`Entered: June 11, 2013
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`Trials@uspto.gov
`571-272-7822
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
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`SAP AMERICA, INC.
`Petitioner,
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`
`
`
`
`v.
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`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.
`
`FINAL WRITTEN DECISION
`37 C.F.R. § 42.73
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`Case CBM2012-00001
`Patent 6,553,350
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`
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`SAP filed a petition seeking a covered business method patent review of
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`Versata’s 6,553,350 (’350) patent pursuant to section 18 of the Leahy-Smith
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`America Invents Act (AIA).1 An oral hearing was held on April 17, 2013. This
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`decision is a final written decision under 35 U.S.C. § 328(a) as to the patentability
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`of the challenged claims. Based on the record presented, we hold that Versata’s
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`’350 claims 17, and 26-29 are unpatentable under 35 U.S.C. § 101.
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`
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`I.
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`
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`Background
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`In 2007, Versata sued SAP for infringement of the ’350 patent. The case
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`proceeded to trial and a jury found infringement by SAP and awarded damages.
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`Ex. 2039 (Jury Verdict). The district court denied SAP’s post trial motion
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`challenging the infringement verdict, but held a new trial on damages. In the
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`second trial, the jury awarded lost-profits and reasonable royalty damages.
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`The district court upheld those awards. Patent Owner Preliminary Response 7
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`(“Prel. Resp.”), Paper 29.
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`
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`Both parties appealed the district court’s final judgment to the U.S. Court of
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`Appeals for the Federal Circuit on October 11, 2011. Versata Software, Inc. v.
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`SAP America, Inc., Nos. 2012-1029, -1049. Of note, SAP did not appeal the
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`district court’s claim construction, and the validity of the ’350 patent was not an
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`issue on appeal. Prel. Resp. 8. The Federal Circuit affirmed the jury’s
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`infringement verdict and damages award but vacated and remanded a permanent
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`injunction as overbroad. Versata Software Inc. v. SAP America Inc., 106 USPQ2d
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`1649 (Fed. Cir. 2013).
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`
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`SAP filed a petition with the United States Patent and Trademark Office
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`(“Office”) on September 16, 2012, challenging claims 17 and 26-29 of the
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`1 Pub. L. No. 112–29, 125 Stat. 284 (2011).
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`2
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`’350 patent as unpatentable for failing to comply with 35 U.S.C. §§ 101, 102, and
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`112, 1st and 2nd paragraphs. Petition (“Pet.”), Paper 1. Versata filed a patent
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`owner preliminary response opposing the institution of the review. On
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`January 9, 2013, the Patent Trial and Appeal Board (“Board”) granted the petition
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`and instituted the trial proceeding. The Board concluded that SAP demonstrated
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`that claims 17 and 26-29 were more likely than not unpatentable under 35 U.S.C.
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`§§ 101 and 102, but denied the petition as to 35 U.S.C. § 112, 1st and 2nd
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`paragraphs. Decision on Institution of a Covered Business Method Patent Review
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`(“Decision”), Paper 36.
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`
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`SAP requested that the trial be expedited with respect to the patentability of
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`Versata’s claims under 35 U.S.C. § 101. Motion, Paper 40. Versata opposed the
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`request, alleging that bifurcating the § 101 and § 102 issues had the potential to
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`prolong the proceeding and increase costs, contrary to the purposes of the AIA.
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`Opposition, Paper 42. SAP, however, agreed to forgo its challenge on the ground
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`of unpatentability under § 102, if the Board were to enter the requested expedited
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`schedule. Renewed Request, Paper 44. In light of SAP’s agreement to forgo the
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`§ 102 challenge, the Board granted SAP’s request to expedite the trial schedule.
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`Decision Conduct of the Proceeding, Paper 45.
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`
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`Versata filed a patent owner response to the petition, contending that the
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`challenged claims are patentable under § 101 and that the Board had employed an
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`incorrect claim construction standard in construing the ’350 patent claims.
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`Response (“PO Resp.”), Paper 51. SAP’s reply to the patent owner response
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`maintained that the claims are unpatentable and that the Board had construed the
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`claims properly. “Pet. Reply,” Paper 58.
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`3
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`
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`Both parties requested an oral hearing. See 35 U.S.C. § 326(a)(10) and 37
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`C.F.R. § 42.70(a). A hearing was held on April 17, 2013, a transcript of which
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`appears in the record. Record of Oral Hearing, Paper 66.
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`
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`II. Versata’s ’350 Patent2
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`
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`Versata’s ’350 patent is directed to a method and apparatus for pricing
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`products and services. Ex. 1001, ’350 patent, 3:9-13. The central concept of the
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`’350 patent involves hierarchies and the hierarchal arrangement of data. Ex. 1005,
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`¶ 20.
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`
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`The ’350 patent states that its “invention operates under the paradigm of
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`WHO (the purchasing organization) is buying WHAT (the product).” The ’350
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`patent, 3:24-25. An example of the WHO/WHAT paradigm is depicted in Figure 1
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`of the ’350 patent below:
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`2 This background section appears also in the Decision, 3-5.
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`4
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`According to the ’350 patent, the WHO/WHAT paradigm was known in the prior
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`art. Id., Fig. 1, 4:16-18. The ’350 patent, however, states that prior art pricing
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`tables for WHO/WHAT (customer/products) required large tables of data. Id.,
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`1:52-59.
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`
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`The ’350 patent invention is said to improve upon the prior art and reduce
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`the need for large tables of data by arranging customers into a hierarchy of
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`customer groups and products into a hierarchy of product groups. Id., 3:24-27, 41-
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`42. Specifically, in the ’350 patent, WHO is defined by creating an organizational
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`hierarchy of organizational groups, where each group represents a characteristic of
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`the organizational group. Id. An example of an arrangement of an organization
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`customer group is depicted below in Fig. 4A of the ’350 patent:
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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
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`5
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`product groups. Id., 8:17-25. As such, special pricing adjustments may be defined
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`as applying to all members of a specific customer group or a specific product
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`group. Id., 3:26-49.
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`
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`III. Analysis
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`
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`SAP contends that the ’350 claims 17 and 26-29 are unpatentable because
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`the claims are abstract and not statutory subject matter for a patent under 35 U.S.C.
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`§101. Pet. 16-21. Specifically, SAP states that Versata’s claims are directed to the
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`abstract ideas of arranging customer and product hierarchies and calculating a
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`product price.
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`
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`Versata contends that the Board should conclude that the ’350 claims are not
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`abstract, but instead are patent-eligible under § 101. Versata maintains that each of
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`the claims, considered as a whole, is directed to a specific, practical and
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`advantageous way to determine a product price. PO Resp. 1. According to
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`Versata, both SAP’s petition and the Board’s Decision on Institution, failed to
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`consider the claims as a whole and address each of their recited limitations, such as
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`storing, retrieving, and sorting. PO Resp. 16-51. Additionally, Versata contends
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`that the Board should not have applied the broadest reasonable interpretation
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`standard for claim construction in this proceeding and, therefore, the Board’s claim
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`construction in the Decision instituting trial was in error. PO Resp. 51-67. Versata
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`states that the correct claim construction was that used by the district court, which
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`further supports the patent eligibility of Versata’s challenged claims. PO Resp. 61-
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`67.
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`
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`SAP, as petitioner, bears the ultimate burden of proof that Versata’s claims
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`are unpatentable under § 101. To place SAP’s and Versata’s contentions in
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`context, we begin our analysis by first discussing our construction of the
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`6
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`challenged claims. Bancorp Serv., LLC v. Sun Life Assurance Co. of Canada, 687
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`F.3d 1266, 1273-74 (Fed. Cir. 2012) (“[I]t will ordinarily be desirable—and often
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`necessary— to resolve claim construction disputes prior to a § 101 analysis, for the
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`determination of patent eligibility requires a full understanding of the basic
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`character of the claimed subject matter.”).
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`A.
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`Claim Construction: The Broadest Reasonable Interpretation Standard
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`The Board’s Decision on Institution construed the challenged claims using
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`the broadest reasonable interpretation (“BRI”) standard. Decision 6. SAP
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`contends that the Board’s use of BRI was appropriate under the AIA statutes and
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`rules. Pet. Reply 14-15. Versata disagrees and contends that the Board’s use of
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`such a standard “was in error.” PO Resp. 61.
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`
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`1.
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`A Century of BRI at the Office
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`Versata states that claim construction is a question of law and that claim
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`
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`terms should be accorded only one definition: that which is based on a district
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`court interpretation standard. PO Resp. 62. There are, however, two claim
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`construction standards: the Office’s BRI construction and the district court
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`standard set forth in Phillips v. AWH.3 The difference in standards generally arises
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`from the ability of an applicant or patent owner in Office proceedings to amend
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`their claims, and the fact that there is no presumption of validity before the Office.4
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`Through the use of the broadest reasonable interpretation standard, the Office is
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`3 415 F.3d 1303, 1313 (Fed. Cir. 2005)(en banc).
`4 Whereas a patent is presumed “valid” unless overcome by clear and convincing
`evidence before a district court, a petitioner’s burden before the Office is limited to
`proving “unpatentability” by a preponderance of the evidence. Compare 35 U.S.C.
`§ 282(a) and § 326(e).
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`7
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`able to encourage inventors to amend their claims to remove uncertainties and over
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`breadth of claim scope.
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`
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`For at least a century, the Office has encouraged clear and unambiguous
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`claim drafting by utilizing the broadest reasonable interpretation. For example, a
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`1906 Commissioner of Patent’s Decision held that there is no better method of
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`construing claims before the Office. Specifically, this early decision explains the
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`rationale for BRI as follows:
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`No better method of construing claims is perceived than to give them
`in each case the broadest interpretation which they will support
`without straining the language in which they are couched. This
`method would seemingly give more uniform and satisfactory results
`than are obtained by methods largely in vogue – such, for example, as
`that of importing limitations from the specification according to the
`exigencies of the particular situation in which the claim may stand at a
`given moment. The method suggested also seems to have the
`advantage according in its results with the probable intentions of the
`inventor at the time when the claim is drawn. In presenting claims to
`the Office the object constantly sought is breadth. Where a limited
`meaning is intended when a claim is drawn, what possible objection
`can there be to imposing that meaning unmistakably upon the claim
`by its express terms? That a claim which does not carry its true
`meaning on its face misleads those affected by the patent instead of
`guiding them to its true scope is alone sufficient reason why the
`Patent Office should refuse to recognize proposed limitations of
`claims which have not been clearly expressed therein.
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`Podlesak and Podlesak v. McInnerney, 123(2) O.G. 1989, 1990 (Dec. Com. Pat.
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`1906, emphasis added). This standard of claim construction and its rationale have
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`been upheld consistently by the Federal courts, including both the Court of
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`Customs and Patent Appeals (“CCPA”) and the Federal Circuit. For instance, in
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`1932, the CCPA stated that:
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`After a patent has issued, and it no longer is possible for the patentee
`to control the phraseology of his claims, the courts will so interpret
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`8
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`them, if possible, as to protect him; but there is no reason, as we many
`times have observed, why an applicant in the Patent Office should not
`draw his claims to cover his actual invention only. For this reason, we
`have uniformly ruled that claims will be given the broadest
`interpretation of which they reasonably are susceptible. This rule is a
`reasonable one and tends not only to protect the real invention but to
`prevent needless litigation after the patent has issued.
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`
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`In re Horton, 54 F.2d 961, 964-65 (CCPA 1932) quoting In re Carr, 297 F. 542,
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`543-44 (C.A.D.C. 1924); see also, In re Kebrich, 201 F.2d 951 954 (CCPA 1953)
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`(stating that consideration of patentability requires use of broadest reasonable
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`interpretation); In re Prater, 415 F.2d 1393, 1405-05 (CCPA 1969) (holding that
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`the broadest reasonable interpretation is appropriate where party may amend the
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`claims to obtain protection commensurate with the inventor’s actual contribution to
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`the art).
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`The use of the broadest reasonable interpretation standard applies to
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`pre-issuance as well as post-issuance proceedings before the Office such as reissue
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`and reexamination proceedings. Both the CCPA and the Federal Circuit have
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`recognized that BRI serves an important public interest and that a key factor in its
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`use is that patent owners before the Office are provided an opportunity to amend
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`their claims and obtain appropriate coverage for their inventions with express
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`claim language. See, e.g., In re Reuter, 670 F.2d 1015 (CCPA 1981) (holding that
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`broadest reasonable interpretation is applicable in reissue proceedings); In re
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`Yamamoto, 740 F.2d 1569 (Fed. Cir. 1984) (holding that broadest reasonable
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`interpretation is applicable in reexamination proceeding).
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`
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`The new AIA reviews before the Office, like reissue and reexamination
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`proceedings, provide patent owners with an opportunity to amend their claims.
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`See, e.g., 35 U.S.C. § 326(d). Thus, the recognized public interest that supports the
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`use of the broadest reasonable interpretation during reissues and reexaminations
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`applies also to the new AIA post grant reviews. Specifically, as the cited
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`authorities recognize, claims serve an important notice function.5 The use of the
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`broadest reasonable interpretation encourages patent owners to remove ambiguities
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`and to narrow their claims by amendment, such that the inventor’s contribution to
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`the art is expressed in clear, precise and unambiguous terms.6 Hence, consistent
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`with the settled expectations of the past century, the Office has extended the use of
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`the broadest reasonable interpretation to the new AIA reviews.
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`
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`2.
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`The Office’s Adoption of BRI
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`Under the rulemaking authority provided for in the AIA, the Office, through
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`
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`
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`notice and comment rulemaking, adopted the use of the broadest reasonable
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`interpretation for all the new reviews. Thus, in covered business method patent
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`reviews, this claim construction standard is required by 37 C.F.R. § 42.300(b),
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`which reads as follows:
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`(b) 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.
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`Versata contends that the Office, in promulgating this rule, exceeded its
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`rulemaking authority provided for in 35 U.S.C. § 2(b)(2). PO Resp. 62. Versata’s
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`contention is unavailing, for it presumes that no other statutory authority exists for
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`5 See also, White v. Dunbar, 119 U.S. 47, 51-52 (1886) (“The claim is a statutory
`requirement, prescribed for the very purpose of making the patentee define
`precisely what his invention is; and is unjust to the public, as well as an evasion of
`the law, to construe it in a manner different from the plain import of its terms.”).
`6 A patent owner may not amend an expired patent. In such situations, the Board
`will construe the claims by giving more weight to the prosecution history than
`provided for under the broadest reasonable interpretation standard.
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`this standard of claim construction other than the Office’s rulemaking authority
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`under 35 U.S.C. § 2(b)(2). As discussed in the following sections, the AIA has
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`provided the Office with new statutory and rulemaking authority, particularly with
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`respect to post grant reviews, including covered business method patent reviews.
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`See, e.g., Title 35, Chapter 32.7
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`
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`
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`a.
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`Post Grant Rulemaking Authority Under the AIA
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`To understand the Office’s expanded rulemaking authority, it is necessary to
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`explore the evolution of the administrative inter partes reexamination process that
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`was previously available for the review of issued patents. As will be seen, this
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`evolution reveals Congress’ desire to develop a viable inter partes administrative
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`system for patent review coupled with the necessary rulemaking discretion to
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`establish and govern such an administrative system.
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`
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`Congress established the inter partes reexamination as part of the American
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`Inventors Protection Act of 1999 (“AIPA”), Pub. L. 106–113 §§ 4001-4808, 113
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`Stat. 1536 § 1501A et seq. (1999), (then codified as amended at 35 U.S.C.
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`§§ 311-318, superseded by inter partes review, §§ 311-319). Inter partes
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`reexamination was created to provide third parties an opportunity to participate in
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`patent challenges before the Office. 145 Cong. Rec. S26983, S26984 (daily ed.
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`Oct. 27, 1999) (statement of Sen. Hatch). The AIPA did not provide rulemaking
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`powers specifically directed to inter partes reexamination. Accordingly, in order
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`to regulate the conduct of the inter partes reexamination proceedings, the Office
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`issued final rules on December 7, 2000 “under the authority given to the
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`7 For additional views further characterizing the AIA and rulemaking authority
`under the Act, see Sarah Tran, Patent Powers, 25 Harv. J. L. & Tech. 595, 662-73
`(2012).
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`11
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`Commissioner of Patents and Trademarks by 35 U.S.C. 2(b)(2).” Rules to
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`Implement Optional Inter Partes Reexamination Proceedings, 65 Fed. Reg. 76756,
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`76772 (Dec. 7, 2000).
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`
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`Prior to the AIA, 35 U.S.C. § 2(b)(2) was said to be the “broadest of the
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`Office’s rulemaking powers.” Stevens v. Tamai, 366 F.3d 1325, 1333 (Fed. Cir.
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`2004) (citing Gerritsen v. Shirai, 979 F.2d 1524, 1527 n.3 (Fed. Cir. 1992)). This
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`section provides that the Office may govern the conduct of the proceedings before
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`it. 35 U.S.C. § 2(b)(2)(A). The Federal Circuit has held that “[t]o comply with
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`section 2(b)(2)(A), a Patent Office rule must be ‘procedural’ –i.e., it must ‘govern
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`the conduct of the proceedings in the Office.’” Cooper Techs. Co. v. Dudas, 536
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`F.3d 1330, 1335 (Fed. Cir. 2008). According to the Federal Circuit, a rule is
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`substantive when it “effects a change in existing law or policy” which affects
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`individual rights and obligations. Id. at 1336.
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`
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`Prior to the enactment of the AIA, several attempts were made by Congress
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`to reform patent law. For example, Congress introduced, but failed to pass, the
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`Patent Reform Act of 2007 and the Patent Reform Act of 2009. These acts
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`included a post grant review procedure that included the following rulemaking
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`provision:
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`§ 326. Conduct of post-grant review proceedings
`(a) IN GENERAL.—The Director shall prescribe regulations, in
`accordance with section 2(b)(2)—
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`(1) establishing and governing post-grant review proceedings
`under this chapter and their relationship to other proceedings
`under this title;
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`The Patent Reform Act of 2007, S. 1145 110th Cong. (2007) and the Patent Reform
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`Act of 2009, S. 515 111th Cong. (2009). As explained in the Senate Judiciary
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`Committee’s Report on the Patent Reform Act of 2009, while the committee
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`recognized the importance of removing disincentives to current administrative
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`processes, the reviews were not to be used as tools for harassment and the Office
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`was to address these potential abuses using its expanded procedural authority.
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`S. Rep. No. 111-18, at 18 (2009). These predecessors of the AIA, however, would
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`have limited the Office’s new rulemaking authority to that provided in
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`section 2(b)(2).
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` With the passage of the AIA, Congress sought to provide a viable alternative
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`to challenging patents in district court litigation,8 and therefore, replaced inter
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`partes reexamination with new adjudicative review proceedings. As part of this
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`transformation, Congress bestowed new rulemaking authority on the Office to
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`establish and govern the new reviews and the relationship of the reviews to other
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`proceedings under title 35. See 35 U.S.C. §§ 316(a)(4) and 326(a)(4). In
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`particular, the section 2(b)(2) restriction that appeared in the 2007 and 2009 bills
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`was removed. As recognized in the AIA legislative history, Congress granted the
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`Office rulemaking discretion to change existing examination policies such that the
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`new review proceedings would be more adjudicative in nature.9 This grant of AIA
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`8 See, for example, the Summary of the Manager’s Amendment adding section 18
`to the AIA, which states:
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`Recent court decisions, culminating in last year’s Supreme Court
`decision in Bilski v. Kappos, have sharply pulled back on the
`patenting of business methods, emphasizing that these “inventions”
`are too abstract to be patentable. In the intervening years, however,
`PTO was forced to issue a large number of business-method patents,
`many or possibly all of which are no longer valid. The Schumer
`proceeding offers a relatively cheap alternative to civil litigation for
`challenging these patents, and will reduce the burden on the courts of
`dealing with the backwash of invalid business-method patents.
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`157 Cong. Rec. S1367 (daily ed. Mar. 8, 2011).
`9 See Senator Kyl’s statement that:
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`post grant rulemaking authority is consistent with the recognition that the Office’s
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`establishment of a viable alternative for challenging patents required further
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`rulemaking discretion than had been provided previously.
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`
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`While granting the Office broad rulemaking authority, Congress sought to
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`guide the Office’s establishment of the new proceedings by providing certain
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`minimum requirements. For example, in establishing the new proceedings the
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`Office was required to promulgate rules setting forth the standards to institute a
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`review, as well as standards and procedures for discovery and motions to amend
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`claims. 35 U.S.C. § 326(a)(2), (5), and (9). Thus, the plain language of the AIA
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`statutes provides the Office with authority exceeding that of merely setting forth
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`“procedures.”
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`
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`As the Supreme Court has observed, “[Congress] does not . . . hide elephants
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`in mouseholes.” Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 468 (2001). It is
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`apparent from the plain language of the AIA that Congress has granted the Office
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`new and expanded rulemaking authority to ensure the success of the new reviews.
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`
`
`
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`b.
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`Promulgation of Rule 37 C.F.R. § 42.300(b)
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`The AIA was enacted into law on September 16, 2011. Pub. L. 112–29, 125
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`Stat. 284 (2011). Prior to its enactment, then Director Kappos requested that the
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`public provide comments to the Office regarding implementation of the AIA,
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`including the new patent reviews. Numerous comments were filed in response to
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`this request, including comments from intellectual property organizations, law
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`In the present bill, section 316(a)(4) gives the Office discretion in
`prescribing regulations governing the new proceeding. The Office has
`made clear that it will use this discretion to convert inter partes into an
`adjudicative proceeding.
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`157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011).
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`firms, companies, and individuals.10
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`
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`On February 10, 2012, the Office published a notice of proposed rulemaking
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`concerning the Office’s implementation of the transitional program for covered
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`business method patent reviews. See Changes to Implement Transitional Program
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`for Covered Business Method Patents, 77 Fed. Reg. 7080 (Feb. 10, 2012).11 In this
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`notice, the Office proposed adding 37 C.F.R. § 42.300(b), which is directed to the
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`broadest reasonable interpretation. As explained in the notice:
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`This proposed rule would be consistent with longstanding established
`principles of claim construction before the Office. See, e.g., In re Am.
`Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004); In re
`Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984).
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`Id. at 7082. The notice further explains that the patent owner’s ability to amend
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`claims to avoid prior art distinguishes the Office proceedings from those of district
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`court’s. Id. Additionally, the notice identified the relevant statutory authority for
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`the rules as including, among other things, 35 U.S.C. §§ 321-326 and 329. Id. at
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`7094.
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`
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`The Office received numerous comments on the rules,12 and on
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`August 14, 2012, the Office issued its final rules. See, e.g., Changes to Implement
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`Inter Partes Review Proceedings, Post-Grant Review Proceedings, and Transitional
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`Program for Covered Business Method Patents; Final Rule, 77 Fed. Reg. 48680
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`(August 14, 2012). The final rules adopted 37 C.F.R. § 42.300(b) as set forth in
`
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`10 http://www.uspto.gov/patents/law/comments/aia_implementation.jsp
`11 The Office also provided notices of rulemaking for a consolidated set of rules
`relating to Board trial practice, specific rules for inter partes review, post grant
`review, derivations, definitions for covered business method patent reviews and a
`practice guide. See 77 Fed. Reg. 48734 (Aug. 14, 2012).
`12 Public comments on the AIA rules may be viewed at:
` http://www.uspto.gov/aia_implementation/comments.jsp
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`
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`the proposed rule above and identified the statutory basis for the adoption of the
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`rule, how it was supported by the legislative history,13 and how the rule was
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`consistent with the settled expectations arising from Federal Circuit precedent
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`where a party is afforded an opportunity to amend claims. Id. at 48693. For
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`example, as to the authority for 37 C.F.R. § 42.300(b), the final rules explained
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`how the Office was required to enter final written decisions on patentability, 35
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`U.S.C. § 328, how the Office was required to set standards for instituting the
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`proceedings and for amending claims, 35 U.S.C. § 326(a)(2) and (9), and that the
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`Office was required to promulgate rules establishing and governing the proceeding
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`and the relationship of the proceeding to other proceedings, 35 U.S.C. § 326(a)(4).
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`Id. at 48697-98.
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`
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`During rulemaking, the Office received comments for and against the
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`adoption of the broadest reasonable interpretation standard.14 In response to
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`
`13 Senator Kyl stated:
`
`This [district court] information should help the Office understand and
`construe the key claims of a patent. It should also allow the Office to
`identify inconsistent statements made about claim scope--for example,
`cases where a patent owner successfully advocated a claim scope in
`district court that is broader than the “broadest reasonable
`construction” that he now urges in an inter partes review.
`
`157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011)(emphasis added). See also, San
`Huan New Materials High Tech, Inc. v. Int’l Trade Comm’n, 161 F.3d 1347, 1355
`(Fed. Cir. 1998) (“The legislative history shows that Congress was fully aware of
`the agency regulations and practices at the time of legislating in their area, and
`absent some special circumstance the failure to change or refer to existing practices
`is reasonably viewed as ratification thereof.”).
`14 See, e.g., Comments of Verizon, et al., at 8 (April 9, 2012)(The Office should
`“confirm that challenged claims will be given their broadest reasonable
`construction in light of the specification of the patent in which it appears.”), and
`Comments of the Pharmaceutical Research and Manufacturers of America at 12
`
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`comments received, the Office explained in the final rules its consideration of the
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`comments and provided detailed reasons for the adoption of the broadest
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`reasonable interpretation standard. Id. at 48697-48699. For example, the Office
`
`interpreted the requirement to determine patentability as requiring the use of the
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`broadest reasonable interpretation, as opposed to the district court standard of
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`construing to preserve validity. Additionally, the responses to comments noted
`
`that, unlike district court adjudicative proceedings, patent owners are afforded an
`
`opportunity to amend their claims during the Office reviews. By encouraging
`
`patent owners to eliminate ambiguity through amendment, the use of the broadest
`
`reasonable interpretation standard encourages clarity in claim language, which
`
`serves the important public notice function.
`
`
`
`Further, the responses noted that inconsistent results would become a major
`
`issue if the Office adopted a standard of claim construction other than the broadest
`
`reasonable interpretation for post grant reviews. Specifically, as in the present case
`
`where SAP has requested reexamination of the ’350 patent in addition to this
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`proceeding, the AIA contemplates that there will be multiple proceedings in the
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`Office, and thus requires the Office to establish rules concerning the relationships
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`between the various proceedings. Major difficulties would arise where the Office
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`is handling multiple proceedings with different claim construction standards, as it
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`could produce confusing results, which would be unhelpful to patentees,
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`applicants, the public, and the system.
`
`
`
`
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`Versata’s contention that the Office is limited to 35 U.S.C. § 2(b)(2) does
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`not take into account the policy reasons for the use of the broadest reasonable
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`interpretation or the well-settled expectations resulting from decades of case law
`
`
`(April 10, 2012)(The Office should “adopt a claim construction approach similar to
`that used by courts.”).
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`17
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`supporting the Office’s reliance on the standard to ensure clear and precise claim
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`language.
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`
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`We have reviewed Versata’s other contentions regarding the need to adopt
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`the district court’s claim construction, but find them equally unavailing. For
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`example, Versata contends that stare decisis requires the Board to apply the district
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`court’s claim construction. Pat. Opp., 65. We disagree as appeals from this
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`proceeding are exclusively to the Federal Circuit rather than to district courts.
`
`See also, In re Trans Texas Holdings Corp., 498 F.3d 1290, 1295-98 (Fed. Cir.
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`2007). Versata also contends that the Board is not bound to apply the “BRI
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`standard in every instance” and cites to 37 C.F.R. § 42.5. Pat. Opp., 64-65. While
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`37 C.F.R. § 42.5(b) allows the Board to waive or suspend a requirement under part
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`42, the discussion section of the rules make clear that this rule is intended to
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`address procedural requirements, e.g., waiving page limits, to permit the resolution
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`of issues in a uniform and efficient manner. 77 Fed. Reg. 48612, 48616
`
`(Aug. 14, 2012).
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`
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`Clear, precise and unambiguous claims are as important now as they were a
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`century ago.15 Clarity in claim scope is of the utmost importance because the
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`claims set forth all to which the patentee is enti