Automating Background Checks Held Patent Ineligible Under § 101

MILLER MENDEL, INC. V. CITY OF ANNA, TEXAS

Before Moore, Stoll, and Cunningham. Appeal from the United States District Court for the Eastern District of Texas.

Summary: No live controversy existed over patent claims omitted from infringement contentions prior to a judgment on the pleadings.  Claims remaining in controversy were invalid under § 101.

Miller Mendel, Inc. (“Miller Mendel”) alleged that the City of Anna, Texas (“City”) infringed its patent claims directed to software for managing pre-employment background investigations.  The district court granted City’s motion for judgment on the pleadings, holding Miller Mendel’s patent claims invalid under 35 U.S.C. § 101.  Miller Mendel appealed.  On cross appeal, City argued that the district court erred in limiting the invalidity judgment to only claims 1, 5, and 15 of the patent.

First, the Federal Circuit held that the district court properly declined to invalidate claim 9 of the patent.  Miller Mendel served infringement contentions before the district court’s invalidity decision.  The contentions did not allege infringement of claim 9.  Thus, the district court lacked subject-matter jurisdiction over claim 9.

Second, the Federal Circuit affirmed the district court’s invalidity judgment.  Applying Alice step one, the Federal Circuit held that the claims were directed to the abstract idea of performing a background check.  Applying step two, the claims recited no inventive concept because they required only routine computer and network functionality.

Editor: Sean Murray