In Mortgage Grader, Inc. v. First Choice Loan Services Inc., Appeal No. 2015-1415, the Federal Circuit affirmed a district court’s summary judgment ruling that claims directed to anonymous loan shopping were invalid under 35 U.S.C. § 101.

At the district court level, plaintiff Mortgage Grader moved to strike defendants’ § 101 defense as untimely because the defense was not asserted in their initial invalidity contentions as required by the court’s standing patent rules. The district court denied the motion to strike, finding that the defense was properly asserted after the Supreme Court’s decision in Alice, which was a substantial change in law. The Federal Circuit upheld this decision under the abuse of discretion standard.

The Federal Circuit also held that the district court did not err in granting summary judgment to defendants under § 101. The Federal Circuit stated that the district court correctly applied the two-step framework set out in Mayo and Alice. First, the Federal Circuit determined that the asserted claims were directed to the abstract idea of “anonymous loan shopping” and that the series of steps covered by the claims “could all be performed by humans without a computer.” Second, the Court determined that the claims lacked an “inventive concept” because the claims only recite a method of using this abstract idea using generic computer components.