Bigfoot, Sasquatch, Yeti … out here in Oregon we are known for having the habitat this elusive creature calls home. With miles and miles of thick mountainous and remote forests, Oregon is the ideal place for a Yeti sighting. While there has never been a confirmed Yeti attack on a human, the potential for danger is not to be underestimated. Fortunately, Oregon has an extensive and highly technical warning system for hikers, as you can see from the image for this post. Such warning systems are critically important, and have a significant real world impact in protecting human life.

Yet, warning systems can have a difficult time being patented, particularly in view of Section 101 and Fair Warning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1094 (Fed. Cir. 2016) ("collecting and analyzing information to detect misuse and notifying a user when misuse is detected").

A recent PTAB case (13/326,055) illustrates how Section 101 and Fair Warning can be used by the Examiner/PTAB to block patent protection for certain types of warning systems. Claim 1 on appeal is listed below:

1. A method for detecting unauthorized transfers from an originating account to a recipient account, wherein the originating account is held by a customer of a financial institution and is fraudulently taken over by an unauthorized person in order to conduct the unauthorized transfer to the recipient account, and wherein the recipient account is controlled by the unauthorized person, the method comprising:

receiving, by one or more processors from a plurality of institutions, account data associated with accounts maintained by the institutions, wherein the account data includes characteristics of each account; storing, by one or more of the processors, the account data in an account database;

receiving transfer transaction data associated with the transfer of value from an originating account to a recipient account, wherein the transaction data includes data identifying the recipient account and the originating account associated with the transfer;

analyzing, by one or more of the processors, the account data stored in the account database for at least one of the accounts, to determine a risk score for that account as a recipient account, the risk score reflecting the risk that a transfer into the recipient account is unauthorized;

when the risk score for the recipient account reflects that the transfer of value is unauthorized, storing in the account database, in association with the recipient account, a fraud flag;

monitoring the account database for fraud flags; and

if a plurality of fraud flags are stored in association with the recipient account arising from transfers from multiple originating accounts maintained by the same financial institution, notifying the financial institution maintaining the multiple originating accounts of possible compromise of multiple accounts at the financial institution.

The PTAB essentially abstracted the claim elements to fall under the abstract idea of organizing human activity, and from there found that everything else that the patentee tried to rely upon was simply part of the abstract idea or otherwise did no more than generally link the use of a judicial exception to a particular technological environment or field of use. The PTAB’s analysis follows the well-worn path of courts invalidating a patent - lump everything that relates to the inventive concept into a more generalized abstract idea, so that all that is left is mere implementation in a particular environment.

While this case may have been somewhat hindered by being related to financial transactions, as a society we should encourage inventors to develop warning systems, whether for watching your bank balance or keeping on your toes for a Yeti encounter.