Trials@uspto.gov
`571-272-7822
`
`
`Paper No. 14
`Entered: February 20, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`JP MORGAN CHASE & CO., and
`JP MORGAN CHASE BANK, N.A.,
`Petitioner,
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.,
`Patent Owner.
`____________
`
`Case CBM2014-00180
`Patent 5,949,880
`____________
`
`
`
`Before TREVOR M. JEFFERSON, MITCHELL G. WEATHERLY, and
`KERRY BEGLEY, Administrative Patent Judges.
`
`BEGLEY, Administrative Patent Judge.
`
`
`
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`571-272-7822
`
`
`Paper No. 14
`Entered: February 20, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`JP MORGAN CHASE & CO., and
`JP MORGAN CHASE BANK, N.A.,
`Petitioner,
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.,
`Patent Owner.
`____________
`
`Case CBM2014-00180
`Patent 5,949,880
`____________
`
`
`
`Before TREVOR M. JEFFERSON, MITCHELL G. WEATHERLY, and
`KERRY BEGLEY, Administrative Patent Judges.
`
`BEGLEY, Administrative Patent Judge.
`
`
`
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`CBM2014-00180
`Patent 5,949,880
`
`
`
`JP Morgan Chase & Co. and JP Morgan Chase Bank, N.A.
`
`(collectively, “Petitioner”) filed a Petition requesting covered business
`
`method patent review (“CBM review”) of claims 1–4 of U.S. Patent No.
`
`5,949,880 (Ex. 1001, “the ’880 patent”). Paper 1 (“Pet.”). Maxim
`
`Integrated Products, Inc. (“Patent Owner”) filed a Preliminary Response.
`
`Paper 7 (“Prelim. Resp.”).
`
`Pursuant to 35 U.S.C. § 324(a), CBM review may not be instituted
`
`unless “the information presented in the petition . . . , if such information is
`
`not rebutted, would demonstrate that it is more likely than not that at least 1
`
`of the claims challenged in the petition is unpatentable.” For the reasons
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`that follow, we determine that the Petition, taking into account the
`
`Preliminary Response, demonstrates that it is more likely than not that the
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`challenged claims of the ’880 patent are unpatentable.
`
`I. BACKGROUND
`
`A. RELATED PROCEEDINGS
`
`
`
`Patent Owner asserted the ’880 patent against Petitioner in the U.S.
`
`District Court for the Western District of Pennsylvania, Maxim Integrated
`
`Products, Inc. v. JP Morgan Chase & Co., No. 2:12-cv-01641-JFC (“the
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`District Court Case”). Pet. 4–6; Paper 6, 2. This case was consolidated,
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`with many other cases involving the ’880 patent filed in various district
`
`courts, into a multidistrict litigation proceeding in the Western District of
`
`Pennsylvania, In re: Maxim Integrated Products, Inc., MDL No. 2354, Misc.
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`No. 12-244-JFC (W.D. Pa.) (“the MDL Proceeding”). Pet. 4–6; Paper 6, 2–
`
`4. On October 20, 2014, the district court dismissed with prejudice all
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`
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`2
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`
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`CBM2014-00180
`Patent 5,949,880
`
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`claims against Petitioner involving the ’880 patent in the District Court
`
`Case, pursuant to the parties’ stipulation and motion. See Ex. 1018.
`
`In addition, the ’880 patent was previously the subject of two petitions
`
`requesting CBM review: one petition filed by Branch Bank & Trust Co.
`
`(“BB&T”) in CBM2013-00059, and another petition filed by Petitioner and
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`PNC Bank, N.A. (“PNC”) in CBM2014-00039. Pet. 1; Paper 6, 1–2. In
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`both proceedings, the Board did not institute CBM review of the ’880 patent,
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`because institution was barred under 35 U.S.C. § 325(a)(1). PNC Bank v.
`
`Maxim Integrated Prods., Inc., Case CBM2014-00039 (PTAB June 3, 2014)
`
`(Paper 19) (“CBM2014-00039 Inst. Dec.”); Branch Banking & Trust Co. v.
`
`Maxim Integrated Prods., Inc., Case CBM2013-00059 (PTAB Mar. 20,
`
`2014) (Paper 12) (“CBM2013-00059 Inst. Dec.”).
`
`B. THE ’880 PATENT
`
`
`
`The ’880 patent is directed to a “system, apparatus, and method for
`
`communicating valuable data,” more specifically, a “cash equivalent,” to
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`and from a “portable module.” Ex. 1001, [57], 1:61–63. A consumer can
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`carry the portable module, fill it with a cash equivalent at an “add-money
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`station,” and spend the stored cash equivalent “when buying products and
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`services in the market place.” Id. at [57], 1:63–2:4. For example, a
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`consumer can “take cash out of an ATM” and “put the cash value into the
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`portable module,” and can use monetary value on the portable module to
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`“pay for a train fare.” Id. at 7:13–35, 8:30–37.
`
`
`
`In a preferred embodiment, portable module 102 communicates to
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`microprocessor based device 104, which is connected to secure
`
`microprocessor based module 108. Id. at 1:66–2:1, 2:33–35, 2:59–61.
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`3
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`CBM2014-00180
`Patent 5,949,880
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`Portable module 102 is a “rugged read/write data carrier.” Id. at 3:39–41;
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`see id. 3:42–4:24. Microprocessor based device 104, in turn, “can be any of
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`an unlimited number of devices,” for example, “a personal computer, an
`
`add-a-fare machine at a train or bus station (similar to those in today’s
`
`District of Columbia metro stations), a turn style, a toll booth, a bank’s
`
`terminal, . . . or any device that controls access, or meters a monetary
`
`equivalent.” Id. at 2:37–45. Finally, secure microprocessor based
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`module 108 comprises “microprocessor 12, a real time clock 14, control
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`circuitry 16, a math coprocessor 18, memory circuitry 20, input/output
`
`circuitry 26, and an energy circuit 34.” Id. at 4:24–33.
`
`C. ILLUSTRATIVE CLAIM
`
`Claim 1, the sole independent claim of the ’880 patent, is illustrative
`
`of the claimed subject matter:
`
`1. A method for electronically transferring units of
`exchange between a first module and a second module,
`comprising the steps of:
`a. initiating communication between said first module and
` an electronic device;
`b. passing a first value datum from said first module to
` said electronic device;
`c. passing said first value datum from said electronic
` device to said second module;
`d. performing a mathematical calculation on said first
` value datum thereby creating a second value datum;
`e. passing said second value datum from said second
` module to said electronic device;
`f. passing said second value datum from said electronic
` device to said first module;
`g. storing said second value datum in said first module;
` and
`
`
`
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`4
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`CBM2014-00180
`Patent 5,949,880
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`
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`h. discontinuing communication between said first module
`and said electronic device.
`
`Ex. 1001, 24:47–67.
`
`D. ASSERTED GROUNDS
`
`Petitioner challenges the claims of the ’880 patent on the following
`
`grounds. Pet. 22.
`
`Challenged
`Claims
`1–4
`
`1–4
`
`Basis
`
`Reference[s]
`
`§ 102 U.S. Patent No. 5,428,684 (issued June 27, 1995)
`(“Akiyama”)
`
`
`§ 101
`
`
`
`II. ANALYSIS
`
`A. REAL PARTY IN INTEREST — ALLEGED § 325(A)(1) BAR
`
`
`
`Petitioner and Patent Owner dispute whether PNC—who previously
`
`filed an action challenging the validity of claims of the ’880 patent—is a real
`
`party in interest in this proceeding, such that institution of review is barred
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`under 35 U.S.C. § 325(a)(1). Pet. 1–3; Prelim. Resp. 1–25.
`
`1. Relevant Facts
`
`
`
`On January 25, 2012, PNC filed PNC Financial Services Group, Inc.
`
`v. Maxim Integrated Products, Inc., No. 2:12-cv-00089-JFC (W.D. Pa.)
`
`(“the PNC Case”), asserting that claims of the ’880 patent were invalid.
`
`CBM2014-00039 Dec. Inst. 2–3. This case and the District Court Case in
`
`which Patent Owner asserted the ’880 patent against Petitioner were
`
`consolidated into the MDL Proceeding. See Pet. 4; Paper 6, 2.
`
`
`
`On November 22, 2013, Petitioner and PNC jointly filed a petition for
`
`review of the ’880 patent in CBM2014-00039 (“CBM2014-00039 Petition”).
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`5
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`CBM2014-00180
`Patent 5,949,880
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`CBM2014-00039, Paper 3. On April 1, 2014, Petitioner and PNC filed a
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`motion for adverse judgment against PNC. CBM2014-00039, Paper 11.
`
`
`
`On May 21, 2014, PNC and Patent Owner stipulated to dismiss with
`
`prejudice all claims and counterclaims in the PNC Case. Ex. 1006. On the
`
`same day, PNC withdrew from the joint defense and common interest
`
`agreement in the MDL Proceeding, of which Petitioner is a signatory.
`
`Ex. 1009; see Pet. 2–3.
`
`
`
`On June 3, 2014, the Board denied the CBM2014-00039 Petition and
`
`dismissed as moot the motion for adverse judgment. CBM2014-00039 Dec.
`
`Inst. 3–4. The Board concluded that § 325(a)(1) precluded institution of
`
`CBM review, because PNC, a petitioner and real party in interest, had filed a
`
`civil action challenging claims of the ’880 patent. Id. at 3. The Board,
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`however, “express[ed] no opinion regarding the likelihood that any party
`
`other than PNC would prevail in establishing that any of the challenged
`
`claims are unpatentable for the reasons set forth in the Petition.” Id.
`
`
`
`Petitioner retained new counsel to prepare the current Petition
`
`challenging the ’880 patent, which it filed on August 21, 2014. Pet. 2.
`
`2. Discussion
`
`Petitioner argues that PNC is not a real party in interest in this
`
`proceeding, because “PNC has had no participation or control in the filing of
`
`this Petition” and “has no interest in the outcome of this proceeding.” Id.
`
`at 2–3. Petitioner emphasizes that PNC settled the PNC Case in May 2014
`
`and therefore, PNC and Petitioner have not been co-signatories to any joint
`
`defense agreement since that time; Petitioner and PNC are “entirely separate
`
`and unrelated corporate entities with no common ownership . . . and no
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`
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`6
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`CBM2014-00180
`Patent 5,949,880
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`common control”; and counsel that prepared this Petition differs from the
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`counsel that prepared the CBM2014-00039 Petition. Id.
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`Patent Owner, however, contends that PNC is a real party in interest
`
`because, under the clear language of § 325(a)(1) and the Board’s decision
`
`denying institution in CBM2014-00039, PNC’s status as a real party in
`
`interest cannot be altered by ceasing further participation in challenging the
`
`’880 patent or settling its dispute with Patent Owner. Prelim. Resp. 2, 12–
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`14. In addition, Patent Owner argues that even if new facts could alter
`
`PNC’s status as a real party in interest, PNC remains a real party in interest
`
`in this proceeding under the facts of this case. Id. at 3, 8, 14–25.
`
`Specifically, according to Patent Owner, the Petition is substantially similar
`
`to the CBM2014-00039 Petition that challenged the same patent, and is
`
`supported by a declaration from the same declarant. Id. at 3–4, 6–8, 14–25.
`
`Patent Owner, thus, argues that PNC’s prior “funding, control, and other
`
`contributions” to the CBM2014-00039 Petition remain in this Petition. Id.
`
`Patent Owner also asserts that Petitioner and PNC jointly planned and
`
`announced to the Board in CBM2014-00039 that Petitioner would re-file a
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`petition, and suggests this shows PNC has an ongoing understanding with
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`Petitioner and a continued interest in the ’880 patent. Id. at 3, 8, 10–11, 16,
`
`22–25.
`
`As an initial matter, we are not persuaded by Patent Owner’s
`
`argument that, regardless of any factual changes since the preparation and
`
`filing of the CBM2014-00039 Petition, PNC must be a real party in interest
`
`in this proceeding, under the language of § 325(a)(1) and the Board’s prior
`
`decision in CBM2014-00039. As the Office Patent Trial Practice Guide
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`7
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`CBM2014-00180
`Patent 5,949,880
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`explains, “[w]hether a party who is not a named participant in a given
`
`proceeding nonetheless constitutes a ‘real [party in interest]’ . . . to that
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`proceeding is a highly fact-dependent question,” which must be addressed
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`on a “case-by-case basis.” Office Patent Trial Practice Guide, 77 Fed. Reg.
`
`48,756, 48,759 (Aug. 14, 2012) (“Trial Practice Guide”) (citing Taylor v.
`
`Sturgell, 553 U.S. 880, 893–95 & n.6 (2008)). Here, the facts relevant to
`
`whether PNC is a real party in interest, including PNC’s participation in and
`
`interest in this proceeding, are significantly different than the facts presented
`
`in CBM2014-00039. Therefore, we address the issue of whether PNC is a
`
`real party in interest under the facts of this proceeding.
`
`In general terms, a real party in interest is a “party that desires review
`
`of the patent” or “at whose behest the petition has been filed.” Id.
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`(explaining these considerations apply to “IPR and PGR proceedings” and
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`“similar considerations” apply to CBM review). Courts, which traditionally
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`have invoked the term real party in interest to describe a relationship
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`sufficient to justify applying conventional principles of estoppel and
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`preclusion to non-parties, have identified multiple relevant factors, which
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`inform our analysis. Id. at 48,759–60. Relevant factors include the non-
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`party’s “relationship with the petitioner” and “relationship to the petition
`
`itself, including the nature and/or degree of involvement in the filing; and
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`the nature of the entity filing the petition.” Id.
`
`In Taylor v. Sturgell, the Supreme Court identified six categories of
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`exceptions to the general rule that a non-party is not estopped, precluded, or
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`otherwise bound by previous litigation, namely where: (1) the non-party
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`“agrees to be bound by the determination of issues” in the proceeding; (2) a
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`8
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`“pre-existing substantive legal relationship[]” with the named party justifies
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`binding the non-party (e.g., “assignee and assignor”); (3) the non-party, “in
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`certain limited circumstances,” is “adequately represented” by a party with
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`the same interests (e.g., class actions); (4) the non-party “assume[d] control”
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`over the proceeding; (5) the non-party is bound by a prior decision and is
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`attempting to rehear the matter through a proxy; and (6) a “special statutory
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`scheme . . . expressly foreclos[es] successive” hearing by non-parties. 553
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`U.S. at 892–98 (citations and quotations omitted).
`
`A common focus of inquiry is the fourth category, namely whether the
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`non-party exercised or could have exercised control over a party’s
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`participation in the proceeding. Trial Practice Guide, at 48,759 (citing
`
`Taylor, 553 U.S. at 895). The concept of control generally means that “the
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`non[-]party has the actual measure of control or opportunity to control that
`
`might reasonably be expected between two formal coparties.” Id. (citation
`
`omitted). In other words, the non-party “had the opportunity to present
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`proofs and argument,” Taylor, 553 U.S. at 895 (citation omitted), or “to
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`direct or control the content” of the filing, In re Guan Inter Partes
`
`Reexamination Proceeding, Control No. 95/001,045, Decision Vacating
`
`Filing Date, at 8 (Aug. 25, 2008). “The non[-]party’s participation may be
`
`overt or covert, and the evidence may be direct or circumstantial—so long as
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`the evidence as a whole shows that the non[-]party possessed effective
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`control over a party’s conduct of the [proceeding] as measured from a
`
`practical, as opposed to a purely theoretical standpoint.” Gonzalez v. Banco
`
`Central Corp., 27 F.3d 751, 759 (1st Cir. 1994).
`
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`9
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`Patent 5,949,880
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`“[T]here is no bright-line test,” however, “for determining the
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`necessary quantity or degree of participation to qualify as a ‘real [party in
`
`interest]’ . . . based on the control concept.” Trial Practice Guide, at 48,759
`
`(citing Gonzalez, 27 F.3d at 759). “[A] party that funds and directs and
`
`controls” a petition or proceeding constitutes a real party in interest, “[b]ut
`
`whether something less than complete funding and control” is sufficient
`
`depends on the facts. Id. at 48,760.
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`Here, on the present record, we are persuaded that PNC is not a real
`
`party in interest in this proceeding—the Petition was not filed at PNC’s
`
`“behest,” PNC no longer “desires review” of the ’880 patent, and the other
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`factors and categories identified in the Office Patent Trial Practice Guide
`
`and Taylor do not warrant naming PNC as a real party in interest.
`
`Patent Owner’s speculation regarding an ongoing common interest and
`
`understanding between PNC and Petitioner lacks any factual basis on the
`
`record before us. See Prelim. Resp. 3, 8, 10–11, 16, 22–25.
`
`Rather, the evidence before us shows Petitioner and PNC are entirely
`
`separate corporate entities, with no identifiable ongoing relationship.
`
`Petitioner and PNC were once co-defendants and co-members of a joint
`
`defense agreement, and previously collaborated in filing the CBM2014-
`
`00039 Petition challenging the ’880 Patent in November 2013. PNC,
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`however, “expressly abandon[ed]” the CBM2014-00039 Petition in
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`April 2014, and withdrew from the joint defense agreement it had co-signed
`
`with Petitioner in May 2014. CBM2014-00039, Paper 11, at 3; see Pet. 2–3,
`
`Ex. 1009. Further, Petitioner hired new counsel, different from the counsel
`
`that previously co-represented PNC and Petitioner in CBM2014-00039, to
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`10
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`CBM2014-00180
`Patent 5,949,880
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`prepare and file this Petition. Therefore, based on the evidence before us,
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`we determine that Petitioner and PNC have had no continuing relationship
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`since at least the conclusion of CBM2014-00039 in June 2014.
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`PNC also has no identifiable ongoing interest in a review of the
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`’880 patent. All claims and counterclaims in the PNC Case, including those
`
`involving the ’880 patent, were dismissed with prejudice in May 2014,
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`Ex. 1009, and there is no evidence before us to suggest that PNC has had
`
`any interest in review of the ’880 patent after this dismissal.
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`In addition, on the record before us, we are persuaded that PNC has
`
`not participated in or controlled the present Petition, as Petitioner expressly
`
`represents in the Petition. Pet. 2–3. Although Patent Owner contends that
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`overlap in some of the prior art and arguments in the CBM2014-00039
`
`Petition and the current Petition demonstrates PNC’s control and
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`contributions in this proceeding, Prelim. Resp. 3–4, 6–8, 14–25, such
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`overlap is not sufficient to show that PNC had any opportunity to direct or
`
`control the arguments and evidence presented in the present Petition. The
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`similarity is understandable because the ’880 patent as well as the relevant
`
`prior art and potential unpatentability arguments have not changed.
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`Nevertheless, the current Petition indisputably has differences from the
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`CBM2014-00039 Petition. For example, the CBM2014-00039 Petition
`
`proposed different terms for construction and asserted a ground based on
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`obviousness. Compare Pet., with CBM2014-00039, Paper 3. No evidence
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`is before us to suggest that PNC had any involvement in directing such
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`changes or the arguments and evidence presented in the Petition, which was
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`prepared by new counsel retained by Petitioner alone.
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`11
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`Yet, because Petitioner supports the Petition with a declaration from
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`Stephen D. Bristow, the same declarant as in CBM2014-00039, we agree
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`with Patent Owner that the Petition “enjoys at least part of the benefit of”
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`any payments PNC made to Mr. Bristow to prepare his declaration in
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`CBM2014-00039, even though the declaration filed in this case is not the
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`same as the one filed in CBM2014-00039. Prelim. Resp. 17–18; see
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`generally Ex. 1011 (Decl. of Stephen Bristow); CBM2014-00039, Ex. 1005
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`(Decl. of Stephen D. Bristow). Nevertheless, even if we were to
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`characterize these payments by PNC to Mr. Bristow as partial funding of the
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`Petition, we are not persuaded that PNC had sufficient involvement in or
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`direction of the Petition to be a real party in interest, in light of the other
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`facts outlined above that strongly weigh against a finding of control.
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`Therefore, on this record, we are not persuaded that Petitioner had the
`
`opportunity to control this proceeding. Similarly, none of the other five
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`categories of exceptions outlined by the Supreme Court in Taylor is
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`applicable to the facts of this case. See 553 U.S. at 892–98.
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`Finally, we note that a petitioner and a non-party’s status as co-
`
`defendants and co-members of a joint defense group is not alone sufficient
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`to render the non-party a real party in interest. Trial Practice Guide, at
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`48,760; see, e.g., Petroleum Geo-Servs. Inc. v. WesternGeco LLC, Case
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`IPR2014-00687, slip op. at 16 (PTAB Dec. 15, 2014) (Paper 33) (holding
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`petitioner and non-party’s shared interest in invalidating patent at issue,
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`“collaborat[ion] together, and invo[cation of the] common interest privilege
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`with respect to sharing potentially invalidating prior art references” was
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`insufficient to render non-party a real party in interest). In our view, based
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`12
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`on the facts before us, PNC and Petitioner’s terminated collaboration in
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`preparing the CBM2014-00039 Petition, while co-defendants and co-
`
`signatories of a joint defense agreement in the MDL Proceeding, is similar to
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`such a situation. PNC’s lack of involvement or control in the subsequent
`
`preparation and funding of this Petition, prepared by different counsel and
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`presenting different prior art and arguments, persuades us that PNC is not a
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`real party in interest in this case.
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`Accordingly, based on the evidence before us at this stage of the
`
`proceeding, PNC is not a real party in interest in this case, and § 325(a)(1)
`
`does not bar institution of review.
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`B. SECTION 325(D) – DISCRETION TO DECLINE TO INSTITUTE
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`
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`Patent Owner also urges us to exercise our discretion, under 35 U.S.C.
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`§ 325(d), to decline to institute the Petition because the “same or
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`substantially the same prior art or arguments” were presented in CBM2014-
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`00039, filed by Petitioner and PNC, and CBM2013-00059, filed by BB&T.
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`Section 325(d) provides: “[i]n determining whether to institute or order a
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`proceeding . . . , the Director may take into account whether, and reject the
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`petition or request because, the same or substantially the same prior art or
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`arguments previously were presented to the Office.” 35 U.S.C. § 325(d).
`
`
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`We need not address whether the petitions in CBM2013-00059 or
`
`CBM2014-00039 involved the same or substantially the same prior art or
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`arguments as this Petition. Even if this requirement of § 325(d) were met,
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`we would not exercise our discretion to deny the Petition, given that the
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`Board did not reach the merits of the unpatentability arguments in either
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`13
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`case based on a determination that § 325(a)(1) barred institution of review.
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`See CBM2014-00039 Dec. Inst.; CBM2013-00059 Inst. Dec.
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`
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`Relatedly, Patent Owner asks that we “disregard[]” “all arguments not
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`found in” the previous CBM2014-00039 Petition, asserting that these
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`arguments are “[w]aived” and unfairly bolster the Petition. Prelim. Resp.
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`26–28. Petitioner has not waived arguments absent from the previous
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`petition it filed with PNC, the merits of which were never addressed by the
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`Board. We consider and address all the arguments presented in the Petition
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`presently before us.
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`C. PETITIONER’S STANDING
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`
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`To have standing, Petitioner must show that: (1) “the patent for which
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`review is sought is a covered business method patent,” and (2) Petitioner
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`“meets the eligibility requirements of § 42.302.” 37 C.F.R. § 42.304(a).
`
`1. Requirements of 37 C.F.R. § 42.302
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`
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`Petitioner satisfies both requirements of 37 C.F.R. § 42.302. First,
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`pursuant to Section 18(a)(1) of the Leahy-Smith American Invents Act
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`(“AIA”), Pub. L. No. 112-29, § 18(a)(1)(B), 125 Stat. 284, 330 (2011), and
`
`37 C.F.R. § 42.301(a), “a person may not file a petition” for CBM review
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`unless the petitioner, its real party in interest, or its privy “has been sued for
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`infringement of the patent or has been charged with infringement under that
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`patent.” AIA, Pub. L. No. 112-29, § 18(a)(1)(B), 125 Stat. 284, 330 (2011);
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`37 C.F.R. § 42.302. Under the plain language of Section 18(a)(1), as well as
`
`its implementing rule, the relevant time for determining whether Petitioner
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`“has been sued” is when Petitioner “file[s]” the Petition. See eBay Enter.,
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`Inc. v. Lockwood, Case CBM2014-00025, slip op. at 9–12 (PTAB May 20,
`
`
`
`14
`
`
`
`CBM2014-00180
`Patent 5,949,880
`
`
`2014) (Paper 24); SAP Am. Inc. v. Versata Dev. Grp. Inc., Case CBM2012-
`
`00001, slip op. at 18 (PTAB Jan. 9, 2013) (Paper 36); see also Coach Servs.,
`
`Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1376 (Fed. Cir. 2012)
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`(“[F]or an agency, such as the PTO, standing is conferred by statute.”).
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`Here, at the time the Petition was filed on August 21, 2014, Patent Owner
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`had asserted the ’880 patent against Petitioner in the District Court Case, as
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`indicated in the Petition. Pet. 4; see Paper 11, at 1. The subsequent
`
`dismissal with prejudice of all claims against Petitioner involving the ’880
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`patent in the District Court Case does not divest Petitioner of standing to
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`pursue CBM review. See Ex. 1018; Prelim. Resp. 6 n.2.
`
`
`
`Second, we agree with Petitioner’s representation, which Patent
`
`Owner does not dispute, that Petitioner is not estopped from pursuing CBM
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`review under 35 U.S.C. § 325(e)(1) because the Board did not issue a final
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`written decision in CBM2014-00039, in which Petitioner previously
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`challenged the ’880 patent. 37 C.F.R. § 42.302(b); Pet. 8–9.
`
`2. Covered Business Method Patent
`
`
`
`Petitioner argues that the ’880 patent is a covered business method
`
`patent. Pet. 11–21. Patent Owner does not dispute this assertion. For the
`
`reasons explained below, we agree with Petitioner that the ’880 patent
`
`qualifies as a covered business method patent.
`
`
`
`A “covered business method patent,” as defined in the AIA, is “a
`
`patent that claims a method or corresponding apparatus for performing data
`
`processing or other operations used in the practice, administration, or
`
`management of a financial product or service, except that the term does not
`
`include patents for technological inventions.” AIA, § 18(d)(1); accord 37
`
`
`
`15
`
`
`
`CBM2014-00180
`Patent 5,949,880
`
`
`C.F.R. § 42.301(a). In determining whether a patent is eligible for CBM
`
`review, the focus is on the claims. See 37 C.F.R. § 42.301; Transitional
`
`Program for Covered Business Method Patents—Definitions of Covered
`
`Business Method Patent and Technological Invention; Final Rule, 77 Fed.
`
`Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Final Rules”). One claim
`
`directed to a covered business method is sufficient to render the patent
`
`eligible for review. Id.
`
`a. Financial Product or Service
`
`Petitioner argues that the ’880 patent claims, particularly claim 2, are
`
`directed to a financial product or service, as confirmed by the specification
`
`of the ’880 patent. See Pet. 12–15. The legislative history of the AIA
`
`indicates that “‘financial product or service’ should be interpreted broadly.”
`
`CBM Final Rules, at 48,735 (response to comment 1). Specifically, the
`
`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.’” Id. (quoting 157 Cong. Rec. S5432 (daily ed. Sept. 8,
`
`2011) (statement of Sen. Schumer)).
`
`
`
`Here, independent claim 1 recites a “method for electronically
`
`transferring units of exchange” in which a “first value datum” is passed
`
`between two “module[s],” one of which performs a “mathematical
`
`calculation” on the datum. Ex. 1001, 24:47–67. In claim 2, which depends
`
`from claim 1, the recited “first value datum represents a monetary
`
`equivalent.” Id. at 25:1–2. Accordingly, based on the claim language, the
`
`method recited in claim 2 involves electronically transferring monetary
`
`
`
`16
`
`
`
`CBM2014-00180
`Patent 5,949,880
`
`
`value and is, at a minimum, incidental or complementary to financial
`
`activities and services, such as electronic payments or cash transfers and
`
`withdrawals. See Apple Inc. v. Sightsound Techs., LLC, Case CBM2013-
`
`00020, slip op. at 11–12 (PTAB Oct. 8, 2013) (Paper 14) (“The electronic
`
`transfer of money is a financial activity, and allowing such a transfer
`
`amounts to providing a financial service.”); see also David W. Gillman v.
`
`Stoneeagle Servs., Inc., Case CBM2013-00047, slip op. at 7–8 (PTAB Feb.
`
`18, 2014) (Paper 11) (holding claimed method to be financial in nature
`
`because processing payment is an “inherently financial activit[y]”).
`
`
`
`The written description confirms that the ’880 patent claims,
`
`particularly claim 2, involve financial activities. In the written description,
`
`the unit or data being exchanged between portable module 102 and secure
`
`microprocessor based module 108 is a “cash equivalent” (Ex. 1001, [57],
`
`1:62), “electronic money” (id. at 2:2), or a “currency equivalent” (id. at
`
`2:37). For example, a consumer can “take cash out of an ATM,” or “add-
`
`money station,” and “put the cash value into the portable module.” Id. at
`
`2:1–6, 8:34–37. The consumer then can use the monetary value stored on
`
`the portable module “when buying products or services in the market place”
`
`(id. at 1:63–65; see id. at 1:66–2:6), for example, “to pay for a train fare” (id.
`
`at 7:13–35, 8:30–37). Accordingly, the specification provides further
`
`evidence that the recited methods facilitate electronic financial activities and
`
`transactions, including transferring monetary value, and paying for goods
`
`and services.
`
`
`
`Accordingly, on the record before us, we determine that the
`
`’880 patent claims are directed to “a method . . . for performing data
`
`
`
`17
`
`
`
`CBM2014-00180
`Patent 5,949,880
`
`
`processing or other operations used in the practice, administration, or
`
`management of a financial product or service.” AIA, § 18(d)(1); 37 C.F.R.
`
`§ 42.301(a).
`
`b. Technological Invention Exception
`
`The technological invention exception in the definition of a covered
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`business method patent is not met by “[m]ere recitation of known
`
`technologies, such as computer hardware, . . . or specialized machines, such
`
`as an ATM or point of sale device,” or “[r]eciting the use of known prior art
`
`technology to accomplish a process or method, even if that process or
`
`method is novel and non-obvious.” Trial Practice Guide, at 48,763–64. To
`
`determine whether a patent is for a technological invention, we consider
`
`“whether the claimed subject matter as a whole”: (1) “recites a technological
`
`feature that is novel and unobvious over the prior art;” and (2) “solves a
`
`technical problem using a technical solution.” 37 C.F.R. § 42.301(b); see
`
`CBM Final Rules, at 48,736. Both the first and second prong must be met
`
`for the technological invention exception to apply. Agilysys, Inc. v.
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`Ameranth, Inc., Case CBM2014-00014, slip op. at 11 (PTAB Mar. 26, 2014)
`
`(Paper 19); see Google Inc. v. Inventor Holdings, LLC, Case CBM2014-
`
`00002, slip op. at 10 (PTAB Apr. 1, 2014); 157 Cong. Rec. S1364 (daily ed.
`
`Sept. 8, 2011) (statement of Sen. Schumer).
`
`
`
`Regarding the first prong—whether the subject matter as a whole
`
`recites a “technological feature that is novel and unobvious over the prior
`
`art”—Petitioner contends that each of the technological features recited in
`
`the ’880 patent claims was generic, common, and conventional in 1996, the
`
`earliest effective filing date of the ’880 patent. Pet. 16–20. Petitioner
`
`
`
`18
`
`
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`CBM2014-00180
`Patent 5,949,880
`
`
`further argues that the combination of these features in the recited method
`
`merely achieves the normal, expected, and predictable result of the
`
`combination. Id. On this record, we are persuaded that the ’880 patent
`
`claims do not recite a technological feature that is novel and nonobvious.
`
`
`
`Independent claim 1 recites a “first module,” a “second module,” and
`
`an “electronic device.” Ex. 1001, 24:47–67. To the extent these are
`
`technological features, the only functionalities recited by the steps of the
`
`claim are that these modules and the electronic device “pass[]” data to one
`
`another; the first module and the electronic device “communicat[e]”; the
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`first module “stor[e]” data; and the second module “perform[] a
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`mathematical calculation” on data. Id. Petitioner proffers testimony from
`
`Mr. Bristow that these functionalities can be performed by generic
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`computing structures. Ex. 1011 ¶¶ 32–34. Dependent claims 2–4 do not
`
`recite any additional functions for these features, or any other features that
`
`could be classified as technological. See Ex. 1001, 25:1–6.
`
`
`
`The written description of the ’880 patent refers to the components of
`
`the recited modules and electronic device generally by reference to their
`
`function, without any detail or particularity that would suggest, or that might
`
`be expected of, a disclosure of new technology. See id. at 3:1–27, 3:39–
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`5:62. In addition, the specification discusses using known structures or
`
`devices. For example, microprocessor based device 104, which corresponds
`
`to the recited “electronic device,” is disclosed to be “any of an unlimited
`
`number of devices,” for example, “a
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