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Fairwarning IP LLC v. Iatric Systems Inc.

United States Court of Appeals, Federal Circuit

October 11, 2016

FAIRWARNING IP, LLC, Plaintiff-Appellant
v.
IATRIC SYSTEMS, INC., Defendant-Appellee

         Appeal from the United States District Court for the Middle District of Florida in No. 8:14-cv-02685-SDM-MAP, Judge Steven D. Merryday.

          Sean A. PASSINO, Hauptman Ham, LLP, Alexandria, VA, argued for plaintiff-appellant. Also represented by Rachel Karen Pilloff; Michael S. Hooker, Jason Paul Stearns, Phelps Dunbar LLP, Tampa, FL.

          LISA M. Tittemore, Sunstein Kann Murphy & Timbers LLP, Boston, MA, argued for defendant-appellee. Also represented by BRANDON TAYLOR SCRUGGS.

          Before LOURIE, Plager, and Stoll, Circuit Judges.

          STOLL, CIRCUIT JUDGE.

         FairWarning IP, LLC, appeals a judgment of the United States District Court for the Middle District of Florida dismissing its suit with prejudice after holding that the asserted patent, U.S. Patent No. 8, 578, 500, claims patent-ineligible subject matter under 35 U.S.C. § 101. Because we agree with the district court that FairWarning's '500 patent claims patent-ineligible subject matter, we affirm.

         Background

         FairWarning sued Iatric Systems, Inc. for infringing claims of the '500 patent. The '500 patent is titled "System and Method of Fraud and Misuse Detection" and discloses ways to detect fraud and misuse by identifying unusual patterns in users' access of sensitive data. The specification describes systems and methods to detect fraud by an otherwise-authorized user of a patient's protected health information ("PHI"). According to the specification, pre-existing systems were able to record audit log data concerning user access of digitally stored PHI. The claimed systems and methods record this data, analyze it against a rule, and provide a notification if the analysis detects misuse. Claim 1 recites:

1. A method of detecting improper access of a patient's protected health information (PHI) in a computer environment, the method comprising:
generating a rule for monitoring audit log data representing at least one of transactions or activities that are executed in the computer environment, which are associated with the patient's PHI, the rule comprising at least one criterion related to accesses in excess of a specific volume, accesses during a pre-determined time in-terval, accesses by a specific user, that is indicative of improper access of the patient's PHI by an authorized user wherein the improper access is an indication of potential snooping or identity theft of the patient's PHI, the authorized user having a pre-defined role comprising authorized computer access to the patient's PHI;
applying the rule to the audit log data to determine if an event has occurred, the event occurring if the at least one criterion has been met;
storing, in a memory, a hit if the event has occurred; and
providing notification if the event has occurred.

'500 patent col. 16 11. 27-46.

         Before the district court, Iatric moved to dismiss the complaint, arguing the asserted patent claimed patent-ineligible subject matter under § 101. FairWarning filed an amended complaint asserting all claims of the '500 patent, and Iatric again moved to dismiss. The district court granted ...


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