Smart Sys v. Chicago Transit: One more sorry decision from the Federal Circuit

The Federal Circuit in Smart Sys v. Chicago Transit decision ( http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/16-1233.Opinion.10-13-2017.1.PDF), again has demonstrated the need to buttress software/process claims with at least some concrete elements.

In this case, the Federal Circuit found the claims were directed to an abstract idea, stating that the claims in issue “are not directed to a new type of bankcard, turnstile, or database, nor do the claims provide a method for processing data that improves existing technological processes.”   Rather, the court found the claims are directed to the collection, storage, and recognition of data, which constitutes an abstract idea.

Claim 14, which the court determined was representative, recites:

A method for validating entry into a first transit system using a bankcard terminal, the method comprising:

downloading, from a processing system associated with a set of transit systems including the first transit system, a set of bankcard records comprising, for each bankcard record in the set, an identifier of a bankcard previously registered with the processing system, and wherein the set of bankcard records identifies bankcards from a plurality of issuers;

receiving, from a bankcard reader, bankcard data comprising data from a bankcard currently presented by a holder of the bankcard, wherein the bankcard comprises one of a credit card and a debit card;

determining an identifier based on at least part of the bankcard data from the currently presented bankcard;

determining whether the currently presented bankcard is contained in the set of bankcard records;

verifying the currently presented bankcard with a bankcard verification system, if the bankcard was not contained in the set of bankcard records; and

denying access, if the act of verifying the currently presented bankcard with the bankcard verification system results in a determination of an invalid bankcard.

Arguably, the first two steps are passively receiving data.  The third step is arguably so high-level that it could be deemed abstract under various theories (e.g., mental steps, humanly performable with pen and paper, conventional computer, or well-known economic activity).  The fourth step could arguably be cast as a yes/no decision that falls into abstractness on similar grounds.  The fifth and sixth steps are more active, but are recited at such a high-level as to sound non-technical.  Had these claims been presented from the perspective of explicitly reading a bankcard using a on-site device, and controlling physical access to a transit system, through for example a turnstile, it is less likely that the claims would have been dismissed as claiming an abstract idea.  

On the other hand, it would be much preferred if inventions such as this, that provide a very practical solution to a big technical problem, did not have to meet a standard of utility and eligibility that exceeds other technologies.

Thanks to Joe Wang of Schwegman, Lundberg & Woessner, P.A., for this analysis.

 

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