The district court did not err in refusing to strike a Section 101 patent eligibility defense or in granting summary judgment under Section 101 holding patent claims on anonymous loan shopping to be directed to patent ineligible subject matter.  Although First Choice included the Section 101 defense in its affirmative defenses, it did not include this defense in its preliminary invalidity contentions pursuant to the district court’s rules in patent cases.  After claim construction and after the Supreme Court issued its opinion in the Alice case, First Choice amended its invalidity contentions to include a Section 101 patent ineligibility defense.  Mortgage Grader moved to strike the Section 101 defense, but the district court denied that motion and the Federal Circuit affirmed, holding that the court did not abuse its discretion, because Alice was a significant enough change in the law to justify First Choice’s change of position. 

On the issue of patent ineligibility itself, the court affirmed the district court, holding that the claims are directed to an abstract idea, anonymous loan shopping, which includes steps that could all be performed by humans without a computer.  Further, there was no inventive concept in the claims, because the claims merely added generic computer components and did not purport to improve the functioning of the computer itself or effect an improvement in any other technology or technical field.  

Mortgage Grader, Inc. v. First Choice Loan Services Inc., Case No. 2015-1415 (January 20, 2016); Opinion by: Stark (sitting by designation), joined by O’Malley and Taranto; Appealed From: United States District Court for the Central District of California, Guilford, J.  Read the full opinion here

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