Methods That Could Be Entirely Executed Mentally Found Unpatentable Under 35 U.S.C. § 101

This article previously appeared in Last Month at the Federal Circuit, September 2011

Judges: Bryson, Dyk (author), Prost

[Appealed from N.D. Cal., Judge Patel]

In CyberSource Corp. v. Retail Decisions, Inc., No. 09-1358 (Fed. Cir. Aug. 16, 2001), the Federal Circuit affirmed the district court's grant of SJ of invalidity of claims 2 and 3 of U.S. Patent No. 6,029,154 ("the '154 patent") under 35 U.S.C. § 101 for failure to recite patent-eligible subject matter.

CyberSource Corporation ("CyberSource") owns the '154 patent, which recites a method and system for detecting fraud in a credit card transaction between a consumer and a merchant over the Internet. Claim 3 recites "[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." Slip op. at 3 n.1. Claim 2 recites "[a] computer readable medium containing program instructions for detecting fraud in a credit card transaction between a consumer and a merchant over the Internet . . . ." Id. at 3 n.2.

CyberSource brought suit against Retail Decisions, Inc. ("Retail Decisions"), alleging infringement. In response, Retail Decisions initiated an ex parte reexamination, which resulted in amended claims. After reexamination, Retail Decisions moved for SJ of invalidity under 35 U.S.C. § 101. The district court found that claim 3 recited an unpatentable mental process for collecting data and weighing values, which did "not become patentable by tossing in references to [I]nternet commerce," and found with respect to claim 2 that "simply appending 'A computer readable media including program instructions . . .' to an otherwise non-statutory process claim is insufficient to make it statutory." Id. at 5 (alterations in original) (citations omitted).

On appeal, CyberSource argued that the method of claim 3 is tied to a particular machine because it "would not be necessary or possible without the Internet." Id. at 9 (citation omitted). In In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008) (en banc), the Court held that a claimed process would only be "patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus...