Paper No.
`Filed: May 6, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`CQG, INC. AND CQGT, LLC
`Petitioners
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`v.
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`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`Patent Owner
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`Case CBM2015-00057
`Patent 6,766,304
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`Patent Owner’s Preliminary Response
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`Case No. CBM2015-00057
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`Table of Contents
`I. INTRODUCTION .................................................................................. 1
`II. CQG FILED A DJ ACTION ON THE ’304 PATENT,
`PRECLUDING CQG FROM SEEKING CBM REVIEW .......................... 2
`A. The Parties’ Litigation History ........................................................... 2
`1. CQG Filed a DJ Action Challenging the Validity of the ’304 Patent in
`Colorado................................................................................................................. 2
`2. After CQG’s Colorado DJ Action, TT Filed an Infringement Action in
`Illinois ..................................................................................................................... 3
`3. The Parties Jointly Requested Consolidation of the Transferred
`Colorado Action and the Illinois Infringement Action ................................... 4
`4. The Court Implemented the Parties’ Agreement to Reassign and
`Consolidate ............................................................................................................ 5
`B. CQG’s DJ Action Bars Its Petition, Without Exception ..................... 6
`C. 35 U.S.C. § 325(a)(1) Applies to CBM Review and Bars Institution of
`CBM Review After Filing of a DJ Action ................................................ 10
`D. Allowing a DJ Plaintiff to File a CBM Depending on How Its DJ
`Action Ended Is Contrary to the Statute ................................................. 11
`III. EVEN IF THE PETITION WAS NOT BARRED BY CQG’S
`PREVIOUS DJ CLAIM, INSTITUTION SHOULD BE DENIED
`BECAUSE CQG IS IMPROPERLY ATTEMPTING TO GET A
`SECOND (SOMETIMES THIRD) BITE AT THE APPLE AND HAS
`NOT SHOWN THAT IT IS MORE LIKELY THAN NOT TO
`PREVAIL ..................................................................................................... 14
`A. CQG Unsuccessfully Advanced the Same Grounds in Litigation
`That It Proposes in the Petition .............................................................. 15
`1. CQG Advanced the Identical 35 U.S.C. § 112 Argument in Litigation,
`But Lost ................................................................................................................ 16
`2. CQG Presented the Identical 35 U.S.C. § 101 Argument In Litigation,
`But Lost ................................................................................................................ 20
`IV. THE BOARD LACKS JURISDICTION BECAUSE THE ’304
`PATENT CLAIMS ARE DIRECTED TO TECHNOLOGY, AN
`IMPROVED GUI TOOL, AND, THEREFORE, ARE NOT ELIGIBLE
`FOR CBM REVIEW ................................................................................... 25
`A. The Patented Technology ................................................................. 28
`1. The Technological Field of the Invention ................................................ 28
`2. It Is Undisputed That the Claimed GUI Is Technology ......................... 29
`3. Prior Art GUIs Had Technical Problems Relating to Speed and
`Accuracy ............................................................................................................... 32
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`Case No. CBM2015-00057
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`4. The Inventors Solved the Prior Art GUIs’ Speed and Accuracy Problem
`as Well as Another Technical Problem of Usability ....................................... 36
`5. TT Commercialized the Invention ............................................................. 37
`6. In the Prior Litigations, More Than 30 Declarations Confirmed the
`Claimed GUI Software’s Improvement ........................................................... 39
`7. The Patent Claims the Improved Technology ......................................... 40
`8. The Prosecution History Confirms That the ’304 Patent’s Novelty Is
`GUI Technology, Not Conducting a Trade .................................................... 48
`B. Because Its Claims Are for a Technological Invention, the ’304
`Patent Is Not a CBM Patent .................................................................... 50
`1. The Claims Recite a Technological Feature, a New GUI, That is Novel
`and Unobvious Over the Prior Art .................................................................. 50
`2. The Claims Recite a Technological Feature, a New GUI, That Solves
`Technical Problems (Speed, Accuracy and Usability of Old Technologies –
`the Prior GUIs) Using a Technological Solution (New Technology – the
`New GUI) ............................................................................................................ 53
`3. CQG’s Declarants Admit That the Claims Recite a Technological
`Feature That Is Novel and Unobvious and Solves a Technical Problem
`Using a Technical Solution ................................................................................ 56
`V. CONCLUSION ...................................................................................... 61
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`I.
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`Case No. CBM2015-00057
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`INTRODUCTION
`More than a decade ago, CGQ filed a declaratory judgment (“DJ”) action
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`against Trading Technologies International, Inc. (“TT”) challenging the validity of
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`U.S. Patent No. 6,766,304 (“the ’304 patent”). The court has already fully resolved
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`CQG’s invalidity challenges at trial, including the two arguments repeated in the
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`Petition. Accordingly, the Board should not institute this proceeding for at least four
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`independent reasons.
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`First, 35 U.S.C. § 325(a) and AIA Section 18 bar CQG’s petition because it
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`previously filed a civil action challenging the validity of the ’304 patent. CQG’s
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`arguments to the contrary are based upon an incomplete and inaccurate analysis of the
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`facts and the law. Second, because the grounds in the Petition already reached the
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`merits during litigation, instituting this proceeding would expand CBM review beyond
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`its intended purpose—as a litigation alternative. Third, because CQG repeats its
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`losing litigation arguments without pointing to any new facts or any change in the law,
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`it provides no reason to reverse the court’s analysis. Indeed, the facts and the law
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`show CQG’s arguments lack merit. Accordingly, CQG fails to demonstrate that its
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`arguments will more likely than not succeed. Fourth, the ’304 patent claims are
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`directed to an improvement to technology, making the patent ineligible for CBM
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`review at least under the technological exception. The testimony of CQG’s own
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`declarants confirms this, flatly contradicting unsupported statements made in the
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`Petition.
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`II. CQG FILED A DJ ACTION ON THE ’304 PATENT, PRECLUDING
`CQG FROM SEEKING CBM REVIEW
`CQG requests covered-business method (“CBM”) review of the ’304 patent,
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`Case No. CBM2015-00057
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`alleging that the claims are unpatentable under 35 U.S.C. §§ 101 and 112. Pet. 31-32.
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`CQG, however, previously filed a DJ action challenging the validity of the ’304 patent
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`under 35 U.S.C. §§ 101 and 112. “A post-grant review may not be instituted under
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`[Section 18] if, before the date on which the petition for such a review is filed, the
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`petitioner or real part in interest filed a civil action challenging the validity of a claim
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`of the patent.” 35 U.S.C. § 325(a)(1). Accordingly, the statute precludes institution of
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`this proceeding. CQG’s arguments to the contrary are without merit.
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`A. The Parties’ Litigation History
`1.
`CQG Filed a DJ Action Challenging the Validity of the ’304
`Patent in Colorado
`The dispute between CQG and TT began nearly ten years ago when CQG filed
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`a DJ action against TT (the “Colorado DJ Action”). Ex. 1003. CQG does not dispute
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`that the Colorado DJ Action challenged the validity of the ’304 patent, including on
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`all grounds asserted in the Petition. Specifically, CQG’s complaint in the Colorado DJ
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`Action alleged that the “’304 Patent. . . and each and every . . . claim thereof, [is]
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`invalid and unenforceable for failure to comply with one or more provisions of Title
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`35 of the United States Code, including without limitation, Sections 101, 102, 103,
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`and/or 112.” Ex. 1003, 4.
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`2.
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`After CQG’s Colorado DJ Action, TT Filed an Infringement
`Action in Illinois
`After CQG filed the Colorado DJ Action, TT filed an infringement suit in the
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`Northern District of Illinois (the “Illinois Infringement Action”), where seven other
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`suits involving the ’304 patent were currently pending at the time. Pet. 3; Ex. 1004;
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`Ex. 1005, 3. CQG moved to transfer the Illinois Infringement Action to Colorado for
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`“consolidation” with the Colorado DJ action because the cases “address the same
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`issues.” Ex. 2006, 1. The Illinois court denied CQG’s motion, ruling that it “believe[s]
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`that the Colorado court should transfer the related case to Illinois for consolidation
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`with this case.” Ex. 2007, 7. In that ruling, the Illinois court noted that CQG was
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`“engaging in tactical strategies similar to the maneuvering the Declaratory Judgment
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`Act was designed to prevent.” Id., at 10. Subsequently, the Colorado court transferred
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`the Colorado DJ Action to Illinois (the “Transferred Colorado Action”). Ex. 2005. In
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`its transfer decision, the Colorado court quoted both of the above-cited statements
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`from the Illinois court decision. Ex. 1005 at 2-3; Ex. 1006. Further, the Colorado
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`court noted that “Judge Moran concluded that the balance of conveniences weighs in
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`favor of consolidating the suits in Illinois, and that the two cases are so similar that
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`consolidation of the two cases is warranted.” Ex. 1006, at 3.
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`CQG also filed an Answer in the Illinois Infringement Action asserting that
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`“[t]he claims of the . . . ‘304 Patent are invalid or unenforceable for failure to comply
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`with one or more provisions of Title 35 of the United States Code, including without
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`limitation, Sections 101, 102, 103, and/or 112,” mirroring the allegations of the
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`Colorado DJ Action. Ex. 2008, 5.
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`3.
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`The Parties Jointly Requested Consolidation of the
`Transferred Colorado Action and the Illinois Infringement
`Action
`TT filed a Motion to Reassign and Consolidate the Transferred Colorado
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`Action with the Illinois Infringement Action after it was transferred. Ex. 1010. Shortly
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`thereafter, CQG submitted a proposed order granting the Motion to Reassign and
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`Consolidate. Ex. 1012. The proposed order included three forms of relief:
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`1. “Case number 06-C-05222 entitled CQGT, LLC, and CQG, INC. v.
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`TRADING TECHNOLOGIES INTERNATIONAL, INC. [the
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`Colorado DJ Action] which is currently pending before Honorable John
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`W. Darrah is reassigned to Honorable James B. Moran.” Id. at 3.
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`2. “Upon agreement of the parties, [CQG’s] complaint in case number 06-
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`C-05222 [the Colorado DJ Action] is dismissed without prejudice. All
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`parties are to pay their own attorney’s fees and costs in case number 06-
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`C-05222.” Id. (paragraph numbers omitted).
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`3. “CQG is granted leave to file its Amended Answer, Affirmative
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`Defenses and Counterclaims in case number 05-C-4811, D.I. 85,
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`Attachment #1 [the Illinois Infringement Action]. Trading Technologies
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`preserves its right to move to dismiss CQG’s amended answer,
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`affirmative defenses and counterclaims. Trading Technologies has 21
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`days from the date of CQG’s filing of its amended answer, affirmative
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`defenses and counterclaims to answer or otherwise plead.” Id. at 4
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`(paragraph numbers omitted).
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`The docket for the Transferred Colorado Action does not include any other
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`agreement between the parties. Ex. 2009.
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`4.
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`The Court Implemented the Parties’ Agreement to Reassign
`and Consolidate
`After submission of the proposed order, the Court provided all of the
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`requested relief, issuing three separate orders.
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`1. In a Finding of Relatedness, the Transferred Colorado Action before
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`Judge John W. Darrah was reassigned to Judge James B. Moran, granting
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`the first form of relief requested in the proposed order. Ex 1007.
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`2. A docket entry was entered in the Transferred Colorado Action granting
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`the second form of relief requested in the proposed order. Ex. 1008.
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`Specifically, the Court ordered, “Pursuant to the agreement of the
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`parties, this case is dismissed without prejudice. All parties are to pay
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`their own attorney’s fees and costs in this case.” Id. This was entered on
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`Friday, December 1, 2006. Id.
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`3. On Monday, December 4, 2006, a docket entry was entered in the
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`Illinois Infringement Action granting the third, and final, form of relief
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`requested in the proposed order. Ex. 1013. Specifically, the Court
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`ordered that “CQG is granted leave to file its amended answer,
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`affirmative defenses and counterclaims in case number 05 C 4811.
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`Trading Technologies preserves its right to move to dismiss CQG’s
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`amended answer, affirmative defenses, and counterclaims. Trading
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`Technologies has 21 days from the date of CQG’s filing of its amended
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`answer, affirmative defenses and counterclaims to answer or otherwise
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`plead.” Id.
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`Despite these docket entries, CQG asserts that the court did not issue an order
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`directly addressing the Motion to Reassign and Consolidate. Pet. 7. But CQG does
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`not contend that the requested relief was not provided, or that the “agreement of the
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`parties” the court referred to in the order could be anything other than the agreement
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`reflected in the proposed order provided by CQG. Id. Indeed, CQG took the benefit
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`of the agreement by immediately filing its Amended Answer with the same DJ claims
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`from the Transferred Colorado Action on December 4, 2006, the same day the court
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`granted CQG leave to file the amended answer. Ex. 1014, ¶ 10.
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`B.
`CQG’s DJ Action Bars Its Petition, Without Exception
`CQG argues that some Board panels have recognized an exception to the
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`statute’s explicit preclusion of petitions filed by a prior DJ plaintiff—if the DJ action
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`was voluntarily dismissed without prejudice. Pet. 14-18. But, the Board should not
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`apply that exception here because CQG has not shown that it falls within the
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`exception. 37 C.F.R. § 42.304(a). Indeed, CQG does not, and no exception applies.
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`Case No. CBM2015-00057
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`In Callidus Software, the Board found that if a DJ action is voluntarily dismissed
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`without prejudice, it is treated as if it never existed, and thus the DJ plaintiff may file a
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`CBM.1 Callidus Software, Inc. v Versata Software, Inc., Case CBM2013-00054, Decision
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`on Request for Rehearing (Paper 25) (P.T.A.B. 2014).
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`Even if the non-precedential opinion in Callidus Software was the law (in Section
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`II.D below TT explains why it is not), CQG’s argument fails based on distinguishing
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`facts. In Apple v. Rensselaer Polytechnics Institute, the Board clarified that an action
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`dismissed without prejudice cannot be treated as if it never existed if the cause of
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`action is continued immediately in a different case. Case IPR2014-00319, Decision on
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`Institution (Paper 12) (P.T.A.B. 2014).2 The Apple decision relied on Third Circuit
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`guidance explaining that prior cases are treated as if they never existed after dismissal
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`because “[a]n order merely dismissing a complaint without prejudice could result in a
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`1 Callidus Software relied upon two prior IPR decisions, Cyanotech Corp. v. The Board Of
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`Trustees of the University of Illinois, IPR2013-00401, Paper No. 17 at 11-12 (PTAB
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`December 19, 2013) and Clio USA, Inc. v. The Procter & Gamble Co., IPR2013-00438,
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`Paper No. 9 at 6-9 (PTAB January 9, 2014), as the basis of it voluntary dismissal
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`exception. Callidus Software, Paper 19 at 11.
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`2 While Apple v. Rensselaer Polytechnics Institute addressed an IPR petition, the statutory
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`bar based on prior civil actions challenging validity is the same in both the IPR and
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`CBM contexts. Compare 35 U.S.C. § 315(a) with 35 U.S.C. § 325(a).
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`significant period of delay prior to the bringing of a new action.” Brennan v. Kulick, 407
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`Case No. CBM2015-00057
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`F.3d 603, 607 (3d Cir. 2005). But with a conditional dismissal, the Third Circuit
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`explained, the prior case would be treated as if it existed because “[t]he conditions
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`specified in the order prevent a plaintiff from indefinitely extending the limitations
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`period.” Id. Thus, treating a case dismissed without prejudice as if it never existed
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`depends upon whether the arguments continued immediately or within a certain time
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`period. Id.
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`Here, CQG’s DJ invalidity claims continued immediately in the Illinois
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`Infringement Action.3 Therefore, the facts here do not justify treating CQG’s DJ
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`action as if it never existed. CQG included its DJ invalidity claims in its Amended
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`Answer, including its §§ 101 and 112 DJ claims. Compare supra at II.A.1 with supra at
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`II.A.2. CQG does not contest that it included its DJ invalidity claims in its Amended
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`Answer, Pet. 14-18, but instead argues that it added unenforceability claims in the
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`Illinois Infringement Action, Pet. 10. Adding unenforceability claims, however, does
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`not show that the invalidity challenges from the Colorado DJ Action did not continue
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`immediately. This continuity is all that is needed to not ignore the Colorado DJ
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`Action.
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`3 Also, CQG’s DJ claims were never “voluntarily” dismissed—they were dismissed
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`pursuant to an agreement of the parties in which they would be consolidated into the
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`Illinois Infringement Action.
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`CQG attempts to distinguish Apple by arguing that in Apple the claims were
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`“consolidated” and that CQG’s DJ claims were technically not “consolidated” in the
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`Illinois Infringement Action. Pet. 8. This argument fails for two reasons. First, the
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`Apple decision did not turn on whether the cases were “consolidated” per se. The
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`determinative fact was that the claims continued within a definite time period after the
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`DJ action was dismissed. See IPR2014-00319, Paper 12. Therefore, whether the CQG
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`DJ claims were “consolidated” versus “refiled” is a red herring.
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`Second, although not required, CQG’s DJ claims were in fact consolidated in
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`the Illinois Infringement Action even if the court’s order combining the cases did not
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`use the word “consolidated.” Substantively, by executing the terms of the parties’
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`agreement to consolidate, the Illinois court consolidated the cases. In the Illinois
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`Infringement Action, TT requested consolidation and CQG provided a proposed
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`order reflecting the parties’ agreement to consolidate the cases. Supra II.A.3. To argue
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`there was no consolidation, CQG omits critical language from the court’s order
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`following the proposed order—“[p]ursuant to the agreement of the parties, this
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`case is dismissed without prejudice.” Supra II.A.4 (emphasis added). The only
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`agreement between the parties was consolidation. Id. CQG’s Petition does not identify
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`any other agreement between the parties. Pet. 9, FN 2. Accordingly, the dismissal was
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`conditioned on consolidation. The court also provided the relief requested in the
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`proposed order (i.e., the agreement between the parties), but just in separate orders.
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`Supra II.A.4. In particular, the court granted CQG leave to amend its answer to add
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`the DJ claims, which CQG did. Thus, CQG’s Amended Answer contained the same
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`DJ invalidity claims (in the form of DJ counterclaims) from the Colorado DJ Action.
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`Id..
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`CQG’s attempt to distinguish Apple improperly elevates form over substance.
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`The argument incorrectly focuses on whether a claim was “consolidated” rather than
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`the substantive issue—whether the claim continued immediately, a fact that is
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`undisputed here. Supra at II.A.4. Furthermore, CQG’s argument incorrectly
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`characterizes its DJ claims as not “consolidated” merely because the word
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`“consolidated” did not appear in the order. But the substance of the orders makes
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`clear that consolidation is exactly what happened.
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`C.
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`35 U.S.C. § 325(a)(1) Applies to CBM Review and Bars Institution
`of CBM Review After Filing of a DJ Action
`CQG’s alternative argument that 35 U.S.C. §325(a)(1) does not apply to CBMs
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`also lacks merit—this very argument was rejected by the Board in the precedential
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`Securebuy decision. Securebuy, LLC v. Cardinal Commerce Corp., Case CBM2014-00035,
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`Decision to Institute (Paper No. 12) (P.T.A.B. 2014) (Precedential). Despite CQG’s
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`attempt to dismiss Securebuy as pertaining only to “[s]ome Board Panels,” it is binding
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`precedent. P.T.A.B. SOP 2, Rev. 8.
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`Despite Securebuy, CQG argues that 35 U.S.C. §325(a)(1) only applies to PGR
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`proceedings because AIA Section 18 governs CBM proceedings. Pet. 5-10. AIA
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`Section 18, however, explicitly states that “[t]he transitional proceeding implemented
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`pursuant to this subsection shall be regarded as, and shall employ the standards and
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`Case No. CBM2015-00057
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`procedures of, a post-grant review under chapter 32 of title 35, United States Code,”
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`which includes 35 U.SC. §325(a)(1). AIA Sec. 18. Section 18 carves out a few PGR
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`provisions that do not apply in CBM review, but § 325(a) is not one of them. AIA
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`Sec. 18 (a)(1)(A).4 Indeed, later in its Petition, CQG admits that that CBM review
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`“shall employ the standards and procedures of post-grant review” except “Section
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`18(a)(1)(A) states that 35 U.S.C. §§ 321(c) and 325(b), (e)(2), and (f) do not apply to
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`CBM reviews.” Pet. 11 (emphasis omitted).
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`Accordingly, the Board should deny institution because the Board lacks
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`jurisdiction to institute this proceeding after CQG filed a DJ action challenging the
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`validity of the ’304 patent.
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`D. Allowing a DJ Plaintiff to File a CBM Depending on How Its DJ
`Action Ended Is Contrary to the Statute
`As noted above, even applying the holding in Callidus Software, CQG’s petition
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`is barred by 35 U.S.C. § 325(a)(1). However, TT submits that the non-precedential
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`4 CQG argues the rules override the statute because they do not bar a CBM petition
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`based on a previously filed DJ action, Pet. 10-14, but a rule cannot override the
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`express language of the statute. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc.,
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`467 U.S. 837, 842-43 (1984).
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`finding in Callidus Software that there is an exception to 35 U.S.C. § 325(a)(1) based on
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`whether a claim was dismissed without prejudice is incorrect.5
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`35 U.S.C. § 325(a)(1) states the following:
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`(a) Infringer’s Civil Action.—
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`(1) Post-grant review barred by civil action.— A post-
`grant review may not be instituted under this chapter if,
`before the date on which the petition for such a review is
`filed, the petitioner or real party in interest filed a civil
`action challenging the validity of a claim of the patent.
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`(2) Stay of civil action.— If the petitioner or real party
`in interest files a civil action challenging the validity of a
`claim of the patent on or after the date on which the
`petitioner files a petition for post-grant review of the
`patent, that civil action shall be automatically stayed until
`either—
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`(A) the patent owner moves the court to lift the stay;
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`(B) the patent owner files a civil action or counterclaim
`alleging that the petitioner or real party in interest has
`infringed the patent; or
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`5 While the Board need not reach this issue here in light of the Apple decision, TT
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`notes that this section provides an additional ground for denying institution of CQG’s
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`Petition.
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`(C) the petitioner or real party in interest moves the
`court to dismiss the civil action.
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`Thus, the plain language of the statute precludes filers of DJ actions from pursuing
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`CBM review regardless of whether, for any reason, such a DJ action is later dismissed.
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`And, when Congress wanted to create an exception for certain DJ plaintiffs in this
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`statute, it did. See, e.g., 35 U.S.C. § 325(a)(2)(C) (permitting the DJ plaintiff to dismiss
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`the DJ action to lift a stay). Indeed, Callidus Software’s rationale that a DJ action
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`dismissed without prejudice does not exist for the purpose of § 325(a) renders 35
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`U.S.C. § 325(a)(2)(C) meaningless, making that interpretation inconsistent with the
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`statute’s plain language. Accordingly, the Board should not recognize an exception to
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`35 U.S.C. § 325(a)(1) because the PTO does not have the authority to create an
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`exception to the express language of the statute.6 See Chevron, 467 U.S. at 842-43.
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`6 None of the cases relied upon in Callidus Software recognized an exception to a
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`statutory preclusion of an activity after a DJ action was filed. Instead, those cases, like
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`the Third Circuit case discussed above, address the filer attempting to use the
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`dismissed action as a jurisdictional basis. Holloway v. U.S., 60 Fed. Cl. 254, 261 (2004),
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`aff’d 143 F. App’x 313 (Fed. Cir. 2005) (addressing whether an untimely complaint can
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`relate back to the dismissed actions for statute of limitations purposes); Beck v.
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`Caterpillar, Inc., 50 F.3d 405, 407 (7th Cir.1995) (addressing the used of the dismissed
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`action to toll a statute of limitations); Graves v. Principi, 294 F.3d 1350, 1356 (Fed. Cir.
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`Case No. CBM2015-00057
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`For the above reasons alone, institution should be denied. But, this CBM
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`should not be instituted for the additional independent reasons set forth below. First,
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`on each of its requested grounds, CQG is improperly seeking a second bite at the
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`apple on arguments which have already been definitively rejected by a district court as
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`a matter of law and CQG has failed to show it is more likely than not to prevail.
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`Second, the ’304 patent does not qualify as a CBM within the jurisdictional scope of
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`Section 18.
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`III. EVEN IF THE PETITION WAS NOT BARRED BY CQG’S
`PREVIOUS DJ CLAIM, INSTITUTION SHOULD BE DENIED
`BECAUSE CQG IS IMPROPERLY ATTEMPTING TO GET A
`SECOND (SOMETIMES THIRD) BITE AT THE APPLE AND HAS
`NOT SHOWN THAT IT IS MORE LIKELY THAN NOT TO
`PREVAIL
`The Board should decline to consider the grounds presented in the Petition
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`because CQG already presented the identical arguments at trial and lost on both as a
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`2002) (addressing use of the dismissed action as a basis for appellate jurisdiction) U.S.
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`ex rel. Koch v. Koch Indus., Inc., 188 F.R.D. 617(D.C. Okla. 1999) (addressing use of the
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`dismissed action to toll a statute of limitations); Supra at II.B. Or, the cases address
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`inapplicability of res judicata when merits were not reached in cases dismissed without
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`prejudice. Jet, Inc. v. Sewage Aeration Systems, 223 F.3d 1360, 1364 (Fed. Cir. 2000)
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`(addressing claim preclusion caused by a prior action).
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`matter of law.7 The Board has regularly stated that AIA proceedings were intended to
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`Case No. CBM2015-00057
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`be an alternative to litigation, as reflected in the Congressional Record. See e.g.,
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`NetApp, Inc. v. PersonalWeb Tech., Case IPR2013-00319, Institution Decision (Paper 19)
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`at 5 (P.T.A.B. 2013); 157 Cong. Rec. S1363 (daily ed. Mar. 8, 2011). Here, the court in
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`the Illinois Infringement Action not only rejected CQG’s arguments as a matter of
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`law but also found the CBM petitions to be a dilatory tactic. Ex. 2001, 5-6.
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`Accordingly, because the statute makes institution optional, the Board should deny
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`this proceeding to prevent an abuse of the process. See 35 U.S.C. § 324 (using “may”
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`instead of “shall” language). Moreover, the Board should deny institution of the
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`proceeding because CQG fails to show it is more likely than not to prevail on its
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`recycled and failed litigation arguments. Indeed, CQG never presents new arguments
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`or facts to distinguish the rulings or explains why the court’s rulings were wrong—
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`because it cannot.
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`A.
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`CQG Unsuccessfully Advanced the Same Grounds in Litigation
`That It Proposes in the Petition
`The district court litigation between CQG and TT recently went to trial, where
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`CQG presented the same invalidity grounds that it presents here in its CBM Petition.
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`7 Notably, CQG presented these identical arguments by pursuing the very DJ claims
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`that it filed ten years ago and which bar CQG from filing the present Petition for the
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`reasons set forth above in Section II.
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`For both of its §§ 101 and 112 grounds, CQG’s Petition makes the identical
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`Case No. CBM2015-00057
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`arguments it made to the district court. CQG also relies on the same evidence: CQG’s
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`CBM exhibits 1017 and 1028 consist of testimony copied from the litigation reports.
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`See e.g., 2066 (redlining the differences between Dr. Mellor’s prior § 112 report and
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`his report filed with the Petition). The district court rejected both CQG’s §§ 101 and
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`112 defenses as a matter of law. Because it cannot, CQG fails to explain why the
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`district court’s decision on either ground was incorrect. See Pet. 34-66.
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`1.
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`CQG Advanced the Identical 35 U.S.C. § 112 Argument in
`Litigation, But Lost
`In the Petition, CQG asserts that the claims “are invalid for lack of written
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`description under 35 U.S.C. § 112, ¶ 1 if the claims cover a price column where some
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`but not all displayed prices are static, as asserted by TT.”8 Pet. 65 (emphasis in
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`8 Contrary to its § 112 argument, CQG argues that “static” should be construed as
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`requiring “all” displayed prices to be “static”—so that the presence of non-static
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`prices in addition to a range of static prices would cause a product to fall outside the
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`literal scope of the claims. CQG’s construction should be rejected, because the district
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`court properly construed “static price axis” as “a line comprising price levels that do
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`not change positions unless a manual re-centering command is received and where the
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`line of prices corresponds to at least one bid value and one ask value.” Ex. 1019, 5-6.
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`The Federal Circuit affirmed that construction, Trading Technologies Int’l, Inc. v. eSpeed,
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`original). CQG presented the same argument twice during litigation, failing both
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`Case No. CBM2015-00057
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`times. CQG’s first attempt was a motion for summary judgment based on the same
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`testimony from Dr. Mellor presented with the Petition. Exs. 2010-2012; Supra at
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`III.A. During litigation, TT explained that CQG applied the wrong standard in its
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`arguments because the proper standard for written description support is whether the
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`language of the claims is supported—not whether there is written description support
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`for unclaimed additional features found in the accused products. Ex. 2013. The claims
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`of the ’304 patent recite a “static display of prices” and do not recite having a display
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`where some prices are static and some are not static. TT explained that CQG is
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`improperly seeking to require support for an unclaimed feature—non-static prices.
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`The court denied the motion for summary judgment, Ex. 2014, 10-11, making
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`the following findings:
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`Inc., 595 F.3d at 1354, and a different petitioner adopted it in a petition regarding a
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`related patent, CBM2014-00136, Paper 4 at 11-12. Nothing in the claim, the
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`specification, or the prosecution history supports limiting “static” to require “all”
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`displayed prices be static, which is why the construction does not have this limitation.
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`CQG overemphasizes the word “column” in the specification, but the word
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`“column” is not in the claims and, in any event, that word itself does not require all
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`prices in the display to operate in the same manner (a column can have different
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`sections that function differently).
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`• The written description requirement only needs to describe the claimed
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