Intellectual Ventures I LLC v. Capital One Bank (USA), Nat'l Ass'n

• Citation: 792 F.3d 1363,115 U.S.P.Q.2d 1636
• Decision Date: 06 July 2015
• Docket Number: No. 2014–1506.,2014–1506.
• Parties: INTELLECTUAL VENTURES I LLC, Intellectual Ventures II LLC, Plaintiffs–Appellants v. CAPITAL ONE BANK (USA), National Association, Capital One Financial Corporation, Capital One, National Association, Defendants–Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

792 F.3d 1363

115 U.S.P.Q.2d 1636

INTELLECTUAL VENTURES I LLC, Intellectual Ventures II LLC, Plaintiffs–Appellants

v.CAPITAL ONE BANK (USA), National Association, Capital One Financial Corporation, Capital One, National Association, Defendants–Appellees.

No. 2014–1506.

United States Court of Appeals, Federal Circuit.

July 6, 2015.

Nickolas Bohl, Feinberg Day Alberti & Thompson LLP, Menlo Park, CA, argued for plaintiffs-appellants. Also represented by Marc Belloli, Elizabeth Day, Clayton W. Thompson, II ; Thomas Richard Burns, Jr., Adduci, Mastriani & Schaumberg, LLP, Washington, DC; Eric F. Citron, Goldstein & Russell, P.C., Bethesda, MD; Thomas Goldstein, Washington, DC.

Matthew J. Moore, Latham & Watkins LLP, Washington, DC, argued for defendants-appellees. Also represented by Abbott B. Lipsky, Jr., Gabriel Bell, Marguerite M. Sullivan, James Scott Ballenger ; Jeffrey G. Homrig, Menlo Park, CA; Robert A. Angle, Dabney Jefferson Carr, IV, Troutman Sanders LLP, Richmond, VA.

James Quarles, III, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for amicus curiae Askeladden, L.L.C. Also represented by Richard Anthony Crudo, Gregory H. Lantier.

Before DYK, REYNA, and CHEN, Circuit Judges.

Opinion

DYK, Circuit Judge.

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).

Following the district court's claim construction of the term “machine readable instruction form” in the '587 patent, the parties stipulated to non-infringement of the asserted claims of that patent. The district court also determined that the asserted claims of the '137 patent claimed ineligible subject matter and the asserted claims of the '382 patent claimed ineligible subject matter and were also indefinite under 35 U.S.C. § 112(b). Intellectual Ventures appeals the district court's invalidity determinations with respect to the '137 and '382 patents and its claim construction with respect to the '587 patent.

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.¹

Background

Intellectual Ventures owns the three patents at issue, the first two of which generally relate to activities on the Internet, and the third of which generally relates to photography organization using a computer. The '137 patent, entitled “Administration of Financial Accounts,” claims methods of budgeting, particularly methods of tracking and storing information relating to a user's purchases and expenses and presenting that information to the user vis-à-vis the user's pre-established, self-imposed spending limits. The ' 382 patent, entitled “Advanced Internet Interface Providing User Display Access of Customized Webpages,” claims methods and systems for providing customized web page content to the user as a function of user-specific information and the user's navigation history. The '587 patent, entitled “Method for Organizing Digital Images,” claims methods for scanning hard-copy images onto a computer in an organized manner.

On June 19, 2013, Intellectual Ventures filed suit in the United States District Court for the Eastern District of Virginia against Capital One, alleging infringement of claims 5–11 of the '137 patent, claims 1–5, 16, 17, and 19–22 of the '382 patent, and claims 1 and 18 of the '587 patent. On December 18, 2013, the district court issued its claim construction order, construing terms for all three patents. The representative asserted claim of the '587 patent (claim 1) claims a method of organizing digital images in which hard-copy images are scanned into a computer and sorted according to an associated machine readable instruction form. The district court construed “digitally scanning a plurality of hard copy prints [that have been grouped into one or more categories, each category separated by] an associated machine readable instruction form” as requiring the “associated machine readable instruction form” be in a hard-copy, rather than electronic, form. Because of that construction, Intellectual Ventures stipulated to non-infringement of all asserted claims of the '587 patent.

On April 16, 2014, the district court granted summary judgment with respect to the asserted claims of the '137 and '382 patents. The district court concluded that the asserted claims of the '137 and '382 patents claimed ineligible subject matter in violation of 35 U.S.C. § 101. The district court also determined that, based on its construction of “interactive interface,” the asserted claims of the '382 patent were indefinite under 35 U.S.C. § 112(b). The district court thus held invalid all of the asserted claims of both patents.

Intellectual Ventures appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). We review summary judgment determinations de novo. Laber v. Harvey, 438 F.3d 404, 415 (4th Cir.2006). Patent eligibility under § 101 is an issue of law we review de novo. In re BRCA1– & BRCA2–Based Hereditary Cancer Test Patent Litig., 774 F.3d 755, 758 (Fed.Cir.2014). We review the district court's claim construction based on intrinsic evidence and the district court's ultimate claim construction de novo. See Warsaw Orthopedic, Inc. v. NuVasive, 778 F.3d 1365, 1369 (Fed.Cir.2015) (citing Teva Pharm. USA, Inc. v. Sandoz, Inc., ––– U.S. ––––, 135 S.Ct. 831, 841, ––– L.Ed.2d –––– (2015) ).

Discussion

I

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, machines, 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, ––– U.S. ––––, 134 S.Ct. 2347, 2354, 189 L.Ed.2d 296 (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, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972) ). An abstract idea does not become nonabstract by limiting the invention to a particular field of use or technological environment, such as the Internet. See Alice, 134 S.Ct. at 2358 (limiting an abstract idea to a particular technological environment, such as a computer, does not confer patent eligibility); Bilski v. Kappos, 561 U.S. 593, 612, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010) (“[L]imiting an abstract idea to one field of use ... d[oes] not make the concept patentable.”).

If we determine that the patent is drawn to an abstract idea or otherwise ineligible subject matter, at a second step we ask whether the remaining elements, either in isolation or combination with the non-patent-ineligible elements, are sufficient to “ ‘transform the nature of the claim’ into a patent-eligible application.” Alice, 134 S.Ct. at 2358 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., ––– U.S. ––––, 132 S.Ct. 1289, 1297, 182 L.Ed.2d 321 (2012) ). Put another way, there must be an “inventive concept” to take the claim into the realm of patent-eligibility. Id. at 2355. A simple instruction to apply an abstract idea on a computer is not enough. Alice, 134 S.Ct. at 2358 (“[M]ere recitation of a generic computer cannot transform a patent-ineligible idea into a patent-eligible invention. Stating an abstract idea ‘while adding the words “apply it” is not enough for patent eligibility.’ ” (quoting Mayo, 132 S.Ct. at 1294 )).

Nor, in addressing the second step of Alice, does claiming the improved speed or efficiency inherent with applying the abstract idea on a computer provide a sufficient inventive concept. See Bancorp Servs., LLC v. Sun Life Assurance Co. of Can., 687 F.3d 1266, 1278 (Fed.Cir.2012) (“[T]he fact that the required calculations could be performed more efficiently via a computer does not materially alter the patent eligibility of the claimed subject matter.”); CLS Bank, Int'l v. Alice Corp., 717 F.3d 1269, 1286 (Fed.Cir.2013) (en banc) aff'd, ––– U.S. ––––, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014) (“[S]imply appending generic computer functionality to lend speed or efficiency to the performance of an otherwise abstract concept does not meaningfully limit claim scope for purposes of patent eligibility.” (citations omitted)).

A

The '137 patent generally relates to budgeting, or, as the district court described it, “utiliz[ing] user-selected pre-set limits on spending that are stored in a database that, when reached, communicates a notification to the user via a device.” J.A. 780. Claim 5 is representative and provides:

A method comprising:

storing, in a database, a profile keyed to a user identity and containing one or more user-selected categories to track transactions associated with said user identity, wherein individual user-selected categories include a user pre-set limit; and

causing communication, over a communication medium and to a receiving device, of transaction summary data in the database for at least one of the one or more user-selected categories, said transaction summary data containing said at least one user-selected category's user pre-set limit.

'137 patent col. 10 ll. 4–15.

Here, the patent claims are directed to an abstract idea: tracking financial transactions to determine whether they exceed a pre-set spending...