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`Paper No.
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`CALLIDUS SOFTWARE, INC.
`Petitioner
`
`v.
`
`VERSATA DEVELOPMENT
`GROUP, INC.
`Patent Owner
`
`AND
`
`VERSATA SOFTWARE, INC.
`Real Party-In-Interest
`___________________
`
`Case CBM2013-00053
`Patent 7,958,024
`_____________________
`
`
`
`VERSATA’S PATENT OWNER RESPONSE
`PURSUANT TO 37 C.F.R. § 42.220
`
`
`i
`
`
`
`
`
`

`

`TABLE OF CONTENTS
`
`I. 
`
`II. 
`
`INTRODUCTION ............................................................................................ 1 
`
`PETITIONER’S BURDEN .............................................................................. 2 
`
`III.  U.S. PATENT 7,958,024 .................................................................................. 2 
`A.  Overview ....................................................................................................... 2 
`
`IV.  CLAIM CONSTRUCTION ............................................................................. 4 
`A.  Claim 1. ......................................................................................................... 4 
`1.  Claim Term: “Using a Distributor Management System” ........................ 4 
`2.  Claim Term: “Regulatory Conditions Applicable to/Associated with
`said Sales” ........................................................................................................ 7 
`3.  Claim Term: “Executing a Payment Process” ........................................ 10 
`4.  Claim Term: “Generating a Selling Agreement” .................................... 12 
`5.  Means Plus Function Claim Terms .......................................................... 17 
`
`V. 
`
`PETITION DOES NOT ESTABLISH THAT CLAIMS ARE
`UNPATENTABLY ABSTRACT ................................................................. 25 
`A.  All Instituted Claims are Directed to Patent Eligible Processes ................. 25 
`1.  The “Abstract Idea” Articulated by the Petitioner and Adopted by the
`Board in the Institution Decision is Not an Abstract Idea. ............................ 27 
`2.  Even if an Abstract Idea is Present in the Claims, the Elements of the
`Claim are Patent-Eligible. .............................................................................. 33 
`1.  The Claims are Tied to a Particular Machine ......................................... 37 
`2.  CyberSource is inapplicable to the claims at issue .................................. 39 
`3.  Petitioner Did Not Carry Its Burden on the Dependent Claims .............. 42 
`
`VI.  Trial Should Not Have Been Instituted, and a Final Written Decision
`Would Be Improper, Because Petitioner is Statutorily Barred from
`Seeking Post-Grant Review ........................................................................... 45 
`A.  Section 325(a)(1) Defines a Statutory Bar that Pertains to the
`Transitional Program for Covered Business Method Review .................. 45 
`
`
`
`ii
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`

`

`
`
`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`B.  Plain Language of § 325(a)(1) Bars Post-Grant Review ............................ 46 
`C.  Legislative History Confirms the Meaning of § 325(a)(1)’s Plain
`Language; Petitioner’s Own Choice Triggers Statutory Bar ................... 48 
`D.  Statutory Framework is Hardly Inequitable to Patent Challenger .............. 52 
`E.  Prior Judicial and Administrative Interpretations Confirm Applicability
`of Statutory Bar for Prior-Filed Civil Action Challenging Validity ........ 54 
`F.  Statutory Language Defining the § 325(a)(1) Prior Civil Action Bar, its
`Legislative History and Prior Interpretations of the Statute All Dictate
`Non-Institution ......................................................................................... 62 
`
`VII.  CONCLUSION .............................................................................................. 63 
`
`CERTIFICATE OF SERVICE ............................................................................ 66 
`
`
`
`–ii–
`
`

`

`TABLE OF AUTHORITIES
`
`Cases
`
`Cases 
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l et al., No. 13-298, 573 U. S. ___, 2014
`WL 2765283 (2014) ..................................................................................... passim
`Anova Food, LLC v. Sandau, No. IPR2013-00114, Paper No. 17, Decision –
`Denying Inter Partes Review (P.T.A.B. Sept. 13, 2013) .................................... 54
`Bancorp Servs., L.L.C. v. Sun Life Assurance Corp., 687 F.3d 1266, 1278 (Fed.
`Cir. 2012) ............................................................................................................. 42
`Bilski v. Kappos, 561 U.S. 593 (2010) ..................................................................... 28
`CLS Bank Int’l et al. v. Alice Corp. Pty. Ltd., 717 F.3d 1269 (Fed. Cir. 2013) ...... 41
`CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) ....... 40
`Diamond v. Diehr, 450 U.S. 175 (1981) .................................................................. 42
`Ethicon, Inc. v. Quigg, 849 F.2d 1422 ..................................................................... 49
`Gottschalk v. Benson, 409 U.S. 63 (1972) ............................................................... 29
`Gottshalk v. Benson, 409 U.S. 63 (1972) ................................................................. 29
`Graves v. Principi, 294 F.3d 1350, 1356 (Fed. Cir. 2002) ...................................... 58
`In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994) .................................................. 6
`Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2012) 26, 27
`Parker v. Flook, 437 U.S. 584, (1978) .................................................................... 29
`Phillips v. AWH Corp., 415 F.3d 1303, (Fed. Cir. 2005) ........................................ 13
`Superguide Corp. v. DirecTV Enterprises, Inc., 358 F.3d 870, 875, (Fed. Cir. 2004)
` .............................................................................................................................. 13
`
`
`Statutes 
`35 U.S.C. § 101 ................................................................................................. 24, 62
`35 U.S.C. § 326(e) ..................................................................................................... 2
`35 U.S.C. §101 ........................................................................................................... 2
`AIA § 18(a)(1) ......................................................................................................... 45
`Rules 
`37 C.F.R. § 42.1(d.) ................................................................................................... 2
`
`
`
`iv
`
`

`

`
`
`I.
`
`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`
`INTRODUCTION
`The claims of U.S. Patent 7,958,024 (“the '024 Patent”) recite patent eligible
`
`subject matter. Claims 1, 2, and 35-47 are in issue in the present Covered Business
`
`Method Patent Review. In its Petition, Petitioner alleged that claims 1, 2, and 35-
`
`47 were patent-ineligible for being directed to an abstract idea. The Board
`
`instituted trial of claims 1, 2, and 35-47, solely on grounds under 35 U.S.C. § 101.
`
`Decision – Institution of Covered Business Method Patent Review, Paper No. 16,
`
`March 4, 2014, p. 19 (“Institution Decision”). This Patent Owner Response
`
`addresses the sole ground on which trial has been instituted.
`
`In its Preliminary Response, Patent Owner focused on the preclusive effect
`
`of a statutory bar under 35 U.S.C. § 325(a).1 Relying on interim orders issued in
`
`1
`In its Preliminary Response and subsequent Request for Rehearing, Patent
`
`Owner argued that trial should not have been instituted where the Petitioner,
`
`prior to the filing of the petition for post-grant review, filed a civil action
`
`challenging the validity of a claim of the patent. As the Board has stated that
`
`arguments from the Preliminary Response are not considered after a Decision to
`
`institute trial, Patent Owner herein repeats (see Section VI, infra at 44) certain
`
`aspects of its earlier argument that Petitioner is barred under 35 U.S.C.
`
`§ 325(a), solely to ensure a complete record of this proceeding, and to preserve
`
`all issues for appeal.
`
`
`
`–1–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`other proceedings after Patent Owner had filed its Preliminary Response, the Board
`
`
`
`found that dismissal without prejudice of Petitioner’s prior, and otherwise barring,
`
`civil action challenging validity nullified the § 325(a) statutory bar. Accordingly,
`
`the Board instituted trial as to claims 1, 2, and 35-47, solely on grounds under 35
`
`U.S.C. § 101. This Response now addresses all grounds on which trial has been
`
`instituted.
`
`II.
`
`PETITIONER’S BURDEN
`
`35 U.S.C. § 326(e) states “[i]n a post-grant review instituted under this
`
`chapter, the petitioner shall have the burden of proving a proposition of
`
`unpatentability by a preponderance of the evidence.” See also 37 C.F.R. § 42.1(d).
`
`III. U.S. PATENT 7,958,024
`A. Overview
`The '024 Patent describes a method and apparatus for processing sales
`
`transaction data in an efficient manner which minimizes the use of computing
`
`resources in a traditionally computationally-expensive process.
`
`Managing sales and distribution channels had become a difficult task on and
`
`before March 15, 2001 (the filing date of the '024 Patent) in the business
`
`environment where it is necessary to quickly and fairly administer incentives for
`
`salespeople and distribution channel partners while coping with regulatory issues.
`
`Exh. 1001, col. 1, lines 18-22. To keep revenues growing and to keep up with
`
`customer demands, financial services providers had to move quickly even when
`
`
`
`–2–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`regulation, competition and new sales distribution channels inhibited growth. Id.,
`
`
`
`lines 22-25. Management was expected to provide new opportunities for improved
`
`revenues and margins, while providing customers with better, faster information
`
`and services. Id., lines 25-28.
`
`One of the problems facing financial service providers was the lack of
`
`technological innovation to keep up with the process of implementing modern
`
`compensation incentive programs. As the '024 Patent explained:
`
`Sales compensation for direct and indirect channels can be one of the
`most effective levers for aligning sales performance with business
`goals. Unfortunately, designing and administering effective incentive
`programs is a difficult management challenge. The management of a
`business can spend a great deal of time and money in developing
`incentive plans. In the prior art, the creation and distribution of
`incentive plans is a slow process that is prone to error. It can take
`months to implement a new compensation plan, and dependencies on
`computer software can frustrate sales managers who want to make
`even simple changes. Moreover, a lack of measurement tools can
`make it impossible to develop a "closed loop", continuous
`improvement process. Businesses must be able to design, process, and
`communicate sophisticated incentive programs that drive revenue
`growth across all sales channels. Id., col. 2, lines 20-34.
`
`The inability of then-current technology to meet the problems faced by the
`
`industry including a lack of technology to handle credential management and the
`
`
`
`–3–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`computer generation of selling agreements that define a relationship between an
`
`
`
`institution and a distributor drove the development of the technology in the '024
`
`Patent. See also, Exh. 1001, col. 3, lines 24-58.
`
`The USPTO examined the '024 Patent over prior art references and
`
`determined that the invention of the '024 Patent met all statutory requirements
`
`including novelty and non-obvious and was, thus, inventive.
`
`IV. CLAIM CONSTRUCTION
`Patent Owner respectfully submits that Petitioner’s proposed claim
`
`construction for the following claim terms adopted by the Board is not supported
`
`by the '024 Patent’s Specification. Patent Owner provides an alternative claim
`
`construction supported under the Board’s broadest reasonable interpretation (BRI).
`
`A. Claim 1.
`1.
`Claim Term: “Using a Distributer Management System”
`
`Claim 1 is a “method for processing sales transaction data” that requires
`
`“using a distributer management system to perform.” Petitioner only sought
`
`construction of “Distributer Management System” and asserts that the BRI of
`
`“Distributer Management System” is “software for managing information about a
`
`sales force.” Pet. 23 and Inst. Dec. 10. The Board stated, “The components
`
`described in the specification that comprise the distributor management system,
`
`namely “information infrastructure,” “applications,” “engines,” and “a database,”
`
`would be understood by ordinarily skilled artisans as software.” Inst. Dec. 10.
`
`
`
`–4–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`The Board acknowledged, “No software exists in a vacuum in that it requires
`
`
`
`something to execute it.” Id. However, the Board continued, stating “As discussed
`
`above, the specification of the ’024 Patent does not provide specifics of hardware
`
`or software configurations. Accordingly, we are persuaded that defining a
`
`‘distributer management system’ as ‘software for managing information about a
`
`sales force’ does not unduly limit the scope of that claim limitation.
`
`Patent Owner respectfully submits that the entire term “using a distributer
`
`management system” should be construed. Under the BRI, Patent Owner requests
`
`the Board construe “using a distributer management system” as “using a special
`
`purpose computer executing software to perform distributer management system
`
`functions.”
`
`Claim 1 is a method claim, and, thus, the elements of the method claim are
`
`performed. As the Board acknowledged, “No software exists in a vacuum in that it
`
`requires something to execute it.” Inst. Dec. 10. The '024 Patent describes
`
`embodiments of a distributor management system as software “executing with a
`
`computer.” Exh. 1001, col. 4, lines 61-62. Figures 1-6, 7a, and 7b and
`
`corresponding text in the '024 Patent describe in detail the processes and
`
`algorithms of a distributor management system, which links to execution with a
`
`computer programmed in accordance therewith.
`
`
`
`–5–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`Furthermore, in accordance with In re Alappat and the Manual of Patent
`
`
`
`Examining Procedure (MPEP) § 2181, “For computer implemented processes, the
`
`“machine” is often disclosed as a general purpose computer. In these cases, the
`
`general purpose computer may be sufficiently “particular” when programmed to
`
`perform the process steps. Such programming creates a new machine because a
`
`general purpose computer, in effect, becomes a special purpose computer once it
`
`is programmed to perform particular functions pursuant to instructions from
`
`program software.” MPEP § 2181 citing In re Alappat, 33 F.3d 1526, 1545 (Fed.
`
`Cir. 1994).
`
`Thus, since (i) Petitioner and the Board acknowledge that the distributer
`
`management system includes software, (ii) in a method claim the Board
`
`acknowledges that “no software exists in a vacuum in that it requires something to
`
`execute it,” (iii) claim 1 is a method claim that requires performance of elements of
`
`claim 1, (iv) the '024 Patent states that the distributer management system software
`
`is executed with a computer, and (v) programming creates a new machine because
`
`a general purpose computer, in effect, becomes a special purpose computer once
`
`it is programmed to perform particular functions pursuant to instructions from
`
`program software, the proper BRI construction of “using a distributer management
`
`system” is “using a special purpose computer executing software to perform
`
`distributer management system functions.”
`
`
`
`–6–
`
`

`

`
`
`Claim Term
`
`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`BRI Construction
`
`using a distributer management system
`
`using a special purpose computer
`
`executing software to perform
`
`distributer management system
`
`functions
`
`2.
`Claim Term: “Regulatory Conditions Applicable
`to/Associated with said Sales”
`
`Claim 1 recites in part “determining if said sales representatives associated
`
`with said transaction data are in conformity with a set of regulatory conditions
`
`applicable to said sales.” The Board adopted Petitioner’s proposed construction of
`
`“Regulatory Conditions Applicable to/Associated with said Sales” to be “any
`
`internal or external constraint, regulation, requirement, policy or objective with
`
`which a sales representative must comply to receive compensation[s] for said
`
`sales.” Inst. Dec. p. 11 and Pet. 27.
`
`Patent Owner respectfully submits that the Board’s claim construction is too
`
`broad. The '024 Patent makes clear that “regulatory conditions” are conditions put
`
`in place by licensing and governmental organizations. For example:
`
`[Firms] must track professional accreditation including licenses,
`appointments, National Association of Securities Dealers (NASD)
`registration and continuing education requirements for the
`maintenance of these professional accreditations to ensure that they
`are represented by appropriately credentialed representatives. This
`
`
`
`–7–
`
`

`

`
`
`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`need is made more acute by constantly changing government rules
`and regulations, as well as by different regulations imposed by the
`different jurisdictions in which a firm operates. Finns must determine
`when renewal processing is required and manage new and renewal
`application processes to ensure regulatory 35 compliance in every
`jurisdiction. Exh. 1001, col. 3, lines 25-36.
`
`[This solution] must manage regulatory information and ensure that
`distributors are licensed and appointed to sell the products
`manufactured, or distributed, by the provider. Id., lines 23-28.
`
`Thus, organizations such as life insurances companies may utilize
`embodiments of the invention to manage the sale and distribution of
`life insurance plans in a way that coincides with the regulatory
`constraints put in place on such sales by government organizations.
`Id., lines 50-54.
`
`The Board’s “[A]ny internal or external constraint, regulation, requirement,
`
`policy or objective with which a sales representative must comply to receive
`
`compensation[s] for said sales” goes beyond the broadest reasonable interpretation.
`
`To receive compensation, it is known that quotas and plan objects can serve as
`
`internal or external constraints with which a sales representative must comply to
`
`receive compensation for sales. See, Exh. 1001, col. 7, lines 28-30 and col. 8, lines
`
`1-9. However, “quotas” and “plan objects” while falling within the Board’s
`
`construction are not regulatory conditions as defined by the '024 Patent. Thus, the
`
`
`
`–8–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`Board’s construction is overly broad since it includes constraints and requirements
`
`
`
`that go beyond regulatory conditions.
`
`Accordingly, since (i) the '024 Patent sets forth regulatory conditions as
`
`conditions imposed by licensing and governmental organizations and (ii) the
`
`Petitioner’s and Board’s construction goes beyond the BRI of the '024 Patent,
`
`Patent Owner respectfully requests the Board under the BRI to adopt the
`
`construction of “regulatory conditions applicable to/associated with said sales” to
`
`be “regulatory conditions put in place by licensing and government organizations
`
`with which a sales representative must comply to receive compensation[s] for said
`
`sales.”
`
`The same rationale applies to claims 40, 42, and 45 mutatis mutandis.
`
`Claim Term
`
`BRI Construction
`
`regulatory conditions applicable
`
`regulatory conditions put in place by
`
`to/associated with said sales
`
`licensing and government organizations
`
`with which a sales representative must
`
`comply to receive compensation[s] for
`
`said sales
`
`
`
`
`
`–9–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`Claim Term: “Executing a Payment Process”
`
`
`
`3.
`
`Claim 1 recites, “executing a payment process to compensate said plurality
`
`of sales representatives for said sales in accordance with said compensation
`
`amounts.”
`
`The Board adopted the Petitioner’s construction of “executing a payment
`
`process” to be “distributing payment.” Inst. Dec. p. 11 citing Pet. 26. Patent
`
`Owner respectfully submits that “Distributing payment” broadly includes any
`
`distribution of payment and ignores both the context and the claim language itself
`
`of “executing a payment process.” Pet. 27-28. As noted by the Board, “no
`
`software exists in a vacuum in that it requires something to execute it.” Thus, even
`
`with reliance only on the Board’s construction of “distributer management
`
`system,” “using a distributer management system to perform: … executing a
`
`payment process” requires “executing a payment process” to be tied to the
`
`distributer management system software and the mechanism (i.e. a computer) that
`
`executes the software. Additionally, the terms “execute,” “executes,” “executing,”
`
`and “execution” are used throughout the '024 Patent. These terms are consistently
`
`used in the context of execution by a computer. See, e.g., Exh. 1001, col. 4, lines
`
`61-62 (“executing with a computer”), col. 18, lines 15-17 (“the system executes
`
`step 710”), col. 18, line 62 (“the system executes step 726”), col. 19, lines 4-8
`
`(“The system will ensure that the terms of the selling agreement are followed and
`
`
`
`–10–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`that the licensing and appointment requirements are not violated with respect to
`
`
`
`each transaction executed by the system), col. 22, lines 4-6 (“The debt
`
`management engine automates the process of issuing and maintaining debt and
`
`may execute within a payment engine”), and col. 24, lines 50-54 (“In an
`
`embodiment of the invention the functions for consolidating net payment are
`
`incorporated into a net pay module (executed e.g., at step 322). The net pay
`
`module enables financial institutions to track and calculate payments to
`
`distributors”).
`
`Under the Board’s construction of “executing a payment process” to be
`
`“distributing payment,” distributing payment could be a manual process of handing
`
`or mailing funds (e.g. cash or check) to an individual or any other process outside a
`
`computer execution environment. Additionally, the '024 Patent states “Once the
`
`commission amounts are processed by the payment system, the amounts earned
`
`may be distributed to the appropriate parties.” Exh. 1001, col. 23, lines 12-14.
`
`Thus, actual distribution of payments is performed after commission amounts are
`
`processed. Thus, Patent Owner respectfully submits that the Board’s construction
`
`is too broad.
`
`Accordingly, Patent Owner respectfully submits that under the BRI, the
`
`proper construction of “executing a payment process” is “executing a payment
`
`process by a computer programmed to execute the payment process.”
`
`
`
`–11–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`The same rationale applies to claims 42 and 45 mutatis mutandis.
`
`
`
`Claim Term
`
`BRI Construction
`
`executing a payment process
`
`executing a payment process by a
`
`computer programmed to execute the
`
`payment process
`
`
`
`4.
`
`Claim Term: “Generating a Selling Agreement”
`
`Claim 2 depends from claim 1 and recites “using the distributer management
`
`system to perform: generating a selling agreement to define a relationship between
`
`an institution and a distributor, wherein said plurality of sales representatives work
`
`on behalf of said distributor and said institution is a source of products to said
`
`distributor and sold by said sales representatives working on behalf of the
`
`distributor.”
`
`The Petitioner advanced two constructions for “generating a selling
`
`agreement”/”generate a selling agreement.” The first construction is “creating a
`
`selling agreement contract comprising templates or reusable components” / “create
`
`a selling agreement contract comprising templates or reusable components.” Pet.
`
`27. The second construction proposed by the Petitioner is “creating a selling
`
`agreement contract” / “create a selling agreement.” Pet. 28.
`
`
`
`–12–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`The Board adopted Petitioner’s first construction that “generating a selling
`
`
`
`agreement” means “to create a selling agreement contract comprising templates or
`
`reusable components.” Inst. Dec. 13.
`
`Patent Owner respectfully submits that the Petitioner and Board have
`
`impermissibly read limitations from the specification into the claim to adopt a
`
`narrower construction than the BRI.
`
`In Phillips v. AWH Corp., the Federal Circuit stated, “The Patent and
`
`Trademark Office ("PTO") determines the scope of claims in patent applications
`
`not solely on the basis of the claim language, but upon giving claims their broadest
`
`reasonable construction “in light of the specification as it would be interpreted by
`
`one of ordinary skill in the art in question at the time of the invention.” Phillips v.
`
`AWH Corp., 415 F.3d 1303, (Fed. Cir. 2005). See also, MPEP §2111. However,
`
`"[t]hough understanding the claim language may be aided by explanations
`
`contained in the written description, it is important not to import into a claim
`
`limitations that are not part of the claim. For example, a particular embodiment
`
`appearing in the written description may not be read into a claim when the claim
`
`language is broader than the embodiment." Superguide Corp. v. DirecTV
`
`Enterprises, Inc., 358 F.3d 870, 875, (Fed. Cir. 2004). See also, MPEP § 2111.
`
`The Petitioner’s argument hinged on whether contract kits that include
`
`reusable components are required to generate a selling agreement. Petitioner
`
`
`
`–13–
`
`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`argued that because (i) agreements are put together from contract kits, (ii) a
`
`
`
`contract kit contains compensation components, and (iii) a user can select which
`
`components from the kit to include in the agreement, then generating a selling
`
`agreement must be creating a selling agreement comprising templates or reusable
`
`components.
`
`Claim 2 does not recite “templates or reusable components.” The '024
`
`Patent does not limit or otherwise require the generation of selling agreements
`
`using a contract kit or templates. For example, the '024 Patent states:
`
`“For example, a selling agreement may be formulated using contract
`kits comprised of components such as compensation components and
`document components.” Exh. 1001, col. 10, line 67-col. 11, line 3
`(emphasis added).
`
`“In an embodiment of the invention, customizable contract kit
`components enable a financial services institution to define the
`content of contracts and the processes by which they are
`administered.” Id., col. 11, lines 12-15 (emphasis added).
`
`“Selling agreements module 117 may use contract kits to perform
`several tasks comprising: … .” Id., col. 11, lines 20-21 (emphasis
`added).
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`“In one embodiment of the invention, each agreement is assembled of
`contact components.” Id., col. 15, lines 38-39 (emphasis added).
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`
`
`–14–
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`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`“The system may utilize contract kits that remain in usage to generate
`selling agreements. In accordance with one embodiment of the
`invention, the system comprises a mechanism for creating selling
`agreements from a contract kit (see e.g., step 306 of FIG. 3).” Id., col.
`16, lines 38-42 (emphasis added).
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`The term “templates” is used only twice in the SUMMARY OF THE
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`INVENTION and DETAILED DESCRIPTION sections of the '024 Patent. The
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`following quote includes the word “template” but relates to a selling agreement
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`report when a reporting engine is included, and the reporting engine is not recited
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`in claim 1 or claim 2.
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`“A reporting engine 142 may be added to the DMSS and configured
`to generate reports and store such reports in the database. Each
`component of an agreement has a corresponding document, generated
`from report templates, which describes that component.” Exh. 1001,
`col. 9, line 43.
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`The following quote mentions the word “template” but does not arise in the
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`context of a selling agreement, “The system comprises global deduction
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`components, which form the template for adding deduction rules for a party.” Id.,
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`col. 23, line 25.
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`Thus, since the specification nowhere requires generating a selling
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`agreement using contract kits and associated reusable components and templates,
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`contrary to Superguide Corp. and the MPEP § 2111, reading “templates and
`
`
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`–15–
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`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`reusable components” into claim 2 impermissibly reads in limitations from the
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`
`
`specification into claim 2.
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`Instead, the actual claim language, “generating a selling agreement to define
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`a relationship between an institution and a distributor” speaks for itself and does
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`not require a specialized construction at least insofar as the “generating” is
`
`concerned. Should a construction of “selling agreement” be necessary and
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`dispositive to some issue in this proceeding, it is notable that explicit lexicography
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`in ‘024 Patent (Exh. 1001, 6:63-7:4) provides helpful insight. However, it is
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`exceedingly clear (as explained above) that inclusion of the extraneous phrase “…
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`contract comprising templates or reusable components” urged by Petitioner and
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`previously acquiesced in by the Board does not follow from the specification and is
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`therefore errant.
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`In short, the construction adopted by the Board for purposes of its institution
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`decision is not the “broadest reasonable construction in light of the specification.
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`That prior construction should be vacated or replaced for the trial phase of these
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`proceedings.
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`Based on the forgoing, “generating a selling agreement” (and
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`correspondingly “generate a selling agreement”) are to be understood in
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`accordance with the plain and ordinary meaning of the constituent terms, and no
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`
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`–16–
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`

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`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`explicit construction appears to be necessary or probative to the issues in this
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`
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`proceeding.
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`Claim Term
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`BRI Construction
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`generating a selling agreement
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`ordinary meaning, no explicit
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`construction necesary
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`
`
`
`
`5. Means Plus Function Claim Terms
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`Claims 40 and 41 are acknowledged by Petitioner as means plus function
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`claims interpreted under 35 U.S.C. § 112 ¶ 6 (pre-AIA). Pet. 28. The Petitioner
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`states that, “[t]he only structure disclosed in the specification of the ‘024 patent –
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`and only in the most superficial terms – is “a computer.” Pet. 28. See also, Pet.
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`21-22, which presents a claim chart for claims 40 and 41 that identifies only “a
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`computer” as the corresponding structure. The Board did not adopt any claim
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`construction for claims 40 and 41.
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`Construction of a means-plus-function limitation includes two steps. “First,
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`the court must determine the claimed function. Second, the court must identify the
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`corresponding structure in the written description of the patent that performs the
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`function.” Applied Med. Res. Corp. v. U.S. Surgical Corp., 448 F.3d 1324, 1332
`
`(Fed. Cir. 2006) (emphasis added). See also, MPEP § 2182.
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`
`
`–17–
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`

`

`
`
`Patent Owner’s Response
`CBM2013-00053 (Patent 7,958,024)
`The Petitioner’s construction of the means plus function terms of claims 40
`
`
`
`and 41 is contrary to the law. The Petitioner has identified the corresponding
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`structure of each element in claims 40 and 41 as only “a computer.” However, the
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`law clearly requires more. In WMS Gaming, the Federal Circuit stated, “In a
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`means-plus-function claim in which the disclosed structure is a computer, or
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`microprocessor, programmed to carry out an algorithm, the disclosed structure is
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`not the general purpose computer, but rather the special purpose computer
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`programmed to perform the disclosed algorithm.” WMS Gaming Inc. v.
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`International Game Technology, 184 F.3d 1339 (Fed. Cir. 1999). See Alappat, 33
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`F.3d