  United States Court of Appeals
      for the Federal Circuit
                ______________________

                  SOLUTRAN, INC.,
                Plaintiff-Cross-Appellant

                           v.

           ELAVON, INC., U.S. BANCORP,
                Defendants-Appellants
               ______________________

                 2019-1345, 2019-1460
                ______________________

    Appeals from the United States District Court for the
District of Minnesota in No. 0:13-cv-02637-SRN-BRT,
Judge Susan Richard Nelson.
                ______________________

                Decided: July 30, 2019
                ______________________

    ROBERT JAMES GILBERTSON, Greene Espel, PLLP, Min-
neapolis, MN, argued for plaintiff-cross-appellant. Also
represented by SYBIL LOUISE DUNLOP, DAVID WALLACE-
JACKSON.

   JOHN THOMAS VITT, Jones Day, Minneapolis, MN, ar-
gued for defendants-appellants. Also represented by
GREGORY A. CASTANIAS, Washington, DC; PETER
MCCREERY LANCASTER, TIMOTHY J. DROSKE, BEN DESMOND
KAPPELMAN, Dorsey & Whitney LLP, Minneapolis, MN.
               ______________________
2                               SOLUTRAN, INC. v. ELAVON, INC.




    Before CHEN, HUGHES, and STOLL, Circuit Judges.
CHEN, Circuit Judge.
    U.S. Bancorp and its affiliate Elavon, Inc. (collectively,
U.S. Bank) appeal orders in the United States District
Court for the District of Minnesota (1) denying U.S. Bank’s
motion for summary judgment that claims 1–5 of U.S. Pa-
tent No. 8,311,945 (’945 patent), assigned to Solutran, Inc.
(Solutran), are invalid under 35 U.S.C. § 101 for failing to
recite patent-eligible subject matter and (2) granting So-
lutran’s motion for summary judgment that Solutran’s
products infringe claims 1–5 of the ’945 patent. Solutran
cross-appeals, arguing that the district court abused its
discretion when it denied Solutran the ability to amend its
complaint to include a claim for willful infringement after
the deadline set out in the scheduling order.
    Because we agree with U.S. Bank that claims 1–5 of
Solutran’s patent are invalid under § 101, we reverse.
                        BACKGROUND
                    A. The ’945 Patent
    The ’945 patent, issued in 2012, describes a system and
method for processing paper checks. ’945 patent. The pa-
tent explains that in the past, the payee would transport
the check to his or her own bank to be read and processed,
then the payee’s bank would transport the check to the
payor’s bank, where it also would be read and processed.
Id. at col. 1, ll. 30–39. At this point, the payor’s bank would
debit the payor’s account and transfer the money to the
payee’s bank, which would credit the payee’s account. Id.
at col. 1, ll. 39–45.
    The Background section of the ’945 patent explains
that the digital age ushered in a faster approach to pro-
cessing checks, where the transaction information—e.g.,
amount of the transaction, routing and account number—
on the check is turned into a digital file at the merchant’s
SOLUTRAN, INC. v. ELAVON, INC.                                  3



point of sale (POS) terminal. Id. at col. 1, l. 51 – col. 2, l. 8,
col. 4, ll. 51–58 (at the point of purchase, “the merchant
keys, or applies amount captured at POS, into the terminal
the amount of the purchase” and “passes the check through
a MICR (magnetic ink character recognition) reader to cap-
ture the consumer’s account number, routing number of
the financial institution holding the account, and the check
number”). The digital check information is sent electroni-
cally over the Internet or other network, id. at col. 1, ll. 54–
61, and the funds are then transferred electronically from
one account to another. Id. at col. 2, ll. 5–8. By converting
the check information into digital form, it no longer was
always necessary to physically move the paper check from
one entity to another to debit or credit the accounts. Id. at
col. 2, ll. 1–5. But retaining the checks was still useful for,
among other things, verifying accuracy of the transaction
data entered into the digital file. Id. at col. 2, ll. 11–15. It
was well-known that merchants could optionally capture a
digital image of the check at the point of purchase. Id. at
col. 2, ll. 61–63, col. 4, ll. 58–59, FIG. 1; see also id. at col.
2, ll. 30–31 (“The original check can be scanned and its dig-
ital image stored for later use . . . .”).
    The patent also discloses a method proposed by the Na-
tional Automated Clearing House Association (NACHA)
for “back office conversion” where merchants scan their
checks in a back office, typically at the end of the day, id.
at col. 2, l. 65 – col. 3, l. 1, “instead of at the purchase ter-
minal,” id. at col. 5, ll. 2–4, FIG. 2. A scanner captures an
image of the check, and MICR data from the check is stored
with the image. Id. at col. 3, ll. 1–2. An image file contain-
ing this information can be transferred to a bank or third-
party payment processor. Id. at col. 3, ll. 2–4.
     The patent describes its invention as a system and
method of electronically processing checks in which (1)
“data from the checks is captured at the point of purchase,”
(2) “this data is used to promptly process a deposit to the
merchant’s account,” (3) the paper checks are moved
4                              SOLUTRAN, INC. v. ELAVON, INC.




elsewhere “for scanning and image capture,” and (4) “the
image of the check is matched up to the data file.” Id. at
col. 3, ll. 16–46. The proffered benefits include “improved
funds availability” for merchants and allegedly “reliev[ing
merchants] of the task, cost, and risk of scanning and de-
stroying the paper checks themselves, relying instead on a
secure, high-volume scanning operation to obtain digital
images of the checks.” Id. at col. 3, ll. 46–62. Solutran ex-
plains that its method allows merchants to get their ac-
counts credited sooner, without having to wait for the check
scanning step.
    The court treated claim 1 as representative, which the
parties do not dispute. See J.A. 47. Claim 1 recites:
    1. A method for processing paper checks, compris-
    ing:
    a) electronically receiving a data file containing
    data captured at a merchant’s point of purchase,
    said data including an amount of a transaction as-
    sociated with MICR information for each paper
    check, and said data file not including images of
    said checks;
    b) after step a), crediting an account for the mer-
    chant;
    c) after step b), receiving said paper checks and
    scanning said checks with a digital image scanner
    thereby creating digital images of said checks and,
    for each said check, associating said digital image
    with said check’s MICR information; and
    d) comparing by a computer said digital images,
    with said data in the data file to find matches.
Id. at claim 1.
SOLUTRAN, INC. v. ELAVON, INC.                            5



         B. District Court and CBM Proceedings
     Solutran sued U.S. Bank in the United States District
Court for the District of Minnesota, alleging infringement
of claims 1–5 of the ’945 patent. U.S. Bank filed an answer
and counterclaims alleging, inter alia, that it did not in-
fringe and that the asserted claims were invalid under
§ 101. U.S. Bank later filed a motion for summary judg-
ment that the ’945 patent was invalid because it did not
recite patent-eligible subject matter under § 101, specifi-
cally because the claims were directed to the “abstract idea
of delaying and outsourcing the scanning of paper checks.”
See J.A. 50. The district court disagreed, concluding that
the claims were not directed to an abstract idea and the
’945 patent was therefore patent-eligible.
    The district court found a previous covered business
method (CBM) review of the ’945 patent by the Patent Trial
and Appeal Board (Board) persuasive in reaching its deter-
mination. J.A. 52 n.5. In August 2014—two months after
the Supreme Court issued its Alice Corp. Pty. Ltd. v. CLS
Bank International, 573 U.S. 208 (2014), decision—the
Board issued an institution decision denying the petition
as to the § 101 challenge, concluding that claim 1 of the
’945 patent was not directed to an abstract idea. U.S. Ban-
corp v. Solutran, Inc., No. CBM2014-00076, 2014 WL
3943913 (P.T.A.B. Aug. 7, 2014). The Board reasoned that
“the basic, core concept of independent claim 1 is a method
of processing paper checks, which is more akin to a physical
process than an abstract idea.” Id. at *8. “Indeed, there is
nothing immediately apparent about this basic, core con-
cept that would indicate that it is directed to an abstract
idea at all.” Id.
    The district court’s reasoning aligned with the Board’s.
The district court focused on the physical nature of checks’
processing and movement and accused U.S. Bank of im-
properly construing the claim to “a high level of abstrac-
tion.” J.A. 51–57. The district court distinguished U.S.
6                              SOLUTRAN, INC. v. ELAVON, INC.




Bank’s cited Federal Circuit and Board decisions involving
check-related patents on the basis that the ’945 patent, in
its view, is directed to an improved technique for pro-
cessing and transporting physical checks, rather than just
handling data that had been scanned from the checks. J.A.
55.
    The district court concluded, in the alternative, that
the asserted claims also recited an inventive concept under
step two of Alice. The district court accepted Solutran’s as-
sertion that “Claim 1’s elements describe a new combina-
tion of steps, in an ordered sequence, that was never found
before in the prior art and has been found to be a non-obvi-
ous improvement over the prior art by both the USPTO ex-
aminer and the PTAB’s three-judge panel (affirmed by the
Federal Circuit).”1 J.A. 58. The district court also con-
cluded that the claim passes the machine-or-transfor-
mation test because “the physical paper check is
transformed into a different state or thing, namely into a
digital image.” J.A. 59.
    U.S. Bank appeals, inter alia, the § 101 ruling. So-
lutran cross-appeals on the issue of willful infringement.
We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).
                        DISCUSSION
    Patent eligibility under § 101 is a question of law that
may contain underlying issues of fact. Interval Licensing
LLC v. AOL, Inc., 896 F.3d 1335, 1342 (Fed. Cir. 2018) (cit-
ing Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir.



    1   CBM2014-00076, which this court affirmed, only
included an obviousness challenge to the ’945 patent, as the
§ 101 challenge had already been denied at institution. See
U.S. Bancorp v. Solutran, Inc., No. CBM2014-00076, 2015
WL 4698463, at *17 (P.T.A.B. Aug. 5, 2015); U.S. Bancorp
v. Solutran, Inc., 668 F. App’x 363, 364 (Fed. Cir. 2016).
SOLUTRAN, INC. v. ELAVON, INC.                              7



2018)). We review an ultimate conclusion on patent eligi-
bility de novo. See id.
    The Supreme Court has held that certain categories of
subject matter, including abstract ideas, are not eligible for
patent protection under § 101. Mayo Collaborative Servs.
v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012). “The ‘ab-
stract ideas’ category embodies the longstanding rule that
an idea of itself is not patentable.” Alice, 573 U.S. at 218
(internal brackets and quotation marks omitted). To deter-
mine whether claimed subject matter is patent-eligible, we
apply the two-step framework explained in Alice. Id. First,
we “determine whether the claims at issue are directed to
a patent-ineligible concept” such as an abstract idea. Id.
Second, if so, we “examine the elements of the claim to de-
termine whether it contains an ‘inventive concept’ suffi-
cient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Id. at 221 (internal quotation marks
omitted) (quoting Mayo, 566 U.S. at 72, 80). At each step,
the claims are considered as a whole. See id. at 218 n.3,
225.
                        1. Step One
    We agree with U.S. Bank that the claims of the ’945
patent are directed to an abstract idea, although we artic-
ulate it a bit differently than U.S. Bank does. We conclude
that the claims are directed to the abstract idea of crediting
a merchant’s account as early as possible while electroni-
cally processing a check.
    We have previously ruled that certain transaction
claims performed in a particular order or sequence are di-
rected to abstract ideas. In Ultramercial, Inc. v. Hulu,
LLC, 772 F.3d 709 (Fed. Cir. 2014), the claims at issue were
drawn to a method for distribution of copyrighted content
over the Internet including the steps of, inter alia, receiv-
ing media from a content provider, selecting an ad, offering
the media to the consumer in exchange for watching the
ad, displaying the ad, then allowing the consumer to access
8                                SOLUTRAN, INC. v. ELAVON, INC.




the media. Id. at 714–15. We determined that the ordered
combination of steps recited “an abstraction—an idea, hav-
ing no particular concrete or tangible form.” Id. at 715. We
defined the abstract idea as “showing an advertisement be-
fore delivering free content.” Id. “Because the innovative
aspect of the claimed invention [wa]s an entrepreneurial
rather than a technological one,” we deemed the invention
patent-ineligible. Id. at 722.
    Aside from the timing of the account crediting step, the
’945 patent claims recite elements similar to those in Con-
tent Extraction & Transmission LLC v. Wells Fargo Bank,
National Ass’n, 776 F.3d 1343 (Fed. Cir. 2014). There, we
held that a method of extracting and then processing infor-
mation from hard copy documents, including paper checks,
was drawn to the abstract idea of collecting data, recogniz-
ing certain data within the collected data set, and storing
that recognized data in a memory. Id. at 1347. We ex-
plained that “[t]he concept of data collection, recognition,
and storage is undisputedly well-known”; “[i]ndeed, hu-
mans have always performed these functions.” Id. We also
recognized that “banks have, for some time, reviewed
checks, recognized relevant data such as the amount, ac-
count number, and identity of account holder, and stored
that information in their records.” Id. Here, too, the claims
recite basic steps of electronic check processing. In its
background, the ’945 patent explains that “there has been
an industry transition to the electronic processing of
checks[, including] the recordation of the data . . . pre-
sented by the check into a digital format which can then be
transferred electronically.” Id. at col. 1, ll. 53–57, col. 1, ll.
61–62. It had become standard for the merchant to capture
the check’s transaction amount and MICR data at the point
of purchase. Id. at col. 4, ll. 52–58, FIG. 1. Further, the
patent’s background explains that verifying the accuracy of
the transaction information stored in the digital file
SOLUTRAN, INC. v. ELAVON, INC.                            9



against the check was already common.2 Id. at col. 2, ll.
13–15.
     Crediting a merchant’s account as early as possible
while electronically processing a check is a concept similar
to those determined to be abstract by the Supreme Court
in Bilski v. Kappos, 561 U.S. 593 (2010) and Alice. In Bil-
ski, the Supreme Court determined that claims directed to
“the basic concept of hedging, or protecting against risk”
recited “a fundamental economic practice long prevalent in
our system of commerce and taught in any introductory fi-
nance class” and therefore “an unpatentable abstract idea.”
561 U.S. at 611–12. In Alice, the Supreme Court deemed
“a method of exchanging financial obligations between two
parties using a third-party intermediary to mitigate settle-
ment risk” to be an abstract idea. 573 U.S. at 219. The
desire to credit a merchant’s account as soon as possible is
an equally long-standing commercial practice.
     Solutran argues that the claims “as a whole” are not
directed to an abstract idea. See, e.g., Cross-Appellant’s
Op. Br. at 38. The ’945 patent articulates two benefits of
its invention: (1) “improved funds availability” because the
merchant’s account is credited before the check is scanned
or verified; and (2) relieving merchants of the task, cost,
and risk of scanning and destroying paper checks by out-
sourcing those tasks. ’945 patent at col. 3, ll. 38–64. At
oral argument, Solutran’s counsel conceded that the claims
are not limited to an embodiment that requires outsourc-
ing. Oral Argument at 25:36–26:09 (“Claim 1 doesn’t re-
quire that it be done by someone other than the
merchant . . . .”). The only advance recited in the asserted
claims is thus crediting the merchant’s account before the



    2   Solutran does not contend that using a digital ra-
ther than paper version of the check for that comparison is
inventive.
10                              SOLUTRAN, INC. v. ELAVON, INC.




paper check is scanned. We conclude that this is an ab-
stract idea.
    This is not a situation where the claims “are directed
to a specific improvement to the way computers operate”
and therefore not directed to an abstract idea, as in cases
such as Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336
(Fed. Cir. 2016). Solutran’s counsel acknowledged at oral
argument that the ’945 patent’s invention did not improve
the technical capture of information from a check to create
a digital file or the technical step of electronically crediting
a bank account. See, e.g., Oral Argument at 23:40–24:12
(“So I grant you that there is not a specific technical change
in the way the data file is constructed or in the way the
crediting occurs . . . .”), 33:14–33:29. Nor does the ’945 pa-
tent invention improve how a check is scanned. This is also
not a situation where the claims are “limited to rules with
specific characteristics” to create a technical effect and
therefore not directed to an abstract idea, as in McRO, Inc.
v. Bandai Namco Games America Inc., 837 F.3d 1299, 1313
(Fed. Cir. 2016). To the contrary, the claims are written at
a distinctly high level of generality.
    We do not agree that U.S. Bank “improperly con-
strue[d] Claim 1 to ‘a high level of abstraction.’” J.A. 51
(quoting Enfish, 822 F.3d at 1337). In Enfish, the district
court and the appellees generalized the claims such that
their characterization of the alleged abstract idea was “un-
tethered from the language of the claims.” See Enfish, 822
F.3d at 1337. That is not the case here; rather, both our
characterization and U.S. Bank’s characterization are di-
rectly tethered to the claim language. We understand that
it may be difficult at times to determine what the correct
level of abstraction is to characterize the claims. After all,
“all inventions at some level embody, use, reflect, rest
upon, or apply laws of nature, natural phenomena, or ab-
stract ideas.” Mayo, 566 U.S. at 71. We share the Supreme
Court’s concern that “too broad an interpretation of this ex-
clusionary principle could eviscerate patent law.” Id. But
SOLUTRAN, INC. v. ELAVON, INC.                               11



where, as here, the abstract idea tracks the claim language
and accurately captures what the patent asserts to be the
“focus of the claimed advance over the prior art,” Affinity
Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257
(Fed. Cir. 2016), characterizing the claim as being directed
to an abstract idea is appropriate. Moreover, the specifica-
tion states, and Solutran does not dispute, that the steps of
the claim are conventional processes for processing checks
electronically.
    Contrary to Solutran’s arguments, the physicality of
the paper checks being processed and transported is not by
itself enough to exempt the claims from being directed to
an abstract idea. As we explained in In re Marco Gul-
denaar Holding B.V., 911 F.3d 1157, 1161 (Fed. Cir. 2018),
“the abstract idea exception does not turn solely on
whether the claimed invention comprises physical versus
mental steps.” In fact, “[t]he claimed methods in Bilski and
Alice also recited actions that occurred in the physical
world.” Id. We have likewise determined that a method
for voting that involved steps of printing and handling
physical election ballots, Voter Verified, Inc. v. Election Sys.
& Software LLC, 887 F.3d 1376 (Fed. Cir. 2018), and a
method of using a physical bankcard, Smart Sys. Innova-
tions, LLC v. Chi. Transit Auth., 873 F.3d 1364 (Fed. Cir.
2017), were abstract ideas. And the Supreme Court has
concluded that diagnostic methods that involve physical
administration steps are directed to a natural law. Mayo,
566 U.S. at 92. The physical nature of processing paper
checks in this case does not require a different result,
where the claims simply recite conventional actions in a
generic way (e.g., capture data for a file, scan check, move
check to a second location, such as a back room) and do not
purport to improve any underlying technology
    The district court’s and Solutran’s reliance on the pa-
per checks being processed in two “different location[s]” via
two paths as preventing the claims from being directed to
an abstract idea is also misplaced. See, e.g., J.A. 51; Cross-
12                             SOLUTRAN, INC. v. ELAVON, INC.




Appellant’s Op. Br. at 39–40, 42–43, 46, 48–49. The claims
on their face are broad enough to allow the transaction data
to be captured at the merchant’s point of purchase and the
checks to be scanned and compared in the merchant’s back
office. The location of the scanning and comparison—
whether it occurs down the hallway, down the street, or
across the city—does not detract from the conclusion that
these claims are, at bottom, directed to getting the mer-
chant’s account credited from a customer’s purchase as
soon as possible, which is an abstract idea.
                       2. Step Two
     We disagree with the district court that the ’945 patent
claims “contain a sufficiently transformative inventive con-
cept so as to be patent eligible.” See J.A. 60. Even when
viewed as a whole, these claims “do not, for example, pur-
port to improve the functioning of the computer itself” or
“effect an improvement in any other technology or tech-
nical field.” See Alice, 573 U.S. at 225. To the contrary, as
the claims in Ultramercial did, the claims of the ’945 patent
“simply instruct the practitioner to implement the abstract
idea with routine, conventional activity.” 772 F.3d at 715.
As we noted above, the background of the ’945 patent de-
scribes each individual step in claim 1 as being conven-
tional. Reordering the steps so that account crediting
occurs before check scanning (as opposed to the other way
around) represents the abstract idea in the claim, making
it insufficient to constitute an inventive concept. Id. Any
remaining elements in the claims, including use of a scan-
ner and computer and “routine data-gathering steps” (i.e.,
receipt of the data file), have been deemed insufficient by
this court in the past to constitute an inventive concept.
Content Extraction, 776 F.3d at 1349 (conventional use of
computers and scanners); OIP Techs., Inc. v. Amazon.com,
Inc., 788 F.3d 1359, 1363 (Fed. Cir. 2015) (routine data-
gathering steps).
SOLUTRAN, INC. v. ELAVON, INC.                               13



    To the extent Solutran argues that these claims are pa-
tent-eligible because they are allegedly novel and non-ob-
vious, see Cross-Appellant’s Op. Br. at 49, 52, 54–55, 63,
67, we have previously explained that merely reciting an
abstract idea by itself in a claim—even if the idea is novel
and non-obvious—is not enough to save it from ineligibil-
ity. See, e.g., Synopsys, Inc. v. Mentor Graphics Corp., 839
F.3d 1138, 1151 (Fed. Cir. 2016) (“[A] claim for a new ab-
stract idea is still an abstract idea.” (emphasis in original)).
    Solutran also argues on appeal that its claims pass the
machine-or-transformation test—i.e., “transformation and
reduction of an article ‘to a different state or thing.’” See
Gottschalk v. Benson, 409 U.S. 63, 70 (1972). While the
Supreme Court has explained that the machine-or-trans-
formation test can provide a “useful clue” in the second step
of Alice, passing the test alone is insufficient to overcome
Solutran’s above-described failings under step two. See
DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,
1256 (Fed. Cir. 2014) (“[I]n Mayo, the Supreme Court em-
phasized that satisfying the machine-or-transformation
test, by itself, is not sufficient to render a claim patent-eli-
gible, as not all transformations or machine implementa-
tions infuse an otherwise ineligible claim with an
‘inventive concept.’”).
    In any respect, we disagree with Solutran that the
claims pass the test. Solutran reads the analysis in In re
Bilski, 545 F.3d 943, 962–63 (Fed. Cir. 2008) (en banc),
which the Supreme Court explicitly declined to follow, as
supporting its argument that “scanning . . . paper checks
with a digital-image scanner to create images of the
checks” alone passes the machine-or-transformation test.
See Appellant’s Op. Br. at 65 (relying on discussion of In re
Abele, 684 F.2d 902 (C.C.P.A. 1982) in In re Bilski, 545 F.3d
at 962–63). Regardless of whether our Bilski opinion’s
analysis of Abele is still sound in view of recent Supreme
Court opinions, Solutran’s check-scanning argument di-
rectly conflicts with Content Extraction. Merely using a
14                             SOLUTRAN, INC. v. ELAVON, INC.




general-purpose computer and scanner to perform conven-
tional activities in the way they always have, as the claims
do here, does not amount to an inventive concept. See Con-
tent Extraction, 776 F.3d at 1348–49; Ultramercial, 772
F.3d at 716–17.
    Because the claims of the ’945 patent recite the ab-
stract idea of using data from a check to credit a merchant’s
account before scanning the check, and because the claims
do not contain an inventive concept sufficient to transform
this abstract idea into a patent-eligible application, the
claims are not directed to patent-eligible subject matter un-
der § 101. We therefore need not review U.S. Bank’s alter-
native § 103 argument or Solutran’s cross-appeal relating
to a potential willful infringement claim. We have consid-
ered the parties’ remaining arguments and find them un-
persuasive. Accordingly, we reverse.
                       REVERSED
