SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`2013 WL 3167735 (Patent Tr. & App. Bd.)
`
`Patent Trial and Appeal Board
`
`Patent and Trademark Office (P.T.O.)
`
`SAP AMERICA, INC. PETITIONER,
`v.
`VERSATA DEVELOPMENT GROUP, INC. PATENT OWNER.
`
`Case CBM2012-00001 (MPT)
`Patent 6,553,350
`June 11, 2013
`
`PETITIONER:
`*1 Erika Arner
`Finnegan, Henderson Farabow, Garrett & Dunner, LLP
`SAP-PGR@finnegan.com
`J. Steven Baughman
`Ropes & Gray, LLP
`Steven.baughman@ropesgray.com
`
`PATENT OWNER:
`Nancy Linck
`Martin Zoltick
`Rothwell, Figg, Ernst & Manbeck, PC
`nlinck@rfem.com
`mzoltick@rfem.com
`
`Before SALLY C. MEDLEY, MICHAEL P. TIERNEY, and RAMA G. ELLURU
`Administrative Patent Judges
`TIERNEY
`Administrative Patent Judge
`
`
`
`FINAL WRITTEN DECISION
`
`37 C.F.R. § 42.73
`
`SAP filed a petition seeking a covered business method patent review of Versata's 6,553,350 ('350) patent pursuant to section 18
`of the Leahy-Smith America Invents Act (AIA). 1 An oral hearing was held on April 17, 2013. This decision is a final written
`decision under 35 U.S.C. § 328(a) as to the patentability of the challenged claims. Based on the record presented, we hold that
`Versata's '350 claims 17, and 26-29 are unpatentable under 35 U.S.C. § 101.
`
`I. Background
`
`In 2007, Versata sued SAP for infringement of the '350 patent. The case proceeded to trial and a jury found infringement by SAP
`and awarded damages. Ex. 2039 (Jury Verdict). The district court denied SAP's post trial motion challenging the infringement
`verdict, but held a new trial on damages. In the second trial, the jury awarded lost-profits and reasonable royalty damages. The
`district court upheld those awards. Patent Owner Preliminary Response 7 (“Prel. Resp.”), Paper 29.
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`1
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`Both parties appealed the district court's final judgment to the U.S. Court of Appeals for the Federal Circuit on October 11,
`2011. Versata Software, Inc. v. SAP America, Inc., Nos. 2012-1029, -1049. Of note, SAP did not appeal the district court's
`claim construction, and the validity of the '350 patent was not an issue on appeal. Prel. Resp. 8. The Federal Circuit affirmed
`the jury's infringement verdict and damages award but vacated and remanded a permanent injunction as overbroad. Versata
`Software Inc. v. SAP America Inc., 106 USPQ2d 1649 (Fed. Cir. 2013).
`
`SAP filed a petition with the United States Patent and Trademark Office (“Office”) on September 16, 2012, challenging claims
`17 and 26-29 of the '350 patent as unpatentable for failing to comply with 35 U.S.C. §§ 101, 102, and 112, 1 st and 2 nd
`paragraphs. Petition (“Pet.”), Paper 1. Versata filed a patent owner preliminary response opposing the institution of the review.
`On January 9, 2013, the Patent Trial and Appeal Board (“Board”) granted the petition and instituted the trial proceeding. The
`Board concluded that SAP demonstrated that claims 17 and 26-29 were more likely than not unpatentable under 35 U.S.C.
`§§ 101 and 102, but denied the petition as to 35 U.S.C. § 112, 1 st and 2 nd paragraphs. Decision on Institution of a Covered
`Business Method Patent Review (“Decision”), Paper 36.
`
`*2 SAP requested that the trial be expedited with respect to the patentability of Versata's claims under 35 U.S.C. § 101. Motion,
`Paper 40. Versata opposed the request, alleging that bifurcating the § 101 and § 102 issues had the potential to prolong the
`proceeding and increase costs, contrary to the purposes of the AIA. Opposition, Paper 42. SAP, however, agreed to forgo its
`challenge on the ground of unpatentability under § 102, if the Board were to enter the requested expedited schedule. Renewed
`Request, Paper 44. In light of SAP's agreement to forgo the § 102 challenge, the Board granted SAP's request to expedite the
`trial schedule. Decision Conduct of the Proceeding, Paper 45.
`
`Versata filed a patent owner response to the petition, contending that the challenged claims are patentable under § 101 and that
`the Board had employed an incorrect claim construction standard in construing the '350 patent claims. Response (“PO Resp.”),
`Paper 51. SAP's reply to the patent owner response maintained that the claims are unpatentable and that the Board had construed
`the claims properly. “Pet. Reply,” Paper 58.
`
`Both parties requested an oral hearing. See 35 U.S.C. § 326(a)(10) and 37 C.F.R. § 42.70(a). A hearing was held on April 17,
`2013, a transcript of which appears in the record. Record of Oral Hearing, Paper 66.
`
`II. Versata's '350 Patent 2
`
`Versata's '350 patent is directed to a method and apparatus for pricing products and services. Ex. 1001, '350 patent, 3:9-13. The
`central concept of the '350 patent involves hierarchies and the hierarchal arrangement of data. Ex. 1005, ¶ 20.
`
`The '350 patent states that its “invention operates under the paradigm of WHO (the purchasing organization) is buying WHAT
`(the product).” The '350 patent, 3:24-25. An example of the WHO/WHAT paradigm is depicted in Figure 1 of the '350 patent
`below:
`
`
`FIG. 1
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`2
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`According to the '350 patent, the WHO/WHAT paradigm was known in the prior art. Id., Fig. 1, 4:16-18. The '350 patent,
`however, states that prior art pricing tables for WHO/WHAT (customer/products) required large tables of data. Id., 1:52-59.
`
`The '350 patent invention is said to improve upon the prior art and reduce the need for large tables of data by arranging customers
`into a hierarchy of customer groups and products into a hierarchy of product groups. Id., 3:24-27, 41-42. Specifically, in the
`'350 patent, WHO is defined by creating an organizational hierarchy of organizational groups, where each group represents a
`characteristic of the organizational group. Id. An example of an arrangement of an organization customer group is depicted
`below in Fig. 4A of the '350 patent:
`
`
`FIG. 4A
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`3
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`*3 Similarly, a product group hierarchy for products (WHAT) is also defined. Id., Fig. 4B, 4:26-28. Pricing information is
`then associated with the customer and product groups. Id., 8:17-25. As such, special pricing adjustments may be defined as
`applying to all members of a specific customer group or a specific product group. Id., 3:26-49.
`
`III. Analysis
`
`SAP contends that the '350 claims 17 and 26-29 are unpatentable because the claims are abstract and not statutory subject matter
`for a patent under 35 U.S.C. §101. Pet. 16-21. Specifically, SAP states that Versata's claims are directed to the abstract ideas
`of arranging customer and product hierarchies and calculating a product price.
`
`Versata contends that the Board should conclude that the '350 claims are not abstract, but instead are patent-eligible under §
`101. Versata maintains that each of the claims, considered as a whole, is directed to a specific, practical and advantageous way
`to determine a product price. PO Resp. 1. According to Versata, both SAP's petition and the Board's Decision on Institution,
`failed to consider the claims as a whole and address each of their recited limitations, such as storing, retrieving, and sorting.
`PO Resp. 16-51. Additionally, Versata contends that the Board should not have applied the broadest reasonable interpretation
`standard for claim construction in this proceeding and, therefore, the Board's claim construction in the Decision instituting trial
`was in error. PO Resp. 51-67. Versata states that the correct claim construction was that used by the district court, which further
`supports the patent eligibility of Versata's challenged claims. PO Resp. 61-67.
`
`SAP, as petitioner, bears the ultimate burden of proof that Versata's claims are unpatentable under § 101. To place SAP's and
`Versata's contentions in context, we begin our analysis by first discussing our construction of the challenged claims. Bancorp
`Serv., LLC v. Sun Life Assurance Co. of Canada, 687 F.3d 1266, 1273-74 (Fed. Cir. 2012) (“[I]t will ordinarily be desirable--
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`4
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`and often necessary-- to resolve claim construction disputes prior to a § 101 analysis, for the determination of patent eligibility
`requires a full understanding of the basic character of the claimed subject matter.”).
`
`A. Claim Construction: The Broadest Reasonable Interpretation Standard
`
`The Board's Decision on Institution construed the challenged claims using the broadest reasonable interpretation (“BRI”)
`standard. Decision 6. SAP contends that the Board's use of BRI was appropriate under the AIA statutes and rules. Pet. Reply
`14-15. Versata disagrees and contends that the Board's use of such a standard “was in error.” PO Resp. 61.
`
`1. A Century of BRI at the Office
`
`*4 Versata states that claim construction is a question of law and that claim terms should be accorded only one definition: that
`which is based on a district court interpretation standard. PO Resp. 62. There are, however, two claim construction standards:
`the Office's BRI construction and the district court standard set forth in Phillips v. AWH. 3 The difference in standards generally
`arises from the ability of an applicant or patent owner in Office proceedings to amend their claims, and the fact that there is no
`presumption of validity before the Office. 4 Through the use of the broadest reasonable interpretation standard, the Office is
`able to encourage inventors to amend their claims to remove uncertainties and over breadth of claim scope.
`
`For at least a century, the Office has encouraged clear and unambiguous claim drafting by utilizing the broadest reasonable
`interpretation. For example, a 1906 Commissioner of Patent's Decision held that there is no better method of construing claims
`before the Office. Specifically, this early decision explains the rationale for BRI as follows:
`No better method of construing claims is perceived than to give them in each case the broadest interpretation
`which they will support without straining the language in which they are couched. This method would
`seemingly give more uniform and satisfactory results than are obtained by methods largely in vogue -
`such, for example, as that of importing limitations from the specification according to the exigencies of the
`particular situation in which the claim may stand at a given moment. The method suggested also seems to
`have the advantage according in its results with the probable intentions of the inventor at the time when the
`claim is drawn. In presenting claims to the Office the object constantly sought is breadth. Where a limited
`meaning is intended when a claim is drawn, what possible objection can there be to imposing that meaning
`unmistakably upon the claim by its express terms? That a claim which does not carry its true meaning on
`its face misleads those affected by the patent instead of guiding them to its true scope is alone sufficient
`reason why the Patent Office should refuse to recognize proposed limitations of claims which have not
`been clearly expressed therein.
`
`Podlesak and Podlesak v. McInnerney, 123(2) O.G. 1989, 1990 (Dec. Com. Pat. 1906, emphasis added). This standard of claim
`construction and its rationale have been upheld consistently by the Federal courts, including both the Court of Customs and
`Patent Appeals (“CCPA”) and the Federal Circuit. For instance, in 1932, the CCPA stated that:
`After a patent has issued, and it no longer is possible for the patentee to control the phraseology of his
`claims, the courts will so interpret them, if possible, as to protect him; but there is no reason, as we many
`times have observed, why an applicant in the Patent Office should not draw his claims to cover his actual
`invention only. For this reason, we have uniformly ruled that claims will be given the broadest interpretation
`of which they reasonably are susceptible. This rule is a reasonable one and tends not only to protect the real
`invention but to prevent needless litigation after the patent has issued.
`
`*5 In re Horton, 54 F.2d 961, 964-65 (CCPA 1932) quoting In re Carr, 297 F. 542, 543-44 (C.A.D.C. 1924); see also, In
`re Kebrich, 201 F.2d 951 954 (CCPA 1953) (stating that consideration of patentability requires use of broadest reasonable
`interpretation); In re Prater, 415 F.2d 1393, 1405-05 (CCPA 1969) (holding that the broadest reasonable interpretation is
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`5
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`appropriate where party may amend the claims to obtain protection commensurate with the inventor's actual contribution to
`the art).
`
`The use of the broadest reasonable interpretation standard applies to pre-issuance as well as post-issuance proceedings before the
`Office such as reissue and reexamination proceedings. Both the CCPA and the Federal Circuit have recognized that BRI serves
`an important public interest and that a key factor in its use is that patent owners before the Office are provided an opportunity to
`amend their claims and obtain appropriate coverage for their inventions with express claim language. See, e.g., In re Reuter, 670
`F.2d 1015 (CCPA 1981) (holding that broadest reasonable interpretation is applicable in reissue proceedings); In re Yamamoto,
`740 F.2d 1569 (Fed. Cir. 1984) (holding that broadest reasonable interpretation is applicable in reexamination proceeding).
`
`The new AIA reviews before the Office, like reissue and reexamination proceedings, provide patent owners with an opportunity
`to amend their claims. See, e.g., 35 U.S.C. § 326(d). Thus, the recognized public interest that supports the use of the broadest
`reasonable interpretation during reissues and reexaminations applies also to the new AIA post grant reviews. Specifically, as
`the cited authorities recognize, claims serve an important notice function. 5 The use of the broadest reasonable interpretation
`encourages patent owners to remove ambiguities and to narrow their claims by amendment, such that the inventor's contribution
`to the art is expressed in clear, precise and unambiguous terms. 6 Hence, consistent with the settled expectations of the past
`century, the Office has extended the use of the broadest reasonable interpretation to the new AIA reviews.
`
`2. The Office's Adoption of BRI
`
`Under the rulemaking authority provided for in the AIA, the Office, through notice and comment rulemaking, adopted the use
`of the broadest reasonable interpretation for all the new reviews. Thus, in covered business method patent reviews, this claim
`construction standard is required by 37 C.F.R. § 42.300(b), which reads as follows:
`*6 (b) A claim in an unexpired patent shall be given its broadest reasonable construction in light of the
`specification of the patent in which it appears.
`
`Versata contends that the Office, in promulgating this rule, exceeded its rulemaking authority provided for in 35 U.S.C. § 2(b)
`(2). PO Resp. 62. Versata's contention is unavailing, for it presumes that no other statutory authority exists for this standard
`of claim construction other than the Office's rulemaking authority under 35 U.S.C. § 2(b)(2). As discussed in the following
`sections, the AIA has provided the Office with new statutory and rulemaking authority, particularly with respect to post grant
`reviews, including covered business method patent reviews. See, e.g., Title 35, Chapter 32. 7
`
`a. Post Grant Rulemaking Authority Under the AIA
`
`To understand the Office's expanded rulemaking authority, it is necessary to explore the evolution of the administrative inter
`partes reexamination process that was previously available for the review of issued patents. As will be seen, this evolution
`reveals Congress' desire to develop a viable inter partes administrative system for patent review coupled with the necessary
`rulemaking discretion to establish and govern such an administrative system.
`
`Congress established the inter partes reexamination as part of the American Inventors Protection Act of 1999 (“AIPA”), Pub. L.
`106-113 §§ 4001-4808, 113 Stat. 1536 § 1501A et seq. (1999), (then codified as amended at 35 U.S.C. §§ 311-318, superseded
`by inter partes review, §§ 311-319). Inter partes reexamination was created to provide third parties an opportunity to participate
`in patent challenges before the Office. 145 Cong. Rec. S26983, S26984 (daily ed. Oct. 27, 1999) (statement of Sen. Hatch).
`The AIPA did not provide rulemaking powers specifically directed to inter partes reexamination. Accordingly, in order to
`regulate the conduct of the inter partes reexamination proceedings, the Office issued final rules on December 7, 2000 “under
`the authority given to the Commissioner of Patents and Trademarks by 35 U.S.C. 2(b)(2).” Rules to Implement Optional Inter
`Partes Reexamination Proceedings, 65 Fed. Reg. 76756, 76772 (Dec. 7, 2000).
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`6
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`Prior to the AIA, 35 U.S.C. § 2(b)(2) was said to be the “broadest of the Office's rulemaking powers.” Stevens v. Tamai, 366 F.3d
`1325, 1333 (Fed. Cir. 2004) (citing Gerritsen v. Shirai, 979 F.2d 1524, 1527 n.3 (Fed. Cir. 1992)). This section provides that
`the Office may govern the conduct of the proceedings before it. 35 U.S.C. § 2(b)(2)(A). The Federal Circuit has held that “[t]o
`comply with section 2(b)(2)(A), a Patent Office rule must be “procedural' -i.e., it must ‘govern the conduct of the proceedings
`in the Office.”’ Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1335 (Fed. Cir. 2008). According to the Federal Circuit, a rule is
`substantive when it “effects a change in existing law or policy” which affects individual rights and obligations. Id. at 1336.
`
`*7 Prior to the enactment of the AIA, several attempts were made by Congress to reform patent law. For example, Congress
`introduced, but failed to pass, the Patent Reform Act of 2007 and the Patent Reform Act of 2009. These acts included a post
`grant review procedure that included the following rulemaking provision:
`§ 326. Conduct of post-grant review proceedings
`
`(a) IN GENERAL.--The Director shall prescribe regulations, in accordance with section 2(b)(2)--
`
`(1) establishing and governing post-grant review proceedings under this chapter and their relationship to other proceedings
`under this title;
`
`The Patent Reform Act of 2007, S. 1145 110 th Cong. (2007) and the Patent Reform Act of 2009, S. 515 111 th Cong. (2009).
`As explained in the Senate Judiciary Committee's Report on the Patent Reform Act of 2009, while the committee recognized
`the importance of removing disincentives to current administrative processes, the reviews were not to be used as tools for
`harassment and the Office was to address these potential abuses using its expanded procedural authority. S. Rep. No. 111-18, at
`18 (2009). These predecessors of the AIA, however, would have limited the Office's new rulemaking authority to that provided
`in section 2(b)(2).
`
`With the passage of the AIA, Congress sought to provide a viable alternative to challenging patents in district court litigation, 8
`and therefore, replaced inter partes reexamination with new adjudicative review proceedings. As part of this transformation,
`Congress bestowed new rulemaking authority on the Office to establish and govern the new reviews and the relationship of the
`reviews to other proceedings under title 35. See 35 U.S.C. §§ 316(a)(4) and 326(a)(4). In particular, the section 2(b)(2) restriction
`that appeared in the 2007 and 2009 bills was removed. As recognized in the AIA legislative history, Congress granted the Office
`rulemaking discretion to change existing examination policies such that the new review proceedings would be more adjudicative
`in nature. 9 This grant of AIA post grant rulemaking authority is consistent with the recognition that the Office's establishment
`of a viable alternative for challenging patents required further rulemaking discretion than had been provided previously.
`
`While granting the Office broad rulemaking authority, Congress sought to guide the Office's establishment of the new
`proceedings by providing certain minimum requirements. For example, in establishing the new proceedings the Office was
`required to promulgate rules setting forth the standards to institute a review, as well as standards and procedures for discovery
`and motions to amend claims. 35 U.S.C. § 326(a)(2), (5), and (9). Thus, the plain language of the AIA statutes provides the
`Office with authority exceeding that of merely setting forth “procedures.”
`
`*8 As the Supreme Court has observed, “[Congress] does not . . . hide elephants in mouseholes.” Whitman v. Am. Trucking
`Ass'ns, 531 U.S. 457, 468 (2001). It is apparent from the plain language of the AIA that Congress has granted the Office new
`and expanded rulemaking authority to ensure the success of the new reviews.
`
`b. Promulgation of Rule 37 C.F.R. § 42.300(b)
`
`The AIA was enacted into law on September 16, 2011. Pub. L. 112-29, 125 Stat. 284 (2011). Prior to its enactment, then
`Director Kappos requested that the public provide comments to the Office regarding implementation of the AIA, including the
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`7
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`new patent reviews. Numerous comments were filed in response to this request, including comments from intellectual property
`organizations, law firms, companies, and individuals. 10
`
`On February 10, 2012, the Office published a notice of proposed rulemaking concerning the Office's implementation of the
`transitional program for covered business method patent reviews. See Changes to Implement Transitional Program for Covered
`Business Method Patents, 77 Fed. Reg. 7080 (Feb. 10, 2012). 11 In this notice, the Office proposed adding 37 C.F.R. § 42.300(b),
`which is directed to the broadest reasonable interpretation. As explained in the notice:
`This proposed rule would be consistent with longstanding established principles of claim construction
`before the Office. See, e.g., In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004); In re
`Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984).
`
`Id. at 7082. The notice further explains that the patent owner's ability to amend claims to avoid prior art distinguishes the Office
`proceedings from those of district court's. Id. Additionally, the notice identified the relevant statutory authority for the rules as
`including, among other things, 35 U.S.C. §§ 321-326 and 329. Id. at 7094.
`
`The Office received numerous comments on the rules, 12 and on August 14, 2012, the Office issued its final rules. See, e.g.,
`Changes to Implement Inter Partes Review Proceedings, Post-Grant Review Proceedings, and Transitional Program for Covered
`Business Method Patents; Final Rule, 77 Fed. Reg. 48680 (August 14, 2012). The final rules adopted 37 C.F.R. § 42.300(b) as
`set forth in the proposed rule above and identified the statutory basis for the adoption of the rule, how it was supported by the
`legislative history, 13 and how the rule was consistent with the settled expectations arising from Federal Circuit precedent where
`a party is afforded an opportunity to amend claims. Id. at 48693. For example, as to the authority for 37 C.F.R. § 42.300(b),
`the final rules explained how the Office was required to enter final written decisions on patentability, 35 U.S.C. § 328, how
`the Office was required to set standards for instituting the proceedings and for amending claims, 35 U.S.C. § 326(a)(2) and
`(9), and that the Office was required to promulgate rules establishing and governing the proceeding and the relationship of the
`proceeding to other proceedings, 35 U.S.C. § 326(a)(4). Id. at 48697-98.
`
`*9 During rulemaking, the Office received comments for and against the adoption of the broadest reasonable interpretation
`standard. 14 In response to comments received, the Office explained in the final rules its consideration of the comments and
`provided detailed reasons for the adoption of the broadest reasonable interpretation standard. Id. at 48697-48699. For example,
`the Office interpreted the requirement to determine patentability as requiring the use of the broadest reasonable interpretation,
`as opposed to the district court standard of construing to preserve validity. Additionally, the responses to comments noted
`that, unlike district court adjudicative proceedings, patent owners are afforded an opportunity to amend their claims during the
`Office reviews. By encouraging patent owners to eliminate ambiguity through amendment, the use of the broadest reasonable
`interpretation standard encourages clarity in claim language, which serves the important public notice function.
`
`Further, the responses noted that inconsistent results would become a major issue if the Office adopted a standard of claim
`construction other than the broadest reasonable interpretation for post grant reviews. Specifically, as in the present case where
`SAP has requested reexamination of the '350 patent in addition to this proceeding, the AIA contemplates that there will be
`multiple proceedings in the Office, and thus requires the Office to establish rules concerning the relationships between the
`various proceedings. Major difficulties would arise where the Office is handling multiple proceedings with different claim
`construction standards, as it could produce confusing results, which would be unhelpful to patentees, applicants, the public,
`and the system.
`
`Versata's contention that the Office is limited to 35 U.S.C. § 2(b)(2) does not take into account the policy reasons for the use of
`the broadest reasonable interpretation or the well-settled expectations resulting from decades of case law supporting the Office's
`reliance on the standard to ensure clear and precise claim language.
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`8
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`We have reviewed Versata's other contentions regarding the need to adopt the district court's claim construction, but find
`them equally unavailing. For example, Versata contends that stare decisis requires the Board to apply the district court's claim
`construction. Pat. Opp., 65. We disagree as appeals from this proceeding are exclusively to the Federal Circuit rather than to
`district courts. See also, In re Trans Texas Holdings Corp., 498 F.3d 1290, 1295-98 (Fed. Cir. 2007). Versata also contends
`that the Board is not bound to apply the “BRI standard in every instance” and cites to 37 C.F.R. § 42.5. Pat. Opp., 64-65. While
`37 C.F.R. § 42.5(b) allows the Board to waive or suspend a requirement under part 42, the discussion section of the rules make
`clear that this rule is intended to address procedural requirements, e.g., waiving page limits, to permit the resolution of issues
`in a uniform and efficient manner. 77 Fed. Reg. 48612, 48616 (Aug. 14, 2012).
`
`*10 Clear, precise and unambiguous claims are as important now as they were a century ago. 15 Clarity in claim scope is of
`the utmost importance because the claims set forth all to which the patentee is entitled while apprising the public of what is
`still open to them. McClain v. Ortmayer, 141 U.S. 419, 424 (1891); Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,
`535 U.S. 722, 730 (2002). Accordingly, we agree with SAP and hold that the broadest reasonable interpretation standard is the
`one correct standard for post grant reviews.
`
`3. Construction of Versata's Claims
`
`The Board's decision to institute identified four claim terms for which construction was sought by the parties: “sorting the
`pricing information,” “the pricing information that is less restrictive,” “pricing type(s),” and “pricing information.” Decision 7.
`As discussed in the decision, the terms were given the following meanings:
`
`Decision to Institute - Claim Construction
`
`
`Sorting the pricing information
`
`
`The pricing information that is less restrictive
`
`
`Pricing information is ordered either before or after the
`information is retrieved. Decision 8-11.
`
`Information that is less specifically applicable to a product,
`a purchasing organization, an organizational group or a
`product group. Decision 11.
`
`Class or category of pricing adjustments. Decision 12-14.
`
`Information related to pricing. The definition comprises
`both price adjustments and denormalized price adjustments.
`Decision 15-17.
`
`*11 Generally, Versata contends that, to the extent the Board's construction differs from that of the district court, the Board
`should have applied the district court's claim interpretation as this interpretation was “advocated by both SAP and Versata.” 16
`PO Resp. 52. SAP, however, contends that Versata's disagreements with the Board's constructions are ““unfounded.” In
`particular, SAP states that Versata fails to justify the application of its narrower litigation definitions or to explain how
`the preferred embodiments of Versata's specification overrides the Board's construction based on the doctrine of claim
`differentiation. Reply 16-17. For this decision, we will construe each of the claim terms identified by the parties in turn.
`
`a. Sorting the Pricing Information
`
`Pricing types and pricing adjustments
`
`Pricing information
`
`
`The term “sorting the pricing information” appears only in the following limitation of claim 17 (emphasis added):
`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;
`
` © 2013 Thomson Reuters. No claim to original U.S. Government Works.
`
`9
`
`RCAMC EXHIBIT 2002
`
`

`
`SAP AMERICA, INC. PETITIONER, v. VERSATA..., 2013 WL 3167735...
`
`This step is recited after a “retrieving pricing information” step, but before an “eliminating less restrictive pricing information”
`step.
`
`The Board's decision to institute adopted the district court's construction of the term “sorting the pricing information.” Decision
`8-9. Neither party disputes this construction. The parties, however, disagree as to when the pricing information is sorted.
`Decision 9, PO Resp. 52-61 and Reply 16-17.
`
`In instituting the review, the Board held that the plain language of claim 17 did not require that the information be retrieved
`first and sorted. This was in contrast to Versata claim 1, which requires “sorting the retrieved information.” Further, the Board
`credited the testimony of SAP's expert, 17 Dr. Siegel, who testified that sorting the pricing information in the context of the
`'350 patent encompassed sorting either before or after the information is retrieved. Decision 9-11.
`
`Versata contends that claim 17 requires “sorting” after “retrieving.” PO Resp. 52-61. According to Versata, the intrinsic and
`extrinsic record demonstrates that a person of ordinary skill in the art would have understood that “the pricing information”
`referred to in the sorting step of claim 17 pertains to the “retrieved applicable pricing information.” PO Resp. 53. Versata states
`that “any other interpretation would not be reasonable,” as it is “generally the case that data stored in a data source must be
`retrieved from the data source before the data can be sorted.” Id. at 53-54. Versata relies upon the testimony of its expert, Dr.
`Liebich, to support its construction. PO Resp. 53-54 (citing Ex. 2091, ¶¶ 123-128).
`
`*12 We agree with SAP that claim 17 does not itself impose a temporal limitation on when the pricing information is sorted.
`As SAP contends, Versata's arguments and expert testimony as to what is “generally” the case do not demonstrate that Versata
`sought to limit claim 17 in the way that claim 1 expressly was limited. Moba, B.V. v. Diamond Automation, Inc., 325 F.3d 1306,
`1314 (Fed. Cir. 2003) (holding that similar language did not require separate and consecutive performance of various steps).
`
`Versata contends that the specification demonstrates that sorting must occur after retrieval. PO Resp. 55-57. We agree with
`Versata that Figure 15B of the '350 patent describes the use of the method where the sorting step occurs after retrieving all
`pricing adjustments. Id., and Ex. 1001, Fi