Federal Circuit: Check Depositing Too Abstract for Patent

The Federal Circuit has reversed a summary judgment ruling from a district court, finding that patent claims directed to the idea of depositing a check using a handheld device are abstract and thus unpatentable.

The case is United Services Automobile Association v. PNC Bank N.A.

USAA owns the ’638 patent, entitled “Digital Camera Processing System,” which is directed to remote check deposit technology.

As the court explained,

USAA alleges that it wanted to improve upon early remote check deposit systems, which required specialized check scanners to ensure high quality check image capture. The ’638 patent contemplates a customer using her personal mobile device, like a cell phone, to take a picture of a check and transmit that image to her financial institution. In order to ensure the check image is appropriately captured and increase the likelihood that the check will be accepted for deposit, the patent discusses implementing real-time error checking steps, like using optical character recognition (OCR) to read the account number, routing number, and check number, to ensure the resultant image is of sufficient quality for computer-based check recognition systems.

The only claim asserted from the patent recites, in part:

A system for allowing a customer to deposit a check using a customer’s handheld mobile device, the system configured to authenticate the customer using data representing a customer fingerprint, the system including:

a customer’s handheld mobile device including a downloaded app, the app associated with a bank and causing the customer’s handheld mobile device to perform the following steps:

instructing the customer to take a photo of the check;

using a display of the customer’s handheld mobile device to assist the customer in taking the photo of the check;

assisting the customer as to an orientation for taking the photo;

and using a wireless network, transmitting a copy of the photo from the customer’s handheld mobile device and submitting the check for mobile check deposit;…

USAA sued PNC for infringement of the asserted patents. After discovery, both parties filed cross-motions for summary judgment on whether the claims were patent-eligible under 35 U.S.C. § 101.

The district court granted USAA’s motion for summary judgment, concluding that the asserted claims were patent eligible under § 101 because they are not directed to an abstract idea.

As the Federal Circuit explained,

Section 101 provides that a patent may be obtained for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. But there is an important exception: “[l]aws of nature, natural phenomena, and abstract ideas are not patentable,” because tying up these “basic tools of scientific and technological work” through patent grants risks impeding innovation.

The court held that “the asserted claim is directed to the abstract idea of depositing a check using a handheld mobile device.”

As the court noted,

We have previously held that claims directed to collecting information, analyzing information by “steps people go through in their minds, or by mathematical algorithms, without more,” and presenting the results of collecting and analyzing information fall “within the realm of abstract ideas.”

The court also noted that the check-deposit processes described in the claim “are routine processes implemented by a general-purpose device (e.g., a handheld mobile device) in a conventional way.”

Also, said the court, “mere computer-based implementation, without more, is not sufficient to render claims directed to patent-eligible subject matter.”

Here, said the court,

the claim recites routine data collection and analysis steps that have been traditionally performed by banks and people depositing checks—namely reviewing checks, recognizing relevant data, checking for errors, and storing the resultant data.

The addition of a handheld mobile device to carry out these routine steps, the court said, does not make the claim any less abstract.

USAA claimed that “accomplishing check deposit on a consumer device required the development of extremely non-obvious algorithms.”

That’s irrelevant, said the court, because

those algorithms are not found within the claim or the specification—the claim merely recites a system that is “configured to” “authenticate the customer,” “check for errors,” and “confirm that the mobile check deposit can go forward” without providing how the system is configured.

The claim, said the court,

provides [only] a concept of improving the check deposit process by using a handheld mobile device, which is insufficient to render the claims directed to patent-eligible subject matter.

Also, “improving a user’s experience while using a computer application is not, without more, sufficient to render the claims directed to an improvement in computer functionality.”

The court also concluded that the claim lacked an inventive concept sufficient to transform the abstract idea into a patent-eligible application under the US Supreme Court’s decision in Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014).

The court noted that “[I]nvoking a computer merely as a tool” to “improve a fundamental practice or abstract process” does not make an otherwise abstract claim non-abstract.

Thus, the court concluded there is no inventive concept that would support patent eligibility under step two:

Our precedent is clear that computer-mediated implementation of routine or conventional activity is not enough to provide an inventive concept.

Said the court,

The claim recites nothing more than routine image capture, OCR, and data processing steps—all of which were well-known and routine. … The inclusion of a handheld mobile device in the claim does not add an inventive concept as the use of a handheld mobile device does “no more than claim[] the abstract idea itself.” … Moreover, the mobile device is a piece of generic hardware. USAA contends that the inventive concept is implementing these steps on a customer’s mobile device, instead of a specialized check scanner.

But, said the court, “such implementation is not inventive.”

Here, said the court,

there is no technological improvement—though the claim recites a system that makes the remote check deposit process easier and more convenient for bank customers, there is no fundamental change to how any of the technology functions, because it is all operating in a conventional way. Nor is there any disclosure of technology for depositing a check using a handheld mobile device. We conclude that the claim lacks an inventive concept that would transform the claim into a patent-eligible application of an abstract idea.