PTAB

CBM2018-00037

cxLoyalty, Inc. v. Maritz Holdings Inc.

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1. Case Identification

  • Case #: CBM2018-TBA
  • Patent #: Patent 7,134,087
  • Filed: July 5, 2018
  • Petitioner(s): Connexions Loyalty, Inc.
  • Patent Owner(s): Maritz Holdings Inc.
  • Challenged Claims: 1-15

2. Patent Overview

  • Title: System for Transacting Purchases Using Loyalty Points
  • Brief Description: The ’087 patent relates to a computerized system for allowing a participant in a rewards program to use loyalty points to make purchases from vendors that transact only in currency. The system uses a graphical user interface (GUI) and an application programming interface (API) to manage the transaction, which is completed using a hidden "shadow" program account (e.g., a credit card) without the participant's direct knowledge of the currency-based instrument used.

3. Grounds for Unpatentability

Ground 1: Patent Ineligibility under §101 - Claims 1-15 are unpatentable under 35 U.S.C. §101.

  • Prior Art Relied Upon: This ground was based on patent ineligibility under 35 U.S.C. §101 and the two-step framework established in Alice Corp. v. CLS Bank Int'l, not on prior art references.
  • Core Argument:
    • Abstract Idea Analysis (Alice Step 1): Petitioner argued that all challenged claims are directed to the abstract idea of a fundamental economic practice: brokering a commercial transaction between two parties using different forms of value (loyalty points versus currency). Petitioner asserted this concept is analogous to non-patentable ideas like intermediated settlement or currency exchange. The petition contended that the claimed invention merely automates the long-standing business practice of redeeming loyalty points for goods and services, replacing the role of a human agent (e.g., a travel agent booking a ticket) with generic computer components. The problem the patent purports to solve—eliminating human intervention for "high-touch" reward redemptions—was framed as a business problem, not a technical one.
    • Search for an Inventive Concept (Alice Step 2): Petitioner argued that the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. It was contended that the claims' recitation of a processor, display, GUI, and API are merely generic and conventional computer components performing their well-understood, routine functions. The GUI and API are described as simply receiving and transmitting information. Petitioner further argued that the "shadow account" feature amounts to nothing more than conventional electronic record-keeping, a basic function of a computer. The argument concluded that the claims do not improve the functioning of the computer itself but instead use the computer as a tool to implement the abstract business method.

4. Key Claim Construction Positions

  • Program Account: Petitioner proposed this term means "a payment account associated with the loyalty program that is accepted by the vendor system, such as a cash account or credit card." This construction was used to argue that the claims merely recite the use of standard financial accounts.
  • Shadow Credit Card: This term, appearing in dependent claims, was construed as "a program credit card account that is hidden from the participant of the program." Petitioner argued this highlights that the "invention" is merely about concealing a standard payment method.
  • Vendor System: Petitioner proposed this term be interpreted as "components of a computer network system... provided by... a third-party vendor that are capable of transacting a purchase... and that does not accept points as a form of payment." This construction was intended to show the system merely interfaces with a standard, pre-existing commercial entity's system.

5. Key Technical Contentions (Beyond Claim Construction)

  • Lack of a Technical Solution: Petitioner's central contention was that the ’087 patent fails to solve a technical problem with a technical solution. The patent was argued to address a business problem (improving the convenience of loyalty point redemption) by simply applying generic computer technology, which does not constitute a patent-eligible technical invention.
  • No Improvement in Computer Technology: Petitioner argued that the claimed components (GUI, API, processor) are described in the specification in purely functional terms and do not represent any specific, concrete improvement to computer technology. The claims do not purport to make computers faster, more efficient, or provide a new technological capability, but rather use existing capabilities to automate a business practice.

6. Arguments Regarding Discretionary Denial

  • Standing for CBM Review: The petition addressed the statutory requirements for a Covered Business Method (CBM) review. Petitioner argued it had standing to file the petition because it had been sued for infringement of at least claims 1, 5, 9, and 13 of the ’087 patent by the Patent Owner in a U.S. District Court. Petitioner also certified that it was not estopped from bringing the challenge, thereby meeting the threshold requirements for instituting a CBM proceeding.

7. Relief Requested

  • Petitioner requested institution of a Covered Business Method (CBM) review and cancellation of claims 1-15 of Patent 7,134,087 as unpatentable for being directed to ineligible subject matter under 35 U.S.C. §101.