Processes Equivalent to "Human Mental Work” Not Patent-Eligible

CyberSource v. Retail Decisions (decided 8/16/11)

By: Andrew (A.J.) Tibbetts

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What This Means to You

  • Consider the following when drafting your invention’s specification:
    • Emphasize the utility of a computer to the software method; and
    • Discuss the differences between a computerized method and any similar pen-and-paper method.
  • Choose verbs for your invention’s claims that suggest actions that are not mental.

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Overview

In the aftermath of the US Supreme Court’s 2010 Bilski decision, the US Court of Appeals for the Federal Circuit (Federal Circuit) continues to waffle on the appropriate standard for patentability of processes, including software processes. The CyberSourceCorp. v. Retail Decisions, Inc. decision sets out the highest bar yet for patentability of software by suggesting that any process that is the “equivalent of human mental work” is not eligible for patenting.

Case Background

CyberSource Corporation held a patent on processes for detecting credit card fraud in e-commerce transactions. The CyberSource method involved examining information about the computer described in the transaction, such as an IP address for the computer, to determine whether the information was consistent with previous transactions.

CyberSource sued Retail Decisions for patent infringement. In response, Retail Decisions argued that CyberSource’s patent covered the type of technologies not eligible for patenting and was, therefore, invalid. The trial judge agreed with Retail Decisions and invalidated the claims CyberSource had asserted against Retail Decisions. CyberSouce then appealed to the Federal Circuit.

Decision Analysis

The Federal Circuit affirmed the district court’s decision that the claims of CyberSource’s patent were directed to “non-statutory” subject matter and thus ineligible for patenting. The decision rested on the court’s conclusion that CyberSource’s claims were worded in a way that covered human mental activity and mere equivalents of human mental activity.

A “process” is one of the categories called out in the Patent Act as patent-eligible. Since the 1800s, courts have tried to draw lines between natural processes or “abstract” processes on one side—which the courts have said are ineligible for patenting—and human-created processes on the other—which are eligible for patenting. The line has always been blurred and has been shifting lately following the 2010 Supreme Court decision in Bilski (for our alert on Bilski  decision, go here). The courts have routinely confirmed, though, that mathematical equations or human mental activity are not eligible for patenting.

In this case, the Federal Circuit closely examined the wording of CyberSource’s process claim and determined the language did not require the use of anything other than human intelligence, possibly combined with a pen and paper. The words of the claim described simply “obtaining information” about credit card transactions, building a “map” of credit card numbers based on the transactions, and “utilizing” the map to determine validity of a transaction, all of which the court said could be performed mentally.

CyberSource’s patent also included a claim to a “computer-readable medium” (e.g., a memory chip or CD) encoded with software to carry out the method. While this claim would not cover mental activity, the court held that this claim was also non-statutory. The court concluded that the software was merely an equivalent to human mental activity, as the software steps recited in the claim did not appear to be any different from the mental steps.

This was a first-time decision from the court and set the highest bar yet for patenting of software.

Takeaways

The court’s decision is one of a flurry of decisions issued this year by the Federal Circuit regarding patentability of processes, and it stakes out a position on the patentability of software that is more extreme than other decisions from other judges on the court. It is uncertain at this point what viewpoint will win on the court, and what overall rule will emerge from this debate. The decision is still enforceable law, though, and best practices dictate addressing concerns raised by the decision, rather than ignoring them and hoping for the best.

As a result of this case, we recommend carefully describing a software invention in the text of the application so as to emphasize the utility of the computer to the process and the difference between the software implementation of the method and any similar mental processes. This may include a discussion of fast or complex analysis, or transmission of information via the web, or other advantages of computers. All software can be viewed, at its heart, as an “equivalent” to human mental activity, but if the text of the application emphasizes differences with how a similar process could be performed mentally, a judge may be less likely to rule that the claims are merely equivalent to mental work.

We also recommend wording claims carefully to ensure they cannot be interpreted to cover activity of the human mind. This can be difficult and fact-specific, but mentioning data storages or other computer hardware and the interactions with this hardware may be helpful.