Claims of US patent 5,258,855 in the name of Content Extraction and Transmission LLC were found not to be patent eligible subject matter under 35 USC 101 because the invention was merely the use of conventional equipment to perform standard activities.
- For the role of a computer in a computer-implemented invention to be deemed meaningful in the context of this analysis, it must involve more than performance of “well-understood, routine, [and] conventional activities previously known to the industry.” Additionally using a scanner or other digitizing device to extract data is not sufficient.
Broad description of the invention
The ‘885 patent claims methods and systems that collect data using a scanner, recognise certain data therein, and storing the recognised data in memory.
Claim 1 of the `855 patent recites:
A method of processing information from a diversity of types of hard copy documents, said method comprising the steps of:
(a) receiving output representing a diversity of types of hard copy documents from an automated digitizing unit and storing information from said diversity of types of hard copy documents into a memory, said information not fixed from one document to the next, said receiving step not preceded by scanning, via said automated digitizing unit, of a separate document containing format requirements;
(b) recognizing portions of said hard copy documents corresponding to a first data field; and
(c) storing information from said portions of said hard copy documents corresponding to said first data field into memory locations for said first data field.
The claims generally recite a method of 1) extracting data from hard copy documents using an automated digitizing unit such as a scanner, 2) recognizing specific information from the extracted data, and 3) storing that information in a memory. This method can be performed by software on an automated teller machine (ATM) that recognizes information written on a scanned check, such as the check’s amount, and populates certain data fields with that information in a computer’s memory.
An invention is patent-eligible if it claims a “new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The Supreme Court, however, has long interpreted § 101 and its statutory predecessors to contain an implicit exception: “laws of nature, natural phenomena, and abstract ideas” are not patentable. Alice Corp. Pty Ltd. v. CLS Bank Int’l, 573 U.S. ___, 134 S. Ct. 2347, 2354 (2014). We focus here on whether the claims of the asserted patents fall within the excluded category of abstract ideas.
The Supreme Court’s two-step framework, described in Mayo and Alice, guides our analysis. Id. at 2355 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. ___, 132 S. Ct. 1289, 1296-97 (2012)). We first determine whether a claim is “directed to” a patent-ineligible abstract idea. If so, we then consider the elements of the claim — both individually and as an ordered combination — to assess whether the additional elements transform the nature of the claim into a patent-eligible application of the abstract idea. Id. This is the search for an “inventive concept” — something sufficient to ensure that the claim amounts to “significantly more” than the abstract idea itself. Id.
The Supreme Court has not “delimit[ed] the precise contours of the `abstract ideas’ category.” Id. at 2357. We know, however, that although there is no categorical business-method exception, Bilski v. Kappos, 561 U.S. 593, 606, 608 (2010), claims directed to the mere formation and manipulation of economic relations may involve an abstract idea. See Alice, 134 S. Ct. at 2356-57. We have also applied the Supreme Court’s guidance to identify claims directed to the performance of certain financial transactions as involving abstract ideas. See buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014) (creating a transaction performance guaranty for a commercial transaction on computer networks such as the Internet); Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1338 (Fed. Cir. 2013) (generating rule-based tasks for processing an insurance claim); Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) (managing a stable value protected life insurance policy); Dealertrack, 674 F.3d at 1333 (processing loan information through a clearinghouse).
Applying Mayo/Alice step one, we agree with the district court that the claims of the asserted patents are drawn to the abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory. The concept of data collection, recognition, and storage is undisputedly well-known. Indeed, humans have always performed these functions. And banks have, for some time, reviewed checks, recognized relevant data such as the amount, account number, and identity of account holder, and stored that information in their records.
CET attempts to distinguish its claims from those found to be abstract in Alice and other cases by showing that its claims require not only a computer but also an additional machine — a scanner. Appellant’s Br. 31-32. CET argues that its claims are not drawn to an abstract idea because human minds are unable to process and recognize the stream of bits output by a scanner. Id. at 29. However, the claims in Alice also required a computer that processed streams of bits, but nonetheless were found to be abstract. See 134 S. Ct. at 2358. Similar to how the computer-implemented claims in Alice were directed to “the concept of intermediated settlement,” id. at 2356, and the claims in Dealertrack were directed to the concept of “processing information through a clearinghouse,” 674 F.3d at 1333, CET’s claims are drawn to the basic concept of data recognition and storage.
For the second step of our analysis, we determine whether the limitations present in the claims represent a patent-eligible application of the abstract idea. Alice, 134 S. Ct. at 2357. For the role of a computer in a computer-implemented invention to be deemed meaningful in the context of this analysis, it must involve more than performance of “well-understood, routine, [and] conventional activities previously known to the industry.” Id. at 2359 (quoting Mayo, 132 S. Ct. at 1294 (internal quotation marks and brackets omitted)). Further, “the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.” Id. at 2358.
Applying Mayo/Alice step two, we agree with the district court that the asserted patents contain no limitations — either individually or as an ordered combination — that transform the claims into a patent-eligible application. CET conceded at oral argument that the use of a scanner or other digitizing device to extract data from a document was well-known at the time of filing, as was the ability of computers to translate the shapes on a physical page into typeface characters. Oral Arg. at 3:35-3:55; 16:12-16:17, available at http://oralarguments. cafc.uscourts.gov/default.aspx?fl=2013-1588.mp3. CET’s claims merely recite the use of this existing scanning and processing technology to recognize and store data from specific data fields such as amounts, addresses, and dates. See id. There is no “inventive concept” in CET’s use of a generic scanner and computer to perform well-understood, routine, and conventional activities commonly used in industry. See Alice, 134 S. Ct. at 2359. At most, CET’s claims attempt to limit the abstract idea of recognizing and storing information from hard copy documents using a scanner and a computer to a particular technological environment. Such a limitation has been held insufficient to save a claim in this context. See Alice, 134 S. Ct. at 2358; Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715-16 (Fed Cir. 2014); buySAFE, 765 F.3d at 1355.
CET next argues that the failure of PNC or the district court to individually address every one of its claims is inconsistent with the statutory presumption of validity that requires proving the invalidity of each claim by clear and convincing evidence. See Dana Corp. v. Am. Axle & Mfg., Inc., 279 F.3d 1372, 1376 (Fed. Cir. 2002). The district court, however, correctly determined that addressing each claim of the asserted patents was unnecessary. After conducting its own analysis, the district court determined that PNC is correct that claim 1 of the `855 patent and claim 1 of the ‘416 patent are representative, because all the claims are “substantially similar and linked to the same abstract idea.” CET, 2013 WL 3964909, at *5 (citing Bilski, 561 U.S. at 612). Moreover, CET never asserted in its opposition to PNC’s motion that the district court should have differentiated any claim from those identified as representative by PNC. Nor did CET identify any other claims as purportedly containing an inventive concept. If CET disagreed with PNC’s or the district court’s assessment, CET could have identified claims in its opposition brief that it believed would not be fairly represented by claims 1 of the `855 and ‘416 patents for purposes of PNC’s § 101 challenge. Regardless, we have reviewed all the claims of CET’s asserted patents, and agree with the district court that, for the purposes of PNC’s § 101 challenge, 1) the claims of the asserted patents are substantially similar in that they recite little more than the same abstract idea, and 2) claim 1 of the `855 patent and claim 1 of the ‘416 patent are representative.
CET argues on appeal that certain dependent claims recite additional steps, such as extracting and detecting specific data fields, repeating some steps, and storing data as images or text, rendering those claims patent-eligible. Appellant’s Br. 40-41. For instance, CET notes that dependent claim 44 of the ‘416 patent additionally requires: “defining a set of symbols which designate fields of information required by an application program; and detecting the presence of a particular one of said defined set of symbols on a hard copy document and extracting a field of information required by an application program based on said detecting.” Id. This limitation merely describes generic optical character recognition technology, which CET conceded was a routine function of scanning technology at the time the claims were filed. Oral Arg. at 3:35-3:55, 16:12-16:17, available at http://oralarguments. cafc.uscourts.gov/default.aspx?fl=2013-1588.mp3. Indeed, all of the additional limitations in the claims cited in CET’s appeal brief recite well-known, routine, and conventional functions of scanners and computers. Thus, while these claims may have a narrower scope than the representative claims, no claim contains an “inventive concept” that transforms the corresponding claim into a patent-eligible application of the otherwise ineligible abstract idea.