PTAB

CBM2013-00016

HArLand Clarke Corp v. EZShield Inc

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: System and Method for Providing Recovery for Victims of Check Fraud
  • Brief Description: The ’637 patent discloses a computer-implemented method for providing financial recovery to victims of check fraud. The method involves a consumer ordering checks along with a "check fraud protection" service, the provider printing the checks and recording their numbers in a database, the consumer later submitting a notification of fraud and a written limited power of attorney, and the provider issuing a reimbursement.

3. Grounds for Unpatentability

Ground 1: Claims 1-10 are Unpatentable Under 35 U.S.C. §101

  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that claims 1-10 are directed to the abstract idea of reimbursing a victim of check fraud in exchange for an assignment of the victim's recovery rights, using a well-known legal instrument. The claimed steps—receiving an order, printing checks, recording data, receiving fraud notification, receiving a power of attorney, and issuing reimbursement—were asserted to be merely conventional activities that describe "how business should be conducted." Petitioner contended that the method is a fundamental economic practice and that tying it to a physical document (the power of attorney) does not make it patent-eligible.
    • Key Aspects: The petition emphasized that the terms "computer-implemented" and "database" were added late in prosecution to overcome §101 rejections and do not salvage the claims. It was argued that these terms represent nominal machine involvement, as the specification provides no detail on a specific machine or how a computer is integral to the process. Petitioner asserted the method does not transform any article into a different state or thing, as the legal relationship change is not a patent-eligible transformation.

Ground 2: Claims 1-10 are Unpatentable Under 35 U.S.C. §112

  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that if the preamble term "computer implemented" is deemed limiting, the claims fail the written description and enablement requirements of §112. The as-filed specification allegedly contained no disclosure of a computer, software, processor, or algorithm, and thus failed to show the inventor was in possession of a "computer implemented" invention. It was further argued that the patent provides no guidance on how to make and use the claimed method on a computer, lacking even a basic flowchart, thus requiring undue experimentation.
    • Key Aspects: The petition also asserted an indefiniteness challenge under §112, arguing that it is impossible to determine from the claims or specification which of the method steps are required to be "computer-implemented" versus performed by a human. This ambiguity allegedly fails to apprise a person of ordinary skill in the art (POSA) of the scope of the invention.

Ground 3: Obviousness over Carney, Farnsworth, DesignerChecks.com, and Pine - Claims 1-10 are obvious over Carney in view of Farnsworth, DesignerChecks.com, and Pine

  • Prior Art Relied Upon: Carney (Patent 6,181,814), Farnsworth (a 1960 article titled “Insurance Against Check Forgery”), DesignerChecks.com (a 2001 website archive), and Pine (Application # 2002/0032648).

  • Core Argument for this Ground:

    • Prior Art Mapping: Petitioner alleged the combination of these references teaches all limitations of the challenged claims. Carney was cited for teaching a computer-implemented system for detecting check fraud that involves printing checks and storing related information in a database. DesignerChecks.com was cited for showing a well-known online system for consumers to order personal checks that included a "Fraud Alert" protection service. The core financial transaction was taught by Farnsworth, which described the long-standing practice of an insurer reimbursing a victim for check forgery in exchange for an assignment of the victim's right of recovery against the responsible financial institution. This assignment in Farnsworth was argued to perform the same function as the claimed "limited power of attorney."
    • Motivation to Combine (for §103 grounds): A POSA seeking to create a comprehensive check fraud protection service would combine the computerized check printing and database management of Carney with the online ordering system of DesignerChecks.com. To enhance this service beyond mere detection, a POSA would be motivated to incorporate the well-established reimbursement-for-assignment model described in Farnsworth. Should the exact phrase "power of attorney" be required, it would have been obvious to use the limited power of attorney from Pine, which teaches its use in the analogous field of credit card processing, as a known legal instrument to implement Farnsworth’s assignment of rights.
    • Expectation of Success (for §103 grounds): A POSA would have had a high expectation of success, as the combination merely applies known business practices and technical systems for their predictable and intended purposes in the field of financial services.

  • Additional Grounds: Petitioner asserted additional obviousness challenges based on various other combinations of the above references, as well as in further view of a DOJ Fraud Bulletin (for adding steps like filing a police report) and Wilkinson (Patent 5,863,074) (for applying the method to personal checking accounts).

4. Key Claim Construction Positions

  • "computer implemented": Petitioner argued this preamble term is not limiting. Alternatively, if it is limiting, the term is insolubly ambiguous because the specification provides no guidance on what is actually performed by a computer. This construction was central to the §101 and §112 invalidity arguments.
  • "database": Proposed construction was "a collection of data arranged for ease of retrieval." Petitioner argued this term does not necessarily require a computer database and could be interpreted as a traditional paper filing system, thus failing to tie the claims to a specific machine.
  • "written limited power of attorney...": Proposed construction was "a tangible document that enables the receiving entity to pursue an appropriate action against the responsible party or parties." This construction equates the term with the function of an "assignment of rights," which was critical for mapping the claims onto the Farnsworth reference.

5. Key Technical Contentions (Beyond Claim Construction)

  • Petitioner contended that the ’637 patent is not directed to a "technological invention" and is thus subject to Covered Business Method (CBM) review. The argument was that the late addition of generic terms like "computer-implemented" and "database" to the claims does not represent a novel and unobvious technological feature or solve a technical problem with a technical solution. Instead, it was argued to be a superficial application of general-purpose computing to an abstract business concept.

7. Relief Requested

  • Petitioner requests institution of a CBM review and cancellation of claims 1-10 of the ’637 patent as unpatentable.