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State St. Bank & Trust Co. v. Signature Fin. Grp.

State St. Bank & Trust Co. v. Signature Fin. Grp.

United States Court of Appeals for the Federal Circuit

July 23, 1998, Decided

96-1327

Opinion

 [***1598]  [*1370]   RICH, Circuit Judge.

Signature Financial Group, Inc. (Signature) appeals from the decision of the United States District Court for the District of Massachusetts granting a motion for summary judgment in favor of State Street Bank & Trust Co. (State Street), finding U.S. Patent No. 5,193,056 (the '056 patent) invalid on the ground that the claimed subject matter is not encompassed by 35 U.S.C. § 101 (1994). See State Street Bank & Trust Co. v. Signature Financial Group, Inc., 927 F. Supp. 502, 38 U.S.P.Q.2D (BNA) 1530 (D. Mass. 1996). We reverse and remand because we conclude that the patent claims are directed to statutory subject matter.

BACKGROUND

Signature is the assignee of the '056 patent which is entitled "Data Processing System for Hub and Spoke Financial Services Configuration." The '056 patent issued to Signature on 9 March 1993, naming R. Todd Boes as the inventor. The '056 patent is generally directed to a data processing system (the system) for implementing an investment structure which was developed [**3]  for use in Signature's business as an administrator and accounting agent for mutual funds. In essence, the system, identified by the proprietary name Hub and Spoke (R), facilitates a structure whereby mutual funds (Spokes) pool their assets in an investment portfolio (Hub) organized as a partnership. This investment configuration provides the administrator of a mutual fund with the advantageous combination of economies of scale in administering investments coupled with the tax advantages of a partnership.

State Street and Signature are both in the business of acting as custodians and accounting agents for multi-tiered partnership fund financial services. State Street negotiated with Signature for a license to use its patented data processing system described and claimed in the '056 patent. When negotiations broke down, State Street brought a declaratory judgment action asserting invalidity, unenforceability, and noninfringement in Massachusetts district court, and then filed a motion for partial summary judgment of patent invalidity for failure to claim statutory subject matter under § 101. The motion was granted and this appeal followed.

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149 F.3d 1368 *; 1998 U.S. App. LEXIS 16869 **; 47 U.S.P.Q.2D (BNA) 1596 ***

STATE STREET BANK & TRUST CO., Plaintiff-Appellee, v. SIGNATURE FINANCIAL GROUP, INC., Defendant-Appellant.

Subsequent History:  [**1]  Certiorari Denied January 11, 1999, Reported at: 1999 U.S. LEXIS 493.

Prior History: Appealed from: U.S. District Court for the District of Massachusetts. Judge Patti B. Saris.

Disposition: REVERSED and REMANDED.

CORE TERMS

subject matter, patent, algorithm, mathematical, calculations, machine, business methods, abstract idea, configuration, invention, portfolio, invalid, financial services, summary judgment, district court, unpatentable, partnership, processing, allocate, concrete, tangible, recited, funds, data processing, mutual fund, arithmetic, numbers, output

Civil Procedure, Summary Judgment, Summary Judgment Review, General Overview, Judgments, Entitlement as Matter of Law, Genuine Disputes, Materiality of Facts, Appeals, Standards of Review, De Novo Review, Governments, Legislation, Interpretation, Patent Law, Jurisdiction & Review, Utility Patents, Product Patents, Machines, Process Patents, Computer Software & Mental Steps, Compositions of Matter, Subject Matter, Manufactures, Computer & Internet Law, Intellectual Property Protection, Patent Protection, Defenses, Inequitable Conduct, Principles & Results