IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`
`EBAY INC. AND
`PAYPAL, INC.,
`Petitioners,
`
`v.
`
`XPRT VENTURES, LLC
`Patent Owner.
`__________________
`
`CBM2017-Unassigned
`U.S. Patent No. 7,610,244
`Issued: October 27, 2009
`Named Inventors: George Likourezos and Michael A. Scaturro
`Title: SYSTEM AND METHOD FOR EFFECTING PAYMENT FOR AN ITEM
`OFFERED FOR AN ELECTRONIC AUCTION
`__________________
`
`DECLARATION OF CLIFFORD NEUMAN IN SUPPORT OF PETITION
`FOR COVERED BUSINESS METHOD REVIEW OF
`U.S. PATENT NO. 7,610,244
`UNDER 35 U.S.C. § 321 AND 37 C.F.R. § 42.304
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`eBay et al., Ex.1005, p.1
`
`
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`
`EBAY INC. AND
`PAYPAL, INC.,
`Petitioners,
`
`v.
`
`XPRT VENTURES, LLC
`Patent Owner.
`__________________
`
`CBM2017-Unassigned
`U.S. Patent No. 7,610,244
`Issued: October 27, 2009
`Named Inventors: George Likourezos and Michael A. Scaturro
`Title: SYSTEM AND METHOD FOR EFFECTING PAYMENT FOR AN ITEM
`OFFERED FOR AN ELECTRONIC AUCTION
`__________________
`
`DECLARATION OF CLIFFORD NEUMAN IN SUPPORT OF PETITION
`FOR COVERED BUSINESS METHOD REVIEW OF
`U.S. PATENT NO. 7,610,244
`UNDER 35 U.S.C. § 321 AND 37 C.F.R. § 42.304
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`eBay et al., Ex.1005, p.1
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`BACKGROUND AND QUALIFICATIONS ................................................. 2
`A.
`Status as an Independent Expert Witness .............................................. 3
`II. MATERIALS CONSIDERED ........................................................................ 4
`III. The Person of Ordinary Skill in the Relevant Field in the Relevant
`Timeframe ........................................................................................................ 4
`IV. THE ’244 PATENT ......................................................................................... 5
`V.
`PRIORITY DATE ........................................................................................... 8
`VI. CLAIM INTERPRETATION ......................................................................... 8
`VII. THE ’244 PATENT IMPLEMENTS WELL-KNOWN BUSINESS
`PRACTICES
`USING
`GENERIC
`COMPUTER
`AND
`NETWORKING COMPONENTS .................................................................. 8
`VIII. JURAT ........................................................................................................... 49
`
`
`i
`
`eBay et al., Ex.1005, p.2
`
`
`
`DECLARATION OF CLIFFORD NEUMAN
`
`I, Clifford Neuman, make this declaration in connection with the petition for
`
`post-grant review submitted by Petitioner for U.S. Patent No. 7,610,244 (“the ’244
`
`patent”). All statements herein made of my own knowledge are true, and all
`
`statements herein made based on information and belief are believed to be true. I
`
`am over age 21 and otherwise competent to make this declaration. Although I am
`
`being compensated for my time in preparing this declaration, the positions
`
`articulated herein are my own, and I have no stake in the outcome of this
`
`proceeding or any related litigation or administrative proceedings.
`
`I.
`
`BACKGROUND AND QUALIFICATIONS
`1.
`Appendix A to this declaration is my curriculum vitae. As shown in
`
`my curriculum vitae, I have devoted my career to the field of distributed computer
`
`systems development and research, with a significant portion of my experience in
`
`the area of electronic commerce and internet payments. I earned my Bachelor of
`
`Science degree in Computer Science and Engineering from the Massachusetts
`
`Institute of Technology in 1985. I received a Master of Science degree in
`
`Computer Science from the University of Washington in 1988, and my Ph.D. in
`
`Computer Science from the University of Washington in 1992.
`
`2.
`
`I worked extensively in the field of electronic commerce and online
`
`payment transactions in the mid-1990s. As shown in my curriculum vitae, I was
`
`2
`
`eBay et al., Ex.1005, p.3
`
`
`
`one of the principal creators of NetCash, an online currency and transaction
`
`framework for realtime electronic payments over the internet. I developed the
`
`NetCash framework in conjunction with Gennady Medvinsky, who at the time was
`
`one of my Ph.D. students at the University of Southern California. We first
`
`published our research relating to NetCash in November 1993. In 2000 and 2001 I
`
`was on the advisory board for NetResearch Inc, d/b/a BayBuilder, which was a
`
`company developing online auction platforms.
`
`A.
`3.
`
`Status as an Independent Expert Witness
`
`I have been retained in this matter by Weil, Gotshal & Manges L.L.P.
`
`(“Weil”) to provide observations regarding the ’244 patent. I am being
`
`compensated at the rate of $600 per hour for my work. My fee is not contingent on
`
`the outcome of this matter or on any of the positions I have taken or may take in
`
`this matter.
`
`4.
`
`I have been advised that Weil represents the Petitioner in this matter.
`
`I have no direct financial interest in the Petitioner.
`
`5.
`
`I have been advised that XPRT Ventures, LLC (hereinafter referred to
`
`as “XPRT”) owns the ’244 patent. I have no financial interest in XPRT or the ’244
`
`patent. I do not believe that I have ever had any contact with XPRT or with
`
`George Likourezos and Michael A. Scaturro, the inventors of the ’244 patent.
`
`3
`
`eBay et al., Ex.1005, p.4
`
`
`
`II. MATERIALS CONSIDERED
`6.
`I have reviewed the ’244 patent and its prosecution history. I have
`
`also reviewed each of the exhibits attached to the petition for post-grant review
`
`submitted by Petitioner.
`
`III. THE PERSON OF ORDINARY SKILL IN THE RELEVANT
`FIELD IN THE RELEVANT TIMEFRAME
`7.
`
`The patent states that the “invention relates to a computerized
`
`electronic auction payment system and a method for effecting a real-time payment
`
`using the computerized electronic auction payment system for an item won on an
`
`electronic auction, where users access the computerized electronic auction
`
`payment system by remote terminals via an electronic network, such as the
`
`Internet.” Ex.1001, 1:20-26. Making and using the alleged inventions of the patent
`
`without undue experimentation requires familiarity with electronic commerce
`
`systems, including electronic auction systems, electronic payment systems, the
`
`World Wide Web and networked system integration. It is my opinion that one of
`
`ordinary skill in the art disclosed in the ’244 patent would have a bachelor’s degree
`
`in computer science, or equivalent work experience, and three years’ experience in
`
`implementing networked electronic commerce systems, including familiarity with
`
`electronic auction systems, electronic payment systems, networked system
`
`integration, the World Wide Web, and the use of graphical user interfaces.
`
`4
`
`eBay et al., Ex.1005, p.5
`
`
`
`IV. THE ’244 PATENT
`8.
`The ’244 patent addresses a perceived need for better methods of
`
`effecting payment by the winning bidder of an electronic auction. The
`
`specification describes prior art methods of bidders using a check, money order, or
`
`credit card to pay for an item won in an electronic auction; after payment is
`
`received, the seller ships the item to the winning bidder. Ex.1001, 2:29-64.
`
`Because the winning bidder must take the time to draft a check or obtain a money
`
`order and mail it to the seller (and may wait until other pending auctions have been
`
`completed so these tasks can be completed for multiple items at once or until the
`
`start of a new credit card billing cycle to make a credit card payment), there could
`
`be a delay before the winning bidder even attempts to make a payment. Ex.1001,
`
`2:65-3:27. Then, of course, the seller must wait for the check to arrive in the mail
`
`or for the credit card transaction to be processed by a third party. The ’244 patent
`
`also describes a delay of several days to several weeks before payment of a
`
`commission is made to the operator of the electronic auction website. Ex.1001,
`
`3:28-36. Separately, some bidders may not own credit cards or may feel uneasy
`
`about transferring their credit card information via an electronic network.
`
`Ex.1001, 3:16-27.
`
`9.
`
`The ’244 patent claims to solve these problems by providing a
`
`computerized electronic auction payment system wherein electronic auction
`
`5
`
`eBay et al., Ex.1005, p.6
`
`
`
`payment accounts are established and maintained for prospective bidders and
`
`sellers. Ex.1001, 3:66-4:3. The claimed computerized electronic auction payment
`
`system is depicted in Figure 1 below.
`
`
`
`10. Using this system, prospective bidders provide funds to their
`
`electronic auction payment accounts before being deemed a winning bidder “via
`
`direct deposit, using a credit card, or sending a check, money order, or other
`
`financial document to an operator of the computerized electronic auction payment
`
`system.” Ex.1001, 4:3-9. Upon winning an electronic auction, the winning bidder
`
`6
`
`eBay et al., Ex.1005, p.7
`
`
`
`can authorize the computerized electronic auction payment system to effect a
`
`payment by debiting his electronic auction payment account and crediting the
`
`electronic auction payment account of the seller. Ex.1001, 4:9-17. In one
`
`embodiment, an automatic payment field can be provided for the user to authorize
`
`the computerized electronic auction payment system to debit the user’s electronic
`
`auction payment account in real-time every time the user is deemed the winning
`
`bidder. Ex.1001, 9:64-10:1. After the winning bidder wins an auction item from
`
`the electronic auction web site, the winning bidder can initiate a real-time payment,
`
`e.g., by clicking an icon on the electronic auction web site or by clicking a
`
`hyperlink provided on an e-mail transmitted by the electronic auction system to the
`
`winning bidder and seller for accessing a payment segment. Ex.1001,16:1-7.
`
`11. Generally speaking, the Patent Owner claims methods of (1) creating
`
`payment accounts using information about users; (2) allowing users to enable
`
`automatic payments; (3) allowing users to view the funds in their accounts; (4)
`
`determining if an auction has concluded; (5) e-mailing the winning bidder;
`
`(6) providing a payment page where the winning bidder can authorize payment;
`
`(7) deducting funds from the winning bidder’s account; and (8) paying the seller.
`
`12. Beyond the generic components depicted in Figure 1, the ’244 patent
`
`does not specify anything other than a generic computer to implement these
`
`methods for the claimed computerized electronic auction payment system.
`
`7
`
`eBay et al., Ex.1005, p.8
`
`
`
`13. Nor do the claims improve the functioning of the computer itself, or
`
`improve any other technology or technical field.
`
`V.
`
`PRIORITY DATE
`14.
`
`I understand that the ’244 patent was filed on January 11, 2002, but
`
`claims priority to an application filed January 17, 2001. For the purposes of my
`
`analysis below, I have used January 17, 2001 as the priority date.
`
`VI. CLAIM INTERPRETATION
`15.
`In the present proceeding, I have been advised that the claims are to
`
`be given their broadest reasonable interpretation in view of the specification
`
`(“BRI”) as it would be interpreted by one of ordinary skill in the art. In forming
`
`my opinions, I have interpreted the term “web site” as “a computer or system
`
`connected to the Internet that maintains one or more pages on the World Wide
`
`Web,” which is the BRI of the term. For all other claim terms, I have applied the
`
`BRI as it would be interpreted by one of ordinary skill in the art.
`
`VII. THE ’244 PATENT IMPLEMENTS WELL-KNOWN BUSINESS
`PRACTICES USING GENERIC COMPUTER AND
`NETWORKING COMPONENTS
`16.
`
`I have reviewed the ’244 patent and especially claims 1, 2, 15, 19 20,
`
`34, 40, 47, 48, 52, and 53 that are the subject of the Petition. Based upon my
`
`review and my experience, the claims implement well-known business practices,
`
`such as pre-funded payment accounts and pre-authorized transfers, with generic
`
`computer and networking components.
`
`8
`
`eBay et al., Ex.1005, p.9
`
`
`
`17. Pre-funded payment accounts are a mainstay of commerce, electronic
`
`or otherwise. Ex.1006, p.4 (describing the use of deposit accounts in 1910);
`
`Ex.1008, Federal Regulations at p.5. Indeed, a merchant would much prefer to do
`
`business with a customer that can demonstrate that the funds are readily available.
`
`Doing business using credit involves risks that are obviated with a pre-funded
`
`payment account. Nonetheless, the ’244 patent suggests that it has devised
`
`something novel and innovative because its electronic accounts are prefunded.
`
`This is simply not true. Pre-funded accounts, e.g., bank accounts, are ubiquitous
`
`and a fundamental building block to commerce. Id. Likewise, prepaid debit cards
`
`have been around for years. Ex.1011. The fact that the patent’s accounts are
`
`“electronic” adds nothing to the invention, nor does the fact that the accounts are
`
`managed on a server associated with an electronic auction or electronic commerce
`
`site, rather than a traditional bank. Ex.1008, Federal Regulations at p.3 (disclosing
`
`that Federal Regulations recognize that electronics do not add anything to the
`
`financial services being conducted on those electronics). Bank accounts are almost
`
`universally kept electronically and there is nothing special or non-conventional
`
`about keeping bank records electronically. Moreover, there were dozens of
`
`electronic commerce systems that were widely implemented prior to the priority
`
`date of the patent. See, e.g., corresponding inter partes 95/001,597 reexamination.
`
`Gennady Medvinsky and I, for example, had developed a system called NetCash in
`
`9
`
`eBay et al., Ex.1005, p.10
`
`
`
`the mid 1990s. NetCash was a framework that included electronic currency,
`
`usable in both online and offline commerce. We also developed a system called
`
`NetCheque in the same timeframe which maintained account holder balances
`
`(funds available) in a distributed online accounting system. Nothing recited in the
`
`claims or the specification of the ’244 patent suggests that the invention somehow
`
`improves the operation of these types of well-known systems for maintaining pre-
`
`funded payment accounts or provides a technological advance. The computers
`
`disclosed in the claims and the specification are general purpose and generic.
`
`18.
`
`In addition to pre-funded accounts, the ’244 patent includes claim
`
`limitations directed to loaning funds to a buyer that has insufficient funds to make
`
`a purchase. Like the pre-funded account, loaning funds is a well-known,
`
`conventional, fundamental economic practice that has been practiced for decades
`
`by banks and governments. Ex.1006, p.5; Ex.1009, pp.3, 4. The ’244 patent does
`
`not state that it invented this abstract concept. Taking the bank account discussed
`
`in the preceding paragraph, financial institutions have, for decades, offered
`
`overdraft protection. See, e.g., Ex.1006, p.5; Ex.1007, pp.4, 6. Overdraft
`
`protection permits the bank to give its customer a temporary loan of funds when
`
`the account is overdrawn. Ex.1006, p.5; Ex.1007, pp.4, 6 at 54, 60. This is exactly
`
`what is disclosed by the ’244 patent. The fact that the loans are being offered in an
`
`electronic payment system or in connection with an electronic auction adds nothing
`
`10
`
`eBay et al., Ex.1005, p.11
`
`
`
`to the invention. Nothing recited in the claims or the specification suggests that the
`
`invention somehow improves the operation of the system or provides a
`
`technological advance.
`
` The computers disclosed in the claims and the
`
`specification are general purpose and generic. Fig. 1 of the ’244 patent, for
`
`example, “is an overview of a network computing environment including the
`
`computerized electronic auction payment system according to the invention.”
`
`Ex.1001, 6:21-23. The figure depicts “users” and the “Internet,” who interact with
`
`an electronic auction system comprising “web servers” and an electronic payment
`
`system comprising “databases,” a “processor,” and “memory.” These are generic
`
`hardware components and the specification does not suggest that these components
`
`add significantly more to the claimed inventions.
`
`19. The ’244 patent claims are directed to financial transfers. Financial
`
`transactions, electronic or otherwise, are the fundamental building blocks of the
`
`economy. Ex.1006, p.4 (describing the use of deposit accounts in 1910); Ex.1008,
`
`Federal Regulations (including regulations for electronic accounts). Indeed, this is
`
`the type of subject matter that is taught in economics or business classes. The fact
`
`that the ’244 patent’s transfers are occurring electronically do not add to the
`
`invention. Transactions are regularly conducted electronically, and have been for
`
`decades. Ex.1007, pp.5, 7, 8. Basically, the ’244 patent takes this well-known
`
`concept and applies it to, for example, the Internet. As discussed in the previous
`
`11
`
`eBay et al., Ex.1005, p.12
`
`
`
`paragraph, Figure 1 of the ‘244 patent shows that these components are nothing
`
`more than general purpose servers, databases, and processors, depicted as nothing
`
`more than generic boxes.
`
`20.
`
` Nor is the combination of financial transactions, pre-funded accounts,
`
`and overdraft protection anything other than a well-trod, fundamental economic
`
`concept. As I discussed in the preceding paragraphs, a generic bank account
`
`implements, collectively, these concepts. Bank accounts are regularly used in
`
`financial transactions, including electronic transactions, and banks offer overdraft
`
`protection. Ex.1006, p.5; Ex.1007, pp.4, 5, 6, 7, 8. Although the recited claim
`
`elements include generic components such as “computing device,” “electronic
`
`commerce system,” or “electronic auction system,” which are used to perform the
`
`steps of the claimed methods for effecting payment, there is nothing novel or
`
`technologically innovative about using generic computers to accomplish financial
`
`transactions. The claims recite the use of conventional, non-specialized systems
`
`and devices (comprised of the generic databases and processors disclosed in the
`
`specification). The claims do not, nor do they even claim to, improve the
`
`functioning of these generic computer components, or to improve any other
`
`technology or technical field.
`
`21. The conventional nature of the hardware is further reflected in the
`
`specification. Fig. 1 of the ’244 patent “is an overview of a network computing
`
`12
`
`eBay et al., Ex.1005, p.13
`
`
`
`environment including the computerized electronic auction payment system
`
`according to the invention.” Ex.1001, 6:21-23. The figure depicts “users” and the
`
`“Internet,” who interact with an electronic auction system comprising “web
`
`servers” and an electronic payment system comprising “databases,” a “processor,”
`
`and “memory.” These are generic hardware components and the specification does
`
`not suggest that these components add significantly more to the claimed
`
`inventions.
`
`22.
`
`I also note that while the dependent claims provide additional
`
`limitations, it is clear that they are also directed to the abstract idea of using a
`
`previously-funded account to effect a payment. Ultimately, the patent claims
`
`nothing more than a collection of well-known, generic ideas for conducting a
`
`computerized exchange of funds in an electronic auction sale.
`
`23. As set forth in the paragraphs that follow, the claims of the ’244
`
`patent, both individually and as a combination, recite the use of conventional,
`
`generic computers to make a payment in an electronic auction sale from a pre-
`
`funded account, without adding any technologically innovative or novel elements.
`
`13
`
`eBay et al., Ex.1005, p.14
`
`
`
`CLAIM 1
`
`[1.a.] A method for effecting payment for at least one item offered for auction
`sale by a seller via an electronic auction web site and won by a winning
`bidder, where the electronic auction web site is accessible by a plurality of
`users and maintained by an electronic auction system, the method comprising:
`24. The preamble of claim 1 recites an electronic auction sale via an
`
`electronic auction web site. Conducting auction sales is a fundamental economic
`
`activity that has been practiced for decades by live auction houses, and which in
`
`the claim is performed by a generic, non-specialized computer. Ex.1001, 1:30-34.
`
`The abstract concept of an auction has been practiced for decades. The limitation
`
`adds nothing more than that the auction sale is made via an electronic auction web
`
`site, which is maintained by a computing device. The ’244 patent admits that
`
`electronic auction web sites were known in the prior art. Ex.1001, 1:35-49. Nor
`
`does the limitation (and the successive limitations that implement the method) do
`
`anything to improve the operation or structure of the computer that carries out the
`
`auction.
`
`[1.b.] receiving informational data from the plurality of users via at least one
`web page accessible via at least one web page of the electronic auction web
`site;
`
`25. This limitation recites obtaining data about users from a web page.
`
`This too is a purely conventional step. Ex.1008, Federal Regulations at pp.7, 8
`
`(describing records needed to be kept by financial institutions). The ’244 patent
`
`itself discloses that electronic auctions on the Internet were commonplace and
`
`14
`
`eBay et al., Ex.1005, p.15
`
`
`
`“tremendously popular” at the time of filing. Ex.1001, 1:35-36. The recitation of
`
`a “web page” or “electronic auction web site” does not introduce a technical
`
`innovation. The ’244 patent admits that electronic auction web sites were known
`
`in the prior art. Ex.1001, 1:35-49. The limitation does not improve the
`
`functioning of the computer itself or effect an improvement in any other
`
`technology or technical field.
`
`[1.c.] creating a plurality of payment accounts configured for storing funds
`therein and corresponding to the plurality of users of the electronic auction
`web site using the informational data received via the at least one web page
`accessible via the at least one web page of the electronic auction web site,
`26. This limitation recites the step of setting up electronic payment
`
`accounts for storing funds that can be used to make payments. This is a purely
`
`conventional activity—akin to opening a conventional bank account, which banks
`
`have performed for decades. Ex.1008, Federal Regulations at p.5; Ex.1012.
`
`Likewise, requiring that the plurality of payment accounts correspond to a plurality
`
`of users of an electronic auction site does nothing more than limit these
`
`conventional accounts to a particular context—electronic auctions. Given the ’244
`
`patent’s admissions that electronic auctions were well-known and highly popular,
`
`one would expect that the conventional payment accounts provided by a bank
`
`would include a subset of accounts belonging to customers who were also users of
`
`an electronic auction web page. The setting up of the account is accomplished
`
`using information data received via a web page. This is nothing more than the
`
`15
`
`eBay et al., Ex.1005, p.16
`
`
`
`conventional use of a web page to collect data. The limitation does nothing more
`
`than take the abstract idea and apply it using the Internet. The ’244 patent admits,
`
`for example, that it was known in the prior art to use payment web pages to receive
`
`credit card information (i.e., collect data) from winning bidders in electronic
`
`auctions. Ex.1001, 2:41-51.
`
`[1.d.] wherein funds stored within the plurality of payment accounts can be
`used by said plurality of users for effecting payment for network transactions
`associated with said electronic auction web site;
`27. This limitation recites that the claimed payments using stored funds
`
`are made in the context of network-based electronic auction transactions. This is
`
`nothing more than the well-known, traditional function of a financial account. A
`
`bank account, for example is an account that stores funds therein and is regularly
`
`used in transactions. Ex.1006, p.4; Ex.1008, Federal Regulations at p.5. That the
`
`claims recite an “electronic auction web site” does not add significantly more to
`
`the abstract idea. This simply takes the abstract idea and applies it using wholly
`
`conventional technology to a particular context. The ’244 patent itself discloses
`
`that electronic auctions on the Internet were commonplace and “tremendously
`
`popular” at the time of filing. Ex.1001, 1:35-36. Using a network to effect
`
`commerce is not innovative. The limitation does not improve the functioning of
`
`the computer itself or effect an improvement in any other technology or technical
`
`field.
`
`16
`
`eBay et al., Ex.1005, p.17
`
`
`
`[1.e.] providing the plurality of users an option to enable an automatic
`payment service,
`28. This limitation recites allowing a user to authorize an automatic
`
`payment to be made on behalf of the user at the end of the auction. Advance
`
`authorization of a payment to be made upon fulfillment of a condition is a basic
`
`economic practice that has been practiced for years by users of bank accounts,
`
`electronic fund transfers, escrow services, automatic bill payment services, and the
`
`like. Ex.1007, pp.5, 7, 8; Eh.1010, pp.3, 4. Indeed, anyone who has purchased a
`
`house using an escrow service has engaged in this practice; the purchaser
`
`authorizes the escrow service, in advance of closing, to execute a payment to the
`
`seller when the transaction closes. A more common example is the use of advance
`
`authorization for bill pay. For decades, people have authorized banks to make
`
`monthly, automatic bill payments when a bill comes due. Ex.1007, pp.5, 7, 8;
`
`Ex.1010, pp.3, 4. The limitation does not add significantly more to the abstract
`
`concept.
`
`[1.f.] wherein the automatic payment service automatically effects payment
`after occurrence of a termination event associated with the network
`transactions;
`29. This limitation recites nothing more than the act of automatically
`
`effecting payment (e.g., debiting or withdrawing funds) from an account at the
`
`close of the transaction. Effecting payments from payment accounts is a basic
`
`economic activity that holders of bank accounts have practiced for decades, in both
`
`17
`
`eBay et al., Ex.1005, p.18
`
`
`
`traditional offline commercial transactions and online commerce. Ex.1007, pp.5,
`
`7, 8; Ex.1010, pp.3, 4. The payment is made by a “payment service,” which is
`
`nothing more than a recitation of generic computer components and does not add
`
`“significantly more” to the claim limitation. The ’244 patent admits that web-
`
`based payment services were well-known in the prior art. Ex.1001, 2:41-59. The
`
`limitation does not improve the functioning of the computer itself or effect an
`
`improvement in any other technology or technical field.
`
`30. Moreover, the recitation that the payment is “automatic” simply adds
`
`a well-understood, routine, and conventional element. Automatic electronic funds
`
`transfers have been known for decades as a means to pay recurring bills. Ex.1007,
`
`pp.7, 8; Ex.1010, pp.3, 4.
`
`[1.g.] linking said plurality of payment accounts to at least one computing
`device of the electronic auction system;
`31. This limitation recites “linking” (i.e., connecting or tying) the claimed
`
`payment accounts to a generic “computing device.” The claimed “linking” only
`
`adds a well-understood and routine computer step. Bank accounts are almost
`
`universally kept electronically—which requires them to be “linked” to the
`
`computing device in which they are electronically kept—and there is nothing
`
`special or non-conventional about keeping bank records electronically. The
`
`limitation does not improve the functioning of the computer itself or effect an
`
`improvement in any other technology or technical field.
`
`18
`
`eBay et al., Ex.1005, p.19
`
`
`
`[1.h.] displaying a link on the electronic auction web site for providing said
`plurality of users which includes the winning bidder access to their respective
`payment accounts for viewing the amount of funds stored therein;
`32. This limitation recites providing a hyperlink to the payment accounts.
`
`It is well-understood and routine, however, that hyperlinks can be used to provide
`
`access to other web sites for displaying information to a user. The ’244 patent
`
`admits, for example, that one “prior art method for effecting payment” in
`
`electronic auctions “entails clicking an icon on the electronic auction web site and
`
`accessing a payment web site.” Ex.1001, 2:41-43. Indeed, any generic, non-
`
`specialized computer with a basic web browser is capable of rendering a hyperlink.
`
`This is a purely conventional activity. The limitation does not improve the
`
`functioning of the computer itself or effect an improvement in any other
`
`technology or technical field.
`
`[1.i.] determining the conclusion of the auction sale by the electronic auction
`system; and
`33. This limitation requires the electronic auction system to determine
`
`whether certain conditions have taken place, i.e., to process information. Using an
`
`electronic system to process information is nothing more than using a computer for
`
`its conventional function. Indeed, the ’244 patent admits that it was conventional
`
`and routine for prior art electronic auction systems to determine the winning bidder
`
`at the end of an auction. Ex.1001, 2:29-31.
`
`19
`
`eBay et al., Ex.1005, p.20
`
`
`
`[1.j.] interacting with said winning bidder by the electronic auction system by
`performing the steps of: sending an e-mail by the electronic auction system to
`the winning bidder;
`34. This limitation recites only sending an e-mail from the auction system
`
`to the winning bidder. As described in the specification, however, sending the
`
`winning bidder an email at the conclusion of the auction is not a technological
`
`innovation and was known and practiced in the prior art. Ex.1001, 2:31-34.
`
`Interacting with the winning bidder via email is a conventional, well-known
`
`concept. The limitation does not improve the functioning of the computer itself or
`
`effect an improvement in any other technology or technical field.
`
`[1.k.] receiving, via one of the electronic auction web site and the e-mail, at
`least one input from the winning bidder indicating an initiation to effect
`payment to the seller;
`35. This limitation requires receiving an indication from a user that she
`
`intends to pay – e.g. a button click. Receiving a user input from a web page is
`
`simply routine, conventional computer activity that can be performed by any
`
`generic, non-specialized web server. The ’244 patent admits, for example, that one
`
`“prior art method for effecting payment” in electronic auctions “entails clicking an
`
`icon on the electronic auction web site and accessing a payment web site.”
`
`Ex.1001, 2:41-43. Likewise, receiving information from the winning bidder via
`
`email is also a purely conventional activity. The limitation does not improve the
`
`20
`
`eBay et al., Ex.1005, p.21
`
`
`
`functioning of the computer itself or effect an improvement in any other
`
`technology or technical field.
`
`[1.l.] providing a payment page to the winning bidder after receiving the at
`least one input from the winning bidder,
`36. This limitation recites providing a payment page to the winning bidder
`
`after she indicates her intention to pay. As described in the specification, however,
`
`providing a payment page to the winning bidder is not a technological innovation,
`
`but rather was a well-known and practiced prior art method for effecting payment.
`
`Ex.1001, 2:41-44. This step is carried out by conventional, well-known computers
`
`and does not improve the functioning of the computer itself, or improve any other
`
`technology or technical field.
`
`[1.m.] said payment page displaying the amount of funds to be deducted from
`a payment account of the plurality of payment accounts corresponding to the
`winning bidder,
`37. This limitation further recites the mundane limitation that the payment
`
`page displays the amount of funds to be deducted from the user’s payment account.
`
`This is a routine, well-understood, and conventional element that offers no
`
`inventive elements; in order to complete any financial transaction, the buyer needs
`
`to know how much to pay. Neither the specification nor the claims suggests that
`
`the displaying is done by anything other than a conventional computer or
`
`computers.
`
`21
`
`eBay et al., Ex.1005, p.22
`
`
`
`[1.n.] said payment account having been created using informational data
`received via the at least one web page accessible via the at least one web page
`of the electronic auction web site; and
`38. This limitation again recites that the payment account was created
`
`from informational data received from a web page. As discussed above with
`
`respect to limitation 1.c., this is routine and well-understood. Banks maintain
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