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A Method for Detecting Fraud in a Credit Card Transaction over the Internet is not Patentable: A Case Study of Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011)

Abstract— Under the American patent law, an invention claiming a law of nature, physical phenomenon, or an abstract cannot be a patentable subject matter. In 2011, the Federal Circuit in Cybersource Corp. v. Retail Decisions, Inc. held that a method for detecting fraud in a credit card transaction over the Internet lacked of patent eligibility because the claimed invention could be performed in a human mind. The patent at dispute was considered an abstract idea because it did not specify an algorithm. This paper intends to review the reasoning behind such holding. First, the legal doctrine that the Federal Circuit relied on is discussed. Second, the reasons to invalidate two claims at dispute are analyzed. This paper found that the key factor to the judgment of patent eligibility was whether a claim can be mentally performed. If so, then a claim cannot be valid even though a claim recites a computer or a machine. However, to save a process claim from being held invalid because of lack of patent eligibility, such process claim needs to have a limitation of an algorithm that is complex enough not to be mentally performed in a human mind.

Presented at 2012資訊科技國際研討會暨第二屆網路智能與應用研討會 http://ait.inf.cyut.edu.tw/2012/