The Federal Circuit has affirmed a summary judgment of invalidity finding the asserted claims patent-ineligible under Alice. Plaintiff Mortgage Grader sued Costco and First Choice alleging infringement of two patents relating to systems and methods for a borrower to evaluate and obtain financing from multiple lenders. The patent claims are directed to “a computer-implemented system for enabling borrowers to anonymously shop for loan packages offered by a plurality of lenders” using a loan package database and computer interfaces that allow the lenders and borrowers to interact. First Choice filed a motion for summary judgment that the asserted claims were patent-ineligible under § 101. Both sides submitted expert reports in support of their § 101 positions. The district court agreed with First Choice and entered summary judgment that all of the asserted claims were directed to the unpatentable abstract idea of “anonymous loan shopping.” On appeal, Mortgage Grader argued that the district court erred by improperly resolving underlying factual disputes and misapplying the Alice test.
The Federal Circuit disagreed. The court explained that a § 101 analysis may be undertaken without resolving fact issues and the issue may appropriately be resolved on a motion for summary judgment. “The mere existence in the record of dueling expert testimony does not necessarily raise a genuine issue of material fact,” the court wrote. In this case, the court found that the expert reports merely provided information on how people obtained mortgages in the pre-Internet era and added little to what was already disclosed in the patents. Mortgage Grader’s expert testified that the invention solved the problem of information asymmetry between borrowers and lenders, which had previously permitted lenders to steer borrowers to predatory loans. The court rejected that argument, noting that conflicts-of-interest and predatory lending were still possible when practicing the asserted claims. In the end, the court held that no reasonable factfinder could find, based on Mortgate Grader’s expert report, that the asserted claims were directed to patent-eligible subject matter.
Mortgage Grader, Inc., V. First Choice Loan Services Inc., No. 2015-1415 (Fed. Cir. Jan. 20, 2016) [O’Malley, Taranto, Stark (author)]