United States: Method Implemented On Generic Computers Is Not Patent Eligible, But Method For Processing Paper Checks Is

Salesforce.com, Inc. v. Virtualagility, Inc. and U.S. Bancorp v. Solutrain, Inc.

In a pair of covered business method (CBM) decisions, the U.S. Patent and Trademark Office Patent Trial and Appeal Board (PTAB or Board) illustrated what types of business-method patents are directed to patent-eligible subject matter and which are not.  The PTAB has now determined that a patent directed toward managing a collaborative activity was not patent-eligible because it did not require a specialized computer, and could instead be implemented on any generic computer.  Salesforce.com, Inc. v. Virtualagility, Inc., Case No. CBM2013-00024 (PTAB, Sept. 16, 2014) (Braden, APJ).  In contrast, the PTAB determined that the basic, core concept of a patent for processing paper checks was directed to patent-eligible subject matter.  U.S. Bancorp v. Solutran, Inc., Case No. CBM2014-00076 (PTAB, Aug. 7, 2014) (Bunting, APJ).

Both of these PTAB decisions applied the recent Supreme Court opinion in Alice ( IP Update , Vol. 17, No. 7) that tightened up the test for subject matter eligibility.  Under Alice, the first step in a § 101 analysis to determine whether the patent falls into one of the three categories of patent-ineligible subject matter: "laws of nature, physical phenomena, and abstract ideas."  Both the Salesforce and Bancorp decisions focused on the "abstract idea" category.  If the patent falls within one of the three categories, the second step is to identify an "inventive concept," an element or combination of elements that directs the patent toward more than just the abstract idea itself.  In both Salesforce and U.S. Bancorp, the PTAB applied the two-step Alice test, but arrived at opposite conclusions.

In Salesforce the PTAB explained it will not accept (as patent-eligible) patent claims directed to an abstract business idea implemented on "a generic computer [that] perform[s] generic computer functions."  The challenged patent claims were directed toward managing a collaborative activity by using a computer database filled with various types of data related to a company—such as customer information and economic data—so that a user could sort the information to show how best to allocate company resources.

Applying the first Alice step, the PTAB determined that the Salesforce patent was directed toward an abstract idea:  "[t]he creation and use of models to aid in processing management information" was a "disembodied concept" not tied to a specialized computer and was therefore just an abstract idea.  The patent failed the second part of the Alice analysis for a similar reason.  The PTAB determined that a generic computer was not an "inventive concept" that would narrow the claims to cover less than the abstract idea.  Although the patent owner argued that its invention required "a specialized computer that is programmed to execute a series of steps," the PTAB explained that a conventional, generic computer could perform the patent's steps.

In contrast, in U.S. Bancorp, the PTAB determined that even if some steps of a business-method patent are directed toward abstract ideas, the proper is focused on the "basic, core concept" of the challenged patent and claims directed toward a physical invention are subject matter-eligible.  The petitioner's mistake was arguing for subject matter ineligibility based on discrete parts of the patent claims, instead of focusing on the invention as a whole.

The challenged patent was directed toward a system and method for processing paper checks, using check data to promptly make a deposit into a merchant's account and then creating a check image to match with the check data.  U.S. Bancorp argued that none of the limitations were directed toward any technological improvement in scanning, and none of the other limitations were anything other than abstract ideas.  The PTAB, however, determined that the "basic, core concept" of the patent was a method of processing paper checks.  On the spectrum of "abstract ideas," which are not patent eligible, and "technological processes," which are, the PTAB found the invention was closer to a technological process and was therefore directed toward patent-eligible subject matter.  Notwithstanding that certain discrete claim limitations were directed toward fundamental economic practices, it remained the case that the concept of receiving and depositing paper checks was a physical, and therefore patent-eligible, invention.  As the Board explained, it is a patent's claims' basic, core concept that must be found patent-eligible, not each claim element.  Here, the PTAB determined that § 101 subject matter eligibility was not an appropriate ground on which to institute a covered business method patent review.

Method Implemented on Generic Computers Is Not Patent Eligible, but Method for Processing Paper Checks Is

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Knobbe Martens Olson & Bear
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Knobbe Martens Olson & Bear
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions