`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`AGILYSYS, INC., ET AL.
`Petitioners
`
`v.
`
`AMERANTH, INC.
`Patent Owner
`
`____________
`
`Case CBM2014-00015
`Patent No. 6,384,850
`____________
`
`MAIL STOP PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`Post Office Box 1450
`Alexandria, Virginia 22313-1450
`
`Submitted Electronically via the Patent Review Processing System
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`Starbucks Corp. Exhibit 1047
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`
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`TABLE OF CONTENTS
`
`CBM2014-00015
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`Page
`
`I.
`
`II.
`
`III.
`
`STATEMENT OF PRECISE RELIEF REQUESTED......................................1
`
`BACKGROUND ...............................................................................................5
`
`PETITIONERS LACK STANDING BECAUSE THE ‘850
`PATENT IS NOT A COVERED BUSINESS METHOD PATENT
`UNDER THE AIA.............................................................................................7
`
`A. The ‘850 Patent Does Not Claim A Financial Product or Service ...............7
`
`1. Legislative History Of AIA And Intent Of CBM Review.......................8
`
`2. The ‘850 Claims Are Not Directed To Financial Services......................9
`
`B. The ‘850 Patent Is Directed To A Technological Invention Which Is
`Novel And Unobvious Over The Prior Art And Is Directed To A
`Technical Solution To A Technical Problem .............................................11
`
`1. The Technological Nature Of The ‘850 Patent .....................................11
`
`2. Many Others Have Found Ameranth’s Claimed Inventions
`To Be Novel and Innovative..................................................................16
`
`3. The Petition Grossly Misstates The Actual Claims...............................21
`
`4. The Petition Fails To Provide Any Credible Basis For Its
`Contention That The Claims Do Not Define A Technological
`Feature That Is Novel And Unobvious Over The Prior Art ..................23
`
`5. The Petition Also Failed To Consider The Claims As A Whole
`As Required By The AIA And The PTAB Rules..................................28
`
`6. The ‘850 Patent Claims Technological Inventions Directed To
`Technical Solutions To Technical Problems .........................................31
`
`IV. CLAIM CONSTRUCTION.............................................................................33
`
`V.
`
`THE PETITION DID NOT ESTABLISH THAT ANY CLAIM IS
`MORE LIKELY THAN NOT INVALID........................................................43
`
`ii
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`A. Petitioners Have Not Established That The Claims Of The ‘850
`Patent Are Invalid On The Asserted Ground Based On
`35 U.S.C. §112............................................................................................43
`
`1. The Claims Do Not Mix Apparatus And Method Elements .................43
`
`2. Petitioners’ Other Section 112 Arguments Fail.....................................50
`
`B. Petitioners Have Not Established That The Claims Of The ‘850
`Patent Are Invalid on the Asserted Ground Based on
`35 U.S.C. §101............................................................................................59
`
`1. The Petition Grossly Mischaracterized The Actual Claimed
`Subject Matter........................................................................................61
`
`2. The ‘850 Patent Claims Fall Squarely Within The Federal Circuit’s
`And Supreme Court’s Bounds Of Patent Eligible Subject Matter ........65
`
`3. 35 U.S.C. §101 Is Not A Condition For Patentability And Thus
`Cannot Form A Ground For CBM Review ...........................................75
`
`VI. CONCLUSION................................................................................................76
`
`iii
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`
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`TABLE OF AUTHORITIES
`
`Cases
`
`CBM2014-00015
`
`Page
`
`Alstom Power Inc. v. Hazelmere Res. Ltd.
`Reexam. No. 95/001,368 (Dec, 17, 2013) ......................................................59
`
`Apple, Inc. v. Samsung Elec. Co.
`877 F.Supp.2d 838 (N.D. Cal. 2012) .......................................................... 47, 48
`
`Apple v. SightSound
`CBM2013-00019, Paper No. 17, Non-Institution Decision at 7................. 35, 67
`
`Ariad Pharms., Inc. v. Eli Lilly & Co.
`598 F.3d 1336 (Fed. Cir. 2010)........................................................................50
`
`Bilski v. Kappos
`130 S. Ct. 3218 (2010)........................................................59, 60, 63, 68, 73, 74
`
`Bilstad v. Wakalopulos
`386 F.3d 1116 (Fed. Cir. 2004)........................................................................59
`
`Biosig Inst. v. Nautilus, Inc.
`715 F.3d 891 (Fed. Cir. 2013)..........................................................................48
`
`CLS Bank Intl v. Alice Corp. Pty. Ltd.
`717 F.3d 1269 (Fed. Cir. 2013)............................................................. 60, 75, 76
`
`Crown Pkg. Tech., Inc. v. Ball Container Corp.
`635 F.3d 1373 (Fed. Cir. 2011)................................................................... 55, 56
`
`Diamond v. Chakrabarty
`447 U.S. 303 (1980).........................................................................................60
`
`Diamond v. Diehr
`450 U.S. 175 (1981).................................................................................... 63, 67
`
`Eltech Sys. Corp. v. PPG Indus., Inc.
`903 F.2d 805 (Fed. Cir. 1990)..........................................................................39
`
`iv
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`CBM2014-00015
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`Exxon Research & Eng’g Co. v. United States
`265 F.3d 1371 (Fed. Cir. 2001)........................................................................52
`
`Fonar Corp. v. General Elec. Co.
`107 F.3d 1543 (Fed. Cir. 1997)........................................................................64
`
`Gottschalk v. Benson
`409 U.S. 63 (1972)...........................................................................................73
`
`Hybritech Inc. v. Monoclonal Antibodies, Inc.
`802 F.2d 1367 (Fed. Cir. 1986)........................................................................34
`
`In re American Acad. of Sci. Tech Ctr.
`367 F.3d 1359, 1368 (Fed. Cir. 2004)..............................................................34
`
`In re Bilski
`545 F.3d 943 (Fed. Cir. 2008)..........................................................................74
`
`In re De Blauwe,
`736 F.2d 699 (Fed. Cir. 1984)..........................................................................36
`
`In re Koller
`613 F.2d 819 (CCPA 1980) .............................................................................50
`
`In re Pearson
`494 F.2d 1399 (CCPA 1974) ...........................................................................36
`
`In re Roufett
`149 F.1350 (Fed. Cir. 1998).............................................................................12
`
`In re Skvorecz
`580 F.3d 1262 (Fed. Cir. 2009)........................................................................35
`
`Kara Tech. Inc. v. Stamps.com Inc.
`2008 WL 8089236 * 21 (C.D. Cal. April 3, 2008) ..........................................48
`
`Kilopass Tech v. Sidense Corp.
`No. 2013-1193 (Fed. Cir. Dec. 26, 2013) ................................................... 34, 39
`
`Mayo Coll. Svcs. v. Prometheus Labs., Inc.
`132 S. Ct. 1289 (2012).....................................................................................60
`
`v
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`Medical Inst. & Diag. Corp. v. Elekta AB
`344 F.3d 1205 (Fed. Cir. 2003)........................................................................64
`
`Microprocessor Enhancement Corp. v. Texas Instr. Inc.
`520 F.3d 1367 (Fed. Cir. 2008)........................................................................44
`
`Orthokinetics, Inc. v. Safety Travel Chairs, Inc.
`806 F.2d 1565 (Fed. Cir. 1986)........................................................................50
`
`Phillips v. AWH Corp.
`415 F.3d 1303 (Fed. Cir. 2005)..........................................................................5
`
`Rambus Inc. v. Rea
`731 F.3d 1248 (Fed Cir. 2013).........................................................................28
`
`Rembrandt Data Techs., LP v. AOL, LLC
`641 F.3d 1331 (Fed. Cir. 2011)........................................................................46
`
`Research Corp. Tech., Inc. v. Microsoft Corp.
`627 F.3d 859 (Fed. Cir. 2010)..........................................................................63
`
`Ricoh Co., Ltd. v. Katun Corp.
`486 F. Supp. 2d 395 (D.N.J. 2007) ..................................................................48
`
`S3 Inc. v. nVIDIA Corp.
`259 F.3d 1364 (Fed. Cir. 2001)...........................................................64
`
`SAP Am., Inc. v. Versata Dev. Grp., Inc.
`Case CBM2012-00001, Paper No. 36 (PTAB Jan. 9, 2013) ...........................72
`
`SAP, Inc. v. Pi-Net Intl. Inc.
`CBM2013-00013, Paper No. 15, Inst. Dec. at 21.................................73
`
`SFA v. 1-800-Flowers.com
`Case No. 6:09-cv-340-LED (E.D. Tex. April 11, 2013)..................................47
`
`SiRF Tech., Inc. v. ITC
`601 F.3d 1319 (Fed. Cir. 2010)...........................................................68
`
`State St. Bank & Trust Co. v. Signature Fin. Group
`149 F.3d 1368 (Fed. Cir. 1998)........................................................................60
`
`vi
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`Superguide Corp. v. DirecTV Enterprises, Inc.
`358 F.3d 870 (Fed. Cir. 2004)..........................................................................33
`
`Teva Pharms USA, Inc. v. Sandoz, Inc.
`723 F.3d 1363 (Fed. Cir. 2013)........................................................................52
`
`Tronzo v. Biomet, Inc.
`156 F.3d 1154 (Fed. Cir. 1998)........................................................................59
`
`Ultramercial, LLC v. Hulu, LLC
`722 F.3d 1335 (Fed. Cir. 2013)........ 65, 66, 67, 69, 70, 71, 72, 73, 75, 76
`
`WesternGeco L.L.C. v. ION Corp.
`876 F.Supp. 2d 857 (S.D. Tex. 2012) ..............................................................48
`
`Other
`
`37 C.F.R. §42.12 ..........................................................................................................3
`
`37 C.F.R. §42.207(a)....................................................................................................1
`
`37 C.F.R. §42.300(b)..................................................................................................33
`
`37 C.F.R. §42.301(a)....................................................................................................8
`
`37 C.F.R. §42.301(b)................................................................................. 23, 24, 28, 29
`
`37 C.F.R. §42.302 ........................................................................................................8
`
`37 C.F.R. §42.304(a)....................................................................................................7
`
`37 C.F.R. §42.6(d)........................................................................................................8
`
`35 U.S.C. §101 ................................................................1, 4, 59, 60, 61, 68, 73, 75, 76
`
`35 U.S.C. §102 ...........................................................................................................76
`
`35 U.S.C. §103 ...........................................................................................................76
`
`35 U.S.C. §112 ....................................................................................1, 2, 4, 50, 54, 76
`
`35 U.S.C. §282(b)(2)..................................................................................................76
`
`157 Cong. Rec. S1053 (Mar. 1, 2011) .........................................................................8
`
`vii
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`157 Cong. Rec. S1364................................................................................................18
`
`157 Cong. Rec. S1379 (Mar. 8, 2011) .......................................................................18
`
`157 Cong. Rec. S5431 (Sept. 8, 2011).................................................................. 18, 32
`
`157 Cong. Rec. S5432 (Sept. 8, 2011).........................................................................8
`
`157 Cong. Rec. S5441 (Sept. 8, 2011).........................................................................9
`
`AIA §18(a)(1)(B) .........................................................................................................8
`
`AIA §18(d)(1) ..............................................................................................................8
`
`CBM Final Rules, 77 Fed. Reg. 157 ..................................................................... 22, 33
`
`CBM Final Rules, 77 Fed. Reg. 48680 (Aug. 14, 2012)............................................24
`
`CBM Final Rules, 77 Fed. Reg. 48734 (Aug. 14, 2012)..............................................8
`
`CBM Final Rules, 77 Fed. Reg. 48735 (Aug. 14, 2012)..............................................8
`
`CBM Final Rules, 77 Fed. Reg. 48736 (Aug. 14, 2012)..............................................8
`
`viii
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`PATENT OWNER’S LIST OF EXHIBITS
`
`CBM2014-00015
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`Exhibit No.
`
`Description
`
`2001
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`Memorandum of Points and Authorities in Support of
`Plaintiff Ameranth, Inc.’s Motion to Disqualify Counsel
`(Fulbright Jaworski)
`
`Memorandum of Points and Authorities in Support of
`Plaintiff Ameranth, Inc.’s Motion to Disqualify Counsel
`(Akin Gump)
`“Domino's Pizza First in Industry to Offer Mobile
`Ordering” (September 27, 2007)
`
`http://www.dailymotion.com/video/xr7y4b_tim-cook-
`calls-patent-wars-pain-in-the-ass_tech
`
`157 Cong. Rec. S1053 (Mar. 1, 2011)
`
`157 Cong. Rec. S5441 (Sept. 8, 2011)
`
`“Software Patent Reform Just Died in the House,”
`Washington Post, Nov. 20, 2013
`
`Nov. 18, 2013 Letter from Victoria A. Espinel, President
`and CEO of the Business Software Alliance
`
`http://www.bsa.org/advocacy/intellectual-property-and-
`innovation
`
`http://www.bsa.org/~/media/Files/Policy/Patents/JointCB
`MLetter091913
`
`“Ameranth Signs Major New Patent License with PAR
`Technology Corporation for its Patented 21st Century
`Communications Web/Wireless Synchronization
`Inventions” (Jan. 28, 2013)
`
`ix
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`
`
`2012
`
`2013
`
`2014
`
`2015
`
`2016
`
`2017
`
`2018
`
`2019
`
`2020
`
`2021
`
`2022
`
`2023
`
`2024
`
`CBM2014-00015
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`“Ameranth Signs Major New Patent License with
`Snapfinger, Inc. for its Patented 21st Century
`Communications Web/Wireless Synchronization
`Inventions” (Jan. 24, 2012)
`
`Secondary Factors Evidence and Nexus Charts Submitted
`in App. Ser. No. 11/112,990 (U.S. Pat. No. 8,146,077)
`
`April 21, 2010 Claim Construction Order (Judge
`Everingham)
`
`September 9, 2010 Claim Construction Order (Judge
`Everingham)
`
`September 13, 2010 Claim Construction Order (Judge
`Everingham)
`August 10, 2012 Claim Construction Order (Judge Payne)
`
`July 5, 2013 Order re: Motions to Dismiss (Judge
`Sammartino)
`
`157 Cong. Rec. S1379 (Mar. 8, 2011) (Statement of
`Senator Kyl)
`
`157 Cong. Rec. S5431 (Sept. 8, 2011) (Statement of
`Senator Kyl)
`
`“Ameranth Wireless Awarded Computerworld Honors 21st
`Century Achievement Laureate Medal” (April 16, 2001)
`
`Letter from Computerworld Honors Program (July 5,
`2001)
`
`“Wireless Finds a Welcome in Hospitality,” Business
`Week (Feb. 9, 2004)
`
`Steve Glen (VP of Marriott) Letter to K. McNally (Feb. 3,
`2000)
`
`x
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`
`
`2025
`
`2026
`
`2027
`
`2028
`
`2029
`
`2030
`
`2031
`
`2032
`
`2033
`
`CBM2014-00015
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`Computerworld Honors Archive
`
`Ameranth Receives Moby Award For Wireless Mobile
`Computer Application (Sept. 13, 2000)
`
`“Food.com and Ameranth Technology Announce
`Partnership to Develop Link From Food.com site With
`Ameranth's 21st Century Restaurant System” (July 15,
`1999)
`
`Internal Food.com Memo between its Executive Team
`(Sept. 13, 1999)
`
`Examiner Interview Summary in App. Ser. No.
`11/112,990, October 14, 2011
`
`Web Characterization Terminology & Definitions at §2.3,
`May 24, 1999, http://www.w3.org/1999/05/WCA-terms
`
`SFA v. 1-800-Flowers.com, Case No. 6:09-cv-340-LED
`(E.D. Tex. April 11, 2013)
`
`https://developer.apple.com/library/ios/documentation/IDE
`s/Conceptual/iOS_Simulator_Guide/iOS_Simulator_Guide
`
`Kilopass Tech v. Sidense Corp., No. 2013-1193 (Fed. Cir.
`Dec. 26, 2013)
`
`xi
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`CBM2014-00015
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`I.
`
`STATEMENT OF PRECISE RELIEF REQUESTED
`In accordance with 37 C.F.R. § 42.207(a), Patent Owner, Ameranth, Inc.,
`
`submits this Preliminary Response to the Petition for Covered Business Method
`
`(“CBM”) review (“Petition,” “Pet.” or “Am. (‘Amended’) Petition”). For the
`
`reasons set forth below, the Patent Trial and Appeal Board ("PTAB" or
`
`“Board”) should deny the Petition for review of claims 1-16 of U.S. Patent No.
`
`6,384,850 ("the '850 patent") because (1) the '850 patent is not a CBM patent,
`
`because it is unrelated to the practice, management or administration of a
`
`financial product or service and/or is directed to a technological invention, (2)
`
`the claims of the ‘850 patent are not invalid under 35 U.S.C. §112 and (3) the
`
`claims of the ‘850 patent are not patent ineligible under 35 U.S.C. §101.
`
`The Petition itself obfuscates the truth, hides critical facts, and is rife with
`
`inconsistencies, errors, omissions, deceptions and mischaracterizations. When
`
`the facts were counter to their invalidity allegations, Petitioners simply ignored
`
`or withheld them‒not only from the PTAB but from their own expert as well.
`
`When there were no facts supporting their contentions, Petitioners were not
`
`fazed‒they simply invented new ones. When it was clear that the examiner
`
`allowed the issued claims over the prior art, Petitioners simply cited to his
`
`rejection of different claims not even in the `850 patent. When the actual
`
`elements of the `850 claims did not support their positions, they simply added
`
`new elements to suit their purposes. When the dependent claims contradicted
`
`their positions, they tried to sweep them under the rug. When the evidentiary
`
`record refuted their positions, they simply withheld it. Specifically, Petitioners
`
`withheld from the PTAB all the judicial rulings and multiple Markman
`
`1
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`constructions from three different federal judges, rulings which previously
`
`rejected Petitioners’ core invalidity allegations and which rulings rejected and
`refute Petitioners’ claim construction proposals.1 Petitioners also purposefully
`parsed and restricted the scope of their expert’s analysis by withholding all
`
`contradictory evidence from him and manipulated the definition of a POSA, so
`
`as to exclude the internet and “Web page” knowledge and skills that a true
`
`POSA would have, because such knowledge would have rendered all of their
`written description and indefiniteness arguments incorrect.2 It was no accident
`that the scope of Mr. Larson’s review omitted Ameranth’s U.S. Pat. No.
`
`8,146,077 (the “`077 patent”) (the fourth in Ameranth's patent family and
`
`subject of CBM2014-00014), because exclusion of that knowledge would allow
`
`him to assert plausible deniability as to knowledge of the vast amount of
`
`contradictory evidence in the `077 files, including the direct evidentiary links to
`
`1 Petitioners also conveniently ignore the fact that their lead counsel, Mr. Zembek,
`was also counsel for defendants on almost all of the prior adverse judicial rulings and
`that Mr. Zembek’s firm recently hired Judge Everingham’s law clerk (Jim Warriner),
`who assisted in writing three of those Markman rulings and subsequently worked on
`this CBM matter and the Ameranth v. Pizza Hut et al. case under Mr. Zembek’s
`direction. Mr. Warriner’s improper involvement in this matter and the Southern
`District of California case is the subject of one of two attorney disqualification
`motions pending in the district court (Exhs. 2001, 2002). Petitioners are charged with
`knowledge of all these prior rulings and thus were required to disclose them to the
`PTAB per counsel’s duty of candor requirement.
`2 This kind of tactical calculation, i.e., narrowly restricting the definition of a POSA
`(so that he/she would then know very little) to support §112 contentions before the
`PTAB, while concurrently asserting a much broader POSA scope in district court to
`support invalidity contentions based on prior art, is highly duplicitous and indicative
`of improper motivations in the filing of the present Petition.
`2
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`the Ameranth v. Menusoft case and its Markman rulings. This renders the entire
`
`Larson Declaration unreliable and meaningless.
`
`Worse yet, while the Petitioners now self-servingly allege that Ameranth's
`
`‘850 patent claims are invalid and patent ineligible, they do so while also
`
`simultaneously seeking patents for themselves directed to the same subject
`
`matter as the ‘850 patent. Apple and the other Petitioners withheld the fact that
`
`Apple is even now concurrently asserting to the USPTO that its own copycat
`
`hospitality market patent titled “Systems and Methods for Processing Orders and
`
`Making Reservations Using an Electronic Device” (US 2013/0332208), published
`
`December 12, 2013, is non-obvious and represents a patentable invention. This
`
`should independently constitute an estoppel against their contradictory
`
`arguments in the Petition. This kind of hypocritical “hide the ball” litigation
`
`tactic as to all contradictory evidence has no place in the AIA petition process.
`
`See 37 C.F.R. §42.12. The Board should deny the Petition for these ethical
`
`reasons alone as well as for the following substantive factual and legal reasons,
`
`as fully explained herein.
`
`First, Petitioners mischaracterize the claimed invention as a financial
`
`product or service by superficial attorney arguments devoid of any focus on the
`
`actual claims of the ‘850 patent.
`
`Second, Petitioners assert that the ‘850 patent is not directed to a
`
`technological invention, while ignoring the vast amount of contradictory
`
`evidence well known to them, based on a blatant misrepresentation of the ‘850
`
`prosecution history, which actually compels the opposite conclusion that the
`
`actual claimed software system invention was technological and novel and non-
`
`3
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`obvious over the prior art (because the Examiner said it was, contrary to
`
`Petitioner’s false characterization of the Examiner’s statements) and was
`
`directed to a technical solution to a technical problem. Thus, Petitioners’
`
`argument necessarily fails to meet the heightened “more likely than not”
`
`standard for institution of CBM review because it provides no credible basis for
`
`anticipation or obviousness of any claim.
`
`Third, Petitioner’s arguments under §101 are based on a gross
`
`mischaracterization of the actual claimed subject matter; the claims are clearly
`
`directed to patentable subject matter under all controlling precedent.
`
`Fourth, Petitioners’ arguments regarding §112 have been previously
`
`rejected by multiple federal judges and are incompatible with their arguments
`
`regarding the purported teachings of the prior art. Petitioners contradict their
`
`own arguments by first asserting that the ‘850 patent is so rudimentary that its
`
`claims are not patentable over prior art which the Examiner himself allowed the
`
`claims over (as discussed below), but then allege that the patent is so inexorably
`
`complex that one of ordinary skill in the art could not possibly understand those
`
`claims. Petitioners’ contradictions eviscerate their own arguments.
`
`Fifth, Petitioners ignored the uniqueness of numerous dependent claims
`
`by incorrectly asserting that the patentability of those dependent claims rises
`
`and falls with the independent claims. That is factually and legally incorrect.
`
`Sixth, the Petitioners’ expert’s definition of the level of skill of a POSA is
`
`deceptively incomplete and their core claim construction positions (alleging,
`
`e.g., that the critical inventive “synchronization” claim elements are “method
`
`steps”) were rejected by all three federal judges and are simply wrong. Thus,
`
`4
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`because the overall validity analysis of the claims must be based on a correct
`
`claim construction, all of the Petitioners’ invalidity/ineligibility arguments
`(which are all based on their incorrect claim constructions) also fail.3
`Accordingly, for each of these reasons, which are described in greater
`
`detail below, the Petition should be denied in its entirety.
`II.
`BACKGROUND
`Patent Owner Ameranth, a small but innovative software company founded in
`
`1996, is the type of company for which the protections of the U.S. patent system were
`
`intended. Its entrepreneur founders saw needs and invented a visionary means to
`
`meet them, not “abstractly,” but with real, proven, award-winning products based on
`
`the patented computer software system technology encompassed, inter alia, by the
`‘850 patent. Ameranth, in fact, invented, produced and deployed five such products
`
`which were directed to meeting specific technical needs of business and commerce,
`and which were the opposite of an “abstract idea.”4 Ameranth was properly awarded
`the `850 patent and three other later-issued patents which protect those inventions,
`
`and deployed its award-winning software products into the market, across thousands
`
`of restaurants, hotels, casinos, clubs and stadiums and, as confirmed by Harvard
`
`3 “[H]ow a person of ordinary skill in the art understands a claim term provides an
`objective baseline from which to begin claim interpretation.” Phillips v. AWH Corp.,
`415 F.3d 1303, 1313 (Fed. Cir. 2005). Claim scope is determined by analyzing each
`limitation in light of the claim as a whole before determining compliance with
`statutory requirements for patentability. MPEP 2106.01(III)(A). Claims must be
`construed before engaging in a validity analysis. Phillips, 415 F.3d at 1327.
`4 As discussed below, those products include Ameranth’s (1) 21st Century
`Restaurant, (2) Improv Comedy Club web/mobile ticketing, (3) Hostalert
`Reservations/Waitlist, (4) eHost-web/mobile hotel concierge and (5) Magellan
`restaurant reservations.
`
`5
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`Business School, Ameranth’s technology innovations effectively set the wireless
`ordering standard5 until the Petitioners’ (all much larger companies) copying and
`willful infringements largely displaced them (adopting Ameranth’s innovations as
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`their own) and took the market that Ameranth created for themselves.
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`Ameranth was thus compelled by Petitioners’ improper conduct to enforce its
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`patents against infringers. This includes, e.g., Petitioner Domino’s, which claimed in
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`2007 that it had invented aspects of Ameranth's technology, and characterized it as its
`own “breakthrough technology.”6 The importance of Ameranth's right to protect its
`inventions from copying and infringement was emphasized by Petitioner Apple's
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`CEO, Tim Cook: “The worst thing in the world that can happen to you if you are an
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`engineer and you have given your life to something - is for someone to rip it off and
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`put their name on it.” (http://www.dailymotion.com/video/xr7y4b_tim-cook-calls-
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`patent-wars-pain-in-the-ass_tech) (Exh. 2004)). Yet, Apple is trying to do just that,
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`right now, to Ameranth, with its own copycat hospitality market patent application.
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`It is a daunting challenge for a very small company to defend its inventions and
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`its rights against so many powerful corporations, but Ameranth is determined to do
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`5 Harvard Bus. Sch. Press (2005) (“Ameranth’s main product, 21st Century
`Restaurant is poised to become the industry standard for mobile wireless ordering
`and payment processing in restaurants.”) (emphasis added) (Exh. 2013 at Exh. A
`thereto, p. 11 (Nexus Charts)).
`6 "With the addition of yet another order-taking channel, Domino's is thrilled to lead
`the market with this breakthrough technology." See Exh. 2003. Domino’s made this
`claim despite now disparaging Ameranth's inventions as an unpatentable “abstract
`idea.” Further contradicting its position, Domino's had sought two patents for itself
`(App. Serial Nos. 09/491,265 and 10/182,091) for technology similar to Ameranth’s
`inventions. Yet only Ameranth obtained patents on this technology.
`6
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`Starbucks Corp. Exhibit 1047
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`so. The current Petition is yet another in a long series of delay and harassment tactics
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`employed by large company defendants against Ameranth, first in the district court
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`lawsuits and now before the Board. Petitioners’ objective is merely to allow them to
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`continue to infringe Ameranth's patents without consequence and adversely affect
`Ameranth’s licensing program.7 Moreover, Petitioners’ contrived arguments have
`been rejected previously by three different district court judges. And it is clear that
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`Petitioners are using the CBM process merely as a litigation delay tactic in view of
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`the fact that not all defendants have joined the Petition or the Petitions against
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`Ameranth’s other three patents (in a thinly-disguised attempt to avoid estoppel in the
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`district court after this effort fails). Petitioners' dubious tactics abuse the goals of the
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`CBM program, which was designed to provide an alternative and expedited forum for
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`adjudication of the validity of a particular narrow type of patents and not merely a
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`second venue for already failed arguments that did not survive the litigation process
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`and which are intended only to impose further delay and expense.
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`III. PETITIONERS LACK STANDING BECAUSE THE '850 PATENT IS
`NOT A COVERED BUSINESS METHOD PATENT UNDER THE AIA
`In violation of 37 C.F.R. §42.304(a), Petitioners have failed to demonstrate that
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`the '850 patent is a covered business method patent as defined by 37 C.F.R. §42.304
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`and, as such, lacks standing to petition for CBM patent review.
`A.
`The '850 Patent Does Not Claim A Financial Product or Service
`A "covered business method patent" is a patent that "claims a method or
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`corresponding apparatus for performing data processing or other operations used in
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`7 The Ameranth v. Pizza Hut et al. case against Petitioners in the Southern District of
`California is currently stayed pending conclusion of this and the three other CBM
`proceedings.
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`7
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`Starbucks Corp. Exhibit 1047
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`the practice, administration, or management of a financial product or service, except
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`that the term does not include patents for technological inventions." AIA §18(d)(1);
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`see also §18(a)(1)(B), 37 C.F.R. §§42.301(a), 42.302. For purposes of determining
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`whether a patent is eligible for a covered business method patent review, the focus is
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`on the claims. See CBM Final Rules, 77 Fed. Reg. 48734, 48736 (Aug. 14, 2012)
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`("CBM Rules") (Pet. Exh. 1026) (In accordance with 37 C.F.R. § 42.6(d),
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`Patent Owner refers to Exhibits and documents already of record).
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`Legislative History Of AIA And Intent Of CBM Review
`1.
`Neither the AIA nor the CBM Rules provide an explicit definition for
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`"practice, administration, or management of a financial product or service."
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`However, the CBM Rules indicate that the legislative history and intent of the AIA
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`definitions and the CBM review program would be instructive in determining the
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`contours of the "financial product or services" language. See CBM Rules, 77 Fed.
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`Reg. 48735 (Aug. 14, 2012) (Pet. Exh. 1026).
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`Petitioners have cited a statement from Senator Schumer (also quoted in
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`the CBM Rules) to the effect that the CBM program was drafted to encompass
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`patents "claiming activities that are financial in nature, incidental to a financial
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`activity or complementary to a financial activity." Id. at 48735, quoting 157
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`Cong. Rec. S5432 (Sept. 8, 2011) (Pet. Exh. 1026). Patent Owner notes that the
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`quoted statement was in response to a statement by Congressman Shuster that
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`incorrectly characterized the CBM program as limited only to companies in the
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`financial services sector. As such, it must also be noted that Senator Schumer
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`clarified that "[i]n response to concerns that earlier versions of the amendment
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`were too broad," the CBM patent review would be "narrowly targeted." See 157
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`8
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`Starbucks Corp. Exhibit 1047
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`Cong. Rec. S1053 (Mar. 1, 2011) (Exh. 2005).
`2.
`The ‘850 Claims Are Not Directed To Financial Services
`In support of their erroneous assertion that the claimed subject matter of the
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`'850 patent is directed to activities that are financial in nature, Petitioners cherry
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`picked references from the specification dealing with particular applications of the
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`invention for, inter alia, restaurant ordering (Am. Petition 26-29). Apparently,
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`Petitioners believe that any us