Only Some of the Claims are Invalid

by Dennis Crouch

Hantz Software v. Sage Intacct (Fed. Cir. 2023) (non-precedential) 

The district court sided with the defendant Sage, dismissing the complaint for lack of eligibility.  In a short opinion, the Federal Circuit has largely affirmed, but made an important caveat — that the district court held only that claims 1 and 31-33 are invalid.

[W]e agree that the operative complaint asserted infringement of only claims 1 and 31–33 of each asserted patent, and because Sage did not file any counterclaim of its own (instead, it simply moved to dismiss Hantz’s complaint), we conclude that the ineligibility judgment should apply to only claims 1 and 31–33 of the asserted patents. We therefore vacate the district court’s judgment insofar as it held any claim other than claims 1 and 31–33 of each asserted patent ineligible and affirm in all other respects.

Slip Op.  Despite the limit here, claim preclusion will prevent Hantz from reasserting any of the remaining claims against Sage. Non-mutual collateral estoppel should also apply here to to prevent Hantz from asserting any of the claims against a third party — unless the claims are meaningfully distinct on eligibility grounds from those already adjudged to be invalid.  Normally, collateral estoppel only applies to issues actually litigated, but in the patent context, the Federal Circuit has ruled that it may also apply to non-litigated claims when the differences do not “materially alter the question of invalidity.” Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013); MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1377-78 (Fed. Cir. 2018) (Asking “whether the remaining claims present materially different issues that alter the question of patentability”).

Asserted US8055560 claims a method of Account Payable Accounting with the following steps:

• at a processor, recording a multi-company voucher with the multi-company accounting system, the interface user entering financial data into the multi-company accounting system via the computer arrangement including:
• entering a voucher total money amount; and
• entering input voucher detail lines, each of the input voucher detail lines having an entered account associated with one of a plurality of companies of a multi-company group and an amount of money, at least two of the input voucher detail lines being associated with two distinct companies of the multi-company group, wherein the distinct companies are affiliated with each other and wherein each uses the multi-company accounting system for tracking money flow and balancing balance sheets for their respective accounting operations;
• at the processor, automatically adding via the multi-company accounting system at least a pair of multi-company generated balancing lines associated with the multi-company voucher for balancing money owed by each of the distinct companies to define an outstanding balance associated with each of the distinct companies, thereby keeping Accounts Payable for each of the distinct companies in balance;
• at the processor, creating a payment for paying the multi-company voucher including the interface user entering an amount of the payment into the multi-company accounting system via the computer arrangement; and
• at the processor, recording the payment with the multi-company accounting system to reduce the outstanding balances for the distinct companies including the multi-company accounting system automatically adding at least a pair of multi-company generated Due To/Due From lines as Due To/Due From entries to balance the money owed between the distinct companies, thereby keeping Accounts Payable for each of the distinct companies in balance.