Trials@uspto.gov Paper No. 15
`571-272-7822
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`
`
`Entered: September 30, 2014
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`
`
`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
`
`
`
`
`
`Universal Electronics Exhibit 2005, Page 1
`Universal Remote Control v. Universal Electronics, Trial No. IPR2014-01111
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`

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`CBM2014-00125
`Patent 8,352,357
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`A. Background
`
`I. INTRODUCTION
`
`
`
`eBay (“Petitioner”) has petitioned for institution of a covered
`
`business method patent review of all claims (1–24) of U.S. Patent No.
`
`8,352,357 (Ex. 1001; “the ʼ357 patent”). Paper 4 (“Pet.”).1 PAID, Inc.
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`(“Patent Owner”) filed a Preliminary Response. Paper 12 (“Prelim. Resp.”).
`
`
`
`For the reasons that follow, we determine that the ʼ357 patent
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`qualifies as a covered business method patent under § 8(d)(1) of the Leahy-
`
`Smith America Invents Act (“AIA”).2 We further determine that it is more
`
`likely than not that at least one claim of the ʼ357 patent is unpatentable. We
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`therefore institute a covered business method patent review of claims 1–24.
`
`See 35 U.S.C. § 324(a).
`
`
`
`B. Related Cases
`
`
`
`Patent Owner has sued Petitioner for infringement of the ʼ357 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
`
`(“the ’642 patent”) and 7,930,237 (“the ’237 patent), and was subsequently
`
`amended to include U.S. Patent No. 8,635,150 (“the ’150 patent”). Ex.
`
`1005.
`
`
`
`In addition, Petitioner has filed Petitions for covered business method
`
`patent reviews of the ʼ642 patent (CBM2014-00126), the ʼ237 patent
`
`(CBM2014-00127), and the ʼ150 patent (CBM2014-00128). Decisions on
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`those Petitions are being issued with this decision.
`
`
`1 “Amended Petition for Covered Business Method,” filed May 29, 2014.
`2 Pub. Law 112-29, 125 Stat. 284, 331 (Sept. 16, 2011).
`
`
`
`2
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`Universal Electronics Exhibit 2005, Page 2
`Universal Remote Control v. Universal Electronics, Trial No. IPR2014-01111
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`CBM2014-00125
`Patent 8,352,357
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`A. Overview
`
`
`
`II. THE ʼ357 PATENT
`
`
`
`The ʼ357 patent relates to improvements in on-line auctions.
`
`According to the patent, conventional online auctions do not offer the buyer
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`complete information about the real cost of the auction. Ex. 1001, col. 4, ll.
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`13–15. This is because they do not specify exact shipping cost information.
`
`Id. at ll. 15–16. 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.
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`Id. at ll. 16–22. That information may include entry of the ZIP code of the
`
`buyer on a screen display. When the buyer enters ZIP code information in
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`the ZIP code field the buyer may initiate the shipping calculator by clicking
`
`a display button. Id. at ll. 22–29. The operation of the calculator is
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`illustrated in Figure 14 from the patent reproduced below:
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`
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`3
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`CBM2014-00125
`Patent 8,352,357
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`Figure 14 is a flow chart of a server process for generating shipping
`
`rates.
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`
`
`In the flowchart reproduced above, at step 1402 the system initiates a
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`rate engine in response to a buyer input, such as clicking on the calculator
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`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
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`at step 1404. Id. at col 10, l. 62–col. 11, l. 8.
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`
`
`At step 1407, the system queries the seller’s preferences to determine
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`whether the shipping rate is a fee-based rate. If so, the fee-based rate is
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`calculated at step 1409. If not, at step 1408 an algorithm is applied to
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`determine the packaging for the items to be shipped. Id. at col. 11, ll. 23–44.
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`
`
`At step 1410, the system determines the location of the seller and the
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`buyer based on data entered in interaction with the servers of the system. At
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`step 1412 the system calculates and stores a rate factor based on the location
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`of the buyer and seller. Id. at ll. 45–49.
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`
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`At step 1414, the system queries whether weight is a factor in the
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`calculation, and if so, the system at step 1418 calculates and stores a weight
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`factor for the item. At step 1420, the system queries whether taxes apply
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`and at step 1422, calculates and stores a tax factor. Id. at ll. 50–55.
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`
`
`At step 1424, the system queries whether insurance charges apply, and
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`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,
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`calculates and stores a handling factor. Once all of these factors are
`
`determined, the system calculates a rate at step 1434. Id. at ll. 55–61.
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`
`
`
`
`4
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`CBM2014-00125
`Patent 8,352,357
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`B. Illustrative Claim
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`
`
`Claim 1 is an independent method claim. Claims 2–12 depend,
`
`directly or indirectly, from claim 1. Claim 13 is an independent system
`
`claim. Claims 14–24 depend, directly or indirectly, from claim 13.
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`
`
`Claim 1 is illustrative (some paragraphing added):
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`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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`CBM2014-00125
`Patent 8,352,357
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`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 1–24 are directed to abstract ideas
`
`that are not patentable under 35 U.S.C. § 101.
`
`
`
`2. Petitioner asserts that claims 1–24 fail to comply with the written
`
`description and enablement requirements of 35 U.S.C. § 112.
`
`
`
`3. Petitioner asserts that claims 1–24 are obvious over PCT Pub.
`
`WO 01/55931 A1, published August 2, 2001 (Ex. 1011, “Van Zandt”).
`
`
`
`4. Petitioner asserts that claims 2, 5, 14, and 17 are obvious over Van
`
`Zandt and a publication entitled “Sales Tax Issues in Illinois,” dated October
`
`2001 (Ex. 1010, “Illinois Sales Tax”).
`
`
`
`5. Petitioner asserts that claims 1–8, 10–20, and 22–24 are obvious
`
`over PCT Pub. No. WO 00/70515, published November 23, 2000 (Ex. 1012,
`
`“Hosey”) and screenshots of the PriceGrabber.com Web site,
`
`www.pricegrabber.com, obtained through the Wayback machine (Ex. 1013,
`
`“PriceGrabber.com”).
`
`
`
`6
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`CBM2014-00125
`Patent 8,352,357
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`
`
`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
`
`limited under 35 U.S.C. § 282(b) to “condition[s] for patentability.”
`
`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. §§ 102–103. Id. at 26–30. 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 1952 Patent Act “sets out the
`
`conditions of patentability in three sections,” citing 35 U.S.C. §§ 101, 102,
`
`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
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`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
`
`rejected the dissent’s contention that § 101 is not a “condition[] for
`
`patentability,” stating that “the ‘defenses provided in the statute’ § 282,
`
`include not only the ‘conditions of patentability’ in §§ 102 and 103, but also
`
`those in § 101.” 674 F.3d 1315, 1330 n.3 (Fed. Cir. 2012) (citing Aristocrat
`
`Techs. Austl. Pty Ltd. v. Int’l Game Tech., 543 F.3d 657, 661 (Fed. Cir.
`
`2008)) (“It has long been understood that the Patent Act sets out the
`
`conditions for patentability in three sections: sections 101, 102, and 103.”).
`
`
`
`7
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`CBM2014-00125
`Patent 8,352,357
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`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).
`
`Accordingly, we are not persuaded by Patent Owner’s argument that 35
`
`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(b). There is a “‘heavy presumption’” that a claim
`
`term carries its ordinary and customary meaning. CCS Fitness, Inc. v.
`
`Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002) (internal citation
`
`omitted).
`
`Petitioner proposes constructions for three claim terms: “tax factor,”
`
`“tax rate,” and “state.” Pet. 14–16. Patent Owner argues that Petitioner’s
`
`“constructions should be rejected and the claim terms should be found to
`
`carry their ordinary and customary meaning to a person of ordinary skill in
`
`
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`8
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`the art.” PO Resp. 31. Other than this general statement, Patent Owner
`
`offers no alternative constructions for these terms.
`
`1. “tax factor”
`
`Petitioner proposes that we interpret the term “tax factor” as the “total
`
`tax applied to an item.” Pet. 15. Petitioner argues that the dictionary
`
`definition of “factor” is “a quantity by which a given quantity is multiplied
`
`or divided in order to indicate a difference in measurement.” Id.; Ex. 1008.
`
`Petitioner concludes that “based on the context of claim 1,” the term refers
`
`to the “total tax amount.” Pet. 15.
`
`The Specification mentions “tax factor” in describing Figure 14:
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`“Next, at a step 1420 the system can query whether taxes apply and at a step
`
`1422 calculate and store a tax factor.” Ex. 1001, col. 11, ll. 53–55. “Once
`
`all of the factors have been determined, then the system can calculate a rate
`
`at step 1434. Id. ll. 62–63. The specification also discusses factors in
`
`general in the context of Figure 14: “Next, at a step 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
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`1440.” Id. at col. 11, ll. 27-31.
`
`Petitioner has not pointed to anything in the Specification that would
`
`define “tax factor” as the “total tax applied to an item.” We do not agree
`
`with Petitioner that this is the broadest reasonable interpretation of the term.
`
`Based on the disclosure in the Specification and on the dictionary
`
`definition provided by Petitioner, we construe “factor” to mean a calculation
`
`result that can be stored and used in determining the shipping rate. We
`
`construe “tax factor” to be a factor that represents the taxes applicable to the
`
`purchase.
`
`
`
`9
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`Patent 8,352,357
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`
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`2. “tax rate”
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`Petitioner proposes that we interpret the term “tax rate” as “percentage
`
`rate of the tax.” Pet. 16. Petitioner reasons that the claimed “tax rate” found
`
`in claim 1 “is associated with a political division.” Id. at 15. The
`
`Specification discloses a “tax rate engine” in Figure 13, and provides that
`
`“[t]he tax rate engine 1030 determines what taxes may apply to the auction.”
`
`Ex. 1001, col. 8, ll. 43–44. The Specification also provides that “tax rates
`
`can be stored for purposes of determining taxes that apply to the auction.”
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`Id. at col. 13, ll. 34–36.
`
`Based on the Specification’s disclosure, and applying the broadest
`
`reasonable interpretation, we construe “tax rate” to mean “the rate at which
`
`something is taxed.”
`
`3. “state”
`
`
`
`Relying on a dictionary definition, Petitioner proposes that we
`
`interpret the term “state” as “a politically organized body of people usually
`
`occupying a definite territory.” Pet. 16. Petitioner argues that “[n]othing in
`
`the ’357 patent specification or prosecution history contradicts this broad
`
`definition.” Id. The term “state” appears in claim 13 of the ’357 patent. Id.
`
`We agree with Petitioner’s proposed construction and interpret the term
`
`“state” as “a politically organized body of people usually occupying a
`
`definite territory.”
`
`
`
`C. Petitioner Has Standing to Seek Covered Business Method Patent
`Review of the ʼ357 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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`CBM2014-00125
`Patent 8,352,357
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`Section 18(d)(1) of the AIA defines the term “covered business method
`
`patent” to mean:
`
`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 – 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 Has Been Sued for Infringement of the ’357 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 ’357 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 the ʼ357 patent qualifies as a
`
`covered business method patent, Petitioner has met this requirement. See 37
`
`C.F.R. § 42.302(a).
`
`2. Claims 1–24 are Directed to Financial Products and Services
`
`The AIA legislative history explains that the definition of a covered
`
`business method patent was drafted to encompass patents “claiming
`
`
`
`11
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`activities that are financial in nature, incidental to a financial activity or
`
`complementary to a financial activity” and that “financial product or
`
`service” should be interpreted broadly. 157 Cong. Rec. S5432
`
`(daily ed. Sept. 8, 2011) (statement of Sen. Schumer).
`
`Petitioner argues that claims 1–24 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 argues: “As discussed below, the ’357 Patent does not meet this
`
`definition [of a covered business method patent] because it is directed to a
`
`technological invention.” Prelim. Resp. 6.
`
`Accordingly, we are persuaded that claims 1–24 are directed to
`
`financial products or services.
`
`3. Claims 1–24 Are Not Directed to a Technological Invention
`
`The definition of “covered business method patent” in § 18(d)(1) of
`
`the AIA excludes patents for “technological inventions.” AIA, 125 Stat. at
`
`331. For guidance, we look to 37 C.F.R. § 42.301(b), which defines the
`
`term “technological invention” and requires a case-by-case consideration of
`
`“whether the claimed subject matter as a whole recites a technological
`
`feature that is novel and unobvious over the prior art; and solves a technical
`
`problem using a technical solution.” The following claim drafting
`
`techniques, for example, typically do not render a patent a “technological
`
`invention”:
`
`(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
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`(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, 48,763–64 (August
`
`14, 2012). Therefore, to qualify under the “technological invention”
`
`exception to covered business method patent review, it is not enough that the
`
`claimed invention makes use of technological systems, features, or
`
`components.
`
`
`
`Petitioner contends that the ʼ357 patent is not directed to a
`
`technological invention. Pet. 9–12. 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
`
`that the ʼ357 patent does not claim an improvement in computer technology.
`
`Id.
`
`Petitioner contends that claim 13 is “merely claim 1 masquerading as
`
`a system claim.” Id. Therefore, the function of the claimed rate engine is
`
`the same as in claim 1, and the “mere” recitations of rate engine, computer
`
`interface, and database are not sufficient to make claim 13 a technological
`
`invention. Id. Petitioner further contends that the ʼ357 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 “technical
`
`problem” according to Petitioner. Id.
`
`Patent Owner responds that the claims of the ʼ357 patent, as a whole,
`
`recite a novel and nonobvious technical feature. Prelim. Resp. 21. Patent
`
`
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`13
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`Owner contends the ’357 patent discloses novel and unobvious “hardware
`
`and/or software elements,” such as the claimed rate engine. Id. Patent
`
`Owner also contends that the patent solves a technical problem with a
`
`technical solution: “providing buyers accurate information at any time
`
`during the online auction about the true shipping costs for their items.” Id.
`
`at 22 (emphasis omitted).
`
`We are not persuaded by Patent Owner’s argument. “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,” typically is
`
`not enough to show a technological invention. Office Patent Trial Practice
`
`Guide, 77 Fed. Reg. at 48,764. Nor is “[r]eciting the use of known prior art
`
`technology to accomplish a process or method, even if that process or
`
`method is novel and non-obvious.” Id. The recitations of generic computer
`
`elements in the ʼ357 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
`
`ʼ357 patent, as claimed, does not solve a technical problem using a technical
`
`solution and, thus, is not a technological invention. Accordingly, the ’357
`
`patent is eligible for covered business method patent review.
`
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`D. Claims 1–24 Are More Likely Than Not Unpatentable Under 35 U.S.C.
`§ 101
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`1. Overview
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`Section 101 of the Patent Statute (35 U.S.C. § 101) defines the subject
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`matter eligible for patenting. The Supreme Court has “long held that this
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`provision contains an important implicit exception: Laws of nature, natural
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`CBM2014-00125
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`phenomena, and abstract ideas are not patentable.” Alice Corp. Pty. Ltd. v.
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`CLS Bank Int’l, 134 S.Ct. 2347, 2354 (2014) (citing Assoc. for Molecular
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`Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2116 (2013) (internal
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`quotation marks and brackets omitted)). “The ‘abstract ideas’ category
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`embodies the longstanding rule that ‘[a]n idea of itself is not patentable.’”
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`Alice Corp., 134 S.Ct. at 2355 (citing Gottschalk v. Benson, 409 U.S. 63, 67
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`(1972) (quotations omitted)).
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`In Alice Corp., the Supreme Court emphasized the importance of the
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`so-called “Mayo framework,” which provides “a framework for
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`distinguishing patents that claim laws of nature, natural phenomena, and
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`abstract ideas from those that claim patent-eligible applications of those
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`concepts.” Id. (citing Mayo, 132 S.Ct. at 1298). Under the Mayo
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`framework, “[w]e must first determine whether the claims at issue are
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`directed to a patent-ineligible concept.” Id. Next, “we consider the elements
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`of each claim both individually and ‘as an ordered combination’ to
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`determine whether the additional elements ‘transform the nature of the
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`claim’ into a patent-eligible application.” Id. (citing Mayo, 132 S.Ct. at
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`1297–1298).
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`Under Mayo, to be patentable, a claim must do more than simply state
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`the law of nature or abstract idea and add the words “apply it.” Mayo, 132
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`S.Ct. at 1294; Benson, 409 U.S. at 67. Furthermore, “the mere recitation of
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`a generic computer cannot transform a patent-ineligible abstract idea into a
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`patent-eligible invention.” Alice Corp., 134 S.Ct. at 2358. “Thus, if a
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`patent’s recitation of a computer amounts to a mere instruction to
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`‘implemen[t]’ an abstract idea ‘on . . . a computer,’ that addition cannot
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`impart patent eligibility.” Id. (internal citation omitted).
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`A challenged patent claim, properly construed, must incorporate
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`enough meaningful limitations to ensure that it claims more than just an
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`abstract idea and not just a mere “‘drafting effort designed to monopolize the
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`[abstract idea].’” Alice Corp., 134 S.Ct. at 2357 (quoting Mayo, 132 S.Ct. at
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`1297). “Simply appending conventional steps, specified at a high level of
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`generality,” is not “enough” for patent eligibility. Id. (quoting Mayo, 132
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`S.Ct. at 1292). Thus, we analyze the claims of the ʼ357 patent to determine
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`whether the claims embody a patent-eligible application of an abstract idea
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`or merely nothing more than the abstract idea itself.
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`2. Whether Claims 1–24 Are Directed To An Abstract Idea
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`In accordance with the Supreme Court’s “framework for
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`distinguishing patents that claim . . . abstract ideas from those that claim
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`patent-eligible applications of those concepts,” we must first “determine
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`whether the claims at issue are directed to one of those patent-ineligible
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`concepts.” Alice Corp., 134 S.Ct. at 2355. In Alice Corp., the Supreme
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`Court determined that the claims at issue were “drawn to the concept of
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`intermediated settlement,” i.e., the use of a third party to mitigate settlement
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`risk. Id. at 2356. Furthermore, the Supreme Court determined that “[l]ike
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`the risk hedging in Bilski, the concept of intermediated settlement is ‘a
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`fundamental economic practice long prevalent in our system of commerce.’”
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`Id. (citations omitted). With respect to the first step of the “Mayo
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`framework,” the Supreme Court concluded in Alice Corp. that “there is no
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`meaningful distinction between the concept of risk hedging in Bilski and the
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`concept of intermediated settlement” in Alice Corp., and that “[b]oth are
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`squarely within the realm of ‘abstract ideas’ as we have used that term.”
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`Alice Corp., 134 S.Ct. at 2357.
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`As described by the Patent Owner, “[t]he [’]357 Patent describes
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`novel systems and methods for improving auction-based online commerce,
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`such as facilitating advance, rapid, accurate estimation of shipping costs
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`between a seller and the winner of an online auction.” Prelim. Resp. 6.
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`Petitioner contends that the abstract idea claimed in the patent is
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`“determining shipping and tax rates for an online auction item.” Pet. 18.
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`These descriptions are consistent with the ʼ357 patent Specification, which
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`explains “a need exists for the parties to online auctions to have access to
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`better information in advance about the real shipping costs for their items.”
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`Ex. 1001, col 1, ll. 47–50.
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`Petitioner asserts the patent claims mental steps that humans have
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`done for many years. Pet. 18. Patent Owner denies that the claimed
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`invention can be performed by the human mind or on a piece of paper.
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`Prelim. Resp. 34. However, Patent Owner goes on to state, “while it is
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`theoretically conceivable that, given enough time, paper, and ink, a human
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`could calculate accurate shipping costs based on the various claimed inputs,
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`no human could do that in the time or manner contemplated by the claims.”
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`Id. at 35.
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`We are not persuaded on the present record by Patent Owner’s
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`argument that the ʼ357 patent does not claim an abstract idea. Under Alice
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`Corp., the concept of intermediated settlement was determined to be “a
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`fundamental economic practice long prevalent in our system of commerce.”
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`134 S.Ct at 2356 (quoting Bilski, 561 U.S. at 611). This led the Court to
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`conclude that intermediated settlement, like the concept of “hedging” in
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`Bilski, is an abstract idea under § 101. Id. We see little difference between
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`determining shipping and tax rates for auctioned items and the type of
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`fundamental economic practices considered to be abstract ideas in Alice
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`Corp. and Bilski. We conclude on the present record, therefore, that the ʼ357
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`patent claims are directed to an abstract idea.
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`3. Whether Claims 1–24 are Not Meaningfully Limited Under 35
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`U.S.C. § 101
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`The second step of the Supreme Court’s “Mayo framework” requires
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`that we consider the elements of the claim and determine whether there is an
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`“element or combination of elements that is ‘sufficient to ensure that the
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`patent in practice amounts to significantly more than a patent upon the
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`[ineligible concept] itself.’” Alice Corp., 134 S.Ct. at 2355 (quoting Mayo,
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`132 S.Ct. at 1294).
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`Petitioner focuses its § 101 arguments on claims 1 and 13. Pet. 18–
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`24. The main argument is that the claims are not meaningfully limited
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`because they are directed to activities that can be performed in the human
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`mind or by a human using pencil and paper. Id. at 19. Patent Owner
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`addresses this argument indirectly, in response to other arguments (i.e.,
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`“technological invention”), by emphasizing the “hardware and/or software”
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`aspects of the claims. Prelim. Resp. 21. These include the data storage,
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`retrieval, manipulation, analysis, and communication features, including the
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`so-called “rate engine” that provides the shipping rate calculations. Id.
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`We are not persuaded on the present record by Patent Owner that
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`these are meaningful limitations on the abstract idea. As the Supreme Court
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`held in Gottschalk v. Benson, 409 U.S. 63 (1972), claims do not become
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`patent-eligible under § 101 simply for reciting a known, general purpose
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`computer. See id. at 67 (inva