February 4, 2020

"Not A Close Call" – Taxicab Credit Card System Patent Found to be Abstract, Invalid

Holland & Knight Section 101 Blog
Anthony J. Fuga
Section 101 Blog

Curb Mobility sued a handful of taxicab companies in the U.S. District Court for the District of Nevada and alleged infringement of a patent titled "System for Credit Card Acceptance in Taxicabs." Curb's complaint focused on the defendants' credit card systems that include "a taxi meter, a credit-debit card reader, and a modem for wireless communications," which aligned with the asserted patent claims' limitations. The defendants moved for judgment on the pleadings and argued that the patent is not directed to patent eligible subject matter under Section 101.

At step one of the Alice inquiry, defendants argued that the patent was directed to an abstract idea – "the longstanding commercial practice of paying for public transit, here, paying for a taxicab with a credit card." Curb countered, arguing that the asserted claims were not directed to this abstract idea because they "claim computerized components performing unordinary functions above and beyond the prior art."

The court agreed with the defendants and turned to step two of the inquiry. Here, Curb argued that the asserted claims contained an inventive concept – "application programs described in several claims that mandate a sequential exchange of electronic information." The defendants argued that such an element did not save the patent because it merely recited preexisting computerized components to transmit electronic information.

The court again sided with the defendants and found that "this is not a close call." The asserted claims all focused on a system consisting of a taxicab meter, a credit-debit card reader and a modem, and the patent specification made it clear that these elements were conventional or otherwise known in the art. "Plaintiff fails to show how any of the conventional components described in the patent specification were combined in an unconventional manner."

The court lastly dismissed the argument that factual issues and claim construction preclude the entry of judgment at the Rule 12 stage. The court reviewed the arguments and determined that neither factual issues nor claim construction would affect the outcome of the defendants' motion. The court granted the motion and found that the asserted patent was invalid.

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