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Smart Systems Innovations, LLC v. Chicago Transit Authority

Claim References to Tangible Items Insufficient to Demonstrate Non-Abstractness

Smart Systems Innovations, LLC v. Chicago Transit Authority [errata], 2017 U.S. App. LEXIS 20333 (Fed. Cir. Oct. 18, 2017) (Reyna, Linn (DIP/CIP), WALLACH) (N.D. Ill.: Chang) (3 of 5 stars)

Fed Cir affirms § 101 patent-ineligibility. SSI’s claims related to techniques for using bankcards to regulate rider access to a transit system, and for collecting/storing funding data. Four patents were in issue; the opinion treats them together, and they all fail both steps of the Alice inquiry. At step one, the opinion rejects SSI’s arguments that the claims were non-abstract because they operated in the “tangible” world. The claims were all “directed to the collection, storage, and recognition of data,” and were thus abstract. The opinion also rejects SSI’s contention that the claims improved existing technological processes, as in Enfish, 822 F.3d 1327 (Fed. Cir. 2016), and DDR Holdings, 773 F.3d 1245 (Fed. Cir. 2014). SSI’s claims did not improve computer technology, “but rather invoke computers in the collection and arrangement of data.” Op. at 15. That the claims were limited to mass transit applications did not confer an inventive concept. At step two, the opinion finds no inventive concept sufficient to confer patentability. The opinion also rejects SSI’s arguments as to lack of preemption, and alleged satisfaction of the machine-or-transformation test.

Linn opinion: Judge Linn would have found two of SSI’s patents—patents specifically related to the use of a bankcard in accessing a transit system—to be directed to non-abstract ideas, and thus patent-eligible.

KEYWORDS: SUBJECT MATTER ELIGIBILITY (NO)