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Secure Axcess, LLC v. PNC Bank National Association

United States Court of Appeals, Federal Circuit

February 21, 2017


         Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. CBM2014-00100.

          Andrew J. Wright, Bruster PLLC, Southlake, TX, argued for appellant. Also represented by ANTHONY Kyle Bruster; Eric M. Albritton, Albritton Law Firm, Longview, TX; Andre J. Bahou, Secure Axcess, LLC, Piano, TX; GREGORY J. GONSALVES, Falls Church, VA.

          GREGORY H. Lantier, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, argued for all appellees. Appellee PNC Bank National Association also represented by Brittany Blueitt Amadi; Wei Wang, Palo Alto, CA.

          Terence P. Ross, Katten Muchin Rosenman LLP, Washington, DC, for appellees U.S. Bank National Association, U.S. Bancorp.

          ANTHONY H. Son, Barnes & Thornburg LLP, Washington, DC, for appellees Bank of the West, Ally Financial, Inc., Cadence Bank, N.A. Appellee Cadence Bank, N.A. also represented by TONYA GRAY, Andrews Kurth LLP, Dallas, TX; Sean WOODEN, Washington, DC.

          Scott Wesley Parker, Parker Ibrahim & Berg LLC, Somerset, NJ, for appellee Santander Bank, N.A. Also represented by DIANE Ragosa.

          Jason Stewart Jackson, Kutak Rock LLP, Omaha, NE, for appellee Raymond James & Associates, Inc.

          ERIC C. Cohen, Brinks Gilson & Lione, Chicago, IL, for appellee Trustmark National Bank.

          Garret A. Leach, Kirkland & Ellis LLP, Chicago, IL, for appellee Nationwide Bank.

          Marc Wade Vander Tuig, Senniger Powers LLP, St. Louis, MO, for appellee Commerce Bank.

          Before LOURIE, Plager, and TARANTO, Circuit Judges.


          PLAGER Circuit Judge.

         This is a patent case-the issue turns on what is a covered business method patent. Appellant Secure Ax-cess, LLC ("Secure Axcess") challenges a Final Written Decision of the Patent Trial and Appeal Board ("Board" or "PTAB"). As part of that decision, the Board reaffirmed its determination that the patent at issue, U.S. Patent No. 7, 631, 191 ("'191 patent"), owned by Secure Axcess, was a covered business method ("CBM") patent under § 18 of the Leahy-Smith America Invents Act ("AIA"), Pub. L. No. 112-29, 125 Stat. 284 (2011). The Board further held that claims 1-32, all the claims in the patent, were unpatentable under that statute on the grounds that they would have been obvious under the cited prior art.

         On appeal, Secure Axcess challenges the Board's determination to decide the case as a covered business method patent, as well as the Board's obviousness determination. We agree with Secure Axcess on the first point and therefore do not reach the second. Recently, in Un-wired Planet, LLC v. Google Inc., 841 F.3d 1376, 1379-82 (Fed. Cir. 2016), we concluded that the Board-adopted characterization of CBM scope in that case was contrary to the statute. We draw the same conclusion here, and further conclude that the patent at issue is outside the definition of a CBM patent that Congress provided by statute.


         1. The Patent-at-Issue

         Secure Axcess owns the '191 patent, which issued from a continuation application of U.S. Patent Application No. 09/656, 074. That parent application issued as U.S. Patent No. 7, 203, 838 ("'838 patent"). The '191 and '838 patents have substantially the same written descriptions.

         The '191 patent is entitled "System and Method for Authenticating a Web Page." According to the patent, the "invention relates generally to computer security, and more particularly, to systems and methods for authenticating a web page." '191 patent at 1:16-18. The claims generally support this broad understanding. Claims 1 and 17 are illustrative.

         1. A method comprising:

transforming, at an authentication host computer, received data by inserting an authenticity key to create formatted data; and
returning, from the authentication host computer, the formatted data to enable the authenticity key to be retrieved from the formatted data and to locate a preferences file,
wherein an authenticity stamp is retrieved from the preferences file.

Id. at 12:9-18; '191 Certificate of Correction.

         17. An authentication system comprising:

an authentication processor configured to insert an authenticity key into formatted data to enable authentication of the authenticity key to verify a source of the formatted data and to retrieve an authenticity stamp from a preferences file.

'191 patent at 12:62-67; '191 Certificate of Correction.

         Similarly, the written description of the '191 patent generally discusses computer security with a focus on authenticating a web page. However, on occasion, the written description contains references that might be considered to concern (at least facially) activities that are financial in nature, a consideration in determining CBM patent status.

         For example, in discussing the invention, the written description explains that an Internet user might be misled to the wrong website without proper authentication. To illustrate the problem, the patent uses "'' vs. 'www.b[l]' (with an T instead of an 'i')." '191 patent at 1:31-33, see also id. at 8:22-24 (again, by way of example, using '""'). Also, despite typically referring to Internet "users, " the patent occasionally refers to "customers, " id. at 1:28-29, and "consumers, " id. at 1:44. The written description further explains that "[t]he web server can be any site, for example a commercial web site, such as a merchant site, a government site, an educational site, etc." Id. at 3:34-37.

         In contrast to such brief references, the last several paragraphs of the written description provide several more detailed and possibly relevant references:

Moreover, while the exemplary embodiment will be described as an authentication system, the system contemplates the use, sale or distribution of any goods, services or information over any network having similar functionality described herein.

'191 patent at 11:17-21.

The customer and merchant may represent individual people, entities, or business. The bank may represent other types of card issuing institutions, such as credit card companies, card sponsoring companies, or third party issuers under contract with financial institutions. It is further noted that other participants may be involved in some phases of the transaction, such as an intermediary settlement institution, but these participants are not shown.

Id. at 11:22-29. (There is no previous mention of "the bank" in the patent-there is only the "" reference. Similarly, the only previous mention of a "merchant" is the "merchant site" at 3:36, and the only previous mention of a "customer" is the "customers" at 1:28-29.)

Each participant is equipped with a computing system to facilitate online commerce transactions. The customer has a computing unit in the form of a personal computer, although other types of computing units may be used including laptops, notebooks, hand held computers, set-top boxes, and the like. The merchant has a computing unit implemented in the form of a computer-server, although other implementations are possible. The bank has a computing center shown as a main frame computer. However, the bank computing center may be implemented in other forms, such as a mini-computer, a PC server, a network set of computers, and the like.

Id. at 11:30-40. (There is no previous mention of "commerce" or a "commerce transaction" in the patent.)

For instance, the customer computer may employ a modem to occasionally connect to the internet, whereas the bank computing center might maintain a ...

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