IN THE UNITED STATES PATENT TRIAL & APPEAL BOARD
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`CQG, INC. and CQGT, LLC
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`Petitioners,
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`v.
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`TRADING TECHNOLOGIES INTERNATIONAL, INC.
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`Patent Owner.
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`U.S. Patent No. 6,772,132 B1
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`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW
`UNDER 35 U.S.C. § 321 AND § 18 OF THE LEAHY-SMITH AMERICA
`INVENTS ACT
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`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`I.
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`Table of Contents
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`II.
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`Introduction .................................................................................................... 1
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`III. Mandatory Notices (37 C.F.R. § 42.8(b)) ..................................................... 1
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`A. Real Party-in-Interest ......................................................................... 1
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`B. Related Matters ................................................................................... 1
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`C.
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`Lead and Back-up Counsel Including Service
`Information .......................................................................................... 3
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`IV. Grounds for Standing (37 C.F.R. § 42.304(a)) ............................................ 3
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`A. CQG Has Standing to File a Petition Under 37 C.F.R. §
`42.302(a) ............................................................................................... 3
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`B. CQG Is Not Estopped from Filing a Petition Under 37
`C.F.R. § 42.302(b) by Having Filed a Now-Dismissed DJ
`Action in 2005 ...................................................................................... 3
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`1.
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`2.
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`3.
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`Institution of CBM Review Is Not Precluded by
`CQG’s Earlier Filed Declaratory Judgment Action
`Because Such Action Was Dismissed Without
`Prejudice .................................................................................... 5
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`The Rules Promulgated by the PTO Under Section
`18 of the AIA Do Not Prohibit Institution of CBM
`Review, Because a Petitioner First Filed a
`Declaratory Judgment Action ................................................ 10
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`35 U.S.C. § 325(a)(1) Does Not Apply to CBM
`Review and Does Not Bar the Institution of CBM
`Review that Is Initiated After the Filing of a
`Declaratory Judgment Action ................................................ 14
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`C.
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`The ’132 Patent Is Eligible for Covered Business Method
`Patent Review Under 37 C.F.R. § 42.301 ........................................ 18
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`1.
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`2.
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`3.
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`4.
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`The USPTO Has Already Determined that the ’132
`Patent Is a Covered Business Method Patent ....................... 20
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`The ’132 Patent Is Not for a “Technological
`Invention” ................................................................................ 23
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`The Claimed Subject Matter of the ’132 Patent As
`a Whole Does Not Recite a Technical Feature that
`Is Novel and Unobvious Over the Prior Art ......................... 24
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`The Claimed Subject Matter of the ’132 Patent As
`a Whole Does Not Solve a Technical Problem Using
`a Technical Solution ................................................................ 27
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`V.
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`Identification of Challenge Under 37 C.F.R. § 42.304(b) ........................ 31
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`A.
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`Specific Statutory Grounds of Challenge ........................................ 32
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`B. A Person of Ordinary Skill in the Art ............................................. 32
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`C. Claim Construction ........................................................................... 32
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`VI. Detailed Explanation of Reasons That Claims 1-56 of the ’132
`Patent Are Unpatentable ............................................................................. 34
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`A. Ground 1: Claims 1−56 Are Unpatentable Under 35
`U.S.C. § 101 ........................................................................................ 34
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`1.
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`2.
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`3.
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`4.
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`New PTO Guidelines ............................................................... 36
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`Indicators of Abstract Ideas ................................................... 40
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`Economic Practices Are Abstract Ideas ................................ 42
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`The ’132 Patent Is Not Patentable Under 35 U.S.C.
`§ 101 Because All of Its Claims Are Directed to an
`Abstract Idea ........................................................................... 43
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`B. Ground 2: Claims 1−56 Are Unpatentable Under 35
`U.S.C. § 112, First Paragraph, for Lacking Sufficient
`Written Description of a Price column Where Only Some
`Prices Move, Not All .......................................................................... 58
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`1.
`1.
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`Claim Coverage ....................................................................... 60
`Claim Coverage ..................................................................... ..60
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`2. Written Description ................................................................ 61
`2. Written Description .............................................................. ..61
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`3.
`3.
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`Possession ................................................................................. 64
`Possession ............................................................................... ..64
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`VII. Conclusion .................................................................................................... 66
`VII. Conclusion .................................................................................................. ..66
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`II.
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`Introduction
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`Petitioners, CQG, Inc. and CQGT, LLC (collectively, “CQG”) request Post-
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`Grant Review of claims 1−56 of Covered Business Method Patent, U.S. Patent No.
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`6,772,132 (“the ’132 patent”) (Ex. 1001). The ’132 patent issued on August 3,
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`2004 and is owned by Trading Technologies International, Inc. (“TT”). (Id.) The
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`Petitioner will show below that the claims of the ’132 patent are unpatentable
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`because they are directed to an abstract idea, and based on the broadest reasonable
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`interpretation, lack written description. Accordingly, covered business method
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`patent (“CBM”) review of claims 1−56 of the ’132 patent should be granted.
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`III. Mandatory Notices (37 C.F.R. § 42.8(b))
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`A. Real Party-in-Interest
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`The real parties-in-interest are CQG, Inc. and CQGT, LLC.
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`B. Related Matters
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`The ’132 patent is or has been involved in the following proceedings that
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`may affect, or be affected by, a decision in this proceeding: GL Trade Am., Inc. v.
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`Trading Tech. Int'l, Inc. (“TT”), 1:11-cv-001558 (N.D. Ill.); TT v. TradeHelm, Inc.,
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`1:10-cv-00931 (N.D. Ill.); TT v. Rosenthal Collins Group, LLC, 1:10-cv-00929
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`(N.D. Ill.); TT v. Open E Cry, LLC, et al., 1:10-cv-00885 (N.D. Ill.); TT v.
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`thinkorswim Group, Inc., et al., 1:10-cv-00883 (N.D. Ill.); TT v. Tradestation Sec.,
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`Inc., et al., 1:10-cv-00884 (N.D. Ill.); TT v. FuturePath Trading, LLC, 1:10-cv-
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`00720 (N.D. Ill.); TT v. Stellar Trading Sys., Ltd., et al., 1:10-cv-00882 (N.D. Ill.);
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`TT v. Cunningham Trading Sys., LLC, et al., 1:10-cv-00726 (N.D. Ill.); TT v. BGC
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`Partners, Inc., 1:10-cv-00715 (N.D. Ill.); TT v. CQG, Inc., et al., 1:05-cv-04811
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`(N.D. Ill.); TT v. IBG LLC, et al., 1:10- cv-00721 (N.D. Ill.); TT v. Orc Software,
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`Inc., et al., 1:05-cv-06265 (N.D. Ill.); TT v. FuturePath Trading, LLC, 1:05-cv-
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`05164 (N.D. Ill.); TT v. Transmarket Group, LLC, 1:05-cv-05161 (N.D. Ill.); TT v.
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`FFastFill PLC, Inc., 1:05-cv-04449 (N.D. Ill.); TT v. Strategy Runner, Ltd., 1:05-
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`cv-04357 (N.D. Ill.); TT v. Rolfe & Nolan Sys., Inc., et al., 1:05-cv-04354 (N.D.
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`Ill.); TT v. RTS Realtime Sys., Inc., et al., 1:05-cv-04332 (N.D. Ill.); TT v.
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`Peregrine Fin. Group, Inc., 1:05-cv-04137 (N.D. Ill.); TT v. GL Consultants, Inc.,
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`et al., 1:05-cv-04120 (N.D. Ill.); Rosenthal Collins Group, LLC v. TT, 1:05-cv-
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`04088 (N.D. Ill.); TT v. Ninja Trader, LLC, 1:05-cv-03953 (N.D. Ill.); TT v.
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`Patsystems NA LLC, et al., 1:05-cv-02984 (N.D. Ill.); TT v. Man Group PLC, et al.,
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`1:05-cv-02164; TT v. Refco Group, Ltd., LLC, 1:05-cv-01079 (N.D. Ill.); TT v.
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`Kingstree Trading, 1:04-cv-06740 (N.D. Ill.); TT v. Goldenberg Hehmeyer, 1:04-
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`cv-06278 (N.D. Ill.); TT, et al. v. eSpeed, Inc., 1:04-cv-05312 (N.D. Ill.).
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`C. Lead and Back-up Counsel Including Service Information
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`Lead counsel for Petitioners is Adam G. Kelly and back-up counsel is
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`William J. Kramer and William J. Voller, III, of the law firm of Loeb & Loeb LLP
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`having an address at 321 N. Clark St., Suite 2300, Chicago, IL 60654, telephone
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`number (312) 464-3100, and facsimile number (312) 464-3111. Petitioners
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`consent to service by email at the following email addresses: akelly@loeb.com,
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`wkramer@loeb.com, and wvoller@loeb.com.
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`IV. Grounds for Standing (37 C.F.R. § 42.304(a))
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`A. CQG Has Standing to File a Petition Under 37 C.F.R. § 42.302(a)
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`CQG certifies that it meets the eligibility requirements of 37 C.F.R. §
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`42.302(a) because TT sued CQG, Inc. and CQGT, LLC for infringement of the ’132
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`patent. See TT v. CQG, Inc., 1:05-cv-04811 (N.D. Ill.).
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`B. CQG Is Not Estopped from Filing a Petition Under 37 C.F.R. §
`42.302(b) by Having Filed a Now-Dismissed DJ Action in 2005
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`CQG filed a complaint for declaratory judgment action against TT
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`challenging, inter alia, the invalidity of the ’132 patent in the U.S. District Court for
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`the District of Colorado on August 17, 2005 (“Colorado Action”). (Ex. 1003.) The
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`Colorado Action was assigned Case No. 05-cv-01584. (Id.) Two days later, on
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`August 19, 2005, TT sued CQG in the Northern District of Illinois (“Illinois
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`Action”), which was designated Case No. 1:05-cv-04811. (Ex. 1004.) TT filed a
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`renewed motion to transfer the Colorado Action to the Northern District of Illinois
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`on December 22, 2005. (Ex. 1005.) The renewed motion to transfer was granted on
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`September 21, 2006, and the Colorado Action was transferred to the Northern
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`District of Illinois the same day (“Transferred Colorado Action”). (Ex. 1006.) The
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`Transferred Colorado Action was designated Case No. 1:06-cv-05222 by the
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`Northern District of Illinois and assigned to Judge John W. Darrah, but was
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`subsequently re-assigned to Judge James B. Moran on November 14, 2006, because
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`the Illinois Action, Case No. 1:05-cv-04811, was pending before Judge Moran. (Ex.
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`1007.) On December 1, 2006, the Transferred Colorado Action, Case No. 1:06-cv-
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`05222, was dismissed without prejudice by Judge Moran. (Ex. 1008.)
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`Contrary to TT’s prior representations to the Northern District of Illinois,
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`CQG is not estopped from filing this petition under 37 C.F.R. § 42.302(b). First, the
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`declaratory judgment action filed by CQG was dismissed without prejudice and,
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`therefore, is considered to have never been filed. Second, the rules promulgated by
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`the PTO under Section 18 of the Leahy-Smith America Invents Act (“AIA”) do not
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`prohibit the filing of a declaratory judgment action before the filing of a petition
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`for CBM review. Third, 35 U.S.C. § 325(a)(1), which relates to Post-Grant
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`Review (“PGR”), does not apply to CBM review.
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`1.
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`Institution of CBM Review Is Not Precluded by CQG’s
`Earlier Filed Declaratory Judgment Action Because Such
`Action Was Dismissed Without Prejudice
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`Covered business method patent review of the ’132 patent should be granted
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`because CQG’s declaratory judgment action was dismissed without prejudice prior
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`to the filing of the present petition. Thus, it is considered to have never existed.
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`Federal courts treat a civil action that is dismissed without prejudice as
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`“something that de jure never existed.” Holloway v. U.S., 60 Fed. Cl. 254, 261 (Fed.
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`Cl. 2004), aff’d 143 F. App’x 313 (Fed. Cir. 2005); see also Beck v. Caterpillar,
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`Inc., 50 F.3d 405, 407 (7th Cir. 1995) (“[Plaintiff’s] suit was dismissed voluntarily
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`pursuant to [Rule] 41(a), and is treated as if it had never been filed.”). The Federal
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`Circuit has consistently interpreted the effect of dismissals without prejudice as
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`“leav[ing] the parties as though the action had never been brought.” See, e.g.,
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`Graves v. Principi, 294 F.3d 1350, 1356 (Fed. Cir. 2002); Jet, Inc. v. Sewage
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`Aeration Sys., 223 F.3d 1360, 1364 (Fed. Cir. 2000).
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`Similarly, the Board has found that civil actions dismissed without prejudice
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`to have no preclusive effect. See Callidus Software Inc. v. Versata Software, Inc.,
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`Case CBM2013-00053, Decision to Institute (Paper No. 16), at p. 6 (P.T.A.B. Mar.
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`4, 2014) (holding that dismissal without prejudice indicates that judgment is not on
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`the merits and will have no preclusive effect); see also Macuto U.S.A. v. BOS
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`GmbH & KG, Case IPR2012-00004, Decision to Institute (Paper No. 18), at pp.14–
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`16 (PTAB Jan. 14, 2013) (holding that a dismissal without prejudice nullified the
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`effect of service for purposes of 35 U.S.C. § 315(b)). Thus, when an action is
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`dismissed without prejudice, the parties are free to litigate the matter in a
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`subsequent action, as though the dismissed action had never existed. Univ. of
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`Pittsburgh v. Varian Med. Sys., Inc., 569 F.3d 1328, 1333 (Fed. Cir. 2009); see
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`also 9 WRIGHT & MILLER, FED. PRAC. & PROC. CIV. § 2367 (3d ed.); id. at
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`nn. 6 & 9 (citing numerous cases throughout the courts of appeals).
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`When a court permits a party to dismiss the declaratory judgment action
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`voluntarily without prejudice, the party effectively unmakes that choice, and the
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`action is considered never to have existed. Here, the court dismissed CQG’s
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`declaratory judgment action without prejudice prior to the filing of the present
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`Petition. Therefore, the declaratory judgment action never existed, and CQG is not
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`estopped from filing the present Petition.
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`If TT attempts to rely on the Board’s decision in Securebuy, LLC v.
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`CardinalCommerce Corp., Case CBM2014-00035, Decision to Institute (Paper No.
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`13) (P.T.A.B. Apr. 25, 2014) (Precedential), or the Board’s decision in Branch
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`Banking & Trust Co. v. Maxim Integrated Products, Inc., Case CBM2013-00059,
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`Decision Denying Institution (Paper No. 12) (P.T.A.B. Mar. 20, 2014), to support an
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`argument that the filing of a declaratory judgment action precludes the filing of a
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`CBM petition, both cases can be distinguished from the present case. In
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`SecureBuy, the petitioner filed a declaratory judgment action two weeks prior to
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`the filing of its petition for CBM review, and the declaratory judgment action
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`remained on-going at the time the Board issued its decision denying institution of
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`CBM review. Securebuy, Decision to Institute (Paper No. 13), at p. 3. In Branch
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`Banking, the petitioner filed a declaratory judgment action prior to filing its
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`petition for CBM review. Branch Banking, Decision Denying Institution (Paper No.
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`12), at p. 3. The declaratory judgment action was consolidated into another action
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`by order of the Judicial Panel on Multi-district Litigation and remained ongoing.
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`Id.; Branch Banking, Ex. 1005, at pp. 6–7, n.2; (Ex. 1009, at p. 4.) Here, the
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`declaratory judgment action filed by CQG is no longer pending as it was dismissed
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`without prejudice in 2006 before the merits of the case were decided. In addition,
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`there were no orders consolidating the Transferred Colorado Action with the
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`Illinois Case.1 The Board’s decisions in SecureBuy and Branch Banking, therefore,
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`1Although TT filed a motion in the Illinois Case to consolidate the
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`Transferred Colorado Action with the Illinois case (Ex. 1010), an order ruling on
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`the motion was never entered by the court. (See Ex. 1011); see also footnote 2,
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`infra.
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`are not applicable to the present Petition, and CQG’s petition for institution of
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`CBM review of the ’132 patent should be granted.
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` Further, TT will likely attempt to rely on Apple Inc. v. Rensselaer
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`Polytechnic Institute, Case IPR2014-00319, Decision Denying Institution (Paper
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`No. 12) (P.T.A.B., Jun. 12, 2014). In that case, a first infringement complaint was
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`filed by Dynamic Advances, LLC against Apple, Inc. on October 19, 2012
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`(Dynamic I), and a second infringement complaint was filed by Dynamic
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`Advances, LLC in conjunction with Rensselaer Polytechnic Institute (“RPI”)
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`against Apple, Inc. on June 3, 2013 (Dynamic II). Id., at p. 3. The court ordered
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`the consolidation of the two actions and dismissed Dynamic I without prejudice.
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`Id. The Board concluded that because Dynamic I was consolidated with Dynamic
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`II, Dynamic I remained pending and presented a time bar to the petition for Inter
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`Partes Review filed by Apple, Inc. on January 3, 2014. Id., at p. 7 (“[W]e
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`conclude that the Dynamic I case did not cease in the same sense as a complaint
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`dismissed without prejudice—it was consolidated with another case, and its
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`complaint cannot be treated as if it never existed.” (emphasis added)).
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`Here, the Illinois Action and the Transferred Colorado Action were not
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`consolidated. Notably, in Apple, the parties had filed a “Stipulated Joint Request
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`to Coordinate Civil Actions,” which was signed and entered by the court. Apple,
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`Ex. 1022, at p. 1. The stipulated joint request specifically requested that the court
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`“coordinate” the two actions, and indicated how the two actions were to be
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`combined. Id., at p. 2 (E.g., “All disclosures, discovery, and filings by Dynamic
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`Advances . . . in [Dynamic I] are hereby deemed to have occurred in [Dynamic II]
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`as made jointly by both Dynamic Advances and RPI, including all reservation of
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`rights.”) No such stipulation was filed in the Transferred Colorado Action or the
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`Illinois Action nor is there any order stating that the Transferred Colorado Action
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`and Illinois Action were consolidated. (see Ex. 1011.) The order filed by Judge
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`Moran in the Transferred Colorado Action states that the “case is dismissed
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`without prejudice”—plain and simple.2 (Ex. 1008.) There is no mention of
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`2 TT may argue that CQG submitted a proposed order to Judge Moran that,
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`if signed, would have granted TT’s Motion for Consolidation of the Transferred
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`Colorado Action with the Illinois Action, see footnote 1, supra, and granted
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`dismissal of the Transferred Colorado Action without prejudice and leave for CQG
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`to file an amended answer and counterclaims. (See Ex. 1012.) But that proposed
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`order was never entered by court. Instead, the court entered an order that granted
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`dismissal without prejudice (Ex. 1008) and later entered an order that granted CQG
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`leave to amend (Ex. 1013). Again, an order granting consolidation was not
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`entered.
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`TT may also argue that the order granting CQG leave to amend its Answer
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`in the Illinois Action is effectively a consolidation, but this was not the case.
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`consolidation, coordination, or incorporation of the claims of the Transferred
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`Colorado Action into the Illinois Action. Thus, unlike Apple, consolidation did not
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`occur, and the Colorado Action should be treated as not having been filed.
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`Accordingly, the filing of the Colorado Action does not bar the present Petition for
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`CBM review.
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`2.
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`The Rules Promulgated by the PTO Under Section 18 of the
`AIA Do Not Prohibit Institution of CBM Review, Because a
`Petitioner First Filed a Declaratory Judgment Action
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`In addition, CQG is not estopped from filing the present Petition because the
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`rules promulgated by the PTO under Section 18 of the AIA do not prohibit CBM
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`Granting leave to amend, merely gives a party the opportunity to withdraw or add
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`counterclaims at its discretion—it does not automatically combine the claims of
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`one action into another.
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`Tellingly, CQG did not simply roll the claims of the Colorado Action into
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`the Illinois Case. In fact, the counterclaims in CQG’s Amended Answer in the
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`Illinois Case differ significantly from those claims presented by CQG in the
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`Amended Complaint filed in the Colorado Action. (Compare Ex. 1014, pp. 6–11,
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`with Ex. 1015, pp. 4–8.) Most notably, CQG’s Amended Answer in the Illinois
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`Case
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`includes a counterclaim
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`requesting a declaratory
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`judgment of
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`unenforceability based on inequitable conduct (Ex. 1014, p. 7), which was not
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`presented in the Colorado Action. (Ex. 1003, p. 4; 1015, pp. 4–8.) Thus, treating
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`the order granting CQG leave to amend does not equate to an order of
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`consolidation.
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`review after the filing of a declaratory judgment action. Section 18 created a
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`transitional program providing for the review of covered business method patents
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`by the USPTO. Congress’ intent behind Section 18 of the AIA was to provide a
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`cost-effective alternative to litigation to examine business method patents. See 112
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`Cong. Rec. S1363 (daily ed. Mar. 8, 2011) (statement of Sen. Leahy).
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`Under Section 18 of the AIA, Congress mandated the PTO to establish
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`procedures for instituting and conducting covered business method patent reviews.
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`See AIA § 18(a)(1) (“Not later than the date that is 1 year after the date of the
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`enactment of this Act, the director shall issue regulations establishing and
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`implementing a transitional post-grant review proceeding for review of the validity
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`of covered business method patents.”). Section 18 also provided that the
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`transitional program shall employ the standards and procedures of a post-grant
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`review under chapter 32 of title 35 subject to Sections 18(a)(1)(A)–(E).
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`Sections 18(a)(1)(A)–(E) of the AIA provide certain exceptions to the
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`standards and procedures relating to PGRs and also provide specific requirements
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`for CBM reviews. In particular, Section 18(a)(1)(A) states that 35 U.S.C. §§
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`321(c) and 325(b), (e)(2), and (f), do not apply to CBM reviews. Section
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`18(a)(1)(B) establishes a case or controversy requirement for CBM reviews as
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`opposed to a 9-month window (as required for PGRs) for when a petition can be
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`filed. Id. (“A person may not file a petition for transitional [CBM Reviews]
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`proceeding . . . unless the person . . . has been sued for . . . or charged with
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`infringement . . . .”). Section 18(a)(1)(C) establishes the availability of certain
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`prior art in a CBM review that is not available in a PGR. Section 18(a)(1)(D)
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`establishes a separate estoppel provision for CBM reviews; and, Section
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`18(a)(1)(E) limits CBM reviews to covered business method patents.
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`Pursuant to the grant of authority by Congress under the AIA and consistent
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`with Congressional intent, the PTO—through its then existing Board of Patent
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`Appeals and Interferences—promulgated rules to implement the AIA3, including
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`CBM reviews. The specific rules applicable to CBM reviews are 37 C.F.R. §§
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`42.300-304. Section 42.300(a) provides that:
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`§ 42.300 Procedure, pendency.
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`(a) A covered business method patent review is a trial and subject
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`to the rules set forth in subpart A and also subject to the post-grant
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`review procedures set forth in subpart C except for §§ 42.200,
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`42.201, 42.202, and 42.204.
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`37 C.F.R. § 42.300(a) (emphasis added).
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`3 Preliminary notice of the rules was published in February 10, 2012, at 77
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`Fed. Reg. 7080, 7080–095 (Feb. 10, 2012). Following a comments period, the final
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`rules were published August 14, 2012, at 77 Fed. Reg. 48680, 48680–732 (Aug. 14,
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`2012).
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`Section 42.201 is one of the sections relating to PGRs that was expressly
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`exempted from applying to CBM review by the PTO. Section 42.201 states in
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`relevant part that a person may institute post-grant review unless: “Before the date
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`on which the petition for review is filed, the petitioner or real party-in-interest filed
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`a civil action challenging the validity of a claim of the patent[.]”
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`Although Section 18 of the AIA provides that CBM reviews “shall employ
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`the standards and procedures of [,] a post-grant review under chapter 32 of title
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`35, United States Code,” it does so with several exceptions. AIA § 18 (a)(1).
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`Nowhere in Section 18 of the AIA does it state that only those subsections
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`specifically listed in AIA § 18 (i.e., 35 U.S.C. §§ 321(c) and 325(b), (e)(2), and
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`(f)) do not apply to a CBM review, or that other exceptions could not be included
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`by the USPTO when it promulgated its rules).
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`Because 37 C.F.R. § 42.201, which prohibits the filing of a PGR if a
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`petitioner first filed a civil action challenging the validity of the patent, is expressly
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`exempt from applying to CBM review, the filing of petition for CBM review is not
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`barred by an earlier filing of a civil action by the petitioner. Thus, under Rule §
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`42.300(a), CQG is not estopped from filing the present petition.
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`3.
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`35 U.S.C. § 325(a)(1) Does Not Apply to CBM Review and
`Does Not Bar the Institution of CBM Review that Is
`Initiated After the Filing of a Declaratory Judgment Action
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`Finally, 35 U.S.C. § 325(a)(1) neither applies to CBM review, nor does it
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`prohibit the institution of CBM review that is initiated after the filing of a
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`declaratory judgment action. Some Board panels have incorrectly denied institution
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`of CBM review because the petitioner filed a petition for CBM review after it filed a
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`civil action challenging the validity of the patent-at-issue. See, e.g., Securebuy,
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`Decision to Institute, supra. The panels in such cases cited 35 U.S.C. § 325 as the
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`basis for their denial of CBM review. But, reliance on 35 U.S.C. § 325 for the
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`proposition that the filing of a declaratory judgment action precludes the ability to
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`later file a petition for CBM review is incorrect.
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`Section 325 states in relevant part:
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`§ 325. Relation to other proceedings or actions
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`(a) INFRINGER’S CIVIL ACTION.—
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`(1) POST-GRANT REVIEW BARRED BY CIVIL
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`ACTION.—A post-grant review may not be instituted under
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`this chapter if, before the date on which the petition for such a
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`review is filed, the petitioner or real party in interest filed a
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`civil action challenging the validity of a claim of the patent.
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`35 U.S.C. § 325(a)(1).
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`On its face, 35 U.S.C. § 325 does not apply to CBM reviews. Section 325
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`was promulgated under Section 6 of the AIA, and was codified under Chapter 32 of
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`Title 35 of the United States Code. In considering the application of a statute to a
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`set of facts, the starting point for such an analysis is the language of the statute
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`itself. Southeastern Community College v. Davis, 442 U.S. 397, 405 (1979). And,
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`“unless otherwise defined, words will be interpreted as taking their ordinary,
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`contemporary, common meaning.” Perrin v. U.S., 444 U.S. 37, 42 (1979).
`
`
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`Post-Grant Review, Inter Partes Review, and CBM Review are separate
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`post-issuance reviews of patents created under the AIA. See, e.g., AIA § 6 (a)
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`(Inter Partes Review), § 6 (d) (Post-Grant Review), and § 18 (Transitional
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`Program for Covered Business Method Patents). As noted above, 35 U.S.C. §
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`325 is directed to Post-Grant Review, not the Transitional Program for Covered
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`Business Method Patents (established by uncodified Section 18 of the AIA).
`
`Chapter 31 of Title 35 of the U.S. Code, which was also promulgated under Section
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`6 of the AIA, has a similar statute, but is directed to Inter Partes Review. See 35
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`U.S.C. § 315. Tellingly, there are no similar statutes relating to Section 18 of the
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`AIA, directed to CBM reviews.
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`
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`Congress could have, but did not, promulgate a statute corresponding to 35
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`U.S.C. § 315 or § 325 expressly barring institution of a CBM review if the
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`petitioner earlier filed a civil action challenging the validity of the patent. Instead,
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`Congress delegated the authority to draft rules and regulations governing CBM
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`reviews to the Director of the USPTO. AIA § 18(a)(1). The Director should be
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`guided by the instruction that “[t]he transitional proceeding implemented pursuant
`
`to this subsection shall be regarded as, and shall employ the standards and
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`procedures of, a post-grant review under chapter 32 of title 35, United States
`
`Code,” subject to certain exceptions. Id. Congress, however, did not command the
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`Director to draft rules matching the constraints of the Chapter 32 statutes.
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`
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`Considering the differences between CBMs and PGRs, the Director
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`promulgated rules. And the rules, specifically 37 C.F.R. § 42.300(a), exempted
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`CBM reviews from being barred by an earlier filing of a declaratory judgment
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`action against the patent. This is fully consistent with legislative intent, with AIA
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`§ 18(a)(1)(B), and was declared consistent by the PTO.
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`
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`Further, 37 C.F.R. § 42.302, which relates to who can petition for CBM
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`review, does not prohibit the filing of a declaratory judgment action prior to the
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`filing of a petition for CBM review. Section 42.302 states, in relevant part, as
`
`follows:
`
`§ 42.302 Who may petition for a covered business method patent review.
`
`(a) A petitioner may not file with the Office a petition to institute a
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`covered business method patent review of the patent unless the
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`petitioner, . . . has been sued for infringement of the patent or has been
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`charged with infringement under that patent. . . .
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`(b) A petitioner may not file a petition to institute a covered business
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`method patent review of the patent where the petitioner, the
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`petitioner's real party-in-interest, or a privy of the petitioner is
`
`estopped from challenging the claims on the grounds identified in the
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`petition.
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`Id. (emphasis added.)
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`Section 42.302, which is direct to CBMs, mirrors and replaces 37 C.F.R.
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`§ 42.201, which relates to PGRs. Section 42.201 reads as follows:
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`§ 42.201 Who may petition for a post-grant review.
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`A person who is not the owner of a patent may file with the Office a
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`petition to institute a post-grant review of the patent unless:
`
`(a) Before the date on which the petition for review is filed, the
`
`petitioner or real party-in-interest filed a civil action challenging the
`
`validity of a claim of the patent; or
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`(b) The petitioner, the petitioner's real party-in-interest, or a privy of
`
`the petitioner is estopped from challenging the claims on the grounds
`
`identified in the petition.
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`Id. (emphasis added.)
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`Clearly, Section 42.302(a) replaces Section 42.201(a), and Section
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`42.302(b) corresponds to Section 42.201(b). Thus, the estoppel provision for
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`CBMs, Section 42.302(b), does not expressly preclude the filing of a petition for
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`CBM review if a declaratory judgment action was filed first. Section 42.302(a)
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`only precludes challenging the claims on the grounds identified in the petition.
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`Because there has been no prior adjudication on the merits of the grounds raised in
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`the present petition (e.g., invalidity under 35 U.S.C. §§ 101,102, 103, and 112),
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`CQG is not estopped from challenging the claims on the grounds identified in the
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`present Petition under 37 C.F.R. § 42.302(b).
`
`C. The ’132 Patent Is Eligible for Covered Business Method Patent
`Review Under 37 C.F.R. § 42.301
`
`
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`A patent is eligible for CBM review if the patent claims a “method or
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`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.” 37
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`C.F.R. § 42.301 (a); see also AIA § 18(d)(1) (a covered business method patent 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”). A patent is for a technological invention if “the
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`claimed subject matter as a whole recites a technological feature that is novel and
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`unobvious over the prior art; and solves a technical problem using a technical
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`solution.” 37 C.F.R. § 42.301(b).
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`18
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`To determine whether a patent is eligible for a covered business method
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`patent review, the focus is on the claims. Transitional Program for CBM Patents—
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`Definitions, 77 Fed. Reg. 48734, 48736 (Aug. 14, 2012). A patent needs only o