August 3, 2020

Conclusory Allegations Do Not Save Barcode Patent Found to be Ineligible Under Section 101

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

In Coding Technologies LLC v. Mississippi Power Co., 1:19-CV-994-LG-RHW (S.D. Mississippi, June 4, 2020), Coding Technologies (CT) asserted U.S. Patent No. 9,240,008, entitled, "Method for Providing Mobile Service Using Code-Pattern," against the Mississippi Power Company. The asserted method claim recites:

1. A method comprising:

receiving a payment request message including a code pattern image
from a terminal, wherein the code pattern image includes billing
information and is photographed by a photographing unit in the
analyzing the code pattern image to obtain code information
corresponding to the code pattern image obtaining user information
and billing information corresponding to the code information in
reference of billing database; and
processing payment of a bill based on the billing information and user

CT alleged that the patent taught methods, systems and apparatuses for "enabling the recognition and reading of a code pattern image that includes billing information," and Mississippi Power used QR codes or barcodes in connection with its service bills. Mississippi Power moved to dismiss, arguing that the asserted patent was patent-ineligible under Section 101.

Alice Step One

Mississippi Power argued that the asserted patent and its claims "all make clear that the basic thrust of the claims is using a barcode on a mobile device to facilitate bill payment." CT, on the other hand, argued that Mississippi Power oversimplified the asserted patent claims but failed to articulate an alternative for the court to consider.

The court agreed with Mississippi Power. Upon its own independent reading of the patent and its claims, the court found that the claims were directed to the "use of a barcode on a mobile device to facilitate or effectuate bill payment." With this understanding of the patent, the court found that the asserted patent was similar to the barcode-related patents in Secured Mail. In that case, the U.S. Court of Appeals for the Federal Circuit invalidated patent claims where "a sender affixes an identifier on the outer surface of a mail object" and then computers and networks communicate the information about the mail's contents and the sender of the mail. The Federal Circuit found that the claims in Secured Mail were not directed to a new barcode format or an improved method of generating or scanning barcodes, but were instead directed to the "generic process whereby identifiers were stored in a database and retrieved by scanning a barcode."

Instead of patent claims directed to improving a technological process, CT's asserted claims merely embodied "the sort of computer-implemented abstract idea which the Federal Circuit has consistently rejected."

Alice Step Two

At step two, the court examined the claim elements more closely to determine whether there was an inventive concept. The court noted that whether the claim elements or claimed combination is routine or conventional is a question of fact, but the court may still find that the patent presents no inventive concept at the Rule 12 stage.

CT alleged that its patent eliminated "the need for hand typing certain information into a URL" and that the claims consisted of "a system of units that correspond to produce an inventive concept." CT argued that these allegations at least constitute factual issues that should preclude dismissal at the pleading stage.

The court disagreed. The activities recited in the patent claims – receiving messages, analyzing code image patterns and processing payment – were routine computing tasks that did not require fact-finding or claim construction. There was no indication that the claimed steps were performed by unconventional components. Instead, the abstract idea was implemented using "commonplace technology."

While CT argued that the claim components, such as the processor, specified non-generic functionalities, the court found that it need not accept CT's conclusory allegations as true. The activities described in the asserted patent were "generic computer tasks which the invention uses to effectuate a longstanding commercial practice." And despite the conclusory statements, CT did not point to anything in the patent that specified the purported "additional software," which supposedly supplied the inventive concept.

Finally, the court found that there was no need for claim construction because, under any reasonable construction, the claims at issue did not solve a technological problem. Furthermore, the method, apparatus and system claims contained "no material difference" with respect to the court's Section 101 analysis.

Accordingly, the U.S. District Court for the Southern District of Mississippi granted Mississippi Power's motion to dismiss and dismissed CT's complaint with prejudice.

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