The Software IP Report

E.D. Tex. Invalidates E-Ticket Patents Under § 101

Magistrate Judge Payne in the Eastern District of Texas recently recommended invalidating two e-ticket patents for ineligible subject matter under § 101. In Bytemark v. Masabi, No. 2:16-cv-00543-JRG-RSP (E.D. Texas, Nov. 25, 2018), the magistrate judge recommended granting a motion for summary judgment of invalidity under § 101, mooting challenges under §§ 102, 103, and 112.

The parties’ dispute began with Bytemark suing Masabi for infringement of two e-ticket patents, U.S., Patent Nos. 8,494,967 and 9,239,993. Bytemark and Masabi market competing e-ticket apps to cities for their citizens to use on public-transportation systems. In essence, the patents cover displaying a picture on an end user’s smartphone so that a human ticket taker can quickly verify the ticket. Claim 1 of the ’967 patent, which the court treated as representative, recites:

A method by a server system for obtaining visual validation of the possession of a purchased electronic ticket on a user’s computer device for presentation to a ticket taker comprising:

receiving from the user’s computer device a request to verify purchase of a previously purchased electronic ticket and to obtain a visual validation display object that confirms that the user possesses the previously purchased electronic ticket for utilization of a service monitored by the ticket taker, the visual validation display object configured to be readily recognizable visually by the ticket taker;

receiving from the user’s computer device a token associated with the received request;

determining whether a token associated with the purchased electronic ticket has been stored in a data record associated with the received request, and if it has, whether the received token is valid; and

in dependence on the determination that the received token is valid, causing an activation of the purchased electronic ticket by transmitting to the user’s computer device a data file comprising the visual validation display object that causes upon visual recognition by the ticket taker, the user to be permitted to utilize the service monitored by the ticket taker.

Masabi responded with inter partes review petition against the ’967 patent, and the case was stayed. Masabi also moved to lift the stay and for summary judgment against both patents for ineligible subject matter under § 101, lack of novelty under § 102, obviousness under § 103, and grounds under § 112.

The court sidestepped most of the grounds, basing its decision solely on § 101. The court applied the two-step Alice framework, finding under Step One that the claims are directed to an abstract idea and under Step Two that the claims lack an inventive concept.

Step One took most of the analysis and did not go well for Bytemark, as it was “not a close case under step one.” The court focused first on the claim language itself: “Computer-related claims withstanding scrutiny by the Federal Circuit under step one have generally recited a technological improvement in the claims themselves.” The court characterized the claim language as using conventional computer technology to increase the efficiency of a process, namely, verifying tickets, and not as “an improvement to the technology itself.” The specification and the prosecution history backed up this characterization. The specification identifies the purpose of the invention as speeding up ticket-taking time, and the prosecution history cited the speed of a ticket taker looking for the “visual validation display object.”

Finally under Step One, the comparison to other § 101 decisions does not help Bytemark.

More generally, the claims are a hybrid of two categories of claims routinely invalidated under § 101. On one hand, the asserted claims involve collecting, storing, recognizing, and manipulating data, or encoding or decoding data, to make the data human- or machine-readable. … On the other hand, the method recited in the asserted claims ensures the security of a financial transaction, and may improve the ticket-taking process.

Under Step Two, the court first reiterated the lack of technological improvements recited in the claims. The claims merely recite conventional computer technology. Second, while the claims may not preempt the field, this fact does not help Bytemark. Preemption counts against patent eligibility, but the lack of preemption does not count for patent eligibility.

Lessons for Practice

The court likely saved itself substantial work by using § 101. To begin with, the court mooted several other grounds of invalidity raised by Masabi. Moreover, the decision was entirely confined to the patents and prosecution histories, allowing a decision on the law. “The Court finds no relevant disputed underlying facts in this case, nor has [Bytemark] demonstrated any.” Anticipation and obviousness would likely have entailed disputes over prior art, the ordinary level of skill in the art, expert declarations, and so on. Finally, the court could rely on one representative claim rather than marching through all the claims. Section 101 continues to serve as a tool for clearing out infringement cases with less effort.

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