Use of Generic Computer Functions to Make Traditional Economic Method More Efficient Does Not Confer Patent Eligibility


OIP Techs., Inc. v., Inc., ___F.3d ___ (Fed. Cir. June 11, 2015) (Taranto, Mayer (concurring), HUGHES) (N.D. Cal.: Chen) (4 of 5 stars)

Federal Circuit affirms judgment on the pleadings that patent was invalid under section 101.

The claims addressed "the concept of offer-based price optimization," slip op. at 6, which is a fundamental economic concept and an abstract idea under the first part of Alice. "[T]hat the claims do not preempt all price optimization or may be limited to price optimization in the e-commerce setting do not make them any less abstract."  Id.

Beyond that idea, the claims merely recited "well-understood, routine conventional activities" such as sending electronic messages, storing results on a machine-readable medium, and using a computerized system to determine estimated outcomes. In addition, the claims were "exceptionally broad, and the computer implementation limitations do little to limit their scope."  Slip op. at 7. Such elements, taken individually or together, do not transform the abstract idea into a patent-eligible application—at best, they simply automated the abstract idea "through the use of generic-computer functions."  Id. That the claims' use of computers might enhance the efficiency of traditional price-optimization methods did not make the claims patent-eligible. Further, steps that required presenting offers to potential customers, or gathering statistics about customers' responses, were "routine, conventional data-gathering activities that do not make the claims patent eligible." Id. at 8. The patentee's reliance on Diamond v. Diehr, 450 U.S. 175 (1981), could not save the claims, as Diehr must be read in view of Alice, and the claims more closely resembled those in Alice.

Concurrence: Judge Mayer commended the district court for disposing of the patent eligibility issue on the pleadings, emphasizing that patent eligibility is a "threshold" issue.