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Mortgage Grader v. First Choice

Representative Claim

‘694

1. A computer-implemented system for enabling borrowers to anonymously shop for loan packages offered by a plurality of lenders, the system comprising:

a database that stores loan package data specifying loan packages for home loans offered by the
lenders, the loan package data specifying, for each of the loan packages, at least a loan type, an interest rate, and a required borrower credit grading; and

a computer system that provides:

a first interface that allows the lenders to securely upload at least some of the loan package data for their respective loan packages to the database over a computer network; and

a second interface that prompts a borrower to enter personal loan evaluation information, and invokes, on a computer, a borrower grading module which uses at least the entered personal loan evaluation information to calculate a credit grading for the borrower, said credit grading being distinct from a credit score of the borrower, and being based on underwriting criteria used by at least some of said lenders;

wherein the second interface provides functionality for the borrower to search the database to identify a set of loan packages for which the borrower qualifies based on the credit grading, and to compare the loan packages within the set, including loan type and interest rate, while remaining anonymous to each of the lenders and without having to post a request to any of the lenders, said second interface configured to display to the borrower an indication of a total cost of each loan package in the set, said total cost including costs of closing services not provided by corresponding lenders.

Posture:

Appeal from the United States District Court for the Central District of California in No. 8:13-cv-00043-AG-AN.

Abstract Idea: Yes

The Federal Circuit agreed with the District Court that the claims constitute the abstract idea of “anonymous loan shopping” because all of the steps can be performed by a human without the aid of a computer. Citing CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011) in support, the Court explained:

“’[C]omputational methods which can be performed entirely in the human mind are the types of methods that embody the ‘basic tools of scientific and technological work’ that are free to all men and reserved exclusively to none.’(quoting Gottschalk v. Benson, 409 U.S. 63, 67, 93 S. Ct. 253, 34 L. Ed. 2d 273 (1972).”

Something More: No

Further, the claims lack an inventive concept:

“Nothing in the asserted claims ‘purport[s] to improve the functioning of the computer itself’ or ‘effect an improvement in any other technology or technical field.’ Alice, 134 S. Ct. at 2359. Nor do the claims solve a problem unique to the Internet. See DDR Holdings, 773 F.3d at 1257. In addition, the claims are not adequately tied to ‘a particular machine or apparatus.’ Bilski v. Kappos, 561 U.S. 593, 601, 130 S. Ct. 3218, 177 L. Ed. 2d 792 (2010).”