Trials@uspto.gov
`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.,
`Petitioners,
`
`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.
`
`
`DECISION
`Granting Institution of Covered Business Method Patent Review
`35 U.S.C. § 324(a) and 37 C.F.R. § 42.208
`
`
`
`
`
`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.,
`Petitioners,
`
`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.
`
`
`DECISION
`Granting Institution of Covered Business Method Patent Review
`35 U.S.C. § 324(a) and 37 C.F.R. § 42.208
`
`
`
`
`
`
`CBM2017-00027
`Patent 7,483,856 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, 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 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 ’856 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 therefore institute a covered
`business method patent review as to all the challenged claims.
`
`B. 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.
`
`
`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.
`
`2
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`CBM2017-00027
`Patent 7,483,856 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. 7,567,937 (“’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.
`The parties also indicate that one Petitioner entity, eBay Inc.,
`requested inter partes reexaminations of the ’856 patent, ’937 patent, ’563
`patent, ’528 patent, ’881 patent, and ’244 patent, which were instituted 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; 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.
`4; Paper 4, 2. Meanwhile, in the ’594 Reexamination, a decision on a
`request for rehearing is pending. Pet. 4.
`The parties further indicate that Petitioner has requested covered
`business method patent reviews for the ’244 patent, ’528 patent, ’563 patent,
`’881 patent, and ’937 patent in Cases CBM2017-00024, CBM2017-00025,
`CBM2017-00026, CBM2017-00028, and CBM2017-00029, respectively.
`Pet. 4; Paper 4, 2. Also, Patent Owner discloses 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 ’856 patent in the U.S. district court case. Pet. 11.
`Petitioner further states that it is not estopped from challenging the claims on
`the ground identified in the Petition and demonstrates that the ’856 patent is
`a covered business method patent. Id. at 6–11; infra § I.F.
`
`D. The ’856 Patent
`The ’856 patent generally relates to an electronic auction payment
`system and a method for effecting a real-time payment using the electronic
`auction payment system for an item won in an electronic auction. E.g., Ex.
`1001, 1:7–10. 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 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. Also,
`the seller must wait at least two business days to several weeks before being
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`Patent 7,483,856 B2
`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.
`The ’856 patent seeks to address those drawbacks 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 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
`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 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.
`
`5
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`Patent 7,483,856 B2
`Figure 1 of the ’856 patent is reproduced below.
`
`
`Figure 1 is an overview of a network computing environment that includes
`the 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 6:18–22. The web server computers 107 and 108 also allow each user
`to access computerized electronic auction payment system 110 for effecting
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`CBM2017-00027
`Patent 7,483,856 B2
`a real-time payment at the conclusion of an electronic auction. Id. at 6:23–
`26.
`
`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. External financial system
`122 may access system account database 120, which maintains a system
`account storing system funds available for loaning to the user if authorized
`by the user. Id. at 9:38–48.
`
`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
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`CBM2017-00027
`Patent 7,483,856 B2
`site and a payment segment of said electronic auction web site
`by an electronic auction payment system integrated with said
`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”).
`
`8
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`Patent 7,483,856 B2
`
`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 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. In support of this contention, Petitioner
`refers to the classification of the ’856 patent and quotes language from the
`’856 patent, including from each of independent claims 1, 35, and 45. Id.
`We agree with Petitioner that each of independent claims 1, 35, and
`45 contains limitations for performing data processing or other operations
`that include a financial activity element. 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”; “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
`
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`one account corresponding to the seller to effect payment.” Ex. 1001,
`16:31–64; accord id. at 21:5–37, 23:47–24:11. Maintaining payment
`accounts that store funds and transferring the funds from those accounts to
`effect payment is financial activity. Accomplishing this task 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 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 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
`
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`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, 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).
`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 “computing device,” “electronic database,” and
`“processor,” none of which are specific or unconventional. Merely reciting
`such known technologies and their use to accomplish the otherwise non-
`technological methods 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
`
`11
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`Patent 7,483,856 B2
`purchased in an electronic auction and alternatives to providing credit card
`information for paying for the item. Ex. 1001, 2:52–3:38. The ’856 patent,
`however, does not describe specifically any technical issues presenting a
`technical problem to be solved. Meanwhile, the claimed solution––
`maintaining prefunded accounts for effecting payment––is more akin to
`maintaining and effecting payment from a bank account, than a technical
`solution. Indeed, the ’856 patent itself analogizes its electronic auction
`payment accounts to effect payment as being similar to bank accounts. See
`id. at 7:18–20. At most, the solution implemented uses a computing device
`and processor, but this is not sufficient to constitute a technological
`invention. See 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.”).
`
`3. Summary
`Independent claims 1, 35, and 45 satisfy the definition for a covered
`business method patent as set forth in § 18(d)(1) of the AIA, and they are not
`for a technological invention. Accordingly, the ’856 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, 21–51.
`
`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.
`
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`§ 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 covered business method patent review.
`
`B. § 101 Ground
`Petitioner contends that the challenged claims are directed to patent-
`ineligible subject matter under § 101. Pet. 21–51. 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 22–50. 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
`the parties.
`
`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.
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`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,
`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).
`2. Independent Claims 1, 35, and 45
`We first address independent claims 1, 35, and 45. Each of these
`
`independent claims have similar scope in that they recite “[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”
`comprising the steps of “maintaining an electronic database of a plurality of
`electronic auction payment accounts”; “performing at least one payment-
`related activity by at least one processor”; 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.
`
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`
`a. Abstract Idea
`In the first step of our analysis, we determine whether independent
`claims 1, 35, and 45 are directed to a patent-ineligible concept (i.e., an
`abstract idea). See Alice, 134 S. Ct. at 2355. These claims of the ’856 patent
`each recite a “method” (i.e., a process), that is by definition statutory subject
`matter under § 101. The issue, therefore, is whether they fall under the
`abstract idea exception.
`Petitioner contends that these claims “are directed to the abstract idea
`of using a previously-funded account to effectuate a financial transaction in
`an electronic auction.” Pet. 1. Petitioner asserts that it is a fundamental
`economic concept to use a previously-funded electronic payment account to
`make payments in electronic auctions. Id. at 28. Petitioner cites evidence
`showing that individuals have long used funded accounts for commercial
`transactions and to make payments. Id. at 1, 29 (citing Edward Preston
`Moxey, Jr., Practical Banking (1910) (Ex. 1006, 42)). Petitioner further
`asserts that these claims are directed to an abstract idea because they are
`purely functional, are directed to the use of generic computer components,
`rather than to an improvement of those computer elements, and are unlike
`the claims found not to be directed to abstract ideas under Federal Circuit
`precedent. Id. at 30–32.
`We agree with Petitioner that independent claims 1, 35, and 45 are
`directed to an abstract idea, and at this stage of the proceeding, we accept
`Petitioner’s description of the abstract idea as using a previously-funded
`account to effectuate a financial transaction in an electronic auction. These
`
`
`2 The reference to the page number of Exhibit 1006 is to the page number
`inserted by Petitioner at the bottom, right-hand corner of the page.
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`independent claims recite an intent of effecting payment in the context of an
`electronic auction sale by a process that includes the steps of maintaining
`and storing funds in payment accounts; either debiting the purchaser’s
`funded payment account or withdrawing funds from a different account; and
`crediting the seller’s account. Ex. 1001, 16:31–64, 21:5–37, 23:47–24:11.
`This purchaser-seller arrangement is not meaningfully distinct from the
`financial arrangements found to be abstract ideas in Alice, 134 S. Ct. at 2356
`(“method of exchanging financial obligations between two parties using a
`third-party intermediary to mitigate settlement risk”) and Bilski v. Kappos,
`561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to
`purchase commodities in the energy market at a fixed rate as a way of
`protecting, or “hedging,” against risks of price changes).
`The Supreme Court has explained that concepts like 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 to effectuate a financial transaction is a
`fundamental economic practice. See Ex. 1006, 4 (describing, in a 1910
`publication, the use of a deposit account as a ready means for paying debts
`in a way that is more convenient than cash). Moreover, the ’856 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, 7:18–20. 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 Advert., Inc., 83 F. Supp. 3d
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`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 methods offer any
`improvement in computer functionality as in McRO, Inc. v. Bandai Namco
`Games America Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016), and Enfish, LLC
`v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016). Instead,
`independent claims 1, 35, and 45 only generally recite the use of a computer
`as a tool and focus on implementing a financial transaction. 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 ’856 patent seeks to provide is over
`manual payment processes such as drafting and mailing a check (Ex. 1001,
`2:63–65), typing and transferring credit card information (id. at 3:29), or
`exchanging e-mails to authorize a commission (id. at 3:18–20). These types
`of improvements, however, do not represent patentable improvements in
`computer technology. See Credit Acceptance Corp. v. Westlake Servs., 859
`F.3d 1044, 1055 (Fed. Cir. 2017) (finding that claims do not improve the
`functionality of a general purpose computer where they only permit
`automation of previously manual processing of loan applications because
`“prior cases have made clear that mere automation of manual processes
`
`17
`
`
`
`CBM2017-00027
`Patent 7,483,856 B2
`using generic computers does not constitute a patentable improvement in
`computer technology”).
`
`b. Inventive Concept
`The second step in our analysis requires us to look for additional
`elements that may “transform the nature of the claim[s]” into a patent-
`eligible application of an abstract idea. Mayo, 132 S. Ct. at 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.’” Alice, 134 S. Ct. at 2355 (alteration in original)
`(quoting Mayo, 132 S. Ct. at 1294).
`Petitioner states that independent claims 1, 35, and 45 merely recite
`well-known, generic computer components, which are arranged in a
`conventional way. Pet. 32–34. Petitioner provides a detailed analysis of
`each individual claim element in asserting that the claim limitations, taken
`individually, do not contain an inventive concept. Id. at 35–48. Considered
`as an ordered combination, Petitioner asserts that these claims simply recite
`the well-known, conventional process of debiting and crediting a funded
`account to pay for an item won in an electronic auction, and amount to
`nothing significantly more than an instruction to apply this abstract idea
`using a generic computer. Id. at 50. Petitioner further argues that the ’856
`patent preempts all effective uses of paying for items in an electronic auction
`using a prefunded account. Id. at 50–51.
`Considering the claim elements individually, the independent claims
`at issue require the following steps: (1) “maintaining” an electronic database
`of electronic auction payment accounts, each storing funds; (2) “performing”
`
`18
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`
`CBM2017-00027
`Patent 7,483,856 B2
`at least one payment-related activity––either “debiting” a purchaser’s
`electronic auction payment account or “withdrawing” funds from another
`account; and (3) “crediting” a seller’s account. Ex. 1001, 16:31–64, 21:5–
`37, 23:47–24:11. These claims further recite the use of a “computing
`device” in the preamble, an “electronic auction web site” in the
`“maintaining” step, and a “processor” in the “performing” and “crediting”
`steps. Id.
`As Alice explains, “[u]sing a computer to create and maintain . . .
`electronic recordkeeping” (like the “maintaining” step here) is “one of the
`most basic functions of a computer.” Alice, 134 S. Ct. at 2359. Also, under
`Alice, “[t]he same is true with respect to the use of a computer to obtain data
`[and] adjust account balances” (like the “debiting”/“withdrawing” and
`“crediting” actions here). Id.
`Nor does performing the steps with a generic computer processor or
`on a website over the Internet add an inventive concept. See Intellectual
`Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir.
`2017) (claims reciting a generic computer element––a processor––do not
`contain an inventive concept); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d
`709, 716 (Fed. Cir. 2014) (“The claims’ invocation of the Internet also adds
`no inventive concept. As we have held, the use of the Internet is not
`sufficient to save otherwise abstract claims from ineligibility under § 101.”).
`Also, limiting these claims to the particular technological environment of
`electronic auctions is not enough for patent eligibility. See Alice, 134 S. Ct.
`at 2358.
`Considering the claim elements as an ordered combination, each
`claimed method, as a whole, is simply indicative of the abstract idea of usin
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