PTAB Invalidates Payment Patents Under Section 101 as Divided Federal Circuit Grapples with Whether Alice Is an Emperor with No Clothes

July 29, 2018

The Patent Trial and Appeal Board (PTAB) has invalidated six online payment patents due to unpatentable subject matter in a victory for eBay and PayPal. In a series of final decisions issued on July 23 in six covered business method (CBM) reviews filed by the two companies against XPRT Ventures LLC, the Board ruled that the NPE’s patents are invalid under Alice as unpatentably directed to various abstract ideas based on fundamental economic concepts involving transactions and payments. These decisions follow a fresh bout of Federal Circuit skepticism toward the basic Alice framework itself. Recent court opinions have exposed a sharp divide concerning the impact of February decisions in Berkheimer and Aatrix, which placed limits on early 101 challenges, with Senior Circuit Judge S. Jay Plager going so far as to decry Alice and its progeny as an “incoherent body of doctrine”.

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