Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-19-01018/USCOURTS-ca13-19-01018-0/pdf.json

Parties Involved:
Bozeman Financial LLC
Appellant
Federal Reserve Bank of New York
Appellee
Federal Reserve Bank of Atlanta
Appellee
Federal Reserve Bank of Boston
Appellee
Federal Reserve Bank of Chicago
Appellee
Federal Reserve Bank of Cleveland
Appellee
Federal Reserve Bank of Dallas
Appellee
Federal Reserve Bank of Kansas City
Appellee
Federal Reserve Bank of Minneapolis
Appellee
Federal Reserve Bank of Philadelphia
Appellee
Federal Reserve Bank of Richmond
Appellee
Federal Reserve Bank of San Francisco
Appellee
Federal Reserve Bank of St. Louis
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________

BOZEMAN FINANCIAL LLC,

Appellant

v.

FEDERAL RESERVE BANK OF ATLANTA, 

FEDERAL RESERVE BANK OF BOSTON, 

FEDERAL RESERVE BANK OF CHICAGO, 

FEDERAL RESERVE BANK OF CLEVELAND, 

FEDERAL RESERVE BANK OF DALLAS, FEDERAL 

RESERVE BANK OF KANSAS CITY, FEDERAL 

RESERVE BANK OF MINNEAPOLIS, FEDERAL 

RESERVE BANK OF NEW YORK, FEDERAL 

RESERVE BANK OF PHILADELPHIA, FEDERAL 

RESERVE BANK OF RICHMOND, FEDERAL 

RESERVE BANK OF SAN FRANCISCO, FEDERAL 

RESERVE BANK OF ST. LOUIS,

Appellees

______________________

2019-1018

______________________

Appeal from the United States Patent and Trademark 

Office, Patent Trial and Appeal Board in No. CBM2017-

00035.

-------------------------------------------------------

BOZEMAN FINANCIAL LLC,

Appellant

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2 BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK

v.

FEDERAL RESERVE BANK OF ATLANTA, 

FEDERAL RESERVE BANK OF BOSTON, 

FEDERAL RESERVE BANK OF CHICAGO, 

FEDERAL RESERVE BANK OF CLEVELAND, 

FEDERAL RESERVE BANK OF DALLAS, FEDERAL 

RESERVE BANK OF KANSAS CITY, FEDERAL 

RESERVE BANK OF MINNEAPOLIS, FEDERAL 

RESERVE BANK OF NEW YORK, FEDERAL 

RESERVE BANK OF PHILADELPHIA, FEDERAL 

RESERVE BANK OF RICHMOND, FEDERAL 

RESERVE BANK OF SAN FRANCISCO, FEDERAL 

RESERVE BANK OF ST. LOUIS,

Appellees

______________________

2019-1020

______________________

Appeal from the United States Patent and Trademark 

Office, Patent Trial and Appeal Board in No. CBM2017-

00036.

______________________

Decided: April 10, 2020 

______________________

SCOTT E. GANT, ERIC J. MAURER, Boies, Schiller & 

Flexner, LLP, Washington, DC, argued for appellant. Also 

represented by THOMAS MAIORINO, Maiorino Law Group 

LLC, Mt. Laurel, NJ; JOHN W. GOLDSCHMIDT, JR., Ference 

& Associates LLC, Philadelphia, PA. 

 JEFFREY S. BUCHOLTZ, JOSHUA NATHANIEL MITCHELL, 

King & Spalding LLP, Washington, DC, argued for 

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BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK 3

appellees. Also represented by NATASHA HORNE MOFFITT, 

Atlanta, GA. 

 ______________________

Before LOURIE, DYK, and MOORE, Circuit Judges.

MOORE, Circuit Judge.

Bozeman Financial LLC appeals from the Patent Trial 

and Appeal Board’s covered business method (CBM) review 

decisions holding all of the claims of U.S. Patent Nos. 

6,754,640 and 8,768,840 ineligible under 35 U.S.C. § 101.1

On appeal, Bozeman challenges the Board’s authority to 

decide the petitions because it argues the Banks2 are not

“persons” under the America Invents Act (AIA). It further 

challenges the Board’s eligibility decisions. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A). 

For the reasons set forth below, we hold that the Banks 

are “persons” who may petition for post-issuance review

under the AIA. We further hold that claims 21–24 of the 

’640 patent and 1–20 of the ’840 patent are ineligible under 

§ 101. Accordingly, the Board’s decisions are affirmed.

I

Bozeman filed a supplemental brief arguing that the 

Banks are not “persons” under the AIA, and therefore they 

may not petition for post-issuance review under the AIA. 

Bozeman contends that the Banks are government entities, 

1 The Board also determined that claims 1–20, 25, 

and 26 of the ’640 patent are unpatentable under § 112, but 

Bozeman does not challenge that decision on appeal.

2 The petitioners and now appellees are a set of Federal Reserve banks from Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, 

Philadelphia, Richmond, San Francisco, and St. Louis (the 

Banks).

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4 BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK

which the Supreme Court held in Return Mail, Inc. v. U.S. 

Postal Serv., are not “persons” under the AIA. 139 S. Ct. 

1853 (2018). The Banks argue that Bozeman waived this 

argument by not raising it to the Board or in its opening 

brief. Additionally, they argue that Return Mail is inapplicable because the Banks are distinct from the United 

States government.

The general rule is “that a federal appellate court does 

not consider an issue not passed upon below.” Singleton v. 

Wulff, 428 U.S. 106, 120 (1976). We generally do not consider arguments not raised to the Board. See In re Baxter, 

678 F.3d 1357, 1362 (Fed. Cir. 2012); In re DBC, 545 F.3d 

1373 (Fed. Cir. 2008). We similarly consider arguments 

not raised in an appellant’s opening brief waived absent 

exceptional circumstances. SmithKline Beecham Corp. v. 

Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006). There 

are circumstances where we will exercise our discretion to 

consider an issue despite its not being raised below or in an 

appellant’s opening brief, however. See Interactive Gift 

Exp., Inc. v. Compuserve, Inc., 256 F.3d 1323, 1344–45 

(Fed. Cir. 2001); L.E.A. Dynatech, Inc. v. Allina, 49 F.3d 

1527, 1531 (Fed. Cir. 1995); Cemex, S.A. v. United States, 

133 F.3d 897, 902 (Fed. Cir. 1998); Becton Dickinson & Co. 

v. C.R. Bard, Inc., 922 F.2d 792, 800 (Fed. Cir. 1990). Here, 

we find that the circumstances warrant deviating from the 

general rule of waiver.

Whether the Banks are “persons” for purposes of the 

AIA is an issue of statutory interpretation, a purely legal 

question. Resolving this issue is limited to interpretation 

of provisions of the AIA that apply to the Board, an issue 

that would only be appealable to this court, even if addressed by the Board in the first instance. Patent law questions of this sort fall squarely within the role of this court 

to create a uniform body of patent law. Reaching the issue 

is unlikely to substantially prejudice the parties. Bozeman 

moved for supplemental briefing to address the Supreme 

Court’s decision in Return Mail, which the Banks opposed, 

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BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK 5

arguing that Bozeman forfeited its argument by not raising 

that argument in its opening brief. That motion was 

granted and the parties were given the opportunity to brief 

the issue. While resolution of this issue may not have a 

large impact (beyond this case) on pending post-issuance 

proceedings before the Board, it is pertinent to multiple 

pending and future patent litigations involving the Banks. 

Oral Arg. at 23:08–12. Because the issue is narrow and

legal, and the parties are not prejudiced by our resolution, 

we exercise our discretion to reach the issue. We note that 

this decision is limited to the status of the Banks and does 

not prejudice other entities whose status as “persons” under the AIA may separately be questioned. 

Turning to the merits, we hold that the Banks are “persons” under the AIA and the Board had authority to resolve 

the issues raised in their petitions. In Return Mail, the 

Supreme Court held that federal agencies are not “persons” 

able to seek post-issuance review of a patent under the 

AIA. 139 S. Ct. at 1858. The Court held that the government was not a “person,” such that it was capable of petitioning for any of the three post-issuance proceedings 

before the USPTO—inter partes review, post-grant review, 

and CBM review. The Banks argue that they are distinct 

from the government for purposes of the AIA, such that 

they are “persons” capable of bringing petitions for postissuance review under the AIA. We agree. 

Bozeman argues that the Banks are operating members of the nation’s Federal Reserve System, which is a federal agency, meaning they are government entities. 

According to Bozeman, the Banks implement the monetary 

and fiscal policies of the United States, conduct important 

governmental functions, and any profit generated by the 

Banks is transferred to the United States Treasury. See 12 

U.S.C. § 289. For these reasons, Bozeman argues that the 

Banks are not private financial institutions, but are instead fundamentally public, government institutions 

whose equity interest remains with the United States. 

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6 BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK

The Banks respond that the Federal Reserve Banks are 

chartered corporate instrumentalities of the United States, 

which are distinct from the sovereign because they are not 

part of any executive agency or department. They argue 

that they are corporations that are not government-owned 

and are operationally distinct from the federal government. 

We agree that the Banks are “persons” and as such are capable of petitioning the USPTO.

The Federal Reserve Banks were established as chartered corporate instrumentalities of the United States under the Federal Reserve Act of 1913. See 12 U.S.C. § 221 et 

seq. Unlike the Postal Service, which was at issue in Return Mail, the Banks’s enabling statute does not establish 

them as part of an executive agency, but rather each bank 

is a “body corporate.” 12 U.S.C. § 341. Like any other private corporation, the Banks each have a board of directors 

to enact bylaws and to govern the business of banking. Id. 

Moreover, the Banks may sue or be sued in “any court of 

law or equity.” Id. 

It is significant that the Banks are subject to suit for 

patent infringement in any court. The Supreme Court recognized that federal agencies face less risk for patent infringement than do private entities, and recognized that 

lessened risk as a reason for Congress to treat federal agencies differently. Return Mail, 139 S. Ct. at 1867. A patent 

owner’s remedy is limited when it sues the government rather than private entities.3 28 U.S.C. § 1498(a). Patent 

3 Although this court has held that § 1498(a) applied 

to the Banks in Advanced Software Design Corp. v. Fed. 

Reserve Bank of St. Louis, 583 F.3d 1371, 1378 (Fed. Cir. 

2009), that decision arose in an unusual posture. The court 

held that the Banks’ acts of infringement were only “for the 

Government” because a government agency, the Treasury, 

had authorized and consented to the use of the infringing 

software. Id. at 1377–78. The court specifically declined 

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BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK 7

owners’ ability to sue the Banks in any district court, and 

to seek remedies they would be prohibited from in a suit 

against the government, favors a finding that the Banks 

are separate from the government and Congress intended 

the Banks have access to post-issuance proceedings. 

The Banks are not structured as government agencies. 

The Banks do not receive congressionally appropriated 

funds. 12 U.S.C. § 244. No Bank official is appointed by 

the President or any other Government official. 12 U.S.C. 

§ 341. Moreover, the government exercises limited control 

over the operation of the Banks. Instead, the “direct supervision and control of each Bank is exercised by its board of 

directors.” 12 U.S.C. § 301. And the Banks cannot promulgate regulations with the force of law. Scott v. Fed. Reserve Bank, 406 F.3d 532, 535 (8th Cir. 2005). 

For these reasons, we conclude that the Banks are distinct from the government for purposes of the AIA. We recognize that there may be circumstances where the 

structure of the Banks does not render them distinct from 

the government for purposes of statutes other than the 

AIA. For purposes of the AIA, however, we conclude the 

Banks are “persons” capable of petitioning for post-issuance review under the AIA. The Board therefore had authority to decide the CBM petitions at issue here.

II

Having determined that the Board had the authority 

to resolve the petitions before it, we now turn to Board’s 

determinations holding ineligible the claims of the ’840 and 

’640 patents. The ’840 and ’640 patents are directed to 

methods for authorizing and clearing financial transactions to detect and prevent fraud. See, e.g., ’640 patent at 

to resolve whether the Banks themselves are considered 

government agencies in a patent infringement suit. Id. at 

1379.

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8 BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK

Abstract. The ’840 patent is a continuation of a divisional 

application, which was a continuation-in-part of the application that issued as the ’640 patent. Claim 1 of the ’840 

patent is representative: 

1. A computer implemented method for detecting 

fraud in financial transactions during a payment 

clearing process, said method comprising: 

receiving through one of a payer bank and a third 

party, a first record of an electronic financial transaction from at least one of the following group: a 

payer, a point-of-sale terminal, an online account 

and a portable electronic device;

storing in a database accessible by each party to 

said payment clearing process of said electronic financial transaction, said first record of said electronic financial transaction, said first record 

comprising more than one parameter;

receiving at said database at least a second record 

of said electronic financial transaction from one or 

more of a payee bank and any other party to said 

payment clearing process as said transaction 

moves along said payment clearing process, 

wherein said second record comprises at least one 

parameter which is the same as said more than one 

parameter of said first record;

each of said first and second records received at 

said database comprise at least two of the same 

said more than one parameters;

determining by a computer when there is a match 

between at least two of said parameters of said second record of said first financial transaction received at said database and the same parameters 

of said first record of said financial transaction 

stored in said database, and wherein any party to 

said payment clearing process is capable of 

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BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK 9

verifying said parameters at each point along said 

financial transaction payment clearing process;

sending a notification to said payee bank participant with authorization to process said electronic 

financial transaction when said parameters match; 

and

sending a notification to said payee bank participant to not process said electronic financial transaction when said parameters do not match.

The Banks petitioned for CBM review of claims 1–26 of 

the ’640 patent and claims 1–20 of the ’840 patent. The 

Board determined that the ’640 patent’s claims are directed 

to the abstract idea of “collecting, displaying, and analyzing information to reconcile check information against a 

ledger.” No. 2019-1018 at J.A. 34. The Board further found 

that the claims do not contain an inventive concept to render them eligible under § 101. The Board noted, and rejected, Bozeman’s attempt to incorporate by reference 

arguments related to the ’840 patent’s CBM rather than 

offer any argument in its Patent Owner Response. The 

Board also found that claims 1–20, 25, and 26 are unpatentable under § 112.

The Board determined that the ’840 patent claims are 

directed to the abstract idea of “collecting and analyzing 

information for financial transaction fraud or error detection.” No. 2019-1020 at J.A. 33. The Board found that the 

claims do not contain an inventive concept to render them 

eligible under § 101. It found that the claims recite generic 

computer technology and that the claim elements considered individually and as an ordered combination merely 

“apply the abstract concept of collecting, storing, analyzing, 

and communicating information to reconcile financial information.” Id. at J.A. 47. The Board concluded that 

claims 1–20 of the ’840 patent are ineligible under § 101. 

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10 BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK

Bozeman appeals the Board’s decisions that the claims of 

the ’640 and ’840 patents are ineligible under § 101.4

A. Eligibility 

The Banks argue that Bozeman waived any separate 

eligibility arguments related to the claims of the ’640 patent. In its patent owner response, Bozeman’s argument 

was limited to a single sentence incorporating by reference 

its eligibility arguments in the ’840 patent CBM proceeding 

stating, “the ’640 Patent would fall under the same Section 

101 Patentability as the child parent, the ’840.” No. 19-

1018 at J.A. 188. The Board found that Bozeman “offer[ed] 

no arguments in its Patent Owner Response” in the ’640 

patent CBM proceeding. Id. at J.A. 37. It also determined 

that Bozeman’s attempt to incorporate by reference its arguments in the separate CBM proceeding violated the 

Board’s rules. Id. (citing 37 C.F.R. § 42.6(a)(3)). The Board 

nevertheless viewed as applicable the reasoning it provided

in the CBM related to the ’840 patent and held ineligible 

the claims of the ’640 patent. Id. at J.A. 38.

Bozeman’s failure to separately argue the eligibility of 

the ’640 patent claims before the Board precludes it from 

doing so for the first time on appeal. Bozeman concedes 

that the appeal is limited to the eligibility of claims 21–24 

of the ’640 patent. We limit our review to the only argument Bozeman made to the Board, that the ’640 patent 

4 At oral argument, Bozeman’s counsel acknowledged that only the Board’s ineligibility decisions as to 

claims 21–24 of the ’640 patent are at issue on appeal. Oral 

Arg. at 17:55–18:13. Bozeman did not appeal the Board’s 

decision that claims 1–20, 25, and 26 of the ’640 patent 

were invalid under § 112. Thus, our review of the Board’s 

ineligibility decision is limited to claims 21–24 of the ’640 

patent and claims 1–20 of the ’840 patent.

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BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK 11

claims are eligible for the same reasons as the ’840 patent

claims. 

We review the Board’s legal conclusions de novo and its 

factual findings for substantial evidence. Samsung Elecs. 

Co. v. Elm 3DS Innovations, LLC, 925 F.3d 1373, 1380 

(Fed. Cir. 2019). Eligibility under § 101 is a question of 

law, based on underlying facts. SAP Am., Inc. v. InvestPic, 

LLC, 898 F.3d 1161, 1166 (Fed. Cir. 2018). Section 101 

states that “[w]hoever invents or discovers any new and 

useful process, machine, manufacture, or composition of 

matter, or any new and useful improvement thereof, may 

obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101. Abstract ideas 

are not patent eligible. Alice Corp. Pty. Ltd. v. CLS Bank 

Int’l, 573 U.S. 208, 216 (2014). We apply the two-step 

framework set forth in Alice to determine patent-eligibility 

under § 101. Id. at 217. We first determine whether the 

claims are directed to a “patent-ineligible concept,” such as 

an abstract idea. Id. If so, we “consider the elements of 

each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible 

application.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 78–79 (2012)). 

1. Alice Step One

At step one, we determine whether the claims are directed to an abstract idea. Alice, 573 U.S. at 217. “[F]undamental economic practice[s] long prevalent in our system 

of commerce” are examples of abstract ideas, which are ineligible subject matter. Bilski v. Kappos, 561 U.S. 593, 611 

(2010). The Board determined that the claims of the ’840 

patent are directed to the abstract idea of “collecting and 

analyzing information for financial transaction fraud or error detection.” No. 19-1020 at J.A. 33. We agree.

Claim 1 of the ’840 patent claims a method of receiving 

data from two financial records, storing that data, 

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12 BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK

comparing that data, and displaying the results. As the 

specification explains, “[t]he present invention relates to a 

Universal Positive Pay Database method, system, and/or 

computer useable medium to reduce check fraud and verify 

checks, other financial instruments and documents.” ’840 

patent at 1:22–25; see id. at 5:29–53. Verifying financial 

documents to reduce transactional fraud is a fundamental 

business practice that, without more, is not eligible for patent protection. The ’840 patent’s claimed method, which 

implements basic computer equipment to achieve this verification, is similar to methods we have held directed to abstract ideas. See Credit Acceptance Corp. v. Westlake 

Servs., 859 F.3d 1044, 1054–56 (Fed. Cir. 2017); Fairwarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1093 (Fed. 

Cir. 2016); Content Extraction & Transmission LLC v. 

Wells Fargo Bank, National Assoc., 776 F.3d 1343 (Fed. 

Cir. 2014). 

In Credit Acceptance, we held claims directed to “a system for maintaining a database of information about the 

items in a dealer’s inventory, obtaining financial information about a customer from a user, combining these two 

sources of information to create a financing package for 

each of the inventoried items, and presenting the financing 

packages to the user” were directed to an abstract idea. 

859 F.3d at 1054. We explained that the claims there were 

directed to the abstract idea of processing an application 

for a financial purchase, which was not meaningfully distinct from the types of financial industry practices held ineligible by the Supreme Court. Id. (citing Alice, 134 S. Ct. 

at 2356; Bilski, 561 U.S. at 611). The claims here likewise 

obtain information from financial databases and present 

results of a comparison of those pieces of financial information.

Our recent decision in Solutran, Inc. v. Elavon, Inc.

held claims like the claims of the ’840 patent ineligible. 931 

F.3d 1161 (Fed. Cir. 2019). In Solutran, the claims recited 

a method for electronic check processing that involved, 

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among other things, receiving purchase data at a point of 

sale and comparing that information to the paper check to 

verify the accuracy of the transaction, and crediting a merchant’s account while processing the check. Id. at 1166–

67. We held that crediting a merchant’s account as early 

as possible was a long-standing commercial practice, and 

that the claims directed to that commercial practice were 

directed to an abstract idea. Id. The ’840 patent claims 

similarly recite a method of reducing check fraud by receiving financial transaction data from two sources including 

the point of sale and comparing that data to verify a transaction. And like the claimed subject matter in Solutran, 

verifying a transaction to avoid fraud, in particular check 

fraud, is a long-standing commercial practice. Moreover, 

the use of well-known computer components to collect, analyze, and present data, in this case to verify financial 

transactions, does not render these claims any less abstract. See Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 

1350, 1352 (Fed. Cir. 2016). We see no meaningful distinction between the claims of the ’840 patent and our precedent that would lead us to conclude that these claims are 

not directed to an abstract idea.

Bozeman argues that the claimed method is a physical 

process that improves handling and processing of checks, 

not an abstract idea. It argues that because the process 

involves tangible steps, it cannot be an abstract idea, even 

if the claims additionally involve or include otherwise abstract concepts. As we explained in Solutran, “the physicality of the paper checks being processed and transported 

is not by itself enough to exempt the claims from being directed to an abstract idea” Id.; see In re Marco Guldenaar 

Holding B.V., 911 F.3d 1157, 1161 (Fed. Cir. 2018) (“[T]he 

abstract idea exception does not turn solely on whether the 

claimed invention comprises physical versus mental 

steps.”). Moreover, recording or extracting data from physical documents, such as paper checks, is not alone sufficient 

to render claims not abstract. Content Extraction, 776 F.3d 

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14 BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK

at 1347. In Content Extraction, we explained that “data 

collection, recognition, and storage is undisputedly wellknown. Indeed, humans have always performed these 

functions. And banks have, for some time, reviewed 

checks, recognized relevant data such as the amount, account number, and identity of account holder, and stored 

that information in their records.” Id. Despite the presence of physical documents from which data was collected, 

we held that the claims were directed to the abstract idea 

of “1) collecting data, 2) recognizing certain data within the 

collected data set, and 3) storing that recognized data in a 

memory.” Id. The claims of the ’840 patent, however, do 

not even limit the method steps to processing a physical 

check. These claims are directed to the abstract idea of collecting and analyzing information for financial transaction 

fraud or error detection.

2. Alice Step Two

At Alice step two, we “consider the elements of each 

claim individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the 

nature of the claim’ into a patent-eligible application.” Alice, 573 U.S. at 218 (quoting Mayo, 566 U.S. at 78–79). The 

Board determined that the ’840 patent claims do not contain an inventive concept sufficient to “transform the nature of the claims into patent-eligible applications of an 

abstract idea.” No. 19-1020 at J.A. 42. We agree that there 

is nothing additional in the claims of the ’840 patent that 

would render the claims patent-eligible.

The ’840 patent specification explains that methods for 

inhibiting check fraud and verifying financial transactions 

were well-known. See ’840 patent at 1:57–2:46. The specification further demonstrates that the technological components recited in claim 1 of the ’840 patent were 

conventional, off-the-shelf computer components. Id. at 

9:30–47. As the Board found, “[n]othing in the claims, understood in light of the specification, appears to require 

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BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK 15

anything more than off-the-shelf, conventional computer, 

storage, network, and display technology for collecting the 

data related to financial transactions, and displaying the 

data to the users.” No. 19-1020 at J.A. 43. Indeed, Bozeman does not argue that the claimed computer components provide the inventive concept. 

Bozeman instead argues that the ordered combination 

of the elements in claim 1 of the ’840 patent is a specific 

implementation of an invention that was not routine or 

conventional. But Bozeman fails to identify what about the 

ordering of the steps in claim 1 provides an inventive concept. It argues that “the claim elements describe a new 

combination of steps, in an ordered sequence, that was 

never found before in the prior art and was found to be a 

non-obvious improvement over the prior art by the USPTO 

examiner.” No. 19-1020, Appellant’s Br. at 44. Bozeman 

does not provide any evidence to contradict the Board’s 

finding that, “the claims only recite a logical sequence of 

steps for receiving and storing information, analyzing that 

information, and sending a notification upon completion of 

that analysis.” No. 19-1020 at J.A. 46.

Bozeman further argues that the claims meet the machine-or-transformation test by transforming a paper 

check into financial data. “While the Supreme Court has 

explained that the machine-or-transformation test can provide a ‘useful clue’ in the second step of Alice, passing the 

test alone is insufficient” to satisfy step two. Solutran, 931 

F.3d at 1169 (citing DDR Holdings, LLC v. Hotels.com, 

L.P., 773 F.3d 1245, 1256 (Fed. Cir. 2014)). In any event, 

we do not agree that the claims of the ’840 patent satisfy 

the machine-or-transformation test. As explained in Solutran, “[m]erely using a general-purpose computer and 

scanner to perform conventional activities in the way they 

always have, as the claims do here, does not amount to an 

inventive concept.” Id. (citing Content Extraction, 776 F.3d 

at 1348–49; Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709,

716–17 (Fed. Cir. 2014)). Bozeman’s use of a digital-image 

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16 BOZEMAN FINANCIAL LLC v. FEDERAL RESERVE BANK

scanner to create a digital electronic record of a check, 

therefore, does not meet the machine-or-transformation 

test. 

Based on the foregoing, we conclude that the claims of 

the ’840 patent are directed to the abstract idea of “collecting and analyzing information for financial transaction 

fraud or error detection,” and the claims do not include an 

inventive concept that would otherwise render the claims 

eligible. The claims are therefore not directed to patenteligible subject matter under § 101. As discussed, Bozeman 

has not preserved any eligibility arguments related to 

claims 21–24 of the ’640 patent separate from the claims of 

the ’840 patent. The Board’s holdings that claims 21–24 of 

the ’640 patent and claims 1–20 of the ’840 patent are ineligible are therefore affirmed.

III

We have considered Bozeman’s remaining arguments 

and find them unpersuasive. We hold that the Banks are 

“persons” who may petition for post-issuance review under 

the AIA. We further hold that claims 21–24 of the ’640 patent and 1–20 of the ’840 patent are ineligible under § 101.

AFFIRMED 

Case: 19-1018 Document: 70 Page: 16 Filed: 04/10/2020