Globalprivatequity.com, Inc. v. The Debt Exchange, Inc. (D. Mass. 24-cv-11481).

Globalprivatequity.com (“GPE”) accused The Debt Exchange (“DebtX”) of infringing three patents related to digital systems for monitoring and transacting in securities not listed on a traditional exchange, such as syndicated mortgage loans.  DebtX moved to dismiss the complaint, saying that the patents claim ineligible subject matter under 35 U.S.C. § 101.

Judge Saylor noted that patent eligibility, an issue of law, is susceptible to a motion to dismiss, but that such a motion should only be granted where the complain contains no factual allegations that (taken as true) prevent resolution on eligibility.  Here, the claimed subject matter – monitoring and transacting in securities not listed on a conventional exchange – constituted nothing more than a fundamental practice long prevalent in the American system of commerce, the like of which the Supreme Court has deemed to be an ineligible abstract idea, so fundamental that it is one of the organizing ideas of most introductory finance classes.  Judge Saylor further found that to the extent any element of the claims were not functional components of a digital exchange, they nevertheless related to the display and analysis of trading information, which the Federal Circuit has previously held to constitute abstract ideas.  The claims did not recite any inventive technology for achieving the display and analysis of the relevant information, instead only reciting generic computer components for so doing, which was insufficient to make the claims non-abstract.

Looking to the second step of the Alice test, Judge Saylor determined that the claims lacked the required inventive concept to transform the abstract idea into a patent-eligible one.  He acknowledged that this analysis is usually fact-dependent and not susceptible to a motion to dismiss, but found that the complaint did not make any factual allegations about the nature of the claims in suit on which an inventive concept could be found.  Accordingly, he dismissed the complaint for failure to state a claim on which relief could be granted.