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`Paper No.
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`CALLIDUS SOFTWARE, INC.
`Petitioner
`
`v.
`
`VERSATA DEVELOPMENT
`GROUP, INC.
`Patent Owner
`
`AND
`
`VERSATA SOFTWARE, INC.
`Real Party-In-Interest
`___________________
`
`Case CBM2014-00117
`Patent 7,908,304
`_____________________
`
`
`
`PATENT OWNER PRELIMINARY RESPONSE
`PURSUANT TO 37 C.F.R. § 42.207
`
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`

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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`TABLE OF CONTENTS
`
`INTRODUCTION ............................................................................................ 4 
`I. 
`II.  U.S. PATENT 7,908,304 .................................................................................. 5 
`A.  Overview ....................................................................................................... 5 
`B.  The ‘304 Patent Improves on Systems That Had Long Sought to Apply
`Technological Solutions to Business Challenges ......................................... 6 
`C.  Broadest Reasonable Claim Construction ................................................... 11 
`D.  Support for Patent Owner’s Broadest Reasonable Claim Constructions .... 14 
`1. 
`“Commission Engine” ......................................................................... 14 
`2. 
`“Selling Agreement” ........................................................................... 16 
`3. 
`“Interface” for Obtaining a Plurality of Business Rules ..................... 21 
`III.  TRIAL SHOULD NOT BE INSTITUTED BECAUSE PETITIONER IS
`STATUTORILY BARRED FROM SEEKING POST-GRANT REVIEW . 23 
`A.  Section 325(a)(1) Defines a Statutory Bar that Pertains to the
`Transitional Program for Covered Business Method Review .................... 25 
`B.  Plain Language of § 325(a)(1) Bars Post-Grant Review ............................ 26 
`C.  Legislative History Confirms the Meaning of § 325(a)(1)’s Plain
`Language; Petitioner’s Own Choice Triggers Statutory Bar ...................... 28 
`D.  Statutory Framework is Hardly Inequitable to Patent Challenger .............. 32 
`E. 
`Prior Judicial and Administrative Interpretations Confirm Applicability
`of Statutory Bar for Prior-Filed Civil Action Challenging Validity ........... 34 
`F.  The Prior CBM and Prior Institution........................................................... 38 
`G.  Statutory Language Defining the § 325(a)(1) Prior Civil Action Bar, its
`Legislative History and Prior Interpretations of the Statute All Dictate
`Non-Institution ............................................................................................ 42 
`IV.  CONCLUSION .............................................................................................. 42 
`
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`–ii–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`TABLE OF AUTHORITIES
`
`Cases 
`Anova Food, LLC v. Sandau, IPR2013-00114, Paper No. 17 (P.T.A.B. Sept. 13,
`2013) .................................................................................................................... 35
`Branch Banking and Trust Co. v. Maxim Integrated Products, Inc., CBM2013-
`00059, Paper No. 12 (P.T.A.B. March 20, 2014) ......................................... 25, 35
`Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988) .......................................... 29
`Graves v. Principi, 294 F.3d 1350 (Fed. Cir. 2002) ................................................ 39
`Hoechst Aktiengesellschaft v. Quigg, 917 F.2d 522 (Fed. Cir. 1990) ..................... 28
`In re Translogic Tech., Inc., 504 F.3d 1249 (Fed. Cir. 2007) ................................. 12
`InVue Sec. Prods., Inc. v. Merch. Techs., Inc., 2012 U.S. Dist. LEXIS 92097 ....... 36
`InVue Sec. Prods., Inc. v. Merch. Techs., Inc., IPR2013-00122, Paper No. 17
`(P.T.A.B. June 27, 2013) .............................................................................. 36, 37
`
`Statutes 
`35 U.S.C. § 325(a)(1) .............................................................................. 4, 23, 25, 30
`35 U.S.C. § 325(a)(2) ............................................................................................... 31
`35 U.S.C. § 325(a)(3) ............................................................................................... 30
`35 U.S.C. § 326(e) ..................................................................................................... 5
`AIA § 18(a)(1) ......................................................................................................... 23
`
`Rules 
`37 CFR § 42.1(d) ....................................................................................................... 5
`37 CFR § 42.208 ........................................................................................................ 4
`
`Legislative History 
`153 Cong. Rec. E774 ............................................................................................... 27
`154 Cong. Rec. S9987.............................................................................................. 27
`157 Cong. Rec. S1041.............................................................................................. 28
`157 Cong. Rec. S1363.............................................................................................. 29
`157 Cong. Rec. S1375.............................................................................................. 28
`157 Cong. Rec. S5428.............................................................................................. 29
`157 Cong. Rec. S5429.............................................................................................. 31
`157 Cong. Rec. S952 ................................................................................................ 29
`
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`–ii–
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`I.
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`INTRODUCTION
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
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`The claims of U.S. Patent 7,908,304 (“the ’304 Patent”) recite patent eligible
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`subject matter. Based on the present petition for Covered Business Method Patent
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`Post-Grant Review, only dependent claims 2-11, 26-29, 33-41 and 44-46 are in
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`issue. Petitioner alleges in its Petition that dependent claims 2-11, 26-29, 33-41
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`and 44-46 of the ’304 Patent are, under 35 U.S.C. § 101, directed to no more than a
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`patent-ineligible abstract idea, seeking to leverage the Board’s prior institution
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`decision (relative to independent claims) in Callidus v. Versata, CBM2013-00054
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`(“the prior CBM”), Paper No. 19, but performing little actual analysis of the claims
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`here challenged. No other grounds are alleged.
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`While Patent Owner specifically reserves its legal and evidentiary opposition
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`to the substance of Petitioner’s challenges under § 101, for purposes of the Board’s
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`decision process under 37 CFR § 42.208 as to why post-grant review should not be
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`instituted, this preliminary response reemphasizes1 the dispositive jurisdictional
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`
`1
`In the prior CBM, Patent Owner briefed the preclusive effect of a statutory bar
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`under 35 U.S.C. § 325(a). Relying on interim orders issued in other
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`proceedings, the Board found that dismissal without prejudice of Petitioner’s
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`prior, and otherwise barring, civil action challenging validity nullified the
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`§ 325(a) statutory bar. Accordingly, the Board instituted trial in that prior
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`bar to institution under 35 U.S.C. § 325(a)(1). In addition, and out of an
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`
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`abundance of caution, this preliminary response addresses proper construction of
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`claim terms that Patent Owner has briefed and has demonstrated (relative the prior
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`CBM) are dispositive as to Petitioner’s failure to carry its § 326(e) burden2 in those
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`proceedings relative to the independent claims that Petitioner seeks here to
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`rhetorically leverage. Substantive briefing is ongoing in that prior CBM, and oral
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`argument is scheduled for October 22, 2014 (see CBM2013-00054, Paper No. 20).
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`II. U.S. PATENT 7,908,304
`A. Overview
`The ’304 Patent describes specific information systems that allow financial
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`services companies to manage and track information about a sales force,
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`particularly a sales force for which complex commission schedules are desirable
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`and for which particular licensure and/or appointment requirements pertain to
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`CBM. Patent Owner understands, though disagrees with, the Board’s decision
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`in the prior CBM, but nonetheless reemphasizes the § 325(a) statutory bar to
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`ensure a complete record in this proceeding and to preserve all issues for
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`appeal.
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`2 35 U.S.C. § 326(e) states “[i]n a post-grant review instituted under this chapter,
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`the petitioner shall have the burden of proving a proposition of unpatentability
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`by a preponderance of the evidence.” See also 37 CFR § 42.1(d).
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`–5–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`particular sales transactions. Insurance companies, particularly those emphasizing
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`
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`life insurance lines, were (circa the filing date of the ’304 Patent) no stranger to
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`Byzantine manual processes and computational systems that sought to automate or
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`at least facilitate storage, retrieval or processing of some information pertaining to
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`agent compensation or current licensure.
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`B.
`
`The ‘304 Patent Improves on Systems That Had Long Sought to
`Apply Technological Solutions to Business Challenges
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`In the era in which the invention(s) of the ‘304 Patent were made, insurance
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`companies had, of course, made routine and extensive use of computer systems in
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`their back office operations. Indeed, Petitioner’s declarant, Joseph E. DeHaven,
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`establishes the nature of insurance companies as early adopters of computer
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`technology for back office operations in his discussion of legacy IBM 705 and
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`IBM 1401 systems (systems that employed vacuum tube technology) still used in
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`the early 1970s by his then employer, The Prudential, to administer life insurance
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`policy functions and later introduction of more advanced computer systems. See
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`Exh. 1011, ¶6.
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`However, as is often the case, information system techniques developed in
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`some domains, here for agile web-centric dynamic pricing and product
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`configuration applications, were slow to be adapted in other domains. Indeed, far
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`from merely applying fundamental economic practices or merely automating
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`methods of organizing human activities, the ‘304 Patent applicants recognized the
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`challenges for which existing systems and methods employed in the insurance
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`
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`industry were simply ill equipped to handle, and they described some of those
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`challenges in the application as follows:
`Financial service companies are being driven by
`increased competition to consider the use of
`independent agents in place of captive sales staff. …
`They must be able to … effectively manage independent
`brokers and captive sales staff. They must reduce the
`time required to market new products and implement new
`compensation plans and differentiate themselves based
`on services offered to customers. In addition, they
`must be able to rapidly integrate new distribution
`channel acquisitions and grow distribution
`capabilities, while reducing administration costs.
`…
`Firms must reduce implementation time for new products
`and compensation plans on these antiquated systems and
`reduce the potential for overpayment. … [T]hese
`companies must interact with the producers (of sales)
`using preferred methods and quickly model new and
`creative compensation plans, while consolidating
`compensation administration systems.
`‘304 Patent, Exh. 1001, 1:46-67. Indeed, the ‘304 Patent applicants themselves
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`observed and described for the benefit of the public and, indeed the Office (in
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`examination of the application that granted as the ‘304 Patent), the nature and
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`–7–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`complexity of then existing insurance industry compensation and commission
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`
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`apportionment practices. Specifically, the ‘304 Patent applicants noted that:
`[i]n order to provide sales representatives with an
`incentive to sell as much as possible, or to sell more
`of a desired product or products at certain prices,
`sales organizations create incentive plans where
`commissions are provided or offered to the sales
`representatives when specific sales goals or targets
`are achieved during particular period of time. In
`addition, an incentive plan may apportion credit to
`everyone on a sales representative’s sales team, to the
`representative’s manager, or someone other than the
`sales representative himself. Sales representatives
`typically receive compensation based on a salary, the
`hours worked, and/ or on the goods or services sold.
`When basing compensation on transactions, specifically
`on the goods or services sold, sales representatives
`receive a commission that can be based on profits, net
`sales, the number of products sold, or some other
`variable. Other primary compensation includes gross
`dealer concessions. Secondary compensation includes
`expense allowances, persistency bonuses and overrides
`that can be allocated among sales teams and accumulated
`over time if desired.
`‘304 Patent, Exh. 1001, 2:1-19. The ‘304 Patent applicants further observed the
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`business impact of largely inflexible and, at least from the perspective of modern
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`computationally driven, agile business practices that were just beginning (again,
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`circa the filing date of the ’304 Patent) to gain a foothold in entrenched businesses,
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`
`
`that:
`
`[s]ales compensation for direct and indirect channels
`can be one of the most effective levers for aligning
`sales performance with business goals. Unfortunately,
`designing and administering effective incentive
`programs is a difficult management challenge. The
`management of a business can spend a great deal of time
`and money in developing incentive plans.
`‘304 Patent, Exh. 1001, 2:20-25. More specifically, the ‘304 Patent applicants
`
`identified specific failures of existing technological solutions:
`In the prior art, the creation and distribution of
`incentive plans is a slow process that is prone to
`error. It can take months to implement a new
`compensation plan, and dependencies on computer
`software can frustrate sales managers who want to make
`even simple changes. Moreover, a lack of measurement
`tools can make it impossible to develop a “closed
`loop”, continuous improvement process. Businesses must
`be able to design, process, and communicate
`sophisticated incentive programs that drive revenue
`growth across all sales channels. Businesses need to
`streamline the administration of quotas, territories,
`and commissions, and also require tools to measure and
`improve the effectiveness of incentive programs. This
`would greatly simplify the management challenge of
`aligning tactical business performance with strategic
`
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`–9–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`objectives, making it possible to react more quickly
`and effectively to changes in market and competitive
`conditions.
`‘304 Patent, Exh. 1001, 2:25-41.
`
`It is against this backdrop of longstanding, largely inflexible information
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`systems supporting entrenched business practices that the ‘304 Patent applicants
`
`developed specific, complex and improved technological solutions for information
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`systems that facilitate customization and dynamic change in compensation models
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`and sales incentives to be applied accurately and verifiably in a variety of disparate
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`sales channels, notwithstanding:
`
` a constantly changing sales channel workforce,
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` constantly changing organizational hierarchies and reporting
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`relationships,
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` constantly changing contractual relationships between financial service
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`companies and the distributors who sell their products,
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` constantly changing financial product offerings and sales incentives,
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` constantly changing appointment and licensure statuses of individuals in
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`the sales channel workforce, and even the
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` constantly changing appointment and licensure requirements as they
`
`apply to potentially staggering numbers of transactions and particular sets
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`–10–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`individuals from the sales channel workforce that participate in any given
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`transaction.
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`While the existence of financial product sales channels, incentive compensation
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`schemes and licensure requirements in the financial services industry were
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`generally not new, the described and, indeed, claimed information systems by
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`which the inventors of the ‘304 Patent sought to facilitate customization and
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`dynamic change in compensation models and sales incentives to be applied
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`accurately and verifiably in such sales channels were new and indeed, non-
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`obvious. That novelty and non-obviousness has been established by the Patent
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`Office’s own examination of the claims here challenged and, to be clear, nothing in
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`the present proceedings is to the contrary.
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`C. Broadest Reasonable Claim Construction
`In a covered business method patent review, it is the Board’s practice to give
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`claim terms in an unexpired patent their broadest reasonable construction in light
`
`of the specification of the patent in which they appear. 37 C.F.R. § 42.300(b).
`
`Under this broadest reasonable construction standard, claim terms are given their
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`ordinary and customary meaning, as would be understood by one of ordinary skill
`
`in the art in the context of the entire disclosure. In re Translogic Tech., Inc., 504
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`F.3d 1249, 1257 (Fed. Cir. 2007). An inventor is free to define the specific terms
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`used to describe his or her invention; however, where an inventor chooses to be his
`
`
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`–11–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`own lexicographer he or she must do so with reasonable clarity, deliberateness, and
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`
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`precision. In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994).
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`In the present proceedings, certain claim constructions advanced by the
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`Petitioner are uncontested for purposes of the Board’s institution inquiry. These
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`uncontested constructions are as follows:
`
`Claims
`2-113, 26-
`29 and 41,
`33-40 and
`44-464
`
`33, 44
`
`Broadest Reasonable Interpretation
`
`“software applications that perform a
`stated function”
`
`“software, and may include hardware,
`though which engines, modules and
`databases can exchange information”
`
`Claim Term
`
`“module” / “modules”
`
`“backbone”
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`“engine”
`
`6-7, 34-37
`and 44
`
`“software that processes data for a
`stated function”
`
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`Other claim constructions advanced by the Petitioner are improper, are
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`opposed and are now more properly construed by Patent Owner. These remaining
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`claim terms, now construed for purposes of this trial in accordance with the
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`broadest reasonable construction in light of the specification standard adopted by
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`3 Claim term is recited in independent claim 1 (not here challenged) from which
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`each of challenged claims 2-11 depend (directly or indirectly).
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`4 Claim term is recited in independent claim 32 (not here challenged) from which
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`each of challenged claims 44-46 depend (directly or indirectly).
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`–12–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`the Board, are construed as detailed below. Where applicable, specific support for
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`
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`the ‘304 Patent inventors’ chosen lexicography is thereafter detailed.
`
`Claim Term
`
`Claims
`
`Broadest Reasonable Interpretation
`
`“commission engine”
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`33-40 and
`44-455
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`“selling agreement”
`
`2-11, 26-
`29, 33-41
`and 44-466
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`“interface”
`
`33-40 and
`44-467
`
`“an engine that takes two inputs, a
`commission model and a set of
`transactions, and generates ledger items
`(that correspond to payments) as
`output”
`
`“a representation of an agreement or
`contract between parties that defines a
`hierarchy of sales people that can sell
`products under that contract, defines
`what products can be sold in that
`agreement, defines what commission
`schedules can be used in that agreement,
`and defines which sales people
`participate in which commission
`schedule”
`
`“a communication or user interface”
`
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`5 Claim term “commission engine” is recited in independent claim 32 (not here
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`challenged) from which each of challenged claims 33-40 and 44-45 depend
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`(directly or indirectly).
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`6 Claim term “selling agreement” is recited in independent claims 1, 12 and 32
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`(not here challenged) from which each of the challenged claims respectively
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`depend (directly or indirectly).
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`–13–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
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`For avoidance of doubt, the foregoing constructions are for purposes of the
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`Board’s decision-making on the question of whether or not to institute. Patent
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`Owner specifically reserves the right to construe additional terms for purposes of
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`trial if the Board decides to institute trial as to any particular claims here
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`challenged. In addition, Patent Owner specifically reserves the right to argue
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`alternative constructions in other fora (or at other levels of review) in which
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`different (e.g., Phillips-based) rules of construction apply or based on new theories
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`or evidence introduced by the Petitioner or adopted by the Board.
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`D.
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`Support for Patent Owner’s Broadest Reasonable Claim
`Constructions
`1.
`
`“Commission Engine”
`
`The broadest reasonable interpretation of “commission engine” is “an engine
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`that takes two inputs, a commission model and a set of transactions, and generates
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`ledger items (that correspond to payments) as output.” Petitioner has not advanced
`
`a construction for “commission engine,” but parties appear to concur in proper
`
`construction of the lesser included term “engine.” In view of the specific
`
`lexicography that appears in the ‘304 Patent, a specific, on the record, construction
`
`7 Claim term “interface” is recited in independent claim 32 (not here challenged)
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`from which each of challenged claims 33-40 and 44-46 depend (directly or
`
`indirectly).
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`
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`–14–
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`Patent Owner’s Preliminary Response
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`for “commission engine” is appropriate. Specifically, the ‘304 Patent specification
`
`
`
`states:
`
`A commission engine takes two inputs, a commission
`model and a set of transactions, and generates ledger
`items (that correspond to payments) as output. Each
`transaction represents a physical sales transaction,
`such as distributor selling a life insurance policy.
`The commission model represents two critical pieces of
`data: the sales team hierarchy and the commission
`schedules. The sales team hierarchy comprises a
`hierarchy of all sales people that will be responsible
`for a transaction. The commission schedules define
`formula for translating transactions into ledger items.
`Commission schedules may be modeled through quota,
`bonus, and plan objects. The commission model utilized
`in one or more embodiments of the invention is
`described in further detail in pending patent
`application Ser. No. 09/081857, entitled “Method and
`Apparatus For Determining Commission”, which in
`incorporated herein by reference.
`‘304 Patent, Exh. 1001, 7:1-17 (emphasis added).
`
`In order to complete the record, the above-referenced application is included
`
`as Exh. 2013, although under the claim construction standards dictated by the
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`Board’s rules of practice at this level of review, further construction of the term
`
`commission model appears unnecessary. Accordingly, the broadest reasonable
`
`interpretation of “commission engine” is “an engine that takes two inputs, a
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`–15–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`commission model and a set of transactions, and generates ledger items (that
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`
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`correspond to payments) as output.”
`
`2.
`
`“Selling Agreement”
`
`The broadest reasonable interpretation of “selling agreement” is “a
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`representation of an agreement or contract between parties that defines a
`
`hierarchy of sales people that can sell products under that contract, defines what
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`products can be sold in that agreement, defines what commission schedules can be
`
`used in that agreement, and defines which sales people participate in which
`
`commission schedule.” Although Petitioner has not advanced a particular
`
`construction for “selling agreement,” it has surreptitiously sought to import
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`inappropriate and extraneous limitations into a composite term “to generate a
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`selling agreement,” in its proposed construction for purposes of the institution
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`decision, “to create a selling agreement contract comprising templates or reusable
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`components.”
`
`In view of the specific lexicography that appears in the ‘304 Patent, the
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`Petitioner’s proposed construction is simply incorrect. Specifically, the ‘304
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`Patent specification states:
`The engines and modules of DMSS may, for example, be
`configured to perform at least the following functions:
`…
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`Model[] agreements or contracts between the financial
`services company or provider and the distributors who
`sell the products. These agreements are termed
`‘Selling Agreements’. A selling agreement defines a
`hierarchy of sales people that can sell products
`under that contract, it defines what products can be
`sold in that agreement, it defines what commission
`schedules can be used in that agreement, and it
`defines which sales people participate in which
`commission schedule. The DMSS may utilize the terms
`defined in selling agreements to calculate
`compensations for all distributors.
`‘304 Patent, Exh. 1001, 6:27-56 (emphasis added).
`
`Nothing in the foregoing express lexicography requires that a selling
`
`agreement itself, or when “generated” or “defined and created,” constitute a
`
`“contract comprising templates or reusable components.” Rather, a “selling
`
`agreement” is “a representation of an agreement or contract between parties that
`
`defines a hierarchy of sales people that can sell products under that contract,
`
`defines what products can be sold in that agreement, defines what commission
`
`schedules can be used in that agreement, and defines which sales people
`
`participate in which commission schedule.”
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`The propriety of that construction is reinforced by the range of usages of
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`“selling agreement” throughout the claims, and particularly relative to the
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`independent (though here unchallenged) claims that introduce the term and those
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`dependent claims that specifically recite use or manipulation of a “selling
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`
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`agreement” in the following composite constructs:
`
` “a selling agreements module configured to generate a selling
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`agreement” and “determine commission amounts associated with a sales
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`transaction based on said selling agreement” (claim 1)
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` “wherein said selling agreements module configured to generate said
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`selling agreement utilizes a configuration engine to determine which of
`
`said compensation components and said document components to
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`include.” (claim 6)
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` “data objects representative of … at least one selling agreement,”
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`“determine whether said at least one distributing party conforms with
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`said at least one selling agreement” and “allow the at least one
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`distributing party to sell one or more products of the first party in
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`accordance with the selling agreement” (claim 12)
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` “fetch said at least one selling agreement from said database source”
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`(claim 15)
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` “utilized to model a set of selling agreement objects” (claim 16)
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` “generates payments based on said selling agreement objects” (claim 17)
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`–18–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
` “wherein said selling agreements module manages a set of business rules
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`governing how contract components are combined into said at least one
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`selling agreement. (claims 27, 39)
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` “data objects representative of … at least one selling agreement,” “by
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`evaluating said at least one selling agreement data object” and “a selling
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`agreements module configured to enable said product provider to define
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`and create a selling agreement” (claim 32)
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`Given the foregoing range of composite usages, the constructions proposed by
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`Petitioner could be viewed as an attempt to gloss over express lexicography that
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`suggests that a selling agreement is a computer readable representation of specific
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`information used by the described DMSS and, indeed, by the claimed machines, in
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`a specific way. Petitioner’s proposed construction appears to instead misleadingly
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`suggest the mere abstraction of form documents.
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`The express lexicography of “selling agreement” is clear on its face and the
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`Board should not be so misled. Furthermore, in view of its widespread usage
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`throughout the claims (often apart from “generate” or “define and create”
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`language), “selling agreement” is the appropriate term to construe. Nonetheless,
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`should the Board be inclined to, for some reason, uniquely elevate the composite
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`terms “a selling agreements module configured to generate a selling agreement”
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`and/or “a selling agreements module configured to enable said product provider to
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`–19–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`define and create a selling agreement” to separate constructions, Patent Owner
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`suggests that, rather than the somewhat misleading cobble of partial quotations
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`leveraged by the Petitioner in its Petition, that the full context below might suggest
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`a more balanced and less opportunistic construction.
`In one embodiment of the invention, each selling
`agreement defines a hierarchy of sales people that can
`sell products under that contract, it defines what
`products can be sold in that agreement, it defines what
`commission schedules can be used in that agreement, and
`it defines which sales people participate in which
`commission schedule. Selling agreements are built from
`pre-defined contract kit components customized during
`negotiations. For example, a selling agreement may be
`formulated using contract kits comprised of components
`such as compensation components and document
`components. Each selling agreement is assembled by the
`system using rules (e.g., a component may be required,
`optional, or standard) defining the relationships
`between each of the components.
`‘304 Patent, Exh. 1001, 6:27-56 (emphasis added).
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`Thus, should the Board be inclined to uniquely elevate the above-mentioned
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`composite terms to separate constructions, proper constructions in light of the
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`specification would not require that a “generated” or “defined and created” selling
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`agreement constitute a “contract comprising templates or reusable components.”
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`Rather, the salient features of a construction anchored in the specification would be
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`–20–
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`Patent Owner’s Preliminary Response
`CBM2014-00117 (Patent 7,908,304)
`that a properly configured selling agreements module “generate[s]” or “define[s]
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`
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`and create[s]” a selling agreement in a manner that involves:
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` buil[ding] from pre-defined contract kit components customized during
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`negotiations; and/or
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` assembl[y] by the system using rules … defining the relationships
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`between each of the components”.
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`3.
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`“Interface” for Obtaining a Plurality of Business Rules
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`No construction of “interface” is necessary as the ordinary meaning of the
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`term is well understood. Alternatively, should the Board deem construction to be
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`necessary at this point in the trial, the broadest reasonable construction of an
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`“interface” is “a communication or user interface” as both are described in the ‘304
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`patent specification. User int