On March 25, 2015, a federal judge in Delaware dismissed a patent infringement case against Amazon.com Inc., saying that the patent at issue covered an abstract idea that was not protectable.
Tuxis Technologies, LLC sued Amazon in 2013, alleging infringement of its patent for a method of upselling using an electronic communications device.
An “upsell,” as defined in the patent, is “an offer or provision of a good or service which is selected for offer to the customer and differs from the good or service for which the primary contact was made.”
Amazon asserted that the patent’s claims were invalid because they did not claim patent-eligible subject matter under 35 U.S.C. § 101.
Section 101 is the fundamental statement of patentability under US law and provides that:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
The US Supreme Court has recognized “three narrow categories of subject matter outside the eligibility bounds of § 101 — laws of nature, physical phenomena, and abstract ideas.”
The recent Supreme Court case of Alice Corp. Pty. Ltd. v. CLS (“Alice”) considered an allegedly abstract idea implemented by use of a computer.
Amazon contended that “offering something to a customer based on his or her interest in something else” was a concept that “has been a cornerstone of commercial activity since time immemorial.”
The court agreed, finding (when dismissing claim one of the patent last September) that the fundamental concept of upselling was “a marketing technique as old as the field itself.”
Tuxis argued that the claims of the patent were narrower than the abstract concept of upselling, applying “negative rules” to exclude from the additional items offered previous purchases by the consumer.
In the latest ruling, dismissing the case as a whole, the judge rejected this argument saying:
The fundamental premise behind upselling is determining what a customer wants or needs based on information learned about that customer. This includes information about what the customer has already purchased or has declined to purchase in the past.
The judge concluded that Tuxis’s alleged invention failed to add an “inventive concept” that was significantly more than the abstract idea, and thus failed the Alice test.
Significance of the Ruling
The case underscores the continuing role that Supreme Court’s Alice decision is playing in shaping patent litigation.
The case was Tuxis Technologies, LLC v. Amazon.com, Inc., Civil Action No. 13-1771-RGA (D.Del., March 25, 2015).