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Card Verification v. Citigroup: Software Patent Survives 12(b)(6) Abstract Idea Attack

This decision provides a bit of hope for software patents at least in getting through a 12(b)(6) motion, it will be interesting to keep track of this case as it progresses.  There is nothing particularly remarkable about the claims (in fact it seems like much less abstract claims have gone down in other cases).   Card Verification v. Citigroup ilnd-1-13-cv-06339-50-Claims up held at 12(b)(6)

It is very interesting that this Court choose to give the patent owner a very favorable construction around the “tokens” as there is nothing in the claim that would require these to be interpreted as being “four-digit pseudorandom strings of numbers and characters.”

Summary of Court’s Analysis:

Claims are directed to the abstract idea of “verifying a transaction.”

(Commentary: fairly board and reasonable identification of an abstract idea that the claims do embody.)

The Court continues by analogizing the present claims to the credit card verification claims in CyberSource, and states that the claims involve a fundamental economic practice long prevalent in our system of commerce.

The Court then moves to the 2nd Step of the Mayo/Alice analysis – is there something more sufficient to transform the unpatentable abstract idea?

The Court expressly finds “a review of the diagrams demonstrates incorporation of a computer, nonsecure network, and pseudorandom tag generating software. A plausible interpretation of the patent is that computing devices, software, keyboards, and credit card readers would be required to use the invention.”

(Commentary: This seems like a very favorable read for the patent owner, probably due to the nature of the motion at issue (12(b)(6) motion on the pleadings))

The Court essentially predicates their decision on an interpretation of the claims that includes “a limitation requiring pseudorandom tag generating software that could not be done with pen and paper.”

(Commentary: This “limitation” is not literally recited in the independent claims.  Without this favorable interpretation the reminder of the Court’s analysis falls apart.)

Here is to hoping this analysis is were things are heading–it would not to severely limit the claims at issue to literally recite the limitation read into the claims by the court.  Accordingly, this decision provides some ground to stand on for software patents.

My thanks to Greg Stark of Schwegman, Lundberg & Woessner, PA, for this post.

Principal & Chief Innovation Officer

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