- Google LLC v. Videoshare LLCInstitution deniedPTAB · Mar 24, 2021 · CBM2020-00027 · APJ Thomas L Giannetti · CBM · Institution
The Board denied institution of CBM review for claims 1–7 because the patent did not qualify as a covered business method patent; it did not reach the § 101 challenge.
RulingsInstitution decision- PTAB / AIA Trials › Institution threshold (reasonable likelihood / more likely than not)Institution denied meritsInstitution denied
“covered business method patent review, the focus is on the claims. Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016) (challenged patent eligible for review because the claims recited “an express financial component in the form of a subsidy” that was “central to the operation of the claimed invention”). Thus, “§ 18 (d)(1) directs us to examine the claims when deciding whether a patent is a CBM patent.” Blue Calypso, 815 F.3d at 1340. More specifically, the focus is on the claims to determine whether there is anything “explicitly or inherently financial in the construed claim language.” Id. The claims of the ’341 patent are directed to “[a] method for sharing video over a structured hierarchical network.” Ex. 1001, 25:14–15. We are not persuaded that this a financial activity. We agree with Patent Owner that the focus of the claims is video sharing technology. Prelim. Resp. 21. The claims describe a series of method steps for sharing video content involving servers and video files. Nowhere do the claims discuss or suggest obtaining payment or remuneration. Thus, the claims are unlike those in Blue Calypso, 815 F.3d 1331. In Blue Calypso, the claims expressly recited the term “subsidy,” which the Board construed as “financial assistance given by one to another.” Id. at 1339–40. The Federal Circuit explained that based on this understanding, the Board had concluded that the claims “were financial in nature” and instituted CBM review. Id. at 1340. The Federal Circuit agreed with the Board’s analysis and affirmed its decision to institute CBM patent review: “Significantly, Blue Calypso has not challenged the Board’s interpretation of subsidy as ‘financial assistance given by one to another.’” Id.” slip op. at 6
- BurdenDecided for patent owner
“covered business method patent review, the focus is on the claims. Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016) (challenged patent eligible for review because the claims recited “an express financial component in the form of a subsidy” that was “central to the operation of the claimed invention”). Thus, “§ 18 (d)(1) directs us to examine the claims when deciding whether a patent is a CBM patent.” Blue Calypso, 815 F.3d at 1340. More specifically, the focus is on the claims to determine whether there is anything “explicitly or inherently financial in the construed claim language.” Id. The claims of the ’341 patent are directed to “[a] method for sharing video over a structured hierarchical network.” Ex. 1001, 25:14–15. We are not persuaded that this a financial activity. We agree with Patent Owner that the focus of the claims is video sharing technology. Prelim. Resp. 21. The claims describe a series of method steps for sharing video content involving servers and video files. Nowhere do the claims discuss or suggest obtaining payment or remuneration. Thus, the claims are unlike those in Blue Calypso, 815 F.3d 1331. In Blue Calypso, the claims expressly recited the term “subsidy,” which the Board construed as “financial assistance given by one to another.” Id. at 1339–40. The Federal Circuit explained that based on this understanding, the Board had concluded that the claims “were financial in nature” and instituted CBM review. Id. at 1340. The Federal Circuit agreed with the Board’s analysis and affirmed its decision to institute CBM patent review: “Significantly, Blue Calypso has not challenged the Board’s interpretation of subsidy as ‘financial assistance given by one to another.’” Id.” slip op. at 6
- Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Not reached
“E. Subject Matter Eligibility Under 35 U.S.C. § 101 Petitioner contends that the challenged claims are directed to an abstract idea that is not eligible subject matter for a patent under 35 U.S.C. § 101. Pet. 77. According to Petitioner, “[t]he claims recite the abstract idea of including advertising with appropriately formatted video.” Id. at 80. Patent Owner responds that Petitioner has failed to show that the claims recite ineligible subject matter. Prelim. Resp. 64. According to Patent Owner, “[t]he ’341 Patent claims recite specific steps that improve the functioning of a video server providing shared video files.” Id. Because we have determined that the ’341 patent does not qualify for covered business method patent review, we do not address whether the claims recite eligible subject matter under 35 U.S.C. § 101.” slip op. at 11
§ 101 eligibilityDiscretionary denialPatents in suitUS 10,362,341 - Cxloyalty, Inc. v. Maritz Holdings Inc.All claims unpatentablePTAB · Dec 19, 2019 · CBM2018-00037 · APJ Justin T Arbes · CBM · Final written decision
Claims 1–15 are unpatentable under § 101; the motion to amend is granted for proposed substitute claims 16–23, which were not shown unpatentable.
RulingsFinal written decision- Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable
“does not remove the claim from the realm of abstract ideas. See Pet. 52–53; Reply 12; SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018) (holding that it “does not matter to [the conclusion that the claim is directed to an abstract idea] whether the information here is information about real investments,” as “even if a process of collecting and analyzing information is ‘limited to particular content’ or a particular ‘source,’ that limitation does not make the collection and analysis other than abstract” (citation omitted)). Further, the last two clauses of claim 1 that recite how the transaction is viewed from the perspectives of the participant and vendor system, respectively, merely express the “non-physical result” of the information transfers and confirm the abstract nature of the claimed subject matter. See Pet. 57. In fact, as to the vendor system clause, the Specification indicates that the vendor system transfers information no differently than it would for any other transaction. See Ex. 1001, col. 7, ll. 15–18 (disclosing that vendor system 208 responds to purchase request 216 “in the same way that it would respond to any other purchase request from a consumer that presents a credit card”).” slip op. at 35
- Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable
“Our conclusion also is supported by the ’087 patent’s description of” slip op. at 41
- PTAB / AIA Trials › Motions to amend / substitute claimsMotion to amend, grantedGranted
“transaction, . . . display[ing] an order message indicating the completion of the purchase transaction to the respective participant.” Mot., App’x A, 4. An example in which a judicial exception is not integrated into a practical application is when “an additional element adds insignificant extra-solution activity to the judicial exception.” Guidance, 84 Fed. Reg. at 55; Flook, 437 U.S. at 590 (holding that a step of adjusting an alarm limit variable was “post-solution activity”). Displaying an order message after the facilitated transaction has been completed amounts to insignificant post-solution activity, and does not support a conclusion that the abstract idea of claim 16 is integrated into a practical application.” slip op. at 75
- 101 substituteMixed
“transaction, . . . display[ing] an order message indicating the completion of the purchase transaction to the respective participant.” Mot., App’x A, 4. An example in which a judicial exception is not integrated into a practical application is when “an additional element adds insignificant extra-solution activity to the judicial exception.” Guidance, 84 Fed. Reg. at 55; Flook, 437 U.S. at 590 (holding that a step of adjusting an alarm limit variable was “post-solution activity”). Displaying an order message after the facilitated transaction has been completed amounts to insignificant post-solution activity, and does not support a conclusion that the abstract idea of claim 16 is integrated into a practical application.” slip op. at 75
Patent outcomesUS 7,134,087 unpatentable§ 101 eligibilitycites Alice · Mayo · Bilski · Berkheimer · EnfishPatents in suitUS 7,134,087 - Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentablePTAB · Jul 23, 2018 · CBM2017-00029 · APJ Michael R Zecher · CBM · Final written decision
Claims 1 and 9 are unpatentable under § 101 because they claim pre-authorized automatic auction payments using conventional computer components, without an inventive concept.
RulingsFinal written decision- BurdenDecided for petitioner
“4. Summary In summary, we determine that Petitioner has demonstrated by a preponderance of the evidence that all of the challenged claims are directed to patent-ineligible subject matter under 35 U.S.C. § 101.” slip op. at 34
- Skill levelOther
- Claim Construction › Threshold & procedure › Whether a term needs construction (O2 Micro)No construction neededOther
“II. ANALYSIS A. Claim Construction In a covered business method patent review, we interpret claim terms in an unexpired patent according to the broadest reasonable interpretation in light of the specification of the patent in which it appears. 37 C.F.R. § 42.300(b). “[W]e need only construe terms ‘that are in controversy, and only to the extent necessary to resolve the controversy.’” Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017) (quoting Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999)). Petitioner proposes a construction for the claim term “web site.” Pet. 23. We, however, need not address the construction of any claim term to resolve the issues before us.” slip op. at 17
- Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable
“We agree with Petitioner that independent claim 1 is directed to an abstract idea, and we adopt Petitioner’s description of the abstract idea as using a payment account to automatically effect a pre-authorized financial transaction in an electronic auction. Patent Owner does not challenge Petitioner’s description of the abstract idea, other than by making the conclusory statement that the challenged claims are not directed to an abstract idea based on Federal Circuit precedent and USPTO examination guidance. See PO Resp. 7. The language of independent claim 1 supports the finding that it is directed to the abstract idea of using a payment account to automatically effect a pre-authorized financial transaction in an electronic auction. This claim recites a method for automatically effecting payment by a process that includes the steps of maintaining and storing funds in payment accounts for use in transactions in an electronic auction system; receiving authorization prior to an electronic auction to execute an automatic payment; and executing the automatic payment by deducting and transferring funds from a payment account. Ex. 1001, 18:20–53. This purchaser-seller arrangement is not meaningfully distinct from the financial arrangements found to be abstract ideas in Alice, 134 S. Ct. at 2356 (“method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”), and Bilski v. Kappos, 561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to purchase commodities in the energy market at a fixed rate as a way of protecting, or “hedging,” against risks of price changes). The Supreme Court has explained that concepts like intermediated settlement and risk hedging are abstract ideas beyond the scope of 35 U.S.C. § 101 as they are “a fundamental economic practice long prevalent in our system of commerce.” Alice, 134 S. Ct. at 2356 (quoting Bilski, 561 U.S. at 611). Likewise, in this case, the concept of using a payment account to automatically effect a pre-authorized financial transaction is a fundamental economic practice.” slip op. at 22
Patent outcomesUS 7,567,937 unpatentableClaim construction§ 101 eligibilitycites Alice · Bilski · Enfish · Electric PowerPatents in suitUS 7,567,937 - Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentablePTAB · Jul 23, 2018 · CBM2017-00026 · APJ Jameson Lee · CBM · Final written decision
Claims 1, 6, and 7 are unpatentable under § 101 because they claim an abstract idea without an inventive concept.
RulingsFinal written decision- BurdenFwd all claims unpatentable
“Under the second step in the two-step Alice/Mayo analysis, a claim that recites an abstract idea must include “additional features” to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea. Alice, 134 S. Ct. at 2357 (citing Mayo, 132 S. Ct. at 1297). We consider the claim elements “both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. at 2355. We determine whether the claims include an “‘inventive concept’” (i.e., an element or combination of elements sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea itself). Id. at 2357. The “additional features” must be more than “‘well-understood, routine, conventional activity.’” Ultramercial, 772 F.3d at 715. The Supreme Court in Alice cautioned that merely limiting the use of abstract idea “to a particular technological environment” or implementing the abstract idea on a “wholly generic computer” is not sufficient as an additional feature to provide “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Alice, 134 S. Ct. at 2358 (quoting Mayo, 132 S. Ct. at 1297). “[M]ethod claims, which merely require generic computer implementation, fail to transform [an] abstract idea into a patent-eligible invention.” Id. at 2357. The Supreme Court in Bilski unequivocally stated that the prohibition against patenting abstract idea “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.” Bilski, 561 U.S. at 610–11 (quoting Diamond, 450 U.S. at 191–92).” slip op. at 35
- Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable
“Petitioner provides two differently worded articulations of the alleged abstract idea to which the challenged claims are directed: (1) “pre- authorizing debits from a previously-funded electronic payment account to make payments in electronic auctions or electronic commerce” (Pet. 27), and (2) “pre-approving a transaction using a previously-funded account to effect an automatic payment” (id. at 29). These two articulations are essentially the same and Petitioner’s arguments are not different substantively based on one articulation as opposed to the other. Accordingly, we need to discuss only the first articulation (i.e., pre-authorizing debits from a previously-funded electronic payment account to make payments in electronic auctions or electronic commerce). The ’563 patent describes an electronic payment account as being similar to a bank account that stores funds which can be used to effect payment. Ex. 1001, 7:23–27. According to the challenged claims, the electronic payment account has funds pre-stored therein that can be used for effecting automatic payment. Dr. Neuman testifies that pre-funded accounts, such as bank accounts, are ubiquitous and are fundamental building blocks to commerce, and that bank accounts are almost universally kept electronically. Ex. 1005 ¶ 17. Dr. Neuman further testifies that, like the pre-funded account, pre-authorizing transfers is a well-known and conventional economic practice. Id. ¶ 18. Dr. Neuman notes that, for example, “financial institutions have, for decades, permitted customers to pre-authorize payments for recurring expenses such as monthly life insurance premiums, rent and mortgage payments, phone bills, or other utility bills,” and that “[m]any banks also allow customers to pre-authorize regular transfers of funds from a checking account to a savings account, thereby creating an automatic savings plan.” Id. We credit the above-noted testimony of Dr. Neuman as it is unrebutted. Claim 7 recites a step of setting up an electronic payment account, a step of automatically deducting funds stored within the electronic payment account due to at least one network-based transaction, and a step of automatically transferring at least a portion of the deducted funds to an account associated with an operator of the electronic commerce web site. These steps correspond fittingly to the alleged abstract idea of pre-authorizing debits from a previously-funded electronic payment account to make payments in electronic auctions or electronic commerce.” slip op. at 26
- Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable
“Under the second step in the two-step Alice/Mayo analysis, a claim that recites an abstract idea must include “additional features” to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea. Alice, 134 S. Ct. at 2357 (citing Mayo, 132 S. Ct. at 1297). We consider the claim elements “both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. at 2355. We determine whether the claims include an “‘inventive concept’” (i.e., an element or combination of elements sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea itself). Id. at 2357. The “additional features” must be more than “‘well-understood, routine, conventional activity.’” Ultramercial, 772 F.3d at 715. The Supreme Court in Alice cautioned that merely limiting the use of abstract idea “to a particular technological environment” or implementing the abstract idea on a “wholly generic computer” is not sufficient as an additional feature to provide “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Alice, 134 S. Ct. at 2358 (quoting Mayo, 132 S. Ct. at 1297). “[M]ethod claims, which merely require generic computer implementation, fail to transform [an] abstract idea into a patent-eligible invention.” Id. at 2357. The Supreme Court in Bilski unequivocally stated that the prohibition against patenting abstract idea “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.” Bilski, 561 U.S. at 610–11 (quoting Diamond, 450 U.S. at 191–92).” slip op. at 35
- PTAB / AIA Trials › Constitutional / APA (Arthrex, Oil States, due process)Decided for petitioner
“To the extent that Patent Owner presents additional constitutional arguments regarding covered business method patent reviews separately, or arguments that the Oil States Court did not reach, we decline to consider those constitutional challenges. The “[a]djudication of the constitutionality of congressional enactments has generally been thought beyond the jurisdiction of administrative agencies.” Thunder Basin Coal Co. v. Reich, 510 U.S. 210, 215 (1994) (alteration in original) (quoting Johnson v. Robison, 415 U.S. 361, 368 (1974)). Although “[t]his rule is not mandatory” (id.), “a finding that the agency lacks jurisdiction to decide constitutional questions is especially likely when the constitutional claim asks the agency to act contrary to its statutory charter” (Riggin v. Office of Senate Fair Emp’t Practices, 61 F.3d 1563, 1569 (Fed. Cir. 1995)). Considerations in determining whether an agency may decide a constitutional issue include whether “the constitutional issue . . . require[s] the agency to question its own statutory authority or to disregard any instructions Congress has given it,” and whether the defense would “disable the board from fulfilling its responsibility to decide the statutory claim presented to it.” Id. at 1569–70. Patent Owner challenges the constitutionality of congressional enactments, including the constitutionality of covered business method patent reviews as set forth in the AIA. Patent Owner’s constitutional arguments are not directed to a particular statutory provision—instead, they concern the entire statutory scheme of covered business method patent reviews, and often also include inter partes reviews. It is, however, our statutory duty to “conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32” (35 U.S.C. § 6(b)(4)), which include covered business method patent reviews (AIA § 18(a)(1)). Patent Owner, in generally arguing that those reviews are unconstitutional, would have us question our statutory authority and our ability to conduct those reviews— something we decline to do.” slip op. at 48
Patent outcomesUS 7,512,563 unpatentableClaim construction§ 101 eligibilitycites Alice · Bilski · EnfishPatents in suitUS 7,512,563 - Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentablePTAB · Jul 23, 2018 · CBM2017-00027 · APJ Michael R Zecher · CBM · Final written decision
Claims 1, 5, 6, 8, 34, 35, 45, and 48 are unpatentable under § 101 because they claim an abstract financial transaction implemented with generic computer technology.
RulingsFinal written decision- BurdenDecided for petitioner
“4. Summary In summary, we determine that Petitioner has demonstrated by a preponderance of the evidence that all of the challenged claims are directed to patent-ineligible subject matter under 35 U.S.C. § 101.” slip op. at 35
- Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionDecided for petitioner
“We agree with Petitioner that independent claims 1, 35, and 45 are directed to an abstract idea, and we adopt Petitioner’s description of the abstract idea as using a previously-funded account to effectuate a financial transaction in an electronic auction. Patent Owner does not challenge Petitioner’s description of the abstract idea, other than by making the conclusory statement that the challenged claims are not directed to an abstract idea based on Federal Circuit precedent and USPTO examination guidance. See PO Resp. 7. The language of independent claims 1, 35, and 45 supports the finding that they are directed to the abstract idea of using a previously-funded account to effectuate a financial transaction in an electronic auction. These claims recite methods for effecting payment in the context of an electronic auction sale by a process that includes the steps of maintaining and storing funds in payment accounts; either debiting the purchaser’s funded payment account or withdrawing funds from a different account; and crediting the seller’s account. Ex. 1001, 16:31–64, 21:5–37, 23:47–24:11. This purchaser-seller arrangement is not meaningfully distinct from the financial arrangements found to be abstract ideas in Alice, 134 S. Ct. at 2356 (“method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”), and Bilski v. Kappos, 561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to purchase commodities in the energy market at a fixed rate as a way of protecting, or “hedging,” against risks of price changes). The Supreme Court has explained that concepts like intermediated settlement and risk hedging are abstract ideas beyond the scope of 35 U.S.C. § 101 as they are “a fundamental economic practice long prevalent in our system of commerce.” Alice, 134 S. Ct. at 2356 (quoting Bilski, 561 U.S. at 611). Likewise, in this case, the concept of using a previously-funded account to effectuate a financial transaction is a fundamental economic practice.” slip op. at 21
- Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptDecided for petitioner
“Considering the claim elements as an ordered combination, each claimed method, as a whole, is simply indicative of the abstract idea of using a previously-funded account to effectuate a financial transaction in an electronic auction, applied using a website and a generic processor. See Alice, 134 S. Ct. at 2359–60 (explaining that the application of an abstract idea using some unspecified, generic computer is not enough to transform an abstract idea into a patent-eligible invention). There is no indication on the record developed during trial that these claims improve the functioning of a computer, or result in an improvement in any other technology or technical field. See id. at 2359. On the contrary, Dr. Neuman’s unrebutted testimony explains that the computer components recited in the claims add nothing that is not already present when the steps are considered separately, and viewed as a whole, the claims simply recite the well-known, conventional process of debiting and crediting a funded account. Ex. 1005 ¶ 46. Furthermore, there is no evidence of record that independent claims 1, 35, and 45 are like those of BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC (i.e., a “non-conventional and non-generic arrangement of known, conventional pieces”). 827 F.3d 1341, 1350 (Fed. Cir. 2016). BASCOM explains that where claims “merely recite the abstract idea . . . along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components[, s]uch claims would not contain an inventive concept.” Id. At most, the ’856 patent makes a known payment process, in which a buyer transfers payment to a seller for an item in an electronic auction, faster and more efficient through a computer system that allows for payment in real-time. See Ex. 1001, 3:63–4:4. That computer system, however, includes a set of generic computer components functioning in a generic way. See id. Fig. 1; Ex. 1005 ¶ 19. Meanwhile, the real-time payment replaces previously-known manual processes––namely, the need for a winning bidder to “draft a check, obtain a money order, or some other payment document, and mail it to the seller” (Ex. 1001, 2:63–65), “to type and transfer credit card information” (id. at 3:29), or for the website operator and seller to exchange e-mails to authorize a commission payment (id. at 3:18–20). “But merely ‘configur[ing]’ generic computers in order to ‘supplant and enhance’ an otherwise abstract manual process is precisely the sort of invention that the Alice Court deemed ineligible for patenting.” Credit Acceptance Corp., 859 F.3d at 1056 (alteration in original). Accordingly, we agree with Petitioner that for independent claims 1,” slip op. at 29
- PTAB / AIA Trials › Constitutional / APA (Arthrex, Oil States, due process)Decided for petitioner
“arguments regarding covered business method patent reviews separately, or arguments that the Oil States Court did not reach, we decline to consider those constitutional challenges. The “[a]djudication of the constitutionality of congressional enactments has generally been thought beyond the jurisdiction of administrative agencies.” Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 215 (1994) (alteration in original) (quoting Johnson v. Robison, 415 U.S. 361, 368 (1974)). Although “[t]his rule is not mandatory” (id.), “a finding that the agency lacks jurisdiction to decide constitutional questions is especially likely when the constitutional claim asks the agency to act contrary to its statutory charter” (Riggin v. Office of Senate Fair Emp’t Practices, 61 F.3d 1563, 1569 (Fed. Cir. 1995)). Considerations in determining whether an agency may decide a constitutional issue include whether “the constitutional issue . . . require[s] the agency to question its own statutory authority or to disregard any instructions Congress has given it,” and whether the defense would “disable the board from fulfilling its responsibility to decide the statutory claim presented to it.” Id. at 1569–70. Patent Owner challenges the constitutionality of congressional enactments, including the constitutionality of covered business method patent reviews as set forth in the AIA. Patent Owner’s constitutional arguments are not directed to a particular statutory provision—instead, they concern the entire statutory scheme of covered business method patent reviews, and often also include inter partes reviews. It is, however, our statutory duty to “conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32” (35 U.S.C. § 6(b)(4)), which include covered business method patent reviews (AIA § 18(a)(1)). Patent Owner, in generally arguing that those reviews are unconstitutional, would have us question our statutory authority and our ability to conduct those reviews— something we decline to do. III. CONCLUSION We determine that Petitioner has proven by a preponderance of the” slip op. at 39
Patent outcomesUS 7,483,856 unpatentable§ 101 eligibilitycites Alice · Bilski · Enfish · Electric PowerPatents in suitUS 7,483,856 - Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentablePTAB · Jul 23, 2018 · CBM2017-00025 · APJ Kevin F Turner · CBM · Final written decision
Claims 13–15 are unpatentable under § 101 because they claim the abstract idea of using a loan to effect a financial transaction without an inventive concept.
RulingsFinal written decision- PTAB / AIA Trials › Institution threshold (reasonable likelihood / more likely than not)InstitutedInstituted
“We preliminarily determined that the information presented in the Petition established that the ’528 Patent qualifies as a covered business method patent that is eligible for review, and that it was more likely than not that the challenged claims are unpatentable under 35 U.S.C. § 101. Paper 8. Pursuant to 35 U.S.C. § 324 and § 18(a) of the Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284, 329–31 (2011), we instituted a covered business method patent review as to all of the challenged claims. Id.” slip op. at 2
- BurdenFwd all claims unpatentableUnpatentable
“Considering the claim elements as an ordered combination, each claimed method, as a whole, is simply indicative of the abstract idea of using a loan to effect a financial transaction when a buyer has insufficient funds in his or her payment account. See Alice, 134 S. Ct. at 2359–60 (explaining that the application of an abstract idea using some unspecified, generic computer is not enough to transform an abstract idea into a patent-eligible invention). There is no indication on the record developed during trial that these claims improve the functioning of a computer, or result in an improvement in any other technology or technical field. See id. at 2359. On the contrary, Dr. Neuman’s unrebutted testimony explains that the computer components recited in the claims add nothing that is not already present when the steps are considered separately, and viewed as a whole, the claims simply recite the well-known, conventional process of debiting and crediting a funded account. Ex. 1005 ¶ 36. Furthermore, there is no evidence of record that independent claim 13 is like those of BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC (i.e., a “non-conventional and non-generic arrangement of known, conventional pieces”). 827 F.3d 1341, 1350 (Fed. Cir. 2016). BASCOM explains that where claims “merely recite the abstract idea . . . along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components[, s]uch claims would not contain an inventive concept.” Id. Rather, the ’528 Patent seems to indicate that the existing payment process is simply made faster and more efficient in that an immediate, real-time payment is made without the winning bidder having to access a payment page, through the use of a conventional computing network. See Ex. 1001, 4:30–34, Fig. 1; Ex. 1005 ¶¶ 20–24. Meanwhile, the method of independent claim 13 may offer an improvement to the previously-known manual processes identified in the ’528 Patent––the need for a winning bidder “to draft checks, obtain money orders, etc. and mail them to the various sellers” (Ex. 1001, 3:3–4), or to “enter his credit card information” (id. at 3:15), or for the website operator and seller to exchange e-mails to authorize a commission payment (id. at 3:26–34). “But merely ‘configur[ing]’ generic computers in order to ‘supplant and enhance’ an otherwise abstract manual process is precisely the sort of invention that the Alice Court deemed ineligible for patenting.” Credit Acceptance Corp., 859 F.3d at 1056 (alteration in original). Accordingly, we agree with Petitioner that the claim elements recited” slip op. at 29
- Claim Construction › Threshold & procedure › Whether a term needs construction (O2 Micro)No construction neededOther
“in an unexpired patent according to the broadest reasonable interpretation in light of the specification of the patent in which it appears. 37 C.F.R. § 42.300(b). “[W]e need only construe terms ‘that are in controversy, and only to the extent necessary to resolve the controversy.’” Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017) (quoting Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999)). Petitioner proposes a construction for the claim term “web site.” Pet. 20. We, however, need not address the construction of any claim term to resolve the issues before us.” slip op. at 16
- Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable
“We agree with Petitioner that independent claim 13 is directed to an abstract idea, and we adopt Petitioner’s description of the abstract idea as using a loan to effectuate a financial transaction in an electronic auction. Patent Owner does not challenge Petitioner’s description of the abstract idea, other than by making the conclusory statement that the challenged claims are not directed to an abstract idea based on Federal Circuit precedent and USPTO examination guidance. See PO Resp. 7–8. The language of independent claim 13 supports the finding that it is directed to the abstract idea of using a loan to effect a financial transaction when a buyer has insufficient funds in his or her payment account. This independent claim recites methods for effecting payment by a process that includes the steps of providing the user with the option to enable the loaning of funds, through receipt of a user’s authorization, and loaning funds to effect the payment if insufficient funds are determined for a payment source. Ex. 1001, 20:13–37. This purchaser-seller arrangement is not meaningfully distinct from the activity relating to commercial practices found to be abstract ideas in Alice, 134 S. Ct. at 2356 (“method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”) and Bilski v. Kappos, 561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to purchase commodities in the energy market at a fixed rate as a way of protecting, or “hedging,” against risks of price changes). The Supreme Court has explained that concepts like intermediated settlement and risk hedging are abstract ideas beyond the scope of 35 U.S.C. § 101 as they are “a fundamental economic practice long prevalent in our system of commerce.” Alice, 134 S. Ct. at 2356 (quoting Bilski, 561 U.S. at 611). Likewise, in this case, the concept of using a loan to effect a financial transaction when a buyer has insufficient funds in his or her payment account is a fundamental economic practice.” slip op. at 21
Patent outcomesUS 7,627,528 unpatentableClaim construction§ 101 eligibilitycites Alice · Mayo · Bilski · EnfishPatents in suitUS 7,627,528 - Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentablePTAB · Jul 23, 2018 · CBM2017-00024 · APJ Kevin F Turner · CBM · Final written decision
Claims 1, 2, 15, 19, 20, 34, 40, 47, 48, 52, and 53 are unpatentable under § 101 as directed to an abstract idea without an inventive concept.
RulingsFinal written decision- BurdenDecided for petitioner
“6. Summary In summary, we determine that Petitioner has demonstrated by a preponderance of the evidence that all of the challenged claims are directed to patent-ineligible subject matter under 35 U.S.C. § 101.” slip op. at 41
- Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable
“We agree with Petitioner that independent claim 1 is directed to an abstract idea, and we adopt Petitioner’s description of the abstract idea as using a previously-funded account or loan to effectuate a financial transaction in an electronic auction. Patent Owner does not challenge Petitioner’s description of the abstract idea, other than by making the conclusory statement that the challenged claims are not directed to an abstract idea based on Federal Circuit precedent and USPTO examination guidance. See PO Resp. 7–8. The language of independent claim 1 supports the finding that it is directed to the abstract idea of using a previously-funded account or loan to effectuate a financial transaction in an electronic auction. This independent claim recites methods for effecting payment by a process that includes the steps of creating payment accounts and storing funds therein for use in transactions in an electronic auction system; interacting with the winning bidder to effect payment to the seller through an authorization; and deducting funds from the payment account, whereby there is no requirement of interaction between the bidder and the seller. Ex. 1001, 19:50–20:39. This purchaser-seller arrangement is not meaningfully distinct from the activity relating to commercial practices found to be abstract ideas in Alice, 134 S. Ct. at 2356 (“method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”), and Bilski v. Kappos, 561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to purchase commodities in the energy market at a fixed rate as a way of protecting, or “hedging,” against risks of price changes). The Supreme Court has explained that concepts like intermediated settlement and risk hedging are abstract ideas beyond the scope of 35 U.S.C. § 101 as they are “a fundamental economic practice long prevalent in our system of commerce.” Alice, 134 S. Ct. at 2356 (quoting Bilski, 561 U.S. at 611). Likewise, in this case, the concept of using a previously-funded account to effectuate a financial transaction is a fundamental economic practice.” slip op. at 22
- Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable
“those components. See, e.g., Ex. 1001, 7:9–13 (“The computerized electronic auction payment system 110 includes a database of electronic auction payment accounts 114 and a web server computer 116 having a processor 118 capable of executing a set of programmable instructions stored within a memory 119.”). Performing steps with a generic computer processor or on a website over the Internet does not add an inventive concept. See Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir. 2017) (claims reciting a generic computer element––a processor––do not contain an inventive concept); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014) (“The claims’ invocation of the Internet also adds no inventive concept. As we have held, the use of the Internet is not sufficient to save otherwise abstract claims from ineligibility under § 101.”). Again, Dr. Neuman’s unrebutted testimony supports this finding. Ex. 1005 ¶¶ 16–19. Lastly, limiting independent claim 1 to the particular technological environment of electronic auctions is not enough to impart patent eligibility. See Alice, 134 S. Ct. at 2358. Considering the claim elements as an ordered combination, each claimed method, as a whole, is simply indicative of the abstract idea of using a previously-funded account to effectuate a financial transaction in an electronic auction, applied using a website and a generic processor. See Alice, 134 S. Ct. at 2359–60 (explaining that the application of an abstract idea using some unspecified, generic computer is not enough to transform an abstract idea into a patent-eligible invention). There is no indication on the record developed during trial that these claims improve the functioning of a computer, or result in an improvement in any other technology or technical field. See id. at 2359. On the contrary, Dr. Neuman’s unrebutted testimony explains that the computer components recited in the claims add nothing that is not already present when the steps are considered separately, and viewed as a whole, the claims simply recite the well-known, conventional process of debiting and crediting a funded account. Ex. 1005 ¶ 102. Furthermore, there is no evidence of record that independent claim 1 is like those of BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC (i.e., a “non-conventional and non-generic arrangement of known, conventional pieces”). 827 F.3d 1341, 1350 (Fed. Cir. 2016). BASCOM explains that where claims “merely recite the abstract idea . . . along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components[, s]uch claims would not contain an inventive concept.” Id. At most, the ’244 Patent makes a known payment process, in which a buyer transfers payment to a seller for an item in an electronic auction, faster and more efficient through a computer system that allows for payment in real-time. See Ex. 1001, 3:55–65. That computer system, however, includes a set of generic computer components functioning in a generic way. See id. Fig. 1; Ex. 1005 ¶ 21. Meanwhile, the method of independent claim 1 may offer an improvement to the previously-known manual processes identified in the ’244 Patent––the need for a winning bidder to “draft a check, obtain a money order, or some other payment document, and mail it to the seller” (Ex. 1001, 3:9–11), or “to type and transfer credit card information” (id. at 3:39–43), or for the website operator and seller to exchange e-mails to authorize a commission payment (id. at 3:28–36). “But merely ‘configur[ing]’ generic computers in order to ‘supplant and enhance’ an otherwise abstract manual process is precisely the sort of invention that the” slip op. at 30
- PTAB / AIA Trials › Constitutional / APA (Arthrex, Oil States, due process)Decided for petitioner
“To the extent that Patent Owner presents additional constitutional arguments regarding covered business method patent reviews separately, or arguments that the Oil States Court did not reach, we decline to consider those constitutional challenges. The “[a]djudication of the constitutionality of congressional enactments has generally been thought beyond the jurisdiction of administrative agencies.” Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 215 (1994) (alteration in original) (quoting Johnson v. Robison, 415 U.S. 361, 368 (1974)). Although “[t]his rule is not mandatory” (id.), “[a] finding that the agency lacks jurisdiction to decide constitutional questions is especially likely when the constitutional claim asks the agency to act contrary to its statutory charter” (Riggin v. Office of Senate Fair Emp’t Practices, 61 F.3d 1563, 1569 (Fed. Cir. 1995)). Considerations in determining whether an agency may decide a constitutional issue include whether “the constitutional issue . . . require[s] the agency to question its own statutory authority or to disregard any instructions Congress has given it,” and whether the defense would “disable the board from fulfilling its responsibility to decide the statutory claim presented to it.” Id. at 1569–70. Patent Owner challenges the constitutionality of congressional enactments, including the constitutionality of covered business method patent reviews as set forth in the AIA. Patent Owner’s constitutional arguments are not directed to a particular statutory provision—instead, they concern the entire statutory scheme of covered business method patent reviews, and often also include inter partes reviews. It is, however, our statutory duty to “conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32” (35 U.S.C. § 6(b)(4)), which include covered business patent reviews (AIA § 18(a)(1)). Patent Owner, in generally arguing that those reviews are unconstitutional, would have us question our statutory authority and our ability to conduct those reviews— something we decline to do.” slip op. at 43
Patent outcomesUS 7,610,244 unpatentable§ 101 eligibilitycites Alice · Mayo · Bilski · EnfishPatents in suitUS 7,610,244 - PTAB · May 12, 2015 · IPR2014-00242 · APJ Peter P Chen · IPR · Final written decision
The Board canceled claims 1–3, 5, and 6 and denied substitute claims 7–11 because the Patent Owner failed to establish written-description support for claim 10 and patentability over prior art for claims 7–9 and 11.
RulingsFinal written decision- PTAB / AIA Trials › Motions to amend / substitute claimsMotion to amend granted in partGranted in part
“Unlike examination, entry of the proposed substitute claims in an inter partes review is not automatic. As the moving party, Patent Owner must establish that it is entitled to the requested relief. See 37 C.F.R. § 42.20(c). In its Motion to Amend, Patent Owner bears the burden to show, inter alia, that a reasonable number of substitute claims is proposed, there is no broadening of scope, the proposed claims are supported adequately by the written description of the application as filed originally, and the proposed claims are patentable over the prior art. See 37 C.F.R. § 42.121; Idle Free Sys. Inc. v. Bergstrom, Inc., Case IPR2012-00027, slip op. at 5–6 (PTAB June 11, 2013) (Paper 26) (“Idle Free”). We address each of these requirements in turn.” slip op. at 10
- 112 supportDenied
“its Motion to Amend to set forth “[t]he support in the original disclosure of the patent for each claim that is added or amended,” and “[t]he support in an earlier-filed disclosure for each claim for which benefit of the filing date of the earlier filed disclosure is sought.” The test for written description support is “whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date.” Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010). The purpose of the written description requirement is to convey with reasonable clarity to those skilled in the art that, as of the filing date sought, applicant was in possession of the invention as now claimed. Vas-Cath, Inc. v. Mahurkar, 935 F.2d 1555, 1563–64 (Fed. Cir. 1991).” slip op. at 12
- ScopeDecided for patent owner
“2. No Broadening of Scope Proposed substitute claims in an inter partes review “may not enlarge the scope of the claims of the patent.” 35 U.S.C. § 316(d)(3); see 37 C.F.R. § 42.121(a)(2)(ii). In its Motion to Amend, Patent Owner proposes claim 7 as a substitute for claim 1, claim 8 as a substitute for claim 2, claim 9 as a substitute for claim 3, claim 10 as a substitute for claim 5, and claim 11 as a substitute for claim 6. Mot. 1–5. Each claim includes all of the limitations of the corresponding challenged claim for which it is a substitute, and adds additional limitations. Id. No limitations from the challenged claims were deleted in the proposed substitute claims. Patent Owner asserts that the proposed substitute claims do not enlarge the scope of the claims of the ’047 patent. See Mot. 1. Petitioner does not dispute this assertion (“patent owner’s proposed substitute claims . . . add ancillary features”). Opp. 1. We are persuaded that each of the proposed substitute claims does not enlarge the scope of each of the challenged patent claims it intends to replace.” slip op. at 11
- Claim Construction › Threshold & procedure › Whether a term needs construction (O2 Micro)No construction neededOther
“In the Decision to Institute, we determined that no explicit construction was necessary for any of the claim terms beyond their ordinary and customary meanings. Dec. to Inst. 8–9. Neither party has challenged that determination, and based on the record adduced during trial, we see no reason to provide an express construction for any term. For the proposed substitute claims, Patent Owner states that: Like the terms in the original claims, all of [the newly added claim terms in the proposed substitute claims] are simple [claim terms] whose ordinary meaning applies and for which no construction is required, with the possible exception of “member” and “group.” As explained in the specification (Ex. 1) at 3:2–4, “The present invention comprises a method . . . for allowing on-line communications with members of a group of recipients for whom the invention has been implemented.” In the context of proposed independent claim [7], the claimed invention requires that “said first computer system storing information about said plurality of members in a database.” Thus, in the context of the proposed amended claims[,] a “group” is a group of a plurality of members for whom the first computer system has stored information in a database. Mot. 7. Petitioner does not propose alternative constructions for the claim terms “member” or “group.” We cannot discern how the constructions proffered by Patent Owner add any clarity to the terms “member” and “group,” which are simple and commonly understood terms. We decline to provide an express construction for either “member” or “group.”” slip op. at 8
Claim construction§ 101 eligibility§ 103 obviousnesscites AlicePatents in suitUS 8,499,047
Holdings, summaries, rulings, issues, outcomes, winners and claim constructions shown for a decision were generated by a large language model reading the opinion. They are a guide to the decision, not the decision. Confirm every one against the court's own text before relying on it. Outcomes read from the patent owner’s side. Party names are extracted from the decision and are missing on about 900 short Director denials and scans, which carry the trial number instead.