469 F.Supp.3d 231
D. Del.2020Background
- Plaintiff Universal Secure Registry LLC (USR) sued Apple Inc. and Visa Inc. (and Visa U.S.A.) alleging infringement of four patents directed to secure authentication of identity using personal electronic devices, biometrics, time-varying codes, and a secure registry.
- Exemplary claims include: #539 claim 22 (time-varying multicharacter code and third-party registry mapping), #826 claim 10 (biometric + device-to-device authentication), #813 claim 1 (electronic ID device generating encrypted authentication info), and #137 claim 12 (system with biometric sensor, processor, and wireless transceiver).
- Defendants moved to dismiss under Rule 12(b)(6), arguing the asserted claims are directed to an abstract idea and thus ineligible under 35 U.S.C. § 101. The Magistrate Judge recommended denying the motion.
- The district judge reviewed the recommendation de novo, applied the Alice two-step framework, and concluded the claims are directed to the abstract idea of identity verification for transactions and lack an inventive concept.
- The court held the asserted claims are not grounded in a technical improvement to computer functionality and therefore granted defendants’ motion to dismiss for failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Patent eligibility of #539 claim 22 (time-varying code + registry) | Claim innovates by approving transactions without revealing account info and using time-varying codes; not abstract. | Claim is an abstract process of verifying identity/controlling access implemented with generic computer components. | Claim is directed to an abstract idea and lacks an inventive concept; ineligible under § 101. |
| Patent eligibility of #826 claim 10 (biometric + two-device auth) | Claim provides technological improvements: local biometric authentication plus remote multi-factor verification. | Claim uses generic biometric capture/devices and routine token exchange; no technical means or improvement. | Claim is an abstract authentication method using conventional tech; not patent-eligible. |
| Patent eligibility of #813 claim 1 (electronic ID device generating encrypted auth info) | Device components work together in a specific way to generate/transmit encrypted authentication info. | Components are generic (sensor, UI, processor, comms); no specific technical solution disclosed. | Claim recites generic components performing routine functions; lacks inventive concept; ineligible. |
| Patent eligibility of #137 claim 12 (system with biometric sensor and transceiver) | System enables secure authentication for transactions as claimed. | System is a combination of generic components performing customary operations; directed to abstract idea. | Claim is directed to an abstract idea and fails Alice step two; ineligible. |
Key Cases Cited
- Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208 (2014) (established two-step framework for § 101 patent-eligibility analysis)
- Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012) (explains need for "significantly more" than ineligible concept to confer patentability)
- Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) (consideration of whether claims focus on a technical improvement to computer functionality)
- In re TLI Commc'ns LLC Patent Litig., 823 F.3d 607 (Fed. Cir. 2016) (§ 101 analysis for claims implemented with conventional computer components)
- Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (Fed. Cir. 2017) (distinguishes claims directed to improvements in computer functionality from abstract ideas)
- Bilski v. Kappos, 561 U.S. 593 (2010) (laws of nature, natural phenomena, and abstract ideas are not patentable)
- Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315 (Fed. Cir. 2017) (holding generic mobile interface usage and routine data access insufficient for inventive concept)