Reverse Auction Claims Found Ineligible for Patent Protection CBM2014-00119


Takeaway: Claims involving a conventional system interface, routine data gathering, and routine calculations will likely be found patent ineligible under § 101.

In its Final Written Decision, the Board found that all of the challenged claims (1-39) of the ’211 Patent are unpatentable under 35 U.S.C. § 101, and denied Patent Owner’s Motion to Amend. The ’211 Patent is drawn to a method of conducting a telephone- or Internet-based reverse auction, where the reverse auction is transmitted to users on a medium.

The Board agreed with the parties that none of the claims needed construction for the puroses of this proceeding, and applied ordinary meaning to the terms used in the claims.

The Board then reviewed the merits of the one ground of unpatentability – that the challenged claims recite subject matter that is not patentable under 35 U.S.C. § 101. The Board stated that to determine whether a patent claims ineligible subject matter, it engages in a two-step process: (1) determination of whether the claims at issue are directed to a patent ineligible concept (i.e., laws of nature, natural phenomena, or abstract ideas): and (2) determination of whether the elements contain an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application.

Patent Owner argued that the primary inventive concept of the ’211 Patent is the use of preliminary indicators to reduce a preliminary available quantity of products before a sale of a unit is complete. Patent Owner provided expert testimony to support this argument. Petitioner responded that the inventive use of preliminary indicators is itself an abstract idea.

The Board found this case analogous to OIP Techs., Inc. v., Inc., 788 F.3d 1359 (Fed. Cir 2015), which found that claims drawn to testing a plurality of prices, gathering statistics generated about how customers reacted to the offers, testing the price, using the data to map the demand curve for a given product, and automatically selecting and offering new prices based on the estimated outcome were found to recite ineligible subject matter. Specifically, the Board found that the claims involve a conventional system interface, routine data gathering, and routine calculations. The Board also noted that the specification states that the producer conducting the auction can carry out the inventive concept mentally.

The Board then reviewed Patent Owner’s Motion to Amend.  The Board found that the additional elements added in the proposed claims do not impose meaningful limits on the abstract idea presented by the original claims. Therefore, the Board denied the Motion.

The Jewelry Channel, Inc. USA d/b/a Liquidation Channel v. America’s Collectibles Network, Inc.
, CBM2014-00119
Paper 40: Final Written Decision
Dated: October 16, 2015
Patent 8,370,211 B2
Before: Linda M. Gaudette, Brian J. McNamara, and David C. McKone
Written by: McNamara