`
`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`PNC BANK, N.A., JP MORGAN CHASE & CO.
`AND JP MORGAN CHASE BANK, N.A.
`Petitioner
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner
`____________
`
`Case CBM2014-00038
`Patent 5,940,510
`____________  
`
`PATENT OWNER MAXIM INTEGRATED PRODUCTS, INC.’S
`PRELIMINARY RESPONSE TO PETITION FOR COVERED BUSINESS
`METHOD PATENT REVIEW OF UNITED STATES PATENT NO.
`5,940,510 PURSUANT TO 35 U.S.C. § 321, 37 C.F.R. § 42.304
`
`
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`
`TABLE OF CONTENTS
`
`I.   INTRODUCTION ............................................................................................. 1  
`II.   UNDER 35 U.S.C. § 325(a)(1) AND AMERICA INVENTS ACT
`§ 18(a)(1), INSTITUTION OF REVIEW IS BARRED BY PNC’S
`PRIOR CIVIL ACTION. ............................................................................. 3  
`A.   PNC Previously “Filed A Civil Action Challenging The Validity Of A Claim Of The
`Patent.” .................................................................................................................... 4  
`B.   For Purposes Of 35 U.S.C. § 325(a)(1), A CBM Patent Review Is A “Post-Grant
`Review.” .................................................................................................................. 8  
`1.   The Plain Meaning Of AIA § 18(a)(1) Requires CBM Patent Reviews To
`Employ The Standards And Procedures Of Post-Grant Reviews. ............... 9  
`2.   Legislative History Confirms That CBM Patent Review Functions Like Post-
`Grant Review. ............................................................................................ 13  
`3.   The Office Has Consistently Interpreted Post-Grant Review Procedures To
`Apply To CBM Patent Review. .................................................................. 16  
`C.   Regulations Cannot Narrow The § 325(a)(1) Bar. .................................................... 19  
`D.   “Petitioner”’s Inclusion Of The JP Morgan Entities In Addition To PNC Does Not
`Change The Applicability of The 35 U.S.C. § 325(a)(1) Statutory Bar. ............... 24  
`1.   PNC’s Prior Action Satisfies § 325(a)(1)’s Requirement That “The
`Petitioner” Have Filed A Prior Action Challenging The Patent. ............. 25  
`2.   PNC’s Status As “Real Party In Interest” Is An Independently Sufficient
`Reason For PNC’s Prior Action To Raise The § 325(a)(1) Bar Against All
`Entities Forming Petitioner. ...................................................................... 27  
`III.   REVIEW IS BARRED BECAUSE PETITIONER FAILED TO SHOW
`THE PATENT IS A “COVERED BUSINESS METHOD PATENT.” . 33  
`A.   Petitioner Fails To Demonstrate That The Patent “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.” ................................................................................................................ 35  
`B.   Even If The Patent Claimed A Method Or Corresponding Apparatus For Performing
`Data Processing Or Other Operations Used In The Practice, Administration, Or
`
` i
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Management Of A Financial Product Or Service, Petitioner Fails To Demonstrate
`That The Patent Is Not A “Patent[] For A Technological Invention.” .................. 38  
`1.   The Claimed Subject Matter Of The Patent As A Whole Recites Novel And
`Unobvious Technological Features. .......................................................... 40  
`2.   The Claimed Subject Matter Solves A Technical Problem Using A Technical
`Solution. ..................................................................................................... 53  
`IV.   IF INSTITUTION OF REVIEW WERE NOT BARRED UNDER 35
`U.S.C. § 325 AND AIA § 18(d)(1), THE PETITION WOULD STILL
`FAIL TO SATISFY THE 35 U.S.C. § 324 THRESHOLD. ..................... 58  
`A.   The Petition Makes No Showing Of Ineligible Subject Matter. ................................ 60  
`1.   The Claims Do Not Merely Recite An Abstract Idea. ..................................... 61  
`2.   Recent Case Law Confirms Petitioner’s Failure Of Proof. ........................... 64  
`B.   Petitioner Fails To Set Forth A Prima Facie Case Of Obviousness. ....................... 67  
`V.   CONCLUSION .............................................................................................. 68  
`
`
`
`
` ii
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`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`
`
`COURT DECISIONS
`
`Andrus v. Glover Construction Co.,
`446 U.S. 608 (1980) ........................................................................................... 11
`
`Bilski v. Kappos,
`130 S. Ct. 3218 (2010) ................................................................................. 60, 61
`
`Conte v. Justice,
`996 F.2d 1398, 1402 (2d Cir. 1993); cf. ............................................................ 31
`
`Cook v. Principi,
`318 F.3d 1334 (Fed. Cir. 2002) ................................................................ 9, 11, 12
`
`Diamond v. Diehr,
`450 U.S. 175 (1981) ..................................................................................... 61, 66
`
`Fireman’s Fund Ins. Co. v. England,
`313 F.3d 1344 (Fed. Cir. 2002) .......................................................................... 14
`
`Ford Motor Co. v. United States,
`715 F.3d 906 (Fed. Cir. 2013) ............................................................................ 17
`
`Gottschalk v. Benson,
`409 U.S. 63 (1972) ............................................................................................. 65
`
`In re Lueders,
`111 F.3d 1569 (Fed. Cir. 1997) .......................................................................... 10
`
`K Mart Corp. v. Cartier,
`486 U.S. 281 (1988) ........................................................................................... 22
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) ................................................................................. 61, 62
`
` iii
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`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Milam v. Director, Office of Worker’s Comp. Progs.,
`874 F.2d 223 (4th Cir. 1989) .............................................................................. 12
`
`Mills Music, Inc. v. Snyder,
`469 U.S. 153 (1985) ............................................................................................. 8
`
`TRW Inc. v. Andrews,
`534 U.S. 19 (2001) ............................................................................................. 10
`
`Ultramercial, Inc. v. Hulu, LLC,
`722 F.3d 1335 (Fed. Cir. 2013), pet. For cer. Filed sub nom. Wild Tangent, Inc.
`v. Ultramerical, LLC, No. 13-255 (Aug. 23, 2013) ............................... 61, 63, 65
`
`Versata Dev. Gp. v. Rea,
`2013 WL 4014649 (E.D. Va. Aug. 7, 2013), appeal filed, No. 14-1145 (Fed.
`Cir. Dec. 2, 2013) ............................................................................................... 16
`
`Watts v. Swiss Bank Corp.,
`27 N.Y.2d 270, 278 (1970) ................................................................................ 32
`
`
`
`ADMINISTRATIVE DECISIONS
`
`Agilsys, Inc. et al. v. Ameranth, Inc.,
`Case No. CBM 2014-00014 (P.T.A.B. Feb. 11, 2014)
`(per Lee, APJ.) ............................................................................................. 25, 26
`
`Apple, Inc. v. SightSound Tech., LLC,
`Case No. CBM2013-00019, paper No. 17 (P.T.A.B. Oc. 8, 2013) (per Arbes,
`APJ) .................................................................................................. 60, 61, 63, 64
`
`Ariosa Diags. v. Isis Innovation Ltd.,
`Case No. IPR2012-00022 (MPT), paper 20 (P.T.A.B. Feb. 12, 2013) (per
`Green, APJ) .................................................................................................... 6, 14
`
`Bloomberg Inc., et al. v. Markets-Alert PTY LTD.,
`
` iv
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Case No. CBM2013-00005 Paper No. 18 (P.T.A.B. Mar. 29, 2013) (per
`Medley, APJ) ...................................................................................................... 47
`
`Chicago Mercantile Exch., Inc. v. 5th Market, Inc.,
`Case No. CBM20132-00027 (P.T.A.B. Dec. 18, 2013)
`(per Zecher, J.) ....................................................................................... 61, 63, 64
`
`Ex Parte Reexamination, Control No. 90/013,063, Order (Feb. 19, 2014) ............. 46
`
`Groupon, Inc. v. Blue Calypso, LLC,
`Case No. CBM2013-00033 Paper No. 10 (P.T.A.B. Dec. 19, 2013) (per Benoit,
`APJ) .................................................................................................................... 47
`
`Interthinx, Inc. v. Corelogic Solutions, LLC,
`Case No. CBM2012-00007 Paper No. 15 (P.T.A.B. Jan. 31, 2013) (per
`McNamara, APJ) ................................................................................................ 47
`
`Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co.,
`Case No. CBM2012-00003 (P.T.A.B. Feb. 12, 2013)
`(per Lee, APJ.) ................................................................................. 47, 49, 50, 51
`
`Salesforce.com, Inc. v. VirtualAgility, Inc.,
`Case No. CBM2013-00024 Paper No. 16 (P.T.A.B. Nov. 19, 2013) (per
`Braden, APJ) ...................................................................................................... 47
`
`Teleservices Industry Association v. AT&T Corp.,
`15 FCC Rcd 21454 (2000) ................................................................................. 30
`
`
`
`STATUTES AND RULES
`
`Leahy-Smith America Invents Act,
`Pub. L. No. 112-29, 125 Stat. 284 (2011), § 18 ......................... 4, 8, 9, 33, 34, 59
`
`Fed. R. Civ. P. 2 ........................................................................................................ 7
`
`Fed. R. Civ. P. 3 ........................................................................................................ 7
`
` v
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`1 U.S.C. § 1 ............................................................................................................. 27
`
`35 U.S.C. § 101 ....................................................................................................... 60
`
`35 U.S.C. § 314 ....................................................................................................... 21
`
`35 U.S.C. § 315 ....................................................................................................... 21
`
`35 U.S.C. § 321 ....................................................................................................... 27
`
`35 U.S.C. § 322 ....................................................................................................... 28
`
`35 U.S.C. § 323 ................................................................................................. 21, 58
`
`35 U.S.C. § 324 ................................................................................................. 21, 59
`
`35 U.S.C. § 325 ................................................................................................ passim
`
`35 U.S.C. § 326 ................................................................................................. 16, 59
`
`
`
`REGULATIONS
`
`Rules Of Practice For Trials Before PTAB & Judicial Review Of PTAB
`Decisions; Final Rule, 77 Fed. Reg. 48,612 (Aug. 14, 2012) (codified at C.F.R.
`tit. 37, ch. 1) ............................................................................................................ 16
`
`Changes to Implement Inter Partes Review Proceedings, Post-Grant Review
`Proceedings, and Transitional Program for Covered Business Method Patents;
`Final Rule, 77 Fed. Reg. 48,680 (Aug. 14, 2012) (codified at C.F.R. tit. 37, ch.
`1) .................................................................................................................. 20, 34, 58
`
`Transitional Program for Covered Business Method Patents—Definitions of
`Covered Business Method Patent and Technological Invention; Final Rule, 77 Fed.
`Reg. 48,734 (Aug. 14, 2012) (codified at C.F.R. tit. 37, ch. 1) ............. 34, 37, 47, 53
`
`Office Patent Trial Practice Guide; Rule, 77 Fed. Reg. 48,756 (Aug. 14, 2012) (to
`be codified at C.F.R. pt. 42) ............................................................ 37, 39, 55, 56, 59
`
` vi
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`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`37 C.F.R. § 42.51 .................................................................................................... 44
`
`37 C.F.R. § 42.201 .................................................................................................. 20
`
`37 C.F.R. § 42.207 .................................................................................................. 58
`
`37 C.F.R. § 42.300 .................................................................................................. 49
`
`37 C.F.R. § 42.301 ............................................................................................ 34, 39
`
`37 C.F.R. § 42.304 ............................................................................................ 34, 48
`
`
`
`LEGISLATIVE HISTORY
`
`Leahy-Smith America Invents Act,
`H.R. 112-98 (June 1, 2011) ................................................................................ 13
`
`Leahy-Smith America Invents Act,
`157 Cong. Rec. S5428 (daily ed. Sept. 8, 2011) .................................... 13, 14, 29
`
`Leahy-Smith America Invents Act,
`157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) ................................................ 14
`
`Leahy-Smith America Invents Act,
`157 Cong. Rec. 1363, 1364 (daily ed. Mar. 8, 2011) ......................................... 47
`
`
`
`MISCELLANEOUS
`
`Elizabeth Laughton, “Can a declaratory judgment plaintiff file a CBM petition?,”
`Finnegan—America Invents Act (Jun. 18, 2013) ................................................... 19
`
`Lori Gordon, “IP: The power of the covered business method review—The AIA
`provides an effective new tool for companies accused of infringement of financial
`patents,” Inside Counsel (Jan. 1, 2013) ................................................................... 22
`
`
`
` vii
`
`

`

`
`
`EXHIBIT LIST
`
`Exhibit 2001
`
`Exhibit 2002
`
`Exhibit 2003
`
`Exhibit 2004
`
`Exhibit 2005
`
`Exhibit 2006
`
`Exhibit 2007
`
`Exhibit 2008
`
`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Complaint, PNC Fin. Servs. Grp., Inc. & PNC Bank,
`N.A. v. Maxim Integrated Prods., Inc., No. 2:12-cv-
`00089-JFC (W.D. Pa. Jan. 25, 2012)
`
`Memorandum Of Law In Support Of Defendant USPTO
`Director’s Motion To Dismiss, Versata Dev. Group v.
`Rea, No. 1:13-cv-00328-GBL-IDD (E.D. Va. May 16,
`2013)
`
`Elizabeth Laughton, “Can a declaratory judgment
`plaintiff file a CBM petition?,” Finnegan—America
`Invents Act (Jun. 18, 2013)
`
` Lori Gordon, “IP: The power of the covered business
`method review—The AIA provides an effective new
`tool for companies accused of infringement of financial
`patents,” Inside Counsel (Jan. 1, 2013)
`
`Counterclaims, JPMorgan Chase & Co. & JPMorgan
`Chase Bank, N.A. v. Maxim Integrated Prods., Inc., No.
`2:12-cv-01641-JFC (W.D. Pa. Apr. 02, 2013)
`
`Hearing Transcript, In re Maxim Integrated Products,
`Inc., Misc. No. 12-244 (MDL No. 2354) (W.D. Pa. Mar.
`20, 2013) (excerpt)
`
` Accused Infringers’ Hearing Demonstratives, In re
`Maxim Integrated Products, Inc., Misc. No. 12-244
`(MDL No. 2354) (W.D. Pa. Mar. 20, 2013) (excerpt)
`
`U.S. Patent No. 8,140,358, Notice of Allowability
`(mailed Jan. 11, 2012)
`
` viii
`
`

`

`Exhibit 2009
`
`Exhibit 2010
`
`Exhibit 2011
`
`Exhibit 2012
`
`Exhibit 2013
`
` Exhibit 2014
`
`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Memorandum Opinion, In re Maxim Integrated
`Products, Inc., Misc. No. 12-244 (MDL No. 2354)
`(W.D. Pa. Dec. 17, 2013)
`
`Order, In re Maxim Integrated Products, Inc., Misc. No.
`12-244 (MDL No. 2354) (W.D. Pa. Dec. 17, 2013)
`
`First Amended Complaint, PNC Fin. Servs. Grp., Inc. &
`PNC Bank, N.A. v. Maxim Integrated Prods., Inc., No.
`2:12-cv-00089-JFC (W.D. Pa. Jan. 21, 2014)
`
`The PNC Financial Services Group, Inc. And PNC
`Bank, N.A.’s Objections And Responses To Maxim
`Integrated Products, Inc.’s First Set Of Common
`Interrogatories (Nos. 1–2), In re Maxim Integrated
`Products, Inc., Misc. No. 12-244 (MDL No. 2354)
`(W.D. Pa.), Mar. 11, 2013
`
`Branch Banking & Trust Co.’s Responses To Maxim
`Integrated Products, Inc.’s First Common
`Interrogatories (Nos. 1-2), In re Maxim Integrated
`Products, Inc., Misc. No. 12-244 (MDL No. 2354)
`(W.D. Pa.), Jul. 8, 2013
`
`JPMorgan Chase & Co. And JPMorgan Chase Bank,
`N.A.’s Objections And Responses To Maxim Integrated
`Products, Inc.’s First Common Interrogatories (Nos. 1-
`2), In re Maxim Integrated Products, Inc., Misc. No. 12-
`244 (MDL No. 2354) (W.D. Pa.), Feb. 18, 2014
`
`
`
`
` ix
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`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, Virginia 22313-1450
`
`
`Pursuant to 35 U.S.C. § 323, America Invents Act of 2011 (“AIA”)
`
`§ 18(a)(1), and 37 C.F.R. §§ 42.207-208, the undersigned, on behalf of and acting
`
`in a representative capacity for patent owner, Maxim Integrated Products, Inc.
`
`(“Patent Owner” or “Maxim”), submits the following Preliminary Response to the
`
`Petition for covered business method (“CBM”) patent review filed in the above-
`
`captioned proceeding by PNC Bank N.A., JP Morgan Chase & Co. and JP Morgan
`
`Chase Bank, N.A. (collectively, “Petitioner”) against United States Patent No.
`
`5,940,510 (“the ’510 patent” or “the Patent”).
`
`I.
`
`INTRODUCTION
`
`As a matter of law, this case cannot proceed because 35 U.S.C. § 325(a)(1)
`
`bars CBM patent review where the petitioner has filed a prior civil action
`
`challenging the validity of the patent. On January 25, 2012, months before
`
`Petitioner filed its petition challenging the Patent, PNC (one of the companies that
`
`collectively form Petitioner) filed a declaratory judgment action in federal court
`
`seeking to invalidate the Patent.
`
` 1
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Congress recognized the evils inherent in patent owners being subject to a
`
`succession of proceedings instigated at the behest of the same parties challenging
`
`the same patents. Accordingly, when PNC, without having been sued by Patent
`
`Owner, and months after the AIA was signed into law, chose to mount its first
`
`challenge to the Patent’s validity by filing a declaratory judgment action in District
`
`Court, it was on full notice that it was giving up the right to later initiate a second
`
`challenge to the same Patent by CBM patent review.
`
`PNC’s prior action is sufficient under § 325(a)(1) to bar initiation as to all
`
`entities that form Petitioner. Even if it were not, all entities that form Petitioner are
`
`also real parties-in-interest. That too is sufficient under § 325(a)(1) to bar
`
`initiation as to all entities that form Petitioner.
`
`Despite the fact the Petition includes facts making it apparent that every
`
`element of paragraph 325(a)(1) is satisfied, Petitioner does not even mention that
`
`provision, or attempt to argue how the provision might permit the requested
`
`review.
`
`In light of the paragraph 325(a)(1) bar, Petitioner’s other standing arguments
`
`are moot. Nevertheless, if initiation were not barred by 35 U.S.C. § 325(a)(1), the
`
`petition should in any event be rejected under America Invents Act § 18(a)(1)(E)
`
`because the Patent is not a covered business method patent eligible for covered
`
` 2
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`business method patent review, and under 35 U.S.C. § 324 because (among other
`
`flaws) Petitioner fails to demonstrate any likelihood that the claims are ineligible
`
`for patenting under 35 U.S.C. § 101.
`
`The Board is statutorily obligated to deny institution of the review requested
`
`by Petitioner.
`
`II. UNDER 35 U.S.C. § 325(a)(1) AND AMERICA INVENTS ACT
`§ 18(a)(1), INSTITUTION OF REVIEW IS BARRED BY PNC’S
`PRIOR CIVIL ACTION.
`
`The Petition requests CBM patent review of claims 1, 3, 5 and 6 of the
`
`Patent. Petition (“Pet.”) at 1. However, before the Petition was filed, PNC filed a
`
`civil action challenging the validity of the Patent. By law, a post-grant review may
`
`not be instituted where, as here, the petitioner filed a civil action challenging the
`
`validity of a claim of the patent prior to filing the petition for review:
`
`POST–GRANT REVIEW BARRED BY CIVIL ACTION. – A post-
`grant review may not be instituted under this chapter if, before the
`date on which the petition for such a review is filed, the petitioner or
`real party in interest filed a civil action challenging the validity of a
`claim of the patent.
`
`35 U.S.C. § 325(a)(1). For purposes of this statutory provision, CBM patent
`
`reviews are regarded as post-grant reviews and employ the same standards and
`
` 3
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`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`procedures. AIA § 18(a)(1). Therefore, under 35 U.SC. § 325(a)(1), institution of
`
`a CBM patent review in this case is barred by PNC’s previous civil action.1
`
`A.
`
`PNC Previously “Filed A Civil Action Challenging The Validity
`Of A Claim Of The Patent.”
`
`According to the Petition’s face page, “PNC Bank, N.A. (‘PNC’), JP
`
`Morgan Chase & Co., and JP Morgan Chase Bank, N.A. (‘JP Morgan’)” are
`
`“collectively, ‘Petitioner.’” Moreover, PNC Bank, N.A. (one of the plaintiffs in
`
`the earlier declaratory judgment action) is “a subsidiary of The PNC Financial
`
`Services Group, Inc.” (the other plaintiff in the declaratory judgment action).2 The
`
`Petition also notes that PNC Financial Services and its subsidiary PNC Bank are
`                                                                                                                          
`1 Reference is made to the somewhat more detailed version of the discussion in
`
`Sections II-A through II-C herein, as it applies to another, similar case found in
`
`Patent Owner’s preliminary response in Branch Bank and Trust Co. v. Maxim
`
`Integrated Products, Inc., Case No. CBM2013-00059, Paper 10 (P.T.A.B. Dec. 26,
`
`2013). A decision regarding institution of review in that case is currently pending.
`
`2 According to The PNC Financial Services Group, Inc.’s and PNC Bank, N.A.’s
`
`joint Complaint in the prior action, PNC Bank, N.A. “is a wholly owned, indirect
`
`subsidiary of The PNC Financial Services Group, Inc.” Ex. 2001 [Complaint] at
`
`2001-001 ¶ 3.
`
` 4
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`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`collectively referred to as “‘PNC.’” Pet. at 2. (In this Preliminary Response,
`
`Patent Owner employs the same nomenclature for these parties as does Petitioner.)
`
`On January 25, 2012, PNC, filed a declaratory complaint against the Patent
`
`Owner in District Court (the “Complaint”). Ex. 2001 [Complaint, PNC Fin. Servs.
`
`Grp., Inc. & PNC Bank, N.A. v. Maxim Integrated Prods., Inc., No. 2:12-cv-
`
`00089-JFC (W.D. Pa. Jan. 25, 2012)] at 2001-001. The Complaint named the
`
`Patent Owner as sole defendant, and sought a declaration of “invalidity under the
`
`patent laws of the United States . . . [and] the Declaratory Judgment Act . . . .”:
`
`  
`
`  
`
`  
`
`  
`
`  
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`
` 5
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`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Id. at 2001-001 & ¶ 1.
`
`Petitioner filed the Petition in this case over a year after the Complaint was
`
`filed. Thus, the Complaint was filed “before the date on which the petition [in this
`
`case was] filed.” § 325(a)(1).3
`
`There can be no dispute that a declaratory judgment claim is a “civil action.”
`
`Rule 2 of the Federal Rules of Civil Procedure states that “[t]here is one form of
`
`action—the civil action.” Rule 3 states that “[a] civil action is commenced by
`
`filing a complaint with the court.” Thus, PNC’s filing of its Complaint constitutes
`
`the “fil[ing] [of] a civil action.” § 325(a)(1). Accord Ariosa Diags. v. Isis
`
`Innovation Ltd., Case No. IPR2012-00022 (MPT), Paper 20 (P.T.A.B. Feb. 12,
`
`2013) (per Green, APJ.) at 5 (under 35 U.S.C. § 315(a)(1)’s identical language,
`
`“when the statute refers to filing a civil action, it refers to filing a complaint with
`
`the court to commence the civil action.”).
`
`PNC’s civil action also plainly “challeng[ed] the validity of a claim of the
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`[P]atent.” § 325(a)(1). PNC’s “Count II” in its Complaint sought a “declaratory
`
`judgment of invalidity,” asserting that “[t]he claims of each of the ‘510, ‘880, ‘013,
`
`                                                                                                                          
`3  Last January, PNC filed an Amended Complaint, maintaining its invalidity claim,
`
`which remains pending. Ex. 2011 [Amended Complaint] at 2011-001 ¶ 1.  
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` 6
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`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`and ‘095 patents are invalid under Title 35 of the United States Code, including but
`
`not limited to §§ 101, 102, 103, and/or 112.” Ex. 2001 [Complaint] at 2001-005
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`¶ 30. The Complaint specified that when it refers to “the ’510, ’880, ’013, and
`
`’095 patents,” id., it meant “United States Patent Nos. 5,940,510 (‘’510 patent’),
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`5,949,880 (‘’880 patent’), 6,105,013 (‘’013 patent’), and 6,237,095 (‘’095
`
`patent’).” Id. at 3 ¶ 13 (emphases added). Thus, the Complaint challenged the
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`validity of the same Patent now challenged in this Petition.
`
`Of note, 35 U.S.C. § 325(a)(3) expressly distinguishes “[a] counterclaim
`
`challenging the validity of a claim of a patent” from “a civil action challenging the
`
`validity of a claim of a patent for purposes of this subsection.” 35 U.S.C.
`
`§ 325(a)(3) (emphases added). PNC’s earlier claim for declaratory judgment is a
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`civil action, not a counterclaim, and therefore raises the statutory bar.
`
`The Petition itself discloses all the facts needed to apply the statutory bar.
`
`The face of the Petition shows that (i) before the petition for review was filed, PNC
`
`filed a civil action against Patent Owner; (ii) that action is “related” to this case;
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`and (iii) that action is part of a litigation in which Patent Owner filed counterclaims
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`against PNC for infringement of the Patent. Pet. at 3; Exs. 1003 & 1005. Those
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`facts demonstrate that PNC’s prior action challenged the validity of a claim of the
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`Patent, and therefore all elements of 35 U.S.C. § 325(a)(1) are met.
`
` 7
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`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`For Purposes Of 35 U.S.C. § 325(a)(1), A CBM Patent Review Is
`A “Post-Grant Review.”
`
`B.
`
`The AIA created and defined CBM patent review as a transitional form of
`
`post-grant review to which 35 U.S.C. § 325(a) applies. The statute expressly
`
`defines CBM patent reviews as “post-grant review” proceedings; expressly dictates
`
`that the “standards and procedures” of post-grant reviews shall apply to CBM
`
`patent reviews and that the CBM patent reviews “shall be regarded as” post-grant
`
`reviews, subject to certain specific exceptions; and makes clear that subsection
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`325(a) of Chapter 32, 35 U.S.C. § 325(a), the operative statutory provision for
`
`present purposes, shall apply to CBM patent review proceedings.
`
`The plain language of AIA § 18(a)(1) explains that “the Director shall issue
`
`regulations establishing and implementing a transitional post-grant review
`
`proceeding for review of the validity of covered business method patents”
`
`(emphases added). Thus, the AIA makes explicit that CBM patent reviews are a
`
`type of “post-grant review” proceeding. “In construing a federal statute it is
`
`appropriate to assume that the ordinary meaning of the language that Congress
`
`employed accurately expresses the legislative purpose.” Mills Music, Inc. v.
`
`Snyder, 469 U.S. 153, 164 (1985) (internal quotation marks omitted).
`
`The AIA further specifies that the
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` 8
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`transitional post-grant review proceeding for review of the validity of
`covered business method patents . . . shall be regarded as, and shall
`employ the standards and procedures of, a post-grant review under
`chapter 32 of title 35, United States Code, subject to the following:
`
`(A) Section 321(c) of title 35, United States Code, and
`subsections (b), (e)(2), and (f) of section 325 of such title shall
`not apply to a transitional proceeding. . . .
`
`AIA § 18(a)(1)(A). In other words, the AIA expressly states that CBM patent
`
`reviews “shall be regarded as, and shall employ the standards and procedures of, a
`
`post-grant review under” section 325 “subject to the following” exception:
`
`“subsections (b), (e)(2), and (f) of section 325 of such title shall not apply.” Id.
`
`Importantly, subsection (a) of section 325 is not one of the exceptions.
`
`1.
`
`The Plain Meaning Of AIA § 18(a)(1) Requires CBM Patent
`Reviews To Employ The Standards And Procedures Of Post-
`Grant Reviews.
`
`Under familiar canons of statutory interpretation, including that of
`
`“expressio unius est exclusio alterius,” when the AIA expressly excludes
`
`“subsections (b), (e)(2), and (f)” of section 325 from the provisions that apply to
`
`CBM patent reviews, it necessarily includes subsection (a) of section 325.
`
`(“Expressio unius est exclusio alterius means that the expression of one thing is the
`
`exclusion of another,” Cook v. Principi, 318 F.3d 1334, 1339 n.6 (Fed. Cir. 2002),
`
` 9
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`and “instructs that where law expressly describes a particular situation to which it
`
`shall apply, an irrefutable inference must be drawn that what was omitted or
`
`excluded was intended to be omitted or excluded.” In re Lueders, 111 F.3d 1569,
`
`1577 n.12 (Fed. Cir. 1997).)
`
`The decisions confirming these principles are legion. Today in Law v.
`
`Siegel, 571 U. S. ____, ___ S. Ct. ____, 2014 U.S. LEXIS 1784 (Mar. 4, 2014), the
`
`Supreme Court reversed a court of appeals decision that read an exception into a
`
`statutory exemption that was not among the statute’s express exceptions to that
`
`exemption. As the Court explained, “[t]he Code’s meticulous—not to say mind-
`
`numbingly detailed—enumeration of exemptions and exceptions to those
`
`exemptions confirms that courts are not authorized to create additional
`
`exceptions.” Id., 2014 U.S. LEXIS at *16-*17. Similarly, as explained above, the
`
`AIA carefully set forth provisions for post-grant review and exemptions from such
`
`review in 35 U.S.C. § 325 et seq., and equally meticulously set forth the exceptions
`
`to the applicability of the general post-grant provisions to CBM review. This
`
`detailed enumeration of “carefully calibrated exceptions and limitations,” id. at
`
`*16, confirms that the Office may not create additional exceptions to the paragraph
`
`325(a)(1) bar.
`
` 10
`
`

`

`Case CBM2014-00038
`Patent 5,940,510
`Attorney Docket No. 131209-001USCBM
`
`  
`
`Law cites, among other decisions, TRW Inc. v. Andrews, 534 U.S. 19, 28-29
`
`(2001). Law, ___ S. Ct. at ___. In TRW, the Supreme Court analyzed a statute
`
`that, like the statute in this case, “set[] out a general rule and an exception.” 534
`
`U.S. at 22. The court of appeals had held that the statute’s general rule in TRW had
`
`an additional, unstated exception that was a “prevailing . . . rule” in those types of
`
`legal provisions. Id. at 26-27. The Supreme Court reversed. The Court explained
`
`that “[w]here Congress explicitly enumerates certain exceptions to a general
`
`prohibition, additional excep