IP Law Daily, TOP STORY—E.D. Va.: Patents related to administration of financial accounts were invalid, unenforceable, (Apr 17, 2014)

By Thomas Long, J.D.

Two patents related to the use of databases and the Internet to administer financial accounts were invalid and unenforceable as a matter of law and could not support infringement claims against Capital One Financial Corp., the federal district court in Alexandria, Virginia has determined (Intellectual Ventures I LLC v. Capital One Financial Corp., April 16, 2014, Trenga, A.). Both patents covered unpatentable abstract ideas, and one of the patents was invalid for indefiniteness.

Intellectual Ventures I, LLC and Intellectual Ventures II, LLC (collectively referred to as “IV”) brought suit against Capital One Financial Corp. and affiliated entities (collectively referred to as “Capital One”), claiming that Capital One infringed IV’s U.S. Patent No. 7,603,382, entitled “Advanced Internet Interface Providing User Display Access of Customized Webpages” (“the '382 patent”) and U.S. Patent No. 8,083,137, entitled “Administration of Financial Accounts” (“the '137 patent”). Capital One moved for summary judgment.

Patentability. Capital One contended that the patents-in-suit consisted of unpatentable subject matter under Sec. 101 of the Patent Act.

The invention covered by the '137 patent, in essence, utilizes user-selected pre-set limits on spending that are stored in a database that, when reached, communicates a notification to the user via a device. Capital One argued that the '137 patent covered simply the abstract idea of basic budgeting, whereby a user categorized transactions and established limits on the charges he or she desired for those categories. IV argued that the '137 patent was not simply an abstract idea, but rather “cover[s] a specific patent eligible application of database technology for electronically administering financial accounts.”

The underlying invention of the '382 patent was summarized as “a system for delivering information from an information provider to an information user that is selectively tailored toward the capabilities of the information provider and the needs of the information user.” Capital One argued that the '382 patent also claimed an unpatentable abstract idea, specifically the abstract idea of “personalizing a website display to reflect a user’s characteristics and navigation history.” Capital One contended that the claims did not sufficiently apply this idea through any specific machine, but rather simply incorporated generic components that store, transmit, or display various types of information.

The court concluded as a matter of law, based on clear and convincing evidence, that neither the '137 nor the '382 patent contained patentable subject matter under Sec. 101. Neither satisfied either prong of the “machine-or-transformation” test nor otherwise contained a “patentable process,” as that term was defined in Sec. 100(b) or as established by the “guideposts” provided by Supreme Court precedents.

Nothing in the court’s claim construction established patentability because, no matter how the claim terms were construed, each patent consisted of nothing more that the entry of data into a computer database, the breakdown and organization of that entered data according to some criteria (disclosed in the '137 patent, but not in the '382 patent), and the transmission of information derived from that entered data to a computer user. These steps were all taken through the use of conventional computer components, such as a database and processors, operating in a conventional manner. There was no inventive technology or other inventive concept that authorizes the protections of a patent, such as an improvement in the workings of the computer or the transmissibility of data or some other transformation of data into something qualitatively beyond the informational content of the data entered, the court said. Rather, the patents were drawn to a mental process, that is, an abstract idea.

Indefiniteness. Capital One also argued that independent claim 5 of the '382 patent and its dependent claims failed to satisfy the definiteness requirements of Sec. 112(b) of the Patent Act. Section 112(b) required that every patent’s specification “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” A claim may be invalid for indefiniteness when the claim language is so “standardless” that it could not be meaningfully applied, the court said.

At issue was whether the term “interactive interface,” as construed by the court, and the dependent “Display Terms” terms (which incorporated the “interactive interface” term), failed to meet the definiteness requirement of Sec. 112(b) because the term “interactive interface” in claim 1 was insolubly ambiguous. The court construed “interactive interface” as “a selectively tailored medium by which a web site user communicates with a web site information provider” (emphasis added).

The court found and concluded as a matter of law that the '382 patent failed for indefiniteness. The '382 patent did not disclose to someone of ordinary skill in the art enough information to understand was an “interactive interface” is in fact. IV’s experts had provided various alternatives as to what a “selectively tailored medium” could be, but they could not say definitely what it was or was not.

Nothing in the court’s construction of “interactive interface” or the patent’s specification provided guidance on what the “medium” is, how it could be “selectively tailored,” or how the selective tailoring relates to communication between website users and website information providers. In the court’s view, it was difficult to know whether a “selectively tailored medium” had any specific structure or scope. Neither the public nor a person of ordinary skill in the art could reasonably determine the precise “metes and bounds” of the claimed invention.

As for the Display Terms, the court found that the word “display” did not refer to a physical device but rather a pictorial or graphic depiction shown to the user regarding what portion of the website the user had visited. With regard to independent claims 1, 16, and 21, the displays were created, in part, based on information “automatically downloaded from the interactive interface” (emphasis added). Therefore, for the same reasons that “interactive interface” was found indefinite, the court concluded as a matter of law that the Display Terms were insolubly ambiguous.

Accordingly, the court granted summary judgment in favor of Capitol One and dismissed the action.

The case is Civil Action No. 1:13-cv-00740 (AJT/TRJ).

Attorneys: Clayton Walter Thompson, II (Feinberg Day Alberti & Thompson LLP) and Craig Crandall Reilly (Law Office Of Craig C. Reilly) for Intellectual Ventures I LLC and Intellectual Ventures II LLC. Dabney Jefferson Carr , IV (Troutman Sanders LLP) for Capital One Financial Corp., Capital One Bank (USA), Nat’l Assoc., and Capital One Bank (USA), N.A.

Companies: Intellectual Ventures I LLC; Intellectual Ventures II LLC; Capital One Financial Corp.; Capital One Bank (USA), Nat’l Assoc.; Capital One Bank (USA), N.A.

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