Federal Reserve Bank Of Atlanta v. Bozeman Financial LLC

1. Case Identification

• Case #: CBM2017-00036
• Patent #: 8,768,840
• Filed: January 31, 2017
• Petitioner(s): Federal Reserve Bank of Atlanta, Federal Reserve Bank of Boston, Federal Reserve Bank of Chicago, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Dallas, Federal Reserve Bank of Kansas City, Federal Reserve Bank of Minneapolis, Federal Reserve Bank of New York, Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, Federal Reserve Bank of San Francisco, and Federal Reserve Bank of St. Louis
• Patent Owner(s): Bozeman Financial LLC
• Challenged Claims: 1-20

2. Patent Overview

• Title: Universal Positive Pay Match, Authentication, Authorization, Settlement and Clearing System
• Brief Description: The ’840 patent discloses computer-implemented methods and systems for reducing financial transaction fraud, such as check fraud. The invention centers on a "universal" positive pay database that is accessible to all participants in a payment clearing process, allowing for the verification of transaction data at every point along the clearing path.

3. Grounds for Unpatentability

Ground 1: Claims 1-20 are unpatentable under 35 U.S.C. § 101 as directed to ineligible subject matter.

• Prior Art Relied Upon: This ground is based on §101 and does not rely on a specific prior art combination for anticipation or obviousness. The petition cited numerous prior art references to demonstrate that the hardware and software elements recited in the claims were conventional and well-known at the time of the invention.
• Core Argument for this Ground:
  • Abstract Idea (Alice Step 1): Petitioner argued that all challenged claims are directed to the abstract idea of "collecting and analyzing information and presenting the results," applied to the field of financial transaction fraud detection. This concept was described as a fundamental and long-standing economic practice that can be performed mentally or with pen and paper (e.g., comparing a check ledger to a bank statement). The petition asserted that limiting this abstract idea to the context of financial services does not make it patent-eligible. The core steps recited in independent claim 1—receiving a first record, storing it, receiving a second record, determining a match, and sending a notification—were presented as the quintessential elements of this abstract information-based process.
  • Lack of an Inventive Concept (Alice Step 2): Petitioner contended that the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The recitation of generic computer components—such as a computer, database, network interface, processor, and memory—was argued to be nothing more than an instruction to implement the abstract idea on a conventional computer. The petition emphasized that the patent specification describes these components in generic terms and does not disclose any novel technological improvement to computer functionality itself. The alleged point of novelty, providing "universal" access to all participants in the clearing process, was argued to be recited merely in functional terms without any specific, inventive technical implementation for achieving such access.
  • Dependent Claims: Petitioner argued that the dependent claims fail to add an inventive concept. They were grouped into three categories, all of which were asserted to add only conventional elements:
    • Claims specifying well-known financial information (e.g., check number, amount) and data sources (e.g., point-of-sale terminal, mobile device).
    • Claims specifying well-known financial transaction types (e.g., check payment, credit card payment).
    • Claims reciting minor variations of the abstract processing steps from the independent claims (e.g., archiving, authenticating, compiling a "behavior matrix").
  • Key Aspects: The petition’s central argument was that the ’840 patent claims a business method using generic technology for its intended purpose, which falls squarely within the class of claims deemed abstract by the Federal Circuit. The claims were characterized as merely reciting the "what" of the invention (the idea of universal verification) but failing to disclose any inventive "how" (the specific technology to accomplish it).

4. Key Claim Construction Positions

• Petitioner proposed a construction for the term "behavior matrix," which appears in dependent claims 6, 13, and 20.
  • Proposed Construction: "a table structure containing information relating to financial transaction history."
  • Rationale: This construction was based on the plain and ordinary meaning of "matrix" in the context of computer science at the time of the invention, which referred to a table structure for organizing data. Petitioner argued this is consistent with the specification's description of compiling a "complete historical behavior" of a customer's check writing habits to detect abnormalities.

5. Relief Requested

• Petitioner requested the institution of a Covered Business Method (CBM) review and the cancellation of claims 1-20 of the ’840 patent as unpatentable under 35 U.S.C. § 101.