PTAB

CBM2014-00051

First Banking Services Inc v. Segin Software LLC

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1. Case Identification

2. Patent Overview

  • Title: METHOD OF SETTLING A REAL ESTATE TRANSACTION AND SYSTEM IMPLEMENTING THE METHOD
  • Brief Description: The ’939 patent discloses a computer-implemented method and system for tracking and verifying financial transactions involved in a real estate settlement. The system is designed to automate the process of monitoring fund transfers, comparing them against anticipated transactions from closing documents, and alerting users to discrepancies.

3. Grounds for Unpatentability

Ground 1: Unpatentability Under §101 - Claims 1-10 are directed to patent-ineligible subject matter.

  • Legal Basis: Claims 1-10 are unpatentable under 35 U.S.C. §101 as being directed to an abstract idea without an inventive concept.
  • Core Argument for this Ground:
    • Abstract Idea: Petitioner argued that the challenged claims are directed to the fundamental and well-known abstract idea of tracking and verifying the progress of a financial transaction, specifically in the context of a real estate closing. Petitioner contended that the claimed steps—such as storing data from a HUD-1 form, initiating fund transfers, tracking their completion, comparing results, and alerting users—are mental processes and routine business practices that could be performed by a person using human actions and mental activity.
    • Lack of Inventive Concept: Petitioner asserted that the claims fail to add “significantly more” to the abstract idea. The recitation of generic computer components, such as a “database” and a “computer system,” was argued to be nothing more than the application of conventional technology to a known business practice. Petitioner maintained that these components are not tied to any specific, novel machine and merely provide a generic technological environment for the abstract process. The argument emphasized that the claims do not improve computer functionality or solve a technical problem, but rather use a computer to perform routine data gathering and comparison.
    • Machine-or-Transformation Test: As a corroborating argument, Petitioner contended that the claims fail the machine-or-transformation test. The claims were not tied to a particular machine but rather a general-purpose computer, and the claimed steps involved mere data manipulation (storing, selecting, comparing) which does not constitute a physical transformation of an article into a different state or thing.

Ground 2: Unpatentability Under §112, First Paragraph - Claims 1-10 lack adequate written description.

  • Legal Basis: Claims 1-10 are unpatentable under 35 U.S.C. §112, first paragraph, for failing to provide adequate written description for certain claim limitations.
  • Core Argument for this Ground:
    • Unsupported Limitations: Petitioner argued that the patent specification fails to demonstrate that the inventors were in possession of the full scope of the claimed invention as of the filing date. This argument centered on key limitations that were added during prosecution to overcome rejections.
    • “Expecting Payments”: The claim limitation of “automatically initiating in real time a fund transferring action defined by...expecting payments” was alleged to be without support. Petitioner asserted that while the specification describes initiating disbursements, it provides no disclosure, figures, or guidance regarding the process of automatically initiating an action for an expected payment.
    • Specific Alerting Condition: The limitation requiring “alerting in real time a user...when said tracked result differs from said data representative of an associated one of said at least one anticipated transaction” was also challenged. Petitioner argued that while the specification generically discloses alerting for fraud or incorrect deposits, it lacks specific support for an alert triggered by a comparison between a tracked transaction result and the corresponding anticipated transaction data from a HUD-1 form.

Ground 3: Unpatentability Under §112, Second Paragraph - Claims 1-10 are indefinite.

  • Legal Basis: Claims 1-10 are unpatentable under 35 U.S.C. §112, second paragraph, because they fail to particularly point out and distinctly claim the subject matter.
  • Core Argument for this Ground:
    • Ambiguity of “Real Time”: Petitioner contended that the repeated use of the phrase “real time” (e.g., “initiating in real time,” “tracking in real time”) renders the claims indefinite. The specification allegedly provides no clear definition, instead using the term “near real-time” once, leaving a person of ordinary skill in the art (POSITA) unable to determine the temporal scope of the claimed actions with reasonable certainty.
    • Unclear Scope of “Tracked Result”: The limitation regarding the “completion of each of said initiated fund transferring actions whereby a tracked result is generated” was argued to be unclear. Petitioner asserted that this language, added during prosecution, fails to clarify what constitutes completion or what the "tracked result" specifically is, creating ambiguity as to when the claimed detection and comparison steps occur.
    • Human vs. Computer Implementation: A central indefiniteness argument was that the claims are unclear as to which steps are performed by the computer system versus by a human. Because many steps could be performed manually, a POSITA would be unable to discern the boundaries of the claimed method and determine which actions are computer-implemented versus merely human activity assisted by a generic computer.

4. Relief Requested

  • Petitioner requested institution of a Covered Business Method Patent review and cancellation of claims 1-10 of the ’939 patent as unpatentable under 35 U.S.C. §101 and §112.