Federal Circuit invites SAP America to Respond to InvestPic Petition for Rehearing

Last week the United States Court of Appeals for the Federal Circuit invited the appellee, SAP America, to respond to InvestPic, LLC’s combined petition for panel rehearing and rehearing en banc in the matter of SAP America, Inc. v. InvestPic LLC (Appeal No. 2017-2081).

InvestPic filed a combined petition for panel rehearing and rehearing en banc on June 19, 2018, making two arguments. First, that the original decision must be vacated and remanded because the claims considered by the district court and the panel were surrendered as the result of two  reexaminations that ultimately resulted in the original claims being lost, with new claims awarded in their place. Second, that the panel’s decision is alleged to be inconsistent with decisions of prior panels, which found claims lacking improvements in the physical-realm could still be patent eligible improvements. This second argument goes on to assert that the ruling of the panel would effectively preclude groundbreaking innovations in the field of data science to be considered patent eligible moving forward.

The original panel decision reached by Judges Lourie, O’Malley and Taranto on May 15, 2018, in an opinion authored by Judge Taranto, found the patent claims of U.S. Patent No. 6,349,291 invalid because they were directed to an abstract idea and lacked an inventive concept necessary to save the invention under 35 U.S.C. § 101.


In order to remedy specifically identified deficiencies in the prior art, the ‘291 patent proposed a technique for analyzing, displaying and disseminating financial information using resampled statistical methods. The innovation disclosed in the ‘291 patent does not assume a normal probability distribution, and the patent teaches several different methods in some detail.

Before applying the familiar Alice/Mayo two-part test for determining the presence of patent eligible subject matter, Judge Taranto seemed to recognize that the claimed invention found in the ‘291 patent was, in fact, innovative. Nonetheless, in the view of the original panel the innovation fell outside the realm of innovations that are patent eligible.

Under Alice/Mayo step 2A, the Federal Circuit concluded that the ‘291 patent was directed to the abstract idea. Judge Taranto wrote:

The claims in this case are directed to abstract ideas. The focus of the claims, as is plain from their terms, quoted above, is on selecting certain information, analyzing it using mathematical techniques, and reporting or displaying the results of the analysis. That is all abstract.

The Federal Circuit would distinguished this case from its holding in McRO and Thales Visionix because the claims in McRO were directed to the creation of something physical — namely, the display of lip synchronization and facial expressions of animated characters on screens for viewing by human eyes.

The Federal Circuit also distinguished the claims from Enfish, BASCOM and Thales Visionix explaining that in both cases the claims were found patent eligible because they were directed to improvements in the way computers and networks carry out their basic functions. In this case, however, the focus of the claims was not on any computer or network, but rather an improved mathematical analysis.

Because the claims are directed to an abstract idea, the Federal Circuit proceeded to Step 2B of the Alice/Mayo test, concluding that there is nothing in the claims sufficient to transform them into patent eligible subject matter.

Judge Taranto explained:

What is needed is an inventive concept in the non-abstract application realm. Here, all of the claim details identified by InvestPic fall into one or both of two categories: they are themselves abstract; or there are no factual allegations from which one could plausibly infer that they are inventive. In these circumstances, judgment on the pleadings that the claims recite no “inventive concept” is proper.

InvestPic does, however, make a compelling argument in its rehearing petition regarding the original claims, which were lost, or in the words of InvestPic in their filing “surrendered”. As a result, InvestPic argues the panel decision must be remanded because of the Inter Partes Reexamination Certificate, which issued on September 6, 2017, and the Ex Parte Reexamination Certificate, which issued on October 30, 2017, left none of the claims interpreted by either the district court or the Federal Circuit. This, InvestPic argues means that by no later than October 30, 2017, the original claims no longer existed, which should have mooted the case.

InvestPic argued in the rehearing petition that the panel had two options, neither of which were taken. First, the panel could have addressed the amended claims that were presented and argued by InvestPic, or the amended claims could have been remanded to the district court for consideration. The option elected by the panel, to consider the original claims that no longer existed, was not proper and requires vacatur, the argument explains.

InvestPic also argues that the panel created a new “physical-realm” requirement for claims in order to be patent eligible, which cannot be reconciled with several prior decisions of the Federal Circuit, including McRo and Thales Visionix. While that may be true, arguments such as that generally face a much greater uphill battle on a petition for rehearing. In this case that argument faces added challenges given the nature of the ‘291 patent, which covers a method and system for the statistical analysis, display and dissemination of financial data over an information network. Unfortunately, the reality is financial software faces more scrutiny and greater obstacles than other software.

Given that the Court has invited SAP America to respond, it seems likely the petition for rehearing has caught the attention of more than a few of the judges. If I had to guess which issue is most concerning for the Court, I’d guess that it is the first issue presented regarding the fact that the panel issued a decision relating to claims that had been removed from the patent through reexamination. If true, that would mean the panel decision was nothing more than an advisory opinion on claims of no consequence to either party. Therefore, it seems inevitable that this case will be headed for vacatur and further consideration by the district court.


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Join the Discussion

3 comments so far.

  • [Avatar for B]
    June 30, 2018 01:02 pm

    When I read Investpic’s Petition for Rehearing, I was shocked Taranto et al. addressed the wrong claims in their decision. Wrong claims, no case or controversy, no jurisdiction. This from the second-highest court in the nation? Pathetic.

    That said – worst 101 holding since Electric Power Group

  • [Avatar for Eric Berend]
    Eric Berend
    June 29, 2018 06:37 pm

    @ 1., ‘Anon’:

    And, to further your point – an inappropriately *ultra vires* decision that “…would effectively preclude groundbreaking innovations in the field of data science to be considered patent eligible moving forward.”

    I have seen many judicial rulings that in effect, ‘put the cart before the horse’. Now this one, is a version of ‘adding injury to insult’. Legerdemain abounds, while legitimate private and public interests are thwarted and harmed.

  • [Avatar for Anon]
    June 28, 2018 08:49 pm

    Article III courts are not permitted to give advisory opinions (and require a proper current case or controversy).

    Taking these pleadings as true, it appears that the CAFC attempted BOTH providing what is essentially an advisory opinion and lacked an actual current case or controversy – on the specific claims.

    This appears to be an easy slam dunk case of ultra vires action.

    Am I missing anything?