UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_______________
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`
`
`SAP AMERICA, INC. ET AL.
`Petitioner
`v.
`
`Patent of VERSATA DEVELOPMENT GROUP, INC.
`Patent Owner
`_______________
`
`
`
`Case CBM2012-00001
`Patent 6,553,350
`
`_______________
`
`
`
`
`
`PATENT OWNER VERSATA’S REQUEST FOR REHEARING
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
` 
`
` 
`
`

`
`
`
`TABLE OF CONTENTS
`
`TABLE OF AUTHORITIES ................................................................................... iii 
`
`EXHIBIT LIST ........................................................................................................ vi 
`
`I. 
`
`II. 
`
`III. 
`
`PRELIMINARY STATEMENT ..................................................................... 1 
`
`STATEMENT OF THE PRECISE RELIEF REQUESTED .......................... 1 
`
`STATEMENT OF REASONS WHY THE RELIEF REQUESTED
`SHOULD BE GRANTED ............................................................................... 2 
`
`A. 
`
`B. 
`
`C. 
`
`D. 
`
`E. 
`
`F. 
`
`The ʼ350 Patent Is Not A Covered Business Method Patent ................ 2 
`
`Claim and Issue Preclusion Bar The Review Initiated By SAP ........... 4 
`
`35 U.S.C. § 101 Is Not A Permissible Ground For Review ................. 5 
`
`The Broadest Reasonable Interpretation Is Not the Correct
`Standard For Claim Construction In Review Proceedings ................... 6 
`
`Even Assuming BRI Applied, The Board’s Claim Constructions
`Are Unreasonable ................................................................................ 11 
`
`The ʼ350 Patent Claims Patent Eligible Subject Matter ..................... 12 
`
`IV.  CONCLUSION .............................................................................................. 15 
`
`ii
`
`   
`
` 
`
`

`
`TABLE OF AUTHORITIES
`
` 
`
`Cases 
`
`CLS Bank Int’l v. Alice Corp. Pty,
`No. 2011-1301, 2013 U.S. App. LEXIS 9493 (Fed. Cir. May 10, 2013) .......5, 6
`
`Diamond v. Diehr,
`450 U.S. 175 (1981) ...................................................................................... 6, 14
`
`Gottschalk v. Benson,
`409 U.S. 63 (1972) ............................................................................................. 12
`
`In re Alappat,
`33 F.3d 1526 (Fed. Cir. 1994) ........................................................................... 14
`
`In re Skvorecz,
`580 F.3d 1262 (Fed. Cir. 2009) ........................................................................... 6
`
`Markman v. Westview Instr.,
`517 U.S. 370 (1996) ........................................................................................... 10
`
`Nasalok Coating Corp. v. Nylok Corp.,
`522 F.3d 1320 (Fed. Cir. 2008) ........................................................................... 5
`
`Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of Veterans Affairs,
`260 F.3d 1365 (Fed. ........................................................................................... 10
`
`Phillips v. AHW Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) ........................................................................... 8
`
`Tafas v. Doll,
`559 F.3d 1345 (Fed. Cir. 2009) ........................................................................... 8
`
`Ultramercial, Inc. v. Hulu, LLC,
`No. 2010-1544, 2013 U.S. App. LEXIS 12715 (Fed. Cir. June 21, 2013)12, 13, 14
`zzDecision, Motion to Amend, Idle Free Sys., Inc. v. Bergstrom, Inc.
`IPR2012-00027 (JL), paper 26 (June 11, 2013) at 7 (Exh. 2105) ...................8, 9
`
` 
`
`iii
`
`

`
`Statutes 
`
`35 U.S.C. § 101 ................................................................................................ passim
`
`35 U.S.C. § 145 ........................................................................................................ 11
`
`35 U.S.C. § 146 ........................................................................................................ 11
`
`35 U.S.C. § 2(b)(2) .................................................................................................7, 8
`
`35 U.S.C. § 2(b)(2)(A) ............................................................................................... 7
`
`35 U.S.C. § 282 .......................................................................................................... 6
`
`35 U.S.C. § 282(b)(2)................................................................................................. 5
`
`35 U.S.C. § 305 .......................................................................................................... 9
`
`35 U.S.C. § 321(b) ..................................................................................................... 5
`
`35 U.S.C. § 326 .......................................................................................................... 7
`
`35 U.S.C. § 326(d) ..................................................................................................... 9
`
`35 U.S.C. § 326(e) ..................................................................................................... 9
`
`5 U.S.C. § 701 .......................................................................................................... 10
`
`5 U.S.C. § 702 .......................................................................................................... 10
`
`5 U.S.C. § 703 .......................................................................................................... 10
`
`5 U.S.C. § 704 .......................................................................................................... 10
`
`5 U.S.C. § 705 .......................................................................................................... 10
`
`5 U.S.C. § 706 .......................................................................................................... 10
`
`§ 18, Leahy-Smith America Invents Act ...................................................... 2, 3, 4, 7
`
`Other Authorities 
`
`Patent Quality Improvement Act of 2013,
`Senate 866, 113th Congress
`§ 1 (2013-2014) (proposed legislation) ............................................................... 4
`
` 
`
`iv
`
`

`
`Restatement 2d of Judgments, § 22 ........................................................................... 5
`
`Rules 
`
`37 C.F.R. § 42.207(a) ................................................................................................. 2
`
`37 C.F.R. § 42.22(a)(3) .............................................................................................. 9
`
`37 C.F.R. § 42.220 ..................................................................................................... 2
`
`37 C.F.R. § 42.221 ..................................................................................................... 9
`
`37 C.F.R. § 42.300(b) ................................................................................................ 7
`
`37 C.F.R. § 42.71(d) ..............................................................................................1, 2
`
`v
`
`  
`
` 
`
`

`
`EXHIBIT LIST
`
`The Exhibits referenced in Patent Owner Versata’s Request for Rehearing
`
`are listed in the Exhibit List being filed concurrently herewith.
`
` 
`
` 
`
`vi
`
`

`
`I.
`
`PRELIMINARY STATEMENT
`
`Pursuant to 37 C.F.R. § 42.71(d), Patent Owner, Versata Development
`
`Group, Inc. (“Versata”), submits this Request for Rehearing in response to the
`
`Final Written Decision entered June 11, 2013 (Paper 70) (“Final Decision”) by the
`
`Patent Trial and Appeal Board (“Board”).
`
`II.
`
`STATEMENT OF THE PRECISE RELIEF REQUESTED
`
`In its Final Decision, the Board erroneously held that Versata’s claims 17
`
`and 26-29 of U.S. Patent No. 6,553,350 (“’350 patent”) are unpatentable under 35
`
`U.S.C. § 101. The Board states that the claims “recite unpatentable abstract ideas”
`
`and “do not provide enough significant meaningful limitations to transform these
`
`abstract ideas into patent-eligible applications of these abstractions.” Final
`
`Decision at 34. In doing so, the Board misapprehended and overlooked numerous
`
`matters previously raised by Versata. Specifically, in making this erroneous
`
`determination, the Board misapprehended or overlooked, among other things, that:
`
`(1) the ʼ350 patent is not a “covered business method patent”;
`
`(2) claim and issue preclusion bar this review initiated by SAP;
`
`(3) 35 U.S.C. § 101 is not a permissible basis for review;
`
`(4) the alleged broadest reasonable interpretation (“BRI”) standard for claim
`construction is not the proper standard for interpreting the claims in this review;
`
`(5) even under the alleged BRI standard—assuming arguendo it applies—
`the Board’s claim constructions are unreasonable; and
`
`(6) the challenged claims of the ʼ350 patent recite patent eligible subject
`matter.
`
` 
`
`1
`
`

`
`For at least these reasons, the Board should vacate its Final Decision and/or
`
`terminate the proceeding involving the ʼ350 patent.1
`
`III. STATEMENT OF REASONS WHY THE RELIEF REQUESTED
`SHOULD BE GRANTED
`A. The ʼ350 Patent Is Not A Covered Business Method Patent
`In its Final Decision, the Board held that claims 17 and 26-29 of the ʼ350
`
`patent are unpatentable under 35 U.S.C. § 101 in response to SAP’s petition
`
`seeking review of the ʼ350 patent pursuant to § 18 of the Leahy-Smith America
`
`Invents Act (“AIA”). Final Decision at 2. In doing so, the Board misapprehended
`
`the proper definition of “covered business method patent” and the ʼ350 patent’s
`
`eligibility for review under § 18.
`
`First, the ʼ350 patent claims a technological invention. Specifically, claims
`
`17 and 26-29 of the ʼ350 patent recite a technological feature. POPR at 13. This
`
`feature is novel and unobvious. Id. at 16-30. The technical problem addressed by
`
`the claimed invention is storing, maintaining and retrieving massive amounts of
`                                                            
`1 37 C.F.R. § 42.71(d) provides that a party dissatisfied with a decision may file a
`request for rehearing and that “[t]he request must specifically identify all matters
`the party believe the Board misapprehended or overlooked, and the place where
`each matter was previously addressed in a motion, an opposition, or a reply.”
`Under 37 C.F.R. § 42.207(a), a patent owner may file a preliminary response
`(“POPR”) “setting forth the reasons why no post-grant review should be
`instituted.” Under 37 C.F.R. § 42.220 the patent owner may file a Patent Owner
`Response (“POR”) “addressing any ground for unpatentability not already denied.”
`As such, Versata previously addressed the arguments in Section III.A.–C., infra, in
`its POPR pursuant to § 42.207(a) and the arguments in Section III.D.–F. in its POR
`pursuant to § 42.220.
`
` 
`
`2
`
`

`
`data to provide accurate pricing for sales transactions. Id. at 14. The technical
`
`solution provided by the claimed invention is using its technological features so
`
`that a reduced number of tables storing the data on purchasing organizations,
`
`products, pricing adjustments and price can be used and the product price obtained
`
`with as little as a single query. The technological features claimed in the ʼ350
`
`patent significantly simplify storage, maintenance and retrieval, minimize
`
`utilization of computer processing power, substantially reduce access times, and
`
`permit flexibility to change product and organizational data. Id. at 14-15. The
`
`Board misapprehended or overlooked that the ʼ350 patent recites a technological
`
`invention and thus is not properly reviewable under § 18 of the AIA.
`
`In rendering a final decision under § 18 of the AIA, the Board also
`
`misapprehended or overlooked the statutory definition of “covered business
`
`method patent” under § 18(d)(1).2 A crucial distinction misapprehended or
`
`overlooked by the Board is the difference between a “financial product or service”
`
`and any product or service. Id. Anything that relates to money does not qualify as a
`
`“financial product or service”; nor does determining a price using novel and
`
`unobvious technological steps or elements. This language of the statute cannot be
`
`                                                            
`2 Section 18(d)(1) defines “covered business method patent” as “a patent [for a
`non-technological invention] that claims a method or corresponding apparatus for
`performing data processing or other operations used in the practice, administration,
`or management of a financial product or service . . . .”
`
` 
`
`3
`
`

`
`ignored, as the Board has done.3 The Board’s over-expansive reading of § 18(d)(1)
`
`reaches beyond the scope of the statute and beyond the scope of the PTO’s
`
`procedural rulemaking authority. See infra pp.7-8 discussing PTO’s rulemaking
`
`authority. The challenged claims of the ʼ350 patent include: (1) steps or elements
`
`for creating a novel pricing data structure, which stores pricing information, and
`
`(2) steps or elements for using this novel data structure to determine the price of a
`
`product. POPR at 32. Under the proper interpretation of the statute, the ʼ350 patent
`
`is not eligible for review under § 18.
`
`B. Claim and Issue Preclusion Bar The Review Initiated By SAP
`The Board further misapprehended and overlooked the preclusive effect of
`
` 
`
`the district court’s final judgment, and the Federal Circuit’s affirmance with
`
`respect to all issues but the form of the permanent injunction. See Final Decision at
`
`2. First, the Board misapprehended the nature of this proceeding—a trial between
`
`SAP and Versata where the burden of proving unpatentability is on SAP4—and
`
`thus the preclusive effect of the prior judgment between the same two parties.
`
`POPR at 64-65. E.g., Nasalok Coating Corp. v. Nylok Corp., 522 F.3d 1320, 1328-
`
`                                                            
`3 The “financial” modifier has a more specific meaning than just involving money
`as evidenced by Senator Schumer’s proposed legislation. Patent Quality
`Improvement Act of 2013, S.866, 113th Cong. § 1 (2013-2014) (introduced May 6,
`2013) (Exh. 2101). The legislation would expand the applicability of § 18 to any
`patent claiming “data processing or other operations used in the practice,
`administration, or management of an enterprise, product or service.” Id.
`4 Final Decision at 6.
`
` 
`
`4
`
`

`
`30 (Fed. Cir. 2008); Restat. 2d of Judgments, § 22. Second, the Board overlooked
`
`that SAP did not appeal the district court’s determination that SAP failed to
`
`establish that any claims of the ʼ350 patent are invalid, and thus is barred from
`
`pursuing the present action. Id. Third, the Board misapprehended or overlooked the
`
`effect of the Federal Circuit’s affirmance of the district court’s judgment dated
`
`May 1, 2013, which Versata requested permission to brief on May 28, 2013 (the
`
`request was denied) (Exh. 2102). The Federal Circuit’s affirmance further supports
`
`the fact that both claim and issue preclusion bar SAP’s untimely, collateral attack
`
`on the claims of the ʼ350 patent. POPR at 66-68.
`
`C.
`
`35 U.S.C. § 101 Is Not A Permissible Ground For Review
`
`
`
`In holding that claims 17 and 26-29 of the ʼ350 patent are unpatentable
`
`under 35 U.S.C. § 101 (Final Decision at 2), the Board misapprehended the
`
`permissible grounds for review under 35 U.S.C. § 321(b). Because § 101 is not a
`
`condition for patentability, much less specified as such as required by 35 U.S.C.
`
`§ 282(b)(2), it is not reviewable in a post-grant review (or CBM review). POPR at
`
`69-80. Further, the Board erred by overlooking the Federal Circuit’s recent
`
`decision in CLS Bank—a decision that Versata requested permission to brief on
`
`May 14, 2013 (Exh 2103). The Board denied that request. In CLS, Chief Judge
`
`Rader stated explicitly “the Supreme Court long ago held that Section 101 is not a
`
`‘condition of patentability.’” CLS Bank Int’l v. Alice Corp. Pty, No. 2011-1301,
`
` 
`
`5
`
`

`
`2013 U.S. App. LEXIS 9493, at *184 (Fed. Cir. May 10, 2013) (Rader, C.J.)
`
`(citing Diamond v. Diehr, 450 U.S. 175, 189-90 (1981)). Chief Judge Rader further
`
`noted that “the statute does not list Section 101 among invalidity defenses to
`
`infringement.” Id. (citing 35 U.S.C. § 282). This is directly contrary to the Board’s
`
`erroneous assertion that it has authority to review patents under 35 U.S.C. § 101,
`
`and its holding that Versata’s claims are unpatentable on this ground.
`
`
`
`Notably, not a single opinion in CLS referred to § 101 as a condition for
`
`patentability. Instead, the opinions support the opposite conclusion. E.g., id. at *16
`
`(Lourie, J., joined by Dyk, Prost, Reyna, and Wallach, J.J. concurring) (“It is also
`
`important to recognize that § 101, while far-reaching, only addresses patent
`
`eligibility, not overall patentability.”) (emphasis in original); id. at 95 (Rader, C.J,
`
`joined by Lin, Moore and O’Malley, J.J. concurring ) (“The Supreme Court
`
`repeatedly has cautioned against conflating the analysis of the conditions of
`
`patentability in the Patent Act with inquiries into patent eligibility.”).
`
`D. The Broadest Reasonable Interpretation Is Not the Correct
`Standard For Claim Construction In Review Proceedings
`
`The Board concludes that the purported BRI standard for claim construction
`
`is the proper standard to apply in post-grant reviews. Final Decision at 7-10. In
`
`doing so, the Board overlooked binding precedent, In re Skvorecz, 580 F.3d 1262,
`
`1267-68 (Fed. Cir. 2009). POR at 62. In that decision the Federal Circuit held that
`
`the BRI standard “is solely an examination expedient, not a rule of claim
`
` 
`
`6
`
`

`
`construction.” Id.; see also POR at 62. None of the authority cited by the Board
`
`states that BRI is substantive law applicable in any proceeding at the PTO. Final
`
`Decision at 7-10.
`
`Additionally, the Board’s Final Decision overlooks that the promulgation of
`
`substantive Rule 42.300(b) exceeded the PTO’s procedural rulemaking authority
`
`by imposing substantive legal requirements. POR at 62. The Board’s statement that
`
`the Leahy-Smith America Invents Act vested the PTO with substantive rulemaking
`
`authority misapprehends the statute and the limited authority given to the PTO.5
`
`Final Decision at 11-14. While the PTO was given authority to prescribe
`
`procedures for post-grant reviews, it was not given authority to impose substantive
`
`patent law on those appearing before it, such as a claim construction not authorized
`
`by statute or the federal courts. POR at 62. The Board’s citation to the purported
`
`grant of authority in 35 U.S.C. § 326 is not inconsistent with the limitations
`
`provided for by 35 U.S.C. § 2(b)(2). In § 2(b)(2)(A), the PTO may only “establish
`
`regulations, not inconsistent with law, which (A) shall govern the conduct of
`
`proceedings in the Office.” The title of § 326 is “Conduct of post-grant review.”
`
`Thus, the fact that § 326 gave the PTO authority to provide regulations for the
`                                                            
`5 Under the Board’s reasoning, 35 U.S.C. § 2(b)(2) does not apply to the new PGR
`proceedings because the AIA provides the PTO with substantive rulemaking
`authority. But the only support the Board provides is changes in draft legislation.
`If Congress intended to vest the PTO with substantive rulemaking authority, it
`would have done so explicitly rather than by oblique reference to the PTO’s ability
`to prescribe regulations governing the conduct of PGR proceedings.
`
` 
`
`7
`
`

`
`conduct of post-grant reviews is simply an example of the PTO promulgating
`
`regulations for the conduct of proceedings under § 2(b)(2). Nothing, however,
`
`allows the PTO to affect substantive patent law. E.g., Tafas v. Doll, 559 F.3d 1345,
`
`1352 (Fed. Cir. 2009), vacated and reh'g en banc granted, 328 F. App’x 658 (Fed.
`
`Cir. 2009), stayed, 331 F. App’x 748 (Fed. Cir. 2009).
`
`Finally, the Board overlooks that the BRI standard for claim construction
`
`used during the examination of patents is not applicable to review proceedings.
`
`POR at 62. Because of the nature of these new proceedings, the Board should have
`
`construed the claim terms using the standard enunciated in Phillips v. AHW Corp.,
`
`415 F.3d 1303 (Fed. Cir. 2005). Notably, the authority relied upon by the Board to
`
`support its BRI standard for claim construction relates to reexamination or reissue
`
`applications. But the new contested review proceedings are not examinations,
`
`reexaminations or reissues. Decision, IPR2012-00027 (JL), paper 26 (June 11,
`
`2013) at 7 (Exh. 2105) (Noting that “[a]n inter partes review is neither a patent
`
`examination nor a patent reexamination” and providing guidance on the strict
`
`requirements governing the patent owner’s limited ability to amend claims in the
`
`new review proceedings). Instead, a review proceeding is a trial – in this case
`
`between SAP and Versata. See id. at 6 (“An inter partes review is more
`
`adjudicatory than examinational, in nature.”). The Board is simply acting as the
`
`tribunal. It is up to the petitioner—here SAP—to prove unpatentability (just as in
`
` 
`
`8
`
`

`
`litigation). See 35 U.S.C. § 326(e). Unlike reexamination and reissue proceedings,
`
`the PTO is not a party in a review proceeding; there is no examiner analyzing the
`
`claims and the burden of proving unpatentability does not fall on the PTO.6 POR at
`
`62. Further, unlike the situation during examination, reviews provide the patentee
`
`with a very limited opportunity to amend the claims. Cf. 35 U.S.C. § 305 (“the
`
`patent owner will be permitted to propose any amendment to his patent and a new
`
`claim or claims thereto . . . .) and 35 U.S.C. § 326(d) (“During a post-grant review
`
`instituted under this chapter, the patent owner may file 1 motion to amend the
`
`patent in 1 or more of the following ways . . . (B) For each challenged claim,
`
`propose a reasonable number of substitute claims [determined by the Board to be
`
`one (37 C.F.R. § 42.22(a)(3)].”). Thus, in review proceedings, including this one,
`
`no additional claim can be added as a matter of right, and the Board has the
`
`discretion to deny the motion to amend altogether. 37 C.F.R. § 42.221; Decision,
`
`IPR2012-00027 (JL), paper 26 (June 11, 2013) (Exh. 2105).
`
`For at least the above reasons, use of the BRI standard is not proper in a
`
`review proceeding, including this one. The Board’s application of it is contrary to
`
`law and exceeds the Board’s statutory authority. In this proceeding, the Board
`
`should have applied the claim construction which the district court applied in the
`                                                            
`6 Nevertheless, the Board appears to be attempting to act in a hybrid manner under
`the new proceedings—impermissibly serving as both an advocate and tribunal.
`See Institution Decision at 12-15 (rejecting the parties agreed upon construction);
`Final Decision at 7-19 (advocating for BRI).
`
` 
`
`9
`
`

`
`district court litigation (finally decided in favor of Versata and affirmed by the
`
`Federal Circuit). See Claim Construction Order, Versata v. SAP, Case No. 2:07-cv-
`
`153 (SX 1012). In its Markman order, the district court, at SAP’s urging, construed
`
`“‘pricing adjustment(s)’ and ‘price adjustment(s)’ as ‘a denormalized number that
`
`may affect the determined price’” and similarly construed “pricing information” as
`
`“any information relating to price other than an adjustment to price that is not a
`
`denormalized number.” The district court also construed “sorting the pricing
`
`information,” found in claim 17, to mean “the pricing information is ordered.”
`
`Claim Construction Order, Versata v. SAP, Case No. 2:07-cv-153 (SX 1012).”
`
`POR at 63.
`
`
`
`Additionally, stare decisis requires that the Board apply the district court’s
`
`claim construction. This simple but powerful doctrine “binds courts to follow their
`
`own earlier decisions or the decisions of a superior tribunal.” Nat’l Org. of
`
`Veterans’ Advocates, Inc. v. Sec’y of Veterans Affairs, 260 F.3d 1365, 1373 (Fed.
`
`Cir. 2001). The Supreme Court has held that claim construction should be subject
`
`to the doctrine—indeed, the Court cited the uniformity and finality promised by
`
`stare decisis as a compelling reason to treat claim construction as a legal question.
`
`Markman v. Westview Instr., 517 U.S. 370, 390-91 (1996). The district courts are
`
`superior tribunals as evidenced by, inter alia, their powers to review the PTO’s
`
`actions under the Administrative Procedure Act, 5 U.S.C. §§ 701-706, and 35
`
` 
`
`10
`
`

`
`U.S.C. §§ 145, 146. That certain appeals from the PTAB are directly to the Federal
`
`Circuit does not change this fact—the PTAB is not an Article III court. Cf. Final
`
`Decision at 18. Thus, stare decisis dictates that the district court’s claim
`
`construction be applied to this proceeding.” POR at 65.
`
`E.
`
`Even Assuming BRI Applied, The Board’s Claim Constructions
`Are Unreasonable
`
`
`
`In its Final Decision, the Board misapprehends or overlooks the broadest
`
`reasonable interpretation of the claims of Versata’s ʼ350 patent. First, in claim 17,
`
`the only reasonable interpretation when the claim is construed in light of the
`
`specification, as it must be, is that the sorting step is performed after the retrieving
`
`step. POR at 52-61. The Board misapprehended the broadest reasonable
`
`interpretation. Final Decision at 21.
`
`
`
`Second, the Board also misapprehended the broadest reasonable
`
`interpretation of claims 17 and 26-29 when read in light of the specification, which
`
`requires the use of denormalized numbers. POPR at 26 n.3. SAP conceded this
`
`point during its petition. Petition at 14 (“Pricing adjustments are limited to
`
`denormalized numbers under the BRI standard because the patent owner limited its
`
`claims to denormalized numbers.”) and at 16 (“The BRI of pricing information
`
`should include denormalized numbers, as discussed above.”). Yet the Board
`
`overlooked SAP’s acknowledgement that, even under the BRI, claims 17 and 26-
`
`29 still require the use of denormalized numbers.
`
` 
`
`11
`
`

`
`The ʼ350 Patent Claims Patent Eligible Subject Matter
`
`F.
`The Board’s Final Decision misapprehends or overlooks the proper legal
`
`
`
`analysis for determining patent eligibility under 35 U.S.C. § 101, as was recently
`
`expounded on in Ultramercial, and consequently reaches a mistaken conclusion
`
`regarding the challenged claims of the ʼ350 patent.7 First, as a threshold matter, the
`
`Board misapprehends what qualifies as an abstract idea. An abstract idea is “a
`
`fundamental truth; an original cause; a motive . . . .” Gottschalk v. Benson, 409
`
`U.S. 63, 67 (1972); see also Ultramercial, Inc. v. Hulu, LLC, No. 2010-1544, 2013
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`U.S. App. LEXIS 12715, at *38-39 n.2 (Fed. Cir. June 21, 2013). The Board’s
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`identification of an alleged abstract idea was in error.8 Final Decision at 28-29.
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`None of the challenged claims involve a mere abstract idea as that judicial
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`exception is properly understood. POR at 16-18, 32-34, 36-37, 40-42, 43-44.
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`                                                            
`7 The following specific instances are exemplary, and not limiting.
`8 While the Board allegedly identifies a single abstract idea, the Board notes that it
`involves two concepts both of which are allegedly abstract: (1) the “concept of
`organizational hierarchies for products and customers”; and (2) “determining a
`price.” Final Decision at 28-29. Thus, the Board apparently concedes that the
`alleged abstract idea is really two alleged abstract ideas. Cf. Reply at 3. But the
`Board does not cite any authority where a claim was struck down for reciting
`multiple abstract ideas. Versata is not aware of any. And there is good reason no
`precedent exists—where two abstract ideas are present, the claim does not preempt
`either abstract idea by itself. Rather, the claim is meaningfully limited. The Board
`misapprehends or overlooks this. Final Decision at 28 (“We agree with SAP that
`each of the challenged claims involves the use of an abstract idea . . . .”); Reply at
`3 (“claim 17 recites two abstract ideas . . . Claim 27 likewise recites two abstract
`ideas . . . .”). To hold that Versata’s claims preempt all practical applications of the
`two allegedly abstract ideas (but only when used together) defies logic.
`12
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`

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`
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`Second, the Board misapprehended or overlooked the requirement that the
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`claims be considered as a whole when analyzing under § 101. Ultramercial, 2013
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`U.S. App. LEXIS 12715, at *21-22 (“[C]ourt must focus on claim as a whole . . .
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`[and] cannot go hunting for abstractions by ignoring the concrete, palpable,
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`tangible limitations of the invention the patentee actually claims.”). For example,
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`the Final Decision fails to address the claimed subject matter in each of the specific
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`steps of claim 17—also not addressed by SAP or Dr. Siegel—such as the storing,
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`retrieving, sorting, eliminating, and determining steps. POR at 18-19. The
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`retrieving step of claim 17 alone recites: “retrieving applicable pricing information
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`corresponding to the product, the purchasing organization, each product group
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`above the product group in each branch of the hierarchy of products groups in
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`which the product is a member, and each organizational group above the
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`purchasing organization in each branch of the hierarchy of the organizational
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`groups in which the purchasing organization is a member.” POR at 19. Yet the
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`Board fails to analyze this specific claim language in addition to the many other
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`specific and meaningful limitations recited in the challenged claims. POR at 13-51
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`(discussing in detail the patent eligibility of the challenged claims).
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`
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`Third, the Board misapprehended or overlooked the significance of the
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`computer hardware limitations that it admits are part of the claims, and applied the
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`wrong analysis in determining whether the claim limitations are meaningful. Final
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` 
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`13
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`

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`Decision at 29-30. As noted in Ultramercial, “that a claim is limited by a tie to a
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`computer is an important indication of patent eligibility.” 2013 U.S. App. LEXIS
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`12715, at *34. And “meaningful limitations may include the computer being part
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`of the solution, being integral to the performance of the method, or containing an
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`improvement in computer technology.” Id. at *34-35. But instead of performing
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`this analysis, the Board improperly looked at the novelty of the computer
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`limitations.9 Final Decision at 30 (“Thus, we analyze whether the claimed
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`invention is carried out using existing computers long in use.”). But novelty has
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`never been the test for determining whether a limitation is meaningful. Diehr, 450
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`U.S. at 190; Ultramercial, 2013 U.S. App. LEXIS 12715, at *32-33; 35 U.S.C.
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`100(b) (process includes a new use of a known machine). The Board also ignored
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`how programming a general purpose computer with software makes it a special
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`purpose computer. See Ultramercial, 2013 U.S. App. LEXIS 12715, at *35-36
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`(citing In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994)(en banc)). For at least
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`these reasons, the Board’s analysis and conclusion are flawed. Under the proper
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`legal standard, the additional limitations are meaningful. E.g., POR 21, 47-48.
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`                                                            
`9 The Board cites Dr. Siegel’s declaration, paragraphs 44-49, in support of its
`finding that the claimed steps are routine and conventional. But paragraphs 44-49
`merely express Dr. Siegel’s opinions and do not disclose any facts or data on
`which his opinions are based. Dr. Siegel’s ipse dixit does not constitute substantial
`evidence in support of the Board’s conclusion.
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` 
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`14
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`Fourth, the Board overlooked that the challenged claims are limited to a
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`specific way of pricing products and do not preempt all practical uses of the
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`alleged abstract idea. Final Decision at 30. Indeed, in spite of concluding the
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`claimed invention is computer implemented, Final Decision at 24, the Board later
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`states that the alleged abstract idea may be performed via pen and paper.10 Id. at
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`29. The Board also states that Versata could have drafted its claims differently to
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`capture other ways to practice the alleged abstract idea, and improperly states that
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`it failed to establish the additional limitations as meaningful. Final Decision at 32-
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`33. But even if the Board’s approach were proper, all this means is that other ways
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`not covered by the current claims exist. Cf. VX 2044 (SAP’s CAFC Blue Brief) at
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`3 (The ʼ350 patent is “directed to a very specific way to determine the price of a
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`product using a computer.”) (emphasis in original). For the same reason, the Board
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`misapprehended