In CyberSource Corporation v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011), the Federal Circuit provides additional guidance on patentable subject matter stating that when a method can be performed mentally, or where the method is the equivalent of human mental work, such methods recite unpatentable abstract ideas. The appeal was decided on August 16, 2011 and involved U.S. Patent No. 6,029,154 which, in part, recites a “method and system for detecting fraud in a credit card transaction between [a] consumer and a merchant over the Internet.” CyberSource Corporation (“CyberSource”) initiated this lawsuit against Retail Decisions, Inc. (“Retail Decisions”) in August 2004.
After the Federal Circuit issued its opinion in In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) setting forth the machine-or-transformation test as the exclusive test for patentability of a claimed process, Retail Decisions moved for summary judgment in the district court on invalidity grounds. The district court found that one of the two asserted claims recited an unpatentable mental process for collecting data and weighing values. With regard to the other asserted claim, the district court held that simply appending “[a] computer readable medium containing program instructions” to an otherwise non-statutory process claim was insufficient to make it statutory. CyberSource appealed to the Federal Circuit in April 2009.
The Federal Circuit affirmed the district court’s decision. While the Supreme Court in Bilski v. Kappos, --- U.S. --- (2011), rejected the machine-or-transformation test as the exclusive test for patentability of a claimed process, it did not define what constitutes a patentable process beyond pointing to the definition of “process” in 52 USC § 100(b) and looking to the guideposts of unpatentable subject matter (i.e. laws of nature, physical phenomena and abstract ideas). Here, the Federal Circuit held that the asserted claims both failed to meet the machine-or-transformation test and recited unpatentable subject matter in that they were drawn to a mental process, a subset of unpatentable abstract ideas. Citing Gottschalk v. Benson, 409 U.S. 63 (1972), the Federal Circuit further stated that when a method can be performed mentally, or where the method is the equivalent of human mental work, such methods recite unpatentable abstract ideas.