UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Paper No. 10
`Filed: December 18, 2013
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TRULIA, INC.
`Petitioner,
`
`V.
`
`Patent of ZILLOW, INC.
`Patent Owner.
`
`Case CBM2013-00056
`
`Patent No. 7,970,674
`
`PRELIMINARY PATENT OWNER RESPONSE
`
`5692043902.USOO/LEGAL28681238.I
`
`_
`
`

`

`TABLE OF CONTENTS
`
`I.
`
`INTRODUCTION ........................................................................................... 1
`
`II.
`
`BACKGROUND ......................................................................... ‘.................... 4
`
`III.
`
`CLAIM CONSTRUCTION ....................
`
`.................... 5
`
`V
`
`A. "computer-readable medium for storing contents that causes a
`computing system to perform" .................................. 6
`
`B. "owner" ............................................................._...................
`
`................. 8
`
`C. "user knowledgeable about the distinguished home" ................................. 9
`
`IV.
`
`THE '674 PATENT IS NOT ELIGIBLE FOR COVERED
`
`BUSINESS METHOD PATENT REVIEW ................................................. 11
`
`A. Each Claim of the '674 Patent Recites a Technological Feature .............. 12
`
`B. The Recited Technological Features are Novel and Unobvious .............. 16
`
`C. Each Claim of the '674 Patent Solves a Technical Problem Using a
`Technical Solution .................................................................................... 17
`
`D. The '674 Patent Does not Claim 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 ..................................................................... 20
`
`V.
`
`THE PETITIONER FAILS TO SHOW A REASONABLE
`LIKELIHOOD THAT THE CLAIMS OF THE '674 PATENT ARE
`
`UNPATENTABLE ........................................................................................ 22
`
`VI. GROUND l: 35 U.S.C. § 101 ....................................................................... 23
`
`A. The Petitioner Fails to Establish that the Claims of the '674 Patent
`
`are Directed to Patent—Ineligible Subject Matter ...................................... 26
`
`1. Claims 2 and 5 ............................................................................................. 27
`
`2. Claims 15-25 and 40 ..............................................i......................................3 1
`
`3. Machine-or-Transformation Test ................................................................. 34
`
`4. Petitioner's "Preemption" Argument Is Undercut by Its Own
`Noninfringement Contentions ..................................................................... 36
`
`56920-8902.USOO/LEGAL2868 ] 238.]
`
`l
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`

`

`VII. GROUNDS UNDER 35 U.S.C. §§ 102 AND‘103 ........................................37
`
`A. Legal Standard for Anticipation .......................... 37
`B. Legal Standard for Obviousness ...............................................................38
`
`C. Ground 2:Weiss ...... 39
`
`1. Claims 2 and 5 ............................................................................................. 39
`
`2. Claims 15-18,. 20, 25, and 40 ........................................................................ 45
`
`3. Claims 16 and 17 .........................................................................................46
`
`D. Ground 3: Foster......................................................................................47
`
`1. Claims 2 and 5 .............................................................................................48
`
`2. Claims 15—18, 25, and 40 ...................................................... .......................49
`
`3. Claim 16 ....................................................................................................... 52
`
`4. Claim 17 ..........................................................................I.....................'........ 53
`
`5. Clalm25 ........ 58
`
`E. Ground 4: Weiss, Keyes, and Calhoun or Foster, Keyes, and
`
`Calhoun ..................................................................................................... 60
`
`F. Ground 5: Lamont ................................................................................... 60
`1. Claims 2 am 5 ............................_.................................................................61
`
`. 2. Claims 15-18 ......................p.........................l.................................................66
`
`G. Ground 6: Lamont and Foster .......
`
`.......................................... 7O
`
`1'. Claims 2 and 5 ............................................................................................... 70
`
`2. Claims 15-18, 20, 25, and40 ..................... 72
`
`3. The Petitioner Does Not Establish a Prima Facz’e Case that it is proper to
`combine Lamont and Foster ........................................................................ 73
`
`H. Ground 7: Lamont, Foster, Keyes, and Calhoun ..................................... 75
`1. The Petitioner Does Not Establish a Prima Facze Case that it is proper to
`combine Lamont, Foster, Keyes and Calhoun ............................................. 75
`
`VIII. CONCLUSION ................................................................,.............................. 77
`
`56920—890211500/LEGAL28681238.l
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`-ii—
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`

`

`Cases
`
`TABLE 'OF AUTHORITIES
`
`Advanced Fiber Techs. Trust v. J&L Fiber Servs, Inc., 674 F.3d 1365 (Fed.
`
`Cir. 2012)
`
`Atlas Powder Co.
`
`v. E]. duPont De Nemours, 750 F.2d 1569 (Fed.
`
`Cir. 1984)
`
`.
`
`Bilski v. Kappos, 130 S. Ct. 3218 (2010)
`I CLS Bank Int’l. v. Alice Corp. Ply, 717 F.3d 1269 (Fed. Cir. 2013)
`
`Computer Docking Station Corp. v. Dell, Inc, 519 F.3d 1366 (Fed. Cir.
`
`2008)
`
`Diamond 9. Chakrabarly, 447 U.S. 303 (1980)
`
`Diamond v. Diehr , 450 U.S. 175 (1981)
`
`Glaverbel Socie'té Anonyme v. Northlake Mktg. & Supply, Inc., 45 F.3d 1550
`
`(Fed. Cir. 1995)
`
`Gottschalk v. Benson, 409 U.S. 63 (1972)
`
`Graham et al. v John Deere Co., 383 U.S. 1 (1966)
`
`Grober v. Mako Prods, Inc, 686 F.3d 1335 (Fed. Cir. 2012)
`In re Kahn, 441 F.3d 977 (Fed. Cir. 2006)
`I
`
`In re Rijckaert, 9 F.3d 1531, 28 U.S.P.Q.2d (BNA) 1955 (Fed. Cir. 1993)
`
`Krippelz v. Ford Motor Co., 667 F.3d 1261 (Fed. Cir. 2012)
`
`KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007)
`
`Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314 (Fed. Cir. 2003)
`
`O’Reilly v. Morse, 56 U.S. 62 (1853)
`
`_
`Parker v. Flook, 436 U.S. 584 (1978) ~
`Research Corp. Techs,
`Inc.
`v. Microsoft Corp, 627 F.3d 859 (Fed.
`
`Cir. 2010)
`
`56920-8902.USOO/LEGAL2868l238.1
`
`iii
`
`

`

`Ullramercial, Inc. v. Hulu, LLC, 2010—1544 (Fed. Cir. 2013)
`
`Ex parte Levy, 17 U.S.P.Q.2d 1461 (Bd. Pat. App. & Interf. 1990)
`Statutes
`
`35 U.S.C. § 101
`
`Leahy—Smith America Invents Act, Section 18(d)(1) (2011)
`
`Rules
`
`I
`
`37 C.F.R. § 4220(0)
`
`_ 37 C.F.R. § 42.208(c)
`
`37 C.F.R. § 42.300(b)
`
`. 37 C.F.R. § 42.301
`
`37 C.F.R. § 42.304(a)
`
`Other Authorities
`
`.
`
`157 Cong. Rec. 85432 (Sept. 8 2011) (statement of Sen. Schumer)
`
`Ex parte Levengood, 28 USPQ2d 1300 (Ed. Pat. App. & Inter. 1993)
`
`Federal Register, Vol. 77, No. 157, 48756
`
`Interthz'nx, Inc. v. CoreLogic Solutions, LLC, CBM2012—00007, Decision to
`Institute (Paper No. 16) Page 17 (P.T.A.B. Jan. 31, 2013)
`
`MPEP § 2143.01(IV)
`
`_
`
`SAP America, Inc. v. Versata Development Group, Inc., CBM2012—00001,
`
`Decision:
`
`Institution of Covered Business Method Review (Paper No.36)
`
`(P.T.A.B. Jan. 9, 2013)
`
`56920-8902.USOO/LEGAL28681238.l
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`‘1V-
`
`

`

`ZILLOW 2001 ‘
`
`LIST OF EXHIBITS
`
`Jeffrey M. O’Brien, What’s your house really worth?, Fortune,
`Feb.
`19, ' 2007, at 56, available at. http://money.cnn.com/
`
`magazines/fortune/fortune_archive/2007/02/1 9/8400262/index.
`
`htm
`
`ZILLOW 2002
`
`Timothy J. Mullaney, A New Home Site on the Block,
`
`BusinessWeek, Feb. 7, 2006, http://www.businessweek.com/
`
`stories/2006-02—07/a-new-honie—site—on—the-block
`
`ZILLOW 2003
`
`Rick Aristotle Munarriz, Pop Goes the Bubble, Feb. 14, 2006,
`
`http ://www.fool.com/investing/small-cap/2006/02/ l 4/pop-goes—
`
`the-bubbleaspx
`
`ZILLOW 2004
`
`Final Office Action, February 2, 2011
`
`. ZILLOW 2005
`
`Response to Final Office Action, March 4, 2011
`
`ZILLOW 2006
`
`MicroStrategy, Inc. v. ZillOw, Ina, IPR2013-00034, Preliminary
`
`Patent Owner Response (Paper No. 16) (February 15, 2013)
`
`ZILLOW 2007
`
`MicroSz‘rategy,
`
`Inc. v. Zillow, Inc,
`
`IPR2013-00034, Patent
`
`Owner Response (Paper No. 24) (June 14, 2013)
`
`ZILLOW 2008
`
`January 16, 2013 archive of ”Trulia Estimates" webpage
`
`(http://www.trulia.com/trulia_estirnates/),
`
`56920-8902.USOO/LEGAL28681238.1
`
`'V
`
`

`

`https://Web.archive.0rg/web/201301 16041616/http://www.trulia
`
`.Com/trulia_estimates/ (January 16, 2013)
`
`ZILLOW 2009
`
`Petitioner's Answer to Complaint for Patent Infringement and
`
`Counterclaim, March 1, 2013
`
`56920-8902.USOO/LEGAL2868 1 23811
`
`~V1-
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`

`

`Trulia, Inc. ("Petitioner") filed a Petition for Covered Business Method
`
`Patent Review of US. Patent No. 7,970,674 (the "'674 Patent") on September 11,
`
`2013. On September 18, 2013, the Patent Trial and Appeal Board (the "Board")
`
`mailed a Notice of Filing Date Accorded'to Petition.
`
`Zillow,
`
`Inc.
`
`("Patent Owner") submits this Preliminary Patent Owner
`
`Response in reply to the Petition. As discussed below, Petitioner has failed to
`
`show that any claim of the '674 Patent is likely to be found unpatentable.
`
`Accordingly,
`
`the Board should deny Petitioner's request for covered business
`
`method patent review for all grounds proposed in the Petition.
`
`I.
`
`Introduction
`
`Over seven years ago, Zillow revolutionized the US. real estate market.
`
`Before 2006, most people had no easy or’inexpensive way to get estimated values
`
`of properties. Valuations were the province of professionals in the real estate
`
`industry such as realtors and appraisers, and of homeowners who hired a
`
`professional to appraise a home before putting it up for sale. Few others bothered
`
`getting a home appraised because the process was expensive, generally required
`
`the appraiser to inspect the home, and time-consuming.
`
`'674 Patent at 1:24—44.
`
`Until Zillow started "a real estate revolution," as Fortune magazine wrote in a
`
`February 2007 cover article, good home valuation data was proprietary
`
`information:
`
`56920-8902.USOO/LEGAL28681238.1
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`~1-
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`

`

`The real estate industry is based on what economists call
`
`information asymmetry, which simply means that one party
`
`(typically the seller) knows more about a product than the other
`
`(the buyer).
`
`It's an opaque market that encourages obfuscation
`
`and leads to flawed pricing.
`
`The big idea behindZillow is. to make real estate more like a
`
`stock eXchange, a transparent market Where all information about
`
`every property is readily available, and as a result pricing is
`
`' perfect.
`
`Jeffrey M. O’Brien, What ’5‘ your house really worth?, Fortune, Feb. 19, 2007, at
`
`56,
`
`available
`
`at
`
`http://money.cnn.com/magazines/fortune/fortune_archive/
`
`2007/02/19/8400262/index.htm (Exhibit ZILLOW 2001).
`
`No one besides Zillow had conceived of a service that would offer instant
`
`automatic valuations for nearly every home—and that would further allow users to
`
`augment the information used in their home valuations to generate better estimates.
`
`To the extent that a person could find another automatic home valuation service
`
`before February 2006, it would have provided a very rough estimate for a single
`
`home based on public database information about the home (and whatever recently
`
`sold properties it considered ”comps"), without a way for that person or anyone
`
`else to provide additional information regardinghis or her home.
`
`'674 Patent“ at
`
`56920-8902,USOO/LEGAL2868l238.l
`
`-2-
`
`

`

`1:44—51;
`
`see also Timothy J. Mullaney,‘ A New Home Site on the Block,
`
`BusinessWeek, Feb. 7, 2006, http://www.businessweek.com/stories/2006-02-07/a—
`
`new—home—site—on—the-block ("[Zillow’s] approach is unique. .
`
`.
`
`. Zillow's offering
`
`is more sophisticated than other real estate tools currently available online. .
`
`.
`
`. For
`
`example, once Zillow gives a basic home-price'estimate, users can refine it by
`
`adding details Zillow may not know") (Exhibit ZILLOW 2002). Zillow alone
`
`conceived, patented, and brought
`
`to' market
`
`technology for
`
`the large—scale
`
`automatic valuation of homes,
`including refinement of its estimates using data
`obtained from individuals in addition to public records.
`
`Zillow’s technology was disruptive, and it was wildly popular. The Motley
`
`Fool investor site warned its readers the week following Zillow’s debut that it
`
`"makes many'of the other models obsolete. .
`
`.
`
`. Zillow has disrupted the online
`
`real estate services market, probably irreparably. The rest of the market just
`
`doesn't realize it yet. .
`
`.
`
`. most companies fail to realize the magnitude of a startup
`
`with a better mousetrap." Rick Aristotle Munarriz, Pop Goes the Bubble, Feb. 14,
`
`2006,
`
`http://www.fool.com/investing/small—cap/2006/02/1 4/pop—goes—the-
`
`bubbleaspx (Exhibit ZILLOW 2003). Fortune magazine captured‘the excitement
`
`that Zillow’s innovative new technology brought to the public: "Next, you realize
`
`that the information on your property is incomplete. What about the kitchen V
`
`upgrade? Your new deck? The landscaping? All that work's gotta count for
`
`56920-8902.USOO/LEGAL2868l238.1
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`-3-
`
`

`

`something. .
`
`.
`
`. So you tap in some modifications and watch your home's value
`
`rise." O’Brien, supra. By developing a unique feature to leverage the knowledge
`of individuals as well as public information, Zillow is able to provide better home
`
`valuations. The innovative technology that Zillow developed—and patented—has
`democratized home valuations in the United States and helped Zillow become a.
`
`popular and successful enterprise.
`
`II.
`
`Background
`
`The '674 Patent is directed to a system and method for using input from a
`
`property's owner "to refine an automatic valuation of the . .. property."
`
`'674
`
`Patent, Abstract. The '674 Patent distinguishes prior systems, which. generally
`
`required a professional appraiser to "determine[] a value for a home by comparing
`
`some of its attributes to the attributes of similar nearby homes that have recently
`
`sold ('compsl)."
`
`'674 Patent, 1:33-37. To arrive at a value for a home,
`
`the
`
`appraiser "subjectively adjust[ed] the sale prices of the comps to reflect differences
`
`between the attributes of the comps and the attributes of the home being
`
`appraised."
`
`'674 Patent, 1:37—40.
`
`In some cases, automatic valuations could be
`
`performed; however, these automatic valuations were generated from a database
`
`(e.g., public information records) and "without input from each home's owner or
`
`other information not in the public database." '674 Patent, 1:45-49. Thus, prior to
`
`the '674 Patent, a homeowner was faced with two choices for home valuation: l)
`
`56920-8902.USOO/LEGAL28681238.1
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`~4-
`
`

`

`pay a professional appraiser, or 2) rely on an automatic valuation system using
`
`incomplete or incorrect information.
`
`In contrast,
`
`the '674 Patent discloses a method for home valuation that
`
`makes the owner a direct participant in the valuation process.
`
`In particular, the
`
`method begins by displaying information relating to an automatic valuation of a
`
`selected property.
`
`'674 Patent, Figure 14. The automatic valuation may be
`
`generated using a geographically specific valuation model, such as using a forest of
`
`classification trees model.
`
`'674 Patent, Figure 2, 4347-1 1 :60.
`
`After the information for the automatic valuation is displayed, the owner can
`
`update information about home attributes that were used in generating the
`
`automatic valuation.
`
`'674 Patent, Figure 14. The system then provides a new,
`
`refined valuation that reflects the adjustment to the information about the selected
`
`property,
`
`'674 Patent, Figure 14. In some cases, the refined valuation is generated
`
`by applying the geographically specific valuation model
`
`to an updated set of
`
`attributes corresponding to the owner's adjustment.
`
`'674 Patent, 13:60-65.
`
`III. Claim Construction
`
`"A claim‘in an unexpired patent shall be given its broadest reasonable
`
`construction in light of the specification of? the patent
`
`in which it appears."
`
`37 C.F.R. § 42.300(b). "If a patentee makes a clear and unambiguous disavowal'of
`
`claim scope during prosecution, that disclaimer informs the claim construction
`
`56920-8902.USOO/LEGAL2868l238.1
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`~5-
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`

`

`analysis by 'narrow[ing] the ordinary. meaning of the claim congruent with the
`
`scope of the surrender."' Advanced Fiber Techs. Trust v. J&L Fiber Servs., Inc,
`
`- 674 F.3d 1365, 1372-73 (Fed. Cir. 2012) (quoting Omega Eng’g, Inc. v. Raytek
`
`Corp, 334 F.3d 1314, 1324 (Fed. Cir.2003)); see also Computer Docking Station
`
`Corp. v. Dell, Ind, 519 F.3d 1366, 1374—75 (Fed. Cir. 2008). Such disclaimer
`
`applies to statements made both during the original prosecution, and during
`
`reexamination. Grober v. Mako Prods,
`
`Inc., 686 F.3d .1335, 1341 (Fed.
`
`Cir. 2012); see also Krz'ppelz v. Ford Motor Co., 667 F.3d 1261, 1267 (Fed. Cir.
`
`2012) ("As a result of these statements [in reexamination], [the patent owner]
`disclaimed lamps lacking the limitations, and the limitations therefore became part
`
`of the properly construed claims") This doctrine applies when construing terms in
`
`.
`
`this proceeding.
`
`A.
`
`"computer-readable medium for Storing contents that causes a
`- computing system to perform"
`
`Claim 2 recites a "computer—readable medium for storing contents that
`
`causes a computing system to perform" the recited method steps. The Petitioner
`
`asserts that "[w]hile 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."
`
`Petition, Page 10. The Petitioner, however, misreads claim 2. Claim 2 recites a
`
`56920-8902.USOO/LEGAL2868l238.1
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`-6-
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`

`

`
`"computer—readable medium for storing contents that causes" a computing system
`
`to perform the recited method steps. Thus, claim 2 is directed to a computer-
`
`
`readable medium that "causes" a computing system to perform the recited method
`
`steps, not merely a computer-readable medium "capable of storing contents that
`
`cause" a computing system to perform the recited method steps, as the Petitioner
`
`asserts. One of ordinary skill in the art would understand that a computer-readable
`
`medium for storing contents only causes a computing system to perform method
`
`steps if the computer—readable medium stores contents (e.g., instructions/software)
`
`for causing the computing system to perform the method steps, In other words, a
`
`computer-readable medium cannot cause a computing system to perform method
`
`steps unless the computer-readable medium stores contents for causing the
`
`computing system to perform the method steps.
`
`Accordingly,
`
`the proper
`
`construction of a "computer—readable medium for storing contents that causes a
`
`computing system to perform" the recited method steps, as claim 2 recites, requires
`
`that the computer—readable medium store the contents because a computer-readable
`
`
`medium that "causes" a computing system to perform method steps, as claim 2
`
`recites, must include contents for causing the computing system to perform the
`
`method steps.
`
`56920-8902.USOO/LEGAL28681238.l
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`-7~
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`

`

`B.‘
`
`"owner"
`
`Claim 2 recites "procuring information about a distinguished property from
`its owner" and "obtaining user input from the owner." The Petitioner asserts that
`
`"[u]nder the broadest reasonable interpretation, the claim terms relating to the
`
`identity of the user. .
`
`. fail to impart any meaningful structure to the computer-
`
`readable medium of claim 2 or dependent claim 5" and that "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
`
`[a] prospective buyer, or another third party." Petition, Page l1. The Petition,
`
`however, fails to explain how "owner" should be construed.
`
`"Owner" should be
`
`given its "ordinary and customary meaning as would be understood by one of
`
`ordinary skill
`
`in the art," which includes "a person who owns; possessor;
`
`proprietor" (http://dictionary.reference.com/browse/owner (retrieved December 16,
`
`2013)) but does not include those who do not own, such} as "a prospective buyer or
`
`an agent or other person representing [a] prospective buyer," as the Petitioner
`
`asserts. Thus, "procuring information about a distinguished property from its
`
`H
`
`owner" and
`
`obtaining user input
`
`from the owner"vshould be construed as
`
`"procuring information about a distinguished property from [a person who owns
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`56920—8902.USOO/LEGAL2868l238.l
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`-8-
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`

`

`the distinguished property]" and "obtaining user input from the [person who owns
`
`the distinguished property]."
`
`C.
`
`"user knowledgeable about the distinguished home"
`
`Claim 15 recites "user knowledgeable about
`
`the distinguished home."
`
`"[U]ser knowledgeable about the distinguished home" should be construed to refer
`
`specifically to the owner or a person with equivalent knowledge to the owner. This
`
`construction has the required breadth while still being consistent with the
`
`specification, as implicitly recognized by the Examiner during prosecution of the
`
`'674 Patent.
`
`This interpretation is required by the specification, which discloses that a
`
`core problem with automatic valuation systems is that they operate "without input
`
`from each home's owner."
`
`'674 Patent, 1:48. The specification also notes the
`
`difficulties of using a third party appraiser, which is time-consuming and may
`
`require that the appraiser have physical access to the property.
`
`'674 Patent, 1:42—
`
`44. . To solve these problems, the invention provides a system'designed to receive
`
`input from the owner to modify an automatic valuation. See, e.g.,
`
`'674 Patent,
`
`Abstract ("The facility obtains user input from the owner. . ."); Figure 14, step
`
`1402 ("solicit updated home attributes from owner"). Only an owner (or a person
`
`with similar knowledge) would have the information necessary to use the disclosed
`
`system while avoiding the inconvenience of working with a third-party appraiser.
`
`56920-8902.USOO/LEGAL28681238.]
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`.
`
`'9-
`
`

`

`This interpretation is supported by the prosecution history of the '674 Patent.
`
`For example, an amendment
`
`filed on March 4, "2011 states that all claims
`
`(including independent claims 2 and 15) were allowable because the cited
`
`references do not disclose receiving input "from the home's owner" to generate the ‘
`
`refined valuation. Response to Final Office Action, March 4, 2011, Page 1
`
`(Exhibit Zillow 2004). Thus, the prosecution history indicates Patent Owner's
`
`intention that 15 have scope similar to claim 2, which does recite "owner," for
`
`purposes of this limitation. A Notice of Allowance was mailed immediately after
`
`this Amendment, indicating the examiner's acceptance of this interpretation.
`
`Moreover, during an inter partes review of the '674 Patent, Patent Owner
`
`asserted that "a 'user knowledgeable about the distinguished property' must refer to
`
`the owner or a person with equivalent knowledge to the owner" and "any proper
`
`construction of this term must be limited to the owner of a home, or someone with
`
`equivalent knowledge, because Patent Owner has made a clear and unambiguous
`
`disavowal of any broader construction, or, if not deemed to have previously done
`
`so, at the very least herein expressly disclaims any construction that is broader than
`
`'the owner or a person with equivalent knowledge to the owner.'" MicroStrategy,
`
`Inc. v. Zillow, Inc, IPR2013—00034, Preliminary Patent Owner Response (Paper
`
`No. 16) Page 24 (February 15, 2013) (Exhibit Zillow 2006); MicroStrategy, Inc. v.
`
`56920-8902.USOO/LEGAL28681238,l
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`~10-
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`Zillow, Inc, IPR2013-00034, Patent Owner Response (Paper No. 24) Page 19
`
`(June 14, 2013) (Exhibit Zillow 2007).
`
`Both the specification and the history of the '674 Patent indicate that a "user
`
`knowledgeable about the distinguished property'l must refer to the owner or a
`
`person with equivalent knowledge to the owner.’ Accordingly,
`
`the broadest
`
`reasonable interpretation of "user knowledgeable about the distinguished home," as
`
`claim 15 recites,
`
`is no broader than "the owner or a person with equivalent
`
`knowledge to the owner."
`
`IV. The '674 Patent. is not Eligible for Covered Business Method Patent
`Review
`
`37 CPR. § 42.304(a) requires that the Petitioner "demonstrate that the
`
`patent for which. reviewis sought is a covered business method patent." 37 CPR.
`
`§ 42.301 provides that:
`
`"[c]overed 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, except that the term does not include
`
`patents for technological inventions" and "[i]n determining whether a
`
`patent
`
`is for a technological
`
`invention solely for purposes of the
`
`Transitional Program for Covered Business Methods
`
`(section
`
`42.301(a)), the following will be considered on a case—by-case basis:
`
`whether the claimed subject matter as a whole recites a technological
`
`56920-8902USOO/I.EGAL2868l238.1
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`-l l-
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`feature that is novel and unobvious over the prior art; and solves a
`
`technical problem using a technical solution."
`
`37 C.F.R. § 42.30l(a) and (b); see also Leahy—Smith America Invents Act, Section
`
`18(d)(l) (2011).
`
`A.
`
`Each Claim of the '674 Patent Recites a Technological Feature
`
`As discussed above, 37 CPR. § 42.301 provides that:
`
`"[i]n determining whether a patent is for a technological invention
`solely for purposes of the Transitional Program for Covered Business i
`Methods (section. 42.30l(a)), the following will be considered on a
`case—by-case basis: ‘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." .
`
`Thus, the determination of whether a claim is directed to a technological invention
`
`is based on a three—prong test:
`
`1.
`
`2.
`
`3.
`
`Does the claim recite a technological feature?
`
`Is the recited technological feature novel and unobvious?
`
`Does the claimed subject matter solve a technical problem using a
`
`technical solution?
`
`According to guidelines published by the United States Patent and
`
`Trademark Office, "[t]he folloWing claim drafting techniques would not typically
`
`render a patent a technological invention:
`
`56920-8902.USOO/LEGAL28681238.l
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`~l2-
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`(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."
`
`Federal Register, Vol. 77, No. 157, 48756, 487.64. Furthermore, "[t]he following
`
`are examples of covered business method patents that are subject to a CBM review
`
`proceeding:
`
`(a) A patent that claims a method for hedging risk in the field of
`
`commodities trading.
`
`(b) A patent that claims a method for verifying validity of a
`
`credit card transaction"
`
`while the "following are examples of patents that claim a technological invention
`
`that would not be subject to a CBM review proceeding:
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`56920-8902.USOO/LEGAL28681238,l
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`~13 -
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`(a) A patent
`
`that claims a novel and non-obvious hedging
`
`4 machine for hedging risk in the field of commodities trading.
`
`(b).A patent that claims a novel and non—obvious credit card
`reader for verifying the validity of a credit card transaction."
`
`Federal Register, Vol. 77, No. 157, 48756, 48764. As discussed in fiirther detail
`
`below, the claims of the '674 Patent are directed to a technological
`
`invention
`
`because the claimed subject matter recites a technological feature that is novel and
`
`unobvious over the prior art and solves a technical problem using a technical
`
`solution.
`
`As is clear
`
`from the USPTO guidelines, ”software" and "specialized
`
`machines" are forms of technology. Thus, any inventive "software" or "specialized
`
`machine" is a "technological invention" that includes a technical feature. Each
`
`claim of the '674 Patent is directed to software or a specialized machine. For
`
`example, claim 2 recites:
`
`A computer readable medium for storing contents that causes a _
`
`computing system to perform a method for procuring information
`
`about a distinguished property from its owner that is usable to refine
`
`an automatic valuation of the distinguished property, the method
`
`comprising:
`
`56920-8902.USOO/LEGAL2868]238.]
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`~14-
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`displaying at
`
`least
`
`a portion of
`
`information about
`
`the
`
`distinguished property used in the automatic valuation of the
`
`distinguished property;
`
`obtaining user input from the owner adjusting at
`
`least one
`
`aspect of information about the distinguished property used in the
`
`automatic valuation of the distinguished property; and
`
`displaying to the owner a refined valuation of the distinguished
`
`property that is based on the adjustment of the obtained user input.
`
`A computer—readable medium storing contents that causes a computing syStem to
`
`perform method steps must include the instructions, or software, for causing the
`
`computing system to perform the method steps. Thus, claim 2 includes software, a
`
`technological feature.
`
`Claim 15 recites:
`
`A method in a computing system for refining an automatic
`
`valuation of a distinguished home based upon input from a user
`
`V
`
`‘ knowledgeable about the distinguished home, comprising:
`
`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
`
`56920—8902.USOO/LEGAL28681238.l
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`‘
`
`-15-
`
`

`

`presenting the refined valuation of the distinguished home.
`
`Thus, claim 15 includes a computer programmed to perform the recited method.
`
`"[A] programmed computer contains circuitry unique to that computer" and "[t]hat
`
`'new machine' could be claimed in terms of a complex array of hardware circuits,
`
`or more efficiently, in terms of the programming that facilitates a unique function."
`
`Ultramercial at 31. Thus, claim 15 includes a unique or specialized computer,
`
`which is a technological feature.
`
`Accordingly,- contrary to the Petitioner's assertion that "the claims fail to
`
`recite a technological feature,” claims 2 and 15, and their dependent claims 5, 16—
`
`25 and 40, each recite a technological feature.
`
`B.
`
`The Recited Technological Features are Novel and Unobvious
`
`The above—mentioned technological
`
`features are novel and unobvious.
`
`Claim 2 is directed to a "computer readable medium for storing contents that
`
`causes a computing system to perform [a .
`
`.
`
`. method comprising: .
`
`.
`
`. obtaining user
`
`input from the owner adjusting at
`
`least one aspect of information about the
`
`distinguished property used in the automatic valuation of the distinguished
`
`property." Claim 15 is directed to a "method in a computing system for refining an
`
`automatic valuation of a distinguishedhome based upon input
`
`from a user
`
`knowledgeable about the distinguished home" (i.e., the owner or a person with
`
`equivalent knowledge to the owner). As discussed in the '674 Patent, a "core
`
`56920-8902.USOO/LEGAL28681238.l
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`-l 6-
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`

`

`. problem with automatic valuation systems is that they operate ”without input from
`
`each home's owner." '674 Patent, 1:48. After the Patent Owner ¢(as applicant), in
`
`response to an Office Action, stated that all claims (including independent claims 2
`
`and 15) were allowable because the cited references do not disclose receiving input
`
`"from the home's owner" to generate the refined valuation, the Examiner mailed a
`
`Notice of Allowance, indicating that the Examiner agreed that the receipt of input
`
`from a home's owner in a process for refining valuations. rendered the claims novel
`
`and unobvious.
`
`Furthermore, and as discussed in further detail below,
`
`the
`
`Petitioner has not demonstrated that any claim of the '674 patent is not novel or
`
`unobvious. Accordingly, the Petitioner has not demonstrated that the technological
`
`features of the claimed subject matter
`
`(e.g..,
`
`the software and specialized
`
`machines) are not novel and unobvious.
`
`C.
`
`Each Claim of the '674 Patent Solves a