Head Case

Cybersource Corp. v. Retail Decisions, Inc.

The patent pain felt by some process method inventors might not be psychosomatic. In Cybersource Corp. v. Retail Decisions, Inc., the Federal Circuit held that an invention is not patent-eligible under § 101 if it claims a method that can be entirely performed in the human mind. Those kind of mental processes are a sub-category of abstract ideas and abstract ideas have long been one of the exceptions to § 101's broad grant of patent eligibility. Adding a computer to the process does not help. The Cybersource court also held that if the method used on the computer can be done as a mental calculation-or by using a pen and paper-having a computer perform the process will not make the otherwise unpatentable method patentable. As a result, some inventors may find that their patents are really just all in their head.

The patent at issue in Cybersource claimed a method of detecting fraudulent credit card transactions on the Internet. The patent claimed to cover any method for relating credit card transaction information to a particular Internet address. The patent also included a "Beauregard claim" reciting a computer readable medium to perform the claimed method. Patent holder Cybersource sued Retail Decisions alleging infringement of its patent. After the Federal Circuit decided In re Bilski, Retail Decisions moved for summary judgment on validity. The district court granted the motion, finding the claimed method was "an unpatentable mental process for collecting data and weighing values." Cybersource appealed.

The Federal Circuit stayed the appeal in anticipation of the Supreme Court's Bilski decision-and then used the Supreme Court's opinion to affirm the district court. The Cybersource court first reviewed Cybersource's patent under the machine-or-transformation test approved by Bilski. The court found that the patent failed both prongs of the test. The claims of the patent only required that certain data be obtained and compared. The court said that the "mere collection and organization of data" was insufficient to meet the transformation prong of the test. It also held that the plain language of the claimed process did not require the use of "a particular machine, or even a machine at all."  

Cybersource had no success arguing that the patent's reliance on the Internet qualified as the use of a machine. Whether or not it is a machine, the court found that the Internet could not perform the fraud verification steps of the method. At best, the Internet offered a source for gathering the data needed to perform the method, but data gathering alone cannot make an invalid claim valid.

And, following Bilski's requirement that a review of patentability go past a machine-or-transformation inquiry, the Cybersource court undertook a further analysis-which the patent also failed. Reviewing both Federal Circuit and Supreme Court precedent, the court concluded that methods that can be performed mentally, or which are the equivalent of human mental work, constitute abstract ideas. Because abstract ideas are one of the categories excluded as patentable subject matter under § 101, mental processes represent a similarly unpatentable sub-category. Analyzing each of the patent's claims, the court concluded that the method's steps covered mental processes that can all be done by the human mind or by someone using pen and paper. The court ruled that computations steps like these embody the "basic tools of scientific and technological work," free to all and "reserved exclusively to none."

The Federal Circuit rejected Cybersource's argument that the use of a computer to carry out the claimed method transformed its invention into a valid "manufacture" rather than an invalid process. The court looked at the function the computer performed. The court found that, because all the steps the computer performed could also be done independently by human, the claims remained method or process claims-and that those claims were still invalid. Though the computer aided the manipulation and organization data, it did not transform it. And, because the process could be done in a variety of ways, using a computer did not meaningfully limit the scope of the claims as needed to satisfy the machine prong of the machine-or-transformation test. The Court concluded that, unless the computer performs a function that the human mind cannot do entirely on its own, merely combining an unpatentable process with a computer cannot make the process patentable.

Cybersource will straightjacket the enforcement of some process patents-and may breed a new host of patent law mind games. What are the limits to the mental processes test Cybersource establishes? How fast a mind are we talking about? While the court in Cybersource says that methods that can be done mentally or with pen and paper alone are not patentable, it is easy to imagine situations that test those boundaries. What about a method that uses a computer to deliver human-possible calculations, but at a speed that humans cannot ever produce?  What if the method gets it value from producing those calculations in a very finite amount of time? The answers to these questions impact both method patent holders and potential method infringers-making Cybersource the most recent decision with the potential to drive both sides of the patent bar a little bit crazy.

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