Solutran, Inc. v. Elavon, Inc., No. 19-1345 (Fed. Cir. 2019)Annotate this Case
Solutran’s patent, issued in 2012, describes a system for processing paper checks. It explains that the digital age ushered in a faster approach to processing checks, where the transaction information on the check is turned into a digital file at the merchant’s point of sale terminal and is sent electronically; the funds are then transferred electronically from one account to another, so that it is not always necessary to physically move the paper check from one entity to another to debit or credit the accounts.. The patent discloses a method proposed by the National Automated Clearing House Association for “back office conversion” where merchants scan their checks in a back office, typically at the end of the day, “instead of at the purchase terminal.” The district court held that the patent was not invalid under 35 U.S.C. 101 for failing to recite patent-eligible subject matter and was infringed. The Federal Circuit reversed, applying the “Alice” test. The claims are directed to the abstract idea of crediting a merchant’s account as early as possible while electronically processing a check and do not “contain a sufficiently transformative inventive concept so as to be patent-eligible. The patent's claims simply instruct the practitioner to implement the abstract idea with routine, conventional activity.