By Kevin M. Finson, J.D.
Collecting mortgage application information from potential borrowers over the Internet was an abstract idea that merely applied the ordinary process of gathering information using conventional computer components.
Collecting mortgage application information over the internet was a patent-ineligible abstract idea, the U.S. court of Appeals for the Federal Circuit has held. A district court’s decision finding the claims invalid was affirmed. However, the district court was within its discretion to determine that a party asserting otherwise did not produce an "exceptional" case for purposes of the Patent Act’s fee-shifting provision. Therefore, the Federal Circuit also affirmed the district court’s decision to deny a defendant’s motion for attorney fees (Mortgage Application Technologies, LLC v. MeridianLink, Inc., January 12, 2021, Clevenger, R.).
Mortgage Application Technologies, LLC (MAT) was the assignee of U.S. Patent No. 8,548,902 (the ’902 patent), which was directed to an online loan origination service for creating and populating loan applications. MAT filed suit against MeridianLink, Inc. (Meridian) for alleged infringement, and Meridian took the position that the patent was ineligible as an abstract idea and moved for judgment on the pleadings. The trial court granted judgment on the pleadings to Meridian. After judgment, Meridian moved for attorney’s fees under 35 U.S.C. § 285, claiming that this was an exceptional case. The trial court declined to award fees. Both parties appealed to the Federal Circuit, which applied the two-step Alice test.
Claim construction. As a preliminary matter, MAT argued that the trial court should not have entered judgment prior to claim construction. The court held that neither party had advanced a proposed claim construction, so there was no dispute about claim construction and therefore no reason to withhold judgment.
Abstract idea. The court determined that the ’902 patent described a process which could be, and had been, performed by humans without the aid of computers. Adding computers to the process, when the computer technology itself was generic and conventional, did not make the process of storing and exchanging information any less abstract. As a result, the patent was directed to ineligible subject matter under step one of the Alice test.
Inventive concept. The patent did not contain any technological advancements or other changes which could be construed as an inventive concept. MAT argued that the patent described a way to use multiple pieces of non-compatible third-party software by transferring information from one format to another. The court determined that this argument merely described an idea, with no information in the patent describing how that would be achieved. For that reason, the patent did not possess an inventive concept under step two of the Alice test.
Attorney fees. Meridian argued that the case was exceptional because MAT had a weak litigating position, offered a nuisance-value settlement, and failed to advance the case on the merits. Although the trial court could have inferred abusive litigation tactics from those facts, it was not required to do so. The trial court considered them as part of the totality of the circumstances, and the Federal Circuit saw no reason to disturb the findings below.
This case is No. 20-1504.
Attorneys: Stephen M. Lobbin (SML Avvocati P.C.) for Mortgage Application Technologies, LLC. Rudolph A. Telscher (Husch Blackwell LLP) for MeridianLink, Inc.
Companies: Mortgage Application Technologies, LLC; MeridianLink, Inc.
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