Conventional Component For Accepting Credit Card Payment In Taxicab is Ineligible: Curb Mobility, LLC v. Kaptyn, Inc.

A court held that patent claims directed to “the longstanding commercial practice of paying for public transit” are abstract ideas, and “the mere assemblage of admittedly known components” does not provide an inventive concept,  granting a motion to dismiss based on lack of patent-eligible subject matter under 35 U.S.C. § 101 and the Alice/Mayo test. Curb Mobility, LLC v. Kaptyn, Inc., et al., No. 18-cv-02416-MMD-EJY (D. Nev. Jan. 21, 2020).

U.S. Patent No. 6,347,739 is directed to “paying for a taxicab with a credit card.” The court noted that the patent “includes two independent claims, though independent claim 11 is basically independent claim 1- a system claim- written as a method claim.” Independent claim 1 of the ‘739 Patent is reproduced here:

1.A system for communications with a network of systems which accepts cred-debit type cards for payments and which is located in a taxicab driven by drivers comprising:

a) a meter mounted in the taxicab, having computing capabilities for determining and displaying the fare being charged to a passenger, and having application programs at least some of which mandate a sequential exchange of electronic information between said passenger and said driver regarding the fare that includes the charge for the distance that said passenger was transported by taxicab driven by said driver before said fare is charged to said passenger, said meter further having a plurality of ports;

b) a credit-debit card reader electrically connected to some of said ports of said meter and operable therewith for read information stored on a credit-debit card that is releasably engagable with said card reader, said information identifying a charge account; and

c) a modem for wireless communications electrically connected to some of said ports of said meter and to an antenna for transferring information between said meter and said network systems.

The court applied the two-step Alice framework to Kaptyn’s Rule 12(b)(6) motion to dismiss. The court noted the Federal Circuit decision in Smart Sys. Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364 (Fed. Cir. 2017), which “affirm[ed] the district court’s finding that the asserted claims of four patents were directed to the abstract idea of ‘paying for a subway or bus ride with a credit card.’”  As such, the court found the claims of the ‘739 Patent are similarly directed to an abstract idea because the claims are directed to “paying for a taxicab with a credit card.”

The court went on to analyze step two of Alice. The court noted that “[a]t the heart of all of the asserted claims is a system consisting of a taxicab meter, a credit-debit card reader, and a modem” and “[t]he specification of the ‘739 Patent makes it clear that these elements are conventional or otherwise known in the art.”  Further, the court noted that “adding known technological elements from the dependent claims to the known technological elements from the independent [sic] claims does not make the claims patent eligible.” See Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat. Ass’n, 776 F.3d 1343, 1348-49 (Fed. Cir. 2014). The court also noted that “Plaintiff fails to show how any of the conventional components described in the ‘739 Patent’s specification were combined in an unconventional manner.” As such, the court found that the claims of the ‘739 Patent “lack an inventive concept because ‘the claims and the specification recite computer components that perform well-understood, routine, conventional functions.’” Therefore, the court found the ‘739 Patent does not satisfy the Alice framework and is patent ineligible subject matter.

Lessons for Practice

While including structure in the claims and specification of software applications can be helpful in establishing patent eligible subject matter, the inclusion of merely conventional structure is insufficient to establish patent eligibility. If relying solely on a combination of conventional structure, this case illustrates the importance of describing how the conventional structure is being combined in an unconventional manner to establish patent eligibility under § 101. Additionally, it is important to remember that the claims and specification should be directed toward technological solutions to technological problems.