throbber
Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`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 CBM2015-00102
`Patent 6,237,095
`____________
`
`PATENT OWNER’S
`REQUEST FOR REHEARING OF DECISION INSTITUTING
`COVERED BUSINESS METHOD PATENT REVIEW
`
`
`
`
`
`
`
`

`
` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
`TABLE OF CONTENTS
`
`
`
`
`
`I.  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” ........... 1 
`
`A.  The Board Relied On The Specification, Rather Than The Claims. ...... 3 
`
`B.  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. ........................... 5 
`
`C.  Both Plain Meaning And Past Decisions Make Clear That What A
`Patent “Claims” Is Defined By The Patent’s Claim Limitations. ........... 7 
`
`D.  The Board Improperly Rejected The “Technological Invention”
`Exception To Institution Based On Extrinsic Trial Evidence. ............. 11 
`
`1.  The “Technological” Exception Is A Threshold Determination. ... 12 
`
`2.  The Exception Cannot Be Decided Based On Trial Testimony..... 12 
`
`II.  THE BOARD IS DIVIDED ON THE INTERPRETATION OF § 18 ....... 14 
`
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
`TABLE OF AUTHORITIES
`
`Cases
`Achates Reference Publ., Inc. v. Apple Inc., --- F.3d ----,
`2015 U.S. App. LEXIS 17183 (Fed. Cir. Sep. 30, 2015) .................................... 15
`
`Arlington Indus. v. Bridgeport Fittings, Inc., 632 F.3d 1246 (Fed. Cir. 2011) ......... 9
`
`Hoechst-Roussel Pharms., Inc. v. Lehman, 109 F.3d 756 (Fed. Cir. 1997) ..........7, 9
`
`Hughes Tool Co. v. Dresser Indus., 816 F.2d 1549 (Fed. Cir. 1987) ........................ 8
`
`Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317 (Fed. Cir. 2004) ............. 8
`
`Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc) ... 9
`
`Pall Corp. v. Hemasure, Inc., 181 F.3d 1305 (Fed. Cir. 1999) ............................... 10
`
`Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) ......................... 13
`
`Sjolund v. Musland, 847 F.2d 1573 (Fed. Cir. 1988) ................................................ 9
`
`Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling U.S., Inc.,
`699 F.3d 1340 (Fed. Cir. 2012), cert. dismissed, 134 S. Ct. 2333 (2013) ............. 8
`
`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) ..................................... 15
`
`Wilson Sporting Goods Co. v. Hillerich & Bradsby Co., 442 F.3d 1322
`(Fed. Cir. 2006) .................................................................................................... 11
`
`Administrative Determinations
`Ex parte Remark, 15 U.S.P.Q. 2d (BNA) 1498 (BPAI Jan. 25, 1990) ...................... 9
`
`Fairchild Semiconductor Corp. v. In-Depth Test LLC, CBM2015-00060,
`Paper 11 (PTAB Aug. 3, 2015) ............................................................................ 10
`
`Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00003,
`Paper 15 (PTAB Feb. 12, 2013)........................................................................... 13
`
`
`
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`
`Motorola Mobility LLC v. Intellectual Ventures I LLC, CBM2014-00083,
`Paper 17 (PTAB Aug. 6, 2014) ............................................................................ 13
`
`Sony Corp. of Am. v. Network-1 Techs., CBM2015-00078,
`Paper 7 (PTAB Jul. 1, 2015) ........................................................................... 6, 10
`
`Statutes
`
`35 U.S.C. § 156(a) ..................................................................................................... 8
`
`Leahy-Smith America Invents Act of 2011, Pub. L. No. 112-29,
`125 Stat. 284, 327, § 14(a) ..................................................................................... 7
`
`Leahy-Smith America Invents Act of 2011, Pub. L. No. 112-29,
`125 Stat. 284, 330, § 18(a)(1)(E) ......................................................................... 12
`
`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) ............................................................................................... 13
`
`USPTO Guidance Document, “Tax Strategies Training Examples,”
`www.uspto.gov “Patents Examination Area” (last visited Sep. 28, 2015) ............ 7
`
`USPTO Patent And Trademark Appeal Board, Standard Operating
`Procedure No. 1 (rev. 14) ..................................................................................... 14
`
`USPTO, Amendments to the Rules of Practice; Proposed Rules, 80 Fed. Reg.
`50,719 et seq. (Aug. 20, 2015) ............................................................................. 15
`
`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) ....... 13
`
`
`
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
`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. 6,237,095, cl. 7 (09/003,541 Jul. 8, 2015)
`
`
`
`
`
`EXHIBIT LIST
`
`Exhibit 2001
`
`Exhibit 2002
`
`Exhibit 2003
`
`Exhibit 2004
`
`U.S. Patent No. 5,805,702 to Curry et al.
`
`Exhibit 2005
`
`Exhibit 2006
`
`Exhibit 2007
`
`Exhibit 2008
`
`Exhibit 2009
`
`
`
`
`
`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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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`Patent Owner respectfully petitions for rehearing of the Board’s October 7,
`
`2015 decision, Paper 16 (“Decision” or “ID”), which found the Petition showed the
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`Patent to be a covered business method (“CBM”) patent under AIA § 18(d)(1).
`
` First, the ruling misapprehended § 18(d)(1)’s “claims” requirement, by
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`interpreting it to require merely that CBM patents have (i) a claim that
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`“encompasses” operations used in practicing, administering, or managing
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`financial products or services, and (ii) disclosure that the invention is
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`“intended” for such operations—rather than requiring that it claim, as defined
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`by explicit or implicit claim limitations, an invention for performing such
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`operations in accordance with the ordinary meaning of “claiming” an invention.
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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.
`
`I.
`
`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.” In accordance
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`with the plain meaning of this language, as interpreted by the Office and its
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`reviewing Court, this provision should be interpreted to require that a CBM patent
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`have one or more claims limited to an invention “for performing . . . operations
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`used in the practice, administration, or management of a financial product or
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`service.” Under a valid interpretation, standing is absent. POPR 5-11, 26-31.
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`The Institution Decision found standing under a broad, unprecedented
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`interpretation of AIA § 18(d)(1).
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` The Decision interpreted the “claims”
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`requirement to require only a claim that “encompasses” operations used in the
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`practice, administration, or management of a financial product or service and is
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`described in the specification as “intended” to be used in such operations. ID 14-
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`15. This interpretation, which effectively rewrites the “claims” requirement into a
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`“covers and describes” requirement, is unreasonable because it is contrary to both
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`the well-settled plain meaning of “claims” requirements in patent statutes, and the
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`Office’s position on its meaning both in other statutes and elsewhere in this one.
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`In short, AIA § 18(d)(1) uses the word “claims” for a reason. It limits CBM
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`standing based on what the patent “claims”1—not based on unclaimed examples or
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`aspirational intentions in the specification. The Decision’s interpretation would
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`permit the Office to find CBM standing whenever operations used in financial
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`1 Emphases herein are added unless otherwise indicated.
`2
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`services are mentioned in the patent, regardless of what the patent claims. If that
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`were true, a claim reciting simply “a ball-point pen” could suffice for CBM
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`standing—so long as the patent specification lauded the use of such pens for
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`bookkeeping, and banks using them were sued for infringement. Such an
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`interpretation is not only inconsistent with other Office and court 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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`conventional “business methods”—like the Patent herein. ID 17; POPR 39-43.
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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 finds that the [P]atent meets the
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`financial product or service requirement “as evidenced by
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`the financial
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`embodiments disclosed in the specification.” ID 12. It then quotes a series of
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`statements from the written description, which it says “show[] that the apparatus
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`recited in independent claim 1 encompasses an apparatus for managing financial
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`products or delivering services,” and that “embodiments involving secure financial
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`transactions, including payments and deposits, are a central focus of the
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`Specification.” ID 13. During this analysis, the Decision does not even quote the
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`claims, let alone find any financial limitations therein. Id. But see POPR 6-11, 19.
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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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 ‘first
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`data object’ and ‘second data object’ of independent claim 1—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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`[t]he cited portions of the specification, outlined above, make clear
`that the “first data object” and “second data object” recited in claim 1
`is intended to be used for secure financial transactions. Using these
`two data objects, the claimed apparatus stores and adjusts the value of
`a cash equivalent or monetary value. A claimed system that transfers
`a cash equivalent or monetary value manages a financial product and
`delivers a financial service.
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`Id. The authorities cited by the Board for this proposition, ID 13-14, found CBM
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`standing for patents with expressly financial claim limitations. So is the Board
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`construing the “data object” terms of the claims to have implicit monetary
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`limitations? No. The Board affirmatively insists that it is not engaging in any
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`express claim construction. Id. at 10. Indeed, had the Board done so, it would
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`have had to address Patent Owner’s arguments why such constructions would be
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`erroneous. POPR 19-22, 26-31. But the Board did not address those arguments.
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`Patent Owner could agree with the Board’s last sentence quoted above if the
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`claims contained limitations limiting the invention to being “used for secure
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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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 patent that “claims [an invention] for . . . operations used in the practice,
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`administration, or management of a financial products or service,” as § 18(d)(1)
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`requires. A “claimed system” can be said to “transfer” something only if the
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`claims require it. Otherwise, that is an unclaimed feature, as explained below.
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`B.
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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.
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`The Institution Decision recognizes that it does not identify any financial
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`limitations in the claims. ID 14. It nevertheless 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
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`requires only that a claim be “used in the practice, administration, or
`management” of such a product or service.
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`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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`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 omitted) (quoting Sens. Schumer and Leahy).
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`This interpretation of AIA § 18(d)(1) is unreasonably broad. As noted
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`above, under such an interpretation a claim reciting “a ball-point pen” could suffice
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`to generate CBM standing. The Board has previously rejected such a broad
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`interpretation, noting that failing to require claim “language relating to a financial
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`product or service” “‘would mean that any patent claiming something that can be
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`used in connection with a financial service (e.g., an Ethernet cable, a generic
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`computer monitor, or even a ball point pen) would be eligible for covered business
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`method patent review, regardless of what the patent claims.’” Sony Corp. v.
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`Network-1 Techs., CBM2015-00078, No. 7 (PTAB Jul. 1, 2015), at 9, 12; POPR 8.
`6
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
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`C. Both Plain Meaning And Past Decisions Make Clear That What A
`Patent “Claims” Is Defined By The Patent’s Claim Limitations.
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`Sony is hardly the first decision to interpret the requirement that a patent
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`“claims” a particular invention to require that the patent have claim limitations
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`defining that invention. On the contrary, the Decision’s contrary interpretation
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`flies in the face of many earlier Board decisions, POPR 7-8, 10, 13-15, 17, 25-28,
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`34-36, and courts’ settled interpretations of this language in the patent context.
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`First, in addition to contradicting earlier Board interpretations of AIA § 18,
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`the Decision bears no resemblance to Office interpretations of other AIA
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`provisions. For example, AIA § 14(a) provides 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.” To determine whether a patent claims such
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`a strategy, the Office examines, not whether the claims encompass or are intended
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`to encompass strategies “for reducing, avoiding or deferring a tax liability”, but
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`whether the claim’s limitations “require” such actions. USPTO Guidance, “Tax
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`Strategies Training Examples,” uspto.gov (last visited Oct. 6, 2015).
`
`The Decision also contradicts the well-settled plain meaning of “claims” in
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`patent laws. “The term ‘claims’ has been used in patent legislation since the Patent
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`Act of 1836 to define the invention that an applicant believes is patentable.”
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`Hoechst-Roussel Pharms., Inc. v. Lehman, 109 F.3d 756, 758 (Fed. Cir. 1997). In
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`Hoechst, the Court addressed 35 U.S.C. § 156(a), which provides that “a patent
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`which claims a product” that “has been subject to a regulatory review period before
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`its commercial marketing or use” is entitled to a term extension. The losing party
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`argued that when § 156(a) said “claims,” Congress intended to include any patent
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`with a claim that encompasses such a product. Id. at 759. Instead, the Court
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`agreed with the Office’s position that “the settled ordinary meaning of the term
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`‘claims’” instead requires that the claims’ limitations define such a product. Id. at
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`758-60. Yet here, the Decision takes exactly the opposite position, and argues that
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`the claims’ limitations are not the test for what a CBM patent “claims.” ID 14.
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`This “plain meaning of ‘claims’” is ubiquitously confirmed throughout the
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`Federal Circuit’s jurisprudence, which insists that “the features claimed in the
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`patent” are those features “called for in the claims.” Hughes Tool Co. v. Dresser
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`Indus., 816 F.2d 1549, 1556 (Fed. Cir. 1987) (5-judge panel); see, e.g., Transocean
`
`Offshore Deepwater Drilling, Inc. v. Maersk Drilling U.S., Inc., 699 F.3d 1340,
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`1350 (Fed. Cir. 2012) relying on dichotomy between invention’s “features claimed
`
`in the patent,” which are reflected in claim limitations, and “unclaimed features,”
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`which are not), cert. dismissed, 134 S. Ct. 2333 (2013); Iron Grip Barbell Co. v.
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`USA Sports, Inc., 392 F.3d 1317, 1324 (Fed. Cir. 2004) (distinguishing between
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`“claimed” invention set forth in claim limitations and “described” invention merely
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`
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`8
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`disclosed in specification); Sjolund v. Musland, 847 F.2d 1573, 1582 (Fed. Cir.
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`1988) (distinguishing emphatically between “claimed invention” “define[d]” by
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`claim limitations, and “a feature not claimed” because it is not recited in claims)
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`(emphasis in original). And the Office has routinely agreed, recognizing that “the
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`claimed invention” is “the invention defined in the . . . claims” by “recited”
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`features. Ex parte Remark, 15 U.S.P.Q. 2d 1498, 1504 (BPAI Jan. 25, 1990).
`
`It is equally well established that what was “intended” is irrelevant to what is
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`“claimed,” except as it affects the claims’ limitations. See, e.g., Markman v.
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`Westview Instruments, Inc., 52 F.3d 967, 986 (Fed. Cir. 1995) (en banc); Arlington
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`Indus. v. Bridgeport Fittings, Inc., 632 F.3d 1246, 1255-56 (Fed. Cir. 2011).
`
`As for the legislative history, the Federal Circuit has emphasized that
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`“[g]iven the existence of a plain meaning” of the statutory term “claims” that looks
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`to the claim limitations, any departure from that plain meaning to broaden its
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`scope “must provide an extraordinary showing of contrary intentions” by
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`Congress. Hoechst, 109 F.3d at 760 (emphasis in original). The Board merely
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`quotes generalized statements of individual Senators, which do not even mention
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`the meaning of “claims.” And these must be weighed in balance with other
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`legislative assurances—including statements by the same Senators—that the scope
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`of the CBM statute was narrow. E.g., 157 Cong. Rec. S1053, 1053 (Mar. 1, 2011)
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`(Statement of Sen. Schumer) (“In response to concerns that earlier versions of the
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`[CBM] amendment were too broad, we have modified it so it is narrowly targeted.
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`We want to make sure to capture the business method patents which are at the
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`heart of the problem and avoid any collateral circumstances.”); 157 Cong. Rec.
`
`H4421 (June 22, 2011) (Statement of Rep. Smith) (CBM statute is “a pilot program
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`to review a limited group of business method patents”). Also, 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).
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`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
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`financial limitations. “[T]he construction of the claim is independent of the
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`device charged with infringement,” Pall Corp. v. Hemasure, Inc., 181 F.3d 1305,
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`1308 (Fed. Cir. 1999), and the Board “may not use the accused product or process
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`as a form of extrinsic evidence to supply limitations for patent claim language.”
`
`Wilson Sporting Goods Co. v. Hillerich & Bradsby Co., 442 F.3d 1322, 1331 (Fed.
`
`
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`10
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` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
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`Cir. 2006). Moreover, once more the Decision is inconsistent with other Board
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`decisions, which reject the argument that assertion of generally-applicable claims
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`against financial operations can transform a patent into a CBMP. POPR 23-24.
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`In sum, a reasonable interpretation of AIA § 18(d)(1) would require the
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`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. Litigation activity
`
`should not affect CBM standing except as it affects how the claims are construed.
`
`D. The Board Improperly Rejected The “Technological Invention”
`Exception To Institution Based On Extrinsic Trial Evidence.
`
`The Institution Decision also 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 16-19. The Decision holds that “on
`
`the record before [it],” Petitioners’ position is supported—relying on “testimony
`
`from Peter Alexander, Ph.D.,” Petitioner’s expert declarant. ID 17, 19.
`
`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 41, 43-44.
`
`
`
`11
`
`
`
`

`
` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
`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 19. This fundamentally
`
`misapprehends that 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 any 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
`
`not apply, the Decision relied repeatedly on the expert testimony submitted with
`
`the Petition. ID 16, 17. Such 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
`
`
`
`12
`
`
`
`

`
` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
`
`that is not subject to cross-examination.” Phillips v. AWH Corp., 415 F.3d 1303,
`
`1318 (Fed. Cir. 2005) (en banc). That was exactly the situation with 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). Therefore, it would be fundamentally unfair to rely upon Dr.
`
`Alexander’s unrebuttable hearsay to reject the “technological” exception to
`
`institution. POPR 32-33, 51. Yet the Board did exactly that. ID 16-17.
`
`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 fairer process suggested
`
`by 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”).
`
`
`
`13
`
`
`
`

`
` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
`
`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 40-58. The Board should grant
`
`rehearing and find the “technological” exception was not shown to be inapplicable.
`
`II.
`
` THE BOARD IS DIVIDED ON THE INTERPRETATION OF § 18
`
`The Decision’s broad interpretation of the CBM standing statute guts both
`
`the “claim[ing]” requirement and the “technological” exception. It is not of long
`
`standing. It decides novel legal questions at an intermediate agency level without
`
`relying on specialized Office expertise. It contravenes Congress’s limiting intent.
`
`And it ignores and contradicts the prior interpretations of this provision, other
`
`provisions of the AIA, and other Congressional enactments using the same
`
`language. Rehearing should be granted to revisit AIA § 18(d)(1)’s interpretation.
`
`An expanded panel on rehearing is respectfully suggested. SOP 1 § III-C.
`
`No settled interpretation of § 18 has yet emerged, and on this question “a
`
`substantial difference of opinion among judges exists” on the Board. PTAB
`
`Standard Operating Procedure No. 1 (rev. 14) § III-A-2. POPR 6-8, 13-15, 21-24.
`
`“A request for rehearing is an opportunity to address whether a panel
`
`misapprehended or overlooked a matter in rendering its opinion, which may
`
`
`
`14
`
`
`
`

`
` Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003USCBM
`
`
`include identification of conflicting Board or court decisions[.]” USPTO,
`
`Amendments; Proposed Rules, 80 Fed. Reg. 50,719, 50,740 (Aug. 20, 2015).
`
`The scope of statutory standing under § 18 is a vitally important question
`
`going to “the fundamental limitation of the Board’s . . . ultimate authority to
`
`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.
`
`Sep. 30, 2015) (citations omitted). This Office’s reviewing Court has addressed
`
`the CBM standing statute in only one case, which shed little light on its scope
`
`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). Because the Decision in this case so
`
`clearly turns on how broadly AIA § 18 should be interpreted, it is an appropriate
`
`case for the Office to reconcile its past decisions on the subject of CBM standing,
`
`and set forth a reasonable, consistent, and supported interpretation of Section 18.
`
`Rehearing should be granted, and review denied for lack of CBM standing.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Respectfully submitted,
`
`______/Kenneth J. Weatherwax/_______
`Kenneth J. Weatherwax, Reg. No. 54,528
` Lowenstein & Weatherwax LLP
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Date: October 21, 2015
`
`
`
`15
`
`
`
`

`
`Case CBM2015-00102
`Patent 6,237,095
`Attorney Docket No. 150326-003 USCBM
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that the following documents were served,
`
`by electronic mail on October 21, 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:
`
`William F. Long
`blong@mckennalong.com
`
`
`
`
`
`Respectfully submitted,
`
`____/ Kenneth J. Weatherwax /______
`
`Kenneth J. Weatherwax
`Registration No. 54,528
`Attorney for Patent Owner
`
`Date: October 21, 2015

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