Case: 23-1036    Document: 53     Page: 1    Filed: 05/28/2024




         NOTE: This disposition is nonprecedential.


   United States Court of Appeals
       for the Federal Circuit
                  ______________________


                     CASELAS, LLC,
                     Plaintiff-Appellant

                             v.

    VERIFONE, INC., DEFYNE HOLDINGS, LLC,
   SYNOVUS FINANCIAL CORP., GEORGIA'S OWN
                CREDIT UNION,
               Defendants-Appellees
             ______________________

       2023-1036, 2023-1038, 2023-1040, 2023-1041
                ______________________

     Appeals from the United States District Court for the
 Northern District of Georgia in Nos. 1:21-cv-03480-VMC,
 1:21-cv-03828-VMC, 1:21-cv-03829-VMC, 1:21-cv-03834-
 VMC, Judge Victoria M. Calvert.
                 ______________________

                  Decided: May 28, 2024
                  ______________________

      MICHAEL SCOTT FULLER, Garteiser Honea, PLLC, Ty-
 ler, TX, argued for plaintiff-appellant. Also represented by
 RANDALL T. GARTEISER, CHRISTOPHER A. HONEA.

    CAROLYN CHANG, Marton Ribera Schumann & Chang
 LLP, San Francisco, CA, for VeriFone, Inc. and argued for
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 2                              CASELAS, LLC v. VERIFONE, INC.




 all defendants-appellees.

    MARCUS R. CHATTERTON, Balch & Bingham LLP, Bir-
 mingham, AL, for defendant-appellee Defyne Holdings,
 LLC. Also represented by JAMES T. DAWKINS, IV.

     ROBERT L. LEE, Alston & Bird LLP, Atlanta, GA, for de-
 fendant-appellee Synovus Financial Corp.

     BENJAMIN THOMPSON, Fish & Richardson P.C., At-
 lanta, GA, for defendant-appellee Georgia’s Own Credit
 Union.   Also represented by ASHLEY BOLT; NEIL J.
 MCNABNAY, Dallas, TX.
                 ______________________

       Before CHEN, LINN, and STARK, Circuit Judges.
 LINN, Circuit Judge
     Caselas, LLC, appeals the dismissal by the District
 Court for the Northern District of Georgia of its complaint
 of infringement of U.S. Patent Nos. 7,529,698 (“’698 pa-
 tent”), 7,661,585, 9,117,206, 9,117,230, and 9,715,691 (col-
 lectively, the “Asserted Patents”) in related cases against
 Appellees VeriFone, Inc.; Defyne Holdings, LLC; Synovus
 Financial Corp.; and Georgia’s Own Credit Union (collec-
 tively, “VeriFone”). See Caselas, LLC v. Verifone, Inc., 

, 1331 (N.D. Ga. 2022) (dismissing claims
 against VeriFone); J. App’x at 22–24 (dismissing actions
 Defyne and Georgia’s Own and entering summary judg-
 ment in favor of Synovus based on the VeriFone order).
     For the reasons that follow, we affirm the district
 court’s dismissal of Caselas’s infringement claims for lack
 of patent-eligible subject matter under 

. Be-
 cause we write for the parties, we rely on the district court’s
 exposition of the facts of the case.
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 CASELAS, LLC v. VERIFONE, INC.                              3




                    I.   Patent Eligibility
     Patent subject matter eligibility “is a question of law,
 based on underlying facts.” SAP Am., Inc. v. InvestPic,
 LLC, 

 (Fed. Cir. 2018). We analyze el-
 igibility under the two-step Alice framework. Alice Corp.
 Pty. Ltd. v. CLS Bank Int’l, 

, 217 (2014). In
 step one, we “determine whether the claims at issue are
 directed to a patent-ineligible concept.” Id. at 218. Under
 this inquiry, we identify “the focus of the claimed advance
 over the prior art” to assess if the character of the claim as
 a whole, considered in light of the specification, is directed
 to excluded subject matter. Intell. Ventures I LLC v. Cap.
 One Fin. Corp., 

 (Fed. Cir. 2017) (quot-
 ing Affinity Labs of Tex., LLC v. DIRECTV, LLC, 

 (Fed. Cir. 2016)).
     In step two, we “consider the elements of each claim
 both individually and ‘as an ordered combination’ to deter-
 mine whether the additional elements ‘transform the na-
 ture of the claim’ into a patent eligible application.” Alice,
 573 U.S. at 217 (quoting Mayo Collaborative Servs. v. Pro-
 metheus Lab’ys, Inc., 

, 78–79 (2012)). Step two
 “looks more precisely at what the claim elements add” to
 determine if “they identify an inventive concept in the ap-
 plication of the ineligible matter to which . . . the claim is
 directed.” SAP, 

 (internal quotation marks
 and citation omitted). The abstract idea itself cannot sup-
 ply the inventive concept, “no matter how groundbreaking
 the advance.” 

.
                         A. ’698 Patent
    Like the district court, we treat claim 20 of the ’698 pa-
 tent as representative of the Asserted Patents’ claims. Ver-
 iFone, 624 F. Supp. 3d at 1340. Caselas does not dispute
 that claim 20 is representative.
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 4                              CASELAS, LLC v. VERIFONE, INC.




                      1. Alice Step One
     The district court determined that claim 20 is directed
 to the foundational commercial principle of underwriting,
 devoid of any patent eligible inventive concept. Id. at 1341.
 The district court concluded that as so directed, claim 20
 resembles claims that the courts have previously held pa-
 tent ineligible. Id. at 1342 (citing Bilski v. Kappos, 

, 611 (2010) (holding that claims directed to “the
 basic concept of hedging, or protecting against risk” are pa-
 tent ineligible); FairWarning IP, LLC v. Iatric Sys., Inc.,
 

, 1094–95 (Fed. Cir. 2016) (holding ineligible
 claims that “merely implement an old practice in a new en-
 vironment”)).
     Caselas argues that the district court overgeneralized
 claim 20 by ignoring two key features of the claim: first, the
 use of charge-back data and, second, the insertion of that
 data at the front end of the transaction process. Caselas
 argues that while the claims in Bilski and FairWarning
 were drawn to longstanding concepts, claim 20 focuses on
 a comparatively new problem in the art and the computer
 implementation of a solution to that problem. Caselas con-
 tends that this case more closely resembles TecSec, Inc. v.
 Adobe, Inc., in which we upheld the eligibility of claims
 that provided specific enhancements to a basic computer
 operation. See 

, 1295–96 (Fed. Cir. 2020).
    VeriFone argues that the district court correctly con-
 cluded that claim 20 is directed to the abstract underwrit-
 ing idea of checking financial history before completing a
 transaction. See VeriFone, 624 F. Supp. 3d at 1341–42. Ac-
 cording to VeriFone, limiting the use of an abstract idea to
 a specific charge-back context does not render the claim
 any less abstract. See Content Extraction & Transmission
 LLC v. Wells Fargo Bank, Nat’l Ass’n, 

 (Fed. Cir. 2014). VeriFone argues that Caselas can-
 not effectively distinguish Bilski and notes that we have
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 CASELAS, LLC v. VERIFONE, INC.                              5



 held ineligible similar claims directed to “collecting and an-
 alyzing information for financial transaction fraud.” Bo-
 zeman Fin. LLC v. Fed. Rsrv. Bank of Atlanta, 

 (Fed. Cir. 2020). Finally, VeriFone contends that
 TecSec does not control because claim 20 lacks a recitation
 of specific structures that enhance a computer operation.
     We agree with VeriFone that claim 20 is essentially di-
 rected to the abstract idea of underwriting. We also agree
 that because underwriting involves checking financial his-
 tories before completing a transaction, the incorporation of
 data at the front end of the transaction process adds noth-
 ing of consequence. In our view, claim 20 invokes a funda-
 mental economic principle similar to the abstract ideas of
 hedging against commercial risk, Bilski, 561 U.S. at 611–
 12, and detecting transaction fraud, Bozeman, 

. Although Caselas attempts to distinguish those cases
 by arguing that claim 20 solves an online-only problem,
 “not all claims purporting to address Internet-centric chal-
 lenges are eligible for patent.” DDR Holdings, LLC v. Ho-
 tels.com, L.P., 

 (Fed. Cir. 2014).
 Further, limiting the use of underwriting to charge-back
 data at most “implement[s] an old practice in a new envi-
 ronment.” FairWarning, 

. Thus, the fact
 that Claim 20 uses charge-back data as an input to the
 same checks involved in underwriting does not meaning-
 fully distinguish Bilski or Bozeman.
     We also agree that Claim 20 is distinguishable from the
 claims in TecSec. Caselas’s claim recites standard infor-
 mation processing steps at a high level of generality, not
 specific improvements to basic computer functionality. See
 TecSec, 

. Moreover, because underwriting
 is performed before the completion of a transaction, the
 step of receiving charge-back data on a computer at the
 front end of a transaction amounts to nothing more than
 the use of a computer as a tool to implement underwriting.
 See Elec. Power Grp., LLC v. Alstom S.A., 

 (Fed. Cir. 2016). Claim 20 contains neither a specific
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 6                              CASELAS, LLC v. VERIFONE, INC.




 improvement to basic computer functionality nor any en-
 hancement to a basic computer operation.
     We next turn to step two of the Alice framework.
                      2. Alice Step Two
     The district court correctly framed the step two inquiry
 as a search for an inventive concept that ensures the claim
 amounts to significantly more than a patent on an abstract
 idea. VeriFone, 624 F. Supp. 3d at 1342. The district court
 reasoned that the claim’s application of prior charge-back
 data at “an unconventional juncture” was not inventive be-
 cause “underwriting always occurs before a transaction.”
 Id. The district court concluded that claim 20 does not re-
 cite an inventive concept that would render the claims pa-
 tent eligible at Alice step two.
    Caselas argues that the district court erred by failing to
 accept as true the intrinsic record’s specific factual allega-
 tions of unconventionality. Caselas’s complaint alleges
 that industry actors did not use charge-back data as an im-
 portant payment processing data point until nearly a dec-
 ade after the ’698 patent’s date of invention. J. App’x at
 307–08. Caselas also argues that the ’698 patent’s applica-
 tion of charge-back data at the front end is inventive. Ver-
 iFone argues that reciting nothing more than the abstract
 idea of underwriting does not add an inventive concept at
 step two. SAP, 

.
    We agree with VeriFone. Placing charge-back data at
 the front end of the transaction process does not add an
 inventive concept because, as the district court noted,
 checking account history before completing a transaction
 simply invokes the concept of underwriting. VeriFone, 624
 F. Supp. 3d at 1342. A claim’s “use of the ineligible concept
 to which it is directed cannot supply the inventive concept.”
 BSG Tech LLC v. BuySeasons, Inc., 

 (Fed. Cir. 2018). Moreover, the argument that the claimed
 invention is unconventional based on the fact that industry
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 CASELAS, LLC v. VERIFONE, INC.                              7



 actors did not check charge-back histories until nearly a
 decade after the ’698 patent’s date of invention is of no con-
 sequence. See SAP, 

 (noting that patent
 law does not protect abstract claims “no matter how
 groundbreaking the advance”); BSG, 

 (ex-
 plaining that at step two, “[a]s a matter of law, narrowing
 or reformulating an abstract idea does not add ‘signifi-
 cantly more’ to it”). For these reasons, we conclude that
 nothing in representative claim 20 adds an inventive con-
 cept that would transform the claim into more than an ab-
 stract idea.
   We have carefully considered Caselas’s other argu-
 ments but do not find them persuasive.
                         CONCLUSION
      For the foregoing reasons, the district court’s decision
 is affirmed.
                         AFFIRMED