Federal Circuit Voids Check Processing Patent’s Eligibility

In Solutran, Inc. v. Elavon, Inc.,  Nos. 2019-1345, -1460 (Fed. Cir. July 30, 2019), the Federal Circuit reversed the district court’s patent-eligibility finding and held Solutran’s U.S. Patent No. 8,311,945 not patent eligible under § 101.

The ’945 patent relates to processing paper checks by receiving electronic data captured by a merchant and crediting the merchant’s account. The district court denied defendant U.S. Bank’s motion for summary judgment of invalidity, finding persuasive a prior PTAB decision denying CBM review based on a determination that the ’945 patent was not directed towards an abstract idea. Alternatively, the district court concluded that the claims recited an inventive concept and passed the machine-or-transformation test. U.S. Bank and Elavon appealed.

On appeal, the Federal Circuit reversed, agreeing with U.S. Bank that the ’945 patent’s claims are not patent eligible under § 101. In Alice step one, the court concluded that “the claims are directed to the abstract idea of crediting a merchant’s account as early as possible while electronically processing a check.” The court compared the claims to similarly ineligible claims in Content Extraction, finding that the use of physical checks does not preclude a finding of abstractness. In step two, the court found that the claimed steps were conventional and did not pass the machine-or-transformation test, as alleged by Solutran. Therefore, the Federal Circuit determined that the claims were not directed to patent-eligible subject matter under §101.