`571-272-7822
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`Paper 26
`Date: June 11, 2013
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`IDLE FREE SYSTEMS, INC.
`
`Petitioner,
`
`V.
`
`BERGSTROM, INC.
`Patent Owner.
`
`Case IPR2012-00027 (JL)
`Patent 7,591,303
`
`Before JAMESON LEE, MICHAEL P. TIERNEY, SCOTT R. BOALICK,
`JONI Y. CHANG, THOMAS L. GIANNETTI, and MICHAEL J. FITZPATRICK,
`Administrative Patent Judges.
`
`LEE, Administrative Patent Judge.
`
`DECISION
`
`Motion to Amend Claims
`
`37 CFR. § 42.121
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`VERSATA EXHIBIT 2105
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`SAP v. VERSATA
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`CASE CBM2012-00001
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`IPR2012-00027
`Patent 7,591,303
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`INTRODUCTON
`Counsel for Petitioner (“Idle Free Systems”) initiated a conference call on
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`May 20, 2013, with Judges Lee, Giannetti, and Fitzpatrick. Counsel for Patent
`Owner (“Bergstrom”) were present on the call.
`
`Idle Free Systems requested the call to discuss what it believes to be an
`unreasonable number of proposed substitute claims in Bergstrom Motion to
`Amend Claims (“Motion to Amend”) (Paper 22). Idle Free Systems also inquired
`whether its reply needs to address challenged claims 1-4, 8, 10, and 17-19.
`According to Idle Free Systems, Bergstrom did not address the unpatentability of
`those claims over Ieda, alone or in combination with Erdman or Gillett, in the
`Patent Owner Response filed on April 30, 2013.
`
`Upon inquiry from the judges, counsel for Bergstrom conceded that claims
`1-4, 8, 10, and 17-19 are unpatentable on the grounds instituted for those claims,
`which include the Ieda reference. On that basis, the Board authorized Petitioner to
`omit those claims in its reply. The Board will cancel claims 1-4, 8, 10, and 17-19,
`based on the concession of unpatentability by Bergstrom.
`
`Bergstrom filed the Motion to Amend on April 30, 2013, without having
`conferred with the Board about the specific amendments contemplated, in violation
`of 37 C.F.R. § 42.121(a). Because the Motion to Amend was not filed in
`compliance with 37 C.F.R. § 42.121(a), it is dismissed.
`
`Below, we provide a general discussion of several important requirements
`for a patent owner’s motion to amend claims. Thereafter, we also provide a brief
`discussion of how Bergstrom’s Motion to Amend fails to satisfy many of the
`requirements for a motion to amend claims. Finally, we provide Bergstrom
`another opportunity to file a motion to amend claims.
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`IPR2012-00027
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`DISCUSSION
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`I. Claim-by-Claim Analysis
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`
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`Substitution,
`Responsive to alleged ground, and
`Prohibition of broadening
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`Congress provided an opportunity for a patent owner to file a motion to
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`amend claims in an inter partes review, but did not intend that opportunity to be
`unfettered.
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`For example, 35 U.S.C. § 316(d), as amended by the Leahy-Smith America
`Invents Act (Pub. L. 112-29, 125 Stat. 284 (2011)) (“AIA”), states:
` (d) Amendment of the Patent. –
`
`(1) IN GENERAL. – During an inter partes review instituted
`under this chapter, the patent owner may file 1 motion to amend the
`patent in 1 or more of the following ways:
`(A) Cancel any challenged patent claim.
`(B) For each challenged claim, propose a
`reasonable number of substitute claims.
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`*
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`*
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`*
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`*
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`(3) SCOPE OF CLAIMS. – An amendment under this
`subsection may not enlarge the scope of the claims of the patent or
`introduce new matter.
`(Emphasis added.)
`
`Congress also gave the Director authority to set forth “standards and
`procedures” for moving to amend to cancel a challenged claim or propose a
`reasonable number of substitute claims. 35 U.S.C. § 316(a)(9). The resulting
`regulation for filing motions to amend claims in an inter partes review is 37 C.F.R.
`§ 42.121.
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`Subsection (a)(3) of 37 C.F.R. § 42.121 states that a motion to amend may
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`cancel a challenged claim or propose a reasonable number of substitute claims, and
`then provides: “The presumption is that only one substitute claim would be
`needed to replace each challenged claim, and it may be rebutted by a
`demonstration of need.” (Emphasis added.) In addition, subsection (a)(2) of
`37 C.F.R. § 42.121 states:
` (2) Scope. A motion to amend may be denied where:
`(i) The amendment does not respond to a ground of
`unpatentability involved in the trial; or
`(ii) The amendment seeks to enlarge the scope of the
`claims of the patent or introduce new subject matter.
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`An inter partes review is a focused proceeding, unlike ex parte patent
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`prosecution or patent reexamination. For instance, a final determination must be
`issued not later than one year after the date on which the Director notices the
`institution of review, except that for good cause the Director may extend the period
`by not more than six months. 35 U.S.C. § 316(a)(11); 37 C.F.R. § 42.100(c). All
`portions of Part 42, Title 37, Code of Federal Regulations, are construed to secure
`the just, speedy, and inexpensive resolution of every proceeding, 37 C.F.R.
`§ 42.1(b), including determining what constitutes a substitute claim for a
`challenged claim, what is deemed responsive to an alleged ground of
`unpatentability, and whether an amendment seeks to enlarge the scope of claims.
`We appreciate that the “just” resolution of the proceeding consideration
`supports allowing a patent owner an opportunity to propose a substitute claim for
`each challenged claim, and also recognize that every substitute claim to be briefed
`by the parties and analyzed by the Board adds to the cost of the review in terms of
`both time and expense. The Board seeks to streamline and converge issues at all
`phases of the proceeding. For example, at time of institution the Board analyzes
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`the petition on a claim-by-claim, ground-by-ground basis, to eliminate redundant
`grounds.
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`Thus, for all of the foregoing reasons, in the absence of special circumstance,
`a challenged claim can be replaced by only one claim, and a motion to amend
`should, for each proposed substitute claim, specifically identify the challenged
`claim which it is intended to replace. Without such indication, the Board does not
`have adequate basis to determine the reasonableness of the number of substitute
`claims for each original claim. The determination is made on a claim-by-claim
`basis, consistent with statutory language that refers to a reasonable number of
`substitute claims for “each” challenged claim. 35 U.S.C. § 316(d)(1)(B); 37 C.F.R.
`§ 42.121(a)(3). All proposed claims should be traceable to an original challenged
`claim as a proposed substitute claim for that challenged claim.
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`The two conditions of 37 C.F.R. § 42.121(a)(2), as quoted above, also are
`evaluated on a claim-by-claim basis, and that evaluation also is premised on the
`patent owner’s having identified, for each proposed substitute claim, the
`challenged claim which it is intended to replace. Specifically, with regard to
`37 C.F.R. § 42.121(a)(2)(i), a proposed substitute claim is not responsive to an
`alleged ground of unpatentability of a challenged claim if it does not either include
`or narrow each feature of the challenged claim being replaced. A patent owner
`may not seek to broaden a challenged claim in any respect, in the name of
`responding to an alleged ground of unpatentability. A proper substitute claim
`under 37 C.F.R. § 42.121(a)(2)(i) must only narrow the scope of the challenged
`claim it replaces. Similarly, under 37 C.F.R. § 42.121(a)(2)(ii), a substitute claim
`may not enlarge the scope of the challenged claim it replaces by eliminating any
`feature.
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`It is provided in 37 C.F.R. § 42.121(a)(2) that a motion to amend may be
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`denied on the failure of either condition specified therein. The “just . . . resolution”
`portion of 37 C.F.R. § 42.1(b), however, would permit a patent owner to seek
`authorization for other amendments where such amendments are justified by
`special circumstance. The same is true if a patent owner desires to rebut the
`presumption that only one substitute claim would be needed to replace each
`challenged claim. Such actions must be discussed with the Board prior to filing of
`the motion to amend. A patent owner is required to confer with the Board prior to
`filing a motion to amend claims. 37 C.F.R. § 42.121(a).
`A desire to obtain a new set of claims having a hierarchy of different scope
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`typically would not constitute a sufficient special circumstance. An inter partes
`review is more adjudicatory than examinational, in nature. See Abbott Labs v.
`Cordis Corp., 710 F.3d 1318, 1326 (Fed. Cir. 2013). If a patent owner desires a
`complete remodeling of its claim structure according to a different strategy, it may
`do so in another type of proceeding before the Office. For instance, a patent owner
`may file a request for ex parte reexamination, relying on the Board’s conclusion of
`a petitioner’s having shown reasonable likelihood of success on certain alleged
`grounds of unpatenatability as raising a substantial new question of unpatentability.
`In appropriate circumstance, it may also seek to file a reissue application.
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`II. Need to Show Patentable Distinction
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`For each proposed substitute claim, we expect a patent owner: (1) in all
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`circumstances, to make a showing of patentable distinction over the prior art; (2) in
`certain circumstances, to make a showing of patentable distinction over all other
`proposed substitute claims for the same challenged claim; and (3) in certain
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`circumstances, to make a showing of patentable distinction over a substitute claim
`for another challenged claim. The three situations are addressed below.
`1.
`An inter partes review is neither a patent examination nor a patent
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`reexamination. The proposed substitute claims are only “proposed” claims. They
`are not added to the patent unless a corresponding motion to amend claims has
`been granted by the Board. In bringing a motion to amend claims, as the moving
`party, a patent owner bears the burden to show entitlement to the relief requested.
`37 C.F.R. § 42.20(c). For a patent owner’s motion to amend, 37 C.F.R. § 42.20(c)
`places the burden on the patent owner to show a patentable distinction of each
`proposed substitute claim over the prior art.
`
`A patent owner should identify specifically the feature or features added to
`each substitute claim, as compared to the challenged claim it replaces, and come
`forward with technical facts and reasoning about those feature(s), including
`construction of new claim terms, sufficient to persuade the Board that the proposed
`substitute claim is patentable over the prior art of record, and over prior art not of
`record but known to the patent owner. The burden is not on the petitioner to show
`unpatentability, but on the patent owner to show patentable distinction over the
`prior art of record and also prior art known to the patent owner. Some
`representation should be made about the specific technical disclosure of the closest
`prior art known to the patent owner, and not just a conclusory remark that no prior
`art known to the patent owner renders obvious the proposed substitute claims.
`
`A showing of patentable distinction can rely on declaration testimony of a
`technical expert about the significance and usefulness of the feature(s) added by
`the proposed substitute claim, from the perspective of one with ordinary skill in the
`art, and also on the level of ordinary skill, in terms of ordinary creativity and the
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`basic skill set. A mere conclusory statement by counsel, in the motion to amend,
`to the effect that one or more added features are not described in any prior art, and
`would not have been suggested or rendered obvious by prior art, is on its face
`inadequate.
`
`In an opposition to a patent owner’s motion to amend, in addition to noting
`any deficiency in the patent owner’s showing, the petitioner may come forward
`with specific evidence and reasoning, including citation and submission of any
`applicable prior art and reliance on declaration testimony of technical experts, to
`rebut the patent owner’s position on patentability of the proposed substitute claims.
`
`Prior to moving on to the second situation, we note that a motion to amend
`claims may also be denied if it introduces new matter. 35 U.S.C. § 316(d)(3);
`37 C.F.R. § 42.121(a)(2)(ii). In that context, the burden likewise lies also with the
`patent owner to show written description support in the original disclosure of the
`patent.
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`2.
`In the event a patent owner proposes more than one substitute claim for any
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`one challenged claim, the patent owner may additionally label each one after the
`first as a proposed new claim, to signal its special status, but also identify the
`challenged claim which it is intended to replace. As explained above, a patent
`owner has to show a special need to justify more than one substitute claim for each
`challenged claim. In such situations, the patent owner needs to show patentable
`distinction of the additional substitute claim over all other substitute claims for the
`same challenged claim. If the patent owner shows no such patentable distinction
`or any other special circumstance, then at the Board’s discretion, the proposed
`additional claim may be denied entry, or it may be grouped with, or deemed as
`standing and falling with, another substitute claim for the same challenged claim,
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`e.g., the first substitute claim, for purposes of considering patentability over prior
`art. Each substitute claim for the same challenged claim should be proposed for a
`meaningful reason. Submission of multiple patentably non-distinct substitute
`claims is redundant and not meaningful in the context of an inter partes review.
`3.
`Even in the case of proposing only one substitute claim for a particular
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`challenged claim, if the substitute claim is presented as patentable over prior art on
`the same basis that another substitute claim on which it depends is patentable over
`prior art, then the patent owner should provide meaningful reasons for making the
`additional changes effected by that dependent claim. For instance, where
`independent claim 1 and dependent claims 2 and 3 are challenged, and claims 2
`and 3 each depend on claim 1, a patent owner may propose three substitute claims
`4-6 and indicate that claim 4 replaces claim 1, claim 5 replaces claim 2, and claim
`6 replaces claim 3, where claims 5 and 6 each read the same as claims 2 and 3,
`respectively, except for the difference in claim dependency. Claims 5 and 6 will
`be patentable if claim 4 is shown to be patentable.
`
`On the other hand, if the patent owner also proposes to add further features
`into proposed substitute claims 5 and 6, the patent owner should provide
`meaningful reasons to establish a special circumstance for adding those features.
`Without any explanation, at least facially the insertion of those additional features
`would not be responsive to an alleged ground of unpatentability. Showing a
`patentable distinction between each of proposed substitute claims 5 and 6, and
`proposed substitute claim 4, would be one such special circumstance. Adding
`features for no meaningful reason is generally inconsistent with proposing a
`reasonable number of substitute claims, and also not responsive to an alleged
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`ground of unpatentability. Any such proposed substitute claim may be denied
`entry by the Board. See 37 C.F.R. §§ 42.121(a)(2) and (a)(3).
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`III. Clearly Stating the Contingency of Substitution
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`Because an amendment can only cancel or substitute claims, the condition
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`and target of substitution should be clearly stated, without ambiguity. For instance,
`it is unclear to state that in the event claims 1-50 are found unpatentable, entry of
`substitute claims 51-100 is requested. Facially, that would mean only if all
`challenged claims 1-50 are determined to be unpatentable would claims 51-100 be
`substituted in their place, which may not be the intent of the patent owner. A
`patent owner should adopt a claim-by-claim approach to specifying the
`contingency of substitution, e.g., which claim for which claim and in what
`circumstance.
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`IV. Bergstrom’s Motion to Amend
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`The pending Motion to Amend is being dismissed for Bergstrom’s failure to
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`confer with the Board prior to filing the motion. However, as this is one of the first
`inter partes reviews instituted by the Board, in the absence of further guidance it
`was not unreasonable for Bergstrom to have considered the initial conference call
`as satisfying the conferring requirement, even though nothing specific was
`discussed about how Bergstrom intended to amend claims. Accordingly, we will
`provide an opportunity for Bergstrom to file a renewed motion to amend. As
`guidance, we also comment on several deficiencies of the first motion, based on
`the requirements discussed above.
`
`The motion does not clearly state the contingency of substitution, on a
`claim-by-claim basis. It also does not, for each proposed substitute claim, identify
`the original patent claim it is intended to replace. By our computation, it appears
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`to propose ten alternative substitute claims, i.e., claims 24-33, for original patent
`claim 1, and thirteen alternative substitute claims, i.e., claims 34-46, for original
`patent claim 17. No explanation was given in the motion for overcoming the
`presumption that only one substitute claim is needed for each claim to be replaced.
`During the conference call held on May 20, 2013, counsel for Bergstrom explained
`that they desire the benefit offered by having multiple backup positions on an
`incremental basis, in case any substitute claim is proven unpatentable. That is a
`general and common desire insufficient to constitute the necessary special
`circumstance. Bergstrom did not show patentable distinction of any substitute
`claim with respect to other substitute claims for the same challenged claim.
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`ORDER
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`It is
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`ORDERED that Bergstrom’s Motion to Amend is dismissed; and
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`FURTHER ORDERED that Bergstrom may, within one week of the date
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`of this communication, file a renewed motion to amend claims, without need to
`further confer with the Board, in light of the guidance provided herein.
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`IPR2012-00027
`Patent 7,591,303
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`For PETITIONER:
`Matthew A. Smith
`Howard N. Shipley
`Foley & Lardner LLP
`3000 K St. NW, Suite 600
`Washington, DC 20008
`msmith-PRPS@foley.com
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`For PATENT OWNER:
`
`Dion M. Bregman
`Jason C. White
`2 Palo Alto Square,
`3000 El Camino Real, Suite 700
`Palo Alto, CA 94306-2121
`bergstrom.service@morganlewis.com
`padocketingdepartment@morganlewis.com
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