Content Extraction & Transmission LLC v. Wells Fargo Bank
776 F.3d 1343
| Fed. Cir. | 2014

Background

  • CET owned four related patents claiming a method for extracting data from hard-copy documents (using scanners), recognizing specific fields (e.g., check amount), and storing that data in memory; 242 total claims across the patents.
  • CET sued Wells Fargo and PNC for patent infringement (2012). Diebold, ATM manufacturer for those banks, sued CET seeking declaratory judgment of noninfringement/invalidity and alleged tortious interference and RICO violations based on CET’s suits against Diebold’s customers.
  • PNC moved to dismiss under Rule 12(b)(6), arguing all asserted claims were patent-ineligible under 35 U.S.C. § 101; PNC identified claim 1 of the ’855 and claim 1 of the ’416 patents as representative.
  • The district court held the representative claims (and thus all asserted claims) invalid under § 101 and dismissed CET’s suits; it also dismissed Diebold’s tortious-interference and RICO claims, invoking Noerr-Pennington immunity.
  • On appeal, the Federal Circuit reviewed § 101 eligibility de novo, affirmed invalidity (applying the Mayo/Alice two-step framework), and affirmed dismissal of Diebold’s claims because CET’s suits were not objectively baseless when filed.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether CET’s asserted claims are patent-eligible under § 101 CET: claims are not abstract because they require a scanner/digitizing unit and computer processing that humans cannot perform on raw scanner output PNC: claims are directed to the abstract idea of collecting, recognizing, and storing data; scanner/computer are generic implementation Held: Claims are directed to the abstract idea; using a scanner/computer is routine/conventional and adds no inventive concept — claims invalid under § 101
Whether representative claims may stand for all claims in § 101 challenge CET: must address each claim individually; presumption of validity requires clear-and-convincing proof per claim PNC: claim 1 of ’855 and ’416 are representative because other claims are substantially similar to same abstract idea Held: Representative claims appropriate; court reviewed all claims and agreed they are substantially similar and contain no inventive concept
Whether § 101 invalidity can be decided at pleadings without claim construction/discovery CET: premature to decide eligibility before claim construction, discovery, expert input PNC: § 101 can be resolved on the pleadings when claim content is clear; district court construed terms in CET’s favor Held: Resolution at pleading stage proper; court assumed favorable constructions and still found no inventive concept
Whether CET is immune under Noerr-Pennington from Diebold’s tortious-interference and RICO claims Diebold: CET’s suits were sham litigation objectively baseless and meant to extract settlements from Diebold’s customers CET: filing suits was protected petitioning; prevailing § 101 law was unsettled when suits filed Held: Suits were not objectively baseless in 2012 given unsettled § 101 law; Noerr-Pennington immunity applies; Diebold’s claims dismissed

Key Cases Cited

  • Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (U.S. 2014) (establishes Mayo/Alice two-step test for abstract-idea analysis and that generic computer implementation does not supply inventive concept)
  • Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (U.S. 2012) (articulates framework for assessing patent eligibility and inventive concept)
  • Bilski v. Kappos, 561 U.S. 593 (U.S. 2010) (limits on patentability of abstract business methods; representative-claim approach discussed)
  • Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (U.S. 1993) (sham litigation test for overcoming Noerr-Pennington immunity)
  • BE & K Constr. Co. v. N.L.R.B., 536 U.S. 516 (U.S. 2002) (First Amendment protection for reasonably based suits)
  • Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012) (information-processing patent eligibility precedent)
  • buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014) (computer-implemented business-method claims held abstract)
  • Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) (discussion of patent eligibility at pleading stage and role of claim construction)
  • Noerr Motor Freight, Inc. v. E. R.R. Presidents Conference, 365 U.S. 127 (U.S. 1961) (establishes petitioning immunity under Noerr-Pennington)
  • Deck v. Engineered Laminates, 349 F.3d 1253 (10th Cir. 2003) (treating meritless litigation as extortion under RICO would chill petitioning)
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