Hantz Software, LLC v. Sage Intacct, Inc.

Background

Hantz Software brought a patent-infringement action against Sage Intacct involving U.S. Patent Nos. 8,055,559 and 8,055,560. The patents concern computer-implemented accounting methods and systems for accounts receivable and accounts payable within a multi-company system. The asserted claims describe entering financial information, adding balancing lines for distinct affiliated companies, tracking outstanding balances, and applying payments while generating “Due To/Due From” entries.

Sage moved to dismiss under Rule 12(b)(6), arguing that the asserted claims were invalid under Section 101 of the Patent Act because they covered patent-ineligible subject matter. Hantz opposed the motion and argued that Sage oversimplified the claims by examining their parts rather than the claims as a whole. Hantz also argued that claim construction was necessary before the court could decide eligibility. The court found that Hantz had not identified a disputed claim term or proposed a construction that could change the Section 101 analysis.

Patent-Eligibility Analysis

The court applied the two-step framework for determining whether patent claims are directed to patent-eligible subject matter. At the first step, it held that the asserted patents were directed to the abstract idea of improving financial recordkeeping for multi-company businesses through balancing lines. The claims gathered and organized financial information using mathematical calculations. The court found no meaningful distinction between those activities and other abstract financial practices recognized in precedent.

The court also rejected Hantz’s argument that the claims involved a technical improvement. It reasoned that the claimed accounting activities could be performed with pen and paper, and that using computers to automate those activities did not improve computer technology or computer capabilities. The claimed problem—maintaining accounts payable or accounts receivable balances for affiliated companies—was not unique to computers.

At the second step, the court considered whether the claims contained an “inventive concept,” meaning an element or combination of elements that transformed the abstract idea into a patent-eligible application. It held that the claims merely used conventional computer functions, such as entering invoice amounts, adding amounts, and displaying outstanding balances. Considering the claim elements individually and together, the court found no inventive concept. It therefore concluded that the asserted patents failed both parts of the eligibility test.

Motion to Amend and Disposition

Hantz separately moved for leave to file a second amended complaint. The court concluded that no additional allegations could establish that the asserted claims were patent-eligible. It also found that dependent claims 2 and 7 of the ’560 Patent were only variations on the same abstract idea of collecting and organizing financial data.

The court granted Sage’s motion to dismiss without leave to amend and denied Hantz’s motion for leave to file a second amended complaint as futile. The clerk was directed to enter judgment in Sage’s favor and close the case.

Classification Note

This summary classifies the opinion as a procedural order because the court disposed of the case through a Rule 12(b)(6) motion to dismiss, even though it analyzed the patents’ eligibility under Section 101.