PTAB

CBM2014-00042

EDO Interactive Inc v. TuitionFund LLC

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Petition
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1. Case Identification

2. Patent Overview

  • Title: Methods and Systems for Applying Rebates to Higher Education
  • Brief Description: The ’872 patent discloses methods and systems for funding higher education by accumulating and managing merchant-funded rebates. The system directs rebates from consumer purchases at registered merchants into a designated "higher education account" for educational expenses.

3. Grounds for Unpatentability

Ground 1: Claims 1-24 are unpatentable under 35 U.S.C. §101 as being directed to an abstract idea.

  • Core Argument: Petitioner argued that the claims are directed to the abstract idea of a merchant-funded rebate applied to a specific field of use (educational savings). The claims recite ordinary financial transactions that could be performed manually and do not require more than a general-purpose computer for implementation. Petitioner contended that the method and system claims fail the machine-or-transformation test as they are not tied to a particular machine and only manipulate financial data, which is not a physical transformation. The addition of a non-specific "processor" or limiting the rebate's use to education were argued to be insufficient to confer patent eligibility.

Ground 2: Claims 1-7, 9-15, 17-22, and 24 are obvious over Koch in view of the FutureBanker Article.

  • Prior Art Relied Upon: Koch (International Publication No. WO 97/46961) and the FutureBanker Article (a June 1997 article from American Banker Publications).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that Koch disclosed a merchant-funded cash rebate system using credit and debit cards, a network of registered merchants, and a central "rebate network manager" to monitor transactions, calculate rebates, and credit an account. Koch explicitly taught that its accumulated value account could be used for various purposes, including purchasing goods that qualify as educational expenses. The FutureBanker Article was cited for its disclosure of a merchant-sponsored rebate system using a "HERO" (Health, Education, Retirement Organization) card specifically designed to help consumers save money for educational purposes.
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine these references because they are both in the field of incentive rebate programs. A POSITA would have been motivated to modify Koch’s rebate system to explicitly credit a dedicated higher education account, as taught by the FutureBanker Article, to achieve the predictable result of a targeted savings vehicle for educational expenses.
    • Expectation of Success: Combining the known financial concept of a rebate system (Koch) with a known savings goal (education, from FutureBanker) involved applying predictable financial principles and would have resulted in a high expectation of success.

Ground 3: Claims 1-22 and 24 are obvious over CA448 in view of the FutureBanker Article.

  • Prior Art Relied Upon: CA448 (Canadian Publication No. 2,177,448) and the FutureBanker Article.
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that CA448 taught a rebate system with a remote processor that monitors debit and credit card transactions. CA448’s system allowed a consumer to designate a portion of a rebate to a selected nonprofit or affinity organization. As in the previous ground, the FutureBanker Article was relied upon for its teaching of applying rebates to higher education savings accounts.
    • Motivation to Combine: A POSITA would have been motivated to modify the rebate system of CA448 to allow crediting rebates to a user's own educational savings account (as taught by FutureBanker) instead of, or in addition to, a charity. This modification would simply be applying a known incentive technique to a different, but analogous, financial goal to yield the predictable result of saving for education.

Ground 4: Claims 1-9, 11-14, 16-22, and 24 are obvious over Hardesty in view of the FutureBanker Article.

  • Prior Art Relied Upon: Hardesty (Patent 6,105,865) and the FutureBanker Article.

  • Core Argument for this Ground:

    • Prior Art Mapping: Petitioner contended that Hardesty disclosed a merchant-funded rebate system where a percentage of a credit or debit card transaction is refunded into a tax-deferred retirement trust account for the consumer. Hardesty taught all the core system elements, including participating merchants and account crediting. The FutureBanker Article was again used to supply the specific teaching of applying rebates to educational savings.
    • Motivation to Combine: A POSITA would have found it obvious to adapt Hardesty's system to credit rebates to an educational account, as suggested by the FutureBanker Article, in place of or as an alternative to a retirement account. This would have been a simple substitution of one known financial savings goal for another to achieve the predictable benefit of saving for education.

  • Additional Grounds: Petitioner asserted additional obviousness challenges, including combining Koch and FutureBanker with the Michigan Article (a 1999 law journal note) to explicitly teach using a "state 529 plan" for the higher education account. Petitioner also challenged claim 5 as indefinite under 35 U.S.C. §112, arguing the term "managing said at least one higher education account" was vague and not sufficiently defined in the specification.

4. Key Claim Construction Positions

  • "higher education account": Petitioner adopted the patent's express definition: "a financial account that is used to fund or pay for post-high school (i.e. post-secondary) education or contribute to a higher education institution (e.g., college, university, or trade school)."
  • "rebate network manager": Petitioner adopted the patent's express definition: "an entity that correlates purchases made from merchants belonging to a network with rebates offered in conjunction with the purchases."

5. Relief Requested

  • Petitioner requests institution of a Covered Business Method patent review and cancellation of claims 1-24 of the ’872 patent as unpatentable under 35 U.S.C. §§ 101, 103, and/or 112.