Trials@uspto.gov
`571-272-7822
`
`
`
` Paper 36
`
`Entered: January 9, 2013
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SAP AMERICA, INC.
`Petitioner,
`
`
`
`DECISION
`Institution of Covered Business Method Review
` 37 C.F.R. § 42.208
`
`
`
`
`
`
`
`
`
`
`
`v.
`
`VERSATA DEVELOPMENT GROUP, INC.
`Patent Owner.
`____________
`
`Case CBM2012-00001 (MPT)
`Patent 6,553,350
`____________
`
`Before SALLY C. MEDLEY, MICHAEL P. TIERNEY, and RAMA G. ELLURU,
`Administrative Patent Judges.
`
`TIERNEY, Administrative Patent Judge.
`
`
`571-272-7822
`
`
`
` Paper 36
`
`Entered: January 9, 2013
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SAP AMERICA, INC.
`Petitioner,
`
`
`
`DECISION
`Institution of Covered Business Method Review
` 37 C.F.R. § 42.208
`
`
`
`
`
`
`
`
`
`
`
`v.
`
`VERSATA DEVELOPMENT GROUP, INC.
`Patent Owner.
`____________
`
`Case CBM2012-00001 (MPT)
`Patent 6,553,350
`____________
`
`Before SALLY C. MEDLEY, MICHAEL P. TIERNEY, and RAMA G. ELLURU,
`Administrative Patent Judges.
`
`TIERNEY, Administrative Patent Judge.
`
`
`
`Case CBM2012-00001
`Patent 6,553,350
`
`I.
`
`Introduction
`
`
`
`SAP has filed a petition seeking covered business method review of
`
`Versata’s 6,553,350 (’350) patent pursuant to Section 18 of the Leahy-Smith
`
`America Invents Act (AIA)1. The patent owner, Versata, has filed a patent owner
`
`preliminary response (POPR) opposing the institution of the review. Paper No. 29.
`
`We have jurisdiction under 35 U.S.C. § 324.
`
`
`
`The standard for instituting a covered business method review is set forth in
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`35 U.S.C. § 324(a), which provides as follows:
`
`THRESHOLD --The Director may not authorize a post-grant review
`to be instituted unless the Director determines that the information
`presented in the petition filed under section 321, if such information is
`not rebutted, would demonstrate that it is more likely than not that at
`least 1 of the claims challenged in the petition is unpatentable.
`
`SAP challenges claims 17 and 26-29 of the ’350 patent as unpatentable for
`
`
`
`failure to comply with 35 U.S.C. §§ 101, 102, and 112, 1st and 2nd paragraphs.
`
`
`
`We grant the petition as SAP has demonstrated that claims 17 and 26-29 are
`
`more likely than not unpatentable under 35 U.S.C. §§ 101 and 102. SAP however,
`
`has not demonstrated a likelihood that Versata’s claims are unpatentable under 35
`
`U.S.C. § 112, 1st and 2nd paragraphs therefor these grounds of unpatentability do
`
`not form a part of the review. 37 C.F.R. 42.408(a).
`
`
`
`
`1 Pub. L. No. 112–29, 125 Stat. 284 (2011).
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`
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`2
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`Case CBM2012-00001
`Patent 6,553,350
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`II.
`
`Background
`
`
`
`
`
`A. Versata’s ’350 Patent
`
`Versata’s ’350 patent is directed to a method and apparatus for pricing
`
`products and services. SX 1001, ’350 patent, 3:9-13.2 The central concept of the
`
`’350 patent is hierarchies and the hierarchal arrangement of data. SX 1005, ¶ 20.3
`
`
`
`The ’350 patent states that its “invention operates under the paradigm of
`
`WHO (the purchasing organization) is buying WHAT (the product).” ’350 patent,
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`3:24-25. An example of the WHO/WHAT paradigm is depicted in Figure 1 of the
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`’350 patent below:
`
`
`
`
`2 SAP’s exhibits are referred to as SX and Versata’s exhibits are referred to as VX.
`3 Declaration of SAP expert, Michael Siegel, Ph.D.
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`3
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` According to the ’350 patent, the WHO/WHAT paradigm was known in the art.
`Id., Fig. 1, 4:16-18. The ‘350 patent however, states that prior art pricing tables for
`WHO/WHAT (customer/products) required large tables of data. Id., 1:52-59.
`
`
`
`The ’350 patent invention is said to improve upon the prior art and reduce
`
`the need for large tables of data by arranging customers into a hierarchy of
`customer groups and products into a hierarchy of product groups. Id, 3:24-27, 41-
`
`42. Specifically, in the ’350 patent, WHO is said to be defined by creating an
`
`organizational hierarchy of organizational groups, where each group represents a
`characteristic of the organizational group. Id. An example of an arrangement of an
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`organization customer group is depicted below in Fig. 4A of the ’350 patent:
`
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`4
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`Similarly, a product group hierarchy for products (WHAT) is also defined. Id.,
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`Fig. 4B, 4:26-28. Pricing information is then associated with the customer and
`product groups. Id., 8:17-25. As such, special pricing adjustments may be defined
`
`as applying to all members of a specific customer group or a specific product
`group. Id., 3:26-49.
`
`B.
`
`Procedural History
`
`In 2007, Versata sued SAP for infringement of, inter alia, the ’350 patent.
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`
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`The case proceeded to trial and a jury found infringement and awarded damages.
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`SX 2039, Jury Verdict (Aug. 26, 2009). The district court confirmed the
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`infringement verdict for the ’350 patent, but reversed other rulings unrelated to the
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`’350 patent, resulting in a new trial on damages. POPR, 7. In the second trial, the
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`jury found that an SAP post-patch software continued to infringe, and awarded
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`lost-profits damages and reasonable royalty damages. The district court upheld
`those awards. Id.
`
`
`SAP appealed the district court’s Final Judgment to the U.S. Court of
`Appeals for the Federal Circuit on October 11, 2011. Versata Software, Inc. v.
`SAP America, Inc., Nos. 2012-1029, -1049. The appeals have been fully briefed
`
`and are currently pending. Of note, SAP did not appeal the district court’s claim
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`5
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`construction, and there are no issues on appeal relating to the validity of the ’350
`
`patent. POPR, 8.
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`
`
`III. Analysis
`
`
`
`There are five claims challenged in this proceeding, claims 17 and 26-29.
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`The claims are directed to methods and apparatuses for determining the price of a
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`product offered to a purchasing organization. To better understand the challenges
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`brought against these claims, we begin by first construing the claims.
`
`A.
`
`Claim Construction
`
`
`
`
`During a review before the Board, we provide claims with the broadest
`reasonable interpretation in light of the specification. 37 C.F.R. 42.300(b). See, 77
`
`Fed. Reg. 157 (August 14, 2012) at 48697-48698. We begin our analysis with the
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`plain language of the claims themselves but look to the specification for guidance
`
`as to how one skilled in the art would understand the ordinary meaning of the
`
`claims. In interpreting claims care must be exercised as there is a fine line between
`
`interpreting claims in light of the specification and reading limitations into the
`claims from the specification. Comark Commc'ns, Inc. v. Harris Corp., 156 F.3d
`
`1182, 1186 (Fed. Cir. 1998).
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`6
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`Case CBM2012-00001
`Patent 6,553,350
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`
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`The parties have identified four claim terms for which claim construction is
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`sought: “sorting the pricing information,” “the pricing information that is less
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`restrictive,” “pricing type(s),” and “pricing information.” Claim 17 is illustrative
`
`of the claims for which review is sought and reads as follows:
`
`17. A method for determining a price of a product offered to a
`purchasing organization comprising:
`
`arranging a hierarchy of organizational groups comprising a
`plurality of branches such that an organizational group below a higher
`organizational group in each of the branches is a subset of the higher
`organizational group;
`
`arranging a hierarchy of product groups comprising a plurality
`of branches such that a product group below a higher product group in
`each of the branches in a subset of the higher product group;
`storing pricing information in a data source, wherein the
`
`pricing information is associated, with (i) a pricing type, (ii) the
`organizational groups, and (iii) the product groups;
`retrieving applicable pricing information corresponding to the
`
`product, the purchasing organization, each product group above the
`product group in each branch of the hierarchy of product groups in
`which the product is a member, and each organizational group above
`the purchasing organization in each branch of the hierarchy of
`organizational groups in which the purchasing organization is a
`member;
`sorting the pricing information according to the pricing
`
`types, the product, the purchasing organization, the hierarchy of
`product groups, and the hierarchy of organizational groups;
`eliminating any of the pricing information that is less
`
`restrictive; and
`
`determining the product price using the sorted pricing
`information.
`
`7
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`’650 Patent, SX 1001 (emphasis added). Claim 24, which was not challenged by
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`SAP, and is not part of this proceeding, depends from claim 17 and limits claim 17
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`as follows:
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`24. The method of claim 17 wherein the pricing
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`information comprises denormalized pricing adjustments.
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`Id. (emphasis added).
`
`The four terms for which claim construction is sought are analyzed below.
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`
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`1.
`
`Sorting the Pricing Information
`
`SAP requests that the Board construe the term “sorting the pricing
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`
`
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`information” to mean that the pricing information is ordered. Pet., 11. Versata
`
`does not oppose this construction. POPR, 58-60.
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`
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`SAP’s expert, Dr. Siegel,4 testifies that the plain meaning of “sorting the
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`pricing information” is that the pricing information is ordered. SX 1005, ¶ 98.
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`This construction is consistent with Versata’s proposed construction in the related
`
`district court proceeding, and this is the construction that was adopted by the
`
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`4 The field of the invention is computerized financial systems. SX 1005, ¶ 16. A
`person of ordinary skill in the art would have at least a bachelor’s degree in
`computer science and experience developing computerized financial systems. Id.,
`¶ 18. Dr. Siegel has a Ph.D. in computer science and extensive experience in
`financial services software. Id., ¶¶ 1-11. We conclude that Dr. Siegel is qualified
`to testify as to the understanding of one skill in the art.
`
`
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`8
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`district court. SX 1012,5 16-17. We credit Dr. Siegel’s testimony and hold that
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`sorting the pricing information means that the pricing information is ordered.
`
`
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`SAP and Versata disagree however, on when the pricing information is
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`sorted. Specifically, Versata contends that the information must first be retrieved
`
`and then sorted, whereas SAP contends the language of claim 17 does not imply or
`
`require a temporal limitation forcing the sorting to occur after retrieving. Pet., 12-
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`13 and POPR, 60.
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`
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`The plain language of claim 17 does not require that the information be
`
`retrieved first and then sorted. This is in contrast to claim 1, which requires
`“sorting the retrieved information.” Dr. Siegel testifies that this is an important
`
`distinction and concludes that there is no basis in claim 17 for requiring retrieving
`
`to happen before sorting or vice versa. Dr. Siegel concludes that the term “sorting
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`the pricing information” in the context of the ’350 patent simply means that pricing
`
`information is sorted either before or after the information is retrieved. SX 1005,
`
`¶ 98.6 SAP also directs our attention to the trial testimony of a Versata expert, Dr.
`
`
`5 Memorandum Opinion and Order Regarding Claim Construction, Versata v. SAP
`Litigation, 07-cv-00153.
`6 The district court held that the retrieving step must be performed before the
`sorting step as claim 1 requires the “retrieved pricing information” be sorted. SX
`1012, 15-16. As noted by Dr. Siegel, claim 17 does not require “retrieved” pricing
`information be sorted.
`
`
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`9
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`Nettles, who indicated that there was not always a need to change the retrieved
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`data set to fall within the definition of “sort.” Pet., 13, SX 1018, 81-82.
`
`
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`We agree with SAP that the ordinary meaning of “sorting the pricing
`
`information” in claim 17 does not require that the information be retrieved and
`
`then sorted. There are circumstances however, where a claim term may be
`
`construed more narrowly than its ordinary meaning. Such circumstances include
`
`where a patentee sets out a definition and acts as its own lexicographer and where
`the patentee disavows the full scope of a claim term in the specification. Thorner
`v. Sony Computer Entm’t. America L.L.C., 669 F.3d 1362, 1365 (Fed. Cir. 2012).
`
`
`
`Versata fails to direct our attention to sufficient and credible evidence that
`
`the ’350 patent restricted the term “sorting the pricing information” to sorting
`
`retrieved information. While Versata directs the Board’s attention to four exhibits,
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`VX 2061, VX 2063, VX 2064, and SX 1018, none of the exhibits demonstrates
`
`that the specification defined the term or sought to disavow sorting the information
`
`prior to retrieval. Specifically, the exhibits reflect trial testimony excerpts and a
`
`closing statement, none of which provide an underlying basis for their positions.
`ActiveVideo Networks Inc. v. Verizon Commc’ns Inc., 694 F.3d 1312 (Fed. Cir.
`
`2012) (district court did not err in granting JMOL where expert opinion was
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`conclusory and lacked factual support).
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`10
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`We credit the testimony of SAP’s expert, Dr. Siegel, and conclude that claim
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`17 does not require a temporal limitation forcing the sorting to occur after
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`retrieving.
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`
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`2.
`
`The Pricing Information That Is Less Restrictive
`
`SAP contends that the term “the pricing information that is less restrictive”
`
`
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`
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`is insolubly ambiguous, but employs the district court construction for purposes of
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`prior art analysis. Pet., 11-12. Versata disagrees that the term is insolubly
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`ambiguous and directs our attention to the fact that SAP initially offered a claim
`
`construction in the related district court proceeding. POPR, 57-58, SX 1012, 17,
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`fn. 3. Further, Versata requests that we adopt the district court construction and
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`construe the term to mean “less specifically applicable to a product, a purchasing
`organization, an organizational group or a product group.” Id. 17-18.
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`
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`We agree with Versata and adopt the district court’s construction of the term
`
`“pricing information that is less restrictive.” Specifically, we construe the term as
`
`meaning “less specifically applicable to a product, a purchasing organization, an
`
`organizational group or a product group.”
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`11
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`3.
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`Pricing Types and Pricing Adjustments
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`
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`SAP contends that the term “pricing types” means “a class or category of
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`pricing adjustments.” Pet., 12. Versata did not oppose this construction.
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`
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`SAP relies upon the testimony of Dr. Siegel, who testifies that the ‘350
`
`patent leads to an understanding that the term “pricing type(s)” is “a class or
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`category of pricing adjustments.” SAP notes that the parties agreed at the district
`
`court to this construction.
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`
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`We credit Dr. Siegel’s testimony and hold that the term “pricing types”
`
`means a class or category of pricing adjustments.
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`
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`SAP further defines the term “pricing types” by contending that pricing
`
`types means a class or category of pricing adjustments and that the term pricing
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`adjustments means “a denormalized number that may affect the determined price.”
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`Pet., 12 and 14. SAP then defines denormalized number as meaning nothing more
`
`than a user, at data entry time, associating units with a number and specifying how
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`the number is to be applied, and then, at runtime, a system simply uses that
`information. Id., 14-15. Versata agrees that the term “pricing adjustment” is
`
`limited to denormalized numbers and contends that all of the challenged claims
`
`require denormalized numbers. POPR, 26. We disagree that “pricing adjustment”
`
`is limited to denormalized numbers and do not adopt this construction.
`
`
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`12
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`The plain and ordinary meaning of the term “pricing adjustment” does not
`
`require the use of denormalized numbers nor do the ’350 claims and specification
`
`require such an interpretation. For example, ’350 claim 1 requires the use of
`
`pricing information. Dependent claim 6 depends from claim 1 and states that the
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`pricing information comprises pricing adjustments. Dependent claim 7 depends
`
`from claim 6 and states that pricing adjustments comprise denormalized numbers.
`
`Similarly, claim 17 requires the use of pricing information and claim 24, which
`depends from claim 17, states that pricing information comprises denormalized
`
`pricing adjustments. To read pricing adjustments as restricted to denormalized
`
`pricing adjustments would render the term denormalized in claim 24 redundant and
`
`render claim 7 superfluous. Accordingly, the ’350 claims themselves create a
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`rebuttable presumption that the term “pricing adjustments” is broader than the use
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`of denormalized numbers.
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`
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`SAP contends that Versata restricted the term “pricing adjustment” to
`
`denormalized numbers. Pet., 14 and 16. Versata agrees. POPR, 26 n. 3.
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`
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`SAP identifies the following language from the ’350 patent as evidence of
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`Versata’s alleged disclaimer for the term pricing adjustment:
`
`The combination of organizational groups and product groups
`hierarchies and the denormalized pricing table relating a particular
`organization (or an entire organizational group) to a particular product
`(or an entire product group) result in some of the advantages of the
`present invention over the prior art pricing systems.
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`13
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`Pet., 14, SX 1001, 3:65-4:4. The quoted language however does not restrict
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`pricing adjustments to denormalized numbers but instead is consistent with the
`
`proposition that denormalized numbers represent a preferred embodiment of
`
`Versata’s invention. Other citations provided by SAP likewise do not evidence
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`that Versata sought to be its own lexicographer or disclaim a broader definition for
`
`the term “pricing adjustment.” Further evidence that Versata did not intentionally
`
`seek to disclaim the broader construction may be found in the district court
`
`proceeding where Versata argued that the claims are not so limited and that
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`“denormalized” constitutes a preferred embodiment. SX 1012, 7-9.
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`
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`We hold that the plain language of the claims creates a rebuttable
`
`presumption that the term “pricing adjustment” encompasses, but is not limited to,
`
`“denormalized pricing adjustments.” Further, we hold that the parties have failed
`
`to rebut this presumption such as by providing evidence demonstrating that Versata
`
`acted as its own lexicographer or that Versata disavowed the broader construction.
`
`Accordingly, we hold that pricing adjustment means simply a price modification.
`In re Bigio, 381 F.3d 1320, 1325-26 (Fed. Cir. 2004) (“Absent claim language
`
`carrying a narrow meaning, the PTO should only limit the claim based on the
`
`specification or prosecution history when those sources expressly disclaim the
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`broader definition.”).
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`14
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`4.
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`Pricing Information
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`
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`SAP states that the broadest reasonable interpretation of the term “pricing
`
`information” should include denormalized numbers. Pet., 16. SAP further states
`
`that the term “pricing information” means “any information relating to price other
`than an adjustment to price that is not a denormalized number.” Id. Versata agrees
`
`and states that all the challenged claims require denormalized numbers and that
`
`denormalized numbers are determined at run time. POPR, 26-27, n. 3 and 4.
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`
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`The plain and ordinary meaning of the term pricing information is not
`
`restricted to denormalized numbers. Further, the claims themselves do not place
`
`such a limitation on the term. As recognized by Versata in the related litigation,
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`the term “pricing information” in dependent claims 6 and 24 encompasses both
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`price adjustments and denormalized price adjustments. SX 1012, 10. To interpret
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`the term “pricing information” as restricted to denormalized pricing adjustments
`
`would make the term denormalized superfluous in claims 6 and 24. We hold that
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`there is a rebuttable presumption that the term pricing information is not restricted
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`to the use of denormalized numbers.
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`SAP relies upon the testimony of Dr. Siegel to support its construction of the
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`term pricing information. Pet., 15. Dr. Siegel agrees with the district court’s
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`interpretation of the ‘350 patent that the patent owner limited its invention to
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`15
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`denormalized numbers. SX 1005, ¶ 103. Dr. Siegel directs the Board’s attention
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`to various passages in the ’350 patent that allegedly limit the invention to
`denormalized numbers. Id., ¶ 100. The cited passages however, contain
`
`statements such as “Fig. 5 is an example of the inventions denormalized table,”
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`“[o]ne aspect of the invention is now explained by referring to FIG 5 and
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`comparing the invention with prior art systems for generation of pricing
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`recommendations,” “[s]till referring to FIG 5,” “the prior art systems do not use
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`denormalized price tables.” Although the cited passages highlight the benefits of
`
`using denormalized numbers in combination with organizational and product
`
`groups hierarchies, they do not literally disavow the broader construction of the
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`term pricing information or “repeatedly, consistently, and exclusively” seek to
`confine pricing information to denormalized numbers. Cf., In re Abbott Diabetes,
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`Nos. 2011-1516, 1517, 2012 WL 4465236 (Fed. Cir. September 28, 2012) (plain
`
`language of claim and specification consistently demonstrated absence of external
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`wires).
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`
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`Although the doctrine of claim differentiation creates only a rebuttable
`
`presumption, SAP has failed to provide sufficient intrinsic evidence to overcome
`this presumption and justify its narrow construction. Thorner v. Sony Computer
`Entm’t America, 669 F.3d at 1365 (“It is likewise not enough that the only
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`embodiments, or all of the embodiments, contain a particular limitation. We do
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`16
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`not read limitations from the specification into claims; we do not redefine words.
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`Only the patentee can do that.”). We agree with the position advanced by patent
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`owner Versata in the district court litigation and hold that denormalized numbers
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`represent a preferred embodiment of the invention. We further hold that the term
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`pricing information means information related to pricing and comprises both price
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`adjustments and denormalized price adjustments. SX 1012, 10.
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`
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`Versata, to the extent it disagrees with the claim constructions provided, may
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`seek to file a motion to amend during the review and propose substitute claims that
`
`state with precision the claim scope it so desires. 35 U.S.C. § 326(a)(9) and (d).
`
`B.
`
`
`SAP Has Standing to File a Petition for a Covered Business Method
`Review of Versata’s ’350 Patent
`
`The parties disagree as to whether SAP has standing to file a petition for a
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`
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`covered business method review of the ’350 patent. Pet., 3-10, and POPR, 10-45
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`and 61-68.
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`
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`Section 18 of the AIA provides for the creation of a transitional program for
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`covered business method reviews. Section 18 limits reviews to persons or their
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`privies that have been sued or charged with infringement, of a covered business
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`method patent where covered business method patents do not include patents for
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`technological inventions. AIA, §§ 18(a)(1)(B) and 18(d)(1).
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`17
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`1.
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`SAP Has Been Sued for Infringement of the ’350 Patent
`
`
`SAP represents that it has been sued for infringement of the ’350 patent in
`Versata Software Inc. v. SAP America Inc., No. 2:07-cv-153 (E.D. Tex). Pet. 9-10.
`
`Versata acknowledges that SAP was sued for infringement but contends that the
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`related litigation has progressed beyond the point where the statute contemplated it
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`would be employed. POPR, 62.
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`
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`Versata represents that “sued for infringement” should be interpreted as
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`requiring ongoing litigation and that while SAP was sued for infringement, there
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`will be no further proceedings in the district court on the issue of validity. POPR,
`
`62. Versata acknowledges, however, that it is unaware of any legislative history
`relating to this question. Id. We give § 18(a)(1)(B) its literal meaning and
`
`conclude that a party sued for infringement of a patent, and not otherwise estopped
`
`from challenging validity, may file a petition for a transitional proceeding with
`
`respect to a covered business method patent. 37 C.F.R. 42.302 (party that has been
`
`sued for infringement and not otherwise estopped may file a petition).
`
`
`
`Versata contends that SAP should be precluded from pursuing its challenge
`
`under the principles of issue and claim preclusion. POPR, 63-68. We disagree.
`
`
`
`37 C.F.R. 42.302 generally provides that a party may not file a petition for a
`
`covered business method review unless the party has been sued for infringement or
`
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`18
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`charged with infringement under that patent and that the petitioner must not
`
`otherwise be estopped from challenging the claims. As recognized by Versata,
`
`estoppel may arise from claim preclusion and issue preclusion. Claim preclusion
`requires a final judgment on the merits of the first suit. Bowers Inv. Co. v. United
`States, 695 F.3d 1380, 1384 (Fed. Cir. 2012) (citing Ammex, Inc. v United States,
`
`334 F.3d 1052, 1055 (Fed. Cir. 2003)). Similarly, issue preclusion requires that the
`
`party against whom preclusion will apply had a full and fair opportunity to litigate
`the issue in the first action. In re Freeman, 30 F.3d 1459, 1465 (Fed. Cir. 1994).
`
`For a judgment to be “final” for purposes of preclusion before the Board, the
`
`decision needs to be immune, as a practical matter, to reversal or amendment.
`See, e.g., Vardon Golf Co., Inc. v. Karsten Mfg. Corp., 294 F.3d 1330, 1333 (Fed.
`Cir. 2002) (citing Miller Brewing Co. v. Jos. Schlitz Brewing Co., 605 F.2d 990,
`996 (7th Cir. 1979). As the final judgment in the related Versata v. SAP litigation
`
`is currently on appeal to the Federal Circuit, we hold that the district court’s
`
`judgment is not sufficiently firm to be accorded conclusive effect for purposes of
`
`37 C.F.R. 42.302 as it is still subject to reversal or amendment.
`
`
`
`Versata states that the validity of the ’350 patent has been finally adjudicated
`
`and even if the ’350 patent were held unpatentable in this proceeding, that
`
`determination would have no effect on the judgment in the litigation and thus, “the
`
`lawsuit is over for purposes of 37 C.F.R. 42.302.” POPR, 62-63.
`
`
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`19
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`Case CBM2012-00001
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`
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`As stated above, we hold that the district court’s judgment is not sufficiently
`
`firm to be accorded conclusive effect for purposes of estoppel under 37 C.F.R.
`
`42.302. Additionally, Versata has failed to establish on this record that a
`
`determination of unpatentability would have no effect on the related litigation.7
`
`
`
`We hold that SAP has been sued for infringement for purposes of AIA
`
`§ 18(a)(1)(B) and 37 C.F.R. 42.302.
`
`
`
`
`2.
`
`
`Versata Claims 17 and 26-29 are Directed to Financial
`Products or Services
`
`
`
`SAP and Versata disagree as to whether the ’350 patent is directed to a
`
`
`
`
`
`
`
`
`covered business method. Pet., 4-5 and POPR, 31-45. According to SAP, the ’350
`
`patent is a covered business method patent as it claims methods and corresponding
`
`apparatus for determining a price, and relates to management of pricing data and is
`
`
`In re Translogic Technology Inc., 504 F.3d 1249 (Fed. Cir. 2007) arose out
`7
`of a reexamination proceeding whose patent was the subject of a related patent
`infringement litigation between Translogic and Hitachi. In Translogic, the Board
`upheld a rejection of the patent claims and an appeal was taken to the Federal
`Circuit. 504 F.3d at 1251. In the related district court litigation a jury found that
`Hitachi had induced infringement and held Hitachi liable for $86.5 million in
`damages. Id. After post-trial briefing, the district court entered final judgment and
`Hitachi appealed to the Federal Circuit. Id. On appeal from the Board’s
`unpatentability determination, the Federal Circuit upheld the decision of the Board
`and held Translogic’s claims unpatentable. Id. 1262. That same day, the Federal
`Circuit vacated the district court’s judgment and remanded the case to the district
`court for dismissal. Translogic Tech., Inc. v. Hitachi, Ltd., 250 Fed. Appx. 988
`(Fed. Cir. 2007).
`
`
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`20
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`classified in class 705. Pet. 5. Versata takes the position that the broadest
`
`reasonable definition of financial services or products would exclude its claimed
`
`invention. POPR, 32.
`
`
`
`The AIA defines covered business method patents as:
`
`(1) IN GENERAL.—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, except that the term does not include
`patents for technological inventions.
`
`AIA, § 18(d)(1).
`
`
`
`The Office published notices of proposed and final rulemaking seeking to
`
`implement Section 18. The notice of proposed rulemaking solicited public
`
`comment, and fully considered and responded to comments received. 37 C.F.R.
`
`42.301(a) was among the rules proposed and finalized by the notices. 37 C.F.R.
`
`42.301(a) tracks the language of AIA § 18(d)(1) and was subject to comment and
`
`response as to its interpretation. In considering public comments, the Office stated
`
`that it would consider legislative intent and history behind the definition and the
`
`transitional program itself. 77 Fed. Reg. 157 (August 14, 2012) 48734, 48735.
`
`The Office stated that the legislative history explained that the definition of
`
`covered business method patents supported the notion that the definition be
`
`broadly interpreted and encompass patents claiming activities that are financial in
`
`
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`21
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`Case CBM2012-00001
`Patent 6,553,350
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`nature, incidental to a financial activity or complementary to a financial activity.
`Id. The Office also stated that it did not adopt the suggestion that the term
`
`financial product or service be limited to the products or services of the financial
`services industry as it ran contrary to the intent behind § 18(d)(1). Id. at 48736.
`
`
`
`Versata raises a number of issues as to why its method and apparatus for
`
`pricing would not be considered a financial product or service. We do not find
`
`them persuasive.
`
`
`
`Versata cites definitions from a variety of sources including the Dodd-Frank
`
`Wall Street Reform and Consumer Protection Act, the Bank Holding Company Act
`
`of 1956, as well as North American Industry Classification Codes. POPR, 32-37.
`
`Versata’s proposed definitions are inconsistent with the legislative history of
`
`Section 18 and the final rules. For example, Versata relies upon an FTC definition
`
`of “financial product or service” as directed to products or services that a financial
`
`holding company could offer. The suggestion to adopt a definition limiting
`
`financial services or products to a particular industry, financial services industry,
`
`was considered but not adopted during rulemaking as such a narrow construction
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`would be contrary to the legislative history of Section 18. 77 Fed. Reg. 157,
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`48736.
`
`
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`Versata contends that there is nothing in the claims indicating that they are
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`related to a financial service or product. POPR, 37 – 42. Versata alleges that
`
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`financial products or services
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