Dozens of Banks Sued Doesn’t Make Patent Financial Method

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By Tony Dutra

The assertion of a patent against Bank of America, GE Capital Corp. and 40 other financial institutions doesn’t make it a financial business method invention vulnerable to attack in a Patent and Trademark Office special proceeding, an appeals court said Feb. 21 ( Secure Axcess, LLC v. PNC Bank N.A. , 2017 BL 51354, Fed. Cir., No. 2016-1353, 2/21/17 ).

Patent challengers like the special “covered business method” proceeding because it gives them more options to make invalidity charges, such as on whether the invention is patent-eligible. In November, the U.S. Court of Appeals for the Federal Circuit ruled against Apple Inc.'s argument that a CBM patent includes one whose invention is “incidental” to financial activity. The court’s 2-1 decision Feb. 21 further limited CBM to be more dependent on what, exactly, the patent holder claimed.

The claims of Secure Axcess LLC’s patented method of ensuring that a user is on the right internet web page do not refer to financial applications. That was enough for the majority on the court to conclude it was not a CBM. The dissent said that the patent description was rife with references to how financial institutions would use the authentication method, and that it should matter that the patent holder only asserted it against financial institutions.

The court’s CBM limitations could put the issue squarely back in Congress. Sen. Charles E. Schumer (D-N.Y.) proposed to expand the definition of CBM in the last session. But he backed off, possibly because the PTAB’s definition was so broad. Now that the Federal Circuit has severely cut back the PTAB’s rulings, Schumer and others may be tempted to revive the proposal.

Secure Axcess, however, won’t get the benefit of the CBM-related decision. The appeals court simultaneously affirmed a PTAB ruling, in EMC Corp.'s non-CBM challenge, that all but one of the patent’s claims were invalid as obvious, and Secure Axcess hasn’t asserted the remaining claim in court ( Secure Axcess, LLC v. EMC Corp. , 2017 BL 51200, Fed. Cir., No. 2016-1354, 2/21/17 ).

Two-Pronged Attack at PTAB

U.S. Patent No. 7,631,191 is described in the Abstract and Summary sections of the patent generally. It addresses cases where a website is set up to defraud a consumer into believing he or she reached a desired site, such as a bank’s website. The example used is when the fraudulent site replaces “i” with “l” in “” The claims cover authenticating the website to the consumer’s satisfaction before continuing.

The written description of the patent includes a specific example of accessing a credit card company’s website to complete a commercial transaction.

The Federal Circuit’s decision interpreted Section 18 of the America Invents Act, which defines a CBM as “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.”

The majority focused on the word “claims.” The court acknowledged that the written description can inform how to interpret the claims. But it said that nothing was missing from the ‘191 patent claims that needed further explanation from the description.

The court contrasted another case where a different Federal Circuit panel held that the claims were “financial in nature.” Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 118 U.S.P.Q.2d 1035 (Fed. Cir. 2016). The claims of the ‘191 patent, it said, do not have “a financial activity element.”

Judge S. Jay Plager wrote the court’s opinion, which was joined by Judge Richard G. Taranto.

Judge Alan D. Lourie dissented. He said that, in fact, the written description shows that “nature of the invention” is for use in the practice of a financial product. Lourie also would have considered who Secure Axcess sued.

Two-Pronged Attack at PTAB

Secure Axcess is a patent licensing company that filed 17 complaints in the U.S. District Court for the Eastern District of Texas in September and October 2013. Four CBM challenges were filed at the PTAB by 14 of the alleged infringers. The board consolidated those cases and issued its ruling under PNC Corp.'s CBM2014-00100, Paper 43.

EMC and RSA Security LLC were not alleged infringers. They chose the alternative “inter partes review” challenge. They made their case for the invention’s obviousness using slightly different prior art than the banks used. The PTAB’s decision in IPR2014-00475 in favor of EMC was the subject of the second Federal Circuit ruling Feb. 21—an affirmance without opinion.

The same PTAB panel ruled in both the IPR and CBM trials. The CBM trial ended with all 32 claims deemed obvious. The IPR trial was instituted on the same patent claims, excluding claim 24.

Bruster PLLC, Southlake, Texas, represented Secure Axcess. Wilmer Cutler Pickering Hale and Dorr LLP, Washington, represented PNC and argued for all appellees. WilmerHale, Boston, represented EMC and RSA in the IPR case.

To contact the reporter on this story: Tony Dutra in Washington at

To contact the editor responsible for this story: Mike Wilczek at

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