Interesting set of motions in an E.D. Texas case that I’ve been following where one of my former students – Adam Baumli – is representing NexusCard who is asserting United States Patent No. 5,924,080 against a set of retailers.
Retailer defendants petitioned the PTO for Covered-Business-Method-Review and then immediately petitioned for a stay of the district court proceeding under AIA Section 18(b). Although judges generally have the power to stay civil cases, Section 18(b) makes it easier to obtain a when a CBM (“transitional proceeding”) is pending. The big problem for the defendants here is the Federal Circuit’s clear holding that the proceeding is not pending (and Section 18(b)) doesn’t apply until the PTO grants the petition. See Intellectual Ventures v. JPMorgan (Fed. Cir. 2015).
The CBM petition challenges the patent claims under 35 U.S.C. 101 — arguing that they lack subject matter eligibility under Alice Corp and that the patent qualifies for CBM review because it claim a method for using a financial product and is not a technological invention. KrogerCBMPetition.
Claim 1 itself is a long one with parts (a) through (q) — all relating to a method of member coupon processing:
1. The method of processing and applying merchandise discounts to a consumer’s purchases by providing a computerized membership system, said membership including a plurality of consumer members, a plurality of point of purchase merchant members, a plurality of manufacturer members, and a centralized system provider, said membership system having:a point of purchase merchant member computer terminal and computer and a centralized provider’s computer, said provider’s computer having a database for the storage and retrieval of information, said database storing information regarding point of purchase merchant members, manufacturer members, and consumer members, in predetermined files, at least some of said information being entered into the system at the time of a member establishing membership in said system andcommunication means, said communications means providing real time communication between said member merchants’ computer terminal and said provider’s computer,
comprising the steps of:a. providing consumer members with individual identification codes, said identification codes accessing said databases;b. storing said consumer member identification codes on said provider’s computer in a consumer database;c. providing each consumer member with a membership ID, said membership ID having memory storage means, said memory storage means containing at least said consumer identification code;d. storing merchandise information provided by said manufacturer members in a manufacturer member database in said provider’s computer, said merchandise information including at least a merchandise identification code and the discount on predetermined merchandise,e. displaying to consumers indicia, said indicia identifying point of purchase merchandise subject to a price discount,f. transporting, by said consumer, consumer selected discounted and non-discounted point of purchase merchandise to a purchase location at said merchant member to form a collection of transported merchandise, each of said transported merchandise having a merchandise identification code,g. scanning merchandise identification codes of each of said transported merchandise, at said communication means,h. scanning said consumer ID,i. uploading said scanned consumer identification code, from said merchant member, through said communication means to said provider’s computer,j. comparing said consumer identification code with consumer identification codes stored in said provider’s computer and verifying said consumer’s membership,k. uploading said merchandise identification code for each of said scanned merchandise from said merchant member’s computer, through said communication means to said provider’s computer,l. comparing said uploaded merchandise identification codes with the identification codes of merchandise subject to a price discount,m. computing the discounts on said merchandise subject to a price discount,n. downloading to said merchant’s computer through said merchant communication means, the discounts on said merchandise subject to a price discount,o. printing a sales slip for said member consumer including the discounts for said merchandise subject to a price discount,p. sorting and storing in said provider’s databases said uploaded data on said consumer and said merchandise purchased by said consumer,q. storing merchant member sales data on said merchant member computer,wherein said provider maintains and processes, in real time, discounts provided by manufacturer members to member consumers without said member merchant being required to process said discounts or member consumers being required to present coupons or file rebates to obtain said discounts.