United Services Automobile Association v. PNC Bank N.A.

Filing 258

MEMORANDUM OPINION AND ORDER re 116 MOTION to Dismiss Defendant PNC Bank N.A.'s Counterclaims Seven and Eight 114 filed by United Services Automobile Association.. Signed by District Judge Rodney Gilstrap on 11/18/2021. (nkl, )

Case 2:20-cv-00319-JRG Document 258 Filed 11/18/21 Page 1 of 13 PageID #: 11078

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
UNITED SERVICES AUTOMOBILE
ASSOCIATION,
Plaintiff,
v.
PNC BANK N.A.,
Defendant.

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CIV. A. NOS. 2:20-CV-00319-JRG (LEAD)
2:21-CV-00110-JRG

MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff United Services Automobile Association’s (“USAA”) Motion
to Dismiss Defendant PNC Bank N.A.’s Counterclaims Seven and Eight (the “Motion to
Dismiss”). (Dkt No. 116). Having considered the Motion to Dismiss and subsequent briefing, and
for the reasons set forth herein, the Court finds that the Motion to Dismiss should be DENIED.
I.

PROCEDURAL BACKGROUND
On June 7, 2021, Defendant PNC Bank N.A. (“PNC”) filed its Amended Answer and

Counterclaims to USAA’s First Amended Complaint. (Dkt. No. 114). In its Counterclaims, PNC
asserted several patents against USAA, two of which are relevant to the Motion to Dismiss: U.S.
Patent No. 8,682,754 (the “ʼ754 Patent) and U.S. Patent No. 8,380,623 (the “ʼ623 Patent)
(collectively, the “Patents-at-Issue”). (Id. ¶¶ 65–85) (PNC’s Counterclaims Seven and Eight).
Also on June 7, 2021, USAA filed the instant Motion to Dismiss under 35 U.S.C. § 101 arguing
that PNC’s Counterclaims Seven and Eight should be dismissed because the ʼ754 Patent and ʼ623
Patent claim patent ineligible subject matter.

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II.

THE PATENTS-AT-ISSUE
A.

The ʼ754 Patent

The ʼ754 Patent is titled “Tracking Customer Spending and Income” and issued on March
25, 2014—before the Supreme Court’s decision in Alice Corp. Pty. v. CLS Bank Int’l, 573 U.S.
208 (2014). The ʼ754 Patent describes “[v]arious embodiments [that] may be directed to products
for displaying a customer’s spending versus the customers income.” (ʼ754 Patent at 1:59–60).
These embodiments are described and shown throughout the ʼ754 Patent and generally describe a
“user interface [that] may display multiple income and spending bar pairs simultaneously.” (Id. at
2:11–13). For example, Figure 4 of the ʼ754 Patent (depicted below) shows “one embodiment of
a user interface 400 including bar sets 402, 404, 406, 408 showing historical spending and income
information for the customer.” (Id. at 3:15–17).

Claim 1 of the ʼ754 Patent reads as follows 1:
A computer implemented method of tracking customer spending and income, the
method comprising:
aggregating spending transactions by a customer during a first time period;
PNC asserts that Claim 4 of the ʼ754 Patent is representative of the asserted claims “because it captures the ordered
combination required by the asserted claims that includes aggregating and displaying data over multiple time periods.”
(Dkt. No. 118 at 4). The Court finds that dependent Claim 4 merely adds the same steps of independent Claim 1 over
additional time periods. Such a distinction is immaterial to the patent eligibility analysis of the claims of the ʼ754
Patent. Content Extraction and Transmission LLC v. Wells Fargo Bank, 776 F.3d 1343, 1348 (Fed. Cir. 2014).
1

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estimating income to the customer during the first time period; and
displaying a user interface to the customer, wherein the user interface
comprises:
a first bar, wherein a dimension of the first bar is proportional to the
estimated income to the customer during the first time period; and
a second bar, wherein a dimension of the second bar is proportional
to the aggregate spending transactions by the customer during the
first time period, wherein the second bar is positioned within the first
bar, and wherein the dimension of the first bar is parallel to the
dimension of the second bar.
(ʼ754 Patent at Claim 1).
The client used for displaying the user interface “may include any suitably networkenabled devices such as, for example, personal computers (PC’s), automated teller machines
(ATM’s), palmtop computers, mobile phones, etc.” (ʼ754 Patent at 4:37–40). The client may also
use “a suitable browser software application including, for example, MICROSOFT INTERNET
EXPLORER, MICROSOFT INTERNET EXPLORER MOBILE, MOZILLA FIREFOX, PALM
BLAZER, etc.) for enabling the customer to display, enter and interact with information exchanged
via the communication network 20.” (Id. at 4:44–48).
B.

The ʼ623 Patent

The ʼ623 Patent is titled “Systems and Methods for Enabling Financial Savings” and issued
on February 19, 2013—also before the Supreme Court’s Alice decision. The ʼ623 Patent contains
thirty-two pages of diagrams and screenshots depicting the interfaces embodied in the invention.
(ʼ623 Patent at 1:66–2:14). The ʼ623 Patent describes the functionality of these embodiments:
Various embodiments of the present invention are directed to systems and methods
that provide electronic banking tools and interfaces. The systems and methods, in
various embodiments, allow users to change payment dates of bills by way of
graphical operation (e.g., by “dragging” and “dropping” a scheduled payment).
Various embodiments alert a user when an available account balance drops below
a certain threshold. Various embodiments allow for real time population of
payment items on a calendar and allow for daily, weekly, monthly and yearly
calendar views of past and future account activity.

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(ʼ623 Patent at 2:18–27). Both USAA and PNC cite to Claim 1 in their briefing (Dkt. No. 116 at
18; Dkt. No. 118 at 17):
A computer-assisted method for facilitating financial savings, the method
comprising:
accepting, using a processor, a funds transfer request by a user of an amount
of funds between a funding account and at least one receiving account,
wherein the funding account and the receiving account are separate
accounts;
accepting, from the user, using the processor, a designation of an intended
purpose of use of the amount of funds and a date of intended use of the
amount of funds;
transferring the amount of funds from the funding account to the at least one
receiving account;
generating, using the processor, for display on a graphical banking
interface, a graphical representation of the designation of the intended
purpose of use of the amount of funds; and
transferring the amount of funds from the at least one receiving account to
the funding account on the date of intended use.
(ʼ623 Patent at Claim 1). This claim, inter alia, was rejected during prosecution as directed to
ineligible subject matter under § 101. (Dkt. No. 116-2 at 5). The Examiner stated:
In the case of claim 1 of the instant application, the entire process except the
nominal step of generating a graphical banking interface is performed by a human
entity. Generating a graphical banking interface including a graphical
representation of the intended purpose of use of the amount of funds is treated as a
nominal or tangibly related (and not central to the claimed invention) to the
performance of the claimed invention. Such nominal step(s) do not render the claim
101 compliant even if implemented on a machine. All other steps (accepting a funds
transfer request and a designation of an intended purpose, and transferring funds)
are performed manually and or conceived in human mind alone. Therefore, the
claim is treated as an abstract idea and therefore non-statutory under 35 USC 101.
(Id.). In response, PNC amended claim 1 to add “using a processor” to the “accepting” and
“generating” steps. (Id. at 8, 13). The claims were then allowed. (Id. at 16).
III.

LEGAL STANDARD
To evaluate the Motion to Dismiss, the Court may consider the complaint, the documents

attached to the complaint, and documents “attached to the motion to dismiss that are central to the
claim and referenced by the complaint.” Lone Star Fund V (U.S.) L.P. v. Barclays Bank PLC, 594
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F.3d 383, 387 (5th Cir. 2010). The Court will grant a motion to dismiss for lack of patent eligibility
under 35 U.S.C. § 101 only where “there are no factual allegations that, taken as true, prevent
resolving the eligibility question as a matter of law.” ChargePoint, Inc. v. SemaConnect, Inc., 920
F.3d 759, 765 (Fed. Cir. 2019).
The Court determines whether patent claims cover ineligible subject matter using a twostep analytical framework set out by the Supreme Court of the United States in Alice. 573 U.S.
208. At the first step, the Court evaluates whether the claims are directed to ineligible subject
matter, such as an abstract idea. Id. at 217. To do so, the Court looks to the claims’ “character as
a whole.” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016). Although all
claims embody abstract ideas and other ineligible subject matter at some level, the Court’s task is
to examine “whether the claims [] focus on a specific means or method that improves the relevant
technology or are instead directed to a result or effect that itself is the abstract idea and merely
invoke generic processes and machinery.” McRO, Inc. v. Bandai Namco Games Am. Inc., 837
F.3d 1299, 1314 (Fed. Cir. 2016).
At Alice step two, if the claims are directed to ineligible subject matter, the Court then
determines whether the claims contain an “inventive concept—i.e., an element or combination of
elements that is sufficient to ensure that the patent in practice amounts to significantly more than
a patent upon the [abstract idea] itself.” Alice, 573 U.S. at 217–18 (internal citations and quotes
omitted).

“[A]n inventive concept can be found in the non-conventional and non-generic

arrangement of known, conventional pieces,” BASCOM Glob. Internet Svcs., Inc. v. AT&T
Mobility LLC, 827 F.3d 1341, 1349–50 (Fed. Cir. 2016), but must be more than mere
“‘well-understood, routine, conventional activit[ies].’” Alice, 573 U.S. at 225 (quoting Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012)). “While the ultimate

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determination of eligibility under § 101 is a question of law, like many legal questions, there can
be subsidiary fact questions which must be resolved en route to the ultimate legal determination.”
Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1127–1128 (Fed. Cir. 2018).
“The question of whether a claim element or combination of elements is well-understood, routine
and conventional to a skilled artisan in the relevant field is a question of fact.” Berkheimer v. HP
Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018).
IV.

DISCUSSION
A.

The ʼ754 Patent
1.

The Claims of the ʼ754 Patent are Directed to an Abstract Idea

USAA argues that the ʼ754 Patent “is directed to the abstract idea of collecting and
displaying spending and income data, rather than any technical improvement.” (Dkt. No. 116 at
7). USAA argues that “[c]omputers (and people using pencil and paper or calculators) have long
been capable of comparing income and spending and making bar graphs.” (Id.). USAA claims
that the ʼ754 Patent “does not contend that the practice of comparing spending and income or of
creating bar charts is new, but rather merely that using the computer to create the claimed bar chart
is “convenient” for the user.” (Id. at 9). USAA traverses post-Alice case law in arguing that claims
related to collecting data, analyzing it, and displaying the results and budgeting and financial
concepts have been found to be abstract. (Id. at 8).
PNC responds that the ʼ754 Patent “claims the technological solution of a user interface
for banking applications that overcomes the shortcomings of the prior art with a specific, compact
display of income and spending data aggregated and grouped from many transactions and
presented in a format suitable for devices such as mobile phones and ATMs.” (Dkt. No. 118 at 5).
PNC explains that the invention disclosed in the ʼ754 Patent “is not an abstract idea, but a
technological solution to the shortcomings of prior art user interfaces for online banking
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applications.” (Id.). PNC primarily points to the Federal Circuit’s decision in Core Wireless
Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356 (Fed. Cir. 2018) as support. PNC argues that,
like Core Wireless, the ʼ754 Patent is directed to “an improvement in the functioning of online
banking computer systems, particularly those where the customer is using a small screen and/or
limited input means such as a mobile device or an ATM.” (Dkt. No. 118 at 7).
USAA responds that Core Wireless confirms that the ʼ754 Patent claims are patent
ineligible. (Dkt. No. 119 at 2). USAA argues that the claims in Core Wireless were directed to
improving the functioning of computers, but the ʼ754 Patent “does not purport to change how users
navigate an online banking system or how any aspect of the computer system functions.” (Id.).
USAA argues that Core Wireless focused on the specific requirements of the claim limitation to
limit the additional information displayed and therefore improve the functioning of the device.
(Id. at 3–4). Rather, USAA argues, the ʼ754 Patent merely requires displaying information in a
graph “displayed on a conventional screen and interface, without limits on what applications can
run at the same time.” (Id. at 4).
The Court agrees with USAA. In Core Wireless, the patent described the issue with prior
art user interfaces and the difficulty with navigating such user interfaces on small screens. Core
Wireless, 800 F.3d at 1363 (“[The patent] teaches that the prior art interfaces had many deficits
relating to the efficient functioning of the computer, requiring a user ‘to scroll around and switch
views many times to find the right data/functionality.’”). The ʼ754 Patent and its claims do not
purport to solve any technical problem associated with prior art products. Instead, the ʼ754 Patent
seeks to “provide a clear and convenient way to convey to a customer the relationship between
their income and their spending.” ʼ754 Patent at 1:25–27 (emphasis added). Put differently, the
ʼ754 Patent seeks to show users the connection between their income and spending, which was not

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done by prior art products. Plotting the relationship between income and spending as disclosed in
the ʼ754 Patent is not a technical solution to improve a user interface on smaller, resource intensive
devices as in Core Wireless. 2 800 F.3d at 1363. Rather, such is an abstract idea directed towards
showing users how much they spend as compared to how much they earn or are expected to earn.
The Court is not persuaded by PNC that the ʼ754 Patent “claims the technological solution
of a user interface for banking applications that overcomes the shortcomings of the prior art with
a specific, compact display of income and spending data aggregated and grouped from many
transactions and presented in a format suitable for devices such as mobile phones and ATMs.”
(Dkt. No. 118 at 5). Although it is true that the ʼ754 Patent mentions mobile phones and ATMs,
the patent and its claims lack any disclosure or limitation that indicate a technical improvement of
these smaller devices. Instead, the ʼ754 Patent merely discloses rendering a user interface that
shows the relationship between spending and income on any client device. 3 This is an abstract
idea directed to budgeting of personal finances. Accordingly, the Court finds the ʼ754 Patent is
directed to the abstract idea of collecting and displaying income data.
2.
There are Disputed Issues of Fact as to the Claims of the ʼ754 Patent
and any Inventive Concept
USAA argues that the claims of the ʼ754 Patent—collecting spending transactions,
estimating income, comparing the two, and displaying information about them—was indisputably
conventional. (Dkt. No. 116 at 12). USAA argues that the patent recognizes that all of these steps
PNC also contends that cases in this District relying on Core Wireless support its position. (Dkt. No. 118 at 7) (citing
CXT Sys., Inc. v. Academy, Ltd., Case No. 2:18-cv-171, 2019 WL 1237148 (E.D. Tex. Mar. 12, 2019); IDB Ventures,
LLC v. Charlotte Russe Holdings, Inc., Case No. 2:17-cv-660, 2018 WL 5634231 (E.D. Tex. Oct. 31, 2018)). Like
Core Wireless, the claims at issue in those cases contained limitations directed at a solving a technical problem
associated with data extraction, sorting, and collection rather than simply showing the relationship between two
discrete sets of data (e.g., income and spending).
3
USAA argues that “the claims broadly encompass all sizes of devices: any ‘user interface’ on any ‘computer,’ as
long as it ‘comprises’ (includes) the claimed bar graph.” (Dkt. No. 119 at 1). The fact that an invention can operate
on any type of device does not show that the patent is directed to an abstract idea. A user interface that provides
readability across all devices could be a technical improvement. However, the Court finds no disclosure that the ʼ754
Patent is meant to improve interoperability in user interfaces amongst various devices.
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were conventional except for the generating of the bar graph, which USAA argues is also a
conventional process that can be done manually. (Id. at 13).
PNC responds that, at a minimum, there is a factual question as to what was well-known,
routine, or conventional to a person of ordinary skill in the art at the time. (Dkt. No. 118 at 11).
PNC argues that the inventive concept disclosed in the claims of the ʼ754 Patent “is a highly
specific method for aggregating and displaying banking information to improve an online banking
interface.” (Id.). PNC acknowledges that the ʼ754 Patent lists certain actions that were previously
possible. (Id.). However, PNC argues “that nothing cited by USAA suggests that it was known,
let alone conventional, to aggregate spending and estimate income over multiple time periods
using an online banking interface, or to display that information in the specific, compact way
required by the claims . . . that allows the information to be provided, for example, on a mobile
phone.” (Id.). PNC contends that the claims require “aggregating income and spending data over
discrete time periods and displaying that information in a novel graphical user interface.” (Id. at
12).
The Court finds that there are factual disputes related to whether various elements of the
asserted claims, alone or in combination, were conventional and well-understood at the time the
patent was filed.

These are factual questions directly “underlying [] the § 101 inquiry.”

Berkheimer, 881 F.3d at 1368–69. At the motion to dismiss stage of the case, these types of
disputes must be presumed to favor the non-movant (i.e., PNC). BASCOM, 827 F.3d at 1347,
1350. Dismissal under Fed. R. Civ. P. 12 is therefore not appropriate for the ʼ754 Patent.
Accordingly, USAA’s Motion to Dismiss is DENIED with respect to PNC’s Counterclaim Eight.

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B.

The ʼ623 Patent
1.

The Claims of the ʼ623 Patent are Directed to an Abstract Idea

USAA argues that the ʼ623 Patent is directed to the abstract idea of displaying information
entered by the user about a funds transfer. (Dkt. No. 116 at 18). USAA argues that the ʼ623 Patent
is directed to displaying user-entered information (e.g., date and intended use of funds) about a
transfer of funds. (Id. at 18–19). USAA argues that courts have recognized that basic economic
practices and displaying user-entered information is abstract. (Id. at 19). USAA also points to
PNC’s infringement contentions and argues that they further support a finding that the ʼ623 Patent
is directed to an abstract idea. USAA argues that the ʼ623 Patent does nothing more than introduce
a computer into the human process of exchanging a check. (Id. at 21). USAA points to the
prosecution history where the claims were initially rejected under § 101, but then were allowed
once the patentee added that certain steps were performed by a “processor.” (Id.). USAA argues
that this is insufficient to save the claims under Alice. (Id. at 21–22).
PNC responds that the ʼ623 Patent is directed to a “novel feature that allows users to tag
amounts of money within an account with information about their future intended use.” (Dkt. No.
118 at 18). PNC argues that this feature “facilitates new types of transactions such as the claimed
method of sequestering designated amounts of money in a separate or ‘reserve’ account for future
use.” (Id.). PNC argues that the invention of the ʼ623 Patent is not a “fundamental economic
practice” as USAA alleges. (Id. at 19). PNC responds that a “novel computerized method does
not become abstract simply because it includes money transfers that may, viewed in isolation, be
fundamental economic practices.” (Id.). PNC argues that at a minimum whether this is a
fundamental economic practice is a factual dispute that should not be resolved at the motion to
dismiss stage. (Id.).

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The Court agrees with USAA that the claims of the ʼ623 Patent are directed to the abstract
idea of displaying information entered by the user about funds transfers. The Court finds that the
claims of the ʼ623 Patent are directed more broadly than the “novel feature” described by PNC.
For example, the claims make no mention of the “reserve” account identified by PNC in its
briefing. Compare ʼ623 Patent at Claim 1 with Dkt. No. 118 at 17–18. Further, the Court finds
that the Finjan and Data Engine cases cited by PNC are inapplicable. (Dkt. No. 118 at 18–19)
(citing Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299 (Fed. Cir. 2018); Data Engine Techs.
LLC v. Google LLC, 906 F.3d 999 (Fed. Cir. 2018)). Specifically, Finjan contrasted the traditional
“code-matching” virus detection systems of the prior art (which simply looked for the presence of
known viruses) to the “behavior-based” approach (which analyzed the code to determine if it
performed dangerous operations) disclosed in the patent at issue. Finjan, 879 F.3d at 1304. In
finding the claims satisfied Alice step one, the Federal Circuit reasoned that the security profile
made the use of the behavior-based information possible. Id. at 1305. Similarly, in Data Engine,
the Federal Circuit held that the patent at issue satisfied Alice step one by disclosing an
improvement to three-dimensional spreadsheets, which were complex and difficult to navigate.
906 F.3d at 1008. The Federal Circuit concluded that the idea was not abstract because “[t]he
claim recites specific steps detailing the method of navigating through spreadsheet pages within a
three-dimensional spreadsheet environment using notebook tabs.” Id. Both Finjan and Data
Engine stand for the proposition that technical improvements are not abstract ideas. 4 PNC again
fails to identify anything in the ʼ623 Patent that is a technical improvement of the abstract idea of

PNC again cites decisions from this Court that it contends support its position. (Dkt. No. 118 at 21–23). These cases
involve USAA’s patents that were previously subject to patent eligibility challenges before this Court. As the Court
explained in those opinions, those patents involved new means of check depositing that improved on the prior art.
United Servs. Auto. Ass’n v. Wells Fargo Bank, N.A., Case No. 2:18- cv-366, Dkt. No. 182, at 13-16 (E.D. Tex. Dec.
20, 2019), report and recommendation adopted, Dkt. No. 235 (E.D. Tex. Jan. 6, 2020). PNC has failed to show how
the claimed method of the ʼ623 Patent is a technical solution that improves on the prior art.

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labeling transferred funds and displaying that information. Accordingly, the Court finds the ʼ623
Patent is directed to an abstract idea. 5
2.
There are Disputed Issues of Fact as to the Claims of the ʼ623 Patent
and any Inventive Concept
USAA contends that there is no “inventive concept” that transforms the claims to a patenteligible invention. (Dkt. No. 116 at 22). USAA argues that the first, third, and fifth steps of the
asserted claims merely relate to accepting a request to transfer funds and transferring those funds,
and the patent recognizes that such was well known. (Id. at 23). USAA also argues that the
remaining steps involve accepting manually entered information about the transfer, which USAA
argues is a process that could be performed by humans. (Id.).
PNC responds that the ʼ623 Patent overcame the difficulty for customers to maintain stable
account balances where multiple inflows and outflows occur automatically. (Dkt. No. 118 at 27).
PNC argues that the ʼ623 Patent overcomes these problems by using a computerized process to
tag amounts of money within the online account. (Id.). PNC argues that this is an unconventional
solution that is specific to online banking. (Id.). PNC points out that prior art systems allowed
scheduling of transfers, “but had no mechanism for tagging money within an account with
information about an intended purpose.” (Id. at 28).
Like the ʼ754 Patent, the Court finds that there are factual disputes related to whether
various elements of the asserted claims, alone or in combination, were conventional and
well-understood at the time the patent was filed. These are factual questions directly “underlying
[] the § 101 inquiry.” Berkheimer, 881 F.3d at 1368–69. At the motion to dismiss stage of the
case, these types of disputes must be presumed to favor the non-movant (i.e., PNC). BASCOM,
The Court does not find USAA’s arguments based on PNC’s infringement contentions and the pre-Alice prosecution
history of the ʼ623 Patent relevant to this analysis. The Court’s analysis properly focuses on the claims of the ʼ623
Patent and applicable case law.

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827 F.3d at 1347, 1350. Dismissal under Fed. R. Civ. P. 12 is therefore not appropriate for the
ʼ754 Patent. Accordingly, USAA’s Motion to Dismiss is DENIED with respect to PNC’s Seventh
.
Counterclaim.
V.

CONCLUSION
For the reasons set forth above, the Court finds the ʼ754 Patent and ʼ623 Patent are each

directed to an abstract idea under Alice step one. However, as to both patents, there are factual
underpinnings with respect to Alice step two, which are improper for the Court to resolve at the
pleadings stage. Accordingly, USAA’s Motion to Dismiss is DENIED.
So ORDERED and SIGNED this 18th day of November, 2021.

____________________________________
RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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