In a final written decision, a Patent Trial and Appeal Board (PTAB) panel has ruled that claims related to managing disposition of surplus capital assets, such as obsolete computers, are directed to an abstract idea unpatentable under § 101. Dell, Inc. filed a petition for a covered business method patent review challenging all claims of U.S. Patent 5,424,944 in response to a suit filed by patent owner Disposition Services, LLC in the Eastern District of Texas. The district court case was stayed pending the PTAB’s review. The ’944 patent claims methods for creating records for assets being disposed and tracking them through the disposal process. The invention attempts to solve the problem of inadvertent or fraudulent disposal of such assets on the black market. The claimed disposition process includes an interactive multimedia system that combines images of the assets with relevant data, audio records, and disposition instructions. In response to Dell’s petition, Disposition Services argued that the disposition of the asset is a “necessarily physical and tangible outcome achieved through the use of a system with specific defined recited structure.” The panel rejected that argument, stating that under Alice, the fact that an asset exists in the physical realm is irrelevant to the § 101 inquiry. The panel also concluded that modes of disposition involving the physical transformation of the asset, such as refurbishing, dismantling, dysfunctioning, reclaiming, and destroying the asset merely constitute “insignificant extra-solution activity” that cannot transform an unpatentable process into a patentable one. The panel found computer and database limitations recited in some of the claims were not meaningful given that the function performed by the computer was purely conventional. Lastly, the panel rejected the patent owner’s argument that the claims of the ’944 patent are designed to solve a technological problem, writing that “the claims do not add any inventive concept to the abstract idea of handling a customer’s physical item in such a way that the customer can verify that its handling instructions were followed.”
Dell Inc. v. Disposition Servs. LLC., No. CBM2013-00040 (PTAB Jan. 9, 2015) [Medley, Turner, Clements (opinion)].