Fort Properties, Inc. v. American Master Lease LLC

By Zi Wang In Fort Properties, Inc. v. American Master Lease LLC, 2012 WL 603969 (Fed. Cir. 2012), the Federal Circuit affirmed the district court’s holding that a method patent for creating real estate investment instrument adapted for performing tax-deferred exchanges is invalid because it is directed at an unpatentable abstract idea, even though the claim language of the patent at issue recited a computer in certain operations. American Master Lease LLC (“AML”) holds the ‘788 patent at issue.  The ‘788 patent discloses an investment tool designed to enable property owners to buy and sell properties without incurring tax liability pursuant to a tax law provision that exempts certain investment property exchanges when an owner of investment property exchanges one property for another of like kind and certain conditions are met. Specifically, the claims require the aggregation of a number of properties into a “real estate portfolio.”  The property interests in this portfolio are then divided into shares, called “deedshares”,

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Federal Circuit Says § 101 Requires “Concrete Steps” In Software Methods

By Chris Reaves Dealertrack, Inc. v. Huber, No. 2009-1566, Fed. Cir. Jan. 20 2012 The Federal Circuit on January 20 once again addressed the question of 35 U.S.C. § 101 eligibility for a software method.   The court found the patent at issue closer to CyberSource than Ultramercial, drawing a distinction between “a practical application with concrete steps” and a mere declaration that the method is “computer-aided.”  It also looked to the interpretation of claims, expanding the rule of Phillips v. AWH to cover exemplary lists. Background Plaintiff Dealertrack, Inc. owns three patents related to the same concept: the use of a computer system as a loan intermediary, converting one generalized application for a car loan into several bank-specific applications and processing said applications with their respective banks.  The original patent, U.S. Patent No. 5,878,403 (‘403), was filed in 1995.  Later, 7,181,427 (‘427), patenting the computer system, was filed as a continuation-in-part, and 6,587,841 (‘841), patenting the method, was filed as

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Federal Circuit Clarified Abstractness in the Context of Software

Court Finds Software Patentable Unless Unmistakably Abstract In Research Corp. Technologies, Inc. v. Microsoft Corp., Civ. Case. No. 10-1037 (Fed. Cir. December 8, 2010), Research Corporation Technologies, Inc. (“RCT”) owns six related patents: U.S. Patent Nos. 5,111,310 (“’310 patent”); 5,341,228 (“’228 patent”); 5,477,305 (“’305 patent”); 5,543,941 (“’941 patent”); 5,708,518 (“’518 patent”); and 5,726,772 (“’772 patent”).  The six related patents relate to digital image half toning which allows a computer to create more colors than otherwise possible with the limited number of pixel colors available in a typical printer.  In order to measure the quality of the half toning, the inventors created a method of detecting a power spectrum which measures the frequency of the dots used to create the half tone and compares this power spectrum to an ideal spectrum stored in a mask.  By comparing the stored mask and detected power spectrum, the method determines half tone quality.

Supreme Court Confirms Broad Standard for Patentability

Supreme Court Rejects Precluding Business Method from Patentability In Bilski et al. v. Kappos, 561 U.S. ____ (2010) June 29th, 2010, appellant, Bernard L. Bilski seeks a patent on a procedure for instructing buyers and sellers on protection against price fluctuations in a certain subsection of the economy.  The application consisted of two key claims: the description of a series of steps instructing how to hedge risk; and reducing the procedure to a mathematical formula. The application was rejected by the examiner, the Board of Patent Appeals and Interferences, and the United States Court of Appeals for the Federal Circuit.  The Court of Appeals used the “machine or transformation test” as the sole test for section 101 of the Patent Act analysis in rejecting the application.  It stated that, “a claimed process is surely patent eligible under 101 if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state

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Central District of California Extends Bilski Holding to Find Computer Aided Method Not Tied To A Particular Machine If Merely Tied to Computer

In Dealertrack, Inc. v. Huber et al., CV 06-2335 AG (C. D. Calif. July 7, 2009), the patent at issue, U.S. Patent No. 7,181,427 (the ‘427 patent), is directed toward an automated credit application system.  Dealertrack at 2.  The independent claim at issue, claim 1, recites a “computer aided method” of managing a credit application.  The method consists of steps of receiving credit application data and forwarding the application and subsequent funding decisions to remote devices. Id. at 2.  The only issue in the case was the validity of the claims under 35 U.S.C. § 101. Since Dealertrack did not argue the “transformation” prong of the test outlined in In re Bilski, 545 F. 943 (Fed. Cir. 2008) (en banc), the court considered only the “particular machine” prong of the Bilski test – whether the claimed process was tied to a particular machine.  Dealertrack at 5.  However, the Bilski decision provided no guidance as to the nature of the “particular machine”,

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Federal Circuit Revises Comiskey Decision in light of Bilski

In En Banc Ruling, Federal Circuit Orders New Decision to Address Whether Arbitration Methods and System Comply with Machine-or-Transformation Test   In In re Comiskey, 89 USPQ2d 1641 (Fed. Cir. 2009) (en banc), the Court of Appeals for the Federal Circuit, sitting en banc, issued an order allowing the merits panel to issue a revised opinion found at In re Comiskey, 89 USPQ2d 1655 (Fed. Cir. 2009) and vacating the prior opinion found at In re Comiskey, 499 F.3d 1365; 84 USPQ2d 1670 (Fed. Cir. 2007).   The revised decision removes the portion of the opinion discussing claims 17 and 42, which were directed to a “system”.  Previously, the court had ruled that these claims satisfied the patentability test of 35 U.S.C. § 101, but were prima facie obvious under 35 U.S.C. § 103(a).  The revised decision instead remands the case to the Board of Patent Appeals and Interferences to determine, in the first instance and in light of the Federal

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Federal Circuit Limits Which Methods Can be Patented

In En Banc Ruling, Federal Circuit Requires Methods to Comply with Machine-or-Transformation Test In In re Bilski, 545 F.3d 943, 88 USPQ2d 1385 (Fed. Cir. 2008), the Federal Circuit upheld the final decision of the Board of Patent Appeals and Interferences (hereinafter, “the Board”) in rejecting all eleven claims of U.S. Patent Application No. 08/833,892 (hereinafter, “the ‘892 application”).  As will be explained below, the Federal Circuit held that, for purposes of defining patentable subject matter for method claims, claims must meet the “machine-or-transformation” test for subject matter eligibility and expressly rejected the “useful, concrete, and tangible result” test spelled out in State Street Bank & Trust Company v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998). As background, Bernard L. Bilski and Rand A. Warsaw (hereinafter, “the Applicants”) filed the ‘892 application on April 10, 1997.  Claim 1 of the ‘892 application reads: A method for managing the consumption risk costs of a commodity sold by a

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