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`TRADING TECH EXHIBIT 2127
`IBG et al. v. TRADING TECH. - CBM2016-00087
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`

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`Case: 16-120 Document: 2-4 Page: 135 Filed: 03/08/2016
`S1361
`March 8, 2011
`CONGRESSIONAL RECORD — SENATE
`prices, the Dow Jones industrial aver-
`I also thank the many individuals,
`tion that can create jobs and help our
`companies, associations and coalitions
`age has climbed back to over 12,000
`economy through common sense meas-
`that have helped with this effort. This
`from a low point of 6,500. Passage of
`ures. That is what this bill can do. It
`legislation has been supported by both
`the America Invents Act should help
`relies on not one dollar of taxpayer
`business and labor, including the Na-
`bolster our economic recovery and
`money. Let me emphasize, not a dime
`tional Association of Manufacturers,
`keep us on the right path toward busi-
`in taxpayer money is spent on the Pat-
`the United Steelworkers, the AFL–CIO,
`ness development and job creation.
`ent and Trademark Office, PTO, re-
`the Association of American Univer-
`As we began this debate, I referred
`forms. They are all funded by patent
`sities, the American Bar Association,
`back to the President’s State of the
`fees, not taxes.
`the Association of Public and Land-
`Union address and his challenge to the
`Innovation drives the Nation’s econ-
`Grant Universities, the Association of
`Nation to out-innovate, out-build and
`omy, and that entrepreneurial spirit
`American Medical Colleges, the Asso-
`out-educate our global competitors.
`can only be protected by a patent sys-
`ciation of University Technology Man-
`Enacting the America Invents Act is a
`tem that promotes invention and spurs
`agers, the American Council on Edu-
`key to meeting this challenge. Reform-
`new ideas. We need to reform our pat-
`cation, the Council on Government Re-
`ing the Nation’s antiquated patent sys-
`ent system so that these innovations
`lations, PhRMA, BIO, the Intellectual
`tem will promote American innova-
`can more quickly get to market. A
`Property Owners Association,
`the
`tion, create American jobs, and grow
`modernized patent system—one that
`American Intellectual Property Law
`America’s economy. I thank the Presi-
`puts American entrepreneurs on the
`Association, the Coalition for 21st Cen-
`dent and his administration for their
`same playing field as those throughout
`tury Patent Reform, the Association
`help and support for the Leahy-Hatch-
`the world—is a key to that success.
`for Competitive Technology, the Coali-
`Grassley America Invents Act. Com-
`This is an idea that cuts across the po-
`tion for Patent and Trademark Infor-
`merce Secretary Locke has been a
`litical spectrum.
`mation Dissemination, IBM, General
`During Senate debate over the last
`strong partner in our efforts, and Di-
`Electric, Eli Lilly and Company, Bose
`week our bill has been improved by a
`rector Kappos of the Patent and Trade-
`Corporation, Johnson and Johnson, 3M,
`number of Senators who have contrib-
`mark Office has been an indispensable
`General Mills, Honeywell, Monsanto,
`uted amendments. Senators BENNET,
`source of wise counsel.
`Motorola, Cargill, Inc., Caterpillar,
`COONS, SCHUMER, MENENDEZ, PRYOR,
`The America Invents Act will keep
`Enventys, Abbott, Astra Zeneca,
`STABENOW, BAUCUS, BINGAMAN, COBURN
`America in its longstanding position at
`AdvaMed, Air Liquide, Bayer, Beckman
`and KIRK have all contributed, and I
`the pinnacle of innovation. This bill
`Coulter, Boston
`Scientific, BP,
`thank them for working with us. Sen-
`will establish a more efficient and
`Bridgestone American Holdings, Inc.,
`ator CARDIN attempted to offer ger-
`streamlined patent system that will
`Bristol-Myers Squibb, the California
`mane amendments, and I regret that
`improve patent quality and limit un-
`Healthcare Institute, the Colorado Bio-
`these were blocked.
`necessary and counterproductive liti-
`Science Association, Cummins, The
`I thank our ranking Republican on
`gation costs, while making sure no par-
`Dow Chemical Company, DuPont, East-
`the committee and the comanager of
`ty’s access to court is denied.
`man Chemical Company, ExxonMobil,
`this measure, Senator GRASSLEY, and
`The America Invents Act is the prod-
`Genentech, Genzyme, GlaxoSmith-
`his staff, Kolan Davis and Rita Lari,
`uct of eight Senate hearings over the
`Kline, the Healthcare Institute of New
`for their dedication to this effort. I
`last three Congresses. Our bill is the
`Jersey, Henkel Corporation, Hoffman-
`commend Senator HATCH for sticking
`product of years of work and com-
`LaRoche, Illinois Tool Works, Inter-
`with it for these many years, and Sen-
`promise. The Senate Judiciary Com-
`national Game Technology, Kodak,
`ator KYL for helping get this done.
`mittee has reported patent reform leg-
`Medtronic, Merck & Co.,
`Inc.,
`I also extend my personal thanks, as
`islation to the Senate in each of the
`Millenium Pharmaceuticals, Milliken
`well, to Senator KLOBUCHAR of Min-
`last three Congresses, this year, unani-
`and Company, Northrop Grumman,
`nesota who was active during com-
`mously. And the House has seen efforts
`Novartis, PepsiCo., Inc., Pfizer, Procter
`mittee consideration and helped man-
`over the same period led by Congress-
`& Gamble, SanDisk Corporation,
`age this legislation effort in the Sen-
`men LAMAR SMITH of Texas and HOW-
`Sangamo BioSciences, Inc., United
`ate. She has been outstanding.
`ARD BERMAN of California. The legisla-
`Technologies, USG Corporation, the
`The Senate’s action today could not
`tion we are acting on today, in fact, is
`Virginia Biotechnology Association,
`have been accomplished without the
`structured on the original House bill
`Weyerhaeuser, the American Institute
`hard work of many dedicated staffers. I
`and contains many of the original pro-
`for CPAs, the American Institute of
`would like to thank in particular the
`visions.
`Certified Public Accountants, the Tax
`steadfast work of Aaron Cooper of my
`From the beginning, we recognized
`Justice Network USA, the New Rules
`Judiciary Committee staff. Aaron has
`the need for a more effective and effi-
`for Global Finance, the American Col-
`spent countless hours in meetings and
`cient patent system, one that improves
`lege of Tax Counsel, Consumer Action,
`briefings, with Members, other staff,
`patent quality and provides incentives
`The American College of Trust and Es-
`and interested parties, working to help
`for entrepreneurs to create jobs. A bal-
`tate Counsel, the Partnership for Phil-
`me ensure that the America Invents
`anced and efficient intellectual prop-
`anthropic Planning, Global Financial
`Act preserved the meaningful reforms
`erty system that rewards invention
`Integrity, the International Associa-
`we have been working toward since
`and promotes innovation through high
`tion for Registered Financial Consult-
`2005. I would also like to thank Ed
`quality patents is crucial to our Na-
`ants, the National Association of En-
`Pagano, my chief of staff, and Bruce
`tion’s economic prosperity and job
`rolled Agents, USPIRG, the Certified
`Cohen, my chief counsel, who have
`growth. That is how we win the fu-
`Financial Planner Board of Standards,
`worked on this issue since the start, as
`ture—by unleashing the American in-
`the Financial Planning Association,
`well as Susan Davies who served as my
`ventive spirit. This bill, the America
`the American Association of Attorney-
`chief Intellectual Property counsel
`Invents Act, will allow our inventors
`Certified Public Accountants, the Citi-
`through the formative stages of this
`and innovators to flourish.
`zens for Tax Justice, the National
`legislative effort. Erica Chabot, Curtis
`It is important to our country’s con-
`Treasury Employees Union, the Inde-
`LeGeyt and Scott Wilson of my Judici-
`tinued economic recovery, and to our
`pendent Community Bankers of Amer-
`ary Committee staff also deserve
`successfully competing in the global
`ica, and numerous other organizations
`thanks for their committed work on
`economy. America needs a 21st century
`and companies representing all sectors
`this legislation.
`patent system to lead. The last exten-
`of the patent community that have
`I also commend the hardworking
`sive reform of our patent system was
`been urging action on patent reform
`Senate floor staff, Tim Mitchell and
`nearly 60 years ago. It is time.
`proposals for years.
`Trish Engle, as well as Dave Schiappa,
`While the Congress debates spending
`The America Invents Act will accom-
`and the staffs of other Senators, in-
`and budget measures in an often too
`plish 3 important goals, which have
`cluding Tim Molino, Joe Matal, and
`partisan manner, the American people
`been at the center of the patent reform
`debate from the beginning: It will im-
`Matt Sandgren, for their dedicated ef-
`are craving—and the American econ-
`prove and harmonize operations at the
`forts.
`omy is demanding—bipartisan legisla-
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`Page 2 of 35
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`TRADING TECH EXHIBIT 2127
`IBG et al. v. TRADING TECH. - CBM2016-00087
`
`

`

`Case: 16-120 Document: 2-4 Page: 136 Filed: 03/08/2016
`S1362
`March 8, 2011
`CONGRESSIONAL RECORD — SENATE
`The PRESIDING OFFICER. Without
`PTO; it will improve the quality of pat-
`ventors, for our consumers. Working
`objection, it is so ordered.
`together, we can smooth the path for
`ents that are issued; and it will provide
`more
`interesting—and great—Amer-
`more certainty in litigation. In par-
`Mr. REID. Mr. President, with this
`ican inventions. That is what this bi-
`ticular, the legislation will move this
`agreement, I ask unanimous consent
`partisan, comprehensive patent reform
`Nation’s patent system to a first-in-
`that the cloture vote with respect to
`bill will do. No one claims that ours is
`ventor-to-file system, make important
`the motion to proceed to H.R. 1 be viti-
`a perfect bill. It is a compromise that
`quality enhancement mechanisms, and
`ated.
`will make key improvements in the
`provide the PTO with the resources it
`The PRESIDING OFFICER. Without
`patent system. Having coordinated
`needs to work through its backlog by
`objection, it is so ordered.
`with the leaders in the House through
`providing it with fee setting authority,
`Mr. REID. Mr. President, even
`this process, I hope that the House will
`subject to oversight. The America In-
`though there have been a few turns in
`look favorably on our work and adopt
`vents Act provides the tools the PTO
`the road, we are at the place where we
`this measure so that it can be sent to
`needs to separate the inventive wheat
`need to be. We need to be able to show
`the President without delay and its im-
`from the chaff, which will help business
`the American people where we are on
`provements can take effect in order to
`bring new products to market and cre-
`these two measures. I express my ap-
`encourage American innovation and
`ate jobs.
`preciation to my friend, the Republican
`promote American invention.
`Innovation has always been at the
`leader. As I said, things don’t always
`I suggest the absence of a quorum.
`heart of America and American suc-
`work smoothly around here, but they
`The PRESIDING OFFICER. The
`cess. From the founding of our Nation,
`usually work. Now we are at a point
`clerk will call the roll.
`we recognized the importance of pro-
`where we can vote on these two meas-
`The assistant bill clerk proceeded to
`moting and protecting innovation, and
`ures which is what we need to do.
`call the roll.
`so the Constitution explicitly grants
`The PRESIDING OFFICER. Under
`Mr. REID. I ask unanimous consent
`Congress the power to ‘‘promote the
`the previous order, amendment No. 152
`that the order for the quorum call be
`progress and science and useful arts, by
`is withdrawn.
`rescinded.
`securing for limited times to . . . in-
`The PRESIDING OFFICER. Without
`Under the previous order, amend-
`ventors the exclusive right to their re-
`objection, it is so ordered.
`ment No. 143 is modified with the
`spective . . . discoveries.’’ The patent
`Mr. REID. Mr. President, I ask unan-
`changes at the desk.
`system plays a key role in encouraging
`imous consent the Reid amendment
`The amendment, as modified, is as
`innovation and bringing new products
`No. 152 be withdrawn; that the Reid
`follows:
`to market. The discoveries made by
`amendment No. 143 be modified with
`(Purpose: To include public institutions of
`American inventors and research insti-
`the changes at the desk; the Senate
`higher education in the definition of a
`tutions, commercialized by our compa-
`proceed to vote on the amendment, as
`micro entity)
`nies, and protected and promoted by
`modified, with no amendments in order
`On page 93, before line 18, insert the fol-
`our patent laws have made our system
`prior to the vote; that there then be 30
`lowing:
`the envy of the world.
`minutes of debate equally divided be-
`‘‘(d) STATE INSTITUTIONS OF HIGHER EDU-
`High quality patents are the key to
`tween the two managers or their des-
`CATION.—
`our economic growth. They benefit
`ignees; that S. 23 be read a third time;
`‘‘(1) IN GENERAL.—For purposes of this sec-
`both patent owners and users who can
`that a budgetary pay-go statement be
`tion, a micro entity shall include an appli-
`be more confident in the validity of
`read; the Senate then proceed to a vote
`cant who certifies that—
`issued patents. Patents of low quality
`on passage of the bill, as amended; and
`‘‘(A) the applicant’s employer, from which
`and dubious validity, by contrast, en-
`the motions to reconsider be consid-
`the applicant obtains the majority of the ap-
`able patent trolls who extort unreason-
`plicant’s income, is a State public institu-
`ered made and laid upon the table with
`able licensing fees from legitimate
`tion of higher education, as defined in sec-
`no intervening action or debate.
`tion 102 of the Higher Education Act of 1965
`businesses, and constitute a drag on in-
`Further, I ask unanimous consent
`(20 U.S.C. 1002); or
`novation. Too many dubious patents
`that at 12 noon Wednesday, March 9,
`‘‘(B) the applicant has assigned, granted,
`also unjustly cast doubt on truly high
`the Senate proceed to the consider-
`conveyed, or is under an obligation by con-
`quality patents.
`ation of Calendar No. 14, H.R. 1, the De-
`tract or law to assign, grant, or convey, a li-
`After 6 years of debate and discus-
`fense appropriations long-term con-
`cense or other ownership interest in the par-
`sion, more than a dozen hearings and
`tinuing resolution for fiscal year 2011;
`ticular application to such State public in-
`mark up sessions, and countless hours
`that there be 3 hours of debate on H.R.
`stitution.
`of member and staff meetings with two
`1 and the Democratic alternative, the
`‘‘(2) DIRECTOR’S AUTHORITY.—The Director
`may, in the Director’s discretion, impose in-
`presidential administrations and inter-
`Inouye substitute amendment No. 149,
`come limits, annual filing limits, or other
`ested parties across the spectrum, the
`with the time equally divided between
`limits on who may qualify as a micro entity
`Senate is finally acting to make the
`the two leaders or their designees prior
`pursuant to this subsection if the Director
`first meaningful, comprehensive re-
`to a vote on passage of H.R. 1; that the
`determines that such additional limits are
`forms to the nation’s patent system in
`vote on passage be subject to a 60-vote
`reasonably necessary to avoid an undue im-
`nearly 60 years. The Senate debate has
`threshold; that if the bill achieves 60
`pact on other patent applicants or owners or
`now extended for more than a week.
`affirmative votes, the bill be read a
`are otherwise reasonably necessary and ap-
`Passage of the America Invents Act
`third time and passed; that if the bill
`propriate. At least 3 months before any lim-
`its proposed to be imposed pursuant to this
`demonstrates what we can accomplish
`does not achieve 60 affirmative votes,
`paragraph shall take effect, the Director
`the majority leader be recognized to
`when we cast aside partisan rhetoric,
`shall inform the Committee on the Judiciary
`offer the Inouye substitute amendment
`and focus on working together for the
`of the House of Representatives and the
`No. 149; the Senate then proceed to a
`American people and for our future.
`Committee on the Judiciary of the Senate of
`It has been almost 6 years since
`vote on the substitute amendment;
`any such proposed limits.’’.
`Chairman SMITH and Congressman
`that the substitute amendment be sub-
`The PRESIDING OFFICER. The
`BERMAN introduced the first version of
`ject to a 60-vote threshold; if the sub-
`question is on agreeing to amendment
`patent reform legislation in 2005, but
`stitute amendment achieves 60 affirma-
`No. 143, as modified.
`tive votes, the substitute amendment
`the structure and guiding principles of
`The amendment (No. 143), as modi-
`be agreed to; the bill, as amended, be
`the legislation remain the same. The
`fied, was agreed to.
`read a third time and passed; if the
`bill will speed the process by which the
`Mr. COBURN. I wish to express my
`substitute amendment does not achieve
`Patent Office considers applications
`opposition to Reid amendment No. 143,
`60 affirmative votes, H.R. 1 be returned
`and should improve the quality of pat-
`as modified. I do not believe public in-
`to the calendar; that no motions or
`ents it issues.
`Innovation and economic develop-
`stitutions of higher education, or any
`amendments be in order to the sub-
`ment are not uniquely Democratic or
`entity, should be carved out of the defi-
`stitute amendment or to the bill prior
`to the votes; further, that all of the
`Republican objectives, so we worked
`nition of micro entity in the under-
`above occur with no intervening action
`together to find the proper balance for
`lying legislation. Had a rollcall vote
`or debate.
`America—for our economy, for our in-
`occurred, I would have voted no.
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`Page 3 of 35
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`TRADING TECH EXHIBIT 2127
`IBG et al. v. TRADING TECH. - CBM2016-00087
`
`

`

`Case: 16-120 Document: 2-4 Page: 137 Filed: 03/08/2016
`S1363
`March 8, 2011
`CONGRESSIONAL RECORD — SENATE
`Mr. LEAHY. That is correct. The pro-
`Mr. LEAHY. Mr. President, I suggest
`ods of conducting business, unlike in-
`ceeding has a higher threshold than
`the absence of a quorum, with unani-
`formation about other patents, is often
`current reexamination before the PTO
`mous consent that the time be equally
`not documented in patents or published
`will even undertake a review of the
`divided.
`in journals. This means a patent exam-
`The PRESIDING OFFICER. Without
`patent. So as a practical matter, a pat-
`iner has significantly less opportunity
`objection, it is so ordered.
`ent without any serious challenge to
`than he might with a traditional pat-
`The clerk will call the roll.
`its validity would never be subject to a
`ent to weed out undeserving applica-
`The assistant bill clerk proceeded to
`proceeding.
`tions. Unfortunately, that means the
`call the roll.
`Mr. PRYOR. Would the Senator agree
`burden falls on private individuals and
`Mr. LEAHY. Mr. President, I ask
`that in a case in which the validity of
`an expensive court process to clean up
`unanimous consent that the order for
`the patent has been upheld by a dis-
`the mess.
`the quorum call be rescinded.
`The ability to easily obtain business
`trict court but the case remains on ap-
`The PRESIDING OFFICER. Without
`method patents without a rigorous and
`peal, that this amendment would likely
`objection, it is so ordered.
`thorough review in the Patent Office
`not affect the pending appeal?
`Mr. LEAHY. I would. The patent may
`CHECK 21 ACT PATENTS
`has created a flood of poor quality
`Mr. PRYOR. I would like to clarify
`still be subject to the proceeding, but
`business method patents and a cottage
`some concerns I have about the Schu-
`since the court did not hold the patent
`industry of business method patent
`mer-Kyl program that was included in
`invalid or unforceable, it would not
`litigation. The Federal courts have rec-
`the managers’ amendment to the
`likely have an effect on the pending ap-
`ognized this problem, and indeed even
`America Invents Act, adopted on
`peal.
`the Supreme Court has begun to ad-
`Mr. SCHUMER. Mr. President, I want
`March 1. I am specifically concerned
`dress it. In KSR Intl Co. v. Teleflex,
`to take the opportunity to explain fur-
`that this provision revives an amend-
`Inc. and Bilski v. Kappos, the Court ar-
`ther a few elements of the Schumer-
`ment that had been included in pre-
`ticulated a new standard for obvious-
`Kyl provision in the patent bill. The
`vious versions of the bill—that amend-
`ness and made clear that abstract busi-
`Transitional Program
`for business
`ment specifically targeted patents re-
`ness methods are not patentable. While
`method patents addresses a critical
`lated to the Check 21 Act and elimi-
`these legal developments are impor-
`problem in the patent world, and it is
`nated the ability of the holder of such
`tant, the leave in limbo the many pat-
`crucial that it be administered and im-
`patents to collect damages. Is that the
`ents that were issued by the PTO since
`plemented appropriately by both the
`purpose of the Schumer-Kyl language?
`State Street that are not in fact valid.
`Patent and Trademark Office and the
`Mr LEAHY. No, the amendment is
`Litigation over
`invalid patents
`courts.
`entirely different from the 2008 amend-
`places a substantial burden on U.S.
`Business method patents are the
`ment related to patents that place on
`courts and the U.S. economy. Business-
`bane of the patent world. The business
`tax on implementation of the Check 21
`method inventions generally are not
`method problem began in 1998 with the
`Act. The Schumer-Kyl program ad-
`and have not been patentable in coun-
`U.S. Court of Appeals for the Federal
`dresses certain business method pat-
`tries other than the United States. In
`Circuit decision in State Street Bank &
`ents and does not target any specific
`order to reduce the burden placed on
`Trust Co. v. Signature Financial
`patents. The Schumer-Kyl program is
`courts and the economy by this back-
`Group, Inc. State Street created a sea-
`intended to provide a cost-effective al-
`and-forth shift in judicial precedent,
`change in the patentability of business-
`ternative to litigation to examine busi-
`the Schumer-Kyl transitional pro-
`methods, holding that any invention
`ness-method patents.
`ceeding authorizes a temporary admin-
`can be patented so long as it produces
`Mr. PRYOR. Am I correct then that
`istrative alternative
`for reviewing
`a ‘‘useful, concrete, and tangible re-
`the Schumer-Kyl program is simply
`business method patents.
`sult’’ and meets other requirements of
`trying to address the problem of busi-
`It is important to clarify two ele-
`the patent laws.
`ness method patents of dubious valid-
`ments of the Schumer-Kyl program’s
`State Street launched an avalanche
`ity that are commonly associated with
`operation in particular. First, there is
`of patent applications seeking protec-
`the Federal Circuit’s 1998 decision in
`the issue of how a district court should
`tion for common business practices.
`State Street Bank v. Signature?
`treat a motion for a stay of litigation
`The quality of these business method
`Mr. LEAHY. That is correct. It is
`in the event the PTO initiates a pilot
`patents has been much lower than that
`still unclear whether the subject mat-
`program. Second, there is the issue of
`of other patents, as Justice Kennedy
`ter of these patents qualifies as patent-
`how the Federal circuit will treat in-
`noted in his concurring opinion in eBay
`able subject matter under current law.
`terlocutory appeals from stay deci-
`Inc. v. MercExchange. Justice Kennedy
`Patents of low quality and dubious va-
`sions. Finally, there is the issue of
`wrote about the ‘‘potential vagueness
`lidity, as you know, are a drag on inno-
`which patents should be considered to
`and suspect validity’’ of some of ‘‘the
`vation because they grant a monopoly
`be covered business method patents.
`burgeoning number of patents over
`The transition program created by
`right for an invention that should not
`business methods.’’ Commentators like
`the Schumer-Kyl amendment is de-
`be entitled to one under the patent
`Rochelle Dreyfuss have also lamented
`signed to provide a cheaper, faster al-
`law.
`‘‘the frequency with which the Patent
`Mr. PRYOR. Can the Senator de-
`ternative to district court litigation
`Office issues patents on shockingly
`scribe how the program would work in
`over the validity of business-method
`mundane business inventions.’’ Malla
`practice?
`patents. This program should be used
`Mr. LEAHY. Certainly. If a peti-
`Pollack pointed out that ‘‘[M]any of
`instead of, rather than in addition to,
`tioner provides evidence to the PTO
`the recently-issued business method
`civil
`litigation. To that end, the
`and the PTO determines that the pat-
`patents are facially (even farcically)
`amendment expressly authorizes a stay
`ent is on a ‘‘covered business method
`obvious
`to
`persons
`outside
`the
`of litigation in relation to such pro-
`patent’’ then the PTO would institute a
`USPTO.’’
`ceedings and places a very heavy
`One of the main reasons for the poor
`post-grant review of that patent. In
`thumb on the scale in favor of a stay
`quality of business method patents is
`this review, the PTO could consider
`being granted. It is congressional in-
`the lack of readily accessible prior art
`any challenge that could be heard in
`tent that a stay should only be denied
`references. Because business methods
`court.
`in extremely rare instances.
`Mr. PRYOR. Is it correct then that
`When Congress initially created ex
`were not patentable prior to 1998 when
`the Schumer proceeding would only
`parte reexamination, it did not ex-
`the State Street decision was issued,
`have an effect if the PTO determines it
`pressly provide for a stay of litigation
`the library of prior art on business
`is more likely than not that a claim of
`pending the outcome of an ex parte re-
`method patents is necessarily limited—
`the patent is invalid and, even then,
`examination proceeding. Rather, Con-
`as opposed, say, to more traditional
`the proceeding would have no effect on
`gress relied on the courts’ inherent
`types of patents for which there can be
`a patent unless the petitioner can dem-
`power to grant stays and encouraged
`centuries of patents and literature
`onstrate that under current law the
`courts to liberally grant stays. How-
`about them for the PTO to examine.
`patent is not valid?
`ever, relying on the courts’ inherent
`Furthermore, information about meth-
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`Page 4 of 35
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`TRADING TECH EXHIBIT 2127
`IBG et al. v. TRADING TECH. - CBM2016-00087
`
`

`

`Case: 16-120 Document: 2-4 Page: 138 Filed: 03/08/2016
`S1364
`March 8, 2011
`CONGRESSIONAL RECORD — SENATE
`lack of the best prior art. And the pro-
`gram was developed in close consulta-
`power to grant stays did not result in
`tion with the PTO to capture all of the
`courts liberally granting stays. For ex-
`ceeding will typically be completed
`worst offenders in the field of business
`ample, one commentator who surveyed
`within 1 year.
`In summary, it is expected that, if a
`method patents, including those that
`the grant rates on motions for stay
`proceeding against a business method
`are creatively drafted to appear to be
`pending reexamination, Matthew A.
`patent is instituted, the district court
`true innovations when in fact they are
`Smith, found that numerous district
`would institute a stay of litigation un-
`not.
`courts granted stays less than half the
`The amendment only applies to ‘‘cov-
`less there were an extraordinary and
`time. In fact, Eastern District of Texas
`ered business method patents.’’ If the
`grants stays only 20 percent of the
`extremely rare set of circumstances
`PTO determines that a patent is a
`time. Due to low grant rates for stays
`not contemplated in any of the existing
`‘‘covered business method patent’’—
`in several jurisdictions, this amend-
`case law related to stays pending reex-
`and the other applicable requirements
`ment instructs courts to apply the
`amination. In the rare instance that a
`of this amendment and Chapter 32 are
`four-factor test first announced in
`stay is not granted, the PTO should
`met—the patent will be subject to post-
`Broadcast Innovation, L.L.C. v. Char-
`make every effort to complete its re-
`grant review under this amendment re-
`ter Communications when evaluating
`view expeditiously. We encourage the
`gardless of whether the patent has been
`stay motions.
`PTO Director to promulgate regula-
`through prior PTO proceedings, such as
`The amendment employs the Broad-
`tions to this effect to ensure that peti-
`ex parte reexamination, or current or
`cast Innovation test, rather than other
`tioners know that in extreme cir-
`prior litigation.
`multifactor tests employed by other
`cumstance where a gay is not granted,
`The definition of a ‘‘covered business
`district courts, because this test prop-
`the PTO will complete its review in a
`method patent’’ includes ‘‘a method or
`erly emphasizes a fourth factor that is
`compressed timeframe, such as within
`corresponding apparatus.’’ The phrase
`often ignored by the courts: ‘‘whether a
`6 months.
`‘‘method or corresponding apparatus’’
`stay will reduce the burden of litiga-
`To ensure consistent and rigorous ap-
`is intended to encompass, but not be
`tion on the parties and on the court.’’
`plication of the Broadcast Innovation
`limited to, any type of claim contained
`Too many district courts have been
`standard, the amendment also allows
`in a patent, including, method claims,
`content to allow litigation to grind on
`the parties, as of right, to have the
`system
`claims, apparatus
`claims,
`while a reexamination is being con-
`Federal Circuit closely review the ap-
`graphical user interface claims, data
`ducted, forcing the parties to fight in
`plication of this test in a manner that
`structure claims—Lowry claims—and
`two fora at the same time. This is un-
`ensures adherence to these precedents
`set of instructions on storage media
`acceptable, and would be contrary to
`and consistent results across cases. As
`claims—Beauregard claims. A patent
`the fundamental purpose of the Schu-
`such, either party may file an inter-
`qualifies as a covered business method
`mer-Kyl amendment to provide a cost-
`locutory appeal directly with the Fed-
`patent regardless of the type or struc-
`efficient alternative to litigation.
`eral Circuit. Because this amendment
`ture of claims contained in the patent.
`cir-
`Absent
`some
`exceptional
`provides an automatic right to an in-
`Clever drafting of patent applications
`cumstance, the institution of a busi-
`terlocutory appeal, the district court
`should not allow a patent holder to
`ness-methods proceeding—which re-
`does not need to certify the appeal in
`avoid PTO review under this amend-
`quires a high up-front showing and will
`writing, as it would ordinarily need to
`ment. Any other result would elevate
`be completed in a relatively short pe-
`do under 28 U.S.C. § 1292(b). Also, unlike
`form over substance.
`riod of time—should serve as a sub-
`the discretion typically afforded an ap-
`Not all business method patents are
`stitute for litigation, and result in a
`pellate court under 28 U.S.C. § 1292(b),
`eligible for PTO review under this
`stay of co-pending district court litiga-
`under this amendment the Federal Cir-
`amendment. Specifically, ‘‘patents for
`tion.
`cuit may not decline to hear an inter-
`technological inventions’’ are out of
`By adopting this four-factor test,
`locutory appeal.
`scope. The ‘‘patents for technological
`rather than one of the three-factor
`Since the denial of a stay pending
`inventions’’ exception only excludes
`tests used by other courts, the amend-
`post-grant review under this amend-
`those patents whose novelty turns on a
`ment also precludes the use of addi-
`ment is an extraordinary and ex-
`technological innovation over the prior
`tional factors that are not codified
`tremely rare circumstance, the filing
`art and are concerned with a technical
`here and that have occasionally been
`of an interlocutory appeal should re-
`problem which is solved with a tech-
`used by some district courts. For ex-
`sult in the stay of proceedings in the
`nical solution and which requires the
`ample, a few courts have occasionally
`district court pending the appeal. Stay-
`claims to state the technical features
`employed a different de facto fourth
`ing the lower court proceedings while
`which the inventor desires to protect.
`factor: whether the challenger offers
`the Federal Circuit reviews the ques-
`It is not meant