Case Dismissed Seven Months After Filing Because Claims Recited Ineligible Subject Matter

In OIP Technologies, Inc. v. Amazon.com, Inc., No. 12-1696 (Fed. Cir. June 11, 2015), the Federal Circuit struck down claims directed to the concept of “offer based pricing.” The district court granted Amazon’s FRCP 12(b)(6) motion to dismiss for failure to state a claim, which the Court upheld, relying on Alice Corp. Pty. Ltd v. CLS Bank Int'l, 134 S. Ct. 2347 (2014). The case was dismissed merely seven months after filing, and just at the start of discovery and well before claim construction.

Applying the two-part Alice test, the Court first found that the concept of “offer based pricing” was similar to other “fundamental economic concepts” found to be unpatentable abstract ideas. Specifically, the Court noted that the “key distinguishing feature” of the claims was “the ability to automate or otherwise make more efficient traditional price-optimization methods.” Second, the additional elements recited in the claims—“conventional computer activities or routine data-gathering steps[,]” which used the computer only to perform routine tasks more quickly and accurately—were merely “well-understood, routine conventional” activities insufficient to confer patent eligibility.

Judge Mayer concurred, adding that, in his opinion, the failure to recite statutory subject matter is a “basic deficiency” that was properly determined following a motion for failure to state a claim in order to conserve litigation costs.