Grecia v. The Bank of New York Mellon Corporation

Background

The opinion addresses five nearly identical cases brought by William Grecia against Bank of New York Mellon Corporation, Citibank, N.A., Morgan Stanley Smith Barney LLC, TIAA, FSB doing business as TIAA Bank, and Samsung Electronics America, Inc. The court treated the pleadings in the first-listed case, Grecia v. Bank of New York Mellon Corporation, as representative of the others.

Grecia is the inventor of U.S. Patent No. 8,887,308, titled “Digital Cloud Access (PDMAS Part III).” The patent concerns digital rights management, meaning technologies that control access to digital content. Claim 1 describes a process that receives a user’s access request and verification information, authenticates the verification information, communicates with another database through an application programming interface, obtains an identifier, and stores the verification information and identifier as a computer-readable authorization object. The object is later used to determine the user’s access rights.

Grecia alleged that the four banks’ financial applications, which connect with Zelle, and Samsung Pay directly infringe Claim 1. The banks’ applications allegedly authenticate a user’s email address or telephone number, obtain query data from Zelle, and create and process an authorization object for financial transactions. Grecia alleged that Samsung Pay transforms a credit-card account number into a payment token used for purchases.

Motions to Dismiss and Claim Construction

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not allege enough facts to state a legally sufficient claim. They argued, among other things, that Claim 1 was not patent-eligible under 35 U.S.C. § 101 and the Supreme Court’s decision in Alice Corp. v. CLS Bank International.

Grecia argued that the motions were premature because the parties disagreed about whether the court needed another proceeding to interpret the patent’s terms. The court rejected that argument. It accepted Grecia’s proposed interpretations of the disputed terms and concluded that no factual allegations prevented the court from deciding patent eligibility as a matter of law. The opinion notes that an earlier judge had interpreted several terms of Claim 1 but had not decided the issues presented in these cases.

Patent-Eligibility Analysis

The court applied the two-step framework from Alice and Mayo. First, it asked whether Claim 1 was directed to an abstract idea. If so, it then asked whether the claim contained an inventive concept—an element or combination of elements that amounted to significantly more than the abstract idea itself.

At step one, the court held that Claim 1 was directed to the abstract idea of storing information about permission and identity for processing access requests. In the court’s view, the claim did not explain how to use those generic types of information to improve computer functionality. Instead, it described receiving an access request, authenticating a permission token, obtaining identity information from another source, and storing both types of information for later reference.

The court found that the patent’s specification did not provide a concrete technical solution for achieving access across multiple devices. It described the computer components and processes in general, functional terms and did not identify a specific improvement in the way computers operated. The court also reasoned that the claimed process could be performed by people, using an analogy involving a military police officer checking identification and authorization before allowing access to a secure facility.

At step two, the court held that Claim 1 did not contain an inventive concept. The references to an authorization object, a cloud, the Internet, databases, and other computer components were, in the court’s view, routine computer-aided limitations. Grecia identified the claimed writing of a verified account identifier into a data store as the inventive concept, but the court concluded that this was the same abstract idea already found ineligible at step one.

The court therefore concluded that Claim 1 was patent-ineligible under Section 101. Because that conclusion required dismissal, the court did not address the defendants’ alternative argument that Grecia had not alleged that their applications performed every step of the claimed method.

Disposition

Judge Valerie Caproni granted the defendants’ motions to dismiss. The court dismissed Grecia’s complaints with prejudice and without leave to amend. It directed the clerk to close all captioned cases and the pending motions. The opinion states that it superseded the court’s March 13, 2020 opinion.