U.S. Bancorp v. Retirement Capital Access Management Co.

In the first final written decision issued in a Covered Business Method (CBM) proceeding, the Patent Trial and Appeal Board (PTAB, the Board) ruled that it has authority to review petitions premised on 35 U.S.C. § 101 grounds, and then exercised that authority by invalidating the patent at issue.  U.S. Bancorp v. Retirement Capital Access Management Co., Case No. CBM2013-00014 (PTAB, Aug. 22, 2014) (Ward, ALJ)

Retirement Capital Access Management (the patent owner) and Benefit Funding Systems sued U.S. Bancorp (the Petitioner) for infringement in district court.  Less than a year later Bancorp filed a petition for CBM, requesting that the asserted patent be found invalid under 35 U.S.C. § 101 as being directed to an abstract idea.  The patent owner argued that § 101 was not an appropriate ground to maintain a CBM proceeding because it is not a “condition for patentability” within the meaning of § 282(b).  The patent owner also argued that even if the PTAB could review the § 101 issue the asserted patent should be found valid.  The PTAB disagreed on all counts.

The PTAB confirmed that § 101 is a proper ground for a CBM review, noting that the Supreme Court recognized § 101 as “a condition for patentability” as far back as Graham v. John Deere (Supr. Ct., 1966).  The PTAB also looked to the legislative history of the America Invents Act (AIA), and found that “[t]he specified purpose of the covered business method review program was to allow the Office to revisit business method patents post-Bilski and evaluate whether the patents were too abstract to be patentable under § 101.”

Analyzing the asserted patent under the framework set forth by the Supreme Court in Mayo Collaboration Servs. v. Prometheus Labs, (IP Update, Vol. 15, No. 3) the PTAB concluded that the asserted patent claims recite nothing more than abstract concepts that constitute non-patentable subject matter.  Specifically, the Board explained the asserted patent covered a method by which recipients of retirement payments (such as Social Security payments) can obtain a monetary advance in exchange for a predetermined portion of that recipient’s future retirement benefits.  The Board likened the claimed invention to the method of managing risk at issue in Alice Corp., (IP Update, Vol. 17, No. 7) and the method of hedging risk commodities found invalid in Bilski (IP Update, Vol. 13, No. 7).

After concluding that the patent was directed to an abstract idea, the Board considered whether the claims contained meaningful and substantive limitations that caused them to cover less than the identified abstract concept.  Ultimately, the Board was unpersuaded that any such meaningful and substantive limitations existed because the limitations cited by the patent owner for this proposition merely required the transaction to be legal, a routine requirement that cannot render an abstract idea patent-eligible.

The Board also concluded that the challenged claims were not saved because of the recited the use of a computer.  With respect to the words “computerized method” in the preamble, the Board concluded that this language did not meaningfully limit the claims.  As for certain means-plus-function limitations, which the Board construed as being implemented on a computer, the Board concluded that these limitations merely require “utilizing the well-known technique of electronic funds transfer” and thus could not save the claims from being patent-ineligible.  Indeed, as the Board noted, the specification expressly states that the “present invention utilizes known computer capabilities,” which suggests that no special purpose computer is necessary to implement any step of the claimed method.