The U.S. Patent Trial and Appeal Board (PTAB) recently found a business method patent eligible under 35 U.S.C. § 101, in one of the first such decisions since the institution of Covered Business Method (CBM) Patent Reviews and the Supreme Court’s decision in Alice Corp. Pty Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).
The decision, NRT Technology Corp. v. Everi Payments, CBM2015-00167, comes with enough caveats to give patent holders and patent practitioners pause, but stands in stark contrast to the vast majority of recent PTAB decisions utilizing the Alice hammer to obliterate patents in the software and business method fields.
The patent at issue, U.S. Patent No. 6,081,792 (“the ‘792 patent”), is directed to utilizing a modified automated teller machine (ATM) to obtain cash from an account using both debit and/or credit cards via an ATM network and/or a point-of-sale (POS) network. Because most ATM networks impose various burdens on obtaining cash (e.g., daily limits on ATM cards, a PIN requirement for credit cards, etc.), it becomes useful to allow the transactions to occur over a POS network, which does not encounter these burdens, if an initial ATM transaction is denied.
Claim 1 of the ‘792 patent is representative:
- A method of providing money or an item of value to an account-holder, the method comprising:
- identifying an account to a terminal;
- entering a personal identification number into the terminal;
- requesting money or an item of value based upon the account via a first type of transaction;
- forwarding the first type of transaction to a processor;
- forwarding the first type of transaction from the processor to a first network;
- forwarding the first type of transaction from the first network to a bank;
- making a denial of the first type of transaction due to exceeded pre-set limit;
- forwarding the denial to the processor;
- notifying the account-holder at the terminal of the denial of the first type of transaction, and asking the account holder if they would like to request the money or item of value via a second type of transaction;
- requesting money or an item of value based upon the account via a second type of transaction;
- forwarding the second type of transaction to the processor;
- forwarding the second type of transaction from the processor to a second network;
- forwarding the second type of transaction from the second network to the bank;
- making an approval of the second type of transaction;
- forwarding the approval to the processor;
- and instructing a money location separate from the terminal to provide money or an item of value to the accountholder.
As a threshold matter, the PTAB held that the ‘792 patent was a CBM Patent, despite the Patent Owner’s assertion that “the claims as a whole ‘rel[y] on a combination of hardware and innovative software …’” The PTAB found persuasive Petitioner’s argument that the ‘792 patent failed to “solve a technical problem using a technical solution,” because the problem solved is not technological in nature, being instead the result of “withdrawal limits set by banks.”
The PTAB then turned to Petitioner’s assertion that the claims were “patent-ineligible because they are directed to nothing more than abstract ideas.” Despite Petitioner failing to “identify directly ‘the abstract ideas’ to which the claims are purportedly directed,” the PTAB held that Petitioner implicitly identified them as “providing money to an account holder” and “trial-and-error.” The PTAB, however, resolved the §101 inquiry in only a brief statement:
As Patent Owner points out, Petitioner has oversimplified the challenged claims. The challenged claims are not directed simply to the idea of providing money to an account holder or using trial-and-error until success is achieved. Rather, the claims are directed to particular methods of providing money to an account holder using an ATM via a POS transaction after an ATM transaction has failed. Further, Petitioner’s analysis omits any consideration of the elements of the claims as ordered combinations to determine whether the additional elements transform the nature of the claims into a patent-eligible application. It was Petitioner’s burden to do so. Petitioner has not shown that the claims are more likely than not patent-ineligible. (citations omitted)
This resolution is notable for two reasons. First, the decision does not directly hold that any particular aspect of the challenged claims are patent-eligible, merely that the Petitioner made an inadequate showing that the claims were more likely than not patent-ineligible. Second, the decision demonstrates that the PTAB may consider the elements of the claims“as ordered combinations to determine whether the additional elements transform the nature of the claims into a patent-eligible application.” (emphasis added)
While the latter principle is not controversial in current § 101 jurisprudence, practitioners still face rejections from Patent Examiners who fall into the same traps set by Petitioner in this case. Rejections often do not accurately articulate the “abstract ideas” present in claims, do oversimplify the claims, and do not consider the claims as ordered combinations. This case can be cited to assist in combating spurious § 101 rejections, and its reasoning implemented during claim drafting to intertwine and order claim limitations, thereby making it more difficult for an Examiner (or the PTAB) to isolate and attack limitations directed to a purported “abstract idea” and ignore the remainder of the claim limitations.