Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 8
`Entered: November 16, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00126
`Patent 8,118,221 B2
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, and
`JEREMY M. PLENZLER, Administrative Patent Judges.
`
`BISK, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`Tel: 571-272-7822
`
`Paper 8
`Entered: November 16, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00126
`Patent 8,118,221 B2
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, and
`JEREMY M. PLENZLER, Administrative Patent Judges.
`
`BISK, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`INTRODUCTION
`
`A. Background
`Petitioner, Google, Inc., filed a Petition to institute covered business
`method patent review of claim 3 (the “challenged claim”) of U.S. Patent No.
`8,118,221 B2 (Ex. 1001, “the ’221 patent”) pursuant to § 18 of the Leahy-
`Smith America Invents Act (“AIA”). Paper 31 (“Pet.”). Smartflash LLC
`(“Patent Owner”) filed a Preliminary Response. Paper 7 (“Prelim. Resp.”).
`We have jurisdiction under 35 U.S.C. § 324(a), which provides that a
`covered business patent review may not be instituted “unless . . . it is more
`likely than not that at least 1 of the claims challenged in the petition is
`unpatentable.”
`After considering the Petition and Preliminary Response, we
`determine that the ’221 patent is a covered business method patent and that
`Petitioner has demonstrated that it is more likely than not that the challenged
`claim is unpatentable. Therefore, we institute a covered business method
`patent review of claim 3.
`B. Asserted Grounds
`Petitioner contends that the challenged claim is unpatentable under 35
`U.S.C. § 101. Pet. 1. Petitioner provides a Declaration from Dr. Justin
`Douglas Tygar in support of its petition. Ex. 1002.
`C. Related Matters
`The ’221 patent is the subject of several co-pending district court
`cases in the Eastern District of Texas. Pet. 9–10; Paper 6, 4–5. The ’221
`
`
`1 Petitioner filed two versions of the Petition: Paper 2, which is sealed and
`accessible to the parties and Board only, and Paper 3, which is a public
`version of the Petition containing a small portion of redacted text. For
`purposes of this Decision, we refer only to the public version of the Petition.
`
`2
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`patent has also been challenged in several other petitions for covered
`business method patent review: CBM2014-00102; CBM2014-00103;
`CBM2014-00194; CBM2014-00199; CBM2015-00015; CBM2015-00117;
`and CBM2015-00130.
`Patents in the family of the ’221 patent are currently the subject of
`many other proceedings at the Office. See Paper 6, 2–4.
`D. The ’221 Patent
`The ’221 patent relates to “a portable data carrier for storing and
`paying for data and to computer systems for providing access to data to be
`stored,” and the “corresponding methods and computer programs.” Ex.
`1001, 1:21–25. Owners of proprietary data, especially audio recordings,
`have an urgent need to address the prevalence of “data pirates” who make
`proprietary data available over the Internet without authorization. Id. at
`1:29–56. The ’221 patent describes providing portable data storage together
`with a means for conditioning access to that data upon validated payment.
`Id. at 1:59–2:11. This combination allows data owners to make their data
`available over the Internet with less fear of data piracy. Id. at 2:11–15.
`As described, the portable data storage device is connected to a
`terminal for Internet access. Id. at 1:59–67. The terminal reads payment
`information, validates that information, and downloads data into the portable
`storage device from the data supplier. Id. The data on the portable storage
`device can be retrieved and output from a mobile device. Id. at 2:1–4. The
`’221 patent makes clear that the actual implementation of these components
`is not critical and may be implemented in many ways. See, e.g., id. at
`25:41–44 (“The skilled person will understand that many variants to the
`
`3
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`system are possible and the invention is not limited to the described
`embodiments . . . .”).
`E. Challenged Claim
`Petitioner challenges claim 3 of the ’221 patent. Claim 3 depends
`from claim 1, which is not explicitly challenged in this proceeding. Claims
`1 and 3 recite the following:
`1.
`A data access terminal for retrieving data from a data
`supplier and providing the retrieved data to a data carrier, the
`terminal comprising:
`a first interface for communicating with the data supplier;
`a data carrier interface for interfacing with the data
`carrier;
`a program store storing code implementable by a
`processor; and
`a processor, coupled to the first interface, to the data
`carrier interface and to the program store for implementing the
`stored code, the code comprising:
`code to read payment data from the data carrier and to
`forward the payment data to a payment validation system;
`code to receive payment validation data from the
`payment validation system;
`code responsive to the payment validation data to retrieve
`data from the data supplier and to write the retrieved data into
`the data carrier.
`Ex. 1001, 25:45–61.
`
`A data access terminal as claimed in claim 1, further
`3.
`comprising code to retrieve from the data supplier and output to
`a user-stored data identifier data and associated value data and
`use rule data for a data item available from the data supplier.
`Id. at 25:66–26:3.
`
`4
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`ANALYSIS
`
`A. Claim Construction
`While Petitioner presents constructions for several claim terms (Pet.
`11–20), Patent Owner does not identify any term for construction. We
`determine that no terms require express construction for purposes of this
`Decision.
`B. Covered Business Method Patent
`Section 18 of the AIA provides for the creation of a transitional
`program for reviewing covered business method patents. A “[c]overed
`business method patent” is a patent that “claims a method or corresponding
`apparatus for performing data processing or other operations used in the
`practice, administration, or management of a financial product or service,
`except that the term does not include patents for technological inventions.”
`AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). A patent need have only one
`claim directed to a covered business method to be eligible for review. See
`Transitional Program for Covered Business Method Patents—Definitions of
`Covered Business Method Patent and Technological Invention; Final Rule,
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8).
`Petitioner refers to several other covered business method reviews in
`which we have found that claim 32 qualifies the ’221 patent as a CBM
`patent and asserts that those finding are sufficient to establish the ’221 patent
`for the purposes of this proceeding. Pet. 4. In addition, Petitioner asserts
`that “challenged claim 3 further supports the same conclusion.” Id. For the
`following reasons, we agree.
`1. Financial Product or Service
`Petitioner asserts that claim 3 “clearly claims activities that are
`‘financial in nature, incidental to a financial activity or complementary to a
`
`5
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`financial activity.’” Pet. 7. Based on this record, we agree with Petitioner
`that the subject matter recited by claim 3 is directed to activities that are
`financial in nature, namely data access conditioned on payment validation.
`Claim 3 (through its dependence from claim 1) requires “code to read
`payment data from the data carrier and to forward the payment data to a
`payment validation system.” We are persuaded that payment validation is a
`financial activity, and conditioning data access based on payment validation
`amounts to a financial service. This is consistent with the specification of
`the ’221 patent, which confirms claim 3’s connection to financial activities
`by stating that the invention “relates to a portable data carrier for storing and
`paying for data.” Ex. 1001, 1:21–23. The specification also states
`repeatedly that the disclosed invention involves managing access to data
`based on payment validation. See, e.g., id. at 1:59–68, 6:60–64, 20:50–54.
`Patent Owner disagrees that claim 3 satisfies the financial in nature
`requirement of AIA § 18(d)(1), arguing that that section should be
`interpreted narrowly to cover only technology used specifically in the
`financial or banking industry. Prelim. Resp. 30–35. Patent Owner cites to
`various portions of the legislative history as support for its proposed
`interpretation. Id.
`The Federal Circuit has expressly determined, however, that “the
`definition of ‘covered business method patent’ is not limited to products and
`services of only the financial industry, or to patents owned by or directly
`affecting the activities of financial institutions, such as banks and brokerage
`houses.” Versata Dev. Grp., Inc. v. SAP America, Inc., 793 F.3d 1306, 1325
`(Fed. Cir. 2015). Rather, it “covers a wide range of finance-related
`activities.” Id. Further, contrary to Patent Owner’s view of the legislative
`
`6
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`history, the legislative history overall indicates that the phrase “financial
`product or service” is not limited to the products or services of the “financial
`services industry,” and is to be interpreted broadly. CBM Rules, 77 Fed.
`Reg. at 48,735–36. For example, the “legislative history explains that the
`definition of covered business method patent was drafted to encompass
`patents ‘claiming activities that are financial in nature, incidental to a
`financial activity or complementary to a financial activity.’” Id. (quoting
`157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen.
`Schumer)).
`For the reasons stated above, and based on the particular facts of this
`proceeding, we conclude that the ’221 patent includes at least one claim that
`meets the financial in nature requirement of § 18(d)(1) of the AIA.
`2. Exclusion for Technological Inventions
`Petitioner asserts that claim 3 does not fall within § 18(d)(1)’s
`exclusion for “technological inventions.” Pet. 7–9. In particular, Petitioner
`argues that claim 3 does not recite a technological feature that is novel and
`unobvious, or solve a technical problem using a technical solution. Id.
`Patent Owner disagrees and argues that claim 3, as a whole, recites at least
`one technological feature that is novel and nonobvious over the prior art.
`Prelim. Resp. 35–36.
`We are persuaded that claim 3 as a whole does not recite a
`technological feature that is novel and unobvious over the prior art. Claim 3,
`through its dependence on claim 1, does recite a “payment validation
`system.” The specification, however, discloses that the required payment
`validation system may be one that is already in use or otherwise
`commercially available. For example, “[t]he payment validation system
`
`7
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`may be part of the data supplier’s computer systems or it may be a separate
`e-payment system.” Ex. 1001, 8:63–65; see id. at 13:35–47. Claim 3 also
`recites, through its dependence on claim 1, a “data carrier.” This
`component, however, is a generic hardware device known in the prior art.
`The specification discloses, for instance, that a data carrier may be a
`“standard smart card.” Id. at 11:28–29.
`In addition, the ’221 patent makes clear that the asserted novelty of
`the invention is not in any specific improvement of software or hardware,
`but in the method of controlling access to data. For example, the ’221 patent
`states that “there is an urgent need to find a way to address the problem of
`data piracy” (id. at 1:52–55), while acknowledging that the “physical
`embodiment of the system is not critical and a skilled person will understand
`that the terminals, data processing systems and the like can all take a variety
`of forms” (id. at 12:29–32). Claim 3 recites merely known technological
`features, which indicates that it is not a claim for a technological invention.
`See Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,764 (Aug.
`14, 2012).
`Patent Owner also argues that claim 3 falls within § 18(d)(1)’s
`exclusion for “technological inventions” because it is directed toward
`solving the technological problem of “(1) a data carrier from which payment
`data is read and to which retrieved data from a data supplier [is] written; and
`(2) the code for reading the payment data from the data carrier and writing
`the retrieved data into the data carrier.” Prelim. Resp. 35–36. We are not
`persuaded by this argument because, as Petitioner argues, the problem being
`solved by claim 3 is a business problem—data piracy. Pet. 9. For example,
`the specification states that “[b]inding the data access and payment together
`
`8
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`allows the legitimate owners of the data to make the data available
`themselves over the internet without fear of loss of revenue, thus
`undermining the position of data pirates.” Ex. 1001, 2:11–15. Therefore,
`based on the particular facts of this proceeding, we conclude that claim 3
`does not recite a technological invention.
`3. Conclusion
`In view of the foregoing, we conclude that the ’221 patent is a covered
`business method patent under AIA § 18(d)(1) and is eligible for review
`under the transitional covered business method patent program.
`C. Section 101 Patent-Eligible Subject Matter
`Petitioner challenges claim 3 as directed to patent-ineligible subject
`matter under 35 U.S.C. § 101. Pet. 18–33. Petitioner asserts that claim 3 is
`directed to an abstract idea without additional elements that transform it into
`a patent-eligible application of that idea (id. at 18–31), triggers preemption
`concerns (id. at 31–32), and fails the machine-or-transformation test (id. at
`32–33).
`Patent Owner disagrees, arguing that the limitations of claim 3, taken
`as a combination, “recite[s] specific ways of using distinct memories, data
`types, and use rules that amount[s] to significantly more than the underlying
`abstract idea” (Prelim. Resp. 14–15 (quoting Ex. 2049, 19)), and does not
`result in inappropriate preemption (id. at 15–23). Patent Owner also asserts
`that (1) the Office is estopped from revisiting the issue of § 101, which was
`inherently reviewed during examination (id. at 25); (2) invalidating patent
`claims via covered business method patent review is unconstitutional (id. at
`25–27); and (3) section 101 is not a ground that may be raised in a covered
`business method patent review (id. at 27–29).
`
`9
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`1. Abstract Idea
`Under 35 U.S.C. § 101, we must first identify whether an invention
`fits within one of the four statutorily provided categories of patent-
`eligibility: “processes, machines, manufactures, and compositions of
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–714 (Fed. Cir.
`2014). Here, claim 3 recites a “machine,”—a “data access terminal”—under
`§ 101. Section 101, however, “contains an important implicit exception to
`subject matter eligibility: Laws of nature, natural phenomena, and abstract
`ideas are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct.
`2347, 2354 (citing Assoc. for Molecular Pathology v. Myriad Genetics, Inc.,
`133 S.Ct. 2107, 2116 (2013) (internal quotation marks and brackets
`omitted)). In Alice, the Supreme Court reiterated the framework set forth
`previously in Mayo Collaborative Services v. Prometheus Laboratories,
`Inc., 132 S.Ct. 1289, 1293 (2012) “for distinguishing patents that claim laws
`of nature, natural phenomena, and abstract ideas from those that claim
`patent-eligible applications of these concepts.” Alice, 134 S.Ct. at 2355.
`The first step in the analysis is to “determine whether the claims at issue are
`directed to one of those patent-ineligible concepts.” Id.
`Petitioner argues that claim 3 is directed to the abstract idea of
`“controlling access to something based on validation that payment has been
`made.” Pet. 21. Patent Owner does not address expressly this step of the
`analysis. Prelim. Resp. 9–23.
` We are persuaded that claim 3 is more likely than not drawn to a
`patent-ineligible abstract idea. As discussed above, the ’221 patent
`discusses addressing recording industry concerns of data pirates offering
`unauthorized access to widely available compressed audio recordings. Ex.
`
`10
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`1001, 1:20–55. The ’221 patent proposes to solve this problem by
`restricting access to data on a portable data carrier based upon payment
`validation. Id. at 1:59–2:4. The ’221 patent makes clear that the heart of the
`claimed subject matter is restricting access to stored data based on supplier-
`defined access rules and validation of payment. Id. at 1:59–2:15. We are,
`thus, persuaded, on this record, that the claimed “data access terminal,” is
`directed to an abstract idea. See Alice, 134 S.Ct. at 2356 (holding that the
`concept of intermediated settlement at issue in Alice was an abstract idea);
`Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336,
`1344 (Fed. Cir. 2013) (holding the abstract idea at the heart of a system
`claim to be “generating tasks [based on] rules . . . to be completed upon the
`occurrence of an event”).
`
`2. Inventive Concept
`Turning to the second step in the § 101 analysis, we consider the
`elements of the claims “individually and ‘as an ordered combination’” to
`determine whether there are additional elements that “‘transform the nature
`of the claim’ into a patent-eligible application.” Mayo, 132 S.Ct. at 1297.
`On this record, we are not persuaded that claim 3 adds an inventive concept
`sufficient to ensure that the patent in practice amounts to significantly more
`than a patent on the abstract idea itself. Alice, 134 S.Ct. at 2355; see also
`Accenture Global Servs., 728 F.3d at 1345 (holding claims directed to the
`abstract idea of “generating tasks [based on] rules . . . to be completed upon
`the occurrence of an event” to be unpatentable even when applied in a
`computer environment and within the insurance industry).
`Patent Owner argues that claim 3 is patentable because it “recite[s]
`specific ways of using distinct memories, data types, and use rules that
`
`11
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`amount to significantly more than the underlying abstract idea.” Prelim.
`Resp. 14–15 (quoting Ex. 2049, 19:1–4) (emphasis added by Patent Owner).
`Patent Owner, however, does not explain how this statement applies to claim
`3 of the ’221 patent. For example, Patent Owner does not elaborate as to
`how these claim limitations amount to significantly more than the
`underlying abstract idea.
`Claim 3 generically lists several data types including, “retrieved data,”
`“code,” “payment data,” “payment validation data,” and “use rule data.”
`The claims simply recite these data types with no description of the
`underlying programming. Patent Owner does not point to any inventive
`concept related to the way these data types are constructed or used. The
`recitation of these generic computer software data constructs, being used
`simply to store data in the conventional manner, when considered in light of
`the accompanying description in the specification, is insufficient to confer
`specificity. See Content Extraction and Transmission LLC v. Wells Fargo
`Bank, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (“The concept of data
`collection, recognition, and storage is undisputedly well-known. Indeed,
`humans have always performed these functions.”). Moreover, on this
`record, Smartflash has not shown sufficiently that any of the other
`potentially technical additions to the claims performs a function that is
`anything other than “purely conventional.” See Alice, 134 S.Ct. at 2359.
`The linkage of existing hardware devices to existing payment validation
`processes and supplier-defined access rules, as claimed here, appear to be
`“‘well-understood, routine, conventional activit[ies]’ previously known to
`the industry.” Id.; Mayo, 132 S.Ct. at 1294. Based on the present record, we
`determine that none of these limitations, viewed “both individually and ‘as
`
`12
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`an ordered combination,’” transform the nature of the claims into patent-
`eligible subject matter. See Alice, 134 S.Ct. at 2355 (quoting Mayo, 132
`S.Ct. at 1297, 1298).
`Patent Owner also asserts that claim 3 is like the claims in DDR
`Holdings, which the Federal Circuit held were directed to statutory subject
`matter because “‘the claimed solution is necessarily rooted in computer
`technology in order to overcome a problem specifically arising in the realm
`of computer networks.’” Prelim. Resp. 10 (quoting DDR Holdings, LLC v.
`Hotels.Com, LP., 773 F.3d 1245, 1257 (Fed. Cir. 2014)). According to
`Patent Owner, claim 3 is “rooted in computer technology in order to
`overcome a problem specifically arising in the realm of computer
`networks—that of digital data piracy,” “a challenge particular to the
`Internet.” Id. at 11.
`We are not persuaded that claim 3 is like the claims at issue in DDR
`Holdings. In DDR Holdings, the Federal Circuit found that the challenged
`claims were directed to patentable subject matter because they “specif[ied]
`how interactions with the Internet are manipulated to yield a desired result—
`a result that overrides the routine and conventional” aspects of the
`technology. 773 F.3d at 1258. On this record, we are not persuaded that the
`claims specify interactions that depart from the routine use of the recited
`devices. Instead, the claims appear to apply conventional computer
`processes to restrict access to data based on payment.
`The differences between claim 3 and the claims at issue in DDR
`Holdings are made clear by Patent Owner in its table mapping claim 1 (from
`which claim 3 depends) of the ’221 patent to claim 19 of the patent at issue
`in DDR Holdings. Prelim. Resp. 12–14. For example, claim 1 of the ’221
`
`13
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`patent recites “code responsive to the payment validation data from the data
`supplier and to write the retrieved data into the carrier.” There is no
`language in this, or any other, limitation of claim 3 or in the Specification of
`the ’221 patent that demonstrates that these generic computer components
`function in an unconventional manner or employ sufficiently specific
`programming. Instead, through the bare recitation of “code responsive to”
`and “code to write,” this limitation, like the other limitations of claim 3, is
`“specified at a high level of generality,” which the Federal Circuit has found
`to be “insufficient to supply an inventive concept.” Ultramercial, 772 F.3d
`at 716.
`The limitation of claim 19 in DDR Holdings, that Patent Owner
`contends corresponds to the “code responsive to” limitation identified above
`from claim 1 of the ’221 patent, recites “using the data retrieved,
`automatically generate and transmit to the web browser a second web page
`that displays: (A) information associated with the commerce object
`associated with the link that has been activated, and (B) the plurality of
`visually perceptible elements visually corresponding to the source page.”
`Prelim. Resp. 14. It was this limitation from claim 19 in DDR Holdings,
`according to the Federal Circuit, that specifies “how interactions with the
`Internet are manipulated to yield a desired result—a result that overrides the
`routine and conventional sequence of events ordinarily triggered by the click
`of a hyperlink.” DDR Holdings, 773 F.3d at 1258. Importantly, the Federal
`Circuit identified this limitation as differentiating the DDR Holdings claims
`from those held to be unpatentable in Ultramercial, which “broadly and
`generically claim ‘use of the Internet’ to perform an abstract business
`practice (with insignificant added activity).” Id.
`
`14
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`We are persuaded, at this point in the proceeding, that claim 3 is
`closer to the claims at issue in Ultramercial than to those at issue in DDR
`Holdings. The claims at issue in Ultramercial, like claim 3, were also
`directed to a method for distributing media products. Similar to restricting
`data based on payment, as in the challenged claims, the Ultramercial claims
`restricted access based on viewing an advertisement. Ultramercial, 772 F.3d
`at 712.
`Thus, on this record, we are persuaded that Petitioner has shown that
`it is more likely than not that claim 3 of the ’221 patent does not add an
`inventive concept sufficient to ensure that the patent in practice amounts to
`significantly more than a patent on the abstract idea itself. Alice, 134 S.Ct.
`at 2355; see also Accenture, 728 F.3d at 1345 (holding claims directed to the
`abstract idea of “generating tasks [based on] rules . . . to be completed upon
`the occurrence of an event” to be unpatentable even when applied in a
`computer environment and within the insurance industry).
`
`3. Preemption
`Petitioner argues that claim 3 “firmly triggers preemption concerns”
`because it “discloses only an ultimate objective: using a generic computer to
`implement the steps inherent in the abstract idea of providing access to
`content based on payment.” Pet. 31–32. Patent Owner responds that claim
`3 does not result in inappropriate preemption. Prelim. Resp. 15–23.
`According to Patent Owner, the claims of the ’221 patent recite “specific
`ways of managing access to digital content data based on payment validation
`through storage and retrieval of use status data and use rules in distinct
`memory types and evaluating the use data according to use rules.” Id. at 17
`(quoting Ex. 2049, 20). Patent Owner also asserts that the existence of a
`
`15
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`large number of non-infringing alternatives shows that the claims of the ’221
`patent do not raise preemption concerns because they do not “tie up or
`prevent others from using the abstract idea of controlling access based on
`payment.” Id. at 23. Thus, according to Patent Owner, claim 3 is directed to
`statutory subject matter. Id. at 15.
`Patent Owner’s preemption argument does not alter our § 101
`analysis. The Supreme Court has described the “pre-emption concern” as
`“undergird[ing] our § 101 jurisprudence.” Alice, 134 S.Ct. at 2358. The
`concern “is a relative one: how much future innovation is foreclosed relative
`to the contribution of the inventor.” Mayo, 132 S.Ct. at 1303. “While
`preemption may signal patent ineligible subject matter, the absence of
`complete preemption does not demonstrate patent eligibility.” Ariosa
`Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
`Importantly, the preemption concern is addressed by the two part test
`considered above. After all, every patent “forecloses . . . future invention”
`to some extent, Mayo, 132 S.Ct. at 1292, and conversely, every claim
`limitation beyond those that recite the abstract idea limits the scope of the
`preemption. Ariosa, 788 F.3d at 1379 (“The Supreme Court has made clear
`that the principle of preemption is the basis for the judicial exception to
`patentability. For this reason, questions on preemption are inherent in and
`resolved by the § 101 analysis.”).
`The two part test elucidated in Alice and Mayo does not require us to
`anticipate the number, feasibility, or adequacy of non-infringing alternatives
`to gauge a patented invention’s preemptive effect in order to determine
`whether a claim is patent-eligible under § 101. The relevant precedents
`simply direct us to ask whether the claim involves one of the patent-
`
`16
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`ineligible categories, and if so, whether additional limitations contain an
`“inventive concept” that is “sufficient to ensure that the claim in practice
`amounts to ‘significantly more’ than a patent on an ineligible concept.”
`DDR Holdings, LLC, 773 F.3d at 1255. This is the basis for the rule that the
`unpatentability of abstract ideas “cannot be circumvented by attempting to
`limit the use of the formula to a particular technological environment,”
`despite the fact that doing so reduces the amount of innovation that would be
`preempted. Diamond v. Diehr, 450 U.S. 175, 191; see also Alice, 134 S.Ct.
`at 2358; Mayo, 132 S.Ct. at 1303; Bilski v. Kappos, 561 U.S. 593, 612
`(2010); Parker v. Flook, 437 U.S. 584, 593 (1978). The Federal Circuit
`spelled this out, stating that “[w]here a patent’s claims are deemed only to
`disclose patent ineligible subject matter under the Mayo framework, as they
`are in this case, preemption concerns are fully addressed and made moot.”
`Ariosa, 788 F.3d at 1379. Patent Owner argues that Ariosa does not apply
`here because the claims and facts are distinguishable. Prelim. Resp. 20–23.
`Although the facts and claims in this case certainly differ from those in
`Ariosa, we are not persuaded by Patent Owner’s arguments that the general
`principle described by the Federal Circuit in that case does not apply here.
`As described above, after applying this two-part test, we are
`persuaded that Petitioner has shown that it is more likely than not that claim
`3 of the ’221 patent is drawn to an abstract idea that does not add an
`inventive concept sufficient to ensure that the patent in practice amounts to
`significantly more than a patent on the abstract idea itself. The alleged
`existence of a large number of non-infringing, and, thus, non-preemptive
`alternatives does not alter this conclusion because the question of
`preemption is inherent in and resolved by this inquiry.
`
`17
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`4. Patent Owner’s Other Arguments
`Patent Owner asserts that (1) the Office is estopped from revisiting the
`issue of § 101, which was inherently reviewed during examination (id. at
`25); and (2) section 101 is not a ground that may be raised in a covered
`business method patent review (id. at 27–29). For the following reasons, we
`are not persuaded by these arguments.
`As an initial matter, Patent Owner does not provide any authority for
`its assertion that “[t]he question of whether the challenged claims are
`directed to statutory subject matter has already been adjudicated by the
`USPTO, and the USPTO is estopped from allowing the issues to be raised in
`the present proceeding.” Prelim. Resp. 25. As to Patent Owner’s second
`argument, Patent Owner concedes that the Federal Circuit, in Versata, found
`that “the PTAB acted within the scope of its authority delineated by
`Congress in permitting a § 101 challenge under AIA § 18.” Id. at 27 n.1
`(quoting Versata Dev. Grp., Inc. v. SAP America, Inc., 793 F.3d 1306, 1330
`(Fed. Cir. 2015). We conclude that our review of the issue of § 101 here is
`proper.
`Patent Owner also argues that invalidating patent claims via covered
`business method patent review “is a violation of the Separation of Powers
`and is unconstitutional” (id. at 25–27). We decline to consider Petitioner’s
`constitutional challenge as, generally, “administrative agencies do not have
`jurisdiction to decide the constitutionality of congressional enactments.” See
`Riggin v. Office of Senate Fair Employment Practices, 61 F.3d 1563, 1569
`(Fed. Cir. 1995); see also Harjo v. Pro-Football, Inc., 50 U.S.P.Q.2d 1705,
`1999 WL 375907, at *4 (TTAB Apr. 2, 1999) (“[T]he Board has no
`authority . . . to declare provisions of the Trademark Act unconstitutional.”);
`
`18
`
`
`
`CBM2015-00126
`Patent 8,118,221 B2
`
`Blackhorse v. Pro-Football, Inc., 111 U.S.P.Q.2d 1080, 2014 WL 2757516,
`at *1 n.1 (TTAB June 18, 2014); but see American Express Co. v. Lunenfeld,
`Case CBM2014-00050, slip. op. at 9–10 (PTAB May 22, 2015) (Paper 51)
`(“for the reasons articulated in Patlex, we conclude that covered business
`method patent reviews, like reexamination proceedings, comply with the
`Seventh Amendment”) .
`
`5. Conclusion
`Having considered the information provided in the Petition and the
`Preliminary Response, we are persuaded that Petitioner has demonstrated
`that it is more likely than not that claim 3 of the ’221 is unpatentable under
`35 U.S.C. § 101.
`
`ORDER
`
`For the reasons given, it is:
`ORDERED that a covered business method patent review is instituted
`on the ground that claim 3 is patent ineligible under 35 U.S.C. § 101; and
`FURTHER ORDERED that pursuant to 35 U.S.C. § 324(d) and
`37 C.F.R. § 42.4, notic
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
