Safeway wins patent case with echoes of Alice
Supermarket brand Safeway has scored a victory after a US court rejected claims that it infringed a patent covering a computer program for offering awards.
On Friday (May 29) the US District Court for the Eastern District of Texas, Marshall Division accepted Safeway’s motion for summary judgment that a patent owned by licensing company Kroy IP Holdings was invalid.
The dispute focussed on Kroy’s patent, US number 7,054,830, which centred on a method for providing awards online.
Kroy had accused Safeway of infringing its patent through its Just for U program.
The program enables users to participate in online games and pick up prizes from their nearest Safeway store.
Kroy was granted its patent in May 2006 by the US Patent and Trademark Office and filed its infringement claim at the Texas court in 2012.
Last year, the Patent Trial and Appeal Board rejected Safeway’s petition for an inter partes review to challenge the patent’s validity.
But Judge William Bryson, presiding over the case, granted Safeway’s motion for summary judgment and said the patent covered ineligible subject matter.
According to Safeway, the patent was invalid because “using a computer to apply the ancient idea of incentivising a customer to buy more products does not turn a basic business method into patentable subject matter”.
In his judgment, Bryson agreed.
Citing the US Supreme Court’s decision in Alice v CLS Bank, Bryson said: “The use of incentive award programs in marketing is indistinguishable in principle from the kinds of financial or business operations that were at issue in Alice.
“Although Kroy emphasises the importance of use of computers in its invention, the fact that the claimed system and methods employ computers or a network such as the internet is clearly insufficient to make the claims patent eligible,” he added.
William Overend, partner at law firm Reed Smith and who represented Safeway, said: “Safeway developed the accused Just for U program for its customers and we are pleased to see its program vindicated in the court’s rulings.”
