EDO Interactive Inc v. TuitionFund LLC

1. Case Identification

• Case #: CBM2014-00043
• Patent #: 7,653,572
• Filed: December 5, 2013
• Petitioner(s): EDO Interactive, Inc.
• Patent Owner(s): TuitionFund, LLC
• Challenged Claims: 1-26

2. Patent Overview

• Title: Methods and Systems for Providing a Rebate Program
• Brief Description: The ’572 patent describes methods and systems for a merchant-funded rebate program. The system manages consumer purchases at registered merchants, which trigger rebates that are then credited to a designated "rebate account" monitored by a "rebate network manager."

3. Grounds for Unpatentability

Ground 1: Patent Ineligibility under 35 U.S.C. §101 - Claims 1-26 are invalid for claiming an abstract idea.

• Prior Art Relied Upon: Not applicable (§101 ground).
• Core Argument for this Ground:
  • Abstract Idea Mapping: Petitioner argued that the claims are directed to the abstract idea of providing a rebate from a merchant to a customer's account, a fundamental and well-known economic practice. The claims merely recite steps for surveilling transactions, determining if a rebate is warranted, and generating information to apply the rebate. Petitioner contended these steps can be performed manually with paper and a pencil, demonstrating the insignificant nature of the claimed computer-based limitations.
  • No Inventive Concept: Petitioner asserted that implementing this abstract idea on a general-purpose computer system with a generic "processor" does not transform it into patent-eligible subject matter. The claims allegedly lack any novel technological feature or unique methodology for tracking and processing rebates, failing to provide an inventive concept sufficient to satisfy the requirements of §101. The system and computer-readable medium claims were argued to be mere repackaged versions of the ineligible method claims.

Ground 2: Invalidity under 35 U.S.C. §112 - Claims 1-5, 7-18, and 20-26 fail the written description requirement.

• Prior Art Relied Upon: Not applicable (§112 ground).
• Core Argument for this Ground:
  • Written Description Mapping: Petitioner argued there is a fatal mismatch between the scope of the claims and the disclosure in the specification. The specification of the ’572 patent, which is identical to its parent ’872 patent, consistently and exclusively described the invention as a system for applying rebates to a "higher education account" for funding college tuition. In contrast, the challenged claims were broadened to recite a generic "rebate account" without any limitation to educational purposes.
  • Lack of Possession: Petitioner contended that the specification provides no disclosure supporting the application of rebate funds to accounts not used for higher education. Because the entire disclosure is narrowly focused on the specific problem of funding education, the inventor was allegedly not in possession of the broader invention—a general-purpose rebate system—at the time of filing. This broadening of the claims beyond the disclosed invention was argued to violate the written description requirement of §112.

Ground 3: Anticipation over Koch - Claims 1-5, 7-9, 11-18, and 22-26 are anticipated under 35 U.S.C. §102(b) by Koch.

• Prior Art Relied Upon: Koch (International Publication No. WO 97/46961).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Koch discloses every element of the challenged claims. Koch described a "point of sale (POS) redeemable purchasing value accumulation system" that provides merchant-funded rebates to registered members. The system used a centralized host (the "rebate network manager") connected to merchant terminals to monitor debit and credit card purchases, calculate a rebate or "funding value" based on the transaction, and credit it to the consumer's "purchase value account" (the "rebate account").
  • Key Aspects: Petitioner contended that Koch’s system host is located remote from the merchant terminals, tracks transactions from registered members at registered merchants, and generates the necessary information to apply the calculated rebate to the member's account, thereby teaching all limitations of the independent claims.

Ground 4: Obviousness over Koch and FutureBanker - Claims 6 and 19 are obvious over Koch in view of the FutureBanker Article.

• Prior Art Relied Upon: Koch (WO 97/46961) and the FutureBanker Article (an article published in June 1997).

• Core Argument for this Ground:

  • Prior Art Mapping: This ground built upon the teachings of Koch as the base rebate system. Claims 6 and 19 add the limitation that funds in the rebate account are applied "towards higher education expenses." The FutureBanker Article disclosed a merchant-sponsored rebate card system designed to help consumers save money for expenses including education.
  • Motivation to Combine: Petitioner argued a POSITA would combine these references because both relate to the same field of consumer rebate systems. A POSITA would have been motivated to apply the specific educational savings goal from the FutureBanker Article to the robust, automated rebate accumulation system disclosed in Koch to create an improved, targeted savings program.
  • Expectation of Success: A POSITA would have had a high expectation of success, as it would have been a simple and predictable application of a known savings purpose (education) to a known rebate system architecture.

• Additional Grounds: Petitioner asserted additional challenges, including anticipation of claims 1-2, 7-9, 11-16, and 22-26 by CA448 (Canadian Publication No. 2,177,448) and obviousness of claims 10, 20, and 21 over combinations of Koch or CA448 with Slater (’053 patent) and/or Walker (’772 patent) to teach variable rebate rates. Indefiniteness challenges under §112 were also raised.

4. Key Claim Construction Positions

• "a rebate account": Petitioner proposed the construction "an account to which a rebate can be applied." This construction was based on the plain meaning of the claim language and was central to the §112 written description argument, as it highlights the broadness of the claim term relative to the narrow "higher education account" disclosure.
• "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." This construction was used to map the centralized host systems disclosed in the prior art, like Koch, directly onto the claim limitations.

5. Relief Requested

• Petitioner requests institution of a Covered Business Method patent review and cancellation of claims 1-26 of the ’572 patent as unpatentable.