OIP Technologies, Inc. v. Amazon, Inc.

Docket No. 2012-1696

June 11, 2015

Brief Summary: DC decision that claims to computer-implemented “method[s] of pricing a product for sale” were no more than abstract ideas and patent ineligible affirmed.

Summary: OIP appealed DC decision that US 7,970,713, which claims computer-implemented “method[s] of pricing a product for sale”, “claims no more than an abstract idea coupled with routine data-gathering steps and conventional computer activity” (“the claims merely ‘describe what any business owner or economist does in calculating a demand curve for a given product”). The FC opinion summarizes claim 1 as having “the following relevant limitations: (1) testing a plurality of prices; (2) gathering statistics generated about how customers reacted to the offers testing the prices; (3) using that data to estimate outcomes (i.e. mapping the demand curve over time for a given product); and (4) automatically selecting and offering a new price based on the estimated outcome”, and explains that the “dependent claims add various computer elements such as including webpages”. The opinion explains that “[p]atent eligibility under 35 U.S.C. 101 is an issue of law reviewed de novo” (Accenture Global Servs., FC 2013). Under the Alice test (US, 2014), the court must “first determine whether the claims at issue are directed to a patent-ineligible concept” (e.g., an abstract idea) and then “consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” The “offer based pricing” encompassed by the claim was determined to be “similar to other ‘fundamental economic concepts’ found to be abstract ideas by the Supreme Court and this court”. It was determined that “[a]t best, the claims describe the automation of the fundamental economic concept of offer-based price optimization through the use of generic-computer functions” (“the prosecution history and the specification emphasize the key distinguishing feature of the claims is the ability to automate or otherwise make more efficient traditional price-optimization methods”) and “relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible.” And “[l]ike the claims in Mayo, which added only the routine steps of administering medication and measuring metabolite levels for the purposes of determining optimal dosage, here the addition of steps to test prices and collect data based on customer reactions does not add any meaningful limitations to the abstract idea” (Mayo, US 2012; see also Ass’n for Mol. Path., US 2013). OIP’s reliance on Diamond v. Diehr (US 1981; use of computer program does not preclude patentability of the invention as a whole) could not save its claims because it “involved ‘a well-known’ mathematical equation…used…in a process designed to solve a technological problem in ‘conventional industry practice” (as it “could not save the claims in Alice”). Thus, the DC decision was affirmed. In a concurring opinion, Judge Mayer “commend[ed] the district court’s adherence to the Supreme Court’s instruction that patent eligibility is a ‘threshold’ issue…by resolving it at the first opportunity” (on the pleadings).

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