PTAB

CBM2017-00024

eBay Inc v. XPRT Ventures LLC

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Petition
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1. Case Identification

2. Patent Overview

  • Title: Computerized Electronic Auction Payment System and Method
  • Brief Description: The ’244 patent discloses a method and system for effecting real-time payments for items won in an electronic auction. The system establishes and maintains pre-funded electronic payment accounts for users, who can then authorize payments to sellers upon winning an auction, with options for automatic payment services.

3. Grounds for Unpatentability

Ground 1: Claims are Unpatentable as Directed to an Abstract Idea under 35 U.S.C. §101

  • Prior Art Relied Upon: This ground was not based on specific prior art references but on the legal framework established in Alice Corp. v. CLS Bank Int'l and related case law, arguing the claims are directed to patent-ineligible subject matter.
  • Core Argument for this Ground: Petitioner argued that all challenged claims are unpatentable under 35 U.S.C. §101 because they are directed to an abstract idea without adding an inventive concept, following the two-step Alice/Mayo framework.
    • Step 1: Directed to an Abstract Idea: Petitioner asserted that the claims are directed to the fundamental economic practice of using a previously-funded account to effect a financial transaction, specifically in the context of an electronic auction. This practice was characterized as a longstanding method of organizing human activity, analogous to intermediated settlement or hedging, which courts have consistently found to be abstract. The petition contended that limiting this fundamental practice to the environment of an electronic auction—itself an abstract economic practice—does not make the claims any less abstract. Furthermore, Petitioner argued the claims are purely functional, describing a desired outcome (e.g., "effecting payment," "creating a plurality of payment accounts") without reciting a specific, concrete, or technological solution for achieving that outcome.
    • Step 2: Lacks an Inventive Concept: Petitioner argued the claims fail to provide an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The claims allegedly recite only generic computer components (e.g., "computing device," "web server," "database") performing their conventional functions. The petition detailed how each claimed step—such as receiving user data, creating accounts, providing a payment page, sending emails, and deducting funds—represents a well-understood, routine, and conventional activity when performed by a generic computer or over the internet. Petitioner contended that the ordered combination of these conventional steps adds nothing more than the sum of their parts and does not improve computer functionality or solve a technical problem. The claims merely instruct one to apply the abstract idea of a pre-funded payment system using generic computer technology.

4. Key Claim Construction Positions

  • Web site: Petitioner proposed that under the broadest reasonable construction, the term "web site" should be interpreted as "a computer or system connected to the Internet that maintains one or more pages on the World Wide Web." This construction was asserted to be consistent with the patent’s specification and defines the generic technological environment in which the claimed abstract method is performed.

5. Key Technical Contentions (Beyond Claim Construction)

  • Not a "Technological Invention": A central contention was that the ’244 patent does not claim a "technological invention," a requirement to be excluded from Covered Business Method (CBM) patent review. Petitioner argued that the claimed subject matter as a whole fails to recite a novel and unobvious technological feature. Instead, it uses known, generic technology as a tool to implement a financial business process. The petition asserted that the patent does not solve a technical problem using a technical solution but rather addresses a business challenge (improving payment efficiency in auctions) using conventional computer functions.

6. Relief Requested

  • Petitioner requested institution of a Covered Business Method patent review and cancellation of claims 1-2, 15, 19-20, 34, 40, 47-48, and 52-53 of the ’244 patent as unpatentable under 35 U.S.C. §101.