Paper No. 10
`Filed: October 19, 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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`SONY CORPORATION OF AMERICA,
`Petitioner
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`v.
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`NETWORK-1 TECHNOLOGIES, INC.,
`Patent Owner
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`Case CBM2015-00078
`U.S. Patent No. 6,218,930
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`Petitioner’s Notice of Basis for Request for Relief in
`The Form of a Rehearing by an Enlarged Panel
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`Filed: October 19, 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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`SONY CORPORATION OF AMERICA,
`Petitioner
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`v.
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`NETWORK-1 TECHNOLOGIES, INC.,
`Patent Owner
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`Case CBM2015-00078
`U.S. Patent No. 6,218,930
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`Petitioner’s Notice of Basis for Request for Relief in
`The Form of a Rehearing by an Enlarged Panel
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`Sony Corporation of America (“Petitioner”) respectfully submits this notice
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` Case CBM2015-00078
`U.S. Patent No. 6,218,930
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`of request for relief as authorized under 37 C.F.R. § 42.21,1 requesting rehearing of
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`the decision denying rehearing (Paper 9) and the decision to not institute a covered
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`business method patent (CBM) review (Paper 7) by an enlarged panel. Petitioner
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`respectfully suggests that rehearing by an enlarged panel is necessary because
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`(1) the Panel’s decisions on the scope of CBM review are inconsistent with most
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`other decisions on the scope of CBM and (2) to reconcile the Panel’s decisions
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`with Versata Development Group, Inc. v. SAP America, Inc.,2 a precidential
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`decision of the Federal Circuit.3
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`The Board based its CBM decision on the premise that claims must recite a
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`financial activity to be eligible for CBM review—even if there is evidence of
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`1 See e.g., Apple Inc. v. Rensselaer Polytechnic Inst., IPR2014-00320, Paper 19
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`(2014) (Apple’s Notice of Basis for Request for Relief.); Apple, IPR2014-00320,
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`Paper 20 (granting an expanded panel to reconsider rehearing in response to
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`Apple’s Notice).
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`2 Versata Dev. Grp., Inc. v. SAP Am., Inc., 2014-1194 (Fed. Cir. July 9, 2015) aff’g
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`SAP Am., Inc. v. Versata Dev. Grp., Inc., CBM2012-00001.
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`3 See Patent and Trial Board Standard Operating Procedure No. 1 (rev. 14) § III-A.
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` 1
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`U.S. Patent No. 6,218,930
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`financial products that practice a claimed method.4 But the “Board has consistently
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`held that a claim need not expressly contain a financial limitation.”5 Here, the
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`Petition provided unrefuted evidence that the claims are used by a financial
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`product. For example, it is undisputed that the patent includes a method claim.6 It
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`is undisputed that patent owner asserts that the claimed method covers practicing
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`the Power-over-Ethernet (PoE) standard.7 It is undisputed that the PoE standard
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`describes using the standard for financial products—e.g., point-of-sale terminals.8
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`It is undisputed that the Petition provided documentation for a number of financial
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`4 See e.g., Paper 7 at 8-9; Paper 9 at 4-5.
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`5 Motorola Mobility, LLC v. Intellectual Ventures I, LLC, CBM2015-00004, Paper
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`9 at 11 (2015).
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`6 See, e.g., Pet. 13; Prelim. Resp. 35 (not disputing that the patent includes a
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`method claim).
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`7 See, e.g., Id. at 2; Prelim. Resp. 39 (not disputing that the claimed method covers
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`practicing the PoE standard).
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`8 See, e.g., Id. at 15; Prelim. Resp. 35-44 (not disputing that the PoE standard
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`describes using the standard for financial products).
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` 2
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`products that use the PoE standard.9 The only dispute is over whether the claims
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`U.S. Patent No. 6,218,930
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`must include limitations to only those financial uses to be eligible for CBM
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`review.10 Because the Panel’s decision runs counter to the decisions of many other
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`panels, expanded review is needed to avoid the scope of CBM review becoming
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`panel dependent. Indeed, the Panel here never addressed the decision of the other
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`panel cited in the Petition that found claims to similar subject matter eligible for
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`CBM review.11
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`On rehearing, the Panel also asserted that the decision in Versata supported
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`the premise that CBM review is limited to claims to financial activities.12 That was
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`legal error. In Versata, the Federal Circuit “agree[d] with the USPTO that, as a
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`matter of statutory construction, the definition of ‘covered business method patent’
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`is not limited to products and services of only the financial industry, or to patents
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`9 See, e.g., Id. at 14-18; Prelim. Resp. 35-44 (not disputing that a number of
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`financial products use the PoE standard).
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`10 See, e.g., Paper 7 at 9; Paper 9 at 3.
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`11 See, e.g., Pet. at 14 (citing Google Inc. v. Simpleair, Inc., CBM2014-00170,
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`Paper 13 (2015)); Paper 7 (never mentioning the decision in Google Inc. v.
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` 3
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`Simpleair, Inc.); Paper 9 (same).
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`12 Paper 9 at 4.
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`owned by or directly affecting the activities of financial institutions such as banks
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`U.S. Patent No. 6,218,930
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`and brokerage houses.”13
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`The Court’s interpretation confirms the USPTO’s rulemaking, where the
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`Office stated that the scope of CBM review not only “encompass[es] patents
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`claiming activities that are financial in nature” but also encompasses activities that
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`are “incidental to a financial activity or complementary to a financial activity”14—
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`i.e., not just financial activities. Indeed, the Office explicitly rejected a proposal to
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`limit CBM review to the financial services industry.15 The USPTO based its
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`position in part on the Congressional record, including:
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`The amendment covers not only financial products and
`services, but also the “practice, administration and
`management” of a financial product or service. This
`language is intended to make clear that the scope of patents
`eligible for review under this program is not limited to patents
`covering a specific financial product or service.
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`13 Versata, slip op. at 35 (emphasis added).
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`14 Transitional Program for Covered Business Method Patents—Definitions of
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`Covered Business Method Patent and Technological Invention, 77 Fed. Reg.
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` 4
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`48734, 48735 (Aug. 14, 2012).
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`15 See, e.g., id. at 48736.
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`…
`In addition to patents covering a financial product or service,
`the “practice, administration and management” language is
`intended to cover any ancillary activities related to a financial
`product or service …. The amendment also requires a patent to
`relate to a “financial product or service.” To meet this
`requirement, the patent need not recite a specific financial
`product or service. Rather the patent claims must only be
`broad enough to cover a financial product or service. For
`example, if a patent claims a general online marketing method
`but does not specifically mention the marketing of a financial
`product, such as a savings account, if that marketing method
`could be applied to marketing a financial product or
`service, the patent would be deemed to cover a “financial
`product or service.”
`…
`Likewise, if a patent holder alleges that a financial product or
`service infringes its patent, that patent shall be deemed to cover
`a “financial product or service” for purposes of this amendment
`regardless of whether the asserted claims specifically reference
`the type of product of service accused of infringing.”16
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`16 154 Cong. Rec. S1360–94, S1364-5 (daily ed. March 8, 2011); Transitional
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`Program for Covered Business Method Patents, 77 Fed. Reg. at 48744 (citing
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`S1364) (emphasis added).
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` 5
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`Importantly, the Court’s interpretation, the USPTO’s rulemaking, and the
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`U.S. Patent No. 6,218,930
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`Congressional record did not require any explicit financial language in a patent’s
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`claims. To the contrary, only a claim to a method used to practice, administer, or
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`manage a financial product or service is required.17
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`Accordingly, rehearing by an enlarged panel is needed to reconcile the
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`panel’s decisions with the decisions of other panels, the Federal Circuit’s guidance
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`in Versata, and the PTO’s own rulemaking. The petition presented unrefuted
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`evidence that the claims are used in providing a finacial product—e.g., a point-of-
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`sale terminal—so it is undisputed that the patent claims a method “used in the
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`practice, administration, or management of a financial product or service.” And the
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`Panel’s and the patent owner’s assertion that the claim’s lack of a financial
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`limitation trump this evidince is irreconsilable with the decisions of other panels,
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`the Federal Circuit’s guidance in Versata, and the PTO’s rulemaking. Thus,
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`rehearing by an enlarged panel is necessary to ensure uniformity of the Board’s
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`decisions on the scope of covered business method patent review.
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` 6
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`17 AIA Sec. 18(d)(1).
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`Dated: October 19, 2015
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` Case CBM2015-00078
`U.S. Patent No. 6,218,930
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`Respectfully submitted,
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`By: /s/ Lionel M. Lavenue
`Lionel M. Lavenue, Lead Counsel
`Reg. No. 46,859
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that a copy of the foregoing Petitioner’s Notice of
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`Basis for Relief was served on October 19, 2015, via email directed to counsel of
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`record for Patent Owner at the following:
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`Charles F. Wieland III, Esq.
`charles.wieland@bipc.com
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`Robert G. Mukai, Esq.
`robert.mukai@bipc.com
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`BUCHANAN INGERSOLL & ROONEY PC
`1737 King Street, Suite 500
`Alexandria, Virginia 22314-2727
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`/s/ Valencia Daniel
`Valencia Daniel
`Litigation Clerk
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`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, L.L.P.
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