Final Written Decision CBM2013-00014


Takeaway: A specification that discloses only one embodiment may not limit claim terms to that embodiment but may serve to limit means-plus-function limitations. However, if the disclosed structure is nothing more than a general purpose computer, limiting the claim terms to that structure may not save the claims from a patent eligibility challenge under Section 101.

In its Final Written Decision, the Board found that all of the challenged claims of the ‘582 patent are unpatentable under 35 U.S.C. § 101.  The ‘582 patent “relates to a method for enabling recipients of Social Security payments to convert a designated portion of future payments into currently available financial resources.”

The Board first addressed claim construction, stating that the claims are interpreted using the broadest reasonable construction. Patent Owner argued that the limitation “means for causing said future retirement payments to be deposited into said account” in claim 13 and a similar means-plus-function limitation in claim 30 should be limited to require an “electronic funds transfer” because that is the structure disclosed in the specification.  Patent Owner also argued that the term “deposited” in method claims 1 and 18 should be similarly limited to “deposited via direct deposit.”

Petitioner disagreed, arguing that the claimed invention could be “performed on pen and paper” and that the Federal Circuit has “rejected the contention that if a patent describes only a single embodiment, the claims of the patent must be construed as being limited to that embodiment.”

In construing the means-plus-function limitations of claims 13 and 30, the Board relied upon the disclosure in the specification to identify the corresponding structure, and defined the term to mean “disbursing directly to said account utilizing an electronic funds transfer.” With respect to the method claim limitations, however, the Board disagreed with Patent Owner’s arguments.  Although the specification identified electronic deposits as being preferable, Patent Owner failed to establish that such a construction was required.  Echoing Petitioner’s argument, the Board stated that “[e]ven in cases where the specification describes only a single embodiment, the claims are not necessarily limited to that embodiment.”  Thus, the Board did not limit the “deposited” term in claims 1 and 18 to “deposited via direct deposit.”

The Board then addressed Patent Owner’s arguments that Section 101 is not a proper ground in a covered business method patent review. Patent Owner argued that Section 101 did not qualify as a “condition for patentability” under 35 U.S.C. § 282(b).  However, the Board was not persuaded and found Section 101 to be a condition for patentability, citing Supreme Court and Federal Circuit case law as well as the legislative history of the AIA.

The Board then turned to the Section 101 ground of unpatentability. The Board analyzed the claims under the Mayo framework in which it is first determined whether the claims are drawn to a patent-ineligible concept and then it is considered whether the claim elements transform the claim into a patent-eligible application.  The claim must do more than merely recite an abstract idea and add the words “apply it” or add a mere recitation of a generic computer.  Instead, the claim “must incorporate enough meaningful limitations to ensure that it claims more than just an abstract idea.”

Petitioner argued that the claims recite “the abstract concept of advancing funds based on future retirement payments,” with which Patent Owner did not disagree. The Board found this concept similar to the patent-ineligible concept of risk hedging in Bilski, and “squarely within the realm of abstract ideas.”  However, Patent Owner argued that the claims added enough under the second step of the Mayo framework.  In particular, Patent Owner argued that the claims required providing a benefit “without encumbering” certain rights.  Petitioner argued, and the Board agreed, that the “without encumbering” limitation only required that the transaction be lawful, which “is a routine and conventional practice in business transactions.”  Simply adding such conventional steps cannot make an abstract idea patentable.

Petitioner argued that the challenged claims could be performed using pen and paper, but Patent Owner contended that a computer, programmed with particular software, was integral to the claims. The Board noted that the preambles to claims 1 and 18 recited a “computerized method,” but that the recitation did not meaningfully limit the claims, instead only indicating an intended use.  Further, the Board declined to limit the method claims 1 and 18 to “direct deposit” or any other computerized implementation.  The Board also noted that even if a computer were required, the computer would only be performing more efficiently what could be done manually.  The Board was also not persuaded that specialized hardware would be required in light of the specification’s disclosure that “known computer capabilities” were sufficient.  Thus, the Board held that even if limited to a computer implementation, method claims 1 and 18 were not patent eligible because they amount to no more than applying an abstract idea on a generic computer.

The Board next addressed system claims 13 and 30, which recite means-plus-function elements limited to an electronic implementation. Citing Alice Corp., the Board noted that the Supreme Court has struck down system claims that recite generic computer components implementing the same abstract idea as the method claims.  The Board concluded that system claims 13 and 30 recited the same abstract idea as the method claims and only added the “well-known technique of electronic funds transfer,” which merely used a general computer to increase efficiency.  Patent Owner argued that Petitioner failed to provide sufficient factual evidence in support of its arguments because it relied on the disclosure of the ’582 patent itself.  The Board agreed with Petitioner that the claims and specification were not overly complex such that expert testimony would be needed.

Finally, Patent Owner argued that Petitioner’s non-infringement defense in the related litigation showed that non-infringing alternatives may exist. Therefore, Patent Owner argued, the claims do not encompass the full scope of the abstract idea such that others would be preempted from using the abstract idea.  However, the Board was not persuaded, holding that parties may argue alternative defenses.

The Board then addressed Petitioner’s Motion to Exclude a New York Times article on relevance, prejudice, and hearsay grounds. However, the Board did not rely on the article and dismissed the motion as moot.

U.S. Bancorp v. Retirement Capital Access Management Company, CBM2013-00014
Paper 33: Final Written Decision
Dated: August 22, 2014
Patent: 6,624,582 B2
Before: Glenn J. Perry, Thomas L. Giannetti, and Trenton A. Ward
Written by: Ward
Related Proceeding: Benefit Funding Systems LLC v. U.S. Bancorp, Case No 1:12-cv-803-LPS (D. Del.)