On March 18, 2015, Delaware District Court Judge Richard G. Andrews granted defendant’s motion to dismiss two patents that were related to e-commerce activities. At a high level, the patents-in-suit relate to a sales transaction that allows buyers to purchase items at a discounted price based on the buyer’s performance during a “Price-Determining-Activity.” For example, a buyer’s ultimate price would be determined by the buyer’s performance in an electronic board game or crossword puzzle.
Judge Andrews applied the two-step Alice framework finding that the patents were not drawn to patent-eligible subject matter because the patents claim the abstract idea of “sales transaction,” which is a fundamental economic concept. The court rejected plaintiff’s argument that the claims were not directed to abstract ideas because similar e-commerce models have been commercialized by Amazon and Ebay. The court reasoned that “even if some of these models are patented, the patents were granted prior to the Supreme Court's decision inAlice, and have not, to the court's knowledge, been challenged for invalidity. There are many products and services that are commercially available that are not directed to patent-eligible subject matter.”
In evaluating whether the claims contained an “inventive concept,” the court found that “[t]he addition of an auction and a competitive activity to a sales transaction is nothing more than the addition of 'well-understood, routine, conventional activity. . . . Reliance on an intermediary activity to determine price has been a practice in sale negotiations throughout history, long before the existence of the Internet or computers. For example, using a coin flip to decide a contract term, where the parties agree beforehand that both will be bound by the result.'”
Priceplay.com Inc. v. AOL Advertising Inc., No. 1:14-cv-00092 (D. Del. March 18, 2015) (Andrews, J.).