TriZetto Corporationv.Integrated Claims Systems, LLC

Patent Trial and Appeal Board

Jun 21, 2016

11653104 (P.T.A.B. Jun. 21, 2016)

Trials@uspto.gov Paper 24
571-272-7822 Entered: June 21, 2016

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

CARE N’ CARE INSURANCE COMPANY, INC.
and TRIZETTO CORPORATION,
Petitioner,

v.

INTEGRATED CLAIMS SYSTEMS, LLC,
Patent Owner.
____________

Case CBM2015-00064
Patent 8,676,609 B2
____________

Before KALYAN K. DESHPANDE, HYUN J. JUNG, and
TIMOTHY J. GOODSON, Administrative Patent Judges.

GOODSON, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
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I. INTRODUCTION
Care N’ Care Insurance Company, Inc. and TriZetto Corporation
(“Petitioners”) filed a Petition (Paper 3, “Pet.”) requesting institution of a
covered business method patent review of claims 81 and 83–88 of U.S.
Patent No. 8,676,609 B2 (Ex. 1003, “the ’609 patent”). Petitioners proffered
a Declaration of Dr. Wallace Bysinger (Ex. 1001) with the Petition.
Integrated Claims Systems, LLC (“Patent Owner”) filed a Preliminary
Response (Paper 9, “Prelim. Resp.”) to the Petition. Based on these
submissions, we instituted a covered business method patent review of
claims 81 and 83–88 on the ground that the claims are directed to ineligible
subject matter under 35 U.S.C. § 101. Paper 10 (“Dec. on Inst.”).
After institution, Patent Owner filed a Response (Paper 13, “PO
Resp.”), and Petitioners filed a Corrected Reply (Paper 17, “Reply”). Patent
Owner submitted a transcript of its deposition of Dr. Bysinger (Ex. 2007).
A combined oral hearing in this proceeding and Cases CBM2015-
00062 and CBM2015-00063 was held on April 26, 2016, and a transcript of
the hearing is included in the record. Paper 23 (“Tr.”).
We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.
For the reasons that follow, we determine that Petitioners have shown by a
preponderance of the evidence that claims 81 and 83–88 of the ’609 patent
are unpatentable.
A. Asserted Ground of Unpatentability
The instant covered business method patent review was instituted on
the sole ground that claims 81 and 83–88 are directed to patent-ineligible
subject matter under 35 U.S.C. § 101. Pet. 23–43; see Dec. on Inst. 26.
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B. Related Proceedings
The ’609 patent is the subject of multiple lawsuits and has been
asserted against Care N’ Care in Integrated Claims Sys., LLC v. Care N’
Care Ins. Co., Case No. 2:14-cv-00735-JRG (E.D. Tex.), now Integrated
Claims Sys., LLC v. Care N’ Care Ins. Co., Case No. 3:15-cv-03376 (N.D.
Tex.). Pet. 1, 2; Paper 8, 1; Ex. 1014; Paper 14, 1. In addition, the ’609
patent is related to the patents at issue in cases CBM2014-00186,
CBM2014-00187, CBM2015-00062, and CBM2015-00063.
C. The ’609 Patent
The ’609 patent relates to “an attachment integrated claims (AIC)
system for preparing and processing forms with integrated attachments,”
specifically “digital insurance claims including Prior Approval Claim (PAC)
Applications containing both a text form and an integrated digitized
attachment.” Ex. 1003, 1:40–46.
The Background of the ’609 patent summarizes previous attempts to
develop a faster and more cost effective claims processing system. Id. at
1:38–52. According to the ’609 patent, the “original system involved hard
copy paper claims only, with transmission and all processing done
manually.” Id. at 1:55–56. The introduction of the mainframe computer
was a significant advancement to that original system because it “allowed
for electronic processing within a given insurance company, i.e. once the
claim was on the computer inside the company, the paper form could be
dispensed with.” Id. at 1:66–2:3. The next advancement, according to the
’609 patent, was electronic filing of claim forms, which “was made possible
by the introduction of the personal computer and modem into the provider’s
office.” Id. at 2:22–24.
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In order to address compatibility issues between electronic claims
forms and insurers’ claims processing software, as well as compatibility
between providers’ computers and insurers’ mainframe computers, a
consortium of insurance companies established the National Electronic
Information Corporation (NEIC). Id. at 2:38–53. The NEIC “establishes
rigid standards that must be met in order to transmit an electronic claim form
to an insurance company.” Id. at 2:53–59.
The ’609 patent, however, describes that many claims require either
additional text that does not fit into the prescribed format or non-text
information, such as pictures, graphs, sound recordings, x-rays, or EKGs.
Id. at 3:12–23, 4:23–27. Such claims are called “claims with attachments.”
Id. at 3:12–19. An example of this type of claim is a PAC, which is a claim
sent to an insurance carrier before a procedure is performed. Id. at 3:20–23.
According to the ’609 patent, many insurance companies require that PAC
applications include additional medical evidence, such as an x-ray. Id. at
3:26–31.
The ’609 patent describes that “when attachments are required,
providers are forced to submit hard copy claim applications, while insurance
companies labor under an administrative system that is a hybrid between a
manual and an electronic system.” Id. at 4:11–15. Because the insurance
company’s goal is to review the claim, including both the text and the
attachment, in a cost effective manner, the ’609 patent states that the
“natural next stage in the development of claims processing systems is to
attempt to computerize[] this process.” Id. at 3:32–36. Although
“[s]canners are now available that can digitize a dental x-ray,” the ’609
patent describes that “transforming the medical evidence into digital form is
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not enough to facilitate electronic processing of claims with attachments” in
the existing claims processing infrastructure. Id. at 3:37–43.
Figure 3A is reproduced below:

Figure 3A is a combination block and flow diagram. Id. at 10:1–5.
Components 200 located in the health care provider’s office “include a
personal computer 210 . . . and a modem 216, connected to a scanner 220.”
Id. at 11:40–44, 56–58. “Components 300 located at the insurance company
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include the previously described mainframe or legacy computer 350 and
terminals 351, 352.” Id. at 12:4–6.
The AIC software is stored in computer system 210. Id. at 12:24–26.
The ’609 patent describes that “commercial software packages, such as
LOTUS NOTESTM, have been designed with the capability of addressing
combinations of text and graphics files.” Id. at 12:30–33. But
“embodiments according to the present invention are directed at providing
integrated text and graphics files within a coherent system and methodology
for addressing the specific needs of the work flow, preferably of a particular
industry” or “a particular application.” Id. at 12:35–39. The ’609 patent
states that “[i]t is possible, but not necessary, that the software needed to
implement the preferred embodiments of the present invention can be
developed within the frame work of the environment created by something
such as LOTUS NOTESTM.” Id. at 12:40–44.
“Contained within the AIC software are PAC forms for insurance
companies using the AIC system,” and the PAC form “contains boxes . . . in
which alpha-numeric characters can be entered so that, when the characters
are entered in these boxes they are entered so as to fill a ‘field,’ a delimited
alpha-numeric character string.” Id. at 12:45–55. “[T]he information
denoted by the characters can be transferred to and used in completing other
fields in related documents.” Id. at 12:56–58. A patient’s x-ray is digitized,
such as by scanner 220 connected to the service provider’s computer system
running the AIC software. Id. at 13:49–52. “[T]he PAC application is
formed from the electronic PAC form and the digitized patient’s x-ray.” Id.
at 14:8–9. The ’609 patent describes that “the format of the PAC application
advantageously may consist of a text file and an associated digitized image
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file,” and “the text file (i.e., the PAC form) and the image file (i.e., the
digitized x-ray) must cross reference one another (i.e., be correlated) so that
these files can be continuously associated with one another after
transmission to the insurance company.” Id. at 14:11–19. The PAC
application is then sent to the insurance company. Id. at 14:64–67.
When the PAC application is received by the insurance company, it is
downloaded to buffer computer 310, which is preferably a graphic user
interface (GUI)-capable computer or server that can be operated in parallel
with mainframe computer 350. Id. at 17:7–17, 12:27. A reviewing dentist
calls up the PAC application from buffer computer 310 to personal computer
311. Id. at 17:32–41. The AIC software automatically inserts the
company’s Predetermination form into the file, and can automatically
transfer useful information from the PAC application to the
Predetermination form. Id. at 17:41–46. The reviewing dentist reviews the
information in the PAC application and enters in the Predetermination form
the information required to approve or disapprove the procedure. Id. at
18:4–12. As part of the review, another monitor 351 on the reviewing
dentist’s desk may be connected to mainframe computer 350 so that the
patient’s insurance policy can be accessed and displayed. Id. at 18:20–25.
The Predetermination form and the PAC application are downloaded to
buffer computer 310, and the Predetermination form then is transmitted to
the service provider. Id. at 18:35–50.
D. Illustrative Claim
Claim 81, the only independent claim challenged by Petitioners, is
illustrative of the challenged claims and is reproduced below:
81. A computer implemented method, for processing
electronic communications, the method comprises the steps of:
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receiving, from a source external to a computer system,
an electronic communication comprising first digital data in N1
identifiable data fields, wherein N1 is an integer and wherein at
least some of the N1 identifiable data fields comprise insurance
transaction data and at least one of the N1 identifiable data
fields comprises attachment data for at least one attachment
stored in memory of a first computer;
storing the electronic communication in memory of a
second computer;
processing the electronic communication by:
displaying at least one graphic user interface
screen comprising a set of N2 identifiable data fields,
wherein N2 is an integer, and the attachment; and
determining second digital data to be entered in at
least one field in the set of N2 identifiable data fields
using at least some of the insurance transaction data in
the set of N1 identifiable data fields in a logic process;
wherein the second digital data comprises insurance
transaction data and wherein the second digital data excludes
the attachment.
II. ANALYSIS
A. Petitioners’ Eligibility to File a CBM Petition
Section 18 of the AIA governs the transitional program for covered
business method patent reviews. Section 18(a)(1)(B) of the AIA sets forth
that a person may not file a petition for such a review “unless the person or
the person’s real party in interest or privy has been sued for infringement of
the patent or has been charged with infringement under that patent.” Leahy-
Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011)
(“AIA”) § 18(a)(1)(B). Care N’ Care has been sued for infringement of the
’609 patent in Integrated Claims Sys., LLC v. Care N’ Care Ins. Co., Case
No. 2:14-cv-00735-JRG (E.D. Tex.). Pet. 2; Ex. 1014. TriZetto is
indemnifying Care N’ Care, and is listed as a real party in interest. Pet. 1, 2.
Patent Owner does not contest Care N’ Care’s or TriZetto’s eligibility.
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Petitioners have made a sufficient showing that they meet the eligibility
requirement of § 18(a)(1)(B).
B. Whether the ’609 Patent Is a Covered Business Method Patent
A “covered business method patent” is a patent that “claims a method
or corresponding apparatus for performing data processing or other
operations used in the practice, administration, or management of a financial
product or service, except that the term does not include patents for
technological inventions.” AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). To
determine whether a patent is eligible for a covered business method patent
review, the focus is on the claims. See Transitional Program for Covered
Business Method Patents—Definitions of Covered Business Method Patent
and Technological Invention, 77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012)
(Final Rule). A patent need have only one claim directed to a covered
business method to be eligible for review. Id. at 48,735–36.
1. Financial Product or Service
We first consider whether the ’609 patent claims a method “for
performing data processing or other operations used in the practice,
administration, or management of a financial product or service.” AIA
§ 18(d)(1). Petitioners argue that claim 81, from which all other challenged
claims depend, recites processing electronic communications that include
“insurance transaction data.” Pet. 7–8 (quoting claim 81). Petitioners
contend that claim 81 “expressly relates to processing data in an insurance
claim form, which is quintessentially a ‘financial product or service.’” Id. at
8. In support of this contention, Petitioners cite a dictionary definition of
“insurance” as an agreement to “indemnify another against specified loss in
return for premiums paid.” Id. (quoting American Heritage College
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Dictionary 705 (3d ed. 1997) (Ex. 1012)). Petitioners also cite Board
decisions equating insurance with a financial product or service in
evaluating standing for covered business method review. Id. at 8–9 (citing
Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM2013-00001, slip op.
at 6 (PTAB Jan. 27, 2013) (Paper 13); Gillman v. StoneEagle Servs., Inc.,
CBM2013-00047, slip op. at 8 (PTAB Feb. 18, 2014) (Paper 11)).
Patent Owner argues that claim 81 “does not concern the practice,
administration, or management of insurance.” PO Resp. 12. Patent Owner
asserts that claim 81 does not represent an improvement in the issuance,
adjudication, or payment of insurance, but is instead a computer technology
solution to a computer network problem. Id. at 12–13. According to Patent
Owner, “Petitioners should have demonstrated that the Challenged Claims
actually cover a financial product or service—not just a potential use of the
invention.” Id. at 15.
We agree with Petitioners that the plain language of claim 81
establishes that the claim is directed to a method for performing data
processing used in the administration or management of insurance claims.
We also agree with Petitioners that the administration or management of
insurance claims falls within the practice, administration, or management of
a financial product or service. The arguments on this issue in Patent
Owner’s Response largely repeat the corresponding section in the
Preliminary Response. Compare PO Resp. 12–18 with Prelim. Resp. 12–18.
These arguments are not persuasive because the statute does not limit
covered business method patents to those that claim financial products or
services. Instead, the statutory definition includes patents that claim a
method “for performing data processing or other operations used in the
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practice, administration, or management of a financial product or service.”
AIA § 18(d)(1) (emphasis added); see also Versata Dev. Grp., Inc. v. SAP
Am., Inc., 793 F.3d 1306, 1325 (Fed. Cir. 2015) (“[A]s a matter of statutory
construction, the definition of ‘covered business method’ is not limited to
products and services of only the financial industry, or to patents owned by
or directly affecting the activities of financial institutions such as banks and
brokerage houses.”). Here, claim 81 recites a method of processing an
“electronic communication comprising first digital data in N1 identifiable
data fields, . . . wherein at least some of the N1 identifiable data fields
comprise insurance transaction data.” Therefore, the claimed method is
“used in” the administration or management of insurance claims because
claim 81 explicitly recites the method’s usage in managing insurance
transaction data.
2. Technological Invention
Next, we consider whether the ’609 patent is excluded from being a
covered business method patent by virtue of being for a technological
invention. AIA § 18(d)(1). To determine whether a patent is for a
technological invention, we consider “whether the claimed subject matter as
a whole recites a technological feature that is novel and unobvious over the
prior art; and solves a technological problem using a technical solution.” 37
C.F.R. § 42.301(b).
Petitioners assert that claim 81 does not recite a technological feature
that is novel and non-obvious over the prior art because the recited steps use
only known technologies. See Pet. 15–16. Namely, Petitioners argue that
the description in the Background of the ’609 patent discloses the processing
of electronic claims by mainframe computers and electronic transmission of
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claims using a personal computer and modem. Id.; Ex. 1003, 1:66–2:5,
2:22–36. Petitioners support their argument with the testimony of Dr.
Wallace Bysinger. Ex. 1001 ¶¶ 36–37, 46. According to Petitioners, the
steps recited in claim 81 are “generic tasks that could be done with
conventional software and hardware well before the priority date of the ’609
Patent.” Pet. 18.
Patent Owner responds that the ’609 patent added new functionality to
legacy systems. PO Resp. 20. According to Patent Owner, “[a]lthough the
hardware components recited by the Challenged Claims were known at the
time the application leading to the ’609 Patent was filed, the use of computer
software fields as required by each claim, including the receipt of computer
software fields potentially containing digital attachments, was not known.”
Id. Patent Owner further argues that the ’609 patent indicates that the
inventions could be developed within the framework of known commercial
software packages such as LOTUS NOTES, but were not known and did not
exist before Patent Owner’s patent applications were filed. Id. at 22.
In its Reply, Petitioners point out, correctly, that Patent Owner’s
arguments purport to be based in part on an expert declaration, but Patent
Owner did not submit any expert declaration in this proceeding. Reply 3;
see also PO Resp. 20 (citing to a “Declaration of Robert Gross”). Petitioners
further reply that Patent Owner’s argument regarding LOTUS NOTES is
unsupported by evidence. Reply 4.
We are persuaded that claim 81 as a whole does not recite a
technological feature that is novel and unobvious over the prior art. Patent
Owner agrees that “the hardware components recited by the Challenged
Claims were known.” PO Resp. 20. “Reciting the use of known prior art
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technology to accomplish a process or method, even if that process or
method is novel and non-obvious,” typically does not render a patent a
technological invention. Office Patent Trial Practice Guide, 77 Fed. Reg.
48,756, 48,764 (Aug. 14, 2012).
Regarding Patent Owner’s contention that a computer receiving fields
potentially containing digital attachments was not known, Patent Owner has
not rebutted the testimony of Petitioners’ declarant, Dr. Bysinger, that “in
June of 1992, the MIME standard allowed a user to generate and then send
virtually any kind of file in an email.” Ex. 1001 ¶ 46; see also id. ¶ 42
(explaining that the MIME standard “defined a set of methods for
representing binary data in formats other than ASCII text format, allowing
both textual data and image data to be transmitted together”).
With respect to LOTUS NOTES, the ’609 patent’s disclosure that the
software needed to implement the invention can be developed within the
framework of LOTUS NOTES supports Petitioners’ argument that the
claimed method requires only generic tasks that could be done with
conventional software. Pet. 18.
We also have considered Petitioners’ and Patent Owner’s arguments
concerning whether the ’609 patent solves a technological problem using a
technical solution, but we do not find that this consideration militates in
favor of a technological invention. See Pet. 18–22; PO Resp. 22–24.
Petitioners assert that the problems solved were generic business problems
such as improving a process that was labor intensive, costly, and prone to
problems. Pet. 20. Patent Owner responds that those problems were due to
the limitations of mainframe computers, which presented a technical
challenge. PO Resp. 23. The ’609 patent supports Petitioner’s argument
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that both the problem and solution are nontechnical. In describing the
problem it seeks to solve, the ’609 patent focuses on reducing costs and
enhancing efficiency of the claims review process. See, e.g., Ex. 1003,
1:48–51, 3:32–36, 4:4–18, 7:61–8:2, 8:16–26. Further, in its disclosure of
the solution to these problems, the ’609 patent describes only generic and
conventional computer equipment such as mainframe computers, personal
computers, modems, scanners, printers, and servers. See, e.g., id. at 1:66–
2:1, 2:23–25, 11:56–12:12; see also PO Resp. 20 (agreeing that “the
hardware components recited by the Challenged Claims were known”).
In view of the foregoing, we conclude that the ’609 patent is a covered
business method patent under AIA § 18(d)(1).
C. Claim Construction
Consistent with the statute and legislative history of the AIA, the
Board will interpret unexpired claims using the broadest reasonable
construction. See 37 C.F.R. § 42.300(b). In our Decision on Institution, we
determined that we did not need to provide an express construction for any
claim term. See Dec. on Inst. 13.
Patent Owner proposes that the broadest reasonable interpretation of
“field” in view of the Specification is a “computer software field.” PO Resp.
25–26. Petitioners argue that Patent Owner’s proposed construction is
circular and unhelpful, and that the Board need not provide an express
construction of this term because “[t]he construction of ‘field’ does not
impact the section 101 analysis at issue here.” Reply 4.
We agree with Petitioners. We see no reason why the resolution of
the issues before us requires an express construction of this term. Even if we
were to construe “field” as a “computer software field,” it would not impact
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our analysis of claims 81 and 83‒88 under 35 U.S.C. § 101. Accordingly,
we do not provide an express construction of “field.” See Wellman, Inc. v.
Eastman Chem. Co., 642 F.3d 1355, 1361 (Fed. Cir. 2011) (“[C]laim terms
need only be construed ‘to the extent necessary to resolve the
controversy.’”).
D. Patent Eligibility Under 35 U.S.C. § 101
Petitioners challenge claims 81 and 83–88 as unpatentable under
35 U.S.C. § 101 as being directed towards non-statutory subject matter.
Pet. 23–43. An invention is patent-eligible if it claims a “new and useful
process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101.
The Supreme Court, however, has long interpreted § 101 to exclude from
patent-eligible subject matter claims drawn to “laws of nature, natural
phenomena, and abstract ideas.” Alice Corp. Pty Ltd. v. CLS Bank Int’l, 134
S. Ct. 2347, 2354 (2014).
In Alice, the Supreme Court reiterated the framework set forth
previously in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.
Ct. 1289 (2012), “for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts.” Alice, 134 S. Ct. at 2355. The first step in
the analysis is to “determine whether the claims at issue are directed to one
of those patent-ineligible concepts.” Id. If the claims are directed to a
patent-ineligible concept, the second step in the analysis is to consider the
elements of the claims “individually and ‘as an ordered combination’” to
determine whether there are additional elements that “‘transform the nature
of the claim’ into a patent-eligible application.” Alice, 134 S. Ct. at 2355
(quoting Mayo, 132 S. Ct. at 1291, 1297). The second step of the analysis is
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“a search for an ‘inventive concept’ — i.e., an element or combination of
elements that is ‘sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [ineligible concept] itself.’” Id.
1. Are the Claims Directed to an Abstract Idea?
Petitioners assert that the challenged claims are “directed to the
abstract idea of receiving information, storing it, and determining which of
its parts to enter into a display.” Pet. 29, 31. Petitioners analogize the
challenged claims to claims that the Federal Circuit determined were patent
ineligible in Content Extraction & Transmission v. Wells Fargo Bank, 776
F.3d 1343 (Fed. Cir. 2014) and Cyberfone Systems, LLC v. CNN Interactive
Group, Inc., 558 F. App’x 988 (Fed. Cir. 2014) (nonprecedential). See Pet.
31–34.
In Content Extraction, the Federal Circuit considered the patent
eligibility of a method claim for “processing information from a diversity of
types of hard copy documents” that included the following steps:
(a) receiving output representing a diversity of types of hard
copy documents from an automated digitizing unit and storing
information from said diversity of types of hard copy
documents into a memory . . . ;
(b) recognizing portions of said hard copy documents
corresponding to a first data field; and
(c) storing information from said portions of said hard copy
documents corresponding to said first data field into memory
locations for said first data field.
Content Extraction, 776 F.3d at 1345. In applying step one of the
Mayo/Alice framework, the Federal Circuit determined that the claims were
“drawn to the abstract idea of 1) collecting data, 2) recognizing certain data
within the collected data set, and 3) storing that recognized data in a
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memory.” Id. at 1347. The Federal Circuit noted that “[t]he concept of data
collection, recognition, and storage is undisputedly well-known.” Id.
In Cyberfone, the court evaluated a method claim reciting steps that
required “obtaining data, ‘exploding’ the data, i.e., separating it into
component parts, and sending those parts to different destinations.”
Cyberfone, 558 F. App’x at 990. The Federal Circuit held that this claim
involved an abstract idea, explaining that “using categories to organize,
store, and transmit information is well-established.” Id. at 992. Thus, “the
well-known concept of categorical data storage, i.e., the idea of collecting
information in classified form, then separating and transmitting that
information according to its classification, is an abstract idea that is not
patent-eligible.” Id.
We agree with Petitioners that the challenged claims are directed to a
process of receiving information, storing it, and determining which of its
parts to enter into a display. Pet. 29. Claims directed to such a process are
analogous to the data processing claims that the Federal Circuit held were
directed to an abstract idea in Content Extraction and Cyberfone. In
particular, as Petitioners argue, the step in claim 81 “of determining which
parts of the information to enter into a graphical display is analogous to the
step in [Content Extraction] of ‘recognizing certain data within the collected
data set.’” Pet. 33. Further, the steps in claim 81 of receiving information
and storing it are similar to the steps in Content Extraction of collecting data
and storing the recognized data in a memory. Id. With respect to
Cyberfone, we agree with Petitioners that the challenged claims can be
“described as directed to methods of ‘obtaining data . . . separating it into
component parts, and sending those parts to different destinations’ that the
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Federal Circuit in Cyberfone held embodied an abstract idea.” Id. at 34
(quoting Cyberfone, 558 F. App’x at 990). We have considered Patent
Owner’s arguments that the challenged claims are not directed to an abstract
idea, but those arguments are not persuasive for the reasons that follow.
First, Patent Owner argues that “Petitioner does not follow the Alice
test by using pre-emption as the determiner.” PO Resp. 34. Based on its
assertion that preemption is the true test of patent eligibility, Patent Owner
argues that the challenged claims do not preempt the field of insurance
claims processing. Id. at 47–49. Petitioners reply that “‘using pre-emption
as the determiner’ is not the test set forth for patent eligibility under § 101.”
Reply 7. We agree with Petitioners. In particular, Patent Owner does not
identify, and we do not find, any holding in Alice supporting Patent Owner’s
contention that “if an example can be shown of use of [an] idea that is not
pre-empted by the patent claim, then the patent claim is not directed to an
abstract idea.” PO Resp. 33.
Patent Owner is correct that the Supreme Court has described “the
concern that drives this exclusionary principle [i.e., the exclusion of abstract
ideas from patent eligible subject matter] as one of pre-emption.” Alice, 134
S. Ct. at 2354. But pre-emption as a driving concern for patent eligibility
case law does not equate to pre-emption as the sole test for patent eligibility.
“The Supreme Court has made clear that the principle of preemption is the
basis for the judicial exceptions to patentability” and “[f]or this reason,
questions on preemption are inherent in and resolved by the § 101 analysis.”
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir.
2015) (citing Alice, 134 S. Ct. at 2354). Thus, “while preemption may
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signal patent ineligible subject matter, the absence of complete preemption
does not demonstrate patent eligibility.” Id.
Next, Patent Owner argues that Alice and Bilski v. Kappos, 561 U.S.
593, 610–11 (2010), are distinguishable from the claims challenged here
because those cases dealt with fundamental economic practices. PO
Resp. 37–38. We are not persuaded by this distinction because neither Alice
nor Bilski indicates that only fundamental economic practices can qualify as
abstract ideas. See Alice, 134 S. Ct. at 2355 (“The ‘abstract ideas’ category
embodies ‘the longstanding rule that “[a]n idea of itself is not patentable.”’”)
(quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)).
Patent Owner also analogizes the challenged claims to the check
processing claims at issue in U.S. Bancorp v. Solutran, Inc., Case
CBM2014-00076 (PTAB Aug. 7, 2014) (Paper 16). PO Resp. 38–40.
There, the Board denied institution of a § 101 challenge because the
petitioner had failed to demonstrate that claims reciting a method for
processing paper checks were directed to an abstract idea. Solutran, slip op.
at 12–15. Specifically, the Board found “that the basic, core concept of
independent claim 1 is a method of processing paper checks, which is more
akin to a physical process than an abstract idea.” Id. at 13.
Patent Owner’s reliance on Solutran is misplaced. As an initial
matter, the Board’s Decision on Institution in Solutran is nonprecedential
and, therefore, not binding. See PTAB Standard Operating Procedure (SOP)
2 (Rev. 9), available at http://www.uspto.gov/patents-application-
process/patent-trial-and-appeal-board/resources. Also, in rendering that
decision, the Board could not have taken into consideration the Federal
Circuit’s guidance in Content Extraction, which was decided several months
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after the Decision on Institution in Solutran. Still further, Patent Owner
does not account for the difference between claims for processing electronic
communications, as are at issue here, and claims for processing paper
checks, as in Solutran. See Tr. 50:19–51:11. It was significant to the
Board’s § 101 analysis in Solutran that the claim was for “a method of
processing paper checks, which is more akin to a physical process than an
abstract idea.” Solutran, slip op. at 13. Processing electronic
communications is less easily characterized as a concrete, physical process
than processing paper checks.
Patent Owner extensively quotes the Federal Circuit’s decision in
DDR Holdings, LLC v. Hotels.com, 773 F.3d 1245 (Fed. Cir. 2014) to argue
that the claims challenged here differ from claims held to be directed to
abstract ideas. See PO Resp. 40–42. But Patent Owner does not explain
persuasively what specific limitations or features of the challenged claims
prevent them from being directed to an abstract idea. Moreover, Patent
Owner does not explain why Petitioners’ characterization of the challenged
claims as being directed to “receiving information, storing it, and
determining which of its parts to enter into a display” (Pet. 29) is incomplete
or inaccurate.
Patent Owner’s attempt to distinguish the Federal Circuit cases on
which Petitioners rely is unpersuasive. PO Resp. 42–43. After reproducing
claim 1 from Content Extraction in full, Patent Owner simply asserts that
“[u]nlike the ’609 Patent, the patent at issue in [Content Extraction] is
merely ‘drawn to the basic concept of data recognition and storage.’” Id. at
43. Similarly, with respect to Cyberfone, Patent Owner contends that “the
claims of the ’609 Patent are not directed to the concepts of capturing and
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storing data.” Id. at 46. Patent Owner’s mere assertion that the challenged
claims are different than the Content Extraction and Cyberfone claims,
without an explanation of how they are different and why those differences
impact the analysis under the first step of the Mayo/Alice framework, is not
persuasive.
Patent Owner argues that other cases are “far more analogous” than
Content Extraction and Cyberfone. PO Resp. 43, 46. The cases Patent
Owner relies on are Messaging Gateway Solutions v. Amdocs, Inc., 2015
WL 1744343 (D. Del. Apr. 15, 2015) and Kenexa BrassRing, Inc. v.
HireAbility.com, LLC, 2015 WL 1943826 (D. Mass. Apr. 28, 2015). Patent
Owner’s reliance on Messaging Gateway to support its argument on the first
step of the Mayo/Alice analysis is confusing, given the court’s finding that
the claim challenged there “is directed to the abstract idea of translation.”
Messaging Gateway, 2015 WL 1744343, at *4. Patent Owner’s arguments
regarding Kenexa are also unpersuasive because the district court there
found that the patents at issue “may be directed toward an abstract idea,” but
because the court determined that the motion at issue “must be denied under
the second step of the Mayo/Alice analysis, it is not necessary to resolve the
first step definitively at this stage.” Kenexa, 2015 WL 1943826 at *6.
Our determination that claims 81 and 83–88 are directed to an abstract
idea is also consistent with Enfish, LLC v. Microsoft Corp., No. 2015-1244,
2016 WL 2756255 (Fed. Cir. May 12, 2016), and In re TLI Communications
LLC Patent Litigation, No. 2015-1372, 2016 WL 2865693 (Fed. Cir. May
17, 2016), two Federal Circuit decisions concerning § 101 that issued after
the completion of briefing and oral argument in this proceeding. These
cases clarify that “a relevant inquiry at step one is ‘to ask whether the claims
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are directed to an improvement to computer functionality versus being
directed to an abstract idea.’” TLI, 2016 WL 2865693 at *3 (quoting Enfish,
2016 WL 2756255 at *4). In this inquiry, claims “directed to an
improvement in the functioning of a computer” are contrasted with claims
“simply adding conventional computer components to well-known business
practices” or “generalized steps to be performed on a computer using
conventional computer activity.” Id. (quoting Enfish, 2016 WL 2756255 at
*7).
The claims held to be patent-eligible in Enfish recited a “self-
referential table,” which the Federal Circuit determined was a “specific type
of data structure designed to improve the way a computer stores and
retrieves data in memory.” Enfish, 2016 WL 2756255 at *8. We find no
comparable aspect of the claims challenged here that represents “an
improvement to computer functionality itself.” Id. at *4. Rather, the claims
at issue in this case recite “generalized steps to be performed on a computer
using conventional computer activity.” Id. at *7.
Here, just as the Federal Circuit determined was the case in TLI,
Petitioners have shown that the claimed invention is “directed to the use of
conventional or generic technology in a . . . well-known environment.” TLI,
2016 WL 2865693 at *3. Similar to the non-technical goal of the inventor in
TLI to “provid[e] for recording, administration and archiving of digital
images simply, fast and in such way that the information therefore may be
easily tracked,” id., the ’609 patent seeks to reduce costs and enhance
efficiency of the review process for insurance claims. See Ex. 1003, 1:48–
51, 3:32–36, 4:4–18, 7:61–8:2. And, like the patent in TLI, the ’609 patent
“fails to provide any technical details for the tangible components, but
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instead predominately describes the systems and methods in purely
functional terms.” TLI, 2016 WL 2865693 at *4; see, e.g., Ex. 1003, 11:56–
12:3, 12:40–44, 13:58–14:1, 21:30–57, 22:18–24.
For the foregoing reasons, we conclude that claims 81 and 83–88 are
directed to an abstract idea.
2. Do Additional Elements Transform the Nature of the Claims into a
Patent-Eligible Application?
Petitioners argue that the challenged claims do not supply an inventive
concept sufficient to transform the abstract idea into a patent-eligible
invention because they merely apply conventional computer hardware to the
abstract idea. Pet. 34. Petitioners compare the challenged claims to those in
Content Extraction, which merely recited the use of existing technology “to
recognize and store data from specific data fields.” Id. at 35 (quoting
Content Extraction, 776 F.3d at 1348). There, the Federal Circuit held that
“[t]here is no ‘inventive concept’ in [the patentee]’s use of a generic scanner
and computer to perform well-understood, routine, and conventional
activities commonly used in industry.” Content Extraction, 776 F.3d at
1348.
Petitioners also assert that the challenged claims fail the machine-or
transformation test, which provides “a useful clue in the second step of the
Alice framework.” Pet. 35 (quoting Ultramercial, Inc. v. Hulu, LLC, 772
F.3d 709, 716 (Fed. Cir. 2014)). With regard to independent claim 81, for
example, Petitioners argue that all of the recited steps—receiving an
electronic communication having insurance transaction data, storing it, and
using a logic process to decide which parts of the communication to enter
into the fields of a graphic user interface—could be carried out manually,
with a pen and paper. Pet. 36. Petitioners emphasize that no specific “logic
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process” is claimed, “so even the simplest logical method is covered.” Id.
Petitioners assert that claim 81 “does not require the method to be performed
by a particular machine, or even a machine at all,” and so fails the machine
prong of the machine-or transformation test. Pet. 37 (citing CyberSource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1370 (Fed. Cir. 2011)).
Further, according to Petitioners, the claim is not transformative because it
merely requires the collection and organization of data. Id. (citing
CyberSource, 654 F.3d at 1375).
Patent Owner responds that the computer is integral to the claim
because the computer “facilitate[s] the process in a way that a person
making calculations or computations could not.” PO Resp. 49 (quoting
Bancorp. Servs., LLC v. Sun Life Assurance Co., 687 F.3d 1266, 1278 (Fed.
Cir. 2012)). Patent Owner further argues that the use of fields in the
challenged claims enables functions that could not be performed easily by a
person, such as automatically signifying fields that a user need not complete
and automatically transferring information from one field to another. Id. at
51–52. And Patent Owner distinguishes Content Extraction on the basis that
there, the patentee admitted that scanning and using computers to recognize
the scanned shapes as text were known. Id. at 52 (citing Content Extraction,
776 F.3d at 1348). In this case, according to Patent Owner, using fields to
overcome the limitations of mainframe computers was not known. Id. at 53.
Considering the full record before us, we agree with, and adopt as our
own, Petitioners’ explanation of why the challenged claims fail to recite any
elements that individually or as an ordered combination transform the
abstract idea of receiving information, storing it, and determining which of
its parts to enter into a display into a patent-eligible application of that idea.
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Pet. 34–43. Stated simply, the challenged claims require no more than
generic computer components performing generic computer functions and
conventional activities. See Alice, 134 S. Ct. at 2359 (noting, in carrying out
the second step, that the “the relevant question is whether the claims here do
more than simply instruct the practitioner to implement the abstract idea . . .
on a generic computer”); TLI, 2016 WL 2865693 at *6 (“These steps fall
squarely within our precedent finding generic computer components
insufficient to add an inventive concept to an otherwise abstract idea.”).
For example, claim 81 recites receiving data in fields, storing data in
memory, determining which data to enter for display using a generic “logic
process,” and displaying data. “[A]ll of these computer functions are ‘well-
understood, routine, conventional activit[ies]’ previously known to the
industry.” Alice, 134 S. Ct. at 2359 (quoting Mayo, 132 S. Ct. at 1294). The
parallels that Petitioner draws between the claims challenged here and those
addressed in Content Extraction are compelling. See Pet. 35–36. Patent
Owner’s reliance on the use of fields in the challenged claims to satisfy the
second step of the Mayo/Alice analysis and to distinguish Content Extraction
is unpersuasive in view of Petitioners’ argument and evidence that computer
software fields are a generic, well-known concept in data processing, and
that using fields to transfer information from a field in one form to a
correlated field in another form was routine and conventional. Reply 12; Ex.
1001 ¶¶ 36–37.
We also agree with Petitioners that the challenged claims fail the
machine-or-transformation test because the claims “are not tied to any
particular novel machine or apparatus, only a general purpose computer,”
and “adding a computer to otherwise conventional steps does not make an
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invention patent-eligible.” Ultramercial, 772 F.3d at 716–17. We discern
nothing in the challenged claims requiring a novel machine or apparatus.
Indeed, as noted above, Patent Owner concedes that “the hardware
components recited by the Challenged Claims were known at the time the
application leading to the ’609 Patent was filed.” Prelim. Resp. 19; PO
Resp. 20.
Turning to the transformation prong of the test, “[a]ny transformation
from the use of computers or the transfer of content between computers is
merely what computers do and does not change the analysis.” Ultramercial,
772 F.3d at 717. Moreover, as the Federal Circuit explained in
CyberSource, the “mere collection and organization of data regarding credit
card numbers and Internet addresses is insufficient to meet the
transformation prong of the test.” 654 F.3d at 1370. Here, claim 81 recites
receiving an electronic communication that includes digital data in fields,
some of which include insurance transaction data and at least one of which
includes attachment data, storing the electronic communication, and
processing the electronic communication by determining which of the
received data to display and displaying the selected data and the attachment
on a GUI. Ex. 1003, 50:20–43. We agree with Petitioners that the claimed
method merely collects and organizes data, which is insufficient to meet the
transformation prong of the machine-or-transformation test. Dependent
claims 83–88 also do not recite more than the mere collection and
organization of data.
III. CONCLUSION
For the foregoing reasons, we determine that Petitioners have
demonstrated, by a preponderance of the evidence, that claims 81 and 83–88
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of the ’609 patent are unpatentable because they are directed to ineligible
subject matter under 35 U.S.C. § 101.
IV. ORDER
In consideration of the foregoing, it is hereby:
ORDERED that claims 81 and 83–88 of U.S. Patent No. 8,676,609 B2
have been shown to be unpatentable; and
FURTHER ORDERED that parties to the proceeding seeking judicial
review of this Final Decision must comply with the notice and service
requirements of 37 C.F.R. § 90.2.

PETITIONERS:

Gianni Cutri
Jared Barcenas
KIRKLAND & ELLIS LLP
gianni.cutri@kirkland.com
jared.barcenas@kirkland.com

PATENT OWNER:

John F. Ward
David G. Lindenbaum
WARD & ZINNA, LLC
jward@wardzinna.com
dlindenbaum@wardzinna.com