PTAB Ruling on Patent Eligible Subject Matter

PTAB Ruling on Patent Eligible Subject Matter (Article 10)

A recent ruling by the Patent Trial and Appeal Board (PTAB) sheds light on the eligibility of certain business methods and processes for patent protection. The PTAB ruled that the patent claims for a system of scanning receipts, encrypting the data and transmitting the information to a cloud server, developed by DataTreasury, were directed to an abstract idea, and therefore do not qualify as patent-eligible subject matter.

DataTreasury held a patent for a system that collects electronic transactions, or receipts, from various activities, stores that information on a general computer and then moves the information to a cloud service. The PTAB described the patent claims asserted by the plaintiff as “transferring [encrypted] information from one location to another.” This characterization, according to the court, amounted to an abstract idea. DataTreasury attempted to depict their processes as utilizing physical objects, such as scanners, to control the imaging of the documents onto their system. The PTAB clarified that the use of physical objects to implement a system does not impede a finding that the practice is an abstract idea.

The PTAB also dismissed the plaintiff’s second assertion that because other patents for encryption related services have been granted, then encryption was not inherently an abstract idea. It clarified that those claims contained certain limitations that qualified the abstract idea of the encryption method. The system patented by the plaintiff, however, could be utilized with generic hardware, and therefore did not require any specialized mechanisms for implementation.

The eligibility of subject matter for patent protection is an increasingly complex and relevant issue in light of the proliferation of technology and software related patents. These matters require the consultation of an expert in the areas of patent requirements and registration. Leon E. Jew is an experienced intellectual property attorney with broad knowledge in patent prosecution, trademark and copyright registration, intellectual property litigation, and business immigration matters. Contact Jew & Associates at (925) 463-3288 or visit Jew & Associates online to schedule a consultation.