返回概览 CyberSource Corp. vs. Retailer Decisions, Inc.

On August 16, 2011, the Court of Appeals for the Federal Circuit issued a significant decision impacting the evaluation of software method claims under 35 U.S.C. § 101. Under 35 U.S.C. §101, a claim must be directed to statutory subject matter in that a patent shall be awarded to the inventor of "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof" meeting the other patentability requirements.

Over the years, judicially-created exceptions to patentable subject matter have been developed with respect to inventions law of nature, physical phenomena and abstract ideas.

In the lawsuit, CyberSource, Corp. (hereinafter "CyberSource"), owner of U.S. Patent No. 6,029,154, asserted claims 2 and 3 in a patent infringement suit against Retailers Decisions, Inc. (hereinafter "Retailers").

Claim 3, as amended after ex parte reexamination proceedings initiated by Retailers, recites:

3. A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:

a) obtaining information about other transactions that have utilized an Internet address that is identified with the [] credit card transaction;

b) constructing a map of credit card numbers based upon the other transactions and;

c) utilizing the map of credit card numbers to determine if the credit card transaction is valid.

According to the court, the "machine-or-transformation" test espoused in In re Bilski, 545 F.3d (Fed. Cir. 2008), is an appropriate test for determining the patentability for process claims. In applying the test, the court concluded that since the claim does not require the use of any machine and it does not require the transformation of any article into a different state or thing, the claim fails the "machine-or-transformation" test. The court reiterated that the collection and organization of data is insufficient to meet the transformation prong of the "machine-or-transformation" test. Further, the court was not convinced by CyberSource’s arguments asserting that the claim is tied to a machine since "it would not be necessary or possible without the Internet".

The court also noted that the Supreme Court, in Bilski, stated that while the "machine-or-transformation test is a useful and important clue" to patent-eligibility, "it is not the sole test for deciding whether an invention is a patent-eligible ‘process’".

In considering additional guideposts in the Supreme Court’s precedents and relying on Gottschalk v. Benson, 409 U.S. 63, 67 (1972) and Parker v. Flook, 437 U.S. 584 (1978), the court concluded that claim 3 is not patent-eligible subject matter since the claim is drawn to an unpatentable mental process, a subcategory of the judicially-created exception of unpatentable abstract ideas, since each of the steps of claim 3 can be performed entirely in the human mind or by a human using a pen and paper.

Claim 2, as amended after ex parte reexamination proceedings initiated by Retailers, recites:

2. A computer readable medium containing program instructions for detecting fraud in a credit card transaction between a consumer and a merchant over the Internet, wherein execution of the program instructions by one or more processors of a computer system causes the one or more processors to carry out the steps of:

a) obtaining credit card information relating to the transactions from the consumer; and

b) verifying the credit card information based upon values of plurality of parameters, in combination with information that identifies the consumer, and that may provide an indication whether the credit card transaction is fraudulent,

wherein each value among the plurality of parameters is weighted in the verifying step according to an importance, as determined by the merchant, of that value to the credit card transaction, so as to provide the merchant with a quantifiable indication of whether the credit card transaction is fraudulent,

wherein execution of the program instructions by one or more processors of a computer system causes that one or more processors to carry out the further steps of;

[a] obtaining information about other transactions that have utilized an Internet address that is identified with the credit card transaction;

[b] constructing a map of credit card numbers based upon the other transactions; and

[c] utilizing the map of credit card numbers to determine if the credit card transaction is valid.

Claim 2 is directed to a "computer readable medium containing program instructions" for causing a computer to perform the method, i.e. written in "Beauregard" form. See In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995).

CyberSource argued that the claim is patent eligible per se because it is directed to a man-made article of manufacture recited in a computer readable medium. However, the court concluded that the claim is "nothing more than a computer readable medium containing program instructions for executing the method of claim 3" and focused on the "underlying invention" instead of the claim category, stating:

"Regardless of what statutory category (‘process, ma-chine, manufacture, or composition of matter,’ 35 U.S.C. § 101) a claim's language is crafted to literally invoke, we look to the underlying invention for patent-eligibility purposes. Here, it is clear that the invention underlying both claims 2 and 3 is a method for detecting credit card fraud, not a manufacture for storing computer-readable information.

In formulating its opinion on claim 2, the court relied heavily on In re Abele, 684 F.2d 902 (CCPA 1982), stating that

"In Abele, claim 5 of the patent at issue recited ‘[a] method of displaying data’ comprising the steps of ‘calculating the difference’ between two numbers and ‘displaying the value.’ Id. at 908. The court concluded that claim 5 was not directed to patent-eligible subject matter because it claimed an abstract idea. Id. However, claim 7 was argued to be different because it recited an ‘[a]pparatus for displaying data’ comprising ‘means for calculating the differences’ between two numbers and ‘means for displaying the value.’ Id. at 909 (emphases added). Though claim 7 literally invoked an ‘[a]pparatus,’ the court treated it as a method claim for the purpose of its § 101 analysis. Due to its ‘broad’ and ‘functionally-defined’ nature, the court found that treating claim 7 as an apparatus claim would ‘exalt form over substance since the claim is really to the method or series of functions itself. Accordingly, the court placed ‘the burden . . . on the applicant to demonstrate that the claims [were] truly drawn to [a] specific apparatus distinct from other apparatus[es] capable of performing the identical functions’".

Following precedent set by Abele, the court held that an unpatentable mental process remains unpatentable even when restricted to use on a computer reasoning that the claim is a process claim, even though it is written in Beauregard format. The court proceeded to analyze the claim under the "machine-or-transformation test" and concluded that the mere manipulation or reorganization of data does not satisfy the transformation prong of the test. Further, the court concluded that the claim does not satisfy the machine prong of the test stating that

"to impart patent-eligbility to an otherwise unpatentable process under the theory that the process is linked to a machine, the use of the machine must ‘impose meaningful limits on the claims scope’",

citing Bilski. The court further concluded, based on Abele and Benson, that "purely mental processes can be unpatentable, even when performed by a computer". Thus, the court affirmed the invalidity of the claimed method and the claimed computer readable medium.

The opinion issued by the Court of Appeals for the Federal Circuit follows the Supreme Court’s decision in Bilski to the extent of applying the "machine-or-transformation" test to method claims. The Federal Circuit, citing Bilski, states that "[t]he Supreme Court expressly left open the door for ‘the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text’, and subsequently elaborates upon the status of the patentability of software claims rendering purely mental processes unpatentable, even if claimed on a computer readable medium. The impact of this decision remains to be seen, but may have a far-reaching effect on claims directed to software methods and business methods since the court will now be looking at the "underlying invention". It is expected that as more cases are appealed to the Court of Appeals for the Federal Circuit, the court will provide further direction on the patentability of method claims.

Should you have any questions, please feel free to contact mehta@mueller-bore.de

For the full text of the CyberSource Corp. vs. Retailer Decisions, Inc. opinion, please refer to http://www.mueller-bore.de/ tl_files/Decisions_US/decision_cybersource.pdf

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