`571-272-7822
`
` Paper No. 8
`Entered: July 26, 2017
`
`
`
`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.
`
`
`DECISION
`Granting Institution of Covered Business Method Patent Review
`35 U.S.C. § 324(a) and 37 C.F.R. § 42.208
`
`
`
`
`
`
`CBM2017-00024
`Patent 7,610,244 B2
`
`I.
`
`INTRODUCTION
`A. Background
`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 have jurisdiction under 35 U.S.C. § 324,1 which provides that a
`covered business method patent review may not be instituted unless the
`information presented in the Petition demonstrates “that it is more likely
`than not that at least 1 of the claims challenged in the petition is
`unpatentable.” We determine that the information presented in the Petition
`establishes that the ’244 Patent qualifies as a covered business method patent
`that is eligible for review, and that it is more likely than not that the
`challenged claims are unpatentable under 35 U.S.C. § 101. Pursuant to 35
`U.S.C. § 324 and § 18(a) of the AIA, we institute a covered business method
`patent review as to all the challenged claims.
`
`B. 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.
`
`
`1 See Section 18(a)(1) of the Leahy-Smith America Invents Act, Pub. L. No.
`112-29, 125 Stat. 284, 329–30 (2011) (“AIA”), which provides that the
`transitional program for covered business method patents will be regarded as
`a post-grant review under chapter 32 of title 35 of the U.S. Code, and will
`employ the standards and procedures of a post-grant review, subject to
`certain exceptions.
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`2
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`CBM2017-00024
`Patent 7,610,244 B2
`eBay Inc., No. 1:10-cv-00595-SLR (D. Del.) (“U.S. district court case”).
`Pet. 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.
`The parties also indicate that 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; Paper 4, 2. 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. Meanwhile, in the ’594 Reexamination, a decision on a
`request for rehearing is pending. Pet. 3.
`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.
`Pet. 3; 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.
`
`C. Standing
`Section 18 of the AIA governs the transitional program for covered
`business method patent reviews. Section 18(a)(1)(B) of the AIA limits such
`reviews to persons, or their privies, that have been sued or charged with
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`infringement of a covered business method patent. In asserting that it has
`standing to file the Petition, Petitioner states that it has been charged with
`infringement of the ’244 Patent in the U.S. district court case. Pet. 10.
`Petitioner further states that it is not estopped from challenging the claims on
`the ground identified in the Petition and demonstrates that the ’244 Patent is
`a covered business method patent. Id. at 5–10; infra § I.F.
`
`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
`bidder who has the highest bid is deemed the winning bidder, and to effect
`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
`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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`Patent 7,610,244 B2
`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. at
`4:3–9. In one embodiment, the bidder can authorize the system to
`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.
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`Patent 7,610,244 B2
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`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
`computers 107 and 108 are components within electronic auction system
`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.
`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
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`Patent 7,610,244 B2
`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.
`As shown in Figure 4A, the payment registration page includes
`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
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`Patent 7,610,244 B2
`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 claims challenged in this proceeding, 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:
`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
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`CBM2017-00024
`Patent 7,610,244 B2
`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
`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
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`Patent 7,610,244 B2
`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”).
`1. Financial Product or Service
`The Federal Circuit has recognized that “as a matter of statutory
`construction, the 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., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1325 (Fed. Cir. 2015). At
`the same time, “[n]ecessarily, the statutory definition of a [covered business
`method] patent requires that the patent have a claim that contains, however
`phrased, a financial activity element.” Secure Axcess, LLC v. PNC Bank
`Nat’l Ass’n, 848 F.3d 1370, 1381 (Fed. Cir. 2017).
`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
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`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 methods including 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.
`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 this claim
`satisfies the “financial product or service” component of the definition for a
`covered business method patent set forth in § 18(d)(1) of the AIA.
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`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
`exception. See 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, LLC v. Groupon, Inc., 815 F.3d 1331, 1341 (Fed. Cir. 2016)
`(addressing only whether the claimed invention solves a technical problem
`using a technical solution). 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 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 claims merely recite the use of
`conventional, nonspecialized processors, and that there is nothing novel or
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`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.
`We agree with Petitioner that the challenged claims do not recite a
`novel and unobvious technological feature. Here, the challenged claims
`only generically recite a “processor,” which is not specific or
`unconventional. Merely reciting known technologies and their use to
`accomplish the otherwise non-technological method does not render the
`challenged claims a technological invention.
`We also agree with Petitioner that the challenged claims do not
`involve a technical solution to a technical problem. The challenged claims
`seek to solve the problems of delays in effecting payment for an item
`purchased in an electronic auction and identify alternatives to providing
`credit card information for paying for the item. Ex. 1001, 2:65–3:36. The
`’244 Patent, however, does not describe specifically any technical issues
`presenting a technical problem to be solved. Meanwhile, the claimed
`solution––maintaining accounts and loaning funds to effect payments ––is
`more akin to maintaining and effecting payments from a bank account, than
`a technical solution. Indeed, the ’244 Patent itself analogizes its electronic
`auction payment accounts to effect payment as being similar to bank
`accounts. See id. at 7:63–65. At most, the solution is implemented through
`the use of a processor, but this is not sufficient to constitute a technological
`invention. See Versata, 793 F.3d at 1327 (“[E]ven if the invention required
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`the use of a computer, the claim did not constitute a technological
`invention.”).
`
`3. Summary
`Independent claims 1, 15, 19, 34, 47, and 52 satisfy the definition for
`a covered business method as set forth in § 18(d)(1) of the AIA, and they are
`not for a technological invention. Accordingly, the ’244 Patent is eligible
`for review under the transitional program for covered business method
`patents.
`
`G. Asserted Ground of Unpatentability
`Petitioner asserts that the challenged claims are unpatentable under
`35 U.S.C. § 101. Pet. 11, 21–76.
`
`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). Only those terms that are in controversy, however, need be
`construed, and only to the extent necessary to resolve the controversy. 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. 21. We, however, need not address the construction of any claim term
`to resolve the issues currently before us for purposes of determining whether
`to institute a covered business method patent review.
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`B. § 101 Ground
`Petitioner contends that the challenged claims are directed to patent-
`ineligible subject matter under § 101. Pet. 21–76. Petitioner argues that the
`challenged claims are directed to an abstract idea, and when considering the
`elements of each claim both individually and as an ordered combination,
`there are no additional elements that transform the abstract idea into a
`patent-eligible application. Id. at 28–75. At this stage of the proceeding, we
`are persuaded that Petitioner has demonstrated sufficiently that all the
`challenged claims are directed to patent-ineligible subject matter under
`§ 101.
`We begin our analysis with the principles of law that generally apply
`to a ground based on § 101, and then we turn to the arguments presented by
`Petitioner.
`
`1. Principles of Law
`A patent may be obtained for “any new and useful process, machine,
`manufacture, or composition of matter, or any new and useful improvement
`thereof.” 35 U.S.C. § 101. The U.S. Supreme Court has held that this
`statutory provision contains an important implicit exception: laws of nature,
`natural phenomena, and abstract ideas are not patentable. E.g., Alice Corp.
`v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014). Notwithstanding that a law
`of nature or an abstract idea, by itself, is not patentable, the practical
`application of these concepts may be deserving of patent protection. Mayo
`Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293–94
`(2012).
`In Alice, the Supreme Court reaffirmed the framework set forth
`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
`applications of those concepts.” Alice, 134 S. Ct. at 2355. The first step in
`the analysis is to “determine whether the claims at issue are directed to one
`of those patent-ineligible concepts.” Id. If the claims are directed to a
`patent-ineligible concept, the second step in the analysis is to consider the
`elements of the claims “individually and ‘as an ordered combination’” to
`determine whether there are additional elements that “‘transform the nature
`of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S.
`Ct. at 1298, 1297). In other words, the second step is to “search for an
`‘inventive concept’—i.e., an element or combination of elements that is
`‘sufficient to ensure that the patent in practice amounts to significantly more
`than a patent upon the [ineligible concept] itself.’” Id. (alteration in original)
`(quoting Mayo, 132 S. Ct. at 1294).
`2. Independent Claim 1
`We first address independent claim 1, which recites “[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” comprising the
`steps of “receiving informational data from the plurality of users;” “creating
`a plurality of payment accounts . . . storing funds therein;” “providing . . . an
`option to enable an automatic payment service;” “linking said plurality of
`payment accounts to . . . the electronic auction system;” and “displaying a
`link . . . for providing said plurality of users . . . access to their respective
`payment accounts for viewing the amount of funds stored therein;” and
`“determining the conclusion of the auction sale.” Thereafter, “interacting
`with said winning bidder by the electronic auction system by performing the
`steps of: sending an e-mail . . . to the winning bidder; receiving . . . at least
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`one input from the winning bidder indicating an initiation to effect payment
`to the seller; providing a payment page to the winning bidder . . . displaying
`the amount of funds to be deducted from a payment account . . .
`corresponding to the winning bidder;” and “receiving . . . authorization from
`the winning bidder to proceed with effecting payment to the seller.” Finally,
`the steps include “deducting funds from the payment account;” 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.
`a. Abstract Idea
`In the first step of our analysis, we determine whether independent
`claim 1 is directed to a patent-ineligible concept (i.e., an abstract idea). See
`Alice, 134 S. Ct. at 2355. This claim of the ’244 Patent recites a “method”
`(i.e., a process), that is by definition statutory subject matter under § 101.
`The issue, therefore, is whether this claim falls under the abstract idea
`exception.
`Petitioner contends that this claim “[is] directed to the abstract idea of
`using a previously-funded account or loan to effect a financial transaction in
`an electronic auction.” Pet. 1. Petitioner asserts that making payments in
`electronic auctions by debiting from a previously-funded payment account,
`and providing a loan to a person with insufficient funds in his or her
`payment account, are fundamental economic concepts. Id. at 28–29.
`Petitioner cites evidence indicating as early as 1871 that individuals have
`been able to make payments via wire transfers, and also cites the routine use
`of debt cards and prepaid deposit accounts utilized by the U.S. Patent and
`Trademark Office for decades. Id. at 1 (citing Exs. 1006, 1008, 1011, 1012,
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`1013, Ex. 1005 ¶ 17). Petitioner also argues that the types of financial
`activity recited in independent claim 1 are fundamental economic practices
`that have been common business practices for decades. Id. at 29–30.
`Petitioner further asserts that this claim is directed to an abstract idea
`because it is purely functional, it is directed to the use of generic computer
`components, rather than to an improvement of those computer elements, and
`it is unlike the claims found not to be directed to abstract ideas under Federal
`Circuit precedent. Id. at 30–33.
`We agree with Petitioner that independent claim 1 is directed to an
`abstract idea, and at this stage in the proceeding, we accept Petitioner’s
`description of the abstract idea as using a previously-funded account or loan
`to effect a financial transaction in an electronic auction. This independent
`claim recites an intent of 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
`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).
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`The Supreme Court has explained that concepts like intermediate
`settlement and risk hedging are abstract ideas beyond the scope of § 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). The
`current record in this case likewise shows that the concept of using a
`previously-funded account or loan to effect a financial transaction in an
`electronic auction is a fundamental economic practice. We concur with
`Petitioner that limiting the above-discussed financial practices to the context
`of an electronic auction does not render the claims non-abstract, as an
`auction itself is a fundamental economic practice that has been held to be an
`abstract idea. Pet. 29–30 (citing Advanced Auctions LLC v. eBay Inc., 2015
`WL 1415265, at *4 (S.D. Cal. Mar. 26, 2015)).
`Moreover, the ’244 Patent itself references its electronic auction
`payment account configured to store funds, which can be used to effect
`payment, as being “similar to a bank account.” Ex. 1001, 7:63–67. The fact
`that the claimed process occurs in the context of an electronic auction over
`the Internet does not make the abstract idea any less abstract. See
`Priceplay.com, Inc. v. AOL Advertising, Inc., 83 F. Supp. 3d 577, 581 (D.
`Del. 2015) (“Performing a sales transaction over the Internet, or in
`conjunction with an auction and a competitive activity, does not make the
`concept any more ‘concrete.’”), aff’d, 627 F. App’x 925 (Fed. Cir. 2016)
`(mem.).
`Furthermore, we find it unlikely that the claimed method offers any
`improvement in computer functionality as in McRO, Inc. v. Bandai Namco
`Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016) and Enfish, LLC v.
`Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016). Instead, independent
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`claim 1 only generally recites the use of a computer as a tool and focuses on
`implementing a financial transaction using a previously-funded account or
`loan. See Enfish, 822 F.3d at 1336 (distinguishing claims where the plain
`focus is to improve computer functionality from economic or other tasks in
`which computers are invoked merely as a tool and in an ordinary capacity);
`cf. McRO, 837 F.3d at 1315–16 (claim not directed to ineligible subject
`matter where “the automation goes beyond . . . carrying out a fundamental
`economic practice”). The improvement that the ’244 Patent seeks to provide
`