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Judge Andrews Invalidates “Upselling” Patent Claim under Section 101

Judge Andrews has invalidated claim 1 of Tuxis Tech’s Patent No. 6,055,513 under 35 U.S.C. 101 at the pleadings stage of Tuxis’ infringement suit against Amazon. The patent is directed to what the parties and the Court characterized as “upselling,” i.e. offering a second product to a buyer who has already made a decision to purchase a first product. Judge Andrews found it “clear that the claim 1 of the ‘513 patent is drawn to unpatentable subject matter. It claims the fundamental concept of upselling—a marketing technique as old as the field itself. While the additional limitations of the claim do narrow its scope, they are insufficient to save it from invalidity.” Tuxis Techs., LLC v. Amazon.com, Inc., C.A. No. 13-1771-RGA, Memo. Op. at 4 (D. Del. Sept. 3, 2014).

The parties agreed that upselling is an abstract idea, but disagreed as to whether the claim at issue was meaningfully limited and thus does not pre-empt use of the abstract idea. Id. at 5. On this point, Judge Andrews found that after “analyzing the additional limitations imposed by claim 1 of the ‘513 patent, the idea of upselling has not been sufficiently limited to prevent the claim from ‘cover[ing] the full abstract idea itself.’” Id. at 5-6. Judge Andrews found that none of the limitations identified by the patentee were “meaningful” and allowing the claim to survive would “permit the general concept of upselling to be patented, which pre-empts its use in all fields and ‘effectively grant[s] a monopoly over an abstract idea.’” Id. at 6-7.

Judge Andrews further explained that claim 1 lacked an “inventive concept.” His Honor illustrated this point with an example showing how “[s]hrewd sales representatives have long made their living off of this basic practice”:

A man enters a clothing store to purchase a new pair of dress slacks (“a user initiated primary transaction for the purchase of a good or service”). The sales representative assists the man in finding a pair of pants, and in the process learns that the man is a banker (“a second data element relating to the [identity of the customer]”). Knowing that suspenders are fashionable in the banking profession, the sales representative offers the banker a pair of suspenders that match his pants (”utilizing at least in part the primary transaction data including the identity of the good or service of the primary transaction and the second data element [related to the customer] and determining at least one item for a prospective upsell”). The customer agrees with the sales representative and purchases the suspenders (“receiving an acceptance of the offer … in real time”). This type of marketing strategy is at the heart of claim 1 and has been practiced as long as markets have been in operation.

Id. at 8. Accordingly, Judge Andrews found claim 1 invalid and granted Amazon’s motion to dismiss.

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