Monday, July 06, 2015

Intellectual Ventures loses its appeal against Capital One Bank at the CAFC

The overview of the case

Plaintiffs Intellectual Ventures I LLC and Intellectual
Ventures II LLC (collectively, “Intellectual Ventures ”)
asserted infringement of claims of three patents against
defendants Capital One Bank (USA), NA, Capital One
Financial Corporation, and Capital One, NA (collectively,
“Capital One”) . The three patents were U.S. Patent Nos.
8,083,137, 7,603,382, and 7,260,587 (“the ’137 patent,”
“the ’382 patent,” and “the ’587 patent,” respectively)


We affirm, concluding that the asserted claims of the
’137 and ’382 patents claim unpatentable abstract ideas
and that the district court’s claim construction
with respect to the ’587 patent was correct

As to patent subject matter eligibility:

We first address patent eligibility with respect to the
’137 and ’382 patents. An invention is patent-eligible if it
fits into one of four statutory categories:
processes, ma-
chines, manufactures, and compositions. 35 U.S.C. §101.
But there is an implicit exception.
“Laws of nature, natural phenomena, and abstract ideas are not patentable.”
Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014)
(citation omitted) . To determine whether an
invention claims ineligible subject matter, we engage in a two-
step process. First, “we determine whether the
claims at issue are directed to one of [the]
patent - ineligible concepts ”—laws of nature, natural phenomena,
or abstract ideas. Id. at 2355.
“The ‘abstract ideas’ category embodies ‘the longstanding rule’
that ‘[a] n idea of itself is not patentable.’” Id.
(quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)).
An abstract idea does not
become nonabstract by limiting the invention to a particu-
lar field of use or technological environment
, such as the Internet.
See Alice, 134 S. Ct. at 2358 (limiting an ab-
stract idea to a particular technological environment,
such as a computer, does not confer patent eligibility);
Bilski v. Kappos, 561 U.S. 593, 612 (2010) (“[L]imiting an
abstract idea to one field of use . . .
d[oes] not make the
concept patentable.”)

As to the '137 patent:

Here, the patent claims are directed to an abstract
: tracking financial transactions to determine wheth-
er they exceed a pre-set spending limit (i.e. , budgeting).
Although Intellectual Ventures argues the claims are not
“[d]irected or [d]rawn to an [a]bstract [i]dea,” Appellant’s
Br. 30,Intellectual Ventures admits budgeting “undoubt-
edly . . . is an abstract idea.”
Appellant’s Br. 31. And while the claims recite
budgeting using a “communication medium”
(broadly including the Internet and telephone
networks), that limitation does not render the
claims any less abstract. The abstract idea here is not meaningfully
different from the ideas found to be abstract in
other cases before the Supreme Court and our court
involving methods of organizing human activity. In
Bilski, the Supreme Court determined that a
claim directed to a method of hedging risk was
directed to an abstract idea. 561 U.S. at 599 , 613.
In Alice, the Supreme Court held that a computer-based implementation
of a method of mitigating settle-
ment risk using a third-
party intermediary was drawn to
an abstract idea. 134 S. Ct. at 2351–52


Moving to step two of the Alice framework, it is clear
that the claims contain no inventive concept. The recited
elements, e.g., a database, a user profile (“a profile keyed
to a user identity ,” ’137 patent col. 10 l. 5), and a commu-
nication medium, are all generic computer elements.
Instructing one to “apply” an abstract idea and reciting no
more than generic computer elements performing generic
computer tasks does not make an abstract idea patent-eligible.
See Alice, 134 S. Ct. at 2359–60 (



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