[00:00:00] Speaker 04:
It's 141855, CMG Financial Services versus Pacific Trust Bank.

[00:00:46] Speaker 01:
Good morning.

[00:00:59] Speaker 01:
The district court decision must be reversed or remanded because the decision was made in an evidence free and procedurally erroneous manner.

[00:01:10] Speaker 01:
Why is the decision below evidence free?

[00:01:13] Speaker 01:
The Alice analysis, as the Supreme Court teaches us,

[00:01:16] Speaker 01:
must be based on evidence in the record rather than proceed in an evidentiary vacuum.

[00:01:23] Speaker 01:
Here the district court has largely ignored record evidence and specifically a detailed declaration of the appellant's expert witness.

[00:01:34] Speaker 01:
No evidence on why any of the formulations of the abstract idea constitutes a fundamental economic practice.

[00:01:46] Speaker 01:
At the same time, the decision below was procedurally wrong.

[00:01:51] Speaker 04:
In any of the cases, and now we've had a long string of them, or somewhat long string of them, dealing with 101 and the Alice abstract idea, did the issue come up as to whether or not the district court is required to entertain expert declarations or rather entertain factual questions?

[00:02:10] Speaker 01:
Yes.

[00:02:11] Speaker 01:
In fact, we cite a number of cases now, I think it's Page

[00:02:16] Speaker 01:
25 of our opening brief in which the Supreme Court and this court considered specific evidence of whether or not a claimed abstract idea constitutes a fundamental economic practice.

[00:02:32] Speaker 01:
There were references and citations to articles, to textbooks,

[00:02:39] Speaker 01:
to law review articles and such.

[00:02:41] Speaker 01:
So yes, Chief Judge, such evidence has been required or at least relied upon.

[00:02:50] Speaker 01:
There's also procedural error down below.

[00:02:53] Speaker 01:
The district court, for the first time in its decision, formulated an abstract idea on which the entire decision was based.

[00:03:03] Speaker 01:
Therefore, the appellant had no notice of what the abstract idea that the court would consider was.

[00:03:12] Speaker 01:
And accordingly, we had no ability to present, to prepare, to present any evidence on that issue.

[00:03:19] Speaker 02:
There was a lot of briefing below.

[00:03:20] Speaker 02:
There was briefing and re-briefing and re-briefing on the 101 question, right?

[00:03:25] Speaker 02:
Yes, Judge.

[00:03:26] Speaker 02:
You were trying to persuade the Judge below about whatever your conception of the abstract idea was, just as the other side.

[00:03:33] Speaker 02:
was briefing and re-briefing their competing conception, and then likewise what is the inventive concept that follows the underlying abstract idea.

[00:03:43] Speaker 02:
And it turns out the District Court was more persuaded by the defendant's arguments.

[00:03:48] Speaker 01:
Well, what actually happened, Judge, there were several rounds of briefings.

[00:03:54] Speaker 01:
But those briefings were based on the new cases that kept them coming down from the Federal Circuit and from the Supreme Court.

[00:04:02] Speaker 01:
So every time

[00:04:03] Speaker 01:
there was a significant decision, the district judge requested the parties to submit supplemental briefs to discuss how the specific decision affected the situation in the case.

[00:04:17] Speaker 01:
However, there was not at any time a discussion of different formulations of the abstract idea, and the abstract idea that the decision was based on was for the first time formulated in the judge's decision.

[00:04:32] Speaker 01:
so we had no notice of what the abstract idea would be and had no opportunity to prepare.

[00:04:39] Speaker 02:
That happened in all the other cases though too, right?

[00:04:42] Speaker 02:
It wasn't the situation in any of the other opinions where this court affirmed a 101 invalidity ground where we said that the district court is first required to announce

[00:04:57] Speaker 02:
his or her conception of what the abstract idea is, and then there's a second round of briefing by the parties to try to fight over what would be or not be the inventive concept on top of that announced abstract idea.

[00:05:12] Speaker 01:
Well, the Alice Court requires that the first step in the analysis would be the formulation of the abstract idea and the determination of whether or not the claims of the issue are directed to that abstract idea.

[00:05:24] Speaker 01:
But there's no case law, there's no legal authority that states that the judge in the district court has to determine what that basic abstract idea is, regardless of what the parties present.

[00:05:41] Speaker 01:
In our system, the adversaries, the parties in litigation have to present their positions, support their positions with the evidence, and then the judge can decide

[00:05:54] Speaker 01:
But we believe it was a procedural error for the judge to formulate that idea for the first time, and then consider whether or not that idea constituted fundamental economic practice, which has to be done on the basis of evidence.

[00:06:10] Speaker 04:
I don't think I understand your argument.

[00:06:12] Speaker 04:
I mean, is this different than in a Markman?

[00:06:15] Speaker 04:
One side says, this is my proposed plane construction.

[00:06:17] Speaker 04:
The other side says, this is my proposed plane construction.

[00:06:20] Speaker 04:
And the judge, I don't think it's incumbent upon the judge

[00:06:23] Speaker 04:
to only pick one of the two, the judge can come up with a third, some combination.

[00:06:29] Speaker 04:
Are you saying he's not permitted to do this?

[00:06:31] Speaker 04:
Or are you saying before he does it he has to give the parties an advisory opinion, like this is my tentative?

[00:06:38] Speaker 04:
or my tentative view of what the abstract idea is, and then the parties get to comment on what he's come up with?

[00:06:47] Speaker 04:
Is that what you're saying is the process is required?

[00:06:50] Speaker 04:
And if so, why is this different than the way I think a Markman works?

[00:06:54] Speaker 01:
Yes, Judge.

[00:06:55] Speaker 01:
There is, I think, a significant difference.

[00:06:59] Speaker 01:
In the Markman hearing, the judge looks, as you stated,

[00:07:04] Speaker 01:
at the positions of the parties and can come up with his or her own position on the claim construction.

[00:07:10] Speaker 01:
And then the claim construction is handed to the parties, and the parties then formulate their infringement and invalid positions.

[00:07:17] Speaker 01:
So they have an ability to present evidence for the next step.

[00:07:23] Speaker 01:
Here, the judge, if the judge is allowed to formulate his own abstract idea, then the parties at that point

[00:07:32] Speaker 01:
or to have no ability to present evidence.

[00:07:36] Speaker 04:
What are you saying the judge, it was required for the judge to do that, to say this is my tentative idea and now you get to comment and respond to my tentative idea, to what you think about it?

[00:07:48] Speaker 04:
Is that what you're saying was missing here?

[00:07:50] Speaker 01:
I think the judge here needed to look at whether or not the abstract idea argued by the appellee down below.

[00:08:01] Speaker 01:
constitutes an abstract idea in light of the evidence, if any, and then, following the Alice Court ruling or teaching, decide whether or not the claims

[00:08:15] Speaker 01:
or directed to that abstract idea?

[00:08:16] Speaker 04:
I don't understand.

[00:08:17] Speaker 04:
So what is it you're saying went wrong here?

[00:08:20] Speaker 04:
That the district court, it would have been okay if they had accepted the appellee's construction of this abstract idea.

[00:08:27] Speaker 04:
That would have been okay, but they weren't allowed to come up with a variation of that?

[00:08:33] Speaker 01:
Well, a variation maybe, but it was a drastic change.

[00:08:36] Speaker 01:
And I would believe that if the judge should have looked at the abstract idea presented by the appellee.

[00:08:43] Speaker 04:
So the judge is hamstrung and constrained.

[00:08:45] Speaker 04:
It can only pick the abstract.

[00:08:47] Speaker 04:
The construction of the abstract idea is presented by either one side or the other.

[00:08:51] Speaker 04:
They can't take the two and think about it and come up with something else.

[00:08:56] Speaker 04:
Are you saying they're precluded from doing it, or are you just saying there's a process violation here because the party should have had another chance to respond to that?

[00:09:04] Speaker 01:
What I'm saying is that first we did not present, we did not believe that the claims were directed to any abstract idea.

[00:09:10] Speaker 01:
So there was only a set of abstract ideas, probably six or seven, formulated by the athlete in various briefs.

[00:09:20] Speaker 01:
And we argued that none of those abstract ideas is a fundamental economic practice and that our claims in any event are not directed

[00:09:32] Speaker 01:
to any of those abstract ideas.

[00:09:34] Speaker 01:
So we believe that the judge, following the Alice teaching, had to pick either one of these abstract ideas or perhaps a slight variation on it.

[00:09:45] Speaker 02:
But it was a striking departure.

[00:09:47] Speaker 02:
What if we conclude that what the district court articulated as the underlying abstract idea is in fact entirely consistent with what the appellees proposed as being the underlying abstract idea?

[00:09:59] Speaker 02:
then, you know, we're not in this conundrum that you're suggesting New York is.

[00:10:06] Speaker 02:
Right?

[00:10:08] Speaker 02:
And so, what is it, I guess, where is it, you know, what I saw being articulated below by the other side is what the abstract idea is, really didn't seem like this dramatic departure from the formulation that the district court adopted.

[00:10:24] Speaker 02:
I guess that's, you know,

[00:10:26] Speaker 02:
my concern before we even get to your concern.

[00:10:30] Speaker 01:
I'd be happy to respond to the judge.

[00:10:32] Speaker 01:
So if we conclude that the abstract idea formulated by the judge below is no different from one of the variations formulated by the appellee, then we need to look at the evidence of whether or not that stated or claimed abstract idea constitutes a fundamental economic practice and

[00:10:52] Speaker 01:
I believe presented no evidence on that issue.

[00:10:54] Speaker 01:
The only evidence on that subject is presented by the appellant.

[00:11:01] Speaker 01:
And the second step would be to decide whether or not the claims are directed to the abstract idea and that needs to be done by comparing the claim language with the abstract idea and see if the claim language actually tracks the abstract idea in any respect.

[00:11:18] Speaker 01:
And then according to the Alice teachings,

[00:11:20] Speaker 01:
Well, if we conclude that yes, the claims are directed to that abstract idea, then we need to use the evidence to decide whether or not there's substantially more in the claims.

[00:11:30] Speaker 02:
Your understanding of the abstract idea exception that it's limited to so-called fundamental economic practices, I think it's broader than that.

[00:11:41] Speaker 01:
Yes, I agree with you, Judge.

[00:11:44] Speaker 01:
It is broader than that, but as it relates to our case in the business method slash software

[00:11:51] Speaker 01:
Typically, it's a fundamental economic practice.

[00:11:53] Speaker 01:
It can be a mathematical formula, a thing of that nature.

[00:11:59] Speaker 02:
So why isn't the practice of minimizing interest by accelerating loan payments an abstract idea?

[00:12:09] Speaker 01:
It may be an abstract idea, but our claims, if that's the abstract idea, our claims are not directed to it.

[00:12:20] Speaker 01:
because in fact our claims may end up with increasing interest.

[00:12:25] Speaker 01:
The interest does not have to decrease.

[00:12:28] Speaker 01:
The purpose of the method is to allow a consumer to increase the interest due.

[00:12:34] Speaker 02:
That doesn't seem like a goal.

[00:12:37] Speaker 01:
Maybe I misstated, sir.

[00:12:40] Speaker 01:
Let me restate.

[00:12:42] Speaker 01:
The purpose of the method and the system of the patent

[00:12:46] Speaker 01:
is to allow the consumer the ability to reduce the interest.

[00:12:50] Speaker 01:
But the consumer may choose to continue to borrow more than a regular amortization schedule would have allowed.

[00:12:59] Speaker 01:
In that case, the interest actually would go up, total interest.

[00:13:05] Speaker 01:
So even in that sense, our invention is not directed to the claimed abstract idea of reducing the balance to reduce the interest.

[00:13:17] Speaker 02:
In a nutshell, because we're running out of time, what is the inventive concept?

[00:13:22] Speaker 01:
The inventive concept of this innovation is to combine a secured line of credit with a fully transactional checking account, which had never been done and there is no evidence to the contrary in the record, to allow the consumer

[00:13:43] Speaker 01:
to continue to either accelerate the payments at some periods of the loan term or to increase the borrowing according to the consumer's choosing.

[00:13:56] Speaker 00:
So assuming, accepting for the sake of this discussion that it's never been done in the United States, don't you still have problems with novelty in the Australian and foreign practices that we're told are the source of these ideas?

[00:14:15] Speaker 01:
No, Judge.

[00:14:17] Speaker 01:
And we presented volumes of evidence showing how the offset accounts in Australia

[00:14:26] Speaker 01:
in the sweep accounts in the UK are substantially different from what is... So you're saying they're distinguished on the facts.

[00:14:34] Speaker 00:
Correct.

[00:14:34] Speaker 00:
But looking at your claims, at least the broadest claims, don't appear, at least on their face, to make such distinctions, or are you saying that some of the narrower claims nonetheless would result that distinction?

[00:14:48] Speaker 01:
I think it was at the blue, for example, at claim three.

[00:14:51] Speaker 01:
Claim three is materially different, and it's explained in our expert reports.

[00:14:55] Speaker 01:
It's materially different from either the offset accounts in Australia or the sweep accounts in the UK.

[00:15:02] Speaker 01:
And in any event, that would be a 102 issue, not a 101 eligibility issue.

[00:15:09] Speaker 01:
But to answer your direct question, Judge, no, those prior art pieces do not disclose or teach the same methods or systems as claimed in our patent.

[00:15:25] Speaker 04:
And why don't we hear from the other side.

[00:15:27] Speaker 04:
Sure.

[00:15:28] Speaker 04:
Thank you.

[00:15:29] Speaker 04:
Good morning.

[00:15:47] Speaker 03:
May it please the court.

[00:15:49] Speaker 03:
I first wanted to start by addressing a couple of points that were raised in the argument thus far.

[00:15:56] Speaker 03:
First, with respect to whether or not evidence is required.

[00:16:01] Speaker 03:
That is certainly not the case.

[00:16:04] Speaker 03:
This court has ruled in several of these cases at the motion to dismiss stage, finding that the claims and the patents at issue

[00:16:17] Speaker 03:
were drawn to abstract ideas, and that the patents were invalid, and affirming the order on the motion to dismiss entered by the district court.

[00:16:28] Speaker 03:
That included the earlier cases of ultramarital and content extraction.

[00:16:35] Speaker 03:
And it also includes two of the cases most recently handed down by this court within the last few months, including OIP technologies

[00:16:46] Speaker 03:
and Internet Patents Corporation.

[00:16:48] Speaker 02:
Do you agree though that there can be times where going to a motion to dismiss is just too premature and that there does need to be some fact development in some circumstances, maybe not here, but I don't, are you proposing that everything can be done on 101 at a motion to dismiss?

[00:17:08] Speaker 03:
I am not proposing that.

[00:17:10] Speaker 03:
I recognize that the Supreme Court has called the 101 issue a threshold issue and that the court has found that it is capable

[00:17:18] Speaker 03:
at least in certain circumstances, of being resolved at the motion to dismiss stage.

[00:17:23] Speaker 03:
I don't believe that this case presents the situation where evidence is necessary in order to evaluate the question.

[00:17:32] Speaker 03:
But I am not arguing now for a rule that it could always be addressed at the motion to dismiss stage.

[00:17:40] Speaker 03:
I would also just quickly like to call the court's attention to four decisions issued by this court.

[00:17:47] Speaker 03:
since the briefing in this case closed, that all address the question of patentability under Section 101.

[00:17:56] Speaker 03:
Those cases are OIP Technologies, 788, F3rd, 1359.

[00:18:03] Speaker 03:
Internet Patents Corporation, 790, F3rd, 1343.

[00:18:12] Speaker 03:
Intellectual Ventures, 1, LLC.

[00:18:15] Speaker 03:
792 F3 1363 and Versada Development Corporation, excuse me, Versada Development Group 793 F3 1306.

[00:18:28] Speaker 03:
In each of those four cases, this court reviewed the claims and determined that they were drawn to an abstract idea and that the claim limitations did not save them.

[00:18:44] Speaker 00:
Let's qualify your statement.

[00:18:46] Speaker 00:
In each of those cases, the court reviewed the broadest claims because generally the patentee needed

[00:18:54] Speaker 00:
the broadest claims in order to achieve the enforcement that was denied.

[00:19:00] Speaker 00:
One of the unresolved areas is at which stage one gets to the point at which the abstraction becomes concrete.

[00:19:10] Speaker 00:
And certainly that was recognized by the Supreme Court as well in putting us on this path.

[00:19:16] Speaker 00:
And it may very well be that that's an issue in this case.

[00:19:20] Speaker 00:
But I think we can't generalize as you were.

[00:19:23] Speaker 03:
Thank you.

[00:19:24] Speaker 03:
And absolutely, it is the case that those cases looked at the individual claims, the broadest claims, and determined whether or not those claims were, whether any of the other claims at issue offered something more concrete that would, that they should be distinguished and evaluated separately.

[00:19:49] Speaker 04:
I think- Okay, why don't we talk about our claims in this case?

[00:19:52] Speaker 04:
And as formulated by Judge Chen about, you know, it's as old as old can be that you decrease the interest by paying off the loan.

[00:20:02] Speaker 04:
But your friend says this is obviously what he claimed here is way beyond that basic concept.

[00:20:09] Speaker 04:
Why is he wrong about that?

[00:20:11] Speaker 03:
The question here, I think, stems around the other issue that was raised earlier, which is, does it have to be

[00:20:19] Speaker 03:
conventional fundamental idea of ancient lineage, or does any idea suffice?

[00:20:26] Speaker 03:
And it was agreed that any idea suffice.

[00:20:29] Speaker 03:
This, of course, stems from the longstanding rule that you can't have a patent in an idea.

[00:20:35] Speaker 03:
And here, the formulation of this abstract idea reflects what was done here was someone had an idea to join a traditional checking account

[00:20:49] Speaker 03:
with a line of credit mortgage account.

[00:20:52] Speaker 03:
In order to accomplish this, potentially accomplish this savings, there was nothing inventive, there was nothing that was new that was created, there was nothing concrete about the abstract idea of connecting these two.

[00:21:11] Speaker 03:
And what then was done and what's reflected in both the

[00:21:15] Speaker 03:
system claim, claim one, independent claim one, and 1311.

[00:21:21] Speaker 03:
And the method claim and claim three are simply individual steps that demonstrate the combination of those two traditional products.

[00:21:32] Speaker 03:
Again, nothing has been created.

[00:21:37] Speaker 02:
A lot is made.

[00:21:38] Speaker 02:
Hypothetically, it's a novel.

[00:21:41] Speaker 02:
Maybe you don't want to call it invention, but it's an innovation.

[00:21:44] Speaker 02:
It's new.

[00:21:45] Speaker 03:
Uh, excepting a lot of evidence has been put in as to how this is a new idea or how this has not been done before.

[00:21:56] Speaker 03:
And I would postulate that an idea is not patentable, irrespective as to whether or not it's new.

[00:22:05] Speaker 03:
And this is no different, for example, in the Ariosa Diagnostics Inc.

[00:22:11] Speaker 03:
case that was 788.

[00:22:13] Speaker 00:
I think you're overstating again.

[00:22:15] Speaker 00:
We know that every invention starts with an idea.

[00:22:19] Speaker 00:
My idea is to increase gasoline mileage through improving the carburetor.

[00:22:24] Speaker 00:
Then you get to how it's done.

[00:22:26] Speaker 00:
We're told here that this is an idea never implemented.

[00:22:33] Speaker 00:
We could argue about that, but in any case, this is what we're told.

[00:22:37] Speaker 00:
This is a combination of steps never before performed, and along the way as you go through the patents,

[00:22:43] Speaker 00:
We get to more and more details.

[00:22:46] Speaker 00:
Are you telling us that it doesn't matter even the most rigorous implementation of the idea is unpatentable because it's an idea to start with?

[00:23:02] Speaker 03:
Absolutely not.

[00:23:02] Speaker 03:
And I think picking up exactly on your example, the two part test handed down in Mayo and confirmed in ours would say you start with what is the idea.

[00:23:13] Speaker 03:
And then from that idea, you determine whether or not anything in the claim limitations, either taken individually or together as a whole, add that inventive concept.

[00:23:25] Speaker 03:
So for example, in the example that you used, that you've come up with an idea to get better gas mileage in a car, that is an idea.

[00:23:35] Speaker 03:
And then the question would be, are the steps in the individual claim limitations that you apply

[00:23:41] Speaker 03:
Do they actually provide that inventive concept?

[00:23:45] Speaker 03:
If your patent was drawn to, if the claims of your patent read, have a car, increase the gas, and improve the car by entering a system that increases the gas mileage, and thereby improve the car, then those claim limitations, I would postulate, would not advance the idea

[00:24:10] Speaker 03:
If you had something more, if there was something concrete in the implementation of that idea, then that abstract idea would become a patentable application.

[00:24:21] Speaker 00:
But that's what we're told has occurred here.

[00:24:23] Speaker 03:
And if you look at the claim elements in claim one, they simply recite a line of credit mortgage account

[00:24:33] Speaker 03:
and a checking account that are combined.

[00:24:36] Speaker 03:
They recite the trappings of a traditional checking account, including access through an ATM, including the ability to do online transactions, including the provision of writing checks.

[00:24:54] Speaker 03:
All of the things that are associated as set forth in the specification are associated with a traditional checking account.

[00:25:02] Speaker 03:
and combining that with a line of mortgage.

[00:25:05] Speaker 03:
Here, if this patent is allowed to stand, it would block anyone, everyone from combining a checking account with a line of credit mortgage account.

[00:25:19] Speaker 03:
And that's simply an idea, however it is done.

[00:25:22] Speaker 00:
If that had been done before, then that would end their case.

[00:25:25] Speaker 00:
You're telling us that even if they have a brand new concept, a new idea that's never been performed before, and they teach how it's to be carried out, that that would prevent people from doing it in the future.

[00:25:39] Speaker 00:
Well, that's what the patent system does.

[00:25:42] Speaker 03:
And Your Honor, what I would say is this case is no different from

[00:25:46] Speaker 03:
the cases in Internet Patents Corporation or OIP Technologies where you were talking about a form, an Internet form, that the data is lost if you use the forward or backward navigation buttons and the idea, and it's new and it's different and it hasn't been done before, the idea is to

[00:26:12] Speaker 03:
develop a system to keep that data even when you use the navigation buttons to move forward or backward.

[00:26:19] Speaker 03:
Now, that might be a new idea.

[00:26:21] Speaker 03:
That might be something that hasn't been done before.

[00:26:24] Speaker 03:
And we all might find it to be useful.

[00:26:27] Speaker 03:
But the question is simply whether the patent claims that say implement that have added something new.

[00:26:35] Speaker 03:
And in that case, it was determined that they had not.

[00:26:38] Speaker 03:
Likewise, in the OIP technologies case, the price optimization with the demand curve, it was a new idea to engage the internet to get feedback from customers in a more real-time way with respect to pricing.

[00:26:54] Speaker 03:
That was a new idea that hadn't been done before in that context.

[00:27:00] Speaker 03:
And so here, what we're saying is

[00:27:03] Speaker 03:
Even if you accept the evidence that's presented that this is a new idea, this product had not been offered before, the fact of the matter is it's simply an idea.

[00:27:15] Speaker 03:
It's simply an idea to combine two things that

[00:27:19] Speaker 04:
doesn't i i i i i i i i i i i i i i i i i i i i i i i i i

[00:27:41] Speaker 04:
And so I think if you apply the appropriate analysis, you start with that.

[00:27:46] Speaker 04:
And that's your abstract idea.

[00:27:48] Speaker 04:
And then you look at, well, how have they dressed this up?

[00:27:51] Speaker 04:
Have they used non-routine, unconventional steps in their implementation?

[00:27:58] Speaker 04:
It seems to me that's a little different than the analytical framework you've given us here this morning.

[00:28:03] Speaker 03:
Well, and I think, Your Honor, I think it works under either framework.

[00:28:06] Speaker 03:
Addressing the district court framework, I think at the time the district court fashioned the idea, none of the cases that we've been talking about this morning from this court had been handed down.

[00:28:18] Speaker 03:
And as was argued earlier, the court was looking for a conventional fundamental principle.

[00:28:24] Speaker 03:
That was the idea that the court

[00:28:26] Speaker 03:
believed it had to arrive at.

[00:28:29] Speaker 03:
We didn't have the benefit of the decisions like contract content extraction or the internet patents court case to show that the idea could be a more specific idea.

[00:28:43] Speaker 03:
So I think that this analysis is right and that the idea, as was demonstrated, is simply to join accounts.

[00:28:50] Speaker 03:
However, even under the district court's analysis, with this broader idea of reducing interest

[00:28:57] Speaker 03:
and if you reduce interest, you reduce the amount of money owed, that the trappings, the claim limitations as described, simply take a traditional line of credit account, join to a traditional checking account, and have not added or changed anything about that abstract idea.

[00:29:23] Speaker 02:
It seems like this Court and Supreme Court, a line of cases has been coming out that say methods of conducting financial transactions are abstract ideas and all of those claims have gone down under Section 101.

[00:29:41] Speaker 02:
Is it your view that you can't get a patent at all on methods of conducting financial transactions?

[00:29:52] Speaker 02:
Or is there something out there that can truly be regarded as an application of that abstract idea?

[00:30:05] Speaker 02:
Your Honor, I will... Let's say, for example, some very complex exotic 40-step investment scheme that you're able to get a high yield on.

[00:30:19] Speaker 02:
No computer.

[00:30:21] Speaker 02:
It's more precise than just the abstract idea of investing money to get a game back.

[00:30:35] Speaker 03:
I would think, Your Honor, I'm not arguing that you would rule out any such type of patent.

[00:30:42] Speaker 03:
And I would think one of the issues that would be presented in such a case would be

[00:30:49] Speaker 03:
Is there a problem?

[00:30:51] Speaker 03:
Is there something that has impeded your ability to implement the idea that you overcome or solve?

[00:30:59] Speaker 03:
And going back to the example of the gas mileage, simply having an idea, the idea, maybe there was a specific modification to a catalytic converter.

[00:31:11] Speaker 03:
Once you have the idea, you still have to reduce it to practice.

[00:31:15] Speaker 03:
And here in this context, it would be

[00:31:17] Speaker 03:
adding the limitations that demonstrate that you're not preempting the fee.

[00:31:24] Speaker 03:
Thank you.

[00:31:34] Speaker 01:
I would like to address several points as read by Council.

[00:31:36] Speaker 01:
First, I would like to start with a proposition to the claims in our patent contain enough specificity to render them concrete.

[00:31:48] Speaker 01:
The implementations are concrete, going to Judge Newman's question.

[00:31:56] Speaker 01:
There is much more here than the formulated abstract idea.

[00:32:01] Speaker 01:
As Judge Newman stated, that's the intent of the patent system.

[00:32:07] Speaker 01:
It is to protect such inventions.

[00:32:09] Speaker 02:
Could Claim 3, the method claim, be performed just by humans?

[00:32:15] Speaker 02:
human implemented?

[00:32:18] Speaker 02:
A human implemented method of organizing activity?

[00:32:23] Speaker 01:
I can only state what I know based on the evidence.

[00:32:26] Speaker 01:
The evidence in the record shows clearly that it cannot be.

[00:32:31] Speaker 02:
And no one to my knowledge in this room is... Setting up accounts and then transferring money, withdrawing money?

[00:32:38] Speaker 01:
There is much more to that.

[00:32:42] Speaker 01:
And I'd be happy to address element by element.

[00:32:45] Speaker 04:
Is any element one that hasn't been traditionally a long-standing function that performs part of the banking and financial industry?

[00:32:53] Speaker 04:
Withdrawals, transfers of money, is there anything that we haven't engaged in, in some way, shape or form, for as long as we can remember?

[00:33:04] Speaker 01:
to judge let me have an answer twofold answer first i'd not believe that the correct inquiry we need to be making because the combination of well-known elements can be patentable and that's well established uh... the second answer to your question is that yes for example there's no evidence that automatic sweeping of all funds in the checking account

[00:33:34] Speaker 01:
into the line of credit portion of the account has been done in the past, including the prior art that has been argued here from Australia and the United Kingdom.

[00:33:45] Speaker 01:
Those are very different accounts.

[00:33:48] Speaker 01:
And the transactions, according to claim three, go both ways from the checking account portion of the account into the line of credit, and in the opposite direction,

[00:34:03] Speaker 01:
a transaction comes in that needs to be funded.

[00:34:06] Speaker 01:
And that, responding to your question, Judge, has not been done.

[00:34:10] Speaker 01:
That's an example of a new element.

[00:34:13] Speaker 02:
Just to get back to my question, where is the technological instantiation of this invention in Method Claim 3?

[00:34:22] Speaker 01:
I'm sorry, Judge, where is the technological substantiation?

[00:34:26] Speaker 02:
Yeah, where is the

[00:34:30] Speaker 02:
I guess, for lack of a better word, something concrete in claim three that is something physical.

[00:34:39] Speaker 02:
Is there, where do I know that there is some kind of whiz-bang sophisticated computer controlling this invention?

[00:34:51] Speaker 01:
Well, again, Judge,

[00:34:55] Speaker 01:
The question, according to the Supreme Court, is not whether or not there is a computer.

[00:35:00] Speaker 01:
In fact, the Supreme Court appears to state that the presence of the computer is not determinative.

[00:35:08] Speaker 01:
The implication is that the absence of it is not determinative either.

[00:35:13] Speaker 01:
That's fine.

[00:35:13] Speaker 02:
This is just one indicial of the overall 101 analysis.

[00:35:18] Speaker 02:
Absolutely.

[00:35:20] Speaker 02:
Would you agree with me that you can read claim three as being something that's human implemented?

[00:35:28] Speaker 02:
There's no requirement that a computer is running a portion of this.

[00:35:37] Speaker 01:
No, I will not agree with that.

[00:35:39] Speaker 02:
Can you show me where in the claim?

[00:35:43] Speaker 01:
Well, the claim needs to be written for use and interpreted.

[00:35:49] Speaker 01:
from the standpoint of a person skilled in art.

[00:35:55] Speaker 01:
And there is evidence in the record that shows that a person skilled in art with 36 years of consumer mortgage lending states that implementing this in a modern banking environment without a computer is impossible.

[00:36:11] Speaker 01:
It just cannot be done.

[00:36:12] Speaker 01:
I'm an attorney.

[00:36:14] Speaker 01:
And in fact, if the court looks carefully at the arguments or the briefs presented by the appellee, everything is an attorney argument.

[00:36:22] Speaker 01:
They present no evidence except for the patent itself.

[00:36:26] Speaker 01:
And that's not how the Supreme Court teaches us these issues need to be analyzed.

[00:36:31] Speaker 01:
If I may, I'd like to address the couple.

[00:36:33] Speaker 01:
We're way beyond time.

[00:36:35] Speaker 01:
All right.

[00:36:35] Speaker 04:
Thank you so much.

[00:36:39] Speaker 04:
We thank both of you.