AuthWallet asserted a patent directed to methods and systems for processing financial transaction data against Block. Specifically, the claims outline a method for processing financial transaction data using authorization requests and conferring discounts and benefits to the consumer for use with future purchases with the retailer.
Block moved to dismiss. In finding that the claims were drawn to nonstatutory subject matter under 35 U.S.C. ' 101, the U.S. District Court for the Southern District of New York applied the now-familiar two-step Mayo/Alice analysis.
Step One: Are the Claims Directed to an Abstract Idea?
At Alice step one, the court found that the claims were directed to the abstract idea of "processing payments during a sales transaction where a benefit, such as a discounted payment, is given to the purchaser for use in future transactions." The court found the patent was merely describing conventional business practices, noting that "[f]or years, retailers have provided coupons and other financial incentives to customers during purchase." The court further found that the fact that the claims require these conventional business practices to be performed on a computer did not make the idea a patentable one.
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