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 CBM2017-00027
`Patent 7,483,856 B2
`____________
`
`
`
`
`
`Before JAMESON LEE, KEVIN F. TURNER, and
`MICHAEL R. ZECHER, Administrative Patent Judges.
`
`ZECHER, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`Covered Business Method Patent Review
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`

`

`CBM2017-00027
`Patent 7,483,856 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, 5, 6, 8, 34, 35, 45, and 48 (“challenged claims”)
`
`of U.S. Patent No. 7,483,856 B2 (Ex. 1001, “’856 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 ’856 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 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 ’856 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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`CBM2017-00027
`Patent 7,483,856 B2
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`A. Related Matters
`
`
`
`The parties indicate that Patent Owner asserted the ’856 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; 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. 7,567,937 (“’937 patent”), 7,627,528
`
`(“’528 patent”), 7,610,244 (“’244 patent”), 7,599,881 (“’881 patent”), and
`
`7,512,563 (“’563 patent”). Pet. 3.
`
`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, ’563 patent, ’881 patent, and ’937 patent
`
`are the subjects of covered business method patent reviews in Cases
`
`CBM2017-00024, CBM2017-00025, CBM2017-00026, CBM2017-00028,
`
`and CBM2017-00029, respectively. Also, Patent Owner discloses 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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`CBM2017-00027
`Patent 7,483,856 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 ’856 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. 11, 21–51. 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) (Ex. 1010).
`
`D. The ’856 Patent
`
`The ’856 patent generally relates to a computerized electronic auction
`
`payment system and a method for effecting a real-time payment using the
`
`computerized electronic auction payment system for an item won in an
`
`electronic auction. E.g., Ex. 1001, 1:7–10. According to the ’856 patent,
`
`electronic auctions have become tremendously popular. Id. at 1:23. The
`
`’856 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
`
`1:24–31. Prospective bidders using a remote terminal access the electronic
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`CBM2017-00027
`Patent 7,483,856 B2
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`auction website via an electronic network, such as the Internet, and may
`
`submit a bid on the item for sale. Id. at 1:22–23, 1:47–50. 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
`
`the winning bidder informing them to contact each other to proceed with a
`
`payment transaction. Id. at 2:16–21.
`
`The ’856 patent describes several drawbacks of the known methods
`
`for effecting payment. Ex. 1001, 2:52–3:23. According to the ’856 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 2:52–57. The
`
`seller, in turn, must wait at least two business days to several weeks before
`
`being paid. Id. at 2:61–62. Additionally, the ’856 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 3:3–12. 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 3:15–23.
`
`Accordingly, the ’856 patent finds a need to overcome those
`
`drawbacks by effecting a real-time payment for an item won in an electronic
`
`auction. Ex. 1001, 3:24–26. The ’856 patent states that there is also a need
`
`to allow the winning bidder to pay for an item won in an electronic auction
`
`without having to type and transfer credit card information over an
`
`electronic network, or without having to mail the payment to the seller. Id.
`
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`CBM2017-00027
`Patent 7,483,856 B2
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`at 3:26–35. Additionally, the ’856 patent identifies a need for allowing an
`
`operator of an electronic auction website to get paid its commission in real-
`
`time at the conclusion of an auction. Id. at 3:35–38.
`
`The ’856 patent seeks to address those needs by setting up and
`
`maintaining electronic auction payment accounts––which the ’856 patent
`
`describes as similar to bank accounts––for prospective bidders and sellers.
`
`Ex. 1001, 3:53–57, 7:18–19. The prospective bidders provide funds to their
`
`electronic auction payment accounts maintained by the computerized
`
`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 computerized electronic
`
`auction payment system. Id. at 3:57–63.
`
`Upon being deemed as a winning bidder, the winning bidder accesses
`
`a payment page, enters the amount of funds to be transferred to the seller,
`
`and then 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 seller’s electronic auction
`
`payment account or another account specified by the seller. Id. at 3:63–4:4.
`
`Users also have the option of indicating whether the computerized electronic
`
`auction payment system should replenish any debited funds from outside
`
`sources. Id. at 11:24–30.
`
`6
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`

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`CBM2017-00027
`Patent 7,483,856 B2
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`Figure 1 of the ’856 patent is reproduced below.
`
`
`
`Figure 1 is an overview of a network computing environment that includes
`
`the computerized electronic auction payment system of the ’856 patent.
`
`Ex. 1001, 5:44–46.
`
`As shown in Figure 1, users 102 access an electronic auction website
`
`via a network, such as Internet 106. Ex. 1001, 6:11–14. 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 6:17–22. 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 6:23–
`
`26.
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`CBM2017-00027
`Patent 7,483,856 B2
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`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. Ex. 1001, 6:31–35. 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 6:42–47.
`
`System account database 120 maintains a system account that stores
`
`system funds available for loaning to the user if authorized by the user.
`
`Ex. 1001, 9:38–46. System account database 120 is accessible by external
`
`financial system 122. Id. at 9:47–48.
`
`E. Illustrative Claim
`
`Of the challenged claims, claims 1, 35, and 45 are the only
`
`independent claims at issue. Independent claims 1, 35, and 45 are directed
`
`to a method for effecting payment for a purchaser of at least one item
`
`offered for an electronic auction sale by a seller via an electronic auction
`
`website. Claims 5, 6, 8, and 34 directly depend from independent claim 1;
`
`and claim 48 directly depends from independent claim 45. Independent
`
`claim 1 is illustrative of the challenged claims and is reproduced below:
`
`1. A method for effecting payment for a purchaser of at
`least one item offered for an electronic auction sale by a seller
`via an electronic auction web site maintained by at least one
`computing device of an electronic auction system, said method
`comprising the steps of:
`
`maintaining an electronic database of a plurality of
`electronic auction payment accounts corresponding to a plurality
`of users, including the purchaser, of said electronic auction web
`site and a payment segment of said electronic auction web site
`by an electronic auction payment system integrated with said
`
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`Patent 7,483,856 B2
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`electronic auction system, each of said plurality of electronic
`auction payment accounts storing funds therein and each capable
`of being used for user transactions in the electronic auction
`system;
`
`performing at least one payment-related activity by at least
`one processor of said electronic auction payment system for
`effecting payment for said purchaser, said at least one payment-
`related activity selected from the group consisting of debiting an
`electronic auction payment account corresponding to the
`purchaser of the at least one item and maintained by said
`electronic auction payment system, and withdrawing funds from
`at least one account storing funds therein and not corresponding
`to at least one of the plurality of users, wherein at least one
`payment source corresponding to the purchaser is used to obtain
`funds for storing within the electronic auction payment account
`corresponding to the purchaser prior to debiting the electronic
`auction payment account corresponding to the purchaser; and
`
`crediting by said at least one processor at least one account
`corresponding to the seller to effect payment for the at least one
`item offered for the electronic auction sale via the electronic
`auction web site.
`
`Ex. 1001, 16:31–64.
`
`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 ’856 patent both (1) claims
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`Patent 7,483,856 B2
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`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
`
`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 independent claims 1, 35, and 45 “are each
`
`directed to methods for effecting payment for an item won in an auction by
`
`exchanging funds between accounts, which is a financial process that
`
`compels a finding that the ’856 patent is eligible for [covered business
`
`method patent] review.” Pet. 7. Petitioner quotes several limitations of the
`
`challenged claims that pertain to effecting payment for an item won in an
`
`auction by exchanging funds between accounts, which Petitioner argues is a
`
`financial process. Id. Specifically, Petitioner asserts:
`
`Independent claims 1, 35, and 45 each recites “[a] method for
`effecting payment for a purchaser of at least one item offered for
`an electronic auction sale by a seller via an electronic auction
`web site.” The method includes “maintaining an electronic
`database of a plurality of electronic auction payment accounts,”
`
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`Patent 7,483,856 B2
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`each “electronic auction payment account[ ] storing funds
`therein.” The method also includes performing “at least one
`payment-related activity” selected from a group consisting of
`“debiting an electronic auction payment account” and
`“withdrawing funds from at least one account storing funds.”
`Payment is effected by “crediting . . . at least one account
`corresponding to the seller to effect payment for the at least one
`item offered for the electronic auction sale.”
`
`Id. (first alteration in original). 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. 9–12.
`
`We agree with Petitioner that each of independent claims 1, 35, and
`
`45 contains limitations for performing data processing or other operations
`
`that are financial in nature. Specifically, these claims recite methods that
`
`include steps of, for example, “maintaining an electronic database of a
`
`plurality of electronic auction payment accounts . . . storing funds therein”;
`
`“performing at least one payment-related activity by at least one processor
`
`. . . for effecting payment” by “debiting an electronic auction payment
`
`account corresponding to the purchaser” or “withdrawing funds” from
`
`another account; and “crediting by said at least one processor at least one
`
`account corresponding to the seller to effect payment.” Ex. 1001, 16:31–64;
`
`accord id. at 21:5–37, 23:47–24:11. This activity (i.e., maintaining payment
`
`accounts that store funds and transferring the funds from those accounts to
`
`effect payment) is financial in nature. Accomplishing this activity by
`
`maintaining an electronic database, and using a processor to debit one
`
`account and credit another falls within the scope of data processing or other
`
`operations. Accordingly, we determine that these claims satisfy the “method
`
`or corresponding apparatus for performing data processing or other
`
`operations used in the practice, administration, or management of a financial
`
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`Patent 7,483,856 B2
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`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
`
`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.
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`Patent 7,483,856 B2
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`Petitioner argues that the challenged claims are not directed to a
`
`technological invention, but instead are directed to business processes, that
`
`is, activities that are financial in nature, using only known technology.
`
`Pet. 8. Petitioner asserts that the challenged claims merely recite the use of
`
`conventional, non-specialized databases and processors and that there is
`
`nothing novel or unobvious about using a set of computers to complete a
`
`financial transaction. Id. at 8–9 (citing Ex. 1005 ¶ 19). Petitioner further
`
`asserts that using a previously-funded account, such as a bank account or a
`
`deposit account, to effect payments is not a technical solution. Id. at 10
`
`(citing Ex. 1005 ¶ 19).
`
`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. 9–12.
`
`Patent Owner further argues that the specification of the ’856 patent sets
`
`forth drawbacks of prior art payment systems, and that the challenged claims
`
`provide technological solutions to those drawbacks. Id. at 10–11 (citing
`
`Ex. 1001, 3:24–38).
`
`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 ’856 patent in a
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`technological way. Id. at 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 claims do not recite a
`
`novel and unobvious technological feature. See Pet. 8–10. Dr. Neuman’s
`
`unrebutted testimony shows that the challenged claims merely recite the use
`
`of conventional, non-specialized databases and processors. Ex. 1005 ¶ 19.
`
`We also agree with Petitioner that the challenged 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 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 ’856 patent itself analogizes its electronic auction
`
`payment accounts as being similar to bank accounts. Ex. 1001, 7:18–19.
`
`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
`
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`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 claims only generically recite a “computing
`
`device,” “electronic database,” and “processor.” 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 ’856 patent only
`
`generically describes those components. See Ex. 1001, 6:31–35 (“The
`
`computerized electronic auction payment system 110 includes a database of
`
`electronic auction payment accounts 114 and a web server computer 116
`
`having a processor 118 capable of executing a set of programmable
`
`instructions stored within a memory 119.”). Furthermore, Dr. Neuman’s
`
`unrebutted testimony reinforces that the claims only recite the use of
`
`conventional, non-specialized databases, processors, and hardware.
`
`Ex. 1005 ¶ 19.
`
`Patent Owner asserts that “the subject matter of the challenged claims
`
`provide technological solutions to the drawbacks set forth in the
`
`specification and/or recite patentable technological features.” PO Resp. 11.
`
`Patent Owner, however, provides no further evidence or explanation, nor
`
`does Patent Owner identify with specificity the claimed technological
`
`solutions or features that Patent Owner is referring to.
`
`Instead, Patent Owner focuses its argument on the fact that “the
`
`claims hav[e] been found patentable over the prior art of record” by the U.S.
`
`Patent and Trademark Office (“USPTO”). PO Resp. 9; see also id. at 11–12
`
`(“[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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`CBM2017-00027
`Patent 7,483,856 B2
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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.”). We, however,
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`agree with Petitioner that an examiner’s decision to issue a claim is not
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`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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`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, 35, and 45 satisfy the definition for a covered
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`business method patent as set forth in § 18(d)(1) of the AIA because they are
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`financial in nature, and they are not for a technological invention.
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`Accordingly, the ’856 patent is eligible for review under the transitional
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`program for covered business method patents.
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`CBM2017-00027
`Patent 7,483,856 B2
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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. 35 U.S.C. § 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. 21–51. 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 22–50. In response, Patent
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`Owner contends that the challenged claims are directed to patent-eligible
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`subject matter under § 101. PO Resp. 5–9. Based on the record developed
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`during trial, Petitioner has demonstrated that all of the challenged claims are
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`directed to patent-ineligible subject matter under § 101.
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`Patent 7,483,856 B2
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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. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014). Notwithstanding that
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`a law of nature or an abstract idea, by itself, is not patentable, the application
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`of these concepts to a structure or process may be deserving of patent
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`protection. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S.
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`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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`Patent 7,483,856 B2
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`2. Independent Claims 1, 35, and 45
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`
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`We first address independent claims 1, 35, and 45. Each of these
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`independent claims have similar scope in that they recite “[a] method for
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`effecting payment for a purchaser of at least one item offered for an
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`electronic auction sale by a seller via an electronic auction web site”
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`comprising the steps of “maintaining an electronic database of a plurality of
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`electronic auction payment accounts”; “performing at least one payment-
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`related activity by at least one processor”; and “crediting by said at least one
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`processor at least one account corresponding to the seller to effect payment.”
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`Ex. 1001, 16:31–64; accord id. at 21:5–37, 23:47–24:11.
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`a. Statutory Category
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`“It remains true after [Alice] that ‘[a] § 101 analysis begins by
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`identifying whether an invention fits within one of the four statutorily
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`provided categories of patent-eligible subject matter.’” Aatrix Software, Inc.
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`v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018)
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`(second alteration in original) (quoting Ultramercial, Inc. v. Hulu, LLC,
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`772 F.3d 709, 713–14 (Fed. Cir. 2014)).
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`
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`Patent Owner first asserts that the challenged claims are directed to a
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`statutory category because they are for payment systems and/or methods,
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`which are patentable as illustrated by several patents recently issued by the
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`USPTO. PO Resp. 5–6. Petitioner replies by contending that the fact that
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`some payment systems and methods are patent-eligib