Trials@uspto.gov
`571-272-7822
`
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`
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`
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`
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`
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` Paper No. 21
`
`
` Entered: October 13, 2016
`
`
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`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`
`UNITED SERVICES AUTOMOBILE ASSOCIATION,
`Petitioner,
`v.
`NADER ASGHARI-KAMRANI and KAMRAN ASGHARI-KAMRANI,
`Patent Owner.
`____________
`
`Case CBM2016-00063
`Patent 8,266,432 B2
`____________
`
`
`
`
`
`Before JONI Y. CHANG, JUSTIN T. ARBES, and
`FRANCES L. IPPOLITO, Administrative Patent Judges.
`
`CHANG, Administrative Patent Judge.
`
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71
`
`
`
`
`
`
`571-272-7822
`
`
`
`
`
`
`
`
`
`
`
` Paper No. 21
`
`
` Entered: October 13, 2016
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`
`UNITED SERVICES AUTOMOBILE ASSOCIATION,
`Petitioner,
`v.
`NADER ASGHARI-KAMRANI and KAMRAN ASGHARI-KAMRANI,
`Patent Owner.
`____________
`
`Case CBM2016-00063
`Patent 8,266,432 B2
`____________
`
`
`
`
`
`Before JONI Y. CHANG, JUSTIN T. ARBES, and
`FRANCES L. IPPOLITO, Administrative Patent Judges.
`
`CHANG, Administrative Patent Judge.
`
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71
`
`
`
`
`
`
`
`CBM2016-00063
`Patent 8,266,432 B2
`
`
`INTRODUCTION
`I.
`Nader Asghari-Kamrani and Kamran Asghari-Kamrani (collectively,
`“Patent Owner”) filed a Request for Rehearing of the Decision to Institute
`(Paper 14, “Dec.”) a covered business method patent review1 (“CBM”) as to
`claims 1–3, 5–28, and 30–55 (the “challenged claims”) of U.S. Patent No.
`8,266,432 B2 (Ex. 1001, “the ’432 patent”). Paper 18, “Req. Reh’g.” For
`the reasons that follow, Patent Owner’s Request for Rehearing is denied.
`
`II. STANDARD OF REVIEW
`A party requesting rehearing bears the burden of showing that the
`decision should be modified. 37 C.F.R. § 42.71(d). The party must identify
`specifically all matters we misapprehended or overlooked, and the place
`where each matter was previously addressed in a motion, an opposition, or a
`reply. Id. When reconsidering a decision on institution, we review the
`decision for an abuse of discretion. 37 C.F.R. § 42.71(c). An abuse of
`discretion may be determined if a decision is based on an erroneous
`interpretation of law, if a factual finding is not supported by substantial
`evidence, or if the decision represents an unreasonable judgment in weighing
`relevant factors. Star Fruits S.N.C. v. U.S., 393 F.3d 1277, 1281 (Fed. Cir.
`2005); Arnold P’ship v. Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004); In re
`Gartside, 203 F.3d 1305, 1315-16 (Fed. Cir. 2000).
`
`
`1 See § 18(a) of the Leahy-Smith America Invents Act, Pub. L. No. 112-29,
`125 Stat. 284, 329 (2011) (“AIA”).
`
`2
`
`
`
`CBM2016-00063
`Patent 8,266,432 B2
`
`
`III. ANALYSIS
`
`A.
`
`Patent Owner alleges that the Decision to Institute a covered business
`method patent review “made an erroneous conclusion of law by overlooking
`prior decisions that clarify the definition of ‘covered business method
`patent.’” Req. Reh’g 1–10. In particular, Patent Owner contends that “the
`following factors weigh in favor of concluding that a patent at issue is not a
`covered business method patent eligible for review: (1) claims of general
`utility with (2) no explicit or inherent finance-related terminology or
`limitations.” Id. at 2 (emphases omitted, citing Plaid Technologies Inc. v.
`Yodlee, Inc., Case CBM2016-00037, slip op. at 7 (PTAB Aug. 16, 2016)
`(Paper 9)), 10 (citing J.P. Morgan Chase & Co. v. Intellectual Ventures II
`LLC, Case CBM2014-00160 (PTAB Jan. 29, 2015) (Paper 11)).
`As an initial matter, the decisions relied upon by Patent Owner
`regarding these factors are not precedential and are not binding on this panel.
`Every determination of whether a challenged patent is a covered business
`method patent is based on the particular facts of the proceeding. More
`importantly, we have addressed Patent Owner’s arguments as to the “general
`utility” test in our Decision, and declined to apply a financial-exclusivity
`test, as urged by the Patent Owner, in view of the statutory language,
`legislative history, and our reviewing court’s case law. Dec. 9–10. A
`request for rehearing is not an opportunity to express disagreement with a
`decision. Likewise, we addressed Patent Owner’s arguments that claim 1 of
`the ’432 patent does not explicitly recite a finance-related term or limitation
`3
`
`
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`CBM2016-00063
`Patent 8,266,432 B2
`
`in the Decision. See Req. Reh’g 2–5; Dec. 6–10. Moreover, Patent Owner’s
`inherency arguments are presented for the first time in its Request for
`Rehearing. Req. Reh’g. 2–5. A request for rehearing also is not an
`opportunity to submit new arguments. See 37 C.F.R. § 42.71(d). We could
`not have misapprehended or overlooked the arguments that were not made
`previously in Patent Owner’s Preliminary Response.
`In any event, our Decision did not apply an erroneous standard or
`misapply SightSound or Blue Calypso, as alleged by Patent Owner, in
`determining that the ’432 patent is a covered business method patent, and,
`therefore, is eligible for a review. Req. Reh’g 1–10 (citing SightSound
`Techs., LLC v. Apple Inc., 809 F.3d 1307, 1315 (Fed. Cir. 2015); Blue
`Calypso LLC v. Groupon, Inc., 815 F.3d 1331, 1338–40 (Fed. Cir. 2016)).
`As we stated in the Decision, 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.” Dec. 5 (quoting AIA
`§ 18(d)(1)). The legislative history of the AIA “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.’” Transitional Program
`for Covered Business Method Patents—Definitions of Covered Business
`Method Patent and Technological Invention, 77 Fed. Reg. 48,734, 48,735
`(Aug. 14, 2012) (Final Rule) (quoting 157 CONG. REC. S5432 (daily ed.
`
`4
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`CBM2016-00063
`Patent 8,266,432 B2
`
`Sept. 8, 2011) (statement of Sen. Schumer)). The legislative history
`indicates that “financial product or service” should be interpreted broadly.
`Id.
`
`Significantly, as we also noted in the Decision (Dec. 10), our
`reviewing court has “declined to limit the application of CBM review to
`patent claims tied to the financial sector.” Blue Calypso, 815 F.3d at 1338.
`Our reviewing court also explains that the statute “on its face covers a wide
`range of finance-related activities.” Versata Dev. Grp. Inc. v. SAP Am., Inc.,
`793 F.3d 1306, 1325 (Fed. Cir. 2015). Our reviewing court in SightSound
`explained that “as a matter of statutory construction, 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
`activities of financial institutions.” SightSound, 809 F.3d at 1315 (citing
`Versata, 793 F.3d at 1325). The court in Blue Calypso also explained that
`“the legislative history supported the proposition that the definition [of
`CBM] be broadly interpreted to ‘encompass patents claiming activities that
`are financial in nature, incidental to a financial activity or complementary to
`a financial activity.’” Blue Calypso, 815 F.3d at 1338 (citation omitted).
`On this record, Patent Owner does not dispute that claim 1 of the ’432
`patent, as construed in light of the Specification, encompasses sales of goods
`or services in e-commerce. See generally Req. Reh’g. In fact, when seeking
`an earlier priority date, Patent Owner contends that an Originating
`Participating Financial Institution and a Receiving Participating Financial
`Institution, as disclosed in U.S. Patent No. 7,444,676 B1, provide written
`
`5
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`
`CBM2016-00063
`Patent 8,266,432 B2
`
`description support for the claim element “external-entity,” as recited in
`claim 1 of the ’432 patent. Prelim. Resp. 39–43 (“Here Patent Owner
`submits that the PFI (‘financial institution’s system that . . . offers services’)
`falls in the definition of the external entity (‘offering goods or services’).”
`(emphasis added)). Patent Owner also relied upon an embodiment in which
`an online customer requests a funds transfer between two financial
`institutions to show that there is written description support for the claim
`element in claim 1. Id. at 40–42. Significantly, sales of goods or services in
`e-commerce are activities that are financial in nature, and allowing secured
`electronic sales transactions, funds transfer between two financial
`institutions, or access to a financial institution’s system for banking services
`amount to providing a financial service.
`We are not persuaded by Patent Owner’s argument that our Decision
`merely identified some implementations in the ’432 patent directed to
`financial transactions, overlooking alternative implementations that lack any
`aspects directed to financial transactions. Req. Reh’g 4–7. Contrary to
`Patent Owner’s arguments that narrowly focus on a few purportedly
`non-financial aspects in the Specification, our Decision focused on the
`particular language of claim 1 to determine its full scope, as construed in
`light of the Specification. Dec. 7–9.
`As noted in the Decision, claim 1 recites a method “for authenticating
`a user during an electronic transaction between the user and an
`external-entity” and requires each recited method step to be performed
`“during the transaction.” Ex. 1001, 6:24–26 (emphases added); see Dec. 7–
`
`6
`
`
`
`CBM2016-00063
`Patent 8,266,432 B2
`
`10. We turned to the Specification of the ’432 patent to assess the scope of
`that language and noted that the Specification consistently describes the
`“electronic transaction between the user and an external-entity” in a
`financial context for purchasing goods or services in e-commerce. See, e.g.,
`Ex. 1001, 1:22–25; 1:61–65; 2:52–55. Moreover, the Specification
`expressly defines the claim term “user” to “represent both a typical person
`consuming goods and services as well as a business consuming goods and
`services.” Id. at 2:10–12 (emphases added). The Specification also
`explicitly defines the claim term “external-entity” as “any party offering
`goods or services that users utilize by directly providing their UserName and
`SecureCode as digital identity.” Id. at Abs.; 2:19–21 (emphasis added).
`Patent Owner is silent as to these definitions in the Specification for the
`claim terms, proffering no explanation as to why the claim terms, as
`expressly defined in the Specification, are not financial in nature. See
`generally Req. Reh’g.
`Indeed, the Specification specifically explains that the purported
`“invention relates to a system and method provided by a Central-Entity for
`centralized identification and authentication of users and their transactions to
`increase security in e-commerce,” allowing the users “to purchase goods and
`services from an External-Entity using their digital identity, preferably
`without revealing confidential personal or financial information.” Ex. 1001,
`2:52–55, 3:35–40 (emphases added). Examples of Central-Entities include
`banks and credit card issuing companies. Id. at 2:16–18. As we explained
`in the Decision, the claimed “electronic transaction between the user and an
`
`7
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`CBM2016-00063
`Patent 8,266,432 B2
`
`external-entity” encompasses sales of goods or services in e-commerce, and
`the terms “user” and “external-entity,” as Patent Owner has expressly
`defined them in the Specification, show that claim 1 pertains to the offering,
`and consumption, of goods and services via an electronic transaction
`between two parties. Dec. 8.
`For the reasons stated above, our Decision did not import
`financially-related implementations from the Specification into the claims,
`as characterized by Patent Owner (Req. Reh’g 5–7). We simply declined to
`ignore a significant portion of the Specification—especially, the definitions
`that are expressly set forth in the Specification for the key claim terms in
`claim 1. See In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994) (a patentee
`may act as his or her own lexicographer and clearly set forth a definition of
`the claim term in the specification); Phillips v. AWH Corp., 415 F.3d 1303,
`1316 (Fed. Cir. 2005) (en banc) (explaining that “our cases recognize that
`the specification may reveal a special definition given to a claim term by the
`patentee that differs from the meaning it would otherwise possess[; i]n such
`cases, the inventor’s lexicography governs”) (citing CCS Fitness, Inc. v.
`Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002)).
`For the foregoing reasons, Patent Owner has not shown that we
`abused our discretion in determining that at least claim 1 of the ’432 patent
`is directed to a method for performing data processing used in the practice,
`administration, or management of a financial product or service.
`
`8
`
`
`
`CBM2016-00063
`Patent 8,266,432 B2
`
`
`B.
`
`In its Request for Rehearing, Patent Owner argues that the “Board
`committed a clear error in instituting the [covered business method patent
`review] because the Petitioner failed to established that claim 1 lacks a
`technological feature that is unpatentable over the cited art” and that the
`“Board committed a clear legal error in concluding that the claims at issue
`are unpatentable over the cited art.” Req. Reh’g 10–14. In Patent Owner’s
`view, Petitioner fails to meet its burden to show “that one or more of claims
`are not supported by original disclosure of the second prior-filed application
`or the third prior-filed application to assert Norefors as prior art.”2 Id. 11–13
`(emphasis added). Patent Owner also argues that Norefors is not prior art
`against the challenged claims because it was not available “at the time the
`invention was made.” Id. at 13–14 (emphasis omitted).
`Patent Owner’s arguments are misplaced. As explained in our
`Decision, the allegedly technological features appear to have been known in
`the art, in light of the prior art in the record, and Petitioner has explained
`sufficiently why claim 1, as a whole, does not recite a technological feature
`that is novel and non-obvious over the prior art of record. Dec. 12–13. We
`also explained that “following Petitioner’s showing that Norefors and
`Rajasekaran constitute prior art relative to the actual filing date of the ’432
`patent, the burden of production shifted to Patent Owner to show that the
`
`
`2 Norefors, U.S. Patent Application Publication No. US 2006/0094403 A1,
`filed December 12, 2005, and published on May 4, 2006. Ex. 1032.
`9
`
`
`
`CBM2016-00063
`Patent 8,266,432 B2
`
`challenged claims of the ’432 patent are entitled to the benefit of the earlier
`effective filing date, prior to the relevant dates of Norefors and
`Rajasekaran.” Dec. 20–29 (citing Dynamic Drinkware, LLC v. Nat’l
`Graphics, Inc., 800 F.3d 1375, 1380 (Fed. Cir. 2015) (“The burden of
`production then shifted to [Patent Owner] to argue or produce evidence that
`either [the reference] does not actually anticipate, or, as was argued in this
`case, that [the reference] is not prior art because the asserted claims in the
`[involved] patent are entitled to the benefit of a filing date (constructive or
`otherwise) prior to the filing date of [the reference].”); PowerOasis, Inc. v.
`T-Mobile USA, Inc., 522 F.3d 1299, 1305 (Fed. Cir. 2008) (“When neither
`the PTO nor the board has previously considered priority, there is simply no
`reason to presume that claims in a [continuation-in-part] application are
`entitled to the effective filing date of an earlier filed application.”)).
`Patent Owner’s arguments also improperly rest on the premise that the
`challenged claims are entitled to the benefit of the filing date of U.S. Patent
`Application No. 09/940,635 (Ex. 1016, “the first prior-filed application”).
`As we explained in our Decision (Dec. 21–23), there is no copendency
`between the first prior-filed application, which was issued as a patent on
`April 8, 2008, and the application that issued as the ’432 patent, which was
`filed on September 15, 2008. Compare Ex. 1001 at [22], with Ex. 1005 at
`[45]; Ex. 2005, 1.
`Patent Owner’s arguments run afoul of 35 U.S.C. § 120, which
`requires, among other things, copendency between the later-filed application
`and the prior-filed application. “In section 120, Congress set forth two
`
`10
`
`
`
`CBM2016-00063
`Patent 8,266,432 B2
`
`requirements that an applicant must satisfy in order for a later filed
`application to be accorded the same effect as if it were filed on the same date
`as an earlier application by the same inventor disclosing the same invention.
`Those conditions are (1) copendency of the applications, and (2) reference in
`the later filed to the earlier filed application.” In re Costello, 717 F.2d 1346,
`1348 (Fed. Cir. 1983) (emphasis added). Our reviewing court also explained
`that a prior-filed application that was not copending with the later-filed
`application cannot be used to antedate a reference. Id. at 1350.
`Under 35 U.S.C. § 120, the application that issued as the ’432 patent
`is required to be filed before the patenting or abandonment of the first
`prior-filed application, unless there is an intermediate application that meets
`the requirements of § 120. At the time when we decided to institute this
`trial, Patent Owner had yet to proffer sufficient evidence that showed such
`an intermediate application exists. See Medtronic CoreValve, LLC v.
`Edwards Lifesciences Corp., 741 F.3d 1359, 1366 (Fed. Cir. 2014) (noting
`that the burden of properly claiming priority rests squarely on the patentee).
`Subsequent to the Decision on Institution, Patent Owner notified us
`that the Office granted a Petition to Accept an Unintentionally Delayed
`Benefit Claim, alleging that “[t]his benefit claim establishes a second chain
`of priority of the filing date of the first prior-filed application through the
`third prior-filed application.” Req. Reh’g 15; Ex. 2006. However, this
`merely shows that Patent Owner has added a specific reference that the
`application that issued as the ’432 patent is said to be a continuation-in-part
`application of U.S. Patent Application No. 11/333,400 (“the third prior-filed
`
`11
`
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`
`CBM2016-00063
`Patent 8,266,432 B2
`
`application”), which allegedly is a continuation-in-part application of the
`first prior-filed application.
`More importantly, as explained in the Decision, Patent Owner has not
`demonstrated based on the current record that the benefit claim to the third
`prior-filed application complies with the requirements of 35 U.S.C. § 120,
`among which is the requirement that the original disclosure of the third
`prior-filed application provides written description support for the
`challenged claims as required by 35 U.S.C. § 112, first paragraph. See Dec.
`27–28; In re NTP, Inc., 654 F.3d 1268, 1276–77 (Fed. Cir. 2011); In re Chu,
`66 F.3d 292, 297 (Fed. Cir. 1995). Once again, Patent Owner’s arguments
`ignore the requirements of 35 U.S.C. § 120.
`As we determined in our Decision, Patent Owner has not shown, at
`this juncture, that the original disclosure of the second prior-filed
`application or the original disclosure of the third prior-filed application
`provides sufficient written description support for each limitation of the
`challenged claims. Dec. 23–29. Without this showing, the challenged
`claims are not entitled to the benefit of the filing date of any prior-filed
`application. Id. Therefore, on this record, “at the time of the invention” is
`not August 29, 2001, the filing date of the first prior-filed application, as
`alleged by Patent Owner, but rather, September 15, 2008, the actual filing
`date of the application that issued as the ’432 patent.
`Furthermore, we disagree with Patent Owner that we committed a
`clear error in determining that claim 1 does not recite a technological feature
`that is novel and unobvious over the prior art. Norefors, which was filed on
`
`12
`
`
`
`CBM2016-00063
`Patent 8,266,432 B2
`
`December 12, 2005 and published on May 4, 2006, predating the actual
`filing date of the ’432 patent (September 15, 2008) by more than one year, is
`prior art under § 102(b) as to the challenged claims. In addition, on this
`record, the publications of the first prior-filed application—U.S. Patent
`Application Publication No. 2003/0046591 A1 (Ex. 1017), published on
`March 6, 2003, and WIPO International Publication No. WO 03/021837 A1
`(Ex. 1028), published on March 13, 2003, more than one year before the
`actual filing date of the ’432 patent (September 15, 2008)—are also prior art
`under § 102(b), showing what was known in the art and the knowledge of a
`person of ordinary skill in the art at the time of the invention.3 See In re Van
`Langenhoven, 458 F.2d 132, 136–37 (CCPA 1972) (citing In re Hafner, 410
`F.2d 1403 (CCPA 1969); In re Ruscetta, 255 F.2d 687, 690–91 (CCPA
`1958)) (noting that, because the patentee could not claim the benefit of the
`filing date of any prior-filed application, the patentee’s own prior patent or
`publication that was published more than one year from the actual filing date
`of the application at issue was available as prior art under § 102(b)).
`For the reasons stated above, Patent Owner has not established that we
`abused our discretion in determining that the ’432 patent is not excluded as a
`technological invention, and that it is more likely than not that claims 1, 3,
`5–8, 12, 13, 15–27, 30–42, 44, 45, 47, 48, 50–52, 54, and 55 are
`unpatentable under § 102(b) as anticipated by Norefors, and claims 2, 9–11,
`
`
`3 Petitioner’s asserted grounds of unpatentability, on which we instituted a
`trial, are based on Norefors alone under § 102(b), and the combination of
`Norefors and Brown under § 103(a). See Paper 2, 28–66; Dec. 41.
`13
`
`
`
`CBM2016-00063
`Patent 8,266,432 B2
`
`14, 28, 43, 46, 49, and 53 are unpatentable under § 103(a) as obvious over
`the combination of Norefors and Brown.
`
`IV. CONCLUSION
`For the foregoing reasons, Patent Owner has not demonstrated that we
`abused our discretion in determining to institute a covered business method
`patent review as to claims 1–3, 5–28, and 30–55 of the ’432 patent.
`
`
`
`
`14
`
`For PETITIONER:
`
`W. Karl Renner
`Thomas Rozylowicz
`FISH & RICHARDSON P.C.
`CBM36137-0007CP1@fr.com
`ptabInbound@fr.com
`
`
`
`For PATENT OWNER:
`
`Jae Youn Kim
`Harold L. Novick
`Sang Ho Lee
`NOVICK, KIM & LEE, PLLC
`skim@nkllaw.com
`hnovick@nkllaw.com
`slee@nkllaw.com
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