Bilski Does Not Invalidate Patent Claiming "Electronic Payment System" Involving a Non-Cash "Spending Vehicle"

Following the Supreme Court's decision in Bilski v. Kappos, 130 S.Ct. 3218 (2010), the magistrate judge issued a new report recommending that defendant's motion for summary judgment of invalidity be denied as to claims directed to an electronic payment system that involved a "spending vehicle." "Although an abstract intellectual concept -- collateralized loans -- certainly underlies the [patent-in-suit], it differs in important ways from the patent at issue in Bilski. Where the Bilksi patent’s independent claims disclosed the abstract idea of hedging, [the patent-in-suit] describes a particular application of an abstract idea, particularly, the application of collateralized loans to the field of assignable government payments in exchange for something of value. . . . The [patent-in-suit] clearly provides that a spending vehicle is an '[a]lternative to cash payments,' thereby limiting the applicability of the [patent-in-suit] to the use of non-cash collateralized loans in the field of assignable government payments in exchange for something of value. . . . [T]he spending vehicle limitation is meaningful because it does not preempt all uses of collateralized loans in the particular field of assignable government payments in exchange for something of value."

H&R Block Tax Services, Inc. v. Jackson Hewitt Tax Service, Inc., 6-08-cv-00037 (TXED February 2, 2011, Order) (Davis, J.)