IP Law Daily Inventor’s method patent on payroll processing was patent-ineligible abstract idea
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Wednesday, July 13, 2016

Inventor’s method patent on payroll processing was patent-ineligible abstract idea

By Mark Engstrom, J.D.

A federal district court did not err in dismissing an infringement action by the named inventor of a patent on a method of processing the payrolls of public-works contractors, the U.S. Court of Appeals for the Federal Circuit has ruled. Because the patent claims were directed to a patent-ineligible abstract idea, the judgment of the district court was affirmed (Shortridge v. Foundation Construction Payroll Service, LLC, July 13, 2016, per curiam).

Douglas Shortridge, the named inventor of U.S. Patent No. 8,744,933, brought patent infringement claims against Foundation Construction Payroll Service LLC, d/b/a payroll4construction.com; Foundation Software, Inc.; and Associated Builders and Contractors, Inc. The asserted patent claimed a method of processing payrolls for public-works construction companies. The method generated certified payroll records (CPRs) for relevant jurisdictions "in conjunction with and simultaneous with" core payroll processing.

The district court dismissed the action on the ground that the patent claims failed to satisfy the Alice test for patent eligibility. Under the two-step Alice test, courts first determined whether the claims at issue were directed to a patent-ineligible concept, such as an abstract idea. If they were, courts then looked at the claims for "something more" by examining their elements to determine whether the claims contained an "inventive concept" that was sufficient to transform the abstract idea into a patent-eligible application.

The district court found that the patent in suit was directed to the abstract idea of "cataloging labor data," a finding that the inventor did not dispute. Instead, the inventor heavily relied on the generation of CPRs "in conjunction with and simultaneous with" core payroll processing. However, that feature did not confer patent eligibility, according to the court.

Significantly, the district court found that the computer components that were contemplated by the patent in suit were conventional components that were known to the industry at the time of the patent. Relying on a computer to perform routine tasks more quickly or more accurately was insufficient to render a claim patent eligible, the court Federal Circuit explained. Further, the use of a computer to create electronic records, track multiple transactions, and issue simultaneous instructions was not an inventive concept.

The inventor argued that: (1) the "one size fits all" algorithm of the patent in suit was an inventive concept and (2) that concept provided "something more" underAlice. The court was unpersuaded.

According to the court, a process that employed mathematical algorithms to manipulate existing information to generate additional information was, without additional limitations, patent ineligible. Similarly, the fact that the patent claims specifically described the algorithm as one that would be used for public works projects across multiple jurisdictions was insufficient. Limiting an abstract idea to a single field of use did not make the concept patentable, the court explained.

Finally, the inventor noted that the asserted patent claims recited the use of a relational database. Nevertheless, the inventor did not argue—and the patent’s written description did not support—the idea that the claimed database was used to solve a uniquely technical problem.

For those reasons, the court concluded that an inventive concept was not claimed in the patent, whether the court considered the claim limitations individually or as an ordered combination.

The case is No. 2015-1898.

Attorneys: Daniel McMullen, Veronica Lambillotte, and Jennifer Buckey Wick (Calfee, Halter & Griswold, LLP) for Foundation Construction Payroll Service, LLC; Foundation Software, Inc.; and Associated Builders and Contractors, Inc.

Companies: Foundation Construction Payroll Service, LLC, d/b/a payroll4construction.com; Foundation Software, Inc.; Associated Builders and Contractors, Inc.

MainStory: TopStory Patent FedCirNews

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