A district court recently granted a defendant’s motion for judgment on the pleadings, holding that a patent directed to an online auction is invalid as patent-ineligible under § 101. Under the Supreme Court’s two-step analytical framework, the court “first determine[s] whether a claim is ‘directed to’ a patent-ineligible abstract idea.” Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1346 (Fed. Cir. 2014). If it is an abstract idea, the court moves to the second step to determine whether there is an ‘inventive concept’. Under the second step, the court “must determine whether the claims contain an ‘element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 714 (Fed. Cir. 2014). Here, the court first determined that the claims at issue were “directed to” the abstract idea of an auction. The court found that, “putting aside the extensive discussion of the auction in the specification, the claims substantively describe an auction and make absolutely clear the [asserted patent] is directed to an auction.” The court further explained that “[l]ike hedging financial risk, intermediated settlement, or using advertising as currency, an auction is a ‘fundamental economic practice long prevalent in our system of commerce.’” Next, the court found that the claims do not add an ‘inventive concept’ under the second step. The plaintiff pointed to several claimed features, including using two-modes in the auction, and only updating a portion of a webpage during the live portion of the auction, as providing the requisite ‘inventive concept’. The court rejected these arguments, finding that these variations were nothing more than “generic Internet implementation of the abstract idea.”

Advanced Auctions LLC v. EBay Inc., 13-cv-1612 (S.D. Cal. March 26, 2015)