The Software IP Report

Federal Circuit Affirms Patent-ineligibility of Online Retailing Pricing Claims

By Charles Bieneman

Categories: Patent Eligibility, Software Patents, The Software IP Report

In OIP Techs., Inc. v., No. 12-CV-1233 (Fed. Cir. June 11, 2015), the Federal Circuit agreed with a lower court that U.S. Patent No. 7,970,713 failed to claim patentable subject matter under 35 U.S.C. § 101, but rather “merely [used] a general-purpose computer to implement the abstract idea of ‘price optimization’.”

The ‘713 patent is directed to a method for price optimization of merchandise. Claim 1 is representative, reciting a method whereby a plurality of prices for a single product are tested among numerous potential buyers to gather price data informing a merchant of the optimum price of the product.

The Federal Circuit held that the ‘713 patent claims at best “the fundamental economic concept of offer-based price optimization.” Applying Alice, the court found that the invention both is directed to a fundamental abstract concept and that there fails to be any meaningful inventive aspect limiting the overarching economics concept that the patent so describes. The court drew parallels between the instant case and Alice, declaring that “relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent-eligible.”

Judge Mayer’s concurrence focused on a procedural objection made by the patent owner, which had argued that dismissal on a Fed. R. Civ. P. 12(c) Motion for Judgment on the Pleadings was inappropriate. To the contrary, patent-eligibility questions present “the sort of ‘basic deficiency,’ that can, and should, ‘be exposed at the point of minimum expenditure of time and money by the parties and the court.’”