`
`
`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
`PRELIMINARY 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.
`
`STATEMENT OF PRECISE RELIEF REQUESTED ............................ 1
`
`II. PETITIONER LACKS STANDING BECAUSE THE ’944 PATENT
`IS NOT A COVERED BUSINESS METHOD PATENT ......................... 1
`
`A. Statutory Disclaimer of Claim 7 of the ’944 Patent ....................................... 2
`
`B. The ’944 Patent Does Not Claim a Method or Corresponding Apparatus
`Used in the Practice, Administration or Management of a Financial Product
`or Service ........................................................................................................ 2
`
`1. Legislative History and Intent of CBM Patent Review ....................... 3
`
`
`
`2. The ’944 Patent Claims at Issue ........................................................... 9
`
`C. The ’944 Patent Claims a Patentable Technological Invention ................... 13
`
`III. PETITIONER HAS FAILED TO ESTABLISH THAT THE
`CLAIMS OF THE ’944 PATENT ARE MORE LIKELY THAN
`NOT INVALID .......................................................................................... 16
`A. Claim Construction: The Claim Terms of the ’944 Patent Must be Given
`Their Broadest Reasonable Interpretation .................................................... 16
`
`1. Limiting the Recited “Preselected Method of Disposition” to Only
`Those Methods Preselected by the Customer would Impermissibly
`Import Limitations Not Present in the Claims ................................... 16
`
`2.
`
`“Tamper-Proof Transport Means” is Not a Means-Plus-Function
`Term ................................................................................................... 19
`
`B. Petitioner has not Established that the Claims of the ’944 Patent are Invalid
`on the Asserted Ground Based on 35 U.S.C. § 101 ..................................... 21
`
`IV. CONCLUSION ........................................................................................... 25
`
`
`
`
`
`
`
`i
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`

`

`Table of Authorities
`
`Cases
`
`Bilski v. Kappos,
`
`130 S.Ct. 3218 (2010) ................................................................... 5, 20-22, 24
`
`Chrysler Corp. v. Brown,
`
`441 U.S. 281 (1979) ...................................................................................... 15
`
`CLS Bank Int’l v. Alice Corp. Pty. Ltd.,
`
`717 F.3d 1269 (Fed. Cir. 2013) (en banc) .................................................... 15
`
`Diamond v. Chakrabarty,
`
`447 U.S. 303 (1980) ...................................................................................... 21
`
`Diamond v. Diehr,
`
`450 U.S. 175 (1981) .......................................................................... 21, 22, 22
`
`Lighting World, Inc. v. Birchwood Lighting, Inc.,
`
`382 F.3d 1354 (Fed. Cir. 2004) .................................................................... 19
`
`Mayo Collaborative Services v. Prometheus Labs., Inc.,
`
`132 S.Ct. 1289 (2012) ................................................................................... 21
`
`Merck & Co. v. Kessler,
`
`80 F.3d 1545 (Fed. Cir. 1996) ...................................................................... 15
`
`Parker v. Flook,
`
`437 U.S. 584 (1978) ...................................................................................... 22
`
`Phillips v. AWH Corp.,
`
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) .................................................... 19
`
`State Street Bank & Trust Co. v. Signature Financial Group,
`
`149 F.3d 1368 (Fed. Cir. 1998) ...................................................................... 5
`
`Superguide Corp. v. DirecTV Enterprises, Inc.,
`
`358 F.3d 870 (Fed. Cir. 2004) ...................................................................... 17
`
`
`
`ii
`
`

`

`TriMed, Inc. v. Stryker Corp.,
`
`514 F.3d 1256 (Fed. Cir. 2008) .................................................................... 20
`
`
`
`
`
`Statutes
`
`35 U.S.C. § 101 ................................................................................................. 20, 25
`
`35 U.S.C. §112, paragraph 6 .............................................................................. 19, 20
`
`35 U.S.C. § 253 ......................................................................................................... 2
`
`35 U.S.C. § 324 ......................................................................................................... 1
`
`
`
`
`
`List of Exhibits
`
`Exhibit No.
`2001
`
`Description
`Statutory Disclaimer of Claim 7 of the’944 Patent
`
`2002
`
`2003
`
`157 Cong. Rec. S1053 (daily ed. March 1, 2011) (statement by Sen.
`Schumer)
`
`Report on the America Invents Act by the House Committee on the
`Judiciary to H.R. Rep. No. 112-98, Part 1 at p. 54 (2011)
`
`2004
`
`157 Cong. Rec. S1360-94 (March 8, 2011)
`
`2005
`
`S.866, Patent Quality Improvement Act of 2013, Summary
`(authored by the Congressional Research Service)
`
`
`
`
`
`
`
`iii
`
`

`

`I.
`
`STATEMENT OF PRECISE RELIEF REQUESTED
`
`In accordance with 37 C.F.R. § 42.207(a), Patent Owner, Disposition
`
`Services, LLC, submits this Preliminary Response to Petitioner’s Petition for
`
`Covered Business Method (CBM) patent review (“the Petition”). Patent Owner
`
`5
`
`respectfully requests that the Patent Trial and Appeal Board (“PTAB”) deny the
`
`Petition for review of Claims 1-23 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”) on the grounds that the ’944 patent is not a CBM patent, and is unrelated
`
`to the practice, management or administration of a financial product or service.
`
`10
`
`For at least the reasons set forth below, the PTAB must elect not to institute post-
`
`grant review under 35 U.S.C. § 324.
`
`II. PETITIONER LACKS STANDING BECAUSE THE ’944 PATENT IS
`NOT A COVERED BUSINESS METHOD PATENT
`
`Section 18 of the AIA provides for the creation of a transitional program for
`
`15
`
`reviewing covered business method patents. Section 18 limits reviews to persons
`
`or their privies that have been sued or charged with infringement of a “covered
`
`business method patent.” Notably, this does not include patents for “technological
`
`inventions.” AIA §§ 18(a)(1)(B), 18(d)(1); see 37 C.F.R. § 42.302.
`
`Patent Owner respectfully submits that, in violation of 37 C.F.R. §
`
`20
`
`42.304(a), Petitioner has failed to demonstrate that the ’944 patent is a covered
`
`
`
`1
`
`

`

`business method patent as defined by 37 C.F.R. § 42.304, and as such lacks
`
`standing to petition for CBM patent review.
`
`A. Statutory Disclaimer of Claim 7 of the ’944 Patent
`
`In accordance with 35 U.S.C. § 253 and 37 C.F.R. § 1.321(a), in a filing on
`
`5
`
`November 6, 2013, Patent Owner has disclaimed the complete Claim 7 of the ’944
`
`Patent. A copy of the filed Disclaimer along with the automatically-generated
`
`Acknowledgement Receipt showing payment of the fee required under 37 C.F.R. §
`
`1.20(d), is attached hereto as Exhibit 2001. As such, under 37 C.F.R. § 42.207(e)
`
`Patent Owner submits that the Board may not institute a CBM patent review based
`
`10
`
`on disclaimed Claim 7 of the ’944 patent. 1
`
`B. The ’944 Patent Does Not Claim a Method or Corresponding Apparatus
`Used in the Practice, Administration or Management of a Financial
`Product or Service
`
`A “covered business method patent” is a patent that “claims a method or
`
`15
`
`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); see 37 C.F.R. § 42.301(a). For purposes of determining whether a patent
`
`
`1 37 C.F.R. § 42.207(e) specifically contemplates the filing of a statutory disclaimer with or
`before the Preliminary Response, and reads as follows: “(e) Disclaim Patent Claims. The patent
`owner may file a statutory disclaimer under 35 U.S.C. 253(a) in compliance with § 1.321(a),
`disclaiming one or more claims in the patent. No post-grant review will be instituted based on
`disclaimed claims.”
`
`
`
`2
`
`

`

`is eligible for a covered business method patent review, the focus is on the claims.
`
`See Transitional Program for Covered Business Method Patents – Definitions of
`
`Covered Business Method Patent and Technological Invention; Final Rule, 77 Fed.
`
`Reg. 48734, 48736 (Aug. 14, 2012) (“CBM Rules”) (attached as Exhibit 1005 to
`
`5
`
`the Petition).2
`
`1.
`
`Legislative History and Intent of CBM Patent Review
`
`
`
`Neither the AIA nor the CBM Rules (codified at 37 C.F.R. § 42.301)
`
`provide an explicit definition for the phrase “practice, administration, or
`
`management of a financial product or service.” However, in the “Response to
`
`10
`
`Comments” section of the CBM Rules, the USPTO has indicated that the
`
`legislative history and intent of the AIA definitions and the CBM review program
`
`would be instructive in determining the contours of the “financial product or
`
`services” language. See CBM Rules, 77 Fed. Reg. at 48735.3
`
`Petitioner has cited a statement from Senator Schumer (also quoted in the
`
`15
`
`CBM Rules) to the effect that the CBM review program was drafted to encompass
`
`patents that claim “activities that are financial in nature, incidental to a financial
`
`
`2 In accordance with 37 C.F.R. § 42.6(d), Patent Owner has taken care to avoid attaching as an
`Exhibit any document already attached to the Petition or of record in the proceeding.
`
` 3
`
` “In administering the program, the Office will consider the legislative intent and history behind
`the public law definition and the transitional program itself.” 77 Fed. Reg. 48735 (Aug. 14,
`2012).
`
`
`
`3
`
`

`

`activity or complementary to a financial activity.” Id. at 48735, quoting 157 Cong.
`
`Rec. S5432 (Sept. 8, 2011) (statement of Sen. Schumer) (attached as Exhibit 1008
`
`to the Petition). Patent Owner notes that the quoted statement of Senator Schumer
`
`was in response to a statement by Congressman Shuster that incorrectly
`
`5
`
`characterized the CBM patent review program as limited only to companies in the
`
`financial services sector. As such, it must also be noted that Senator Schumer took
`
`the time to point out that “[i]n response to concerns that earlier versions of the
`
`amendment were too broad,” the CBM patent review would be “narrowly
`
`targeted.” See 157 Cong. Reg. S1053 (daily ed. March 1, 2011) (statement by Sen.
`
`10
`
`Schumer) (attached hereto as Exhibit 2002).
`
`Similarly, Senator Leahy, the eponymous lead sponsor of the Leahy-Smith
`
`America Invents Act, offered the following elucidation of the intended scope of the
`
`CBM patent review program:
`
`This provision is intended to cover only those business
`
`15
`
`method patents intended to be used in the practice,
`
`administration, or management of financial services or
`
`products, and not to technologies common in business
`
`environments across sectors that have no particular
`
`relation to the financial service sector, such as computers,
`
`20
`
`communications networks, and business software.
`
`
`
`4
`
`

`

`A financial product or service is not, however,
`
`intended to be limited solely to the operation of banks.
`
`Rather, it is intended to have a broader industry
`
`definition that includes insurance, brokerages, mutual
`
`5
`
`funds, annuities, and an array of financial companies
`
`outside of traditional banking.
`
`157 Cong. Rec. S5441 (daily ed. Sept. 8, 2011) (statement of Sen. Leahy) (attached
`
`as Exhibit 1008 to the Petition).
`
`In the aftermath of the Federal Circuit’s decision in State Street Bank &
`
`10
`
`Trust Co. v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998), which
`
`held as patent-eligible a claimed hub-and-spokes configuration for the financial
`
`pooling of mutual funds assets, a flurry of financial products and services patents
`
`ensued. The Supreme Court has since noted the need to clarify the standards of
`
`patent-eligibility due to the “vague” claims of business method patents of “suspect
`
`15
`
`validity” that issued in the wake of State Street Bank. See Bilski v. Kappos, 130
`
`S.Ct. 3218, 3229 (2010). Thus, Section 18 of the AIA was written with the aim of
`
`targeting this particular species of patent,4 and the voluminous patent litigation that
`
`ensued based on these patents. See America Invents Act: Hearings on H.R. 1249
`
`4 The AIA House Committee Report stated as much, noting that Section 18 was crafted to
`address “the issuance of poor business-method patents during the late 1990’s through the early
`2000’s.” H.R. Rep. No. 112-98, Part 1, at 54 (2011) (relevant portion attached hereto as Exhibit
`2003). Senator Schumer was in agreement, stating that that the provisions of Section 18 were
`designed to target the “flood of poor quality business method patents” inundating the PTO in the
`period between State Street Bank and Bilski.” 157 Cong. Rec. S1363-64 (daily ed. March 8,
`2011) (statement of Sen. Schumer) (attached hereto as Exhibit 2004).
`
`
`
`5
`
`

`

`Before the Subcomm. on Intellectual Property, Competition and the Internet of the
`
`H. Comm. on the Judiciary, 112th Cong. 56-58 (2011) (statement of Steve Bartlett,
`
`President and CEO, The Financial Services Roundtable) (citing a Harvard
`
`University student that found a “flood of patent litigation in the financial services
`
`5
`
`industry”);5 see also Exhibit 2004, 157 Con. Reg. at S1379 (daily ed. March 8,
`
`2011) (statement of Sen. Jon Kyl) 6 (noting that a CBM patent typically “reads on
`
`products or services that are particular
`
`to or characteristic of financial
`
`institutions”).
`
`The above quotes evidence unambiguous Congressional intent that, although
`
`10
`
`the CBM review program was not intended to be limited solely to the financial
`
`service industry, its scope was nevertheless intended to be narrowly tailored.
`
`Specifically, as demonstrated by Senator Leahy’s statements, CBM review was
`
`designed to exclude patents that claim (1) “technologies common in business
`
`environments across sectors”; and (2) that “have no particular relation to the
`
`15
`
`financial services sector.” Id. at S5441. Senator Leahy’s statement also sets the
`
`intended outer bounds of the CBM review program as patents that claim
`
`technologies related to “financial companies outside of traditional banking.”
`
`
`5 See also Exhibit 2004, 157 Cong. Reg. at S1363-64 (daily ed. March 8, 2011) (statement of
`Sen. Schumer) (describing a veritable “cottage industry of business method patent litigation”).
`6 Section 18 was essentially introduced into the AIA by an amendment authored by Senators
`Schumer and Kyl, known as the Schumer-Kyl amendment.
`
`
`
`6
`
`

`

`The USPTO has provided two examples of covered claims that illustrate the
`
`narrow statutory definition: “(a) [a] patent that claims a method for hedging risk in
`
`the field of commodities trading”; and “(b) [a] patent that claims a method for
`
`verifying validity of a credit card transaction.” Office Patent Trial Practice Guide,
`
`5
`
`77 Fed. Reg. 48756, 48763-64 (Aug. 14, 2012) (attached as Exhibit 1005 to the
`
`Petition). Similarly, an exemplary list of the types of “financial products or
`
`services” related activities that would be eligible of CBM review, as detailed by
`
`Sen. Schumer, reads as follows:
`
`[E]xtending credit, servicing loans, activities related to
`
`10
`
`extending and accepting credit, leasing of personal or real
`
`property, real estate services, appraisal of real or personal
`
`property, deposit-taking activities, selling, providing,
`
`issuing or accepting stored value of payment instruments,
`
`check cashing, collection or processing, financial data
`
`15
`
`processing, administration and processing of benefits,
`
`financial fraud detection and prevention, financial
`
`advisory or management consulting services, issuing,
`
`selling and trading financial instruments and other
`
`securities, insurance products and services, collecting,
`
`20
`
`analyzing, maintaining or providing consumer report
`
`information or other account
`
`information, asset
`
`management
`
`trust
`
`functions,
`
`annuities,
`
`securities
`
`brokerage, private placement
`
`services,
`
`investment
`
`transactions, and related support services.
`
`
`
`7
`
`

`

`157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)
`
`(attached as Exhibit 1008 to the Petition).
`
`Recent developments in Congress further evidence the intent of the drafters
`
`of the AIA for the original provisions of Section 18 to be narrowly tailored.
`
`5
`
`Senator Schumer, whom Petitioner has quoted in support of its expansive
`
`definition of “financial product or service,” recently introduced in the Senate a Bill
`
`whose summary, as authored by the Congressional Research Service, reads in
`
`relevant part:
`
`Expands the term “covered business method patent” to
`
`10
`
`include a patent that claims a method or corresponding
`
`apparatus for performing data processing or other
`
`operations used
`
`in
`
`the practice, administration, or
`
`management of any enterprise, product, or service,
`
`except technological inventions. (Current law limits the
`
`15
`
`program to financial products or services.)
`
`See S.866, Patent Quality Improvement Act of 2013: Summary (attached hereto as
`
`Exhibit 2005). A related bill, H.R. 2766, has been introduced in the House. Both
`
`corresponding bills seek to strike the word “financial” from Section 42.301(a) and
`
`replace it with “any enterprise.” The bills are further confirmation that Congress
`
`20
`
`currently contemplates CBM review to apply to patents that claim subject matter
`
`
`
`8
`
`

`

`bearing a reasonable relationship to the practice, administration, or management of
`
`a financial product or service.
`
`2.
`
`The ’944 Patent Claims at Issue
`
`The eligibility of a patent for CBM review is determined by what the patent
`
`5
`
`claims. CBM Rules, 77 Fed. Reg. at 48736. 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. ’944 patent, Col. 9, lines 17-18 and 39-
`
`40; Col. 11, lines 45-46 and 67-68 (attached as Exhibit 1001 to the Petition).7 The
`
`controlled disposition of the physical asset is “supported by an interactive multi-
`
`10
`
`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.
`
`More particularly, the ’944 patent deals with verifiably disposing of physical
`
`assets in a secure and safe manner, such that hazardous materials do not pollute the
`
`15
`
`environment and the integrity of sensitive information is not breached. The
`
`invention recited in the claims of the ’944 patent may be used by companies
`
`concerned with, inter alia, protecting their confidential and trade secret
`
`
`7 See also Amendment dated October 6, 1994 at p. 11 (attached as Exhibit 1010 to the Petition)
`(“[T]he invention claimed is a system and method for controlling the verifiable disposition of
`capital assets, not the actual disposition realized.”) (emphasis in original).
`
`
`
`9
`
`

`

`information, or safely disposing of hazardous waste. Thus, Patent Owner submits
`
`that the claimed subject matter of the ’944 patent is directed to the security and
`
`reconciliation (or recycling) industries. See the ’944 patent, Col. 1, lines 48-49.
`
`Petitioner has inaccurately represented the claimed subject matter of the
`
`5
`
`’944 patent as being directed to activities that are financial in nature and relate to
`
`money matters. In support of this erroneous assertion, Petitioner has cherry picked
`
`references from the specification wherein certain options for the final disposition
`
`of the physical asset are described as, inter alia, refurbishment, dismantling,
`
`dysfunctioning, reclaiming, destroying, and sale. See the ’944 patent, Col. 1, line
`
`10
`
`59 to Col. 2, line 6. However, not only are the aforementioned activities wholly
`
`unrelated to a financial product or services, but a reading of the claims and the
`
`prosecution history of the ’944 patent unequivocally demonstrates that any
`
`potential sale of the asset would be considered a part of the final realized
`
`disposition, and as such outside of the scope of the claimed invention. See, e.g.,
`
`15
`
`Amendment dated October 6, 1994 at p. 11 (attached as Exhibit 1010 to the
`
`Petition) (“the invention claimed is a system and method for controlling the
`
`verifiable disposition of capital assets, not the actual disposition realized”) and p.
`
`12 (stating that the “means for selling said assets” is “not part of the invention
`
`claimed”) (emphasis added). Additionally, as previously noted, Patent Owner has
`
`20
`
`specifically disclaimed Claim 7 of the ’944 patent. See Exhibit 2001.
`
`
`
`10
`
`

`

`Additionally, by claiming subject matter specifically directed to the security
`
`and reconciliation industries, the ’944 patent claims “technologies common in
`
`business environments across sectors” with “no particular relation to the financial
`
`services sector” and is thus squarely within the category of patent explicitly
`
`5
`
`excluded form CBM patent review. See 157 Cong. Rec. S5441. Patent Owner
`
`notes that the ’944 patent does not specifically limit the physical asset being
`
`disposed of to any category of physical asset, lending further credence to the
`
`broad-based industrial applicability of the method and system taught therein.
`
`Moreover, a non-limiting example of an asset whose disposition may be
`
`10
`
`accomplished in accordance with the teachings of the ’944 patent is “an older
`
`model mainframe” computer, which is exactly the type of product that Senator
`
`Leahy stated that CBM patent review would not cover. See 157 Cong. Rec. S5441.
`
`It is also noteworthy that the ’944 patent issued in June 1995, several years before
`
`the decision in State Street Bank whose consequences the present Section 18 was
`
`15
`
`written to address. See Exhibit 2003 (discussed in the preceding subsection).
`
`Petitioner suggests that because one possible end result of the disposition
`
`contemplated by the ’944 patent may include the sale of the asset (the realization
`
`of which is outside the scope of the claimed invention), the claimed subject matter
`
`of the ’944 patent is thereby related to a “financial product or service.” Such a
`
`
`
`11
`
`

`

`strained construction is not only grossly over-inclusive8 and contrary to the plain
`
`meaning of the statutory wording, but would also essentially subsume every
`
`business method patent under the purview of the CBM review program. This is
`
`contrary to understanding of both Congress9 and the USPTO10 regarding the scope
`
`5
`
`of the program as presently instituted.
`
`Patent Owner submits that such an absurdly over-inclusive definition would
`
`open the floodgates for review of business method patents involving any
`
`enterprise, vastly exceeding Congress’ current expectation that that program
`
`
`8 An underlying notion of most modern economic theories is the ability to ascribe a monetary
`value to every component of the natural world, including “externalities” such as air pollution, or
`even personal happiness and family unity. Recent reports have lamented the loss of honey bee
`populations around the country, with economists valuing their “hidden” contributions to the U.S.
`economy (through pollinating crops) at over $14 billion. See Alexei Barrionuevo, Honeybees
`Vanish, Leaving Keepers in Peril, N.Y. Times (Feb. 23, 2007). Under Petitioner’s expansive
`construction, a patent on a method for rearing bees or preventing their deaths would be a
`“financial product or services” patent because the bees might ultimately be sold for money, or
`because their contributions to agriculture can be given a monetary value: an assuredly
`unintended result.
`
` 9
`
` See Exhibit 2005, S.866, Patent Quality Improvement Act of 2013. The pendency of S.866
`shows that Senator Schumer, an author of the Schumer-Kyl amendment which introduced
`Section 18 into the AIA, understands the current scope of the CBM review program to not
`include business method patents relating to all enterprises.
`
`10 See CBM Rules, 77 Fed. Reg. 48734, 48744 (Aug. 14, 2012) (“The Office considered
`proposing that a technological invention be defined as any claimed invention in any patent
`having an original classification in any class other than Class 705 of the United States Patent
`Classification System. Adoption of the alternative definition, as applied to certain patents, would
`have been either overly narrow or overly broad.”). Commentators in the patent law practice
`industry appear to construe the requirement even more narrowly. See, e.g., Sterne et al., America
`Invents Act: The 5 New Post-Issuance Procedures, 13 Sedona Conf. J. 27 (2012) (“Section 18 is
`relevant only to that final subset of non-technological financial data processing patents.”).
`
`
`
`
`12
`
`

`

`receive about fifty CBM petitions per year.11 Not only would this have the
`
`unintended consequence of overwhelming a system specifically targeted to
`
`weeding out unwanted patents that unreasonably burden businesses related to the
`
`financial products and services industry, but it would make the enforcement of
`
`5
`
`legitimate patents more arduous and unfairly disadvantage inventors whose
`
`innovations happen to relate of methods of doing business. Such an outcome would
`
`create the “collateral consequences” warned of by Senator Schumer, in recognition
`
`of which the present provisions of Section 18 were “narrowly targeted.” See
`
`Exhibit 2002, 157 Cong. Reg. S1053 (daily ed. March 1, 2011).
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`C. The ’944 Patent Claims a Patentable Technological Invention
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`Petitioner has likewise failed to meet its burden of proving that the ’944
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`patent fails to claim a “technological invention,” and therefore lacks standing to
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`petition for CBM review.
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`37 C.F.R. § 42.301(b) states that the determination of whether a patent is for
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`15
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`a technological invention requires a case-by-case consideration of “whether the
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`claimed subject matter as a whole recites a technological feature that is novel and
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`unobvious over the prior art; and solves a technical problem using a technical
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`solution.”
`
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`11 Congress anticipated that the PTAB would receive approximately fifty CBM petitions per
`year through 2015. See Transitional Program for Covered Business Method Patents: Definitions,
`77 Fed. Reg. 48734, 48738-39 (Aug. 14, 2012).
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`

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`In the Petition, Petitioner has mistakenly examined each individual feature
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`of the invention recited in the claims of the ’944 patent, declaring them to be
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`“conventional components that are well-known in the art.” See the Petition at p. 11.
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`However, Patent Owner submits that the correct analysis, as supported by the
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`5
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`language of the CBM Rules, is whether the claimed subject matter as a whole
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`recites a novel and non-obvious technical feature. See 37 C.F.R. § 42.301(b).
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`Patent Owner submits that a reading of the prosecution history of the ’944
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`patent reveals that the creation and reconciliation of a transport record, receipt
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`record, and disposition record, along with the use of a central database in
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`10
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`conjunction with multimedia devices and image records for a physical asset, were
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`all technical features of the present invention that were not known in the prior art.
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`See, e.g., Amendment dated October 6, 1994 at p. 14. Similarly, the system recited
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`in the claims of the ’944 patent comprises such technological features as a
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`transport preparation station, a receiving station, a sorting station, a system process
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`15
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`controller, a communications network, a redundant database, etc. While it may be
`
`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
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`prior art at the time of the invention.
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`

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`Additionally, the ’944 patent claims a method and system that solves a
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`technical problem using a technical solution. The technical problem addressed by
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`the invention recited in the claims of the ’944 patent is the achievement of the
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`verifiable control of the disposition of a physical asset. As noted in the
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`5
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`specification, “assets may become surplus due to obsolescence or overproduction,
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`they may need refurbishing with new parts, they may need environmentally
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`unsound parts removed or replaced, and the like.” See the ’944 patent, Col. 1, lines
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`10-15. Thus, the ’944 patent teaches and claims an invention that is “a controlled
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`capital asset disposition process supported by an interactive multi-media system
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`10
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`which combines images of the assets with relevant data and audio records and
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`disposition instructions.” Id. at Col. 1, lines 45-49. Petitioner incorrectly alleges
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`that the invention recited in the claims of the ’944 patent could be performed using
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`only a pencil, paper and a truck. See the Petition at p. 10. However, as previously
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`noted, the claimed invention comprises several elements that, in combination,
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`15
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`comprise a technological feature, forming a technical solution.
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`Based on the above, Patent Owner submits that Petitioner lacks standing to
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`initiate a CBM review of the ’944 patent. As such, Patent Owner also respectfully
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`submits that the PTAB has no jurisdiction to consider the validity of the ’944
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`patent during its consideration of the Petition. See Chrysler Corp. v. Brown, 441
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`20
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`U.S. 281, 302 (1979) (“[T]he exercise of quasi-legislative authority by
`
`
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`15
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`

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`governmental departments and agencies must be rooted in a grant of such power by
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`the Congress and subject to limitations which that body imposes.”); see also Merck
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`& Co. v. Kessler, 80 F.3d 1545, 1549-50 (Fed. Cir. 1996) (noting that the PTO has
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`limited, non-substantive rulemaking power).
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`5
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`III. PETITIONER HAS FAILED TO ESTABLISH THAT THE CLAIMS
`OF THE ’944 PATENT ARE MORE LIKELY THAN NOT INVALID
`
`A. Claim Construction: The Claim Terms of the ’944 Patent Must be
`Given Their Broadest Reasonable Interpretation
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`10
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`1.
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`Limiting the Recited “Preselected Method of Disposition” to Only
`Those Methods Preselected by the Customer would Impermissibly
`Import Limitations Not Present in the Claims
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`During a review before the Board, the claims of an unexpired patent must be
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`provided their broadest reasonable interpretation in light of the specification. 37
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`C.F.R. § 42.300(b); see 77 Fed. Reg. at 48697-48698 (Aug. 14, 2012) (attached as
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`15
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`Exhibit 1011 to the Petition). The broadest reasonable construction means that “the
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`words of the claim must be given their ‘plain meaning’ unless such meaning is
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`inconsistent with the specification.” MPEP § 2111.01(I); see 77 Fed. Reg. at
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`48699. In the absence of a specific definition in the specification, a claim term is
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`presumed to take on its ordinary and customary meaning that the term would have
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`20
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`to a person of ordinary skill in the art. 77 Fed. Reg. 157 at 48699-48700.
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`Significantly:
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`16
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`

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`Though understanding the claim language may be aided
`
`by explanations contained in the written description, it is
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`important not to import into a claim limitations that are
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`not part of
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`the claim. For example, a particular
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`5
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`embodiment appearing in the written description may not
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`be read into a claim when the claim language is broader
`
`than the embodiment.
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`MPEP § 2111.01(II), quoting Superguide Corp. v. DirecTV Enterprises, Inc., 358
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`F.3d 870, 875 (Fed. Cir. 2004).
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`
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`In the Petition, Petitioner has erroneously alleged that the claimed
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`“preselec