US 7177838

An analysis of United States Patent 7,177,838 reveals a method for conducting e-commerce transactions using electronic tokens issued directly by a vendor. The patent, now expired, has been the subject of significant litigation.

Title: Method and apparatus for conducting electronic commerce transactions using electronic tokens

Assignee: The current assignee is listed as Aml Ip LLC. The original assignee was PayByClick Corp.

Inventors: Marvin T. Ling

Filing Date: April 21, 2000

Issue Date: February 13, 2007

Abstract: The patent describes a system where a vendor issues and maintains electronic tokens that customers can purchase online (e.g., with a credit card) or offline (e.g., with a check or money order). These tokens can then be used to buy or rent products and services from that specific vendor. This system is designed to reduce the overhead of third-party transaction processors, giving the vendor more control over pricing and payment arrangements. The patent also notes the system's applicability for renting software under various terms, such as for a limited time, a specific number of uses, or a certain number of processes.

Overview of Independent Claims:

This patent contains several independent claims that define the core of the invention. In plain language, these claims cover:

• Claim 1: A method for a vendor to conduct a business transaction over a network. This involves the vendor's server computer establishing an account for a user, the user purchasing electronic tokens from the vendor, the server storing the number of tokens in the user's account, the user selecting items to purchase, the server calculating the total token cost, and if the user has enough tokens, debiting the user's account and completing the transaction.
• Claim 12: A method for a user to conduct a business transaction with a vendor over a network. This claim mirrors the process from the user's perspective: establishing an account, purchasing tokens from the vendor which are stored by the vendor, selecting items, being informed of the total token cost, and confirming the purchase, which leads to the vendor debiting the token account.
• Claim 21: An apparatus (specifically, a vendor's server computer) for conducting a business transaction. This server is configured to establish user accounts, sell electronic tokens to users, store these tokens, present products for sale with prices in tokens, receive a purchase order, determine if the user has sufficient tokens, and if so, debit the account and confirm the transaction.
• Claim 31: A method for a vendor to facilitate transactions between different users. This involves the vendor's server establishing accounts for multiple users, selling tokens to a first user, the first user authorizing a transfer of tokens to a second user, and the server debiting the first user's account and crediting the second user's account. This is framed for applications like online auctions.

No records for US Patent 7,177,838 were found in the CAFC 2026 dockets based on the conducted search. However, the patent has a history of litigation in various district courts.

Litigation History of US Patent 7,177,838

As of April 28, 2026, United States Patent 7,177,838 B1 ("the '838 patent") has an extensive and well-documented history of litigation. The patent, which expired in April 2020, has been asserted against a large number of companies across various sectors, particularly in e-commerce and gaming. The current assignee and plaintiff in recent cases is Aml Ip LLC, a Texas-based entity identified as a patent assertion entity (PAE) or non-practicing entity (NPE). This entity has engaged in a broad monetization campaign, filing numerous lawsuits that allege infringement of the '838 patent's claims related to electronic tokens.

The litigation campaigns have been active for many years, with earlier cases filed by previous assignees like PayByClick Corp. and GTX Corp. The '838 patent has been described as covering a fundamental concept of using a vendor-issued digital currency for transactions, a common feature in many online platforms and free-to-play games.

The following is a representative, though not exhaustive, list of known litigation involving the '838 patent, with a focus on the recent campaigns by Aml Ip LLC. The data is primarily sourced from the Unified Patents litigation portal, accessible via the Google Patents entry for US 7,177,838 B1.

Recent Litigation (Asserted by Aml Ip LLC)

A significant wave of litigation was initiated by Aml Ip LLC in 2024 and 2025, primarily in the U.S. District Court for the Western District of Texas.

Historical Litigation

Prior to the current wave of lawsuits by Aml Ip LLC, the patent was asserted by other entities. This includes a notable campaign targeting gaming companies.

This list is not exhaustive and is intended to be representative of the litigation activity surrounding this patent. The status of active cases is subject to change.

Proceedings overview

The USPTO Open Data Portal API returns no AIA trial proceedings for US patent 7,177,838. Extensive web searches for Inter Partes Reviews (IPR), Post-Grant Reviews (PGR), or Covered Business Method (CBM) reviews related to US7177838 also yielded no results. Therefore, there are no PTAB proceedings on file for this patent.

Strategic summary

As there are no PTAB proceedings on file for US patent 7,177,838, all claims (Claims 1-31, as identified in the independent claims overview) remain untested by the PTAB. There are no claims that have been canceled or sustained by a PTAB Final Written Decision. Consequently, there is no estoppel landscape established through PTAB proceedings under 35 U.S.C. § 315(e)(2) for any petitioner or their privies, meaning all prior-art grounds remain potentially available for a future challenge. The absence of PTAB activity, particularly for a patent that has been involved in extensive district court litigation, is a notable signal, suggesting that for various reasons, petitioners have not pursued or succeeded in initiating IPRs, PGRs, or CBMs against this patent.

Recommended next steps

Given that there is no PTAB activity on US patent 7,177,838:

• If you are a defendant facing assertion of this patent, there are no existing PTAB invalidity findings to leverage in district court proceedings.
• The absence of PTAB challenges means that the patent's claims have not been subjected to the scrutiny of an AIA trial, which can sometimes lead to claims being canceled or narrowed. This also means there is no existing PTAB record that a district court could consider for claim construction or validity issues.
• Consider evaluating whether an IPR or other AIA trial proceeding would be a viable defensive strategy, taking into account the patent's expiration date (April 21, 2020) and the statutory deadlines for filing such petitions. Since the patent has expired, the ability to file IPRs or PGRs is typically limited or non-existent, depending on the specific statutory provisions and filing windows relative to issuance and expiration.

Inventors

The sole named inventor is Marvin T Ling. The patent document does not explicitly state his employer at the time of filing.

Original assignee

The original assignee was PayByClick Corp. This entity appears to have been an operating company focused on developing and offering electronic commerce systems and financial payment services, including an "electronic commerce bridge system" as described in a related patent, US6876979B2. It is unclear if PayByClick Corp directly shipped a product specifically embodying the electronic token claims of US7177838, but their business was in this domain. The current operational status of the original US entity "PayByClick Corp" is unclear, as the assignment history shows the patent being transferred, and some search results point to a separate UK entity "PAY BY CLICK LTD".

Assignment timeline

• 2000-05-08 (executed) / recorded 2000-05-18 — Reel 010839/0474

  • Conveyance: Assignment of Assignors Interest
  • Assignor: LING, MARVIN T.
  • Assignee: GTX CORPORATION
  • Correspondent: LING, ANDREW M.
  • Context: Inventor assigned patent rights to GTX Corporation.

• 2002-08-20 (executed) / recorded 2002-08-29 — Reel 013205/0801

  • Conveyance: Assignment of Assignors Interest
  • Assignor: GTX CORPORATION
  • Assignee: PAYBYCLICK CORPORATION
  • Correspondent: KENNETH R. POWELL, KENNETH R. POWELL P.C., 2033 GATEWAY PLACE, SUITE 520, SAN JOSE, CA 95110
  • Context: Reassignment of patent rights from GTX Corporation back to PayByClick Corporation.

• 2002-11-25 (executed) / recorded 2002-12-04 — Reel 013531/0746

  • Conveyance: Corrective Assignment
  • Assignor: GTX CORPORATION
  • Assignee: PAYBYCLICK CORPORATION
  • Correspondent: KENNETH R. POWELL, KENNETH R. POWELL P.C., 2033 GATEWAY PLACE, SUITE 520, SAN JOSE, CA 95110. This correspondent recurs in this chain.
  • Context: Corrective assignment of assignor's interest from GTX Corporation to PayByClick Corporation.

• 2009-03-27 (executed) / recorded 2009-04-09 — Reel 022718/0651

  • Conveyance: Assignment of Assignors Interest
  • Assignor: PAYBYCLICK CORPORATION
  • Assignee: PAYBYCLICK CORPORATION-TEXAS
  • Correspondent: JAY S. HOROWITZ, JAY S. HOROWITZ PC, PO BOX 1251, BELLMORE, NY 11710-0016. This correspondent recurs in this chain.
  • Context: Internal corporate restructuring or transfer to a state-specific entity.

• 2009-07-23 (executed) / recorded 2009-08-11 — Reel 023188/0951

  • Conveyance: License
  • Assignor: PAYBYCLICK CORPORATION-TEXAS
  • Assignee: ACTUS LLC
  • Correspondent: JAY S. HOROWITZ, JAY S. HOROWITZ PC, PO BOX 1251, BELLMORE, NY 11710-0016. This correspondent recurs in this chain.
  • Context: Licensing agreement granting rights to Actus LLC.

• 2013-11-04 (executed) / recorded 2013-11-20 — Reel 030560/0179

  • Conveyance: Assignment of Assignors Interest
  • Assignor: ACTUS, L.L.C.
  • Assignee: PAYBYCLICK CORPORATION
  • Correspondent: JAY S. HOROWITZ, LAW OFFICE OF JAY S. HOROWITZ P.C., 1122 BROADWAY, RM 1414, NEW YORK, NY 10010. This correspondent recurs in this chain.
  • Context: Assignment of patent rights back from Actus LLC to PayByClick Corporation.

• 2014-01-15 (executed) / recorded 2014-02-10 — Reel 030784/0074

  • Conveyance: Assignment of Assignors Interest
  • Assignor: PAYBYCLICK CORPORATION
  • Assignee: GTX CORPORATION
  • Correspondent: CHARLES H. BAREFOOT JR., HOFFMANN & BARON, LLP, 6900 JERICHO TURNPIKE, SYOSSET, NY 11791
  • Context: Assignment of patent rights from PayByClick Corporation back to GTX Corporation.

• 2019-09-13 (executed) / recorded 2019-10-18 — Reel 049386/0209

  • Conveyance: Assignment of Assignors Interest
  • Assignor: GTX CORPORATION
  • Assignee: ANDREW M. LING, P.C.
  • Correspondent: ANDREW M. LING, P.C., 2309 N. GALLOWAY AVE, SUITE 210, MESQUITE, TX 75150. This correspondent recurs in this chain.
  • Context: Assignment of patent rights from GTX Corporation to Andrew M. Ling, P.C.

• 2020-03-02 (executed) / recorded 2020-03-24 — Reel 050044/0411

  • Conveyance: Assignment of Assignors Interest
  • Assignor: GTX CORPORATION
  • Assignee: ANDREW M. LING, P.C.
  • Correspondent: ANDREW M. LING, P.C., 2309 N. GALLOWAY AVE, SUITE 210, MESQUITE, TX 75150. This correspondent recurs in this chain.
  • Context: Further assignment from GTX Corporation to Andrew M. Ling, P.C., possibly related to the previous one or a bulk transfer.

• 2020-11-25 (executed) / recorded 2020-12-09 — Reel 051016/0993

  • Conveyance: Assignment of Assignors Interest
  • Assignor: ANDREW M. LING, P.C.
  • Assignee: AML IP LLC
  • Correspondent: ANDREW M. LING, P.C., 2309 N GALLOWAY AVE STE 210, MESQUITE, TX 75150. This correspondent recurs in this chain.
  • Context: Transfer to AML IP LLC, a known patent assertion entity.

• 2021-02-11 (executed) / recorded 2021-02-24 — Reel 051259/0526

  • Conveyance: Security Interest
  • Assignor: AML IP LLC
  • Assignee: PRAVATI INVESTMENT FUND IV, LP
  • Correspondent: Andrew M. Ling, Andrew M. Ling, P.C., 2309 N. Galloway Ave., Suite 210, Mesquite, TX 75150. This correspondent recurs in this chain.
  • Context: Securitization of the patent by AML IP LLC.

• 2025-10-22 (executed) / recorded 2025-11-04 — Reel 056461/0814

  • Conveyance: Nunc Pro Tunc Assignment
  • Assignor: LING, ANDREW M.
  • Assignee: AML IP LLC
  • Correspondent: ANDREW M. LING, P.C., 2309 N. GALLOWAY AVE., SUITE 210, MESQUITE, TX 75150. This correspondent recurs in this chain.
  • Context: Nunc pro tunc assignment from individual Andrew M. Ling to AML IP LLC, likely to clarify or confirm past ownership.

Timeline diagram

timeline
    title Ownership of US 7177838
    2000 : Filed by PayByClick Corp
         : Inventor Ling to GTX Corp
    2002 : GTX to PayByClick Corp
         : Corrective Assignment
    2007 : Patent Issued
    2009 : PayByClick to PayByClick-Texas
         : License to Actus LLC
    2013 : Actus LLC to PayByClick Corp
    2014 : PayByClick to GTX Corp
    2019 : GTX to Andrew M Ling PC
    2020 : GTX to Andrew M Ling PC
         : Andrew M Ling PC to AML IP LLC
    2021 : AML IP LLC Security Interest
    2025 : Andrew M Ling to AML IP LLC

NPE / troll-pattern signals

1. Shell-entity transfer — Present. The assignment to "AML IP LLC" on 2020-11-25 / recorded 2020-12-09 (Reel 051016/0993) is a transfer to an entity whose name indicates a focus on intellectual property, and it has been identified as a patent assertion entity. The consistent correspondent address also suggests a shell operation.
2. Known asserter in the chain — Present. AML IP LLC is the current assignee (Reel 051016/0993, 2020-11-25) and has been identified as a patent assertion entity (PAE) in the previously generated litigation summary.
3. Repeat correspondent across the chain — Present.
   • Jay S. Horowitz, Jay S. Horowitz PC (or Law Office of Jay S. Horowitz P.C.) appears as the correspondent for three assignments: 2009-03-27 (Reel 022718/0651), 2009-07-23 (Reel 023188/0951), and 2013-11-04 (Reel 030560/0179).
   • Andrew M. Ling, P.C. (or Andrew M. Ling) appears as the correspondent for five assignments/conveyances: 2019-09-13 (Reel 049386/0209), 2020-03-02 (Reel 050044/0411), 2020-11-25 (Reel 051016/0993), 2021-02-11 (Reel 051259/0526), and 2025-10-22 (Reel 056461/0814). The recurrence of Andrew M. Ling, P.C. as a correspondent for multiple transfers, including those to the known asserter AML IP LLC, is a strong signal.
4. Cascading transfers — Present. There were three assignments within a 14-month period leading up to the current asserter: 2019-09-13 (GTX to Andrew M. Ling, P.C., Reel 049386/0209), 2020-03-02 (GTX to Andrew M. Ling, P.C., Reel 050044/0411), and 2020-11-25 (Andrew M. Ling, P.C. to AML IP LLC, Reel 051016/0993).
5. Pre-litigation transfer — Present. The assignment to AML IP LLC on 2020-11-25 (Reel 051016/0993) occurred less than two months before the first recorded litigation by Aml Ip LLC on January 13, 2021, indicating a strategic transfer for assertion purposes.
6. Bankruptcy fire-sale — Not present. No evidence of bankruptcy proceedings for any assignor or assignee in the chain.
7. Privateering — Unclear. There is no explicit evidence in the assignment records or provided context to determine if privateering is involved.
8. Defensive aggregator (anti-NPE) — Not present. The patent is currently held by AML IP LLC, a known asserter, not a defensive aggregator.

Verdict

NPE — high confidence. The presence of AML IP LLC as a known asserter (current assignee, Reel 051016/0993, 2020-11-25), the shell-entity nature of AML IP LLC, the consistent recurrence of Andrew M. Ling, P.C. as a correspondent across multiple transfers including those to AML IP LLC, and the clear pre-litigation transfer to AML IP LLC on 2020-11-25, strongly indicate an NPE assertion pattern. These factors, combined with cascading transfers, provide high confidence in this verdict. (USPTO Assignment Center search: https://assignmentcenter.uspto.gov/)

To identify the most relevant prior art for US patent 7,177,838, I will search the USPTO database for the patent and examine its cited references.

The Google Patents entry for US7177838B1 lists 35 patent citations and 25 non-patent citations. The "Background of the Invention" section of US7177838 itself discusses various forms of electronic currency and related systems that existed prior to its filing, highlighting the problems they aimed to solve.

The Examiner, at the close of prosecution for US7177838, noted that "[t]he prior art taken alone or in combination failed to teach or suggest a vendor registering user to purchase electronic tokens wherein each token having a value of at least a fraction of a dollar and authorizing a purchase at a participating vendor web site without requiring any third party authentication and a physical manifestation of the user account.” This statement from the Notice of Allowability (October 6, 2006) provides critical insight into what the Examiner considered the distinguishing features of the claimed invention over the prior art known at that time.

Based on the patent document, here are some of the patent citations listed, along with their publication/filing dates, brief descriptions, and potential anticipation relevant to the claims of US7177838:

Patent Citations from US7177838B1:

• U.S. Pat. No. 5,983,207 to Turk et al.

  • Publication/Filing Date: The patent itself notes its existence, but not specific dates. Turk et al. is cited in the "Background of the Invention" section of US7177838.
  • Brief Description: This patent describes electronic currency systems based on gold or other commodities held at a central location.
  • Potential Anticipation (35 U.S.C. § 102): This reference, and similar systems, are distinguished in US7177838 by their reliance on central organizations (like banks) to manage user accounts and handle transactions. Therefore, it potentially anticipates aspects of electronic currency systems, but likely does not anticipate the vendor-issued and controlled tokens without third-party authentication as claimed in US7177838 (e.g., Claim 1, 12, 21), particularly the direct vendor control and lack of required interaction with a bank for each transaction.

• U.S. Pat. No. 5,671,364 to Turk.

  • Publication/Filing Date: The patent itself notes its existence, but not specific dates. Turk is cited in the "Background of the Invention" section of US7177838.
  • Brief Description: Similar to Turk et al., this patent discusses electronic currency systems based on a central commodity.
  • Potential Anticipation (35 U.S.C. § 102): Similar to the 5,983,207 patent, it would likely not anticipate the vendor-issued and managed electronic tokens and the direct vendor-user interaction emphasized in US7177838, particularly the features of Claims 1, 12, and 21 that avoid third-party bank interaction for each token transaction.

• U.S. Pat. No. 4,977,595 to Ohta et al.

  • Publication/Filing Date: The patent itself notes its existence, but not specific dates. Ohta et al. is cited in the "Background of the Invention" section of US7177838.
  • Brief Description: This patent describes cryptographic techniques that may be used by a bank to issue electronic cash.
  • Potential Anticipation (35 U.S.C. § 102): While covering cryptographic techniques for electronic cash, US7177838 distinguishes itself by avoiding the necessity of a bank or other central organization to issue or use the tokens. Thus, it likely does not anticipate the specific vendor-controlled issuance and redemption features of US7177838, particularly those in Claims 1, 12, and 21 that focus on the vendor directly managing the tokens.

Non-Patent Citations from US7177838B1 (from the "Background of the Invention" section):

• eCash (ecash Technologies Incorporated):

  • Description: "eCash" relies on encryption and digital signature technology, permitting selected "eCash" banks to issue "eCash" currency to users, which can be spent at accepting vendor websites. Vendors then exchange "eCash" for traditional money through an "eCash" bank. This system allows for micropayments and purchases without a credit card.
  • Potential Anticipation (35 U.S.C. § 102): Although "eCash" addresses micropayments and credit card avoidance, US7177838 differentiates itself by stating that "eCash" and similar systems "require that users and merchants make arrangements with authorized banks, and require both the user and the merchant to convert between real currency and electronic currency through an authorized bank." This suggests that "eCash" would not anticipate the vendor-issued and managed tokens of US7177838 that explicitly eliminate the need for third-party bank interaction for each transaction, which is a core element of Claims 1, 12, and 21.

• RocketCash (RocketCash Corporation):

  • Description: The RocketCash system sets up accounts for teens, allowing parents to add funds. Teens can then shop online, with purchases billed to their RocketCash account. It eliminates the need for credit cards but does not address micropayments.
  • Potential Anticipation (35 U.S.C. § 102): US7177838 notes that RocketCash "still necessary to establish and fund an account with a single central entity (i.e. RocketCash Corporation) before goods may be purchased." While it offers a stored value, it is not a system where the vendor directly issues and controls the tokens for use only on their site, which is key to Claims 1, 12, and 21 of US7177838.

• InternetCash (InternetCash Corporation):

  • Description: Based on a pre-paid card purchased in predetermined denominations from a store, usable at selected online merchants. It can handle smaller transactions than credit cards and provides anonymous purchasing without a credit card.
  • Potential Anticipation (35 U.S.C. § 102): US7177838 points out that InternetCash "requires merchants to obtain payment from a central organization." This indicates it would not anticipate the vendor-issued and controlled tokens of US7177838, as defined in Claims 1, 12, and 21, which remove the need for such a central intermediary for payment.

• Beenz (Beenz.com, Inc.):

  • Description: "Beenz" currency is earned as an incentive for online activity and can be spent at selected Web vendors. It does not use a credit card and can be used for micropayments.
  • Potential Anticipation (35 U.S.C. § 102): US7177838 states that "there is no way to purchase the 'beenz' currency" and that "vendors must rely on a single organization to receive payment in real money." This clearly differentiates "Beenz" from the system of US7177838 where tokens are purchased directly from the vendor, a crucial aspect of Claims 1, 12, and 21.

The Examiner's statement regarding the prior art, in conjunction with the distinctions drawn in the patent's background section, suggests that the core novelty of US7177838 lies in a vendor-centric electronic token system where the vendor directly issues, sells, and manages the tokens for use on their own site, without requiring a third-party financial institution for each transaction. Therefore, any prior art that relies on a central bank, a third-party issuer, or a universal electronic currency, would likely not anticipate the specific vendor-controlled aspects of the claims in US7177838.

The analysis of obviousness under 35 U.S.C. § 103 for US patent 7,177,838 requires identifying combinations of prior art that would have made the claimed invention obvious to a person having ordinary skill in the art (PHOSITA) at the time of the invention (priority date January 26, 2000).

The independent claims of US7177838 cover:

• Claim 1 (Vendor's method): A vendor's server establishing a user account, the user purchasing electronic tokens from the vendor, the server storing tokens, the user selecting items, the server calculating token cost, and debiting the account if sufficient tokens are available.
• Claim 12 (User's method): A user's perspective of establishing an account, purchasing tokens from the vendor, selecting items, being informed of costs, and confirming a purchase leading to account debit.
• Claim 21 (Vendor's apparatus): A vendor's server configured to perform the method steps of Claim 1, including selling electronic tokens directly to users.
• Claim 31 (Token transfer between users): A vendor's server establishing accounts for multiple users, the vendor selling tokens to a first user, the first user authorizing transfer to a second user, and the server facilitating the debit/credit for transfers (e.g., for an auction site).

The patent explicitly identifies the problems in the prior art that it seeks to overcome: the necessity for users and merchants to deal with a "central organization, such as a bank" for electronic currency (e.g., eCash, InternetCash, Beenz), which imposes overhead and limits vendor control over token value and terms [cite: Description, Section: BACKGROUND OF THE INVENTION]. The patent aims to provide a system where the vendor itself issues and controls the electronic tokens, accepts various payment options (online and offline) for these tokens, and thereby reduces overhead and increases vendor control and privacy.

Combination of Prior Art for Obviousness

A PHOSITA in electronic commerce in 2000, aware of existing systems and their limitations, would have been motivated to combine certain known elements to achieve the objectives addressed by US7177838.

Key Prior Art References and their Relevant Disclosures:

1. eCash (ecash Technologies Incorporated): This system permits "micropayments" and allows users to purchase products and services on the Web without using a credit card. It relies on "eCash" banks to issue currency, which users spend on vendor sites, and vendors exchange for traditional money through an "eCash" bank. It involves user accounts for storing currency [cite: Description, Section: BACKGROUND OF THE INVENTION].
2. RocketCash (RocketCash Corporation): This system sets up accounts for users (e.g., teens) and allows their parents to add money to these accounts using various payment methods, including "checks, money orders, or credit cards." Users can then shop on the Web, and purchases are billed to their RocketCash account. While it eliminates the need for credit cards for transactions, it operates through a "single central entity (i.e. RocketCash Corporation)" for account management and funding [cite: Description, Section: BACKGROUND OF THE INVENTION].
3. General E-commerce Practices (Pre-2000): It was well-established for vendors to operate Web sites, display products and services, maintain user accounts, and process purchase orders. Application service providers (ASPs) were already offering software for sale or rental, managing authorization codes, and looking for ways to minimize client-server interaction and sensitive data transmission [cite: Description, Section: BACKGROUND OF THE INVENTION].

Obviousness Argument:

The primary distinguishing feature of US7177838 is that the vendor directly issues and sells the electronic tokens, and maintains user accounts for these tokens, thereby cutting out the traditional third-party bank or central organization. This includes accepting both online (e.g., credit card) and offline (e.g., check, money order) payments for the tokens.

A PHOSITA would have been motivated to combine the features of eCash, RocketCash, and general e-commerce practices for the following reasons:

• Addressing Overhead and Control: The '838 patent itself highlights the problem that existing systems (like eCash, InternetCash, Beenz) "necessarily impose overhead" because "both the vendors who accept these various forms of electronic currency, and the users who buy items in exchange for electronic currency must deal with a central organization, such as a bank." It also notes that vendors have "no control over the value of the electronic currency, its sale price, the terms on which it may be bought" [cite: Description, Section: BACKGROUND OF THE INVENTION]. A PHOSITA would clearly understand the commercial desirability of overcoming these limitations.

• Combining Electronic Currency with Flexible Funding:

  • eCash taught the use of electronic currency/tokens for efficient online transactions, including micropayments, and the management of user balances.
  • RocketCash demonstrated a "central entity" (RocketCash Corporation, not a bank) that managed user accounts and, crucially, allowed these accounts to be funded by various means, including checks, money orders, or credit cards. This explicitly teaches the technical concept of a non-bank entity accepting both online and offline payments to load value into user accounts.

Motivation to Combine:
A PHOSITA, seeking to eliminate the "overhead" and gain "complete control over the sale and distribution of electronic currency or tokens" (as articulated in the '838 patent's summary [cite: Description, Section: SUMMARY OF THE INVENTION]), would naturally be motivated to integrate the electronic token concept of eCash with the flexible account funding and management approach of RocketCash, by having the vendor of goods and services directly assume the role of the "central entity" (like RocketCash Corporation).

• If RocketCash Corporation could manage accounts and accept diverse payment methods (online and offline) to fund those accounts, it would be an obvious step for a PHOSITA to realize that a vendor could perform these same functions. The vendor would then issue its own "eCash-like" tokens, storing them in user accounts funded directly by the user using online or offline payments, mirroring RocketCash's funding methods. This directly addresses the stated problems of third-party reliance and lack of vendor control, as the vendor now directly controls the issuance, value, and funding methods of its proprietary tokens.

Application to Specific Claims:

• Claims 1, 12, and 21 (Vendor/User Transaction and Apparatus): The combination renders these claims obvious. The vendor operating a server to establish accounts, accept payments (online/offline, as taught by RocketCash) for its own electronic tokens (as generally taught by eCash, but now vendor-issued), store these tokens, present products for token purchase, and process transactions is a straightforward application of existing technologies with an obvious motivation to improve efficiency and control. The concept of using these tokens for software purchase or rental (including various rental terms like time, uses, or processings) is an application of the token system to a known business model (ASP software rental, as detailed in the '838 background), not a distinct invention in the token system itself.

• Claim 31 (Token Transfer Between Users): Once a vendor-issued token system (as made obvious by combining eCash and RocketCash) is established, extending it to permit transfers between user accounts within that vendor's system (e.g., for an auction site) is an obvious implementation choice for a PHOSITA. Auction sites already existed and facilitated transactions between users. The '838 patent itself describes this as a way for "users to exchange electronic tokens issued by a vendor" and "paying each other for products and services, without having to obtain and send a money order" [cite: Description, Section: DETAILED DESCRIPTION OF THE INVENTION, referring to FIG. 13]. The motivation for an auction site vendor (acting as the token issuer) to enable such transfers to streamline internal payments would be clear.