Aviation Capital Partners v. SH Advisors: Patent Eligibility, decided May 6, 2025

Case: Aviation Capital Partners, LLC, DBA Specialized Tax Recovery v. SH Advisors, LLC, DBA Situs Hawk Court: United States Court of Appeals for the Federal Circuit

Case Number: 2024-1099

Date Decided: May 6, 2025

Lower Court: U.S. District Court for the District of Delaware (No. 1:22-cv-01556-RGA, Judge Richard G. Andrews)

I. Overview

This lawsuit, brought by Aviation Capital Partners, dba Specialized Tax Recovery ("STR"), alleged infringement of U.S. Patent No. 10,956,988 ("the ’988 patent") by SH Advisors, dba Situs Hawk. The district court dismissed the case under Federal Rule of Civil Procedure 12(b)(6), finding the asserted claims of the ’988 patent invalid under 35 U.S.C. § 101. The Federal Circuit reviewed the district court's decision de novo and found no error, upholding the invalidity ruling.

II. Key Players

• Plaintiff-Appellant: Aviation Capital Partners, LLC, DBA Specialized Tax Recovery ("STR")

• Defendant-Appellee: SH Advisors, LLC, DBA Situs Hawk

• Patent-in-Suit: U.S. Patent No. 10,956,988 ("System and Method for Determining a Taxability Status for a Vehicular Asset")

III. Background

• STR sued Situs Hawk in November 2022, alleging infringement of claims 1, 13, and 15 of the ’988 patent.

• Situs Hawk moved to dismiss the complaint under Rule 12(b)(6), arguing the asserted claims were invalid under 35 U.S.C. § 101, which relates to patent eligibility.

• The District Court of Delaware, Judge Richard G. Andrews, granted Situs Hawk's motion, concluding the asserted claims were invalid under § 101 after applying the two-step framework from Alice Corporation Pty. Ltd. v. CLS Bank International.

IV. The '988 Patent

• The ’988 patent is titled "System and Method for Determining a Taxability Status for a Vehicular Asset."

• Claim 1 was agreed by the parties to be representative for the § 101 analysis.

• Claim 1 Recitation: A computer-implemented method comprising:

• Obtaining traffic control system information (departures/arrivals).

• Detecting a gap in the information (location indeterminate).

• Receiving transponder data (altitude/speed).

• Determining, based on transponder data, that the aircraft landed during the gap.

• Computing taxability status based on presence at the airport during the gap.

V. District Court's Analysis and Findings (Affirmed by Federal Circuit)

The district court applied the two-step Alice framework:

• Alice Step One: Directed to an Abstract Idea?

• The district court found the asserted claims were directed to an abstract idea akin to those in Electric Power Group, LLC v. Alstom S.A. (830 F.3d 1350).

• The abstract idea was characterized as "collecting aircraft-related data from multiple sources and using an algorithm to improve . . . what can be gleaned from the data, and then referring to yet another database about taxation to determine the taxability status."

• Even if the focus was determining taxability status, the court found this also to be an abstract idea, noting it "is simply a matter of referring to various tax codes, and using a computer to make this easier does not make it less abstract."

• Alice Step Two: Inventive Concept?

• The district court found no inventive concept sufficient to transform the abstract idea into a patent-eligible application.

• The claims "do not ‘require anything other than off-the-shelf conventional . . . technology.’" (quoting Elec. Power Grp.).

• The specific step of "determining that an aircraft landed at an airport based on speed or altitude data during a time when the location of the aircraft is indeterminate" was not an inventive concept but "simply an application of common sense and physics."

• The claims "offer no new insights or improvements for implementing their abstract idea," merely stating the idea and adding "apply it." (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc.).

• Conclusion: The district court concluded the asserted claims were invalid under § 101 and granted Situs Hawk's motion to dismiss.

VI. Federal Circuit's Review and Holdings

• The Federal Circuit reviewed the district court's grant of a Rule 12(b)(6) motion de novo under Third Circuit law. Patent eligibility under § 101 is also reviewed de novo.

• The court applied the Alice two-step framework.

• Step One: The Federal Circuit agreed with the district court's conclusion that the claims were directed to an abstract idea.

• The court cited precedent (In re Killian, Elec. Power Grp.) supporting that claims directed to "collection of information, comprehending the meaning of that collected information, and indication of the results" on a generic computer are abstract.

• "Merely selecting information, by content or source, for collection, analysis, and display does nothing significant to differentiate a process from ordinary mental processes..." (quoting Elec. Power Grp.).

• Step Two: The Federal Circuit also agreed with the district court's finding of no inventive concept.

• The claims "offer no new insights or improve-ments for implementing their abstract idea." (quoting district court).

• The specific landing determination step is not an inventive concept.

• The claims merely "automate or otherwise make efficient traditional . . . methods." (quoting PersonalWeb Techs. LLC v. Google LLC).

• "Relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible." (quoting OIP Techs., Inc. v. Amazon.com, Inc.).

• STR's Arguments Addressed:STR argued the claims were narrow, specific, and did not preempt the abstract idea. The court rejected this, stating that "while preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility." (quoting FairWarning IP, LLC v. Iatric Sys., Inc.).

• STR argued the district court should have assumed the Patent Office's "factual finding that the claims were integrated into a practical application and contained significantly more than an abstract idea" as true for the motion to dismiss. The court disagreed, noting that for a Rule 12(b)(6) motion, only factual allegations in the complaint are assumed true. The complaint in this case did not include such factual findings from the Patent Office, only legal determinations.

VII. Conclusion

The Federal Circuit affirmed the district court's decision, finding the asserted claims of the ’988 patent invalid under 35 U.S.C. § 101 for being directed to an abstract idea without an inventive concept. The case was dismissed.