throbber
Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`AMERICAN EXPRESS COMPANY, AMERICAN EXPRESS TRAVEL
`RELATED SERVICES COMPANY, INC., COMPASS BANK,
`DISCOVER FINANCIAL SERVICES, DISCOVER BANK,
`DISCOVER PRODUCTS INC., and
`STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
`Petitioners,
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.,
`Patent Owner.
`____________
`
`Case CBM2015-00101
`Patent 6,105,013
`____________
`
`PATENT OWNER’S
`REQUEST FOR REHEARING OF DECISION INSTITUTING
`COVERED BUSINESS METHOD PATENT REVIEW
`
`
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`

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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
`
`TABLE OF CONTENTS
`
`
`
`
`
`THE DECISION MISAPPREHENDED AIA § 18’S REQUIREMENT
`THAT A CBM PATENT IS “A PATENT THAT CLAIMS A METHOD
`OR CORRESPONDING APPARATUS FOR PERFORMING . . .
`OPERATIONS USED IN THE PRACTICE, ADMINISTRATION, OR
`MANAGEMENT OF A FINANCIAL PRODUCT OR SERVICE”. ................. 3 
`
`A.  The Board Relied On The Specification, Rather Than The Claims. ............ 5 
`
`B.  The Statute Requires That The Patent Claim An Invention
`“For” Operations “Used In . . . Financial Products Or Services,” Not
`Merely “Encompassing” Such Operations. ................................................... 7 
`
`C.  The Board Improperly Rejected The “Technological Invention”
`Exception To Institution Based On Extrinsic Trial Evidence. ................... 12 
`
`1.  The “technological” exception is a threshold determination. .............. 13 
`
`2.  The exception cannot be decided based on trial testimony. ................. 13 
`
`CONCLUSION .................................................................................................. 15 
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
`
`TABLE OF AUTHORITIES
`
`
`
`Cases
`
`Achates Reference Publ., Inc. v. Apple Inc., --- F.3d ----,
`2015 U.S. App. LEXIS 17183 (Fed. Cir. Sep. 30, 2015) ...................................... 2
`
`Pall Corp. v. Hemasure, Inc., 181 F.3d 1305 (Fed. Cir. 1999) ............................... 11
`
`Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) ......................... 14
`
`Versata Dev. Group, Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015),
`reh’g & reh’g en banc denied (Fed. Cir. Oct. 15, 2015) ...................................2, 3
`
`Wilson Sporting Goods Co. v. Hillerich & Bradsby Co., 442 F.3d 1322
`(Fed. Cir. 2006) ............................................................................................. 11, 12
`
`Administrative Determinations
`
`Fairchild Semiconductor Corp. v. In-Depth Test LLC, CBM2015-00060,
`Paper 11 (PTAB Aug. 3, 2015) ............................................................................ 11
`
`Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00003,
`Paper 15 (PTAB Feb. 12, 2013)........................................................................... 15
`
`Motorola Mobility LLC v. Intellectual Ventures I LLC, CBM2014-00083,
`Paper 17 (PTAB Aug. 6, 2014) ............................................................................ 15
`
`Sony Corp. of Am. v. Network-1 Techs., CBM2015-00078,
`Paper 7 (PTAB Jul. 1, 2015) ........................................................................... 8, 11
`
`Statutes
`
`Leahy-Smith America Invents Act of 2011, Pub. L. No. 112-29,
`125 Stat. 284, 327, § 14 .................................................................................. 9, 10
`
`Leahy-Smith America Invents Act of 2011, Pub. L. No. 112-29,
`125 Stat. 284, 327, § 14(a) .............................................................................. 9, 10
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`
`Leahy-Smith America Invents Act of 2011, Pub. L. No. 112-29,
`125 Stat. 284, 330, § 18 ................................................................................ 2, 3, 9
`
`Leahy-Smith America Invents Act of 2011, Pub. L. No. 112-29,
`125 Stat. 284, 330, § 18(a)(1)(E) ......................................................................... 13
`
`Leahy-Smith America Invents Act of 2011, Pub. L. No. 112-29,
`125 Stat. 284, 331, § 18(d)(1) ...................................................................... passim
`
`Regulations and Rulemaking
`
`37 C.F.R. § 42.207(c) ............................................................................................... 14
`
`USPTO Guidance Document, “Tax Strategies Training Examples,”
`www.uspto.gov “Patents Examination Area” (last visited Sep. 28, 2015) .......... 10
`
`USPTO Patent And Trademark Appeal Board, Standard Operating
`Procedure No. 1 (rev. 14) ...................................................................................2, 3
`
`USPTO, Amendments to the Rules of Practice; Proposed Rules, 80 Fed. Reg.
`50,719 et seq. (Aug. 20, 2015) ............................................................................... 2
`
`USPTO, Manual of Patent Examining Procedure
`(9th Ed. Mar. 2014) § 2124.01 ............................................................................... 9
`
`Legislative History
`
`157 Cong. Rec. H4421 (June 22, 2011) (Statement of Rep. Smith) ....................... 10
`
`157 Cong. Rec. S1053, 1053 (Mar. 1, 2011) (Statement of Sen. Schumer)............ 10
`
`157 Cong. Rec. S1363 (daily ed. Mar. 8, 2011) (Statement of Sen. Schumer) ....... 15
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`EXHIBIT LIST
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`Exhibit 2001
`
`Exhibit 2002
`
`Exhibit 2003
`
` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`Order of Dismissal With Prejudice, Maxim Integrated
`Prods., Inc. v. Navy Fed. Credit Union, Civil Action
`No. 5:14-cv 01032-XR (W.D. Tex. May. 18, 2015)
`
`Confidential Settlement Agreement between Maxim
`Integrated Products and Navy Federal Credit Union
`
`Disclaimer in Patent Under 37 CFR 1.321(a), U.S. Pat.
`No. 6,105,013, cls. 7, 14, 16 (09/041,190 Jul. 6, 2015)
`
`Exhibit 2004
`
`U.S. Patent No. 5,805,702 to Curry et al.
`
`Disclaimer in Patent Under 37 CFR 1.321(a), U.S. Pat.
`No. 5,940,510, cl. 2 (08/594,975 Jun. 19, 2015)
`
`Restriction Requirement, U.S. Patent No. 5,805,702
`(08/595,014 Jul. 21, 1997)
`
`Originally-filed claims, U.S. Patent No. 5,805,702
`(08/595,014 Jan. 31, 1996)
`
`Hearing Transcript, In re Maxim Integrated Products,
`Inc., Misc. No. 12-244 (MDL No. 2354) (W.D. Pa.
`Mar. 20, 2013) (excerpt)
`
`Declaration of Nathan Lowenstein in support of Patent
`Owner Maxim Integrated Products, Inc.’s Motion For
`Pro Hac Vice Admission Of Nathan Lowenstein Under
`37 C.F.R. § 42.10(c)
`
`iv
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`
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`Exhibit 2005
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`Exhibit 2006
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`Exhibit 2007
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`Exhibit 2008
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`Exhibit 2009
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`Patent Owner respectfully petitions for rehearing of the Board’s October 2,
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`2015 decision instituting covered business method (“CBM”) patent review. Paper
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`17 (“Institution Decision,” “Decision” or “ID”).
`
`The Decision found that the Petition showed that claims 1 and 9
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`demonstrates that the Patent is a CBM patent, and on that basis found standing for
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`institution of review under the CBM standing statute, AIA § 18(d)(1). ID 12.
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`Rehearing is sought based on two errors, each dispositive of CBM standing.
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` First, the ruling misapprehended § 18(d)(1)’s “claims” requirement, by
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`interpreting it to require merely that CBM patents have a claim that
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`“encompasses” operations used in practicing, administering, or managing
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`financial products or services, and specification disclosure that the invention is
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`“intended” for such operations; rather than requiring that it claim, by explicit or
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`implicit claim limitations, an invention for performing such operations.
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` Second, the ruling misapprehended § 18(d)(1)’s “technological inventions”
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`standing exception, effectively nullifying that exception, by rejecting it on the
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`basis of extrinsic trial evidence to which Patent Owner could not fairly respond.
`
`“A request for rehearing is an opportunity to address whether a panel
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`misapprehended or overlooked a matter in rendering its opinion, which may
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`include identification of conflicting Board or court decisions[.]” USPTO,
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`to
`
`the
`
`Rules
`
`of
`
`Practice;
`
`Proposed
`
`Rules,
`
`
`Amendments
`
`80 Fed. Reg. 50,719, 50,740 (Aug. 20, 2015). The Office has issued many CBM
`
`standing decisions that are in striking tension with this Decision. POPR 6-8, 13-
`
`15, 21-24. It thus appears that “a substantial difference of opinion among judges
`
`exists” on the Board with respect to the scope of CBM standing. PTAB Standard
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`Operating Procedure No. 1 (rev. 14) § III-A-2. This Office’s reviewing Court has
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`addressed CBM standing in only one case, which shed little light on that scope,
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`except to clarify that the determination is reviewable on appeal. Versata Dev.
`
`Group, Inc. v. SAP Am., Inc., 793 F.3d 1306, 1319 (Fed. Cir. 2015), reh’g & reh’g
`
`en banc denied (Fed. Cir. Oct. 15, 2015). Thus, since the AIA’s passage in 2011, a
`
`settled interpretation of § 18’s CBM standing provisions has yet to develop.
`
`The scope of statutory standing under § 18 is a vitally important question. It
`
`concerns “the fundamental limitation of the Board’s . . . ultimate authority to
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`invalidate only CBM patents in a CBMR proceeding.” Achates Reference Publ.,
`
`Inc. v. Apple Inc., --- F.3d ----, 2015 U.S. App. LEXIS 17183, *11-12 (Fed. Cir.
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`Sep. 30, 2015) (citations omitted). Because the decision on institution in this case
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`so clearly turns on how broadly AIA § 18 should be interpreted, it is an appropriate
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`case for the Office to reconcile its past decisions on the subject of CBM standing,
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`and set forth a reasonable, consistent, and supported interpretation of Section 18.
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`Yesterday, in Versata, the Office’s reviewing court let stand its decision that
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`CBM standing determinations are appealable. If necessary, the errors raised here
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`will come before the court for correction. As discussed herein, the Decision’s
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`broad, strained interpretation transgresses the bounds of reasonable interpretation
`
`of AIA § 18; is not of long standing; decides novel legal questions at an
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`intermediate level of the Office without relying on its specialized expertise;
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`contravenes Congress’s limiting intent; and is inconsistent with prior Office
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`interpretations of this provision and of related provisions. Rehearing is merited.
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`An expanded panel on rehearing is respectfully suggested. SOP 1 § III-C.
`
`THE DECISION MISAPPREHENDED AIA § 18’S REQUIREMENT THAT
`A CBM PATENT IS “A PATENT THAT CLAIMS A METHOD OR
`CORRESPONDING APPARATUS FOR PERFORMING . . . OPERATIONS
`USED IN THE PRACTICE, ADMINISTRATION, OR MANAGEMENT OF
`A FINANCIAL PRODUCT OR SERVICE”
`
`AIA § 18(d)(1) requires that a CBM patent be “a patent that claims a method
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`or corresponding apparatus for performing . . . operations used in the practice,
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`administration, or management of a financial product or service.” This provision
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`should be interpreted to require that a CBM patent have one or more claims limited
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`to an invention that is, at least, an invention “for performing . . . operations used in
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`the practice, administration, or management of a financial product or service.”
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`Under a valid interpretation, standing is absent. POPR 6-11, 25-28.
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`The Institution Decision found standing under an unreasonably broad
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`interpretation of this provision. Contrary to the statutory text, and the Office’s
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`positions elsewhere, the Decision interpreted this provision to require only a claim
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`that “encompasses” operations used in the practice, administration, or management
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`of a financial product or service and is described in the specification as “intended”
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`to be used in such operations. ID 12-13. This interpretation, which effectively
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`rewrites the “claims” requirement into a “reads on and mentions” requirement, is
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`unreasonably broad. AIA § 18(d)(1) uses the word “claims” for a reason. It limits
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`CBM standing based on what the patent “claims”1—not based on unclaimed
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`examples or aspirational intentions in the specification.
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` The Decision’s
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`interpretation would permit the Office to find CBM standing whenever operations
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`used in financial services are mentioned anywhere in the patent, regardless of what
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`the patent claims. If that were so, a claim reciting simply “a ball-point pen” could
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`suffice for CBM standing—so long as the patent specification lauded the use of
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`such pens for bookkeeping, and banks using them were sued for infringement.
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`Such an interpretation is not only inconsistent with other Office determinations; it
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`would be hiding a regulatory elephant in a statutory mousehole, for it would grant
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`the Board CBM jurisdiction over wide swaths of patents bearing no resemblance to
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`1 Emphases herein are added unless otherwise indicated.
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`conventional “business methods”—like the Patent here, which even the Decision
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`admits has claims laden with “technological” limitations. ID 16; POPR 22, 36-37.
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`A. The Board Relied On The Specification, Rather Than The Claims.
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`In finding standing, the Institution Decision quite candidly finds that the
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`[P]atent meets the financial product or service requirement “as evidenced by the
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`financial embodiments disclosed in the specification.” ID 12. It then quotes a
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`series of statements from the written description, which it says “show[] that the
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`system recited in independent claim 1 encompasses financial products and services
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`and is intended to be used for such products and services,” and that “embodiments
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`involving secure financial transactions, including payments and deposits, are the
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`central focus of the specification.” ID 12. During this analysis, the Decision does
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`not quote the claims. Id. But see POPR 6-9, 16. Nor does it specify how the
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`“central focus” of a specification might be determined—or how it can affect what
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`the patent claims if it does not affect the claims’ limitations.
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`The closest the Institution Decision comes to finding anything financial in
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`the claims comes next, where it says “the relationship between the portions of the
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`Specification cited in the Petition and the claim language—particularly the ‘secure
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`transaction integrated circuit’ of independent claims 1 and 9—is evident from the
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`Petition.” ID 13. And just what is that “relationship”? The Decision explains that
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`[t]he cited portions of the specification, outlined above, make clear
`that the “secure transaction integrated circuit” recited in claims 1 and
`9 is intended to be used for secure financial transactions. The
`‘input/output circuit,’, for exchanging the recited ‘information’ (claim
`1) and ‘data’ (claim 9) encompasses circuitry for exchanging a cash
`equivalent or monetary value. A claimed system that transfers a cash
`equivalent or monetary value manages a financial product, and
`providing such transfers delivers a financial service.
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`Id. But a “claimed system” can only be said to “transfer” something if the claims
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`require that it be transferred. Otherwise, that is merely unclaimed additional
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`activity. Patent Owner could agree with the Board’s last sentence quoted above if
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`the claims contained limitations limiting the invention to being “used for secure
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`financial transactions,” or requiring that the recited “data” “encompass[] circuitry
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`for exchanging ‘a cash equivalent or monetary value.’” Such limitations would
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`make it a claim that “claims [an invention] for . . . operations used in the practice,
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`administration, or management of a financial products or service,” as AIA
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`§ 18(d)(1) requires. However, the Board never even purports to construe claim 1
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`to have any such limitations. And it does not have any. POPR 19-22, 26-31.
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`To be sure, had the Board construed the claims to have implicit financial
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`limitations, it would have had to address Patent Owner’s detailed arguments why
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`such constructions would be erroneous. Id. But it nowhere addressed them.
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`The Statute Requires That The Patent Claim An Invention “For”
`Operations “Used In . . . Financial Products And Services,” Not
`Merely “Encompassing” Or “Intended” For Such Operations.
`
`
`B.
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`The Institution Decision recognizes that it does not identify any financial
`
`limitations in the claims. ID 14. Nevertheless, it finds CBM standing, by
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`announcing that it interprets AIA § 18(d)(1) to not require any such limitations. Id.
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`The Decision holds that it would “overstate the financial product or service
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`requirement” of AIA § 18(d)(1) to require that the claims be “limited to,
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`specifically directed to, or specific to financial products or services.” Id. Instead:
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`[t]o satisfy the definition of a covered business method patent in
`§ 18(d)(1) of the AIA, the patent need only “claim[] 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.” AIA § 18(d)(1) (emphases added). Thus,
`the express statutory language does not mandate that a claim be
`specific or limited to a financial product or service. Instead, it requires
`only that a claim be “used in the practice, administration, or
`management” of such a product or service.
`
`Id. (emphasis by Board). In an attempt to support this surprising interpretation, the
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`Decision points to statements by individual Senators in the AIA legislative history,
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`which it says “indicate[] that to meet the [CBM standing] requirement, the patent
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`must be ‘intended to be used in the practice, administration, or management of
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`financial services or products,’ but ‘need not recite a specific financial product or
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`service’” and may “‘encompass not only patents claiming the financial product or
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`service itself, but also patents claiming activities that are financial in nature,
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`incidental to a financial activity or complementary to a financial activity.’” Id. at
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`14 (citations and internal markings omitted) (quoting Sens. Schumer and Leahy).
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`This interpretation of AIA § 18(d)(1) is unreasonably broad. As already
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`noted, under this interpretation a claim to “a ball-point pen” can straightforwardly
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`suffice to generate CBM standing, so long as the patent specification lauds the use
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`of such pens for bookkeeping (and banks using them have been sued). The Board
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`has already squarely rejected just such a broad interpretation of AIA § 18(d)(1),
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`noting that it “‘would mean that any patent claiming something that can be used in
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`connection with a financial service (e.g., an Ethernet cable, a generic computer
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`monitor, or even a ball point pen) would be eligible for covered business method
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`patent review, regardless of what the patent claims,’” and insisting instead that
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`“language [in the claims] relating to a financial product or service” is required.
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`Sony Corp. of Am. v. Network-1 Techs., CBM2015-00078, Paper 7 (PTAB Jul. 1,
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`2015), at 9, 12; POPR 8. Sony is in close accord with many other earlier Board
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`decisions, which have insisted that CBM standing must rest on the language of the
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`claims. POPR 6-8, 13, 17-18, 25, 27, 31-33 (quoting numerous Board decisions).
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`This interpretation does not merely contradict earlier Board interpretations
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`of AIA § 18. It also bears no resemblance to Office interpretations of other,
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`similar AIA provisions—in particular AIA § 14, which limits the patentability of
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`tax preparation methods. AIA § 14(a) specifies that “any strategy for reducing,
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`avoiding, or deferring tax liability . . . shall be deemed insufficient to differentiate
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`a claimed invention from the prior art.” It is instructive to see how the Office has
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`interpreted AIA § 14(a)’s requirement that a tax strategy patent be one claiming a
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`“strategy for reducing, avoiding, or deferring tax liability”—for it stands in sharp
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`contrast to the Decision’s interpretation of the provisions of AIA § 18(d)(1).
`
`When it applies AIA § 14, the Office determines whether a claim is a tax
`
`strategy claim by looking to the claims’ recited limitations. The Office instructs
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`examiners to apply § 14 by “[i]dentify[ing] any limitations relating to a tax
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`strategy,” and that such “claim limitations directed to a tax strategy should not be
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`given patentable weight.” M.P.E.P. § 2124.01. Its official training guide reads:
`
`Issues under Section 14 arise where the claim recites a plan for
`reducing, avoiding, or deferring a tax liability. The determination of
`whether a tax strategy is involved is not only a claim-by-claim
`analysis, but also a limitation-by-limitation analysis . . . . [If a]
`determining step does not explicitly or inherently require the
`performance of any action towards reducing, avoiding, or deterring
`tax liability, the determining step would not be considered to be
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`within the prior art per Section 14. . . . [If] no limitations in the claim
`are directed to a tax strategy for reducing, avoiding or deferring a tax
`liability as no steps are taken that explicitly or implicitly change any
`such liability, . . . the method does not limit the use of any tax
`strategy by any taxpayer or tax advisor and Sec. 14 does not apply.
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`USPTO Guidance Document,
`
`“Tax Strategies Training Examples,”
`
`www.uspto.gov “Patents Examination Area” (last visited Oct. 6, 2015). Thus,
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`under AIA § 14, the Office determines whether a patent claims a strategy “for
`
`reducing, avoiding or deferring a tax liability” based on the claim’s limitations that
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`“require” such actions—not based on whether the claims “encompass” such
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`actions, or the specification has a “focus” on such actions, or the invention is
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`“intended” for such actions. In other words, the Office’s interpretation of claimed
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`“strategies for” affecting liability under AIA § 14(a) contrasts very sharply with
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`the Institution Decision’s interpretation of the “claims” requirement of § 18(d)(1).
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`As for the legislative history, these statements of individual Senators must
`
`be weighed in balance with other legislative assurances—including statements by
`
`the same Senators—that the scope of the CBM statute was narrow. E.g., 157
`
`Cong. Rec. S1053, 1053 (Mar. 1, 2011) (Statement of Sen. Schumer) (“In response
`
`to concerns that earlier versions of the [CBM] amendment were too broad, we have
`
`modified it so it is narrowly targeted. We want to make sure to capture the
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` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
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`business method patents which are at the heart of the problem and avoid any
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`collateral circumstances.”); 157 Cong. Rec. H4421 (June 22, 2011) (Statement of
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`Rep. Smith) (CBM statute is “a pilot program to review a limited group of
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`business method patents”). Even taken literally, the legislative history cited by the
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`Decision would still require that the patent “claim”—not merely “encompass”—
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`incidental or complementary activities. See POPR 6-8. And once again, in other
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`cases the Board has interpreted the legislative history very differently. See, e.g.,
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`Sony, CBM2015-00078, Paper 7 at 12; Fairchild Semiconductor Corp. v. In-Depth
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`Test LLC, CBM2015-00060, Paper 11 (PTAB Aug. 3, 2015) at 9 (same).
`
`Finally, the Board cites “Patent Owner’s assertion of the [Patent] against
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`numerous financial institutions and banks” as “a factor weighing in favor of a
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`conclusion
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`that
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`the [Patent]
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`is ‘used
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`in
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`the practice, administration, or
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`management’ of financial products or services.” ID 15. Again, Patent Owner
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`would agree—if such evidence supported construing the claims to include
`
`financial limitations. “Although the construction of the claim is independent of
`
`the device charged with infringement,” Pall Corp. v. Hemasure, Inc., 181 F.3d
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`1305, 1308 (Fed. Cir. 1999), “knowledge of [the accused] product or process
`
`provides meaningful context for . . . claim construction,” Wilson Sporting Goods
`
`Co. v. Hillerich & Bradsby Co., 442 F.3d 1322, 1326 (Fed. Cir. 2006). But
`
`
`
`11
`
`
`
`

`
` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
`
`
`although the Patent has been asserted against banks’ activities, the Board “may not
`
`use the accused product or process as a form of extrinsic evidence to supply
`
`limitations for patent claim language.” Wilson, 442. F.3d at 1331. Moreover, once
`
`more the Institution Decision is inconsistent with other Board decisions, which
`
`squarely reject the argument that the assertion of generally-applicable claims
`
`against financial operations can transform a patent into a CBMP. POPR 21-22.
`
`A reasonable interpretation of AIA § 18(d)(1) would require the patent to
`
`have claim limitations restricting it to 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—not merely that its scope
`
`encompass such an invention. And litigation activity should not affect CBM
`
`standing except as it affects how the claims must be construed.
`
`C. The Board Improperly Rejected The “Technological Invention”
`Exception To Institution Based On Extrinsic Trial Evidence.
`
`The Institution Decision adopts Petitioner’s position that the Patent is not a
`
`“patent[] for technological inventions—” a category expressly “except[ed]” from
`
`CBM standing under AIA § 18(d)(1). ID 15-18. The Decision holds that “on the
`
`record before [it],” Petitioners’ position is supported—relying first and foremost on
`
`“testimony from Peter Alexander, Ph.D.,” Petitioner’s expert declarant. ID 16.
`
`
`
`12
`
`
`
`

`
` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
`
`
`The Board misapprehends this exception. It is unreasonable to interpret an
`
`express exception to institution to depend on a record to be developed at trial.
`
`Moreover, Patent Owner was barred from submitting its own testimony and had no
`
`right to cross-examine Petitioners’ “expert.” Thus, rejecting this exception based
`
`on Dr. Alexander’s hearsay was unreasonable, as well as unfair. POPR 38-39.
`
`1.
`
`The “technological” exception is a threshold determination.
`
`The Decision inexplicably asserts that the “technological” exception does
`
`not bar institution “on the record before us.” ID 16-17. This fundamentally
`
`misapprehends the exception. AIA § 18(a)(1)(E) says that “[t]he Director may
`
`institute a transitional proceeding only for a patent that is a covered business
`
`method patent.” AIA § 18(d)(1) grants “patents for technological inventions” an
`
`express “except[ion]” from such “institut[ion].” Therefore, the determination
`
`whether or not the technological exception applies cannot ordinarily be made on a
`
`preliminary-record basis, awaiting further development of “the record before” it.
`
`That would transmute this express “except[ion]” of “technological inventions”
`
`from “institution” into a question to be developed at trial, after institution.
`
`2.
`
`The exception cannot be decided based on trial testimony.
`
`The Decision’s process in rejecting the technological exception was
`
`fundamentally improper for a second reason. In determining that the exception did
`
`
`
`13
`
`
`
`

`
` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
`
`
`not apply, the Decision relied, first and foremost, on the expert testimony
`
`submitted with the Petition. ID 16. Such expert testimony is paradigmatic
`
`“extrinsic evidence . . . generated at the time of and for the purpose of litigation”
`
`that “can suffer from bias that is not present in intrinsic evidence” and is a
`
`particularly poor basis for ascertaining the scope of the patent when “the expert’s
`
`opinion is offered in a form that is not subject to cross-examination.” Phillips v.
`
`AWH Corp., 415 F.3d 1303, 1318 (Fed. Cir. 2005) (en banc). Yet at the time of
`
`the Institution Decision, that was exactly the situation with respect to this
`
`testimony. Before institution, patent owners have no right to cross-examine
`
`Petitioner’s expert, and are barred from submitting rebuttal testimony. 37 C.F.R.
`
`§ 42.207(c). For these reasons, it would be fundamentally inappropriate for the
`
`Board to rely upon petitioners’ litigation testimony to reject the “technological”
`
`exception to institution. POPR 32-33. Yet that is exactly what the Institution
`
`Decision did. Relying on Dr. Alexander’s unrebuttable hearsay assertions to find
`
`that this exception did not apply was manifestly unfair.
`
`The technological-invention exception should be interpreted to turn, not on
`
`untestable, asymmetric, preliminary extrinsic evidence, but on the intrinsic
`
`evidence of whether the Office determined at the time of issuance that the claims’
`
`novelty turned on a technological innovation. That is the process suggested by
`
`
`
`14
`
`
`
`

`
` Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002USCBM
`
`
`numerous other Board decisions. See, e.g., Liberty Mut. Ins. Co. v. Progressive
`
`Cas. Ins. Co., CBM2012-00003, Paper 15 (PTAB Feb. 12, 2013) at 11-14;
`
`Motorola Mobility LLC v. Intellectual Ventures I LLC, CBM2014-00083, Paper 17
`
`(PTAB Aug. 6, 2014) at 4-5. And it is the process supported by the legislative
`
`history. See 157 Cong. Rec. S1363, S1364 (daily ed. Mar. 8, 2011) (Statement of
`
`Sen. Schumer) (indicating that test for when a patent is for a technology invention
`
`should be whether the Examiner’s determination of novelty for the claims
`
`“turn[ed] on a technological innovation over the prior art”).
`
`Under a reasonable interpretation of the technological exception, and a fair
`
`process for deciding the question, Petitioners’ rudimentary attempts to show that it
`
`did not apply were clearly insufficient. POPR 33-41. The Board should grant
`
`rehearing and find the “technological” exception was not shown to be inapplicable.
`
` CONCLUSION
`
`The Institution Decision’s interpretation of the CBM standing statute, AIA
`
`§ 18(d)(1), would gut both its “claim[ing]” requirement and its “technological”
`
`exception, and goes farther than the statute fairly allows. Rehearing should be
`
`granted to address the appropriate interpretation of CBM standing requirements.
`
`
`
`
`
`
`
`
`
`
`Date: October 16, 2015
`
`
`
`
`
`
`
`
`
`
`
`
`
` Respectfully submitted,
`______/Kenneth J. Weatherwax/_______
`Kenneth J. Weatherwax, Reg. No. 54,528
` Lowenstein & Weatherwax LLP
`15
`
`
`
`

`
`Case CBM2015-00101
`Patent 6,105,013
`Attorney Docket No. 150326-002 USCBM
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that the following documents were served,
`
`by electronic mail on October 16, 2015, pursuant to the parties’ May 29, 2015
`electronic service agreement:
`
`
`PATENT OWNER’S REQUEST FOR REHEARING OF DECISION
`INSTITUTING COVERED BUSINESS METHOD PATENT REVIEW
`
`
`
`The names and addresses of the parties being served are as follows:
`
`David M. Tennant
`dtennant@whitecase.com
`WCAXPMaximCBMTeam@whitecase.com
`
`William F. Long
`blong@mckennalong.com
`
`
`
`
`Date: October 16, 2015
`
`
`Respectfully submitted,
`
`____/ Kenneth J. Weatherwax /______
`
`Kenneth J. Weatherwax
`Registration No. 54,528
`Attorney for Patent Owner

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