Patent Claims Reordering Conventional Steps May Be Ineligible Under 101

SOLUTRAN, INC v. ELAVON, INC.

Before Chen, Hughes, and Stoll. Appeal from the United States District Court for the District of Minnesota

Summary: Method claims directed to performing conventional steps in a new order may be insufficient to render claims patent eligible under § 101.

Solutran sued Elavon for patent infringement. The patent claims covered a method for processing paper checks, which comprised the following steps in sequence: a) receiving a data file with information from the checks, but not including images of the checks; b) crediting a merchant’s account; c) creating digital images of the checks; and d) using a computer to match the digital images to the data file. Elavon moved for summary judgment, claiming that the patent was directed to an abstract idea under § 101. The district court denied Elavon’s motion, and affirmatively held the claims to be patent eligible, finding that the claims focused on the physical processing and transporting of paper checks. After entry of final judgment of infringement, Elavon appealed.

The Federal Circuit reversed, finding under Alice step one that the claims were directed to the abstract idea of “crediting a merchant’s account as early as possible while electronically processing a check.” The Federal Circuit explained that the physicality of the paper checks being processed and transported is not enough to exempt the claims from being directed to an abstract idea, since the claims recite conventional actions in a generic way and do not improve any underlying technology.  Under Alice step two, the Federal Circuit did not find an inventive concept sufficient to render the claims patent eligible.  The Federal Circuit noted that the patent specification described each individual step of the claims as conventional and explained that reordering conventional steps was insufficient to constitute an inventive concept.

Editor: Paul Stewart

Written by: Adam R. Aquino & Andrea Cheek