IN THE UNITED STATES PATENT TRIAL AND APPEAL BOARD
`
`Petition for Post-Grant Review
`of U.S. Patent No. 6,553,350
`
`
`
`
`In re Post-Grant Review of:
`)
`)
`
`) U.S. Class: 705/20
` U.S. Patent No. 6,553,350
`)
`
`) Group Art Unit: 3628
`Issued: April 22, 2003
`)
`
`
`) Confirmation No. 5578
`Inventor: Thomas J. CARTER
`)
`
`
`) Petition filed: September 16, 2012
`Application No. 09/253,427
`)
`
`
`)
`Filed: February 19, 1999
`) FILED ELECTRONICALLY
`
`
`) PER 37 C.F.R. § 42.6(b)(1)
`For: METHOD AND APPARATUS
`)
`
`FOR PRICING PRODUCTS IN
` MULTI-LEVEL PRODUCT AND )
`
`ORGANIZATIONAL GROUPS
`)
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S.P.T.O.
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`PETITION FOR POST-GRANT REVIEW UNDER 35 U.S.C. § 321 AND
`§ 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT
`
`Pursuant to 35 U.S.C. § 321 and § 18 of the Leahy-Smith America Invents
`
`
`
`Act (“AIA)” and pursuant to 37 C.F.R. § 42.300 et seq., the undersigned hereby
`
`requests post-grant review of claims 17 and 26-29 of U.S. Patent No. 6,553,350
`
`(“the ’350 patent,” attached as Petition Exhibit 1001), which issued to Thomas J.
`
`CARTER on April 22, 2003.
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`Petition for Post-Grant Review
`of U.S. Patent No. 6,553,350
`
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`An electronic payment in the amount of $35,800.00 for the post-grant review
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`fee specified by 37 C.F.R. § 42.15(b)(1) is being paid at the time of filing this
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`petition, charged to deposit account no. 06-0916.
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`Petition for Post-Grant Review
`of U.S. Patent No. 6,553,350
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`PRELIMINARY STATEMENT .................................................................. 1
`
`II. GROUNDS FOR STANDING ...................................................................... 3
`
`A. At Least One Challenged Claim is Unpatentable ................................. 3
`
`B.
`
`C.
`
`D.
`
`Claims 17 and 26-29 are Directed to a Covered Business
`Method ................................................................................................... 4
`
`Claims 17 and 26-29 are Not Directed to a “Technological
`Invention” .............................................................................................. 5
`
`Petitioner has Been Sued for Infringement of the ’350 Patent
`and is Not Estopped ............................................................................... 9
`
`III. STATEMENT OF PRECISE RELIEF REQUESTED FOR
`EACH CLAIM CHALLENGED ............................................................... 10
`
`A.
`
`B.
`
`C.
`
`Claims for which Review is Requested .............................................. 10
`
`Statutory Grounds of Challenge .......................................................... 10
`
`Claim Construction ............................................................................. 10
`
`1.
`
`2.
`
`Broadest Reasonable Interpretation .......................................... 10
`
`Support for Petitioner’s Broadest Reasonable
`Interpretation ............................................................................. 12
`
`IV. CLAIMS 17 and 26-29 OF THE ’350 PATENT ARE
`UNPATENTABLE ...................................................................................... 16
`
`A.
`
`Claims 17 and 26-29 are Invalid Under 35 U.S.C. § 101 ................... 16
`
`1.
`
`2.
`
`The ’350 Patent Is Unpatentably Abstract ................................ 17
`
`The ’350 Patent Does Not Satisfy The Machine-or-
`Transformation Test .................................................................. 20
`
`B.
`
`Claims 17 and 26-29 are Invalid under 35 U.S.C. § 112 .................... 21
`
`3
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`Petition for Post-Grant Review
`of U.S. Patent No. 6,553,350
`
`
`35 U.S.C. § 112, First Paragraph .............................................. 22
`
`35 U.S.C. § 112, Second Paragraph .......................................... 24
`
`1.
`
`2.
`
`C.
`
`Claims 17 and 26-29 are Invalid under 35 U.S.C. § 102 .................... 30
`
`1.
`
`2.
`
`3.
`
`4.
`
`The R/3 2.2 SAP System .......................................................... 30
`
`Printed Publication .................................................................... 33
`
`Known by Others in the United States ...................................... 36
`
`Anticipation under 35 U.S.C. § 102 .......................................... 36
`
`V. APPLICATION OF PRIOR ART TO CLAIMS 17 and 26-29 OF
`THE ’350 PATENT ..................................................................................... 46
`
`A.
`
`R/3 Documentation.............................................................................. 46
`
`VI. ANTICIPATION OF DENORMALIZED NUMBERS ........................... 59
`
`VII. APPLICATION OF THE ADMITTED PRIOR ART UNDER
`THE PATENT OWNER’S CONSTRUCTION ........................................ 61
`
`CONCLUSION ....................................................................................................... 62
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`Petition for Post-Grant Review
`of U.S. Patent No. 6,553,350
`
`
`
`TABLE OF AUTHORITIES
`
`
`FEDERAL CASES
`
`
`
`Page(s)
`
`3M v. Chemque, Inc., 303 F.3d 1294 (Fed. Cir. 2002) ............................................ 36
`
`Ariad Pharms, Inc. v. Eli Lilly & Co., 598 F.3d 1336 (Fed. Cir. 2010) (en
`banc) .................................................................................................................... 21
`
`Bancorp Services v. Sun Life, 687 F.3d 1266 (Fed. Cir. 2012) ............................... 19
`
`Bilski v. Kappos, 130 S. Ct. 3218 (2010) ................................................................. 16
`
`CA, Inc. v. Simple.com, Inc., 2009 U.S. Dist. LEXIS 27092 (E.D.N.Y. Mar.
`17, 2009) ............................................................................................................. 33
`
`Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560 (Fed. Cir. 1988) ......... 36
`
`CyberSource Corp. v. Retail Decisions, 654 F.3d 1366 (Fed. Cir. 2011) ............... 17
`
`Datamize LLC v. Plumtree Software, Inc., 417 F.3d 1342 (Fed. Cir. 2005) ........... 22
`
`Energizer Holdings, Inc. v. Int’l Trade Comm’n, 435 F.3d 1366 (Fed. Cir.
`2006) ................................................................................................................... 22
`
`Ex Parte ePlus, Inc., Decision on Appeal in Reexamination Control No.
`90/008,104 14-18 (B.P.A.I. May 18, 2011) ........................................................ 34
`
`Fort Properties v. American Master Lease, 671 F.3d 1317 (Fed. Cir. 2012) ......... 20
`
`Gottschalk v. Benson, 409 U.S. 63 (1972) ............................................................... 17
`
`In re Grams, 888 F.2d 835 (Fed. Cir. 1989) ............................................................ 17
`
`In re Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004)) ............................................... 34
`
`In re Lister, 583 F.3d 1307 (Fed. Cir. 2009) ........................................................... 34
`
`In re NTP, Inc., 654 F.3d 1268 (Fed. Cir. 2011) ..................................................... 11
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`Petition for Post-Grant Review
`of U.S. Patent No. 6,553,350
`
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`In re Wyer, 655 F.2d 221 (CCPA 1981) .................................................................. 33
`
`In re Yamamoto, 740 F.2d 1569 (Fed. Cir. 1984) .................................................... 10
`
`IPXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d 1377 (Fed. Cir. 2005) ....... 22
`
`Kyocera Wireless Corp. v. Int’l Trade Comm'n, 545 F.3d 1340 (Fed. Cir.
`2008) ................................................................................................................... 34
`
`Lockwood v. American Airlines, Inc., 107 F.3d 1565 (Fed. Cir. 1997) ................... 22
`
`Mayo v. Prometheus, 132 S. Ct. 1289 (U.S. 2012) .................................................. 16
`
`OIP Tech. v. Amazon.com, Inc., 2012 U.S. Dist. LEXIS 129396 ........................... 18
`
`Parker v. Flook, 437 U.S. 584 (1978) ..................................................................... 16
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`Versata Software, Inc. v. SAP America, Inc., No. 2:07-cv-153 (E.D. Tex) .............. 9
`
`
`
`
`
`FEDERAL STATUTES
`35 U.S.C. § 101 .................................................................................................passim
`
`35 U.S.C. § 102 .................................................................................................passim
`
`35 U.S.C. § 112 .................................................................................................passim
`
`
`
`REGULATIONS
`
`37 C.F.R. § 42.301 ................................................................................................. 4, 6
`
`37 C.F.R. § 42.302 ................................................................................................... 10
`
`37 C.F.R. § 42.300……………………………………………………………...1, 11
`
`
`OTHER AUTHORITIES
`
`21 Fed. Cir. B. J. No. 4 .................................................................................. 4, 7, 8, 9
`6
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`LIST OF EXHIBITS
`
`Petition for Post-Grant Review
`of U.S. Patent No. 6,553,350
`
`
`
`Petition Exhibit 1001: U.S. Patent No. 6,553,350
`
`Petition Exhibit 1002: Transitional Program for Covered Business Method
`Patents—Definitions of Covered Business Method Patent
`and Technological Invention, 77 Fed. Reg. 157 (August
`14, 2012)
`
`Petition Exhibit 1003: United States Patent and Trademark Office -
`Classification Definitions, Class 705
`
`Petition Exhibit 1004: A Guide to the Legislative History of the America Invents
`Act; Part II of II, 21 Fed. Cir. Bar J. No. 4
`
`Petition Exhibit 1005: Declaration of Dr. Michael Siegel
`
`Petition Exhibit 1006: Versata Complaint for Patent Infringement against SAP,
`filed April 20, 2007, Versata v. SAP Litigation, 07-cv-
`00153
`
`Petition Exhibit 1007: Excerpt of Trial Transcript Before the Honorable Chad
`Everingham United States Magistrate Judge, Versata v.
`SAP Litigation, 07-cv-00153 (24:13-15-Versata’s
`Opening Statement)
`
`Petition Exhibit 1008: Declaration of Jodi Gregory on Public Accessibility of
`R/3 Reference Materials
`
`Petition Exhibit 1009: Declaration of Karin Fischer on Public Accessibility of
`Documents Referencing the R/3 System
`
`Petition Exhibit 1010: Trial Transcript Before the Honorable Chad Everingham
`United States Magistrate Judge, Versata v. SAP
`Litigation, 07-cv-00153 (Carter Testimony)
`
`Petition Exhibit 1011: Versata Opening Brief, Federal Circuit Appeals 2012-
`1029, -1049
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` Petition Exhibit 1012: Memorandum Opinion and Order Regarding Claim
`Construction, Versata v. SAP Litigation, 07-cv-00153
`
`Petition for Post-Grant Review
`of U.S. Patent No. 6,553,350
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`
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`Petition Exhibit 1013:
`
`SAP History, 1972-1981: the Early Years
`
`Petition Exhibit 1014:
`
`SAP History, 1982-1991: the SAP R/2 Era
`
`Petition Exhibit 1015:
`
`SAP History, 1992-2001: the SAP R/3 Era
`
`Petition Exhibit 1016:
`
`SAP History, 2002-Present: Real-Time Data Where and
`When You Need It
`
`Petition Exhibit 1017: R/3 2.2A and 2.2B Online Documentation
`
`Petition Exhibit 1018: Trial Transcript Before the Honorable Chad Everingham
`United States Magistrate Judge, Versata v. SAP
`Litigation, 07-cv-00153 (Nettles Testimony)
`
`Petition Exhibit 1019:
`
`Joint Claim Construction and Prehearing Statement from
`Versata v. SAP Litigation, 07-cv-00153
`
`Petition Exhibit 1020: Changes to Implement Inter Partes Review Proceedings,
`Post-Grant Review Proceedings, and Transitional
`Program for Covered Business Method Patents, 77 Fed.
`R Versata v. SAP Litigation, 07-cv-00153 eg. 157
`(August 14, 2012)
`
`
`Petition Exhibit 1021: Office Patent Trial Practice Guide, 77 Fed. Reg. 157
`(August 14, 2012)
`
`
`
`
`
`8
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`I.
`
`PRELIMINARY STATEMENT
`
`The ’350 patent relates to determining a price for a product using hierarchies
`
`of customers (“purchasing organizations”) and products. The patent admits that
`
`pricing based on customer and product data was not new, explaining that prior art
`
`pricing systems including SAP’s R/3 system used large databases to calculate
`
`prices based on price adjustments for customers and products. But rather than
`
`organize customer and product data in tables like the prior art, the inventor of the
`
`’350 patent reorganized pricing data using the ubiquitous customer and product
`
`hierarchies used by large companies. The inventor also “abstracted” the pricing
`
`numbers to create “denormalized” numbers, whose units are determined at
`
`runtime. According to the patent, the rearrangement of pricing data into hierarchies
`
`and these abstracted numbers provided significant benefits over prior art systems
`
`like R/3.
`
`Versata sued SAP in 2007, alleging that a later version of SAP’s software
`
`infringed claims 26, 28, and 29 of the ’350 patent, among others. Although SAP’s
`
`accused software did not perform the claimed functions “out of the box,” Versata
`
`maintained that the ’350 claims cover software that can be modified to perform the
`
`infringing functions, as long as its source code is not changed. Under this broad
`
`interpretation of its claims, Versata accused SAP pricing functionality that was
`
`also present in SAP’s earlier pricing systems including R/3. For example, Versata
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`explained that determining the treatment of “denormalized” numbers “at runtime”
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`covers any software that applies units and meaning entered before runtime into the
`
`software by a user, just as in SAP’s prior art R/3. Given Versata’s recent
`
`characterizations of the ’350 claims and how they apply to SAP pricing
`
`functionality, it is apparent that SAP’s R/3 was in fact anticipatory prior art that
`
`renders the claims unpatentable.
`
`The ’350 claims are unpatentable for the additional reason that they recite
`
`abstract ideas—arranging data in hierarchies and calculating prices using
`
`“abstracted” numbers—without adding anything more than routine, conventional
`
`features. By its own admission, the ’350 patent may be implemented using any
`
`conventional database system or data source or computer or processing
`
`environment. Moreover, the invention could be performed manually, with a user
`
`performing the claimed functions using a pencil and paper.
`
`In fact, several of the claimed functions are only described as being
`
`performed by a person. For example, the specification explains that the product
`
`and customer hierarchies are “arbitrary and determined by the user.” The patent
`
`gives no hint of how a programmed computer could possibly perform the arbitrary
`
`arranging required by claim 26. And it is the user who “receives the price” once it
`
`is determined, not the computer software required by claims 28 and 29. The failure
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`to explain at all how computer software would perform these functions and the
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`mixture of computer software with user-performed steps render these claims
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`invalid under section 112.
`
`Section 18 of the AIA was designed to address patents like the ’350 patent,
`
`those issued during the late 1990’s and early 2000’s. At that time, Congress has
`
`explained, the USPTO lacked examiners with expertise in business methods and
`
`faced a dearth of available prior art. After the Supreme Court explained in Bilski v.
`
`Kappos that patents issued during that time may be too abstract to be patentable,
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`Congress took action, empowering the USPTO to review these patents on almost
`
`all validity grounds throughout the life of the patent. Congress explained that
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`patents in class 705, like the ’350 patent, are the focus of section 18, defining
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`“covered business method patent” to track the USPTO’s class 705 definition. And
`
`while “technological inventions” are excluded from the definition of covered
`
`business methods, patents like the ’350 patent that accomplish business processes
`
`using only known technology are not. The ’350 patent, with its myriad
`
`unpatentability issues and abstract subject matter, is ripe for review.
`
`II. GROUNDS FOR STANDING
`A. At Least One Challenged Claim is Unpatentable
`As further detailed below, claims 17 and 26-29 of the ’350 Patent are invalid
`
`under one or more of 35 U.S.C. §§101, 112, 102, and 103. Thus, for the reasons set
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`3
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`forth below, it is “more likely than not that at least one of the claims of the ’350
`
`patent is unpatentable.” 35 U.S.C. 324(a).
`
`B. Claims 17 and 26-29 are Directed to a Covered Business Method
`The AIA defines a covered business method (“CBM”) patent as “a patent
`
`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 . . . .” AIA § 18(d)(1); see also 37 C.F.R. § 42.301. According to
`
`the USPTO, “patents subject to covered business method patent review are
`
`anticipated to be typically classifiable in Class 705.” Exh. 1002, p. 48739.
`
`The USPTO noted that the AIA’s legislative history demonstrates that
`
`“financial product or service” should be “interpreted broadly,” encompassing
`
`patents “claiming activities that are financial in nature, incidental to a financial
`
`activity or complementary to a financial activity.” Exh. 1002, p. 48735. Moreover,
`
`the language “practice, administration, or management” is “intended to cover any
`
`ancillary activities related to a financial product or service, including . . .
`
`marketing, customer interfaces [and] management of data . . . .” Exh. 1004,
`
`p. 635-36. “The phrase ‘method or corresponding apparatus’ is intended to
`
`encompass, but not be limited to, any type of claim contained in a patent,
`
`including, method claims, system claims, apparatus claims . . . and set of
`
`instructions on storage media claims.” Id. at p. 638.
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`4
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`The ’350 patent, classified in class 705 and reciting methods and apparatus
`
`“for determining a price of a product offered to a purchasing organization,” is
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`plainly a CBM patent. See, e.g., Exh. 1001, claims 17 and 29. Indeed, the ’350
`
`patent claims subject matter contained in the very title of class 705, “Data
`
`Processing: Financial, Business Practice, Management, or Cost/Price
`
`Determination,” subclass 20, “Price look-up processing.” Exhibit 1003, pg. 705-1,
`
`705-25 (emphasis added).
`
`The patent specification further demonstrates that the ’350 patent is for a
`
`CBM. The patent manages information related to customers and products by
`
`grouping it in hierarchical arrangements for pricing purposes. Exh. 1001,
`
`Col. 3:24-49. Using these hierarchies, pricing adjustments are determined and
`
`applied to determine a final price at which a particular product or service can be
`
`sold to a particular customer. Exh. 1001, Col. 3:50-65.
`
`Because the ’350 patent claims methods and corresponding apparatus for
`
`determining a product price, is classified in class 705, and relates to management
`
`of pricing data, it is a CBM patent subject to Section 18 review.
`
`C. Claims 17 and 26-29 are Not Directed to a “Technological
`Invention”
`
`The AIA excludes “patents for technological inventions” from the definition
`
`of CBM patents. AIA § 18(d)(2). To determine when a patent is for a technological
`
`invention, “the following will be considered on a case-by-case basis: whether the
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`claimed subject matter as a whole recites a technological feature that is novel and
`
`unobvious over the prior art; and solves a technical problem using a technical
`
`solution.” 37 C.F.R. § 42.301. When this definition was first proposed by the
`
`USPTO, commentators asked the USPTO to revise the definition to clarify that a
`
`technological invention could meet one of these tests or the other, or to provide a
`
`wholly different test. See, e.g., Exh. 1002, p. 48736-37. Citing the legislative
`
`history, which explained that the “‘patents for technological inventions’ exception
`
`only excludes patents whose novelty turns on a technological innovation over the
`
`prior art and are concerned with a technical problem which is solved by a technical
`
`solution,” id. at p. 48735, the USPTO declined to change the definition, leaving the
`
`“and” and explaining that this definition is consistent with the AIA’s legislative
`
`history and represents “the best policy choice.” Exh. 1002, p. 48735-36. Thus, to
`
`qualify as a technological invention, a patent must have a novel, unobvious
`
`technological feature and a technical problem solved by a technical solution.
`
`Moreover, to institute a CBM post-grant review, a patent need only have one claim
`
`directed to a CBM, and not a technological invention, even if the patent includes
`
`additional claims. Exh. 1002, p. 48736. Because the claims of the ’350 patent fail
`
`to recite a novel and unobvious technological feature and fail to recite a technical
`
`problem solved by a technical solution, the patent is not for a technological
`
`invention.
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`First, the ’350 patent does not recite a technological feature that is novel and
`
`unobvious over the prior art. The inventor did not claim to have invented customer
`
`and product hierarchies; instead, he leveraged the “ubiquitous customer and
`
`product hierarchies” already used by large companies to organize pricing
`
`information. Exh. 1011, p. 5. The inventor also admitted that computerized pricing
`
`systems using databases to retrieve price adjustments were not new. Exh. 1001,
`
`Col. 2:20-62. The patent also explains that no novel computer was invented. “The
`
`present invention may be implemented in any type of computer system or
`
`programming or processing environment.” Exh. 1001, Col. 5:55-58; see also Exh.
`
`1005, ¶50.
`
`According to the patent, a primary distinction over the prior art is the is the
`
`use of “denormalized” numbers1 to represent price adjustments. Exh. 1005, ¶ 36.
`
`The patent explains that “denormalized” numbers are “abstracted” from prior art
`
`pricing numbers. Exh. 1005, ¶ 38. “[A]bstract business concepts and their
`
`implementation, whether in computers or otherwise,” are not included in the
`
`definition of “technological inventions.” Exh. 1004, pg. 634. Another alleged
`
`distinction over the prior art is the arrangement of customer and product data into
`
`hierarchies for pricing determinations. Exh. 1005, ¶¶ 31-33. Even if the patent’s
`
`arrangement of data were novel and unobvious, which patent owner admits is not
`
`1 The concept and claim requirement of denormalized numbers is discussed on
`pages 11-16 of this petition.
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`7
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`so, it is not a “technological” feature, as demonstrated by Congress’s explanation
`
`that accomplishing a business process or method is not technological, whether or
`
`not that process or method is novel. See, e.g., Exh. 1004, p. 634.
`
`Some of the ’350 claims recite a “computer readable storage media,” or “a
`
`memory” coupled to “a processor,” but Congress has explained that simply reciting
`
`technology like “software, memory, computer-readable storage medium, [or]
`
`databases” does not make a patent a technological invention. Id., p. 635. Moreover,
`
`the ’350 patent includes some claims lacking even these minimal computer-related
`
`recitations, such as claim 17, foreclosing any argument that these claims are
`
`“technological” and therefore not a CBM. To institute a CBM post-grant review, a
`
`patent need only have one claim directed to a CBM and not a technological
`
`invention. Exh. 1002, p. 48736.
`
`Second, the ’350 patent does not solve a technical problem using a technical
`
`solution. According to the patent, prior art systems required multiple updates and
`
`retrievals of pricing information due to the storage of pricing data in separate
`
`tables. Exh. 1005, ¶ 34. But even if this could be characterized as a “technical”
`
`problem, the ’350 patent does not provide a “technical” solution. The patent does
`
`not claim any improvement in database or computer technology. Rather, the patent
`
`admits that its “data source” is nothing novel: “[A]lthough the invention is
`
`discussed in terms of a ‘database,’ the invention can be implemented using any
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`data source . . . .” Exh. 1001, col. 10:58-61 (emphasis added). References to known
`
`technology, including “databases,” do not make a patent a technological invention.
`
`Exh. 1004, p. 635. Instead, the patented solution is accomplished by reorganizing
`
`data and using “abstracted” numbers to price products. Exh. 1005, ¶ 33; 38.
`
`Post-grant review is proper if at least one claim is directed to a CBM and not
`
`a technological invention. Because claim 17 and the other claims of the ’350 patent
`
`cover the business process of determining product prices, do not recite a
`
`technological feature that is novel and unobvious over the prior art, and do not
`
`solve a technical problem with a technical solution, the ’350 patent is not for a
`
`technological invention. CBM review is therefore appropriate for ’350 patent.
`
`Moreover, the ’350 patent includes some claims lacking even these minimal
`
`computer-related recitations, such as claim 17, foreclosing any argument that these
`
`claims are “technological” and therefore not a CBM. To institute a CBM post-grant
`
`review, a patent need only have one claim directed to a CBM and not a
`
`technological invention. Exh. 1002, p. 48736.
`
`D.
`
`Petitioner has Been Sued for Infringement of the ’350 Patent and
`is Not Estopped
`
`Petitioner has been sued for infringement of claims 17 and 26-29 of the ’350
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`patent in Versata Software, Inc. v. SAP America, Inc., No. 2:07-cv-153 (E.D. Tex).
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`Exh. 1006. Petitioner is not estopped from challenging the claims on the grounds
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`identified in the petition. 37 C.F.R. 42.302(b). Petitioner has not been party to any
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`other post-grant review of the challenged claims.
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`III. STATEMENT OF PRECISE RELIEF REQUESTED FOR EACH
`CLAIM CHALLENGED
`A. Claims for which Review is Requested
`Petitioner respectfully requests review under 35 U.S.C. § 321 and AIA § 18
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`of claims 17 and 26-29 of the ’350 patent, and the cancellation of these claims as
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`unpatentable.
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`Statutory Grounds of Challenge
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`B.
`Petitioner requests that claims 17 and 26-29 be cancelled as unpatentable on
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`the following grounds. The claim construction, reasons for unpatentability, and
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`specific evidence supporting this request are detailed below.
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`Claim 17: Unpatentable under 35 U.S.C. § 101, 112, and 102.
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`Claim 26: Unpatentable under 35 U.S.C. § 101, 112, and 102.
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`Claim 27: Unpatentable under 35 U.S.C. § 101, 112, and 102.
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`Claim 28: Unpatentable under 35 U.S.C. § 101, 112, and 102.
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`Claim 29: Unpatentable under 35 U.S.C. § 101, 112, and 102.
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`C. Claim Construction
`1.
`Broadest Reasonable Interpretation
`In the instant proceeding, a claim in an unexpired patent is to be given its
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`broadest reasonable construction in light of the specification in which it appears.
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`37 C.F.R. § 42.300(b); see also In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir.
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`1984). Even in the situation where the patent claims have been previously
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`construed by a district court using a different standard, the PTO is nevertheless
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`required to apply the broadest reasonable interpretation (BRI) standard. See
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`Exh. 1020, pg. 48697 (citing In re NTP, Inc., 654 F.3d 1268, 1274
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`(Fed. Cir. 2011)). The ’350 patent has not expired, and thus its claims, for the
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`purposes of this proceeding, should be given their broadest reasonable
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`interpretation.
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`Simple statement: Pursuant to the USPTO’s final Office Patent Trial
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`Practice Guide, a party may provide “a simple statement that the claim terms are to
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`be given their broadest reasonable interpretation, as understood by one of ordinary
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`skill in the art and consistent with the disclosure.” Exh. 1021, pg. 48764. Petitioner
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`so states for all terms as supplemented by the discussion below as to terms that
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`may be of particular interest in this proceeding. The below constructions and the
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`rationale therefore are supported by the declaration of Dr. Michael Siegel
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`(“Exh. 1005”), at ¶¶ 97-103; see also ¶¶ 67-77.
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`Claim Term
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`“sorting the pricing information”
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`“the pricing information that is less
`restrictive”
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`Broadest Reasonable Interpretation in
`View of the Specification
`The term means that the pricing
`information is ordered.
`This term is insolubly ambiguous and
`indefinite. Therefore, for purposes of the
`prior art analysis, petitioner uses the
`district court’s claim construction:
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`“pricing type(s)”
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`“pricing information”
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`“pricing information that is less
`specifically applicable to a product, a
`purchasing organization, an
`organizational group or a product group.”
`The term “pricing type” means “a class or
`category of pricing adjustments,” where
`pricing adjustments means ”a
`denormalized number that may affect the
`determined price.”
`The term “pricing information” means:
`“any information relating to price other
`than an adjustment to price that is not a
`denormalized number.”
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`2.
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`Support for Petitioner’s Broadest Reasonable
`Interpretation
`sorting the pricing information: The BRI of “sorting the pricing
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`information”2 is that the pricing information is ordered. This is the plain meaning.
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`See Exh. 1005, ¶ 98. Also, this is the construction urged by the patent owner at the
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`district court and adopted by the court. Exh. 1012, pgs. 16-17. Moreover, claim 1
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`of the ‘350 patent specifically requires “sorting the retrieved pricing information”
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`(emphasis added), while claim 17 (and thus claim 26) only require “sorting the
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`pricing information.” This is a deliberate and important distinction. See Exh. 1005,
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`¶ 98. The language of claim 1 requires that pricing information first be retrieved,
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`and then sorted. The language of claim 17, on the other hand, requires only that the
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`information be sorted (i.e., ordered)–it does not imply or require a temporal
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`2 Petitioner notes that, as presented elsewhere, the phrase “the pricing information”
`is indefinite.
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`limitation forcing the sorting to occur after the retrieving. See Exh. 1005, ¶ 98.
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`Thus, the sorting step could occur before the retrieving step. See Exh. 1005, ¶ 98.
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`Accordingly, the BRI of “sorting the pricing information” is simply that the pricing
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`information is ordered and this may happen either before or after the retrieving
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`step. See Exh. 1005, ¶ 98
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`In addition, the patent owner’s expert witness at trial, Dr. Nettles, made
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`certain admissions that support petitioner’s BRI for this term:
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`
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`Exh. 1018, pp. 81-82. Dr. Nettles thus believed that there does not always need to
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`be an “affirmative action” or change in the data set to fall within the definition of
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`“sort.”
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`the pricing information that is less restrictive: As discussed elsewhere in
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`this petition, the term “the pricing information that is less restrictive” is insolubly
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`ambiguous and indefinite See Exh. 1005, ¶ 99. Therefore, for the below prior art
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`analysis, petitioner uses the district court’s claim construction: “pricing information
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`that is less specifically applicable to a product, a purchasing organization, an
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`organizational group or a product group.” Exh. 1012 at 17-18.
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`pricing type(s): The BRI of “pricing type(s)” is “a class or category of
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`pricing adjustments.” See Exh. 1005, ¶ 100; see also Exh. 1001, Col. 19:44-45
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`(“the less restrictive pricing adjustments with the same Pricing Types are
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`eliminated.”). The parties agreed at the district court that pricing types means “a
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`class or category of pricing adjustments.” “Pricing adjustments” means “a
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`denormalized number that may affect the determined price,” which is consistent
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`with the district court’s claim construction. See Exh. 1012 at 7-10. Pricing
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`adjustments are limited to denormalized numbers under the BRI standard because
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`the patent owner limited its claims to denormalized numbers. See Exh. 1001, Col.
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`3:65-col.4:4. (“The combination of organizational groups and product groups
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`hierarchies and the denormalized pricing table . . . result in some of the advantages
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`of the present invention over the prior art pricing systems.”); see also id. at
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`Abstract; id. at Figs. 1, 2, and 5; id. at Col. 4:28-32; id. at Col. 8:37-col. 9:4; id. at
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`Col. 10:45-66; id. at Col. 11:7-66; Exh. 1005, ¶ 101. According to the patent
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`owner, the term “denormalized numbers” means nothing more than a user, at data
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`entry time, associating units with a number and specifying how the number is to be
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`applied (e.g., a discount) and then, at runtime, a system simply using that
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`information. See Exh. 1011. The patent owner’s interpretation supported a jury
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`verdict at trial under the district court’s claim construction of “denormalized
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`number,” which follows:
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`