United States District Court, E.D. Texas, Marshall Division
MEMORANDUM OPINION AND ORDER
GILSTRAP UNITED STATES DISTRICT JUDGE
the Court is Defendant Wells Fargo Bank N.A.'s
(“Wells Fargo”) Motion for Summary Judgment Under
35 U.S.C. § 101 (the “Motion”). (Dkt. No.
131.) The Court heard argument on this Motion at the pretrial
conference held in the above-captioned case on October 17,
2019. (Dkt. No. 263.) As announced at that hearing and for
the reasons set forth herein, the Court is of the opinion
that the Motion should be and hereby is
DENIED. (Id. at 228:3-229:5.)
Services Automobile Association (“USAA”) brought
suit against Wells Fargo alleging infringement of U.S. Patent
Nos. 8, 977, 571 (the “'571 Patent”) and 9,
818, 090 (the “'090 Patent”) (collectively,
the “Asserted Patents” or
“Patents-in-Suit”). Shortly thereafter, Wells Fargo
filed a Motion for Judgment on the Pleadings that the
Asserted Patents are ineligible under 35 U.S.C. § 101.
(Dkt. No. 28.) The Court denied Well Fargo's motion as
moot in light of USAA's subsequently filed First Amended
Complaint and granted leave to refile a similar motion
directed at the First Amended Complaint. (Dkt. No. 61.) Wells
Fargo declined to refile under Federal Rule of Civil
Wells Fargo did file Petitions for Covered Business Method
(“CBM”) Review with the United States Patent
Trial and Appeal Board (“PTAB”) challenging each
of the Asserted Patents, inter alia, as claiming
patent-ineligible subject matter under § 101. Petition,
Wells Fargo Bank, N.A. v. United Servs. Auto.
Ass'n, CBM2019-00004, Paper No. 2 (P.T.A.B. Nov. 8,
2018) (hereinafter, “'571 CBM Petition”);
Petition, Wells Fargo Bank, N.A. v. United Servs. Auto.
Ass'n, CBM2019-00002, Paper No. 2 (P.T.A.B. Nov. 8,
2018). The PTAB declined to institute CBM review as to the
'571 Patent because it found that the patent claimed a
“technological invention”; that is, it claimed a
technological feature that is novel and nonobvious and
“solves a technical problem using a technical
solution.” Decision, Wells Fargo Bank, N.A. v.
United Servs. Auto. Assoc'n, CBM2019-00004, Paper
No. 22 at 22-32 (P.T.A.B. May 15, 2019) (hereinafter,
“'571 CBM Decision”); see also 37
C.F.R. § 42.301 (defining the scope of CBM review).
Wells Fargo sought, and the PTAB granted, dismissal of its
CBM petition as to the '090 Patent. Decision, Wells
Fargo Bank, N.A. v. United Services Automobile
Association, CBM2019-00002, Paper No. 16 (P.T.A.B. Aug.
26, 2019). The PTAB also denied initiation as to Wells
Fargo's related Petition for Inter Partes Review
of the '090 Patent. Decision, Wells Fargo Bank, N.A.
v. United Services Automobile Association,
IPR2019-00815, Paper No. 17 (P.T.A.B. Aug. 26, 2019).
Fargo now brings the instant Motion under Federal Rule of
Civil Procedure 56 that the claims of the Patents-in-Suit are
directed at patent-ineligible subject matter.
The Asserted Patents and Claims
asserts that Wells Fargo infringes Claims 1-10 and 12-13 of
the '571 Patent and Claims 1-10 of the '090 Patent
(collectively, the “Asserted Claims”). (Dkt. No.
268.) By this Motion, Wells Fargo seeks summary judgment that
each of these Asserted Claims is directed at
patent-ineligible subject matter. The '571 Patent and the
'090 Patent share the same priority date and
Asserted Claims generally relate to the automated capture of
a digital image of a check for deposit using a mobile device.
The '571 Patent and '090 Patent generally claim
systems and methods for capturing check images by monitoring
images for conformance with certain monitoring criteria.
Claim 1 of the '571 Patent is illustrative:
1. A non-transitory computer-readable medium comprising
computer-readable instructions for depositing a check that,
when executed by a processor, cause the processor to:
monitor an image of the check in a field of view of a camera
of a mobile device with respect to a monitoring criterion
using an image monitoring and capture module of the mobile
capture the image of the check with the camera when the image
of the check passes the monitoring criterion; and provide the
image of the check from the camera to a depository via a
communication pathway between the mobile device and the
'571 Patent, Claim 1.
Fargo asserts that Claim 1 of the '090 Patent is
representative for purposes of the Court's analysis. The
Court is not convinced that Wells Fargo has met its initial
burden of showing representativeness. See PPS Data, LLC
v. Jack Henry & Assocs., Inc., __F.Supp.3d__, No.
2:18-cv-00007-JRG, 2019 WL 4745122, at *3-6 (E.D. Tex. Sept.
6, 2019) (“[W]hen a defendant seeks to invalidate
multiple claims based only on allegations relating to a
subset of those claims, the defendant must justify treating
that subset as representative of the other claims.”)
(citing Aqua Prod., Inc. v. Matal, 872 F.3d 1290,
1305 (Fed. Cir. 2017); 35 U.S.C. § 282(a)); id.
at 5 (“Since different patents must generally contain
patentably distinct inventions, it follows that the claims in
one patent will not usually represent all of the inventive
concepts embodied in the claims of another patent.”)
(citing Novartis Pharm. Corp. v. Breckenridge Pharm.
Inc., 909 F.3d 1355, 1362 (Fed. Cir. 2018)).
Accordingly, the Court looks to each independent Asserted
Claim in each Asserted Patent. '571 Patent, Claims 1, 9;
'090 Patent, Claim 1. The Court also looks to the
individual limitations of particular dependent Asserted
Claims to the extent relevant to its analysis.
judgment should be granted “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). Any evidence must be viewed in the light
most favorable to the nonmovant. See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986) (citing
Adickes v. S.H. Kress & Co., 398 U.S. 144,
158-59 (1970)). Summary judgment is proper when there is no
genuine dispute of material fact. Celotex v.
Catrett, 477 U.S. 317, 322 (1986). “By its very
terms, this standard provides that the mere existence of some
alleged factual dispute between the parties will not defeat
an otherwise properly supported motion for summary judgment;
the requirement is that there be no genuine [dispute] of
material fact.” Anderson, 477 U.S. at 247-48.
The substantive law identifies the material facts, and
disputes over facts that are irrelevant or unnecessary will
not defeat a motion for summary judgment. Id. at
248. A dispute about a material fact is “genuine”
when the evidence is “such that a reasonable jury could
return a verdict for the nonmoving party.” Id.
moving party must identify the basis for granting summary
judgment and evidence demonstrating the absence of a genuine
dispute of material fact. Celotex, 477 U.S. at 323.
If the movant bears the burden of proof on an issue at trial,
then the movant “must establish beyond peradventure all
of the essential elements of the claim or defense to warrant
[summary] judgment in [its] favor.” Fontenot v.
Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986).
“If the moving party does not have the ultimate burden
of persuasion at trial, the party ‘must either produce
evidence negating an essential element of the nonmoving
party's claim or defense or show that the nonmoving party
does not have enough evidence of an essential element to
carry its ultimate burden of persuasion at trial.'”
Intellectual Ventures I LLC v. T Mobile USA, Inc.,
No. 2:17-CV-00577-JRG, 2018 WL 5809267, at *1 (E.D. Tex. Nov.
6, 2018) (quoting Nissan Fire & Marine Ins. Co., Ltd.
v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir.
Patent-Eligible Subject Matter
invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefor, subject to
the conditions and requirements of [the Patent Act].”
35 U.S.C. § 101. Since patent protection does not extend
to claims that monopolize the “building blocks of human
ingenuity, ” claims directed to laws of nature, natural
phenomena, and abstract ideas are not patent eligible.
Alice Corp. v. CLS Bank Int'l, 573 U.S. 208, 216
(2014). The Supreme Court instructs courts to distinguish
between claims that set forth patent-ineligible subject
matter and those that “integrate the building blocks
into something more.” Id. at 217. In doing so,
courts apply a two-step test.
the court “determine[s] whether the claims at issue are
directed to a patent-ineligible concept.” Id.
at 218. This “step of the inquiry calls upon us to look
at the ‘focus of the claimed advance over the prior
art' to determine if the claim's ‘character as
a whole' is directed to excluded subject matter.”
Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838
F.3d 1253, 1257 (Fed. Cir. 2016). The court must “tread
carefully in construing this exclusionary principle”
because “[a]t some level, ‘all inventions . . .
embody, use, reflect, rest upon, or apply laws of nature,
natural phenomena, or abstract ideas.'”
Alice, 573 U.S. at 217 (omission in original)
(quoting Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 556 U.S. 66, 71 (2012)). The court must
distinguish “ineligible abstract-idea-based solutions
implemented with generic technical components in a
conventional way from the eligible technology-based solution
and software-based invention that improves the performance of
the computer system itself.” Amdocs (Israel) Ltd.
v. Openet Telecom, Inc., 841 F.3d 1288, 1299 (Fed. Cir.
2016) (internal quotations omitted) . In doing so, the
Court's analysis must be “directly tethered to the
claim language” and should avoid recasting specific
limitations “at a high level of abstraction.”
Solutran, Inc. v. Elavon, Inc., 931 F.3d 1161, 1168
(Fed. Cir. 2019).
if the challenged claims are directed towards a
patent-ineligible concept, the court then “consider[s]
the elements of each claim both individually and ‘as an
ordered combination' to determine whether the additional
elements ‘transform the nature of the claim' into a
patent eligible application.” Alice, 573 U.S.
at 217 (quoting Mayo, 566 U.S. 66, 78-79 (2012)).
This step is satisfied when the claim limitations contain an
inventive concept that “involve[s] more than
performance of ‘well-understood, routine, [and]
conventional activities previously known to the
industry.'” Content Extraction &
Transmission LLC v. Wells Fargo Bank, Nat'l
Ass'n, 776 F.3d 1343, 1347-48 (Fed. Cir. 2014)
(quoting Alice, 573 U.S. at 225). The Federal
Circuit has explained that “[w]hile the ultimate
determination of eligibility under § 101 is a question
of law, like many legal questions, there can be subsidiary
fact questions which must be resolved en route to the
ultimate legal determination.” Aatrix Software,
Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1128
(Fed. Cir. 2018). As such, “[t]he question of whether a
claim element or combination of elements is well-understood,
routine, and conventional to a skilled artisan in the
relevant field is a question of fact” that must be
“proven by clear and convincing evidence.”
Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed.
is not necessarily well-understood, routine, and conventional
simply because it is disclosed in a prior art reference.
Exergen Corp. v. KAZ USA, Inc., 725 Fed.Appx. 959,
965-66 (Fed. Cir. 2018). There are many obscure references
that may qualify as prior art but are insufficient to
establish something is a “well-understood, routine, and
conventional activity previously engaged in by scientists who
work in the field.” Mayo, 566 U.S. at 79.
Accordingly, determining “[w]hether a particular
technology is well-understood, ...