Friday, May 29, 2009

Process Requiring Machine Doesn't Necessarily Satisfy 35 USC 101

Every Penny Counts, Inc. v. Bank of America Corp., 2-07-cv-00042 (M.D. Fla. May 27, 2009, Order) (Magnuson, J.)

Plaintiff Every Penny Counts (“EPC”) received patent number 6,112,191 (the “191 patent”) in 2000. This patent claims a system whereby consumers can save and/or donate a portion of a credit or debit transaction. EPC sued Bank of America ("BOA") for infringement, and BOA moved for summary judgment of invalidity in light of Bilski. A contested claim reads:

A system, comprising:

A network;

entry means coupled to said network for entering into the network an amount being paid in a transaction by a payor;

identification entering means in said entry means and coupled to said network for entering an identification of the payor;

said network including computing means having data concerning the payor including an excess determinant established by the payor for the accounts;

said computing means in said network being responsive to said data and said identification entering means for determining an excess payment on the basis of the determinant established by the payor, and

said computing means in said network being responsive to the excess payment for apportioning, at least a part of the excess payment amount said accounts on the basis of the excess determined and established by the payor and on the basis of commands established by the payor and controlled by other than the payee.

EPC argued that the patent does not claim a process, but a system, which is analogous to a machine. Thus, according to EPC, Bilski did not apply. Since a machine is “a concrete thing, consisting of parts, or of certain devices and combination of devices,” (In re Nuijten) EPC contended that, because claim 15 claims a “network,” an “entry means,” an “identification entry
means,” and a “computing means,” the patent is a “machine” under the above definition.

Taking a hard line against EPC, the district court rejected this argument:

Simply because the process at issue requires machines or computers to work, however, does not mean that the process or system is a machine. See, e.g., Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972) (finding that “the mathematical formula involved here has no substantial practical application except in connection with a digital computer” and was therefore not eligible for a patent). The “system” described by the 191 patent “has no substantial practical application except in connection with” computers, cash registers, and networks, but it is not comprised of those devices. The 191 patent is a process, not a machine.

Bilski emphasized that the use of a machine in the process in question was not particularly relevant in determining whether that process was patent-eligible. Rather, a Court must examine whether “the use of a specific machine . . . impose[s] meaningful limits on the claim’s scope” and whether “the involvement of the machine in the claimed process [is] merely. . . insignificant extra-solution activity.” Id. at 961-62. In the process claimed by the 191 patent, a mathematical algorithm uses machines for data input and data output and to perform the required calculations. Those machines do not, however, impose any limit on the process itself. The involvement of the machine in the process is insignificant extrasolution activity and thus the process is not patentable under §101.

The 191 patent is invalid unless it “is tied to a particular machine” or “transforms a particular article into a different state or thing.” Bilski, 545 F.3d at 954. EPC does not argue that the 191 patent transforms any article into something different. Thus, the patent is valid only if it is tied to a particular machine. Because it is beyond question that the patented process is not tied to a particular computer or other device, the process embodied by the 191 patent is invalid under § 101.

As an additional "kicker", the district court judge even noted BOA's patent activities in this area and commented that BOA "cannot have its cake and eat it too":

According to EPC, BOA has attempted patent its Keep the Change program. EPC
contends that BOA changed some of the patent application language after the PTO raised Bilski issues. BOA cannot have its cake and eat it, too. If the EPC patent is invalid because it is not patentable subject matter, then the very similar process used by Keep the Change is likewise invalid.

Read/download the opinion here (link)

From Docket Navigator

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