PTAB Finds Patent Claims Directed to Organizing Digital Images Patent-Ineligible in CBM Review

The Patent Trial and Appeal Board (“PTAB”) has held all claims of U.S. Patent No. 7,260,587 patent-ineligible under 35 U.S.C. § 101, and the rubric of Alice Corp. v. CLS Bank.  Bank of America, NA v. Intellectual Ventures II LLC, Case CBM2014-00033 (PTAB May 18, 2015). The claims of the ’587 patent are directed to organizing and searching digital images.

According to the ’587 patent, a customer categorizes a plurality of hard copy prints, e.g., personal photographs, and associates a pre-ordered, machine readable instruction form to each category. Thereafter, a service provider digitally scans the plurality of prints and instruction forms while maintaining the respective category, and stores the digital image files with the associated category onto a digital storage medium. Per a customer order, the service provider produces a product incorporating images from one or more categories as requested.

The patent owner argued that the claims were not directed to an abstract idea because the claims purportedly do not “fall within any of the categories of abstract ideas enumerated by the Supreme Court.” Additionally, the patent owner argued that the conceptual method for organizing digital images requires a machine because digitizing and organizing hard copy prints via an instruction form “cannot be performed by a human and is not a mental process.”

The PTAB was persuaded that the specific categories of abstract idea that the Supreme Court enumerated in Alice “were not intended as exclusive.” The PTAB further agreed with the petitioner that the independent claims are directed to conventional computer components used in a “well understood way” to “produce a photo album.” Moreover, an inventive concept transforming the claimed subject matter from an abstract idea does not arise by the conventional use of a computer, and “scanning a hard copy image into a stored digital image is patent-ineligible organization of data.”

The PTAB was also persuaded by direct testimony of the patent owner’s own expert that the scanning technology recited in the claims was known at least five years prior to the application date of the ‘587 patent. In other words, a new application for old technology will not overcome an Alice / Section 101 rejection.

The patent owner also made an argument that probably will occur to many upon reading the subject matter of the ’587 patent: that the claims were not directed to a financial product or service, and should not have been subject to CBM review. This PTAB panel, taking an approach perhaps more expansive than some, reasoned that consumer product ordering is “representative of the type of activities that are ‘complementary to financial activity’ and ‘relate to monetary matters.’”

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