Claims Directed at Longstanding Commercial Practices Do Not Pass Step One of the § 101 Test

ELECTRONIC COMMUNICATION TECHNOLOGIES, LLC v. SHOPPERSCHOICE.COM, LLC

Before Prost, Dyk, and Wallach.  Appeal from the United States District Court for the Southern District of Florida.

Electronic Communication Technologies, LLC (“ECT”) sued ShoppersChoice.com, LLC (“SC”) for patent infringement of U.S. Patent No. 9,373,261 (“the ’261 patent”).  SC moved for judgment on the pleadings that claim 11 of the ’261 patent was invalid under 35 U.S.C. § 101. The district court granted the motion. ECT appealed to the Federal Circuit, which affirmed the invalidity of claim 11.

The ’261 patent recites a delivery notification system for goods. Claim 11 specifically recites the delivery notification system in terms of its hardware and software components and their function. The district court found claim 11 invalid under Section 101 because “claim 11 is directed to the abstract idea of providing advance notification of the pickup or delivery of a mobile thing” and “does not include an inventive concept.” The Federal Circuit agreed, applying the two-step Alice/Mayo test. The Federal Circuit reiterated that claims directed to longstanding commercial practices do not pass step one of the test, and found that the idea of providing advance notification of the pickup or delivery of a mobile thing was a longstanding commercial practice. The Court also found that Claim 11 failed step two of the test because it “did not include an inventive concept sufficient to transform the claimed abstract idea into a patent eligible application.”

ECT argued that the enhanced security protocols of its delivery notification system, the speed with which the ’261 patent received allowance from the USPTO, and ECT’s good faith in requesting that the USPTO check § 101 eligibility during prosecution should make claim 11 patent eligible. The Federal Circuit found these arguments unpersuasive. Finally, ECT argued that the district court erred in finding Claim 11 ineligible without engaging in claim construction. The Federal Circuit also rejected this argument, because ECT did not propose a single term that it believed required construction. Thus, the Federal Circuit affirmed the invalidity of Claim 11 of the ’261 patent.

Editor: Paul Stewart