Source: https://www.bna.com/claims-real-estate-n12884908058/
Timestamp: 2019-04-26 08:05:24+00:00

Document:
Patent claims on buying and selling real estate properties without incurring a tax liability are not patent eligible under 35 U.S.C. §101, the U.S. Court of Appeals for the Federal Circuit ruled Feb. 27 (Fort Properties Inc. v. American Master Lease LLC., Fed. Cir., No. 2009-1242, 2/27/12).
Affirming a lower court's ruling invalidating the claims under Section 101, the court first likened the invention to the claims rejected by the U.S. Supreme Court in its Bilskidecision.
Fort Properties Inc. filed a declaratory judgment action in the U.S. District Court for the Central District of California, seeking a judgment of noninfringement. When AML counterclaimed, Fort Properties sought summary judgment that the ‘788 patent was invalid as not directed to patent eligible subject matter under Section 101.
Judge Andrew J. Guilford analyzed all 41 claims using the Federal Circuit's then-definitive machine or transformation (MoT) test. He found neither prong satisfied and granted summary judgment in favor of Fort Properties. 609 F. Supp. 2d 1052 (C.D. Cal. 2009).
After the lower court's decision, the U.S. Supreme Court said that the MoT test could be a useful tool to assess patent eligibility, but that it was not an exclusive test. Bilski v. Kappos, 129 S. Ct. 2735, 95 USPQ2d 1001 (2010).
Judge Sharon Prost first noted the high court's Bilski decision, but affirmed the lower court's judgments nonetheless.
The court looked at the claims lacking the computer use limitation and determined that they were similar to the claims held patent ineligible as abstract ideas in Bilski.
its more recent holding that claims on a method of mandatory arbitration resolution were not drawn to patentable subject matter in In re Comiskey, 554 F.3d 967, 979, 89 USPQ2d 1655 (Fed. Cir. 2009).
The court then turned to post-BilskiFederal Circuit opinions to address Claims 32-41.
Specifically, it quoted its statement that “the basic character of a process claim drawn to an abstract idea is not changed by claiming only its performance by computers, or by claiming the process embodied in program instructions on a computer readable medium,” in CyberSource Corp. v. Retail Decisions Inc., 654 F.3d 1366, 99 USPQ2d 1690 (Fed. Cir. 2011)(159 PTD, 8/17/11).
In addition, “claims to a method of applying for credit did not satisfy §101 even though the claims contained a limitation requiring the invention to be ‘computer aided,' ” the instant court said, quoting Dealertrack Inc. v. Huber, No. 2009-1566, 101 USPQ2d 1325 (Fed. Cir. 2012) (15 PTD, 1/25/12).
In contrast, the internet advertising claims found to be patent eligible under Section 101 in Ultramercial LLC v. Hulu LLC, 657 F.3d 1323, 100 USPQ2d 1140 (Fed. Cir. 2011) (182 PTD, 9/20/11), “require[d] intricate and complex computer programming” and “specific application to the Internet and a cyber-market environment,” the court noted, quoting from that case.
The court thus concluded that the computer “does not ‘impose meaningful limits on the claim's scope,' ” citing CyberSource. It therefore rejected those claims as invalid under Section 101.
Senior Judge Alvin A. Schall and Judge Kimberly A. Moore joined the opinion.
Arianna Frankl of Cole, Schotz, Meisel, Forman & Leonard, New York, represented Fort Properties. Donald M. Falk of Mayer Brown, Palo Alto, Calif., represented AML.
The Fort Properties court distinguished Section 101 patent eligibility related to computer use in a patent claim on four grounds, all of which can be seen to work against the patent applicant in this particular case.
However, are the court's other recent opinions—CyberSource, Ultramercial, and Dealertrack—in sync on those four grounds, as to both computer and internet use?
Generally, then, inasmuch the claims at issue in both Cybersource and Dealertrack thus required “specific application to the Internet and a cyber-market environment,” that ground alone appears insufficient to distinguish those cases of patent ineligibility from the claims found patent eligible in Ultramercial. That would further make it difficult to discern how the patents in Cybersource and Dealertrack could use computers and the internet as “merely insignificant post-solution activity” while the third did not.
Whether any of the claims at issue in CyberSource, Ultramercial, or Dealertrack represents an “advance in computer technology” is open to question and possibly a misnomer. All are directed to software and network functions. Perhaps the court meant to refer to “advances in internet applications” more specifically. It is unclear, though, why internet advertising might be an advance while internet credit handling is not.
Though the court is undoubtedly not finished with its Section 101 jurisprudence on these issues, it would seem advantageous for a patent applicant to limit claim scope to internet use and to add at least one limitation that ties the invention to internet processing, not a mere replication of a real world function into the internet application context.

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