Rewards Program and Recruiting Patents Invalid for Claiming Unpatentable Subject Matter

The court granted defendant's motion for summary judgment that plaintiff's anonymous communication patents were invalid for lack of patentable subject matter. "Plaintiff . . . asserts that the methods and systems of the [patent-in-suit] claim more than an abstract idea because the claims contain meaningful limitations . . . [1] receiving party data including an identity from both a first and second party; [2] receiving at least two rules for releasing party data . . . [3] receiving a search request from a second party; [4] processing the second party's search request . . . [5] exchanging first and second party data except the identities of the first and second party . . . and [6] releasing the identities of the first and second parties upon satisfying the first and second party rules for releasing their respective identities . . . [N]one of these limitations [presented by plaintiff's expert] adds anything meaningful to the basic concept of controlled exchange of information about people as historically practiced by matchmakers and headhunters - and as disclosed in the patent specification itself. By contrast, all of these steps could be performed (and have been performed) by human beings interacting with one another prior to the filing of the [patent-in-suit]. . . . To allow the claim to survive would disproportionately risk preempting a building block of human interaction, retarding rather than promoting progress, contrary to the very purpose patents are granted."

Walker Digital LLC v. Google Inc., 1-11-cv-00318 (DED September 3, 2014, Order) (Stark, J.)

---

The court granted defendant's motion for judgment on the pleadings that plaintiff's rewards program patents were invalid for lack of patentable subject matter. "Notwithstanding the prolixity of the claims, they recite a very simple invention: a computer-driven method and computer program for converting one vendor’s loyalty award credits into loyalty award credits of another vendor. In principle, the invention is thus the equivalent of a currency exchange as applied to loyalty award credits such as airline frequent flyer miles or hotel loyalty award points. . . . It is certainly true that computers assist with managing a large volume of transactions, doing so at great speed, and communicating the results of those transactions to the parties. However, the basic functions of converting non-negotiable loyalty award credits of one vendor into loyalty award credits of a second vendor according to an agreed-upon conversion rate, and then allowing the consumer to use the converted loyalty award credits to make purchases from the second vendor, are all functions that are readily within the capacity of a human to perform without computer aid. . . . . [A]lthough the field of use is narrow — the conversion of one entity’s loyalty award points into those of another entity — the preemptive effect of [plaintiff's] claims within that field of use is broad. . . . There is no disclosure of the precise method by which the computer performs those functions. Accordingly, the claims would read on virtually any computerized method of performing that function, even if the method used were quite different from any conventional computer-based means."

Loyalty Conversion Systems Corporation v. American Airlines, Inc., 2-13-cv-00655 (TXED September 3, 2014, Order) (Bryson, C.J.)