District Judge Katherine Polk Failla granted declaratory judgment plaintiff Kickstarter, Inc.’s motion for summary judgment that U.S. Patent No. 7,885,887 (“the ’887 patent”) is invalid under 35 U.S.C. § 101. The ’887 patent claims “a system and method for raising financing and/or revenue by [an] artist for a project, where the project may be a creative work of the artist.”

The court first reviewed Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), its predecessors, and its progeny, and then applied the two-step framework clarified in Alice to “distinguish[] patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Under step 1, the court concluded that the ’887 patent’s broad claims directed to incentive-based crowd-funding embodies an abstract idea that is “incontestably similar to other ‘fundamental economic concepts,’ and to other types of ‘organizing human activity,’ both of which have been found to be abstract ideas by the Supreme Court and the Federal Circuit.” Under step 2, the court found no additional “inventive concept” to “transform” the claimed idea of crowd-funding into patent-eligible subject matter. It explained that “[b]eyond the abstract idea of patronage, the claims merely recite ‘well-understood, routine conventional activities,’ by requiring either conventional computer activities or routine data-gathering steps.” The court found that even the “ordered combination of steps” found in the ’887 patent “describe an abstract idea, devoid of a concrete or tangible application.” Neither the repetition of words like “particular” and “specific,” nor limitations like “operable from a remote site . . . [which] might add some degree of particularity” could save the ’887 patent from a holding of invalidity. The court concluded that [w]hile the concept of fan-funding may have been made a more realistic and fruitful endeavor with the advent of widespread Internet access, ‘cloaking [that] otherwise abstract idea in the guise of a computer-implemented claim’ does not bring it within Section 101.”

Case: Kickstarter, Inc. v. Fan Funded, LLC, No. 11 Civ. 6909 (KPF), 2015 BL 206324 (S.D.N.Y. June 29, 2015)