Patent Directed to Process of Payment Processing in Income Transactions Discovered Summary | Holland & Knight LLP

Advanced in Tech & Business

Patent Directed to Process of Payment Processing in Income Transactions Discovered Summary | Holland & Knight LLP

AuthWallet asserted a patent directed to techniques and methods for processing economic transaction data against Block. Specifically, the claims define a process for processing economical transaction details making use of authorization requests and conferring discounts and advantages to the buyer for use with potential buys with the retailer.

Block moved to dismiss. In locating that the claims ended up drawn to nonstatutory issue issue under 35 U.S.C. § 101, the U.S. District Court for the Southern District of New York utilized the now-acquainted two-phase Mayo/Alice investigation.

Action One particular: Are the Statements Directed to an Abstract Plan?

At Alice move one, the courtroom identified that the claims were directed to the abstract strategy of “processing payments for the duration of a revenue transaction the place a profit, this kind of as a discounted payment, is presented to the purchaser for use in potential transactions.” The court docket found the patent was simply describing standard company practices, noting that “[f]or a long time, vendors have supplied coupon codes and other financial incentives to consumers through purchase.” The court even more observed that the truth that the claims need these conventional small business practices to be done on a laptop did not make the strategy a patentable a person.

The courtroom in contrast this situation to other individuals wherever patent promises ended up identified to be directed to an summary concept. Particularly, the court docket identified that this case was comparable to In re Elbaum, 2021 WL 3923280 (Fed. Cir. Sept. 2, 2021), Universal Secure Registry LLC v. Apple Inc., 10 F.4th 1342 (Fed. Cir. 2021), and RDPA, LLC v. Geopath, Inc., 543 F. Supp. 3d 4, 16 (S.D.N.Y. 2021).

In In re Elbaum, the Federal Circuit found that a patent directed to storing, acquiring, analyzing and processing data was directed to an summary idea as it was a approach “ordinarily done in the stream of commerce.” The court observed this similar to the patent in this circumstance, as equally patents “explain[d] revenue transaction activity that is ‘ordinarily performed’ in the stream of commerce.”

AuthWallet argued that the promises were directed to additional than traditional procedures carried out on a computer system simply because the claims presented a option to problems unique to on line transactions, these kinds of as the credit playing cards not being bodily existing for the transaction and that the absence of a actual physical card led to greater transaction costs. AuthWallet even more argued that the claimed methods and programs permitted access to savings that or else would have been reserved for brick-and-mortar retailers. In rejecting these arguments, the court relied on Common Protected Registry and RDPA.

In Universal Safe Registry, the Federal Circuit located that a patent directed to securely obtaining products devoid of furnishing credit history card info to the merchant was directed to an abstract plan as “the claims recite standard actions in a generic way – e.g., authenticating a user employing traditional resources and producing and transmitting that authentication – without the need of improv[ing] any fundamental technology.” The courtroom found this analogous to the patent in this case, as equally patents “mitigate the on line credit rating card transactional stability considerations by obtaining the middleman control and transmit authentication requests,” which the Federal Circuit has observed to be common. Further more, the court noted that the patent in this case, like the one in Common Protected Registry, “does not converse to precise or specialized difficulties and methods but instead recites generic methods and results.”

In RDPA, the Southern District of New York discovered that patents “for monitoring exposure and response to general public media displays were being directed to the abstract concept of collecting and examining facts, regardless of the reality that the patents claimed to remedy information selection problems particularly in out-of-household media contexts by employing GPS technological innovation.” In this case, the court uncovered “the truth that the Patent seeks to solve safety and transaction charge troubles in non-physical credit history card transactions” cannot help save it because, like in RDPA, the narrow context does not change an abstract strategy into a non-summary thought.

Action Two: Is There an Creative Idea?

Turning to Alice stage two, AuthWallet argued that the statements delivered a unique advancement to digital commerce by a “two-stage authentication process performed by an middleman services, in which the intermediary services transmits a transaction notification to a cellular machine, and the transaction notification concept to deliver facts to continue on the transaction.” The courtroom disagreed, getting that there was no ingenious step mainly because the statements “simply just use two-phase authentication procedures and knowledge storage mechanisms to handle on the web payment transactions with bargains.” The court docket located this two-phase authentication course of action anxious “generic computer system capabilities” carried out by “standard laptop components” utilizing “fundamental financial methods.”

AuthWallet even further argued that the patent overcame a specific dilemma of digital commerce wherever the credit score card is not physically introduced to the seller, ensuing in lessened expenses owing to minimized fraud. The court dismissed this argument, noting that “on the internet fraud and customer authentication are not distinctive to on-line discounted gross sales” and that “AuthWallet does not link fraud to the asserted claims.”

Finally, AuthWallet argued that preemption was not a issue for the reason that the claims were constrained to e-commerce. The court disagreed, acquiring that “e-commerce does not slim preemption concerns for the reason that of the proliferation of on line sales in the market in present day day and age.”