Cybersource Corp. v. Retailed Decisions, Inc., 2011 U.S. App. LEXIS 16871 (Fed. Cir. 2011) (DYK, Bryson & Prost). Cybersource08162011
Major issues: mental steps as unpatentable methods; Section 101; Bilski; claims to computer readable medium with executable programs instructions; Beauregard claims
A Federal Circuit panel, in an opinion by Judge Dyk, held that method claims to a credit card fraud prevention system, which could be carried out by a human mentally or with the aid of pencil, were unpatentably abstract in the Bilski sense. The panel also held claims to “computer reaable medium” for carrying out the methods to be unpatentable.
Cross Reference. For a discussion of the “mental steps” doctrine, see Chisum on Patents Sec. 1.03.
A Growing Line of Post-Bilski Cases. This one of a line of Federal panel decisions that to apply the Supreme Court’s ambiguous analysis in Bilski. For earlier decisions in the line, see Research Corp. Technologies, Inc. v. Microsoft Corp., 627 F.3d 859, CPLRG 0072 (Fed. Cir. 2010); Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 628 F.3d 1347, CPLRG 0071 (Fed. Cir. 2010), on remand from 130 S. Ct. 3543 (2010), cert. granted, 180 L. Ed. 2d 844 (June 20, 2011); Ass’n for Molecular Pathology v. United States Patent and Trademark Office, CPLRG 0073 (Fed. Cir. July 29, 2011). For a subsequent decision, see Classen Immuotherapies, Inc. v. Biogen Idec, 2011 U.S. App. LEXIS 18126 (Fed. Cir. Aug. 31, 2011) (with three opinions by three judges, Newman, Rader and Moore).
Pertinent to this decision is the Supreme Court’s June 20, 2011 grant of certiorari in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 628 F.3d 1347, CPLRG 0071 (Fed. Cir. 2010), which involves Section 101 issues on patent claims concerning medical diagnostics. In Prometheus, the Supreme Court may–or, unfortunately, may not–clarify the current confusion in Section 101 doctrine, a confusion that dates back to Gottschalk v. Benson, 409 U.S. 63 (1972). See Chisum, Patenting Intangible Methods: Revisiting Benson (1972) After Bilksi (2010), 27 Santa Clara Computer & High Tech. L. J.445 (2011) (SSRN 1698724).
Patent. The patent concerned a credit card fraud detection system. U.S. Pat. No. 6,029,145. USPatNo6029145
Claim 3; Method. Claim 3 provided:
3. A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:
a) obtaining information about other transactions that have utilized an Internet address that is identified with the [ ] credit card transaction;
b) constructing a map of credit card numbers based upon the other transactions and;
c) utilizing the map of credit card numbers to determine if the credit card transaction is valid.
Machine-or-Transformation Test Failed. The Federal Circuit noted that the Supreme Court in Bilski confirmed that the Federal Circuit’s “machine-or-transformation” (MORT) test was a useful tool but not an exclusive test. The court held that the claim failed the MORT test: “The mere collection and organization of data regarding credit card numbers and Internet addresses is insufficient to meet the transformation prong of the test, and the plain language of claim 3 does not require the method to be performed by a particular machine, or even a machine at all.”
Abstract Ideas: Mental Steps. As the Supreme Court had directed, the court did not stop with the MORT test, but it held that the claim “fails to recite patent-eligible subject matter because it is drawn to an unpatentable mental process–a subcategory of unpatentable abstract ideas.” In the 1972 Benson decision, “the Supreme Court appeared to endorse the view that methods which can be performed mentally, or which are the equivalent of human mental work, are unpatentable abstract ideas–the “basic tools of scientific and technological work” that are open to all.” Subsequent Supreme Court and Federal Circuit decisions similarly refused to uphold claims to “a mental process standing alone.” In re Comiskey, 554 F.3d 967, 980 (Fed. Cir. 2009).
Method Claim 3. Claim 3 fell within the mental steps ban: “the broad scope of claim 3 extends to essentially any method of detecting credit card fraud based on information relating past transactions to a particular `Internet address,’ even methods that can be performed in the human mind.” For example, step (b) requires construction of a “map of credit card numbers”; a person could make such a map by writing down a list.
The court acknowledged that it would be proper to include “mental method steps as part of a process containing non-mental steps (citing In re Abele, 684 F.2d 902, 908 (CCPA 1982).
Claim 2; Computer Readable Medium; “Beauregard” Claims. The court then considered claim 2:
2. A computer readable medium containing program instructions for detecting fraud in a credit card transaction between a consumer and a merchant over the Internet, wherein execution of the program instructions by one or more processors of a computer system causes the one or more processors to carry out the steps of:
a) obtaining credit card information relating to the transactions from the consumer; and
b) verifying the credit card information based upon values of plurality of parameters, in combination with information that identifies the consumer, and that may provide an indication whether the credit card transaction is fraudulent,
wherein each value among the plurality of parameters is weighted in the verifying step according to an importance, as determined by the merchant, of that value to the credit card transaction, so as to provide the merchant with a quantifiable indication of whether the credit card transaction is fraudulent,
wherein execution of the program instructions by one or more processors of a computer system causes that one or more processors to carry out the further steps of;
[a] obtaining information about other transactions that have utilized an Internet address that is identified with the credit card transaction;
[b] constructing a map of credit card numbers based upon the other transactions; and
[c] utilizing the map of credit card numbers to determine if the credit card transaction is valid.
This type of claim is known as a “Beauregard” claim after In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995), that 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 perform a particular process.”
The patent owner argued that claim 2 was to Section 101 “manufacture” or “machine,” not a processor or method and, therefore, could not fall within any of the Bilski “exceptions” (law of nature, physical phenomena, abstract idea). The court disagreed: “Regardless of what statutory category (“process, machine, manufacture, or composition of matter,” 35 U.S.C. § 101) a claim’s language is crafted to literally invoke, we look to the underlying invention for patent-eligibility purposes.”
The court distinguished cases, such as Research Corp. CPLG 0072 (Fed. Cir. 2010), “where, as a practical matter, the use of a computer is required to perform the claimed method.”