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CyberSource v. Retails Decisions: Someone needs to terminate the endless loop

In the previous post my guest blogger Greg Stark discussed the Federal Circuit’s recent decision in Cybersource Corp v. Retail Decisions, Inc. Greg’s take on on the case is an academic one, one that assumes the the case fits into a logical framework of legal jurisprudence that logical minds can digest and use for sorting inventions, and in particular software inventions, into Section 101 eligible and ineligible categories.

Unfortunately, if we didn’t all know already that the Federal Circuit and Supreme Court were stuck in an endless loop of a hopelessly contradictory algorithm (one part bizarre, one part incomprehensible, and one part schizoid)  for deciding the Section 101 issue for software, we were painfully reminded again by the Cybersource decision.  It seems that no one is ever going to simply acknowledge that the Supreme Court’s Benson and Flook decisions are largely if not entirely contradictory to the Diehr decision.  For example, in my estimation it is quite reasonable to say that the invention in the ‘154  patent constituted an improvement to an automated verification system for use in verifying credit card transactions.  If we assume for the sake of argument that such verification systems constitute patent eligible “machines”, then it stands to reason that the application of an otherwise abstract idea to the improvement of the operation of such a machine is patent eligible under the standard laid down in Diehr.  In Diehr, an abstract mathematical algorithm was applied to making a rubber mold work better.   Accordingly, had the Diehr Court decided the Cybersource decision, using my assumption that an automated credit card verification system is patent eligible, it would have most likely found that the “invention” was an improved credit card verification system, and therefore patent eligible notwithstanding that the point of novelty is found in an abstract idea.  In fact, I thought one of the key points in Diehr was to avoid dissecting claimed subject matter into novel and old portions, and focusing on the novel part for patent eligibility.  Obviously, if that had been done in Diehr, it would have resulted in rejection of the patent for failure to claim patent eligible subject matter.

Perhaps the Federal Circuit considered an automated credit card verification system as falling outside the type of technology or machines eligible for protection, but on this point they would definitely be flying in the face of common sense.  For instance, take a look at the definition for USPTO Patent Class 705:

“This is the generic class for apparatus and corresponding methods for performing data processing operations, in which there is a significant change in the data or for performing calculation operations wherein the apparatus or method is uniquely designed for or utilized in the practice, administration, or management of an enterprise, or in the processing of financial data.”

Granted, the US patent classification system has no bearing on patent eligibility, but it represents the commonly held view that apparatus to perform data processing operations in support of the administration of an enterprise, or the processing of financial data, is real technology, not a mere abstraction.

Will someone please reset the Federal Circuit program running the Section 101 subject matter eligibility test?


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