Fort Props., Inc. v. Am. Master Lease, LLC, No. 09-1242 (Fed. Cir. 2012)
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Defendant's patent discloses an investment tool designed to enable property owners to buy and sell properties without incurring tax liability by enabling like-kind exchanges under 26 U.S.C. 1031. The claims require aggregation of multiple properties into a portfolio; interests in the portfolio are divided into "deed shares" and sold to investors similar to the sale of stock. Each deedshare can be encumbered by its own mortgage. The patent allows for a master tenant to perform administrative tasks such as paying insurance, property taxes, and rents. The district court invalidated each of 41 claims in the patent for failing to claim patent-eligible subject matter under 35 U.S.C.101, reasoning that the claims were not tied to a particular machine or apparatus and that none of the claims transform any article to a different state or thing. The Federal Circuit affirmed, holding that the claims attempt to capture unpatentable abstract subject matter.
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