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Solutran, Inc. v. Elavon, Inc.

United States Court of Appeals for the Federal Circuit

July 30, 2019, Decided

2019-1345, 2019-1460

Opinion

 [*1163]  Chen, Circuit Judge.

U.S. Bancorp and its affiliate Elavon, Inc. (collectively, U.S. Bank) appeal orders in the United States District Court for the District of Minnesota (1) denying U.S. Bank's motion for summary judgment that claims 1-5 of U.S. Patent No. 8,311,945 ('945 patent), assigned to Solutran, Inc. (Solutran), are invalid under 35 U.S.C. § 101 for failing to recite patent-eligible subject matter and (2) granting Solutran's motion for summary judgment that Solutran's products infringe claims 1-5 of the '945 patent. Solutran cross-appeals, arguing that the district court abused its discretion when it denied Solutran the ability to amend its complaint [**2]  to include a claim for willful infringement after the deadline set out in the scheduling order.

Because we agree with U.S. Bank that claims 1-5 of Solutran's patent are invalid under § 101, we reverse.

Background

A. The '945 Patent

The '945 patent, issued in 2012, describes a system and method for processing paper checks. '945 patent. The patent explains that in the past, the payee would transport the check to his or her own bank to be read and processed, then the payee's bank would transport the check to the payor's bank, where it also would be read and processed. Id. at col. 1, ll. 30-39. At this point, the payor's bank would debit the payor's account and transfer the money to the payee's bank, which would credit the payee's account. Id. at col. 1, ll. 39-45.

The Background section of the '945 patent explains that the digital age ushered in a faster approach to processing checks, where the transaction information—e.g., amount of the transaction, routing and account number—on the check is turned into a digital file at the merchant's point of sale (POS) terminal. Id. at col. 1, l. 51 - col. 2, l. 8, col. 4, ll. 51-58 (at the point of purchase, "the merchant keys, or applies amount captured at POS, into the terminal the amount of the purchase" [**3]  and "passes the  [*1164]  check through a MICR (magnetic ink character recognition) reader to capture the consumer's account number, routing number of the financial institution holding the account, and the check number"). The digital check information is sent electronically over the Internet or other network, id. at col. 1, ll. 54-61, and the funds are then transferred electronically from one account to another. Id. at col. 2, ll. 5-8. By converting the check information into digital form, it no longer was always necessary to physically move the paper check from one entity to another to debit or credit the accounts. Id. at col. 2, ll. 1-5. But retaining the checks was still useful for, among other things, verifying accuracy of the transaction data entered into the digital file. Id. at col. 2, ll. 11-15. It was well-known that merchants could optionally capture a digital image of the check at the point of purchase. Id. at col. 2, ll. 61-63, col. 4, ll. 58-59, FIG. 1; see also id. at col. 2, ll. 30-31 ("The original check can be scanned and its digital image stored for later use . . . .").

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931 F.3d 1161 *; 2019 U.S. App. LEXIS 22516 **; 2019 U.S.P.Q.2D (BNA) 281076; 2019 WL 3418471

SOLUTRAN, INC., Plaintiff-Cross-Appellant v. ELAVON, INC., U.S. BANCORP, Defendants-Appellants

Subsequent History: US Supreme Court certiorari denied by Solutran, Inc. v. Elavon, Inc., 2020 U.S. LEXIS 1852 (U.S., Mar. 23, 2020)

Prior History:  [**1] Appeals from the United States District Court for the District of Minnesota in No. 0:13-cv-02637-SRN-BRT, Judge Susan Richard Nelson.

Solutran, Inc. v. U.S. Bancorp & Elavon, Inc., 2017 U.S. Dist. LEXIS 194336 (D. Minn., Nov. 27, 2017)

Disposition: REVERSED.

CORE TERMS

abstract idea, checks, merchant's, processing, scanning, inventive, digital, patent, district court, recite, capture, electronically, crediting, steps, patent-eligible, conventional, infringement, transform, scanner, subject matter, machine-or-transformation, explains, images, stored

Patent Law, Jurisdiction & Review, Standards of Review, De Novo Review, Subject Matter