`Tel: 571-272-7822
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`
`
`Paper 14
`Entered: December 1, 2015
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`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00132
`Patent 8,336,772 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`GREGG I. ANDERSON and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`CBM2015-00132
`Patent 8,336,772 B2
`
`
`
`I. INTRODUCTION
`
`Google Inc. (“Google” or “Petitioner Google”) filed a corrected
`Petition requesting covered business method patent review of claims 1, 5, 9,
`10, 14, 21, and 22 (the “challenged claims”) of U.S. Patent No. 8,336,772
`B2 (Ex. 1001, “the ’772 patent”) (“Pet.,” Paper 6, 11). Smartflash LLC
`(“Smartflash”) filed a Preliminary Response (“Prelim. Resp.,” Paper 13).
`We have jurisdiction under 35 U.S.C. § 324, which provides that a
`covered business method patent review may not be instituted “unless . . . it is
`more likely than not that at least 1 of the claims challenged in the petition is
`unpatentable.”
`On June 29, 2015, Google filed a Motion for Joinder (“Mot.,” Paper
`10), seeking to consolidate this case with earlier-filed petitions for covered
`business method patent reviews of the ’772 patent in Apple Inc. v.
`Smartflash, LLC, CBM2015-00031 and CBM2015-00032 (collectively, the
`“Apple CBM Proceedings,” and “Petitioner Apple” when the Petitioner in
`those reviews is referenced), which were instituted on May 28, 2015. See
`Apple Inc. v. Smartflash, LLC, Case CBM2015-00031, slip. op. at 19–20
`(PTAB May 28, 2015) (Paper 11) (instituting review of claims 1, 5, 8, and
`10 of the ’772 patent under 35 U.S.C. § 101); and Apple Inc. v. Smartflash,
`
`
`1 Google filed two versions of the corrected Petition: Paper 7, which is
`sealed and accessible to the parties and Board only, and Paper 6, which is a
`public version of the corrected Petition containing a small portion of
`redacted text. For purposes of this Decision, we refer only to the public
`version of the corrected Petition. Pursuant to 37 C.F.R. § 42.55, Google’s
`motion to seal (Paper 4) the un-redacted Petition (Paper 7) is granted upon
`institution.
`
`2
`
`
`
`CBM2015-00132
`Patent 8,336,772 B2
`
`
`
`LLC, Case CBM2015-00032, slip. op. at 18–19 (Paper 11) (instituting
`review of claims 14, 19, and 22 of the ’772 patent under 35 U.S.C. § 101).
`Smartflash filed an Opposition to Google’s Motion for Joinder.
`(“Opp.,” Paper 11). Google also filed a Reply in Support of its Motion for
`Joinder. (“Reply,” Paper 12).
`For the reasons explained below, we institute a covered business
`method patent review of claims 1, 5, 9, 10, 14, 21, and 22 of the ’772 patent
`and grant Google’s Motion for Joinder.
`
`II. INSTITUTION OF COVERED BUSINESS METHOD PATENT
`REVIEW ON SAME GROUNDS AS INSTITUTED IN THE APPLE CBM
`PROCEEDINGS
`
`In view of the identity of the challenges in the instant Petition and
`those of the institutions in each of CBM2015-00031 and CBM2015-00032,
`we determine that it is more likely than not that Google will prevail in
`demonstrating that the claims challenged in Google’s present petition are
`unpatentable.
`Smartflash reiterates arguments in support of its position that the ’772
`patent is ineligible for covered business method patent. See Prelim. Resp.
`49–58. We previously have determined that the ’772 patent contains at least
`one claim that is eligible for covered business method patent review. AIA
`§ 18(d)(1); see 37 C.F.R. § 42.301(a); see also CBM2015-00031, Paper 11,
`7–10 (determining that the ’772 patent is eligible for covered business
`method patent review based on claim 8); CBM2015-00032, Paper 11, 6–10
`(determining that the ’772 patent is eligible for covered business method
`patent review based on claim 19); Apple Inc. v. Smartflash, LLC, Case
`CBM2015-00033, slip. op. at 7–11 (PTAB May 28, 2015 (Paper 11)
`
`3
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`CBM2015-00132
`Patent 8,336,772 B2
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`(determining that the ’772 patent is eligible for covered business method
`patent review based on claim 30).
`In the present petition, Google contends that claim 21 renders the ’772
`patent eligible for a covered business method patent review. Pet. 4–10.
`Smartflash disagrees. Prelim. Resp. 49–58. We need not address the merits
`of Smartflash’s argument with respect to claim 21 because we have
`previously determined that the ’772 patent contains at least one claim that is
`eligible for covered business method patent review. See 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 Rules”) (Comment 8) (A
`patent need have only one claim directed to a covered business method to be
`eligible for review).
`Google’s Petition challenges a subset of the claims based upon the
`same ground, 35 U.S.C. § 101, for which we instituted covered business
`method patent reviews in each of the Apple CBM proceedings, and
`challenges for the first time claims 9 and 21, which depend from claims 8
`and 19, respectively, and recite the same additional limitation, based upon
`the same ground. Mot. 2–3. Specifically, Google challenges claims 1, 5, 9,
`10, 14, 21, and 22. Pet. 1; Mot. 2–3. In CBM2015-00031, our institution
`included a review of claims 1, 5, 8, and 10 under § 101. Paper 11, 19–20.
`In CBM2015-00032, our institution included a review of claims 14, 19, and
`22 under § 101. Paper 11, 18–19. Based upon our review of the Petition, we
`are persuaded that it is more likely than not that claims 9 and 21 also are
`unpatentable under § 101.
`
`4
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`CBM2015-00132
`Patent 8,336,772 B2
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`
`Smartflash’s arguments in the present preliminary response do not
`alter our determinations in the previous Apple proceedings. For example,
`Smartflash again argues that AIA § 18(d)(1) should be interpreted narrowly
`to cover only technology used specifically in the financial or banking
`industry. Prelim. Resp. 51–56. The Federal Circuit has expressly
`determined, however, that “the definition of ‘covered business method
`patent’ is not limited to products and services of only the financial industry,
`or to patents owned by or directly affecting the activities of financial
`institutions, such as banks and brokerage houses.” Versata Dev. Grp., Inc. v.
`SAP America, Inc., 793 F.3d 1306, 1325 (Fed. Cir. 2015). Rather, “it covers
`a wide range of finance-related activities.” Id.
`Furthermore, we have reviewed Smartflash’s present preliminary
`response and are not persuaded that we should deny institution of the present
`petition. For example, in support of its argument that the challenged claims
`are directed to statutory eligible subject matter, Smartflash relies heavily on
`DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), a
`decision that we determine, at this point in the proceeding, is not relevant to
`the claims challenged here. See Prelim. Resp. at 15–31. Smartflash also
`argues that the challenged claims do not result in inappropriate preemption
`(Prelim. Resp. 31–43) and alleges that “[t]he existence of a large number of
`non-infringing alternatives shows that the claims of the ’772 Patent do not
`raise preemption concerns” (Prelim. Resp. 36). The Federal Circuit,
`however, has recently acknowledged that “questions on preemption are
`inherent in and resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v.
`Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015). The Federal Circuit
`further stated,
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`5
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`CBM2015-00132
`Patent 8,336,772 B2
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`While preemption may signal patent ineligible subject matter,
`the absence of complete preemption does not demonstrate
`patent eligibility. In this case, Sequenom’s attempt to limit the
`breadth of the claims by showing alternative uses of cffDNA
`outside of the scope of the claims does not change the
`conclusion that the claims are directed to patent ineligible
`subject matter. Where a patent’s claims are deemed only to
`disclose patent ineligible subject matter under the Mayo
`framework, as they are in this case, preemption concerns are
`fully addressed and made moot.
`
`Id. (emphasis added).
`Smartflash further asserts that (1) section 101 is not a ground that may
`be raised in a covered business method patent review (Prelim. Resp. 44–46);
`(2) the Office is estopped from revisiting the issue of § 101, which was
`inherently reviewed during examination (id. at 46–47); and (3) invalidating
`patent claims via covered business method patent review is unconstitutional
`(id. at 47–48). For the following reasons, we are not persuaded by these
`arguments.
`As an initial matter, Smartflash concedes that the Federal Circuit, in
`Versata, found that “‘the PTAB acted within the scope of its authority
`delineated by Congress in permitting a § 101 challenge under AIA § 18.’”
`Id. at 44 n.1 (quoting Versata Dev. Grp., Inc. v. SAP America, Inc., 793 F.3d
`1306, 1330 (Fed. Cir. 2015). We conclude that our review of the issue of
`§ 101 here is proper.
`Next, Smartflash does not provide any authority for its assertion that
`“[t]he question of whether the challenged claims are directed to statutory
`subject matter has already been adjudicated by the USPTO, and the USPTO
`is estopped from allowing the issues to be raised in the present proceeding.”
`Id. at 46.
`
`6
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`CBM2015-00132
`Patent 8,336,772 B2
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`Smartflash also argues that invalidating patent claims via covered
`business method patent review “violates the Separation of Powers doctrine
`of the United States Constitution” (id. at 47). We decline to consider
`Smartflash’s constitutional challenge as, generally, “administrative agencies
`do not have jurisdiction to decide the constitutionality of congressional
`enactments.” See Riggin v. Office of Senate Fair Employment Practices, 61
`F.3d 1563, 1569 (Fed. Cir. 1995); see also Harjo v. Pro-Football, Inc., 50
`U.S.P.Q.2d 1705, 1999 WL 375907, at *4 (TTAB Apr. 2, 1999) (“[T]he
`Board has no authority . . . to declare provisions of the Trademark Act
`unconstitutional.”); Blackhorse v. Pro-Football, Inc., 111 U.S.P.Q.2d 1080,
`2014 WL 2757516, at *1 n.1 (TTAB June 18, 2014); but see American
`Express Co. v. Lunenfeld, Case CBM2014-00050, slip. op. at 9–10 (PTAB
`May 22, 2015) (Paper 51) (“for the reasons articulated in Patlex, we
`conclude that covered business method patent reviews, like reexamination
`proceedings, comply with the Seventh Amendment”).
`Accordingly, we institute a covered business method patent review in
`this proceeding on the same ground, namely § 101, as that on which we
`instituted in the Apple CBM proceedings for claims 1, 5, 9, 10, 14, 21, and
`22 of the ’772 patent. We do not institute a covered business method patent
`review on any other ground.
`III. GRANT OF MOTION FOR JOINDER
`Smartflash opposes Google’s request to consolidate the present
`petition with the Apple CBM proceedings. Paper 11. Smartflash opposes
`consolidation for the following reasons: “(i) it is too late for the proposed
`joinder to provide the purported efficiencies Petitioner suggests; (ii) the
`cases are sufficiently different in terms of proffered exhibits and witnesses to
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`7
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`CBM2015-00132
`Patent 8,336,772 B2
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`gain any advantage by joinder; and (iii) the Board should exercise its
`discretion under 35 U.S.C. § 325(d) and decline to institute a covered
`business method patent review of claims 1, 5, 9, 10, 14, 21, and 22 of U.S.
`Patent 8,336,772 on 35 U.S.C. § 101 grounds in CBM2015-00132 because it
`has already instituted covered business method review of on the same
`grounds of claims 1, 5, 10, 14, and 22, as well as on claims 8 and 19, from
`which 9 and 22 depend, in CBM2015-0031 and -00032.” Id. at 1.
`We are not persuaded by Smartflash’s arguments. Smartflash
`contends that it is too late for the proposed consolidation to provide
`efficiencies because the Apple CBM proceedings have proceeded through
`Patent Owner discovery with Patent Owner’s Response being filed on July
`29, 2015, and Google’s proposed schedule for consolidation is
`“impractical.” Opp. 2–3. To address this concern, however, we determine
`that the Scheduling Orders in place for CBM2015-00031 and CBM2015-
`00032 shall govern the consolidated proceedings. See Reply 2. Smartflash
`next argues that there is not complete overlap in exhibits and witnesses
`relied upon by Google and the record in the Apple CBM proceedings. Id. at
`4–5. Thus, contends Smartflash, “[consolidation] would force Patent Owner
`to respond to different sets of evidence simultaneously, on a compressed
`schedule, and in more limited space.” Id. at 5.
`However, Google acknowledges that to the extent we determine that
`“incorporating Google’s arguments and evidence in the Apple CBMs would
`complicate the schedules, Google requests [consolidation] as to Apple’s
`petitions so that Google can, at minimum, ensure that the proceedings on the
`challenged claims continue in the event Apple settles or otherwise
`terminates the proceedings.” Mot. 9–10; see Reply 2–3. To address
`
`8
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`Patent 8,336,772 B2
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`
`
`Smartflash’s concerns, trial will proceed on the basis of the argument and
`evidence presented by Petitioner Apple in each of the Apple CBM
`proceedings without submission of additional evidence from Petitioner
`Google. Any additional evidence, papers, and briefing filed on behalf of
`Petitioner Apple and Petitioner Google in the consolidated proceedings shall
`be filed by Petitioner Apple, as a consolidated filing, unless we provide
`authorization otherwise, as noted below. Lastly, Smartflash argues that we
`should exercise our discretion under 35 U.S.C. § 325(d) by declining to
`institute a review in the instant case because we have already instituted
`review “on the same grounds of claims 1, 5, 10, 14, and 22, as well as on
`claims 8 and 19, from which claims 9 and 22 depend in CBM2015-00031
`and -00032.” Opp. 6. We decline to exercise our discretion under § 325(d)
`because we consolidate these proceedings based on the same schedule,
`evidence, and argument proffered in the Apple CBM proceedings.
`As noted above, we instituted the Apple CBM proceedings on May
`28, 2015. Google filed the instant petition on May 8, 2015, and its Motion
`for Joinder was filed on June 29, 2015. Mot. 5, 13; Paper 7. Thus, Google’s
`request satisfies the requirement that the consolidation request be made no
`later than one month after the institution date of the Apple CBM
`proceedings. See 35 U.S.C. § 325(c); 37 C.F.R. §§ 42.22 and 42.222(b);
`Fed. R. Civ. P. 6(a).
`The only ground upon which we institute a covered business method
`patent review in this proceeding is a challenge to claims 1, 5, 9, 10, 14, 21,
`and 22 of the ’772 patent based on § 101. We have already determined that
`five of the seven claims challenged by Google are more likely than not
`unpatentable on the same ground on which Google’s challenge is based,
`
`9
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`CBM2015-00132
`Patent 8,336,772 B2
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`§ 101. CBM2015-00031, Paper 11, 19–20 (instituting a review of claims 1,
`5, 8, and 10 under § 101); CBM2015-00032, Paper 11, 18–19 (instituting a
`review of claims 14, 19, and 22 under § 101). That Google’s petition
`challenges two claims not at issue in the Apple CBMs, claims 9 and 21, does
`not weigh against joinder. See Reply 7. As an initial matter, the statute and
`regulation allowing consolidation require that only the petition or matter
`concern the same patent. 35 U.S.C. § 325(c); 37 C.F.R. § 42.222(a).
`Because claims 9 and 21 depend from claims 8 and 19, respectively, and we
`instituted a review of both claims 8 and 19 in the Apple CBMs,
`consolidation will increase efficiency by allowing the Board to address the
`patententability of the claims challenged in these proceedings in a fewer
`number of proceedings. Google, thus, does not assert any new ground of
`unpatentability that is not already being considered in the Apple CBM
`proceedings.
`Under the circumstances, we conclude Google has demonstrated that
`consolidation will not unduly complicate or delay the Apple CBM
`proceedings, and therefore, we grant Google’s Motion for Joinder to
`consolidate this proceeding with each of the Apple CBM proceedings,
`CBM2015-00031 and CBM2015-00032, as follows. We consolidate
`Google’s challenge to claims 1, 5, 9, and 10 based on § 101 to CBM2015-
`000312, and Google’s challenge to claims 14, 21, and 22 based on § 101 to
`CBM2015-000323. All filings in the consolidated proceedings will be made
`
`2 We note that a challenge to claims 5 and 10 based on 35 U.S.C. § 101 in
`CBM2015-00059 also has been consolidated with CBM2015-00031.
`3 We note that a challenge to claim 14 based on 35 U.S.C. § 101 in
`CBM2015-00059 also has been consolidated with CBM2015-00032.
`
`10
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`CBM2015-00132
`Patent 8,336,772 B2
`
`
`
`by Petitioner Apple in each of the Apple CBM proceedings. Petitioner
`Google shall not file any separate papers or briefing in these consolidated
`proceedings without authorization from the Board. In addition, Petitioner
`Google shall not seek any additional discovery beyond that sought by
`Petitioner Apple. Petitioner Apple and Petitioner Google shall resolve any
`disputes between them concerning the conduct of the consolidated
`proceedings and shall contact the Board if any such matters cannot be
`resolved. No additional burdens shall be placed on Smartflash as a result of
`the consolidation. In consideration of the above, we institute a covered
`business method patent review in CBM2015-00132 and grant Petitioner
`Google’s motion to consolidate this proceeding with each of the Apple CBM
`proceedings as stated above.
`
`ORDER
`
`For the reasons given, it is:
`ORDERED that the challenge to claims 1, 5, 9, 10, 14, 21, and 22 in
`CBM2015-00132 is instituted;
`FURTHER ORDERED that Google’s challenge to claims 1, 5, 9, and
`10 based on § 101 is consolidated with CBM2015-00031;
`FURTHER ORDERED that Google’s challenge to claims 14, 21, and
`22 based on § 101 is consolidated with CBM2015-00032;
`FURTHER ORDERED that the grounds on which CBM2015-00031
`and CBM2015-00032 were instituted are unchanged, except to the extent
`that a challenge to claims 9 and 21 are consolidated with these proceedings,
`respectively, and no other grounds are instituted in the consolidated
`proceeding;
`
`11
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`CBM2015-00132
`Patent 8,336,772 B2
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`FURTHER ORDERED that the Scheduling Order in place for
`CBM2015-00031 and CBM2015-00032 shall govern the consolidated
`proceedings;
`FURTHER ORDERED that the record in each of the Apple CBM
`proceedings will remain unchanged;
`FURTHER ORDERED that, throughout the consolidated proceeding,
`any paper, except for a motion that does not involve the other party, shall be
`filed by Petitioner Apple, as a single, consolidated filing on behalf of
`Petitioner Apple and Petitioner Google, and Petitioner Apple will identify
`each such filing as a consolidated filing;
`FURTHER ORDERED that except as otherwise agreed by counsel,
`Petitioner Apple will conduct cross-examination and other discovery on
`behalf of Petitioner Apple and Petitioner Google and that Patent Owner is
`not required to provide separate discovery responses or additional deposition
`time as a result of the consolidation;
`FURTHER ORDERED that CBM2015-00132 is terminated under
`37 C.F.R. § 42.72, and all further filings in the consolidated proceedings are
`to be made in each of CBM2015-00031 and CBM2015-00032;
`FURTHER ORDERED that a copy of this Decision will be entered
`into the records of CBM2015-00031 and CBM2015-00032; and
`FURTHER ORDERED that the case caption in each of CBM2015-
`00031 and CBM2015-00032 shall be changed to reflect consolidation with
`this proceeding in accordance with the attached examples.
`
`12
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`CBM2015-00132
`Patent 8,336,772 B2
`
`PETITIONER:
`
`
`
`Raymond Nimrod
`Andrew Holmes
`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`raynimrod@quinnemauel.com
`QE-SF-PTAB-Service@quinnemanuel.com
`
`PATENT OWNER:
`
`Michael R. Casey
`Wayne M. Helge
`DAVIDSON BERQUIST JACKSON & GOWDEY, LLP
`Smartflash-cbm@dbjg.com
`whelge@davidsonberquist.com
`
`
`
`
`
`13
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`CBM2015-00031
`Patent 8,336,772 B2
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`APPLE INC., SAMSUNG ELECTRONICS LTD, and SAMSUNG
`ELECTORNICS AMERICA, INC., and GOOGLE, INC.
`Petitioner,
`
`v.
`
`SMARTFLASH LLC
`Patent Owner.
`____________
`
`Case CBM2015-000311,2
`Patent 8,336,772 B2
`____________
`
`
`
`
`
`
`1 The challenge to claims 5 and 10 based on 35 U.S.C. § 101 in CBM2015-
`00059 has been consolidated with this proceeding.
`2 The challenge to claims 1, 5, 9, and 10 based on 35 U.S.C. § 101 in
`CBM2015- 00132 has been consolidated with this proceeding.
`
`
`
`
`
`CBM2015-00032
`Patent 8,336,772 B2
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`APPLE INC., SAMSUNG ELECTRONICS LTD, and SAMSUNG
`ELECTORNICS AMERICA, INC., and GOOGLE, INC.
`Petitioner,
`
`v.
`
`SMARTFLASH LLC
`Patent Owner.
`____________
`
`Case CBM2015-000321,2
`Patent 8,336,772 B2
`____________
`
`
`
`
`
`
`1 The challenge to claim 14 based on 35 U.S.C. § 101 in CBM2015-00059
`has been consolidated with this proceeding.
`2 The challenge to claims 14, 21, and 22 based on 35 U.S.C. § 101 in
`CBM2015-00132 has been consolidated with this proceeding.