`Entered: September 20, 2013
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`Trials@uspto.gov
`Tel: 571-272-7822
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`U.S. BANCORP
`Petitioner,
`
`v.
`
`RETIREMENT CAPITAL ACCESS MANAGEMENT COMPANY
`Patent Owner.
`_______________
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`Case CBM2013-00014
`Patent 6,625,582
`_______________
`
`
`
`Before GLENN J. PERRY, THOMAS L. GIANNETTI, and
`TRENTON A. WARD, Administrative Patent Judges.
`
`
`
`WARD, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
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`Case CBM2013-00014
`Patent 6,625,582
`I.
`INTRODUCTION
`A. Background
`On March 29, 2013, U.S. Bancorp filed a petition (“Pet.”) requesting a
`review under the transitional program for covered business method patents of U.S.
`Patent 6,625,582 (“the ’582 patent”) (Ex. 1003). The Retirement Capital Access
`Management Company (“RCAMC”), filed a preliminary response (“Prelim.
`Resp.”) on July 2, 2013. We have jurisdiction under 35 U.S.C. § 324. See section
`18(a) of the Leahy-Smith America Invents Act, Pub. L. 112-29, 125 Stat. 284, 329
`(2011) (“AIA”).
`The standard for instituting a covered business method review is set forth in
`35 U.S.C. § 324(a), which provides as follows:
`THRESHOLD --The Director may not authorize a post-grant review
`to be instituted unless the Director determines that the information
`presented in the petition filed under section 321, if such information is
`not rebutted, would demonstrate that it is more likely than not that at
`least 1 of the claims challenged in the petition is unpatentable.
`U.S. Bancorp challenges the patentability of claims 1, 13, 14, 18, 30 and 31
`of the ’582 patent. Taking into account RCAMC’s preliminary response, we
`determine that the information presented in the petition demonstrates that it is more
`likely than not that the challenged claims are unpatentable. Pursuant to 35 U.S.C.
`§ 324 and section 18(a) of the AIA, we authorize a covered business method
`review of claims 1, 13, 14, 18, 30 and 31 of the ’582 patent for the grounds
`identified in the Order section of this decision.
`U.S. Bancorp’s petition is GRANTED.
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`Case CBBM2013-000014
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`Patent 66,625,582
`II.
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`BACKGROOUND
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`A. The Inveention
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`The ’582 paatent is titled “Methood and Systtem For Coonverting AA Designaated
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`Social Seccurity and Other Retiirement Paayments Too Current
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`Portion Of Future
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`Benefitss,” and gennerally relaates to a method for eenabling reecipients o
`f Social
`s into
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`Securityy paymentss to converrt a designaated portioon of futuree payment
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`ll. 1-6; 52--56. The
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`currentlly availablee financial resources
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`. ’582 pateent col. 1,
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`patent eexplains thaat the beneeficiary maay access ccurrent cappital througgh a fundinng
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`source iin exchangge for paymment of a p
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`redeterminned portionn of the benneficiary’ss
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`future reetirement bbenefits. IId. at col. 33, ll. 20-27
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`. Figure 2 of the ’5882 patent
`the metho
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`provideed below illlustrates thhe steps of
`od:
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`B A T
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`Figure 2 ’5822 patent, F
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`Case CBM2013-00014
`Patent 6,625,582
`As shown above in Figure 2, the beneficiary first elects participation in the
`program in step 24 and then designates a financial institution to act as the
`depository for the beneficiary’s retirement payments and a disbursement agent for
`such retirement payments in step 26. Id. at col. 5, ll. 52-56. Step 30 involves
`designating a bank, insurance company, or other source of capital to be the funding
`source of current capital provided to the beneficiary. Id. at col. 5, ll. 43-45.
`Capital then is paid to the beneficiary from the funding source in an amount based
`in part upon present value of a designated portion of the beneficiary’s future
`retirement payments in step 34. Id. at col. 5, ll. 53-56. Step 36 involves directly
`depositing a future retirement benefit into the beneficiary’s deposit account, and
`then a predetermined portion of this benefit automatically is disbursed to the
`funding source in step 38. Id. at col. 5, ll. 60-65. Step 40 involves a possible
`premature termination of participation in the program, in which the beneficiary
`may become obligated to reimburse the funding source for any advance from
`resources other than the future retirement benefits. Id. at col. 1, ll. 7-12.
`Claim 1, illustrates the claimed subject matter and is reproduced below:
`1. A computerized method for creating a source of funds
`based on present value of future retirement payments,
`comprising the steps of:
`
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`in a depository for a
`a. designating an account
`beneficiary to receive future retirement payments
`payable to said beneficiary from a source of said
`retirement payments for a preselected period of time;
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`b. designating a benefit provider for providing a
`monetary benefit to said beneficiary;
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`c. authorizing said depository to periodically disburse a
`predetermined portion of said retirement payments
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`Case CBM2013-00014
`Patent 6,625,582
`deposited in said account to said benefit provider
`during said preselected period of time;
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`d. providing said monetary benefit to said beneficiary
`from said benefit provider based at least in part on
`present value of a designated portion of said future
`retirement payments without encumbering said
`beneficiary's right to said future retirement payments
`and without violating legislated proscriptions in the
`United States against alienation of future retirement
`benefits;
`
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`to be
`e. causing said future retirement payments
`deposited
`into
`said
`account
`throughout
`said
`preselected period of time;
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`f. causing said depository to transfer a portion of said
`retirement payments deposited into said account to
`said benefit provider during said preselected period of
`time; and
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`g. reimbursing said benefit provider from resources other
`than said future retirement payments if said transfer of
`a portion of said retirement payments from said
`depository to said benefit provider are curtailed prior
`to said end of said preselected period of time, and
`making said retirement payments available for the
`exclusive use of said beneficiary.
`
`B. Procedural History
`On June 22, 2012, RCAMC and Benefit Funding Systems LLC sued U.S.
`Bancorp for infringement of the ’582 patent in the District Court for the District of
`Delaware. See Paper 7, 2. Additionally, on June 22, 2012, RCAMC and Benefit
`Funding Systems LLC sued two other defendants for infringement of the same
`patent in the District Court for the District of Delaware. See id.
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`Case CBM2013-00014
`Patent 6,625,582
`III. ANALYSIS
`A. Claim Construction
`As a step in our analysis for determining whether to institute a trial, we
`determine the meaning of the claims. Consistent with the statute and the legislative
`history of the AIA, the Board will interpret claims using the broadest reasonable
`construction. See Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48766
`(Aug. 14, 2012); 37 CFR § 100(b). There is a “heavy presumption” that a claim
`term carries its ordinary and customary meaning. CCS Fitness, Inc. v. Brunswick
`Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002).
`U.S. Bancorp provides a number of proposed constructions for claim terms.
`See Pet. 8-14. RCAMC does not address the proposed constructions. For purposes
`of this decision, we proceed on the basis that the plain and ordinary meaning of
`words in their common usage applies, taken in the context of the disclosure of the
`’582 patent.
`B. U.S. Bancorp Has Standing to Seek Covered Business Method Review of
`RCAMC’s ’582 Patent
`Section 18 of the AIA provides for the creation of a transitional program for
`covered business method reviews. Section 18 limits reviews to persons or their
`privies that have been sued or charged with infringement of a covered business
`method patent, where covered business method patents do not include patents for
`technological inventions. AIA, §§ 18(a)(1)(B) and 18(d)(1).
`1. U.S. Bancorp Has Been Sued for Infringement of the ’582 Patent
`U.S. Bancorp represents that it has been sued for infringement of the ’582
`patent in a litigation styled Benefit Funding Systems LLC v. U.S. Bancorp, Case
`No. 1:12-cv-803-LPS (D. Del. Filed June 22, 2012). Pet. 1. RCAMC does not
`dispute this statement. Therefore, we determine that U.S. Bancorp has been sued
`for infringement for purposes of AIA § 18(a)(1)(B) and 37 C.F.R. § 42.302.
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`Patent 6,625,582
`2. RCAMC’s Claims 1, 13, 14, 18, 30, and 31 are Directed to
`Financial Products and Services
`A covered business method patent “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, except that the
`term does not include patents for technological inventions.” AIA § 18(d)(1). The
`legislative history of the AIA “explains that the definition of covered business
`method patent was drafted to encompass patents ‘claiming activities that are
`financial in nature, incidental to a financial activity or complementary to a
`financial activity.’” 77 Fed. Reg. 48734, 48,735 (Aug. 14, 2012) (quoting 157
`Cong. Rec. S5432 (daily ed. Sept. 8, 2011)).
`RCAMC does not contest U.S. Bancorp’s argument that the challenged
`claims are directed to methods and systems of operations used in the practice,
`administration, and management of financial products. Review of the claims
`illustrates that RCAMC’s challenged method claims are directed to financial
`services, namely, a “computerized method for creating a source of funds based on
`present value of future retirement payments.” ’582 patent, claim 1. Similarly,
`RCAMC’s challenged system claims are directed to financial products, namely, a
`“system for creating a source of funds based on the present value of future
`retirement payments.” ’582 patent, claim 13. Therefore, it cannot be disputed
`reasonably that the RCAMC claims cover “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).
`3. Claims 1, 13, 14, 18, 30, and 31 Are Not Directed to a
`Technological Invention
`Covered business method patents by definition do not include patents for
`technological inventions. AIA § 18(d)(1) (excludes patents for technological
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`inventions from the definition of covered business method patents). In
`determining whether a patent is for a technological invention, 37 C.F.R.
`§ 42.301(b) provides that it shall be considered whether the claimed invention as a
`whole:
`
`1. recites a technological feature that is novel and unobvious
`over the prior art, and
`2. solves a technical problem using a technical solution.
`Simply making use of technology is not the test for meeting the “technological
`invention” exception. In that regard, the Office Patent Trial Practice Guide, 77 Fed.
`Reg. at 48764, states:
`The following claim drafting techniques typically would not
`render a patent a technological invention:
`(a) Mere recitation of known technologies, such as computer
`hardware, communication or computer networks, software, memory,
`computer-readable storage medium, scanners, display devices or
`databases, or specialized machines, such as an ATM or point of sale
`device.
`The ’582 patent states that the “present invention utilizes known computer
`capabilities and electronic communications links to effect the automated
`implementation of various aspects of the inventive financial program.” ’582
`patent, col. 2, ll. 30-33 (emphasis added). Furthermore, the ’582 patent states that
`its “system 10 utilizes existing computer capabilities, both hardware and software,
`and electronic communications links, for example, to effect electronic funds
`transfers to and from the beneficiary's individual deposit account.” ’582 patent,
`col. 5, ll. 2-5 (emphasis added). Accordingly, no specific unconventional software,
`computer equipment, tools, or processing capabilities are required. Therefore, we
`determine that RCAMC’s claims lack a novel and unobvious technological feature.
`Additionally, RCAMC’s claims do not solve a technical problem using a
`technical solution. RCAMC argues that the difference between its claimed
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`invention and the prior art cited during prosecution is that RCAMC’s claims
`require providing a benefit “without encumbering said beneficiary's right to said
`future retirement payments and without violating legislated proscriptions in the
`United States against alienation of future retirement benefits.” Prelim. Resp. 8
`(quoting claim 1). Providing a benefit without encumbering a beneficiary’s future
`rights is not a technical problem or solution.
`Accordingly, we conclude that RCAMC’s ’582 patent is a covered business
`method patent.
`C. RCAMC’s Claims Are More Likely Than Not Unpatentable Under § 101
`The Supreme Court has made it clear that the test for patent eligibility under
`§ 101 is not amenable to bright-line categorical rules. See Bilski v. Kappos, 130 S.
`Ct. 3218 (2010); see also Mayo Collaborative Servs. v. Prometheus Lab., Inc. 132
`S. Ct. 1289 (2012). For example, the fact that a claim recites a method that is
`implemented on a computer or is directed to a computer-readable medium that
`causes a computer to implement certain steps are not per-se indicators of patent
`eligibility. Rather, a challenged claim, properly construed, must incorporate
`enough meaningful limitations to ensure that it claims more than just an abstract
`idea and not just a mere “drafting effort designed to monopolize [an abstract idea]
`itself.” Mayo, 132 S. Ct. at 1297. To be limited meaningfully, the claim must
`contain more than mere field-of-use limitations, tangential references to
`technology, insignificant pre- or post-solution activity, ancillary data-gathering
`steps, or the like. Id. Claims that recite a method of doing business on a computer
`and do no more than merely recite the use of the computer for its ordinary function
`of performing repetitive calculations are not patent eligible. Bancorp Servs., LLC
`v. Sun Life Assurance Co., 687 F.3d 1266, 1278-79 (Fed. Cir. 2012) (computer
`used only for its most basic function, the performance of repetitive calculations
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`does not impose a meaningful claim limitation). Thus, we analyze the claims to
`determine whether the claims embody a specific, practical application of an
`abstract idea, or merely nothing more than the abstract idea itself.
`1. Claim 1
`U.S. Bancorp argues that claim 1 is unpatentable because it claims only the
`abstract concept of providing funds based on the present value of future payments,
`without any “inventive concept” beyond this abstract idea. Pet. 30-31. U.S.
`Bancorp further argues that the nominal recitation of a “computerized method” in
`the preamble of claim 1 fails to render claim 1 patent eligible because, in order to
`fall within § 101, the computer must be “‘integral’” to the claimed method and
`“‘facilitat[e] the process in a way that a person making calculations or
`computations could not.’” Pet. 31-32 (quoting Bancorp Servs. L.L.C. v. Sun Life
`Assurance Co. of Can., 687 F.3d 1266, 1278 (Fed. Cir. 2012).
`RCAMC counters by arguing that the claims of ’582 patent were narrowed
`during prosecution to cover less than the abstract concept. Prelim. Resp. 7.
`Specifically, RCAMC argues that the Examiner cited U.S. Patent No. 5,933,815 to
`Golden (Ex. 2004) against all claims based on its disclosure of a method of
`providing present value to a beneficiary based on future retirement payments.
`Prelim. Resp. 7. In response to the Examiner, RCAMC argues that it narrowed the
`claims to providing a benefit “without encumbering said beneficiary's right to said
`future retirement payments and without violating legislated proscriptions in the
`United States against alienation of future retirement benefits.” Prelim. Resp. 7-8
`(quoting claim 1). RCAMC argues that the “without encumbering” aspect of the
`amendment narrowed the claims to something less than the concept of advancing
`funds based on future retirement payments. Prelim. Resp. 8. U.S. Bancorp
`disagrees and further argues that while the ’582 patent purports to provide a
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`financial scheme that complies with U.S. laws, the ’582 patent fails to explain how
`it achieves such compliance. Pet. 5.
`We agree with U.S Bancorp. While the ’582 patent states that a need exists
`for a financial program that allows a beneficiary to access present value for future
`retirement benefits “while complying with the United States laws and regulations
`governing the assignment of future Social Security or other retirement benefits,”
`(’582 patent, col. 1, ll. 47-49), the ’582 patent fails to provide any description as to
`how the financial methods or systems accomplish this compliance. More
`importantly, the claims of the ’582 patent do not recite any limitations as to how
`the financial systems or methods comply with U.S. laws. Accordingly, we are not
`persuaded by RCAMC’s argument that the “without encumbering” amendment
`significantly narrows the scope of the claims.
`RCAMC also argues that the term “depositing” in claim 1 imports structure
`into the claim because it should be interpreted to mean “depositing via direct
`deposit.” Prelim. Resp. 13. RCAMC further argues that the term “direct deposit”
`has a particular meaning in the financial services industry to describe an electronic
`funds transfer, such as an “Automated Clearing House (ACH),” which is a “batch
`processing system governed by the NACHA Operating Rules.” Prelim. Resp. 16-
`17. RCAMC fails to point to any support in the specification of the ’582 patent
`that would require the construction of the term “depositing” to mean a direct
`deposit, much less a direct deposit via the ACH network. In fact, the ’582 patent
`states that “[p]referably” depositing is conducted with the “well-known technique
`of electronic funds transfer,” but the specification does not limit the term
`“depositing” to this implementation. ’582 patent, col. 5, ll. 18-21 (emphasis
`added). Furthermore, the language of claim 1 does not place any limitations on the
`term “depositing.”
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`U.S. Bancorp argues that claim 1 is not tied to a particular machine because
`the ’582 patent only discloses the use of “known” or “existing” computer
`“capabilities,” suggesting that any general purpose computer will suffice. Pet. 33
`(citing ’582 patent, col. 2, ll. 30-35, col. 5, ll. 1-5). In Gottschalk v. Benson, the
`Supreme Court considered a patent application that was directed to the
`programmed conversion of numerical information in general purpose computers.
`409 U.S. 63, 73-74 (1972). Although the claims at issue in Benson recited
`computer hardware (“shift register”), the Court nevertheless determined the
`recitation of generic general purpose computer hardware (processor, memory,
`storage) in the challenged claims represented routine, well-understood
`conventional hardware that failed to narrow sufficiently the claims relative to the
`abstract idea. Benson, 409 U.S. at 65 (“The general-purpose computer is designed
`to perform operations under many different programs.”). Here, the ’582 patent
`states that the “present invention utilizes known computer capabilities and
`electronic communications links to effect the automated implementation of various
`aspects of the inventive financial program.” ’582 patent, col. 2, ll. 30-33
`(emphasis added). As the Supreme Court held in Benson, claims do not become
`patentable under § 101 simply for reciting a known, general purpose computer.
`See Benson, 409 U.S. at 68.
`U.S. Bancorp additionally argues that claim 1 is the computer
`implementation of an otherwise purely mental process that could be performed
`without the use of a computer. Pet. 33. In Benson, the Supreme Court was
`persuaded by the fact that although the claims recited a “shift register,” the method
`sought to be patented involved ordinary arithmetic steps that could be performed
`by any existing or future machinery, or even without the use of a computer. 409
`U.S. at 68. We are persuaded by U.S. Bancorp’s arguments that the method steps
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`of claim 1, including “designating an account,” “providing said monetary benefit,”
`and “reimbursing said benefit provider,” could be performed by conventional
`computers, or even without the use of a computer.
`Accordingly, based on the record presented, we agree with U.S. Bancorp
`that it is more likely than not that claim 1 covers subject matter that is patent
`ineligible.
`
`2. Claims 13 and 14
`U.S. Bancorp argues that claim 13 is the system counterpart to claim 1 that
`simply substitutes means-plus-function limitations to perform the method steps
`recited in claim 1. Pet. 34. We agree. The primary difference between claim 13
`and claim 1 is the substitution of means-plus-function limitations to perform the
`method steps recited in claim 1. Given that the ’582 patent fails to disclose any
`specific hardware or structure, but simply states that the system is to “utilize[]
`known computer capabilities” to implement the financial program (’582 patent,
`col. 2, ll. 30-33), we are not persuaded that the means-plus-function limitations in
`claim 13 alter the analysis under § 101 from that of claim 1. Furthermore, with
`respect to dependent claim 14, the only additional limitation is that the “benefit
`provider is a source of capital.” Claim 14. This limitation does not alter the
`eligibility analysis of the claim. We are persuaded, therefore, that it is more likely
`than not that claims 13 and 14 cover subject matter that is patent-ineligible under
`35 U.S.C. § 101.
`3. Claims 18, 30, and 31
`U.S. Bancorp argues that claim 18 is similar to claim 1, except that claim 18
`specifies that the future payments are Social Security payments. Pet. 35. U.S.
`Bancorp further argues that this minor difference from claim 1 does not alter the
`eligibility analysis. Pet. 35. We agree that the limitations recited in claim 18 are
`similar to those of claim 1, except that claim 18 specifically recites that the future
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`retirement payments are “Social Security retirement benefits.” Claim 18. We are
`not persuaded that this designation of a particular type of retirement benefit alters
`the eligibility analysis under § 101 from that of claim 1.
`As set forth in the discussion of claim 13 above, U.S. Bancorp argues that
`claim 30 is the system counterpart to claim 18 that simply substitutes means-plus-
`function limitations to perform the method steps recited in claim 18. Pet. 34. We
`agree and are not persuaded that the means-plus-function limitations in claim 30
`alter the eligibility analysis from that of claim 18. Likewise, dependent claim 31
`provides a similar limitation to that of dependent claim 14, namely, that the
`“benefit provider is a source of capital.” Claim 31. This limitation does not alter
`the eligibility analysis of claim 31. We are persuaded, therefore, that it is more
`likely than not that claims 18, 30, and 31 cover subject matter that is patent
`ineligible under § 101.
`
`
`IV. ORDER
`For the reasons given, it is
`ORDERED that the Petition is granted as to claims 1, 13, 14, 18, 30,
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`and 31 of the ’582 patent.
`FURTHER ORDERED that pursuant to 35 U.S.C. § 324(a), a
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`covered business method patent review of the ʼ582 patent is hereby instituted
`commencing on the entry date of this Order, and pursuant to 35 U.S.C. § 324(d)
`and 37 C.F.R. § 42.4, notice is hereby given of the institution of a trial.
`FURTHER ORDERED that the trial is limited to § 101 and no other
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`grounds are authorized.
`FURTHER ORDERED that an initial conference call with the Board
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`is scheduled for 2PM Eastern Time on October 11, 2012. The parties are directed
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`to the Office Trial Practice Guide, 77 Fed. Reg. 48756, 48765-66 (Aug. 14, 2012)
`for guidance in preparing for the initial conference call, and should come prepared
`to discuss any proposed changes to the Scheduling Order entered herewith and any
`motions the parties anticipate filing during the trial.
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`
`
`For U.S. BANCORP:
`
`Anthony Son
`Brian Pandya
`Ryan Corbett
`WILEY REIN LLP
`ason@wileyrein.com
`bpandya@wileyrein.com
`rcorbett@wileyrein.com
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`For RCAMC:
`
`Casey Griffith
`Shital Desai
`KLEMCHUK KUBASTA LLP
`casey.griffith@kk-llp.com
`sita.desai@kk-llp.com
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