Wednesday, August 17, 2011

CyberSource: Beauregard claim Bilski'd

The CAFC affirmed ND Ca as to non-eligible matter under 35 USC 101:

Plaintiff-appellant CyberSource Corporation (“Cyber- Source”) appeals from a decision of the United States District Court for the Northern District of California. The district court granted summary judgment of invalidity of claims 2 and 3 of U.S. Patent No. 6,029,154 (“’154 patent”) under 35 U.S.C. § 101 for failure to recite patent-eligible subject matter. See CyberSource Corp. v. Retail Decisions, Inc., 620 F. Supp. 2d 1068 (N.D. Cal. 2009). We affirm.


The district court found that claim 3 fails to meet ei- ther prong of the machine-or-transformation test. Cyber- Source, 620 F. Supp. 2d at 1078. We agree.


We have held that mere “[data-gathering] step[s] cannot make an otherwise nonstatutory claim statutory.” In re Grams, 888 F.2d 835, 840 (Fed. Cir. 1989) (quoting In re Meyer, 688 F.2d 789, 794 (CCPA 1982)).


It is clear that unpatentable mental processes are the subject matter of claim 3. All of claim 3’s method steps can be performed in the human mind, or by a human using a pen and paper. Claim 3 does not limit its scope to any particular fraud detection algorithm, and no algo- rithms are disclosed in the ’154 patent’s specification. Rather, the broad scope of claim 3 extends to essentially any method of detecting credit card fraud based on infor- mation relating past transactions to a particular “Internet address,” even methods that can be performed in the human mind.

Separately, a Beauregard claim—named after In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995)—is a claim to a computer readable medium (e.g., a disk, hard drive, or other data storage device) containing program instructions for a computer to per- form a particular process.

CyberSource’s main argument is that coupling the unpatentable mental process recited in claim 3 with a manufacture or machine renders it patent- eligible.


Cyber- Source contends that, by definition, a tangible, man-made article of manufacture such as a “computer readable medium containing program instructions” cannot possibly fall within any of the three patent-eligibility exceptions the Supreme Court has recognized for “laws of nature, physical phenomena, [or] abstract ideas.” Appellant’s Br. 47–48 (quoting Bilski, 130 S. Ct. at 3225). We disagree.


In the present case, CyberSource has not met its burden to demonstrate that claim 2 is “truly drawn to a specific” computer readable medium, rather than to the underlying method of credit card fraud detection.


As we stated in Bilski, to impart patent- eligibility to an otherwise unpatentable process under the theory that the process is linked to a machine, the use of the machine “must impose meaningful limits on the claim’s scope.” 545 F.3d at 961. In other words, the machine “must play a significant part in permitting the claimed method to be performed.” SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010). Here, the incidental use of a computer to perform the mental process of claim 3 does not impose a sufficiently meaningful limit on the claim’s scope. As such, the “computer readable medium” limitation of claim 2 does not make the otherwise unpatentable method patent- eligible under § 101. See Grams, 888 F.2d at 840–41 (after finding claims unpatentable for being drawn to a mental process, the court found that claim 16’s require- ment “that the [same] method be performed with a pro- grammed computer” did not alter the method’s unpatentability under § 101). Abele made clear that the basic character of a process claim drawn to an abstract idea is not changed by claiming only its performance by computers, or by claiming the process embodied in pro- gram instructions on a computer readable medium. Thus, merely claiming a software implementation of a purely mental process that could otherwise be performed without the use of a computer does not satisfy the machine prong of the machine-or-transformation test.

That purely mental processes can be unpatentable, even when performed by a computer, was precisely the holding of the Supreme Court in Gottschalk v. Benson. As discussed above, the Supreme Court found in Benson that a claim to a method of programming a general-purpose computer to convert BCD numbers into pure binary was unpatentable because the conversion of BCD numerals to pure binary numerals “can be done mentally,” 409 U.S. at 65–67, and because the process was “so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion,” id. at 71.


This is entirely unlike cases where, as a practical matter, the use of a computer is required to perform the claimed method. For example, in SiRF Tech., we found that claims to a “method for calculating an absolute position of a GPS receiver and an absolute time of recep- tion of satellite signals” recited patent-eligible subject matter. 601 F.3d at 1331. The court noted that we were “not dealing with . . . a method that [could] be performed without a machine” and that there was “no evidence . . . that the calculations [could] be performed entirely in the human mind.” Id. at 1333. To the contrary, we found it was “clear that the methods at issue could not be per- formed without the use of a GPS receiver.” Id. at 1332.

Similarly, in Research Corp. Techs. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010), we upheld the patentability of a claimed method “for rendering a halftone image of a digital image by comparing, pixel by pixel, the digital image against a blue noise mask.” Id. at 868. Because the method required the manipulation of computer data structures (e.g., the pixels of a digital image and a two- dimensional array known as a mask) and the output of a modified computer data structure (a halftoned digital image), the method could not, as a practical matter, be performed entirely in a human’s mind.

In contrast, it is clear in the present case that one could mentally perform the fraud detection method that underlies both claims 2 and 3 of the ’154 patent, as the method consists of only the general approach of obtaining information about credit card transactions utilizing an Internet address and then using that information in some undefined manner to determine if the credit card transac- tion is valid. Because claims 2 and 3 attempt to capture unpatentable mental processes (i.e., abstract ideas), they are invalid under § 101.


Blogger New said...

It's about time the courts started to see through patentees' device of throwing in language to the effect of "performed using a computer" in order to make their method claims patentable. Hopefully, this decision will help to improve the quality of issued patents henceforth. Those in the anti-software-patent set should also be pleased with this ruling, which potentially sets the stage for invalidating patents on software.

6:51 AM  

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