Motion to Dismiss Granted Where Patent Claimed Unpatentable Subject Matter

September 15, 2014

Amazon.com ("Amazon") filed a motion to dismiss Tuxis Technologies, LLC's ("Tuxis") complaint for failure to state a claim. Tuxis alleged infringement of the 6,055,513 ("the '513 patent") against Amazon. As explained by the district court, the '513 patent relates to a method of upselling. The term "upsell" is defined in the patent to be "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." The patentee defined "real time" as "during the course of the communication initiated with the primary transaction or primary interaction."

Amazon moved to dismiss, asserting that the '513 patent's claims are invalid because they do not claim patent-eligible subject matter under 35 U.S.C. ยง 101. After analyzing the recent case law on section 101 of the Patent Act, including Alice Corp., the district court found that "[i]n applying the framework set out above, it is clear that the claim 1 of the '513 patent is drawn to unpatentable subject matter. It claims the fundamental concept of upselling--a marketing technique as old as the field itself. While the additional limitations of the claim do narrow its scope, they are insufficient to save it from invalidity."

The district court went on to find that "[n]one of the limitations recited by Tuxis, however, are "meaningful." Ultramercial, 722 F.3d at 1344. Although the claim elements have some narrowing effect on the scope of claim 1, the practical effect is insubstantial, as evidenced by the categories of upselling provided by Tuxis that are not covered by claim 1. Six of the twelve categories reserved for the public involve recommending a second item without using the identity of the good or service purchased in the initial transaction (D.I. 12, pp. 8-9 (numbers 2, 3, 5, 6, 8, and 9)), and two more do not rely on information relating to the customer. (Id. (numbers 11 and 12)). The four remaining categories are: upselling not based on remote commerce, upselling not conducted in real time, upselling based on loyalty card information, and upselling based on non-targeted pushed goods. (Id. (numbers 1, 4, 7, and 10, respectively)). Reserving for the public these narrow methods of upselling does not "meaningful Ely]" limit the abstract idea. Allowing claim 1 would permit the general concept of upselling to be patented, which pre-empts its use in all fields and "effectively grant[s] a monopoly over an abstract idea." Bilski, 130 S. Ct. at 3231."

The district court also found that "claim 1 lacks an 'inventive concept' There is no '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 ' Alice Corp, 573 U.S. ___, at (slip op., at 7) (alteration in original). Claim 1 requires nothing more than suggesting an additional good or service, in real time over an electronic communications device, based on certain information obtained about the customer and the initial purchase. Shrewd sales representatives have long made their living off of this basic practice."

Finally, the district court rejected the argument that the recommendation of the upsell "in real time" using a computer could save the claim from invalidity. "Moreover, the fact that the upsell item can be recommended "in real time" using a computer does not save claim 1 because the computer must be 'integral' and facilitate 'the process in a way that a person making calculations or computations could not.'"

Accordingly, the district court dismissed the complaint because there was clear and convincing evidence that claim 1 of the '513 patent was direct toward an unpatentable abstract idea.

Tuxis Technologies, LLC v. Amazon.com, Inc., Case No. 13-1771-RGA (D. Del. Sept. 2014)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.