Case: 14-1506 Document: 44 Page: 1 Filed: 10/21/2014
`
`No. 2014-1506, -1515
`
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`INTELLECTUAL VENTURES I LLC AND
`INTELLECTUAL VENTURES II LLC,
`
`
`Plaintiffs-Appellants,
`
`v.
`
`CAPITAL ONE, NATIONAL ASSOCIATION,
`CAPITAL ONE BANK (USA), NATIONAL ASSOCIATION, AND
`CAPITAL ONE FINANCIAL CORPORATION,
`
`
`Defendants-Appellees.
`
`
`Appeals from the United States District Court for the Eastern District of Virginia
`in civil action No. 1:13-cv-00740, Judge Anthony J. Trenga
`
`BRIEF FOR ASKELADDEN L.L.C. AS AMICUS CURIAE
`IN SUPPORT OF DEFENDANTS-APPELLEES
`
`
`
`
`
`
`
`JAMES L. QUARLES III
`GREGORY H. LANTIER
`RICHARD A. CRUDO
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Avenue, NW
`Washington, DC 20006
`(202) 663-6000
`
`October 21, 2014
`
`
`
`
`
`
`

`

`Case: 14-1506 Document: 44 Page: 2 Filed: 10/21/2014
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`
`
`CERTIFICATE OF INTEREST
`
`Counsel for Amicus Askeladden L.L.C. certifies the following:
`
`1.
`appeal is:
`
`The full name of every party or amicus represented by me in this
`
`Askeladden L.L.C.
`
`2.
`appeal are:
`
`The names of the real parties in interest represented by me in this
`
`Askeladden L.L.C.
`
`All parent corporations and any publicly held companies that own 10
`3.
`percent or more of the stock of the party or amicus curiae represented by me are:
`
`Askeladden L.L.C. is a wholly owned subsidiary of The Clearing House
`Payments Company L.L.C. No corporation or publicly held company owns
`10 percent or more of The Clearing House Payments Company L.L.C.
`
`The names of all law firms and the partners and associates that
`4.
`appeared in the lower tribunal or are expected to appear in this appeal on behalf of
`Amicus Askeladden L.L.C. are:
`
`WILMER CUTLER PICKERING HALE AND DORR LLP: James L. Quarles III,
`Gregory H. Lantier, Richard A. Crudo.
`
`October 21, 2014
`
`/s/ Gregory H. Lantier
`Gregory H. Lantier
`
`
`
`
`
`
`
`- i -
`
`

`

`Case: 14-1506 Document: 44 Page: 3 Filed: 10/21/2014
`
`
`
`TABLE OF CONTENTS
`
`CERTIFICATE OF INTEREST ................................................................................. i
`
`TABLE OF AUTHORITIES .................................................................................... iv
`
`STATEMENT OF INTEREST .................................................................................. 1
`
`ARGUMENT ............................................................................................................. 3
`
`I.
`
`II.
`
`THE PATENTS-IN-SUIT HAVE BEEN INDISCRIMINATELY ASSERTED. ................. 3
`
`A.
`
`IV Has Asserted the Patents-in-Suit and Similar Patents
`Against Other Defendants. .................................................................... 3
`
`The Patents-In-Suit Claim Concepts that Are Fundamental
`to Basic Internet Use and Personal Finance. ......................................... 5
`
`B.
`
`PATENTS DIRECTED TOWARD COMPUTER-IMPLEMENTED, FUNDAMENTAL
`ECONOMIC PRACTICES, LIKE THE PATENTS-IN-SUIT, FALL OUTSIDE THE
`SCOPE OF § 101. ............................................................................................... 8
`
`A.
`
`Section 101 Has Long Applied to Prevent the Monopolization of
`Fundamental Ideas and Practices. ......................................................... 8
`
`The Supreme Court’s Alice Corp. Decision Confirms that Patents
`Directed Toward Fundamental Financial Practices Are Invalid
`Under § 101. .......................................................................................... 9
`
`B.
`
`III. THE DISTRICT COURT PROPERLY GRANTED SUMMARY JUDGMENT OF
`INVALIDITY UNDER § 101. .............................................................................. 12
`
`A.
`
`The Patents Are Directed Toward Patent-Ineligible Ideas.................. 12
`
`1.
`
`B.
`
`
`
`2.
`
`The patent claims embody abstract ideas on their face. ........... 13
`
`The abstract nature of the patent claims is further
`evidenced by the manner in which the patents
`are asserted. ............................................................................... 14
`
`The Other Limitations Do Not Transform the Nature of the Claims
`into Patent-Eligible Applications. ....................................................... 18
`
`- ii -
`
`

`

`Case: 14-1506 Document: 44 Page: 4 Filed: 10/21/2014
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`
`
`IV. THE TIMING OF DISTRICT COURTS’ ADJUDICATION OF INVALIDITY UNDER
`§ 101 IS CRITICALLY IMPORTANT. .................................................................. 20
`
`CONCLUSION ........................................................................................................ 23
`
`CERTIFICATE OF SERVICE
`
`CERTIFICATE OF COMPLIANCE
`
`
`
`
`
`- iii -
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`

`

`Case: 14-1506 Document: 44 Page: 5 Filed: 10/21/2014
`
`
`
`TABLE OF AUTHORITIES
`
`
`CASES
`Accenture Global Services, GmbH v. Guidewire Software, Inc.,
`728 F.3d 1336 (Fed. Cir. 2013) .................................................................... 11, 19
`
`Page(s)
`
`Alice Corp. v. CLS Bank International,
`134 S. Ct. 2347 (2014) .................................................................................passim
`
`Bancorp Services, LLC v. Sun Life Assurance Co. of Canada (U.S.),
`687 F.3d 1266 (Fed. Cir. 2012) .............................................................. 11, 19–20
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) ............................................................................ 8, 10, 14, 19
`
`Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,
`489 U.S. 141 (1989) ............................................................................................ 16
`
`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014) .................................................................... 11–12
`
`Clear with Computers, LLC v. Dick’s Sporting Goods, Inc.,
`-- F. Supp. 2d --, 2014 WL 923280 (E.D. Tex. Jan. 21, 2014) ..................... 18–19
`
`CLS Bank International v. Alice Corp.,
`No. 2011-1301 (Fed. Cir. argued Feb. 8, 2013) ................................................. 15
`
`Cyberfone Systems, LLC v. CNN Interactive Group, Inc.,
`558 F. App’x 988 (Fed. Cir. 2014) ..................................................................... 22
`
`CyberSource Corp. v. Retail Decisions, Inc.,
`654 F.3d 1366 (Fed. Cir. 2011) .................................................................... 11, 17
`
`Dealertrack, Inc. v. Huber,
`674 F.3d 1315 (Fed. Cir. 2012) .......................................................................... 11
`
`DietGoal Innovations LLC v. Bravo Media LLC,
`-- F. Supp. 2d --, 2014 WL 3582914 (S.D.N.Y. July 8, 2014) ........................... 16
`
`Digitech Image Technologies, LLC v. Electronics for Imaging, Inc.,
`758 F.3d 1344 (Fed. Cir. 2014) .......................................................................... 13
`
`- iv -
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`

`

`Case: 14-1506 Document: 44 Page: 6 Filed: 10/21/2014
`
`
`
`Evans Cooling Systems, Inc. v. General Motors Corp.,
`125 F.3d 1448 (Fed. Cir. 1997) .......................................................................... 17
`
`Fort Properties, Inc. v. American Master Lease LLC,
`671 F.3d 1317 (Fed. Cir. 2012) .......................................................................... 11
`
`Funk Brothers Seed Co. v. Kalo Inoculant Co.,
`333 U.S. 127 (1948) .............................................................................................. 9
`
`Gottschalk v. Benson,
`409 U.S. 63 (1972) ........................................................................................ 10, 18
`
`Intellectual Ventures I LLC v. Bank of America Corp.,
`No. 3:13-cv-00358 (W.D.N.C. June 12, 2013) ..................................................... 4
`
`Intellectual Ventures I LLC v. Capital One Financial Corp.,
`No. 1:13-cv-00740 (E.D. Va.) ............................................................................ 21
`
`Intellectual Ventures I, LLC v. Fifth Third Bancorp.,
`No. 1:13-cv-00378 (S.D. Ohio June 4, 2013) ....................................................... 4
`
`Intellectual Ventures I LLC v. HSBC USA, Inc.,
`No. 1:13-cv-05386 (S.D.N.Y. Aug. 1, 2013) ....................................................... 4
`
`Intellectual Ventures I LLC v. Manufacturers & Traders Trust Co.,
`No. 1:13-cv-01274 (D. Del. July 24, 2013) .......................................................... 4
`
`Intellectual Ventures I LLC v. PNC Financial Services Group, Inc.,
`No. 2:13-cv-00740 (W.D. Pa. May 29, 2013) ...................................................... 4
`
`Le Roy v. Tatham,
`55 U.S. (14 How.) 156 (1853) .............................................................................. 8
`
`Lumen View Technology LLC v. Findthebest.com, Inc.,
`984 F. Supp. 2d 189 (S.D.N.Y. 2013) .......................................................... 16, 17
`
`Mayo Collaborative Services v. Prometheus Laboratories, Inc.,
`132 S. Ct. 1289 (2012) ............................................................................ 10, 11, 19
`
`MobileMedia Ideas, LLC v. Apple Inc.,
`907 F. Supp. 2d 570 (D. Del. 2012).................................................................... 17
`
`- v -
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`

`

`Case: 14-1506 Document: 44 Page: 7 Filed: 10/21/2014
`
`
`
`Nassau Precision Casting Co. v. Acushnet Co.,
`566 F. App’x 933 (Fed. Cir. 2014) ............................................................... 16–17
`
`Planet Bingo, LLC v. VKGS LLC,
`-- F. App’x --, 2014 WL 4195188 (Fed. Cir. Aug. 26, 2014) ............................ 12
`
`Rubber-Tip Pencil Co. v. Howard,
`87 U.S. (20 Wall.) 498 (1874) ............................................................................ 10
`
`Ultramercial, Inc. v. Hulu, LLC,
`722 F.3d 1335, 1338 (Fed. Cir. 2013) ................................................................ 21
`
`Vanmoor v. Wal-Mart Stores, Inc.,
`201 F.3d 1363 (Fed. Cir. 2000) .......................................................................... 17
`
`STATUTES
`
`35 U.S.C. § 100(b) ..................................................................................................... 8
`
`35 U.S.C. § 101 .................................................................................................passim
`
`OTHER MATERIALS
`
`Brief for The Clearing House Association, L.L.C. as
`Amicus Curiae Supporting Appellees, Ultramercial, LLC v. Hulu, LLC,
`No. 10-1544 (Fed. Cir. Sept. 4, 2014) ................................................................ 23
`
`Gerald B. Halt Jr., Volpe & Koenig P.C., http://vklaw.com/people/gerald-b-
`halt-jr-2/ ................................................................................................................ 7
`
`Joe Mullin, For World’s Biggest Troll, First Patent Case Ends up in Tatters,
`Ars Technica (Apr. 21, 2014), http://arstechnica.com/tech-policy/2014/
`04/for-worlds-biggest-troll-first-patent-case-ends-up-in-tatters/ ......................... 7
`
`U.S. Patent Office, Patent Assignment Abstract of Title, ’137 Patent ...................... 7
`
`U.S. Patent Office, Patent Assignment Abstract of Title, ’382 Patent ...................... 7
`
`- vi -
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`

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`Case: 14-1506 Document: 44 Page: 8 Filed: 10/21/2014
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`
`
`STATEMENT OF INTEREST1
`
`Askeladden L.L.C. is an education, information, and advocacy organization
`
`whose goal is to improve the understanding, use, and reliability of patents in
`
`financial services and related industries. Askeladden seeks to improve the U.S.
`
`patent system by, among other things, submitting amicus curiae briefs on important
`
`legal issues.2
`
`Askeladden is a wholly owned subsidiary of The Clearing House Payments
`
`Company L.L.C. Established in 1853, The Clearing House is the oldest banking
`
`association and payments company in the United States. It is owned by the
`
`world’s largest commercial banks, which collectively hold more than half of all
`
`deposits in the United States and employ more than one million people in the
`
`United States and more than two million people worldwide. The Clearing House
`
`clears almost $2 trillion each day, representing nearly half of all automated
`
`clearing house, funds transfer, and check-image payments made in the United
`
`States. Its affiliate, The Clearing House Association L.L.C., is a nonpartisan
`
`advocacy organization that represents the interests of its owner banks by promoting
`
`and developing policies to support a safe, sound, and competitive banking system.
`
`
`1
`No party, and no person other than Askeladden L.L.C., or its members,
`contributed toward the preparation or submission of this brief.
`
`Both Appellants and Appellees have consented to the filing of this brief.
`
`2
`
`- 1 -
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`

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`Case: 14-1506 Document: 44 Page: 9 Filed: 10/21/2014
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`
`
`Askeladden recognizes that a strong patent system is vital to continued
`
`innovation in the United States, and many member banks hold patents of their own
`
`related to financial products and services. But invalid patents directed toward
`
`computer-aided, fundamental financial practices undermine real innovation and are
`
`easily abused. Widespread exploitation of such patents has led to tremendous
`
`strain on party and judicial resources, as demonstrated in this and related cases, and
`
`contravenes the spirit, if not the letter, of the patent laws.
`
`Robust application of 35 U.S.C. § 101, as commanded by recent Supreme
`
`Court precedent, is critical to ensuring that the U.S. economy is not unduly
`
`encumbered by low-quality patents purporting to claim foundational ideas, and that
`
`the patent system rewards actual innovation with appropriately tailored patent
`
`protection. The district court in this case correctly held that two of the asserted
`
`patents claim subject matter falling outside the scope of § 101. Askeladden
`
`respectfully urges this Court to affirm that judgment.3
`
`More broadly, Askeladden urges the Court to encourage district courts to
`
`hold a patentee to its infringement theories and assertion activity when evaluating
`
`invalidity under § 101, including at the motion to dismiss stage. Appellants in this
`
`
`3
`This brief addresses only the district court’s judgment of invalidity based on
`§ 101. It does not address the district court’s additional bases for granting
`summary judgment to Appellees, nor the district court’s dismissal of certain of
`Appellees’ counterclaims and affirmative defenses.
`
`- 2 -
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`Case: 14-1506 Document: 44 Page: 10 Filed: 10/21/2014
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`
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`case have undertaken a litigation campaign against numerous, disparate
`
`defendants, predicated only on the ground that the defendants provide financial
`
`services using computer technology. This litigation activity underscores that the
`
`patents claim highly generalized, abstract concepts, and implicates the fundamental
`
`preemption concern that drives the § 101 analysis.
`
`Additionally, in cases where no specific factual or claim construction
`
`disputes underlie the § 101 inquiry, this Court should encourage district courts to
`
`address § 101 early in a case. Invalidating patents that are plainly directed toward
`
`unpatentable subject matter at the early stages of litigation allows defendants to
`
`avoid incurring significant expenses associated with discovery and claim
`
`construction, which are oftentimes unnecessary for purposes of the § 101 analysis,
`
`and would help deter abusive litigation tactics involving such patents.
`
`ARGUMENT
`
`I.
`
`THE PATENTS-IN-SUIT HAVE BEEN INDISCRIMINATELY ASSERTED.
`
`A.
`
`IV Has Asserted the Patents-in-Suit and Similar Patents Against
`Other Defendants.
`
`Appellants Intellectual Ventures I LLC and Intellectual Ventures II LLC are
`
`litigation entities owned by Intellectual Ventures Management, LLC (“IV”). Since
`
`May 2013, IV has filed sixteen lawsuits against banks, including Appellees
`
`(collectively, “Capital One”), asserting several combinations of fourteen patents,
`
`all of which relate to online and computer-based financial services and data
`
`- 3 -
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`

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`Case: 14-1506 Document: 44 Page: 11 Filed: 10/21/2014
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`
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`protection. Two of the patents-in-suit, U.S. Patent Nos. 7,603,382 (“’382 patent”)
`
`and 8,083,137 (“’137 patent”), are currently asserted against five other banks.4
`
`IV has asserted these patents against online personal investment and
`
`personal finance services, with little regard as to how those computerized services
`
`are implemented. The complaints employ the same boilerplate language against
`
`each of the defendants, asserting infringement merely because the defendant
`
`“provides online banking services and other systems and services via electronic
`
`means.” A0006 ¶ 21.5 No supporting material is cited in the complaints other than
`
`the defendants’ websites, nor is there any suggestion that the manner in which each
`
`defendant is believed to implement the accused services is the basis for the
`
`infringement allegation. The complaints’ infringement claims are based on
`
`nothing more than the fact that defendants offer various investment and financial
`
`services over the Internet.
`
`
`4
`See Intellectual Ventures I LLC v. PNC Fin. Servs. Grp., Inc., No. 2:13-cv-
`00740 (W.D. Pa. May 29, 2013); Intellectual Ventures I LLC v. Mfrs. & Traders
`Trust Co., No. 1:13-cv-01274 (D. Del. July 24, 2013); Intellectual Ventures I LLC
`v. Bank of Am. Corp., No. 3:13-cv-00358 (W.D.N.C. June 12, 2013); Intellectual
`Ventures I, LLC v. Fifth Third Bancorp., No. 1:13-cv-00378 (S.D. Ohio June 4,
`2013); Intellectual Ventures I LLC v. HSBC USA, Inc., No. 1:13-cv-05386
`(S.D.N.Y. Aug. 1, 2013). This brief addresses only the ’382 and ’137 patents, and
`does not address the third patent-in-suit, U.S. Patent No. 7,260,587.
`
`See also Complaint ¶ 19, PNC, No. 2:13-cv-00740; Complaint ¶ 19, M&T,
`
`No. 1:13-cv-01274; Complaint ¶ 20, Bank of Am. Corp., No. 3:13-cv-00358;
`Complaint ¶ 20, Fifth Third Bancorp., No. 1:13-cv-00378; Complaint ¶ 6, HSBC,
`No. 1:13-cv-05386.
`
` 5
`
`- 4 -
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`

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`Case: 14-1506 Document: 44 Page: 12 Filed: 10/21/2014
`
`
`
`B.
`
`The Patents-In-Suit Claim Concepts that Are Fundamental to
`Basic Internet Use and Personal Finance.
`
`The ’382 and ’137 patents claim concepts that are fundamental to basic
`
`Internet use and personal finance, which have long been incorporated by banks in
`
`their online financial service tools. The ’382 patent claims the concept of tailoring
`
`communications based on information specific to a user viewing a website. See
`
`A0044, claim 1; A0041, 2:3–6. The purported invention selects a set of data that
`
`most closely aligns with a user’s profile and web-browsing history, and displays
`
`that data on a webpage for the user to see. A0043, 5:39–6:38. Asserted
`
`independent claim 1 recites a generic system for effectuating this concept6:
`
`A system for providing web pages accessed from a web site in a
`manner which presents the web pages tailored to an individual user,
`comprising:
`
`
`an interactive interface configured to provide dynamic web site
`navigation data to the user, the interactive interface comprising:
`
`
`
`
`
`a display depicting portions of the web site visited by the user as a
`function of the web site navigation data; and
`
`a display depicting portions of the web site visited by the user as a
`function of the user's personal characteristics.
`
`
`A0044, claim 1.
`
`
`6
`IV asserts claims 1–5, 16–17, and 19–22 of the ’382 patent against Capital
`One. But, as the district court found, independent claims 1 and 21 are
`representative of the asserted system and method claims, respectively. See A0781–
`82.
`
`- 5 -
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`

`

`Case: 14-1506 Document: 44 Page: 13 Filed: 10/21/2014
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`
`
`The ’137 patent claims a concept that is fundamental to the basic practice of
`
`budgeting—i.e., helping credit card users with financial planning so as to enable
`
`them “to resist the temptation of purchasing a product spontaneously.” A0067,
`
`1:24–25. The user’s credit card information is conveyed from a point-of-sale
`
`device to a processor that categorizes the purchases being made and stores those
`
`purchase amounts and categories in a database. A0068, 3:47–52. If the amounts in
`
`a category exceed a pre-set limit, the user is required to give specific approval for a
`
`particular purchase. Id. at 4:1–5. Asserted independent claim 5 recites a method
`
`for communicating the pre-set limit to the user when providing a transaction
`
`summary:
`
`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
`
`
`causing communication, over a communication medium and to a
`receiving device, of transaction summary data 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 limits.
`
`A0071, claim 5.
`
`Neither of these patents originated with operating companies, nor even with
`
`software programmers or financial services personnel. Indeed, the ’382 patent did
`
`not even originate from an inventor having training or experience with the claimed
`
`- 6 -
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`Case: 14-1506 Document: 44 Page: 14 Filed: 10/21/2014
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`
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`technology. Instead, the patent’s inventor is a licensed patent attorney7 who
`
`assisted in the prosecution of the patent application, and originally assigned the
`
`patent to his own law firm. The patent was acquired by IV in May 2013—less than
`
`one month before suit was filed against Capital One—when IV merged with a
`
`patent licensing company called Roscoe Technologies LLC. See U.S. Patent
`
`Office, Patent Assignment Abstract of Title, ’382 Patent.
`
`The ’137 patent was acquired under similar circumstances when IV formally
`
`merged with its patent licensing shell company, Niaco Data Management, II,
`
`L.L.C., in May 2013. See U.S. Patent Office, Patent Assignment Abstract of Title,
`
`’137 Patent. The inventor, Mary C. Tannenbaum, and her husband, also a patent
`
`attorney, had a role in prosecuting the patent application. Collectively, the
`
`Tannenbaums are named inventors of more than two dozen issued U.S. patents,
`
`many of which were assigned to their own holding company, Union Beach, L.P.8
`
`See Joe Mullin, For World’s Biggest Troll, First Patent Case Ends up in Tatters,
`
`Ars Technica (Apr. 21, 2014), http://arstechnica.com/tech-policy/2014/04/for-
`
`worlds-biggest-troll-first-patent-case-ends-up-in-tatters/.
`
`
`7
`See Gerald B. Halt Jr., Volpe & Koenig P.C., http://vklaw.com/people/
`gerald-b-halt-jr-2/ (last visited Oct. 18, 2014).
`
` 8
`
`The ’137 patent application was originally assigned to Union Beach before
`
`being subsequently assigned to Niaco Data Management.
`
`- 7 -
`
`

`

`
`
`II.
`
`Case: 14-1506 Document: 44 Page: 15 Filed: 10/21/2014
`
`PATENTS DIRECTED TOWARD COMPUTER-IMPLEMENTED, FUNDAMENTAL
`ECONOMIC PRACTICES, LIKE THE PATENTS-IN-SUIT, FALL OUTSIDE THE
`SCOPE OF § 101.
`
`A.
`
`Section 101 Has Long Applied to Prevent the Monopolization of
`Fundamental Ideas and Practices.
`
`Under Section 101 of the Patent Act, “[w]hoever 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
`
`conditions and requirements of this title.” 35 U.S.C. § 101. A “process,” in turn,
`
`is defined as a “process, art or method, and includes a new use of a known process,
`
`machine, manufacture, composition of matter, or material.” Id. § 100(b).
`
`For more than 160 years, the Supreme Court has interpreted § 101 as a
`
`substantive provision that prevents the monopolization of abstract ideas, which are
`
`“the basic tools of scientific and technological work.” Bilski v. Kappos, 561 U.S.
`
`593, 649 (2010) (internal quotation marks omitted); see also Le Roy v. Tatham, 55
`
`U.S. (14 How.) 156, 175 (1853) (“A principle, in the abstract, is a fundamental
`
`truth; an original cause; a motive; these cannot be patented, as no one can claim in
`
`either of them an exclusive right.”). The primary concern that drives this principle
`
`is one of preemption. Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014).
`
`Monopolization of such ideas would “tend to impede innovation more than it
`
`would tend to promote it, thereby thwarting the primary object of the patent laws.”
`
`Id. (internal quotation marks omitted). Thus, fundamental “building blocks of
`
`- 8 -
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`

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`Case: 14-1506 Document: 44 Page: 16 Filed: 10/21/2014
`
`
`
`human ingenuity,” id. (internal quotation marks omitted), are “free to all men and
`
`reserved exclusively to none,” Funk Bros. Seed Co. v. Kalo Inoculant Co., 333
`
`U.S. 127, 130 (1948).
`
`B.
`
`The Supreme Court’s Alice Corp. Decision Confirms that Patents
`Directed Toward Fundamental Financial Practices Are Invalid
`Under § 101.
`
`The Supreme Court reiterated these principles in its most recent decision
`
`addressing § 101. In Alice Corp. v. CLS Bank International, the Court raised the
`
`bar for establishing patent eligibility for computer-implemented inventions,
`
`unanimously affirming the judgment of this Court invalidating claims directed
`
`toward computer-based schemes to manage “settlement risk” in financial
`
`transactions. The Court found that the basic idea of “intermediated settlement,” as
`
`claimed in the patent, “is a fundamental economic practice long prevalent in our
`
`system of commerce” that cannot be exclusively claimed. Alice Corp., 134 S. Ct.
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`at 2356 (internal quotation marks omitted). The Court also noted that in light of
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`“the ubiquity of computers,” limiting a claim covering an abstract concept to a
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`“wholly generic computer implementation” is insufficient to transform the idea
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`into a patent-eligible invention. Id. at 2358. The decision therefore serves as a
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`clear mandate for district courts to invalidate patents that merely claim
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`fundamental economic practices implemented on a computer.
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`Case: 14-1506 Document: 44 Page: 17 Filed: 10/21/2014
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`
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`Alice Corp. articulates a two-step framework for distinguishing patents that
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`claim ineligible abstract ideas from those that claim eligible applications of those
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`ideas. First, courts must determine whether the claim at issue is directed to a
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`patent-ineligible concept, because it is well established that while inventions
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`employing ideas are patentable, the underlying ideas themselves are not. See
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`Gottschalk v. Benson, 409 U.S. 63, 71 (1972) (“It is conceded that one may not
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`patent an idea.”); Rubber-Tip Pencil Co. v. Howard, 87 U.S. (20 Wall.) 498, 507
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`(1874) (“An idea of itself is not patentable, but a new device by which it may be
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`made practically useful is.”).
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`If the claim is in fact directed to an abstract idea, courts must next search for
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`the “inventive concept” in the claim—i.e., “an element or combination of elements
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`that is ‘sufficient to ensure that the patent in practice amounts to significantly more
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`than a patent upon the [ineligible concept] itself.’” Alice Corp., 134 S. Ct. at 2355
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`(quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289,
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`1294 (2012)). Supreme Court precedent makes clear that claims must do
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`“significantly more” than recite an abstract idea or mental process to be patent
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`eligible. Mayo, 132 S. Ct. at 1294. A patentee cannot circumvent the prohibition
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`on patenting abstract ideas by limiting the idea to “a particular technological
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`environment,” nor by adding “insignificant postsolution activity,” Bilski, 561 U.S.
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`at 610–11 (internal quotation marks omitted), or “well-understood, routine,
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`- 10 -
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`

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`Case: 14-1506 Document: 44 Page: 18 Filed: 10/21/2014
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`
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`conventional” features, Mayo, 132 S. Ct. at 1297–98. Thus, “the mere recitation of
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`a generic computer cannot transform a patent-ineligible abstract idea into a patent-
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`eligible invention.” Alice Corp., 134 S. Ct. at 2358.
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`This Court has held similarly even before Alice Corp., invalidating several
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`patents directed toward computer-implemented ideas. See, e.g., Accenture Global
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`Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013)
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`(computer program for handling insurance-related tasks), cert. denied, 134 S. Ct.
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`2871 (2014); Bancorp Servs., LLC v. Sun Life Assurance Co. of Can. (U.S.), 687
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`F.3d 1266 (Fed. Cir. 2012) (computer system for administering and tracking the
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`value of separate-account life insurance policies), cert. denied, 134 S. Ct. 2870
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`(2014); Fort Props., Inc. v. Am. Master Lease LLC, 671 F.3d 1317 (Fed. Cir. 2012)
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`(computer-implemented method of creating tax-deferred real estate instrument
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`using a computer to generate a plurality of deed shares); Dealertrack, Inc. v.
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`Huber, 674 F.3d 1315 (Fed. Cir. 2012) (computer-aided method of managing a
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`credit application); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366
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`(Fed. Cir. 2011) (process for detecting online credit card fraud).
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`In each of these cases, this Court found that the claims reduced to mere
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`known, conventional methods of conducting business that could have been
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`performed without a computer. These decisions are undoubtedly correct in light of
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`the Supreme Court’s intervening Alice Corp. decision. See, e.g., buySAFE, Inc. v.
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`Case: 14-1506 Document: 44 Page: 19 Filed: 10/21/2014
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`
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`Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014) (invalidating after Alice Corp. patent
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`directed toward machine-readable media encoded to perform steps for
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`guaranteeing a party’s performance of its online transaction); Planet Bingo, LLC v.
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`VKGS LLC, -- F. App’x --, 2014 WL 4195188 (Fed. Cir. Aug. 26, 2014)
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`(invalidating after Alice Corp. patent directed toward computer-aided management
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`of bingo games).
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`III. THE DISTRICT COURT PROPERLY GRANTED SUMMARY JUDGMENT OF
`INVALIDITY UNDER § 101.
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`The district court’s decision invalidating all asserted claims of the patents-
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`in-suit under § 101 was correct in view of Alice Corp., and Askeladden urges the
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`Court to affirm that decision.
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`A. The Patents Are Directed Toward Patent-Ineligible Ideas.
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`With regard to the first inquiry commanded by Alice Corp., the district court
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`appropriately found that the patents are directed to abstract ideas that are not
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`eligible for patent protection. The purported inventions embody nothing more than
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`well-known concepts that are fundamental to modern commercial transactions.9
`
`
`9
`Even Appellants appear to acknowledges at some level that these patents are
`directed to abstract ideas. IV repeatedly refers to the patents in its opening brief as
`embodying “concepts” rather than technological innovations. See, e.g., IV Br. 23,
`25, 27, 30, 34.
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`

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`Case: 14-1506 Document: 44 Page: 20 Filed: 10/21/2014
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`1.
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`The patent claims embody abstract ideas on their face.
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`The abstract nature of the patents at issue is plainly evident from the face of
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`the claims. Asserted independent claim 1 of the ’382 patent, for example, recites
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`only the abstract idea of tailoring an information provider’s webpage based on data
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`about a particular user. But the patent itself explains that it was well known to
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`provide a user’s personal characteristics to a webpage. In particular, the
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`specification describes how prior art webpages allowed users to create profiles of
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`their personal characteristics to be used with a “particular web page.” A0042,
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`4:18–20 (“[S]everal current Web pages permit a user to create a profile for that
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`particular Web page[] . . . .”). The patent also makes clear that using website
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`navigation data to tailor webpages was well known at the time the patent was filed.
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`See id. at 3:22–27 (noting that “[m]ost Web pages” allows “the information user
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`[to] gain[] access to additional tiers of information” as the user “inputs information
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`and makes selections”).10 Although the claims of the ’382 patent require that
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`webpages be tailored to the user as a “function” of the website navigation and user
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`data, they do not specify what this “function” is or how the underlying idea is
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`10
`Claim 21 recites a method for customizing a webpage based on information
`in the user’s profile, which is uploaded to the website. But as this Court recently
`conf