PTAB

CBM2014-00044

EDO Interactive Inc v. TuitionFund LLC

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1. Case Identification

2. Patent Overview

  • Title: Methods And Systems For Providing A Merchant Funded Rebate Program
  • Brief Description: The ’704 discloses methods and systems for a merchant-funded rebate program. The system uses at least one processor to monitor retail transactions between registered members and participating merchants, calculate rebates, and credit the corresponding funds to a member's designated "rebate account."

3. Grounds for Unpatentability

Ground 1: Anticipation by Koch - Claims 1-4, 7-8, 11, 15-25, 28-30, and 34-36 are anticipated under 35 U.S.C. §102 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 a point-of-sale (POS) “purchasing value accumulation system” that embodies every limitation of the challenged claims. Koch’s system described enrolling members with identification cards, associating them with financial accounts, and using a central host computer (a processor) to monitor purchases at participating merchants. The host computer then calculates a rebate (“transaction funding value”) based on the purchase and credits it to the member’s account, directly mapping to the methods and systems of independent claims 1, 21, and 35 of the ’704 patent.
    • Key Aspects: Petitioner asserted that Koch explicitly teaches the core functionality, including tracking transactions, calculating rebates based on established rates, and applying them to a member’s account.

Ground 2: Obviousness over Koch and FutureBanker - Claims 5 and 11 are obvious over Koch in view of the FutureBanker Article.

  • Prior Art Relied Upon: Koch (WO 97/46961), FutureBanker Article (a June 1997 publication).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner contended that to the extent Koch does not explicitly teach an "education related" rebate account (claim 5), the FutureBanker Article rendered this limitation obvious. The article described a “HERO” (Health, Education, Retirement Organization) card that provided merchant-sponsored rebates to help consumers save for education. Furthermore, the article disclosed that fees, such as a "customer service charge," could be deducted from the account balance, teaching the limitation of claim 11 (applying rebates against fees).
    • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) would combine these references because both operated in the same field of consumer rebate and savings programs. A POSITA would have found it obvious to apply the general rebate mechanism of Koch to the specific educational savings goal described in the FutureBanker Article to create a more targeted financial product.
    • Expectation of Success: Combining a known rebate processing system with a known financial savings goal like education was a straightforward application of existing technologies with predictable results.

Ground 3: Obviousness over Koch and Bauer - Claims 10, 18, and 27 are obvious over Koch in view of Bauer.

  • Prior Art Relied Upon: Koch (WO 97/46961), Bauer (Patent 7,392,224).

  • Core Argument for this Ground:

    • Prior Art Mapping: Petitioner argued that Koch provided the foundational rebate system, while Bauer supplied teachings for specific dependent claim limitations. Bauer disclosed a debit card reward program where rebates could be aggregated from multiple merchants and credited to a consumer's account on a periodic basis (e.g., monthly), rather than in real-time. This taught the limitations of commingling or aggregating rebates recited in claims 10 and 27. Bauer also explicitly stated that debit cards are also known as “check cards” and are used with checking accounts, teaching the limitation of claim 18.
    • Motivation to Combine: A POSITA would combine Koch’s rebate system with Bauer’s periodic aggregation and crediting method for known business reasons, such as improving system efficiency and reducing the costs associated with processing numerous small, real-time transactions.
    • Expectation of Success: Implementing a batch processing or periodic crediting model into a transaction-based rebate system was a well-understood and predictable design choice for managing such financial systems.

  • Additional Grounds: Petitioner asserted numerous additional challenges, including that claims 1-36 are invalid under §101 as directed to an abstract idea and under §112 for lacking written description and for indefiniteness. Further anticipation and obviousness challenges were based on various combinations of prior art, including CA448 (Canadian Publication No. 2,177,448), Blinn (’914), Hardesty (’865), and Hoffman (’026).

4. Key Claim Construction Positions

  • "a rebate account": Petitioner proposed the construction "an account to which a rebate can be applied." This position was based on the plain meaning of the language in claims 1, 14, and 24, which recite applying earned rebates to "registered member rebate accounts."
  • "rebate network manager": Petitioner proposed the construction "An entity that correlates purchases made from merchants belonging to a network with rebates offered in conjunction with the purchases." Petitioner noted this construction was adopted directly from an express definition provided in the specification of the ’704 patent.

5. Key Technical Contentions (Beyond Claim Construction)

  • Lack of Written Description: Petitioner advanced a significant argument that claims 1-4 and 7-36 are invalid under 35 U.S.C. §112 for lacking written description support in their parent applications. The contention was that the original specification exclusively disclosed an invention limited to funding "higher education accounts," a term the applicant had distinguished over prior art during prosecution as a key functional limitation. Petitioner argued that the later-filed claims reciting a generic "rebate account" were impermissibly broadened beyond the original invention and constituted new matter, thus forfeiting the earlier priority date.

6. Relief Requested

  • Petitioner requested institution of a Covered Business Method review and cancellation of claims 1-36 of the ’704 patent as unpatentable.