Demonstratives for Oral Hearing:
`Callidus v. Versata, CBM2014-00054
`(U.S. Patent No. 7,908,304)
`
`October 29, 2014, 1:ooPM
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`Madison East, gth Floor, Conf Rm. A
`6oo Dulany Street
`Alexandria, VA 22314
`
`DICKSTEINSHAPI ROLLP
`
`dicksteinshapiro.com |
`1
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 01/28
`
`

`

`Claims Directed to Abstract Ideas are
`Unpatentable
`
`Section 101 of Title 35, United Stats Code, provides that:
`
`'Whoever invents
`
`or discovers any new and useful process, machine. manufacnu·e, or composition of
`
`matter_ or any new and useful improvement thereof may obtain a patent therefor_
`
`subject to the conditions and requirements of this title.
`
`The Supreme Court recognizes three exceptions to these stan1to1y classes:
`
`'la~rs of nature, nantral phenomena, and abstract ideas. Bilski, .. Knppos, 130 S.
`
`Ct. 3218. 3220 (2010).
`
`• Institution Decision at 18.
`
`DICKSTEINSHAPI ROLLP
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`dicksteinshapiro.com |
`2
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 02/28
`
`

`

`Alice v. CLS Bank Provides the Standard for
`Patent Eligibility under §101.
`
`III. CLAIMS 1, 12, AND 32 ARE DIRECTED TO ABSTRACT IDEAS
`The Supreme Court in Alice was ve1y clear about the standard that should be
`
`used to dete1mine patent eligibility under § 101: ··First. vve clete1mine whether the
`
`claims at issue are directed to one of those patent-ineligible concepts . . . . If so. we
`
`then ask. ' w hat else is there in the claims before us?"' Alice Corp. Pty. Ltd. v.
`
`CLS Bank Int 'l, 134 S. Ct. 2347, 2355 (2014) (quotations omitted). The Institution
`
`• Petitioner’s Reply at 7.
`
`D ICKSTEIN SHAPI ROLLP
`
`dicksteinshapiro.com |
`3
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 03/28
`
`

`

`‘304 Patent Overview
`
`(12> United States Patent
`Chao et al.
`
`(10) Patent No.:
`(45) Date of Patent:
`
`US 7,908,304 B2
`Mar. 15, 2011
`
`(54)
`
`-'lliTLIOl> ANt> SYSTEM I:'Oit ~'L\~AGI~G
`l>LSTlUB TOR l!liFORi\L\TlO~
`
`(75)
`
`Inventors: David C hao, ustin, TX (US): Bria n
`Blount, Austin, TX (US): C har·les
`E r ickson. Cedar Park, TX (US): Sba ri
`G ba r avy, ustin, TX (US); C beng
`Z bou. Austin. TX (US): J oshua Toub.
`Austin, TX (US)
`
`(73) Assignee: Vcrsata Dcvclopmcot G roup, Inc.,
`Au tin. TX (U )
`
`( •) Notice:
`
`Subject to a ny disclaimer. the term ofthi
`patent is extended or adjusted under 35
`U .S.C. 154(b) by 1198 days.
`
`(21 ) Appl. No.: 09/810,514
`
`(22) Filed:
`
`Mar. 15, 2001
`
`5,5 15,524 A
`5,692,206 A
`5.708.798 A
`5.732.263 A
`5,790,677 A
`5.825.65 1 A
`5.832,268 A
`
`511996 Lynch cl a l.
`1111997 Shirley e l al.
`l / 1998 Lynch ellll.
`3/1998 Havens ct al.
`811998 Fox ct al. .................. 705178
`I 011998 Gupta c1 al.
`1111998 Anderson c1 al.
`(Continued)
`
`EP
`
`FOREIGN PATENT DOCUMENTS
`08 170 17 A2
`1/ 1998
`an IER PUDLICKriO S
`Contractmakcr. hup:/wdMrchivc.orglwcb/200 I 0204 1151 OOfllltp:l/
`www.digicontmcts.com. dmed Feb. 4, 2001.
`
`(Continued)
`
`Primary Examiner Andrew Joseph Rudy
`(74) Allomey, Age111, or firm - Hamilton & Terrile, LLP:
`Kent B. Chambers
`
`(65)
`
`(51)
`
`(52)
`(58)
`
`Prior f>ublicution Data
`US 2002/0133383 . I
`Int. CJ.
`
`Sep. 19.2002
`
`G06F 17130
`(2006.01)
`............................. 707/945; 235/376: 705/7
`U.S. Cl .
`Field of Classification Search ....... 707/9.999.001,
`707/999.009, 923. 930, 944, 945. 950, 999.945.
`707/999.93; 7 11/1; 705/7. 10, 26; 235/375.
`
`(57)
`
`ABSTRACT
`An embodiment o f the invention provides <t system that
`enables financial sen ic~.o-s companies to manage 1u1d tmck
`information about a sales force. 'l11e system includes compo(cid:173)
`nents for managing distributors information. for validating
`a nd tr.tcking licenses ;rnd credcuti;tls. for creating. custumiLcd
`contracts. and for maintai ning compensation structurL'S. 'll1e
`system allows fo r configuring compensations, providing
`financial services companies a toolkit for creating and mod-
`cling their complex commi
`ion schedules used to compen-
`·
`·
`
`\..oll,_..,._ .. ~--... ~...._ _ _..,...,2t,;3~5::,./.-... _.." at
`• ‘304 Patent (Exh. 1001).
`
`DICKSTEINSHAPI ROLLP
`
`dicksteinshapiro.com |
`4
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 04/28
`
`

`

`‘304 Patent – Claim 12
`
`-
`12. A systetn for managing relationships between parties to
`a selling agreerncnt the system comprising:
`a database source comprising a plurality of data objects
`representative of at least one distributing party at least
`one selling agreement and at least one license or
`appointment as ociated with said at least one distribut(cid:173)
`in g party· and
`a distributor managem nt engine configured to obtain at
`least one of aid plurality of data obj ect from said
`databa e ource and detern1ine whether aid at least one
`distributing party conlonns with said at least one selling
`agreen1ent and said at least one license or appointn1ent is
`valid to allow the at least one distributing party to sell
`one or tnore products of the first party in accordance with
`the eJling a gr_ee_m_ent.
`
`• ‘304 Patent Claim 12.
`
`DICKSTEINSHAPI ROLLP
`
`dicksteinshapiro.com |
`5
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 05/28
`
`

`

`Claim 12 is Directed to an Abstract Idea:
`Alice Step 1
`
`The Supreme Court in Alice was ve1y clear about the standard that should be
`
`used to dete1mine patent eligibility under § 101: "First. vve clete1mine whether the
`
`claims at issue are directed to one of those patent-ineligible concepts . . . . If so, we
`
`then ask, " [w]hat else is there in the claims before us?" Alice Corp. Pty. Ltd. v.
`
`CLS Bank Int 'l, 134 S. Ct. 2347, 2355 (2014) (quotations omitted). The Institution
`
`• Petitioner’s Reply at 7.
`
`D ICKSTEIN SHAPI ROLLP
`
`dicksteinshapiro.com |
`6
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 06/28
`
`

`

`Abstract Idea – Petitioner
`
`Clain1 12 is tnerely the abstract idea of ,-alidating a distributor to begin
`
`selling products.
`
`• Petition at 1.
`
`DICKSTEINSHAPI ROLLP
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`dicksteinshapiro.com |
`7
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 07/28
`
`

`

`Abstract Idea – Board
`
`• Institution Decision at 20.
`
`• Institution Decision at 26.
`
`dicksteinshapiro.com |
`8
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 08/28
`
`

`

`Abstract Idea – Patent Owner
`
`Although Petitioner alleges that each of the challenged independent claims
`
`contains nothing more than the abstract idea of"detem1ining compensation for a
`
`validated distributor" (claims 1, 32) or "validating a distributor to begin selling
`
`products" (claim 12) (see Petition, paper no. 6, pp. 29, 43, 54), it is not enough to
`
`simply posit an abstraction ... any mere abstraction. Rather, to implicate the
`
`abstract idea exception to § 101 's othe1wise broad and unqualified definition of
`
`patent eligible subject matter, the alleged abstraction must be an abstraction so
`
`fundamental. indeed such a "building block oflnnnan ingenuity,'' that it implicates
`
`the ve1 constimtional )Ul )Ose. of the a tent laws. See Alice Corp. Pty. Ltd. v. CLS
`
`Bank Int 'l et al., 573 U.S. _
`
`, 2014 \\TL 2765283 at *8-9 (2014) .
`
`• Patent Owner Response at 26.
`DICKSTEIN s HAP I ROLLP
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`dicksteinshapiro.com |
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`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 09/28
`
`

`

`Abstract Idea – Patent Owner
`
`Thus, part 1 of the two-part test with which this Board is tasked is
`
`distinguishing between claims that merely embrace abstractions or abstract
`
`concepts (which do not implicate the abstract idea exception to § 101 's othe1wise
`
`broad and unqualified definition of patent eligible subject matter) and claims that
`
`truth original cause or motfl·e: a mathematical relationship or jom111la: or
`
`f undamental economic practices that define the abstract idea exception itself. Of
`
`those. it would seem appropriate for the Board to restrict4 its deliberation to the
`
`mal inquily.ji111dmnental economic practices. as i11formed by the Supreme
`
`Court's analysis in Bilski and Alice Corp.
`
`• Patent Owner Response at 31.
`
`DICKSTEIN SHAP I RO LLP
`
`dicksteinshapiro.com |
`10
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 10/28
`
`

`

`Claim 12 is Directed to an Abstract Idea:
`Alice Step 2
`
`The Supreme Court in Alice was ve1y clear about the standard that should be
`
`used to dete1mine patent eligibility under § 101: "First, we dete1mine whether the
`
`claims at issue are directed to one of those patent-ineligible concepts. . . . If so. we
`
`then ask. " [w]hat else is there in the claims before us?" Alice Corp. Pty. Ltd. v.
`
`CLS Bank Int 'l, 134 S. Ct. 2347, 2355 (2014) (quotations omitted). The Institution
`
`• Petitioner’s Reply at 7.
`
`D ICKSTEIN SHAPI ROLLP
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`dicksteinshapiro.com |
`11
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 11/28
`
`

`

`Invalidated Abstract Ideas of Supreme Court
`and Federal Circuit Decisions
`
`“managing a stable value protected life insurance
`policy” (Bancorp at 1280-81)
`
`“fraud detection method” (Cybersource at 1376)
`
`“risk hedging” (Bilski at 1321)
`
`“intermediated settlement” (Alice at 2355).
`
`• Petitioner’s Reply at 8
`
`dicksteinshapiro.com |
`12
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 12/28
`
`

`

`‘304 Patent Claim 12 – “Database Source” and
`“Distributor Management Engine”
`
`-
`
`12 .. A systetn lor n1anaging relationships betw n parties to
`as lling agr etnent th system comprising:
`a database source comprising a plurality of data objects
`representative of at least one distributing party at least
`on
`e1ling agreement and at 1 ast one license or
`appointment as ociated w·ith aid at least one di tribut(cid:173)
`ing party· and
`a distributor management engine configuf d to obtain at
`least one of aid plurality of data object from said
`databa e ource and determine vvhether said at lea tone
`distributing party conforms with aid at least on s lling
`agreement and said at least one license or appointment is
`valid to allow the at 1 ast on distributing party to sell
`on or tnore products ofth first party in accordance with
`the elling agreement.
`
`• ‘304 Patent Claim 1.
`
`DICKSTEINSHAPI ROLLP
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`dicksteinshapiro.com |
`13
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 13/28
`
`

`

`‘304 Patent Claim 12 – “Database Source” and
`“Distributor Management Engine”
`
`• Institution Decision at 15.
`
`• Institution Decision at 20-21.
`
`dicksteinshapiro.com |
`14
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 14/28
`
`

`

`Alice, Bancorp, and CyberSource
`• CyberSource, 654 F.3d at 1375 (“[M]erely claiming a
`software implementation of a purely mental process that
`could otherwise be performed without a computer does
`not satisfy the machine-or-transformation test.”)
`• Bancorp, 687 F.3d at 1279 (“using a computer to
`accelerate an ineligible mental process does not make
`that process patent-eligible.”)
`• Petition at 36, 40; Petitioner’s Reply at 10-12.
`
`dicksteinshapiro.com |
`15
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 15/28
`
`

`

`Alice Claims at Issue
`
`• Alice, 134 S. Ct. at 2359-60; Petitioner’s Reply at 11.
`
`dicksteinshapiro.com |
`16
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 16/28
`
`

`

`CyberSource – Exemplary Invalidated Claim
`
`• U.S. Patent 6,029,154 C1 (Exh. 1017), col. 2:9-37;
`Petitioner’s Reply at 11.
`
`dicksteinshapiro.com |
`17
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 17/28
`
`

`

`Bancorp - Exemplary Invalidated Claims
`
`• U.S. Patent 7,249,037 (Exh. 1015), col. 17:33-64;
`Petitioner’s Reply at 10-11.
`
`dicksteinshapiro.com |
`18
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 18/28
`
`

`

`‘304 Patent – Claim 1
`
`r---=l.;J. A system for managin
`elationshiP...,S..,.""""'..,;:;.,;;.:=-:..::;=><oo
`par . and a second p
`comprising:
`at least one processor;
`memory coupled to said at least one processor;
`said memory comprising a plurality of modules configured
`to manage distributor information;
`said plurality of modules comprising a selling agreements
`module configured to generate a selling agreement;
`said plurality of modules comprising a commission mod(cid:173)
`ule configmed to determine commission amotmts asso(cid:173)
`ciated with a sales transaction based on said selling
`agreement;
`said plurality of modules com rising a licensing module
`configured to determme if a party assoctated wttli said
`sales transaction has a valid license to sell products
`associated with the sales transaction; and
`silld plurality of modules comprising a payment module for
`determining payment associatea with said sales tnmsac-1
`tion ro said party in accordance with (i) a determination
`of said conmtission amotmts determined by said com-1
`~nission module and (ii) a detem1ination by said Jicens(cid:173)
`~g module of whether said party has a valid license to
`sell the I.Jroducts associated with said sales transaction.
`
`• ‘304 Patent Claim 1.
`
`DICKSTEIN S HAP I ROLLP
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`dicksteinshapiro.com |
`19
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 19/28
`
`

`

`Abstract Idea of Claim 32 – Petitioner
`
`• Petition at 1.
`
`dicksteinshapiro.com |
`20
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 20/28
`
`

`

`Abstract Idea of Claim 1 – Board
`
`• Institution Decision at 24-25.
`
`dicksteinshapiro.com |
`21
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 21/28
`
`

`

`‘304 Patent – Claim 32
`
`32. A system for managing relationshi s between a first
`paD)' and a second paD)' comprising·
`an interface for obtaining a plurality of business ndes
`defining relationships between a product provider and at
`least one distributor,
`a database source comprising a plurality of data objects
`representative of said at least one distributor, at least one
`selling agreement and at least one license or appoint(cid:173)
`ment associated with said at least one distributor;
`a commission engine configured to determine a commis(cid:173)
`sion a.motrnt associated with said at least one distributor
`by evaluating said at least one selling agreement data
`object;
`a plurality of modules comprising, a distributor adminis(cid:173)
`tration module for managing said plurality of data
`objects;
`
`• ‘304 Patent Claim 32.
`
`DICKSTEIN SHAP I ROLLP
`
`said plurality of mooules compnsmg, a licensing ana
`appointment module configured to detennine if said at
`least. one license or appointment data object associate
`with said at least one distributor is in compliance with a
`set of industry regulations·
`said plurality of modules comprising, a selling agreements
`module configured to enable said product provider to
`define and create a selling agreement with said at least
`one distributor; and
`said plurality of modules comprising, a payment module
`configured to determine said commission amount to said
`at east one dist 'butor.
`
`dicksteinshapiro.com |
`22
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 22/28
`
`

`

`Abstract Ideas of Claim 32 – Petitioner
`
`• Petition at 1.
`
`dicksteinshapiro.com |
`23
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 23/28
`
`

`

`Abstract Idea of Claim 32 – Board
`
`• Institution Decision at 25-26.
`
`• Institution Decision at 26.
`
`dicksteinshapiro.com |
`24
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 24/28
`
`

`

`Dependent Claims 18, 23-25, 30, and 43
`
`• Petition at 63-64.
`
`dicksteinshapiro.com |
`25
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 25/28
`
`

`

`Dependent Claims 13-15 and 20
`
`• Petition at 64, 65.
`
`dicksteinshapiro.com |
`26
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 26/28
`
`

`

`Dependent Claims 16, 17, 21, and 22
`
`• Petition at 67.
`
`dicksteinshapiro.com |
`27
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 27/28
`
`

`

`Dependent Claims 19, 31, and 42
`
`• Petition at 68.
`
`dicksteinshapiro.com |
`28
`© 2014 Dickstein Shapiro LLP. All Rights Reserved.
`
`Exhibit 1026 28/28
`
`