Content Extraction and Transmission LLC v. Wells Fargo Bank, et al. Diebold, Incorporated v. Content Extraction and Transmission LLC et al.

Docket No. 2013-1588, -1589, 2014-1112, -1687

December 23, 2014

Brief Summary: CET’s methods deemed invalid under 35 USC § 101 (“There is no ‘inventive concept’ in CET’s use of a generic scanner and computer to perform well-understood, routine, and conventional activities commonly used in industry.”) Lawsuits determined not be frivolous (not a “sham”).

Summary: Content Extraction (CET) appealed grant of SJ holding CET’s asserted patents (US 5,258,855 and continuations 5,369,508; 5,625,465; and 5,768,416) related to methods used by ATMs to recognize information on scanned checks invalid under 35 USC § 101. The opinion reiterated the Supreme Court’s two-step frameword described in Mayo (US 2012) and Alice (US 2014) (1) determine whether a claim is “directed to” a patent-ineligibel abstract idea; and 2) consider the elements of the claim-both individualy and as an ordered combination-to assess whether the additional elements transform the nature of the claim into a patent-eligible application of the abstract idea (“the search for the ‘inventive concept’-something sufficient to ensure that the claim amounts to ‘significantly more’ than the abstract idea itself”). The opinion explained that the Supreme Court has not “delimit[ed] the precise contours of the ‘abstract ideas’ category” and “there is no categorical business-method exception” (Bilski, US 2010). The claims in CET’s patents were determined to encompass collecting data, recognizing certain data within the collected data set, and storing that recognized data in a memory. It was noted that “humans have always performed these functions” and “banks have, for some time, reviewed checks, recognized relevant data such as the amount, account number, and identity of the account holder, and stored that information in their records.” CET argued that its claims were distinguishable from the Alice situation because “a computer but also an additional machine-a scanner” are required but were concluded to be abstract. And the FC panel agreed with the DC that the patents “contain no limitations-either individually or as an ordered combination-that transform the claims into a patent-eligible application” (“There is no ‘inventive concept’ in CET’s use of a generic scanner and computer to perform well-understood, routine, and conventional activities commonly used in industry.”) It also agreed that DC did not need to address each claim of the asserted patents (242 claims) in part because CET did not “identify any other claims as purportedly containing an inventive concept” and “claim construction is not an inviolable prerequisite to a validity determination under § 101”. Diebold also appealed the DC finding that the lawsuits were not frivolous (not a “sham” (“objectively baseless ‘in the sense that no reasonable litigant could realistically expect success on the merits”)) because there was no intent “to harm the plaintiff…as opposed to harms flowing from the outcome of that process.” The FC panel affirmed this decision.

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