Case: 20-1079   Document: 47     Page: 1   Filed: 07/14/2020




        NOTE: This disposition is nonprecedential.


   United States Court of Appeals
       for the Federal Circuit
                 ______________________

      WESTERN EXPRESS BANCSHARES, LLC,
               Plaintiff-Appellant

                            v.

            GREEN DOT CORPORATION,
                 Defendant-Appellee
               ______________________

                       2020-1079
                 ______________________

    Appeal from the United States District Court for the
 Southern District of New York in No. 1:19-cv-04465-DLC,
 Senior Judge Denise Cote.
                  ______________________

                 Decided: July 14, 2020
                 ______________________

    ANDREW SOL LANGSAM, Pryor Cashman LLP, New
 York, NY, for plaintiff-appellant. Also represented by
 SMITH S. PIYANAN.

    ADAM R. BRAUSA, Durie Tangri LLP, San Francisco,
 CA, for defendant-appellee. Also represented by ANDREW
 LOUIS PERITO.
                 ______________________

      Before MOORE, LINN, and CHEN, Circuit Judges.
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2   WESTERN EXPRESS BANCSHARES     v. GREEN DOT CORPORATION



 PER CURIAM.
     Western Express Bancshares, LLC (“Western Ex-
 press”) appeals the dismissal on the pleadings of its com-
 plaint alleging infringement of Western Express’s U.S.
 Patent No. 8,498,932 (“’932 patent”) by Green Dot Corpo-
 ration (“Green Dot”). Western Express Bancshares, LLC v.
 Green Dot Corp., No. 19-cv-4465 (S.D.N.Y. Oct. 2, 2019)
 (“District Court Op.”). Because the ’932 patent claims pa-
 tent ineligible subject matter under 35 U.S.C. § 101, we af-
 firm.1
     Patent eligibility is ultimately a question of law, that
 may contain underlying fact issues. Solutran, Inc. v. Ela-
 von, Inc., 931 F.3d 1161, 1165 (Fed. Cir. 2019). Patent eli-
 gibility may, however, be susceptible to judgment on the
 pleadings. SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161,
 166 (Fed. Cir. 2018) (“Like other legal questions based on
 underlying facts, this question may be, and frequently has
 been, resolved on a Rule 12(b)(6) or (c) motion where the
 undisputed facts, considered under the standards required
 by that Rule, require a holding of ineligibility under the
 substantive standards of law.”).
     The Supreme Court and this court consistently hold
 that “fundamental economic practice[s]” are not patent eli-
 gible. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208,
 219 (2014) (invalidating as patent ineligible idea of inter-
 mediated settlement); Bilski v. Kappos, 561 U.S. 593, 611
 (2010) (financial risk hedging); Solutran, 931 F.3d at 1166
 (crediting a merchant account as early as possible while
 electronically processing a check); Mortgage Grader, Inc. v.



     1   The district court granted summary judgment
 based on both a failure to plead facts sufficient to state a
 plausible claim of infringement and invalidity due to pa-
 tent ineligibility. Because the validity issue resolves the
 appeal, we need not and do not address infringement.
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 WESTERN EXPRESS BANCSHARES    v. GREEN DOT CORPORATION      3



 First Choice Loan Servs. Inc., 811 F.3d 1314, 1324 (Fed.
 Cir. 2016) (anonymous loan shopping); OIP Techs., Inc. v.
 Amazon.com Inc., 788 F.3d 1359, 1360 (Fed. Cir. 2015) (au-
 tomatic price optimization); Ultramercial, Inc. v. Hulu,
 LLC, 772 F.3d 709, 715 (Fed. Cir. 2014) (using advertising
 as a form of exchange). We have applied this rule even
 where the financial transaction claimed includes physical
 components. See Solutran, 931 F.3d at 1168 (“[T]he phys-
 icality of the paper checks being processed and transported
 is not by itself enough to exempt the claims from being di-
 rected to an abstract idea.”); Content Extraction & Trans-
 mission LLC v. Wells Fargo Bank, Nt. Ass’n, 776 F.3d
 1343, 1347 (Fed. Cir. 2014) (rejecting contention that
 claims directed to a method for scanning checks to collect
 and store their data were non-abstract because of the phys-
 icality of the scanner).
    Claim 1 of the ’932 patent reads, in full:
       A method of funds transfer comprising the steps of:
       a. distributing at least one of a plurality of money
       account cards having specified capabilities to a re-
       tailer, each money account card having information
       associated with a predetermined account with one or
       more financial institutions, the retailer distributing
       the money account card to a purchaser thereof;
       b. receiving funds for allocation to the predeter-
       mined account, said funds being received from the
       purchaser of said money account card from the re-
       tailer;
       c. distributing at least a portion of the funds received
       into said predetermined account to a holder of the at
       least [sic] one money account card; and
       d. permitting the customer to furnish personal infor-
       mation of the holder other than a PIN, by communi-
       cating with the holder through an ATM, Internet
       connection or telephone call, and in response,
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4   WESTERN EXPRESS BANCSHARES       v. GREEN DOT CORPORATION



         activating or altering a previously dormant capabil-
         ity of the at least [sic] one money account card apart
         from withdrawal of funds. 2
 ’932 patent, col. 9, ll. 49–67.
     The first three steps describe the basic concept of a pay-
 ment card, and the last step merely describes the ability to
 adjust the financial relationship between the purchaser
 and the card provider from one conventional form to other
 conventional forms through a communication providing
 personal information. We agree with the district court that
 under the first step of Alice, claim 1 is thus directed to a
 “method of funds transfer” using a payment card.3 District
 Court Op. at 12. Indeed, the ’932 patent itself repeatedly
 characterizes the invention as “relat[ing] to a money trans-
 fer method.” ’932 patent, col. 2, ll. 37; id. at col. 2, l. 10
 (“funds transfer”); id. at col. 2, l. 19 (“funds transfer”); id.
 at col. 1, ll. 55–58 (noting desirability of “a method and/or
 system of providing and retrieving money transfers be-
 tween a customer and recipient through an automated net-
 worked method”); id., Abstract (“a method of funds
 transfer”). This is a “fundamental economic practice long


     2     Western Express does not separately argue the
 other claims in the ’932 patent, nor contest the district
 court’s determinations that independent Claims 17 and 29
 are “substantially similar to Claim 1,” and the dependent
 claims “do not add significant limitations to Claim 1.” Dis-
 trict Court Op. at 17.
      3    The district court also characterized the claims as
 directed to “the receipt, storage, and distribution of money
 by, in, and through existing technologies like stores, banks,
 and ATMs, the internet or telephone.” See District Court
 Op. at 15. We consider this as the same characterization
 as the shorthand characterization noted above. Both char-
 acterizations result in the same conclusion of patent ineli-
 gibility.
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 WESTERN EXPRESS BANCSHARES     v. GREEN DOT CORPORATION     5



 prevalent in our system of commerce” and, as such, is a pa-
 tent ineligible abstract idea. Alice, 573 U.S. at 219.
     Western Express first argues that the ’932 patent
 claims solve several problems associated with prior art
 money account cards: creating a bank account without an
 approval process, allowing the immediate purchase of
 goods, and allowing the purchaser to alter the functionality
 of the card after the card is already connected to a bank
 account. The first two of these “advantages” are just the
 conventional benefits of a payment card. The ability to al-
 ter a financial relationship through communication be-
 tween the parties is a fundamental characteristic of
 financial relationships.
      Western Express’s contention that the district court, in
 quoting from this court’s decision in Smart Systems, did not
 understand the claimed invention has no merit. See Dis-
 trict Court Op. at 14–15 (“Thus, the claim recites ‘the col-
 lection of financial data from third parties, the storing of
 that financial data, linking proffered credit cards to the fi-
 nancial data, and allowing access . . . based on the financial
 data’ to unspecified, altered features of traditional money
 cards” (quoting Smart Sys. Innovations, LLC v. Chicago
 Transit Auth., 873 F.3d 1364, 1372 (Fed. Cir. 2017)). Noth-
 ing in the district court’s quotation from Smart Systems
 can properly be read to suggest or imply that the steps of
 the claimed invention were the same as those in Smart Sys-
 tems. Id. To the contrary, the district court was simply
 making the point that, just as in Smart Systems, “claims
 that are directed to the collection, storage, and recognition
 of data are directed to an abstract idea” and do not effect a
 transformation. Id. at 15 (citing Smart Systems, 873 F.3d
 at 1373). The only potential “transformation” claimed is a
 transformation in the legal and financial obligations be-
 tween the parties, which itself is abstract. See Ultramer-
 cial, 772 F.3d at 717. We agree with the district court that
 the capability of increasing the functionality of the card to
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6   WESTERN EXPRESS BANCSHARES       v. GREEN DOT CORPORATION



 allow for other financial transactions between the parties
 does not effect a transformation.
     Western Express argues that the fact that the claims
 require a physical object—the payment card—renders the
 claims directed to patent eligible matter. We disagree.
 That position is precluded by this court’s holding in Smart
 Systems, where we held that the use of a bank card to ac-
 cess public transport was a patent ineligible abstract idea.
 Smart Systems, 873 F.3d at 1373 (“[T]hat the steps recited
 in the Asserted Claims are ‘necessarily’ performed ‘in the
 physical, rather than purely conceptual, realm . . . is beside
 the point’” (citing Alice, 573 U.S. at 224)). See also So-
 lutran, 931 F.3d at 1168; Content Extraction, 776 F.3d at
 1347.
     Turning to the second step of Alice, nothing in the
 claims provides the requisite inventive concept to save the
 claim from ineligibility. The ’932 patent “simply instruct[s]
 the practitioner to implement the abstract idea with rou-
 tine, conventional activity.” See Solutran, 931 F.3d at 1169
 (quoting Ultramercial, 772 F.3d at 715). Nothing in the
 ’932 patent, either in the claim limitations themselves or
 in their ordered combination goes beyond routine, conven-
 tional activity. The patent itself describes the recited com-
 ponent parts as present in the prior art: credit cards with
 preset credit limits, ’932 patent, col. 1, ll. 20–33; authoriza-
 tion mechanisms, id. at col. 2, ll. 54–58; and communica-
 tions mechanisms by which the relationship may be
 changed, id. at col. 5, l. 65 – col. 6, l. 6. The ’932 patent
 does not describe any new money transfer techniques, and
 Western Express does not argue that by the May 2002 pri-
 ority date, payment cards and or money transfers were in
 any way unconventional. Indeed, Western Express does
 not identify any components that were not conventional by
 the priority date.
     Nor does the ordered combination of limitations pro-
 vide the inventive concept. As Green Dot notes, Western
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 WESTERN EXPRESS BANCSHARES     v. GREEN DOT CORPORATION     7



 Express failed to make this argument below. Western Ex-
 press does not contest this assertion in its Reply Brief. This
 argument is therefore waived. See Fresenius USA, Inc. v.
 Baxter Int’l, Inc., 582 F.3d 1288, 1295 (Fed. Cir. 2009) (ar-
 guments not brought below are waived). In any event,
 Western Express merely argues that its invention is “en-
 tirely different from the steps for conventionally opening,
 obtaining and using a traditional account at a bank.” West-
 ern Express Br. at 57. But the absence of the exact inven-
 tion in the prior art does not prove the existence of an
 inventive concept. Here, Western Express has claimed a
 fundamental economic practice of transferring money
 through a payment card. This abstract idea is not patent
 eligible.


                         AFFIRMED
