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`Exhibit 2
`Defendants’ Motion for Summary Judgment of Invalidity
`(Redacted), Island Intellectual Property LLC, v. TD Ameritrade,
`Inc., et al., No. 2:21-cv-273 (E.D. Tex. filed July 20, 2022)
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`ISLAND INTELLECTUAL PROPERTY LLC,
`
`Plaintiff,
`
`v.
`
`TD AMERITRADE, INC.,
`TD AMERITRADE CLEARING, INC.,
`TD AMERITRADE TRUST COMPANY,
`TD AMERITRADE HOLDING CORP., and
`THE CHARLES SCHWAB CORPORATION,
`
`Defendants.
`
`
`
`
`Civil Action No. 2:21-cv-00273-JRG
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`DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT OF INV ALIDITY UNDER 36
`U.S.C. § 101
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`TABLE OF CONTENTS
`I. INTRODUCTION .............................................................................................................. 1
`II. STATEMENT OF ISSUES TO BE DECIDED BY THE COURT ................................... 1
`III. STATEMENT OF UNDISPUTED MATERIAL FACTS ................................................. 1
`A. The Patents-In-Suit ................................................................................................. 1
`B. The Prosecution Histories And The 1997 Reserve Insured Deposits Product........ 2
`C. Conventional cash-sweep features in the 1980s and 1990s .................................... 4
`1. Admittedly conventional practices shown by the 1980s Merrill
`Lynch CMA/ISA program .......................................................................... 4
`2. Additional admittedly conventional knowledge ......................................... 7
`IV. LEGAL STANDARD ......................................................................................................... 9
`V. ARGUMENT .................................................................................................................... 12
`A. The Infrastructure-Bank Patents ........................................................................... 12
`1. Alice Step One........................................................................................... 12
`2. Alice Step Two .......................................................................................... 16
`B. The Tiered-Rate Patent ......................................................................................... 24
`3. Alice Step One........................................................................................... 24
`4. Alice Step Two .......................................................................................... 27
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`iii
`TABLE OF AUTHORITIES
`Cases Page(s)
`Accenture Glob. Servs., GmbH v. Guidewire Software, Inc.,
`728 F.3d 1336 (Fed. Cir. 2013)................................................................................................20
`Affinity Labs of Texas, LLC v. DirecTV, LLC,
`838 F.3d 1253 (Fed. Cir. 2016)....................................................................................12, 13, 24
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`573 U.S. 208 (2014) ......................................................................................................... passim
`Apple, Inc. v. Ameranth, Inc.,
`842 F.3d 1229 (Fed. Cir. 2016)................................................................................................27
`Bilski v. Kappos,
`561 U.S. 593 (2010) .................................................................................................................10
`Bluebonnet Hotel Ventures, LLC v. Wells Fargo Bank, N.A.,
`754 F.3d 272 (5th Cir. 2014) ...................................................................................................10
`Content Extraction Extraction & Transmission LLC v. Wells Fargo Bank, Nat.
`Ass’n,
`776 F.3d 1343 (Fed. Cir. 2014)................................................................................................28
`Elec. Power Grp., LLC v. Alstom S.A.,
`830 F.3d 1350 (Fed. Cir. 2016)................................................................................................28
`Enfish, LLC v. Microsoft Corp.,
`822 F.3d 1327 (Fed. Cir. 2016)....................................................................................14, 15, 26
`In re Greenstein,
`774 F. App’x. 1035 (Fed. Cir. 2019) .......................................................................................11
`In re Greenstein,
`774 F. App’x. 661 (Fed. Cir. 2019) .............................................................................11, 26, 30
`Intel. Ventures I LLC v. Erie Indem. Co.,
`850 F.3d 1315 (Fed. Cir. 2017)..........................................................................................20, 23
`Intell. Ventures I LLC v. Cap. One Bank (USA),
`792 F.3d 1363 (Fed. Cir. 2015)..............................................................................13, 20, 25, 30
`Interval Licensing LLC v. AOL, Inc.,
`896 F.3d 1335 (Fed. Cir. 2018)................................................................................................10
`Island Intell. Prop., LLC v. Stonecastle Asset Mgmt. LLC,
`463 F. Supp. 3d 490 (SDNY May 29, 2020) ...........................................................................14
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`Island Intell. Prop. LLC v. StoneCastle Cash Mgmt. LLC,
`2021 WL 1393114 (SDNY Apr. 13, 2021)..............................................................................14
`Miller Mendel, Inc. v. City of Anna,
`2022 WL 1437686 (E.D. Tex. Apr. 14, 2022), appeal filed ..............................................16, 27
`Mortg. Grader, Inc. v. First Choice Loan Servs. Inc.,
`811 F.3d 1314 (Fed. Cir. 2016)..............................................................................11, 12, 20, 23
`OIP Techs., Inc. v. Amazon.com, Inc.,
`788 F.3d 1359 (Fed. Cir. 2015)................................................................................................27
`PersonalWeb Techs. LLC v. Google LLC,
`8 F.4th 1310 (Fed. Cir. 2021) ............................................................................................19, 26
`Simio, LLC v. Flexsim Software Prods., Inc.,
`983 F.3d 1353 (Fed. Cir. 2020)................................................................................................19
`
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`I. INTRODUCTION
`Island asserts three related patents with priority dates in 2002 that relate to holding
`customer funds in insured, interest -bearing aggregated deposit accounts . Island admits it sold a
`similar financial product —Reserve Insured D eposits—beginning in 1997, more than four years
`before the 2002 priority dates. Island admits that this product held client funds in an insured,
`interest-bearing aggregated deposit account at the Chase Manhattan Bank.
`The Patents-In-Suit1 claim improveme nts on the concepts embodied in the prior-art
`Reserve Insured Deposits product . The two “infrastructure-bank” patents add the idea of using
`multiple banks (to obtain extended FDIC insurance), and including a bank “in the infrastructure”
`of the financial en tity receiving the customer funds ( to keep those funds on that entity’s balance
`sheet). The “tiered-rate” patent adds the idea of paying tiered interest rates, i.e. paying different
`rates to clients whose money is held in the same aggregated account.
`All three patents are invalid because the purported improvements are abstract ideas.
`II. STATEMENT OF ISSUES TO BE DECIDED BY THE COURT
`Defendants move pursuant to Fed. R. Civ. P. 56 for summary judgment of invalidity under
`35 U.S.C. § 101 of all asserted claims; the issues to be decided are whether Island’s asserted claims
`are patent-eligible.
`III. STATEMENT OF UNDISPUTED MATERIAL FACTS
`A. The Patents-In-Suit
`1. Island asserts claim 1 of the ’286 patent (the “tiered-rate” patent). Dkt. 81 at 3.
`2. Island asserts claims 18, 23, 27, and 33 of the ’551 patent and claims 19, 21, 23, and 25 of
`the ’821 patent (collectively, “infrastructure-bank” patents) . Dkt. 81 at 3 . The ’821 patent is a
`
`1 U.S. Patent Nos. 7,519,551 (“the ’551 patent) (Ex. 1); 7,933,821 (“the ’821 patent”) (Ex. 2); and
`7,509,286 (“the ’286 patent”) (Ex. 3) (collectively, “Patents-In-Suit”). Dkt. 79 and 81.
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`Close your bank accounti Reserve, founders
`of the worlds first money rnarket fund, is
`proud to announce the worlds first FDIC
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`:
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`
`2
`continuation of the ’551 patent, and they share a common specification. (Compare Ex. 1, the ’821
`patent with Ex. 2, the ’551 patent.)2
`3. For the tiered-rate patent, Island’s priority date is April 12, 2002. (Ex. 24, Plaintiff Island
`Intellectual Property LLC’s Disclosure of Asserted Claims and Infringement Contentions at 7)
`4. For the infrastructure-bank patents, Island’s priority date is February 8, 2002. (Id.)
`B. The Prosecution Histories And The 1997 Reserve Insured Deposits Product
`5. Island’s predecessor ( “The Reserve”)3 offered an initial product called “Reserve Insured
`Deposits” (hereinafter “RID” or “RID product”). (Ex. 4, ’286 patent file history at TXISL-010151-
`53).
`6. The RID product was sold to and used by a retail customer by October 23, 1997. (Id.; Ex.
`5, ’551 FH at TXISL-009022-23, 009028-29.)
`7. Island’s “Reserve Insured Deposits” account
`was advertised as shown to the right in magazines that
`were received in multiple libraries in September 1997.
`(See e.g., Ex. 5 at TXISL-009232-33.)
`8. RID customer acco unts were FDIC -insured
`and interest -bearing, and allowed “unlimited”
`checking as well as “ATM access” and a “VISA Gold
`Check Card.” (Ex. 4 at TXISL -010338-42, TXISL -010331-33; Ex. 5 at TXISL -009233-35,
`009240-42.) 4
`
`2 Unless otherwise noted, exhibits referenced herein are identified in the Declaration of Nicholas
`Brown, filed herewith, as well as the table of exhibits above.
`3 For convenience, TD Ameritrade refers to Island and its predecessors collectively as “Island.”
`4 Island also provided a 1998 news article reporting that it began offering its “Reserve Insured
`Deposits” account in August 1997. (Ex. 4 at TXISL -010334; Ex. 5 at TXISL -009236.) It also
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`9. The RID product swept clients’ funds int o an interest -bearing and FDIC -insured
`aggregated MMDA held at the Chase Manhattan Bank in Reserve’s name for the benefit of its
`customers; “the individual clients did not have accounts at the Chase Manhattan Bank.” (Ex. 5 at
`TXISL-009359, TXISL-009363; see also Ex. 6, Bruce Bent II May 11, 2022 Dep. Tr., 37:7-39:14,
`55:14-56:4, 64:20-65:20, 66:9-67:9.)
`10. The RID product made withdrawals from the aggregated accounts at Chase using
`messengers, to ensure avoidance of regulatory limits on the number of withdrawa ls per month
`from an MMDA. (Ex. 4 at TXISL-010396-97; Ex. 5 at TXISL-009359.)
`11. During prosecution of the infrastructure-bank patents, Island distinguished the RID product
`on the basis that it did not use multiple banks to obtain extended FDIC insurance, and that it used
`only a third -party bank, not a “infrastr ucture” bank that would keep client funds on the balance
`sheet of the financial entity receiving those funds. For example, Island explained:
`The use of multiple banks, each with an FDIC-insured interest-bearing aggregated
`deposit account, with a system for managing deposits to and withdrawals from these
`multiple accounts, coupled with a process for preservation of capital on the deposit-
`accepting banks balance sheet, was not disclosed or suggested by the cited
`Advertisement or the actual implementation by The Reserve.
`(Ex. 5 at TXISL-009369; see also id. at TXISL-009358-60, TXISL-009363-68, TXISL-009384
`(Feb. 19, 2008 Interview Summary); TXISL-009406 (Jan. 16, 2008 Interview Summary); TXISL-
`009414 (May 20, 2008 Interview Summary); TXISL-009436 (“until applicant’s filing in February
`2002, no one developed or even proposed a multi -bank system that retained client funds on the
`balance sheet of the bank associated with the client, and at the same time obtained FDIC insurance
`for large client accounts”); TXISL -009438, TXISL-009442-43 (Bent Declaration distinguishing
`claimed invention from initial single-bank product); Ex. 7, Ivan Zatkovich July 7, 2022 Dep. Tr.,
`
`provided another article stating that “The Reserve introduced an FDIC-insured sweep account for
`the brokerage community in 1997.” (Ex. 4 at TXISL-010337; Ex. 5 at TXISL-009239.)
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`35:19-36:9.)
`12. During prosecution of the tiered -rate patent Island distinguished the RID product on the
`basis that it did not use multiple banks, and did not use tiered interest rates, i.e. it did not pay
`different interest rates to clients whose money was held in the same aggregated accounts. (Ex. 4 at
`TXISL-010394-95, TXISL-10396-404, TXISL-010406 (May 9, 2008 IDS explaining when Island
`“first offered interest rate tiers” and that it was for accounts with “FDIC insurance limited to
`$100,000”), TXISL-010713-14 (Notice of Allowability stating that the tiered interest rate
`limitations distinguished the claims from the RID product).)
`C. Conventional cash-sweep features in the 1980s and 1990s
`1. Admittedly conventional practices shown by the 1980s Merrill Lynch
`CMA/ISA program
`13. There is no dispute that in the 1980s, Merrill Lynch (“Merrill”) described and patented a
`product that swept cash from an investment account into an insured savings account . (Ex. 8,
`Responsive Expert Report of Ivan Zatkovich ¶176.) The parties have referred to this as the Merrill
`Lynch CMA/ISA program or product (the “CMA/ISA product”). (Id.) The patent is U.S. Patent
`No. 4,774,663, which was filed in 1983 and issued Septembe r 27, 1988. (Id.; Ex. 7 at 87:2-17
`(citing Ex. 9, the ’663 patent).)
`14. In the early 1980s, Merrill was a broker -dealer without a bank in its infrastructure. (Ex. 8
`¶¶176-78; Ex. 10, 1988 Wharton Study at 136-37.)
`15. Merrill acquired or established banks in its infrastructure in the 1980s and used its own
`bank(s) in Merrill’s program. (Ex. 10 at 137; Ex. 11, Merrill Lynch & Co., Inc. 1996 Form 10-K
`at TDACS_00266515.) This enabled substantial cost savings. (Ex. 10 at 136-37 (explaining that
`in 1984, Merrill Lynch established a bank in New Jersey that “had dramatic impact on costs.”).)
`16. Merrill’s program swept clients’ funds from thei r Merrill accounts into “money market
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`demand accounts” (“MMDAs”), initially at third party banks and later at Merrill’s own banks (e.g.,
`MLB&T). (Ex. 8 ¶¶118, 121-23, 127-29, 180-81.)
`17. MMDAs were conventional insured and interest-bearing accounts. (Ex. 7 at 38:6-11; Ex.
`8 ¶¶181, 185-86.)
`18. Using multiple banks to provide extended FDIC insurance via the use of a “spill over”
`feature is described was conventional in the 1980s and 90s . For example, Island’s expert has
`explained that
` see also Ex. 9 at 11:15 -19.)
`Published articles and FDIC letters dating from the 1980s also show that using MMDAs at multiple
`banks to extend FDIC insurance was routine and conventional. (Ex. 12, 1983 American Banker
`article at TXISL -002696; Ex. 13, 1987 Letter at TXISL -123143, TXISL -123144 (“The first
`depository institution on the regional listing received by the CMA account customer electing the
`automatic option is the customer’s ‘primary institution’ . . . If additional deposits by the CMA
`account customer would cause the customer’s ISA MMDA deposit balances at each of the first
`two depository institutions on the regional listing to exceed $98,500, the deposit ‘spill -over’
`sequence would continue in the order indicated on the regional listing through a maximum of 23
`ISA MMDAs, each located at a different depository institution”); 5 Ex. 16, 1986 FDIC letter at
`TDACS_00000034.)
`19. Aggregated accounts were also conventional, as admitted by Island’s witnesses:
`• “The inventors did not merely use aggregated accounts in a conventional way,
`like as a clearing account in a money fund sweep, but instead teach about using
`a ‘pooled MMDA’ which was an FDIC-insured and interest-bearing aggregated
`deposit account.” (Ex. 8, ¶210.)
`• “[T]he First City Bank of Texas Insured Savings Program does not teach a
`
`5 Merrill continued to offer similar program functionality throughout the 1990s. (See, e.g., Ex. 14,
`1997 Merrill Fact Sheet at TXISL-002630-31; Ex. 15, 2000 Merrill letter at TXISL-000520.)
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`system that can compute interest independent from a client’s pro rata share in
`an aggregated account. Instead, the program teaches paying the same interest
`rate for all customers in the same omnibus account.” (Id. ¶298);
`• “With the use of aggregated accounts, the conventional interest calculation was
`to apply the same rate on all funds held in the account on a pro rata basis.” (Id.
`¶353).
`20. Providing p ass-through FDIC insurance for funds kept in aggregated accounts was
`understood by those of ordinary skill:
`Q. In the final paragraph, question 40 in Exhibit 1342, it states that the agent may
`pool the funds of several owners into one account, correct?
`A. Correct.
`Q. And it states that if the disclosure rules are satisfied, the funds of each owner
`will be separately insured, right?
`A. That’s correct.
`Q. So based on this, do you agree that a person of ordinary skill in the art in 1999
`would understand that an agent could pool the funds of several owners into one
`account and that those funds would be separately insured if the disclosure rules
`were satisfied?
`A. My understanding of this question 40 is to explain the concept of pass -through
`insurance. I think that’s pretty much basically what it’s describing.
`Q. Right. And a person of ordinary skill in the art as of 1999 would have understood
`the concept of pass-through insurance, right?
`A. Yes.
`(Ex. 7 at 193:12-194:17 (internal objections omitted); Ex. 17, 1999 FDIC Pamphlet.)
`21. Merrill withdrew clients’ funds from the banks in the CMA/ISA program via messenger
`throughout the 1980s and 1990s. (Ex. 8 ¶¶90, 94, 100, 127, 132 .) This shows that this was a
`conventional way to avoid the application of withdrawal limits on certain types of accounts:
`• “Since the individual MMDAs at one depository institution are to be
`consolidated and under the control of Merrill Lynch, transactions by Merrill
`Lynch with the MMDA depository institution must be in person since otherwise
`Merrill Lynch would be subject to an overall limit of six preauthorized or
`automatic transfers (including telephone) per month at each institution.” (Ex.
`18, 1983 Federal Reserve letter at TXISL-001144);
`• “You have i ndicated that all withdrawals by Merrill Lynch from MMDA
`accounts will be made by messenger at the depository institution. Such
`withdrawals would be regarded as in person withdrawals and could be made by
`Merrill Lynch without limit….” (Id. at TXISL-001143);
`• “Deposits and withdrawals for the MMDA are netted daily by Merrill Lynch,
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`as agent and messenger for MMDA holders.” (Ex. 1 9, 1986 Merrill Lynch
`Issuer Guide at TXISL-001172);
`• “Withdrawals from MMDAs are made daily by messengers employed by
`Merrill Lynch as agent for each customer…. [W]ithdrawals by a Merrill Lycnh
`messenger, regardless of the subsequent use of the proceeds by Merrill Lynch,
`would not be subject to the transfer limitations on MMDAs” (Ex. 20, 1988
`Federal Reserve letter at TXISL-000975-76.).
`22. Island’s expert also concedes that Merrill withdrew funds from its MMDAs via messenger
`and that the six-withdrawal limit did not apply to such withdrawals. (See, e.g., Ex. 8 ¶¶90, 94, 100,
`127, 132.)
`23. The Merrill CMA/ISA program used computers and databases to track clie nt funds and
`transactions in the 1980s, as shown for example by the ’663 patent. (Ex. 9 at Abstract, 2:6-3:15;
`11:2-13:64;
` Ex. 7 at 98:19-99:25 (acknowledging that computer variables
`and operations described in the ’663 patent were known in 1983).)
`2. Additional admittedly conventional knowledge
`24. More generally, financial institutions used computers and databases to track clients’ funds
`in the 1980s and 1990s. For example, Island’s expert testified as follows:
`Q. In your opinion, or in your view, did banks track custo mer balances in their
`accounts in databases in 1983?
`A. Yes, that would be my understanding.
`(Ex. 7 at 99:20-25 (internal objection omitted); see also Ex. 8 ¶184.)
`Q. Are the books of -- that are referred to in your answer necessarily electronic?
`A. Not necessarily, but I would say any modern financial institution is going to
`have all their financial ledgers maintained electronically within a database.
`Q. And that was true even in the ’80s and ’90s, right?
`A. That’s correct.
`(Ex. 7 at 153:20-154:7 (internal objection omitted); see also id. at 93:6-94:7, 95:13-96:6, 97:19-
`99:25.)
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`25. Similarly, Island’s expert admits that databases were routine and conventional for tracking
`and billing transactions in the 1980s-90s time frame. For example:
`Q. And you say, from 1987 to 1996, you were at GTE/Verizon Telecom. Do you
`see that?
`A. I do.
`Q. And you developed billing applications and systems f or reconciliation of
`interexchange carrier transactions. Do you see that?
`A. I do.
`Q. Did that work involve databases?
`A. It did.
`Q. Did that work involve customer accounts?
`A. It did.
`Q. Did that work involve tracking balances in customer accounts?
`A. Yes.
`Q. Did it involve tracking credits and debits to customer accounts?
`A. Yes, but the customers were not ind ividual customers. The customers were
`telephone companies. This was doing reconciliation between telephone companies.
`But yes, all the same principles would apply.
`(Ex. 7 at 101:7-102:7.) Island’s expert also admitted that databases were used to track fees
`associated with thousands of events and companies were employing hundreds of employees to
`work on the software used for doing so. (Id. at 104:8-106:4.)
`26. Island’s expert concedes that the tiered interest rate limitation in the ’286 patent is met by
`paying a different interest rate to two different clients having funds in the same account:
`Q. So I believe it’s true -- correct me if I am wrong -- that if you are paying two
`different clients different interest rates out of the same aggregated account, that will
`mean that this independent from the respective client account pro rata share
`limitation in the ’286 patent is met, is that right?
`A. That’s correc t. That would be one method, to become independent from the
`respective client pro rata share.
`…
`Q. … Do you agree that if you are paying at least two different clients different
`interest rates out of the same aggregated account, that the limitation “indepe ndent
`from the respective client account pro rata share” is met?
`A. Yes, I would.
`(Id. at 182:17-183:21 (internal objection omitted).)
`27. Island’s expert admits that it was routine and conventional to use tiered interest rates for
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`individual accounts:
`Q. … I think you agree that prior to the ’286 patent, tiered interest rates were known
`generally, right?
`A. I would consider simple tiered interest rates where a client would receive a
`particular interest rate for a particular product or particular interest rate based on a
`particular status within a product.
`Q. So to be-- let’s be concrete about it. Can you get the ’286 patent out, please.
`…
`Q. And do you see table 1?
`A. I do.
`Q. That gives an example of tiered interest rates, correct?
`A. It does.
`Q. And you agree that tiered interest rates as shown for example in that table were
`known prior to the ’286 patent for individual accounts, correct?
`A. I would say that at the time of the invention, tiered interest rates were practiced
`for individual accounts in a simplistic manner.
`Q. Okay. And the simplistic manner that you’re describing includes, for example,
`what’s shown in table 1, right?
`A. Correct. Again, this indicates perhaps the rate they are going to receive based on
`an average monthly balance held within the account --
`Q. Right.
`A. -- which again is very straightforward to calculate.
`(Id. at 205:12-207:5 (internal objection omitted).) This is confirmed by a 1984 article showing that
`some financial institutions “tiered rates according to deposit size,” paying o ne rate for a $10,000
`deposit, and higher rates for larger deposits. (Ex. 21, 1984 Economic Commentary article at
`TDACS_00266522 & n.6.)
`28. By the 1990s, tiered interest rates were discussed in federal banking regulations. ( Id.; Ex.
`22 at TDACS_00265554-55, TDACS_00265560, TDACS_00265562-63.)
`29. There is no dispute that the steps required to calculate a tiered interest rate were
`straightforward. (Ex. 7 at 212:20-213:10.)
`IV. LEGAL STANDARD
`Summary judgment is proper when there are no genuine issue s of material fact and the
`movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c) . “Summary judgment is
`appropriate if the non-movant ‘fails to make a showing sufficient to establish the existence of an
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`element essential to that party’s case.’” Bluebonnet Hotel Ventures, LLC v. Wells Fargo Bank,
`N.A., 754 F.3d 272, 276 (5th Cir. 2014) (quoting Celotex Corp. v. Catrett , 477 U.S. 317, 322
`(1986)).
`Patent eligibility is a question of law. Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335,
`1342 (Fed. Cir. 2018). 35 U.S.C. § 101 “defines the subject matter eligible for patent protection.”
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). Alice articulated a two-step test
`for patent eligibility. Id. at 217. The court first determines whether the claims are directed to a
`patent-ineligible concept like an abstract idea. Id. If so, the court determines whether the re is an
`“inventive concept” that “ensure[s] that the patent in practice amounts to significantly more than
`a patent upon the [abstract ide a] it self.” Id. at 217-18 (quoting Mayo Collaborative Servs . v.
`Prometheus Lab’ys, Inc., 566 U.S. 66, 73 (2012)).
`Claims directed to fundamental business, financial, and economic practices are not patent
`eligible. Bilski v. Kappos , 561 U.S. 593 , 611 -12 (2010). The Alice patents, for example,
`“disclose[d] a computer -implemented scheme for mitigating ‘settlement risk’ (i.e., the risk that
`only one party to a financial transaction will pay what it owes) by using a third-party intermediary.”
`Alice, 573 U.S. at 212. The Court held that intermediated settlement was a “fundamental economic
`practice long prevalent in our syste m of commerce ” and therefore not paten table. Id. at 219-20
`(quoting Bilski, 561 U.S. at 611).
`The Alice claims also did not “do more than simply instruct the practitioner to implement
`the abstract idea of intermediated settlement on a generic computer. ” Alice, 573 U.S. at 225 .
`Considering the steps as an ordered combination yielded the same result : the claims did not
`improve computer functional ity itself, or improve any other technology or technical field. Id. at
`225-26 (citations omitted).
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`Courts following Alice consistently find claims directed to financial or business practices
`patent-ineligible. For example, the Federal Circuit in In re Greenstein affirmed a PTAB decision
`rejecting Greenstein’s claims to a “method for allocation of investment returns f or at least one
`investor in a collective investment.” 774 F. App’x. 661, 663 (Fed. Cir. 2019). The claims included
`limitations requiring:
`(1) “storing personal information corresponding to the investor in a computerized
`database;”
`(2) “using at least one computer to assign[] an investment return to the investor
`which assigned return is different from the investment return assigned to at least
`one other investor in the collective investment vehicle;” and
`(3) “using at least one computer to track and comput e the transfers between
`investors in the collective investment vehicle.”
`Id. The Federal Circuit found that “the claims are directed to the abstract idea of allocating returns
`to different investors in an investment fund, a fundamental business practice t hat long predates
`computer technology.” Id. at 664. The steps simply automated this practice —the abstract idea—
`via computer. Id. Although Green stein argued that claim limitations required performing
`calculations on a computer in a way that was much faster and more efficient, the Federal Circuit
`rejected this argument and noted that “using a computer to perform arithmetic does not provide an
`inventive concept.” Id. at 665. The Federal Circuit also explained that “i t is well -settled that a
`claimed invention’s use of the ineligible concept to which it is directed cannot supply the inventive
`concept that renders the invention ‘significantly more’ than that ineligible concept ,” because “a
`claim for a new abstract idea is still an abstract idea.” In re Greenstein, 774 F. App’x. 1035, 1038
`(Fed. Cir. 2019) (internal citations omitted).
`Likewise, in Mortg. Grader v. First Choice Loan Servs., Inc., the Federal Circuit affirmed
`a decision finding that claims to the abstract idea of “anonymous loan shopping” were ineligible.
`811 F.3d 1314, 1324-25 (Fed. Cir. 2016). The claims required a database that stored loan package
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