Trials@uspto.gov
`571-272-7822
`
`Paper No. 15
`Entered: September 30, 2014
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`EBAY, INC.,
`Petitioner,
`
`v.
`
`PAID, INC.,
`Patent Owner.
`____________
`
`Case CBM2014-00125
`Patent 8,352,357
`____________
`
`Before JAMES P. CALVE, THOMAS L. GIANNETTI, and
`KRISTINA M. KALAN, Administrative Patent Judges.
`
`GIANNETTI, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 1
`
`Petitioner Apple Inc. - Ex. 1023, p. 1
`
`
`571-272-7822
`
`Paper No. 15
`Entered: September 30, 2014
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`EBAY, INC.,
`Petitioner,
`
`v.
`
`PAID, INC.,
`Patent Owner.
`____________
`
`Case CBM2014-00125
`Patent 8,352,357
`____________
`
`Before JAMES P. CALVE, THOMAS L. GIANNETTI, and
`KRISTINA M. KALAN, Administrative Patent Judges.
`
`GIANNETTI, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 1
`
`Petitioner Apple Inc. - Ex. 1023, p. 1
`
`
`
`CBM2014-00125
`Patent 8,352,357
`
`I. INTRODUCTION
`
`A. Background
`eBay $pGWf[f[a‘Wdq% has petitioned for institution of a covered
`business method patent review of all claims (1o24) of U.S. Patent No.
`8,352,357 (Ex. 1001; pfZW{-/1 bSfW‘fq). Paper 4 $pGWf(q%.1 PAID, Inc.
`$pGSfW‘f Fi ‘Wdq% X[^WV a Preliminary Response. Paper 12 $pGdW^[_ ( H Web(q%(
`For the reasons that follow, we determine that the {357 patent
`qualifies as a covered business method patent under § 8(d)(1) of the Leahy-
`I_ [fZ 7_ Wd[US @‘hW‘fe 7Uf $pAIAq%.2 We further determine that it is more
`likely than not that at least one claim of the {357 patent is unpatentable. We
`therefore institute a covered business method patent review of claims 1o24.
`See 35 U.S.C. § 324(a).
`
`B. Related Cases
`Patent Owner has sued Petif[a‘WdXad[‘Xd[‘Y W_ W‘f aX fZW{357 patent
`in PAID, Inc. v. eBay Inc., Case No. 4:13-cv-40151-TSH (D. Mass.). Ex.
`1004.
`
`The complaint in that action also included U.S. Patent Nos. 8,521,642
`(pfZW s0., bSfW‘fq% S‘V 1&3-* &,-1 $pfZW s,-1 bSfW‘f%& S‘V i Se eg TeWcg W‘f^k
`amended to include U.S. Patent No. 8,635,150 (pfZW s+/* bSfW‘fq%( Ex.
`1005.
`
`In addition, Petitioner has filed Petitions for covered business method
`patent reviews aX fZW{642 patent (CBM2014-00126), the {237 patent
`(CBM2014-00127), and the {150 patent (CBM2014-00128). Decisions on
`those Petitions are being issued with this decision.
`
`1 p7_ W‘VWV GWf[f[a‘Xad9ahWdWV 8g e[ness Method&q filed May 29, 2014.
`2 Pub. Law 112-29, 125 Stat. 284, 331 (Sept. 16, 2011).
`2
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`GOOG 1023
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`Page 2
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`Petitioner Apple Inc. - Ex. 1023, p. 2
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`CBM2014-00125
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`@@( J?<{-/1 G7J<EJ
`
`A. Overview
`JZW{-/1 bSfW‘f dW^SfWe fa [_ bdahW_ W‘fe [‘a‘-line auctions.
`According to the patent, conventional online auctions do not offer the buyer
`complete information about the real cost of the auction. Ex. 1001, col. 4, ll.
`13o15. This is because they do not specify exact shipping cost information.
`Id. at ll. 15o16. According to the patent, the improved auction method and
`system include a shipping calculator. The shipping calculator can prompt a
`potential buyer to enter information necessary to determine shipping cost.
`Id. at ll. 16o22. That information may include entry of the ZIP code of the
`buyer on a screen display. When the buyer enters ZIP code information in
`the ZIP code field the buyer may initiate the shipping calculator by clicking
`a display button. Id. at ll. 22o29. The operation of the calculator is
`illustrated in Figure 14 from the patent reproduced below:
`
`3
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`Petitioner Apple Inc. - Ex. 1023, p. 3
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`CBM2014-00125
`Patent 8,352,357
`Figure 14 is a flow chart of a server process for generating shipping
`
`rates.
`
`In the flowchart reproduced above, at step 1402 the system initiates a
`rate engine in response to a buyer input, such as clicking on the calculator
`button appearing on the computer screen. See Ex. 1001, Fig. 5. Next, at
`step 1403, the system retrieves the seller shipping preferences from a data
`storage facility. If multiple items are purchased, the system recognizes this
`at step 1404. Id. at col 10, l. 62ocol. 11, l. 8.
`At step 1407, the system queries the sellerss preferences to determine
`whether the shipping rate is a fee-based rate. If so, the fee-based rate is
`calculated at step 1409. If not, at step 1408 an algorithm is applied to
`determine the packaging for the items to be shipped. Id. at col. 11, ll. 23o44.
`At step 1410, the system determines the location of the seller and the
`buyer based on data entered in interaction with the servers of the system. At
`step 1412 the system calculates and stores a rate factor based on the location
`of the buyer and seller. Id. at ll. 45o49.
`At step 1414, the system queries whether weight is a factor in the
`calculation, and if so, the system at step 1418 calculates and stores a weight
`factor for the item. At step 1420, the system queries whether taxes apply
`and at step 1422, calculates and stores a tax factor. Id. at ll. 50o55.
`At step 1424, the system queries whether insurance charges apply, and
`if so calculates and stores an insurance factor at step 1428. At step 1430, the
`system queries whether a handling charge by the seller and, at step 1432,
`calculates and stores a handling factor. Once all of these factors are
`determined, the system calculates a rate at step 1434. Id. at ll. 55o61.
`
`4
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`GOOG 1023
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`Page 4
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`Petitioner Apple Inc. - Ex. 1023, p. 4
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`
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`CBM2014-00125
`Patent 8,352,357
`B. Illustrative Claim
`Claim 1 is an independent method claim. Claims 2o12 depend,
`directly or indirectly, from claim 1. Claim 13 is an independent system
`claim. Claims 14o24 depend, directly or indirectly, from claim 13.
`Claim 1 is illustrative (some paragraphing added):
`1. A method comprising:
`receiving, at a server computer, first data from a remote
`seller computer over a network, wherein the first data
`comprises:
`
`location information for the remote seller; and
`one or more shipping preferences of the remote
`seller, wherein the shipping preferences comprise any one of, or
`some combination of:
`(i) a flat fee, (ii) a fee set by the seller, (iii)
`one or more rates charged by one or more common carriers, (iv)
`a distance between the seller location and the buyer location,
`(v) size of the item, (vi) weight of the item, (vii) free shipping,
`and (viii) one or more dimensions of the item;
`storing the first data in a database;
`receiving, at the server computer, second data from a
`remote buyer computer over a network, wherein the second data
`corresponds to location information for the remote buyer;
`storing the second data in a database;
`receiving, at the server computer, third data from the
`remote seller computer over a network, wherein the third data
`corresponds to a price of an item that is offered for sale on an
`online auction website;
`storing the third data in a database;
`determining, for the remote buyer, a shipping rate for the
`item, wherein the step of determining the shipping rate
`comprises:
`
`retrieving, from the database, the first data
`corresponding to the one or more shipping preferences of the
`remote seller;
`retrieving, from the database, the second data
`corresponding to the location information for the remote buyer;
`
`5
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`GOOG 1023
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`Page 5
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`CBM2014-00125
`Patent 8,352,357
`
`determining an applicable tax factor for the item
`that is offered for sale on the online auction website based, at
`least in part, on the location information for the remote buyer,
`by:
`
`identifying, from the second data
`corresponding to location information of the remote
`buyer, a state associated with the buyer; and
`determining a tax rate corresponding to the
`state associated with the remote buyer for the purchase of
`the item;
`calculating the shipping rate of the item based at
`least in part on the one or more shipping preferences of the
`remote seller; and
`providing to the remote buyer computer over the network
`the shipping rate of the item that is offered for sale on the
`online auction website.
`
`C. The Asserted Grounds
`1. Petitioner asserts that claims 1o24 are directed to abstract ideas
`that are not patentable under 35 U.S.C. § 101.
`2. Petitioner asserts that claims 1o24 fail to comply with the written
`description and enablement requirements of 35 U.S.C. § 112.
`3. Petitioner asserts that claims 1o24 are obvious over PCT Pub.
`WO 01/55931 A1, published August 2, 2001 (Ex. 1011, pLS‘OS‘Vfq%.
`4. Petitioner asserts that claims 2, 5, 14, and 17 are obvious over Van
`OS‘Vf S‘V S bg T^[USf[a‘W‘f[f^WV pIS^We JSjIssues in Illinois,q VSfWV FUfaTWd
`2001 (Ex. 1010, p@^^[‘a[e IS^We JSjq%.
`5. Petitioner asserts that claims 1o8, 10o20, and 22o24 are obvious
`over PCT Pub. No. WO 00/70515, published November 23, 2000 (Ex. 1012,
`
`p?aeWkq% S‘V eUdWW‘eZafe aX fZW Gd[UW> dSTTWd(Ua_ M WT e[fW&
`www.pricegrabber.com, obtained through the Wayback machine (Ex. 1013,
`pGd[UW> dSTTWd(Ua_ q%.
`
`6
`
`GOOG 1023
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`Page 6
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`Petitioner Apple Inc. - Ex. 1023, p. 6
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`
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`CBM2014-00125
`Patent 8,352,357
`
`III. ANALYSIS
`A. Section 101 Is a Proper Ground Upon Which a Covered Business
`Method Patent Review May Be Maintained
`
`Patent Owner argues that covered business method patent review is
`^[_ [fWV g ‘VWd-/ K (I(9( m ,2,$T% fa pUa‘V[f[a‘[s] for bSfW‘fST[^[fk(q
`PO Resp. 25. Furthermore, Patent Owner argues the determination of patent
`eligibility under 35 U.S.C. § 101 is not a condition for patentability, such as
`those set forth in 35 U.S.C. §§ 102o103. Id. at 26o30. We disagree.
`As recognized by the Supreme Court, § 101 is a condition for
`patentability. In Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 12
`(1966), the Supreme Court stated that the 195, GSfW‘f 7Uf peWfe ag f fZW
`
`Ua‘V[f[a‘e aX bSfW‘fST[^[fk [‘fZdWW eWUf[a‘e&q U[f[‘Y -/ K (I(9( mm +* +& +* ,&
`and 103. The Supreme Court has also addressed invalidity under § 101
`when it was raised as a defense to an infringement claim under § 282. See
`Mayo Collaboration Servs. v. Prometheus Labs, Inc., 132 S.Ct. 1289, 1293
`(2012).
`The Federal Circuit also has recognized that § 101 is a condition for
`patentability that can be raised as an affirmative defense under 35 U.S.C.
`§ 282(b)(2). For example, in Dealertrack, Inc. v. Huber, the majority
`dW\WUfWV fZW V[eeW‘fse Ua‘fW‘f[a‘fZSf m +* + [e ‘af S pUa‘V[f[a‘[] for
`
`bSfW‘fST[^[fk&q efSf[‘Y fZSf pfZW rVWXW‘eWe bdah[VWV [‘fZW efSfg fWs m ,2,&
`include not only the rconditions of patentabilitys in §§ 102 and 103, but also
`fZaeW [‘m +* +(q 01. =(-V +-+/& +--* ‘(- $=WV( 9[d( ,* +,% $U[f[‘Y Aristocrat
`CLJOX & 0Z X YR& @Y^ <YK& [ & 8TYdR 6HSL CLJO., 543 F.3d 657, 661 (Fed. Cir.
`
`,* * 2%% $p@f ZSe ^a‘Y TWW‘g ‘VWdefaaV fZSf fZW GSfW‘f 7Uf eWfe ag f fZW
`conditions for patentabilitk [‘fZdWW eWUf[a‘e4eWUf[a‘e +* +& +* ,& S‘V +* -(q%(
`7
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`GOOG 1023
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`Petitioner Apple Inc. - Ex. 1023, p. 7
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`CBM2014-00125
`Patent 8,352,357
`The legislative history of the AIA also makes it clear that Congress
`intended the Office to consider challenges brought under § 101 for post-
`grant reviews, including covered business method patent reviews. For
`example, with certain exceptions not relevant here, the covered business
`method patent review program employs the same standards and procedures
`as the post grant review program. AIA § 18(a)(1). The specified purpose of
`the covered business method patent review program was to allow the Office
`to revisit business method patents post-Bilski v. Kappos, 561 U.S. 593
`(2010), and evaluate whether the patents were too abstract to be patentable
`under § 101. See 157 Cong. Rec. S1367 (daily ed. Mar. 8, 2011).
`
`7UUadV[‘Y ^k& i W SdW ‘af bWdeg SVWV Tk GSfW‘f Fi ‘Wdse SdY g _ W‘f fZSf -/
`U.S.C. § 101 is not a proper ground upon which a covered business method
`patent review may be maintained.
`
`B. Claim Construction
`Consistent with the statute and the legislative history of the AIA, the
`Board will interpret claims using the broadest reasonable construction. See
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,766 (Aug. 14,
`2012); 37 C.F.R. § 42.300$T%( JZWdW [e S prZWShk bdWeg _ bf[a‘sq fZSf S U^S[_
`term carries its ordinary and customary meaning. CCS Fitness, Inc. v.
`Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002) (internal citation
`omitted).
`
`GWf[f[a‘WdbdabaeWe Ua‘efdg Uf[a‘e XadfZdWW U^S[_ fWd_ e4 pfSjXSUfad&q
`pfSjdSfW&q S‘V pefSfW(q GWf( +.o16. GSfW‘f Fi ‘WdSdY g We fZSf GWf[f[a‘Wdse
`
`pUa‘efdg Uf[a‘e eZag ^V TW dW\WUfWV S‘V fZW U^S[_ fWd_ e eZag ^V TW Xag ‘V fa
`carry their ordinary and customary meaning to a person of ordinary skill in
`
`8
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`GOOG 1023
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`Petitioner Apple Inc. - Ex. 1023, p. 8
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`CBM2014-00125
`Patent 8,352,357
`fZW Sdf(q GF H Web( -+( FfZWdfZS‘fZ[e Y W‘WdS^efSfW_ W‘f& GSfW‘f Fwner
`offers no alternative constructions for these terms.
`1.
`b YH] MHJYUWc
`GWf[f[a‘WdbdabaeWe fZSf i W [‘fWdbdWf fZW fWd_ pfSjXSUfadq Se fZW ptotal
`
`fSjSbb^[WV fa S‘[fW_ (q GWf( +/( GWf[f[a‘WdSdY g We fZSf fZW V[Uf[a‘Sdk
`VWX[‘[f[a‘aX pXSUfadq [e pS cg S‘f[fy by which a given quantity is multiplied
`adV[h[VWV [‘adVWdfa [‘V[USfW S V[XXWdW‘UW [‘_ WSeg dW_ W‘f(q Id.; Ex. 1008.
`
`GWf[f[a‘WdUa‘U^g VWe fZSf pTSeWV a‘fZW Ua‘fWjf aX U^S[_ +&q fZW fWd_ dWXWde
`
`fa fZW pfafS^fSjS_ ag ‘f(q GWf( +/(
`The Specification mentions pfSjXSUfadq [‘VWeUd[T[‘Y =[Y g dW +.4
`pEWjf& Sf S efWb 1420 the system can query whether taxes apply and at a step
`1422 US^Ug ^SfW S‘V efadW S fSjXSUfad(q <j( +* * +, col. 11, ll. 53o55. pF‘UW
`all of the factors have been determined, then the system can calculate a rate
`at step 1434. Id. ll. 62o63. The specification also discusses factors in
`general in the context of Figure 14: pEWjf& Sf S efWb 1411 the system applies
`the preferences of the seller to determine whether the rate is solely fee-
`based, or whether other factors apply. If at the step 1411 no other factors
`apply, then the system can serve a rate for the rate calculator 500 at a step
`1440(q Id. at col. 11, ll. 27-31.
`Petitioner has not pointed to anything in the Specification that would
`
`VWX[‘W pfSjXSUfadq Se fZW pfafS^fSjSbb^[WV fa S‘[fW_ (q M W Va ‘af SY dWW
`with Petitioner that this is the broadest reasonable interpretation of the term.
`Based on the disclosure in the Specification and on the dictionary
`
`VWX[‘[f[a‘bdah[VWV Tk GWf[f[a‘Wd& i W Ua‘efdg W pXSUfadq fa _ WS‘S US^Ug ^Sf[a‘
`result that can be stored and used in determining the shipping rate. We
`Ua‘efdg W pfSjXSUfadq fa TW S XSUfadfZSf dWbdWeW‘fe fZW fSjWe Sbb^[UST^e to the
`purchase.
`
`9
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`)& b YH] WHYLc
`
`GWf[f[a‘WdbdabaeWe fZSf i W [‘fWdbdWf fZW fWd_ pfSjdSfWq Se pbWdUW‘fSY W
`
`dSfW aX fZW fSj(q GWf( +0( GWf[f[a‘WddWSea‘e fZSf fZW U^S[_ WV pfSjdSfWq Xag ‘V
`[‘U^S[_ + p[e SeeaU[SfWV i [fZ S ba^[f[US^V[h[e[a‘(q Id. at 15. The
`SbWU[X[USf[a‘V[eU^aeWe S pfSjdSfW W‘Y [‘Wq [‘=[Y g dW +-& S‘V bdah[VWe fZSf
`p[t]he tax rate engine 1030 VWfWd_ [‘We i ZSf fSjWe _ Sk Sbb^k fa fZW Sg Uf[a‘(q
`Ex. 1001, col. 8, ll. 43o44. The SbWU[X[USf[a‘S^ea bdah[VWe fZSf pfSjdSfWe
`can be stored for pudbaeWe aX VWfWd_ [‘[‘Y fSjWe fZSf Sbb^k fa fZW Sg Uf[a‘(q
`Id. at col. 13, ll. 34o36.
`Based on the SbWU[X[USf[a‘se V[eU^aeg dW& S‘V Sbb^k[‘Y fZW TdaSVWef
`
`dWSea‘ST^W [‘fWdbdWfSf[a‘& i W Ua‘efdg W pfSjdSfWq fa _ WS‘pfZW dSfW Sf i Z[UZ
`
`ea_ WfZ[‘Y [e fSjWV(q
`3. b X YHYLc
`Relying on a dictionary definition, Petitioner proposes that we
`
`[‘fWdbdWf fZW fWd_ pefSfWq Se pS ba^[f[US^^k adY S‘[lWV TaVk aX bWab^W g eg S^^k
`aUUg bk[‘Y S VWX[‘[fW fWdd[fadk(q GWf( 16( GWf[f[a‘WdSdY g We fZSf pP‘QafZ[‘Y [‘
`the s357 patent specification or prosecution history contradicts this broad
`VWX[‘[f[a‘(q Id( JZW fWd_ pefSfWq SbbWSde [‘U^S[_ +- aX fZW s357 patent. Id.
`
`M W SY dWW i [fZ GWf[f[a‘Wdse bdabaeWV Ua‘efdg Uf[a‘S‘V [‘fWdbdWf fZW fWd_
`pefSfWq Se pS ba^[f[US^^k adY S‘[lWV TaVk aX bWab^W usually occupying a
`
`VWX[‘[fW fWdd[fadk(q
`
`C. Petitioner Has Standing to Seek Covered Business Method Patent
`Review of YOL f*,- Patent
`
`Under § 18(a)(1)(E) of the AIA, the Board may institute a transitional
`proceeding only for a patent that is a covered business method patent.
`
`10
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`IWUf[a‘+2$V%$+% aX fZW 7@7VWX[‘We fZW fWd_ pUahWdWV Tg e[‘Wee _ WfZaV
`
`bSfW‘fq fa _ WS‘4
`a patent that claims a method or corresponding apparatus for
`performing data processing or other operations used in the
`practice, administration, or management of a financial product
`or service, except that the term does not include patents for
`technological inventions.
`AIA, 125 Stat. at 331.
`The determination of whether a patent is eligible for covered business
`method patent review is based on what the patent claims. A patent having
`even one claim directed to a covered business method is eligible for review,
`even if the patent includes additional claims. See Transitional Program for
`Covered Business Method Patents a Definitions of Covered Business Method
`Patent and Technological Invention; Final Rule, 77 Fed. Reg. 48,734,
`48,736 (Aug. 14, 2012) (Response to Comment 8).
`1. Petitioner 7HX 1LLT BZ LK MUW 8TMWPTNLSLTY UM YOL d357 Patent
`Section 18 of the AIA limits reviews to persons or their privies that
`have been sued or charged with infringement of a covered business method
`patent. AIA, §§ 18(a)(1)(B) and 18(d)(1).
`Petitioner represents that Patent Owner has sued Petitioner for
`infringement of the s357 patent in PAID, Inc. v. eBay Inc., Case No. 4:13-cv-
`40151-TSH (D. Mass.). Pet. 12; Ex. 1004. Patent Owner does not dispute
`this statement. Therefore, if we determine that fZW {-/1 bSfW‘f cg S^[X[We Se S
`covered business method patent, Petitioner has met this requirement. See 37
`C.F.R. § 42.302(a).
`2. Claims 1a 24 are Directed to Financial Products and Services
`The AIA legislative history explains that the definition of a covered
`
`Tg e[‘Wee _ WfZaV bSfW‘f i Se VdSXfWV fa W‘Ua_ bSee bSfW‘fe pU^S[_ [‘Y
`
`11
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`activities that are financial in nature, incidental to a financial activity or
`
`Ua_ b^W_ W‘fSdk fa S X[‘S‘U[S^SUf[h[fkq S‘V fZSf pX[‘S‘U[S^bdaVg Uf ad
`
`eWdh[UWq eZag ^V TW [‘fWdbdWfWV TdaSV^k( +/1 9a‘Y ( H WU( I/.-,
`(daily ed. Sept. 8, 2011) (statement of Sen. Schumer).
`Petitioner argues that claims 1o24 are directed to financial products or
`services because calculating shipping and tax costs for an item on sale in an
`online auction is an activity incidental or complementary to a financial
`activity. Pet. 7. Patent Owner does not dispute that this requirement is met,
`but instead argues4p7e V[eUg eeWV TW^ai & fZW s357 Patent does not meet this
`definition [of a covered business method patent] because it is directed to a
`
`fWUZ‘a^aY [US^[‘hW‘f[a‘(q GdW^[_ ( H Web( 0(
`Accordingly, we are persuaded that claims 1o24 are directed to
`financial products or services.
`3. Claims 1a 24 Are Not Directed to a Technological Invention
`JZW VWX[‘[f[a‘aX pUahWdWV Tg e[‘Wee _ WfZaV bSfW‘fq [‘m 18(d)(1) of
`the AIA excludes bSfW‘fe XadpfWUZ‘a^aY [US^[‘hW‘f[a‘e(q 7@7& +,/ Stat. at
`331. For guidance, we look to 37 C.F.R. § 42.301(b), which defines the
`fWd_ pfWUZ‘a^aY [US^[‘hW‘f[a‘q S‘V dWcg [dWe S USeW-by-case consideration of
`pi ZWfZWdfZW U^S[_ WV eg T\WUf _ SffWdSe S i Za^W decites a technological
`feature that is novel and unobvious over the prior art; and solves a technical
`
`bdaT^W_
`
`g e[‘Y S fWUZ‘[US^ea^g f[a‘(q JZW Xa^^ai [‘Y U^S[_ VdSXf[‘Y
`
`fWUZ‘[cg We& XadWjS_ b^W& fkb[US^^k Va ‘af dW‘VWdS bSfW‘f S pfWUZ‘a^aY [US^
`
`[‘hW‘f[a‘q4
`
`(a) Mere recitation of known technologies, such as
`computer hardware, communication or computer networks,
`software, memory,
`computer-readable
`storage medium,
`scanners, display devices or databases, or specialized machines,
`such as an ATM or point of sale device.
`
`12
`
`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 12
`
`Petitioner Apple Inc. - Ex. 1023, p. 12
`
`
`
`CBM2014-00125
`Patent 8,352,357
`(b) Reciting the use of known prior art technology to
`accomplish a process or method, even if that process or method
`is novel and non-obvious.
`(c) Combining prior art structures to achieve the normal,
`expected, or predictable result of that combination.
`
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,763o64 (August
`14, 2012)( JZWdWXadW& fa cg S^[Xk g ‘VWdfZW pfWUZ‘a^aY [US^[‘hW‘f[a‘q
`exception to covered business method patent review, it is not enough that the
`claimed invention makes use of technological systems, features, or
`components.
`PWf[f[a‘WdUa‘fW‘Ve fZSf fZW{-/1 bSfW‘f [e ‘af V[dWUfWV fa S
`technological invention. Pet. 9o12. Petitioner argues that the claims are not
`excluded from covered business method patent review merely because they
`recite generic computer technology. Id. at 10. Petitioner contends that
`method claim 1 recites steps that were traditionally performed by a person
`using shipping rate and tax information. Id. at 11. Petitioner further claims
`fZSf fZW{-/1 bSfent does not claim an improvement in computer technology.
`Id.
`
`PWf[f[a‘WdUa‘fW‘Ve fZSf U^S[_ +- [e p_ WdW^k U^S[_ + _ Secg WdSV[‘Y Se
`a system claim.q Id. Therefore, the function of the claimed rate engine is
`the same as in claim 1, and fZW p_ WdWq dWU[fStions of rate engine, computer
`interface, and database are not sufficient to make claim 13 a technological
`invention. Id. Petitioner further contends that the {357 patent fails to recite
`a technical problem. Id. at 12. The problem solved by the patent is
`determining costs for a financial transaction, which is not a ptechnical
`problemq according to Petitioner. Id.
`Patent Owner responds that the claims of the {357 patent, as a whole,
`recite a novel and nonobvious technical feature. Prelim. Resp. 21. Patent
`13
`
`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 13
`
`Petitioner Apple Inc. - Ex. 1023, p. 13
`
`
`
`CBM2014-00125
`Patent 8,352,357
`Owner Ua‘fW‘Ve fZW s-/1 bSfW‘f V[eU^aeWe ‘ahW^S‘V g ‘aTh[ag e pZSdVi SdW
`and/or software elements,q eg UZ Se fZW U^S[_ WV dSfW W‘Y [‘W( Id. Patent
`Owner also contends that the patent solves a technical problem with a
`technical solution: pbdah[V[‘Y Tuyers accurate information at any time
`during the online auction about the true shipping costs for their items.q Id.
`at 22 (emphasis omitted).
`M W SdW ‘af bWdeg SVWV Tk GSfW‘f Fi ‘Wdse SdY g _ W‘f( pMere recitation
`of known technologies, such as computer hardware, communication or
`computer networks, software, memory, computer-readable storage medium,
`scanners, display devices or dataTSeWe& adebWU[S^[lWV _ SUZ[‘We&q typically is
`not enough to show a technological invention. Office Patent Trial Practice
`Guide, 77 Fed. Reg. at 48,764. Ead[e pPdQeciting the use of known prior art
`technology to accomplish a process or method, even if that process or
`method is novel and non-obvious.q Id. The recitations of generic computer
`elements in the {357 patent claims are insufficient to show that the claimed
`invention is technological.
`In sum, we are persuaded, on this record, that the invention of the
`{-/1 bSfW‘f, as claimed, does not solve a technical problem using a technical
`solution and, thus, is not a technological i‘hW‘f[a‘( 7UUadV[‘Y ^k& fZW s-/1
`patent is eligible for covered business method patent review.
`
`D. Claims 1a 24 Are More Likely Than Not Unpatentable Under 35 U.S.C.
`§ 101
`
`Overview
`1.
`Section 101 of the Patent Statute (35 U.S.C. § 101) defines the subject
`matter eligible for patenting. TZW Ig bdW_ W 9ag df ZSe p^a‘Y ZW^V fZSf fZ[e
`provision contains an important implicit exception: Laws of nature, natural
`14
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`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 14
`
`Petitioner Apple Inc. - Ex. 1023, p. 14
`
`
`
`CBM2014-00125
`Patent 8,352,357
`bZW‘a_ W‘S& S‘V STefdSUf [VWSe SdW ‘af bSfW‘fST^W(q Alice Corp. Pty. Ltd. v.
`2<B 1HTQ 8TYdR, 134 S.Ct. 2347, 2354 (2014) (citing Assoc. for Molecular
`Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2116 (2013) (internal
`
`cg afSf[a‘_ Sd] e S‘V TdSU] Wfe a_ [ffWV%%( pJZW rSTefdSUf [VWSes USfWY adk
`
`W_ TaV[We fZW ^a‘Y efS‘V[‘Y dg ^W fZSf rPSQ‘[VWS aX [feW^X [e ‘af bSfW‘fST^W(sq
`Alice Corp., 134 S.Ct. at 2355 (citing Gottschalk v. Benson, 409 U.S. 63, 67
`(1972) (quotations omitted)).
`In Alice Corp., the Supreme Court emphasized the importance of the
`so-called pMayo XdS_ Wi ad] &q i Z[UZ bdah[VWe pS XdS_ Wi ad] Xad
`distinguishing patents that claim laws of nature, natural phenomena, and
`abstract ideas from those that claim patent-eligible applications of those
`Ua‘UWbfe(q Id. (citing Mayo, 132 S.Ct. at 1298). Under the Mayo
`XdS_ Wi ad] & pPi QW _ g ef X[def VWfWd_ [‘W i ZWfher the claims at issue are
`directed to a patent-[‘W^[Y [T^W Ua‘UWbf(q Id( EWjf& pi W Ua‘e[VWdfZW W^W_ W‘fe
`
`aX WSUZ U^S[_ TafZ [‘V[h[Vg S^^k S‘V rSe S‘adVWdWV Ua_ T[‘Sf[a‘s fa
`
`VWfWd_ [‘W i ZWfZWdfZW SVV[f[a‘S^W^W_ W‘fe rfdS‘eXad_ fZW ‘Sfg dW aX fZW
`U^S[_ s [‘fo a patent-W^[Y [T^W Sbb^[USf[a‘(q Id. (citing Mayo, 132 S.Ct. at
`1297o1298).
`Under Mayo, to be patentable, a claim must do more than simply state
`fZW ^Si aX ‘Sfg dW adSTefdSUf [VWS S‘V SVV fZW i adVe pSbb^k [f(q Mayo, 132
`S.Ct. at 1294; Benson, 409 U.S. Sf 01( =g dfZWd_ adW& pfZW _ WdW dWU[fSf[a‘aX
`a generic computer cannot transform a patent-ineligible abstract idea into a
`patent-W^[Y [T^W [‘hW‘f[a‘(q Alice Corp.& +-. I(9f( Sf ,-/2( pJZg e& [X S
`bSfW‘fse dWU[fSf[a‘aX S Ua_ bg fWdS_ ag ‘fe fa S _ WdW [‘efdg Ution to
`
`r[_ b^W_ W‘PfQs S‘STefdSUf [VWS ra‘( ( ( S Ua_ bg fWd&s fZSf SVV[f[a‘US‘‘af
`[_ bSdf bSfW‘f W^[Y [T[^[fk(q Id. (internal citation omitted).
`
`15
`
`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 15
`
`Petitioner Apple Inc. - Ex. 1023, p. 15
`
`
`
`CBM2014-00125
`Patent 8,352,357
`A challenged patent claim, properly construed, must incorporate
`enough meaningful limitations to ensure that it claims more than just an
`
`STefdSUf [VWS S‘V ‘af \g ef S _ WdW prVdSXf[‘Y WXXadf VWe[Y ‘WV fa _ a‘aba^[lW fZW
`PSTefdSUf [VWSQ(sq Alice Corp., 134 S.Ct. at 2357 (quoting Mayo, 132 S.Ct. at
`+,31%( pI[_ b^k SbbW‘V[‘Y Ua‘hW‘f[a‘S^efWbe& ebWU[X[WV Sf S Z[Y Z ^WhW^of
`Y W‘WdS^[fk&q [e ‘af penoughq XadbSfW‘f W^[Y [T[^[fk( Id. (quoting Mayo, 132
`S.Ct. at 1292). Thus, we analyze the claims aX fZW {-/1 bSfW‘f to determine
`whether the claims embody a patent-eligible application of an abstract idea
`or merely nothing more than the abstract idea itself.
`2. Whether Claims 1a 24 Are Directed To An Abstract Idea
`
`@‘SUUadVS‘UW i [fZ fZW Ig bdW_ W 9ag dfse pXdS_ Wi ad] Xad
`distinguishing patents that claim . . . abstract ideas from those that claim
`patent-eligible applications of those Ua‘UWbfe&q i W _ g ef X[def pVWfWd_ [‘W
`whether the claims at issue are directed to one of those patent-ineligible
`Ua‘UWbfe(q Alice Corp., 134 S.Ct. at 2355. In Alice Corp., the Supreme
`9ag df VWfWd_ [‘WV fZSf fZW U^S[_ e Sf [eeg W i WdW pdrawn to the concept of
`intermediated settlement,q i.e., the use of a third party to mitigate settlement
`risk. Id. at 2356. =g dfZWd_ adW& fZW Ig bdW_ W 9ag df VWfWd_ [‘WV fZSf pP^Qike
`the risk hedging in Bilski, the concept of intermediated settlement is rS
`fundamental economic bdSUf[UW ^a‘Y bdWhS^W‘f [‘ag dekefW_ aX Ua_ _ WdUW(sq
`Id. (citations omitted)( M [fZ dWebWUf fa fZW X[def efWb aX fZW pMayo
`XdS_ Wi ad] &q fZW Ig bdW_ W 9ag df Ua‘U^g VWV [‘Alice Corp. fZSf pfZWdW [e no
`meaningful distinction between the concept of risk hedging in Bilski and the
`concept of intermediated settlementq [‘Alice Corp., S‘V fZSf pPTQoth are
`squarely within the realm of rabstract ideass as we have used that term(q
`Alice Corp., 134 S.Ct. at 2357.
`
`16
`
`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 16
`
`Petitioner Apple Inc. - Ex. 1023, p. 16
`
`
`
`CBM2014-00125
`Patent 8,352,357
`7e VWeUd[TWV Tk fZW GSfW‘f Fi ‘Wd& p[t]he PsQ357 Patent describes
`novel systems and methods for improving auction-based online commerce,
`such as facilitating advance, rapid, accurate estimation of shipping costs
`between a seller and the i [‘‘WdaX S‘a‘^[‘W Sg Uf[a‘(q Prelim. Resp. 6.
`Petitioner contends that the abstract idea claimed in the patent is
`
`pVWfWd_ [‘[‘Y eZ[bb[‘Y S‘V fSjdSfWe XadS‘a‘^[‘W Sg Uf[a‘[fW_ (q GWf( +2(
`These descriptions are consistent with the {357 patent Specification, which
`Wjb^S[‘e pS ‘WWV Wj[efe XadfZW bSdf[We fa a‘^[‘W Sg Uf[a‘e fa have access to
`
`TWffWd[‘Xad_ Sf[a‘[‘SVhS‘UW STag f fZW dWS^eZ[bb[‘Y Uaefe XadfZW[d[fW_ e(q
`Ex. 1001, col 1, ll. 47o50.
`Petitioner asserts the patent claims mental steps that humans have
`done for many years. Pet. 18. Patent Owner denies that the claimed
`invention can be performed by the human mind or on a piece of paper.
`Prelim. Resp. 34. However, Patent Owner goes on to state& pwhile it is
`theoretically conceivable that, given enough time, paper, and ink, a human
`could calculate accurate shipping costs based on the various claimed inputs,
`no human could do that in the time or _ S‘‘WdUa‘fW_ b^SfWV Tk fZW U^S[_ e(q
`Id. at 35.
`We are not persuaded on the present record Tk GSfW‘f Fi ‘Wdse
`argument that the {357 patent does not claim an abstract idea. Under Alice
`Corp(& fZW Ua‘UWbf aX [‘fWd_ WV[SfWV eWff^W_ W‘f i Se VWfWd_ [‘WV fa TW pS
`fundamental economic practice long prevalent in our system aX Ua_ _ WdUW(q
`134 S.Ct at 2356 (quoting Bilski, 561 U.S. at 611). This led the Court to
`conclude that [‘fWd_ WV[SfWV eWff^W_ W‘f& ^[] W fZW Ua‘UWbf aX pZWVY [‘Y q [‘
`Bilski, is an abstract idea under § 101. Id. We see little difference between
`determining shipping and tax rates for auctioned items and the type of
`fundamental economic practices considered to be abstract ideas in Alice
`17
`
`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 17
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`Petitioner Apple Inc. - Ex. 1023, p. 17
`
`
`
`CBM2014-00125
`Patent 8,352,357
`Corp. and Bilski. We conclude on the present record& fZWdWXadW& fZSf fZW{-/1
`patent claims are directed to an abstract idea.
`3. Whether Claims 1a 24 are Not Meaningfully Limited Under 35
`U.S.C. § 101
`The eWUa‘V efWb aX fZW Ig bdW_ W 9ag dfse pMayo XdS_ Wi ad] q dWcg [dWe
`that we consider the elements of the claim and determine whether there is an
`pelement or combination of elements that is rsufficient to ensure that the
`patent in practice amounts to significantly more than a patent upon the
`[ineligible concept] itself.sq Alice Corp., 134 S.Ct. at 2355 (quoting Mayo,
`132 S.Ct. at 1294).
`Petitioner focuses its § 101 arguments on claims 1 and 13. Pet. 18o
`24. The main argument is that the claims are not meaningfully limited
`because they are directed to activities that can be performed in the human
`mind or by a human using pencil and paper. Id. at 19. Patent Owner
`addresses this argument indirectly, in response to other arguments (i.e.,
`pfWUZ‘a^aY [US^[‘hW‘f[a‘q%, by emphasizing fZW pZSdVi SdW S‘V)adeaXfi SdWq
`aspects of the claims. Prelim. Resp. 21. These include the data storage,
`retrieval, manipulation, analysis, and communication features, including the
`so-US^^WV pdSfW W‘Y [‘Wq fZSf bdah[VWe fZW eZ[bb[‘Y dSfW USlculations. Id.
`We are not persuaded on the present record by Patent Owner that
`these are meaningful limitations on the abstract idea. As the Supreme Court
`held in Gottschalk v. Benson, 409 U.S. 63 (1972), claims do not become
`patent-eligible under § 101 simply for reciting a known, general purpose
`computer. See id. at 67 (invalidating as patent-ineligible claimed processes
`
`fZSf pUS‘TW USdd[WV ag f [‘Wj[ef[‘Y Ua_ bg fWde ^a‘Y [‘g eW& ‘a ‘Wi _ SUZ[‘Wdk
`TW[‘Y ‘WUWeeSdk&q adpUS‘S^ea TW bWdXad_ WV i [fZag f S Ua_ bg fWd(q%( And in
`Alice Corp., the Supreme Court rejected a similar argument, determining
`18
`
`GOOG 1023
`CBM of U.S. Patent 7,774,280
`Page 18
`
`Petitioner Apple Inc. - Ex. 1023, p. 18
`
`
`
`CBM2014-00125
`Patent 8,352,357
`fZSf pfZW U^S[_ e Sf [eeg W S_ ag ‘f fa rnothing significantly mores than an
`instruction to apply the abstract idea of intermediated settlement using some
`unspecified, generic computer(q Alice Corp., 134 S.Ct. at 2360 (quoting
`Mayo, 132 S.Ct. at 1298).
`Petitioner contends that independent claim 13 (directed to a system)
`adds no meaningful limitations to claim 1 (directed to a method) and
`therefore both are ineligible under § 101 for the same reasons. Pet. 23.
`Petitioner also argues that the dependent claims add only conventional
`elements. Id. at 24. We agree, on the present record, that these claims do
`not provide meaningful limitations on the abstract idea. In Alice Corp., the
`Supreme Court concluded that the system claims were not patentable for
`substantially the same reasons as the method claims because the pekefW_
`claims recite a handful of generic computer components configured to
`[_ b^W_ W‘f fZW eS_ W [VWSq Se fhe method claims. Alice Corp., 134 S.Ct. at
`2360. The Supreme Court i Sd‘WV fZSf S pVdSXfe_ S‘se Sdfq eZag ^V ‘af fdg _ b
`the prohibitions against patenting abstract ideas. See Alice Corp., 134 S.Ct.
`at 2359 (citing Mayo, 132 S.Ct. at 1294 (quoting Parker v. Flook, 437 U.S.
`584, 593 (1978))).
`We do not need to reach, and therefore do not address for the purposes
`of this Decision& GWf[f[a‘Wdse eWUa‘VSdk SdY g _ W‘fe TSeWV a‘bdWW_ bf[a‘$GWf(
`25o,0% S‘V fZW p_ SUZ[‘W adfdS‘eXad_
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