throbber
CBM Review of U.S. Patent No. 7,356,482
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`IN THE UNITED STATES PATENT & TRADEMARK OFFICE
`______________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
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`salesforce.com, inc.,
`Petitioner,
`v.
`Applications In Internet Time LLC,
`Patent Owner.
`______________________
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`
`
`Case CBM: 2014-00168
`Patent U.S. 7,356,482
`______________________
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`PETITIONER’S REQUEST FOR REHEARING
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`
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`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`Commissioner for Patents
`P.O. Box 1450
`Alexandria, Virginia 22313-1450
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`CBM Review of U.S. Patent No. 7,356,482
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`I.
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`RELIEF REQUESTED
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`Pursuant to 37 C.F.R. § 42.71(d), salesforce.com, inc. (“Salesforce”)
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`requests rehearing of the panel’s February 2, 2015 decision (Paper 10, “Decision”)
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`declining institution of covered business method review of U.S. Patent No.
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`7,356,482 (“the ‘482 patent”). Salesforce respectfully submits the panel erred in
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`concluding Salesforce had not established the ‘482 patent is a “covered business
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`method patent” pursuant to Section 18(d)(1) of the America Invents Act (“AIA”),
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`and in particular, erred by applying an incorrect legal standard regarding the basis
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`for CBM subject matter jurisdiction under Section 18(d)(1). In view of the
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`exceptional importance of this issue both to this Petition (Paper 2), and to the CBM
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`process generally, Salesforce respectfully suggests that an expanded panel of the
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`PTAB consider this request for rehearing. Salesforce further requests the PTAB
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`grant this Petition, and institute CBM review of claims 1-59 of the ‘482 patent.
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`II.
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`SUMMARY
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`First, the panel’s Decision misapprehended Section 18(d)(1) of the AIA in
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`requiring that challenged claims must “expressly claim[]” a “particular relation” to
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`financial products or services. See Decision, at 7.1 More particularly, the panel
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`erred in interpreting Section 18(d)(1) to support a finding that AIT’s claims are
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`ineligible for covered business method review because the “claims on their face are
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`1 All emphases herein added, unless otherwise noted.
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`directed to technology ‘common in business environments across sectors’ with ‘no
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`particular relation to the financial services sector.’” Id. Neither Section 18(d)(1),
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`nor the relevant legislative history, nor previous decisions of the PTAB, suggest
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`that CBM review is premised upon an analysis that the patent in question must
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`“expressly claim[]” a “particular relation to the financial services sector.”
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`The interpretation of Section 18(d)(1) is of exceptional importance to the
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`present proceeding, other CBM review proceedings, and the CBM review process
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`generally. This statute defines the very scope of the subject matter jurisdiction of
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`the PTAB with respect to covered business method review, which Congress
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`expressly intended be interpreted broadly. This broad view was confirmed by the
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`Patent Office’s own stated interpretation of 37 C.F.R. § 42.301(a). See infra, at pp.
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`5-9. Interpretations of this statute that are at odds with the express statutory
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`language, Congressional intent, and numerous prior PTAB decisions would result
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`in a significant lack of certainty for the public regarding the PTAB’s role in
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`connection with such post grant review procedures. As such, Salesforce suggests
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`that an expanded panel rehear and address the foundational interpretation issues
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`raised in this Request for Rehearing. See Target Corp. v. Destination Maternity
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`Corp., IPR2014-00508, Paper 28, at 3-6 (Feb. 12, 2015).
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`Second, the Decision overlooked Salesforce’s analysis in its Petition of the
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`claims and specification of the ‘482 patent, which established that the scope of the
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`claims, and in particular, claim 1 and 21’s limitation of “a change management
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`layer for automatically detecting changes that affect an application” and
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`“dynamically generating an application” explicitly cover a method or apparatus
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`“for performing data processing or other operations used in the practice,
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`administration, or management of a financial product or service.”
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`III. LEGAL STANDARD
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`A party may request rehearing of a decision by the PTAB declining
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`institution of a trial where “the party believes the PTAB misapprehended or
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`overlooked” matters in its decision. 37 C.F.R. § 42.71(d). When rehearing a
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`decision on a petition to institute CBM review, the PTAB “will review the decision
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`for an abuse of discretion.” 37 C.F.R. § 42.71(c). An abuse of discretion may be
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`determined “if a decision is based on an erroneous interpretation of law . . . or if the
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`decision represents an unreasonable judgment in weighing relevant factors.”
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`Arnold Partnership v. Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004).
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`IV. ARGUMENT
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`A. The Panel Applied an Erroneous Interpretation of Section
`18(d)(1) of the AIA
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`Contrary to the panel’s Decision, neither Section 18(d)(1) nor 37 C.F.R. §
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`42.301(a) require a petitioner to demonstrate that a patent “expressly claims” a
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`“particular relation to the financial services sector.” Rather, Section 18(d)(1) states
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`generally that a “covered business method patent” is “a patent that claims a method
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`or corresponding apparatus for performing data processing or other operations used
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`in the practice, administration, or management of a financial product or service.”
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`See also 37 C.F.R. § 42.301(a). That is, a patent is eligible for CBM review so
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`long as it claims “a method or corresponding apparatus for performing data
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`processing or other operations,” where that method or apparatus can be “used in the
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`practice, administration, or management of a financial product or service.” Thus,
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`there is no requirement of an “express” claiming of financial products or services
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`or a relation to the financial services industry.
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`The Decision’s interpretation of Section 18(d)(1) diverged from both this
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`plain statutory language and from the Patent Office’s own interpretation of 37
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`C.F.R. § 42.301(a). See Petition, at 8. In pertinent part, the Office indicated in its
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`comments to this regulation that Section 18(d)(1) should be “interpreted broadly,”
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`such that it would be sufficient to establish that a patent claims technology
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`“incidental to a financial activity or complementary to a financial activity”:
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`Comment 1: Several comments suggested that the Office interpret
`“financial product or service” broadly.
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`Response: . . . [T]he legislative history explains that the definition of
`covered business method patent was drafted to encompass patents
`“claiming activities that are financial in nature, incidental to a
`financial activity or complementary to a financial activity.” 157
`Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen.
`Schumer). This remark tends to support the notion that “financial
`product or service” should be interpreted broadly.
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`77 Fed. Reg. 157, at 48735.
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`The Office expressly rejected the view, adopted in the panel’s Decision, that
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`CBM review is limited to patents claiming subject matter with a “particular relation
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`to the financial services sector”:
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`Comment 3: One comment suggested that the Office should clarify
`that the term “financial product or service” should be limited to the
`products or services of the financial services industry. . . .
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`Response: Such a narrow construction of the term would limit the
`scope of the definition of covered business method patents beyond
`the intent of section 18(d)(1) of the AIA. For example, the legislative
`history reveals that “[t]he plain meaning of ‘financial product or
`service’ demonstrates that section 18 is not limited to the financial
`services industry.” 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011)
`(statement of Sen. Schumer). This remark tends to support the notion
`that “financial product or service” is not limited to the products or
`services of the financial services industry.
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`77 Fed. Reg. 157, at 48736.
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`1.
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`The Panel Erred in Its Interpretation of the Legislative
`History of the AIA
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`The panel’s narrow interpretation of Section 18(d)(1) is also inconsistent
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`with pertinent legislative history regarding the scope of CBM review. In declining
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`to institute a trial, the panel placed undue (and inappropriate) emphasis on
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`statements by Sen. Leahy to hold that CBM review is improper for claims which
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`“on their face are directed to technology ‘common in business environments across
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`sectors’ with ‘no particular relation to the financial services sector.’” Decision, at
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`7. This overreliance is inconsistent with relevant authority on statutory
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`interpretation, the prior decisions of the PTAB, and the explicit guidance of the
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`Federal Register.
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`First, it is not the comments of Sen. Leahy, but the comments of the
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`coauthors of Section 18 of the AIA, Sen. Charles Schumer and Jon Kyl, that
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`strongly merit consideration in interpreting Section 18. Ginsburg, Feldman &
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`Bress v. Fed. Energy Admin., 591 F.2d 717, 722 (D.C. Cir. 1978) (holding that the
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`“interpretation [that] conforms to statements of … the principal House author of
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`the Act … is certainly an important principle to be followed when construing the
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`provisions of the Act.”). Indeed, the panel’s disregard of Sen. Schumer and Sen.
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`Kyl’s comments in view of Sen. Leahy’s is inconsistent with the PTAB’s past
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`interpretation of Section 18. See, e.g., JPMorgan Chase & Co. v. Intellectual
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`Ventures II LLC, CBM2014-00157, Paper 8, at 13 (Jan. 14, 2015) (finding
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`unpersuasive Patent Owner’s argument that the PTAB should adopt Sen. Leahy’s
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`statements regarding the “financial product or service” requirement over the
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`construction of Sen. Schumer); Apple, Inc. v. Sightsound Techs., LLC, CBM2013-
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`00020, Paper 14, at 11 (rejecting Patent Owner’s characterization of the legislative
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`history based on Sen. Leahy’s comments).
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`The relevant legislative intent as expressed in the comments of Sen.
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`Schumer, and repeatedly cited by the PTAB, confirm that CBM eligibility should
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`extend to claims that “cover any ancillary activities related to a financial product or
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`service, including . . . customer interfaces, Web site management and functionality,
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`transmission or management of data, [and] customer communications . . . .” 157
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`Cong. Rec. S1365 (daily ed. March 8, 2011) (Sen. Schumer); Petition, at 8.
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`Confirming the relevance of Sen. Schumer’s comments in interpreting
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`Section 18, the binding regulatory guidance explicitly incorporates his definition of
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`CBM patents (not any comments by Sen. Leahy), noting that this definition
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`encompasses “activities that are financial in nature, incidental to a financial
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`activity or complementary to a financial activity,” and does not require a particular
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`relationship to “the financial services sector” as set forth in the panel’s reasoning.
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`CBM Rules, 77 Fed. Reg. 157, at 48735–36 (quoting 157 Cong. Rec. S5432 (daily
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`ed. Mar. 8, 2011) (statement of Sen. Schumer)).
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`The AIA’s other coauthor, Senator Jon Kyl, in fact recognized that
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`determining eligibility for CBM review may even require looking beyond the
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`patent itself to determine if the patent related to a financial product or service:
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`Given the protean nature of many business-method patents, it often
`will be unclear on the face of the patent whether it relates to a
`financial product or service. To make such a determination, the
`Office may look to how the patent has been asserted.
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`157 Cong. Rec. S1379 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl). Again, this
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`contradicts the panel’s interpretation requiring that a CBM patent “expressly
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`claim” a financial product or service or relation to the financial services industry.
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`2.
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`The Panel’s Decision Regarding CBM Eligibility Conflicts
`with Previous PTAB Decisions Interpreting Section 18(d)(1)
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`The Panel’s interpretation of Section 18(d)(1) requiring “express” claiming
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`of a financial product or service or a “particular relation to the financial services
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`sector” also conflicts with numerous prior PTAB decisions.2 In these decisions, the
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`PTAB concluded that challenged claims were CBM eligible despite not
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`“expressly” claiming financial activities or any particular relation to the financial
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`services industry, and indeed encompassed technology “common in business
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`environments across sectors.” The PTAB instead found eligibility in these
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`decisions because challenged claims were directed to technology “incidental to a
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`financial activity or complementary to a financial activity,” or otherwise
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`encompassed “activities that are financial in nature” in accordance with a literal
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`interpretation of Section 18(d)(1) and express legislative intent.
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`In United States Postal Service v. Return Mail, Inc., CBM2014-00116, Paper
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`11, at 11-12 (Oct. 16, 2014), the PTAB found subject matter eligibility for a patent
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`related to a method for distributing encrypted data where the challenged claims did
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`not expressly recite a relationship with or connection to financial services or
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`products. Id. The PTAB concluded that the “subject matter is financial in nature”
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`2 There is an extraordinary need for the PTAB to resolve this conflict
`between the standard set forth in the panel’s Decision and these other PTAB
`decisions, so that Petitioners and the public know which standard will be applied in
`determining CBM subject matter jurisdiction.
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`because it recites “a method for easing the administrative burden” for businesses,
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`including those in the financial services industry. Id. at 12. The PTAB found the
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`patent eligible for review, despite its conclusion that the patent is “applicable to
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`any mail user” who deals with significant returned mail. Id. at 12.
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`Likewise, in Google Inc. v. Unwired Planet, LLC, CBM2014-00005, Paper
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`10, at 9-10 (May 9, 2014) (“Unwired Planet”), the PTAB found subject matter
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`eligibility where the challenged patent claimed a method and system for managing
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`location information for wireless communications devices, where none of the
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`challenged claims expressly claimed a connection to financial service, products, or
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`industry. Id. at 2-4. Instead, the PTAB recognized the specification’s discussion of
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`the claimed “client application” as being possibly “associated with a service
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`provider or a goods provider, such as a hotel, restaurant, or store.” Id. at 11. The
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`PTAB concluded, accordingly, that “the subject matter recited in [the challenged
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`claim] is incidental or complementary to the financial activity of service or product
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`sales,” and therefore that subject matter eligibility had been met. Id.
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`In CRS Advanced Techs, Inc. v. Frontline Techs, Inc., CBM2012-00005,
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`Paper 17, at 6-8 (Jan. 23, 2013), the PTAB instituted CBM review where the
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`claims related to a human resource management system using “substitute
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`fulfillment,” i.e., assigning a replacement worker during a permanent worker’s
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`absence. The challenged claims were silent as to financial products or services and
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`were instead directed to “a plurality of organizations.” Id. at 8. The PTAB
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`nonetheless concluded that “[n]othing in the statute, its legislative history, or the
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`rules requires that a covered business method patent include claim elements that
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`map directly to financial products or services.” Id. The claims, the PTAB noted,
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`“are broad enough to include substitute fulfillment for retail banks,” and are thus at
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`least “incidental” and/or “complementary to a financial activity.” Id.
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`Thus, the PTAB has repeatedly concluded that subject matter eligibility for
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`CBM review is broader than the standard applied by the panel. See, e.g., Volusion
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`Inc. v. Versata Software, Inc., CBM2013-00017, Paper 8, at 5-6 (Oct. 24, 2013)
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`(instituting review where the claims recited a method of hierarchically representing
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`and arranging items in a database because “a person of ordinary skill in the art
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`would have understood” that the items displayed “may be associated with financial
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`services”); Google Inc. v. Inventor Holdings, LLC, CBM2014-00002, Paper 16, at
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`6-9 (Apr. 1, 2014) (instituting review where the challenged claim, silent as to
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`financial products or services, related to a method and system for facilitating
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`anonymous communications and exchange of identities between terminals, routed
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`through a central controller); Experian Mktg. Solutions, Inc. v. Rpost Commc’ns
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`Ltd., CBM 2014-00010, Paper 20, at 5-7 (Apr. 22, 2014) (finding the “financial
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`product or service” requirement met where the claim, silent as to financial products
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`or services, recited a method of authenticating e-mail messages using digital
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`signatures, because the specification “details that the claimed electronic messaging
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`systems and methods” are directed to “financial, monetary, and commercial
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`applications”); Google Inc. v. SimpleAir, Inc., CBM2014-00170, Paper 13, at 6-7
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`(Jan. 22, 2015) (holding that the claim, which recited a method of transmitting data
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`to selected remote locations, met the “financial product or service” requirement
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`because the specification “contemplate[d]” using the method for managing a
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`financial product or service.); Apple, Inc. v. Sightsound Techs., LLC, CBM2013-
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`00020, Paper 14, at 11-15 (Oct. 8, 2013) (instituting review where the challenged
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`patent claimed accessing downloadable content after receiving a payment because
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`a “patent need not be used by a financial services company or involve a traditional
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`financial services business to qualify as a covered business method patent”); Dell
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`Inc. v. Disposition Services LLC, CBM2013-00040, Paper 7, at 7-11 (Feb. 5, 2014)
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`(instituting review where the patent disclosed a surplus asset disassembly and
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`disposition process because the AIA does not require a “particular relation to the
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`financial services sector”); Hulu, LLC v. Intertainer, Inc., CBM2014-00053, Paper
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`11, at 11-12 (June 23, 2014) (finding the “financial product or service” test met
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`where an embodiment in the specification allowed consumers to purchase items).
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`As the above decisions further reflect, contrary to the panel’s reasoning, the
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`PTAB has previously based its holdings on whether a challenged patent is a
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`covered business method patent through not just an examination of the claims, but
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`also explicitly relying on the specification or prosecution history as informing that
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`inquiry. See, e.g., Experian, CBM 2014-0010, Paper 20, at 5, 7; Hulu, LLC,
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`CBM2014-00053, Paper 11, at 12; Volusion, CBM2013-00017, Paper 8, at 5;
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`Google, CBM2014-00170, Paper 13, at 6.
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`Under the broader standard for eligibility consistently applied in these
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`decisions, Salesforce demonstrated that, based on the claims and specification, that
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`the technology of the ‘482 patent claims is at the least “incidental to a financial
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`activity or complementary to a financial activity.” See infra, Section IV.B;
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`Petition, at 8-10, 12-19. In applying a narrower standard for eligibility based on a
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`requirement of “expressly claim[ing]” and a “particular relation” to the financial
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`services sector, the panel erred in denying the Petition.
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`B.
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`The Panel Overlooked The Petition’s Discussion of The Claimed
`Change Management Layer That Manages Changes to Published
`Financial Regulations
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`The panel did not provide further detail in its Decision as to the requirement,
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`discussed in Section IV.A, to “expressly” claim a financial product or service.
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`However, to the extent that the panel’s (erroneous) standard requires claims to
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`“expressly” encompass such financial embodiments3, the panel erred by
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`overlooking that the ‘482 patent claims expressly encompass a change management
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`3 To the extent that the panel instead is requiring that challenged claims
`“expressly” recite a financial product, service or relation to the financial services
`sector, as discussed in Section IV, supra, such a standard is clearly erroneous.
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`system for managing, inter alia, changes to published financial regulations.
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`The Petition established that the claims (including claim 1) are directed to a
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`change management layer for monitoring and detecting changes pertinent to the
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`operation of a business. See Petition, at 8-19. Claim 1 provides:
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`1. A system for providing a dynamically generated application …;
`comprising: …
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`a change management layer for automatically detecting changes that
`affect an application, each client computer further comprising a
`browser application being executed by each client computer, wherein
`a user interface and functionality for the particular application is
`distributed to the browser application and dynamically generated
`when the client computer connects to the server computer.
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`SFDC 1001, at col. 32; see Declaration of Benjamin B. Bederson, SFDC 1012 ¶ 39
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`(“Bederson Decl.”) (“The claims of the ‘482 Patent are directed to monitoring,
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`detecting, and implementing changes in relevant information in the context of an
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`application generated from information stored in a database”); see id. ¶ 41 (“Claims
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`1, 21, and 41 each require . . . “a ‘layer’ of a server or a method step that detects
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`changes that affect an application, and the dynamic generation or regeneration of
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`an application and its user interface . . . .”); see also Petition, at 4 (“[T]he claims of
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`the ‘482 Patent are broadly directed to detecting any ‘changes that effect an
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`application,’ and then generating a user interface incorporating these changes.”) , 4
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`(“the ‘482 Patent focuses, not on changes of any kind, but on managing changes
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`specifically to government regulations or to ancillary business requirements related
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`to government regulations.”). Notably, the Decision itself recognized the
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`“correspond[ence]” of the change management layer of claim 1 (i.e., one of the
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`four layers associated with the server”) with the disclosure of the embodiment of
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`the change management layer in Fig. 1, which “includes one or more change agents
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`that ‘cruise the Web’; and identify and bring to the user’s attention relevant
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`regulatory and non-regulatory changes found on the Web that may affect a user’s
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`business.” Decision, at 7; SFDC 1001, 9:34-38.
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`Salesforce next established, through citation to the claims, specification, and
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`expert declaration, that this claimed change management layer can be used to
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`manage regulatory changes affecting a business. Petition, at 13-14 (noting that the
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`‘482 Patent describes “one integrated system that (1) provides one or more
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`databases that contain information on operations and requirements concerning an
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`activity or area of business; (2) monitors and evaluates the relevance of information
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`on regulatory and non-regulatory changes that affect operations of the business
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`and/or information management requirements . . . .”) (quoting SFDC 1001, Col.
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`8:21-36), 18 (quoting ‘482 patent specification: “Other workers have created . . .
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`partial solutions for tracking changes in, and compliance with, regulations and
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`similar requirements . . .); Bederson Decl. ¶ 78.
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`Salesforce further noted the specification’s disclosure that the claimed
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`change management layer “monitors, responds to, and incorporates changes in,
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`federal, state and local laws, statutes, ordinances and regulations (referred to
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`collectively herein as ‘regulations’) and changes in technology in one or more
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`regulated areas of commercial activity.” Petition, at 9. Further, Salesforce
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`demonstrated that these embodiments are directed towards (a) managing changes in
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`financial and securities regulations and (b) managing other changes impacting a
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`business’ finance department. See Petition, at 8-13.
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`Salesforce also noted the specification expressly contemplates using the
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`claimed change management layer in connection with regulatory change in areas
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`that clearly encompass the financial services sector, i.e., “banking, financial and
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`securities activities and foreign trade”:
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`Examples of activities that are regulated by such regulations include: .
`. . banking, financial and securities activities and foreign trade . . .
`commercial trade practices . . . transportation of persons and cargo . .
`. firearms production and trade . . . mining and related activities . .
`. postal service activities . . . telecommunications . . . .
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`See Petition, at 12; SFDC 1001, at col. 1, lines 16-41. Thus, as set forth in the
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`Petition, the claims of the ‘482 patent all cover this change management system,
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`which as disclosed in the specification encompasses management of regulatory
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`changes in the financial services sector.
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`V. CONCLUSION
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`For the foregoing reasons, Salesforce respectfully requests rehearing and
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`institution of covered business method review of claims 1-59 of the ‘482 patent.
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`CBM Review of U.S. Patent No. 7,356,482
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`Dated: March 4, 2015
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`Respectfully submitted,
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`KEVIN P.B. JOHNSON
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`/Kevin P.B. Johnson/
`Kevin P.B. Johnson
`Registration No. 38,927
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`04554.00001/6555380.5
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`16
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`CBM Review of U.S. Patent No. 7,356,482
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`CERTIFICATE OF SERVICE
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` I
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` hereby certify that, on March 4, 2015, I caused a true and correct copy of
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`the foregoing document to be served via FedEx to the below addresses:
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`Applications in Internet Time LLC
`711 S. Carson St., Ste 4
`Carson City, NV 89701
`
`Steven C. Sereboff (Reg. No. 37,035)
`M. Kala Sarvaiya (Reg. No. 58,912)
`SoCal IP Law Group LLP
`310 N. Westlake Blvd, Ste 120
`Westlake Village, CA 91362
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`
`
`
`/Kevin P.B. Johnson/
`Kevin P.B. Johnson
`Registration No. 38,927
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`04554.00001/6555380.5
`
`17

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