eBay Inc v. XPRT Ventures LLC

1. Case Identification

• Case #: CBM2017-00028
• Patent #: 7,599,881
• Filed: December 23, 2016
• Petitioner(s): eBay Inc. and PayPal, Inc.
• Patent Owner(s): XPRT Ventures, LLC
• Challenged Claims: 21, 23, 31, 32

2. Patent Overview

• Title: Computerized Electronic Auction Payment System
• Brief Description: The ’881 patent discloses an electronic commerce method for encouraging the use of a specific, previously-funded payment system. The system offers an incentive to a user for making a payment for an e-commerce transaction through the designated payment account, aiming to solve delays associated with traditional payment methods like checks or credit cards in online auctions.

3. Grounds for Unpatentability

Ground 1: Claims 21, 23, 31, and 32 are unpatentable under 35 U.S.C. §101 as being directed to an abstract idea.

• Core Argument: Petitioner argued that the challenged claims are directed to the abstract idea of a fundamental economic practice and lack any inventive concept sufficient to transform the idea into a patent-eligible application, following the two-step framework from Alice Corp. v. CLS Bank.
  • Step One (Abstract Idea): Petitioner asserted that the claims are directed to the long-standing, fundamental economic concept of offering an incentive to encourage the use of a preferred payment method. This practice was compared to common commercial activities, such as gas stations offering a lower price for cash payments or credit card companies offering loyalty points. Petitioner argued that merely applying this fundamental business practice to the context of "electronic commerce" does not make the idea any less abstract, as the internet is just a conventional technological environment for conducting a known business process. The claims were also characterized as purely functional, describing a desired outcome (incentivizing a payment choice) without specifying a concrete, technical solution.
  • Step Two (No Inventive Concept): Petitioner contended that the claims, viewed individually and as an ordered combination, add no inventive concept beyond the abstract idea itself. The implementation elements recited in the claims—such as a "graphical user interface," a "database," and "at least one processor"—were described as generic, off-the-shelf computer components performing their well-understood, routine, and conventional functions. For example, using a processor to determine if a condition is met or a database to store account information is a basic function of a computer, not an inventive application. Petitioner argued that the claims do not improve the functioning of the computer itself, solve a technical problem in a novel way, or provide a specific implementation beyond instructing a practitioner to apply the abstract idea using a generic computer. The combination of these generic elements was argued to add nothing more than the sum of their conventional parts, failing to transform the abstract idea into a patent-eligible invention.

4. Key Claim Construction Positions

• Web site: Petitioner proposed that, under the broadest reasonable construction, this term 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.

5. Relief Requested

• Petitioner requested institution of a Covered Business Method review and cancellation of claims 21, 23, 31, and 32 of the ’881 patent as unpatentable under 35 U.S.C. §101.