Trials@uspto.gov
`571-272-7822
`
` Paper 8
`
`Entered: June 21, 2016
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GOOGLE INC. and APPLE INC.,
`Petitioners,
`
`v.
`
`CONTENTGUARD HOLDINGS, INC.,
`Patent Owner.
`____________
`
`Case CBM2015-000401
`Patent 7,774,280 B2
`____________
`
`
`Before MICHAEL R. ZECHER, BENJAMIN D. M. WOOD, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`ZECHER, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`Covered Business Method Patent Review
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`
`1 Case CBM2015-00160 has been joined with this proceeding.
`
`
`571-272-7822
`
` Paper 8
`
`Entered: June 21, 2016
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GOOGLE INC. and APPLE INC.,
`Petitioners,
`
`v.
`
`CONTENTGUARD HOLDINGS, INC.,
`Patent Owner.
`____________
`
`Case CBM2015-000401
`Patent 7,774,280 B2
`____________
`
`
`Before MICHAEL R. ZECHER, BENJAMIN D. M. WOOD, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`ZECHER, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`Covered Business Method Patent Review
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`
`1 Case CBM2015-00160 has been joined with this proceeding.
`
`
`
`CBM2015-00040
`Patent 7,774,280 B2
`
`I. BACKGROUND
`A. Introduction
`Google Inc. (“Google”) filed a Petition requesting a review under the
`transitional program for covered business method patents of claims 1, 5, 11,
`12, and 22 of U.S. Patent No. 7,774,280 B2 (“the ’280 patent,” Ex. 1001).
`Paper 1 (“Pet.”). ContentGuard Holdings, Inc. (“Patent Owner”) filed a
`Preliminary Response. Paper 8 (“Prelim. Resp.”). Taking into account the
`arguments presented in the Preliminary Response, we determined that the
`information presented in the Petition establishes that claims 1, 5, and 11 of
`the ’280 patent are more likely than not unpatentable under 35 U.S.C.
`§§ 102(b) and 103(a). We, however, determined that the information
`presented in the Petition did not establish that claims 12 and 22 of the ’280
`patent are more likely than not unpatentable. Pursuant to 35 U.S.C. § 324
`and § 18(a) of the Leahy-Smith America Invents Act, Pub. L. No. 112-29,
`125 Stat. 284, 329–31 (2011) (“AIA”),2 we instituted this covered business
`method patent review proceeding on June 24, 2015, only as to claims 1, 5,
`and 11 of the ’280 patent. Paper 9 (“Dec. on Inst.”).
`After instituting this proceeding, we considered a Petition filed by
`Apple Inc. (“Apple”) in Case CBM2015-00160 that challenges the same
`
`
`2 Section 18(a)(1) of the AIA provides that the transitional program for
`covered business method patents will be regarded as a post-grant review
`under chapter 32 of title 35 United States Code and will employ the
`standards and procedures of a post-grant review, subject to certain
`exceptions.
`
`
`2
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`CBM2015-00040
`Patent 7,774,280 B2
`claims of the ’280 patent at issue in this proceeding based on the same
`grounds of unpatentability. The Petition in Case CBM2015-00160 was
`accompanied by a Motion for Joinder that requests we join Apple as a party
`to this proceeding. Pursuant to § 324 and § 18(a) of the AIA, we instituted
`another covered business method patent review proceeding as to claims 1, 5,
`and 11 of the ’280 patent, and then granted Apple’s Motion for Joinder.
`Paper 14.
`During the course of trial, Patent Owner filed a Response to the
`Petition (Paper 15, “PO Resp.”), and a Motion to Amend (Paper 16, “Mot. to
`Amend”). Google and Apple (collectively, “Petitioners”) filed a Reply to
`the Patent Owner Response (Paper 21, “Pet. Reply”), and an Opposition to
`the Motion to Amend (Paper 22, “Opp. to Mot.”). Thereafter, Patent Owner
`filed a Reply to the Opposition to the Motion to Amend. Paper 25 (“Reply
`to Mot.”). Patent Owner also filed a Motion for Observation regarding
`certain cross-examination testimony of Petitioners’ rebuttal witness,
`Benjamin Goldberg, Ph.D. (Paper 28, “Obs.”), and Petitioners filed a
`Response (Paper 30, “Obs. Resp.”). An oral hearing was held on February
`24, 2016, and a transcript of the hearing is included in the record. Paper 33
`(“Tr.”).
`We have jurisdiction under 35 U.S.C. § 6(c). This decision is a Final
`Written Decision under 35 U.S.C. § 328(a) as to the patentability of claims
`1, 5, and 11 of the ’280 patent. For the reasons discussed below, we hold
`that Petitioners have demonstrated by a preponderance of the evidence that
`these claims are unpatentable under §§ 102(b) and 103(a). We grant Patent
`Owner’s Motion to Amend.
`
`3
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`Patent 7,774,280 B2
`
`B. Related Matters
`The parties indicate that the ’280 patent has been asserted in the
`
`following three district court cases: (1) ContentGuard Holdings, Inc. v.
`Google Inc., No. 2:14-cv-00061-JRG-RSP (E.D. Tex.); (2) Google Inc. v.
`ContentGuard Holdings, Inc., No. 3:14-cv-00498-WHA (N.D. Cal.); and
`(3) ContentGuard Holdings, Inc. v. Amazon.com Inc., No. 2:13-cv-01112-
`JRG (E.D. Tex.). Pet. 6–7;3 Paper 7, 1–2. In addition to this Petition,
`Google filed another Petition in Case CBM2015-00043 requesting a review
`under the transitional program for covered business method patents of a
`certain subset of claims in U.S. Patent No. 8,001,053 B2 (“the ’053 patent)
`owned by Patent Owner. Pet. 7; Paper 7, 1. In that related case, another
`panel of the Board denied the Petition as to all challenged claims of the ’053
`patent. Google Inc. v. ContentGuard Holdings, Inc., Case CBM2015-00043
`(PTAB June 26, 2015) (Paper 9).
`
`C. Standing
`Section 18 of the AIA governs the transitional program for covered
`
`business method patent reviews. Section 18(a)(1)(B) of the AIA limits such
`reviews to persons, or their privies, that have been sued or charged with
`infringement of a covered business method patent. Petitioners assert that,
`
`
`3 The Petition and supporting evidence filed by Google in Case CBM2015-
`00040 are essentially the same as the Petition and supporting evidence filed
`by Apple in Case CBM2015-00160. For clarity and ease of reference, all
`references to the Petition and supporting evidence throughout this Final
`Written Decision are to the Petition and supporting evidence filed by Google
`in Case CBM2015-00040.
`
`4
`
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`CBM2015-00040
`Patent 7,774,280 B2
`because they have been sued for infringement of the ’280 patent, they have
`standing to file their respective Petitions. Pet. 8 (citing Ex. 1004). Based on
`the record developed during trial, we maintain that Petitioners satisfy the
`standing requirement. See Dec. on Inst. 3.
`D. The ’280 Patent
`The ’280 patent, titled “System and Method for Managing Transfer of
`Rights using Shared State Variables,” issued August 10, 2010, from U.S.
`Patent Application No. 10/956,121 (“the ’121 application”), filed on October
`4, 2004. Ex. 1001, at [54], [45], [21], [22]. The ’280 patent is a
`continuation-in-part of U.S. Patent Application No. 10/162,701 (“the ’701
`application”), filed on June 6, 2002. Id. at [63]. The ’280 patent also claims
`priority to numerous provisional applications, the earliest of which includes
`U.S. Provisional Application No. 60/331,624 (“the ’624 provisional
`application”), filed on November 20, 2001. Id. at [60].
`The ’280 patent generally relates to a method and system for
`managing the transfer of rights associated with digital works using shared
`state variables. Ex. 1001, 1:18–20. According to the ’280 patent, one of the
`most important issues impeding the widespread distribution of digital works
`is the current lack of ability to enforce the rights of content owners during
`the distribution and use of their digital works. Id. at 1:24–29. In particular,
`content owners do not have control over downstream parties unless they are
`privy to transactions with the downstream parties. Id. at 2:33–34. The
`concept of content owners simply granting rights to others that are a subset
`of the possessed rights is not adequate for multi-tier distribution models. Id.
`at 2:45–48.
`
`5
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`CBM2015-00040
`Patent 7,774,280 B2
`The ’280 patent purportedly addresses these problems by providing a
`method and system for transferring rights associated with items of content—
`presumably digital works—from a supplier to a consumer. Ex. 1001, 2:52–
`55. The consumer obtains a set of rights associated with the digital work,
`which includes meta-rights specifying rights that may be derived therefrom.
`Id. at 2:55–57. If the consumer is entitled to the rights derived from the
`meta-rights, the disclosed invention then derives at least one right from the
`meta-rights. Id. at 2:58–60. The rights that may be derived from the meta-
`rights include at least one state variable based on the set of rights, which, in
`turn, may be used to determine a state of the derived right. Id. at 2:62–64.
`E. Illustrative Claim
`Of the challenged claims remaining in this proceeding, only claim 1 is
`independent. Claim 1 is directed to a method for transferring rights
`associated with items from a rights supplier to a rights consumer. Claims 5
`and 11 directly depend from independent claim 1. Independent claim 1 is
`illustrative and is reproduced below:
`1.
`A computer-implemented method for transferring
`rights adapted to be associated with items from a rights supplier
`to a rights consumer, the method comprising:
`obtaining a set of rights associated with an item, the set
`of rights including a meta-right specifying a right that can be
`created when the meta-right is exercised, wherein the meta-
`right is provided in digital form and is enforceable by a
`repository;
`determining, by a repository, whether the rights
`consumer is entitled to the right specified by the meta-right; and
`exercising the meta-right to create the right specified by
`the meta-right if the rights consumer is entitled to the right
`specified by the meta-right, wherein the created right includes
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`CBM2015-00040
`Patent 7,774,280 B2
`at least one state variable based on the set of rights and used for
`determining a state of the created right.
`
`Ex. 1001, 15:7–22.
`
`F. Covered Business Method Patent
`Under § 18(a)(1)(E) of the AIA, we may institute a transitional review
`proceeding only for a patent that is a covered business method patent. A
`“covered 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 also 37 C.F.R. § 42.301 (defining
`“[c]overed business method patent” and “[t]echnological invention”). For
`purposes of determining whether a patent is eligible for a covered business
`method patent review, the focus is on the claims. See Transitional Program
`for Covered Business Method Patents—Definitions of Covered Business
`Method Patent and Technological Invention, 77 Fed. Reg. 48,734, 48,736
`(Aug. 14, 2012). A patent need have only one claim directed to a covered
`business method to be eligible for review. Id. (Response to Comment 8).
`1. Financial Product or Service
`In promulgating rules for covered business method reviews, the U.S.
`Patent and Trademark Office (“Office”) considered the legislative intent and
`history behind the AIA’s definition of a “covered business method patent.”
`77 Fed. Reg. at 48,735–36. 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
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`CBM2015-00040
`Patent 7,774,280 B2
`financial activity or complementary to a financial activity.’” Id. at 48,735
`(quoting 157 CONG. REC. S5432 (daily ed. Sept. 8, 2011) (statement of Sen.
`Schumer)). The legislative history indicates that “‘financial product or
`service’ should be interpreted broadly.” Id.; see also Versata Dev. Grp., Inc.
`v. SAP Am., Inc., 793 F.3d 1306, 1323–26 (Fed. Cir. 2015) (discussing the
`scope of the term “covered business method patent” and, in particular, what
`falls within the purview of a financial product or service).
`In their Petitions, Petitioners contend that the challenged claims of the
`’280 patent encompass embodiments that are, at the very least, incidental or
`complementary to a financial activity. Pet. 10. In particular, Petitioners
`argue that the invention embodied in independent claim 1 is described using
`economic terms, such as the transfer of rights between a rights “supplier”
`and a rights “consumer.” Id. In addition, Petitioners argue that this claim is
`directed toward “obtaining a set of rights” by a consumer, including “meta-
`rights” relating to an item such as a digital work. Id. at 10–11 (citing
`Ex. 1001, 15:10–11). Petitioners then assert that the specification of the
`’280 patent confirms the financial nature of a consumer acquiring a digital
`work from a supplier, as required by independent claim 1. Id. at 11–12
`(citing Ex. 1001, 4:3–14, 4:39–53, 5:4–11, 5:35–37).
`In response, Patent Owner contends that the ’280 patent does not
`claim a financial activity, but instead is context neutral. PO Resp. 28–29.
`Patent Owner argues that, when addressing the financial product or service
`aspect of covered business method patent eligibility in the Decision on
`Institution, we did not analyze the method steps recited in the body of
`independent claim 1, but instead only focused on the preamble, which
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`CBM2015-00040
`Patent 7,774,280 B2
`recites, in relevant part, “transferring rights adapted to be associated with
`items from a rights supplier to a rights consumer.” Id. at 29 (citing Dec. on
`Inst. 9). Patent Owner then alleges that the preamble of independent 1
`merely states the purpose or intended use of the invention and generally is
`not treated as limiting. See id. at 29–30.
`Patent Owner further contends that the activity of transferring rights
`from a supplier to a consumer, by itself, is insufficient to characterize the
`activity as financial in nature. PO Resp. 30. Patent Owner argues that, on
`its face, none of the method steps recited in independent claim 1, much less
`the preamble of this claim, bear any relation to a financial product or service.
`Id. Patent Owner then acknowledges that the specification of the ’280 patent
`discloses examples of paying fees in connection with the exercise of meta-
`right and usage rights, but asserts that these examples are optional and not
`required by independent claim 1. Id. at 31–32 (citing Ex. 1001, 4:3–14,
`4:39–43, 5:4–11, 5:35–37). Patent Owner asserts that the specification also
`discloses implementations of the invention that would be understood to not
`involve the payment of a fee. Id. at 32 (citing Ex. 1001, 6:61–67, 7:6–17,
`7:17–22,12:39–50, 14:41–44). According to Patent Owner, this reinforces
`that the invention has general utility and has no particular relation to the
`financial services sector. Id.
`Lastly, Patent Owner contends that Petitioners merely assess whether
`independent claim 1 encompasses a financial embodiment and does not
`focus on what actually is claimed. PO Resp. 33–34. Patent Owner then
`devotes a significant portion of its Response explaining how the facts of this
`case either align, or are distinguishable from, a number of previous Board
`9
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`CBM2015-00040
`Patent 7,774,280 B2
`decisions that assessed the “financial product or service” component of
`covered business method patent eligibility. Id. at 34–38.
`
`Petitioners counter that independent claim 1 of the ’280 patent covers
`a financial activity because it enables the commercial distribution of digital
`content from a supplier, via distributors and retailers, to a consumer.
`Pet. Reply 2. According to Petitioners, the very purpose of this scheme is to
`enable financial transactions where a “rights consumer” purchases rights
`from a “rights supplier.” Id. at 3 (citing Ex. 1001, 15:5–22). Petitioners
`argue that the specification of the ’280 patent describes numerous
`embodiments where a rights consumer purchases rights from a rights
`supplier. Id. at 3–4 (citing Pet. 10–12; Dec. on Inst. 9–10). Consequently,
`Petitioners assert that there is sufficient evidence to support our initial
`determination that independent claim 1 covers an activity “that, at the very
`least, is incidental or complementary to a financial activity.” Id. at 4 (citing
`Dec. on Inst. 9–10).
`
`Petitioners also disagree with Patent Owner’s assertion that, in order
`to be eligible for a covered business method patent review, a claim must
`necessarily cover only financial activities or an activity incidental or
`complementary to a financial activity, and not other kinds of activities. Pet.
`Reply 4. Petitioners argue that nothing in § 18(d)(1) of the AIA limits
`covered business method patent eligibility in this way. See id. Petitioners
`also contend that the previous Board decisions cited by Patent Owner that
`address the “financial product or service” component of covered business
`method patent eligibility are distinguishable from this case because the ’280
`patent does not describe or claim an invention with general utility that might
`10
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`CBM2015-00040
`Patent 7,774,280 B2
`theoretically apply in a financial context. Id. at 5. Instead, Petitioners assert
`that the central purpose of the ’280 patent is to control the sale of rights in
`multi-tiered distribution schemes. Id. (citing Ex. 1001, 2:22–48).
`Upon considering the information presented by Petitioners, as well as
`the arguments presented by Patent Owner, we maintain our initial
`determination that independent claim 1 of the ’280 patent satisfies the
`“financial product or service” component of the definition for a covered
`business method patent set forth in § 18(d)(1) of the AIA. Dec. on Inst. 7–
`10. We begin our analysis by focusing on the language of independent
`claim 1 and, in particular, the recitation in the preamble of “[a] computer-
`implemented method for transferring rights adapted to be associated with
`items from a rights supplier to a rights consumer.” Ex. 1001, 15:7–9
`(emphasis added). The transfer of rights associated with an item from a
`supplier to a consumer is an activity that, at the very least, is incidental or
`complementary to a financial activity.
`Our determination in this regard is further supported by the
`description of the invention in the specification of the ’280 patent. For
`example, the specification discloses that the transfer of rights associated with
`an item from a supplier to a consumer may require the payment of a fee or
`processing by a clearinghouse. See, e.g., Ex. 1001, 4:3–14 (disclosing how a
`consumer is permitted to view the digital works it purchased for a fee of $5
`or, alternatively, view and print the digital content for a fee of $10), 4:39–43
`(disclosing how a right specified in a license may include payment of a fee),
`5:4–11 (disclosing that, when a consumer wishes to obtain a digital work,
`the consumer may go through a series of steps, including paying a fee),
`11
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`CBM2015-00040
`Patent 7,774,280 B2
`5:35–37 (disclosing the use of a clearinghouse to process payment
`transactions). These cited disclosures in the specification reinforce that the
`transfer of rights associated with an item from a supplier to a consumer is, at
`the very least, incidental or complementary to a financial activity.
`To the extent Patent Owner argues that we narrowly focused on non-
`limiting language in the preamble of independent claim 1 and ignored the
`method steps recited in the body of this claim (PO Resp. 29–30), we do not
`agree. In considering whether a preamble limits a claim, the preamble is
`analyzed to ascertain whether it states a necessary and defining aspect of the
`invention, or whether it is simply an introduction to the general field of the
`claim. On Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331,
`1343 (Fed. Cir. 2006); see also Bicon, Inc. v. Straumann Co., 441 F.3d 945,
`952 (Fed. Cir. 2006) (explaining that whether a preamble limits a claim is
`determined on a claim-by-claim basis). “When limitations in the body of the
`claim rely upon and derive antecedent basis from the preamble, then the
`preamble may act as a necessary component of the claimed
`invention.” Eaton Corp. v. Rockwell Int’l Corp., 323 F.3d 1332, 1339 (Fed.
`Cir. 2003). Here, the recitation in the preamble of “a rights consumer”
`provides antecedent basis for the same claim phrase recited in the body of
`independent claim 1. We also view the recitation in the preamble of “a
`rights supplier” as reciting an essential element of the invention embodied in
`independent claim 1 because a consumer and a supplier are bound
`inextricably. This consumer/supplier relationship provides the necessary
`context for the method steps of “obtaining,” “determining,” and
`“exercising.”
`
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`Patent 7,774,280 B2
`We also do not agree with Patent Owner’s argument that the invention
`embodied in independent claim 1 has general utility and has no particular
`relation to the financial services sector. PO Resp. 31–32. Patent Owner’s
`argument in this regard is predicated on the notion that independent claim 1
`must necessarily cover only financial activities, and not other kinds of
`activities. We agree with Petitioners that there is nothing in § 18(d)(1) that
`suggests covered business method patent eligibility should be limited in this
`way. See Pet. Reply. 4. The U.S. Court of Appeals for the Federal Circuit
`has explained that, as a matter of statutory construction, the definition of
`“covered business method patent” covers a wide range of finance-related
`activities. Versata, 793 F.3d at 1325. This statutory definition makes no
`reference to requiring a claim to only cover financial-related activities, and
`not other kinds of activities. See id. As we explained above, independent
`claim 1 satisfies this statutory definition because it recites a
`consumer/supplier relationship. The specification of the ’280 patent
`reinforces that this consumer/supplier relationship, at least in some
`instances, requires the payment of a fee or processing by a clearinghouse,
`both of which are activities that are financial in nature.
`Lastly, we do not agree with Patent Owner’s argument that previous
`Board decisions demonstrate that independent claim 1 of the ’280 patent
`does not satisfy the “financial product or service” component of covered
`business method patent eligibility. PO Resp. 33–39. The previous Board
`decisions cited by Patent Owner are not precedential and not binding on this
`panel. Nonetheless, we have reviewed these purportedly conflicting
`decisions. Our review of these decision, however, reveals that the
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`determination of whether a patent is a covered business method patent that is
`eligible for review rests upon the specific facts of each case. We agree with
`Petitioners that the previous Board decisions cited by Patent Owner are
`distinguishable from this case in at least one significant respect. See Pet.
`Reply 5. The stated objective of the ’280 patent and, in particular, the
`explicit requirements of independent claim 1, is to control the distribution or
`resale of rights associated with an item from a supplier to a consumer in a
`multi-tiered distribution scheme (Ex. 1001, 2:22–48, 15:7–22), whereas the
`patents involved in the previous Board decisions cited by Patent Owner only
`include claims with general utility that do not relate necessarily to activities
`that are financial in nature.
`We, therefore, maintain our initial determination that Petitioners have
`explained sufficiently why the transfer of rights associated with an item from
`a supplier to a consumer, as required by independent claim 1, satisfies the
`“financial product or service” component of the definition for a covered
`business method patent set forth in § 18(d)(1) of the AIA.
`2. Technological Invention
`The definition of a “covered business method patent” in § 18(d)(1) of
`the AIA does not include patents for “technological inventions.” When
`determining whether a patent is for a “technological invention,” we consider
`the following: “whether the claimed subject matter as a whole [(1)] recites a
`technological feature that is novel and unobvious over the prior art; and [(2)]
`solves a technical problem using a technical solution.” 37 C.F.R.
`§ 42.301(b). The following claim drafting techniques typically do not render
`a patent a “technological invention”:
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`(a) Mere recitation of known technologies, such as
`computer hardware, communication or computer networks,
`software, memory, computer-readable storage medium,
`scanners, display devices or databases, or specialized machines,
`such as an ATM or point of sale device.
`
`(b) Reciting the use of known prior art technology to
`accomplish a process or method, even if that process or method
`is novel and non-obvious.
`
`(c) Combining prior art structures to achieve the normal,
`expected, or predictable result of that combination.
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,763–64 (Aug.
`14, 2012) (“Practice Guide”).
`
`In their Petitions, Petitioners assert that the subject matter of
`independent claim 1, as a whole, does not recite a technological feature that
`is novel and unobvious. Pet. 16. To support their assertion, Petitioners
`contend that the specification of the ’280 patent discloses that the technology
`used to accomplish the method steps recited in independent claim 1 is old
`and well known. Id. at 16–17 (citing Ex. 1001, 3:15–16, 3:55–58, 6:27–31,
`9:28–32, 14:50–67, Fig. 1). For instance, Petitioners argue that, as
`evidenced by the asserted prior art, the claimed features such as a
`“repository” and “rights language” are old and well known. Id. at 18–19.
`Petitioners then assert that the method steps recited in independent claim 1,
`either taken individually or collectively, do not recite a novel way of
`processing or transmitting rights associated with an item from a supplier to a
`consumer. See id. at 19–20.
`In response, Patent Owner contends that independent claim 1 recites a
`number of novel technical features. PO Resp. 41. According to Patent
`Owner, the meta-rights construct is a novel feature that, when implemented
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`with repositories and state variables, imparts new or enhanced functionality
`that was not known at the time of the ’280 patent. Id. at 41–42. Patent
`Owner further asserts that known prior art repositories support only usage
`rights and not meta-rights. Id. at 45. Patent Owner also asserts that neither
`the meta-rights construct, nor repositories designed to enforce meta-rights,
`where known prior to the ’280 patent. Id.
`Petitioners counter by contending that the record as developed during
`trial supports our initial determination that the ’280 patent does not claim a
`novel and unobvious technological feature. Pet. Reply 6 (citing Dec. on
`Inst. 12). In particular, Petitioners argue that the ’280 patent admits that
`meta-rights may be implemented in pre-existing technologies by stating that
`“the mechanism for exercising and enforcing a meta-right can be the same as
`that for a usage right,” and it identifies, as one example, the mechanism
`described in U.S. Patent No. 5,634,012 (“Stefik”), which is the prior art that
`serves as the basis of the grounds instituted in this trial. Id. (citing Ex. 1001,
`7:36–39). Petitioners also argue that the ’280 patent admits that meta-rights
`are an extension of the pre-existing concept of rights, as taught by Stefik. Id.
`(citing Ex. 1001, 5:43–47). Consequently, Petitioners assert that a meta-
`right is simply another type of right and, at a fundamental level, it is simply
`a pre-existing software construct. Id. at 6–7 (citing Ex. 1014 ¶¶ 38–42).
`Upon considering the information presented by Petitioners, as well as
`the arguments presented by Patent Owner, we maintain our initial
`determination that the subject matter of independent claim 1, as a whole,
`does not recite a technological feature that is novel and unobvious over the
`prior art. Dec. on Inst. 10–12. As we explained in the Decision on
`16
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`CBM2015-00040
`Patent 7,774,280 B2
`Institution, based on our assessment of independent claim 1, the only feature
`recited in the body of the claim that resembles a technological feature is the
`claimed “repository.” The claimed “repository,” however, does not direct
`independent claim 1 to a technological invention because, as evidenced by
`Stefik, this feature was not novel and unobvious as of the earliest effective
`filing date of the ’280 patent. See Ex. 1002, 12:42–13:41, 54:24–27. In
`addition, regardless of whether the method steps of “obtaining,”
`“determining,” and “exercising” recited in independent claim 1 impart a
`novel and unobvious way of enforcing or exercising rights associated with
`an item from a supplier to a consumer, this claim only uses known prior art
`technology—namely, the claimed “repository”—to accomplish this method.
`We do not agree with Patent Owner’s argument that known prior art
`repositories were incapable of implementing and enforcing meta-rights. PO
`Resp. 45. We also do not agree with Patent Owner’s argument that, when
`meta-rights are implemented in a repository, they impart new or enhanced
`functionality that was not known at the time of the ’280 patent. Id. at 42–43.
`Patent Owner’s arguments in this regard are undermined by an admission in
`the specification of the ’280 patent. The specification states that “the
`mechanism for exercising and enforcing a meta-right can be the same as that
`for a usage right. For example, the mechanism disclosed in [Stefik] can be
`used.” Ex. 1001, 7:36–39 (emphasis added). Based on this admission in the
`specification, we agree with Petitioners that repositories, such as those
`taught by Stefik, exercise and enforce meta-rights. See Pet. Reply 6.
`Moreover, Patent Owner does not direct us to, nor can we find, sufficient or
`credible evidence to support its assertion that the implementation of meta-
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`CBM2015-00040
`Patent 7,774,280 B2
`rights in Stefik’s repositories somehow imparts new or enhanced
`functionality beyond that already contemplated by Stefik.
`The parties also present arguments directed to whether independent
`claim 1 solves a technical problem using a technical solution, which is the
`second factor involved in determining whether a patent is for a
`“technological invention.” Pet. 20–25; PO Resp. 42–43, 47; Pet. Reply 7.
`We, however, need only assess whether one of the factors set forth in
`37 C.F.R. § 42.301(b) is deficient to determine whether independent claim 1
`is not for a “technological invention.”4 Based on the record developed
`during trial, we maintain our initial determination that Petitioners have
`explained sufficiently why independent claim 1, as a whole, does not recite a
`technological feature that is novel and unobvious over the prior art and,
`therefore, we are satisfied that Petitioners have met their burden of
`demonstrating that the ’280 patent is not for a “technological invention.”
`3. Summary
`Because we have determined that independent claim 1 of the ’280
`patent satisfies the “financial product or service” component of the
`definition for a covered business method patent, and it is not for a
`
`
`4 The legislative history of the AIA supports this interpretation of the
`“technological invention” exception. See, e.g., 157 Cong. Rec. S1364 (daily
`ed. Mar. 8, 2011) (Sen. Schumer stated the “‘technological invention[]’
`exception only excludes those patents whose novelty turns on a
`technological innovation over the prior art and are concerned with a
`technical problem which is solved with a technical solution . . . .” (emphases
`added)).
`
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`CBM2015-00040
`Patent 7,774,280 B2
`“technological invention,” the ’280 patent is a covered business method
`patent eligible for review.
`
`G. Prior Art Relied Upon
`Petitioners rely upon the following prior art reference:
`Inventor U.S. Patent No. Dates
`Exhibit No.
`Stefik
`5,634,012
`issued May 27, 1997,
`1002
`filed Nov. 23, 1994
`
`H. Instituted Grounds of Unpatentability
`We instituted this proceeding based on the asserted grounds of
`unpatentability (“grounds”) set forth in the table below. Dec. on Inst. 43.
`Reference(s)
`Basis
`Claims Challenged
`Stefik
`§ 102(b) 1, 5, and 11
`Stefik and the knowledge of
`§ 103(a) 1, 5, and 11
`one of ordinary skill in the art
`
`
`II. ANALYSIS
`A. Claim Construction
`In a covered business method patent review proceeding, we interpret
`claim terms in an unexpired patent according to the broadest reasonable
`interpretation in light of the specification of the patent in which it appears.
`37 C.F.R. § 42.300(b); c
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