eBay Inc v. Advanced AuctIONs LLC

1. Case Identification

• Case #: IPR2014-00806
• Patent #: 8,266,000
• Filed: May 23, 2014
• Petitioner(s): eBay Inc.
• Patent Owner(s): Advanced Auctions LLC
• Challenged Claims: 1-7, 10-15, 17-21, and 23-26

2. Patent Overview

• Title: Automating Aspects of an Auction
• Brief Description: The ’000 patent discloses a method for conducting computer-based auctions that operate in two distinct modes based on a predetermined time before the auction’s close. In a first mode, participants must manually request auction information from a server, but after a set time is reached, the system switches to a second, "end game" mode where updated bidding information is automatically pushed to all participants.

3. Grounds for Unpatentability

Ground 1: Claims 1-7, 10-15, 17-21, and 23-26 are obvious over Friedland in view of Fisher.

• Prior Art Relied Upon: Friedland (Patent 6,449,601) and Fisher (Patent 5,835,896).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Friedland disclosed a nearly identical two-mode online auction system developed at LiveBid.com in the mid-1990s. Friedland’s first mode was a "pre-bid" or "preview" mode where users placed absentee bids and had to manually refresh their browsers to see updated information. At a predetermined time, the auction transitioned to a second "live auction" mode where bidding information was broadcast automatically in real-time. Petitioner asserted that the only significant difference was that Friedland’s auction ended based on bidder inactivity, whereas the ’000 patent specified a predetermined, fixed end time.
  • Motivation to Combine: Fisher was cited to show that using a fixed end time was a well-known and common alternative to an inactivity-based closing mechanism in the late 1990s. Petitioner contended that a person of ordinary skill in the art (POSITA) would combine the teachings by substituting Friedland's variable closing time with Fisher's conventional fixed closing time to achieve the benefit of a predictable auction conclusion, a simple design choice.
  • Expectation of Success: A POSITA would have had a high expectation of success because the combination involved swapping one known, interchangeable auction closing mechanism for another, which was a simple and predictable modification with no technical hurdles.

Ground 2: Claims 1-7, 10-15, 17-21, and 23-26 are obvious over Handler in view of Kumar.

• Prior Art Relied Upon: Handler (Patent 7,162,446) and Kumar (“Internet Auctions,” Third USENIX Workshop, Aug. 1998).
• Core Argument for this Ground:
  • Prior Art Mapping: Handler was argued to disclose a multi-stage, integrated auction that included an initial online bidding round to establish a starting bid, followed by a subsequent live auction stage. The petition asserted that during the initial stage, updates were manual, while the live stage provided automatically updated information to online participants. Like Friedland, Handler’s auction was kept open as long as new bids arrived. Kumar was presented as a publication that explicitly discussed various online auction formats, noting that auctions could end at a posted closing time or, alternatively, be kept open based on bidding activity.
  • Motivation to Combine: Petitioner argued a POSITA would be motivated to modify Handler’s flexible end time with the fixed end time taught by Kumar. The motivation was to provide a predictable end time, which was a known and desirable feature for online auctions. This modification would necessarily result in the transition time between modes being a set, constant, and predetermined time relative to the auction’s end, as claimed in the ’000 patent.
  • Expectation of Success: The proposed modification was a simple substitution of one known auction format for another, presenting a straightforward design choice with a predictable outcome.

Ground 3: Claims 1-7, 10-15, 17-21, and 23-26 are obvious over Lin-Hendel in view of Fisher.

• Prior Art Relied Upon: Lin-Hendel (Patent 7,542,920) and Fisher (Patent 5,835,896).
• Core Argument for this Ground:
  • Prior Art Mapping: Lin-Hendel was argued to teach an auction aggregator software tool with an "auction wizard" feature. This wizard permitted a user to set programmable alerts, including establishing a predetermined time (e.g., "closing time in one or less hours") at which the tool would begin to automatically monitor an auction. Petitioner asserted that until this automatic monitoring was triggered, auction information was retrieved manually, as evidenced by instructions to use the browser's "reload button." This combination of manual retrieval followed by automatic retrieval at a predetermined time before closing directly mapped to the claimed two-mode system.
  • Motivation to Combine: The motivation to apply the dual-mode update system of Lin-Hendel to a standard online auction like that described in Fisher was to provide the known benefits of both approaches: conserving bandwidth and reducing server load during less active periods (manual mode) while ensuring participants receive critical, up-to-the-minute information during the final, most competitive phase of the auction (automatic mode).
  • Expectation of Success: A POSITA would have reasonably expected success in implementing Lin-Hendel’s programmable, two-mode update mechanism within a conventional online auction framework, as it involved applying known software techniques to achieve a predictable improvement in user experience.
• Additional Grounds: Petitioner asserted an additional obviousness challenge based on Rackson (Patent 6,415,270) in view of the Patent Owner's Admitted Prior Art, arguing that Rackson taught increasing update frequency as an auction’s close approached, and it would have been obvious to transition from manual to automatic updates at a set time.

4. Key Claim Construction Positions

• Auction: Petitioner proposed that under the broadest reasonable construction standard, the term "auction" should be interpreted as "a forum in which property is sold to winning bidder[s] instead of to buyer[s] at a fixed price." This construction was argued to be consistent with the patent’s specification and necessary to properly evaluate the prior art.

5. Relief Requested

• Petitioner requested institution of an inter partes review and cancellation of claims 1-7, 10-15, 17-21, and 23-26 of the ’000 patent as unpatentable under 35 U.S.C. §103.