee appealed. The Court of Appeals,
`359 F.3d 1367, reversed. On remand, the district court,
`421 F.Supp.2d 1196, granted summary judgment of
`noninfringement. Patentee appealed. The Court of
`Appeals, 527 F.3d 1330, vacated and remanded. On
`remand, the United States District Court for the East-
`ern District of Missouri, Carol E. Jackson, J., 771
`F.Supp.2d 1054, granted summary judgment of inva-
`lidity for defendant, and denied reconsideration, 2011
`WL 1599550. Plaintiff appealed.
`
`Holdings: The Court of Appeals, Lourie, Circuit
`Judge, held that:
`(1) asserted dependent system claims required “one or
`more computers”;
`(2) asserted dependent computer-readable medium
`
`claims required “one or more computers”;
`(3) independent method claims did not require im-
`plementation on computer;
`(4) asserted system and medium claims were no dif-
`ferent from asserted method claims for patent eligi-
`bility purposes;
`(5) system and method claims were equivalent for
`purposes of patent eligibility; and
`(6) claims in patents were not patent eligible.
`
`
`Affirmed.
`
`
`
`West Headnotes
`
`324.5
`
`
`[1] Patents 291
`
`291 Patents
` 291XII Infringement
` 291XII(B) Actions
` 291k324 Appeal
` 291k324.5 k. Scope and extent of review
`in general. Most Cited Cases
`
`
`157(1)
`
`Questions about patent-eligible subject matter are
`reviewed without deference. 35 U.S.C.A. § 101.
`
`[2] Patents 291
`
`291 Patents
` 291IX Construction and Operation of Letters Pa-
`tent
` 291IX(A) In General
` 291k157 General Rules of Construction
` 291k157(1) k. In general. Most Cited
`Cases
`
`
`Claim construction is not an inviolable prerequi-
`site to a validity determination; however, it will or-
`dinarily be desirable, and often necessary, to resolve
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`1
`
`SAMSUNG-1034
`
`

`
`
`
`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`claim construction disputes prior to a validity analysis,
`for the determination of patent eligibility requires a
`full understanding of the basic character of the
`claimed subject matter. 35 U.S.C.A. § 101.
`
`[3] Patents 291
`
`291 Patents
` 291XII Infringement
` 291XII(B) Actions
` 291k324 Appeal
` 291k324.5 k. Scope and extent of review
`in general. Most Cited Cases
`
`
`324.5
`
`Even though a district court declines to construe
`the patent claims, that does not preclude the Court of
`Appeals from making that legal determination on
`appeal; just as a district court may construe the claims
`in a way that neither party advocates, the Court of
`Appeals may depart from the district court and adopt a
`new construction on appeal.
`
`[4] Patents 291
`
`291 Patents
` 291IV Applications and Proceedings Thereon
` 291k101 Claims
` 291k101(2) k. Construction in general. Most
`Cited Cases
`
`
`101(2)
`
`Asserted dependent system claims in patent for
`administering and tracking the value of life insurance
`policies in separate accounts required “one or more
`computers”; plain language of system claims required
`particular computing devices, such as a “generator,” a
`“calculator,” and “digital storage,” and specification
`explained that figure in patent showed “an embodi-
`ment of the system of the present invention,” depicting
`a “computer” and “a central processing unit for a
`memory subsystem.”
`
`[5] Patents 291
`
`101(2)
`
`Page 2
`
`
`291 Patents
` 291IV Applications and Proceedings Thereon
` 291k101 Claims
` 291k101(2) k. Construction in general. Most
`Cited Cases
`
`
`Asserted dependent computer-readable medium
`claims in patent for administering and tracking the
`value of life insurance policies in separate accounts
`required “one or more computers”; specification ex-
`plained that term “computer readable media” referred
`generally to “high density removable storage means,”
`such as a “compact disc.”
`
`[6] Patents 291
`
`291 Patents
` 291IV Applications and Proceedings Thereon
` 291k101 Claims
` 291k101(11) k. Process or method claims.
`Most Cited Cases
`
`
`101(11)
`
`Independent method claims in patent for admin-
`istering and tracking value of life insurance policies in
`separate accounts did not require implementation on
`computer, where each independent method claim was
`followed by dependent claim requiring that method be
`“performed by a computer,” claim differentiation
`doctrine created presumption that independent method
`claims did not contain that limitation, and patentee did
`not rebut that presumption with its unpersuasive as-
`sertion that computer was “inherent” in independent
`method claims; although it would have been ineffi-
`cient to do so, steps in independent claims could have
`been completed manually.
`
`[7] Patents 291
`
`291 Patents
` 291IX Construction and Operation of Letters Pa-
`tent
`
`165(5)
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`2
`
`

`
`
`
`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
` 291IX(B) Limitation of Claims
` 291k165 Operation and Effect of Claims in
`General
` 291k165(5) k. Construction of particular
`claims as affected by other claims. Most Cited Cases
`
`
`6
`
`The presence of a dependent claim that adds a
`particular limitation raises a presumption under the
`claim differentiation doctrine that the limitation in
`question is not found in the independent claim.
`
`[8] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k6 k. Principles or laws of nature. Most
`Cited Cases
`
`
`A process is not unpatentable simply because it
`contains a law of nature or a mathematical algorithm,
`and an application of a law of nature or mathematical
`formula to a known structure or process may well be
`deserving of patent protection. 35 U.S.C.A. § 101.
`
`[9] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k5 k. In general. Most Cited Cases
`
`
`5
`
`Limiting an abstract idea to one field of use or
`adding token post-solution components does not make
`the concept patentable; in other words, a recitation of
`ineligible subject matter does not become pa-
`tent-eligible merely by adding the words “apply it.” 35
`U.S.C.A. § 101.
`
`[10] Patents 291
`
`
`7.14
`
`Page 3
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7.14 k. Particular processes or methods
`as constituting invention. Most Cited Cases
`
`
`Asserted system and medium claims in patent for
`administering and tracking the value of life insurance
`policies in separate accounts were no different from
`asserted method claims for patent eligibility purposes,
`where method claim recited “method for managing a
`life
`insurance policy comprising” seven steps,
`whereas medium claim recited “a computer readable
`media [sic] for controlling a computer to perform”
`same seven steps of method claim, repeated word for
`word. 35 U.S.C.A. § 101.
`
`[11] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7.11 k. Use or operation of machine or
`apparatus as affecting process. Most Cited Cases
`
`
`7.11
`
`7.14
`
`A machine, system, medium, or the like may in
`some cases be equivalent to an abstract mental process
`for purposes of patent ineligibility. 35 U.S.C.A. § 101.
`
`[12] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7.14 k. Particular processes or methods
`as constituting invention. Most Cited Cases
`
`
`System and method claims in patent for admin-
`istering and tracking the value of life insurance poli-
`cies in separate accounts were equivalent for purposes
`of patent eligibility, where method claim claimed
`“method for managing a life insurance policy,”
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`3
`
`

`
`
`
`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`whereas system claim of that patent claimed “a life
`insurance policy management system,” method claim
`included step of “generating a life insurance policy,”
`whereas system claim included “a policy generator for
`generating a life insurance policy,” and so on; only
`difference between claims was form in which they
`were drafted. 35 U.S.C.A. § 101.
`
`[13] 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
`
`Claims in patent that employed computers to
`track, reconcile, and administer life insurance policy
`with stable value component were not patent eligible,
`since determination of values, and their subsequent
`manipulation, was matter of mere mathematical
`computation, using computer merely to perform more
`efficiently what could otherwise be accomplished
`manually did not effect transformation, and limiting
`abstract idea to one field of use or adding token
`post-solution components did not make concept pa-
`tentable. 35 U.S.C.A. § 101.
`
`[14] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7.11 k. Use or operation of machine or
`apparatus as affecting process. Most Cited Cases
`
`
`7.11
`
`The use of a computer in an otherwise pa-
`tent-ineligible process for no more than its most basic
`function of making calculations or computations fails
`to circumvent the prohibition against patenting ab-
`stract ideas and mental processes. 35 U.S.C.A. § 101.
`
`
`Page 4
`
`7.11
`
`[15] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7.11 k. Use or operation of machine or
`apparatus as affecting process. Most Cited Cases
`
`
`To salvage an otherwise patent-ineligible process,
`a computer must be integral to the claimed invention,
`facilitating the process in a way that a person making
`calculations or computations could not. 35 U.S.C.A. §
`101.
`
`[16] Patents 291
`
`291 Patents
` 291I Subjects of Patents
` 291k4 Arts
` 291k7.11 k. Use or operation of machine or
`apparatus as affecting process. Most Cited Cases
`
`
`7.11
`
`310.7(2)
`
`The machine-or-transformation test, while not the
`sole test for deciding whether an invention is a pa-
`tent-eligible process, remains a useful and important
`clue, an investigative tool, for determining whether
`some claimed inventions are processes eligible for a
`patent. 35 U.S.C.A. § 101.
`
`[17] Patents 291
`
`291 Patents
` 291XII Infringement
` 291XII(B) Actions
` 291k309 Pleading
` 291k310.7 Plea and Answer
` 291k310.7(2) k. Mode of pleading.
`Most Cited Cases
`
`
`A competitor's alternative assertion of nonin-
`fringement does not detract from its affirmative de-
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`4
`
`

`
`
`
`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`fense of patent invalidity, since the Federal Rules of
`Civil Procedure permit a party to plead in the alterna-
`tive. 35 U.S.C.A. § 101; Fed.Rules Civ.Proc.Rule
`8(d)(3), 28 U.S.C.A.
`
`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)
`
`5,926,792, 7,249,037. Construed and Ruled In-
`valid.
`
`*1269 David A. Perlson, Quinn Emanuel Urquhart &
`Sullivan, of San Francisco, CA, argued for plain-
`tiff-appellant. With him on the brief was Charles K.
`Verhoeven; and Ian S. Shelton, of Los Angeles, CA.
`
`Matthew B. Lowrie, Foley & Lardner, LLP, of Bos-
`ton, MA, argued for the defendant-appellee. With him
`on the brief were Aaron W. Moore and Kevin M.
`Littman.
`
`Before LOURIE, PROST, and WALLACH, Circuit
`Judges.
`
`LOURIE, Circuit Judge.
`Bancorp Services, L.L.C. (“Bancorp”) appeals
`from the final decision of the U.S. District Court for
`the Eastern District of Missouri, which entered sum-
`mary judgment that the asserted claims of U.S. Patents
`5,926,792 and 7,249,037 (the “'792 patent” and “'037
`patent”) are invalid under 35 U.S.C. § 101. See Ban-
`corp Servs., L.L.C. v. Sun Life Assurance Co., No.
`4:00–cv–1073 (E.D.Mo. May 25, 2011) (Final Judg-
`ment), ECF No. 411. We affirm.
`
`
`BACKGROUND
`
`Page 5
`
`Bancorp owns the '792 and '037 patents, both en-
`titled “System for Managing a Stable Value Protected
`Investment Plan.” The patents share a specification
`and the priority date of September 1996. The '792
`patent has been the subject of two prior appeals to this
`court. See Metro. Life Ins. Co. v. Bancorp Servs.,
`L.L.C., 527 F.3d 1330 (Fed.Cir.2008) (vacating
`summary judgment of noninfringement); Bancorp
`Servs., L.L.C. v. Hartford Life Ins. Co., 359 F.3d 1367
`(Fed.Cir.2004) (reversing summary judgment of in-
`validity for indefiniteness).
`
`
`As explained in our earlier opinions and in the
`district court's opinion now on appeal in this case, the
`patents' specification discloses systems and methods
`for administering and tracking the value of life in-
`surance policies in separate accounts. Separate ac-
`count policies are issued pursuant to Corporate Owned
`Life Insurance (“COLI”) and Bank Owned Life In-
`surance (“BOLI”) plans. Under separate account
`COLI and BOLI plans the policy owner pays an ad-
`ditional premium beyond that required to fund the
`death benefit, and specifies the types of assets in
`which the additional value is invested. Banks and
`corporations use the policies to insure the lives of their
`employees and as a means of funding their employees'
`post-retirement benefits on a tax-advantaged basis.
`See Hartford, 359 F.3d at 1369.
`
`
`The value of a separate account policy fluctuates
`with the market value of the underlying investment
`assets. That poses a problem from an accounting
`standpoint, as BOLI and COLI plan owners must
`ordinarily report, on a quarter-to-quarter basis, the
`value of any policies they own. Id. The volatility in-
`herent in short-term market values has made some
`banks and companies reluctant to purchase these
`plans. *1270Bancorp Servs., L.L.C. v. Sun Life As-
`surance Co.,
`771
`F.Supp.2d
`1054,
`1056
`(E.D.Mo.2011). Stable value protected investments
`address that problem by providing a mechanism for
`stabilizing the reported value of the policies, wherein a
`third-party guarantor (the “stable value protected
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`5
`
`

`
`
`
`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`writer”) guarantees a particular value (the “book val-
`ue”) of the life insurance policy regardless of its
`market value. To offset the risk to a potential guar-
`antor for providing that service, the guarantor is paid a
`fee and restrictions are placed on the policyholder's
`right to cash in on the policy. Hartford, 359 F.3d at
`1369. As we previously explained, the asserted patents
`“provide[ ] a computerized means for tracking the
`book value and market value of the policies and cal-
`culating the credits representing the amount the stable
`value protected writer must guarantee and pay should
`the policy be paid out prematurely.” Id.
`
`
`The asserted patents disclose specific formulae
`for determining the values required to manage a stable
`value protected life insurance policy. For example, the
`specification discloses creating and initializing a fund
`by performing particular “calculations and compari-
`sons” to determine an “initial unit value of the policy.”
`'037 patent col.12 ll.56–58; see also id. col.11
`l.67–col.12 l.57, fig. 11. The specification then dis-
`closes “processing [that] is required at regular inter-
`vals to track existing funds.” Id. col.12 ll.60–61; see
`also id. col.12 l.59–col.15 l.10, figs. 12–16. Such
`processing includes the calculation of “fees” for the
`individuals who manage the life insurance policy. Id.
`col.12 l.65–col.13 l.15. That processing also includes
`the computation of values used for determining “sur-
`render value protection investment credits,” which, as
`we previously explained, “means the difference be-
`tween the actual value of a protected investment and
`the targeted return value of that investment at the time
`the protected life insurance policy is surrendered.”
`Hartford, 359 F.3d at 1372. Those computations in-
`clude the concept of a “targeted return,” calculated as
`follows:
`
`
`The Stable Value Protected funds provide an initial
`targeted return for the first period of an investment.
`Upon completion of the first period, the value of the
`fund, the “market value,” is compared with the
`“calculated” value of the fund which is the “book
`value.” The “calculated” value of the fund is cal-
`
`Page 6
`
`culated by multiplying the initial value of the fund
`by (1+targeted return), wherein the targeted return
`for the next period is calculated using the formula:
`
`TR=[ (MV/BV) (1/D)x(1+YTM) ]–1,
`
`where [TR] is the targeted return, MV is the market
`value of a fund, BV is the book value of a fund, D is
`the duration of a fund and YTM is the current yield
`to market....
`
`
`
`
`
`
`
`'037 patent col.3 ll.18–30; see also id. col.13
`ll.44–53 (disclosing formulae for calculating a “policy
`value for the present day” and a “policy unit value for
`the present day”). Those computations also include the
`“duration of a fund,” which is calculated according to
`a formula well-known in the prior art. Id. col.3
`l.28–col.4 l.5. As the specification explains, “[u]sing
`the concepts of duration and targeted return, the actual
`performance of the underlying securities in the fund is
`smoothed over time.” Id. col.4 ll.6–8.
`
`
`At issue on appeal from the '792 patent are as-
`serted claims 9, 17, 18, 28, and 37. The asserted claims
`include methods and computer-readable media.
`Claims 9 and 28 are independent method claims.
`Claims 9 reads:
`
`
`9. A method for managing a life insurance policy on
`behalf of a policy holder, the method comprising the
`steps of:
`
`*1271 generating a life insurance policy includ-
`ing a stable value protected investment with an
`initial value based on a value of underlying secu-
`rities;
`
`calculating fee units for members of a manage-
`ment group which manage the life insurance
`policy;
`
`calculating surrender value protected investment
`
`
`
`
`
`
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`6
`
`

`
`
`
`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`credits for the life insurance policy;
`
`
`
`determining an investment value and a value of
`the underlying securities for the current day;
`
`calculating a policy value and a policy unit value
`for the current day;
`
`storing the policy unit value for the current day;
`and
`
`one of the steps of:
`
`removing the fee units for members of the man-
`agement group which manage the life insurance
`policy, and
`
`accumulating fee units on behalf of the manage-
`ment group.
`
`
`
`
`
`
`
`
`
`
`
`
`
`'792 patent col.16 l.55–col.17 l.8. Independent
`claim 28 claims “A method for managing a life in-
`surance policy” comprising steps that are not materi-
`ally different from the steps of claim 9. Id. col.19
`ll.10–22. Claims 17 and 37 depend from independent
`claims 9 and 28, respectively, and require that the
`methods steps “are performed by a computer.” Id.
`col.17 ll.60–61; id. col.20 ll.32–33. Claim 18, the
`computer-readable medium claim, reads: “A computer
`readable medi[um] for controlling a computer to per-
`form the steps” set out in method claim 9. Id. col.17
`l.63–col.18 l.15.
`
`
`Before us on appeal from the '037 patent are as-
`serted claims 1, 8, 9, 17–21, 27, 28, 37, 42, 49, 52, 60,
`63, 66–68, 72–77, 81–83, 87, 88, and 91–95. Inde-
`pendent claims 9, 28, and 52 claim a “method for
`managing a life insurance policy” that is not materially
`different from the methods claimed in the ' 792 patent.
`For example, claim 9 reads:
`
`
`Page 7
`
`9. A method for managing a life insurance policy
`comprising:
`
`generating a life insurance policy including a
`stable value protected investment with an initial
`value based on a value of underlying securities of
`the stable value protected investment;
`
`calculating fees for members of a management
`group which manage the life insurance policy;
`
`calculating credits for the stable value protected
`investment of the life insurance policy;
`
`determining an investment value and a value of
`the underlying securities of the stable value pro-
`tected investment for the current day;
`
`calculating a policy value and a policy unit value
`for the current day;
`
`storing the policy unit value for the current day;
`and
`
`removing a value of the fees for members of the
`management group which manage the life insur-
`ance policy.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`'037 patent col.16 ll.31–50. Each independent
`method claim is further limited in a dependent claim
`requiring that the method be “performed by a com-
`puter.” Id. claims 17, 37, 60. Independent claims 18
`and 63 are directed to a “computer readable medi[um]
`for controlling a computer to perform the steps” set
`out in the method claims. Claim 18 for example, re-
`cites the same seven steps set forth in method claim 9,
`above.
`
`
`Independent claims 1, 19, and 42 of the '037 pa-
`tent are system claims, which track the content of the
`aforementioned method and medium claims. For
`
`© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
`
`7
`
`

`
`
`
`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`example, claim 1 reads:
`
`
`*1272 1. A life insurance policy management sys-
`tem comprising:
`
`a policy generator for generating a life insurance
`policy including a stable value protected invest-
`ment with an initial value based on a value of
`underlying securities of the stable value protected
`investment;
`
`a fee calculator for calculating fees for members
`of a management group which manage the life
`insurance policy;
`
`a credit calculator for calculating credits for the
`stable value protected investment of the life in-
`surance policy;
`
`an investment calculator for determining an in-
`vestment value and a value of the underlying se-
`curities of the stable value protected investment
`for the current day;
`
`a policy calculator for calculating a policy value
`and a policy unit value for the current day;
`
`digital storage for storing the policy unit value for
`the current day; and
`
`a debitor for removing a value of the fees for
`members of the management group which man-
`ages the life insurance policy.
`
`Id. col.15 ll.28–48.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`In 2000, Bancorp sued Sun Life Assurance
`Company of Canada (U.S.) (“Sun Life”) for in-
`fringement of the '792 patent. In 2002, in a separate
`patent infringement suit filed by Bancorp, the district
`court invalidated all claims of the '792 patent for in-
`
`Page 8
`
`definiteness. See Bancorp Servs., L.L.C. v. Hartford
`Life Ins. Co., No. 4:00–CV–70, 2002 WL 32727071
`(E.D.Mo. Feb. 13, 2002). Bancorp and Sun Life then
`jointly stipulated to dismiss their case due to collateral
`estoppel arising from the district court's invalidity
`ruling in Hartford. The parties further agreed that if
`the district court's Hartford ruling was reversed on
`appeal then their case would be reinstated. The district
`court entered a judgment of conditional dismissal.
`
`
`In 2004, we reversed the district court's Hartford
`ruling. Hartford, 359 F.3d 1367. The district court
`subsequently vacated its judgment of dismissal in the
`present case. Bancorp Servs., L.L.C. v. Sun Life As-
`surance Co., No. 4:00–CV–1073 (E.D.Mo. July 22,
`2004), ECF No. 77. In 2009 Bancorp filed an amended
`complaint adding a claim for infringement of the '037
`patent. The parties then submitted a joint claim con-
`struction and prehearing statement addressing nu-
`merous disputed claim terms in the '792 and '037
`patents. Before the court construed the claims, Sun
`Life moved for summary judgment of invalidity under
`§ 101 for failure to claim patent-eligible subject mat-
`ter. The court stayed the briefing on Sun Life's motion
`pending the Supreme Court's decision in Bilski v.
`Kappos, ––– U.S. ––––, 130 S.Ct. 3218, 177 L.Ed.2d
`792 (2010). After Bilski was decided, briefing on Sun
`Life's summary judgment motion commenced.
`
`
`In a memorandum and order dated February 14,
`2011, the district court granted Sun Life's motion for
`summary judgment of invalidity under § 101. Ban-
`corp, 771 F.Supp.2d at 1067. The court first noted its
`decision to determine invalidity under § 101 without
`addressing the parties' claim construction dispute. Id.
`at 1059. The court then concluded that there was no
`meaningful distinction between the asserted “pro-
`cess,” “system,” and “media” claims, and that each
`would be analyzed as a process claim. Id.; see also id.
`at 1065. Next, after reviewing Bilski and other opin-
`ions,
`the
`court
`concluded
`that
`“the ma-
`chine-or-transformation test remains a useful tool in
`determining whether a claim is drawn to an abstract
`
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`
`

`
`
`
`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`idea and thus unpatentable under § 101.” Id. at 1061.
`
`
`*1273 Applying that test, the court evaluated the
`particular limitations of the asserted claims and found
`them deficient. On the machine prong, the court noted
`that the specified computer components are no more
`than objects on which the claimed methods operate,
`and that the central processor is nothing more than a
`general purpose computer programmed in an unspec-
`ified manner. Id. at 1064. Additionally, the court noted
`that “although it would be inefficient to do so, the
`steps for tracking, reconciling and administering a life
`insurance policy with a stable value component can be
`completed manually.” Id. at 1065. On the transfor-
`mation prong, the court determined that the claims do
`not effect a transformation, as they “do not transform
`the raw data into anything other than more data and
`are not representations of any physically existing
`objects.” Id. at 1066. Finally, the court analogized the
`asserted claims to those that the Supreme Court found
`unpatentable in Bilski, Gottschalk v. Benson, 409 U.S.
`63, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972), and Parker v.
`Flook, 437 U.S. 584, 98 S.Ct. 2522, 57 L.Ed.2d 451
`(1978), and concluded that the claims were invalid
`under § 101 as directed to patent-ineligible abstract
`ideas. Bancorp, 771 F.Supp.2d at 1066–67.
`
`
`After considering and denying Bancorp's motion
`for reconsideration, Bancorp Servs., L.L.C. v. Sun Life
`Assurance Co., No. 4:00–CV–1073, 2011 WL
`1599550 (E.D.Mo. Apr. 27, 2011), ECF No. 408, the
`court entered final judgment in favor of Sun Life.
`Bancorp timely appealed. We have jurisdiction pur-
`suant to 28 U.S.C. § 1295(a)(1).
`
`
`DISCUSSION
`[1] Summary judgment is appropriate where
`“there is no genuine dispute as to any material fact and
`the movant is entitled to judgment as a matter of law.”
`Fed.R.Civ.P. 56(a). We review a district court's grant
`of summary judgment without deference, reapplying
`the same standard as the district court and drawing all
`reasonable inferences in favor of the nonmovant.
`
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`
`Tokai Corp. v. Easton Enters., Inc., 632 F.3d 1358,
`1366 (Fed.Cir.2011). We review questions about
`patent-eligible subject matter under 35 U.S.C. § 101
`without deference. Research Corp. Techs., Inc. v.
`Microsoft Corp., 627 F.3d 859, 867 (Fed.Cir.2010).
`
`
`I.
`[2] A preliminary question in this appeal involves
`the matter of claim construction. As noted above, the
`district court declined to construe numerous disputed
`terms prior to considering invalidity under § 101. The
`court stated that “[t]here is no requirement that claims
`construction be completed before examining patenta-
`bility.” Bancorp, 771 F.Supp.2d at 1059. After the
`district court's decision, we decided Ultramercial,
`LLC v. Hulu, LLC, in which we stated that “[t]his court
`has never set forth a bright line rule requiring district
`courts to construe claims before determining subject
`matter
`eligibility.”
`657
`F.3d
`1323,
`1325
`(Fed.Cir.2011), vacated sub nom. WildTangent, Inc. v.
`Ultramercial, LLC, ––– U.S. ––––, 132 S.Ct. 2431,
`182 L.Ed.2d 1059 (2012). For support, we cited Bilski,
`noting that the Supreme Court “f[ound] subject matter
`ineligible for patent protection without claim con-
`struction.” Id. Although Ultramercial has since been
`vacated by the Supreme Court, we perceive no flaw in
`the notion that claim construction is not an inviolable
`prerequisite to a validity determination under § 101.
`We note, however, that it will ordinarily be desira-
`ble—and often necessary—to resolve claim construc-
`tion disputes prior to a § 101 analysis, for the deter-
`mination of patent eligibility requires a full under-
`standing*1274 of the basic character of the claimed
`subject matter.
`
`
`Bancorp argues that we must either (1) vacate and
`remand the district court's judgment with instructions
`to construe the claims in the first instance; or (2) adopt
`Bancorp's proposed constructions of the disputed
`claim terms, because, as the nonmovant on summary
`judgment, it is entitled to all reasonable inferences in
`its favor. Bancorp argues that under its construction
`each claimed “system” requires “one or more com-
`
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`687 F.3d 1266, 103 U.S.P.Q.2d 1425
`(Cite as: 687 F.3d 1266)
`puters,” and thus those claims cannot constitute ab-
`stract ideas. Bancorp, while acknowledging that the
`specific hardware components recited in the system
`claims are not present in the method claims, asserts
`that a computer is necessary as a practical matter to
`perform the claimed processes on account of the
`“complex and dynamic nature of the invention,” and
`that the computer amounts to more than insignificant
`extra-solution activity. Bancorp Br. 52.
`
`
`Sun Life responds by arguing that even if we
`adopt Bancorp's proposed constructions, the claims
`are not patent eligible. Sun Life Br. 38 (“Bancorp
`argues that the Court should apply its constructions.
`That is fine.” (citation omitted)). According to Sun
`Life, assuming the claims require a computer, that
`limitation merely
`amounts
`to
`insignificant
`post-solution activity incapable of rendering the
`claimed subject matter patent eligible. Sun Life thus
`contends that the district court correctly determined
`that the asserted claims relate to patent-ineligible
`abstract ideas.
`
`
`[3] Numerous claim terms were disputed by the
`parties at the district court. For purposes of the § 101
`issue on appeal, however, the parties' disagreement
`boils down to whether the claimed systems and
`methods require a computer. Although the district
`court declined to construe the claims, that does not
`preclude us from making that legal determination on
`appeal. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d
`1448, 1455 (Fed.Cir.1998) (en banc) (concluding that
`claim construction is a pure issue of law). Just as a
`district court may construe the claims in a way that
`neither party advocates, Exxon Chemical Patents, Inc.
`v. Lubrizol Corp., 64 F.3d 1553, 1555 (Fed.Cir.1995)
`(“[T]he trial judge has an independent obligation to
`determine the meaning of the claims, notwithstanding
`the views asserted by the adversary parties.”), we may
`depart from the district court and adopt a new con-
`struction on appeal, Praxair, Inc. v. ATMI, Inc., 543
`F.3d 1306, 1323–24 (Fed.Cir.2008) (adopting “a new
`claim construction on appeal,” and noting that “the
`
`Page 10
`
`court has an independent obligation to construe the
`terms of a patent [and] need not accept the construc-
`tions proposed by either party”).
`
`
`[4] Before proceeding to our § 101 an