WHO SHOULD READ THIS CASE?You should read this case if you face issuesconcerning: Patented methods that are implemented via the Internet. Patented methods that are implemented using a computer. This is MoFo 2
CLAIM 3A 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. This is MoFo 3
CLAIM 22. 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; andb) 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. This is MoFo 4
LITIGATION•patentee sues alleged infringer•alleged infringer moves for SJ of invalidity under 35 USC §101: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”•district court grants SJ of invalidity•patentee appeals to CAFC This is MoFo 5
§101 VALIDITY TESTS•a process is patent-eligible under §101 if: •(1) it is tied to a particular machine or apparatus, or •(2) it transforms a particular article into a different state or thing•to satisfy machine prong, machine must impose meaningful limits on claim scope•M-or-T test is not exclusive test for patentability of a process•laws of nature, physical phenomena and abstract ideas are not patentable This is MoFo 6
CLAIM 3A 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; [“Internet address” may include IP address or e-mail address]b) constructing a map of credit card numbers based upon the other transactions and; [“map” may include list of credit card numbers]c) utilizing the map of credit card numbers to determine if the credit card transaction is valid. [“utilizing” may include any fraud detection formula or mathematical algorithm] This is MoFo 7
CLAIM 3 FAILS M-or-T TEST•transformation prong •mere collection and organization of data regarding credit card numbers and Internet addresses is insufficient•machine prong •no machine is defined or required for performing method •Internet does not perform steps of claimed method •Internet is merely a data source This is MoFo 8
CLAIM 3 RECITES ABSTRACT IDEA•failure to satisfy M-or-T test is not dispositive of §101 inquiry•claim 3 scope is not limited to a particular algorithm•each step can be performed in human mind alone, or by human using pen and paper•method which can be performed mentally, or by pen and paper, is a mental process - a subcategory of unpatentable abstract idea•even if mental process has a practical application This is MoFo 9
“BEAUREGARD” CLAIM 2•a computer readable medium (e.g., disk, hard drive, data storage, etc.) containing program instructions for a computer to perform a particular process•regardless of statutory category recited in claim (process, machine, manufacture, composition of matter), look to “underlying” invention to determine §101 patent-eligibility•invention “underlying” both claims 2 and 3 is a method for detecting credit card fraud, not a medium for storing computer-readable information•claim 2 recites nothing more than a medium containing program instructions for executing method of claim 3•despite Beauregard format, claim 2 is treated as a process claim for patent-eligibility purposes This is MoFo 10
CLAIM 2 FAILSTRANSFORMATION PRONG•claimed process manipulates data to organize it in a logical way such that additional fraud tests may be performed•mere manipulation or reorganization of data does not satisfy transformation prong This is MoFo 11
CLAIM 2 FAILS MACHINE PRONG•claim 2 recites “computer readable medium” containing software instructions requiring execution by “processors of a computer system”•to pass machine prong, use of machine must impose meaningful limits on claim scope•use of computer to perform mental process of claim 3 does not impose sufficiently meaningful limit on claim scope•merely claiming software implementation of a purely mental process that could be performed without a computer does not satisfy machine prong•claim 2 limitations do not make unpatentable method patent-eligible under §101 This is MoFo 12
CLAIM 2 RECITES ABSTRACT IDEA•method can be performed entirely in human mind, without a machine•merely coupling unpatentable mental process with a manufacture or machine does not render mental process patent-eligible•method claims invalid under §101 for being drawn to abstract ideas cannot avoid invalidity under §101 by •merely requiring a computer to perform the method, or •merely reciting a computer readable medium containing program instructions for performing the method•result may be different where, as a practical matter, a computer is required to perform the claimed method•claims 2 and 3 are invalid under §101 as a matter of law This is MoFo 13
PRACTICAL OBSERVATIONS•merely converting a non-patent eligible method claim to Beauregard format will not be sufficient to •avoid M-or-T test, or •pass M-or-T test•risk of §101 invalidity can be reduced by •reciting a specific algorithm •recite steps that cannot be performed mentally or by pen and paper This is MoFo 14
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