The PTAB finds that the petitioner did not show that a patent claiming internet-based transactions is not a technological invention and denied CBM review on that basis

October 9, 2014

In GSI Commerce Solutions, Inc. v. Lakshmi Arunachalam, GSI filed a petition seeking covered business method patent review of U.S. Patent No. 8,346,894 relating to "facilat[ing] real-time two-way transactions, as opposed to deferred transactions, e.g., e-mail." CBM2014-00101. The Petitioner filed its petition seeking invalidity based on lack of written description, lack of enablement, indefiniteness and obviousness. On October 7, 2014, the Board denied the CBM review finding that the petitioner failed to establish that the claimed inventions were not technological inventions under 37 C.F.R. ยง 42.301(a). Notably, the Board's decision was made without any briefing from the patent owner on this issue, who elected not to file a preliminary response.

In reaching its decision to deny CBM review, the Board rejected the petitioner's argument that the '894 patent does not recite a technological invention because "claim 2 recites only known technologies, such as a processor, a machine readable storage device, a signal, an application, a network, the Web, an object, and a data structure." The petitioner further argued that the '894 patent recites a combination of structures that achieve normal, expected and predictable results by "allowing a user to complete from a Web application the types of transactions he or she can already perform in person."

The Board explained that even if this were true, the petitioner failed to "address whether the claims are drawn to solving a technical problem using a technical solution:"

For example, claim 2 recites that the apparatus accepts a request from a point-of-service (POSvc) application for a real-time transaction specific to the Web merchant's service. Ex. 1001, col. 10, ll. 44-47. Claim 2 next recites that the apparatus utilizes an object in the Web application and the information entries and attributes of an individual data structure in the point-of-service POSvc application to connect to the value-added network service of the Web merchant. Id. at col. 10, ll. 48-55. Claim 2 further recites that the connection is executed by routing a data structure with information entries and attributes at the application layer of the OSI model, as distinguished from routing the data structure at the transport or network layers of the OSI model. Id. at col. 10, ll. 56-65. The recitation in claim 2 of using an object and information entries and attributes to complete the connection at a specific layer of the OSI model appears to be a technical solution. As such, the claim is drawn to solving the technical problem of connecting to a Web merchant's service.

The Board distinguished its holding with that in CBM2013-00013 where the Board instituted CBM review over a patent that had the same specification as the '894 patent. According to the Board, the critical distinction is that the two related patents claimed different subject matter. For example, the related patent at issue in CBM2013-00013 claimed a method of transferring funds including the steps of "providing a Web page with POSvc applications that can be selected, accepting signals indicating the selection of the POSvc application and other information, and transferring funds using 'a routed transactional data structure.'" The Board further noted that in CBM2013-00013, they were not persuaded that claims reciting steps of transferring funds from checking to savings using a "routed transactional data structure" disclosed a particular technical implementation.

**********

The Board's decision illustrates that, in determining whether a patent is eligible for CBM review, in the words of the Federal Circuit, "the name of the game is the claim." In re Hiniker Co., 150 F.3d 1362, 1369 (Fed. Cir. 1998). Here, despite sharing the same specification, the Board determined that the claims of one patent were not technological inventions while the claims of a related patent were technological inventions.

GSI Commerce Solutions, Inc. v. Lakshmi Arunachalam, Case CBM2014-00101 (PTAB Oct. 7, 2014) (Paper 10) (McNamara, J.).

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. The authors represent inventors, patent owners and technology companies in patent licensing and litigation in U.S. District Courts and in the United States Patent and Trademark Office, including numerous IPRs currently pending before the PTAB. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Greg Cordrey at 949.623.7236 or GCordrey@jmbm.com.