Background
Plaintiff brought suit in the U.S. District Court for the Central District of California for alleged infringement of U.S. Patent No. 8,548,902, which related to online loan origination services. The defendant moved for judgment on the pleadings, arguing that the patent was directed to the abstract idea of information exchange in an online loan application process.
Defendant specifically argued that the patent claims were directed to 1) receipt of a loan application, 2) comparison of data and 3) population of a second document with the received information, which amounted to nothing more than the abstract idea of implementing a standard process on a computer and over the internet.
Plaintiff countered that the patent "solved the most nagging problem in the industry at that time by constantly checking for new data and creating an updated PDF application that could be viewed by the customer at any time." Plaintiff also argued that the patent claims included features that take the invention "out of the realm of simply receiving and processing a loan application." These features were an application server, an "automatic decision engine," a database server and a queue manager server – all of which the plaintiff claimed to be "technologically complex."
The Court’s Analysis
Before delving into the Section 101 analysis, the court noted that it may properly entertain the motion without construing the claims. Plaintiff raised the issue of claim construction but failed to identify a claim construction dispute. Plaintiff, instead, simply listed terms that it contended "should be construed."
At step one of the Alice inquiry, the court compared the asserted claims to Audatex N. Am. v. Mitchell Int’l Inc., a Federal Circuit opinion from 2017, and found that the claims recite nothing more than the collection of information to generate a report with the aid of well-known technology.
As in Audatex, the asserted patent described the abstract idea without being directed to an improvement in computer functionality "but simply used a computer to perform data collection and routine manipulations." The mere fact that some of the claims recite "application server" or "database server" does not change the analysis where the claims do not speak to any improvement in technological functioning.
At step two of the Alice inquiry, plaintiff argued that the automatic decision engine is inventive because it solved the problem of "creating a universal protocol for dealing with multiple, disparate and non-compatible software applications used in loan application process." This was unpersuasive. The court noted that the plaintiff failed to cite any portion of the patent that described how the system imports or exports data, or how the compatibility is accomplished.
The court granted defendant's motion for judgment on the pleadings and dismissed the complaint without leave to amend.
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