On July 25, 2016, in a unanimous decision, the three-judge panel of the U.S. Court of Appeals for the Federal Circuit invalidated claims under 35 U.S.C. § 101 in LendingTree, LLC, v. Zillow, Inc. The court ruled that patents for the online loan marketplace relate to ideas that are “long prevalent in our financial system” and not genuine inventions.
LendingTree had filed suit against Zillow and other defendants in the U.S. District Court for the Western District of North Carolina, asserting claims of U.S. Patent Nos. 6,385,594 and 6,611,816 (the ‘816 patent is a continuation of the ‘594 patent, and thus, the patents in suit share a common specification). Zillow had moved for summary judgment of invalidity under 35 U.S.C. § 101 with respect to the asserted claims of both patents. The District Court delayed ruling on the motion until after trial, at which point the Court orally denied it from the bench. Following trial, the jury returned a verdict finding that Zillow and the other defendants did not infringe the asserted claims of the patents in suit and that all claims of the patents in suit were invalid for improper inventorship. These issues were appealed, respectively. During trial, LendingTree had moved to correct inventorship of the patents in suit pursuant to 35 U.S.C. § 256 and the USPTO issued Certificates of Correction (adding James F. Bennett, Jr. as a named inventor).
In the July 25th ruling, the Federal Circuit found that the asserted claims of the patents in suit are directed to an abstract idea and are directed to ineligible subject matter under 35 U.S.C. § 101. The District Court’s denial of Zillow’s motion for summary judgment was reversed.
“We have considered all of LendingTree’s remaining arguments and have found them unpersuasive. Accordingly, because the asserted claims of the patents in suit are directed to an abstract idea and do not present an “inventive concept,” we hold that they are directed to ineligible subject matter under 35 U.S.C. § 101.”
Regarding the invalidity of all claims in the suit for improper inventorship, the Federal Circuit remanded the case to permit LendingTree to file a motion under Fed. R. Civ. P. 60 to vacate the judgment of invalidity on account of improper inventorship with respect to the remaining claims of the patents in suit stating “In light of the PTO’s corrections to the patents in suit, we think a remand is appropriate.”
The court stated that their resolution of the case renders moot the issues of claim construction and the district court’s evidentiary rulings.