Intellectual Ventures (IV) is the world’s biggest patent-licensing company and boasts of having collected tens of thousands of patents since it was founded in 2000. It’s raised about $6 billion from investors over the years, and to recoup that money, it started filing lawsuits over patents a few years ago. In 2013, it launched a new salvo, filing 13 lawsuits against major US banks, including Bank of America, JP Morgan Chase, and Capital One.
The Capital One case ended last Wednesday, when a Virginia federal judge threw out the two IV patents that remained in the case. It’s the first IV patent case seen through to a judgment, and it ended in a total loss for the patent-holding giant: both patents were invalidated, one on multiple grounds. (An IV case against Motorola went to a jury, but it ended in a mistrial, and no new trial has been scheduled.)
The case was just weeks away from a jury trial, but US District Judge Anthony Trenga didn’t let it get that far. In an opinion published Wednesday, Trenga found that IV’s patents were simply abstract ideas: “nothing more than the mere manipulation or reorganization of data,” he wrote. “At most, the patents describe a more efficient system or method for performing tasks than could be done without a computer, i.e. monitoring expenditures according to preset limits (the ‘137 Patent) or determining what would appeal to a particular user from a particular website (the ‘382 Patent.)”
The ‘382 patent, invented by the same Philadelphia patent lawyer who prosecuted it, received a special smackdown from Trenga, who found it invalid on two different grounds. The patent, entitled “advanced Internet interface providing user display access of customized webpages,” dates to an original application filed in 1998. Its principal claim describes sending customized webpages “as a function of the user’s personal characteristics.” But “neither the public nor a person of ordinary skill in the art could reasonably determine the precise metes and bounds of the claimed invention” wrote Trenga.
IV lawyers argued that the ‘137 patent was infringed by Capital One’s “account alerts” system, while the ShareBuilder investing website infringed the ‘382 patent. Three other patents that were dropped by IV earlier in the litigation were initially said to cover widely used features of modern banking: CVV/CVC codes on the back of Visa and MasterCard cards, online bill paying, and envelope-free ATMs.