Paper No. __________
`Filed: September 11, 2013
`
`Filed on behalf of: Trulia, Inc.
`By: Michael T. Rosato
`Jennifer J. Schmidt
`WILSON SONSINI GOODRICH & ROSATI
`701 Fifth Avenue
`Suite 5100
`Seattle, WA 98104-7036
`Tel.: 206-883-2529
`Fax: 206-883-2699
`Email: mrosato@wsgr.com
`Email: jschmidt@wsgr.com
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_____________________________
`
`TRULIA, INC.
`Petitioner
`
`v.
`
`ZILLOW, INC.
`Patent Owner
`
`_____________________________
`
`Patent No. 7,970,674
`
`_____________________________
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW
`
`

`

`Table of Contents
`
`Page
`
`I.
`
`INTRODUCTION ...........................................................................................1
`
`A.
`
`B.
`
`Overview of the ’674 Patent..................................................................1
`
`Brief Overview of the Prosecution History...........................................2
`
`II.
`
`GROUNDS FOR STANDING........................................................................4
`
`A.
`
`B.
`
`Claims 2, 5, 15-25 and 40 of the ’674 Patent are Directed to a
`Covered Business Method Patent that is not a “Technological
`Invention”..............................................................................................4
`
`Petitioner has Been Sued for Infringement of the ’674 Patent
`and is Not Estopped...............................................................................8
`
`III.
`
`STATEMENT OF THE PRECISE RELIEF REQUESTED FOR
`EACH CLAIM CHALLENGED.....................................................................8
`
`IV. CLAIM CONSTRUCTION ............................................................................9
`
`V.
`
`DETAILED EXPLANATION OF GROUNDS FOR
`UNPATENTABILITY ..................................................................................12
`
`A.
`
`[Ground 1] Claims 2, 5, 15-25 and 40 of the ’674 Patent are
`Invalid Under 35 U.S.C. § 101, as Being Directed to Non-
`Statutory Subject Matter......................................................................12
`
`i.
`
`ii.
`
`iii.
`
`The Claims of the ’674 Patent are Directed to an Abstract
`Idea............................................................................................13
`
`The Claims of the ’674 Patent Add No Meaningful
`Limitations to the Abstract Idea Claimed.................................14
`
`The ’674 Patent Claims Fail to Pass the Machine-or-
`Transformation Test of Patent Eligibility .................................17
`
`B.
`
`[Ground 2] Claims 2, 5, 15-18, 20, 25 and 40 are Anticipated
`under 35 U.S.C. § 102 by U.S. Patent Pub. No. 2002/0035520
`to Allan N. Weiss (“Weiss”) ...............................................................19
`
`-i-
`
`

`

`C.
`
`D.
`
`E.
`
`F.
`
`G.
`
`[Ground 3] Claims 2, 5, 15-18, 25 and 40 are Anticipated
`under 35 U.S.C. § 102 by U.S. Patent 7,130,810 to Paul Foster
`et al. (“Foster”)....................................................................................32
`
`[Ground 4] Claims 19-24 are Obvious under 35 U.S.C. § 103
`over Weiss or Foster in View of U.S. Patent 7,120,599 to Tim
`Kerry Keyes (“Keyes”) and Charles A. Calhoun, Property
`Valuation Methods and Data in the United States, Housing
`Finance International Journal 16.2 (2001) (“Calhoun”) .....................46
`
`[Ground 5] Claims 2, 5 and 15-18 are Anticipated under 35
`U.S.C. § 102 by U.S. Patent 7,219,078 to Ian G. Lamont et al.
`(“Lamont”) ..........................................................................................55
`
`[Ground 6] Claims 2, 5, 15-18, 20, 25 and 40 are Obvious
`under 35 U.S.C. § 103 over Lamont in View of Foster ......................69
`
`[Ground 7] Claims 19 and 21-24 are Obvious under 35 U.S.C.
`§ 103 over Lamont in View of Foster, Keyes and Calhoun................74
`
`VI. CONCLUSION..............................................................................................80
`
`VII. MANDATORY NOTICES UNDER 37 C.F.R. § 42.8.................................81
`
`VIII. PAYMENT OF FEES UNDER 37 C.F.R. §§ 42.15(b) ................................82
`
`-ii-
`
`

`

`I.
`
`INTRODUCTION
`
`Pursuant to the provisions of 35 U.S.C. § 321, Section 18 of the Leahy-
`
`Smith America Invents Act (“AIA”), and 37 C.F.R. § 42.300 et seq., the
`
`undersigned Petitioner respectfully requests review of United States Patent No.
`
`7,970,674 to Cheng et al. (“the ’674 patent,” attached as Ex. 1001), issued on June
`
`28, 2011 and currently assigned to Zillow, Inc. (“Patent Owner”). Through this
`
`Petition, Petitioner demonstrates that, by a preponderance of the evidence, it is
`
`more likely than not that claims 2, 5, 15-25 and 40 of the ’674 patent are
`
`unpatentable under 35 U.S.C. § 101, as well as over prior art. Claims 2, 5, 15-25
`
`and 40 of the ’674 patent should be found unpatentable and canceled.
`
`A.
`
`Overview of the ’674 Patent
`
`Application No. 11/374,024 was filed on February 3, 2006 and issued on
`
`June 28, 2011 as the ’674 patent. The ’674 patent is entitled “Automatically
`
`Determining a Current Value For a Real Estate Property, Such as a Home, That is
`
`Tailored to Input From a Human User, Such as its Owner.”
`
`The ’674 patent claims fail to limit the claimed subject matter beyond an
`
`abstract notion of a real estate valuation model (e.g., an automated valuation model
`
`or “AVM”) amenable to user input. See, e.g., Ex. 1001. Claim 15 is illustrative:
`
`A method in a computing system for refining an automatic valuation
`of a distinguished home based upon input from a user knowledgeable
`about the distinguished home, comprising:
`
`1
`
`

`

`obtaining user input adjusting at least one aspect of information about
`the distinguished home used in the automatic valuation of the
`distinguished home;
`automatically determining a refined valuation of the distinguished
`home that is based on the adjustment of the obtained user input; and
`presenting the refined valuation of the distinguished home.
`Even when viewed in the light most favorable to the Patent Owner, in
`
`general terms, the ’674 patent claims are broadly directed to the generation of a
`
`refined real estate valuation based on input from a user (e.g., any user
`
`knowledgeable about the subject property). The ’674 patent claims further recite
`
`certain aspects of well-known statistical methodologies (e.g., classification trees,
`
`regression analysis, etc.). See, e.g., Ex. 1001 at claims 5, 18-25 and 40.
`
`As explained in detail in the corresponding Declaration of Steven R. Kursh,
`
`Ph.D., CSDP, CLP (attached as Ex. 1002), and addressed in further detail below,
`
`the claims of the ’674 patent would not have been considered new or non-obvious
`
`to a person of ordinary skill in the art at the time of filing. A number of prior art
`
`references are discussed below that either anticipate or render obvious each of the
`
`challenged claims of the ’674 patent.
`
`B.
`
`Brief Overview of the Prosecution History
`
`The USPTO allowed the ’674 patent based on the Patent Owner’s arguments
`
`that the cited references U.S. Patent No. 6,609,118 to Kredkar et al. and U.S.
`
`2
`
`

`

`Publication No. 2005/0154657 to Kim et al. allegedly did not disclose “applying a
`
`valuation model to attributes of a subject home as updated in accordance with input
`
`from the home’s owner to obtain a valuation for the subject home.” Ex. 1004 at
`
`0077 (Response After Final Action, dated Mar. 4, 2011, at 15) (emphasis in
`
`original).
`
`The ’674 patent is also currently the subject of inter partes review IPR2013-
`
`00034. During this inter partes review, and using arguments similar to those
`
`advanced during ex parte prosecution, the Patent Owner attempted to distinguish
`
`the ’674 patent claims from the cited prior art based on the identity of the user of
`
`the claimed software/computer methods, rather than advancing any meaningful
`
`distinction vis-à-vis the cited prior art.
`
`As explained in further detail below, under the applicable broadest
`
`reasonable interpretation claim construction standard, such an attempted distinction
`
`based on user identity is based merely on hollow claim language and is
`
`inconsequential for several reasons. First, with regard to the claims directed to
`
`computer readable media (e.g., ’674 patent claims 2 and 5), the identity of one
`
`particular user who may or may not use the software is of little, if any, significance
`
`in describing the software itself. Second, many of the ’674 patent claims (e.g.,
`
`claims 15-25 and 40) do not identify the user as a homeowner, but instead recite in
`
`the claim preamble a “user” who is merely “knowledgeable” about the home, while
`
`3
`
`

`

`more broadly reciting “obtaining user input” in the body of the claims. The term
`
`“user” is broadly defined in the ’674 patent specification.
`
`It is also noteworthy that neither unpatentability of the ’674 patent claims
`
`under 35 U.S.C. §101, nor unpatentability in view of the currently cited prior art
`
`references, was raised in IPR2013-00034 or previously considered by the Board.
`
`II. GROUNDS FOR STANDING
`
`As set forth in this Petition and explained in further detail below, Petitioner
`
`demonstrates that, under 37 C.F.R. § 42.304(a), the ’674 patent is a covered
`
`business method patent. Additionally, Petitioner is eligible to file this Petition
`
`under 35 U.S.C. § 42.302(a) and (b).
`
`A.
`
`Claims 2, 5, 15-25 and 40 of the ’674 Patent are Directed to a
`Covered Business Method Patent that is not a “Technological
`Invention”
`
`The ’674 patent is a “covered business method patent” as defined under § 18
`
`of the AIA and 37 C.F.R. § 42.301. Section 18(d)(1) of the AIA provides:
`
`For purposes of this section, the term “covered business method
`patent” means a patent that claims a method or corresponding
`apparatus for performing data processing or other operations used in
`the practice, administration, or management of a financial product or
`service.
`The above language is similarly recited in 37 C.F.R. § 42.301(a).
`
`Furthermore, as supported by the legislative history, the USPTO has indicated that
`
`4
`
`

`

`the term “covered business method patent” is broadly interpreted and encompasses
`
`patents claiming activities that are financial in nature, incidental to a financial
`
`activity or complementary to a financial activity. See Fed. Reg. Vol. 77, No. 157
`
`at 48734-35; see also SAP Am., Inc. v. Versata Dev. Grp., Inc., No. CBM2012-
`
`00001, Decision to Institute (Paper No. 36) at 23 (P.T.A.B. Jan. 9, 2013).
`
`Here, the ’674 patent plainly qualifies as a “covered business method
`
`patent.” While not dispositive, the patent’s claimed systems and methods are
`
`classified in Class 705. According to the USPTO, “patents subject to covered
`
`business method patent review are anticipated to be typically classifiable in Class
`
`705.” Fed. Reg. Vol. 77, No. 157 at 48739. Moreover, the ’674 patent claims
`
`systems, devices and methods that are used in the practice, administration or
`
`management of a financial product or service, including activities that are financial
`
`in nature, incidental to a financial activity or complementary to a financial activity.
`
`Real estate valuation is, by definition, financial in nature. See, e.g.,
`
`Interthinx, Inc. v. CoreLogic Solutions, LLC, CBM2012-00007, Decision to
`
`Institute (Paper No. 16) (P.T.A.B. Jan. 31, 2013) (finding that real estate appraisal
`
`or valuation is appropriate for Covered Business Method Review, and not a
`
`problem that is per se technical in nature). The ’674 patent claims themselves,
`
`directly or by virtue of their dependency, recite aspects of property valuation (e.g.,
`
`“a method for procuring information about the distinguished property used in the
`
`5
`
`

`

`automatic valuation of the distinguished property” (claim 2) and “a method in a
`
`computing system for refining an automatic valuation of a distinguished home”
`
`(claim 15)). The specification is replete with references to the construction of real
`
`estate valuations based on comparable sales, determining and using selling prices,
`
`and the like. See, e.g., ’674 patent (Ex. 1001) at title (“Automatically Determining
`
`a Current Value for a Real Estate Property . . .”); 1:16-18 (“[I]t can be useful to be
`
`able to accurately determine the value of real estate properties.”); 3:23 (section
`
`titled “Home Valuation”). Such real estate-related activities are fundamentally
`
`financial in nature – i.e., setting and/or determining, by the methods allegedly
`
`described, the estimated transaction price of a given piece of property based on
`
`qualities and valuations attributable to that property and those around it.
`
`Moreover, it is well known that real estate valuation is, at a minimum, incidental to
`
`and/or complementary to a variety of financial products and services, such as home
`
`lending and financing, mortgages, mortgage-based securities, and the like.
`
`Furthermore, none of the claims of the ’674 patent are directed to a
`
`“technological invention” as defined under AIA § 18(d)(2) and 37 C.F.R. §
`
`42.301(b). Section 301(b) provides for determination “whether the claimed subject
`
`matter as a whole recites a technological feature that is novel and unobvious over
`
`the prior art; and solves a technical problem using a technical solution.”
`
`6
`
`

`

`To help the public understand how the rule is applied in practice, the Office
`
`provides the following guidance regarding claim drafting techniques that would
`
`not typically render a patent claim a technological invention under 37 C.F.R.
`
`42.301(b):
`
`(a) Mere recitation of known technologies, such as computer
`hardware, communication or computer networks, software, memory,
`computer readable storage medium, scanners, display devices or
`databases, or specialized machines, such as an ATM or point of sale
`device.
`(b) Reciting the use of known prior art technology to accomplish a
`process or method, even if that process or method is novel and non-
`obvious.
`(c) Combining prior art structures to achieve the normal, expected, or
`predictable result of that combination.
`Fed. Reg. Vol. 77, No. 157, at 48763-48764.
`
`Here, the claims fail to recite a technological feature, let alone one that is
`
`novel and nonobvious over the prior art, and do not solve a technical problem
`
`using a technical solution. Instead, the claims generically recite known
`
`technologies such as a “computing system” and a “computer readable medium.”
`
`See, e.g., ’674 patent (Ex. 1001) at claims 2 and 15. In fact, the ’674 patent does
`
`not identify any technologies beyond generic computer components (e.g., “CPUs,”
`
`“hard drive,” “CD-ROM drive,” “Internet,” etc.) as being relevant to the claimed
`
`7
`
`

`

`computer readable medium and/or methods. See id. at 4:25-46; Fig. 1 (showing
`
`generic CPU, memory, persistent storage, computer-readable media drive, and
`
`network connection components of a computer system). None of these claim
`
`limitations, taken alone or in combination, rises to the level of a technological
`
`feature, let alone a novel and unobvious technical feature; “no specific,
`
`unconventional software, computer equipment, tools or processing capabilities are
`
`required.” SAP, CBM2012-00001, Decision to Institute at 28.
`
`Accordingly, Covered Business Method Patent Review is appropriate for the
`
`’674 patent.
`
`B.
`
`Petitioner has Been Sued for Infringement of the ’674 Patent and
`is Not Estopped
`
`In September 2012, Zillow sued Petitioner for infringement of the ’674
`
`patent, Zillow, Inc. v. Trulia, Inc., No. 2:12-cv-01549-JLR (W.D. Wash.) (attached
`
`as Ex. 1012), and thus Petitioner meets the requirements of AIA § 18(a)(1)(B) and
`
`37 C.F.R. § 42.302. The Petitioner is not estopped from challenging the claims of
`
`the ’674 patent on the grounds identified in the petition, per 37 C.F.R. § 42.302(b).
`
`III.
`
`STATEMENT OF THE PRECISE RELIEF REQUESTED FOR EACH
`CLAIM CHALLENGED
`
`Petitioner requests review of claims 2, 5, 15-25 and 40 of the ’674 patent
`
`under 35 U.S.C. § 321 and AIA § 18. The grounds of challenge Petitioner
`
`8
`
`

`

`advances are that each of claims 2, 5, 15-25 and 40 of the ’674 patent be canceled
`
`as invalid and unpatentable as follows:
`
`Ground
`1
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`Description
`Claims
`2, 5, 15-25 & 40 Invalid as patent-ineligible under 35 U.S.C. § 101
`2, 5, 15-18, 20,
`Anticipated under 35 U.S.C. § 102 by U.S. Patent
`25 & 40
`Pub. No. 2002/0035520 to Weiss (“Weiss”)
`2, 5, 15-18, 25
`Anticipated under 35 U.S.C. § 102 by U.S. Patent
`& 40
`7,130,810 to Foster et al. (“Foster”)
`19-24
`Obvious under 35 U.S.C. § 103 over Weiss or Foster
`in view of U.S. Patent 7,120,599 to Keyes (“Keyes”)
`and Charles A. Calhoun, Property Valuation Methods
`and Data in the United States, Housing Finance
`International Journal 16.2 (2001) (“Calhoun”)
`Anticipated under 35 U.S.C. § 102 by U.S. Patent
`7,219,078 to Lamont et al. (“Lamont”)
`Obvious under 35 U.S.C. § 103 over Lamont in view
`of Foster
`Obvious under 35 U.S.C. § 103 over Lamont in view
`of Foster, Keyes and Calhoun
`
`2, 5, 15-18, 20,
`25 & 40
`19, 21-24
`
`2, 5, 15-18
`
`IV. CLAIM CONSTRUCTION
`
`A claim subject to covered business method patent review receives the
`
`“broadest reasonable construction in light of the specification of the patent in
`
`which it appears.” 37 C.F.R. § 42.300(b). Claim terms are given their ordinary
`
`and customary meaning as would be understood by one of ordinary skill in the art.
`
`Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed. Cir. 2005) (en banc). Here,
`
`the claim terms of the ’674 patent should be given their plain and ordinary
`
`meaning, and a few terms that warrant explanation are discussed.
`
`9
`
`

`

`Computer Readable Medium for Storing Contents: Claim 2 is directed
`
`to a “computer readable medium for storing contents” (emphasis added). While
`
`the computer-readable medium is defined in claim 2 as being capable of storing
`
`contents that cause a computing system to perform the recited method steps, claim
`
`2 does not expressly require storage of the recited contents. Claim 2 does not
`
`positively recite said contents as per se being physical components of the claimed
`
`computer-readable medium. See Ex. 1002 at ¶36.
`
`This defect in claim 2 (and dependent claim 5) is relevant to the discussion
`
`of non-statutory subject matter (see below). For purposes of prior art analysis,
`
`however, the computer-readable medium of claims 2 and 5 are addressed as
`
`having, actually and physically stored thereon, the contents that cause a computer
`
`system to perform the recited method steps. See Ex. 1002 at ¶37.
`
`Owner: Claim 2 recites the term “owner” with respect to a property (e.g.,
`
`“obtaining user input from the owner”). As noted, claim 2 is directed to a
`
`“computer readable medium for storing contents” (e.g., software), that causes a
`
`computing system to perform certain method steps, including obtaining user input.
`
`Under the broadest reasonable interpretation, the claim terms relating to the
`
`identity of the user of a computing system fail to impart any meaningful structure
`
`to the computer readable medium of claim 2 or dependent claim 5. Nothing in the
`
`’674 patent claims or specification identifies a computer-readable medium, or
`
`10
`
`

`

`software, usable to refine an automatic valuation of a property, that has some
`
`different structure when a user addressing the software is an owner of the home
`
`compared to when the user has a different identity. In fact, the ’674 patent
`
`indicates that, with respect to a “software facility” of the ’674 patent, “a wide
`
`variety of users may use the facility, including the owner, an agent or other person
`
`representing the owner, a prospective buyer, an agent or other person representing
`
`prospective buyer, or another third party.” Ex. 1001 at 2:64-67. Additionally, the
`
`’674 patent uses the terms “seller” and “owner” interchangeably. See, e.g., id. at
`
`1:21-22; 2:65-66; 4:6-7; see Ex. 1002 at ¶38-39.
`
`User knowledgeable about the distinguished home: The preamble of
`
`claim 15 recites “a user knowledgeable about the distinguished home,” but the
`
`term is recited nowhere else in the claim. Claim 15 does recite a step including
`
`“obtaining user input adjusting,” but does not limit said “user input” to that
`
`obtained only from “a user knowledgeable about the distinguished home.”
`
`The “user input” recited in claim 15 may be obtained from any user. As
`
`noted above, the term “user” is broadly defined in the ’674 patent. See, e.g., Ex.
`
`1001 at 2:64-67 (“a wide variety of users may use the facility, including the owner,
`
`an agent or other person representing the owner, a prospective buyer, an agent or
`
`other person representing prospective buyer, or another third party.”) Accordingly,
`
`under the broadest reasonable interpretation, a “user knowledgeable about the
`
`11
`
`

`

`distinguished home” is a preamble term that imparts no weight. The recited “user
`
`input” includes input from any user, and may broadly include input from an owner,
`
`agent or other person representing the owner, a prospective buyer, an agent or
`
`other person representing a prospective buyer, or another third party. See Ex. 1002
`
`at ¶40-41.
`
`V.
`
`DETAILED EXPLANATION OF GROUNDS FOR
`UNPATENTABILITY
`
`A.
`
`[Ground 1] Claims 2, 5, 15-25 and 40 of the ’674 Patent are
`Invalid Under 35 U.S.C. § 101, as Being Directed to Non-Statutory
`Subject Matter
`
`While the Supreme Court has made clear there is no bright-line test for
`
`patent eligibility under 35 U.S.C. § 101 (“Section 101”), it is clear that abstract
`
`ideas are not eligible for patent protection. See, e.g., Bilski v. Kappos, 130 S.Ct.
`
`3218 (2010); Bancorp Servs. L.L.C. v. Sun Life Assurance Co. of Canada, 687 F.3d
`
`1266 (Fed. Cir. 2012); CLS Bank Int’l v. Alice Corp. Pty, 717 F.3d 1269 (Fed. Cir.
`
`May 10, 2013) (en banc). A claim must incorporate enough meaningful
`
`limitations to ensure that it claims more than just an abstract idea and not just a
`
`mere “drafting effort designed to monopolize [an abstract idea] itself.” See Mayo v.
`
`Prometheus, 132 S.Ct. 1289 (2012). Claims that recite a business method on a
`
`computer and do no more than merely recite the use of the computer for its
`
`ordinary function of performing repetitive calculations are not patent eligible. See
`
`12
`
`

`

`Bancorp, 687 F.3d at 1278-79. See also SAP, CBM2012-00001, Decision to
`
`Institute at 29.
`
`None of claims 2, 5, 15-25 or 40 of the ’674 patent limits the claimed subject
`
`matter beyond an abstract notion of obtaining user input and real estate valuation.
`
`See, e.g., Ex. 1001.
`
`i.
`
`The Claims of the ’674 Patent are Directed to an Abstract Idea
`
`As discussed in the recent CLS Bank en banc decision, the determination of
`
`patent eligibility begins with “identifying the abstract idea represented in the
`
`claim.” CLS Bank, 717 F.3d at 1286. Judge Lourie’s framework in CLS Bank
`
`assesses whether a claim “pose[s] any risk of preempting an abstract idea,” id. at
`
`1282; see also Accenture Global Svcs. GmbH v. Guidewire Software, Inc., No.
`
`2011-1486, slip op. at 8 (Fed. Cir. Sep. 5, 2013), while Chief Judge Rader assesses
`
`“whether the claim seeks to patent an idea itself, rather than an application of that
`
`idea . . . [i]t is not the breadth or narrowness of the abstract idea that is relevant,
`
`but whether the claim covers every practical application of that abstract idea.” Id.
`
`at 1300.
`
`Here, the ’674 patent claims are directed to the abstract idea of obtaining
`
`user input for determining a refined valuation of a property. The claim as drafted
`
`would allow the Patent Owner to preempt all use of this abstract idea, i.e., the use
`
`13
`
`

`

`of property information from a user to refine automatic valuations, rather than
`
`merely any practical application of the idea.
`
`ii.
`
`The Claims of the ’674 Patent Add No Meaningful Limitations
`to the Abstract Idea Claimed
`
`The law is well settled that adding insignificant pre- or post-solution activity
`
`to an abstract idea does not make the claim any less abstract. See, e.g., Diamond v.
`
`Diehr, 450 U.S. 175, 191-92 (1981). Moreover, limitations that merely represent a
`
`human contribution; are tangential, routine, well-understood, or conventional; or in
`
`practice fail to narrow the claim cannot confer patent eligibility. See id. “[S]imply
`
`appending generic computer functionality to lend speed or efficiency to the
`
`performance of an otherwise abstract concept does not meaningfully limit claim
`
`scope for purposes of patent eligibility.” CLS Bank, 717 F.3d at 1286; see also
`
`Accenture, No. 2011-1486, slip op. at 16.
`
`The ’674 patent claims contains nothing more than the types of hollow and
`
`inconsequential limitations that the Federal Circuit has held are insufficient to
`
`render a claim patent-eligible. Even when viewed in the light most favorable to
`
`the patent owner, the claims of ’674 patent fail to add sufficiently meaningful
`
`limitations so as to restrict the claimed subject matter beyond an abstract idea.
`
`Instead, the ’674 patent claims merely add vague, insignificant, conventional, or
`
`routine limitations to the abstract concept of procuring information about a
`
`14
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`property from a user, whether the user is an owner, knowledgeable person, or some
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`other third party, that is used in determining a refined valuation of the property.
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`Turning first to independent claim 2, that claim appears to be the product of
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`a failed attempt at drafting a Beauregard-type claim. Instead of reciting
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`conventional Beauregard-type claim language (i.e., instructions fixed in (and
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`embodied by) a computer readable medium), claim 2 is directed to “[a] computer
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`readable medium for storing contents.” Broadly construed, claim 2 could
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`encompass any computer readable medium (e.g., hard disk drive, solid state drive,
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`optical media such as a DVD, etc.) which may or may not actually store contents
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`that cause a computing system to perform the recited method steps, as long as the
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`computer readable medium is capable of such storage. Claim 5 only adds further
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`language relevant to the method steps in claim 2, and fails to address the patent-
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`eligibility shortcomings of claim 2 as described above.
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`Even if the method steps of claim 2 were required to be fixed in the
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`computer readable medium, claim 2 would still be patent ineligible because the
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`method limitations are mere pre-or post-processing steps inherent in the abstract
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`idea and add nothing meaningful to the claims. Specifically, the “obtaining” step
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`is a pre-processing step that does not confer patent eligibility because prerequisite
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`collection of data has been expressly found not to confer patent-eligibility. See
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`CLS Bank, 717 F.3d at 1312. In addition, the “displaying” step only adds
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`15
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`meaningless post-solution activity and does not practically limit the abstract idea
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`claimed.
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`Claim 15, directed to substantially the same underlying steps as claim 2, also
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`fails to add any significant limitations. Claim 15 executes the recited method in “a
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`computing system,” and involves “obtaining user input,” “automatically
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`determining a refined valuation,” and “presenting the refined valuation.” Ex. 1001
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`at 21:49-59. These elements are nothing more than generic computing elements
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`incidental to the claimed method (i.e., input, a mathematical calculation, and
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`display).
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`Furthermore, none of the claims dependent from claims 2 or 15 do anything
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`to contribute significant or material limitations to the abstract idea, nor do any of
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`the dependent claims tie to any specific computer the abstract idea of procuring
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`information about a distinguished property from its owner that is usable to refine
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`an automatic valuation of the distinguished property. For example, claim 5
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`meaninglessly adds that “adjustment” includes “altering”; claims 16 and 17
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`insignificantly define “presenting” as “displaying”; claims 18-25 add “a
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`geographically-specific home valuation model” using various statistical models or
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`mathematical formulae well-known in the real estate valuation art, none of which
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`render the claim statutorily patent-eligible (see, e.g., Parker v. Flook, 436 U.S.
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`584, 594-95 (1978) (“if a claim is directed essentially to a method of calculating,
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`using a mathematical formula, even if the solution is for a specific purpose, the
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`claimed method is nonstatutory”)); and claim 40 allows for additional user input
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`(“adding a description of an improvement to the distinguished home”) that is
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`detected but never considered in determining the refined valuation.
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`iii.
`
`The ’674 Patent Claims Fail to Pass the Machine-or-
`Transformation Test of Patent Eligibility
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`While not dispositive, the ’674 patent claims fail to satisfy the machine-or-
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`transformation test by failing to recite subject matter that: (1) is tied to a particular
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`machine or apparatus, or (2) transforms a particular article into a different state or
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`thing. See Bilski, 130 S. Ct. at 3224. As recently noted in Buysafe, Inc. v. Google
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`Inc., 1:11-cv-01282-LPS, Memorandum Opinion at 4 (D. Del. July 29, 2013), “a
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`machine will only impose a meaningful limit on the scope of a claim [when it
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`plays] a significant part in permitting the claimed method to be performed, rather
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`than function solely as an obvious mechanism for permitting a solution to be
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`achieved more quickly, i.e., through the utilization of a computer for performing
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`calculations . . . A computer is not a significant part the process [sic] if that process
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`can be performed without a computer.” Id. (internal quotation marks omitted)
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`(citing CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir.
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`2011); SiRF Tech., Inc. v. ITC, 601 F.3d 1319, 1333 (Fed. Cir. 2010)).
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`Furthermore, recitation of computer hardware elements cannot “salvage an
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`otherwise patent-ineligible process” under Section 101 where the computer merely
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`performs its base function of “permitting a solution to be achieved more quickly.”
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`Bancorp, 687 F.3d at 1278 (holding that claims directed at computer including
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`“digital storage” did not claim any patentable invention) (quotes and citations
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`omitted).
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`Here, the methods claimed in the ’674 patent fail to identify a specific
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`machine. In fact, the ’674 patent specification confirms that no specific machine is
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`required. The ’674 patent claims also fail to transform a physical object or
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`substance, or something representing a physical object or substance, into a
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`different state or thing. “The mere manipulation or reorganization of data,
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`however, does not satisfy the transformation prong.” CyberSource, 654 F.3d at
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`1375. Manipulation of information is precisely what is claimed, and thus, the ’674
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`patent claims do not effect a transformation.
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`Furthermore, the ’674 patent claims are largely directed to known appraisal
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`methodologies and techniques that were historically performed using pen and
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`paper. U.S. Patent Pub. No. 2002/0035520 to Weiss (discussed in further detail
`
`below) provides objective evidence of this fact, reciting that:
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`[A]utomated real estate valuation engines may be used to generate
`real estate appraisals or property valuations, whether via a Web site or
`other system. Such valuation engines typically generate property
`valuations based on property characteristics, prior sales of the subject
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`property, location, and recent sales of nearby properties. These are
`typically systems that provide an automated alternative to the pen
`and paper methods traditionally used.
`Ex. 1005 at [0019] (emphasis added); see also Ex. 1002 at ¶26.
`
`Accordingly, the ’674 patent claims, while reciting computer components
`
`and related aspects, fail to recite any computer aspects or digital processing that
`
`provide meaningful limitation to the claimed subject matter. At best, the ’674
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`patent claims recite real estate valuation that, when compared to a manual method,
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`is only performed more rapidly using a generic computer or software based system.
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`B.
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`[Ground 2] Claims 2, 5, 15-18, 20, 25 and 40 are Anticipated
`under 35 U.S.C. § 102 by U.S. Patent Pub. No. 2002/0035520 to
`Allan N. Weiss (“Weiss”)
`
`U.S. Patent Pub. No. 2002/0035520 to Allan N. Weiss (“Weiss,” attached as
`
`Ex. 1005), entitled “Property Rating and Ranking System and Method,” was filed
`
`on July 31, 2001 and published on March 21, 2002. Weiss qualifies as prior art for
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`this proceeding and teaches each and every feature of claims 2, 5, 15-18, 20, 25
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`and 40 of the ’674 patent, thereby anticipating said claims. See Ex. 1002 at ¶ 42.
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`Weiss is directed to and discloses a system comprehensively on point to the
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`claims of the ’674 patent, including a core property valuation system and
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`functional modules, adjustment of property attributes and recalculation of
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`valuation. See, e.g., Weiss (Ex. 1005) at Abstract; [0081]; [0052]; Fig 1A (shown
`
`below); see also Ex. 1002 at ¶43.
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`Valuation in Weiss can include core property valuation as well as functional
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`modules of the system, including, e.g., a property rating and ranking system (SPR).
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`In particular, Weiss describes “a seller-based property rating