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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 CBM2013-00054
`Patent 7,908,304
`_____________________
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`
`
`VERSATA’S PATENT OWNER’S RESPONSE
`PURSUANT TO 37 C.F.R. § 42.220
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`TABLE OF CONTENTS
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`INTRODUCTION ............................................................................................ 5 
`I. 
`PETITIONER’S BURDEN .............................................................................. 6 
`II. 
`III.  U.S. PATENT 7,908,304 .................................................................................. 6 
`A.  Overview ....................................................................................................... 6 
`B.  The ‘304 Patent Improves on Systems That Had Long Sought to Apply
`Technological Solutions to Business Challenges ......................................... 7 
`C.  Section 101 is not Obviousness-lite ............................................................ 12 
`D.  Broadest Reasonable Claim Construction ................................................... 14 
`E. 
`Support for Patent Owner’s Broadest Reasonable Claim Constructions .... 17 
`1. 
`“Commission Engine” ......................................................................... 17 
`2. 
`“Selling Agreement” ........................................................................... 19 
`3. 
`“Interface” for Obtaining a Plurality of Business Rules ..................... 24 
`IV.  PETITION DOES NOT ESTABLISH THAT CLAIMS ARE
`UNPATENTABLY ABSTRACT ................................................................. 25 
`A.  Challenged Claims are Directed to Patent-Eligible Machines .................... 25 
`B.  Challenged Claims are not Directed to a Patent-Ineligible Abstract Idea .. 26 
`C.  Challenged Claims Require Significantly More that the Abstract Ideas
`Alleged by Petitioner .................................................................................. 35 
`D.  System Claims Are Incapable of being Performed in the Human Mind
`or Using Pen and Paper ............................................................................... 46 
`V.  TRIAL SHOULD NOT HAVE BEEN INSTITUTED, AND A FINAL
`WRITTEN DECISION WOULD BE IMPROPER, BECAUSE
`PETITIONER IS STATUTORILY BARRED FROM SEEKING POST-
`GRANT REVIEW ......................................................................................... 52 
`A.  Section 325(a)(1) Defines a Statutory Bar that Pertains to the
`Transitional Program for Covered Business Method Review .................... 52 
`B.  Plain Language of § 325(a)(1) Bars Post-Grant Review ............................ 53 
`C.  Legislative History Confirms the Meaning of § 325(a)(1)’s Plain
`Language; Petitioner’s Own Choice Triggers Statutory Bar ...................... 55 
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`–ii–
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`F. 
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`D.  Statutory Framework is Hardly Inequitable to Patent Challenger .............. 59 
`E. 
`Prior Judicial and Administrative Interpretations Confirm Applicability
`of Statutory Bar for Prior-Filed Civil Action Challenging Validity ........... 61 
`Statutory Language Defining the § 325(a)(1) Prior Civil Action Bar, its
`Legislative History and Prior Interpretations of the Statute All Dictate
`Non-Institution ............................................................................................ 69 
`VI.  CONCLUSION .............................................................................................. 70 
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`–ii–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`TABLE OF AUTHORITIES
`
`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) .................................... 61
`Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. ___
`(2013) ................................................................................................................... 26
`Bilski v. Kappos, 561 U.S. 593 (2010) ..................................................................... 30
`CLS Bank Int’l et al. v. Alice Corp. Pty. Ltd., 717 F.3d 1269 (Fed. Cir. 2013)
` ...................................................................................................................... passim
`CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) 47, 48
`Diamond v. Diehr, 450 U.S. 175 (1981) ..................................................... 13, 27, 49
`Ethicon, Inc. v. Quigg, 849 F.2d 1422 ..................................................................... 55
`Gottschalk v. Benson, 409 U.S. 63 (1972) ............................................................... 30
`Gottshalk v. Benson, 409 U.S. 63 (1972) ................................................................. 30
`Graves v. Principi, 294 F.3d 1350, 1356 (Fed. Cir. 2002) ...................................... 65
`In re Translogic Tech., Inc., 504 F.3d 1249 (Fed. Cir. 2007) ................................. 15
`Le Roy v. Tatham, 14 How. 156 (1853) ................................................................... 30
`Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2012) passim
`Parker v. Flook, 437 U.S. 584, (1978) .................................................................... 30
`
`Statutes 
`35 U.S.C. § 326(e) ............................................................................ 6, 32, 34, 35, 46
`35 U.S.C. §101 .................................................................................................... 6, 25
`AIA § 18(a)(1) ......................................................................................................... 52
`
`Rules 
`37 CFR § 42.1(d) ....................................................................................................... 6
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`–ii–
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`I.
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`INTRODUCTION
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`
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
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`The claims of U.S. Patent 7,908,304 (“the ’304 Patent”) recite patent eligible
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`subject matter. Claims 1, 12-25, 30-32, 42 and 43 are in issue in the present
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`Covered Business Method Patent Review. Specifically, Petitioner alleged in its
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`Petition that claims of the ’304 Patent are directed to no more than an unpatentable
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`abstract idea.
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`In its Preliminary Response, Patent Owner focused on the preclusive effect
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`of a statutory bar under 35 U.S.C. § 325(a).1 Relying on interim orders issued in
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`other proceedings after Patent Owner had filed its Preliminary Response, the Board
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`found that dismissal without prejudice of Petitioner’s prior, and otherwise barring,
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`1
`In its Preliminary Response and subsequent Request for Rehearing, Patent
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`Owner argued that trial should not have been instituted where the Petitioner,
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`prior to the filing of the petition for post-grant review, filed a civil action
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`challenging the validity of a claim of the patent. As the Board has stated that
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`arguments from the Preliminary Response are not considered after a Decision to
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`institute trial, Patent Owner herein repeats (see Section V, infra at 31) certain
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`aspects of its earlier argument that Petitioner is barred under 35 U.S.C.
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`§ 325(a), solely to ensure a complete record of this proceeding, and to preserve
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`all issues for appeal.
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`civil action challenging validity nullified the § 325(a) statutory bar. Accordingly,
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`
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`the Board instituted trial as to claims 1, 12-25, 30-32, 42 and 43, solely on grounds
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`under 35 U.S.C. § 101. This Response now addresses all grounds on which trial
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`has been instituted.
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`II.
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`PETITIONER’S BURDEN
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`35 U.S.C. § 326(e) states “[i]n a post-grant review instituted under this
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`chapter, the petitioner shall have the burden of proving a proposition of
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`unpatentability by a preponderance of the evidence.” See also 37 CFR § 42.1(d).
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`III. U.S. PATENT 7,908,304
`A. Overview
`The ’304 Patent describes specific information systems that allow financial
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`services companies to manage and track information about a sales force,
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`particularly a sales force for which complex commission schedules are desirable
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`and for which particular licensure and/or appointment requirements pertain to
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`particular sales transactions. Insurance companies, particularly those emphasizing
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`life insurance lines, were (circa the filing date of the ’304 Patent) no stranger to
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`Byzantine manual processes and computational systems that sought to automate or
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`at least facilitate storage, retrieval or processing of some information pertaining to
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`agent compensation or current licensure.
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`–6–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`The ‘304 Patent Improves on Systems That Had Long Sought to
`Apply Technological Solutions to Business Challenges
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`B.
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`In the era in which the invention(s) of the ‘304 Patent were made, insurance
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`companies had, of course, made routine and extensive use of computer systems in
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`their back office operations. Indeed, Petitioner’s declarant, Joseph E. DeHaven,
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`establishes the nature of insurance companies as early adopters of computer
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`technology for back office operations in his discussion of legacy IBM 705 and
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`IBM 1401 systems (systems that employed vacuum tube technology) still used in
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`the early 1970s by his then employer, The Prudential, to administer life insurance
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`policy functions and later introduction of more advanced computer systems. See
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`Exh. 1011, ¶6; Exh. 2013, 14:2-17:4.
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`However, as is often the case, information system techniques developed in
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`some domains, here for agile web-centric dynamic pricing and product
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`configuration applications, were slow to be adapted in other domains. Indeed, far
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`from merely applying fundamental economic practices or merely automating
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`methods of organizing human activities, the ‘304 Patent applicants recognized the
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`challenges for which existing systems and methods employed in the insurance
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`industry were simply ill equipped to handle, and they described some of those
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`challenges in the application as follows:
`Financial service companies are being driven by
`increased competition to consider the use of
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`independent agents in place of captive sales staff. …
`They must be able to … effectively manage independent
`brokers and captive sales staff. They must reduce the
`time required to market new products and implement new
`compensation plans and differentiate themselves based
`on services offered to customers. In addition, they
`must be able to rapidly integrate new distribution
`channel acquisitions and grow distribution
`capabilities, while reducing administration costs.
`…
`Firms must reduce implementation time for new products
`and compensation plans on these antiquated systems and
`reduce the potential for overpayment. … [T]hese
`companies must interact with the producers (of sales)
`using preferred methods and quickly model new and
`creative compensation plans, while consolidating
`compensation administration systems.
`‘304 Patent, Exh. 1001, 1:46-67. Indeed, the ‘304 Patent applicants themselves
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`observed and described for the benefit of the public and, indeed the Office (in
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`examination of the application that granted as the ‘304 Patent), the nature and
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`complexity of then existing insurance industry compensation and commission
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`apportionment practices. Specifically, the ‘304 Patent applicants noted that:
`[i]n order to provide sales representatives with an
`incentive to sell as much as possible, or to sell more
`of a desired product or products at certain prices,
`sales organizations create incentive plans where
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`–8–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`commissions are provided or offered to the sales
`representatives when specific sales goals or targets
`are achieved during particular period of time. In
`addition, an incentive plan may apportion credit to
`everyone on a sales representative’s sales team, to the
`representative’s manager, or someone other than the
`sales representative himself. Sales representatives
`typically receive compensation based on a salary, the
`hours worked, and/ or on the goods or services sold.
`When basing compensation on transactions, specifically
`on the goods or services sold, sales representatives
`receive a commission that can be based on profits, net
`sales, the number of products sold, or some other
`variable. Other primary compensation includes gross
`dealer concessions. Secondary compensation includes
`expense allowances, persistency bonuses and overrides
`that can be allocated among sales teams and accumulated
`over time if desired.
`‘304 Patent, Exh. 1001, 2:1-19. The ‘304 Patent applicants further observed the
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`business impact of largely inflexible and, at least from the perspective of modern
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`computationally driven, agile business practices that were just beginning (again,
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`circa the filing date of the ’304 Patent) to gain a foothold in entrenched businesses,
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`that:
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`[s]ales compensation for direct and indirect channels
`can be one of the most effective levers for aligning
`sales performance with business goals. Unfortunately,
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`–9–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`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.
`‘304 Patent, Exh. 1001, 2:20-25. More specifically, the ‘304 Patent applicants
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`identified specific failures of existing technological solutions:
`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. Businesses need to
`streamline the administration of quotas, territories,
`and commissions, and also require tools to measure and
`improve the effectiveness of incentive programs. This
`would greatly simplify the management challenge of
`aligning tactical business performance with strategic
`objectives, making it possible to react more quickly
`and effectively to changes in market and competitive
`conditions.
`‘304 Patent, Exh. 1001, 2:25-41.
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`–10–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`It is against this backdrop of longstanding, largely inflexible information systems
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`
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`supporting entrenched business practices that the ‘304 Patent applicants developed
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`specific, complex and improved technological solutions for information systems
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`that facilitate customization and dynamic change in compensation models and
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`sales incentives to be applied accurately and verifiably in a variety of disparate
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`sales channels, notwithstanding:
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` a constantly changing sales channel workforce,
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` constantly changing organizational hierarchies and reporting
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`relationships,
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` constantly changing contractual relationships between financial service
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`companies and the distributors who sell their products,
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` constantly changing financial product offerings and sales incentives,
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` constantly changing appointment and licensure statuses of individuals in
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`the sales channel workforce, and even the
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` constantly changing appointment and licensure requirements as they
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`apply to potentially staggering numbers of transactions and particular sets
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`individuals from the sales channel workforce that participate in any given
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`transaction.
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`While the existence of financial product sales channels, incentive compensation
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`schemes and licensure requirements in the financial services industry are generally
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`–11–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`not new, the described and, indeed, claimed information systems by which the
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`
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`inventors of the ‘304 Patent sought to facilitate customization and dynamic change
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`in compensation models and sales incentives to be applied accurately and
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`verifiably in such sales channels were new and indeed, non-obvious. That novelty
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`or non-obviousness has been established by the Patent Office’s own examination
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`of the claims here challenged and, to be clear, nothing in the present proceedings is
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`to the contrary.
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`C.
`Section 101 is not Obviousness-lite
`Petitioner has advanced no art-based grounds in its Petition—none—and no
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`art-based grounds have been instituted by the Board. Petitioner does however
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`intimate—by way of declarant testimony that can only be described as prior use
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`declarations without the pesky strictures of actual prior use in public, or actual use
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`of particular system elements actually claimed, or even corroboration—that Patent
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`Owner’s claims are unworthy.
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`To be frank, section 101 abstract idea analysis is not an obviousness-lite
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`doctrine; rather, it is a narrow exception to the rule that specific, concrete (i.e., non-
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`abstract) systems are patent eligible subject matter, subject (of course) to the
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`requirements of novelty, non-obviousness, enablement and written description
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`codified in the Patent Statute.
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`–12–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`Thus, Petitioner’s almost theatrical discovery (e.g., in its Petition, paper 6,
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`
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`pp. 1, 36-37) of late 20th century business practices “required by law” is just that—
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`theatrics. Theatrics designed to tempt this Board into stepping into the analytical
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`quicksand of, first, reducing Patent Owner’s system claims to mere 6-7 word
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`conceptual catchphrases; second, declaring positively structural elements to be
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`conventional and legal nullity and third, ignoring every other positively recited
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`limitation (sometimes under the guise of a broadest reasonable interpretation) as
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`coextensive with the conceptual catchphrase or with an allegedly conventional
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`structural element.
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`Both the Supreme Court and Federal Circuit have cautioned against such an
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`approach: while “[a]ny claim can be stripped down, simplified, generalized, or
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`paraphrased … a court cannot go hunting for abstractions by ignoring the concrete,
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`palpable, tangible limitations of the invention the patentee actually claims.” CLS
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`Bank Int’l et al. v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1298 (Fed. Cir. 2013)
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`(Rader, Linn, Moore and O’Malley concurring in the per curiam, en banc decision
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`later affirmed by the Supreme Court); see also Diamond v. Diehr, 450 U.S. 175,
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`189 n. 12 (1981). Such an approach would, as the Supreme Court found long ago,
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`“make all inventions unpatentable.” Diehr, 450 U.S. at 189 n. 12.
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`In the briefing that follows, Patent Owner challenges both the particular
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`abstract ideas alleged by Petitioner and the preliminary construction of certain
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`–13–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`dispositive claim terms. However, for avoidance of doubt, and notwithstanding
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`
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`Petitioner’s § 101-based theory of the case, the ‘304 Patent simply does not tie up
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`or preempt the abstract concept of determining compensation for a validated
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`distributer of insurance or another product of the financial services industry.
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`Rather, the inventors of the ‘304 Patent developed specific information systems
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`that allow customization and dynamic change in compensation models and sales
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`incentives that can be applied accurately and verifiably in a variety of disparate
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`sales channels and in accord with licensure and appointment requirements,
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`notwithstanding large transaction flows, a constantly changing workforce and
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`organizational structures and constantly changing licensure/appointments statuses
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`or regulatory requirements. In short, the claimed systems of the ‘304 Patent use
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`technological solutions to address inadequacies of prior systems (and indeed,
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`shortcomings of prior and arcane back office practices) employed in the insurance
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`industry.
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`D. Broadest Reasonable Claim Construction
`In a covered business method patent review, it is the Board’s practice to give
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`claim terms in an unexpired patent their broadest reasonable construction in light
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`of the specification of the patent in which they appear. 37 C.F.R. § 42.300(b).
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`Under this broadest reasonable construction standard, claim terms are given their
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`ordinary and customary meaning, as would be understood by one of ordinary skill
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`–14–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`in the art in the context of the entire disclosure. In re Translogic Tech., Inc., 504
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`
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`F.3d 1249, 1257 (Fed. Cir. 2007). An inventor is free to define the specific terms
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`used to describe his or her invention; however, to where an inventor chooses to be
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`his own lexicographer he or she must do so with reasonable clarity, deliberateness,
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`and precision. In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994).
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`In the present proceedings, certain claim constructions previously advanced
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`by the Petitioner or used by the Board are uncontested, while others are now
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`construed2 for purposes of this trial in a manner that differs (at least somewhat)
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`from that advocated by Petitioner or used by the Board for purposes of its
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`institution decision. The uncontested claim terms are as follows (claim numbers in
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`bold signify independent claims):
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`
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`2
`In its Preliminary Response, Patent Owner opposed certain constructions
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`advanced by Petitioner as including inappropriate and extraneous limitations
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`inconsistent with a broadest reasonable interpretation in light of the
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`specification but, in view of the expected dispositive nature of its § 325(a) bar
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`argument, reserved the right to propose proper constructions if necessary (upon
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`institution of trial). Moreover, Patent Owner herein reserves the right to present
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`different claim constructions before the District Court in the pending litigation.
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`In re Am. Acad. of Sci Tech. Ctr., 367 F.3d 1359, 1369 (Fed. Cir. 2004).
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`–15–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
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`Claim Term
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`Claims
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`Broadest Reasonable Interpretation
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`1, 23, 24,
`25, 30, 32
`and 43
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`13, 15
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`12, 13, 15-
`18, 20-22
`and 32
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`“software applications that perform a
`stated function”
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`“software, and may include hardware,
`though which engines, modules and
`databases can exchange information”
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`“software that processes data for a
`stated function”
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`“module” / “modules”
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`“backbone”
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`“engine”
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`The remaining claim terms, now construed for purposes of this trial in
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`accordance with the broadest reasonable construction in light of the specification
`
`standard adopted by the Board, are construed as follows. Where applicable,
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`specific support for the ‘304 Patent inventors’ chosen lexicography is thereafter
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`detailed.
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`Claim Term
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`Claims
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`Broadest Reasonable Interpretation
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`“commission engine”
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`15, 16 and
`32
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`“an engine that takes two inputs, a
`commission model and a set of
`transactions, and generates ledger items
`(that correspond to payments) as
`output”
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`Claim Term
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`“selling agreement”
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`Claims
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`1, 12, 15-
`17, 32, 43
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`Broadest Reasonable Interpretation
`
`“a representation of an agreement or
`contract between parties that defines a
`hierarchy of sales people that can sell
`products under that contract, defines
`what products can be sold in that
`agreement, defines what commission
`schedules can be used in that agreement,
`and defines which sales people
`participate in which commission
`schedule”
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`“interface”
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`E.
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`14, 32
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`“a communication or user interface”
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`Support for Patent Owner’s Broadest Reasonable Claim
`Constructions
`1.
`
`“Commission Engine”
`
`The broadest reasonable interpretation of “commission engine” is “an engine
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`that takes two inputs, a commission model and a set of transactions, and generates
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`ledger items (that correspond to payments) as output.” Petitioner has not advanced
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`a construction for “commission engine,” but parties (and the Board) appear to
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`concur in proper construction of the lesser included term “engine.” In view of the
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`specific lexicography that appears in the ‘304 Patent, a specific, on the record,
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`construction for “commission engine” is appropriate. Specifically, the ‘304 Patent
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`specification states:
`
`A commission engine takes two inputs, a commission
`model and a set of transactions, and generates ledger
`items (that correspond to payments) as output. Each
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`transaction represents a physical sales transaction,
`such as distributor selling a life insurance policy.
`The commission model represents two critical pieces of
`data: the sales team hierarchy and the commission
`schedules. The sales team hierarchy comprises a
`hierarchy of all sales people that will be responsible
`for a transaction. The commission schedules define
`formula for translating transactions into ledger items.
`Commission schedules may be modeled through quota,
`bonus, and plan objects. The commission model utilized
`in one or more embodiments of the invention is
`described in further detail in pending patent
`application Ser. No. 09/081857, entitled “Method and
`Apparatus For Determining Commission”, which in
`incorporated herein by reference.
`‘304 Patent, Exh. 1001, 7:1-17 (emphasis added).
`
`In order to complete the record, the above-referenced application is included
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`as Exh. 2015, although under the claim construction standards dictated by the
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`Board’s rules of practice at this level of review, further construction of the term
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`commission model appears unnecessary. Accordingly, the broadest reasonable
`
`interpretation of “commission engine” is “an engine that takes two inputs, a
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`commission model and a set of transactions, and generates ledger items (that
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`correspond to payments) as output.”
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`–18–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
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`2.
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`“Selling Agreement”
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`The broadest reasonable interpretation of “selling agreement” is “a
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`representation of an agreement or contract between parties that defines a
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`hierarchy of sales people that can sell products under that contract, defines what
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`products can be sold in that agreement, defines what commission schedules can be
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`used in that agreement, and defines which sales people participate in which
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`commission schedule.” Although Petitioner has not advanced a particular
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`construction for “selling agreement,” it has surreptitiously sought to import
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`inappropriate and extraneous limitations into a composite term “to generate a
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`selling agreement,” and the Board has largely acquiesced in its construction for
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`purposes of the institution decision, “to create a customized selling agreement
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`contract comprising templates or reusable components.”
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`With respect, and in view of the specific lexicography that appears in the
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`‘304 Patent, neither the Petitioner’s proposed construction nor the mongrel
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`construction used by the Board for purposes of the institution decision is correct.
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`Specifically, the ‘304 Patent specification states:
`The engines and modules of DMSS may, for example, be
`configured to perform at least the following functions:
`…
`Model[] agreements or contracts between the financial
`services company or provider and the distributors who
`sell the products. These agreements are termed
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`‘Selling Agreements’. A selling agreement defines a
`hierarchy of sales people that can sell products
`under that contract, it defines what products can be
`sold in that agreement, it defines what commission
`schedules can be used in that agreement, and it
`defines which sales people participate in which
`commission schedule. The DMSS may utilize the terms
`defined in selling agreements to calculate
`compensations for all distributors.
`‘304 Patent, Exh. 1001, 6:27-56 (emphasis added).
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`Nothing in the foregoing express lexicography requires that a selling
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`agreement itself, or when “generated” or “defined and created,” constitute a
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`“contract comprising templates or reusable components.” Accordingly,
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`Petitioner’s attempt to import inappropriate and extraneous limitations should now
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`be rejected by the Board, and for purposes of trial and any final written decision,
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`the Board should adopt as its broadest reasonable interpretation of “selling
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`agreement,” “a representation of an agreement or contract between parties that
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`defines a hierarchy of sales people that can sell products under that contract,
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`defines what products can be sold in that agreement, defines what commission
`
`schedules can be used in that agreement, and defines which sales people
`
`participate in which commission schedule.”
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`–20–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`The propriety of that construction is reinforced by the range of usages of
`
`
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`“selling agreement” throughout the claims and particularly (relative to the
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`challenged claims) in the following composite constructs:
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` “a selling agreements module configured to generate a selling
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`agreement” and “determine commission amounts associated with a sales
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`transaction based on said selling agreement” (claim 1)
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` “data objects representative of … at least one selling agreement,”
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`“determine whether said at least one distributing party conforms with
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`said at least one selling agreement” and “allow the at least one
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`distributing party to sell one or more products of the first party in
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`accordance with the selling agreement” (claim 12)
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` “fetch said at least one selling agreement from said database source”
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`(claim 15)
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` “utilized to model a set of selling agreement objects” (claim 16)
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` “generates payments based on said selling agreement objects” (claim 17)
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` “data objects representative of … at least one selling agreement,” “by
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`evaluating said at least one selling agreement data object” and “a selling
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`agreements module configured to enable said product provider to define
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`and create a selling agreement” (claim 32)
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`–21–
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`Patent Owner’s Response
`CBM2013-00054 (Patent 7,908,304)
`Given the foregoing range of composite usages, the constructions proposed by
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`
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`Petitioner could be viewed as an attempt to gloss over express lexicography that
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`suggests that a selling agreement is a computer readable representation of specific
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`information used by the described DMSS and, indeed, the claimed machines in a
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`specific way and to instead misleadingly suggest the mere abstraction of form
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`documents.
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`The express lexicography of “selling agreement” is clear on its face and the
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`Board should not be so misled. Nonetheless, should the Board be inclined to, for
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`some reason, uniquely elevate the composite terms “a selling agreements module
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`configured to generate a selling agreement” and/or “a selling agreements module
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`configured to enable said product provider to define and create a selling
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`agreement” to separate constructions, Patent Owner suggests that, rather than the
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`somewhat misleading cobble of partial quotations leveraged by the Petition in its
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`petition, that the full context below might suggest a more balanced and less
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`opportunistic construction.
`In one embodiment of the invention, each selling
`agreement defines a hierarchy of sales people that can
`sell products under that contract, it defines what
`products can be sold in that agreement, it defines what
`commission schedules can be used in that agreement, and
`it def