09/04/14

buySAFE v. Google: CAFC Applies Alice Precedent, Provides Further Guidance on Abstract Ideas


Category: 101    
 
 
 
By: Jesus Hernandez, Blog Editor/Contributor 
 
TitlebuySAFE, Inc. v. Google, Inc., No. 13-1575 (Fed. Cir. Sept. 3, 2014).
IssueThe district court granted Google’s motion for judgment on the pleadings, holding that the asserted claims fall outside section 101. The court concluded that the patent “describes a well-known, and widely-understood concept—a third party guarantee of a sales transaction— and then applied that concept using conventional computer technology and the Internet.”
buySAFE, Inc. at *4.
HoldingUnder the approach to section 101 affirmed by the Supreme Court in the recent decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), the district court’s holding is correct [because: (1) the claims encompass only a contractual relationship, an abstract idea; and (2) the claimed computer functionality of receiving and transmitting ‘an offer of guarantee’ is a generic implementation that does not add an inventive concept.].
Id. at *2 (text added).
 
 

Procedural HistoryThis case involves claims directed to creating familiar commercial arrangements by use of computers and net- works. The district court held the asserted claims invalid because they cover subject matter ineligible for patenting under 35 U.S.C. § 101. buySAFE, Inc. v. Google, Inc., 964 F. Supp. 2d 331 (D. Del. 2013).
buySAFE, Inc., at *2.
 
 
 
Legal Reasoning (TARANTO, Hughes)
Background
Different Claim TypesClaim 1 is an independent method claim, with claim 14 dependent on it. Claim 39 is an independent claim to a computer-readable medium encoded with instructions to carry out the Claim 1 method, with claim 44 a dependent claim bearing the same relation to claim 39 as claim 14 does to claim 1. The parties agreed that the analysis of claims 1 and 14 would control the analysis of claims 39 and 44 […]
buySAFE, Inc., at *2-3.
Claims at Issue
1. A method, comprising:

receiving, by at least one computer application program running on a computer of a safe transaction service provider, a request from a first party for obtaining a transaction performance guaranty service with respect to an online commercial transaction following closing of the online commercial transaction;

processing, by at least one computer application program running on the safe transaction service provider computer, the request by underwriting the first party in order to provide the transaction performance guaranty service to the first party,

wherein the computer of the safe transaction service provider offers, via a computer network, the transaction performance guaranty service that binds a transaction performance guaranty to the online commercial transaction involving the first party to guarantee the performance of the first party following closing of the online commercial transaction.

Id. at *3.
Claim 14 narrows the claim 1 method to a guaranty “in one form of: a surety bond; a specialized bank guaranty; a specialized insurance policy; and a safe transaction guaranty.”
Id. at *3-4.
Legal Analysis
101, GenerallyThe Supreme Court has “interpreted § 101 and its predecessors . . . for more than 150 years” to “‘contain[] an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable.’” Alice, 134 S. Ct. at 2354, quoting Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) […] In defining the excluded categories, the Court has ruled that the exclusion applies if a claim involves a natural law or phenomenon or abstract idea, even if the particular natural law or phenomenon or abstract idea at issue is narrow. Mayo, 132 S. Ct. at 1303.
buySAFE, Inc., at *4-5.
Alice Precedent[T]he provision also excludes the subject matter of certain claims that by their terms read on a human-made physical thing (“machine, manufacture, or composition of matter”) or a human-controlled series of physical acts (“process”) rather than laws of nature, natural phenomena, and abstract ideas. Such a claim falls outside section 101 if (a) it is “directed to” matter in one of the three excluded categories and (b) “the additional elements” do not supply an “inventive concept” in the physical realm of things and acts—a “new and useful application” of the ineligible matter in the physical realm—that ensures that the patent is on something “significantly more than” the ineligible matter itself. Alice, 134 S. Ct. at 2355, 2357 (internal quotation marks omitted); see Mayo, 132 S. Ct. at 1294, 1299, 1300. This two-stage inquiry requires examination of claim elements “both individually and ‘as an ordered combination.’” Alice, 134 S. Ct. at 2355.
Id. at *6.
Alice Inquiries
As to the first question: The relevant Supreme Court cases are those which find an abstract idea in certain arrangements involving contractual relations, which are intangible entities. Bilski v. Kappos, 561 U.S. 593 (2010), involved a method of entering into contracts to hedge risk in commodity prices, and Alice involved methods and systems for “exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk,” Alice, 134 S. Ct. at 2356. More narrowly, the Court in both cases relied on the fact that the contractual relations at issue constituted “a fundamental economic practice long prevalent in our system of commerce.” Bilski, 561 U.S. at 611; see Alice, 134 S. Ct. at 2356, 2357.
Id. at *6-7.
As to the second question: The Court in Alice made clear that a claim directed to an abstract idea does not move into section 101 eligibility territory by “merely requir[ing] generic computer implementation.” Alice, 134 S. Ct. at 2357.1 In so holding, the Court in Alice relied on Mayo for the proposition that “‘[s]imply appending conventional steps, specified at a high level of generality,’ was not ‘enough’ to supply an ‘“inventive concept.”’” […]
Id. at *7-8 (internal citations omitted).
Factual Analysis
Abstract IdeaThe claims in this case do not push or even test the boundaries of the Supreme Court precedents under section 101. The claims are squarely about creating a contractual relationship—a “transaction performance guaranty”—that is beyond question of ancient lineage. See Willis D. Morgan, The History and Economics of Suretyship, 12 Cornell L.Q. 153 (1927). The dependent claims’ narrowing to particular types of such relationships, themselves familiar, does not change the analysis. This kind of narrowing of such long-familiar commercial transactions does not make the idea non-abstract for section 101 purposes. See Mayo, 132 S. Ct. at 1301. The claims thus are directed to an abstract idea.
buySAFE, Inc. at *8-9.
No Inventive Concept AddedThe claims’ invocation of computers adds no inventive concept. The computer functionality is generic—indeed, quite limited: a computer receives a request for a guarantee and transmits an offer of guarantee in return. There is no further detail. That a computer receives and sends the information over a network—with no further specification—is not even arguably inventive. The computers in Alice were receiving and sending information over networks connecting the intermediary to the other institutions involved, and the Court found the claimed role of the computers insufficient.
Id. at *9 (internal citations omitted).
Conclusion
For the foregoing reasons, we affirm the judgment of the district court.
buySAFE, Inc. at *10.
 
 
 
 
 
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