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NOTE: This disposition is nonprecedential.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 Case: 23-1036 Document: 53 Page: 2 Filed: 05/28/2024

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., 624 F. Supp. 3d 1328, 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 35 U.S.C. § 101. Be- cause we write for the parties, we rely on the district court’s exposition of the facts of the case. Case: 23-1036 Document: 53 Page: 3 Filed: 05/28/2024

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, 898 F.3d 1161, 1166 (Fed. Cir. 2018). We analyze el- igibility under the two-step Alice framework. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 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., 850 F.3d 1332, 1338 (Fed. Cir. 2017) (quot- ing Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (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., 566 U.S. 66, 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, 898 F.3d at 1167 (internal quotation marks and citation omitted). The abstract idea itself cannot sup- ply the inventive concept, “no matter how groundbreaking the advance.” Id. at 1170. 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. Case: 23-1036 Document: 53 Page: 4 Filed: 05/28/2024

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, 561 U.S. 593, 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., 839 F.3d 1089, 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 978 F.3d 1278, 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, 776 F.3d 1343, 1345, 1347 (Fed. Cir. 2014). VeriFone argues that Caselas can- not effectively distinguish Bilski and notes that we have Case: 23-1036 Document: 53 Page: 5 Filed: 05/28/2024

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, 955 F.3d 971, 980 (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, 955 F.3d at 980. 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., 773 F.3d 1245, 1258 (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, 839 F.3d at 1094. 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, 978 F.3d at 1296. 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., 830 F.3d 1350, 1354 (Fed. Cir. 2016). Claim 20 contains neither a specific Case: 23-1036 Document: 53 Page: 6 Filed: 05/28/2024

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, 898 F.3d at 1170. 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., 899 F.3d 1281, 1290 (Fed. Cir. 2018). Moreover, the argument that the claimed invention is unconventional based on the fact that industry Case: 23-1036 Document: 53 Page: 7 Filed: 05/28/2024

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, 898 F.3d at 1170 (noting that patent law does not protect abstract claims “no matter how groundbreaking the advance”); BSG, 899 F.3d at 1291 (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