`
`In re Post-Grant Review of:
`
`U.S. Patent No. 6,553,350
`
`Issued:
`
`April 22, 2003
`
`Inventor:
`
`Thomas J. CARTER III
`
`Application No.: 09/253,427
`
`Filed:
`
`February 19, 1999
`
`For: METHOD AND APPARATUS
`FOR PRICING PRODUCTS IN
`
`\/\./\/\/xag/g/s/\/\/\/\/\./9
`
`U.S. Class: 705/20
`
`Group Art Unit: 3628
`
`Confirmation No. 5578
`
`FILED ELECTRONICALLY
`
`PER 37 C.F.R. § 42.6(b)
`
`MULTI-LEVEL PRODUCT AND )
`ORGANIZATIONAL GROUPS
`)
`
`Mail Stop Patent Board (37 C.F.R. § 42.6(b)(2))
`Patent Trial and Appeal Board
`U.S.P.T.O.
`
`P.O. Box 1450
`
`Alexandria, VA 22313-1450
`
`DECLARATION OF MICHAEL SIEGEL, Ph.D.
`
`SAP Exhibit 1005
`
`SAP Exhibit 1005
`
`
`
`TABLE OF CONTENTS
`
`Background and Qualifications ............................................................. ..1
`I.
`Status as an Independent Expert Witness ............................................. ..4
`II.
`III. Description of the Relevant Field and the Relevant Timeframe .......... .. 5
`IV. The Person of Ordinary Skill in the Relevant Field in the Relevant
`Timeframe ............................................................................................. .. 5
`
`V. Background of the Technology ............................................................. ..6
`VI. The ‘350 Patent ...................................................................................... ..8
`
`A. Hierarchical Arrangement of Data ................................................ .. 8
`B. “Denormalized” Numbers ........................................................... .. 12
`
`VII. Invalidity Under 35 U.S.C. §101 ......................................................... .. 14
`A. Requirements for Patent-Eligibility ............................................ ..14
`B. Abstract Ideas with Only Routine, Conventional Activity
`Added .......................................................................................... .. 15
`
`C. “Particular Machine” Test ............................................................ .. 16
`
`D. “Transformation” Test ................................................................ .. 19
`
`VIII. Invalidity under 35 U.S.C. §112 ....................................................... ..2O
`A. Claims 17 and 26-29 lack written description ........................... .. 20
`1.
`The Software Claims of the ’350 Patent are not
`
`Supported by the Specification ..................................... ..21
`B. Claims 17, 26, 28, and 29 are Indefinite .................................... ..22
`1.
`The “less restrictive” Recitations of Claims 17 and
`
`26 Render the Claims Indefinite ................................. .. 22
`
`2.
`
`The “pricing information” Recitation of Claims 17
`and 26 Renders the Claims Indefinite ....................... .. 27
`
`3.
`
`Claims 26 and 28 are Indefinite for Improperly
`Mixing Two Statutory Classes .................................. .. 28
`IX. SAP’s Pricing System History ............................................................ .. 32
`X. Claim Interpretation ............................................................................. .. 33
`XI. Unpatentability Based on Prior Art in the Present Proceedings 39 ...... .. 38
`XII. SAP’s R/3 Online Documentation ...................................................... ..40
`
`A. The R3 Documentation’s Automatic Pricing Functionality ....... ..42
`B. The R3 Documentation’s Condition Technique in Operation .....50
`C. The R3 Documentation and U.S. Patent No. 6,553,350 claims
`26 and 17 ...................................................................................... ..52
`
`1. Claim 26: Computer readable storage media:
`
`..................... ..53
`
`
`
`C.
`
`2. Claim 17: A method for determining the price of a
`product offered to a purchasing organization
`comprising:
`......................................................................... .. 54
`a.
`Arranging a hierarchy of organizational groups
`comprising a plurality of branches such that an
`organizational group below a higher organizational
`group in each of the branches is a subset of the higher
`organizational group; ...................................................... ..54
`. Arranging a hierarchy of product groups comprising
`a plurality of branches such that a product group
`below a higher product group in each of the branches
`in a subset of the higher product group;
`........................ .. 55
`Storing pricing information in a data source, wherein
`the pricing information is associated, with (i) a pricing
`type, (ii) the organizational groups, and (iii) the product
`groups; ............................................................................. .. 56
`Retrieving applicable pricing information corresponding
`to the product, the purchasing organization, each product
`group above the product group in each branch of the
`hierarchy of product groups in which the product is a
`member, and each organizational group above the
`purchasing organization in each branch of the hierarchy
`of organizational groups in which the purchasing
`organization is a member; ................................................ .. 59
`. Sorting the pricing information according to the pricing
`types, the product, the purchasing organization, the
`hierarchy of product groups, and the hierarchy of
`organizational groups; ..................................................... ..62
`f. Eliminating any of the pricing information that is less
`restrictive; and determining the product price using the
`sorted pricing information ................................................ .. 66
`D. The R3 Documentation and U.S. Patent No. 6,553,350 claim
`28 and 27: .................................................................................... ..69
`
`1. Claim 28: Computer readable storage media: ...................... .. 70
`2. Claim 27: A computer implemented method for determining
`a price of a product offered to a purchasing organization
`comprising: ............................................................................ .. 71
`a. retrieving from a data source pricing information
`that is (i) applicable to the purchasing organization
`and (ii) from one or more identified organizational
`
`
`
`groups, within a hierarchy of organizational groups,
`of which the purchasing organization is a member; ........ .. 71
`b. retrieving from the data source pricing information
`that is (i) applicable to the product and (ii) from one
`or more identified product groups, within a hierarchy
`of product groups, of which the product is a member;
`and ................................................................................. ..72
`
`c. receiving the price of the product determined using
`pricing information applicable to the one or more
`identified organizational groups and the one or more
`identified product groups according to the hierarchy
`of product groups and the hierarchy of organizational
`groups. .............................................................................. .. 72
`E. The R3 Documentation and U.S. Patent No. 6,553,350
`claim 29 ....................................................................................... .. 73
`
`XIII. Unpatentability Over the R3 Documentation Using the Broadest
`Reasonable Interpretation ................................................................... .. 74
`A. Printed Publication ...................................................................... ..75
`
`1. Public accessibility ................................................................. ..75
`2. Enablement ............................................................................. .. 75
`
`B. Known by Others ......................................................................... .. 84
`1. Public accessibility ................................................................ .. 84
`2. Enablement ............................................................................ .. 84
`
`XIV. Anticipation of Denormalized Numbers .......................................... .. 84
`XV. The Claims are Anticipated Under the Patent Owner’s Claim
`Construction ...................................................................................... .. 87
`
`XVI. Availability for Cross-Examination .................................................. .. 88
`XVII. Right to Supplement ......................................................................... .. 89
`XVIII. Jurat ................................................................................................. .. 89
`
`iii
`
`
`
`I.
`
`Background and Qualifications
`
`(1) My name is Michael Siegel.
`
`I am a Principal Research Scientist in the
`
`Information Technology Group at the Sloan School of Management. I am
`
`currently the Co-Director of the Productivity from Information Technology
`
`(PROFIT) Project at MIT. I have also been a Senior Lecturer at the Sloan School
`
`of Management.
`
`(2)
`
`I have been a research faculty member in MIT’s Information
`
`Technologies Group for more than twenty-two years.
`
`I have also been co-director
`
`of MIT’s International Finance Research Center, a Senior Lecturer for courses in
`
`Finance and Information Technology, and the Director of the Digital Health
`
`Special Interest Group at the MIT Center for Digital Business.
`
`(3)
`
`I hold degrees in Engineering (B.S. and M.S.) from Trinity College
`
`(Hartford, CT) and University of Wisconsin (Madison) respectively, and Computer
`
`Science (M.A. and Ph.D.) from Boston University. In addition to my more than
`
`twenty years on the research faculty at MIT, I have been a Visiting Professor at
`
`Northeastern University, a Research Associate at Boston University, and a
`
`Research Assistant at the Solar Energy Laboratory at the University of Wisconsin
`
`at Madison.
`
`(4)
`
`I have researched and lectured extensively on subjects relating to
`
`information technologies, information integration, and management of information
`
`
`
`systems. I have been performing research in the area of intelligent integration of
`
`information systems and providing new methods for integrating information from
`
`disparate sources. I am the author or co-author of over 70 related journal articles
`
`and reports.
`
`(5) My research has been applied to a number of business areas including
`
`but not limited to Financial Services, Digital Business, Healthcare, Cybersecurity
`
`and International Relations, Software Development and Maintenance, Systems
`
`Integration, and Risk Management. In addition, I have successfully obtained
`
`funding in these areas to maintain several active research groups at MIT.
`
`(6)
`
`I have extensive experience in Financial Services. For example, my
`
`work in Financial Services on benchmarking commercial Value-at-Risk software
`
`systems has been well-received by academics, practitioners, and regulators (e.g.,
`
`national and international agencies).
`
`(7)
`
`I have worked extensively on issues related to the integration of
`
`information. In particular I have looked at systems where the meaning of data may
`
`differ for example between applications and between sources and users. I have
`
`looked at numerous solutions to the processing and movement of information
`
`where the meaning may change or be significant in the operations performed on
`
`that data.
`
`I have had numerous publications on issues around metadata, data
`
`semantics and context mediation. These publications are listed in my CV.
`
`
`
`(8)
`
`As a Principal Research Scientist at the Sloan School of Management,
`
`I have focused on many issues that combine the use of information technology
`
`with business strategy and operations. I have developed algorithms, systems, and
`
`applications related to the integration of information from disparate systems. I
`
`have supervised numerous theses related to these topics.
`
`(9)
`
`I am the co—inventor on three patents related to extraction and
`
`integration of information:
`
`0 U.S. Patent No. 6,282,537, entitled “Querying and Retrieving Semi-
`
`Structured Data from Heterogeneous Sources by Translating
`
`Structured Queries.” This patent issued in 2001.
`
`0 U.S. Patent No. 5,913,214, entitled “Data Extraction from World
`
`Wide Web Pages.” This patent issued in 1999.
`
`0 U.S. Patent No. 5,953,716, entitled “Querying Heterogeneous Data
`
`Sources Distributed over a Network Using Context Interchange.”
`
`This patent issued in 1999.
`
`(10)
`
`I have had a number of consulting roles. These roles have included
`
`the development of financial reporting systems, information integration across
`
`organizations, analysis of systems integration in large foreign exchange trading
`
`systems, patent and software litigation (including banking software), and human
`
`resources software.
`
`
`
`(l 1) A copy of my C.V. is attached as Appendix A and includes a list of
`
`my publications.
`
`II. My Status as an Independent Expert Witness
`
`(12)
`
`I have been retained in this matter by Oblon, Spivak, McClelland,
`
`Maier, & Neustadt, L.L.P. (“Oblon Spivak”) to provide various opinions regarding
`
`U.S. Patent No. 6,553,350 (hereinafter referred to as the “‘350 patent”).
`
`I am
`
`being compensated at the rate of $750 per hour for my work. My fee is not
`
`contingent on the outcome of this matter or on any of the opinions I provide below.
`
`(13)
`
`I have been advised that Oblon Spivak represents SAP in this matter.
`
`I have no financial interest in SAP. However, I should note that SAP is a founding
`
`sponsor of the MIT Center for Digital Business (“founding” relates to sponsorship
`
`level). As a result of the sponsorship, SAP can choose one or more research
`
`projects with faculty members. I was a Principal Investigator for one such project
`
`with SAP starting in July of 2010. My role as Principal Investigator and any
`
`research project with SAP ended in December 2011. As has been the practice with
`
`other projects, I was able to use any residual funding without any obligation, of
`
`which a small amount remains.
`
`(14)
`
`I have been advised that Versata Software, Inc. (hereinafter referred to
`
`as “Versata”) owns the ‘350 patent.
`
`I have no financial interest in Versata or the
`
`
`
`‘350 patent nor have I ever had any contact with Versata, its predecessor Trilogy,
`
`or the inventor of the ‘350 patent, Thomas J. Carter.
`
`III. Description of the Relevant Field and the Relevant Timeframe
`
`(15)
`
`I have reviewed the ‘350 patent, its file history as well as the file
`
`history of the related U.S. Patent No. 5,878,400 (the ‘“400 patent”). Moreover, I
`
`have reviewed various documents from the litigation in the U.S. District Court for
`
`the Eastern District of Texas styled Versata Software, Inc. v. SAP America, Inc.,
`
`Civil Action No. 2:07-cv-153 (hereinafter, the “district court litigation”). For
`
`convenience, all of the information that I considered in arriving at my opinions is
`
`listed in Appendix B.
`
`(16) Based on my review of these materials, I believe that the relevant field
`
`for purposes of the ‘350 patent is computerized financial systems. I have been
`
`advised that the relevant timefiame is June 1995.
`
`(17) As described in Section I above, I have extensive experience in the
`
`relevant field. Based on my experience, I have a very good understanding of the
`
`relevant field in the relevant timeframe.
`
`IV.
`
`The Person of Ordinary Skill in the Relevant Field in the Relevant
`Timeframe
`
`(l8)
`
`I have been advised that “a person of ordinary skill in the relevant
`
`field” is a mythical person to whom an expert in the relevant field could assign a
`
`
`
`routine task with reasonable confidence that the task would be successfully carried
`
`out. In my opinion, a person of ordinary skill in the relevant field in June 1995
`
`would have had at least a Bachelor’s degree in computer science and two years of
`
`experience developing computerized financial systems or, alternatively, a Master’s
`
`degree in computer science and one year of experience developing computerized
`
`financial systems.
`
`(19) Based on my experience, I have a good understanding of the
`
`capabilities of a person of ordinary skill in the relevant filed.
`
`I have supervised
`
`and directed many such persons over the course of my career.
`
`V.
`
`Background of the Technology
`
`(20) The central concept to the ‘350 patent is hierarchies and the
`
`hierarchical arrangement of data. This concept, however, has a long and storied
`
`history.
`
`(21) Hierarchies (taxonomies, classifications) have been used for
`
`thousands of years for organizing groups. Many credit Aristotle (3 84 - 322 B.C.),
`
`a philosopher of ancient Greece, as the first to create a systematic biology by
`
`considering nature as ordered classes (classification) from lower to higher. The
`
`order was known as the “steps of nature,” or the “hierarchy of nature.”
`
`(22) Many years later, Carl Von Linne (1707-1778), molded the history of
`
`classifications into the modern theory of his research in The System of
`
`
`
`Nature (1735). Lime roughly classified living beings into “classes,” each class
`
`into “orders,” each order into “genera,” and each genus into “species.”
`
`(23) Another example a hundred fifiy years later was the introduction of
`
`the Dewey Decimal Classification (DDC) system conceived by Melvil Dewey in
`
`1873 and first published in 1876. The introduction of computer systems made it
`
`easier to store, manage and use classification systems.
`
`(24) Many computer programming languages have constructs for building
`
`hierarchies (e.g., arrays, lists). Object languages were introduced as early as the
`
`1960s but became more defined in the 1970s as the use of classes and subclasses
`
`became common practice. Also in the 1960s, the Hierarchical Data Model and
`
`associated Hierarchical Database was introduced by IBM. Another form of storing
`
`and manipulating hierarchical data was introduced with Object-Oriented Database
`
`Systems in the 1980s. Inheritance was considered an important aspect of all
`
`object-oriented systems. Graphical systems for manipulating hierarchies of classes
`
`became commonplace.
`
`(25) The use of organizational and product groups has become well
`
`understood over many years of classification science. Many computer—based
`
`approaches have been developed for maintaining hierarchies. Inheritance between
`
`classes and superclasses is well understood. Overwriting Values from superclasses
`
`
`
`with those in a subclass is also well-defined and a common practice. In short, the
`
`‘350 patent’s hierarchical arrangement of data is not new.
`
`V1.
`
`The ‘350 Patent
`
`A.
`
`Hierarchical Arrangement of Data
`
`(26) The ’350 patent defines the alleged invention as “a method and
`
`apparatus for determining prices for various products offered to Various purchasing
`
`organizations.” Exh. 1001, Col. 3:10-12.
`
`(27) To determine these prices, the patent explains, “the invention operates
`
`under a paradigm of WHO (the purchasing organization) is buying WHAT (the
`
`product)?’ Exh. 1001, Col. 3:24-25. According to the patent, the WHO/WHAT
`
`paradigm is not new. Prior art pricing systems used price tables, such as the table
`
`illustrated in Figure 1 of the patent, designating “WHO” and “WHAT.” Exh. 1001,
`
`Col. 2:27-42.
`
`7
`FIG.
`PRIOR ART
`
`486/33 456/50 485/66
`
`E
`
`
`
`(28)
`
`In Figure 1, “[e]ach row in the table designates a potential customer
`
`that the product would be sold to, and each column designates the product will be
`
`sold, and the table entry corresponding to the basic unadjusted price for the
`
`product.” Exh. 1001, Col. 2:30-34. In the prior art, other tables would store
`
`pricing adjustment data such as taxes, shipping charges, currency conversions, and
`
`discounts. Exh. 1001, Col. 2:3-6, Fig. 2. The patent contends that by organizing
`
`pricing data in this way, prior art systems required large tables that could grow to
`
`billions of entries. Exh. 1001, Col. 1:52-2:9.
`
`(29) To solve this problem, the purported invention arranges customer and
`
`product data differently. Rather than organizing customers (“WHO”) in rows in a
`
`table like the prior art, the patent defines the “WHO” by arranging customers (i.e.,
`
`purchasing organizations) into a hierarchy of customer groups. Exh. 1001,
`
`Col. 3:25-32, 6: 1-39. This reorganization of customer data is depicted in
`
`Figure 4A of the patent:
`
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`
`(30) And rather than organizing products (“WHAT”) in table columns like
`
`the prior art, the patent describes grouping products into a product group hierarchy.
`
`Exh. 1001, Col. 3:42-46, 7:50-67. This rearrangement of product data is depicted
`
`in Figure 4B of the patent:
`
`FIG. 43
`
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`
`
`(31) These hierarchical arrangements of customer and product information
`
`are used to determine pricing adjustments for a particular sale, and the pricing
`
`adjustments are applied to determine a final price. Exh. 1001, Col. 3:50-65.
`
`(32) According to the patent, these hierarchical arrangements of customer
`
`and product information distinguish the alleged invention from the prior art.
`
`Exh. 1001, Col. 6:37-39, 7267-812.
`
`(33) By arranging the pricing data in hierarchies instead. of tables, the
`
`patent claims several advantages over the prior art. With multiple tables, prior art
`
`systems required “a number of price adjustment tables and a number of database
`
`queries to retrieve applicable price adjustments.” Exh. 1001, Col. 2:55-63. In
`
`10
`
`
`
`contrast, “the method and apparatus of the present invention .
`
`.
`
`. overcome the
`
`prior art’s need to store, maintain, and retrieve huge amounts of data required to
`
`determine prices for various products offered to various purchasing organizations
`
`while applying a large number of price adjustments.” Exh. 1001, Col. 4:4-9.
`
`(34) Prior art systems that arranged data in multiple tables were inflexible,
`
`according to the patent. For example, “the prior art pricing systems had to store,
`
`update and retrieve a separate price adjustment for each purchaser based on the
`
`currency exchange rate for that purchaser’s particular geographic location.”
`
`Exh. 1001, Col. 7:35-39. When a currency rate changes, prior art systems must
`
`update data in several different tables. Exh. 1001, Col. 7:39-41. When customer
`
`data is organized in hierarchies, the purported invention requires only one table to
`
`store changes in currency exchange rates. Exh. 1001, Col. 7:44-49.
`
`(35)
`
`I have been advised that the patent owner, Versata Software, has
`
`explained that the inventor perceived a widespread problem in the way prior art
`
`systems organized data and devised a way to reorganize pricing data. According to
`
`the inventor, “[t]he conventional thinking was that different types of data .
`
`.
`
`.
`
`should be segregated and stored in different tables, which appears orderly from a
`
`human perspective.” Brief of Plaintiffs-Cross Appellants at 4, Versata Software,
`
`Inc. v. SAP America, Inc., No. 2012-1029, -1049 (Fed. Cir. May 29, 2012) (Exh.
`
`1011). He realized that “changing the conventional thinking could lead to vast
`
`11
`
`
`
`improvement, and he invented a pricing engine that leveraged the hierarchical data
`
`structures used by large corporations to organize pricing information.” Exh. 1011
`
`at 5.
`
`B.
`
`“Denormalized” Numbers
`
`(3 6) Another purported distinction over the prior art is the type of numbers
`
`used for price adjustments. The patent explains that in addition to “WHO” and
`
`“WHAT” data hierarchies, “HOW MUCH” numbers are used to arrive at a price
`
`adjustment, as shown in Figure 5 of the patent. Exh. 1001, Col. 10:45-47.
`
`
`
`485/35 485/50
`
`486/66
`
`
`
`ADAM 503 CHARLIE
`
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`
`
`(37) The patent explains: “[C]olumn 44 is labeled as a ‘how much’ column.
`
`The numbers in this column are used to arrive at a price adjustment. The numbers
`
`in this column are ‘denormalized,’ meaning that each number in this column has a
`
`unique significance. In other words, a number in this column could refer to a basic
`
`12
`
`
`
`price, or an adjustment to the basic price such as a tax rate, a shipping charge, a
`
`currency conversion rate, or various discounts applicable to the base price.”
`
`Exh. 1001, Col. 10:45-54.
`
`(38) The use of “denormalized” numbers purportedly provides advantages
`
`over the prior art. Exh. 1001, Col. 10:53-54. For example, the patent explains that
`
`“the numbers in prior art tables are ‘abstracted’ and stored as a denormalized
`
`number in the ‘how much’ column (i.e., column 44 in FIG. 5), and the
`
`interpretation of those numbers are left up to the interpretation engine of the
`
`present invention.” Exh. 1001, Col. 11:19-24. Furthermore, “[t]his dynamic
`
`interpretation of abstracted numbers during run time along with the invention’s
`
`feature permitting a user to flexibly specify and change product and organizational
`
`groups is in contrast to the static nature of the prior art pricing systems.”
`
`Exh. 1001, Col. 11:24-28.
`
`(39) The patent explains that rearranging customer and product data and
`
`using “abstracted” numbers are key improvements. “Fig. 5 illustrates that the
`
`invention greatly simplifies the prior art tables in at least two ways. First, products
`
`and organizations are categorized in different product and organizational groups.
`
`Second, the various product and organizational groups are associated with
`
`denormalized numbers whose interpretation is determined during run time.”
`
`Exh. 1001, Col. 11:48-54.
`
`13
`
`
`
`VII. Invalidity Under 35 U.S.C. §101
`
`A.
`
`Requirements for Patent-Eligibility
`
`(40)
`
`I have been advised that the Supreme Court has ruled that laws of
`
`nature, abstract ideas and natural phenomena are not patentable. Mayo v.
`
`Prometheus, 566 U.S.
`
`, slip op. at 1 (2012).
`
`(41)
`
`I have been advised that the Supreme Court has explained that an
`
`“application” of an abstract idea, such as a mathematical formula, may be patent-
`
`eligible, if the patent claims add “significantly more” than routine, conventional
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`activity to the underlying concept. Mayo, slip op. at 2-4.
`
`(42)
`
`I have been advised that the Supreme Couit has explained that an
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`“important and useful clue” to patent—eligibility is whether a claim is “tied to a
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`particular machine or apparatus” or “transforms a particular article into a different
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`state or thing,” the so-called machine-or-transformation test. Bilski v. Kappos, 130
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`S. Ct. 3218, 3225-26 (2010). I have been advised that the Supreme Court has
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`explained that the machine-or-transformation test is not the only test for patent-
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`eligibility. Bilski, 130 S. Ct. at 3227.
`
`(43)
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`In my opinion, claims 17, 26, 27, 28, and 29 of the ’350 patent do not
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`satisfy these requirements for patent—eligibility, for the reasons discussed below.
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`14
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`
`
`B.
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`Abstract Ideas with Only Routine, Conventional Activity Added
`
`(44)
`
`In my opinion, claims 17, 26, 27, 28, and 29 include the abstract ideas
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`of rearranging pricing data into hierarchies and calculating a product price using
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`“abstracted” numbers, as discussed above. The patent stresses that the purported
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`invention “results in an efficient storage, management and retrieval of pricing data
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`and generation of price recommendations.” Exh. 1001, Col. 8:37-39.
`
`(45) The patent explains that organizing pricing data into hierarchies is
`
`performed by a person. While the patent claims that organizing pricing data into
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`hierarchies rather than tables “has significant advantages over the prior art pricing
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`systems,” it admits that the customer hierarchies are “wholly arbitrary” and
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`“determined by a user of the invention’s pricing system.” Exh. 1001, Col. 6:32-39.
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`Likewise, product groupings are “entirely arbitrary and determined by the user.”
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`Exh. 1001, Col. 7:64-67, 12:14-17.
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`(46) Nothing in claims 17, 26, 27, 28, and 29 adds anything but
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`conventional, well-known activities to these abstract ideas.
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`(47) Organizing data in hierarchies has been performed long before
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`the ’350 patent was filed. For example, companies have manually organized data
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`in hierarchies, such as organizational management charts, for years.
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`15
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`
`
`(48) Organizing pricing data into groups and using grouped pricing
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`information to determine a product price was likewise performed manually long
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`before the ’35O patent was filed. For example, hotels have long offered price
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`discounts for members of groups such as travel club members, senior citizens, and
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`frequent guests. When a guest calls to make a hotel reservation, the hotel clerk
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`may ask which group or groups the guest belongs to, determine the discounts
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`available for the appropriate group or groups, and then offer the lowest price to the
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`guest.
`
`(49)
`
`In my opinion, the addition of only routine, conventional activities to
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`the abstract ideas of reorganizing pricing data in a hierarchy and calculating a
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`product price is insufficient to render claims 17, 26, 27, 28, and 29 patent-eligible.
`
`C.
`
`“Particular Machine” Test
`
`(50) The patent repeatedly explains that the purported invention can be
`
`implemented on any type of computer system. According to the patent, “[t]he
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`present invention may be implemented on any conventional or general purpose
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`computer system.” Exh. 1001, Col. 5:8-9. The other mentions of computers in the
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`specification, discussed below, confirm that no special computer or other machine
`
`is involved. Thus, in my opinion, nothing in claims 17, 26, 27, 28, and 29
`
`indicates a tie to any particular machine.
`
`16
`
`
`
`(51) The patent includes an “example of a computer system used to
`
`generate price recommendations according to the present invention” in Figure 3:
`
`
`77
`
`FIG. 3 DE)
`
`,5
`
`73
`
`VIDEO Ml/_X
`AND 91]/'7ER$
`
` C
`
`M4]/‘I MEMORY
`
`(52) This example of a computer system is described in column 5 of the
`
`patent, but nothing in the figure or the accompanying text indicates any technical
`
`requirements or specific details about any particular machine. Instead, the patent
`
`explains that this computer system is “for purposes of example only” and that
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`“[t]he present invention may be implemented in any type of computer system or
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`programming or processing environment.” Exh. 1001, Col. 5:55-58.
`
`(53) Claims 17, 26, 27, 28, and 29 describe, either directly or indirectly, a
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`“data source” and the patent explains that the purported invention reduces the
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`number of “database queries” needed to determine a price. Exh. 1001, Col. 11:37-
`
`12:3. The terms “data source” and “database” do not imply a tie to any particular
`
`machine. Instead, the patent explains that “although the invention is discussed in
`
`17
`
`
`
`terms of a ‘database,’ the invention can be implemented using any data source that
`
`may be different from a conventional database.” Exh. 1001, Col. 10:59-61.
`
`(54) The patent uses the phrase “interpretation engine” when discussing
`
`denormalized numbers. For example, the patent states that the interpretation of
`
`denormalized numbers is “determined during run time” by “the interpretation
`
`engine of the present invention.” Exh. 1001, Col. 11:17-24. But the patent does
`
`not describe in any detail what the “interpretation engine” is or how it operates.
`
`Nothing in the patent’s brief mention of an “interpretation engine” indicates any
`
`involvement of a particular machine.
`
`(55) The patent includes Figures 6-14, described as “computer screens
`
`according to the present invention.” Exh. 1001, Col. 4:33-60. None of these
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`figures, however, indicates a tie to any particular machine. Instead, the “computer
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`screens” depict the pricing data arrangements in a different way. For example,
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`“FIG 9 is an example of a computer screen according to the invention which
`
`corresponds to the table of Fig. 5.” Exh. 1001, Col. 16:34-36. Neither the
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`“computer screens” nor the corresponding data tables indicate the involvement of
`
`any particular computer.
`
`(56) Although called “computer screens,” the patent explains that these
`
`figures show actions performed by a user, not a computer. For example, the patent
`
`explains that Figure 6 demonstrates how “a user can arbitrarily select the different
`
`18
`
`
`
`grouping of the organizations” by selecting a folder icon, determining where an
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`organizational group is to be placed in a hierarchy, and creating new branches in
`
`the hierarchy. Exh. 1001, Col. 13:20-14:3. Likewise, the patent explains that
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`Figure 7 illustrates how a user specifies pricing types and creates new pricing types
`
`by clicking on an icon. Exh. 1001, Col. 14:4—65. The same is true for Figure 8
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`(e.g., Col. 15:53-67, “pricing sequence can be designated by the user”), Figure 9
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`(e.g., Col. 16:36-55, “the user selects a specific customer” then “the user selects a
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`Pricing Type”), Figure 10 (e.g., Col. 16:59-17:5, “user specifies