Trials@uspto.gov
`571-272-7822
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`Paper No. 33
`Entered: September 11, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
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`THE JEWELRY CHANNEL, INC., USA d/b/a Liquidation
`Channel,
`Petitioner,
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`v.
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`AMERICA'S COLLECTIBLES NETWORK, INC.,
`Patent Owner.
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`____________
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`Case CBM2014-00119
`Patent 8,370,211 B2
`____________
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`Held: July 16, 2015
`____________
`
`
`
`Before BRIAN J. McNAMARA, LINDA M. GAUDETTE, and
`DAVID C. McKONE, Administrative Patent Judges.
`
`
`
`The above-entitled matter came on for hearing on Thursday, July
`16, 2015, commencing at 1:30 p.m., at the U.S. Patent and
`Trademark Office, 600 Dulany Street, Alexandria, Virginia.
`
`
`
`
`571-272-7822
`
`Paper No. 33
`Entered: September 11, 2015
`
`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`THE JEWELRY CHANNEL, INC., USA d/b/a Liquidation
`Channel,
`Petitioner,
`
`v.
`
`AMERICA'S COLLECTIBLES NETWORK, INC.,
`Patent Owner.
`
`____________
`
`Case CBM2014-00119
`Patent 8,370,211 B2
`____________
`
`Held: July 16, 2015
`____________
`
`
`
`Before BRIAN J. McNAMARA, LINDA M. GAUDETTE, and
`DAVID C. McKONE, Administrative Patent Judges.
`
`
`
`The above-entitled matter came on for hearing on Thursday, July
`16, 2015, commencing at 1:30 p.m., at the U.S. Patent and
`Trademark Office, 600 Dulany Street, Alexandria, Virginia.
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`Case CBM2014-00119
`Patent 8,370,211 B2
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`APPEARANCES:
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`ON BEHALF OF THE PETITIONER:
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`ON BEHALF OF THE PATENT OWNER:
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`JEFFREY S. GINSBERG, ESQUIRE
`MICHAEL S. TURNER, ESQUIRE
`Kenyon & Kenyon LLP
`One Broadway
`New York, New York 10004-1007
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`NEIL C. JONES, ESQUIRE
`Nelson Mullins Riley & Scarborough LLP
`Poinsett Plaza, 9th Floor
`104 South Main Street
`Greenville, South Carolina 29601
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`JUDGE McNAMARA: Good afternoon. This is the
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`oral hearing in CBM2014-00119. The Jewelry Channel, Inc.
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`USA, doing business as Liquidation Channel, Petitioner, versus
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`America's Collectibles Network, Inc., Patent Owner.
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`Beginning with the Petitioner, will the parties, please,
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`introduce themselves.
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`MR. GINSBERG: Sure, Your Honor. This is Jeff
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`Ginsberg of Kenyon & Kenyon for the Petitioner The Jewelry
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`Channel, Inc.
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`MR. TURNER: Mike Turner of Kenyon & Kenyon for
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`Petitioner The Jewelry Channel.
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`MR. JONES: And Neil Jones from Nelson Mullins
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`Riley & Scarborough on behalf of Patent Owner America's
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`Collectibles Network.
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`JUDGE McNAMARA: Well, thank you. Welcome to
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`the Patent Trial and Appeal Board.
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`Just to review the trial order, each party will have 60
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`minutes of total argument time. The Petitioner will go first to
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`present its case with regards to the challenged claims and then
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`America's Collectibles, the Patent Owner, will argue its
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`opposition to the Petitioner's case.
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`We also have a motion to amend, so you'll present your
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`motion to amend argument at that point and then the Petitioner
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`will have any time reserved to rebut the Patent Owner's case and
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`to oppose the motion to amend, and then, finally, Patent Owner
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`will have an opportunity to make additional remarks simply
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`rebutting the Petitioner's opposition to the motion to amend.
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`So is everybody ready to proceed?
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`MR. GINSBERG: Yes, Your Honor.
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`JUDGE McNAMARA: Okay. We'll hear from the
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`Petitioner. Is there some amount of time you'd like me to alert
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`you to?
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`MR. GINSBERG: I think based on what I plan, I think
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`there should be plenty of time for rebuttal.
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`JUDGE McNAMARA: Okay.
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`MR. GINSBERG: Good afternoon, members of the
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`Board, as mentioned, my name is Jeff Ginsberg and I am here on
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`behalf of the Petitioner The Jewelry Channel.
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`The Petitioner respectfully submits that this case does
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`not present a close call. All 39 claims of the '211 patent that's
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`U.S. Patent Number 8,370,211 should be found to be
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`unpatentable as directed to noneligible subject matter pursuant to
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`35 U.S.C. Section 101.
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`The claims of the '211 patent are drawn to conducting a
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`telephone-based reverse auction by adjusting the price and
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`available quantities of units for sale based on monitored
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`preliminary indicators.
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`The '211 patent provides that the reverse auction is
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`conducted by a T.V. producer who could be a person or could be
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`automated. The T.V. producer manages the auction using
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`preliminary indicators of a likely sale of a unit that's set forth in
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`column 10, lines 10 to 16 of the patent.
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`Now, as the Board found in its initial Institution
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`Decision, Paper Number 10, adjusting unit prices and quantities
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`goes to the heart of an auction process limiting auction operators
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`from adjusting unit prices and quantities based on the indicators
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`of likely sales as the claims of the '211 patent purports to do
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`would impermissibly preempt such activities.
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`JUDGE McKONE: I'm sorry to interrupt you here, if
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`you're referring to demonstrative slides, I won't be able to see
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`them, but I can pull them up on my computer. So if you could
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`refer to which slide number you're talking about, it would help
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`me.
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`MR. GINSBERG: Absolutely. So now I'll be referring
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`to the slides and the first slide that I'll be turning to is slide
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`number 2 and this presents Claim 1 of the '211 patent. Claim 1 is
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`illustrative of the claims at issues. Each of the claims at issue is
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`directed to subject matter that is not patent eligible because they
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`are drawn to an abstract idea that can be performed within a
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`person's mind or by putting pen to paper.
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`The claims do not include any meaningful
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`unconventional features that would bring them within the scope
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`of 35 U.S.C. Section 101.
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`JUDGE McNAMARA: Counsel, for us to make a
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`determination under 101 that the claims are not patent eligible,
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`must they -- is the fact that they're -- that they're -- they could be
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`done in the mind determinative? I mean, suppose they -- suppose
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`they can be done in the mind. Does that mean that they definitely
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`can't be patentable subject matter?
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`MR. GINSBERG: In this situation -- and I'll come to it,
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`but I can jump ahead a little bit -- the alleged inventive concept is
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`directed -- in its entirety is directed to an abstract idea and there
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`are no meaningful additional limitations that would take that
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`abstract idea and transform it into patent-eligible subject matter.
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`So in this situation, the fact that it all can be conducted
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`in a person's human mind coupled with the fact that there's no
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`additional meaningful limitations that would bring the claims
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`within the scope of 35 U.S.C. Section 101 means that the claims
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`are -- should be found to be unpatentable under Section 101.
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`JUDGE McNAMARA: Okay. When you say coupled
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`with, so I just want to make sure I --
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`MR. GINSBERG: Yes.
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`JUDGE McNAMARA: My understanding is that you
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`mind that they are an abstract -- abstraction that would not be
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`patentable under 101.
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`MR. GINSBERG: That's correct. It's in addition. In
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`addition, there are no meaningful limitations that take that
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`abstract idea that can be performed in a human mind that would
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`bring them within -- bring the claims within the scope of Section
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`101.
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`JUDGE McNAMARA: Okay.
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`MR. GINSBERG: Turning to slide 3, this slide presents
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`the proper analysis under 35 U.S.C. Section 101 as set forth in the
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`Supreme Court's Alice's decision, which also quotes the Mayo
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`Supreme Court decision.
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`The first step in a 101 analysis is to determine whether
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`the claims at issue are directed to a patent-ineligible concept, such
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`as an abstract idea as the present situation presents.
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`If step one is satisfied, the next step is to search for an
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`inventive concept, that is find an element or combination of
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`elements that is sufficient to ensure that the patent in practice
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`amounts to significantly more than a patent upon the ineligible
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`concept itself.
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`Side 4 presents case law from the Federal Circuit, the
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`Accenture case for the proposition that simply implementing an
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`abstract concept on a computer without meaningful limitations to
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`that concept does not transform a patent-ineligible claim to a
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`patent eligible one.
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`Slide 5 provides quotes from additional cases that may
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`clear that mental processes even when performed by a computer
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`are not patentable. Cases cited here are the Supreme Court's
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`Gottschalk decision as well as the Federal Circuit decisions from
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`CyberSource, Planet Bingo and Content Extraction. These cases
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`are all cited in Petitioner's opening and reply papers.
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`Turning to the alleged inventive concept of the '211
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`patent, slide 6, the alleged inventive concept is the use of
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`preliminary indicators in a telephone-based reverse auction to
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`reduce a preliminary quantity of products before a sale is
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`completed.
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`Now, as set forth in the '211 patent itself, the
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`preliminary indicators include the time of the calls, the numbers
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`of calls received, which of those callers that have indicated they
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`which to place an order, for example, by pressing number one on
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`the telephone and which of those callers have gone through a
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`confirmation process.
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`The claimed use of these preliminary indicators may be
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`carried out within the human mind. So is -- that concept itself is
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`abstract and cannot transform the claims into patentable subject
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`matter.
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`Turning to slide 7 --
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`JUDGE McNAMARA: Does it matter if the volume
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`gets to the point where it couldn't be tracked unless you were a
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`MR. GINSBERG: Just faster processor speeds or being
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`able to use a calculator does not take an unpatentable idea where
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`you're using just known components using a computer and
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`processor, all items that were well-known prior to the invention.
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`That does not transform it into patent-eligible subject matter.
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`Turning to slide 7, the '211 patent itself in the
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`specification provides that the reverse auction is conducted by a
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`T.V. producer who manages the auction using preliminary
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`indicators of a likely sale of a unit. The patent explicitly notes
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`that a T.V. producer may be a person manually using these
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`preliminary indicators of a likely sale to adjust the price or
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`quantity of units that are available for sale.
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`Slide 8 shows numerous other portions of the
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`specification where the '211 patent emphasizes that the T.V.
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`producer who runs the auction may be a person using indicators
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`of a likely sale to reduce an initial quantity of products.
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`Jumping ahead a little bit to slide 12. The originally
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`filed application claimed a person performing the allegedly
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`inventive steps of the method. Now, although the applicant later
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`removed just so -- without the amendments, the claim -- the
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`conducting step recited conducting a reverse auction in which a
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`system allows a person to reduce the price for quantity of units
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`for sale.
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`The claims were later amended to remove person from
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`the claims, but the originally filed claims themselves demonstrate
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`applicant's understanding that a human being is capable of
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`performing the claimed method and system.
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`Turning to slide 12, this slide provides -- this was an
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`example of a person carrying out the allegedly inventive concept
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`that was included with the declaration of Petitioner's expert,
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`Andrew Glasspool. The example provides how a person would
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`carry out the alleged inventive concept.
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`You have a human producer could initiate a reverse
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`auction by knowing that there's a hundred units available for sale.
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`The T.V. producer being a person could keep track of the callers.
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`Okay. We received 20 callers. Of those 20 calls that we
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`received, 10 expressed interest in bidding on the units for sale.
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`So then the T.V. producer in his head or writing it out
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`could simply subtract, okay, I know that there's 10 people that
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`have expressed interest in purchasing this product, I'm going to
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`subtract 10 from a hundred and therefore reduce the number of
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`available units for sale to 90. That's the alleged inventive concept
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`of this invention.
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`Turning to slide 13, this is paragraph 42 of the
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`declaration of Patent Owner's expert. This is Exhibit 2021. In his
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`declaration, the Patent Owner's expert acknowledged that a
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`person could perform the allegedly inventive concept if using
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`preliminary indicators to reduce a quantity of units available for
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`sale before a sale is actually completed. He confirmed this during
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`his deposition.
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`Slide 14 provides some snippets from the deposition of
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`Dr. Wyld. This is found at Exhibit 1008. He was asked, the '211
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`patent describes the use of preliminary indicators as possibly
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`being carried out by a person; is that correct? Answer: Correct.
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`Question: So in your opinion a person could carry out the
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`inventive concept described and claimed in the '211 patent; is that
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`correct? Answer: Yes.
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`You specifically asked about Claim 1. If you turn to
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`slide 15, question: The steps of Claim 1 of the '211 patent can be
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`performed within a person's mind or recorded using a pen and
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`paper; is that correct? Answer: If it's done by a human, yes.
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`Now turning to slide 16. In support of its claim for
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`patentability, the Patent Owner argues that at least one aspect of
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`each of the claims of the '211 patent must be performed by a
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`system and not by a human. Patent Owner's reliance on the
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`recitation of a system is misplaced. This appears in Patent
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`Owner's response. It's Paper 21 at pages 19 to 21.
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`It's well-established -- and this is set forth in the Alice's
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`decision and we have a quote here on slide 17 that mere recitation
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`of a system does not render the claims patent eligible. The
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`Supreme Court noted that such a result would make the
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`determination of patent eligibility depend simply on draftman's
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`art, thereby eviscerating the rule that laws of nature, natural
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`phenomena and abstract ideas are not patentable.
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`Turning back to Claim 1, which we have --
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`JUDGE McKONE: I have a question. I mean, is it
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`your position that if some -- if a method can be done entirely
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`within a person's head, then that by definition would be an
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`abstract idea?
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`MR. GINSBERG: If it could be done within a person's
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`head and there are no additional elements that provide any
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`meaningful limitation, then the answer is yes.
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`JUDGE McKONE: Well, I'm just talking about the first
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`prong of the -- -the first step in the Alice test when we have to
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`determine whether the claim is directed to an abstract idea. It's
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`your position that if the steps otherwise could be performed in a
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`person's head, then it meets that abstract idea prong of the Alice
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`test?
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`MR. GINSBERG: My understanding is that the --
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`JUDGE McKONE: Before we get into --
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`MR. GINSBERG: Yeah, my understanding is that, yes,
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`that is correct.
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`JUDGE McKONE: Okay. I know there's some
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`language in -- I believe it's the Bilski case where they talk about
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`an abstract idea being something -- a longstanding economic
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`concept or something to that -- of that nature. Is there any -- I
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`guess I want to say novelty or obviousness analysis that we need
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`to do in conjunction with Section 101 to determine whether
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`something is an abstract idea?
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`MR. GINSBERG: Yeah. I think we represent -- if we
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`go back to slide 5, this provides various cases, the Gottschalk
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`case, the CyberSource, Planet Bingo and Content Extraction
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`cases where the Courts found -- the Supreme Court and Federal
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`Circuit found that human mental processes are abstract, finding
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`that when mental processes and abstract intellectual concepts are
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`not patentable -- are not patentable rather because they are basic
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`tools of scientific technological work.
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`The CyberSource case, the quote that's up on this slide
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`is that purely mental processes can be unpatentable, even when
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`performed by a computer, was the holding in Gottschalk. So if
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`you have a situation where you have this reverse auction where
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`they're arguing that adjusting prices in quantity in connection
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`with an auction is what is -- based on likely indicators of sale is
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`the patentable concept, that goes to the heart of the auction
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`process. That's the basic tool of an auction. That's how these
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`auctions work. In these situations, the abstract idea is
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`unpatentable.
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`Turning -- did I answer your question, Your Honor?
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`JUDGE McKONE: Yes, thank you.
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`MR. GINSBERG: Turning to slide 18, we're going
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`back to Claim 1 which is illustrative of the alleged inventive
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`concept. Claim 1 fails to add any meaningful limitations to the
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`abstract idea of reducing price and/or quantity in a reverse
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`auction based on preliminary indicators.
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`Case CBM2014-00119
`Patent 8,370,211 B2
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`We could go through each one of the elements, but just
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`real quickly you have the preamble and then the first step is
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`providing a number of units for sale and storing a preliminary
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`available quantity in an allocation database initially indicative of
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`the number provided for sale.
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`Now, merely adding an allocation database to the claim
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`does not confer patent eligibility. This is set forth in a previous
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`side from the Accenture case that makes that clear.
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`The next element calls for recording the time in which
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`one or more calls were received on the telephone number in a call
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`record. The next element, placing each caller into a queue and
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`assigning them to a call operator. The next element is conducting
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`a reverse auction in which the system reduces the indicative price
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`of a unit over time and reduces the preliminary available quantity
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`wherein the preliminary available quantity is reduced based -- at
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`least partly on one or more preliminary indicators or indicators of
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`a likely sale, the number of callers, pressing a certain button on
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`the phone, a caller that expressed interest in possibly purchasing
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`the invention.
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`These additional limitations are no more than routine
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`conventional activities of those who work in a field. They go to
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`the heart of what an auction is and do not transform the
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`unpatentable abstract idea into a patentable one.
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`Jumping ahead to slide 26. As the '211 patent
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`acknowledged, selling goods on television by a reverse auction
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`Case CBM2014-00119
`Patent 8,370,211 B2
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`and taking calls from customers were known at the time that the
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`patent application for this invention was filed. It was known at
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`the effective filing date of this application, well-known.
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`These are quotes from the specification of the '211
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`patent, column 1, lines 20 to 24, column 1, lines 52 to 56.
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`Of course -- next slide -- telephones and databases for
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`storing information were known at the time of the invention.
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`Plaintiff's expert in slide 28 here in his declaration
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`confirmed that televised auctions utilizing telephones and
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`information storing -- I'm sorry, made clear that televised
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`auctions using telephones and information storing databases were
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`well-known, no surprise, but Patent Owner's expert, Dr. Wyld,
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`did not dispute that. Telephones and information databases were
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`known.
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`He was asked, question: You would agree that the
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`telephone was well-known prior to 2006? Yes. Question:
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`Would you agree that prior to filing of the '211 patent, computer
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`processors were well-known? Yes. Question: Would you agree
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`that prior to the filing of the '211 patent that databases for storing
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`information were well-known? Yes.
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`And, finally, question: And that these databases could
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`later be assessed for the information stored therein? Answer:
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`Yes.
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`Going to the dependent claims, the ones that depend
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`from Claim 1, Claims 2 through 34, they add no meaningful
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`Case CBM2014-00119
`Patent 8,370,211 B2
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`limitations to the abstract idea. In fact, if you look at Patent
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`Owner's papers, Patent Owner never disputes this, never makes
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`any claim that any of these additional dependent claims add
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`anything more or add any additional elements that would
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`transform the unpatentable abstract idea into a patentable one.
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`We can go through -- it's set forth what is detailed in
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`Claims 2 through 34, the additional limitations, but as previously
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`stated and as reflected in Patent Owner's papers, Patent Owner
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`never relies on any of these additional limitations to separately
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`argue that the invention is patentable.
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`Going to slide 32, that's an independent claim. It's a
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`system claim. That also does not include any meaningful
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`limitations to the abstract idea. It claims a computer system
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`utilizing a processor and memory for conducting a
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`telephone-based reverse auction and recites these same abstract
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`ideas as Claim 1. It adds no meaningful limitations to the abstract
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`idea.
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`Method claims -- Independent Method Claims 36 and
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`39 also include no meaningful limitations to the abstract idea.
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`Claims 36 and the two claims that depend from 36, 37
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`and 38 recite a method of selling units on a television through a
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`telephone-based reverse auction.
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`Claim 39 recites a method of conducting an internet
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`based reverse auction.
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`Patent 8,370,211 B2
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`You don't add any meaningful limitations to the abstract
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`idea of conducting a reverse auction and reducing the price or
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`quantity of units available for sale based on likely indicators of
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`sale.
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`Slide 34. During the deposition of Dr. Wyld, Patent
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`Owner's expert, he was asked, so Claim 35 describes a
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`computerized system for conducting the method of using
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`preliminary indicators that could be carried out by a person; is
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`that correct? Answer: Yes, it could be carried out by a person or
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`a program system.
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`He was asked the same question regarding Independent
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`Claims 36 and 39 and he agreed, answer that yes to both. Both of
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`these claims -- claim methods that can be carried out by a human.
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`Now, Patent Owner asserts that because the '211 patent
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`purportedly does not preempt the use of the idea of a reverse
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`auction in all fields, it is not directed to a patent-ineligible idea.
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`This is at the Patent Owner's response paper. It's pages 59
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`through 60.
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`In so doing, the Patent Owner argues that the claims of
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`the '211 patent are directed to the use of preliminary indicators
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`with a particular type of reverse auction that the Patent Owner
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`calls a multiple single item reverse auction or MSIRA.
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`Now, as an initial matter, the '211 patent does not make
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`reference to multiple single item reverse auctions. The claims
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`just recite selling units. Further, as set forth in the Petitioner's
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`Patent 8,370,211 B2
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`reply paper -- that's Paper Number 27 at 14, page 14 -- the Patent
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`Owner's expert acknowledged that the applicants for the '211
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`patent did not invent this particular type of reverse auction that
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`Patent Owner now says the claims are directed to.
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`In any event, there is no support for Patent Owner's
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`position that if the claims of the patent do not preempt an entire
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`field that you're patent eligible. These are some quotes from the
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`cases that make that abundantly clear. The Ariosa decision, that's
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`one decision that was not raised in the Petitioner's papers because
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`it was -- the decision came down in June of 2015 after the
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`deadline for briefing, but Petitioner's papers do include the
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`BuySAFE and Bank of America decision that made clear that
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`Patent Owner's position is wrong here.
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`The '211 patent seeks to prevent auction operators from
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`adjusting unit prices in quantities merely based on likely
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`indicators of sale. As the Board noted in its Institution Decision,
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`this is impermissible and all 39 claims of the '211 patent should
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`be found to be unpatentable as failing to satisfy the requirements
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`of 35 U.S.C. Section 101.
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`Unless Your Honors have any questions, that's all I have
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`for my opening presentation.
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`JUDGE McKONE: I do have another question. It's
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`similar to my other question, but I think I'm going to try to make
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`it a little bit more articulate this time. So the language that I'm
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`looking at in the Alice decision and it comes from the Bilski
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`Patent 8,370,211 B2
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`decision is that the content for the abstract idea in those cases
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`were fundamental economic practices long prevalent in our
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`system of commerce, and the Supreme Court used that language
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`twice now.
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`Do you have any evidence to point to that the -- what
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`you characterize as the abstract idea in the claims is a
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`fundamental economic practice, it's long prevalent in our system
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`of commerce?
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`MR. GINSBERG: The fundamental aspect of this
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`invention is the fact that for -- it's well-established that in
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`auctions, prices are adjusted and quantities are adjusted
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`throughout the auction process. That's a fundamental concept of
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`an auction. These are things that the Patent Owner is seeking to
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`exclusively say you can't conduct an auction using and reducing
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`-- you can't reduce the quantities available for sale based on likely
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`indicators.
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`When callers repeatedly call saying that we're interested
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`in buying some of their products, when they're expressing
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`interest, when they're saying, all right, I agree, I'm going to
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`purchase it, I'm going to give you my credit card information,
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`these are the basic fundamental aspects of an auction and this is
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`separate and apart from a prior art analysis under Section 102 and
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`103.
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`Now, certainly Petitioner does not concede that simply
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`reducing prices in an auction, that this is something that's novel.
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`Case CBM2014-00119
`Patent 8,370,211 B2
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`But what we're looking at right here is whether or not the claimed
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`alleged inventive concept satisfies the requirements of section
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`101 and for the reasons stated, it is Petitioner's position that it
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`does not.
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`JUDGE McKONE: And let me ask a follow-up
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`question here. Do we need to determine that the -- that this use of
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`preliminary indicators was a practice long prevalent in our system
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`of commerce or something to that effect?
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`MR. GINSBERG: I don't believe so -- I'm sorry.
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`JUDGE McKONE: I'm sorry, go ahead.
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`MR. GINSBERG: Excuse me, I didn't mean to
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`interrupt you. If --
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`JUDGE McKONE: No, I was -- do we need to find that
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`this use of preliminary indicators was long prevalent in our
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`system of commerce in order to conclude that this is an abstract
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`idea?
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`MR. GINSBERG: Here you have the alleged inventive
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`concept, which is limiting auction operators from adjusted unit
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`prices and quantities based on indicators of likely sale. That is
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`something that's long prevalent in reverse auction. Whether -- to
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`answer your question whether or not it's necessary to find, you
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`know, specifically where in the prior art, I don't believe that's
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`correct, but the abstract idea, the alleged inventive concept is
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`something that's a basic fundamental concept involved in auctions
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`going back for a long time.
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`Patent 8,370,211 B2
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`JUDGE McKONE: Okay. Thank you.
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`MR. GINSBERG: Thank you.
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`JUDGE McNAMARA: All right. Counsel, you've used
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`up about 37 minutes of your time.
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`MR. GINSBERG: Thank you. More than I expected.
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`JUDGE McNAMARA: 33 minutes of your time, I'm
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`sorry.
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`And I apologize, I just realized I just misspoke. You
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`have 33 minutes remaining.
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`MR. GINSBERG: My colleague here noted that, so I
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`was going to say something if I needed the time. Thank you,
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`Your Honor.
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`MR. JONES: Your Honor, are we ready?
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`JUDGE McNAMARA: Yes.
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`MR. JONES: Okay. Thank you.
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`May it please the Board, let me first take this
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`opportunity to say what a pleasure it is to be here today. This is
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`my first experience in a Patent Trial and Appeal Board hearing
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`and I am looking forward to it. The mesh of patent prosecution
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`and litigation in this forum is certainly interesting and I've
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`certainly learned a lot from this process.
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`So with that, let me jump straight to Your Honor's
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`question about whether or not you have to find for purposes of
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`determining that this patent does not meet the patent-eligibility
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`Patent 8,370,211 B2
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`standard, whether or not this is a conventional or -- I forget the
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`words that you used, a longstanding practice.
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`And, Your Honor, the answer to that question is
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`absolutely, yes, that is exactly what the Federal Circuit said a few
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`weeks ago in the Versata versus SAP opinion, and I have a slide
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`on that and I'll get to it a little bit later on in my argument, but the
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`answer to your question is yes.
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`In order for this Board to find that this is a
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`patent-ineligible concept, then you have to address the issue of
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`whether or not the use of preliminary indicators in the context of
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`a reverse auction is a conventional technique, is a longstanding
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`technique, is a technique that is known to the industry. Those are
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`the words that were used by the Federal Circuit in the Versata
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`versus SAP opinion a few weeks ago, and, again, I'll get to that a
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`little bit later in my argument.
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`JUDGE McKONE: So is it, then, your position that we
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`would have to conduct I guess some sort of novelty or
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`obviousness analysis of the claims as part of a statutory subject
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`matter analysis?
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`MR. JONES: Your Honor, the Supreme Court
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`unfortunately did not couch the analysis in terms of novelty or
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`obviousness, but they do couch it in terms sufficient so that a
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`patent attorney would understand that that's what you need to do,
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`that you have to go look to see if the use of preliminary indicators
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`in a reverse auction is something that is conventional. That's
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`Patent 8,370,211 B2
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`what the Supreme Court suggested in Alice, even though it did
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`not use those magic words of novelty and nonobviousness that we
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`all -- that we, patent attorneys, all understand.
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`JUDGE McNAMA
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