Wednesday, May 25, 2016

Patents Directed to Categorizing Summarized Information Not Invalid Under 35 U.S.C. § 101

The magistrate judge recommended denying defendant's motion to dismiss the asserted claims of plaintiff’s patents for categorizing summarized information for lack of patentable subject matter because defendant failed to establish that the claims were directed toward an abstract idea. "The Court agrees with [defendant] . . . that businesses have used past transaction information to predict future transactions or for business purposes long before the [patents] existed. Those ideas, or close variations of them, have been found to amount to abstract ideas. The key question as to step one, however, is whether [defendant's] asserted abstract idea encompasses the 'basic character' of the claimed inventions. The Court concludes that it does not. . . . What the [patents] claim to add is not simply the idea of summarizing past transaction information for some future predictive purpose or for a business purpose (as [defendant's] proffered abstract ideas suggest), but rather the added value of having a categorization system that grows and improves in its ability to do its job, based on the consistent incorporation of new information. . . . The specifications . . . go on to identify the 'key ingredient' of the claimed system in this regard: 'an ability to grow and improve the network categorization system.'. . . . [Defendant's] proffered 19th century example of the asserted abstract idea does not appear to speak to how the catalog service would periodically amend their predicting or forecasting processes based on updated information -- the asserted improvement that is called out by the patent specifications and referenced in the claims."

Yodlee Inc. v. Plaid Technologies Inc., 1-14-cv-01445 (DED May 23, 2016, Order) (Burke, M.J.)

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