• Comcast Cable Communications, LLC v. Rovi Guides, Inc.All claims unpatentable
  PTAB · Oct 16, 2018 · IPR2017-01049 · APJ Kevin F Turner · IPR · Final written decision

  Claims 1–18 are unpatentable: claims 1, 3–10, and 12–18 as obvious over Sato and Humpleman; claims 2 and 11 as obvious over those references and Lawler.

  RulingsFinal written decision

  • Expert testimonyPetitioner expert creditedOther

    “of Sato’s Figures 1 and 2 to achieve the same functions described in relation to Figure 17. See Tyco Healthcare Grp. LP v. Ethicon Endo-Surgery, Inc., 774 F.3d 968, 978 (Fed. Cir. 2014) (“[O]ne of ordinary skill is also one of ‘ordinary creativity’ that knows how to combine familiar prior art elements to achieve the same functions.”); Boston Sci. Scimed, 554 F.3d at 991 (“Combining two embodiments disclosed adjacent to each other in a prior art patent does not require a leap of inventiveness.”). Accordingly, we agree with Dr. Tjaden that a person of ordinary skill in the art would have looked to Sato’s Figures 1 and 2 for a teaching as to how the system illustrated in Sato’s Figure 17 controls electronic devices, such as a VTR for scheduling program recordings. Ex. 1152 ¶¶ 27, 28.” slip op. at 46

  • Skill levelOther

    “2. Level of Skill in the Art There is evidence in the record before us that enables us to determine” slip op. at 22

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

    “III. CONCLUSIONS Comcast has demonstrated by a preponderance of the evidence that (1) claims 1, 3–10, and 12–18 are unpatentable under § 103(a) over the combined teachings of Sato and Humpleman; and (2) claims 2 and 11 are unpatentable under § 103(a) over the combined teachings of Sato, Humpleman, and Lawler. Comcast, however, has not demonstrated by a preponderance of the evidence that (1) claims 1, 3–10, and 12–18 are unpatentable under § 103(a) over the combined teachings of Woo, Mizuno, and Rzeszewski; and (2) claims 2 and 11 are unpatentable under § 103(a) over the combined teachings of Woo, Mizuno, Rzeszewski, and Lawler.” slip op. at 86

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation not foundNot shown unpatentable

    “E. Obviousness Over the Combined Teachings of Woo, Mizuno, Rzeszewski, and Lawler Comcast also contends that claims 2 and 11 of the ’413 Patent are unpatentable under § 103(a) over the combined teachings of Woo, Mizuno, Rzeszewski, and Lawler. Pet. 71–72. This ground relies upon Comcast’s argument that it would have been obvious to one of ordinary skill in the art to automate Woo’s manual call-in scheduling process by using Mizuno’s remote access guide web pages. Id. at 47–48 (citing Ex. 1102 ¶¶ 197–199). Because we determine that Comcast does not provide sufficient reasoning for combining the teachings of Woo and Mizuno, Comcast has not demonstrated a reasonable likelihood that it would prevail on its assertion that the subject matter of dependent claims 2 and 11 would have been obvious over the combined teachings of Woo, Mizuno, Rzeszewski, and Lawler.” slip op. at 85

  Patent outcomesUS 8,578,413 unpatentable
  § 103 obviousnesscites KSR · Graham
  Patents in suitUS 8,578,413
• Comcast Cable Communications, LLC v. Rovi Guides, Inc.All claims unpatentable
  PTAB · Oct 16, 2018 · IPR2017-01048 · APJ Kevin F Turner · IPR · Final written decision

  Claims 1–18 are unpatentable: claims 1, 3–10, and 12–18 as obvious over Humpleman and Killian; claims 2 and 11 as obvious over Humpleman, Killian, and Lawler.

  RulingsFinal written decision

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

    “functionality of an “interactive television program guide” (i.e., navigable, selectable, and capable of controlling certain functions or settings), neither party directs us to, nor can we find, a disclosure in the specification that specifically identifies what element or elements constitute a “guide.” Given the lack of disclosure in this regard, we decline to limit the “guide” to a single software application. Rather, these disclosures support Comcast’s proposed construction that an “interactive television program guide” is “control software operative at least in part to generate a display of television program listings and allow a user to navigate through the listings, make selections, and control functions of the software.” We further clarify that, based on the plain language of independent claims 1 and 10, they indicate that the claim terms “local interactive television program guide” and “remote access interactive television program guide” are separately identifiable elements. See Becton, Dickinson & Co. v. Tyco Healthcare Grp., LP, 616 F.3d 1249, 1254 (Fed. Cir. 2010) (“Where a claim lists elements separately, ‘the clear implication of the claim language’ is that those elements are ‘distinct component[s]’ of the patented invention.” (alteration in original) (quoting Gaus v. Conair Corp., 363 F.3d 1284, 1288 (Fed. Cir. 2004))). Our determination in this regard is supported by the specification, which includes various embodiments that treat these claim terms as separately identifiable elements capable of communicating with each other. See, e.g., Ex. 1001, 15:20–23 (“In still another suitable approach, the [local interactive television program guide and remote access interactive television program guide] may be different guides that communicate in a manner or manners discussed . . . herein.”), 23:4–7 (“The remote access [interactive television] program guide may . . . send audio, graphical, and text messages to the local interactive [television] program guide for playing or display by user television equipment 22.”). The specification also explains that the “local interactive television program guide” and “remote access interactive television program guide” may be the same guide, in which case they are separately identifiable elements in that each guide is compiled to run on a different platform. See id. at 15:15–18 (“The remote access and local guide may, for example, be the same guide but compiled to run on two different platforms and to communicate in a manner or manners discussed herein.”).” slip op. at 16

  • Novelty / Anticipation (§102) › Prior-art status of a reference › Patents / published applications (effective date, provisional support)Reference is prior artDecided for petitioner

    “The relevant section of Humpleman is reproduced below: This patent application claims priority from provisional patent application Ser. No. 60/050,762, filed on Jun. 25, 1997, entitled Home Network, Browser Based, Command and Control and provisional patent application Ser. No. 60/059,499, filed on Sep. 22, 1997, entitled Improved Home Network, Browser Based, Command and Control, which are incorporated herein by reference. Ex. 1006, 1:7–13 (emphasis added). From this cited disclosure, we find the patentee in Humpleman incorporated the entireties of both provisional applications by reference. If the intent was to incorporate only one provisional or just part of one provisional, then we would agree that sufficient particularity has not been supplied. However, a reasonable interpretation of such an incorporation by reference clause is that all of the referenced provisional disclosures are incorporated. Similarly, there is no need to stipulate where particular material to be incorporated is found when that particular material is all.” slip op. at 22

  • Skill levelSkill level petitioner adoptedDecided for petitioner

    “the knowledge level of a person of ordinary skill in the art. Relying on the testimony of its declarant, Dr. Tjaden, Comcast asserts that a person of ordinary skill in the art as of July 17, 1998, which is the earliest priority date on the face of the ’413 Patent, would be an individual who possesses the following: a bachelor’s degree in computer science, electrical engineering, computer engineering, or a similar discipline, and two years of experience with interactive program guides, set-top boxes, mobile computer devices, and techniques for delivering content or program guides over communication networks, such as a cable system, a local-area network, and the Internet. Pet. 12–13 (quoting Ex. 1002 ¶ 28). Alternatively, once again relying on the testimony of Dr. Tjaden, Comcast asserts that a person of ordinary skill in the art “could have had equivalent experience in industry or research, such as designing, developing, evaluating, testing, or implementing the aforementioned technologies.” Id. at 13 (quoting Ex. 1002 ¶ 28). Conversely, Rovi’s declarant, Dr. Shamos, does not offer an assessment of the level of skill in the art as of July 1998, nor does he explicitly state his intent to adopt Dr. Tjaden’s assessment. See generally Ex. 2011. Given Dr. Shamos’s lack of testimony on this matter, we adopt Dr. Tjaden’s assessment because it is consistent with the ’413 Patent and the asserted prior art, and apply it to our obviousness evaluation below.” slip op. at 25

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

    “The Supreme Court has held that an obviousness evaluation “cannot be confined by a formalistic conception of the words teaching, suggestion, and motivation, or by overemphasis on the importance of published articles and the explicit content of issued patents.” KSR, 550 U.S. at 419. Instead, the relevant inquiry is whether Comcast has set forth “some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.” In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006), cited with approval in KSR, 550 U.S. at 418. When describing examples of what may constitute a sufficient rationale to combine, the Supreme Court elaborated that, “if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.” KSR, 550 U.S. at 417. Based on the record developed during trial, we agree with Comcast that one of ordinary skill in the art would have had a sufficient reason to implement Killian’s enhancements in Humpleman’s system. When, as here, a technique has been used to improve one device (i.e., Killian’s interactive features), and one of ordinary skill in the art would have recognized that it would improve similar devices in the same way (i.e., applying Killian’s interactive features to Humpleman’s system, thereby allowing viewers to more intelligently select, schedule, and record their viewing opportunities), using the technique is obvious unless its actual application is beyond the skill level of an ordinary skilled artisan. See Pet. 23–25; Ex. 1002 ¶¶ 102– 106. The record includes credible evidence explaining why applying Killian’s features to Blake’s system would not have been uniquely challenging or otherwise beyond the skill level of an ordinary skilled artisan. Comcast declarant, Dr. Tjaden, provides the necessary motivation for doing so—namely, “allowing viewers to more intelligently select, schedule, and record their viewing opportunities.” Ex. 1002 ¶ 106.” slip op. at 43

  Patent outcomesUS 8,578,413 unpatentable
  Claim construction§ 102 anticipation§ 103 obviousnesscites KSR · Graham
  Patents in suitUS 8,578,413
• Comcast Cable Communications, LLC v. Rovi Guides, Inc.All claims unpatentable
  PTAB · Oct 16, 2018 · IPR2017-01050 · APJ Kevin F Turner · IPR · Final written decision

  Claims 1, 3–10, and 12–18 are unpatentable as obvious over Blake and Killian; claims 2 and 11 are unpatentable as obvious over Blake, Killian, and Lawler.

  RulingsFinal written decision

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

    “Beginning with the intrinsic record, neither party argues, nor could we find, an explicit definition for the claim term “interactive television program guide” in the specification of the ’413 Patent. The specification, however, is replete with descriptions of conventional, local, or remote interactive television program guides. For instance, the specification discloses that conventional interactive television program guides display “various groups of television program [guide] listings . . . in predefined or user-defined categories,” and “allow the user to navigate through [the] television program listings” and make a selection “using a remote control.” Ex. 1201, 1:28–33. For a conventional interactive television program guide, the user must physically be located in the same room as the set-top box on which the interactive television program guide is implemented to select programs for recording or to perform other guide functions. Id. at 1:34–42. In the context of discussing the implementation of a remote access interactive television program guide, the specification discloses that such a guide works in conjunction with a remote device to “provide users with the opportunity to remotely access features of the interactive television program guide on the interactive television program guide equipment and to remotely set program guide settings.” Id. at 2:64–3:4. The specification goes on to disclose that “[a]ny suitable interactive television program guide function or setting may be accessed,” including, but not limited to, “remotely select[ing] programming for recordings” and “remotely set[ting] and navigat[ing] through favorites (e.g., favorite channels, program categories, services, etc.).” Id. at 3:5–15. Although the aforementioned disclosures provide guidance as to the functionality of an “interactive television program guide” (i.e., navigable, selectable, and capable of controlling certain functions or settings), neither party directs us to, nor can we find, a disclosure in the specification that specifically identifies what element or elements constitute a “guide.” Given the lack of disclosure in this regard, we decline to limit the “guide” to a single software application. Rather, these disclosures support Comcast’s proposed construction that an “interactive television program guide” is “control software operative at least in part to generate a display of television program listings and allow a user to navigate through the listings, make selections, and control functions of the software.”” slip op. at 13

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

    “Beginning with the intrinsic record, neither party argues, nor could we find, an explicit definition for the claim term “interactive television program guide” in the specification of the ’413 Patent. The specification, however, is replete with descriptions of conventional, local, or remote interactive television program guides. For instance, the specification discloses that conventional interactive television program guides display “various groups of television program [guide] listings . . . in predefined or user-defined categories,” and “allow the user to navigate through [the] television program listings” and make a selection “using a remote control.” Ex. 1201, 1:28–33. For a conventional interactive television program guide, the user must physically be located in the same room as the set-top box on which the interactive television program guide is implemented to select programs for recording or to perform other guide functions. Id. at 1:34–42. In the context of discussing the implementation of a remote access interactive television program guide, the specification discloses that such a guide works in conjunction with a remote device to “provide users with the opportunity to remotely access features of the interactive television program guide on the interactive television program guide equipment and to remotely set program guide settings.” Id. at 2:64–3:4. The specification goes on to disclose that “[a]ny suitable interactive television program guide function or setting may be accessed,” including, but not limited to, “remotely select[ing] programming for recordings” and “remotely set[ting] and navigat[ing] through favorites (e.g., favorite channels, program categories, services, etc.).” Id. at 3:5–15. Although the aforementioned disclosures provide guidance as to the functionality of an “interactive television program guide” (i.e., navigable, selectable, and capable of controlling certain functions or settings), neither party directs us to, nor can we find, a disclosure in the specification that specifically identifies what element or elements constitute a “guide.” Given the lack of disclosure in this regard, we decline to limit the “guide” to a single software application. Rather, these disclosures support Comcast’s proposed construction that an “interactive television program guide” is “control software operative at least in part to generate a display of television program listings and allow a user to navigate through the listings, make selections, and control functions of the software.”” slip op. at 13

  • Skill levelSkill level petitioner adoptedDecided for petitioner

    “2. Level of Skill in the Art There is evidence in the record before us that enables us to determine the knowledge level of a person of ordinary skill in the art. Relying on the testimony of its declarant, Dr. Tjaden, Comcast asserts that a person of ordinary skill in the art as of July 17, 1998, which is the earliest priority date on the face of the ’413 Patent, would be an individual who possesses the following: a bachelor’s degree in computer science, electrical engineering, computer engineering, or a similar discipline, and two years of experience with interactive program guides, set-top boxes, mobile computer devices, and techniques for delivering content or program guides over communication networks, such as a cable system, a local-area network, and the Internet. Pet. 14–15 (quoting Ex. 1202 ¶ 28). Alternatively, once again relying on the testimony of Dr. Tjaden, Comcast asserts that a person of ordinary skill in the art “could have had equivalent experience in industry or research, such as designing, developing, evaluating, testing, or implementing [these] technologies.” Id. at 15 (quoting Ex. 1202 ¶ 28). Conversely, Rovi’s declarant, Dr. Shamos, does not offer an assessment of the level of skill in the art as of July 1998, nor does he explicitly state his intent to adopt Dr. Tjaden’s assessment. See generally Ex. 2211. Given Dr. Shamos’s silence on this matter, we adopt Dr. Tjaden’s assessment because it is consistent with the ’413 Patent and the asserted prior art, and apply it to our obviousness evaluation below.” slip op. at 20

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

    “c. Summary In summary, Comcast has demonstrated by a preponderance of the evidence that the subject matter of independent claims 1 and 10 would have been obvious over the combined teachings of Blake and Killian. 6. Claims 3–9 and 12–18 In its Patent Owner Response, Rovi does not address separately whether the combined teachings of Blake and Killian account for the limitations of dependent claims 3–9 and 12–18. See generally PO Resp. 20– 41. We have reviewed Comcast’s explanations and supporting evidence as to how this proffered combination teaches these limitations, as well as its explanations as to how one ordinary skill in the art would have combined the relevant teachings of Blake with those of Killian, and we agree with and adopt Comcast’s analysis. See Pet. 50–59. Comcast, therefore, has demonstrated by a preponderance of the evidence that the subject matter of dependent claims 3–9 and 12–18 would have been obvious over the combined teachings of Blake and Killian.” slip op. at 64

  Patent outcomesUS 8,578,413 unpatentable
  Claim construction§ 103 obviousnesscites KSR · Graham
  Patents in suitUS 8,578,413
• Samsung Electronics Co., Ltd. v. Red Rock Analytics, LLCInstitution denied
  PTAB · Aug 30, 2018 · IPR2018-00555 · APJ John D Hamann · IPR · Institution

  The Board denied institution because Samsung did not show a reasonable likelihood that claims 1–6 and 38–43 were obvious over Yellin and Su.

  RulingsInstitution decision

  • PTAB / AIA Trials › Institution threshold (reasonable likelihood / more likely than not)Institution denied meritsInstitution denied

    “review under 35 U.S.C. § 314 and 37 C.F.R. § 42.4(a). Inter partes review may be instituted if “the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” 35 U.S.C. § 314(a). Based on the record before us, the information presented in the Petition does not demonstrate a reasonable likelihood that Petitioner would prevail in establishing that at least one challenged claim is obvious under 35 U.S.C. § 103(a). Accordingly, we deny the Petition and do not institute inter partes review.” slip op. at 2

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

    “On this record,7 we agree with Patent Owner that the broadest reasonable interpretation of a “receive chain” is “the portion of the transceiver circuitry that receives and processes an external signal at radio frequency.” Beginning with the intrinsic record, the language of each of the challenged, independent claims indicates that the receive chain is part of the transceiver for receiving data. E.g., Ex. 1001, 11:56–57, 11:59, 11:63; see also Ex. 1002 ¶ 23 (identifying transceivers as “systems including both a transmitter and a receiver”). The ’313 patent discloses that a transceiver communicates (i.e., transmits and receives data) with external sources, such as in wireless communication systems. See Ex. 1001, 1:6–11 (disclosing that the ’313 patent relates to transceivers for digital communications, such as in wireless local area networks), 1:14–24 (disclosing that wireless communication systems employ transceivers, such as heterodyne and directconversion transceivers). For example, Figure 4 shows “a typical transceiver incorporating the present invention and comprising transmit and receive chains plus a transmit power amplifier, receive low-noise amplifier, transmit/receive switch, band-pass filter, an antenna and an automatic gain control.” Id. at 4:60–65, Fig. 4. Figure 4 clearly evidences transmitting and receiving signals from external sources to provide communications. Id. Turning to the extrinsic record, Patent Owner’s interpretation is consistent with the testimony of Petitioner’s expert, Dr. Baker. Dr. Baker testifies that: 7 The parties’ arguments alleging that the other party takes inconsistent claim construction positions with respect to those taken in the related district court case are not helpful to our analysis, and we instead focus on the current record. Wireless communication systems use radio waves . . . to convey information from a source to a destination. At the source, a transmit chain (also known as a transmitter) processes a signal to prepare it to be propagated along a carrier wave at radio frequency (RF) to the destination, where the received RF signal is processed by a receive chain (also known as a receiver) to extract relevant information. Ex. 1002 ¶ 22. Upon considering the plain language of the challenged, independent” slip op. at 11

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation not foundNot shown unpatentableNot shown unpatentable

    “We agree with Patent Owner that Petitioner’s reasoning for combining Yellin and Su’s teachings is conclusory. Such statements of increased utility and minimal modifications are generic, and fail to provide necessary factual support — they are akin to stating in a conclusory fashion that the combination “would have been obvious.” See In re Van Os, 844 F.3d 1359, 1361 (Fed. Cir. 2017); see also ActiveVideo Networks Inc. v. Verizon Comm., Inc., 694 F.3d 1312, 1328 (Fed. Cir. 2012) (finding expert testimony of motivation to combine “to build something better,” “more efficient, cheaper, or” something that “had more features” was generic and insufficient).” slip op. at 20

  • Obviousness (§103) › Motivation to combine / reasonable expectation of success › HindsightTeaching away not foundDecided for patent owner

    “in modifying Yellin’s transmitter to use its IQ mismatch circuitry to function also as the claimed “receive chain.” E.g., Prelim. Resp. 48–51. We agree. Petitioner, via Dr. Baker’s testimony, appears to have relied impermissibly on the ’313 patent itself as a roadmap for putting what amounts to pieces of a jigsaw puzzle together. See Grain Processing Corp. v. Am.-Maize Prods. Co., 840 F.2d 902, 907 (Fed. Cir. 1988) (quoting Orthopedic Equip. Co. v. United States, 702 F.2d 1005, 1012 (Fed. Cir. 1983) (“Care must be taken to avoid hindsight reconstruction by using ‘the patent in suit as a guide through the maze of prior art references, combining the right references in the right way so as to achieve the result of the claims in suit.”’)). For example, Dr. Baker opines, in a conclusory fashion, that a person of ordinary skill in the art would have (i) chosen to use Yellin’s nonlinear element 340 and IQ correction unit 342, and then (ii) added thereto at least the following to obtain a receiver: (1) a processor for the data received by the receive chain (Ex. 1002 ¶ 83); (2) a path between an antenna and nonlinear element 340 for receiving an incoming RF signal from an external device (id. ¶ 85); and (3) a switching mechanism that could select between a transmit mode and a receive mode (id. ¶ 86). Furthermore, Dr. Baker does not explain how or why adding all these additional components to Yellin’s non-linear element 340 and IQ correction unit 342 would have amounted to “minimal” modifications. See Ex. 1002 ¶ 81. Nor does Dr. Baker address how the existing components of Yellin’s IQ mismatch circuitry (e.g., sample and hold circuitry 58) would function in light of these proposed modifications. See id. at ¶¶ 81–88; see also Yellin Fig. 1B. The conclusory nature of Dr. Baker’s testimony and his opining on what could be combined evidences hindsight bias. See Ex. 1002 ¶¶ 80, 82; see also InTouch Tech., Inc. v. VGO Comm., Inc., 751 F.3d 1327, 1352 (Fed. Cir. 2014) (finding hindsight bias in expert testimony that “primarily consisted of conclusory references to [the] belief that one of ordinary skill in the art could combine these references, not that they would have been motivated to do so”).” slip op. at 22

  Claim construction§ 103 obviousnesscites Graham
  Patents in suitUS 7,346,313
• Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentable
  PTAB · Jul 23, 2018 · CBM2017-00029 · APJ Michael R Zecher · CBM · Final written decision

  Claims 1 and 9 are unpatentable under § 101 because they claim pre-authorized automatic auction payments using conventional computer components, without an inventive concept.

  RulingsFinal written decision

  • BurdenDecided for petitioner

    “4. Summary In summary, we determine that Petitioner has demonstrated by a preponderance of the evidence that all of the challenged claims are directed to patent-ineligible subject matter under 35 U.S.C. § 101.” slip op. at 34

  • Skill levelOther
  • Claim Construction › Threshold & procedure › Whether a term needs construction (O2 Micro)No construction neededOther

    “II. ANALYSIS A. Claim Construction In a covered business method patent review, we interpret claim terms in an unexpired patent according to the broadest reasonable interpretation in light of the specification of the patent in which it appears. 37 C.F.R. § 42.300(b). “[W]e need only construe terms ‘that are in controversy, and only to the extent necessary to resolve the controversy.’” Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017) (quoting Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999)). Petitioner proposes a construction for the claim term “web site.” Pet. 23. We, however, need not address the construction of any claim term to resolve the issues before us.” slip op. at 17

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

    “We agree with Petitioner that independent claim 1 is directed to an abstract idea, and we adopt Petitioner’s description of the abstract idea as using a payment account to automatically effect a pre-authorized financial transaction in an electronic auction. Patent Owner does not challenge Petitioner’s description of the abstract idea, other than by making the conclusory statement that the challenged claims are not directed to an abstract idea based on Federal Circuit precedent and USPTO examination guidance. See PO Resp. 7. The language of independent claim 1 supports the finding that it is directed to the abstract idea of using a payment account to automatically effect a pre-authorized financial transaction in an electronic auction. This claim recites a method for automatically effecting payment by a process that includes the steps of maintaining and storing funds in payment accounts for use in transactions in an electronic auction system; receiving authorization prior to an electronic auction to execute an automatic payment; and executing the automatic payment by deducting and transferring funds from a payment account. Ex. 1001, 18:20–53. This purchaser-seller arrangement is not meaningfully distinct from the financial arrangements found to be abstract ideas in Alice, 134 S. Ct. at 2356 (“method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”), and Bilski v. Kappos, 561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to purchase commodities in the energy market at a fixed rate as a way of protecting, or “hedging,” against risks of price changes). The Supreme Court has explained that concepts like intermediated settlement and risk hedging are abstract ideas beyond the scope of 35 U.S.C. § 101 as they are “a fundamental economic practice long prevalent in our system of commerce.” Alice, 134 S. Ct. at 2356 (quoting Bilski, 561 U.S. at 611). Likewise, in this case, the concept of using a payment account to automatically effect a pre-authorized financial transaction is a fundamental economic practice.” slip op. at 22

  Patent outcomesUS 7,567,937 unpatentable
  Claim construction§ 101 eligibilitycites Alice · Bilski · Enfish · Electric Power
  Patents in suitUS 7,567,937
• Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentable
  PTAB · Jul 23, 2018 · CBM2017-00026 · APJ Jameson Lee · CBM · Final written decision

  Claims 1, 6, and 7 are unpatentable under § 101 because they claim an abstract idea without an inventive concept.

  RulingsFinal written decision

  • BurdenFwd all claims unpatentable

    “Under the second step in the two-step Alice/Mayo analysis, a claim that recites an abstract idea must include “additional features” to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea. Alice, 134 S. Ct. at 2357 (citing Mayo, 132 S. Ct. at 1297). We consider the claim elements “both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. at 2355. We determine whether the claims include an “‘inventive concept’” (i.e., an element or combination of elements sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea itself). Id. at 2357. The “additional features” must be more than “‘well-understood, routine, conventional activity.’” Ultramercial, 772 F.3d at 715. The Supreme Court in Alice cautioned that merely limiting the use of abstract idea “to a particular technological environment” or implementing the abstract idea on a “wholly generic computer” is not sufficient as an additional feature to provide “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Alice, 134 S. Ct. at 2358 (quoting Mayo, 132 S. Ct. at 1297). “[M]ethod claims, which merely require generic computer implementation, fail to transform [an] abstract idea into a patent-eligible invention.” Id. at 2357. The Supreme Court in Bilski unequivocally stated that the prohibition against patenting abstract idea “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.” Bilski, 561 U.S. at 610–11 (quoting Diamond, 450 U.S. at 191–92).” slip op. at 35

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

    “Petitioner provides two differently worded articulations of the alleged abstract idea to which the challenged claims are directed: (1) “pre- authorizing debits from a previously-funded electronic payment account to make payments in electronic auctions or electronic commerce” (Pet. 27), and (2) “pre-approving a transaction using a previously-funded account to effect an automatic payment” (id. at 29). These two articulations are essentially the same and Petitioner’s arguments are not different substantively based on one articulation as opposed to the other. Accordingly, we need to discuss only the first articulation (i.e., pre-authorizing debits from a previously-funded electronic payment account to make payments in electronic auctions or electronic commerce). The ’563 patent describes an electronic payment account as being similar to a bank account that stores funds which can be used to effect payment. Ex. 1001, 7:23–27. According to the challenged claims, the electronic payment account has funds pre-stored therein that can be used for effecting automatic payment. Dr. Neuman testifies that pre-funded accounts, such as bank accounts, are ubiquitous and are fundamental building blocks to commerce, and that bank accounts are almost universally kept electronically. Ex. 1005 ¶ 17. Dr. Neuman further testifies that, like the pre-funded account, pre-authorizing transfers is a well-known and conventional economic practice. Id. ¶ 18. Dr. Neuman notes that, for example, “financial institutions have, for decades, permitted customers to pre-authorize payments for recurring expenses such as monthly life insurance premiums, rent and mortgage payments, phone bills, or other utility bills,” and that “[m]any banks also allow customers to pre-authorize regular transfers of funds from a checking account to a savings account, thereby creating an automatic savings plan.” Id. We credit the above-noted testimony of Dr. Neuman as it is unrebutted. Claim 7 recites a step of setting up an electronic payment account, a step of automatically deducting funds stored within the electronic payment account due to at least one network-based transaction, and a step of automatically transferring at least a portion of the deducted funds to an account associated with an operator of the electronic commerce web site. These steps correspond fittingly to the alleged abstract idea of pre-authorizing debits from a previously-funded electronic payment account to make payments in electronic auctions or electronic commerce.” slip op. at 26

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

    “Under the second step in the two-step Alice/Mayo analysis, a claim that recites an abstract idea must include “additional features” to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea. Alice, 134 S. Ct. at 2357 (citing Mayo, 132 S. Ct. at 1297). We consider the claim elements “both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. at 2355. We determine whether the claims include an “‘inventive concept’” (i.e., an element or combination of elements sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea itself). Id. at 2357. The “additional features” must be more than “‘well-understood, routine, conventional activity.’” Ultramercial, 772 F.3d at 715. The Supreme Court in Alice cautioned that merely limiting the use of abstract idea “to a particular technological environment” or implementing the abstract idea on a “wholly generic computer” is not sufficient as an additional feature to provide “practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.” Alice, 134 S. Ct. at 2358 (quoting Mayo, 132 S. Ct. at 1297). “[M]ethod claims, which merely require generic computer implementation, fail to transform [an] abstract idea into a patent-eligible invention.” Id. at 2357. The Supreme Court in Bilski unequivocally stated that the prohibition against patenting abstract idea “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.” Bilski, 561 U.S. at 610–11 (quoting Diamond, 450 U.S. at 191–92).” slip op. at 35

  • PTAB / AIA Trials › Constitutional / APA (Arthrex, Oil States, due process)Decided for petitioner

    “To the extent that Patent Owner presents additional constitutional arguments regarding covered business method patent reviews separately, or arguments that the Oil States Court did not reach, we decline to consider those constitutional challenges. The “[a]djudication of the constitutionality of congressional enactments has generally been thought beyond the jurisdiction of administrative agencies.” Thunder Basin Coal Co. v. Reich, 510 U.S. 210, 215 (1994) (alteration in original) (quoting Johnson v. Robison, 415 U.S. 361, 368 (1974)). Although “[t]his rule is not mandatory” (id.), “a finding that the agency lacks jurisdiction to decide constitutional questions is especially likely when the constitutional claim asks the agency to act contrary to its statutory charter” (Riggin v. Office of Senate Fair Emp’t Practices, 61 F.3d 1563, 1569 (Fed. Cir. 1995)). Considerations in determining whether an agency may decide a constitutional issue include whether “the constitutional issue . . . require[s] the agency to question its own statutory authority or to disregard any instructions Congress has given it,” and whether the defense would “disable the board from fulfilling its responsibility to decide the statutory claim presented to it.” Id. at 1569–70. Patent Owner challenges the constitutionality of congressional enactments, including the constitutionality of covered business method patent reviews as set forth in the AIA. Patent Owner’s constitutional arguments are not directed to a particular statutory provision—instead, they concern the entire statutory scheme of covered business method patent reviews, and often also include inter partes reviews. It is, however, our statutory duty to “conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32” (35 U.S.C. § 6(b)(4)), which include covered business method patent reviews (AIA § 18(a)(1)). Patent Owner, in generally arguing that those reviews are unconstitutional, would have us question our statutory authority and our ability to conduct those reviews— something we decline to do.” slip op. at 48

  Patent outcomesUS 7,512,563 unpatentable
  Claim construction§ 101 eligibilitycites Alice · Bilski · Enfish
  Patents in suitUS 7,512,563
• Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentable
  PTAB · Jul 23, 2018 · CBM2017-00027 · APJ Michael R Zecher · CBM · Final written decision

  Claims 1, 5, 6, 8, 34, 35, 45, and 48 are unpatentable under § 101 because they claim an abstract financial transaction implemented with generic computer technology.

  RulingsFinal written decision

  • BurdenDecided for petitioner

    “4. Summary In summary, we determine that Petitioner has demonstrated by a preponderance of the evidence that all of the challenged claims are directed to patent-ineligible subject matter under 35 U.S.C. § 101.” slip op. at 35

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

    “We agree with Petitioner that independent claims 1, 35, and 45 are directed to an abstract idea, and we adopt Petitioner’s description of the abstract idea as using a previously-funded account to effectuate a financial transaction in an electronic auction. Patent Owner does not challenge Petitioner’s description of the abstract idea, other than by making the conclusory statement that the challenged claims are not directed to an abstract idea based on Federal Circuit precedent and USPTO examination guidance. See PO Resp. 7. The language of independent claims 1, 35, and 45 supports the finding that they are directed to the abstract idea of using a previously-funded account to effectuate a financial transaction in an electronic auction. These claims recite methods for effecting payment in the context of an electronic auction sale by a process that includes the steps of maintaining and storing funds in payment accounts; either debiting the purchaser’s funded payment account or withdrawing funds from a different account; and crediting the seller’s account. Ex. 1001, 16:31–64, 21:5–37, 23:47–24:11. This purchaser-seller arrangement is not meaningfully distinct from the financial arrangements found to be abstract ideas in Alice, 134 S. Ct. at 2356 (“method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”), and Bilski v. Kappos, 561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to purchase commodities in the energy market at a fixed rate as a way of protecting, or “hedging,” against risks of price changes). The Supreme Court has explained that concepts like intermediated settlement and risk hedging are abstract ideas beyond the scope of 35 U.S.C. § 101 as they are “a fundamental economic practice long prevalent in our system of commerce.” Alice, 134 S. Ct. at 2356 (quoting Bilski, 561 U.S. at 611). Likewise, in this case, the concept of using a previously-funded account to effectuate a financial transaction is a fundamental economic practice.” slip op. at 21

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

    “Considering the claim elements as an ordered combination, each claimed method, as a whole, is simply indicative of the abstract idea of using a previously-funded account to effectuate a financial transaction in an electronic auction, applied using a website and a generic processor. See Alice, 134 S. Ct. at 2359–60 (explaining that the application of an abstract idea using some unspecified, generic computer is not enough to transform an abstract idea into a patent-eligible invention). There is no indication on the record developed during trial that these claims improve the functioning of a computer, or result in an improvement in any other technology or technical field. See id. at 2359. On the contrary, Dr. Neuman’s unrebutted testimony explains that the computer components recited in the claims add nothing that is not already present when the steps are considered separately, and viewed as a whole, the claims simply recite the well-known, conventional process of debiting and crediting a funded account. Ex. 1005 ¶ 46. Furthermore, there is no evidence of record that independent claims 1, 35, and 45 are like those of BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC (i.e., a “non-conventional and non-generic arrangement of known, conventional pieces”). 827 F.3d 1341, 1350 (Fed. Cir. 2016). BASCOM explains that where claims “merely recite the abstract idea . . . along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components[, s]uch claims would not contain an inventive concept.” Id. At most, the ’856 patent makes a known payment process, in which a buyer transfers payment to a seller for an item in an electronic auction, faster and more efficient through a computer system that allows for payment in real-time. See Ex. 1001, 3:63–4:4. That computer system, however, includes a set of generic computer components functioning in a generic way. See id. Fig. 1; Ex. 1005 ¶ 19. Meanwhile, the real-time payment replaces previously-known manual processes––namely, the need for a winning bidder to “draft a check, obtain a money order, or some other payment document, and mail it to the seller” (Ex. 1001, 2:63–65), “to type and transfer credit card information” (id. at 3:29), or for the website operator and seller to exchange e-mails to authorize a commission payment (id. at 3:18–20). “But merely ‘configur[ing]’ generic computers in order to ‘supplant and enhance’ an otherwise abstract manual process is precisely the sort of invention that the Alice Court deemed ineligible for patenting.” Credit Acceptance Corp., 859 F.3d at 1056 (alteration in original). Accordingly, we agree with Petitioner that for independent claims 1,” slip op. at 29

  • PTAB / AIA Trials › Constitutional / APA (Arthrex, Oil States, due process)Decided for petitioner

    “arguments regarding covered business method patent reviews separately, or arguments that the Oil States Court did not reach, we decline to consider those constitutional challenges. The “[a]djudication of the constitutionality of congressional enactments has generally been thought beyond the jurisdiction of administrative agencies.” Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 215 (1994) (alteration in original) (quoting Johnson v. Robison, 415 U.S. 361, 368 (1974)). Although “[t]his rule is not mandatory” (id.), “a finding that the agency lacks jurisdiction to decide constitutional questions is especially likely when the constitutional claim asks the agency to act contrary to its statutory charter” (Riggin v. Office of Senate Fair Emp’t Practices, 61 F.3d 1563, 1569 (Fed. Cir. 1995)). Considerations in determining whether an agency may decide a constitutional issue include whether “the constitutional issue . . . require[s] the agency to question its own statutory authority or to disregard any instructions Congress has given it,” and whether the defense would “disable the board from fulfilling its responsibility to decide the statutory claim presented to it.” Id. at 1569–70. Patent Owner challenges the constitutionality of congressional enactments, including the constitutionality of covered business method patent reviews as set forth in the AIA. Patent Owner’s constitutional arguments are not directed to a particular statutory provision—instead, they concern the entire statutory scheme of covered business method patent reviews, and often also include inter partes reviews. It is, however, our statutory duty to “conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32” (35 U.S.C. § 6(b)(4)), which include covered business method patent reviews (AIA § 18(a)(1)). Patent Owner, in generally arguing that those reviews are unconstitutional, would have us question our statutory authority and our ability to conduct those reviews— something we decline to do. III. CONCLUSION We determine that Petitioner has proven by a preponderance of the” slip op. at 39

  Patent outcomesUS 7,483,856 unpatentable
  § 101 eligibilitycites Alice · Bilski · Enfish · Electric Power
  Patents in suitUS 7,483,856
• Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentable
  PTAB · Jul 23, 2018 · CBM2017-00025 · APJ Kevin F Turner · CBM · Final written decision

  Claims 13–15 are unpatentable under § 101 because they claim the abstract idea of using a loan to effect a financial transaction without an inventive concept.

  RulingsFinal written decision

  • PTAB / AIA Trials › Institution threshold (reasonable likelihood / more likely than not)InstitutedInstituted

    “We preliminarily determined that the information presented in the Petition established that the ’528 Patent qualifies as a covered business method patent that is eligible for review, and that it was more likely than not that the challenged claims are unpatentable under 35 U.S.C. § 101. Paper 8. Pursuant to 35 U.S.C. § 324 and § 18(a) of the Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284, 329–31 (2011), we instituted a covered business method patent review as to all of the challenged claims. Id.” slip op. at 2

  • BurdenFwd all claims unpatentableUnpatentable

    “Considering the claim elements as an ordered combination, each claimed method, as a whole, is simply indicative of the abstract idea of using a loan to effect a financial transaction when a buyer has insufficient funds in his or her payment account. See Alice, 134 S. Ct. at 2359–60 (explaining that the application of an abstract idea using some unspecified, generic computer is not enough to transform an abstract idea into a patent-eligible invention). There is no indication on the record developed during trial that these claims improve the functioning of a computer, or result in an improvement in any other technology or technical field. See id. at 2359. On the contrary, Dr. Neuman’s unrebutted testimony explains that the computer components recited in the claims add nothing that is not already present when the steps are considered separately, and viewed as a whole, the claims simply recite the well-known, conventional process of debiting and crediting a funded account. Ex. 1005 ¶ 36. Furthermore, there is no evidence of record that independent claim 13 is like those of BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC (i.e., a “non-conventional and non-generic arrangement of known, conventional pieces”). 827 F.3d 1341, 1350 (Fed. Cir. 2016). BASCOM explains that where claims “merely recite the abstract idea . . . along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components[, s]uch claims would not contain an inventive concept.” Id. Rather, the ’528 Patent seems to indicate that the existing payment process is simply made faster and more efficient in that an immediate, real-time payment is made without the winning bidder having to access a payment page, through the use of a conventional computing network. See Ex. 1001, 4:30–34, Fig. 1; Ex. 1005 ¶¶ 20–24. Meanwhile, the method of independent claim 13 may offer an improvement to the previously-known manual processes identified in the ’528 Patent––the need for a winning bidder “to draft checks, obtain money orders, etc. and mail them to the various sellers” (Ex. 1001, 3:3–4), or to “enter his credit card information” (id. at 3:15), or for the website operator and seller to exchange e-mails to authorize a commission payment (id. at 3:26–34). “But merely ‘configur[ing]’ generic computers in order to ‘supplant and enhance’ an otherwise abstract manual process is precisely the sort of invention that the Alice Court deemed ineligible for patenting.” Credit Acceptance Corp., 859 F.3d at 1056 (alteration in original). Accordingly, we agree with Petitioner that the claim elements recited” slip op. at 29

  • Claim Construction › Threshold & procedure › Whether a term needs construction (O2 Micro)No construction neededOther

    “in an unexpired patent according to the broadest reasonable interpretation in light of the specification of the patent in which it appears. 37 C.F.R. § 42.300(b). “[W]e need only construe terms ‘that are in controversy, and only to the extent necessary to resolve the controversy.’” Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017) (quoting Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999)). Petitioner proposes a construction for the claim term “web site.” Pet. 20. We, however, need not address the construction of any claim term to resolve the issues before us.” slip op. at 16

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

    “We agree with Petitioner that independent claim 13 is directed to an abstract idea, and we adopt Petitioner’s description of the abstract idea as using a loan to effectuate a financial transaction in an electronic auction. Patent Owner does not challenge Petitioner’s description of the abstract idea, other than by making the conclusory statement that the challenged claims are not directed to an abstract idea based on Federal Circuit precedent and USPTO examination guidance. See PO Resp. 7–8. The language of independent claim 13 supports the finding that it is directed to the abstract idea of using a loan to effect a financial transaction when a buyer has insufficient funds in his or her payment account. This independent claim recites methods for effecting payment by a process that includes the steps of providing the user with the option to enable the loaning of funds, through receipt of a user’s authorization, and loaning funds to effect the payment if insufficient funds are determined for a payment source. Ex. 1001, 20:13–37. This purchaser-seller arrangement is not meaningfully distinct from the activity relating to commercial practices found to be abstract ideas in Alice, 134 S. Ct. at 2356 (“method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”) and Bilski v. Kappos, 561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to purchase commodities in the energy market at a fixed rate as a way of protecting, or “hedging,” against risks of price changes). The Supreme Court has explained that concepts like intermediated settlement and risk hedging are abstract ideas beyond the scope of 35 U.S.C. § 101 as they are “a fundamental economic practice long prevalent in our system of commerce.” Alice, 134 S. Ct. at 2356 (quoting Bilski, 561 U.S. at 611). Likewise, in this case, the concept of using a loan to effect a financial transaction when a buyer has insufficient funds in his or her payment account is a fundamental economic practice.” slip op. at 21

  Patent outcomesUS 7,627,528 unpatentable
  Claim construction§ 101 eligibilitycites Alice · Mayo · Bilski · Enfish
  Patents in suitUS 7,627,528
• Ebay Inc. / Paypal, Inc. v. XPRT Ventures, LLCAll claims unpatentable
  PTAB · Jul 23, 2018 · CBM2017-00024 · APJ Kevin F Turner · CBM · Final written decision

  Claims 1, 2, 15, 19, 20, 34, 40, 47, 48, 52, and 53 are unpatentable under § 101 as directed to an abstract idea without an inventive concept.

  RulingsFinal written decision

  • BurdenDecided for petitioner

    “6. Summary In summary, we determine that Petitioner has demonstrated by a preponderance of the evidence that all of the challenged claims are directed to patent-ineligible subject matter under 35 U.S.C. § 101.” slip op. at 41

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

    “We agree with Petitioner that independent claim 1 is directed to an abstract idea, and we adopt Petitioner’s description of the abstract idea as using a previously-funded account or loan to effectuate a financial transaction in an electronic auction. Patent Owner does not challenge Petitioner’s description of the abstract idea, other than by making the conclusory statement that the challenged claims are not directed to an abstract idea based on Federal Circuit precedent and USPTO examination guidance. See PO Resp. 7–8. The language of independent claim 1 supports the finding that it is directed to the abstract idea of using a previously-funded account or loan to effectuate a financial transaction in an electronic auction. This independent claim recites methods for effecting payment by a process that includes the steps of creating payment accounts and storing funds therein for use in transactions in an electronic auction system; interacting with the winning bidder to effect payment to the seller through an authorization; and deducting funds from the payment account, whereby there is no requirement of interaction between the bidder and the seller. Ex. 1001, 19:50–20:39. This purchaser-seller arrangement is not meaningfully distinct from the activity relating to commercial practices found to be abstract ideas in Alice, 134 S. Ct. at 2356 (“method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk”), and Bilski v. Kappos, 561 U.S. 593, 599 (2010) (arrangement between buyers and sellers to purchase commodities in the energy market at a fixed rate as a way of protecting, or “hedging,” against risks of price changes). The Supreme Court has explained that concepts like intermediated settlement and risk hedging are abstract ideas beyond the scope of 35 U.S.C. § 101 as they are “a fundamental economic practice long prevalent in our system of commerce.” Alice, 134 S. Ct. at 2356 (quoting Bilski, 561 U.S. at 611). Likewise, in this case, the concept of using a previously-funded account to effectuate a financial transaction is a fundamental economic practice.” slip op. at 22

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

    “those components. See, e.g., Ex. 1001, 7:9–13 (“The computerized electronic auction payment system 110 includes a database of electronic auction payment accounts 114 and a web server computer 116 having a processor 118 capable of executing a set of programmable instructions stored within a memory 119.”). Performing steps with a generic computer processor or on a website over the Internet does not add an inventive concept. See Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1341 (Fed. Cir. 2017) (claims reciting a generic computer element––a processor––do not contain an inventive concept); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014) (“The claims’ invocation of the Internet also adds no inventive concept. As we have held, the use of the Internet is not sufficient to save otherwise abstract claims from ineligibility under § 101.”). Again, Dr. Neuman’s unrebutted testimony supports this finding. Ex. 1005 ¶¶ 16–19. Lastly, limiting independent claim 1 to the particular technological environment of electronic auctions is not enough to impart patent eligibility. See Alice, 134 S. Ct. at 2358. Considering the claim elements as an ordered combination, each claimed method, as a whole, is simply indicative of the abstract idea of using a previously-funded account to effectuate a financial transaction in an electronic auction, applied using a website and a generic processor. See Alice, 134 S. Ct. at 2359–60 (explaining that the application of an abstract idea using some unspecified, generic computer is not enough to transform an abstract idea into a patent-eligible invention). There is no indication on the record developed during trial that these claims improve the functioning of a computer, or result in an improvement in any other technology or technical field. See id. at 2359. On the contrary, Dr. Neuman’s unrebutted testimony explains that the computer components recited in the claims add nothing that is not already present when the steps are considered separately, and viewed as a whole, the claims simply recite the well-known, conventional process of debiting and crediting a funded account. Ex. 1005 ¶ 102. Furthermore, there is no evidence of record that independent claim 1 is like those of BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC (i.e., a “non-conventional and non-generic arrangement of known, conventional pieces”). 827 F.3d 1341, 1350 (Fed. Cir. 2016). BASCOM explains that where claims “merely recite the abstract idea . . . along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components[, s]uch claims would not contain an inventive concept.” Id. At most, the ’244 Patent makes a known payment process, in which a buyer transfers payment to a seller for an item in an electronic auction, faster and more efficient through a computer system that allows for payment in real-time. See Ex. 1001, 3:55–65. That computer system, however, includes a set of generic computer components functioning in a generic way. See id. Fig. 1; Ex. 1005 ¶ 21. Meanwhile, the method of independent claim 1 may offer an improvement to the previously-known manual processes identified in the ’244 Patent––the need for a winning bidder to “draft a check, obtain a money order, or some other payment document, and mail it to the seller” (Ex. 1001, 3:9–11), or “to type and transfer credit card information” (id. at 3:39–43), or for the website operator and seller to exchange e-mails to authorize a commission payment (id. at 3:28–36). “But merely ‘configur[ing]’ generic computers in order to ‘supplant and enhance’ an otherwise abstract manual process is precisely the sort of invention that the” slip op. at 30

  • PTAB / AIA Trials › Constitutional / APA (Arthrex, Oil States, due process)Decided for petitioner

    “To the extent that Patent Owner presents additional constitutional arguments regarding covered business method patent reviews separately, or arguments that the Oil States Court did not reach, we decline to consider those constitutional challenges. The “[a]djudication of the constitutionality of congressional enactments has generally been thought beyond the jurisdiction of administrative agencies.” Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 215 (1994) (alteration in original) (quoting Johnson v. Robison, 415 U.S. 361, 368 (1974)). Although “[t]his rule is not mandatory” (id.), “[a] finding that the agency lacks jurisdiction to decide constitutional questions is especially likely when the constitutional claim asks the agency to act contrary to its statutory charter” (Riggin v. Office of Senate Fair Emp’t Practices, 61 F.3d 1563, 1569 (Fed. Cir. 1995)). Considerations in determining whether an agency may decide a constitutional issue include whether “the constitutional issue . . . require[s] the agency to question its own statutory authority or to disregard any instructions Congress has given it,” and whether the defense would “disable the board from fulfilling its responsibility to decide the statutory claim presented to it.” Id. at 1569–70. Patent Owner challenges the constitutionality of congressional enactments, including the constitutionality of covered business method patent reviews as set forth in the AIA. Patent Owner’s constitutional arguments are not directed to a particular statutory provision—instead, they concern the entire statutory scheme of covered business method patent reviews, and often also include inter partes reviews. It is, however, our statutory duty to “conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32” (35 U.S.C. § 6(b)(4)), which include covered business patent reviews (AIA § 18(a)(1)). Patent Owner, in generally arguing that those reviews are unconstitutional, would have us question our statutory authority and our ability to conduct those reviews— something we decline to do.” slip op. at 43

  Patent outcomesUS 7,610,244 unpatentable
  § 101 eligibilitycites Alice · Mayo · Bilski · Enfish
  Patents in suitUS 7,610,244
• Apple Inc. v. Andrea Electronics Corp.Some claims unpatentable
  PTAB · Jul 12, 2018 · IPR2017-00627 · APJ Jeremy M Plenzler · IPR · Final written decision

  Claims 1–5, 10–16, 21–23, 25, and 38–46 are unpatentable; claims 6–9, 17–20, 24, and 47 were not shown unpatentable.

  RulingsFinal written decision

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

    “Although the dictionary defines “periodically” as “from time to time” or “at regular intervals of time,” based on the record before us, we agree with Patent Owner that its proposed construction is how one skilled in the art would have understood that term in the context of the ’345 patent Specification. Turning first to the intrinsic evidence, the Specification explains that “[t]he future and current minimum values are calculated continuously and initiated periodically, for example, every 5 seconds.” Ex. 1001, 8:37–39. Although the Specification later notes that “[i]t will be appreciated that, while specific values are used as in the several equations and calculations employed in the present invention, these values may be different than those shown” (id. at 8:64–67), this passage does not mean that the Specification contemplates arrangements where “periodically” is simply “from time to time.” Rather, we determine that statement from the Specification indicates that the specific amount of time (i.e., every 5 seconds) may vary. Turning now to the extrinsic evidence, the testimony of Dr. Douglas supports our conclusion, explaining that “at regular intervals of time” is the “only . . . definition . . . consistent with the understanding of a person skilled in the art in light of the specification of the ’345 Patent and its use in the particular field of audio signal processing” because [l]ike the “period” of an audio signal itself, which is the amount of time it takes for a signal to repeat itself, “periodically” as recited in claims 6 and 9 and throughout the remainder of the specification of the ’345 Patent refers to actions that occur at regular intervals (e.g., every 5 seconds rather than merely “from time to time”). Ex. 2002 ¶ 48. Moreover, Petitioner’s declarant, Dr. Hochwald testifies that outside of the context of the ’345 patent Specification, “periodically” means “at regular time intervals” (Ex. 2005, 99:13–15), and when asked about that term’s meaning in the context of the ’345 patent Specification, Dr. Hochwald simply noted that “all I can do is read what it says,” which is that “[i]t’s doing something periodically, for example, every five seconds” (id. at 100:4–6). Accordingly, the testimony from Dr. Douglas, as well as that from Dr. Hochwald, supports Patent Owner’s construction. In summary, we adopt Patent Owner’s construction of “periodically,” requiring “at regular intervals of time,” because (1) this is consistent with how this term is used in the context of the ’345 Patent Specification; and (2) this is supported by the testimony of both experts.” slip op. at 7

  • Novelty / Anticipation (§102) › Anticipation standard (single reference, every element)UnpatentableNot shown unpatentableMixed

    “Patent Owner responds that, because Helf uses average values (i.e., the average of eight consecutive values), it does not disclose using a minimum value. PO Resp. 17–23. Patent Owner acknowledges that the ’345 patent, itself, uses a “smoothing process [that] produces frequency bins with multiple smoothed magnitude values, ultimately finding the minimum of all of the values,” but contends that “Helf’s averaging process produces a single output representing one average of the original samples.” Id. at 20–21 (underlining omitted) (citing Ex. 1001, 8:14–28; Ex. 2002 ¶¶ 52, 63–72). We disagree with Patent Owner’s characterization of the differences between Helf and the ’345 patent. While Helf may ultimately produce a single minimum value, as discussed above, that value is based on a minimum value of the averages calculated over the given time period. At oral hearing, Patent Owner acknowledged that Helf determines many averages values (i.e., the averages of the eight consecutive frames) and determines a minimum of those values. See, e.g., Tr. 22:2–6. The claim simply requires a “future minimum value,” and does not preclude that value from being a minimum value taken from a set of average values. Indeed, such an interpretation of the claim would be inconsistent with the ’345 patent’s use of smoothed values noted by Patent Owner. Ex. 1001, 8:14–28. The testimony of Dr. Douglas cited by Patent Owner does not convince us otherwise. See Ex. 2002 ¶¶ 52, 63–72 (effectively repeating Patent Owner’s contentions, which are unpersuasive for the reasons set forth above). Accordingly, we are persuaded that Helf’s minimum value (Mk) corresponds to the “future minimum value” recited in claims 4 and 39.” slip op. at 13

  • Obviousness (§103) › Motivation to combine / reasonable expectation of successMotivation not foundMotivation foundMixed

    “With respect to its “running minimum estimator,” Helf explains that the “running minimum estimator” is used “when either the speech signal is never absent for more than a second or the background noise itself is never constant in spectral shape.” Ex. 1010, 8:11–15. Helf acknowledges that its “running minimum estimator” is “much less accura[te]” than its “stationary estimator,” which is typically used for background noise estimates. Id. at 8:15–17. As a result, Helf only uses its “running minimum estimator” if “[i]t has been more than 10 seconds since the last update of the background noise spectral estimate due to the Stationary Estimator,” and “[t]he difference, D, between the past background noise estimate, which may have resulted from the Stationary Estimator or the Running Minimum Estimator, and the current Running Minimum Estimator is great.” Id. at 8:32–42. We see no persuasive reason to set Helf’s current background noise estimate (Nk and Ck, considered the “current minimum” by Petitioner) to the minimum estimate (Mk) from the “running minimum estimator” (considered the “future minimum” by Petitioner). The testimony of Dr. Douglas supports this conclusion. See, e.g., Ex. 2002 ¶¶ 119, 120. Addressing the portions of Helf noted above, Dr. Douglas testifies that “Helf only relies on Mk in a ‘worst case’ scenario” and “disfavors the use of Mk, even where Bk is unavailable,” and concludes that “one of ordinary skill would not be motivated to force the use of the disfavored Mk every ten seconds even where the much more accurate Bk estimate is available.” Id. ¶ 119. Dr. Douglas further testifies that “one of ordinary skill would not have been motivated to abandon[] the comparison of D to a threshold” because “one of ordinary skill in the art would recognize that Helf is a signal-dependent system, and it would not abandon its ability to adapt to varying signal conditions in favor of a blind periodic update using a disfavored estimate.” Id. ¶ 120. We credit the testimony of Dr. Douglas over that of Dr. Hochwald in this regard. See Ex. 1004 ¶¶ 157–159; Ex. 2002 ¶¶ 115–120. The testimony from Dr. Douglas is consistent with the disclosure of Helf, while that of Dr. Hochwald is based on conclusory statements. For example, the only portions of Dr. Hochwald’s testimony cited in the Petition in connection with the rationale provided in this challenge are conclusory statements that “[a] person of ordinary skill would have found it obvious to modify Helf to update the background noise estimate after every 10 second period based on the teachings of Martin,” and “[t]he skilled person would have recognized it was beneficial to periodically update the minimum noise value to ensure it accurately reflected the current noise level,” which are contrary to the disclosure of Helf noted above. Ex. 1004 ¶¶ 158, 159.” slip op. at 21

  • Expert testimonyPatent owner expert creditedPetitioner expert discountedOther

    “We see no persuasive reason to set Helf’s current background noise estimate (Nk and Ck, considered the “current minimum” by Petitioner) to the minimum estimate (Mk) from the “running minimum estimator” (considered the “future minimum” by Petitioner). The testimony of Dr. Douglas supports this conclusion. See, e.g., Ex. 2002 ¶¶ 119, 120. Addressing the portions of Helf noted above, Dr. Douglas testifies that “Helf only relies on Mk in a ‘worst case’ scenario” and “disfavors the use of Mk, even where Bk is unavailable,” and concludes that “one of ordinary skill would not be motivated to force the use of the disfavored Mk every ten seconds even where the much more accurate Bk estimate is available.” Id. ¶ 119. Dr. Douglas further testifies that “one of ordinary skill would not have been motivated to abandon[] the comparison of D to a threshold” because “one of ordinary skill in the art would recognize that Helf is a signal-dependent system, and it would not abandon its ability to adapt to varying signal conditions in favor of a blind periodic update using a disfavored estimate.” Id. ¶ 120. We credit the testimony of Dr. Douglas over that of Dr. Hochwald in this regard. See Ex. 1004 ¶¶ 157–159; Ex. 2002 ¶¶ 115–120. The testimony from Dr. Douglas is consistent with the disclosure of Helf, while that of Dr. Hochwald is based on conclusory statements. For example, the only portions of Dr. Hochwald’s testimony cited in the Petition in connection with the rationale provided in this challenge are conclusory statements that “[a] person of ordinary skill would have found it obvious to modify Helf to update the background noise estimate after every 10 second period based on the teachings of Martin,” and “[t]he skilled person would have recognized it was beneficial to periodically update the minimum noise value to ensure it accurately reflected the current noise level,” which are contrary to the disclosure of Helf noted above. Ex. 1004 ¶¶ 158, 159.” slip op. at 21

  Patent outcomesUS 6,363,345 mixed
  Claim construction§ 102 anticipation§ 103 obviousness
  Patents in suitUS 6,363,345

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