Google Inc. et al. v. Priceplay.com, Inc.

Addressing threshold issues for instituting a covered business method (CBM) review, in two recent related cases, the Patent Trial and Appeal Board (PTAB or Board) found each of the two patent cases eligible for CBM review, concluding that the requirements under § 18 of the America Invents Act (AIA) had been met based on the record presented. Google Inc. et al. v. Priceplay.com, Inc., Case No. CBM2015-00024 (PTAB, May 18, 2015) (Giannetti, APJ.); Google Inc. et al. v. Priceplay.com, Inc., Case No. CBM2015-00025 (PTAB, May 18, 2015) (Giannetti, APJ).

Under AIA § 18(d)(1), a covered business method patent is “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.” As part of the analysis, the Board considers “whether the claimed subject matter as a whole recites a technological feature that … solves a technical problem using a technical solution” to determine whether a patent is for a “technological invention” under the statute.

The two patents at issue in these decisions are directed to online sales transactions, specifically to online auctions where buyer participation in an intermediary activity affects the product purchase price in the online auction. The petitioner argued that the claims in both patents were directed to a sales transaction that was financial in nature and not directed to a technological invention. The Board agreed. In both cases, the Board concluded that the underlying patent met the requirements under the statute for purposes of instituting the CBM.

The Board concluded that the “financial product or service” requirement was met based on the available record. Important to the Board’s analysis was the patent specification and claims. In each case, the patent specification explicitly stated that “the present invention relates … to systems and methods wherein various forms of competition and/or entertainment are used to determine transaction prices between buyers and sellers.” The Board concluded that the claims in both patents confirmed the financial nature of the underlying invention, finding all of the claims directed to determining the sale price of a product at an auction (IP Update, Vol. 18, No. 4).

The Board determined that each case was not a patent for a technical solution to a technical problem, rejecting the patent owner’s argument that the patent claims were “unrelated to financial activities.” In each case, the Board dismissed the patent owner’s argument by reliance on the specification and claims. The Board explained that the patent specification characterized the invention as a business model, concluding that the patent claims as a whole failed to recite a technological feature. The Board found no convincing evidence from the patent owner to rebut the petitioner’s showing that the claimed subject matter as a whole was not directed to a technological invention.

The Board concluded that the petitioner would more likely than not prevail on its challenge based on 35 U.S.C. § 101. In both cases, the petitioner argued that the patent specification itself stated that the invention was directed “to a business model based on the abstract concept of price determination.” According to the patent owner, the claims were patent-eligible under § 101 for being directed to “a patent-eligible e-commerce concept and not a mathematical formula, fundamental truth, or [a] fundamental economic practice long prevalent in … commerce.” The Board disagreed, concluding that claims directed to similar e-commerce system have been held to be patent ineligible under § 101.

The patent owner also argued that the additional elements of the claims, when considered individually and as an ordered combination, greatly narrowed the abstract concept. The Board again disagreed that the narrowing claim limitations made on the record were sufficient to transform the abstract concept into patent-eligible subject matter, concluding that the patent owner’s analysis amounted to “stacking” of two abstract ideas. For these reasons, the Board found both patents eligible for CBM review.