Computerized Method of Settling a Real Estate Transaction Likely Unpatentable under Section 101: PTAB | Practical Law

Computerized Method of Settling a Real Estate Transaction Likely Unpatentable under Section 101: PTAB | Practical Law

In Stewart Title Guaranty Company v. Segin Software, LLC, the US Patent Trial and Appeal Board (PTAB) ordered a Covered Business Method (CBM) review of Segin Software's patent after determining that it is more likely than not that some claims of the patent are unpatentable under 35 U.S.C § 101.

Computerized Method of Settling a Real Estate Transaction Likely Unpatentable under Section 101: PTAB

by Practical Law Intellectual Property & Technology
Published on 25 Jul 2014 • USA (National/Federal)
In Stewart Title Guaranty Company v. Segin Software, LLC, the US Patent Trial and Appeal Board (PTAB) ordered a Covered Business Method (CBM) review of Segin Software's patent after determining that it is more likely than not that some claims of the patent are unpatentable under 35 U.S.C § 101.
On July 8, 2014, the US Patent Trial and Appeal Board (PTAB) issued a decision in Stewart Title Guaranty Company v. Segin Software, LLC, granting Stewart Title Guaranty Company's (Stewart Title) petition for a post-grant review of Segin Software, LLC's (Segin Software) US Patent No. 8,165,939 ('939 patent) (Case No. CBM2014-00051, (PTAB July 8, 2014)).
Segin Software is the owner of the '939 patent, which is directed to a method for settling real estate transactions. Stewart Title filed this petition for post-grant review under the transitional program for covered business method patents, asserting that claims 1-10 of the '939 patent are unpatentable under:
After determining Stewart Title had standing to seek this Covered Business Method (CBM) review and that the '939 patent was eligible for CBM review, the PTAB considered whether it was more likely than not that claims 1-10 of the '939 patent were unpatentable under Section 101.
In determining the '939 patent was likely patent-ineligible, the PTAB applied the two-step framework set out by the US Supreme Court in Alice Corporation Pty, Ltd. v. CLS Bank International (CLS Bank), which requires:
  • A determination of whether the claims are directed to a patent-ineligible law of nature, natural phenomena or abstract idea.
  • If the claims are directed to a patent-ineligible concept, a determination of whether the claim elements individually or as an ordered whole include an inventive concept that transforms the claim into a patent-eligible application of the concept.
(134 S. Ct. 2347 (June 19, 2014)).
On the first step of the analysis, the PTAB determined that claim 1 of the '939 patent is directed to the concept of tracking and verifying the progress of financial transactions between parties to a real estate settlement. The PTAB concluded that this concept was an abstract idea with no meaningful difference from the abstract concept of intermediated settlement at issue in CLS Bank.
The PTAB then determined that the challenged claims do not include any inventive concept that would render the claimed abstract idea patent-eligible. The PTAB relied on the description of the invention in the patent's disclosure and concluded that the individual claimed steps of storing, selecting, tracking and comparing data were previously known to the real property settlement industry and that computer-based tools existed to help perform these steps. The PTAB also analyzed the steps as an ordered combination and concluded that implementing the steps on a computer that would allow them to be performed faster was not sufficient to render the claims patent-eligible. The PTAB also rejected Segin Software's arguments regarding the claimed computer system, explaining that:
  • There was no special programming disclosed in the '939 patent and that the claim language itself could not transform the generic computer into a specific computer.
  • For a computer to be integral to the claimed invention, it must facilitate the process in a way that a person making calculations or computations could not, and it is possible for a person to perform the claimed steps of the '939 patent without error.
The PTAB also considered whether the '939 patent was likely to be unpatentable under Section 112, paragraphs 1 and 2 but declined to institute a CBM review on those grounds. The PTAB, therefore, ordered a CBM review of claims 1-10 of the '939 patent on the Section 101 grounds.