Bucking the Trend: Security Software Patent Not Yet Ruled Ineligible

ScreenShot142Card Verification v. Citigroup (N.D. Ill. 2014)

A growing number district court decision have followed the Supreme Court’s Alice Corp. decision by finding the asserted patent claims to be patent-ineligible as unduly encompassing an abstract idea.

In one recent decision, N.D. Ill. Judge Kendall has tepidly bucked the trend by denying a Fed R. Civ. Proc. R. 12(b)(6) motion for failure to state a claim — instead finding the asserted claims plausibly eligible.

The asserted patent claims cover a transaction verification method and the Judge agreed with defendant-Citygroup the general idea of verifying a transaction is an unpatentable abstract idea.  (Claim 1 is pasted below. See Patent No. 5,826,245).

Moving to the second step of Alice, Judge Kendall found that the claims plausibly avoid the mental steps doctrine by requiring “pseudorandom tag generating software” and also plausibly requires a sufficiently concrete transformation so as to ground the abstract idea to a particular inventive implementation.  Notably, for the second step, Judge Kendall did not draw the law from Alice, which seemingly required novelty in the ‘something more’ but instead quoted from the Federal Circuit’s 2013 holding that “additional substantive limitations [are required that] narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.” Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1341 (Fed. Cir. 2013).  Applying that law to the case, the court ruled that the claimed process of adding random number tags to data in the computer could be seen as “fundamentally altering the original confidential information.”  With this analysis in hand, Judge Kendall denied the defendants’ motion to dismiss for failure to state a claim without prejudice.

The decision here is probably most important for its procedural stance. First, the defendants’ bold move was to file its motion to dismiss as a R. 12(b)(6) motion even before filing its answer to the complaint that would include defenses and counterclaims.  Under Iqbal and Twombly, the complaint must state a claim that is ‘plausible on its face.’  Here, all that the court held was that the claim is plausible.

Although the outcome favored the patentee, the case is also a break from the tradition that a patent’s presumption of validity is generally sufficient to survive such a motion to dismiss. In Ultramercial, the Federal Circuit addressed a similar finding and held that dismissal at such an early stage is only appropriate when “the only plausible reading of the patent [is] that there is clear and convincing evidence of ineligibility.”  Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (Fed. Cir. 2013) vacated on other grounds 132 S. Ct. 24131 (2012). Of course, the clear-and-convincing standard is with regard to questions of fact while the eligibility inquiry is a question of law that depends upon few (if any) questions of fact.

= = = = =

Read the decision here: Kendall101

Claim 1:

A method for giving verification information for a transaction between an initiating party and a verification-seeking party, the verification information being given by a third, verifying party, based on confidential information in the possession of the initiating party, the method comprising:

on behalf of the initiating party, generating first and second tokens each of which represents some but not all of the confidential information,

sending the first token electronically via a nonsecure communication network from the initiating party to the verification-seeking party,

sending the second token electronically via a nonsecure communication network from the initiating party to the verifying party,

sending the first token electronically via a nonsecure communication network from the verification-seeking party to the verifying party,

verifying the confidential information at the verifying party based on the first and second tokens, and sending the verification information electronically via a nonsecure communication network from the verifying party to the verification-seeking party.

122 thoughts on “Bucking the Trend: Security Software Patent Not Yet Ruled Ineligible

  1. 25

    Dennis Crouch wrote: “Security Software Patent Not Yet Ruled Ineligible.”

    How could there be any question about the eligibility of this claim in light of the “Integration Analysis” from Mayo and Alice?

    The claim is clearly an “Integrated” technological process.  Therefore there is no need to proceed to step two of the Alice two step test.   However, for the sake of argument let’s assume one of the District Court Judges distills the invention down to the gist, as is their trend, and then declares the invention directed to the abstract idea of verifying a transaction.  

    Even then the Supreme Court in Mayo made it explicitly clear that the exception,  (in this example an abstract idea of verifying a transaction)  “must” be “Integrated” {to the point} it no longer covers/pre-empts the exception itself. ( See Alice, Mayo)

    So the Judge must proceed with the Integration Analysis and determine if the claims pre-empt.  In this case it does not appear the claims pre-empt, thus the claims are legally Integrated and are patent eligible subject matter.

    1. 25.1

      You bring up another point that the District Courts are getting wrong. A few have begun to beat the “novelty has no relevance to the 101 inquiry” drum. Let’s push aside the fact that nearly everyone who has read Alice agrees that SCOTUS (at least implicitly) dumped a 102/103 type inquiry into 101.

      If we’re talking about the overarching goal of the abstract idea exception – weeding out claims that, if otherwise allowed to stand, would preempt an abstract idea – how is novelty not relevant to the second part of the Alice test?

      For instance, let’s assume X is a longstanding fundamental economic practice – an abstract idea. Let’s assume that everyone agrees that Claim 1 is “directed to” or “includes” or “whatever else” abstract idea X and is novel over the art of record.

      How is the fact that Claim 1 is admittedly novel not relevant to the preemption inquiry? Put another way, how can Claim 1, which has never before existed, preempt a longstanding fundamental economic practice?

      1. 25.1.1

        “How is the fact that Claim 1 is admittedly novel not relevant to the preemption inquiry?”

        You make an excellent point! Of course it will be completely ignored by the anti patent crowd since they have no legal argument to overcome it.

  2. 24

    Hmmm…It could have something more.
    But is it obvious if not fully anticipated by David Chaum’s more secure trustee based splitting cryptography from the 80’s, and 90’s or as a time spaced version of secret sharingclothed as not quite as secret sharing? Wait and watch blatherspoken token and tag assertions get distanced from innovation that might have been.

  3. 23

    Looking ahead in this case as it continues to move forward:

    link to arstechnica.com

    US District Judge Denise Cote found the Lumen View patent invalid in November, saying it described nothing more than a computerized version of “matchmaking,” an ancient process. In June, she ordered Lumen View to pay FindTheBest’s legal fees, ruling the case was exceptional.

    After hearing from both sides, Cote has settled on an amount: $302,083.63. That includes $148,592 in attorneys’ fees enhanced by a multiplier of two, as well as $4,899.63 in costs. They also have been awarded nine percent interest—a little bit better than your savings account, right?—beginning on May 30.

    The reward is almost exactly what FindTheBest asked for, and it was multiplied by two because of Lumen View’s egregious behavior, including threats of “full-scale litigation” with “protracted discovery” and a settlement demand escalator.

    B-b-b-ut it’s presume v-v-v-alid!

    This is how a working patent system deals with bottom-feeding extortionists.

    More, please.

    1. 23.1

      FindTheBest CEO Kevin O’Connor noted that getting the money won’t be easy.

      “We are thrilled that Judge Cote recognized the frivolous nature of the case and awarded us double our fees, but the reality is that being awarded fees and collecting fees are two entirely different things,” said O’Connor. “”We believe we’ll be able to pierce the corporate veil in order to seek justice, even if it ends up costing us more than the award itself. At this point, it’s about justice and protecting future innovation from these trolls. In addition, we feel that Judge Cote’s decision further strengthens our RICO claims, and we fully intend to continue to pursue that case.”

      Anybody still wondering why the people who engage in endless apologetics to defend the worse claims out there are uniformly the same people who insist on their “right” to keep their ownership interests in such patent claims hidden from the public? I hope not.

      1. 23.1.1

        “Anybody still wondering why the people who engage in endless apologetics to defend the worse claims out there are uniformly the same people who insist on their “right” to keep their ownership interests in such patent claims hidden from the public?”

        Gotta keep er a secrit!

    2. 23.2

      MM, why was the case exceptional?

      A link to the June ruling would be helpful to understand this important issue.

      1. 23.2.1

        Ned,

        opinion at ArsTechnica

        Per journalist Joe Mullin:
        . . . it was multiplied by two because of Lumen View’s egregious behavior, including threats of “full-scale litigation” with “protracted discovery” and a settlement demand escalator. The regular “lodestar” award would be too low, because it wouldn’t deter the troll’s bad behavior in the future.

        1. 23.2.1.1

          Dobu, I was looking for this:

          On May 30, FTB’s motion seeking a declaration that this is an exceptional case was granted. Lumen View Tech. LLC v. Findthebest.com, Inc., 13cv3599 (DLC), 2014 WL 2440867, at *6 (S.D.N.Y. May 30, 2014) (“May 30 Opinion”). The May 30 Opinion is incorporated by reference and familiarity with that decision is assumed.

            1. 23.2.1.1.1.1

              Oh, my. My favorite part, so far:

              In “late June or early July” O’Connor telephoned Eileen Shapiro, one of the inventors of the ‘073 Patent. Following a conversation between Shapiro and O’Connor, Lumen’s attorney represented to FTB’s attorney that O’Connor had committed a hate crime under Ninth Circuit law by using the term “patent troll.” FTB’s attorney contends that Lumen’s attorney threatened to pursue criminal charges unless FTB apologized, financially compensated Shapiro and Lumen’s attorney, and settled the litigation by paying Lumen a licensing fee in connection with the ‘073 Patent. FTB’s attorney claims that Lumen’s attorney stated that the offer was only good until the close of business that day and that FTB should “act quickly.”

              Is anyone familiar with the Ninth Circuit law that makes the use of the term “patent trol1” a hate crime?

              1. 23.2.1.1.1.1.1

                Lumen’s attorney represented to FTB’s attorney that O’Connor had committed a hate crime under Ninth Circuit law by using the term “patent troll.”

                We all know that the only thing patent trolls love more than threatening people with lawsuits is making giant batches of their own kool-aid and drinking every last drop.

                That’s what happens after the barrel is emptied.

                1. You guys think only NPE trolls bottom feed and behave in this manner?

                  I’ve been getting nastygrams from IBM Kenexa talking about defamation and unfair competition since 2013- all the way up to a subpoena served on me PERSONALLY – seeking inter alia, all of my comments on PatentlyO or anything I have ever said about patents.

                  I’ve been taking it easy here both to respect our attorney’s wishes and because of Dennis’ efforts to calm things down, but this is just too on-the-nose to pass up….

                  But my friends, if its an old shitty patent claiming the worst computerized junk, acquired from originally disreputable failures, down thru multiple bankruptcies and pressed to the hilt against a non-competing company thousands of times smaller with constant outrageous settlement demands in the face of completed discovery ….its trolling- whether NPE or our most illustrious patent system user.

                  But if you troll someone who punches above their weight, and who just happens to have the most exacting of prior art, and you tout your white hat in the patent world at every turn….well, this is what you get.

                  And maybe lots more if there is justice to be found in Boston.

                  We participated in the amici for Alice- so did IBM. Will this stupid hill be the one they march up on section 101?

                  Stay tuned to this blog to find out ;-)

    3. 23.3

      MM, validity had nothing to do with the exceptional case. The case was based primarily on the impossibility of infringement given the publicly available facts.

      From the May 30 opinion:

      “Lumen contends that it was entitled to rely on a duly issued patent. The invalidity of the ‘073 Patent plays no role in the reasoning underlying this Opinion. The question addressed here is whether Lumen could properly assert infringement based on the ‘073 Patent.”

      link to eff.org

  4. 22

    This is a little stupid. Iqbal and Twombly are the pleading standards. But on a motion to dismiss, the Court can also decide issues of law (such as 101). I’m guessing that Citigroup didn’t just move to dismiss for failure to properly plead, but because the patent was unpatentable under 101 as a matter of law.

    Without reading the order or briefs, this just strikes me as the judge being lazy and not wanting to decide the issue now. Instead, the parties are going to spend lots of money over the next year arguing and re-arguing whether the patent is eligible, taking discovery, etc.

    If any of that is needed to decide the 101 issue (e.g., claim construction), then great. But just relying on “plausibility” is stupid when we are talking about an issue of law, not fact.

    1. 22.1

      this just strikes me as the judge being lazy

      Indeed, and particularly here when it takes about five minutes to read the entire patent and about the same length of time for a thoughtful person to comprehend what the claims (as oppposed to a flowchart in the specification) protect. The fact that the claims are poorly written shouldn’t be a factor that weighs in favor of the patentee’s monetizing scheme.

  5. 21

    Everyone should take a step back and notice the bizarre nature of the comments. Rather than being a test as outlined in Graham and being supported by evidence, we have pontificators who tell us whether they feel the claims are eligible under 101. This is not law. Voo-doo law is Alice.

    1. 21.1

      Right. It’s really “bizarre” to see a discussion about the eligibility of a junky software patent on a patent blog.

      a test as outlined in Graham

      Ah yes: that’s the kind of “judicial activism” that is gleefully embraced by the oh-so-principled defenders of junky software patents. Go figure.

        1. 21.1.1.1

          Knock them out under 102/103 instead.

          Why on earth would I bother?

          101 makes perfect sense and then I don’t have to worry about paying an expert to expound on those nonsensical “secondary factors”.

          Nor do I have to pay to rebut silly self-serving patentee arguments like “the reference doesn’t say the word ‘computer’ therefore it teaches away from using a computer”. Or “if you accept that argument then all automobile claims are obvious because a car just automates the process of walking.” Or (still a favorite) “keeping track of items in a list that aren’t selected is totally different from keeping track of the items that are selected.”

      1. 21.1.3

        Just another thumb-in-your-eye post by MM.

        So, you defend your sniff test. And this string of posts should suggest to everyone that this is not a good test as it depends who is doing the sniffing.

            1. 21.1.3.1.1.1

              I’m really, really, really sad that I can’t attain the high standards set by awesomely substantive comments such as “we have pontificators who tell us whether they feel the claims are eligible under 101. This is not law. Voo-doo law is Alice.”

              Really sad.

              1. 21.1.3.1.1.1.1

                What is really sad is that you post on blogs for 10 hours a day and yet manage to away with not being called a professional.

                My post accurately characterized the current state of 101 law.

  6. 20

    Regarding this “fundamentally change” nonsense here’s what the spec says (reminder: the independent claims that are asserted do not require any random number generation whatsoever):

    The software includes a random number or character generator which issues a four-digit pseudorandom tag. The same tag is added to both pieces of the credit card number. The random tag is attached to the end of one piece and to the beginning of the other piece, so that the verification agent may easily tell which piece comes first in reconstructing credit card number ….

    The tags in the pieces of credit card numbers received by the verification agent are isolated by pattern recognition and matching or through a convention that the tag is always at the beginning or end of the number.

    Let’s say my “confidential information” is “masterpiece”. Here’s the “fundamental change” covered by this fantastically complicated and sooper dooper “technical” (and, oh yes: older than the hills) device:

    masterpiece => master0 0piece

    That’s your “fundamental” alteration. That’s the magical change that this judge is relying on to give these patentees some more time to figure out how to monetize their junky patent that should never have been granted.

  7. 19

    Dennis: Applying that law to the case, the court ruled that the claimed process of adding random number tags to data in the computer could be seen as “fundamentally altering the original confidential information.”

    Another commenter noted this earlier but the judge appears to have confused the flowchart in the specification with what is actually required by the claims.

    The independent claims, including the asserted claim 22, do not require a “random number generator.” (claim 22, in fact, is broader than the claim presented by claim 1)

    22. A method for use in relation to providing verification information for a transaction between an initiating party and a verification-seeking party, the verification information being given by a third, verifying party, based on confidential information in the possession of the initiating party, the method comprising:

    on behalf of the initiating party, generating first and second tokens each of which represents some but not all of the confidential information,

    on behalf of the initiating party, sending the first and second tokens electronically via a nonsecure communication network,

    collecting the first and second tokens at the verifying party,

    verifying the confidential information at the verifying party based on comparing the first and second tokens, and

    sending the verification information electronically via a nonsecure communication network from the verifying party to the verification-seeking party.

    As I already, the key term “nonsecure” is undefined. The key term “token” is defined by example in the specification and include the situation where “The tokens together may represent all of the confidential information.” In other words, the tokens can simply be the “confidential information” divided into two parts.

    So here we have a claim that covers a “verifying party” receiving some information in two parts, combining it, and forwarding it to a “verification seeking party.”

    Once it’s recognized that these abstract terms (“initiating party”, “verifiying party” and “verification seeking party”) are structurally meaningless limitations, it becomes even easier to see why such claims are junk and why the granting of such claims creates all kinds of eligibility issues.

    You can’t protect information with patents.

    Your claim can not prevent me from using an old device to send information — ANY INFORMATION — to anybody else. If it does, your patent is going to end up in the trash (assuming you try to assert it against someone who isn’t interested in playing the same silly games that you’re playing).

  8. 18

    “The decision here is probably most important for its procedural stance. First, the defendants’ bold move was to file its motion to dismiss as a R. 12(b)(6) motion even before filing its answer to the complaint that would include defenses and counterclaims.”

    This is quite typical. Only rarely do you file the 12(b) motion WITH the answer/counterclaims. And you can’t file it later..

  9. 17

    In related news:

    link to mashable.com

    A comparison of stability performance shows a microplane using conventional sensing versus a plane using the natural option. The bird-inspired system creates a much stable end result….

    The researches have lodged a patent for the innovative system.

    Hope the invention doesn’t use any of that dreaded “software” – you know, to control the plane computer or something awful like that.

    1. 17.1

      It would probably more or less follow the model of Diehr which passes 101.

      To tell the truth lots of patents since the 80s have pertained to tightly coupled hardware software systems, e.g., Kempf’s original bridge patent and all the RAID system patents of the 90s.

      The specs tend to gloss over the software component.

      To tell the truth, such patent applications should have been rejected for failing to satisfy enablement or written description requirements, but it appears that fuzziness about the software was the only way to get such patents through prosecution.

    2. 17.2

      dreaded “software”

      Nobody has any “dread” of software, JNG.

      But a lot of people are disturbed by the manner in which the desire to coddle software applicants has warped the patent system.

      Huge difference there.

          1. 17.2.1.1.1

            But they’re business method and not “software” patents (not sure what a “software” patent is considering software has to run on hardware).

            1. 17.2.1.1.1.1

              they’re business method and not “software” patents

              Not true.

              Some are business method patents, some are software patents directed towards a business model, and some are just computer-implemented junk.

              1. 17.2.1.1.1.1.1

                And the junk software patents still flow – though finally the courts are starting to reduce that.

              2. 17.2.1.1.1.1.2

                Still waiting for evidence of coddle…

                Among reams of other evidence:

                2. A system of computerized meal planning, comprising:
                a User Interface;
                a Database of food objects; and
                a Meal Builder, which displays on the User Interface meals from the Database, and wherein a user can change content of said meals and view the resulting meals’ impact on customized eating goals.

                Stop trolling the blog, please.

                1. Sorry Malcolm, but my polite but firm – and easily allowed in any court – answer has not been allowed here.

                  Must have been an “ecosystem” thing or something.

        1. 17.2.1.2

          What evidence do you have?

          Here’s some evidence. From Patent No. 6,585,516, featured on these pages just a day or two ago:

          2. A system of computerized meal planning, comprising:
          a User Interface;
          a Database of food objects; and
          a Meal Builder, which displays on the User Interface meals from the Database, and wherein a user can change content of said meals and view the resulting meals’ impact on customized eating goals.

          This kind of stuff cruises through prosecution, presumably because a keyword search on “Meal Builder” doesn’t get any hits in the patent databases. Meanwhile, claims on real technology are subjected to month after month of bogus rejections because they use actual technical terms that are well understood in the art and thus result in lots of keyword matches, which much of the examining corps equate to obviousness.

          Most of the patents I write involve software, but the claims are about technical solutions to technical problems. The people who file and litigate stuff like claim 2 above are screw!ing things up for the rest of us.

          1. 17.2.1.2.1

            That’s not evidence – you use that word, but I do not think that you understand what that word means.

            I think that you are impugning the examiners instead.

              1. 17.2.1.2.1.1.1

                I do not understand your reply at 17.2.1.2.1.1, DanH.

                Your post at 17.21.2 clearly “blames” examiners – as it is examiners that do not correctly examine by mere keyword searching (and incorrectly attributes this as evidence of coddling).

                Did I misstate anything that you posted?

                1. Did I say anything about you misstating anything that I posted?

                  For whatever reason, you’ve picked today to intensify your trol1ing, and are trying to pick fights wherever you can. Like I said, nice try.

                2. Sorry DanH but I was not tr011ing or attempting to pick a fight.

                  There is a clear difference between bad examination (what you offered as evidence) and what coddling means. If asking for evidence for a rather serious accusation is “picking a fight” or “tr011ing”, then we have – once again – some rather blatant double standards at work here.

                  btw, still no evidence of coddling has been provided…

            1. 17.2.1.2.1.2

              Looks like evidence of coddle to me. Or maybe just evidence of some huge confusion on 101 back in the day. Either or.

    3. 17.3

      “Hope the invention doesn’t use any of that dreaded “software” – you know, to control the plane computer or something awful like that.”

      It doesn’t matter. The invention is to use the “bird-inspired” “natural option”.

      Clearly, any claim would attempt to capture an old (fifth day I think) natural phenomenon, law or product of nature. Therefore, its an abstract idea.

  10. 16

    Hey guys btw buzz aldrin is coming to madison auditorium on nov. 6. Need to get tix tho.

    Get Your Tickets Now to See Apollo Astronaut Buzz Aldrin November 6

    Dr. Buzz Aldrin an engineer, fighter pilot, astronaut, patent owner, and Apollo 11 moonwalker, will speak at the USPTO Thursday, November 6 from 11 a.m. – noon ET in the Madison Auditorium on the Alexandria campus

    link to eventbrite.com

    1. 16.1

      Get him to tell the story about being the first man to pee on the moon. (spoiler alert: he was still on the ladder, so, I don’t think it counts.)

  11. 15

    The claims stake out a possibly “new and useful process” for organizing the actions of electronic devices. It seems to pass 101 muster as do electronic authentication, verification, and network protocols in general even if patenting them often does not make much sense.

    On the other hand does it pass 102, 103, or 112? There was a lot of work back in the 70s and 80s on similar sorts of verification protocols, and verification protocols have a long history going back into the pre-modern period in espionage, in the military, in international relations, and in banking.

    By 1995 this sort of protocol may have been obvious and lost all novelty.

    If I wrote a patent specification and claims back in the 1980s time frame for Kerberos, the X Protocol, or DEC STP, I would have tried to achieve a lot more specificity both in the body and the claims.

    I think I could argue that the inventor is trying to benefit both from patent protection and from maintaining trade secrets. Thus the patent has some serious 112 issues.

  12. 14

    link to vox.com

    record numbers of patents coming out ma patent office and yet the economists are blaming the sluggish econ on a “slowdown in technological progress”. Maybe someone should inform them that we’re issuing more entitlements for supposed technological progress than ever. Not to mention we’re probably issuing more entitlements for actual technological progress than ever. I wonder if, gasp, the amount of entitlements granted don’t really indicate “technological progress” all that well.

  13. 13

    Dennis, I’m going to say something that everyone here will agree with (which doesn’t happen regarding 101 cases very often). I think the title was supposed to read “not yet ruled ineligible” instead of “net yet”

  14. 12

    Thank you Judge Kendall for making the correct call and doing the right thing.

    May others take note of your logic and wisdom.

  15. 11

    A system comprising a computer readable storage media, wherein the computer readable storage media contains [Data A]; a processor for receiving the computer readable media; and a display for displaying [Data A].

    [Data A] is the only difference between the prior art and the invention. [Data A] is arguably nonobvious and novel.

    Does it matter what [Data A] is? Do you think there are some situations where if [Data A] is nonobvious, novel (or maybe even useful) enough the claim should be eligible?

    I’m curious what you all think.

    1. 11.1

      Does it matter what [Data A] is?

      Of course not.

      Does it matter what new, non-obvious and useful recipes are printed on the pages of the newly published cookbook? Nope.

      There’s no distinction whatsoever. Not in 2014. Not in 1970.

      Remember: cert denied in ABL, which was pretty much the same fact pattern you presented. None of the Supremes needed to waste any time on that one.

      1. 11.1.1

        How about the new and novel method steps that are performed by the computer that would not occur without the data? Your recipe analysis is not even remotely analogous.

        1. 11.1.1.1

          How about the new and novel method steps that are performed by the computer that would not occur without the data?

          Oh boy, here we go again. What fun.

          The pages reflect different light patterns containing different information than they do “without the data.”

          Your recipe analysis is not even remotely analogous.

          In fact it’s perfectly analogous which is why claims like ABL’s will never be enforceable against any defendant with half a brain and an ounce of spine.

          But go ahead and bilk some people out of their money telling them differently. Freedom!

          1. 11.1.1.1.1

            That’s the best you’ve got? Please. How does the recipe cause the book do anything close to the method steps claimed above?

            Try harder MM.

            1. 11.1.1.1.1.1

              “How does the recipe cause the book do anything close to the method steps claimed above?”

              By my building a compooter to do those things when fed the recipe?

            2. 11.1.1.1.1.2

              That’s the best you’ve got? Please. How does the recipe cause the book do anything close to the method steps claimed above?

              Let’s ignore the fact you clearly don’t understand the non-functional printed matter rule: Are you seriously arguing whether a government subject to the first amendment has the power to grant an exclusionary right on novel information?

            3. 11.1.1.1.1.3

              Bluto: How does the recipe cause the book do anything close to the method steps claimed above?

              I already told you. Here it is again since you somehow missed it the first time: The pages reflect different light patterns containing different information than they do “without the data.”

              A machine can read those light patterns and it’s “functionality” can be altered as a result.

              This is basic stuff. And it’s why claims to new displays that are distinguishable from old displays only on the basis of their information content are ineligible for patenting, just like books are.

              Books = old manufacture
              Computer/display = old manufacture

              You can’t take these old things and render them patent-worthy again merely by reciting some information content. Such claims protect the information itself which is a big no-no.

              Learn this. Figure it out. It’s not hard.

          2. 11.1.1.1.2

            “claims like ABL’s will never be enforceable against any defendant with half a brain and an ounce of spine.”

            Half a brain, half a spine, and half a million dollars laying around he doesn’t mind spending on frivolous litigation.

            As usual, the victims of the trolls and the patent maximalists are the actual inventors, startups, and small companies.

            1. 11.1.1.1.2.2

              The big companies aren’t victimized too? Or do they just have enough money that they are no longer “victimized”? I worked at a very large corporation that was sued by a troll, and I thought we were being victimized.

          3. 11.1.1.1.3

            “. . . half a brain and an ounce of spine.”

            I sure hope this isn’t an extract from your recipe book, MM.

            =P

        2. 11.1.1.2

          Well, you may be talking generally. But in the example I gave, all the computer is doing is displaying [Data A].

          Thanks for the cite on ABL, MM. That case is pretty on-point.

          1. 11.1.1.2.1

            IF all you see in that claim is “displaying”, you’re a perfect candidate for a district court judicial appointment.

            1. 11.1.1.2.1.2

              “If all you see in that claim to my new book, Your Honor, is words displayed on a page, then blah blah blah blah”

              Run with it, man!

              We’ll watch and clap really hard.

            2. 11.1.1.2.1.3

              BlutoBlutatsky,

              Your reply at 11.1.1 is not being integrated into this discussion – you might want to clarify the context of your discussion points.

          2. 11.1.1.2.2

            Congrats go, you have successfully played the Br’er Rabbit game and had someone wanting to discuss Set C printed matter type of inventions in a Set B printed matter trap.

            And yet, the difference (legal, and yes real) between Set C printed matter and Set B printed matter remains.

            1. 11.1.1.2.2.1

              I wish everyone here were not so jaded. I am dealing with a patent like this IRL and wanted people’s take/analysis on it. Sure, I did so knowing, substantively, how people would react.

            2. 11.1.1.2.2.2

              So, for example, what is the current state of the law?

              Support seems to exist for what I imagine your position to be, anon. For example, In re Lowry, 32 F.3d 1579.

              But ABL, the case cited by MM (though non precedential), is somewhat on point too. I think the facts as presented them seem somewhat in between the two cases.

              1. 11.1.1.2.2.2.1

                May I suggest that you review what I have written regarding Set B and Set C printed matter.

                This has nothing to do with being jaded and everything to do with understanding the law.

                Once you gain the proper perspective, then you will be able to cut through the massive amount of dust-kicking that comes up – as it will come up – when you have philosophical arguments endlessly put up by those who are engaged in what amounts to is a war of ideologies.

                You cannot be naive and think that such is not happening. That would be like thinking that the patent system is not under attack. Jaded? no – let’s not be pollyanna.

                1. Maybe instead of flinging around your incomprehensible b.s. about “Set B” and “Set C”, anon, you can simply tell everyone: can I patent a “A new display, wherein said display is improved over old display only by virtue of its displaying [insert new useful information here].”

                  If not, why not?

                  Go ahead.

                2. My posts were not “flung around” and they certainly were not incomprehensible. By thoughtfully explaining the concept in easy to understand Set Theory terms, I am – in fact – doing the opposite of what you are accusing me of doing.

                  I invited both you and Ned to supply any constructive criticism to my explanation multiple times now. Why is it that you have not provided any? Basically all that you are doing is waiving your hands and calling my explanation names.

                  Please engage in a substantive manner instead.

                  (and lets’ grow up a little and leave out the “not even wrong” non-useful arts types of misdirections)

                3. Going back to the example I provided, would you agree that simply displaying information on a computer readable medium would be ineligible if the only difference between the prior art and the invention is the content of the information?

                  I don’t think that this question means I don’t understand your distinction between, what I believe to be anyway, functional and nonfunctional printed matter. That’s why i cited the lowry case.

              2. 11.1.1.2.2.2.2

                Support seems to exist for what I imagine your position to be, anon. For example, In re Lowry, 32 F.3d 1579.

                Nothing in In re Lowry supports the patentability to an otherwise old computer/display system that displays “new information” (e.g., a new recipe).

                Such a claim protects ineligible subject matter.

                Can you get a claim out of the PTO? Sure — you can get anything out of the PTO on a lucky day.

                Is it enforceable? Of course not. There’s no difference between an old display presenting new information and a old book presenting new information. It’s the reliance on the recitation of information to confer patentability that creates the problem. Whether you sprinkle on an old manufacture like a book (that exists to store and display info) or an old manufacture like a computer/display (that exists to store and display info) makes zero difference.

                Basic logic.

                Don’t get confused by people who never saw a computer-implemented claim they couldn’t embrace.

                1. Why do you persist in trying to confuse Set B and Set C printed matter discussions?

                  There is only ONE logical reason for doing so – but that reason is not an acceptable one if you want to engage in legitimate conversations about the law.

                2. Why do you persist in trying to confuse Set B and Set C printed matter discussions?

                  Nobody knows what you’re talking about, anon.

                  Come back to planet earth.

  16. 10

    Another point Dennis: I’m quite fine with Judges wanting to do 101 first – it means the case is resolved quickly (one way or the other) – so D’s counsel can’t run up the bill and then complain about nasty patent owners “extorting” them through high litigation costs – in fact now if Ds don’t make the motion right away, I suspect P’s bar will be using that to convince Judge no fees are merited at end of case

  17. 9

    Interesting development Dennis… wonder how it will end up…

    In related news, these guys get my award for the biggest cojones:

    Red Pine Point sues Google/others in Northern District:

    link to cand.uscourts.gov

    On this patent:

    link to patft.uspto.gov
    given the 101 trigger happy judges up here these guys are either extremely smart or insane, I guess we’ll find out soon

        1. 9.1.1.1

          The great patent lawyer inventor leading the charge in technological excellence, America is on notice. This stuff stinks. What say you bar keepers?

      1. 9.1.2

        I haven’t seen them, but let me guess – its the timing right? The PTO is completely terrible about obviousness and timing. It has to do with them not really following KSR.

        1. 9.1.2.1

          Why is that? In your opinion of course as a patent examiner and member of the group that is not doing their job.

    1. 9.2

      What they want is for the defendants to fold and give them cash to get out of the lawsuit. If they can get the defendants into the discovery phase, this phase can cost defendants thousands or hundreds of thousands of dollars. The defendant has to weigh this versus the ability to get out of a lawsuit for something relatively “cheap”. A defendant can stay in litigation and maybe they can get the 101 issue looked at before discovery becomes too onerous. Even with this, there’s a large cost to staying in a lawsuit rather than to settle. Anyone who stays in can get the case invalidated most likely, but we’ll have to see how many defendants want to ride this to the end.

      They’ve sued others on this patent:

      link to arstechnica.com

    2. 9.3

      Holy cow. At risk of being accused of being a Gister, the claim just says, “I claim the idea of marketing/selling movies ahead of their public release”.

    3. 9.4

      “wherein the FLM is subsequently distributed to the movie theaters for viewing by a general public after the FLM plays on the HPEDs of the individuals ”

      I don’t think google distributes movies to theaters. If they’re being accused of performing a method IN WHICH the movie is thusly distributed I’d think google would have to be the one doing the distribution.

    1. 8.1

      This isn’t encryption, but as it turns out, the best encryption methods are published.

      You’re just not supposed to publish your private key.

  18. 7

    That flowchart represents some of the worst security imaginable, and Citigroup should be embarrassed just for being accused of infringing it.

  19. 4

    “Applying that law to the case, the court ruled that the claimed process of adding random number tags to data in the computer could be seen as “fundamentally altering the original confidential information.” ”

    He may be right on his recitations of da lawl, but that “analysis” above has nothing to do with making subject matter eligible. Abstractions (adding numbers to data) on top of abstract ideas do not equal something that is not itself abstract regardless of whether it “fundamentally alters the original confidential info” or not.

      1. 4.1.1

        The repetitive recitation of “nonsecure” is interesting.

        Also interesting is the fact that this apparently critical term is undefined.

        Likewise with the term “token.”

        Here is the key pararaph from the description which includes little else other than the flowchart.

        Implementations of the invention may include one or more of the following features. At least some of the confidential information may be stored at the verifying party. The verifying may be done by comparing the information represented by the first and second tokens with at least some of the stored confidential information. The tokens together may represent all of the confidential information. The tokens may include tags identifying the tokens as being related. The tags may be identical and may be randomly generated. The verifying may include associating the tokens with each other based on the tags. The tokens may include actual pieces of the confidential information, and an indication of the order that the two pieces occupy in the confidential information. The two tokens may be of essentially equal size. The tokens need not be sent from the initiating party one immediately after the other. The confidential information may include an identification number, e.g., a credit card number. The transaction may include a purchase, the initiating party may be a consumer, the verifying party may be a verification agent of a credit card company, and the verification-seeking party may be a merchant. Additional non-confidential information related to the transaction may be sent from the initiating party to the verification-seeking party. The additional information may include an expiration date of a credit card and a purchase order

        Got that?

        So here’s what claim 1 covers.

        Bill wants to know the password.

        I’m an “initiating party”. The “verification-seeking party” (VSP) needs proof that I know the password. The password is “gilligan”. A third party — the verifying party (VP) — knows this is the password.

        I call the VSP using my electric phone and say “the first part of the password is ‘gilli’ ” — but not too quietly because I want to make sure that someone else can hear me (it’s “non-secure”). The VSP then calls up the VP and tells the VP that the first part of the password is “gilli.” (again, making sure that someone else can overhear the conversation). I also call the “verifying party” (VP) and say “the second part of the password is ‘gan’ “.

        The verifying party determines that the password is correct and, using an electronic bullhorn, declares that the password has been verified such that the VSP can hear it.

        Really amazing “technology” there. Unprecedented stuff and it never ceases to amaze what wonders can be achieved with electricity.

          1. 4.1.1.1.1

            Dennis: Applying that law to the case, the court ruled that the claimed process of adding random number tags to data in the computer could be seen as “fundamentally altering the original confidential information.”

            Another commenter noted this earlier but the judge appears to have confused the flowchart in the specification with what is actually required by the claims.

            The independent claims, including the asserted claim 22, do not require a “random number generator.” (claim 22, in fact, is broader than the claim presented by claim 1)

            22. A method for use in relation to providing verification information for a transaction between an initiating party and a verification-seeking party, the verification information being given by a third, verifying party, based on confidential information in the possession of the initiating party, the method comprising:

            on behalf of the initiating party, generating first and second tokens each of which represents some but not all of the confidential information,

            on behalf of the initiating party, sending the first and second tokens electronically via a nonsecure communication network,

            collecting the first and second tokens at the verifying party,

            verifying the confidential information at the verifying party based on comparing the first and second tokens, and

            sending the verification information electronically via a nonsecure communication network from the verifying party to the verification-seeking party.

            As I already, the key term “nonsecure” is undefined. The key term “token” is defined by example in the specification and include the situation where “The tokens together may represent all of the confidential information.” In other words, the tokens can simply be the “confidential information” divided into two parts.

            So here we have a claim that covers a “verifying party” receiving some information in two parts, combining it, and forwarding it to a “verification seeking party.”

            Once it’s recognized that these abstract terms (“initiating party”, “verifiying party” and “verification seeking party”) are structurally meaningless limitations, it becomes even easier to see why such claims are junk and why the granting of such claims creates all kinds of eligibility issues.

            You can’t protect information with patents.

            Your claim can not prevent me from using an old device to send information — ANY INFORMATION — to anybody else. If it does, your patent is going to end up in the trash (assuming you try to assert it against someone who isn’t interested in playing the same silly games that you’re playing).

          2. 4.1.1.1.2

            non-secure doesn’t mean someone is necessarily listening in.

            I understand that. I was simply highlighting the silliness of the term.

            What’s the point of its appearance in the claims anyway?

              1. 4.1.1.1.2.1.1

                The non-secure limitation is in the independent claims. Somehow it must have been deemed critical to patentability or else this case is a relative of a related case where the related case includes the broader claims…?

  20. 3

    How CitiGroup could argue with a straight face that this claimed method is “mental steps” that could be carried out with “pen and pencil” is beyond belief. At least this judge didn’t buy such malarkey.

    1. 3.1

      You and me want to send a confidential comm about some verification information about a transaction, and Ned is a third party who verifies and has confidential info. We also have a buddy around.

      Our buddy generates us piece of paper with a 1 on it representing some things and a piece of paper with a 2 on it representing some things.

      Our buddy hands the first piece of paper from me to you.

      Our buddy hands the second piece of paper from me to Ned.

      Our buddy hands the first piece of paper from you to Ned.

      Ned verifies the super secrit infos in his possession based on his having the two pieces of paper. Our buddy then sends the verification information from Ned to you.

      Now do the whole thing on a compooter (let our buddy be a compooter) and use the non-secure interbuts instead of paper.

  21. 2

    From my 101 point of view, I think the result in this case is correct. However from nonobviousness point of view, this essential technique was used in a book I read, but that was written well after the date of this patent.

    Also, it seems to duplicate a known encryption technique invented by others. But that’s off the top of my head. At the time of his patent, the technique claimed here may have been novel and nonobvious.

    I haven’t read the opinion yet, but I have been arguing here consistently that improvements in communication between computers is eligible subject matter.

    1. 2.2

      I have been arguing here consistently that improvements in communication between computers is eligible subject matter.

      What on earth is encompassed by the phrase “improvements in communication between computers”?

      1. 2.2.1

        the fact that you have to ask WHAT could be encompassed by an “improvement in communication between computers” as Ned states suggests you have no business ever opening your mouth again about anything “computer” related

        1. 2.2.1.1

          Let me rephrase the question, JNG, because you seem to have willfully confused yourself again: is there any examples of a new communications between two computers, where that new communication is of value to somebody on the planet earth, which is not arguably encompassed by Ned’s phrase?

          If not, I humble submit the phrase is worthless as a test for what is eligible and what isn’t. If so, I’d like to see those examples articulated.

          1. 2.2.1.1.2

            Again, JNG: the issue is whether there are examples of new communications between two computers, where that new communication is of value to somebody on the planet earth, which do not arguably fall within the scope of Ned’s phrase.

            I don’t doubt that there’s reams of garbage that do fall within the scope of Ned’s term. I thought I made that perfectly clear but, hey, third time’s the charm.

          2. 2.2.1.1.3

            Malcolm accusing others of willfully confusing themselves…

            A return to the same old rhetorical t001s…

  22. 1

    The claim is both obvious (any kind of group access with a shared password teaches) and violates 101 (third party verification over an unsecured network is still third party verification). The process depicted in the figure at the top of the page does not violate 101 and is possibly allowable.

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