Supreme Court Vacates Secure Axcess Precedent – Finding it Moot

by Dennis Crouch

As you’ll read below, the Supreme Court has vacated the Secure Axcess CBM decision on mootness grounds.  This means that the “financial services” limitation of the covered-business-method provisions are again up for interpretation. 

In the America Invents Act (AIA) of 2011, Congress created a trio of AIA-Trials: Inter Partes Reviews; Post Grant Reviews; and Covered Business Method (CBM) Reviews.

The CBM program is particularly targeted at claims for data processing or other operations used in the “practice, administration, or management of a financial product or service” and not covering “technological” inventions.  In PNC Bank v. Secure Axcess, the Federal Circuit narrowly interpreted the eligibility for CBM review – holding that the claims themselves must be directed to a financial service.  A patent does not qualify for CBM simply because it can be used in the financial service industry.

PNC then petitioned the Supreme Court for writ of certiorari asking the following question:

  1. Whether the U.S. Court of Appeals for the Federal Circuit’s judgment should be vacated and remanded with instructions to dismiss the appeal as moot, in accordance with United States v. Munsingwear, Inc., when the claims of the challenged patent are invalid, and there is no longer a live case or controversy between petitioners and respondent; and
  2. Whether, if the case is not moot, the lower court erred in holding that the statutory definition of a patent eligible for covered business method review requires that the claims of the patent expressly include a “financial activity element”—in other words, that the claim have no use outside of financial activity—rather than making covered business method review available for patents that claim “a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.”

In its list of orders, the Supreme Court has decided the case — agreeing with the first question that the case is moot:

The petition for a writ of certiorari is granted. The judgment is vacated as moot, and the case is remanded to the United States Court of Appeals for the Federal Circuit with instructions to remand the case to the Patent Trial and Appeal Board to vacate the Board’s order. See United States v. Munsingwear, Inc., 340 U. S. 36 (1950). Justice Alito took no part in the consideration or decision of this petition.

The mootness issue here stems from the fact that the challenged Secure Axcess patent claims were also cancelled in a separate IPR proceeding that has been affirmed by the Federal Circuit and the time for petitioning the Supreme Court has passed. Petitioner writes:

The now unreviewable invalidation of those claims, and resulting dismissal of Secure Axcess‘ infringement claims with prejudice moots any live case or controversy between the parties here.

The cited Supreme Court Munsingwear decision comes from mootness-on-appeal. In that case, the court explained its establish practice of vacating judgments on issues that become moot while on appeal or pending decision:

The established practice of the Court in dealing with a civil case from a court in the federal system which has become moot while on its way here or pending our decision on the merits is to reverse or vacate the judgment below and remand with a direction to dismiss.

United States v. Munsingwear, Inc., 340 U.S. 36 (1950).

30 thoughts on “Supreme Court Vacates Secure Axcess Precedent – Finding it Moot

  1. 5

    I wouldn’t anticipate that the vacatur of Secure Access will change anything regarding how CBM petitions are evaluated.

    All this means is that there’s no more binding CAFC precedent saying that the claims themselves must be directed to a financial activity. But I expect that the PTAB will continue to adhere to that limiting principle to reject CBM petitions, given current PTO leadership. And given that denials of CBM institution are largely unreviewable, those PTAB decisions won’t give the CAFC an opportunity to issue a precedent-setting decision on the subject.

    So it’s unlikely that we will see any significant changes in CBM eligibility given before the transitional CBM program sunsets and expires in 2020.

  2. 4

    OT, but a major blow to software and heuristic algorithms.

    link to

    “The claims here are ineligible because their
    innovation is an innovation in ineligible subject matter.
    Their subject is nothing but a series of mathematical
    calculations based on selected information and the
    presentation of the results of those calculations (in the
    plot of a probability distribution function). No matter
    how much of an advance in the finance field the claims
    recite, the advance lies entirely in the realm of abstract
    ideas, with no plausibly alleged innovation in the nonabstract
    application realm. An advance of that nature is
    ineligible for patenting.”

    Before LOURIE, O’MALLEY, and TARANTO, Circuit Judges.
    TARANTO, Circuit Judge.

    1. 4.1

      It is not possible to have a functioning patent system with judges like this.

      Note too that Taranto is saying that “abstract ideas” are “ineligible subject matter.” But, that is not really right. The abstract idea exception is supposed to apply to any subject matter where the claims are abstract. There is not a separate “subject matter” that is abstract ideas.

      The other thing is that Taranto is basically holding that heuristic methods that are capable of doing the work of people are not eligible for patentability.

      This is legislation and this is why the Google Judge Taranto needs to resign, be impeached, or the CAFC needs to be disbanded.

    2. 4.2

      The “search for the inventive concept under 101” entirely omits the reason why 101 was created in 1952.

      1. 4.2.1

        If anything, the claims should have been attacked under the utility prong. Mere calculations (without actually being applied to do something) ARE the type of thing that lacks patentable utility.

        Merely calculating a number is not enough utility (even if in calculating that number, the reason why one calculates the number is provided). One must DO something in order to have recognized utility.

        Taking this decision and guaranteeing it to its facts should suffice.

        Let’s move on.


          Yes, but under the pending proposed amendments to 101 this would be patentable anyway.


            It should be eligible for patentability.

            Just think what these Google judges are trying to do. They are saying that machines that replacing what people do and perform tasks that people are paid to perform are not eligible for patentability.

            It is an outrage.

            I vote for disbanding the CAFC.


          (notwithstanding that, there is plenty of damaging ping-pong dicta here that only kicks up dust on the recent cabining of the Electric Power decision – another example of one panel not knowing (not caring) about how other panels have laid down the “evolution” of the common law being written on 101).

          There is a reason why Congress stripped the power of the judicial branch to write the law of 101 using common law in 1952.

          ALL that we are seeing is history repeat itself.

          D00med to do so – as we (the Royal “We”) have refused to learn the lesson.


          >>Merely calculating a number is not enough utility (even if in calculating that number, the reason why one calculates the number is provided). One must DO something in order to have recognized utility.

          This is nonsense. Calculating the number is like a portion of a machine.

          Part of the 101 witch trials to try and say that some upper goal must be obtained, which was never part of the patent system. It is like saying that an improvement to a cog is not an invention because nothing is actually manufactured by the cog in the claim. Just rubbish.


            A portion of a machine – without more – may lack patentable utility.

            It also may not.

            But at least that is a cogent and legislative-law-written angle of attack.


              The anti-patent people have being going after components.

              A component has utility.

              Here, clearly there is utility.


                A component MAY have utility.

                It also may not.

                You are not paying attention here, Night Writer.

                Pay attention to how this avenue removes the judicial branch re-writing and in its place finds full home to the utility requirement as provided by Congress.

                Then remember that utility itself is a rather low bar, and that under U.S. Sovereign choices, the Useful Arts is wider than any particular “Technical Arts.”

  3. 3

    What about potential mootness for WesternGeco (lost profits outside of the US)?
    Last week, the Federal Circuit affirmed invalidity of three of four of WesternGeco’s patents that are currently before the Supreme Court (link to The time to file writ of certiorari from last week’s decision is still open, and it will not expire before the end of the current Supreme Court term.
    Can the SC hold on deciding a case until next term?

    1. 3.2

      Dennis, the Fed. Cir. Western Geo v. Ion decision Greenacre cites above had an unusually detailed discussion of interest as to what the highly ambiguous word “privy” in IPR estoppel and disclosure requirements means.

    2. 3.3

      Wait, does IPR invalidation moot an award of damages? I thought that once you are awarded damages, then you will receive damages. As I understood it, subsequent invalidation might terminate an injunction, but not the damages. Am I wrong about that?


          Would the same apply if the “losing” party simply has not yet complied with a court award?

          In other words, the lesson appears to be: don’t pay a dime until all avenues have been exploited.


            The damages are under appeal at the Supreme Court, so the case is still active just like Secure Access v. PNC discussed above.
            The damages award is at risk the longer the case remains on appeal with other parties having an opportunity to challenge validity on other grounds.
            Maybe it might be a better practice to leverage the initial win with damages into a settlement so that the damages decision becomes final.


              I was thinking even more than the damages under appeal.

              As long as the damages are not paid (the “winner” may have to return to court to enforce collections), then there is an element of the matter being “alive”‘ such that alternate routes may prevail.

      1. 3.3.3

        Yes. Patent damages are only secure now under “law of the case” judge made law. Although I’m sure that is soon to be challenged.

    3. 3.4

      One might argue that SCOTUS no longer has patent jurisdiction under Oil States, as SCOTUS can no longer issue – ‘final decisions’ that is, actually decide with finality the controversy between parties. Every patent case on appeal to SCOTUS is now moot or subject to being moot based on the Oil State’s PTAB authority. SCOTUS is now rendering advisory opinions as to how it thinks things might or should turn out under the new franchise schema, all subject to mootness based on some action of PTAB. Maybe we should start naming the anomalies – #Mootness/Advisory Anomaly #Hayburn’s Case.

  4. 2

    Re: “The mootness issue here stems from the fact that the challenged Secure Axcess patent claims were also cancelled in a separate IPR proceeding that has been affirmed by the Federal Circuit.”
    I assume that IPR by a different Petitioner?

    1. 2.1

      What difference would name of the petitioner make? Same result in an Ex Parte scenario, where there is no third party.

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