Attorney Fees for Suing on Patent that “Looks Like Alice”

After dismissing a lawsuit alleging infringement of US Patent No. 9,569,755 (“Financial Management System”), Delaware’s Judge Richard Andrews has awarded attorney fees under Octane Fitness and 35 U.S.C. § 285, finding an exceptional case because claims of the ’755 patent were so clearly ineligible under 35 U.S.C. § 101 and the Mayo/Alice abstract idea test. Finnavations LLC v. Payoneer, Inc., Civil Action No. 1: 18-cv-00444-RGA and 1: 18-cv-00445-RGA (Mar. 18, 2019).

Judge Andrews acknowledged that “the law of patent eligibility has perhaps become unpredictable and unclear on the fringes,” but stated that he had “rarely been more confident in the patent ineligibility of a set of claims or more confident in the unreasonableness of a Plaintiff’s decision to sue on a patent.” Here is one of the claims that prompted these comments:

1. A method for transferring payment information to a personal financial management program comprising

invoking a financial assistant operating on a network device upon a determination of a transmission of transaction data to a commercial web server configured to conduct online financial transactions

intercepting, by the financial assistant on the network device, the transaction data in a first data structure comprising a plurality of components of transaction data, the first data structure compatible with conducting an online transaction with the commercial web server

copying, by the financial assistant on the network device, each component of the transaction data into a second data structure compatible with the personal financial management program, wherein the second data structure differs from the first data structure

entering, by the financial assistant on the network device, additional transaction data not included in the transmitted transaction data into the second data structure including at least one of a category and remarks; an

transmitting, by the network device, the copied transaction data and the additional transaction data to the personal financial management program.

The plaintiff argued that the Examiner’s allowance of the ’755 patent after four § 101 rejections showed that it was reasonable to have asserted the patent. The plaintiff also argued “that the Patent Office’s continued issuance of substantially identical patents supports its position.” The court rejected both arguments. Plaintiffs are not relieved of their ability to independently evaluate patents before suing, and patent examiners are not lawyers competent to give legal opinions on patent-eligibility. And the court was not worried about “a ‘chilling effect’ on patents.” Instead, the court saw benefit in chilling patent assertions “without first assessing the patent’s weaknesses considering current case law.”

Lessons for Practice

Some courts have awarded attorney fees against plaintiffs who asserted patents later found to be ineligible under § 101, where other courts have declined to award fees for Alice invalidity. Regardless, decisions such as this highlight that, even with the uncertainty that continues to attend patent-eligibility, some cases are clear cut.