UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`DELL, INC.
`Petitioner
`
`v.
`
`DISPOSITION SERVICES, LLC
`Patent Owner
`_____________
`
`Case CBM2013-00040
`Patent 5,424,944
`_____________
`
`PATENT OWNER DISPOSITION SERVICES, LLC’S
`RESPONSE
`
`
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`DELL, INC.
`Petitioner
`
`v.
`
`DISPOSITION SERVICES, LLC
`Patent Owner
`_____________
`
`Case CBM2013-00040
`Patent 5,424,944
`_____________
`
`PATENT OWNER DISPOSITION SERVICES, LLC’S
`RESPONSE
`
`
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`
`
`
`Table of Contents
`
`I.
`
`INTRODUCTION ........................................................................................ 1
`
`II. THE TEST FOR PATENT-ELIGIBILITY
`UNDER 35 U.S.C. § 101 .............................................................................. 1
`A. Abstract Ideas ................................................................................................. 2
`
`B. Inventive Concept .......................................................................................... 5
`
`III. THE ’944 PATENT CLAIMS AT ISSUE ................................................ 7
`
`IV. THE CLAIMS OF THE ’944 PATENT ARE DIRECTED
`TO PATENT-ELIGIBLE SUBJECT MATTER UNDER
`35 U.S.C. § 101 ............................................................................................ 11
`A. The Claim Terms of the ’944 Patent are not Directed
`to an Abstract Idea ....................................................................................... 11
`B. The Claims of the ’944 Patent Recite an Inventive Concept ....................... 15
`
`IV. CONCLUSION .......................................................................................... 20
`
`
`
`
`
`Cases
`
`
`
`Table of Authorities
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l et al.,
`
`134 S.Ct. 2347 (2014) ....................................................................... 2-6, 12-16
`
`Bilski v. Kappos,
`
`130 S.Ct. 3218 (2010) .................................................................... 1, 4, 12, 19
`
`Burr v. Duryee,
`
`68 U.S. 531 (1863) ......................................................................................... 1
`
`
`
`i
`
`
`
`Diamond v. Chakrabarty,
`
`447 U.S. 303 (1980) ....................................................................................... 1
`
`Diamond v. Diehr,
`
`450 U.S. 175 (1981) .......................................................................... 3, 5-6, 19
`
`5
`
`Digitech Image Technologies, LLC v. Electronics for Imaging et al.,
`
`Case Nos. 2013-1600 to 2013-1618 (Fed. Cir. July 11, 2014) .................... 6-7
`
`Gottschalk v. Benson,
`
`409 U.S. 63 (1972) ................................................................................ 3-4, 12
`
`Mayo Collaborative Services v. Prometheus Labs., Inc.,
`
`10
`
`132 S.Ct. 1289 (2012) ............................................................................. 3, 5-6
`
`Parker v. Flook,
`
`437 U.S. 584 (1978) ............................................................................. 4, 6, 12
`
`Phillips v. AWH Corp.,
`
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) ................................................... 20
`
`Statutes
`
`
`
`35 U.S.C. § 101 ................................................................................... 1-7, 10, 17, 20
`
`
`
`Rules
`
`37 C.F.R §42.301(b) ……………………………………………………………..16
`
`
`
`
`
`
`
`15
`
`
`
`
`
`ii
`
`
`
`I.
`
`INTRODUCTION
`
`In accordance with 37 C.F.R. §§ 42.24 & 42.220(a), Patent Owner,
`
`Disposition Services, LLC, submits this Response to Petitioner’s Petition for
`
`Covered Business Method (CBM) patent review (“the Petition”), of Claims 1-6,
`
`5
`
`and 8-23 of U.S. Patent No. 5,424,944 (“the ’944 patent”) under § 18 of the
`
`America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (“AIA”).
`
`Patent Owner respectfully submits that, for at least the reasons stated below,
`
`the Patent Trial and Appeal Board (“PTAB”) must find that Petitioner has failed to
`
`prove by clear and convincing evidence that Claims 1-6 and 8-23 of the ’944
`
`10
`
`patent are directed to patent-ineligible subject matter under 35 U.S.C. § 101.
`
`II. THE TEST FOR PATENT-ELIGIBILITY UNDER 35 U.S.C. § 101
`
`35 U.S.C. § 101 lists new and useful processes, machines, manufactures, and
`
`compositions of matter as the four broad categories of patent-eligible subject
`
`matter. To qualify as a machine under § 101, the claimed invention must be a
`
`15
`
`“concrete thing, consisting of parts, or of certain devices and combinations of
`
`devices.” Burr v. Duryee, 68 U.S. 531, 507 (1863). “In choosing such expansive
`
`terms … modified by the comprehensive ‘any,’ Congress plainly contemplated that
`
`the patent laws would be given wide scope.” Bilski v. Kappos, 130 S.Ct. 3218,
`
`3225 (2010), quoting Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980).
`
`
`
`1
`
`
`
`In its recent decision in Alice Corporation v. CLS Bank Int’l, the Supreme
`
`Court reaffirmed that “laws of nature, natural phenomena, and abstract ideas”
`
`constitute the three judicially-created exceptions to the broad categories of patent-
`
`eligible subject matter under § 101. Alice Corp. Pty. Ltd. v. CLS Bank Int’l et al.,
`
`5
`
`134 S.Ct. 2347, 2354 (2014). In doing so, the Court laid out a two-part test for the
`
`determination of patent-eligibility under § 101, guiding the inquiry as follows:
`
`1. First determine whether the claims at issue are directed to a patent-ineligible
`
`concept; and
`
`2. If the claims are so directed, the focus shifts to whether the claim’s elements,
`
`10
`
`considered both individually and as an ordered combination, transform the
`
`nature of the claim into a patent-eligible application.
`
`Alice, 134 S.Ct. at 2355.
`
`A. Abstract Ideas
`
`Determining what constitutes an “abstract idea” sufficient to render a claim
`
`15
`
`as “directed to a patent-ineligible concept” under step one of the above test is a
`
`nuanced undertaking inherently biased to the over-inclusive. In recognition of this
`
`fact, the Supreme Court has cautioned tribunals to “tread carefully in construing
`
`this exclusionary principle lest it swallow all of patent law,” because “at some
`
`level, all inventions … embody, use, reflect, rest upon, or apply … abstract ideas.”
`
`
`
`2
`
`
`
`Alice, 134 S.Ct. at 2354, quoting Mayo Collaborative Services v. Prometheus
`
`Labs., Inc., 132 S.Ct 1289, 1293 (2012). Moreover, the Supreme Court has stated
`
`in no uncertain terms that “an invention is not rendered ineligible for patent simply
`
`because it involves an abstract concept.” Alice, 134 S.Ct. at 2354, citing Diamond
`
`5
`
`v. Diehr, 450 U.S. 175, 187 (1981). Rather, “applications of such concepts to a
`
`new and useful end … remain eligible for patent protection.” Alice, 134 S.Ct. at
`
`2354, citing Gottschalk v. Benson, 409 U.S. 63, 67 (1972).
`
`In Alice, the Court noted that the “concern that drives this exclusionary
`
`principle is one of pre-emption,” i.e., the law’s desire to avoid the pre-emption of
`
`10
`
`“the basic tools of scientific and technological work.” Alice, 134 S.Ct. at 2354.
`
`“Accordingly, in applying the §101 exception, we must distinguish between
`
`patents that claim the building blocks of human ingenuity and those that integrate
`
`the building blocks into something more.” Id.
`
`
`
`In Alice, the Supreme Court offered guidance regarding the constituent
`
`15
`
`scope of the “abstract ideas” exclusion, holding it to specifically encompass
`
`“method[s] of organizing human activity”
`
`that constitute “longstanding
`
`commercial practice” and “fundamental economic practice long prevalent in our
`
`system of commerce.” Alice, 134 S.Ct. at 2356. In so holding, the Court relied on
`
`its prior §101 jurisprudence to exemplify and delineate the contours of the abstract
`
`20
`
`ideas exception, stating as follows:
`
`
`
`3
`
`
`
`In Benson, for example, this Court rejected as ineligible patent claims
`
`involving an algorithm for converting binary-coded decimal numerals
`
`into pure binary form, holding that the claimed patent was in practical
`
`effect … a patent on the algorithm itself.
`
`5
`
`…
`
`[I]n Parker v. Flook, 437 U.S. 584, 594-595 (1978), we held that a
`
`mathematical formula for computing alarm limits in a catalytic
`
`conversion process was also a patent ineligible abstract idea.
`
`…
`
`10
`
`The claims at issue in Bilski described a method for hedging against
`
`the financial risk of price fluctuations. … All members of the Court
`
`agreed that the patent at issue in Bilski claimed an abstract idea. …
`
`The Court explained that hedging is a fundamental economic practice
`
`long prevalent in our system of commerce and taught in any
`
`15
`
`introductory finance class.
`
`Alice, 134 S.Ct. at 2356-7. Based on the foregoing discussion, the Supreme Court
`
`held in Alice that claims directed to “a method of exchanging financial obligations
`
`between two parties using a third-party intermediary to mitigate settlement risk”
`
`were “directed to an abstract idea” that was a “fundamental economic practice” and
`
`20
`
`therefore ineligible for patent under §101. Alice, 134 S.Ct. at 2356.
`
`
`
`In contrast, in Diehr, the Supreme Court held that a method for “molding
`
`raw, uncured synthetic rubber into cured precision products” using a mathematical
`
`formula to complete some of the steps by way of a computer was indeed patent-
`
`
`
`4
`
`
`
`eligible. See Diehr, 450 U.S. at 177. In Alice, the Court opined that despite the fact
`
`that the claims in Diehr employed a “well-known mathematical equation” in
`
`conjunction with a computer, the claims employed that equation in a process
`
`“designed to solve a technological problem in conventional industry practice,”
`
`5
`
`which thereby rendered them patent-eligible. Alice, 134 S.Ct. at 2358.
`
`B.
`
`Inventive Concept
`
`Step two of the test for patent-eligibility under § 101 is described as a search
`
`for an “inventive concept,” which the Supreme Court defines as “an element or
`
`combination of elements that is sufficient to ensure that the patent in practice
`
`10
`
`amounts to significantly more than a patent upon the ineligible concept itself.”
`
`Alice, 134 S.Ct. at 2355 (internal citations omitted). The determination of an
`
`inventive concept involves the analysis of whether a claim’s elements, considered
`
`both individually and as an ordered combination, transform the nature of the claim
`
`into a patent-eligible application. Id. Thus, transforming an abstract idea into a
`
`15
`
`patent-eligible application via an inventive concept requires “more than simply
`
`stating the abstract idea while adding the words ‘apply it.’” Alice, 134 S.Ct. at
`
`2357, citing Mayo, 132 S.Ct at 1294 (internal citations omitted).
`
`In Alice, the Court characterized the patent at issue in Benson as having
`
`claimed an algorithm implemented on a “general-purpose digital computer” which
`
`
`
`5
`
`
`
`did not supply the necessary inventive concept to confer patent-eligibility. See
`
`Alice, 134 S.Ct. at 2357. Similarly, in Flook, a mathematical formula to adjust
`
`alarm limits in a catalytic conversion process was patent-ineligible because the
`
`formula itself was an abstract idea, and “the computer implementation was purely
`
`5
`
`conventional.” Alice, 134 S.Ct. at 2358. In contrast, the Court in Alice opined that
`
`in Diehr, where the claims at issue were directed to a process for the vulcanization
`
`of rubber
`
`that
`
`included
`
`the computer
`
`implementation of a well-known
`
`mathematical formula, the additional steps of using a thermocouple to record
`
`constant temperature measurements inside a rubber mold and feeding these
`
`10
`
`temperature measurements into a computer to repeatedly calculate the remaining
`
`cure time for the rubber, “transformed the process into an inventive application of
`
`the formula.” Alice, 134 S.Ct. at 2358, quoting Mayo, 132 S.Ct. at 1299.
`
`In Digitech Image Technologies, LLC v. Electronics for Imaging et al., Case
`
`Nos. 2013-1600 to 2013-1618 (Fed. Cir. July 11, 2014), the Federal Circuit issued
`
`15
`
`its first decision construing the patent-eligibility standard promulgated by Alice,
`
`and invalidated claims directed to “device profiles,” and “methods of generating
`
`device profiles,” under § 101. The “device profiles” recited in the claims at issue in
`
`Digitech were “a collection of intangible color and spatial information” that
`
`purportedly allowed for more accurate color translation between computer devices.
`
`
`
`6
`
`
`
`Digitech (slip op., at 8-11). In holding the device profile claims to be patent
`
`ineligible under § 101, the Federal Circuit opined:
`
`The asserted claims are not directed to any tangible embodiment of
`
`this information (i.e., in physical memory or other medium) or claim
`
`5
`
`any tangible part of the digital processing system. The claims are
`
`instead directed to information in its non-tangible form.
`
`Id. (slip op., at 9). Similarly, the court held the method claims to be directed to
`
`abstract ideas, because they “describe a process of organizing information through
`
`mathematical correlations and [are] not tied to a specific structure or machine.” Id.
`
`10
`
`(slip op., at 11).
`
`III. THE ’944 PATENT CLAIMS AT ISSUE
`
`The ’944 patent relates to and claims a method and system for verifiably
`
`controlling the physical disposition of a physical asset comprising a series of
`
`recited steps and structure. ’944 patent, Col. 9, lines 17-18 and 39-40; Col. 11,
`
`15
`
`lines 45-46 and 67-68 (attached as Exhibit 1001 to the Petition). The controlled
`
`disposition of the physical asset is “supported by an interactive multi-media system
`
`which combines images of the assets with relevant data and audio records and
`
`disposition instructions for security and reconciliation purposes.” ’944 patent, Col.
`
`1, lines 45-49.
`
`
`
`7
`
`
`
`More particularly, the ’944 patent deals with verifiably disposing of physical
`
`assets (such as used computers) in a secure and safe manner, using specified
`
`physical structure, to ensure that hazardous materials do not pollute the
`
`environment and the integrity of sensitive information is not breached. The
`
`5
`
`invention recited in the claims of the ’944 patent may be used by companies
`
`concerned for, inter alia, protecting their confidential and trade secret information,
`
`or safely disposing of hazardous waste. The claimed subject matter of the ’944
`
`patent is thus primarily directed to the security and reconciliation (i.e., recycling)
`
`industries. See the ’944 patent, Col. 1, lines 48-49.
`
`10
`
`Claims 1 and 2 of the ’944 patent are independent method claims that each
`
`recite “a method for verifiably controlling the disposition of an asset” comprising a
`
`series of steps. Specifically, Claims 1 and 2 recite the steps of, inter alia, “creating
`
`an asset record uniquely associated with said asset”, “securely sealing said asset in
`
`a tamper-proof transport means”, “creating a transport record associating said asset
`
`15
`
`with said tamper-proof transport means”, “sorting said asset in accordance with a
`
`preselected method of disposition” and “disposing of said asset in accordance with
`
`said preselected method of disposition and creating a disposition record uniquely
`
`associated with said asset to be maintained for customer verification.” Claim 2
`
`also recites these steps, as well as the step of “storing said transport record, said
`
`20
`
`receipt record and said disposition record in a database, said database being
`
`
`
`8
`
`
`
`coupled to a system process controller, said system process controller being
`
`coupled to a communications network.”
`
`The steps of creating an asset record uniquely associated with the asset,
`
`securely sealing the asset in a tamper-proof transport means, creating a transport
`
`5
`
`record associating the asset with the tamper-proof transport means, creating a
`
`receipt record associating the asset with the tamper-proof transport means that is
`
`reconcilable with the transport record, sorting and disposing of the asset according
`
`to a preselected method and creating a disposition record uniquely associated with
`
`the asset for customer verification all require the use of either a physical memory
`
`10
`
`or other physical medium such that they require more than an abstract idea. More
`
`particularly, Claims 1 and 2 require an asset for which a physical memory of an
`
`asset record uniquely associated with the asset is created. They also require a
`
`physical medium in the form of a tamper proof storage means where the asset is
`
`securely sealed and in which the asset is transported from the customer facility to a
`
`15
`
`disposition facility, the customer facility and disposition facility also each being
`
`physical medium. Additionally, a physical memory is required to create the
`
`transport record associated with the asset, the receipt record and the disposition
`
`record that can be customer verified.
`
`Claims 4 and 5 further include obtaining transport and receipt image records
`
`20
`
`of the secure sealing of the asset in the tamper-proof transport means and unsealing
`
`
`
`9
`
`
`
`thereof. These image records clearly require an additional step that is more than
`
`mere “intangible information” and create their own physical memory.
`
`Additional physical medium is found in dependent Claims 9, 10, 11 and 12,
`
`which define such steps as dismantling the asset and creating a dismantle record,
`
`5
`
`dysfunctioning the asset and creating a dysfunction record, reclaiming said asset
`
`and creating a reclaim record, destroying the asset and creating a destruct record,
`
`and for each transmitting such record to a system process controller via
`
`communications network to a database. Of course, dismantling, dysfunctioning,
`
`reclaiming and/or destroying the asset are physical steps and creating the
`
`10
`
`associated record requires physical memory to further the disposition record which
`
`is customer verifiable.
`
`Claims 15 and 16 of the ’944 patent are independent system claims directed
`
`to “a system for verifiably controlling the disposition of an asset” comprising a
`
`significant list of structural elements, including “a tamper-proof transport means”;
`
`15
`
`“a transport preparation station”; “a customer facility”; “a disposition facility”; “a
`
`receiving station”; “a receipt record”; “a sorting station”; and “a plurality of
`
`dispositions stations.” Additionally, independent Claim 16 recites “a database for
`
`storing said transport record and said disposition record”; “a system process
`
`controller”; and “a communications network for transmitting data between said
`
`20
`
`transport station, said receiving station, said sorting station, said disposition
`
`
`
`10
`
`
`
`stations, and said system process controller.” Dependent Claims 17-23 depend on
`
`Claim 16 and recite additional significant structural elements of the system,
`
`including “an image capture device” (Claims 18, 19 and 23); “a data capture
`
`device” (Claims 18-20 and 22-23); “a remote computer coupled to said image
`
`5
`
`capture device” (Claim 18); and “a system terminal coupled to said image capture
`
`device” (Claims 19-20 and 22-23).
`
`
`
`IV. THE CLAIMS OF THE ’944 PATENT ARE DIRECTED TO
`
`PATENT-ELIGIBLE SUBJECT MATTER UNDER 35 U.S.C. § 101
`
`10
`
`Petitioner has incorrectly alleged that the invention recited in the claims of
`
`the ’944 patent is directed to the purely abstract idea of handling a customer’s
`
`physical item in such a way that the customer can verify that its handling
`
`instructions were followed. Petitioner further argues that the entire method can be
`
`performed using a pencil, paper and a truck. Patent Owner strongly disagrees with
`
`15
`
`Petitioner’s inaccurate characterizations and assumptions, as set forth below.
`
`A.
`
`The Claims of the ’944 Patent are not Directed to an Abstract Idea
`
`As described in Section III above, the claims of the ’944 patent are directed
`
`to methods and systems for verifiably controlling the physical disposition of a
`
`physical asset comprising a series of recited steps. Claims 1-6 and 8-14 are method
`
`
`
`11
`
`
`
`claims, and Claims 15-23 are system claims. The contemplated disposition, which
`
`is the end result of the method recited in Claims 1-6 and 8-14, is a necessarily
`
`physical and tangible outcome achieved through the use of a system with specific
`
`defined recited structure. The input into the recited method, i.e., the asset, is a
`
`5
`
`tangible object. As such, the method claims can be readily distinguished from the
`
`intangible methods and attendant outcomes recites in the claims of patents held
`
`unpatentable under § 101 in Alice, Bilski, Benson, Flook et al. Moreover, all of the
`
`modes of disposition recited in Claims 1-6 and 8-23 involve the physical
`
`transformation of the asset via refurbishing (Claims 8 and 21), dismantling (Claims
`
`10
`
`9 and 21), dysfunctioning (Claims 10 and 21), reclaiming (Claims 11 and 21) and
`
`destroying (Claims 13 and 21), or an as-is sale (Claim 21 and now-disclaimed
`
`Claim 7).
`
`Of course, Petitioner has not alleged—nor can it allege—that Claims 1-6 and
`
`8-23 of the ’944 patent encompass “method[s] of organizing human activity” that
`
`15
`
`constitute “longstanding commercial practice” and “fundamental economic
`
`practice long prevalent in our system of commerce.” Alice, 134 S.Ct. at 2356.
`
`Instead, as demonstrated above, the claims of the ’944 patent are directed to
`
`methods and systems used primarily in the security and reconciliation industries,
`
`i.e., in “conventional industry practice,” and are “designed to solve a technological
`
`20
`
`problem,” which is the “need for managing various types of dispositions of surplus
`
`
`
`12
`
`
`
`or obsolete assets,” through “verifiably controlling the disposition of [the] asset.”
`
`Alice, 134 S.Ct. at 2358; ’944 patent, Col. 1, lines 26-27.
`
`Indeed, the claims at issue cannot be considered to be directed to “a method
`
`of organizing human activity.” Alice, 134 S.Ct. at 2356. Claims 1-6 and 8-23 do
`
`5
`
`not recite an algorithm, mathematical formula, or intangible information. Instead,
`
`the method Claims 1-6 and 8-14 recite a series of steps by which a physical object
`
`can be transformed into one or more of a number of physical output states, via a
`
`series of defined steps and set recited structural limitations. Similarly, the system
`
`Claims 15-23 recite a host of physical structural limitations (as described in
`
`10
`
`Section III above), and claim the structure and interplay of the recited elements
`
`together in as a system to achieve the recited disposition.
`
`Moreover,
`
`the claims at
`
`issue cannot be considered
`
`to comprise
`
`“longstanding commercial practice” and/or “fundamental economic practice long
`
`prevalent in our system of commerce.” Alice, 134 S.Ct. at 2356. As specifically
`
`15
`
`stated in the patent, and uncontroverted by Petitioner, prior art methods of
`
`disposition involved such processes as “complete disposal, which may be
`
`accomplished through an outside source,” and nothing in the prior art taught the
`
`specific structure and combination recited in the present claims. ’944 patent, Col.
`
`1, lines 16-18. There is no indication in the record that the methods and systems
`
`
`
`13
`
`
`
`recited in the claims of the ’944 patent could in any way be considered either
`
`“longstanding commercial practice” or a “fundamental economic practice.”
`
`It is also clear that the ’944 patent claims a method and system “designed to
`
`solve a technological problem in conventional industry practice.” Alice, 134 S.Ct.
`
`5
`
`at 2358. The technological problem addressed by the invention recited in the
`
`claims of the ’944 patent is the achievement of the verifiable control of the
`
`disposition of a physical asset. As noted in the specification, “assets may become
`
`surplus due to obsolescence or overproduction, they may need refurbishing with
`
`new parts, they may need environmentally unsound parts removed or replaced, and
`
`10
`
`the like.” See the ’944 patent, Col. 1, lines 10-15. Thus, the ’944 patent teaches
`
`and claims an invention that is “a controlled capital asset disposition process
`
`supported by an interactive multi-media system which combines images of the
`
`assets with relevant data and audio records and disposition instructions.” Id. at Col.
`
`1, lines 45-49. Petitioner incorrectly alleges that the invention recited in the claims
`
`15
`
`of the ’944 patent could be performed using only a pencil, paper and a truck. See
`
`the Petition at 10. However, as previously noted, the claimed invention comprises
`
`several significant structural elements
`
`that,
`
`in combination, comprise a
`
`technological feature, forming a technical solution to the aforementioned
`
`technological problem, which a person could not complete with a pencil, paper and
`
`20
`
`a truck, even if artistically inclined.
`
`
`
`14
`
`
`
`As the Supreme Court has cautioned, at some level all inventions embody,
`
`use, reflect, rest upon, or apply abstract ideas. Alice, 134 S.Ct. at 2354. While the
`
`claims of the ’944 patent no doubt encompass an “idea” that underlies the claimed
`
`invention, there is nothing “abstract” about this idea. To say that the method
`
`5
`
`claims—which recite tangible structure and transform a physical object into
`
`another physical output state—are abstract, would be to completely vitiate the
`
`modifier “abstract” in the phrase “abstract idea.” Moreover, to allege that the
`
`system claims—which clearly
`
`recite significant structure whose
`
`recited
`
`combination and interaction was found to be novel and nonobvious over the prior
`
`10
`
`art—are directed to an “abstract” idea would be fallacious and nonsensical. Thus,
`
`Patent Owner respectfully submits that the Board must find that the claims of the
`
`’944 patent are not directed to an abstract idea within the meaning of § 101.
`
`B. The Claims of the ’944 Patent Recite an Inventive Concept
`
`Even assuming, arguendo, that Petitioner can be considered to have shown
`
`15
`
`that the claims of the ’944 patent implicate an abstract idea (which it has not done
`
`and cannot do), Patent Owner submits that the claims unambiguously contain an
`
`“inventive concept,” i.e., “an element or combination of elements that is sufficient
`
`to ensure that the patent in practice amounts to significantly more than a patent
`
`upon the ineligible concept itself.” Alice, 134 S.Ct. at 2355.
`
`
`
`15
`
`
`
`In the Petition, Petitioner has mistakenly examined each individual feature
`
`of the invention recited in the claims of the ’944 patent, declaring them to be
`
`“conventional components that are well-known in the art.” See the Petition at 11.
`
`However, Patent Owner submits that the correct analysis, as supported by the
`
`5
`
`language of the CBM Rules, is whether the claimed subject matter as a whole
`
`recites a novel and non-obvious technical feature. See 37 C.F.R. § 42.301(b). As
`
`prescribed by the Supreme Court in Alice, the claim’s elements must be considered
`
`both individually and as an ordered combination. Alice, 134 S.Ct. at 2355. When
`
`so viewed, there is no doubt that the elements of the claims of the ’944 patent
`
`10
`
`transform the nature of the claim into a patent-eligible application of the
`
`underlying ideas contained therein.
`
`Patent Owner submits that a reading of the prosecution history of the ’944
`
`patent reveals that the creation and reconciliation of an asset record, transport
`
`record, receipt record, and disposition record, along with the use of a central
`
`15
`
`database in conjunction with multimedia devices and image records for a physical
`
`asset, are all technical features of the present invention that were not known in the
`
`prior art. See, e.g., Amendment dated October 6, 1994 at 14. Similarly, the system
`
`recited in the claims of the ’944 patent comprises such technological features as a
`
`transport preparation station, a receiving station, a sorting station, a system process
`
`20
`
`controller, a communications network, a redundant database, etc. While it may be
`
`
`
`16
`
`
`
`argued that in some respects certain aspects of the aforementioned features might
`
`have been known in the prior art, the combination of these features, taken as a
`
`whole, comprises a technological feature that was novel and unobvious over the
`
`prior art at the time of the invention.
`
`5
`
`Moreover, Patent Owner submits that Petitioner is impermissibly applying
`
`hindsight in alleging that the components recited in the claims of the ’944 patent
`
`are “conventional.” That is to say, while the recited components (such as the
`
`recited computer structure) may be conventional to employ in such processes
`
`today, the ’944 patent was filed twenty years ago in 1994, and Petitioner has made
`
`10
`
`no showing that either the recited components or their combination and
`
`incorporation
`
`into
`
`the claimed methods and systems was
`
`in any way
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`“conventional” as of the earliest effective filing date of the ’944 patent.
`
`The method claims (i.e., Claims 1-6 and 8-14) of the ’944 patent recite a
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`method of verifiably controlling the disposition of an asset, comprising several
`
`15
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`recited steps. As previously noted, the creation and reconciliation of a transport
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`record and receipt record, both verifiably associating an asset with an asset record
`
`and a tamper-proof transport means in which said asset is securely sealed, was not
`
`well known in the art at the time of the filing of the ’944 patent application.
`
`Moreover, it was not well known to create a disposition record uniquely associated
`
`20
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`with the asset, and maintain the disposition record for customer verification.
`
`
`
`17
`
`
`
`Further, the use of a central database in conjunction with multimedia devices for
`
`instructing operators and the creation of image records for verification of the
`
`disposition of assets was not known or suggested by the prior art.
`
`Similarly, the system claims of the ’944 patent (i.e., Claims 15-23) recite a
`
`5
`
`system for verifiably controlling the disposition of an asset, comprising, inter alia,
`
`a tamper-proof transport means; a transport preparation station; a receiving station;
`
`a sorting station; and a plurality of disposition stations. Independent Claim 16
`
`recites the further features of a database for storing the transport record, the receipt
`
`record and the disposition record; a system process controller coupled to the
`
`10
`
`database; and a communications network. The system claims further recite
`
`significant structure corresponding to the various features of the system. For
`
`example, Claim 18 recites that the transport preparation station is comprised of an
`
`image capture device; a data capture device; and a remote computer coupled to
`
`said image capture device and said data capture device and capable of
`
`15
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`communicating with said system process controller via the communications
`
`network. Similarly, Claim 21 recites extensive structure of the various options for
`
`the claimed disposition stations.
`
`Patent Owner submits that the features and components claimed by the ’944
`
`patent comprise meaningful limitations, thereby transforming the claims into much
`
`20
`
`more than mere abstract ideas. The specific functions performed using these
`
`
`
`18
`
`
`
`features and components are not insignificant pre- or post-solution activity: they
`
`are instead, taken in combination, the solution itself.
`
`Petitioner further argues that the specific components recited in the claims of
`
`the ’944 patent add nothing to the claims because each was known individually in
`
`5
`
`the prior art. However, on this issue, the Supreme Court’s holding in Diehr is
`
`instructive:
`
`In determining the eligibility of [a] claimed process for patent
`
`protection under § 101, … claims must be considered as a whole. It is
`
`inappropriate to dissect the claims into old and new elements and then
`
`10
`
`to ignore the presence of the old elements in the analysis. This is
`
`particularly true in a process claim because a new combination of
`
`steps in a process may be patentable even though all the constituents
`
`of the combination were well known and in common use before the
`
`combination was made.
`
`15
`
`450 U.S. at 188; see also Bilski, 130 S.Ct. at 3230. While it may be true that certain
`
`components of the present invention were known at the time of the filing of the
`
`’944 patent, it is the combination of those components (with the specific functions
`
`performed using the components) that must be analyzed.
`
`Petitioner’s analysis, however, does not account sufficiently for any of the
`
`20
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`claims as a whole (i.e., the particular combination of components and how the
`
`claim requires that they be used). As previously noted, the claims of the ’944
`
`
`
`19
`
`
`
`patent recite a claimed system compri
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