Trials@uspto.gov
`571-272-7822
`
` Paper No. 18
`Entered: July 23, 2018
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`EBAY INC. and PAYPAL, INC.,
`Petitioner,
`
`v.
`
`XPRT VENTURES, LLC,
`Patent Owner.
`____________
`
`Case CBM2017-00024
`Patent 7,610,244 B2
`____________
`
`
`
`
`
`Before JAMESON LEE, KEVIN F. TURNER, and
`MICHAEL R. ZECHER, Administrative Patent Judges.
`
`TURNER, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`Covered Business Method Patent Review
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`

`

`CBM2017-00024
`Patent 7,610,244 B2
`
`I.
`
`INTRODUCTION
`
`eBay Inc. and PayPal, Inc. (collectively, “Petitioner”), filed a Petition
`
`requesting a review under the transitional program for covered business
`
`method patents of claims 1, 2, 15, 19, 20, 34, 40, 47, 48, 52, and 53
`
`(“challenged claims”) of U.S. Patent No. 7,610,244 B2 (Ex. 1001, “’244
`
`Patent”). Paper 1 (“Pet.”). Patent Owner, XPRT Ventures, LLC (“Patent
`
`Owner”), did not file a Preliminary Response.
`
`We preliminarily determined that the information presented in the
`
`Petition established that the ’244 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.
`
`Patent Owner filed a corrected Response to the Petition (Paper 13
`
`(“PO Resp.”)), and Petitioner filed a Reply (Paper 14 (“Pet. Reply”)).
`
`Neither Petitioner nor Patent Owner requested oral argument, and no oral
`
`argument was held. Papers 15, 16.
`
`We have jurisdiction under 35 U.S.C. § 6(c). This decision is a Final
`
`Written Decision under 35 U.S.C. § 328(a). For the reasons discussed
`
`below, we hold that (1) the ’244 Patent qualifies as a covered business
`
`method patent that is eligible for review, as defined by § 18(d)(1) of the
`
`AIA; and (2) Petitioner has demonstrated by a preponderance of the
`
`evidence that all of the challenged claims are unpatentable under 35 U.S.C.
`
`§ 101.
`
`2
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`

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`CBM2017-00024
`Patent 7,610,244 B2
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`A. Related Matters
`
`
`
`The parties indicate that Patent Owner asserted the ’244 Patent against
`
`Petitioner in a U.S. district court case captioned XPRT Ventures, LLC v.
`
`eBay Inc., No. 1:10-cv-595-SLR (D. Del.) (“U.S. district court case”).
`
`Pet. 2–3; Paper 4, 2. Petitioner further indicates that, in the U.S. district
`
`court case, Patent Owner also asserted five other patents against Petitioner,
`
`specifically U.S. Patent Nos. 7,483,856 (“’856 patent”), 7,627,528
`
`(“’528 patent”), 7,567,937 (“’937 patent”), 7,599,881 (“’881 patent”), and
`
`7,512,563 (“’563 patent”). Pet. 2–3.
`
`One Petitioner entity, eBay Inc., requested inter partes reexaminations
`
`of the ’937 patent, ’563 patent, ’528 patent, ’856 patent, ’881 patent, and
`
`’244 Patent, which were instituted in Reexamination Control Nos.
`
`95/001,588, 95/001,589, 95/001,590, 95/001,594 (“’594 Reexamination”),
`
`95/001,596, and 95/001,597, respectively. Pet. 3. With the exception of the
`
`’594 Reexamination, decisions in each of those reexamination proceedings
`
`are currently on appeal to the U.S. Court of Appeals for the Federal Circuit.
`
`Pet. 3; Paper 4, 2.
`
`The parties further indicate that Petitioner has requested covered
`
`business method patent reviews for the ’528 patent, ’563 patent, ’856 patent,
`
`’881 patent, and ’937 patent, in Cases CBM2017-00025, CBM2017-00026,
`
`CBM2017-00027, CBM2017-00028, and CBM2017-00029, respectively.
`
`Paper 4, 2. Also, Patent Owner identifies U.S. Patent Application Nos.
`
`12/547,201 and 12/603,063 as related matters. Paper 4, 2.
`
`B. Standing
`
`Section 18 of the AIA governs the transitional program for covered
`
`business method patent reviews. Under § 18(a)(1)(B) of the AIA, a person
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`CBM2017-00024
`Patent 7,610,244 B2
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`may not file a petition for such a review, unless that person, or the person’s
`
`real-party-in-interest or privy, has been sued or charged with infringement of
`
`a covered business method patent. Petitioner contends that Patent Owner
`
`asserted the ’244 Patent against Petitioner in the U.S. district court case. Pet.
`
`2–3, 10. Petitioner also argues that it is not estopped from challenging the
`
`claims on the ground identified in the Petition. Id. at 10 (citing 37 C.F.R.
`
`§ 42.302(b)). Patent Owner has not disputed either of those statements.
`
`Accordingly, based on the record before us, we determine that Petitioner
`
`satisfies the standing requirement.
`
`C. Asserted Ground of Unpatentability
`
`Petitioner asserts that the challenged claims are unpatentable under
`
`35 U.S.C. § 101. Pet. 11, 21–76. Petitioner relies on the Declaration of
`
`Clifford Neuman (Ex. 1005) in support of the Petition. Petitioner also cites
`
`to Edward Preston Moxey, Jr., Practical Banking (1910) (Ex. 1006), and
`
`Robert C. Zimmer & Theresa A. Einhorn, The Law of Electronic Funds
`
`Transfer (1978) (Exs. 1007, 1008).
`
`D. The ’244 Patent
`
`The ’244 Patent generally relates to a computerized electronic auction
`
`payment system and method for effecting a real-time payment for an item
`
`won in an electronic auction. Ex. 1001, 1:20–26. The ’244 Patent describes
`
`electronic auctions as typically involving a website, such as EBAYTM or
`
`YAHOO!TM Auctions, where a prospective seller lists an item for sale and
`
`specifies the date and time for the auction to end. Id. at 1:35–49.
`
`Prospective bidders using a remote terminal access the electronic auction
`
`website via an electronic network, such as the Internet, and may submit a bid
`
`on the item for sale. Id. at 1:60–65. At the conclusion of the auction, the
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`CBM2017-00024
`Patent 7,610,244 B2
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`bidder who has the highest bid is deemed the winning bidder, and to effect
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`payment for the item, an e-mail is sent to the seller and winning bidder
`
`informing them to contact each other to proceed with a payment transaction.
`
`Id. at 2:29–34.
`
`The ’244 Patent describes several drawbacks of the known methods
`
`for effecting payment. Ex. 1001, 2:65–3:36. According to the ’244 Patent,
`
`one drawback is that a winning bidder is apt to wait prior to effecting
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`payment as the winning bidder must perform several tasks, including
`
`drafting a check and mailing the check to the seller. Id. at 2:65–3:6. Also,
`
`the seller must wait at least two business days to several weeks before being
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`paid. Id. at 3:7–8. Additionally, the ’244 Patent states that it is cumbersome
`
`for the winning bidder to enter credit card information every time an item is
`
`won, and the winning bidder may feel uneasy transferring credit card
`
`information or may wait until the start of a new credit card billing cycle
`
`before transferring the credit card information. Id. at 3:16–27. There is a
`
`further delay until the operator of the electronic auction website gets paid a
`
`commission by the seller, which usually involves the operator e-mailing the
`
`seller and receiving the seller’s authorization. Id. at 3:28–36.
`
`The ’244 Patent seeks to address these drawbacks by setting up and
`
`maintaining electronic auction payment accounts––which the ’244 Patent
`
`describes as similar to bank accounts––for prospective bidders and sellers.
`
`Id. at 3:66–4:3, 7:63–64. The prospective bidders provide funds to their
`
`electronic auction payment accounts maintained by the electronic auction
`
`payment system, before being deemed as winning bidders, by direct deposit,
`
`using a credit card, or sending a check, money order, or other financial
`
`document to an operator of the electronic auction payment system. Id.
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`Patent 7,610,244 B2
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`at 4:3–9. In one embodiment, the bidder can authorize the system to
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`automatically pay the seller upon winning the auction. Id. at 9:64–10:1.
`
`After the winning bidder wins an auction item, the winning bidder can pay
`
`in real-time, e.g., by clicking an icon on the electronic auction web site or by
`
`clicking a hyperlink provided on an email transmitted by the electronic
`
`auction system to the winning bidder and seller for accessing a payment
`
`segment. Id. at 16:1–7.
`
`Figure 1 of the ’244 Patent is reproduced below.
`
`Figure 1 is an overview of a network computing environment that includes
`
`the electronic auction payment system of the ’244 Patent. Id. at 6:21–23.
`
`As shown in Figure 1, users 102 access an electronic auction website
`
`via a network, such as Internet 106. Ex. 1001, 6:56–59. Web server
`
`
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`CBM2017-00024
`Patent 7,610,244 B2
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`computers 107 and 108 are components within electronic auction system
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`112 that operate to maintain the electronic auction website and allow each
`
`user 102 to browse the electronic auction website and bid for or sell items.
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`Id. at 6:63–67. The web server computers 107 and 108 also allow each user
`
`to access computerized electronic auction payment system 110 for effecting
`
`a real-time payment at the conclusion of an electronic auction. Id. at 7:1–8.
`
`Computerized electronic auction payment system 110 includes a
`
`database of electronic auction payment accounts 114 and web server
`
`computer 116 having processor 118 capable of executing a set of
`
`instructions stored within memory 119. Id. at 7:9–13. The instructions
`
`enable computerized electronic auction payment system 110 to allow the
`
`winning bidder to effect a real-time payment for an item won on the
`
`electronic auction website. Id. at 7:20–25.
`
`Computerized electronic auction payment system 110 also provides
`
`the users a payment registration page, which is illustrated in Figure 4A of
`
`the ’244 Patent, and is reproduced below. Id. at 6:36–38.
`
`Figure 4A illustrates payment registration page 400 that allows each user to
`
`enter payment information. Id. at 8:43–45.
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`Patent 7,610,244 B2
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`As shown in Figure 4A, the payment registration page includes
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`several fields 402 for entering a user’s bank account information to allow the
`
`computerized electronic payment system to transfer funds into the user’s
`
`electronic auction payment account. Ex. 1001, 8:45–49. Likewise, the
`
`payment registration page includes several fields 404 for entering credit card
`
`information to allow the user’s credit card to be charged so that funds are
`
`deposited into the user’s electronic auction payment account, prior to the
`
`user becoming a winning bidder. Id. at 8:50–56. Automatic payment field
`
`416 is provided for the user to authorize computerized electronic auction
`
`payment system 110 to debit the user’s electronic auction payment account
`
`in real-time every time the user is deemed a winning bidder. Id. at 9:64–
`
`10:1. If the user checks this field, then at the conclusion of an electronic
`
`auction, if the user is deemed the winning bidder, the system debits the
`
`user’s electronic auction payment account and credits the seller’s account in
`
`real-time. Id. at 10:1–8.
`
`E. Illustrative Claim
`
`Of the challenged claims, claims 1, 15, 19, 34, 47, and 52 are
`
`independent. Independent claim 1 is directed to a method for effecting
`
`payment for a user of an electronic auction website. The other independent
`
`claims recite similar subject matter, with variations discussed in more detail
`
`below. See infra §§ I.F.1, II.B.3. Independent claim 1 is illustrative of the
`
`challenged claims and is reproduced below:
`
`1. A method for effecting payment for at least one item
`offered for auction sale by a seller via an electronic auction web
`site and won by a winning bidder, where the electronic auction
`web site is accessible by a plurality of users and maintained by
`an electronic auction system, the method comprising:
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`CBM2017-00024
`Patent 7,610,244 B2
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`receiving informational data from the plurality of users via
`at least one web page accessible via at least one web page of the
`electronic auction web site;
`
`creating a plurality of payment accounts configured for
`storing funds therein and corresponding to the plurality of users
`of the electronic auction web site using the informational data
`received via the at least one web page accessible via the at least
`one web page of the electronic auction web site, wherein funds
`stored within the plurality of payment accounts can be used by
`said plurality of users for effecting payment for network
`transactions associated with said electronic auction web site;
`
`providing the plurality of users an option to enable an
`automatic payment service, wherein the automatic payment
`service automatically effects payment after occurrence of a
`termination event associated with the network transactions;
`
`linking said plurality of payment accounts to at least one
`computing device of the electronic auction system;
`
`displaying a link on the electronic auction web site for
`providing said plurality of users which includes the winning
`bidder access to their respective payment accounts for viewing
`the amount of funds stored therein;
`
`determining the conclusion of the auction sale by the
`electronic auction system; and
`
`interacting with said winning bidder by the electronic
`auction system by performing the steps of:
`
`sending an e-mail by the electronic auction system to the
`winning bidder;
`
`receiving, via one of the electronic auction web site and
`the e-mail, at least one input from the winning bidder indicating
`an initiation to effect payment to the seller;
`
`providing a payment page to the winning bidder after
`receiving the at least one input from the winning bidder, said
`payment page displaying the amount of funds to be deducted
`from a payment account of the plurality of payment accounts
`corresponding to the winning bidder, said payment account
`having been created using informational data received via the at
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`Patent 7,610,244 B2
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`least one web page accessible via the at least one web page of the
`electronic auction web site; and
`
`receiving, via the payment page, authorization from the
`winning bidder to proceed with effecting payment to the seller;
`
`deducting funds from the payment account storing funds
`therein and corresponding to the winning bidder; and
`
`using at least a portion of the deducted funds to effect
`payment to at least the seller, wherein the method for effecting
`payment does not require any interaction between the winning
`bidder and the seller.
`
`Ex. 1001, 19:50–20:39.
`
`F. Covered Business Method Patent
`
`Under § 18(a)(1)(E) of the AIA, we may institute a transitional review
`
`proceeding only for a covered business method patent. A “covered business
`
`method patent” is “a patent that claims a method or corresponding apparatus
`
`for performing data processing or other operations used in the practice,
`
`administration, or management of a financial product or service, except that
`
`the term does not include patents for technological inventions.” AIA
`
`§ 18(d)(1); see also 37 C.F.R. § 42.301 (defining “[c]overed business
`
`method patent” and “[t]echnological invention”). Based on the record
`
`developed during trial, we conclude that the ’244 Patent both (1) claims
`
`methods for performing data processing or other operations used in the
`
`practice, administration, or management of a financial product or service,
`
`and (2) is not for a technological invention.
`
`1. Financial Product or Service
`
`“[T]he definition of ‘covered business method patent’ is not limited to
`
`products and services of only the financial industry, or to patents owned by
`
`or directly affecting activities of financial institutions.” Versata Dev. Grp.,
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`10
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`Patent 7,610,244 B2
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`Inc. v. SAP Am., Inc., 793 F.3d 1306, 1325 (Fed. Cir. 2015). Pursuant to the
`
`AIA, Ҥ 18(d)(1) directs us to examine the claims when deciding whether a
`
`patent is a [covered business method] patent.” Blue Calypso, LLC v.
`
`Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016). The Federal Circuit
`
`has found claims that recite a limitation that is financial in nature to be
`
`subject to covered business method patent review under § 18(d)(1).
`
`Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1380 n.5 (Fed. Cir.
`
`2016) (citing Blue Calypso, 815 F.3d at 1340).
`
`Petitioner contends that the independent, challenged claims recite
`
`“effecting payment for at least one item offered for auction sale by a seller
`
`via an electronic auction web site and won by a winning bidder,” or “for
`
`effecting an immediate payment for at least one item offered for auction sale
`
`by a seller and purchased by a buyer via an electronic commerce website,”
`
`or “[a] method for effecting payment to an electronic commerce merchant.”
`
`Pet. 6. Petitioner points to the method steps of “receiving informational
`
`data,” “creating a plurality of payment accounts,” “providing . . . an option
`
`to enable an automatic payment service,” “providing a payment page,” and
`
`““receiving . . . authorization . . . to proceed with effecting payment.” Id.
`
`Petitioner identifies all of these steps as activities that are financial in nature,
`
`and “compels a finding that the ’244 patent is eligible for [covered business
`
`method patent] review.” Id. at 6–7 (citing Ex. 1005 ¶12). Also in support of
`
`this contention, Petitioner refers to the classification of the ’244 Patent—
`
`namely, class 705. Id. at 5–6.
`
`Patent Owner does not address any of the claim limitations identified
`
`by Petitioner or contend that they are not financial in nature. See generally
`
`PO Resp. 5–9.
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`Patent 7,610,244 B2
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`We agree with Petitioner that the challenged, independent claims
`
`contain limitations for performing data processing or other operations that
`
`include a financial activity element. Specifically, these claims recite
`
`“creating a plurality of payment accounts configured for storing funds
`
`therein;” “providing the plurality of users an option to enable an automatic
`
`payment service;” “deducting funds from the payment account storing funds
`
`therein;” and “using at least a portion of the deducted funds to effect
`
`payment to at least the seller.” Ex. 1001, 19:50–20:39. Maintaining
`
`payment accounts that store funds and transferring the funds from those
`
`accounts to effect payment is financial activity. Accomplishing this task by
`
`maintaining electronic accounts, and using a processor to deduct funds from
`
`one account and transfer them into another, falls within the scope of data
`
`processing or other operations. Accordingly, we determine that these claims
`
`satisfy the “financial product or service” component of the definition for a
`
`covered business method patent set forth in § 18(d)(1) of the AIA.
`
`2. Technological Invention
`
`The definition of a “covered business method patent” in § 18(d)(1) of
`
`the AIA does not include patents for “technological inventions.” When
`
`determining whether a patent is for a technological invention, we consider
`
`the following: “whether the claimed subject matter as a whole [(1)] recites a
`
`technological feature that is novel and unobvious over the prior art; and [(2)]
`
`solves a technical problem using a technical solution.” 37 C.F.R.
`
`§ 42.301(b).
`
`For the technological invention exception to apply, both prongs (1)
`
`and (2) of the inquiry must be met affirmatively, meaning that a negative
`
`answer under either prong renders inapplicable the technological invention
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`Patent 7,610,244 B2
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`exception. See, e.g., Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240
`
`(Fed. Cir. 2016) (“We need not address this argument regarding whether the
`
`first prong of 37 C.F.R. § 42.301(b) was met, as we affirm the Board’s
`
`determination on the second prong of the regulation—that the claimed
`
`subject matter as a whole does not solve a technical problem using a
`
`technical solution.”); Blue Calypso, 815 F.3d at 1341 (addressing only
`
`whether the claimed invention solves a technical problem using a technical
`
`solution); Versata, 793 F.3d at 1326 (deciding to put aside the first prong of
`
`the regulation in stating that there would be little cause to determine whether
`
`a technological invention is novel and nonobvious at the stage of
`
`determining whether the patent at issue is a covered business method
`
`patent). In this case, we discuss both prongs of the inquiry, even though the
`
`discussion of only one is sufficient. For the reasons discussed below, neither
`
`prong of the technological invention inquiry is met.
`
`Petitioner argues that the challenged, independent claims are not
`
`directed to a technological invention, but instead are directed to business
`
`processes, i.e., activities that are financial in nature, using only known
`
`technology. Pet. 7. Petitioner asserts that the challenged, independent
`
`claims merely recite the use of conventional, nonspecialized processors, and
`
`that there is nothing novel or unobvious about using a computer processor to
`
`complete a financial transaction. Id. at 7–8 (citing Ex. 1005 ¶¶ 16–22).
`
`Petitioner further asserts that authorizing deductions from an account, such
`
`as a bank account or a deposit account, and loaning funds to effect
`
`payments, are not technical solutions. Id. at 9.
`
`In response, Patent Owner contends that the challenged, independent
`
`claims are directed to novel and nonobvious improvements in computer-
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`related technology (i.e., technological inventions) as demonstrated by the
`
`claims having been found patentable over the prior art of record. PO Resp.
`
`5–9. Patent Owner further argues that the specification of the ’244 Patent
`
`sets forth drawbacks of prior art payment systems, and that the challenged,
`
`independent claims provide technological solutions to those drawbacks. Id.
`
`at 8–9 (citing Ex. 1001, 3:37–51).
`
`In reply, Petitioner contends that the only patent claims that are
`
`eligible for review in covered business method patent review are claims of
`
`issued patents and that, if an examiner’s decision to issue a claim was
`
`dispositive of whether the claim is novel and nonobvious, then no claim in
`
`an issued patent would ever be eligible for covered business method patent
`
`review. Pet. Reply 2. Petitioner further asserts that Patent Owner does not
`
`provide any evidence or analysis that establishes how the challenged claims
`
`address the drawbacks identified in the specification of the ’244 patent in a
`
`technological way. Id. at 2–3. Instead, Petitioner argues that it is well-
`
`established that using generic computer technology to perform known
`
`financial practices, without more, does not amount to a technological
`
`invention. Id.
`
`We agree with Petitioner that the challenged, independent claims do
`
`not recite a novel and unobvious technological feature. See Pet. 7–10. Dr.
`
`Neuman’s unrebutted testimony shows that the challenged claims merely
`
`recite the use of conventional, non-specialized databases and processors.
`
`Ex. 1005 ¶ 18. We also agree with Petitioner that the challenged,
`
`independent claims do not recite a technical solution to a technical problem,
`
`but rather involve maintaining pre-funded accounts for effecting payment,
`
`which is more akin to maintaining and effecting payment from a bank
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`account. Cf. Versata, 793 F.3d at 1327 (finding that a patent did not fall
`
`within the technological invention exception where the representative claim
`
`did “not [constitute] a technical solution[,] but [was] more akin to creating
`
`organizational management charts”). Indeed, the ’244 Patent itself
`
`analogizes its electronic auction payment accounts as being similar to bank
`
`accounts. Ex. 1001, 7:63–65.
`
`A claim does not represent a technological invention where it contains
`
`“elements [that] are nothing more than general computer system components
`
`used to carry out the claimed process” and there is no “technological aspect
`
`in the claims that rises above the general and conventional.” Blue Calypso,
`
`815 F.3d at 1341; see also SightSound Techs., LLC v. Apple Inc., 809 F.3d
`
`1307, 1315 (Fed. Cir. 2015) (“Claiming a computer without ‘specific,
`
`unconventional software, computer equipment, tools or processing
`
`capabilities’ is insufficient.” (quoting Versata, 793 F.3d at 1327)). That is,
`
`“conventional computer components cannot change the fundamental
`
`character” of the claim. Blue Calypso, 815 F.3d at 1341; see also Versata,
`
`793 F.3d at 1327 (“[E]ven if the invention required the use of a computer,
`
`the claim did not constitute a technological invention.”).
`
`Here, the challenged, independent claims only generically recite, for
`
`example, an “electronic [auction/commerce] [web site/system]” and “at least
`
`one computing device.” There is no indication from the record developed
`
`during trial that those components are used in anything other than in a
`
`general and conventional way. Rather, the ’244 Patent only generically
`
`describes those components. See 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
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`Patent 7,610,244 B2
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`processor 118 capable of executing a set of programmable instructions
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`stored within a memory 119.”). Furthermore, Dr. Neuman’s unrebutted
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`testimony reinforces that the claims only recite the use of conventional, non-
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`specialized databases, processors, and hardware. Ex. 1005 ¶ 20.
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`Patent Owner asserts that “the subject matter of the challenged claims
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`provide technological solutions to the drawbacks set forth in the
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`specification and/or recite patentable technological features.” PO Resp. 9.
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`Patent Owner, however, provides no further evidence or explanation, nor
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`does Patent Owner identify with specificity the claimed technological
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`solutions or features that Patent Owner is referring to.
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`Instead, Patent Owner focuses its argument on the fact that the claims
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`were distinguished over “the prior art of record by addressing the
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`technological and patentable features recited by the claims” in prosecution
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`before the U.S. Patent and Trademark Office (“USPTO”). PO Resp. 7–8.
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`(“[B]y the [USPTO]’s withdrawal of the rejections of the [pending claims]
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`over the prior art of record during the prosecution of the patent by finding
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`Applicant’s arguments regarding the technical and technological differences
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`between the claimed subject matter and the prior art teachings persuasive, is
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`a strong indication the challenged claims were found by the [USPTO] to
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`solve technical problems which the prior art fails to do.”). Id. at 9. We,
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`however, agree with Petitioner that an examiner’s decision to issue a claim is
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`not dispositive of whether the claim is novel and nonobvious in determining
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`whether a patent is eligible for covered business method patent review. See
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`Pet. Reply 2; see also Versata, 793 F.3d at 1326–27 (recognizing that “the
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`invention under review, since it has already been covered by an issued
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`patent, was earlier determined by the USPTO to be novel and nonobvious,”
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`CBM2017-00024
`Patent 7,610,244 B2
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`but, nevertheless, finding the patent at issue to be eligible for covered
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`business method patent review). If Patent Owner’s position were correct,
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`then covered business method patent review authorized by Congress under
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`the AIA would be a nullity. As Petitioner points out, issued patent claims
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`are the only claims that are eligible for covered business method patent
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`review in the first place. Pet. Reply 2; see also e.g., AIA § 18(a)(2) (stating
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`that regulations establishing and implementing transitional program for
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`covered business method patents “shall apply to any covered business
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`method patent issued before, on, or after th[e] effective date” (emphasis
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`added)).
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`3. Summary
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`Independent claims 1, 15, 19, 34, 47, and 52 satisfy the definition for
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`a covered business method as set forth in § 18(d)(1) of the AIA, and they are
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`not for a technological invention. Accordingly, the ’244 Patent is eligible
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`for review under the transitional program for covered business method
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`patents.
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`II. ANALYSIS
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`A. Claim Construction
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`In a covered business method patent review, we interpret claim terms
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`in an unexpired patent according to the broadest reasonable interpretation in
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`light of the specification of the patent in which it appears. 37 C.F.R.
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`§ 42.300(b). “[W]e need only construe terms ‘that are in controversy, and
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`only to the extent necessary to resolve the controversy.’” Nidec Motor
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`Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017 (Fed.
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`Cir. 2017) (quoting Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d
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`795, 803 (Fed. Cir. 1999)).
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`Petitioner proposes a construction for the claim term “web site.”
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`Pet. 21. We, however, need not address the construction of any claim term
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`to resolve the issues before us.
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`B. § 101 Ground
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`Petitioner contends that the challenged claims are directed to patent-
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`ineligible subject matter under 35 U.S.C. § 101. Pet. 11, 21–76. Petitioner
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`argues that the challenged claims are directed to an abstract idea, and when
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`considering the elements of each claim both individually and as an ordered
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`combination, there are no additional elements that transform the abstract
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`idea into a patent-eligible application. Id. at 28–75. Patent Owner disputes
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`this ground. See PO Resp. 5–7. Based on the record developed during trial,
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`Petitioner has demonstrated that all of the challenged claims are directed to
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`patent-ineligible subject matter under 35 U.S.C. § 101.
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`We begin our analysis with the principles of law that generally apply
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`to a ground based on 35 U.S.C. § 101, and then we turn to the arguments
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`presented by the parties.
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`1. Principles of Law
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`A patent may be obtained for “any new and useful process, machine,
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`manufacture, or composition of matter, or any new and useful improvement
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`thereof.” 35 U.S.C. § 101. The United States Supreme Court has held that
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`this statutory provision contains an important implicit exception: laws of
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`nature, natural phenomena, and abstract ideas are not patentable. E.g., Alice
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`Corp. Pty. Ltd., v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014).
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`Notwithstanding that a law of nature or an abstract idea, by itself, is not
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`patentable, the application of these concepts to a structure or process may be
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`deserving of patent protection. Mayo Collaborative Servs. v. Prometheus
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`Labs., Inc., 566 U.S. 66, 71 (2012).
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`In Alice, the Supreme Court reaffirmed the framework set forth
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`previously in Mayo “for distinguishing patents that claim laws of nature,
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`natural phenomena, and abstract ideas from those that claim patent-eligible
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`applications of those concepts.” Alice, 134 S. Ct. at 2355. In the analysis,
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`“we determine whether the claims at issue are directed to one of those
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`patent-ineligible concepts.” Id. If the claims are directed to a patent-
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`ineligible concept, the next step is to consider the elements of the claims
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`“individually and ‘as an ordered combination’” to determine whether there
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`are additional elements that “‘transform the nature of the claim’ into a
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`patent-eligible application.” Id. (quoting Mayo, 566 U.S. at 78–79).
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`2. Independent Claim 1
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`
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`We first address independent claim 1, which recites “[a] method for
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`effecting payment for at least one item offered for auction sale by a seller via
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`an electronic auction web site and won by a winning bidder” comprising the
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`steps of “receiving informational data from the plurality of users;” “creating
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`a plurality of payment accounts . . . storing funds therein;” “providing . . . an
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`option to enable an automatic payment service;” “linking said plurality of
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`payment accounts to . . . the electronic auction system;” and “displaying a
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`link . . . for providing said plurality of users . . . access to their respective
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`payment accounts for viewing the amount of funds stored therein;” and
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`“determining the conclusion of the auction sale.” Thereafter, “interacting
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`with said winning bidder by the electronic auction system by performing the
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`steps of: sending an e-ma