Intellectual Ventures I LLC v. Mfrs. & Traders Trust Co.
`
`United States District Court for the District of Delaware
`
`December 18, 2014, Decided; December 18, 2014, Filed
`
`Civ. No. 13-1274-SLR
`
`Reporter
`2014 U.S. Dist. LEXIS 174725
`
`and
`LLC
`I
`VENTURES
`INTELLECTUAL
`INTELLECTUAL VENTURES II LLC, Plaintiffs, v.
`MANUFACTURERS
`AND
`TRADERS
`TRUST
`COMPANY, Defendants.
`
`Counsel:
`[*1] Brian E. Farnan, Esquire of Farnan LLP,
`Wilmington, Delaware. Counsel for Plaintiff.
`
`Of Counsel: Margaret Elizabeth Day, Esquire, Ian N.
`Feinberg, Esquire, David L. Alberti, Esquire, Sal Lim,
`Esquire, Yakov Zolotorev, Esquire, and Marc Belloli, Esquire
`of Feinberg Day Alberti & Thompson LLP.
`
`Chad M. Shandler, Esquire and Travis S. Hunter, Esquire of
`Richards Layton & Finger, P.A., Wilmington, Delaware.
`Counsel for Defendant.
`
`Of Counsel: Frank M. Gasparo, Esquire, Todd M. Nosher,
`Esquire, and William D. Coston, Esquire of Venable LLP.
`
`Judges: SUE L. ROBINSON, District Judge.
`
`Opinion by: SUE L. ROBINSON
`
`Opinion
`
`MEMORANDUM OPINION
`
`I. INTRODUCTION
`
`’382 patent″), 7,260,587 (″the ’587 patent″) (collectively,
`″the patents-in-suit″), and 6,182,894 (″the ’894 patent″).
`(D.l. 1) After defendant filed a motion to dismiss, plaintiffs
`filed an amended complaint on November 15, 2013,
`including
`additional
`allegations
`regarding
`indirect
`infringement and withdrawing the claims based on the ’894
`patent. (D.l. 14) Presently before the court is defendant’s
`[*2] motion to dismiss the amended complaint. (D.l. 16)
`The court has jurisdiction over this matter pursuant to 28
`U.S.C. §§ 1331 and 1338(a).
`
`II. BACKGROUND
`
`Plaintiffs are Delaware limited liability companies having a
`principal place of business in Bellevue, Washington. (D.l.
`14 at PP2-3) Defendant is a New York corporation with its
`principal place of business in Buffalo, New York. (Id. at 4)
`
`The ’137 patent, titled Administration of Financial Accounts,
`was filed May 26, 2009 and issued December 27, 2011. The
`’382 patent, titled Advanced Internet Interface Providing
`User Display Access of Customized Webpages, was filed
`November 5, 2004 and issued October 13, 2009. The ’587
`patent, titled Method for Organizing Digital Images, was
`filed December 22, 2003 and issued August 21, 2007. The
`’701 patent, titled Masking Private Billing Data by Assigning
`Other Billing Data to Use in Commerce with Businesses,
`was filed November 1, 2006 and issued February 16, 2010.1
`
`III. STANDARD OF REVIEW
`
`On July 24, 2013, plaintiffs Intellectual Ventures I LLC and
`Intellectual Ventures II LLC (collectively, ″plaintiffs″) filed
`a complaint against defendant Manufacturers and Traders
`Trust Company (″defendant″) alleging direct and indirect
`infringement of U.S. Patent Nos. 7,664,701 (″the ’701
`patent″), 8,083,137 (″the ’137 patent″), 7,603,382 (″the
`
`A motion filed under Federal Rule of Civil Procedure
`12(b)(6) tests the sufficiency of a complaint’s factual
`allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555,
`127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007); Kost v.
`Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A complaint
`must contain ″a short and plain statement of the claim
`
`1 Defendant’s briefing cites several cases involving the patents-in-suit. In Intellectual Ventures I LLC v. Capital One Financial Corp.,
`Civ. No. 13-740, 2014 U.S. Dist. LEXIS 53001, 2014 WL 1513273 (E.D. Va. April 16, 2014), the court concluded that the ’137 and ’382
`patents were invalid for lack of patentable subject matter. The remaining cases involving the patents-in-suit are stayed pending review
`of the patents-in-suit by the U.S. Patent and Trademark Office: Civ. No. 13-378, [*3] S.D. Ohio; Civ. No. 13-358, W.D.N.C.; Civ. No.
`13-740, W.D. Pa.; and, Civ. No. 13-5386, S.D.N.Y. (also stayed pending the appeal in Intellectual Ventures I LLC v. Capital One
`Financial Corp.).
`
`Exhibit 2005
`ServiceNow v. HP
`CBM2015-00077
`
`

`
`2014 U.S. Dist. LEXIS 174725, *2
`
`Page 2 of 11
`
`showing that the pleader is entitled to relief, in order to give
`the defendant fair notice of what the . . . claim is and the
`grounds upon which it rests.″ Twombly, 550 U.S. at 545
`(internal quotation marks omitted) (interpreting Fed. R. Civ.
`P. 8(a)). Consistent with the Supreme Court’s rulings in
`Twombly and Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct.
`1937, 173 L. Ed. 2d 868 (2009), the Third Circuit requires
`a two-part analysis when reviewing a Rule 12(b)(6) motion.
`Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 219 (3d
`Cir. 2010); Fowler v. UPMC Shadyside, 578 F.3d 203, 210
`(3d Cir. 2009). First, a court should separate the factual and
`legal elements of a claim, accepting the facts and
`disregarding the legal conclusions. Fowler, 578 F.3d. at
`210-11. Second, a court should determine whether the
`remaining well-pled facts sufficiently show that the plaintiff
`″has a ’plausible claim for relief.’″ Id. at 211 (quoting Iqbal,
`556 U.S. at 679). As part of the analysis, a court must accept
`all well-pleaded factual allegations in the complaint as true,
`and view them in the light most favorable to the plaintiff.
`See Erickson v. Pardus, 551 U.S. 89, 94, 127 S. Ct. 2197,
`167 L. Ed. 2d 1081 (2007); Christopher v. Harbury, 536
`U.S. 403, 406, 122 S. Ct. 2179, 153 L. Ed. 2d 413 (2002);
`Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir.
`2008). In this regard, a court
`[*4] may consider the
`pleadings, public record, orders, exhibits attached to the
`complaint, and documents incorporated into the complaint
`by reference. Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
`551 U.S. 308, 322, 127 S. Ct. 2499, 168 L. Ed. 2d 179
`(2007); Oshiver v. Levin, Fishbein, Sedran & Berman, 38
`F.3d 1380, 1384-85 n.2 (3d Cir. 1994).
`
`The court’s determination is not whether the non-moving
`party ″will ultimately prevail″ but whether that party is
`″entitled to offer evidence to support the claims.″ United
`States ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d
`295, 302 (3d Cir. 2011). This ″does not impose a probability
`requirement at the pleading stage,″ but instead ″simply calls
`for enough facts to raise a reasonable expectation that
`discovery will reveal evidence of [the necessary element].″
`Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at
`556). The court’s analysis is a context-specific task requiring
`the court ″to draw on its judicial experience and common
`sense.″ Iqbal, 556 U.S. at 663-64.
`
`IV. DISCUSSION
`
`A. Standard
`
`The standard of proof to establish the invalidity of a patent
`is ″clear and convincing evidence.″ Golden Blount, Inc. v.
`Robert H. Peterson Co., 365 F.3d 1054, 1058 (Fed. Cir.
`2004); see also, Ultramercial, Inc. v. Hulu, LLC, 722 F.3d
`
`1335, 1338-39 (Fed. Cir. 2013), vacated sub nom.
`WildTangent, Inc. v. Ultramercial, LLC, U.S.
`, 134 S.Ct.
`2870, 189 L. Ed. 2d 828 (2014). Whether a claim is drawn
`to patent-eligible subject matter under 35 U.S.C. § 101 is a
`threshold inquiry to be determined as a matter of law in
`establishing the validity of the patent. CLS Bank Int’l v.
`Alice Corp. Pty. Ltd., 717 F.3d 1269, 1277 (Fed. Cir. 2013),
`aff’d, Alice Corp. Pty. Ltd. v. CLS Bank Int’l, U.S.
`, 134
`S.Ct. 2347, 82 L. Ed. 2d 296, 189 L. Ed. 2d 296 (2014); In
`re Bilski, 545 F.3d 943, 950 (Fed. Cir. 2008) (citing In re
`Comiskey, 499 F.3d 1365, 1371 (Fed. Cir. 2007)) (″Bilski
`I″). Section 101 provides that patentable subject matter
`extends to four broad categories, including: ″new and useful
`processes], machine[s], manufacture, or composition[s] of
`matter.″ 35 U.S.C. § 101; see also Bilski v. Kappos, 561 U.S.
`593, 601, 130 S. Ct. 3218, 177 L. Ed. 2d 792 (2010) (″Bilski
`II″); [*5] Diamond v. Chakrabarty, 447 U.S. 303, 308, 100
`S. Ct. 2204, 65 L. Ed. 2d 144 (1980). A ″process″ is
`statutorily defined as a ″process, art or method, and includes
`a new use of a known process, machine manufacture,
`composition of matter, or material.″ 35 U.S.C. § 100(b). The
`Supreme Court has explained:
`
`A process is a mode of treatment of certain materials to
`produce a given result. It is an act, or a series of acts,
`performed upon the subject-matter to be transformed
`and reduced to a different state or thing. If new and
`useful, it is just as patentable as is a piece of machinery.
`In the language of the patent law, it is an art. The
`machinery pointed out as suitable to perform the
`process may or may not be new or patentable; whilst
`the process itself may be altogether new, and produce
`an entirely new result. The process requires that certain
`things should be done with certain substances, and in a
`certain order; but the tools to be used in doing this may
`be of secondary consequence.
`
`Diamond v. Diehr, 450 U.S. 175, 182-83, 101 S. Ct. 1048,
`67 L. Ed. 2d 155 (1981) (internal quotations omitted).
`
`The Supreme Court recognizes three ″fundamental principle″
`exceptions to the Patent Act’s subject matter eligibility
`requirements: ″laws of nature, physical phenomena, and
`abstract ideas.″ Bilski II, 561 U.S. at 601. The Supreme
`Court has held that ″[t]he concepts covered by these
`exceptions are ’part of the [*6] storehouse of knowledge of
`all men ... free to all men and reserved exclusively to
`none.’″ Bilski II, 561 U.S. at 602 (quoting Funk Bros. Seed
`Co. v. Kalo Inoculant Co., 333 U.S. 127, 130, 68 S. Ct. 440,
`92 L. Ed. 588, 1948 Dec. Comm’r Pat. 671 (1948)). ″[T]he
`concern that drives this exclusionary principle is one of
`pre-emption,″ that is, ″’that patent law not inhibit further
`
`

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`2014 U.S. Dist. LEXIS 174725, *6
`
`Page 3 of 11
`
`discovery by improperly tying up the future use of’ these
`building blocks of human ingenuity.″ Alice, 134 S.Ct. at
`2354 (citing Bilski II, 561 U.S. at 611-12 and Mayo
`Collaborative Services v. Prometheus Labs., Inc., 566 U.S.
`, 132 S.Ct. 1289, 1301, 182 L. Ed. 2d 321 (2012)).
`
`Although a fundamental principle cannot be patented, the
`Supreme Court has held that ″an application of a law of
`nature or mathematical formula to a known structure or
`process may well be deserving of patent protection,″ so long
`as that application would not preempt substantially all uses
`of the fundamental principle. Bilski II, 561 U.S. at 612
`(quoting Diehr, 450 U.S. at 187) (internal quotations
`omitted); Bilski I, 545 F.3d at 954. The Supreme Court
`recently reiterated the
`
`framework for distinguishing patents that claim laws of
`nature, natural phenomena, and abstract ideas from
`those that claim patent-eligible applications of those
`concepts. First, we determine whether the claims at
`issue are directed to one of those patent-ineligible
`concepts. If so, we then ask, ″[w]hat else is there in the
`claims before us?″ To answer that question, we consider
`the elements of each claim both individually and ″as an
`ordered combination″ to determine [*7] whether the
`additional elements ″transform the nature of the claim″
`into a patent-eligible application. We have described
`step two of this analysis as a 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 upon the
`[ineligible concept] itself.″
`
`Alice Corp., 134 S.Ct. at 2355 (citing Mayo, 132 S.Ct. at
`1294, 1296-98).2 ″[T]o transform an unpatentable law of
`nature into a patent-eligible application of such a law, one
`must do more than simply state the law of nature while
`adding the words ’apply it.’″ Mayo, 132 S.Ct. at 1294
`(citing Gottschalk v. Benson, 409 U.S. 63, 71-72, 93 S. Ct.
`253, 34 L. Ed. 2d 273 (1972)). It is insufficient to add steps
`which ″consist of well-understood, routine, conventional
`activity,″ if such steps, ″when viewed as a whole, add
`nothing significant beyond the sum of their parts taken
`separately.″ Id. at 1298. ″Purely ’conventional or obvious’
`’[pre]-solution activity’
`is normally not sufficient
`to
`transform an unpatentable law of nature into a patent-eligible
`
`application of such a law.″ Id. (citations omitted). Also, the
`″prohibition against patenting abstract
`ideas ’cannot be
`circumvented by attempting to limit the use of the formula
`to a particular
`technological environment’ or adding
`’insignificant postsolution [*8] activity.’″ Bilski II, 561 U.S.
`at 610-11 (citation omitted). For
`instance,
`the ″mere
`recitation of a generic computer cannot
`transform a
`patent-ineligible
`abstract
`idea
`into a patent-eligible
`invention.″ Alice, 134 S.Ct. at 2358. ″Given the ubiquity of
`computers, wholly generic computer implementation is not
`generally the sort of ’additional featur[e]’ that provides any
`’practical assurance that the process is more than a drafting
`effort designed to monopolize the [abstract idea] itself.’″ Id.
`(citations omitted).
`
`The court finds the comparison of Bancorp Servs., LLC v.
`Sun Life Assurance Co. of Canada, 687 F.3d 1266 (Fed. Cir.
`2012), to SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d
`1319 (Fed. Cir. 2010), instructive. In Bancorp, where the
`asserted patents disclosed ″specific formulae for determining
`the values required to manage a stable value protected life
`insurance policy,″ the district court granted summary
`judgment of invalidity under § 101. Bancorp, 687 F.3d at
`1270. Under
`the machine prong of
`the machine or
`transformation test, the district court found that ″the specified
`components are no more than objects on
`computer [*9]
`which the claimed methods operate, and that the central
`processor is nothing more than a general purpose computer
`programmed in an unspecified manner.″ Id. at 1273. In
`affirming the district court’s findings, the Federal Circuit
`explained that
`
`the use of a computer in an otherwise patent-ineligible
`process for no more than its most basic function -
`making calculations or computations
`-
`fails
`to
`circumvent the prohibition against patenting abstract
`ideas and mental processes. As we have explained,
`″[s]imply adding a ’computer aided’ limitation to a
`claim covering an abstract concept, without more, is
`insufficient
`to render
`the claim patent eligible.″
`Dealertrack, Inc. y. Huber, 674 F.3d 1315, 1333 (Fed.
`Cir. 2012).
`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.
`
`2 The machine-or-transformation test still may provide a ″useful clue″ in the second step of the Alice framework. Ultramercial, Inc.
`v. Hulu, LLC, 772 F.3d 709, 2014 WL 5904902, at *6 (Fed. Cir. 2014) (citing Bilski II, 561 U.S. at 604 and Bancorp Servs., L.L.C., v.
`Sun Life Assurance Co. of Can., 687 F.3d 1266, 1278 (Fed. Cir. 2012). A claimed process can 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.″ In re Bilski, 545 F.3d
`943, 954 (Fed. Cir. 2008) (en banc), aff’d on other grounds, Bilski II, 561 U.S. 593, 130 S. Ct. 3218, 177 L. Ed. 2d 792.
`
`

`
`2014 U.S. Dist. LEXIS 174725, *9
`
`Page 4 of 11
`
`Id. at 1278. Ultimately, the Federal Circuit concluded that
`″[t]he computer required by some of Bancorp’s claims is
`employed only for its most basic function, the performance
`of repetitive calculations, and as such does not impose
`meaningful limits on the scope of those claims.″ Id. at 1278.
`
`In contrast to Bancorp, the Federal Circuit in SiRF [*10]
`found that a GPS receiver was ″integral″ to the claims at
`issue and, therefore, the machine or transformation test was
`satisfied. SiRF, 601 F.3d at 1332. As in Bancorp, the SiRF
`Court emphasized that a machine will only ″impose a
`meaningful limit on the scope of a claim [when it plays] a
`significant part in permitting the claimed method to be
`performed,
`rather
`than function solely as an obvious
`mechanism for permitting a solution to be achieved more
`quickly,
`i.e.,
`through the utilization of a computer for
`performing calculations.″ Id. at 1333. After noting how the
`GPS receiver was specifically involved in each step of the
`method, the Court concluded that ″the use of [the] GPS
`receiver is essential to the operation of the claimed methods.″
`Id.
`
`that computer-based
`″clear
`is
`In sum, although it
`programming constitutes patentable subject matter so long
`as the basic requirements of [35 U.S.C.] § 101 are met,″
`AT&T, 172 F.3d at 1360, the requirements of § 101 as
`applied to this area of technology have been a moving
`target, from the complete rejection of patentability for
`computer programs3 to the much broader enunciation of the
`test in State Street Bank & Trust Co. v. Signature Fin.
`Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), abrogated by
`In re Bilski, 545 F.3d 943., that is, ″a computer-implemented
`invention was considered patent-eligible so long as it
`produced a ’useful, concrete and tangible result.’″ DDR
`Holdings, LLC v. Hotels.com, L.P., Civ. No. 2013-1505, 773
`F.3d 1245, 2014 U.S. App. LEXIS 22902, 2014 WL 6845152,
`at *10 (Fed. Cir. Dec. 5, 2014). As instructed by the Federal
`Circuit in DDR Holdings, the Court’s most recent attempt to
`bring clarity to this area of the law: (1) ″recitation of generic
`computer limitations does not make an otherwise ineligible
`claim patent-eligible,″ 2014 U.S. App. LEXIS 22902, [WL]
`at *9; (2) ″mathematical algorithms, including those executed
`on a generic computer, are abstract ideas,″ id.; (3) ″some
`fundamental economic and conventional business practices
`are also abstract ideas,″ id.; and (4) general use of the
`Internet ″to perform an abstract business practice (with
`
`insignificant added activity)″ [*11] does not pass muster
`under § 101, 2014 U.S. App. LEXIS 22902, [WL] at *12. In
`order for claims addressing ″Internet-centric challenges″ to
`be patent eligible,4 the claims must do more than
`
`recite a commonplace business method aimed at
`processing business information, applying a known
`business process
`to the particular
`technological
`environment of the Internet, or creating or altering
`contractual relations using generic computer functions
`and conventional network operations, such as the claims
`in Alice, Ultramercial, buySAFE, Accenture, and
`Bancorp.
`
`Id. (citing Alice, 134 S.Ct. at 2359; Ultramercial, 772 F.3d
`709, 2014 WL 5904902, at *5, buySAFE, Inc. v. Google,
`Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014); Accenture
`Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d
`1336, 1344-45 (Fed. Cir. 2013); Bancorp, 687 F.3d at
`1278).
`
`B. Analysis
`
`1. Claim Construction
`
`The Federal Circuit has ″never set forth a bright line rule
`requiring district
`courts
`to construe
`claims before
`determining subject matter eligibility.″ [*12] Ultramercial,
`LLC v. Hulu, LLC, 657 F.3d 1323, 1325 (Fed. Cir. 2011),
`vacated sub nom. WildTangent, 132 S. Ct. 2431, 182 L. Ed.
`2d 1059. ″[B]ecause eligibility is a ’coarse’ gauge of the
`suitability of broad subject matter categories for patent
`protection, Research Corp. Techs., Inc. v. Microsoft Corp.,
`627 F.3d 859, 869 (Fed. Cir. 2010), claim construction may
`not always be necessary for a § 101 analysis.″ Ultramercial,
`657 F.3d at 1325 (citing Bilski II, 130 S.Ct. at 3231 (finding
`subject matter ineligible for patent protection without claim
`construction)). In Bancorp, the Federal Circuit reiterated
`that ″claim construction is not an inviolable prerequisite to
`a validity determination under § 101, but is ″ordinarily . . .
`desirable—and
`often
`necessary—to
`resolve
`claim
`construction disputes prior to a § 101 analysis, for the
`determination of patent
`eligibility requires
`a
`full
`understanding of the basic character of the claimed subject
`matter.″ Bancorp, 687 F.3d at 1273-74. In advocating for
`judicial efficiency, the Federal Circuit recently stated:
`
`3 See, e.g., 33 Fed. Reg. 15581, 15609-10 (1968). Indeed, in his dissent in Diamond v. Diehr, 450 U.S. 175, 101 S. Ct. 1048, 67 L.
`Ed. 2d 155 (1981), Justice Stevens’s solution was to declare all computer-based programming unpatentable. Id. at 219.
`
`4 Although the court understands that the advent of the Internet inspired countless inventive ways of accomplishing routine tasks better,
`faster, cheaper — indeed, both the PTO and the Federal Circuit considered such ingenuity sufficiently inventive under § 101 to be patent
`eligible — apparently such is not the case under the current legal reasoning.
`
`

`
`2014 U.S. Dist. LEXIS 174725, *12
`
`Page 5 of 11
`
`From a practical perspective, addressing section 101 at
`the outset of litigation will have a number of salutary
`effects. First, it will conserve scarce judicial resources.
`Failure to recite statutory subject matter is the sort of
`″basic deficiency,″ that can, and should, ″be exposed at
`the point of minimum expenditure of time and money
`by the parties and the court,″ Bell Atl. Corp. y.
`Twombly, 550 U.S. 544, 558, 127 S. Ct. 1955, 167 L.
`Ed. 2d 929 (2007) (citations and internal quotation
`marks omitted). Here, for example, the district court
`properly invoked section 101 to dismiss
`[*13]
`Ultramercial’s infringement suit on the pleadings. No
`formal claim construction was required because the
`asserted claims disclosed no more than ″an abstract
`idea garnished with accessories″ and there was no
`″reasonable construction that would bring [them] within
`patentable subject matter.″ Ultramercial, LLC v. Hulu,
`LLC, No. 09-CV-6918, 2010 U.S. Dist. LEXIS 93453,
`2010 WL 3360098, at *6 (C.D. Cal. Aug. 13, 2010).
`
`Ultramercial, 772 F.3d 709, 2014 WL 5904902, at *8.
`
`Plaintiffs advocate that ″the claims, consistent with
`[plaintiffs’] arguments . . . , require specific technology to
`practice the patents and therefore are patent eligible.″ (D.l.
`18 at n.3) Plaintiffs’ arguments throughout the briefing
`make no mention of how the construction of certain
`limitations would inform the § 101 analysis. The court
`concludes that it may proceed on a § 101 analysis, as the
`parties’ arguments are not
`focused on specific claim
`limitations, but
`instead on the broader concepts of the
`claims and the computer components used.
`
`2. The ’137 Patent
`
`The ’137 patent describes ″a system and method which
`allows consumer users to establish self-imposed limits on
`the user’s spending (borrowing) such that when the limit is
`reached the consuming user is notified.″ (’137 patent,
`1:65-2:1) There are four independent claims, two system
`claims and two method claims. Representative independent
`claim 12 recites: [*14]
`
`12. A method comprising:
`
`storing, in a database, a profile keyed to a user identity
`and containing one or more user-selected categories to
`track transactions associated with said user identity,
`wherein individual user-selected categories include a
`user pre-set limit; and
`
`in the database for at least one of the one or more user
`selected categories, said transaction summary data
`containing said at least one user-selected category’s
`user pre-set limit, and wherein said transaction summary
`data is configured to be presented by the receiving
`device in a table.
`
`(’137 patent, 9:50-59; 10:4-15, 36-49)
`
`Using the framework set forth in Alice, the court first
`determines the central idea of the patent. Plaintiffs argue
`that
`the ’137 patent ″discloses and claims a specific
`application of administering financial accounts[, or] a
`practical application of the broader idea of electronically
`administering financial accounts using computer and
`database technology.″ (D.l. 18 at 8) However, the core idea
`of the patent is allowing users to set self-imposed limits on
`their spending and receive notifications regarding such
`i.e., setting up a budget and tracking their
`limits, [*15]
`spending. Budgeting is a longstanding and fundamental
`practice, utilized in personal and business finances.
`
`the court
`In the second step of the Alice framework,
`examines whether the claims are limited by an ″inventive
`concept″ such that ″the patent
`in practice amounts to
`significantly more than a patent upon the [ineligible concept]
`itself.″ Alice Corp., 134 S.Ct. at 2355. The steps of
`independent claims 1, 5, and 12 are: (1) storing a user
`profile, which contains at least one user-selected category
`with a user pre-set
`limit;
`and (2) presenting or
`communicating ″transaction summary data″ for such
`category and limit. Claim 12 also requires that
`the
`″transaction summary data″ be configured in a table. Claim
`19 requires: (1) listing the financial transactions in categories
`from a certain time period; and (2) presenting the amount of
`such transactions
`in categories
`together with the
`user-identified limit. Plaintiffs conclude that these limitations
`″create a practical way of self-monitoring financial accounts
`using computer generated automatic updates.″ (D.l. 18 at
`9-10) The steps of storing data from a user, listing data, and
`presenting summary data (configured in a table), [*16]
`however, are ways ″to implement the abstract idea with
`routine and conventional [computer] activity.″ Ultramercial,
`772 F.3d 709, 2014 WL 5904902, at *5; Fuzzysharp Techs.
`Inc. v. 3DLabs Inc., Ltd., 447 Fed. Appx. 182, 185 (Fed. Cir.
`2011) (computing and storing data are ″functions .
`.
`.
`essentially synonymous with the term ″computer″ and thus
`add little or nothing to simply claiming the use of a general
`purpose computer″).
`
`causing communication, over a communication medium
`and to a receiving device, of transaction summary data
`
`Plaintiffs also argue that ″[t]he concept of having your bank
`automatically notify you concerning your pre-set limits was
`
`

`
`2014 U.S. Dist. LEXIS 174725, *16
`
`Page 6 of 11
`
`inventive and not abstract.″ (D.l. 18 at 9) But an automatic
`notification is an implementation of a conventional step
`(users comparing amounts spent with their chosen limit) on
`a computer (or via the Internet). As the Supreme Court has
`stated, ″the mere recitation of a generic computer cannot
`transform a
`patent-ineligible
`abstract
`idea
`into
`a
`patent-eligible invention. Stating an abstract
`idea while
`adding the words ’apply it’ is not enough for patent
`eligibility.″ Alice, 134 S.Ct. at 2358. The Internet is described
`in the specification as being used to send the notification
`message (’137 patent, 2:5-6), change the limits (id. at
`2:24-26), access
`the account
`(id. at 2:45-48), and
`communicate with a third party (id. at 4:19-21). For each of
`other
`these uses, the specification also describes [*17]
`methods, such as telephone or email. Unlike the claims in
`DDR Holdings, where ″the claimed solution [was]
`necessarily rooted in computer technology in order to
`overcome a problem specifically arising in the realm of
`computer networks,″ the claims at bar ″merely recite the
`performance of some business practice known from the
`pre-Internet world along with the requirement to perform it
`on the Internet.″ DDR Holdings, 2014 U.S. App. LEXIS
`22902, 2014 WL 6845152 at *10.
`
`As to the type of technology used to implement the claims,
`plaintiffs argue that: ″a computer is used in a specific way
`to perform the claims and implements the integral steps of
`setting, storing, monitoring the limits and restrictions and
`alerting the user based on the data;″ practicing the invention
`without a computer is impossible, because it would require
`too much manpower and overhead for bank personnel; and,
`″[w]hile a general computer database was well known or
`generic, using a specially programmed database in the way
`claimed by the ’1[3]7 patent was not generic or known at
`the time.″ (D.l. 18 at 11) These arguments fail under the
`Alice framework for analyzing § 101 issues. That
`the
`abstract idea implemented on a computer allows for more or
`faster monitoring of accounts is not the crux [*18] of the
`patentability analysis. See SiRF Tech., Inc. v. Int’l Trade
`Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010) (″In order
`for the addition of a machine to impose a meaningful limit
`on the scope of a claim, it must play a significant part in
`permitting the claimed method to be performed, rather than
`function solely as an obvious mechanism for permitting a
`solution to be achieved more quickly,
`i.e.,
`through the
`utilization of a computer for performing calculations.″).
`
`The computer and components (central processor) described
`in the specification are generic.5 The database is also
`generic; the specification does not describe a ″specially
`programmed database,″ but a database used to store data:
`″Processor 15, in conjunction with database 16 and profiles
`17, then categorizes the various purchases being made and
`stores those purchase amounts and categories in database
`16, according to profiles of user 17, as stored, for example,
`in profile data[]base 17.″ (’137 patent, 3:47-52) The patent
`describes the ″auxiliary database 16-1″ as holding any type
`of information. (Id. at 4:59-5:2) While plaintiffs argue that
`the claims use ″computer implemented algorithms″ as a
`meaningful and specific use of technology, there are no
`algorithms described in the claims. Instead, as discussed
`[*19] above, the claims are directed to generic computing
`functions such as storing and processing data.
`
`The Supreme Court has explained that,
`
`what petitioner characterizes as specific hardware—a
`″data processing system″ with a ″communications
`controller″ and ″data storage unit,″ .
`.
`.
`is purely
`functional and generic. Nearly every computer will
`include a ″communications controller″ and ″data storage
`unit″ capable of performing the basic calculation,
`storage, and transmission functions required by the
`[*20] method claims. See 717 F.3d, at 1290 (Lourie, J.,
`concurring). As a result, none of the hardware recited
`by the system claims ″offers a meaningful limitation
`beyond generally linking ’the use of the [method] to a
`particular
`technological
`environment,’
`that
`is,
`implementation via computers.″ Id., at 1291 (quoting
`Bilski, 561 U.S., at 610-611, 130 S.Ct. 3218).
`
`134 S.Ct. at 2360. That the system of claim 1 at bar recites
`a ″means for storing″ and a ″means for presenting transaction
`summary data,″ and claim 19 recites a ″means for listing,″
`does not change the analysis, as only generic computers and
`components are disclosed in the specification. See In re
`Katz, 639 F.3d 1303, 1316 (Fed. Cir. 2011) (in analyzing
`means-plus-function claims, finding that ″the functions of
`’processing,’ ’receiving,’ and ’storing’ are coextensive with
`the structure disclosed, i.e., a general purpose processor,″
`such ″functions can be achieved by any general purpose
`computer without special programming″).
`
`5 Describing a user ″utilizing keyboard 22 and computer 23 to access his or her account via communication links 201-1 and 210-2 and
`public network 24 to web portal or phone operator 25.″ The ″computer 23 . . . could be a telephone, pager, PDA, or the like . . . .″ The
`communication links are ″pager network, cellular network or any other type of network, including for example, wireless, wire line or
`the cable satellite network typically utilized for broadcast signals into the home for entertainment purposes.″ (’137 patent, 5:48-63) The
`specification also references a ″central processor″ used to catagorize purchases, communicate, controlling the acceptance of a purchase,
`send data. (’137 patent, 3:47, 56; 4:24-26, 43-45)
`
`

`
`2014 U.S. Dist. LEXIS 174725, *20
`
`Page 7 of 11
`
`Dependent claims 2, 4 6, 8, 13, 15 further define certain of
`the user-selected categories. Any changes to the definition
`of the categories are changes to data entered by the user.
`Dependent claims 7 and 14 add a method step of assigning
`purchasable items to a category. Dependent claim 3 adds a
`″means for assigning″ items to a category. Dependent [*21]
`claim 19 adds a ″means for presenting″ a profile. Dependent
`claim 21 adds a ″means for accepting″ changes to categories
`and a ″means for causing storage″ of such changes.
`Dependent claims 22 and 23 add a ″means for listing″
`additional data. Dependent claim 24 adds a ″means for
`allowing″ a user to change certain categories. Using the
`same analysis as above, each of these ″means″ are limited to
`the generic computer and components disclosed in the
`specification. Dependent claims 9-11 and 16-18 define the
`communication medium, as ″network,″ ″wireless,″ or
`″cellular.″ The dependent claims do not further restrict the
`independent claims in such a way that the ″abstract idea″ is
`meaningfully limited.
`
`In this regard, the inquiry on preemption is whether the
`patent ″would risk disproportionately tying up the use of the
`underlying ideas.″ Alice, 134 S.Ct. at 2354. Plaintiffs argue
`that the ’137 patent does not preempt the broader concept of
`managing financial accounts, as the claims provide specific
`algorithms to monitor the data and alert the user. The court
`concludes that
`the claims are not directed to specific
`algorithms, instead implementing the conventional concept
`of budgeting on general computers. As such, the patent
`tie up the abstract idea of budgeting and,
`would [*22]
`therefore, is invalid for lack of patentable subject matter.6
`
`3. The ’382 Patent
`
`The ’382 patent describes ″a system for selectively tailoring
`information delivered to an Internet user depending upon
`the particular needs of the user.″ (’382 pa