Jury Verdict on Patent Eligibility (or its Underlying Factual Foundations)

by Dennis Crouch

Earlier this week, the jury returned with an interesting verdict in PPS DATA, LLC v. Jack Henry & Associates, Inc. (E.D. Tex. Sept 2019).  In the case, PPS sued Jack Henry for infringing its patented method of centrally processing remotely deposited checks.  The defendant argued that the claims improperly encompassed an abstract idea.  However, following Berkheimer, refused invalidate the claims on summary judgment — finding genuine disputes of material fact:

Having considered the § 101 Motion, the Court finds it should be and hereby is DENIED. The Court finds that there are genuine disputes of material fact with respect to whether “the claim limitations involve more than performance of ‘well-understood, routine, and conventional activities previously known to the industry.’” Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018) (quoting Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 224 (2014)).

Those disputed facts were then put on trial and given to the jury to decide. The verdict particularly asked whether the asserted claims “ONLY involve activities that were well-understood, routine, and conventional” as of the application’s priority date.  The verdict – reproduced below – sided with the defendant in finding that the claims were only directed to such non-inventive elements.

The jury also sided with the defendant on infringement — finding none.

With that verdict in hand, Judge Gilstrap has already issued a final judgment in the case — finding (1) no infringement; and (2) that the asserted claims are “invalid for being directed to patent-ineligible subject matter.”

 

 

43 thoughts on “Jury Verdict on Patent Eligibility (or its Underlying Factual Foundations)

  1. 6

    The most overt jury instruction conflating 101 with 102/103 ever. Shame on the Supreme Court & certain Fed. Cir. judges for their activist legislation and getting us into this mess. They have undermined the best patent system in the world. Congress must step in to protect US innovation.

    1. 6.1

      LOL “Shame on these other courts who had nothing to do with this crppy jury instruction!”

      Seriously, w t f is the matter with you?

  2. 5

    Hmmm … let’s read one of the claims …

    1. A method for deposit processing at a central system a plurality of checks deposited at a remote site with accompanying deposit information, comprising:
    the central system receiving deposit information for a plurality of different deposit transactions, with the deposit information including for each of the different deposit transactions a deposit account designation, electronic check data and check image data for at least one check to be deposited, wherein the central system is separate from MICR capture, deposit accounting, cash management, and float processing systems for a bank of first deposit and wherein the deposit account designation for each of at least a subset of the plurality of the deposit transactions is to a different bank of first deposit;
    the central system transmitting the electronic deposit data and optionally the check image data for each different deposit transaction of the subset of the plurality of the deposit transactions to a respective different one of the banks of first deposit;
    the central system performing at least one of sorting the received deposit information and error checking the received deposit information before transmission to any of the MICR capture, deposit accounting, cash management, and float processing systems of each of the different banks of first deposit designated in the respective deposit account designations in the deposit information; and
    the central system transmitting electronic check data and the check image data directly or indirectly to a maker bank or a Federal Reserve Bank or a correspondent bank in a transmission having a transmission path that bypasses the MICR capture, deposit accounting, cash management, and float processing systems of the bank of first deposit for that deposit transaction.

    1. 5.1

      The entire patent bar should be ashamed of this g a r b a g e.

  3. 4

    That jury question is legally incorrect and clear error, but it’s incorrect in favor of the patentee, so I guess it doesn’t matter.

    1. 4.1

      What is the error?

      1. 4.1.1

        There is no legal standard that requires *the entire claim* to “only involve activities that were well-understood, routine and conventional.” Step 2 of Alice doesn’t apply to the whole claim, only to the non-judicial-exception part. This question’s standard is actually closer to a holding of obviousness than it is of ineligibility.

        1. 4.1.1.1

          Thanks

        2. 4.1.1.2

          The Berkheimer memo DOES apply to both individual elements and all of the elements in an ordered combination.

          Recheck with your SPE, Random.

          1. 4.1.1.2.1

            If Berkheimer [the case law applicable to D.C.’s – not the PTO Memo] applied to the ENTIRE claim including the “abstraction” why would that not be a 102 to every term of the claim and their combination including any claimed function or result?
            However, as noted, neither party in this case has any motive to appeal this overbroad jury question.

            1. 4.1.1.2.1.1

              I really do not understand what you are asking given the changes you made to my statement.

              Where is the notion of 102 coming from in relation to the fact that it is NOT only individual claim elements that rise to the requirement of a showing of something being conventional?

              My statement has to do with the fact that ordered combination (up to and including the entire claim) requires a proper evidentiary showing (also, btw, per the APA) — and that Random is simply not correct in his statement.

              For that matter, even showing a 102 reference is not sufficient to establish conventionality.

              1. 4.1.1.2.1.1.1

                “Even a 102 reference is not sufficient to establish conventionality….”

                You gotta love it when the “truth” leaks out. Except that in this case Bildo is just showing everyone the problem.

                If all you have in your claim is a “new” abstraction plus anticipated subject matter, your claim is ineligible. No way around that. “Conventionality” of that anticipated non-inventive subject matter is irrelevant.

                1. There is no “leaking” from me as the statement merely accords with what the courts have said about the difference between conventionality and prior art.

                  I “get” why YOUR feelings are bent out of shape, but don’t aim at me because of YOUR feelings.

                2. You need a better paradigm as even claims made up entirely of individual items for which anticipation (per element) is given remain entirely eligible.

                  ALL that you have done here is fall into the fallacy for which I m0ck you with the Big Box of Protons (anticipated), Neutrons (anticipated), and Electrons (anticipated).

                  If you paradigm cannot even work without the “Abstract” element (oh, just for jakes let’s list as an example the Arrhenius equation), how is it supposed to work WITH an additional element?

                  Try to be cogent in your reply.

                3. Bildo: even claims made up entirely of individual items for which anticipation (per element) is given remain entirely eligible.

                  Yes, some claims that satisfy these criteria are eligible.

                  Nobody has suggested otherwise. But keep ranting, Bildo! Please pound the table and tell us that the sky is sometimes blue so you can pretend that you are an important person with fresh ideas (as opposed to a hypocritical hack who will literally do and say anything if you think you can NW or one of your bff’s to pop up and tr 0ll along with you). You’re a very serious person!

              2. 4.1.1.2.1.1.2

                But of course, establishing conventionality “to both individual elements and all of the elements in an ordered combination” would be more than sufficient for a 102.

                So under your formulation of the test, there could never be an Alice rejection unless a 102 rejection was shown first, and then shown again to prove “conventionality.”

                Clear proof you misapply the test.

                1. So under your formulation of the test, there could never be an Alice rejection unless a 102 rejection was shown first, and then shown again to prove “conventionality.”

                  Absolutely not and this is clear proof that YOU do not understand the test.

                  A showing of conventionality goes BEYOND a showing of EITHER anticipation or obviousness. The courts have been more than clear on this point. That YOU want to make this about anticipation is most definitely a “YOU” thing, and is untethered to my position.

                2. The CAFC has never held that conventionality of non-abstract elements (as ordered) must be shown to rescue an otherwise infirm claim recites an ineligible “new” abstraction.

                  And they never will. They have no authority to create that test, and such a test would completely undermine the patent system. The CAFC is already aware of the problem (you’re welcome!) and that’s why they are dialing back as rapidly as possible.

                  The PTO, of course, is being run by a fraud who was appointed by a criminal.

                3. Apologies: meant to say “non-conventionality of anticipated non-abstract elements (as ordered)” in my earlier comment.

            2. 4.1.1.2.1.2

              If Berkheimer [the case law applicable to D.C.’s – not the PTO Memo] applied to the ENTIRE claim including the “abstraction” why would that not be a 102 to every term of the claim and their combination including any claimed function or result?
              However, as noted, neither party in this case has any motive to appeal this overbroad jury question.

              Correct on both anticipation and the lack of motive to appeal.

          2. 4.1.1.2.2

            The Berkheimer memo DOES apply to both individual elements and all of the elements in an ordered combination.

            No, it doesn’t. It applies to both individual elements and the ordered combination of the non-ineligible subject matter. The Supreme Court explicitly said in Alice that e=mc^2 (a novel, unconventional, not well understood equation prior to Einstein disclosing it) would not be eligible. If Step Two applied to *the whole claim* it would grant eligibility to any of Einstein’s claims including e=mc^2 purely by the equation’s inclusion.

            Once again, Step One is a command to identify ineligible subject matter, and Step Two asks “would we allow this claim if we ignored the ineligible subject matter.” The Step Two test applies over the entirety of the claim EXCEPT for the ineligible subject matter.

            1. 4.1.1.2.2.1

              Thanks for a comment that is clear and not publicly miss-leading.

              1. 4.1.1.2.2.1.1

                BS.

                The ordered combination IS up to and including the claim as a whole.

            2. 4.1.1.2.2.2

              The Berkheimer memo come out BEFORE the Office restructured the eligibility protocol in January of this year.

              You are confused in your attempt to constrain the Berkheimer memo in light of the January 2019 change.

            3. 4.1.1.2.2.3

              Why are we even discussing the Berkheimer memo in the first place? This thread is about an appeal from the ED Tex, not the USPTO. Berkheimer is controlling authority here, but the PTO’s subsequent memo is just a red herring to the issues actually in discussion.

        3. 4.1.1.3

          In case you need a cite for this in future actions:

          BSG Tech LLC v. Buyseasons, 899 F.3d 1281, 1290 (Fed. Cir. 2018)

  4. 3

    You guys will be glad to hear that RBG says she didn’t step down during Obama’s term because there was nobody that she thought could get through the republicans in office at the time that people would want on the court more than here (I presume she means leftists and not mere corporatists).

    link to marketwatch.com

    1. 3.1

      Go eff yourself, twerp.

      1. 3.1.1

        You would never know that for many years MM & 6 were best buds.

        1. 3.1.1.1

          … that is until 6 started pulling back from being aggressively anti-patent AND revealed that he does not share Malcolm’s Liberal Left political views. At that point, 6 was tossed into the “one-bucket” of everyone not agreeing with Malcolm.

          (worth noting that others such as the late Ned Heller and the current Greg “I Use My Real Name” DeLassus have also been tossed into that “one bucket” for not fully sharing Malcolm’s feelings on everything (Ned for his political views, and Greg for his not-fully-aligned 101 views). It was especially ironic with Ned, who had backed up Malcolm’s anti-software rants with suggestions of “just enjoy Malcolm’s swagger” — until that swagger was aimed at Ned for Ned’s political views.

          1. 3.1.1.1.1

            Basically agree with you, but with Ned the tension was there because of Oil States where Ned was advocating for holding IPRs unconstitutional. That is what really caused the split.

            1. 3.1.1.1.1.1

              Actually, that was very satisfying for me as Ned finally agreed that Lemley was highly unethical and an out and out liar.

              1. 3.1.1.1.1.1.1

                I will give credit to the late Ned Heller as being the anti-software patent advocate that would MOST engage on the merits.

                Sadly though, his postings here were NOT of a “personal nature,” as he was an active advocate for a client, and this stopped him from completing several conversations — the completion of which would have been detrimental to his client’s position.

        2. 3.1.1.2

          MM became very mean and hostile when he found out about my new ID :( :( :(

          1. 3.1.1.2.1

            6, you got put into that “one bucket.”

  5. 2

    I gather that this special Berkheimer 101 question* for this EDTX jury was deferred for the full jury trial findings of non-infringement and all other tried issues? [In which case, the 101 motion did not get treated as as a preliminary issue or filter as the Sup. Ct. intends, and did not save any time or money for either party or the court.] On what basis did the court find the “genuine disputes of material fact” that was the basis of this 101 decision deferral?
    *proof that the asserted claims “ONLY involve activities that were well-understood, routine, and conventional.”

    1. 2.1

      “B-b-but this display has a bigger button!”

    2. 2.2

      On the basis that efficient resolutions are not what keeps the E.D. Tex. in business.

  6. 1

    So we have a case of Berkheimer merely kicking the can down the road, so that a jury decides what was routine and well known. Which is reassuring, because juries are soooo good at determining stuff like that in patent cases.

    1. 1.1

      More specifically, kicking the can down a million dollar + road. But will this be the path favored by more judges?

      1. 1.1.1

        Yellow brick road, ever since Alice we’ve been in Oz.

        1. 1.1.1.1

          “Derp derp it’s all so confusing derp!”

          1. 1.1.1.1.1

            Ah, the Derp Dance (and above the typical “classy” Malcolm post like so many others of his that beg for expungement)…

            Our “Trump” is at it again.

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