`Paper No. 36
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
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`CALLIDUS SOFTWARE INC.
`Petitioner
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`v.
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`VERSATA DEVELOPMENT GROUP, INC.
`Patent Owner
`
`AND
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`VERSATA SOFTWARE, INC.
`Real Party-In-Interest
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`____________
`
`Case CBM2013-00052
`Patent 7,904,326
`____________
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`Filed: August 22, 2014
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`PETITIONER’S REPLY TO PATENT OWNER RESPONSE
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`TABLE OF CONTENTS
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`Page No.
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`I. 
`II. 
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`INTRODUCTION ........................................................................................... 1 
`CLAIM CONSTRUCTION ............................................................................ 2 
`A. ..... PO’s Proposed Construction of “Denormalizing” and “Join” Are
`Not Supported ........................................................................................ 2 
`B. ..... Even PO’s Tortured Claim Constructions Do Not Save Its Claims
`From Abstractness ................................................................................. 4 
`III.  CLAIM 1 IS DIRECTED TO AN ABSTRACT IDEA .................................. 5 
`IV.  THE REMAINDER OF CLAIM 1 DOES NOT TRANSFORM THE
`ABSTRACT IDEA INTO A PATENT-ELIGIBLE CLAIM ......................... 9 
`V.  DEPENDENT CLAIMS 2-22 ARE DIRECTED TO NON-PATENTABLE
`SUBJECT MATTER ..................................................................................... 12 
`VI.  PETITIONER WAS NOT BARRED FROM FILING ITS PETITION ....... 12 
`VII.  CONCLUSION .............................................................................................. 15 
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`i
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`TABLE OF AUTHORITIES
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`Page(s)
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`CASES
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`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`134 S. Ct. 2347, 110 U.S.P.Q.2d 1976 (2014) ............................................passim
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`Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.),
`687 F.3d 1266 (Fed. Cir. 2012) ...................................................................... 6, 10
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`Bilski v. Kappos,
`130 S. Ct. 3218 (2010). ................................................................................passim
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`Chevron U.S.A. v. Natural Res. Def. Council,
`104 S. Ct. 2778, 467 U.S. 837 (1984) ................................................................. 13
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`CyberSource Corp v Retail Decisions Inc.,
`654 F.3d 1366, 99 U.S.P.Q.2d 1690 (Fed. Cir. 2011) .................................... 6, 11
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`Ethicon Inc. v. Quigg,
`849 F.2d 1422 (Fed. Cir. 1988) .......................................................................... 13
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`Princess Cruises, Inc. v. United States,
`201 F.3d 1352 (Fed. Cir. 2000) .......................................................................... 13
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`STATUTES
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`35 U.S.C. § 101 .................................................................................................passim
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`35 U.S.C. § 321(a) ................................................................................................... 13
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`35 U.S.C. § 321 (b) .................................................................................................. 13
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`35 U.S.C. § 325(a)(1) ..................................................................................... 12, 13, 9
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`35 U.S.C. § 325(a)(3) ............................................................................................... 14
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`AIA § 18(a)(1)(B) .................................................................................................... 13
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`AIA § 18(a)(1)(C)(i) and (ii) .................................................................................... 13
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`AIA §§ 42.300 .......................................................................................................... 12
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`ii
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`AIA§ 18(a)(1) .................................................................................................... 12, 13
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`REGULATIONS
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`37 C.F.R. § 42.23 ................................................................................................... 1, 3
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`37 C.F.R. § 42.201 ................................................................................................... 12
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`37 C.F.R. § 42.300(a). 37 ................................................................................... 12, 13
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`37 C.F.R. §§ 42.300 et seq. ...................................................................................... 12
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`OTHER AUTHORITIES
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`157 Cong. Rec. S952 (daily ed. Feb. 28, 2011) ......................................................... 9
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`iii
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`I.
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`INTRODUCTION
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`The Board instituted this CBM Review because it found that “Petitioner has
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`demonstrated that it is more likely than not that claims 1-22 are unpatentable
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`under 35 U.S.C. § 101 as being directed to non-statutory subject matter.”
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`Institution Decision, Paper No. 21 at 19 (P.T.A.B. Mar. 4, 2014) (“ID”). Nothing
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`in the Patent Owner’s Response (“POR”) changes the reasoned and correct
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`conclusions in the Institution Decision.
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`Having failed to move to amend claims, POR now attempts to effect,
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`through claim construction, what it should have done through claim amendment.
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`In so doing, Patent Owner (“PO”) tacitly concedes the abstractness of its claims.
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`PO proposes claim constructions that do not even begin to conform to the broadest
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`reasonable interpretation (“BRI”) standard, and improperly imports limitations
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`from the specification. Having foregone a motion to amend, PO cannot now
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`contort the claim construction process to achieve claim amendment.
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`Alice reaffirmed that claims directed to abstract ideas, without limitations
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`sufficient to tie them down, are patent ineligible. Rather than address this
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`standard, PO concocts its own misguided tests for patent-eligibility that have no
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`basis in precedent and, in fact, run afoul of the holdings in Alice, Bilski, Benson,
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`Flook, Bancorp, and CyberSource.
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`1
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`

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`II. CLAIM CONSTRUCTION
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`Neither party has argued that claim construction is necessary to determine if
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`the challenged claims are directed to non-statutory subject matter, and the Board
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`has already concluded that it is not. ID 10. Nonetheless, PO argues that
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`“denormalizing” and “joining” (in dependent claims 2, 9, 11, 12, and 17) are not
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`conventional database operations, but instead require “specific programming”
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`according to “specified criteria.” PO offers no fact or expert testimony to support
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`its assertion and even its attorney argument never identifies what “specific”
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`programming or criteria are required.1 PO’s construction is not supported by the
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`claim language, the specification, or even its own citations. Moreover, PO’s
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`proposed construction, even if adopted, is entirely circular and cannot rescue its
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`challenged dependent claims from abstractness.
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`A.
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`PO’s Proposed Construction of “Denormalizing” and “Join” Are
`Not Supported
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`The POR concedes that “denormalizing” was known to ordinarily skilled
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`artisans, but disputes that it was a conventional database operation. POR 8. PO
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`argues, without support, that “denormalizing” and “join” require specific, complex
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`programming according to particular criteria and seeks to inject those terms into
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`its proposed construction.
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`1 PO does not challenge Petitioner’s “credential information” construction. POR 5.
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`2
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`But nothing in the patent’s specification or claims explains how to perform
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`“denormalizing” or “joining,” or suggests that those operations require any
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`programming, let alone complex programming.2 Indeed, the fact that the ‘326
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`patent provides no guidance regarding how to denormalize data or join database
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`tables suggests that those operations were routine at the time of filing.
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`While the POR is filled with conjecture regarding what is required to
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`denormalize data or join database tables, PO offers no declarant testimony, expert
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`or otherwise, to support its constructions. And none of PO’s citations say or
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`suggest that complex programming was required to perform “denormalizing” or
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`“joining.”3 Instead, PO’s citations suggest that “denormalizing” was a
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`conventional database operation at the time of filing. For example, Exhibit 2017
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`expressly notes four commonly-adopted denormalization operations in the art:
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`In this Section, we discuss denormalization patterns that have been
`commonly adopted by experienced database designers. . . . we
`identified and classified four prevalent strategies for denormalization
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`2 For every mention of the term “denormalizing,” see Exh. 1001, 2:15-22, 2:51-58,
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`11:33-36, 13:38-47, 14:28-31, 14:49-15:4; see claims 2, 9, 11, 12, 17; see also
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`Fig. 5, nowhere is complex programming (or any programming) indicated.
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`3 PO’s argument that the lack of any discussion of “denormalizing” in Exh. 2019
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`implies that complex programming was required is pure conjecture. POR 9.
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`3
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`in Figure 4. They are collapsing tables, splitting a table, adding
`redundant columns and adding derived columns.
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`Exh. 2017 at 4. Nothing in Exhibit 2017 suggests the need for complex
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`programming. Likewise, both Exhibits 2015 and 2019 suggest that a “join” was a
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`commonly-used database operation at the time.4 Thus, PO’s proffered claim
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`construction is unsupported.
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`B.
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`Even PO’s Tortured Claim Constructions Do Not Save Its Claims
`From Abstractness
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`Even if PO’s proposed construction for “denormalizing” and “joining” were
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`adopted, it would not save claims 2, 9, 11, 12, and 17 from abstractness. As
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`discussed above, the ‘326 patent does not disclose any way, let alone a particular
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`way or algorithm, for implementing “denormalizing” or “joining” functionality.
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`Thus, PO’s proposed construction is entirely circular. Much like trying to
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`rehabilitate the abstract method by reciting “the non-abstract method of claim 1,”
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`simply calling something “specific” or “complex” does not make it so. Merely
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`adding the words “specific programming” and “specified criteria” to
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`4 Exhibit 2015 at 262 (“In SQL, a JOIN TABLE allows users to specify a table
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`resulting from a join operation in the FROM clause of a query.”); Exh. 2019 at 964
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`(“Today, MySQL Server and many other modern database systems offer a wide
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`range of outer join types.”).
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`4
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`“denormalizing” and “joining” without actually requiring or disclosing any
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`specific programming or specified criteria does nothing to tie down the abstract
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`idea. Thus, construction of these terms is unnecessary to determine if the
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`challenged claims are directed to non-statutory subject matter.
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`III. CLAIM 1 IS DIRECTED TO AN ABSTRACT IDEA
`The Supreme Court in Alice was very clear about the standard that should
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`be used to determine patent eligibility under § 101: “First, we determine whether
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`the claims at issue are directed to one of those patent-ineligible concepts. . . . If
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`so, we then ask, “[w]hat else is there in the claims before us?” Alice Corp. Pty.
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`Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014) (quotations omitted). The
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`Institution Decision is consistent with Alice, which reaffirms the patent
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`ineligibility of the present claims.
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`Contrary to the clear authority of Alice and its predecessors, PO argues that
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`claims are invalid under § 101 only where Petitioner can prove the claims are
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`directed to a “fundamental economic practice.” See POR 13-14. Nothing in
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`Alice, Mayo, Bilski, Benson, or Flook limits the categories of patent ineligible
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`abstract ideas to the specific examples of abstract ideas found in those cases, nor
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`those made up by PO by a cramped misreading of Alice and Bilski.
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`In fact, the Supreme Court roundly rejected exactly this line of argument in
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`Alice: “petitioner contends that the abstract-ideas category is confined to
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`5
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`preexisting, fundamental truths that exist in principle apart from any human
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`action. . . . Bilski belies petitioner’s assertion.” Alice at 2356 (emphasis added,
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`quotations and modification omitted). PO does not even attempt to explain how
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`generating compensation data using validated transactions and validated
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`distributors’ credentials is different in kind than “managing a stable value
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`protected life insurance policy” (Bancorp at 1280-81), a “fraud detection method”
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`(Cybersource at 1376), “risk hedging” (Bilski at 1321), or “intermediated
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`settlement” (Alice at 2355). In fact, it is not. PO provides no explanation for why
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`an abstract idea regarding a mundane or ordinary economic practice should be
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`more deserving of patent protection (and thus, patent eligibility) than an abstract
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`idea directed to a “fundamental economic practice.” Indeed, to state the premise
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`is to undermine it. The only proper inquiry is whether the claims are directed to
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`an abstract idea;5 PO’s attempts at misdirection should be ignored.6
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`5 Both Alice and the Preliminary Examiner Guidelines agree that a fundamental
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`economic practice is one of several examples of an unpatentable abstract idea, but
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`that abstract ideas are not limited to a particular category. Exh. 2018 at 2-3.
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`6 Even if the “fundamental nature” of an economic practice were relevant to the
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`§101 analysis (which it is not), PO itself offers no evidence to rebut the only
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`6
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`Next, PO argues that because the claimed method is limited by its
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`application to a computer, there is no preemption and, thus, the claims are patent
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`eligible. POR 14. PO mistakenly adopts preemption as a test for patent elibility.
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`However, as Alice makes clear, pre-emption is a policy concern justifying the
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`limits on patent eligibility, but is not itself a test for patentability. See Alice at 2354
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`(“Laws of nature, natural phenomena, and abstract ideas are not patentable. . . .
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`We have described the concern that drives this exclusionary principle as one of
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`pre-emption.”). In any event, PO’s preemption argument based on the use of a
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`computer is flatly contradicted by Alice and Cybersource, which hold that the
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`ordinary use of a computer does not make an abstract idea patent-eligible. Indeed,
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`if that were the case, no computer-implemented business method would ever be
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`patent ineligible so long as they may be performed by hand or in the human mind.
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`That is not the law. See infra Section IV.
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`Moreover, Petitioner’s unrebutted declarant testimony demonstrates that
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`each of the recited functions of the challenged claims could be performed by hand
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`or in the human mind.
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`PO argues that Petitioner has not met its burden of proof for an “inability to
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`evidence of record, which shows the importance of validating transactions and
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`distributors. E.g., Exh. 1003 ¶¶16-17, 21.
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`7
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`select one abstract idea upon which to rest its theory of invalidity” is nit-picking
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`nonsense. POR 15-18. The alleged six different abstract ideas are only slightly
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`different articulations of the same abstract idea: generating compensation data
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`using validated transactions and validated distributors’ credentials. ID 12-13; Pet.
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`22. Notably, nowhere does PO argue that claim 1 is not directed to any one of the
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`six purported abstract ideas. In fact, PO admits that claim 1 is directed to the
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`abstract idea alleged by Petitioner:
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`The ‘326 patent describes and claims a specific method for
`performing transaction processing in an efficient manner which
`minimizes
`the use of computing resources
`in a
`traditionally
`computationally-expensive process: the validation of distributor
`credentials and transactions to ensure proper compensation of a
`distributor.
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`POR 2. Neither Alice nor Bilski state that an abstract idea needs to be distilled to a
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`single set of magic words, or that a challenge must chant a particular incantation
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`for a claim to be unpatentable. The Supreme Court in both Alice and Bilski spoke
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`of the abstract idea much less consistently than Petitioner, and had no problem
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`still invalidating the abstract claims. E.g. Alice at 2352 (“intermediated
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`settlement”), 2352 (“computerized scheme for mitigating ‘settlement risk’”), 2353
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`(“method for exchanging obligations”), 2356 (“exchanging financial obligations
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`between two parties using a third-party intermediary to mitigate settlement risk”);
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`8
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`and e.g. Bilski at 3229 (“hedging risk”), 3231 (“hedging, or protecting against
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`risk”), 3231 (“risk hedging”), 3231 (“hedging, described in claim 1 and reduced to
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`a mathematical formula in claim 4”), 3231 (“hedging risk in the energy market”).
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`PO’s argument that no court has invalidated a claim having multiple abstract ideas
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`(POR 18), even if true, is entirely irrelevant: multiple abstract ideas in a claim
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`would be no less abstract than a single abstract idea. Six times zero is still zero.
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`IV. THE REMAINDER OF CLAIM 1 DOES NOT TRANSFORM THE
`ABSTRACT IDEA INTO A PATENT-ELIGIBLE CLAIM
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`Even while stating that “PO does not suggest that the mere recitation of a
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`computer in a claim is sufficient to qualify as a statutory subject matter under
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`§ 101” (POR 26), PO’s only argument that part two of the Alice framework is not
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`met for claim 1 rests on nothing more than generic computer functionality. POR
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`18-22. PO emphasizes the recitation in claim 1 of “in the computer system” and
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`“stored in a form that can be processed by the computer system,” and argues that
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`a person cannot, “whether mentally or using pencil and paper,” perform these
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`limitations. POR 23-24. First, a person could very well enter data into a
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`computer system, for example by manually keying in such data into a computer,
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`thus presenting the data computer-readable form. This is “by hand.” Second,
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`simply storing data into a computer—which data is necessarily in a computer
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`readable form—is not a meaningful limitation on an abstract claim. Alice at 2359
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`9
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`(“[T]he relevant question is whether the claims here do more than simply instruct
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`the practitioner to implement the abstract idea of intermediated settlement on a
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`generic computer. They do not.”).
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`Even as described by PO, the “processing” recited in “in the computer
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`system” of claim 1 is entirely generic. POR 20-21; Exh. 1001, 15:31-46. PO only
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`states that claim 1 requires checking transactions according to validation criteria
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`before paying the distributor, again “in the computer system.” POR 21. Thus, the
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`claimed “processing” is not any particular type of functionality imparted by the
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`computer, just that these checks are done in a computer, rather than not.
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`PO’s pleas that the specification (e.g. POR 20-21, 28-29) should be
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`consulted are inappropriate to the § 101 analysis. It is black letter law that the
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`claims define the scope of patent protection. It simply does not matter if the
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`“specification of the ‘326 Patent confirms that the invention of the claims is
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`‘significantly more’ than merely ‘generating compensation data.’” POR 20.
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`CyberSource and Bancorp are highly relevant to the claims of the ‘326
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`patent. PO’s statement that “Bancorp is similar [to CyberSource] – the claims, on
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`their face, did not implicate or even recite a computer” is simply false. POR 26.
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`In fact, the Federal Circuit invalidated method, system, and computer-readable
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`medium claims that explicitly recited or required a computer. In Bancorp, one of
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`the independent claims recited a “computer system for administering an existing
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`10
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`life insurance policy.” Bancorp at 1271; Exh. 1015, 17:52-55. In Bancorp, the
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`Federal Circuit noted that “particular computing devices” “such as a ‘generator,’ a
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`‘calculator,’ and ‘digital storage’” were required. Bancorp at 1274. Other
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`independent claims recited “computer readable media for controlling a computer,”
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`and were also invalidated. Bancorp at 1271; Exh. 1016, (cl. 18); see also
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`Exh. 1015, (cls. 18, 63). Likewise, in CyberSource, invalidated independent claim
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`2 recited “a computer readable medium” that required “execution of the program
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`instruction by one or more processors of a computer system” where the “computer
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`system causes that one or more processors to carry out” certain method steps.
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`CyberSource at 1373-74; Exh. 1017, (cl. 2). The Federal Circuit treated claim 2
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`no differently than the abstract method of claim 3 that did not recite a computer:
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`“Here, the incidental use of a computer to perform the mental process of claim 3
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`does not impose a sufficiently meaningful limit on the claim’s scope.”
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`CyberSource at 1375. These holdings are consistent with Alice, where the
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`challenged patents were directed to a “computer-implemented scheme,” and
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`where each of the method, system, and media claims were held unpatentable as
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`directed to abstract ideas. Alice at 2360.
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`Patent Owner argues that the present claims are like those of Diehr (e.g.
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`POR 19), but the claimed invention of Diehr is wholly different than the claimed
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`subject matter here. As noted in Alice, “the claims in Diehr were patent eligible
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`11
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`because they improved an existing technological process, not because they were
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`implemented on a computer.” Alice at 2358. Here, claim 1 takes a process that
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`can be performed by hand and implements it in some general way on a computer.
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`Finally, PO does not address, and thus concedes, that claim 1 fails the
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`machine-or-transformation test. Pet. 36-44. Even after Alice and Bilski, this test
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`remains an “important clue [or] an investigative tool” to determine whether claims
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`are patent-eligible under § 101. Bilski v. Kappos 130 S.Ct. at 3227.
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`V. DEPENDENT CLAIMS 2-22 ARE DIRECTED TO NON-
`PATENTABLE SUBJECT MATTER
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`PO’s arguments for claims 2, 9, 11, 12, and 17 are premised on a tortured
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`construction of “denormalizing” and “join/joining.” POR at 29-32. As discussed
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`in Section II, supra, these constructions are unsupported and, in any event, do not
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`tie down the abstract idea of the claim. Notably, PO nowhere addressed claims 3-
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`8, 10, 13-16, and 18-26. Cf Pet. 42-55 with POR 27-32. PO thus concedes that
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`these are also unpatentable.
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`VI. PETITIONER WAS NOT BARRED FROM FILING ITS PETITION
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`As the Board has already held, Petitioner is not estopped from challenging
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`the claims on the grounds identified in the Petition. ID 5-7; Decision on Request
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`for Rehearing, Paper No. 27 at 2-6 (April 9, 2014). Petitioner’s second-filed
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`declaratory judgment (“DJ”) action did not bar Petitioner from filing its Petition.
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`First, according to 37 C.F.R. §§ 42.300 et seq., 35 U.S.C. § 325(a)(1) does
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`12
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`not apply to CBM Review. This is because 37 C.F.R. § 42.201—the rule
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`promulgated by the Director of the USPTO to implement 35 U.S.C. § 325(a)(1)—
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`is explicitly carved out of CBM Review by 37 C.F.R. § 42.300(a). 37 C.F.R.
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`§§ 42.300; Exh. 1008 at 48691. The Director’s rulemaking that resulted in
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`37 C.F.R. § 42.300(a) was authorized under AIA § 18(a)(1). See Exh. 1008 at
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`48680; see also Exh. 2008 at S5428. In that regard, the Director found that the
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`exceptions set forth in § 42.300(a) were “consistent with section 18(a)(1) of the
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`AIA.” Exh. 1008 at 48693. The Director’s rulemaking is consistent with the
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`statutory mandate and entitled to deference.7 See Chevron U.S.A. v. Natural Res.
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`Def. Council, 467 US 837, 843-44 (1984); see also Ethicon Inc. v. Quigg, 849
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`F.2d 1422, 1425 (Fed. Cir. 1988).
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`Contrary to PO’s argument, nothing in AIA § 18 incorporates Chapter 32 in
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`its entirety for CBM Review. In fact, such incorporation would result in statutory
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`conflicts with other provisions of Section 18. Compare, e.g. 35 U.S.C. § 321(a)
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`with AIA § 18(a)(1)(B); compare also 35 U.S.C. § 321 (b) with AIA §
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`7 While the PTAB’s recent decision in SecureBuy tacitly assumed that 35 U.S.C. §
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`325(a)(1) applies to Section 18 proceedings, the issue was not raised or argued by
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`either party there. See SecureBuy, LLC v. Cardinalcommerce Corp., CBM2014-
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`00035, Paper No. 12, 3 (P.T.A.B. Apr. 25, 2014).
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`13
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`18(a)(1)(C)(i) and (ii). Where an “interpretation directly conflicts with the
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`language of the statute,” it must be rejected. Princess Cruises, Inc. v. United
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`States, 201 F.3d 1352, 1362-63 (Fed. Cir. 2000).
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`In addition, as the Board found in its ID (at 5-7) and Decision on Request
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`for Rehearing, Paper No. 27 (“Rehearing Denial”), Petitioner’s DJ action is
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`properly treated as something that de jure never existed, leaving the parties as
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`though the action had never been brought. See Rehearing Denial at 3-6, and
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`authority cited therein. Petitioner was never in a position to litigate invalidity on
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`multiple fronts simultaneously; Petitioner’s DJ complaint was filed (but never
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`served) and dismissed without prejudice by May 2013, more than three months
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`before Petitioner filed its petition for CBM Review. See Exhs. 2001; 2003.
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`SecureBuy, the only precedential case addressing § 315(a) or § 325(a), is
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`distinguishable. There, SecureBuy had filed two separate DJ actions two weeks
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`before filing its petition for CBM Review, and those actions were still ongoing
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`long after the petition was filed. Decision Denying Institution of Covered
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`Business Method Patent Review at 3, SecureBuy, LLC v. Cardinalcommerce
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`Corp., CBM2014-00035, Paper No. 12, (P.T.A.B. Apr. 25, 2014); see Exhs. 1018
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`and 1019. The Board’s decision is also consistent with the legislative history that
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`expressed concern about parallel litigation tactics or “abusive serial challenges to
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`patents.” Exh. 2006 at S1363 (Sen. Schumer); Exh. 2009 at S952 (Sen. Grassley).
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`14
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`None of those concerns are implicated where there has been a voluntary dismissal.
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`Finally, even if § 325(a) applied here, Petitioner’s second-filed DJ action is
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`properly characterized as an excepted counterclaim within the meaning of
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`§325(a). See 35 U.S.C. § 325(a)(3). PO sued Petitioner first in the District of
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`Delaware. Petitioner’s standing for its second-filed DJ action in California was
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`explicitly based on PO’s first-filed action.8 Exh. 2001 ¶ 9. PO does not dispute
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`that Petitioner’s DJ counterclaim action was a mirror image of PO’s earlier filed
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`patent infringement claim, and both parties understood and agreed that it could not
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`proceed in parallel. Exh. 1020 at 1; Exh. 1021; Exh. 1022. And once the motion
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`to transfer was resolved, Petitioner voluntarily dismissed its second filed DJ claim
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`and added precisely the same DJ claim as a counterclaim to PO’s first filed
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`Delaware action. Exh. 1023.
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`VII. CONCLUSION
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`Because Petitioner has demonstrated the patent ineligibility of each claim
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`under Alice and its predecessors, under any of the proposed constructions, claims
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`1-22 of the ‘326 patent should be cancelled.
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`8 Petitioner’s second-filed DJ counterclaim action was filed for the express purpose
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`of anchoring venue (in response to Patent Owner’s cross-motion for transfer) until
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`the Delaware Court (the first-filed action) had an opportunity to rule on the then-
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`pending motion for transfer. Exh. 1024 at 4, n.1; Exh. 1025.
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`15
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`Respectfully Submitted,
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` /
`
` Deborah E. Fishman /
`Deborah E. Fishman (Reg. No. 48,621)
`Jeffrey A. Miller (Reg. No. 35,287)
`Assad H. Rajani (admitted pro hac vice)
`Michael S. Tonkinson (admitted pro hac vice)
`DICKSTEIN SHAPIRO LLP
`1841 Page Mill Road, Suite 150
`Palo Alto, CA 94304
`Phone: (650) 690-9500
`Fax: (650) 690-9501
`Email: fishmand@dicksteinshapiro.com
` millerj@dicksteinshapiro.com
` rajania@dicksteinshapiro.com
` tonkinsonm@dicksteinshapiro.com
`
`
`Attorneys for Petitioner
`CALLIDUS SOFTWARE INC.
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`16
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`Dated: August 22, 2014
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`Petitioner’s Reply to Patent Owner Response
`CBM2013-00052
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`The undersigned certifies that the foregoing PETITIONER’S REPLY TO
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`
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`PATENT OWNER RESPONSE and associated Exhibits 1015-1025 were served
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`on Patent Owner on August 22, 2014, via electronic filing in the Patent Review
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`Processing System.
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`
`
`/ Deborah E. Fishman /
`Deborah E. Fishman
`Reg. No. 48,621
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`1
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