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 CBM2017-00026
`Patent 7,512,563 B2
`____________
`
`
`
`
`
`Before JAMESON LEE, KEVIN F. TURNER, and
`MICHAEL R. ZECHER, Administrative Patent Judges.
`
`LEE, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`Covered Business Method Patent Review
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`

`

`CBM2017-00026
`Patent 7,512,563 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, 6, and 7 (“challenged claims”) of U.S. Patent
`
`No. 7,512,563 B2 (Ex. 1001, “’563 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 ’563 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 ’563 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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`

`

`CBM2017-00026
`Patent 7,512,563 B2
`
`A.
`
`
`
`Related Matters
`
`Petitioner indicates that Patent Owner asserted the ’563 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. 3. 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. 7,567,937 (“’937 patent”), 7,627,528 (“’528 patent”), 7,610,244
`
`(“’244 patent”), 7,599,881 (“’881 patent”), and 7,483,856 (“’856 patent”).
`
`Pet. 3.
`
`The Petitioner also indicates that one Petitioner entity, eBay Inc., filed
`
`requests for inter partes reexaminations of the ’856 patent, ’937 patent,
`
`’563 patent, ’528 patent, ’881 patent, and ’244 patent, which were granted in
`
`Reexamination Control Nos. 95/001,594 (“’594 Reexamination”),
`
`95/001,588, 95/001,589, 95/001,590, 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. 4; Paper 4, 2.
`
`The ’244 patent, ’528 patent, ’856 patent, ’881 patent, and ’937 patent
`
`are the subjects of covered business method patent reviews in Cases
`
`CBM2017-00024, CBM2017-00025, CBM2017-00027, CBM2017-00028,
`
`and CBM2017-00029, respectively. 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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`3
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`CBM2017-00026
`Patent 7,512,563 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 ’563 patent against Petitioner in the U.S. district court case. Pet.
`
`3, 11. Petitioner also argues that it is not estopped from challenging the
`
`claims on the ground identified in the Petition. Id. at 11 (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. 12, 20–54. Petitioner relies on the Declaration of
`
`Clifford Neuman (Ex. 1005) in support of the Petition. Petitioner also cites
`
`to Robert C. Zimmer & Theresa A. Einhorn, The Law of Electronic Funds
`
`Transfer (1978) (Ex. 1006), and Edward Preston Moxey, Jr., Practical
`
`Banking (1910) (Ex. 1010).
`
`D.
`
`The ’563 Patent
`
`The ’563 patent is titled: “System and Method to Automate Payment
`
`for a Commerce Transaction.” Ex. 1001, [45], [54]. More specifically, the
`
`’563 patent relates to a method for automatically effecting payment for a
`
`user of an electronic auction web site (claim 1) or a method for
`
`automatically effecting payment for a user of an electronic commerce web
`
`site (claim 7). The ’563 patent states: “With the advent of electronic
`
`networks, such as the Internet, electronic auctions have become
`
`tremendously popular.” Ex. 1001, 1:33–34. The ’563 patent identifies
`
`preexisting electronic auction websites EBAY and YAHOO! Auctions. Id.
`
`4
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`CBM2017-00026
`Patent 7,512,563 B2
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`at 1:35–38. The ’563 patent describes three preexisting methods for
`
`effecting payment at the conclusion of an electronic auction for an item. Id.
`
`at 2:27–62. The first method is described as follows:
`
`To effect payment for the item, an email is sent to the seller and
`the winning bidder informing them to contact each other to
`proceed with a payment transaction. Upon the seller notifying
`the winning bidder of where to send payment, e.g., a check or
`money order, the winning bidder sends payment equal to the
`highest bid plus any other costs, such as shipping and handling,
`shipping insurance, and taxes, as indicated by the seller. Soon
`after receiving the payment from the winning bidder, the seller
`ships the item to the winning bidder.
`
`Id. at 2:29–38. The second method is described as this:
`
`Another prior art method for effecting payment for the
`item won on the electronic auction entails clicking an icon on the
`electronic auction web site and accessing a payment web site (or
`a payment segment of the electronic auction web site). The
`payment web site typically lists the seller’s user-name and the
`item won. While at the payment web site, the winning bidder
`enters credit card information and the amount to be charged to
`his credit card. Subsequently, a management system overseeing
`the payment web site charges the credit card for the entered
`amount to a company or entity affiliated with an operator or
`owner of the payment web site. Upon payment confirmation, an
`email is sent to the seller instructing the seller to ship the item to
`the winning bidder. After two to three business days, the
`payment web site management system pays the seller by direct
`deposit an amount equal to the charged amount minus a
`commission and a transaction fee. The commission typically [is]
`paid to the operator or owner of the electronic auction web site
`and the transaction fee is paid to the operator or owner of the
`payment web site.
`
`Id. at 2:39–57. The third method is a variation of the second method, where
`
`the winning bidder directly transfers his credit card information to the seller,
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`CBM2017-00026
`Patent 7,512,563 B2
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`and the seller then charges the credit card and waits for a confirmation of
`
`payment prior to shipping the item to the winning bidder. Id. at 2:58–62.
`
`
`
`The ’563 patent describes several problems with these three
`
`preexisting methods for a user to effect payment. It is described that “the
`
`winning bidder is apt to waiting prior to effecting payment, since the
`
`winning bidder will need to perform several tasks, such as, for example,
`
`draft a check made payable to the seller, and mail the check to the seller.”
`
`Id. at 2:64–3:1. The ’563 patent also describes that “[t]he winning bidder is
`
`also apt to [wait] when he is bidding on other items, since the winning
`
`bidder usually prefers to draft checks, obtain money orders, etc. and mail
`
`them to the various sellers at one time.” Id. at 3:1–4. The ’563 patent
`
`describes that the seller must wait at least two business days to several
`
`weeks before being paid, because of the winning bidder’s delay in making
`
`payment through a two-step process (i.e., draft a check, obtain a money
`
`order or some other payment document, and then mail to the seller). Id.
`
`at 3:5–13.
`
`
`
`The ’563 patent further describes that “a percentage of the population
`
`feels uneasy transferring their credit card information via the electronic
`
`network, especially to unknown sellers,” and that “the winning bidder is apt
`
`to waiting until the start of a new credit card billing cycle before transferring
`
`his credit card information to pay for the item won on the electronic
`
`auction.” Id. at 3:16–23. The ’563 patent also describes that “the winning
`
`bidder must enter his credit card information every time he wins an item on
`
`the electronic auction.” Id. at 3:14–16. Finally, the ’563 patent describes as
`
`a problem that “the operator of the electronic auction web site must wait
`
`several days to several weeks before being paid a commission by the seller,”
`
`6
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`CBM2017-00026
`Patent 7,512,563 B2
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`usually by sending an email request to the seller for an authorization to
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`charge the seller’s credit card. Id. at 3:26–31.
`
`
`
`To address these and other issues, the ’563 patent provides a
`
`computerized electronic auction payment system and method for effecting a
`
`real-time payment for an item won in an electronic auction. Id. at 3:53–56.
`
`The method sets up and maintains electronic auction payment accounts for
`
`prospective bidders and sellers, and the prospective bidders provide funds,
`
`prior to being deemed as winning bidders, to their electronic auction
`
`payment accounts via direct deposits, credit card, check, money order, or
`
`other financial document. Id. at 3:64–4:7.
`
`
`
`In one embodiment, upon being deemed a winning bidder, the
`
`winning bidder accesses a payment page, enters the total amount of the
`
`funds to be transferred to the seller, and authorizes the computerized
`
`electronic auction payment system to effect a real-time payment by debiting
`
`the winning bidder’s electronic auction payment account and crediting the
`
`electronic auction payment account of the seller, and/or another account
`
`specified by the seller. Id. at 4:7–15. In another embodiment, the winning
`
`bidder need not access a payment page, but simply authorizes the
`
`computerized electronic auction payment system to effect a real-time
`
`payment to the seller upon the bidder being deemed the winning bidder,
`
`immediately upon the conclusion of the electronic auction. Id. at 4:16–21.
`
`In still another embodiment, the computerized electronic auction payment
`
`system enables the operator of the electronic auction web site to be paid its
`
`commission in real-time at the conclusion of an auction or upon
`
`authorization by the winning bidder. Id. at 4:35–39.
`
`
`
`
`
`7
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`

`CBM2017-00026
`Patent 7,512,563 B2
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`
`
`Figure 1 of the ’563 patent is reproduced below.
`
`
`
`Figure 1 is an overview of the network computing environment including the
`
`computerized electronic auction payment system of the ’563 patent. Id. at
`
`5:47–49. 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 6:35–39. The instructions
`
`enable computerized electronic auction payment system 110 to maintain the
`
`database of electronic auction payment accounts. Id. at 6:39–44. They also
`
`enable the computerized electronic auction payment system to allow the
`
`winning bidder to effect real-time payment for an item won on the electronic
`
`auction web site. Id. at 6:46–51.
`
`8
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`CBM2017-00026
`Patent 7,512,563 B2
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`
`
`Illustrated in Figure 1 are users 102 who have access to an electronic
`
`auction web site via a network, such as Internet 106. Id. at 6:15–18. Web
`
`server computers 107 and 108 are components within electronic auction
`
`system 112 and they operate to maintain the electronic auction web site and
`
`allow each user 102 to browse the electronic auction web site and bid for
`
`items and/or sell items in an electronic auction. Id. at 6:20–26. 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 6:27–30.
`
`
`
`The challenged independent claims are claims 1 and 7, which are
`
`reproduced below:
`
`1. A method for automatically effecting payment for a user of an
`electronic auction web site maintained by at least one
`computing device to an operator associated with the
`electronic auction web site, said method comprising the
`steps of:
`
`executing by at least one processor a sequence of events, the
`sequence of events including the steps of providing the
`user with an option prior to the conclusion of an electronic
`auction provided by the electronic auction web site, the
`option enabling the user to authorize a payment system to
`execute an automatic payment method after the conclusion
`of the electronic auction, the automatic payment method
`includes automatically deducting funds from a payment
`account storing funds therein and corresponding to the
`user; receiving authorization from the user in response to
`the provided option and prior to the beginning of the
`electronic auction to execute the automatic payment
`method after the conclusion of the electronic auction; and
`determining whether to execute the automatic payment
`method for the user after the conclusion of the electronic
`auction based on whether
`the user has provided
`authorization to execute the automatic payment method in
`response to the provided option; and
`
`9
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`CBM2017-00026
`Patent 7,512,563 B2
`
`executing by the at least one processor the automatic payment
`method after the conclusion of the electronic auction, if it
`is determined by the at least one processor to execute the
`automatic payment method and the user has provided
`authorization for executing the automatic payment method
`in response to the provided option, the executing step
`comprising the steps of:
`
`automatically deducting funds from the funds stored in the
`payment account corresponding to the user of the
`electronic auction web site; and
`
`automatically transferring at least a portion of the
`deducted funds into an account corresponding to the
`operator associated with the electronic auction web
`site.
`
`Id. at 16:35–17:4.
`
`7. A method for automatically effecting payment for a user of an
`electronic commerce web site, said method comprising the
`steps of:
`
`setting up an electronic payment account by at least one
`processor for the user, said payment account storing
`funds therein for use in effecting payment for network
`based commerce transactions;
`
`automatically deducting funds stored within the electronic
`payment account due to at least one network-based
`commerce transaction without receiving a request from
`the user to deduct funds following a termination event
`of
`the at
`least one network-based commerce
`transaction; and
`
`automatically transferring at least a portion of the
`deducted funds to an account associated with an
`operator of the electronic commerce web site, the
`electronic payment account storing funds therein and
`the electronic commerce web site are maintained by an
`electronic commerce
`and payment
`computing
`architecture, said computing architecture having
`computing devices for maintaining the electronic
`
`10
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`

`CBM2017-00026
`Patent 7,512,563 B2
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`payment account storing funds therein and the
`electronic commerce web site, said computing devices
`being in operative communication with each other via
`at least one non-Internet connection.
`
`Id. at 17:32–54.
`
`E.
`
`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 ’563 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.,
`
`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
`
`11
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`CBM2017-00026
`Patent 7,512,563 B2
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`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).
`
`For the ’563 patent, we focus on claim 7. As noted by Petitioner,
`
`claim 7 recites: “A method for automatically effecting payment for a user of
`
`an electronic commerce web site.” Pet. 7; Ex. 1001, 17:31–32. The method
`
`of claim 7 comprises several steps, including (1) setting up an electronic
`
`payment account storing funds for use in effecting payment, (2)
`
`automatically deducting funds stored in that payment account due to a
`
`network-based commerce transaction, and (3) automatically transferring at
`
`least a portion of the deducted funds to an account associated with an
`
`operator of the electronic commerce web site. Id. at 17:34–37, 17:38–40,
`
`17:43–45. Petitioner specifically identifies the “automatic deducting” step
`
`and the “automatic transferring step” as directed to automatically effecting
`
`payment by exchanging funds between accounts. Pet. 7–8.
`
`Claim 7 further specifies that the electronic payment account and the
`
`electronic commerce web site are maintained by an electronic commerce and
`
`payment architecture. Ex. 1001, 17:45–48. Manifestly, the claimed method
`
`performs data processing operations used in the practice, administration, or
`
`management of a financial service (i.e., a payment service for a user of an
`
`electronic commerce web site). Maintaining a payment account and
`
`automatically effecting payment from that payment account is financial in
`
`nature and constitutes a financial service. Patent Owner does not contend
`
`that these claimed steps are not financial in nature or is not a financial
`
`service.
`
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`CBM2017-00026
`Patent 7,512,563 B2
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`
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`For the foregoing reasons, we determine that claim 7 satisfies the
`
`“method or corresponding apparatus for performing data processing or other
`
`operations used in the practice, administration, or management of a 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
`
`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
`
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`Patent 7,512,563 B2
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`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.
`
`a.
`
`Technological Feature – Novel and Unobvious
`
`
`
`The following claim drafting techniques, reciting technology,
`
`typically do not render a patent a technological invention:
`
`(a) Mere recitation of known technologies, such as
`computer hardware, communication or computer networks,
`software, memory, computer-readable
`storage medium,
`scanners, display devices or databases, or specialized machines,
`such as an ATM or point of sale device.
`
`
`(b) Reciting the use of known prior art technology to
`accomplish a process or method, even if that process or method
`is novel and non-obvious.
`
`
`(c) Combining prior art structures to achieve the normal,
`expected, or predictable result of that combination.
`
`Office Patent Trial Practice Guide, 77 Fed. Reg. at 48,763–64.
`
`Petitioner argues that “each of the challenged claims, when read by its
`
`individual elements or as a whole, does not recite a technological feature that
`
`is novel and unobvious over the prior art.” Pet. 8. Focusing on claim 7, we
`
`are persuaded that Petitioner is correct. Petitioner asserts that there is
`
`nothing novel or unobvious about using a set of computers to complete a
`
`financial transaction, and that the claims do not recite any novel technology
`
`to implement the claimed payment flow, but merely recite the use of
`
`conventional and non-specialized processors. Id. at 8–9. The assertions are
`
`supported by the unrebutted declaration testimony of Dr. Neuman. Ex. 1005
`
`¶¶ 19–21. For purposes of this Decision, we credit the following testimony
`
`of Dr. Neuman:
`
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`Patent 7,512,563 B2
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`19. The ’563 patent claims are directed to financial
`transfers. Financial transactions, electronic or otherwise, are the
`fundamental building blocks of the economy. Ex. 1010, p.4
`(describing the use of deposit accounts in 1910); Ex. 1007, p.4
`(describing fund transfer services). Indeed, this is the type of
`subject matter that is taught in economics or business classes.
`The fact that the ’563 patent’s transfers are occurring
`electronically does not add to the invention. Transactions are
`regularly conducted electronically, and have been for decades.
`Basically, the ’563 patent takes this well-known concept and
`applies it to, for example, the Internet. As discussed above,
`Figure 1 of the ’563 patent shows that these components are
`nothing more than general purpose servers, databases, and
`processors, depicted as nothing more than generic boxes.
`
`20. Nor is the combination of financial transactions,
`
`pre-funded accounts, and pre-authorized transfers anything other
`than a well-trod, fundamental economic concept. As I discussed
`in the preceding paragraphs, a generic bank account implements,
`collectively, these concepts. Bank accounts are regularly used in
`financial transactions, including electronic transactions, and
`banks offer overdraft protection. Although the recited claim
`elements include generic components such as “computing
`device”, “computing architecture”, and “processor,” which are
`used to perform the steps of the claimed methods for effecting
`payment, there is nothing novel or technologically innovative
`about using generic computers
`to accomplish financial
`transactions. The claims recite the use of conventional, non-
`specialized databases and processors. The claims do not, nor do
`they even claim to, improve the functioning of these generic
`computer components, or to improve any other technology or
`technical field.
`
`21. The conventional nature of the hardware is further
`
`reflected in the specification. Fig. 1 of the ’563 patent “is an
`overview of a network computing environment including the
`computerized electronic auction payment system according to
`the invention.” Ex. 1001, 5:47-49. The figure depicts “users”
`and the “Internet,” who interact with an electronic auction system
`comprising “web servers” and an electronic payment system
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`Patent 7,512,563 B2
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`comprising “databases,” a “processor,” and “memory.” These
`are generic hardware components and the specification does not
`suggest that these components add significantly more to the
`claimed inventions.
`
`Ex. 1005 ¶¶ 19–21.
`
`In response, Patent Owner contends that the challenged claims are
`
`directed to novel and nonobvious improvements in computer-related
`
`technology (i.e., technological inventions) as demonstrated by the claims
`
`having been found patentable over the prior art of record. PO Resp. 9.
`
`Patent Owner asserts: “Applicant’s or Patent Owner’s representative
`
`technologically and patentably distinguished the then pending claims over
`
`the prior art of record by addressing the technological and patentable
`
`features recited by the claims, including those recited by challenged claims
`
`1, 6, and 7.” Id. According to Patent Owner, the withdrawal of the
`
`Examiner’s rejections over prior art based on Applicant’s arguments “is a
`
`strong indication the challenged claims were found by the Office to solve
`
`technical problems which the prior art fails to do, and therefore the claims
`
`are not [covered business method] claims.” Id. at 11. Patent Owner further
`
`argues that the specification of the ’563 patent sets forth drawbacks of prior
`
`art payment systems, and that the challenged claims provide technological
`
`solutions to those drawbacks. Id. at 9–10.
`
`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
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`Patent 7,512,563 B2
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`provide any evidence or analysis that establishes how the challenged claims
`
`address the drawbacks identified in the specification of the ’856 patent in a
`
`technological way. Id. at 2–3. Petitioner notes 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. at 3.
`
`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.”).
`
`We agree with Petitioner that claim 7 does not recite a novel and
`
`unobvious technological feature. See Pet. 8–10. Here, claim 7 only
`
`generically recites “computing device,” “computing architecture,” and
`
`“processor.” There is no indication from the record developed during trial
`
`that those components are used in anything other than a general and
`
`conventional way. Rather, the ’563 patent only generically describes those
`
`components. See Ex. 1001, 6:35–39 (“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
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`of executing a set of programmable instructions stored within a memory
`
`119.”). Dr. Neuman’s unrebutted testimony shows that claim 7 merely
`
`recites the ordinary use of conventional, non-specialized servers and
`
`processors. Ex. 1005 ¶ 19–21.
`
`As for Patent Owner’s assertion (PO Resp. 10) that the subject matter
`
`of the challenged claims “provide[s] technological solutions to the
`
`drawbacks set forth in the specification and/or recite patentable
`
`technological features,” Patent Owner has not provided persuasive evidence
`
`or explanation. Moreover, Patent Owner has not identified specifically any
`
`such claimed technological solution.
`
`We agree with Petitioner that an examiner’s decision to issue a claim
`
`is not dispositive of whether the claim is novel and nonobvious in
`
`determining whether a patent is eligible for covered business method patent
`
`review. See Pet. Reply 2; see also Versata, 793 F.3d at 1326–27
`
`(recognizing that “the invention under review, since it has already been
`
`covered by an issued patent, was earlier determined by the USPTO [U.S.
`
`Patent and Trademark Office] to be novel and nonobvious,” but nevertheless
`
`finding the patent at issue to be eligible for covered business method patent
`
`review). If Patent Owner’s position were correct, then covered business
`
`method patent review authorized by Congress under the AIA would be a
`
`nullity. As Petitioner points out, issued patent claims are the only claims
`
`that are eligible for covered business method patent review in the first place.
`
`Pet. Reply 2; see also, e.g., AIA § 18(a)(2) (stating that regulations
`
`establishing and implementing transitional program for covered business
`
`method patents “shall apply to any covered business method patent issued
`
`before, on, or after th[e] effective date” (emphasis added)).
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`For the foregoing reasons, we find that setting up an electronic
`
`payment account, obtaining pre-authorization from the account holder for
`
`money transfer from the account, automatically deducting funds from an
`
`electronic payment account, and automatically transferring any portion of
`
`the deducted funds are not novel. We find also that the subject matter of
`
`claim 7, as a whole, does not recite a technological feature that is novel or
`
`unobvious. Even if the claimed method, as a whole, is novel and non-
`
`obvious, the use of known prior a