• Ebay Inc. v. Moneycat Ltd.All claims unpatentable
  PTAB · Sep 23, 2015 · CBM2014-00092 · APJ Minn Chung · CBM · Final written decision

  Claims 1, 2, and 4–11 are unpatentable as obvious over the instituted combinations of Teramura or Bernstein with the APA NetCash System, with Popolo added for specified dependent claims.

  In the decision

  …under § 102(a) as described in the Medvinsky-Neuman publications and as known or used by others in this country; and (2) an admission regarding the teachings of the APA NetCash System—i.e., the teachings of the APA NetCash System are described in column 2, line 37 through column 3, line 32 and…

  RulingsFinal written decision

  • BurdenDecided for petitioner

    “35 U.S.C. § 103(a) over the combination of Teramura and the APA NetCash System. Pet. 41–52. Upon review of all of the parties’ papers and supporting evidence discussed in those papers, we are persuaded that Petitioner has demonstrated, by a preponderance of evidence, that claims 1, 2, 6–8, and 11 are unpatentable under 35 U.S.C. § 103(a) over the combination of Teramura and the APA NetCash System.” slip op. at 25

  • Claim Construction › Intrinsic evidence (Phillips canons) › Plain and ordinary meaning to a POSITATerm construed patent owner constructionDecided for patent owner

    “Currency Issuing Authority Trusted Server” The term “Currency Issuing Authority trusted server” appears in all claims of the ’602 patent. See Pet. 11–12. Petitioner proposes that the term “should be interpreted as a server trusted to make transactions using data packets issued from a particular CIA.” Pet. 12. Patent Owner had argued that Petitioner’s proposal does not comport with the broadest reasonable construction standard. Prelim. Resp. 24. In the Decision to Institute, we adopted Patent Owner’s construction of the term “Currency Issuing Authority trusted server” to mean a “server that is trusted by the Currency Issuing Authority” under the broadest reasonable interpretation standard. Dec. to Inst. 7 (citing Ex. 1001, col. 6, l. 65–col. 7, l. 6, col. 11, ll. 58–64). In the Patent Owner’s Response and the Petitioner’s Reply, the parties do not dispute the construction of this term or any other terms. We see no reason, therefore, to revise the claim construction adopted in our Decision to Institute. Accordingly, we construe the term “Currency Issuing Authority trusted server” to mean “a server that is trusted by the Currency Issuing Authority.” We see no need to construe expressly any other claim terms for purposes of this Decision. See, e.g., Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999) (only those terms that are in controversy need to be construed, and only to the extent necessary to resolve the controversy). slip op. at 9

  • Novelty / Anticipation (§102) › Prior-art status of a reference › Printed publication / public accessibilityPrinted publication establishedReference is prior artDecided for petitioner

    “available to the public” for the purposes of 35 U.S.C. § 102 is a question of law based on underlying findings of fact. In re Enhanced Sec. Research, LLC, 739 F.3d 1347, 1354 (Fed. Cir. 2014) (citing In re Hall, 781 F.2d 897, 899 (Fed.Cir.1986)). The Federal Circuit “has interpreted § 102 broadly, explaining that even relatively obscure documents qualify as prior art so long as the public has a means of accessing them.” Id. (citing Hall, 781 F.2d at 899). 22 Our leading case on public accessibility is In re Hall, 781 F.2d 897 (Fed. Cir. 1986). In Hall we concluded that “a single cataloged thesis in one university library” constitutes “sufficient accessibility to those interested in the art exercising reasonable diligence.” Id. at 900. Thereafter, in Constant v. Advanced Micro–Devices, Inc., we explained that “[a]ccessibility goes to the issue of whether interested members of the relevant public could obtain the information if they wanted to.” 848 F.2d 1560, 1569 (Fed. Cir. 1988). Therefore, “[i]f accessibility is proved, there is no requirement to show that particular members of the public actually received the information.” Id. Enhanced Sec. Research, LLC, 739 F.3d at 1354. The determination of whether a document is a “printed publication” under 35 U.S.C. § 102 involves a case-by-case inquiry into the facts and circumstances surrounding its disclosure to members of the public. In re Klopfenstein, 380 F.3d 1345, 1350 (Fed. Cir. 2004). slip op. at 22

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation foundReasonable expectation foundDecided for petitioner

    “As discussed above, we determined that a person of ordinary skill in the art, at the time of the invention of the ’602 patent, would have been familiar with various conventional systems for electronic payments and electronic currency transactions, including two-step transaction systems that employ trusted intermediary “broker servers,” and would have understood the security problems to be an important issue in existing systems. In view of this knowledge of a person of ordinary skill and her awareness of the security issues, and in further view of the fact that, as discussed above, Teramura addresses the problems of theft and fraud in electronic currency transaction (see Ex. 1007, Abstract, 3:2–18) by using a trusted intermediary broker to send electronic money in two steps, we are persuaded by Petitioner’s arguments that a person of ordinary skill in the art would have been motivated to combine Teramura with the APA NetCash System to improve the security of the electronic currency transaction of the APA NetCash System. We are also persuaded by Petitioner’s argument that a person of ordinary skill in the art would have been guided by Simon and motivated to co-locate the currency server of the APA NetCash System with Teramura’s intermediary broker to further increase the security of the combined system. In addition, we credit the testimony of Dr. Neuman, and 46 are persuaded that a person of ordinary skill would have been motivated by the double-spending problem addressed in the APA NetCash System and Simon’s teaching of currency swapping at the middleman to recognize that, in a combined system where the currency server and the intermediary broker are co-located, the middleman is a preferred location to place the coin exchange function. That is, a person of ordinary skill in the art would have found an internal coin exchange function at the middleman desirable. As discussed above, this means that an ordinary artisan would have found it desirable to have the broker check the coins received from the buyer with the co-located currency server, and, upon verification, replace them with new coins to be sent to the seller, as opposed to forwarding the coins “as-is” to the seller without checking them.” slip op. at 46

  Patent outcomesUS 7,590,602 unpatentable
  Claim construction§ 102 anticipation§ 103 obviousnesscites KSR · Graham
  Patents in suitUS 7,590,602
• Ebay Inc. v. Moneycat Ltd.All claims unpatentable
  PTAB · Sep 23, 2015 · CBM2014-00091 · APJ Minn Chung · CBM · Final written decision

  Claims 1, 2, 4–6, 8, 10, and 11 are unpatentable as obvious over Teramura and APA NetCash, and over Bernstein and APA NetCash.

  In the decision

  …under § 102(a) as described in the Medvinsky-Neuman publications and as known or used by others in this country; and (2) an admission regarding the teachings of the APA NetCash System—i.e., the teachings of the APA NetCash System are described in column 2, line 47 through column 3, line 39 and…

  RulingsFinal written decision

  • BurdenDecided for petitioner

    “under 35 U.S.C. § 103(a) over the combination of Teramura and the APA NetCash System. Pet. 34–46. Upon review of all of the parties’ papers and supporting evidence discussed in those papers, we are persuaded that Petitioner has demonstrated, by a preponderance of evidence, that claims 1, 2, 4–8, 10, and 11 are unpatentable under 35 U.S.C. § 103(a) over the combination of Teramura and the APA NetCash System.” slip op. at 25

  • ExcludeMotion to exclude, deniedDenied

    “NetCash System, Exhibit 1008 (Simon), Exhibit 1009 (Neuman Declaration), and Exhibit 1012 (Neuman Reply Declaration). As the movant, Patent Owner bears the burden of proof to establish that it is entitled to the relief requested—namely, that the material sought to be excluded is inadmissible under the Federal Rules of Evidence. See 37 C.F.R. §§ 42.20(c), 42.62(a). For the reasons discussed below, Patent Owner’s Motion to Exclude is DENIED.” slip op. at 64

  • Skill levelSkill level board ownDecided for petitioner

    “On this record, we find that a person of ordinary skill in the art, at the time of the invention of the ’011 patent, would have been familiar with various conventional systems for electronic payments and electronic currency transactions, including two-step transaction systems that employ intermediary “broker servers” that can be trusted, and would have Resp. 26–29), the Board declined to do so for purposes of institution of trial. Dec. to Inst. 10–11. Therefore, Patent Owner is not justified to presume Dr. Neuman’s testimony is not part of the record in this proceeding and conclude it does not exist for the purposes of trial in this case. 28 understood the security problems to be an important issue in existing systems. In addition, the level of ordinary skill is relatively high and would require knowledge specific to electronic currency and electronic payment transactions. See Ex. 1001, col. 1, ll. 49–54 (“The problem of payments over the Internet is . . . a complicated one, because the use of credit cards over the Internet is unsafe, and because in many transactions the buyer does not wish to provide details of himself, or of his bank account.”) (emphases added).” slip op. at 28

  • Expert testimonyPetitioner expert creditedDecided for petitioner

    “We are also persuaded by Petitioner’s argument that a person of ordinary skill in the art would have been guided by Simon and motivated to co-locate the currency server of the APA NetCash System with Teramura’s intermediary broker to further increase the security of the combined system. In addition, we credit the testimony of Dr. Neuman, and are persuaded that a person of ordinary skill would have been motivated by the double-spending problem addressed in the APA NetCash System and Simon’s teaching of currency swapping at the middleman to recognize that, in a combined system where the currency server and the intermediary broker are co-located, the middleman is a preferred location to place the coin exchange 47 function. That is, a person of ordinary skill in the art would have found an internal coin exchange function at the middleman desirable. As discussed above, this means that an ordinary artisan would have found it desirable to have the broker check the coins received from the buyer with the co-located currency server, and, upon verification, replace them with new coins to be sent to the seller, as opposed to forwarding the coins “as-is” to the seller without checking them.” slip op. at 47

  Patent outcomesUS 8,051,011 unpatentable
  Claim construction§ 102 anticipation§ 103 obviousnesscites KSR · Graham
  Patents in suitUS 8,051,011
• Ebay Inc. v. Moneycat Ltd.All claims unpatentable
  PTAB · Sep 23, 2015 · CBM2014-00093 · APJ Minn Chung · CBM · Final written decision

  Claims 1–3, 5–11, and 13–23 are unpatentable as obvious over the four stated combinations of Teramura, APA NetCash, Bernstein, and Popolo.

  In the decision

  …under § 102(a) as described in the Medvinsky-Neuman publications and as known or used by others in this country; and (2) an admission regarding the teachings of the APA NetCash System—i.e., the teachings of the APA NetCash System are described in column 2, line 47 through column 3, line 39 and…

  RulingsFinal written decision

  • BurdenDecided for petitioner

    “We are persuaded by Petitioner’s argument that the subject matter of claim 1 does not recite a technological feature that is novel and unobvious over the prior art. In the Decision to Institute, the Board analyzed, taking into account Petitioner’s and Patent Owner’s arguments, the steps recited in claim 1 relating to the operation of the CIAS and concluded that, even if the claimed process were novel and non-obvious, it does not render the ’578 patent a “technological invention.” Dec. to Inst. 9–10 (citing 77 Fed. Reg. at 48,764 (claim drafting technique “(b)”)). We see nothing in Patent Owner’s arguments in the Patent Owner’s Response that would justify altering this conclusion. Patent Owner asserts that the Board did not address previously the claimed feature that “the data packets of the first user are accessed and deactivated and never reach the second user [and] the second user receives new data packets.” PO Resp. 2. Similar to the discussion in the Decision to Institute (see Dec. to Inst. 9–10), accessing, deleting, and issuing data packets are known prior art methods of managing and manipulating digital data (see, e.g., Ex. 1001, col. 2, l. 47–col. 4, l. 6). Thus, even if the claimed 12 method, as a whole, is novel and non-obvious, reciting the use of known prior art technology to accomplish that method does not render the ’578 patent a “technological invention” under AIA § 18(d)(1) and 37 C.F.R. § 42.301. See 77 Fed. Reg. at 48,763–64. We also are persuaded by Petitioner’s explanation that the claimed subject matter does not solve a technical problem using a technical solution. We note that Petitioner and Patent Owner appear to agree that the solution of the ’578 patent is to provide an “intermediary server” between the first user and the second user to restructure the transaction in the prior art so that electronic currency is exchanged indirectly through the intermediary server, i.e., CIAS, rather than directly between the users. We agree with Petitioner that this rearrangement is not a “technical solution” because it adopts a traditional brokered transaction approach and applies it to the electronic currency transaction of the prior art. Accordingly, we are persuaded that Petitioner has met its burden of demonstrating that the ’578 patent is a covered business method patent under AIA § 18(d)(1) and is eligible for review under the transitional covered business method patent program.” slip op. at 12

  • Novelty / Anticipation (§102) › Prior-art status of a reference › Applicant-admitted prior artDecided for petitioner

    “developed at the University of Southern California.” PO Resp. 35. Patent Owner further argues that the Petition is not based on the Medvinsky publications or the “framework,” but, rather, is based on the description of the APA NetCash System in the ’578 patent, “which can only be considered non-102 ‘admitted prior art’ at best.” Id. Patent Owner does not describe the admissions made in the ’578 patent accurately. The ’578 patent’s admission described in the Board’s decisions includes two related, but independent components: (1) an admission regarding the prior art status of the APA NetCash System—i.e., it is a prior art system under § 102(a) as described in the Medvinsky-Neuman publications and as known or used by others in this country; and (2) an admission regarding the teachings of the APA NetCash System—i.e., the teachings of the APA NetCash System are described in column 2, line 47 through column 3, line 39 and Figure 2 of the ’578 patent. Patent Owner does not explain how relying on admission (2)— i.e., the ’578 patent’s representation that the teachings of the APA NetCash System are described in the patent—renders the APA NetCash System non- 102(a) prior art, essentially erasing admission (1) that the APA NetCash System is prior art under § 102(a). Absent countervailing considerations, the public is entitled to rely on the patentee’s representations made on the face of the ’578 patent as admissions regarding the NetCash prior art for purposes of patentability challenges, including using the ’578 patent’s description of the APA NetCash System as evidence of the teachings of the NetCash prior art. In Application of Nomiya, 509 F.2d 566 (CCPA 1975), when the appellants’ application included two figures, Figures 1 and 2, that were labeled as “prior art” and described as such in the specification, the court 15 held “[w]e see no reason why appellants’ representations in their application should not be accepted at face value as admissions that Figs. 1 and 2 may be considered ‘prior art’ for any purpose, including use as evidence of obviousness under [Section] 103.” Id. at 570–71 (emphasis added).” slip op. at 15

  • Novelty / Anticipation (§102) › Prior-art status of a reference › Printed publication / public accessibilityReference is prior artPrinted publication establishedDecided for petitioner

    “Whether a document qualifies as a “printed publication” that is “available to the public” for the purposes of 35 U.S.C. § 102 is a question of law based on underlying findings of fact. In re Enhanced Sec. Research, LLC, 739 F.3d 1347, 1354 (Fed. Cir. 2014) (citing In re Hall, 781 F.2d 897, 899 (Fed.Cir.1986)). The Federal Circuit “has interpreted § 102 broadly, explaining that even relatively obscure documents qualify as prior art so long as the public has a means of accessing them.” Id. (citing Hall, 781 F.2d at 899). Our leading case on public accessibility is In re Hall, 781 F.2d 897 (Fed. Cir. 1986). In Hall we concluded that “a single 22 cataloged thesis in one university library” constitutes “sufficient accessibility to those interested in the art exercising reasonable diligence.” Id. at 900. Thereafter, in Constant v. Advanced Micro–Devices, Inc., we explained that “[a]ccessibility goes to the issue of whether interested members of the relevant public could obtain the information if they wanted to.” 848 F.2d 1560, 1569 (Fed. Cir. 1988). Therefore, “[i]f accessibility is proved, there is no requirement to show that particular members of the public actually received the information.” Id. Enhanced Sec. Research, LLC, 739 F.3d at 1354. The determination of whether a document is a “printed publication” under 35 U.S.C. § 102 involves a case-by-case inquiry into the facts and circumstances surrounding its disclosure to members of the public. In re Klopfenstein, 380 F.3d 1345, 1350 (Fed. Cir. 2004). In this case, we are persuaded that Petitioner has shown by a preponderance of the evidence that the Teramura laid-open application was publicly accessible prior to August 26, 1999, the foreign priority filing date for the ’578 patent. To the extent that Patent Owner relies on Bruckelmyer to show Canadian laid-open applications, such as the Teramura application, are not “formally indexed,” Patent Owner’s argument is not persuasive because the application at issue in Bruckelmyer was not laid open for public inspection. First, the Canadian patent applications filed prior to October 1, 1989 were not open to public inspection. See Manual of Patent Office Practice (“MOPOP”) § 2.01.01 (Canadian Intellectual Property Office, 1998 ed.), available at https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr01566.html#itm2_01_01. Second, the prior art patent at issue in Bruckelmyer issued December 6, 1983. Bruckelmyer 445 F.3d at 23 1376. Hence, the application for the patent was filed before October 1, 1989, and, therefore, was not laid open for public inspection, unlike the Teramura application at issue in this case. Thus, Bruckelmyer has no bearing on the issue of whether Canadian laid-open applications, such as the Teramura application, are “formally indexed.” Based on the evidence and arguments provided by Petitioner, we are persuaded that the “interested members of the relevant public” could have obtained the Teramura application “if they wanted to” after the application was laid open to public inspection in the Canadian Patent Office on May 21, 1998. See Enhanced Sec. Research, LLC, 739 F.3d at 1354 (quoting Constant v. Advanced Micro–Devices, Inc., 848 F.2d at 1569) (internal quotation marks omitted). As reflected in the certified application file history, the Canadian Intellectual Property Office classified the Teramura application and indexed it. See Exhibit 1015, 3, 89 (showing classification according to the International Patent Classification (IPC) codes), 89 (showing indexing according to the International Identification (INID) codes). Accordingly, there is sufficient evidence to conclude that the Teramura application was publicly accessible prior to August 26, 1999, the foreign priority filing date for the ’578 patent.” slip op. at 22

  • Skill levelSkill level board ownDecided for petitioner

    “Patent Owner’s declarant, Dr. Tygar, testifies that, at the time the ’578 patent was filed, “a person of ordinary skill in the art would have possessed a bachelor’s degree in computer science or in engineering with exposure to computer science or its equivalent.” Ex. 2012 (“Tygar Decl.”) ¶ 15. Due to the specific nature of the technology and problems at issue, the general education level of a person of ordinary skill, such as a bachelor’s degree in computer science or its equivalent, does not provide much guidance in this proceeding. See GPAC, 57 F.3d at 1579 (“In a given case, every factor may not be present, and one or more factors may predominate.”) (internal citation omitted). Dr. Tygar’s testimony also focuses on the prior art systems that require direct interaction between a payor and a payee, and does not address the middleman systems or features discussed by Dr. Neuman, other than to argue the lack of motivation to combine the middleman systems with the APA NetCash System, argument which does not rely on the level of ordinary skill in the art. Ex. 2012 ¶¶ 18– 34. On this record, we find that a person of ordinary skill in the art, at the time of the invention of the ’578 patent, would have been familiar with various conventional systems for electronic payments and electronic currency transactions, including two-step transaction systems that employ intermediary “broker servers” that can be trusted, and would have Resp. 24–27), the Board declined to do so for purposes of institution of trial. Dec. to Inst. 11. Therefore, Patent Owner is not justified to presume Dr. Neuman’s testimony is not part of the record in this proceeding and conclude it does not exist for the purposes of trial in this case. 28 understood the security problems to be an important issue in existing systems. In addition, the level of ordinary skill is relatively high and would require knowledge specific to electronic currency and electronic payment transactions. See Ex. 1001, col. 1, ll. 49–54 (“The problem of payments over the Internet is . . . a complicated one, because the use of credit cards over the Internet is unsafe, and because in many transactions the buyer does not wish to provide details of himself, or of his bank account.”) (emphases added).” slip op. at 28

  Patent outcomesUS 8,195,578 unpatentable
  § 102 anticipation§ 103 obviousnesscites KSR · Graham
  Patents in suitUS 8,195,578
• Ebay, Inc. v. Paid, Inc.All claims unpatentable
  PTAB · Sep 16, 2015 · CBM2014-00128 · APJ Kristina M Kalan · CBM · Final written decision

  Claims 1–25 are unpatentable under § 101 as directed to an abstract idea and under § 103 over the asserted prior-art combinations.

  In the decision

  …construction is correct. Under the broadest reasonable interpretation standard, the “claims should always be read in light of the specification and teachings in the underlying patent.” Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1297–98 (Fed. Cir. 2015) (citation and internal quotation…

  RulingsFinal written decision

  • Claim Construction › Threshold & procedure › Whether a term needs construction (O2 Micro)Term construed petitioner constructionDecided for petitioner

    “We are not persuaded that Patent Owner’s proposed construction is correct. Under the broadest reasonable interpretation standard, the “claims should always be read in light of the specification and teachings in the underlying patent.” Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1297–98 (Fed. Cir. 2015) (citation and internal quotation marks omitted). Instead, we interpret the term “shipping rate” to mean “the overall or total cost of sending an auction item to a buyer.” This interpretation is consistent with the ’150 patent specification’s disclosure of shipping calculator system 1000 and its rate engine 1024 for calculating shipping rates based on various inputs, as illustrated in Figure 10, reproduced below. Ex. 1001, col. 6, ll. 38–42.” slip op. at 9

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “Despite Patent Owner’s arguments to the contrary, we see little difference between determining shipping rates and tax rates for auctioned items and the type of fundamental economic practices considered to be abstract ideas in Alice Corp. and Bilski.3 As established by the record, both 2 Bilski v. Kappos, 561 U.S. 593 (2010). 3 In Alice Corp., the Supreme Court determined that the claims at issue were “drawn to the concept of intermediated settlement,” i.e., the use of a third party to mitigate settlement risk. Id. at 2356. Furthermore, the Supreme Court determined that “[l]ike the risk hedging in Bilski, the concept of intermediated settlement is ‘a fundamental economic practice long prevalent in our system of commerce.’” Id. (citations omitted). With respect to the first step of the “Mayo framework,” the Supreme Court concluded in Alice Corp. that “there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement” in Alice Corp., and that “[b]oth are squarely within the realm of ‘abstract ideas’ as we have used that term.” Alice Corp., 134 S. Ct. at 2357. conventional auctions and shipping rate calculations existed long before the Internet. See, e.g., Rotman Decl. ¶¶ 4–8; Greenspun Decl. ¶¶ 31–37; Hearing Tr. 56:17–21. We conclude, therefore, that Petitioner has demonstrated that the ʼ150 patent claims, like the claims in Bilski and Alice, are directed to an abstract idea, namely, determining shipping rates for an online auction item.” slip op. at 17

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable

    “We are not persuaded by Patent Owner’s argument for patentability under § 101. First, the claims of the ʼ150 patent do not reflect the asserted “inventive concept” identified by Patent Owner, namely, the ability to calculate shipping rates and tax rates in real time. Patent Owner asserts that the reference in the claims to an “online auction” accomplishes this. Hearing Tr. 62:18–20. But as Petitioner points out, the claims do not recite any form of real-time calculations. The claims simply recite steps that were routinely done manually before the filing date of the patent. Hearing Tr. 7:16–22; Rotman Dep. 127:19–128:5. More fundamentally, however, simply adding a computer limitation to claims covering an abstract concept, without more, is insufficient to render the claim patentable under § 101, even if the use of a computer enables faster operation. Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada, 687 F.3d 1266, 1278 (Fed. Cir. 2012). In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for performing calculations. SiRF Tech., Inc. v. Int'l Trade Comm'n, 601 F.3d 1319, 1333 (Fed. Cir. 2010). Likewise, “the use of the Internet is not sufficient to save an otherwise abstract claims from ineligibility under § 101.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014). For these reasons, Patent Owner’s argument based on meeting the asserted need for speed and other requirements of online auctions fails.” slip op. at 19

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation foundReasonable expectation foundUnpatentable

    “We are persuaded by Petitioner’s arguments that it would have been obvious to combine Van Zandt and Illinois Sales Tax. Pet. 52–54. We are convinced by Petitioner’s arguments, supported by the testimony of Dr. Greenspun,5 that one of ordinary skill in the would have “readily appreciated the combinability of the sales tax calculation flow chart in Illinois Sales Tax to perform accurate tax calculations for the state of Illinois or another jurisdiction,” including the tax and duty calculations set forth in Van Zandt. Pet. 53 (citing Greenspun Decl. ¶¶ 42, 43, 63). We do not credit Patent Owner’s argument limiting Van Zandt’s teachings to international shipping. Van Zandt provides a comprehensive logistics services system and method, including providing landed cost 5 Dr. Greenspun holds a Ph.D. in Electrical Engineering and Computer Science from MIT. He has authored five computer science textbooks. He has taught at MIT and has over 20 years of experience in computer software engineering. Greenspun Decl. ¶¶ 3–16. We determine him to be an expert in the field relevant to this patent and credit his testimony. quoting (62), to integrate logistics vendors “across any industry, at any time, no matter what vendor carrier . . . or mode of transportation is to be used and no matter what country the shipment is being handled in or delivered to.” Ex. 1011, Abstract (emphasis added). More specifically, Van Zandt states that its system can calculate “any shipment duties and taxes.” Id. at 22:18 (emphasis added); see also id. at 32:11–17. Nothing in Van Zandt discredits or disallows the calculation of domestic taxes as a component of its calculation of “any shipment duties and taxes.” We credit Dr. Greenspun’s interpretation of the Van Zandt system as” slip op. at 26

  Patent outcomesUS 8,635,150 unpatentable
  Claim construction§ 101 eligibility§ 103 obviousnesscites Alice · Mayo · Bilski · KSR
  Patents in suitUS 8,635,150
• Ebay, Inc. v. Paid, Inc.All claims unpatentable
  PTAB · Sep 16, 2015 · CBM2014-00126 · APJ Thomas L Giannetti · CBM · Final written decision

  Claims 1–21 are unpatentable under § 101 as directed to an abstract idea without an inventive concept, and under § 103 over the asserted combinations.

  In the decision

  …construction is correct. Under the broadest reasonable interpretation standard, the “claims should always be read in light of the specification and teachings in the underlying patent.” Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1297–98 (Fed. Cir. 2015) (citation and internal quotation…

  RulingsFinal written decision

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “Despite Patent Owner’s arguments to the contrary, we see little difference between determining shipping rates and tax rates for auctioned items and the type of fundamental economic practices considered to be abstract ideas in Alice Corp. and Bilski.3 As established by the record, both 2 Bilski v. Kappos, 561 U.S. 593 (2010). 3 In Alice Corp., the Supreme Court determined that the claims at issue were “drawn to the concept of intermediated settlement,” i.e., the use of a third party to mitigate settlement risk. Id. at 2356. Furthermore, the Supreme Court determined that “[l]ike the risk hedging in Bilski, the concept of conventional auctions and shipping rate calculations existed long before the Internet. See, e.g., Rotman Decl. ¶¶ 4–8; Greenspun Decl. ¶¶ 31–37; Hearing Tr. 56:17–21. We conclude, therefore, that Petitioner has demonstrated that the ʼ642 patent claims, like the claims in Bilski and Alice, are directed to an abstract idea, namely, determining shipping rates for online sales.” slip op. at 17

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable

    “We are not persuaded by Patent Owner’s argument for patentability under § 101. First, the claims of the ʼ642 patent do not reflect the asserted “inventive concept” identified by Patent Owner, namely, the ability to calculate shipping rates and tax rates in real time. Patent Owner asserts that the reference in the claims to an “online auction” accomplishes this. Hearing Tr. 62:18–20. But as Petitioner points out, the claims do not recite any form of real-time calculations. The claims simply recite steps that were routinely done manually before the filing date of the patent. Hearing Tr. 7:16–22; Rotman Dep. 127:19–128:5. The claims, moreover, do not even refer specifically to online auctions. More fundamentally, however, simply adding a computer limitation to claims covering an abstract concept, without more, is insufficient to render the claim patentable under § 101, even if the use of a computer enables faster operation. Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada, 687 F.3d 1266, 1278 (Fed. Cir. 2012). In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for performing calculations. SiRF Tech., Inc. v. Int'l Trade Comm'n, 601 F.3d 1319, 1333 (Fed. Cir. 2010). Likewise, “the use of the Internet is not sufficient to save otherwise abstract claims from ineligibility under § 101.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014). For these reasons, Patent Owner’s argument based on meeting the asserted need for speed and other requirements of online auctions fails.” slip op. at 20

  • Claim Construction › Intrinsic evidence (Phillips canons) › Plain and ordinary meaning to a POSITATerm construed board ownDecided for petitioner

    “correct. Under the broadest reasonable interpretation standard, the “claims should always be read in light of the specification and teachings in the underlying patent.” Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1297–98 (Fed. Cir. 2015) (citation and internal quotation marks omitted). Instead, we interpret the term “shipping rate” to mean “the overall or total cost of sending an auction item to a buyer.” This interpretation is consistent with the patent specification’s disclosure of shipping calculator system 1000 and its rate engine 1024 for calculating shipping rates based on various inputs, as illustrated in Figure 10, reproduced below. Ex. 1001, col. 6, ll. 38–42. Figure 10 shows a computer-based system with a shipping calculator. The ’642 patent discloses that rate engine 1024 may include modules for calculating factors that contribute to the overall shipping rate to include shipping rate engine 1028, tax rate engine 1030, insurance rate engine 1032, packaging algorithm engine 1033, and fee-based rate engine 1034. Id. at col. 7, ll. 45–50. Shipping rate engine 1028 calculates a basic shipping rate for an item based on the distance between seller and buyer locations, the weight of the item, the weight of any packaging, and method of shipment. Id. at col. 8, ll. 34–42. Tax rate engine 1030 determines what taxes may apply. Id. at col. 8, ll. 43–44. Insurance rate engine 1032 calculates a cost of insurance to be added to the overall shipping rate based on buyer and seller preferences. Id. at col. 8, ll. 51–55. Packaging is an important factor in shipping cost, so packaging algorithm engine 1033 determines appropriate packaging based on seller preferences and the size, weight, or shape of the item and applies a factor to the shipping rate. Id. at col. 8, ll. 6–14. Fee-based engine 1034 calculates rates based on seller inputs such as rates charged for shipping and handling above the rates from common carriers and may include a flat rate for shipping, or a flat rate per item shipped. Id. at col. 8, ll. 15–29. Rate engine 1024 integrates inputs from the calculations of these other modules and engines, and applies whatever discounts or other factors are required if the components are not simply added, “to obtain a shipping rate based on the various inputs.” Id. at col. 8, ll. 56–60 (emphasis added). The ’642 patent also discloses that the shipping rate may be a flat rate from feebased engine 1034, a rate calculated from the other engines, or a rate from a combination of different types of calculations. Id. at col. 8, ll. 60–63. Thus, the patent discloses that rate engine 1000 calculates a “shipping rate” that includes not only a basic transportation cost but also many other costs that contribute to the total cost to send an item to a buyer.” slip op. at 9

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation foundReasonable expectation foundUnpatentable

    “the combinability of the sales tax calculation flow chart in Illinois Sales Tax to perform accurate tax calculations for the state of Illinois or another jurisdiction,” including the tax and duty calculations set forth in Van Zandt. Pet. 55 (citing Greenspun Decl. ¶ 56). We do not credit Patent Owner’s argument limiting Van Zandt’s teachings to international shipping. Van Zandt provides a comprehensive logistics services system and method, including providing landed cost quoting (62), to integrate logistics vendors “across any industry, at any time, no matter what vendor carrier [] or mode of transportation is to be used and no matter what country the shipment is being handled in or delivered to.” Ex. 1011, Abstract (emphasis added). More specifically, Van Zandt states that its system can calculate “any shipment duties and taxes.” Id. at 22:18 (emphasis added); see also id. at 32:11–17. Nothing in Van Zandt discredits or disallows the calculation of domestic taxes as a component of its calculation of “any shipment duties and taxes.” We credit Dr. Greenspun’s interpretation of the Van Zandt system as being “capable of handling the simpler task of calculating domestic taxes.” Greenspun Decl. ¶ 54. We further credit Dr. Greenspun’s testimony that one of ordinary skill in the art would have been motivated to combine Van Zandt with other references “whenever international shipping was potentially required,” and that references such as Illinois Sales Tax would allow one of ordinary skill in the art to figure sales tax on domestic sales. Id. at ¶ 56. The motivation to combine references can come from many sources, engineering. Greenspun Decl. ¶¶ 3–16. We determine him to be an expert in the field relevant to this patent and credit his testimony. including the nature of the problem to be solved. ABT Sys., LLC v. Emerson Elec. Co., Nos. 2014-1618, 2014-1700, 2015 WL 4924160, at *9 (Fed. Cir. Aug. 19, 2015) (citing Ruiz v. A.B. Chance, 357 F.3d 1270, 1276 (Fed. Cir. 2004). We determine, therefore, that Petitioner has presented sufficiently articulated and persuasive reasoning for combining the teachings of Van Zandt and Illinois Sales Tax that is supported by rational underpinnings. KSR, 550 U.S. at 418.” slip op. at 27

  Patent outcomesUS 8,521,642 unpatentable
  Claim construction§ 101 eligibility§ 103 obviousnesscites Alice · Mayo · Bilski · KSR · Graham
  Patents in suitUS 8,521,642
• Ebay, Inc. v. Paid, Inc.All claims unpatentable
  PTAB · Sep 16, 2015 · CBM2014-00125 · APJ Thomas L Giannetti · CBM · Final written decision

  Claims 1–24 are unpatentable under §§ 101 and 103(a), as directed to an abstract idea without an inventive concept and obvious over the asserted prior-art combinations.

  In the decision

  …construction is correct. Under the broadest reasonable interpretation standard, the “claims should always be read in light of the specification and teachings in the underlying patent.” Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1297–98 (Fed. Cir. 2015) (citation and internal quotation…

  RulingsFinal written decision

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “patent does not claim an abstract idea simply because it is directed to online auctions. PO Resp. 22; Hearing Tr. 56:10–12. As the Federal Circuit recently reminded us, “[a]n abstract idea does not become nonabstract by limiting the invention to a particular field of use or technological environment such as the Internet.” Intellectual Ventures I LLC v. Capital One Bank (US), 792 F.3d 1363, 1366 (Fed. Cir. 2015) (citations omitted). We are, therefore, not convinced by Patent Owner’s argument that the claims are not abstract because they are limited to a specific application.” slip op. at 16

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable

    “under § 101. First, the claims of the ʼ357 patent do not reflect the asserted “inventive concept” identified by Patent Owner, namely, the ability to calculate shipping rates and tax rates in real time. Patent Owner asserts that the reference in the claims to an “online auction” accomplishes this. Hearing Tr. 62:18–20. But as Petitioner points out, the claims do not recite any form of real-time calculations. The claims simply recite steps that were routinely done manually before the filing date of the patent. Hearing Tr. 7:16–22; Rotman Dep. 127:19–128:5. More fundamentally, however, simply adding a computer limitation to claims covering an abstract concept, without more, is insufficient to render the claim patentable under § 101, even if the use of a computer enables faster operation. Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada, 687 F.3d 1266, 1278 (Fed. Cir. 2012). In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for performing calculations. SiRF Tech., Inc. v. Int'l Trade Comm'n, 601 F.3d 1319, 1333 (Fed. Cir. 2010). Likewise, “the use of the Internet is not sufficient to save otherwise abstract claims from ineligibility under § 101.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014). For these reasons, Patent Owner’s argument based on meeting the asserted need for speed and other requirements of online auctions fails.” slip op. at 19

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation foundReasonable expectation foundUnpatentable

    “We are persuaded by Petitioner’s arguments that it would have been obvious to combine Van Zandt and Illinois Sales Tax. Pet. 58–59. We are convinced by Petitioner’s arguments, supported by the testimony of Dr. Greenspun,5 that one of ordinary skill in the would have “readily appreciated the combinability of the sales tax calculation flow chart in Illinois Sales Tax to perform accurate tax calculations for the state of Illinois or another jurisdiction,” including the tax and duty calculations set forth in Van Zandt. Pet. 58 (citing Greenspun Decl. ¶ 56). We do not credit Patent Owner’s argument limiting Van Zandt’s teachings to international shipping. Van Zandt provides a comprehensive logistics services system and method, including providing landed cost quoting (62), to integrate logistics vendors “across any industry, at any time, 5 Dr. Greenspun holds a Ph.D. in Electrical Engineering and Computer Science from MIT. He has authored five computer science textbooks. He has taught at MIT and has over 20 years of experience in computer software engineering. Greenspun Decl. ¶¶ 3–16. We determine him to be an expert in the field relevant to this patent and credit his testimony. no matter what vendor carrier [] or mode of transportation is to be used and no matter what country the shipment is being handled in or delivered to.” Ex. 1011, Abstract (emphasis added). More specifically, Van Zandt states that its system can calculate “any shipment duties and taxes.” Id. at 22:18 (emphasis added); see also id. at 32:11–17. Nothing in Van Zandt discredits or disallows the calculation of domestic taxes as a component of its calculation of “any shipment duties and taxes.” We credit Dr. Greenspun’s interpretation of the Van Zandt system as” slip op. at 26

  • Obviousness (§103) › Motivation to combine / reasonable expectation of success › Teaching awayTeaching away not foundDecided for petitioner

    “reason to combine the references because they “teach away.” Hearing Tr. 94:13–14. But in response to questioning by the panel, Patent Owner’s counsel agreed that Hosey does not disparage the type of calculation being done in PriceGrabber.com, taking instead the position that the two are not “necessarily compatible.” Hearing Tr. 94:19–95:14. We are not persuaded by Patent Owner’s teaching away argument. Nowhere does Patent Owner demonstrate that Hosey criticizes, discredits, or otherwise discourages the use of its listing or Details page with a shipping interface. In re Fulton, 391 F.3d 1195, 1201 (Fed. Cir. 2004) (prior art’s disclosure did not criticize, discredit, or otherwise discourage the claimed solution and therefore did not teach away). We do not agree, either, that the references are not “compatible.” See supra.” slip op. at 33

  Patent outcomesUS 8,352,357 unpatentable
  § 101 eligibility§ 103 obviousnesscites Alice · Mayo · Bilski · KSR · Graham
  Patents in suitUS 8,352,357
• American Express Co. / American Express Travel Co. et al. v. Harvey LunenfeldAll claims unpatentable
  PTAB · May 22, 2015 · CBM2014-00050 · APJ Frances L Ippolito · CBM · Final written decision

  Claims 1, 5, 15, 21, 31, and 35 are unpatentable under §§ 101 and 103; the contingent motion to amend is denied.

  In the decision

  …the technology underlying the Web, Web-based search engines and metasearch engines, Web-based travel commerce sites, and, in particular, the teachings of Travelscape, Mamma.com, 10 CBM2014-00050 Patent 8,239,451 B1 and Knowledge Broker. PO Resp. 32; see Pet. 24. Patent Owner urges a…

  RulingsFinal written decision

  • Skill levelSkill level petitioner adoptedDecided for petitioner

    “C. Level of Ordinary Skill in the Art Patent Owner disagrees with Petitioner’s definition of PHOSITA” slip op. at 10

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “Accordingly, utilizing this framework, we analyze claims 1, 5, 15, 21, 31,” slip op. at 28

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptUnpatentable

    “Accordingly, based on the evidence of record, we determine that the” slip op. at 35

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation foundUnpatentable

    “1. Knowledge Broker is not a Metasearch Engine As discussed previously, we do not agree with Patent Owner’s assertion” slip op. at 57

  Patent outcomesUS 8,239,451 unpatentable
  § 101 eligibility§ 103 obviousnesscites Alice · Mayo · KSR · Graham
  Patents in suitUS 8,239,451
• American Express Company / American Express Travel Related Services Company, Inc. et al. v. Metasearch Systems, LLCAll claims unpatentable
  PTAB · Mar 13, 2015 · CBM2014-00001 · APJ Howard B Blankenship · CBM · Final written decision

  Claims 2, 6, and 8 are unpatentable under §§ 101 and 103(a); Patent Owner’s motion to amend is denied.

  In the decision

  …associated with the item that may be ordered, to be displayed in the response. Pet. 75–77 (claim chart).7 Petitioner refers to Mamma.com’s teaching of advertisements being returned in addition to the descriptive information that is part of the search results. Id. at 76–77, 78; Ex. 1005,…

  RulingsFinal written decision

  • Patent Eligibility (§101) › Alice/Mayo step one — 'directed to'Step1 directed to exceptionUnpatentable

    “In this case, representative claim 2 recites eight steps for a search that is “associated with at least one travel related item,” and which include receiving the search results, communicating the results along with an advertisement, receiving an order for the item, and processing the order. See Ex. 1001, col. 145, ll. 33–61. Although the claimed process requires computer hardware and software (e.g., step (a) of claim 2, “receiving a Hypertext Transfer Protocol request from a client device”), we agree with Petitioner that the claim embraces 5 The Court’s decision is sometimes referenced as Ultramercial III. The Federal Circuit heard the second appeal from the U.S. District Court after the Supreme Court vacated the Federal Circuit’s first decision. 772 F.3d at 711–12. the abstract idea of marketing an item on a metasearch Web site with keyword ads and providing a way to order the item.” slip op. at 13

  • Patent Eligibility (§101) › Alice/Mayo step two — inventive conceptStep2 no inventive conceptIneligibleUnpatentable

    “Next, or in step two of the analysis, we search for an “inventive concept”— i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself. Alice, 134 S. Ct. at 2355. In this case, the claims recite, for the most part, an ordered combination of steps that contain Internet operations that were conventional at the time of invention. For example, the claims recite communicating with a client device using a Hypertext Transfer Protocol [HTTP]. Momma.com demonstrates that browsers on Internet client devices used such a protocol at the time of invention. See Ex. 1005, 10 (for “Microsoft Internet Explorer,” go to the address “http://www.mamma.com”). The claims further recite a “metasearch engine,” which also was conventional at the time of invention. See id. at 5 (“Mamma is a meta search engine”); see also Prelim. Resp. 3 (Patent Owner did not claim that “metasearching” was novel at the time of invention). Patent Owner argues that designing more than a “rudimentary” metasearch engine in the late 1990’s was not a trivial task. PO Resp. 44. The argument is premised on the assumption that the claims require more than “rudimentary” metasearching. The claims recite, however, as in claim 2, a “metasearch engine to send at least one search query to a plurality of unique hosts”—e.g., a metasearch engine capable of sending a single search query to a plurality (e.g., two) different hosts. The claims are drawn to implementing the abstract idea of marketing an item on a metasearch Web site with keyword ads and some way to order the item with routine, conventional activity. Such an implementation does not transform the abstract idea into patent eligible subject matter.” slip op. at 14

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation foundDecided for petitioner

    “5. Combining Knowledge Broker and Mamma.com Patent Owner argues that a person of ordinary skill in the art would not have been motivated to combine the “disparate technologies” of Mamma.com and Knowledge Broker and would not have known how to do so “without complex, lengthy, and uncertain experimentation.” PO Resp. 62. According to Patent Owner, the “two technologies” of “metasearch engines and structured e-commerce comparison shopping services providing product purchase functionality and associated advertisements—were vastly different technologies during the late 1990s and in particular in 1999-2000.” Id. at 59. A person of ordinary skill in the art would “not have been motivated to combine metasearch engines with structured e-commerce comparison shopping sites due to numerous other technical challenges present at the time.” Id. at 63. We agree with Petitioner, however, that the claims do not require addressing the “technical challenges” submitted by Patent Owner. Pet. Reply 11–12. Adding advertisements to Knowledge Broker would not require combining a metasearch engine with other “technologies” such as “structured ecommerce comparison shopping sites.” For example, the advertisements could be supplied from the hosts. Patent Owner acknowledges there is no limitation as to where the advertisement comes from. Tr. 61:20–25.” slip op. at 26

  • Obviousness (§103) › Objective indicia / secondary considerations › Long-felt need / failure of othersNot shown unpatentableDecided for petitioner

    “The Declaration does not point to any evidence in the record in support of the allegations. Expert testimony that does not disclose the underlying facts or data on which the opinion is based is entitled to little or no weight. 37 C.F.R. § 42.65(a). Moreover, Dr. Carbonell does not allege, let alone show, that others tried and failed to solve the problem allegedly solved by the ’924 patent. See Tex. Instruments, Inc. v. U.S. Int’l Trade Comm’n, 988 F.2d 1165, 1178 (Fed. Cir. 1993) (“[L]ong-felt need is analyzed as of the date of an articulated identified problem and evidence of efforts to solve that problem.”); In re Beattie, 974 F.2d 1309, 1313 (Fed. Cir. 1992) (declarations that failed to show a long-felt need and failure of others to meet that need, and which offered only opinion evidence that has little value without sufficient support, were insufficient to establish nonobviousness). Further, on this record, the “desirability of combined search and shopping functionality” (Ex. 2006 ¶ 40) was not unmet at the time of invention. Patent Owner acknowledges that e-commerce services that allowed a user to query structured databases predated the invention. E.g., PO Reply 8–9, 12, 62 (discussing “SoftBot” and “ShopBot” e-commerce services). For the foregoing reasons, we find that Patent Owner’s evidence in support of a long-felt but unmet need is entitled to little weight in support of nonobviousness.” slip op. at 29

  Patent outcomesUS 8,326,924 unpatentable
  § 101 eligibility§ 103 obviousnesscites Mayo · Bilski · Phillips · KSR · Graham
  Patents in suitUS 8,326,924
• Apple Inc. v. Sightsound Technologies, LLCAll claims unpatentable
  PTAB · Oct 7, 2014 · CBM2013-00023 · APJ Justin T Arbes · CBM · Final written decision

  Claims 1, 64, and 95 were not shown anticipated by the CompuSonics system but were held unpatentable as obvious over the CompuSonics publications.

  In the decision

  …via telephone lines 30. Id. at col. 4, ll. 14–18. According to the ’440 patent, control units 20 and 50 are “designed specifically to meet the teachings of this invention,” but all other components shown in Figure 1 were “already commercially available.” Id. at col. 4, ll. 34–40. The ’440…

  RulingsFinal written decision

  • Claim Construction › Intrinsic evidence (Phillips canons) › Specification disavowal / 'present invention' languageTerm construed petitioner constructionDisclaimer not foundDecided for petitioner

    “memory” to a hard disk. The Specification describes the use of a hard disk in the context of describing a preferred embodiment, not defining the “second memory” recited in the claims. See, e.g., id. at col. 3, l. 55–col. 4, l. 28 (describing hard disk 60 of the user in a section titled “Description of the Preferred Embodiment”); col. 6, ll. 10–16 (stating that the description and drawings “shall be interpreted as illustrative, and not in a limiting sense”). We do not see anything in the Specification indicating that the disclosed method requires a hard disk, as opposed to merely treating it as a preferred type of memory. Nor are we persuaded that the Specification limits “second memory” to only non-removable devices. The Specification does not use the term “removable” or state that any memory must be incapable of being removed. Indeed, hard disks, which are the preferred embodiment disclosed in the Specification, were available at the time of the ’440 patent as removable and non-removable devices, as SightSound’s declarant, Mr. Snell, acknowledges. See Ex. 4366 at 107:20–108:2. Further, the Specification’s description of disadvantages of certain types of removable storage media (i.e., records, tapes, and CDs) does not mean necessarily that the term “second memory” excludes such devices. See Thorner v. Sony Computer Entm’t Am. LLC, 669 F.3d 1362, 1366 (Fed. Cir. 2012) (“Mere criticism of a particular embodiment encompassed in the plain meaning of a claim term is not sufficient to rise to the level of clear disavowal.”). The Specification does not indicate that the identified disadvantages extend to all removable media or that the disadvantages occur specifically because the devices are removable. See Ex. 4301, col. 1, l. 24–col. 2, l. 21. To the contrary, some of the identified disadvantages, like limited capacity and playback capability, have nothing to do with whether the device can be removed. See id. at col. 1, ll. 27–44. Thus, we do not see any basis in the Specification for limiting “second memory” to only non-removable devices.” slip op. at 12

  • Novelty / Anticipation (§102) › Anticipation standard (single reference, every element)Not shown unpatentableNot shown unpatentable

    “persuaded that they disclose a single, publicly known system that anticipates the challenged claims. Anticipation requires that every limitation of the claim at issue be disclosed in a prior art disclosure and “arranged or combined in the same way as recited in the claim.” Net MoneyIN, Inc. v. 4 Section 18(a)(1)(C) of the Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (“AIA”), provides that a covered business method patent review may be based on “prior art that is described by section 102(a)” as in effect before March 16, 2013. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008). “[I]t is not enough that the prior art reference . . . includes multiple, distinct teachings that the artisan might somehow combine to achieve the claimed invention.” Id.; see also Kyocera Wireless Corp. v. ITC, 545 F.3d 1340, 1351–52 (Fed. Cir. 2008) (concluding that a set of eleven specifications pertaining to the same telecommunication standard did not constitute a “single prior art reference”). Apple does not argue that a single prior art reference discloses all limitations of the challenged claims, instead relying on different materials as allegedly disclosing different limitations. See Pet. 50–64. The cited materials undoubtedly are similar, as they all describe technology developed by CompuSonics and pertain generally to the recording of digital audio or video. There are differences, however. For example, the materials describe different models of DSPs with slightly different features and capabilities. Certain materials discuss the recording of digital audio on DSP-1000 series devices with floppy disks, e.g., Ex. 4316, whereas others disclose storage on DSP-2000 series devices with a hard disk, e.g., Ex. 4324. Given that the prior art teachings and suggestions are found in references describing a family of device models, as opposed to a single device model, we find that one skilled in the art would not have at once envisaged the claimed arrangement of known components in a manner consistent with anticipation under 35 U.S.C. § 102(a). Apple has not demonstrated, by a preponderance of the evidence, that claims 1, 64, and 95 of the ’440 patent are anticipated by the CompuSonics system.” slip op. at 22

  • BurdenDecided for patent owner

    “persuaded that they disclose a single, publicly known system that anticipates the challenged claims. Anticipation requires that every limitation of the claim at issue be disclosed in a prior art disclosure and “arranged or combined in the same way as recited in the claim.” Net MoneyIN, Inc. v. 4 Section 18(a)(1)(C) of the Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (“AIA”), provides that a covered business method patent review may be based on “prior art that is described by section 102(a)” as in effect before March 16, 2013. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008). “[I]t is not enough that the prior art reference . . . includes multiple, distinct teachings that the artisan might somehow combine to achieve the claimed invention.” Id.; see also Kyocera Wireless Corp. v. ITC, 545 F.3d 1340, 1351–52 (Fed. Cir. 2008) (concluding that a set of eleven specifications pertaining to the same telecommunication standard did not constitute a “single prior art reference”). Apple does not argue that a single prior art reference discloses all limitations of the challenged claims, instead relying on different materials as allegedly disclosing different limitations. See Pet. 50–64. The cited materials undoubtedly are similar, as they all describe technology developed by CompuSonics and pertain generally to the recording of digital audio or video. There are differences, however. For example, the materials describe different models of DSPs with slightly different features and capabilities. Certain materials discuss the recording of digital audio on DSP-1000 series devices with floppy disks, e.g., Ex. 4316, whereas others disclose storage on DSP-2000 series devices with a hard disk, e.g., Ex. 4324. Given that the prior art teachings and suggestions are found in references describing a family of device models, as opposed to a single device model, we find that one skilled in the art would not have at once envisaged the claimed arrangement of known components in a manner consistent with anticipation under 35 U.S.C. § 102(a). Apple has not demonstrated, by a preponderance of the evidence, that claims 1, 64, and 95 of the ’440 patent are anticipated by the CompuSonics system.” slip op. at 22

  • ExcludeMotion to exclude, deniedMixed

    “Apple argues that Mr. Snell is not qualified to offer opinions on the alleged commercial success of the iTMS, and does not provide a sufficient factual “basis” for his opinions. Pet. Mot. to Exclude 3–5. For instance, Apple contends that Mr. Snell applied an erroneous interpretation of “second memory” in the claims, and gave opinions that contradict the prosecution history of the application that issued as the parent ’573 patent. Id. at 12–15. We have reviewed the cited portions of Mr. Snell’s testimony and see no basis on which they would warrant the extreme remedy of exclusion. Apple’s arguments indicate a mere disagreement with Mr. Snell’s testimony and pertain to the weight to be given to that testimony, which we are able to assess without excluding it, as explained above. Apple’s Motion to Exclude is denied.” slip op. at 59

  Patent outcomesUS 5,966,440 unpatentable
  Claim construction§ 102 anticipation§ 103 obviousnesscites KSR · Graham
  Patents in suitUS 5,966,440
• Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co.All claims unpatentable
  PTAB · Jan 23, 2014 · CBM2012-00002 · APJ Joni Y Chang · CBM · Final written decision

  Claims 1, 3–6, and 9–18 are unpatentable under §103 over the three instituted combinations of Kosaka with Florida Guide, Black Magic and Herrod, or Herrod.

  In the decision

  …knowledge of one of ordinary skill in the pertinent art.” Paulsen, 30 F.3d at 1480. Moreover, “it is proper to take into account not only specific teachings of the reference but also the 19 Case CBM2012-00002 Patent 6,064,970 inferences which one skilled in the art would reasonably be expected to…

  RulingsFinal written decision

  • ExcludeMotion to exclude, deniedDenied

    “We agree with Progressive. Mr. Ehsani may rely upon Mr. Miller’s opinion on actuarial classes or other insurance aspects to formulate his opinion as to fuzzy logic, based on his education, experience, and skills, as outlined in his curriculum vitae (Ex. 2016 ¶¶ 1-12). We also are cognizant of Mr. Ehsani’s qualifications and have weighed his testimony accordingly. With respect to whether Mr. Ehsani’s testimony should be excluded for lack of supporting facts or data, Liberty has not explained adequately why the Board should exclude Mr. Ehsani’s testimony. There is a strong public policy for making all information filed in a non-jury, quasi-judicial administrative proceeding available to the public, especially in an inter partes review which determines the patentability of claim in an issued patent. It is within the Board’s discretion to assign the appropriate weight to be accorded to evidence. See, e.g., In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1368 (Fed. Cir. 2004) (“[T]he Board is entitled to weigh the declarations and conclude that the lack of factual corroboration warrants discounting the opinions expressed in the declarations.”); Velander, 348 F.3d at 1371 (“In giving more weight to prior publications than to subsequent conclusory statements by experts, the Board acted well within [its] discretion.”); Yorkey, 601 F.3d at 1284 (holding the Board has discretion to give more weight to one item of evidence over another “unless no reasonable trier of fact could have done so”). As Liberty points out, it is better to have a complete record of the evidence submitted by the parties 60 than to exclude particular pieces. Mot. 2 (citing e.g., Donnelly Garment Co. v. NLRB, 123 F.2d 215, 224 (8th Cir. 1942) (“One who is capable of ruling accurately upon the admissibility of evidence is equally capable of sifting it accurately after it has been received.”)). Accordingly, Liberty’s motion to exclude is denied.” slip op. at 60

  • Skill levelSkill level board ownOther

    “We agree with Progressive that the Florida Guide and New York Guide, cited by Liberty, reflect conventional or basic knowledge of one with ordinary skill in the art, and include the conventional insurance determination methods disclosed in the background section of the ’970 patent. Prelim. Resp. 13-14 (stating the Florida and New York Guides “discuss the same subject matter (i.e., the existence of traditional actuarial classes) that . . . is disclosed in the background section of the ’970 patent”); id. at 39 (stating the cited portions of the Florida Guide are “essentially identical to the prior art knowledge disclosed in columns 1 and 2 of the ’970 patent”). We conclude that the background section of the ’970 patent (Ex. 1001, 1:17-2:37) reflects the level of ordinary skill in the art. Therefore, one with ordinary skill in the art would have had a thorough understanding of using the principle of actuarial classes to determine vehicle insurance costs. The ’970 patent also indicates that the electronic motor vehicle control and operating systems were known in the art at the time of invention, and those systems could be modified readily to obtain the desired types of information relevant to determine the cost of insurance. Ex. 1001, 3:25-28. Indeed, Liberty’s expert, Mr. Scott Andrew, testifies that “several companies had developed vehicle telematics systems that measured vehicle data, such 17 as speed, acceleration, time of day, etc.,” and these “systems commonly included in-vehicle data monitoring devices that would monitor the data, store it, and/or transmit it to a remote location outside of the vehicle.” Ex. 1012 ¶ 20. As noted in the ’970 patent, vehicle tracking systems— those that used communication links with satellite navigation systems for providing information describing a vehicle’s location based upon navigation signals—were also well known in the art. Ex. 1001, 3:28-32. The ’970 patent further provides that it was known in the art to detect and record seatbelt usage to assist in determination of the vehicle insurance costs. Ex. 1001, 2:66-3:2 (citing U.S. Patent No. 4,667,336, Abs. (“a system for detecting and recording each time a seat belt is used [and depending] on the level of seat belt usage the driver earns discounts on car insurance premiums.”)). Therefore, one with ordinary skill in the art would have possessed the knowledge of determining insurance premiums using monitored vehicle data. In determining the knowledge level of one with ordinary skill in the art, we note that various factors may be considered, including “type of problems encountered in the art; prior art solutions to those problems; rapidity with which innovations are made; sophistication of the technology; and educational level of active workers in the field.” In re GPAC, Inc., 57 F.3d 1573, 1579 (Fed. Cir. 1995) (citing Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955, 962 (Fed. Cir. 1986)). We also recognize that the knowledge of one with ordinary skill in the art would have included the basic principles, standards, and practices of insurance premium 18 determination—e.g., Risk Classification Statement of Principles of the American Academy of Actuaries (Ex. 2012), Actuarial Standard of Practice No. 12, Concerning Risk Classification, issued by the Actuarial Standards Board (Ex. 2020), Interpretative Opinion 3: Professional Communications of Actuaries and Interpretative Opinion 4: Actuarial Principles and Practices (Ex. 1023). Ex. 2010 ¶ 16; Ex. 2020 ¶ 5.” slip op. at 17

  • Expert testimonyPetitioner expert creditedPatent owner expert discountedDecided for petitioner

    “Upon review of the evidence on record, we credit the testimony of Ms. O’Neil over that of Mr. Miller. See Yorkey v. Diab, 601 F.3d 1279, 1284 (Fed. Cir. 2010) (holding that Board has discretion to give more weight to one item of evidence over another “unless no reasonable trier of fact could have done so”). We find that Ms. O’Neil’s explanations are supported by Kosaka, which discusses the conventional way of calculating insurance premiums and the unfairness of such a system. See Ex. 1004, p. 2, col. 2:15- 27 19 (stating “conventional insurance premium determination systems have involved on-line implementation of paper-based insurance agreements, and thus rates have been determined based on risk evaluation using static attributes of the agreement customer”) (emphasis added); id. at p. 2, col. 2:36-40 (stating “with automobile liability insurance[,] which is a type of paper-based insurance agreement, it is normal for there be no difference in insurance premiums between operators who always operate safely, and operators who occasionally take risks. However, it is considered unfair to apply the same insurance premium to both.”).” slip op. at 27

  • Obviousness (§103) › Graham factors (scope of art, differences, level of skill)UnpatentableUnpatentable

    “Progressive argues that “in order to be an actuarial class, a group of risks should predict insurance losses or costs,” and that Herrod’s behavioral groups would not be predictive of insurance claims losses (or premiums). PO Resp. 9-10 (citing Ex. 2010 ¶¶ 16-17), 24-28 (citing Ex. 2010 ¶ 48). Progressive submits that Herrod’s behavioral groups would not have differentiated expected loss costs. Id. at 26. Progressive also alleges that Herrod’s accident statistics “may help to indicate how safe a driver is, but they are not part of the expected loss determination.” Id. at 28 (citing Ex. 2010 ¶ 51). However, Progressive’s argument does not account for certain teachings of Herrod, including its device can be used for measuring safety-related features of driving, and the monitored data can be useful to insurance companies. Ex. 1007, 1-2. Further, as explained by Liberty, “risk characteristics need not be direct or complete predictors of future losses to form the basis of an actuarial class,” as confirmed by Actuarial Standards of Practice No. 12 (Ex. 2020, ASOP No. 12 ¶ 5.2) and the examples provided by the ’970 patent (Ex. 1001, 1:27-2:47). Reply 13 (emphasis added) (citing Ex. 1022 ¶¶ 7-13, 43, 45-47). Liberty submits that a driver’s age or marital 37 status, or a vehicle’s value or age, does not predict losses or costs directly, nor do these risk characteristics result in actual insurance claims. Id. (citing Ex. 1022 ¶¶ 11-12, Ex. 1001, 1:27-2:47, Ex. 2020, ASOP No. 12 ¶ 5.2, Ex. 2012, 15). In support of Liberty’s position, Ms. O’Neil testifies: Herrod teaches monitoring and gathering acceleration data and accident statistics to group drivers in “behavioural groups” reflecting different levels of accident risk. A [person of ordinary skill in the art] would know that, in order to create such behavioural groups relevant to insurance rating—which a [person of ordinary skill in the art] would interpret as actuarial classes—would involve analyzing the data collected in Herrod to determine any associated expected loss costs with such data. Ex. 1022 ¶ 43.” slip op. at 37

  Patent outcomesUS 6,064,970 unpatentable
  § 103 obviousnesscites KSR · Graham
  Patents in suitUS 6,064,970

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