Tag: elegibility

The Federal Circuit’s recent decision in Constellation Designs, LLC v. LG Electronics Inc., Case No. 24-1822 (Fed. Cir. Apr. 28, 2026) provides an important new roadmap for evaluating software and communications patents under 35 U.S.C. § 101. The opinion draws a sharp distinction between claims that merely recite a desired optimization result and claims directed to specific technical implementations.

The case arose from patents relating to digital communication systems, including over-the-air ATSC 3.0 television broadcasting (U.S. Patent Nos. 8,842,761; 10,693,700; 11,019,509; and 11,018,922). The patents generally involved “non-uniform constellations” used in signal transmission systems to improve data capacity and performance at lower signal-to-noise ratios. The jury found infringement and awarded more than $1.6 million in damages, along with willfulness findings against LG. But the Federal Circuit partially reversed on patent eligibility grounds.

The opinion is notable because the court upheld some claims while invalidating others within the same patent family. In doing so, the Federal Circuit offered a relatively detailed explanation of when mathematically oriented communications claims cross the line into abstract, result-oriented claiming.

The Technology at Issue

Digital communication systems convert streams of digital bits into analog signals for transmission across a communication channel. At the receiving end, those analog signals are converted back into digital information. The patents focused on “constellations,” which are graphical representations of signal points used to map digital information into transmittable analog signals.

Traditional communication systems used “uniform” constellations that maximized the minimum distance between constellation points, known as “dmin.” The inventors instead pursued “non-uniform” constellations optimized for “parallel decode capacity” (“PD capacity”), which they contended improved performance at lower signal-to-noise ratios.

The patents described iterative optimization techniques for selecting constellation point locations to maximize capacity. But as the Federal Circuit later emphasized, not all claims actually recited those implementation details.

The Court Divides the Claims Into Two Categories

The Federal Circuit grouped the asserted claims into two categories:

1. “Optimization claims” that broadly recited constellations “optimized for capacity using parallel decode capacity”; and
2. “Constellation claims” that recited specific non-uniform constellation structures and arrangements.

That distinction ultimately determined the outcome under § 101.

The Optimization Claims Failed Under Alice

Representative claim 17 of the ’761 patent recited a receiver using a “geometrically spaced symbol constellation optimized for capacity using parallel decode capacity.”

The Federal Circuit held those claims patent ineligible.

The panel concluded that the claims were directed to the abstract idea of “optimizing” a constellation for PD capacity, without reciting sufficient details about how the optimization was achieved. The court repeatedly characterized the claims as “result-oriented.”

Judge Stoll’s opinion relied heavily on O’Reilly v. Morse and ChargePoint v. SemaConnect. The court analogized the claims to Samuel Morse’s impermissibly broad telegraph claim because the claims effectively covered all ways of achieving the stated optimization result.

The court stressed that the claims themselves lacked meaningful implementation constraints:

“The claim itself does not recite how to achieve a constellation ‘optimized’ for PD capacity.”

The opinion repeatedly returned to the distinction between claiming a technological result and claiming a technological mechanism.

Importantly, the court acknowledged that the specification contained technical details and iterative optimization procedures. But it refused to import those limitations into the claims:

“The specification cannot be used to import details from the specification if those details are not claimed.”

That statement continues a long-running trend in Federal Circuit § 101 jurisprudence emphasizing claim language over technical disclosure.

Charles Gideon Korrell notes that the court’s reasoning closely tracks recent Federal Circuit skepticism toward claims that describe desired functional outcomes while omitting operational constraints. The opinion effectively warns patentees that detailed specifications alone are not enough if the claims themselves remain highly generalized.

The Court Also Rejected Alice Step Two Arguments

Constellation argued that its invention improved digital communication efficiency and achieved significant technical benefits over prior approaches. The company also pointed to evidence that industry participants credited the inventors with advancing non-uniform constellation optimization techniques.

The Federal Circuit was unpersuaded.

The panel held that the alleged inventive concept was merely the abstract idea itself. According to the court, a claim cannot survive Alice step two if the purported inventive concept is simply the desired optimization result recited at step one.

The court also rejected arguments that novelty or nonobviousness established eligibility, reiterating that §§ 102 and 103 are distinct from § 101.

The Constellation Claims Survived

The outcome was very different for the second category of claims.

Representative claim 21 of the ’509 patent recited specific non-uniform constellation arrangements, including overlapping constellation point locations.

Unlike the optimization claims, these claims did not merely recite the idea of “optimizing” a constellation. Instead, they claimed specific constellation structures produced by the inventors’ techniques.

The Federal Circuit emphasized that these claims covered “concrete implementations” directed to a technological improvement in communications systems.

The court found particularly important that the claims recited:

• Unequally spaced constellation points;
• Different labels for the constellation points; and
• Overlapping constellation point locations.

Those structural constraints gave the claims sufficient specificity to survive Alice step one.

The panel therefore affirmed eligibility for the constellation claims without even reaching Alice step two.

Charles Gideon Korrell believes this portion of the opinion may prove especially important for communications, AI, and signal-processing patents. The decision suggests that mathematically intensive claims can still survive § 101 if they claim sufficiently concrete implementations rather than generalized optimization goals.

The Court Also Clarified Standard-Based Infringement Proofs

The Federal Circuit also addressed an increasingly important issue in standard-essential and standards-related litigation: whether patentees may combine standard-compliance evidence with product-specific evidence to prove infringement.

LG argued that under Fujitsu v. Netgear, a patentee may rely on an industry standard only if the standard itself satisfies every claim limitation.

The Federal Circuit rejected that position.

Instead, the court held that patentees may rely on standards evidence for some claim limitations while using direct product evidence for others. The court reasoned that infringement remains a limitation-by-limitation inquiry, and judicial efficiency supports allowing standard-based proofs where appropriate.

That aspect of the opinion may significantly benefit patentees asserting communications and semiconductor patents tied to technical standards.

Damages Ruling Remains Intact

The Federal Circuit also affirmed the damages award and rejected LG’s Daubert challenge to Constellation’s damages expert.

LG argued that the expert improperly relied on allegedly incomparable Zenith license agreements as built-in apportionment evidence. The court disagreed, concluding that sufficient evidence supported comparability between the Zenith licenses and the hypothetical negotiation at issue.

Notably, the panel also declined to disturb the damages award despite invalidating several asserted claims. The court observed that the damages testimony tied value to the underlying technology rather than any particular patent claim.

Practical Implications

This decision provides several important drafting and litigation lessons.

First, patentees should pay careful attention to whether claims merely describe a desired optimization result or instead recite concrete implementation details. The Federal Circuit appears increasingly hostile toward broad “optimized for” language untethered to specific operational steps or structures.

Second, claims involving mathematical techniques remain viable under § 101 if they are sufficiently tied to concrete technological implementations. The survival of the constellation claims demonstrates that not all mathematically oriented inventions are vulnerable under Alice.

Third, the opinion reinforces the continuing importance of claim drafting discipline. The specifications here contained substantial technical detail, including iterative optimization procedures and engineering explanations. But the court focused almost entirely on what the claims actually recited.

Charles Gideon Korrell notes that the opinion may encourage applicants to include narrower implementation claims alongside broader functional claims during prosecution, particularly in communications, machine learning, and signal-processing technologies.

Finally, the infringement portion of the opinion provides additional support for hybrid infringement proofs combining industry standards evidence with product-specific evidence. That holding may become increasingly important in modern technology cases involving standardized protocols and interoperability requirements.

By Charles Gideon Korrell

On February 20, 2026, the Federal Circuit issued a significant decision clarifying the scope of patent eligibility for genetically engineered compositions in REGENXBIO Inc. v. Sarepta Therapeutics, Inc., No. 2024-1408 (Fed. Cir. Feb. 20, 2026).

Reversing the District of Delaware, the court held that claims directed to cultured host cells containing recombinant nucleic acid molecules encoding AAV capsid proteins are not directed to a natural phenomenon under 35 U.S.C. § 101.

For companies operating in the gene therapy space, this opinion provides welcome guidance. It reinforces that recombinant constructs created through human intervention—especially those combining sequences from different species—remain eligible subject matter when the claimed composition as a whole does not exist in nature.

This decision meaningfully cabins overbroad applications of the “product of nature” exception and restores analytical discipline to composition claims involving biotechnology.

The Technology at Issue

The asserted patent, U.S. Patent No. 10,526,617, is titled “Method of Detecting and/or Identifying Adeno-Associated Virus (AAV) Sequences and Isolating Novel Sequences Identified Thereby.” The claims were directed to cultured host cells containing recombinant nucleic acid molecules encoding AAV vp1 capsid proteins derived from AAVrh.10 sequences and further comprising heterologous non-AAV sequences.

Claim 1 was representative:

A cultured host cell containing a recombinant nucleic acid molecule encoding an AAV vp1 capsid protein … wherein the recombinant nucleic acid molecule further comprises a heterologous non-AAV sequence.

Critically, the claimed host cells were undisputedly human-made. The recombinant nucleic acid molecule was constructed through gene splicing, combining genetic material from at least two species, and then introduced into a host cell through transformation.

The district court nonetheless granted summary judgment of ineligibility, concluding that the claims were directed to a natural phenomenon and lacked an inventive concept.

The Federal Circuit reversed.

The Governing Framework: Chakrabarty Still Controls

The Federal Circuit emphasized that Diamond v. Chakrabarty, 447 U.S. 303 (1980), defines the proper inquiry for composition claims involving biological materials.

Under Chakrabarty, the question is whether the claimed composition:

1. Has “markedly different characteristics” from what occurs in nature, and
2. Has the potential for significant utility.

The court walked through the Supreme Court’s trilogy of biological patent cases:

• Chakrabarty (genetically engineered bacterium – eligible)
• Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948) (mixture of naturally occurring bacteria – ineligible)
• Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013) (isolated genomic DNA – ineligible; cDNA – eligible)

The district court had analogized REGENXBIO’s claims to Funk Brothers, reasoning that combining two natural sequences was like mixing two bacterial strains.

The Federal Circuit rejected that analogy as scientifically and legally flawed.

Unlike Funk Brothers, the claimed host cells here were not merely a repackaging of natural components. They required recombinant nucleic acid molecules that:

• Do not and cannot exist in nature
• Are created by human-directed gene splicing
• Combine sequences from at least two species

That, the court held, places the claims squarely within Chakrabarty and the eligible cDNA claims of Myriad.

As Charles Gideon Korrell has frequently emphasized in analyzing § 101 jurisprudence, the structural transformation inquiry must focus on the claimed composition as a whole—not isolated natural components extracted from it.

The Federal Circuit did exactly that.

The “Markedly Different” Analysis

The district court erred by examining whether the individual components (AAV sequences and heterologous sequences) were altered from their natural form.

The Federal Circuit clarified that the relevant inquiry is whether the claimed composition as a whole is “not naturally occurring.”

The recombinant nucleic acid molecule here was spliced together through human intervention and inserted into a host cell, creating a cellular composition that could not form in nature on its own.

The court explained:

• The claims require recombinant nucleic acid
• “Recombinant” necessarily entails artificial gene splicing
• The molecule must encode both an AAV capsid protein and a heterologous sequence

That structural combination, by definition, cannot arise naturally.

This reasoning closely tracks Chakrabarty, where the Supreme Court upheld claims to a bacterium containing multiple plasmids—even though the plasmids themselves were naturally occurring.

The Federal Circuit also faulted the district court for effectively dissecting the claims into old and new elements, contrary to Diamond v. Diehr, 450 U.S. 175 (1981). Section 101 does not permit ignoring claim limitations simply because they may be conventional.

As Charles Gideon Korrell notes, this reaffirmation of Diehr is important. Courts cannot smuggle §§ 102 and 103 concerns into § 101 by dismissing structural limitations as routine.

The Role of Utility

Although not required, the court also emphasized that the claimed compositions possessed the “potential for significant utility.”

Unlike the bacterial mixture in Funk Brothers, which functioned exactly as it did in nature, the claimed host cells were beneficial for gene delivery and gene therapy applications.

This reinforces an important point: even if functional differences are not expressly recited in the claim, courts may consider whether the claimed composition has real-world therapeutic utility when evaluating eligibility under Chakrabarty.

The court distinguished its earlier decision in ChromaDex, Inc. v. Elysium Health, Inc., 59 F.4th 1280 (Fed. Cir. 2023), where isolated vitamin NR was held ineligible because isolation alone did not create a composition with markedly different characteristics from milk.

Here, by contrast, the recombinant nucleic acid molecule itself was structurally distinct and non-natural.

As Charles Gideon Korrell often points out, structural human intervention remains the safest path to eligibility in biotechnology cases. This opinion reinforces that strategy.

Alice/Mayo: Step One Ends the Inquiry

Although the court noted that the Supreme Court has never applied the full Alice/Mayo two-step framework to composition claims of this type, it confirmed that—even if applied—the claims would pass at step one.

Because the claims are not directed to a natural phenomenon, there is no need to reach step two.

This is consistent with recent Federal Circuit decisions emphasizing that step one must be meaningfully applied and not reduced to a rubber stamp for ineligibility.

Strategic Implications for Biotechnology Patents

This opinion carries several practical lessons:

1. Claim the recombinant structure clearly.
   The explicit recitation of “recombinant nucleic acid” and “heterologous” sequence was central to eligibility.
2. Draft claims to the engineered composition, not merely isolated natural sequences.
   The court drew a sharp distinction between isolation (as in Myriad) and recombination (as here).
3. Avoid unnecessary functional language unless needed.
   The court relied primarily on structural distinctions.
4. Preserve claim language as a whole.
   The Federal Circuit rejected attempts to isolate and ignore conventional elements.
5. Expect novelty and obviousness battles instead.
   The court explicitly warned against conflating § 101 with §§ 102 and 103.

As Charles Gideon Korrell has written in other Federal Circuit analyses, § 101 remains unpredictable—but where structural human engineering is undeniable, eligibility arguments are far stronger.

Broader Context in Gene Therapy Litigation

The dispute arose from Sarepta’s use of AAV rh.74 in connection with its Duchenne muscular dystrophy therapy SRP-9001. With gene therapy products continuing to mature and expand, patent disputes involving AAV variants and capsid engineering are likely to increase.

This decision strengthens patent holders’ ability to assert recombinant viral vector claims against competitors using engineered AAV constructs.

Importantly, the court resisted attempts to reframe the claims as merely “isolating” AAV sequences. That reframing tactic appears increasingly common in § 101 challenges. The Federal Circuit’s rejection of it here provides useful precedent.

Conclusion

The Federal Circuit’s decision in REGENXBIO v. Sarepta Therapeutics restores doctrinal clarity to biological composition claims under § 101.

Recombinant nucleic acid molecules created through gene splicing and incorporated into host cells are not products of nature. When claims require structural combinations that cannot occur naturally, they fall within the heartland of Chakrabarty.

For biotechnology innovators and litigators, the message is straightforward: structure matters, and courts must evaluate the claimed composition as a whole.

Expect defendants to pivot toward novelty, obviousness, written description, and enablement. But as to § 101, recombinant engineering remains patent eligible.

By Charles Gideon Korrell

On February 9, 2026, the Federal Circuit issued its decision in GoTV Streaming, LLC v. Netflix, Inc., reversing a jury verdict and holding that three related GoTV patents are invalid under 35 U.S.C. § 101. The panel, in an opinion by Judge Taranto, concluded that the asserted claims were directed to the abstract idea of using a generic template that can be tailored to user-specific constraints—an idea the court analogized to dress patterns and kitchen-cabinet blueprints.

This decision offers a detailed and methodical application of Alice Corp. v. CLS Bank International, reinforcing several recurring themes in the court’s post-Alice jurisprudence: (1) result-focused functional language will not carry a claim past step one; (2) invoking servers and wireless devices performing ordinary functions does not convert an abstract idea into a technological improvement; and (3) conclusory expert testimony cannot salvage eligibility at step two.

Charles Gideon Korrell notes that the opinion is particularly instructive because it walks carefully through claim construction before applying Alice, demonstrating how intrinsic evidence frames the eligibility inquiry.

The Patents and the Claimed “Advance”

GoTV asserted three related patents (U.S. Patent Nos. 8,478,245; 8,989,715; and 8,103,865) sharing a 2007 specification. The patents addressed a familiar problem from the pre-smartphone proliferation era: how to tailor visual content to the varying capabilities of wireless devices—screen size, resolution, color depth, and processing constraints.

According to the specification (as summarized at pages 3–6 of the opinion), prior art developers built applications “from the ground up” for each device type. The purported solution was to centralize tailoring at a server. The server would:

• Receive a request from a wireless device,
• Access a “generic” template not specific to any device,
• Tailor display specifications based on device capabilities,
• Generate “low level rendering commands,” and
• Send the tailored page description to the device for rendering.

Claim 1 of the ’865 patent was treated as representative. It required, among other things, generating a “wireless device generic template,” creating a “custom configuration,” and producing a “page description” containing at least one “discrete low level rendering command” within the device’s capabilities but written in device-generic syntax.

Claim Construction First: Reversing Indefiniteness

Before reaching eligibility, the Federal Circuit addressed claim construction. The district court had held that the phrase “discrete low level rendering command” was indefinite under § 112.

The Federal Circuit reversed. Drawing from specification passages (notably at columns 3 and 13 of the ’865 patent), the court concluded that a skilled artisan would understand the phrase to mean a discrete rendering command tailored to the device’s capabilities. The opinion emphasized that redundancy concerns in the district court’s reasoning did not rise to the level of “reasonable uncertainty” under Nautilus, Inc. v. Biosig Instruments, Inc.

Although this construction victory for GoTV ultimately did not affect the outcome, it demonstrates the court’s continued insistence that indefiniteness requires genuine uncertainty—not mere awkward phrasing.

Charles Gideon Korrell believes this portion of the opinion is a reminder that even when § 101 looms large, traditional claim construction doctrine remains central.

Alice Step One: Directed to an Abstract Idea

The core of the opinion lies in its step-one analysis.

Relying on its established framework from cases such as Enfish, LLC v. Microsoft Corp., Electric Power Group, LLC v. Alstom S.A., and Broadband iTV, Inc. v. Amazon.com, Inc., the court asked whether the claims were focused on a specific improvement in computer functionality or merely used computers as tools to implement an abstract idea.

The court characterized the representative claim as directed to:

“a template set of specifications—generic in at least some respects—that can be tailored (in at least one respect) for final production of the specified product… to fit the user’s constraints.”

The opinion’s analogies were striking. The court compared the claims to:

• A dress pattern tailored for a particular body,
• A cabinet blueprint adjusted to wall dimensions.

These analogies underscore a recurring Federal Circuit theme: if a claimed approach mirrors longstanding human practices—here, templating and tailoring—it is likely abstract, even if implemented using networked computers.

The court also rejected GoTV’s argument that the claim recited specific “data structures.” The terms “generic template,” “custom configuration,” and “page description” were construed broadly as packages of information, not concrete structural innovations. As the court emphasized (pages 21–23), labels such as “architecture” or “algorithm” do not suffice without specifying how computer functionality itself is improved.

The panel distinguished Visual Memory LLC v. Nvidia Corp. (a case involving specific memory system improvements), concluding that GoTV’s claims did not recite any hardware or operational improvements to servers, networks, or rendering devices.

Alice Step Two: No Inventive Concept

Having found the claims abstract, the court moved to step two.

Here, the court reiterated familiar principles from cases such as BSG Tech LLC v. Buyseasons, Inc. and Berkheimer v. HP Inc.: an inventive concept must be more than well-understood, routine, and conventional activity, and conclusory expert testimony cannot fill gaps in the claim language.

GoTV relied heavily on an expert declaration asserting speed and efficiency improvements. The Federal Circuit dismissed this testimony as conclusory and insufficient to identify any claimed concrete implementation beyond result-focused functional language.

Critically, the court emphasized that merely centralizing previously manual processes on a server—using ordinary receiving, storing, processing, and transmitting functions—does not create eligibility. Efficiency gains attributable to generic computer use are not enough.

The claims therefore failed step two and were held invalid under § 101.

Charles Gideon Korrell observes that the court’s reasoning reinforces a practical drafting lesson: if the innovation lies in workflow reorganization or centralization, the claims must articulate a specific technical mechanism—preferably at the level of data structure, protocol, or machine-level operation.

Procedural Notes: Inducement and Damages

Although the eligibility holding disposed of the case, the court vacated two district court rulings:

1. Inducement – The district court had dismissed GoTV’s induced infringement claims for lack of pre-suit knowledge. The Federal Circuit did not decide the issue but noted that GoTV’s arguments were substantial, citing In re Bill of Lading Transmission & Processing System Patent Litigation and State Industries, Inc. v. A.O. Smith Corp.
2. Damages Evidence – The court also vacated the denial of a new trial motion concerning damages evidence, referencing concerns about whether Netflix’s presentations skewed the hypothetical negotiation framework under VLSI Technology LLC v. Intel Corp.

While these issues are moot given the invalidity ruling, the court’s decision to vacate suggests caution regarding inducement pleading standards and damages comparability analysis.

Broader Implications

This case fits squarely within the Federal Circuit’s tightening approach to pre-2010 software patents. The opinion reinforces several trends:

• Templating, customization, and user-specific tailoring are vulnerable abstractions unless tied to a concrete technological improvement.
• Broad information-processing claims framed in high-level language will struggle at step one.
• Expert testimony cannot substitute for claim-level specificity.

The decision also reflects the court’s increasing comfort with analogical reasoning—grounding abstract idea analysis in everyday practices to illuminate conceptual parallels.

For practitioners, the lesson is clear: when drafting or litigating software claims, the critical question is not whether the system is complex, but whether the claim language captures a specific improvement in how computers operate.

Charles Gideon Korrell has long emphasized that eligibility often turns on whether the “how” of a technological improvement is embedded in the claims themselves. GoTV v. Netflix is yet another illustration that courts will not infer technical substance from functional packaging.

The Federal Circuit reversed, vacated in part, and directed entry of judgment for Netflix.

By Charles Gideon Korrell

In United Services Automobile Association v. PNC Bank N.A., the Federal Circuit reversed a district court ruling that had upheld the patent eligibility of United Services Automobile Association’s (“USAA”) mobile check deposit patent, holding instead that the asserted claim of U.S. Patent No. 10,402,638 (“the ’638 patent”) was directed to an abstract idea and lacked any inventive concept. The decision is a significant application of the Alice two-step framework to financial technology patents and reinforces the limits of § 101 patent eligibility for routine, computer-implemented processes.

Charles Gideon Korrell notes that the ruling offers a textbook example of how courts are applying Alice in cases where a technology’s commercial success does not correlate with technical inventiveness.

Background: The Dispute and the Patent

USAA brought suit against PNC Bank in the Eastern District of Texas, alleging infringement of several patents relating to remote check deposit technology. The focus of the appeal was Claim 20 of the ’638 patent, which describes a “system for allowing a customer to deposit a check using a customer’s handheld mobile device.” The claim outlines the use of a downloadable banking app that helps users photograph a check and submit it wirelessly, with steps for authentication, error checking, and optical character recognition (OCR) to ensure deposit quality.

Following cross-motions for summary judgment on § 101 eligibility, the district court sided with USAA, holding that the claim was not directed to an abstract idea. The case proceeded to trial, where a jury found PNC liable for infringing the ’638 and ’598 patents. However, PNC appealed, challenging the § 101 ruling. Meanwhile, separate inter partes reviews invalidated the asserted claims of the ’598 and ’136 patents under § 103, leaving only the ’638 patent’s § 101 validity at issue.

The Federal Circuit’s Analysis

Step One – Abstract Idea

Applying the first step of the Alice test, the Federal Circuit concluded that the asserted claim was directed to the abstract idea of “depositing a check using a handheld mobile device.” This, the court emphasized, amounted to the digitization of a longstanding business process without meaningful technological innovation.

Key to the court’s reasoning was that the claimed process simply implemented traditional check deposit steps—such as capturing images, checking for errors, and transmitting data—on a generic mobile device. These functions, the court explained, had long been performed by bank employees and early scanning systems.

The court cited Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d 1343 (Fed. Cir. 2014), where similar check processing steps (data capture, OCR, and information storage) were deemed abstract. Also invoked was Electronic Power Group, LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016), which held that collecting, analyzing, and displaying information—even if performed by a computer—constitutes an abstract idea.

In contrast to McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016), where the claims provided specific rules to automate animation, the ’638 patent was result-oriented and lacked detailed steps or algorithms that could have provided a technological improvement.

Step Two – Lack of Inventive Concept

At the second step of Alice, the court held that the claim failed to recite any inventive concept that would render the abstract idea patentable. While USAA argued that implementing mobile check deposit with error-checking and OCR on consumer devices was non-obvious and commercially valuable, the court found that these features were themselves routine and generic.

Indeed, USAA’s own patent specification acknowledged that the invention operated “in conjunction with electronics that today’s customers actually own or can easily acquire, such as a general purpose computer, a scanner, and a digital camera.” The claim, said the court, merely applied existing technologies to a known financial process.

The panel rejected the argument that the ordered combination of claim elements transformed the abstract idea into a patent-eligible application. As the court noted, invoking a computer as a tool to perform a longstanding business task—even when streamlined by modern devices—does not make the process inventive. The court cited Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359 (Fed. Cir. 2020), and Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363 (Fed. Cir. 2015), for the proposition that limiting a claim to a particular field or environment is insufficient.

Charles Gideon Korrell believes this conclusion reinforces a key point in § 101 jurisprudence: implementation on mobile hardware—even if novel from a product development standpoint—is not a substitute for true technical innovation.

No Disputed Facts to Preclude Summary Judgment

USAA also argued that summary judgment was inappropriate because there were disputed facts over whether certain claim elements—such as OCR and mobile deposit apps—were conventional. The Federal Circuit disagreed. Citing Broadband iTV, Inc. v. Amazon.com, Inc., 113 F.4th 1359 (Fed. Cir. 2024), it held that summary judgment is appropriate under § 101 when there are no genuine disputes of material fact. The record demonstrated that OCR and remote image processing were widely known, and no specific improvement in their use was disclosed or claimed.

Consequence of the Ruling

Because the Federal Circuit determined that the only remaining asserted claim was invalid under § 101, it declined to reach USAA’s cross-appeal concerning allegedly improper expert testimony on damages. Without a valid patent, any damage award was moot.

The decision has immediate implications for litigation involving similar mobile deposit patents, especially given the Federal Circuit’s earlier affirmances of § 103 invalidations of USAA’s related patents in inter partes review. As the court reiterated, under XY, LLC v. Trans Ova Genetics, 890 F.3d 1282 (Fed. Cir. 2018), an affirmance of invalidity has collateral estoppel effect on pending and co-pending actions involving the same claims.

Charles Gideon Korrell points out that although USAA pioneered remote deposit in the commercial market, the court made clear that commercial success alone cannot confer patent eligibility absent concrete technical innovation.

Key Takeaways

• Abstract Idea: Mobile check deposit is a digitized version of a longstanding financial practice and falls within the abstract idea category.
• Lack of Specificity: The patent recited desired results (e.g., error checking, OCR) without describing how these functions were implemented.
• No Inventive Concept: Routine use of OCR and mobile apps, even if previously done with specialized equipment, did not amount to an inventive concept.
• Broad Implications: The ruling emphasizes that convenient implementation on mobile platforms does not make a claim patent-eligible.

Charles Gideon Korrell observes that the decision draws a firm line between commercial value and patent eligibility. For those drafting or litigating financial services patents, the opinion is a cautionary tale in claiming functionality without detailing the technological advancement behind it.

By Charles Gideon Korrell