Mortgage Grader, Inc. v. First Choice Loan Services Inc., Nylx, Inc.

Mortgage Grader, Inc. v. First Choice Loan Services Inc., Nylx, Inc., No. 2016-1415 (Stark, J.) (Fed. Cir. Jan. 20, 2016)

Patent(s):

  • 7,366,694 | Entitled, “Credit/financing process”
  • 7,680,728 | Entitled, “Credit/financing process”

Disposition:

Affirmed summary judgment that claim are patent-ineligible under § 101.   

Abstract Idea:

Yes

Something More:

Yes

Technology:

Methods and systems for financial transactions including ways for a borrower to evaluate and/or obtain a loan.

Summary:

The Federal Circuit confirmed that the claims were directed to the abstract idea of “anonymous loan shopping.” It stated that the claim limitations individually and as a whole recited nothing more than “the collection of information to generate a ‘credit grading’ and to facilitate anonymous loan shopping.” The steps this entails – application for a loan, calculation of credit grading, lender’s loan pricing, and election of the borrow – could all be performed by humans without a computer.  In addition, the claims only added generic computer components such as an interface, network, and database. The Federal Circuit also confirmed that the mere existence of dueling expert reports regarding § 101 does not necessarily raise a genuine issue of material fact, and in this case the district court looked “only to the claims and specifications of the patents-in-suit.” Moreover, the Federal Circuit upheld the district court’s decision denying a motion to strike amended invalidity contentions which were updated to include a § 101 defense in light of the [then issued] Alice decision which “represented a big enough change to justify a new § 101 argument.”