Trials@uspto.gov
`571-272-7822
`
`
`
`Paper 13
`Entered: February 27, 2017
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`TWILIO INC.,
`Petitioner,
`
`v.
`
`TELESIGN CORPORATION,
`Patent Owner.
`____________
`
`Case CBM2016-00099
`Patent 9,300,792 B2
`____________
`
`Before SALLY C. MEDLEY, MICHAEL W. KIM, and JUSTIN T. ARBES,
`Administrative Patent Judges.
`
`ARBES, Administrative Patent Judge.
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`

`

`CBM2016-00099
`Patent 9,300,792 B2
`
`
`Petitioner Twilio Inc. filed a Petition (Paper 1, “Pet.”) requesting
`covered business method patent review of claims 1–18 of U.S. Patent
`No. 9,300,792 B2 (Ex. 1001, “the ’792 patent”) pursuant to 35 U.S.C.
`§ 321(a). Patent Owner TeleSign Corporation filed a Preliminary Response
`(Paper 7, “Prelim. Resp.”) pursuant to 35 U.S.C. § 323. Petitioner filed a
`Reply (Paper 10, “Reply”) and Patent Owner filed a Sur-Reply (Paper 12,
`“Sur-Reply”), pursuant to our authorization (Paper 8). Patent Owner also
`provided, with its Preliminary Response, evidence that it filed with the
`Office a statutory disclaimer of claims 3, 5, 7, 12, 14, and 16 of the
`’792 patent pursuant to 37 C.F.R. § 1.321(a). See Prelim. Resp. 10–11;
`Ex. 2001, 380. Accordingly, no covered business method patent review will
`be instituted for claims 3, 5, 7, 12, 14, and 16. See 37 C.F.R. § 42.207(e).
`For the remaining claims 1, 2, 4, 6, 8–11, 13, 15, 17, and 18, we
`determine whether to institute a covered business method patent review
`under 35 U.S.C. § 324.1 Pursuant to 35 U.S.C. § 324(a), the Director may
`not authorize a covered business method patent review unless the
`information in the petition, if unrebutted, “would demonstrate that it is more
`likely than not that at least 1 of the claims challenged in the petition is
`unpatentable.” For the reasons that follow, we have decided not to institute
`a covered business method patent review.
`
`
`
`
`1 See Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,764–65
`(Aug. 14, 2012) (“[A] patent owner may file a statutory disclaimer of one or
`more challenged claims to streamline the proceedings. Where no challenged
`claims remain, the Board would terminate the proceeding. Where one or
`more challenged claims remain, the Board’s decision on institution would be
`based solely on the remaining claims.”).
`
`
`
`2
`
`

`

`CBM2016-00099
`Patent 9,300,792 B2
`
`
`I. BACKGROUND
`A. The ’792 Patent2
`The ’792 patent pertains to “on-line or web-site registration,” and
`describes processes for (1) “verifying an on-line registration by a telephone
`connection separate from the on-line connection between the web-site and
`potential registrant,” and (2) “notifying registrants of predetermined events
`using information obtained during the registration process.” Ex. 1001,
`col. 1, ll. 29–36. According to the ’792 patent, there was a need in the art
`for a way to accurately verify an individual’s identity during registration
`because “potential registrants often register with untraceable or false e-mail
`addresses and phone numbers.” Id. at col. 1, ll. 37–60. Similarly, there was
`a need to prevent fraud by subsequently notifying the registered individual
`when certain events occur and potentially seeking the individual’s
`authorization. Id. at col. 1, l. 61–col. 2, l. 25.
`The registration process begins with a user filling out “an on-line
`registration form accessed through a website” (i.e., a “first communication
`connection”). Id. at col. 4, ll. 15–17, 51–54. “For example, the registrant or
`consumer could be an individual attempting to access a web-site and set up
`an account with a financial institution.” Id. at col. 4, ll. 35–38. The user
`provides certain information requested in the form, such as his or her
`telephone number. Id. at col. 4, ll. 55–58. The website then sends a Short
`Message Service (SMS) message to the user’s telephone (i.e., a “second
`communication connection”) containing a verification code. Id. at col. 4,
`
`2 The ’792 patent also is challenged in Case IPR2016-01688. The
`’792 patent is related to U.S. Patent No. 8,462,920 B2, challenged in
`Case IPR2016-00450, and U.S. Patent No. 8,687,038 B2, challenged in
`Case IPR2016-00451.
`
`
`
`3
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`

`CBM2016-00099
`Patent 9,300,792 B2
`
`ll. 61–63, col. 6, ll. 29–36. The user enters the verification code in the
`website form and, if there is a match and the information provided shows
`that the user is who he or she purports to be, the user is verified and may
`login. Id. at col. 2, ll. 57–64, col. 4, ll. 63–67.
`“After registration, notification events are established” by the user or
`business utilizing the system or by a third party. Id. at col. 2, l. 65–col. 3,
`l. 1. A notification event may comprise, for example, “a news event, or a
`request to access or alter [the] registrant’s account.” Id. at col. 3, ll. 1–3.
`When a previously established notification event occurs, the user is notified
`via the telephone number provided during registration. Id. at col. 3, ll. 4–10.
`For example, the system may send an SMS message or voice message to the
`user’s telephone containing a verification code. Id. at col. 9, ll. 25–37. The
`user then enters the verification code into a website form, allowing the user
`to verify his or her identity, “provide[ ] confirmation of receipt of the
`information and, where necessary, authorization for the event to occur, such
`as access to the account, etc.” Id. at col. 9, ll. 37–43.
`
`
`B. Illustrative Claim
`Claim 1 of the ’792 patent recites:
`1. A verification and notification method implemented by
`a computing system, the method comprising:
`receiving, from a user, information via a computing
`interface presented to the user as a result of an attempt by the
`user to access a service, the received information including a
`telephone number associated with the user;
`verifying the telephone number by:
`
`
`
`4
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`

`CBM2016-00099
`Patent 9,300,792 B2
`
`
`establishing a short message service (SMS)
`connection with the user using the received telephone
`number;
`communicating a verification code to the user
`through the SMS connection;
`receiving, via the computing interface, a submitted
`verification code that is entered by the user; and
`verifying the telephone number if the submitted
`verification code is the same as the communicated
`verification code;
`completing a registration of the user based on the
`received information and verified telephone number, wherein
`the completed registration enables the user to access the
`service;
`maintaining a record of one or more notification events
`associated with actions that require acknowledgement by the
`user;
`
`upon receiving an indication of an occurrence of an
`established notification event, transmitting a message addressed
`to the verified telephone number indicating the occurrence of
`the notification event; and
`receiving, from the user, an acknowledgement of an
`action associated with the established notification event.
`
`C. The Prior Art
`Petitioner relies on the following prior art:
`U.S. Patent Application Publication No. 2005/0273442
`A1, filed May 23, 2005, published Dec. 8, 2005 (Ex. 1003,
`“Bennett”); and
`U.S. Patent Application Publication No. 2006/0020816
`A1, filed July 5, 2005, published Jan. 26, 2006 (Ex. 1004,
`“Campbell”).
`
`
`
`
`
`5
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`CBM2016-00099
`Patent 9,300,792 B2
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`
`D. The Asserted Grounds
`Petitioner challenges claims 1, 2, 4, 6, 8–11, 13, 15, 17, and 18 of the
`’792 patent3 on the following grounds:
`References
`Basis
`
`Claims Challenged
`
`N/A
`
`35 U.S.C. § 101
`
`35 U.S.C. § 103(a)4
`
`Bennett and
`Campbell
`
`
`
`1, 2, 4, 6, 8–11, 13, 15,
`17, and 18
`1, 2, 4, 6, 8, 10, 11, 13,
`15, and 17
`
`E. Claim Interpretation
`The Board interprets claims in an unexpired patent using the “broadest
`reasonable construction in light of the specification of the patent in which
`[they] appear[ ].” 37 C.F.R. § 42.300(b); Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131, 2144–46 (2016) (upholding the use of the broadest
`reasonable interpretation standard). The parties provide proposed
`interpretations for various claim limitations. See Pet. 25–28; Prelim. Resp.
`9–10. For purposes of this Decision, however, we conclude that no claim
`terms require interpretation.
`
`
`II. DISCUSSION
`Section 18 of the AIA provides for the creation of a transitional
`program for reviewing covered business method patents, and limits reviews
`
`3 As explained above, Patent Owner disclaimed claims 3, 5, 7, 12, 14,
`and 16.
`4 The Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
`(2011) (“AIA”), amended 35 U.S.C. § 103. Because the ’792 patent has an
`effective filing date before the effective date of the applicable AIA
`amendment, we refer to the pre-AIA version of 35 U.S.C. § 103.
`
`
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`

`CBM2016-00099
`Patent 9,300,792 B2
`
`to persons or their privies that have been sued or charged with infringement
`of a “covered business method patent,” which does not include patents for
`“technological inventions.” AIA §§ 18(a)(1)(B), 18(d)(1); see 37 C.F.R.
`§ 42.302. Petitioner bears the burden of demonstrating that the ’792 patent
`is a covered business method patent. See 37 C.F.R. § 42.304(a). For the
`reasons explained below, Petitioner has not demonstrated that the ’792
`patent 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) (emphasis added); see 37 C.F.R.
`§ 42.301(a). The U.S. Court of Appeals for the Federal Circuit recently held
`the following regarding the scope of covered business method (CBM) patent
`review:
`CBM patents are limited to those with claims that are directed
`to methods and apparatuses of particular types and with
`particular uses “in the practice, administration, or management
`of a financial product or service.” The patent for a novel
`lightbulb that is found to work particularly well in bank vaults
`does not become a CBM patent because of its incidental or
`complementary use in banks. Likewise, it cannot be the case
`that a patent covering a method and corresponding apparatuses
`becomes a CBM patent because its practice could involve a
`potential sale of a good or service. All patents, at some level,
`relate to potential sale of a good or service. Take, for example,
`a patent for an apparatus for digging ditches. Does the sale of
`the dirt that results from use of the ditch digger render the
`patent a CBM patent? No, because the claims of the
`ditch-digging method or apparatus are not directed
`to
`“performing data processing or other operations” or “used in
`
`
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`CBM2016-00099
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`
`
`the practice, administration, or management of a financial
`product or service,” as required by the statute. It is not enough
`that a sale has occurred or may occur, or even that the
`specification speculates such a potential sale might occur.
`Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1382 (Fed. Cir. 2016)
`(citations omitted); see also Secure Axcess, LLC v. PNC Bank Nat’l Ass’n,
`-- F.3d --, 2017 WL 676601, at *9 (Fed. Cir. Feb. 21, 2017) (“Necessarily,
`the statutory definition of a CBM patent requires that the patent have a claim
`that contains, however phrased, a financial activity element.”); Blue
`Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016)
`(approving of prior Board decisions that “properly focuse[d] on the claim
`language at issue and, finding nothing explicitly or inherently financial in
`the construed claim language, decline[d] to institute CBM review,” and
`finding that the challenged patent was eligible for review because the claims
`recited “an express financial component in the form of a subsidy” that was
`“central to the operation of the claimed invention”); Versata Dev. Grp., Inc.
`v. SAP Am., Inc., 793 F.3d 1306, 1325 (Fed. Cir. 2015) (stating that “the
`definition of ‘covered business method patent’ is not limited to products and
`services of only the financial industry” and “on its face covers a wide range
`of finance-related activities”). A patent need have only one claim directed to
`a covered business method to be eligible for review. 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).
`Petitioner cites six claims of the ’792 patent in support of its argument
`that the ’792 patent is a covered business method patent: claims 1, 5, 7, 10,
`14, and 16. See Pet. 5–6; Reply 1–3.
`
`
`
`8
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`

`CBM2016-00099
`Patent 9,300,792 B2
`
`
`Disclaimed Claims 5, 7, 14, and 16
`Claims 5 and 14 recite that “the notification event is associated with
`activity related to a financial account associated with the user.” Claims 7
`and 16 recite “charging a fee to the user based at least in part on the user
`being notified of the occurrence of the established notification event.”
`Petitioner points to these limitations as supporting its contention that the
`’792 patent is a covered business method patent. See Pet. 5–6; Reply 2.
`Patent Owner, however, statutorily disclaimed claims 5, 7, 14, and 16,
`pursuant to 35 U.S.C. § 253(a) and 37 C.F.R. § 1.321(a). See Prelim. Resp.
`10–11; Ex. 2001, 380. Accordingly, we treat the ’792 patent as though these
`claims never existed. See Vectra Fitness, Inc. v. TWNK Corp., 162 F.3d
`1379, 1383 (Fed. Cir. 1998) (“This court has interpreted the term
`‘considered as part of the original patent’ in section 253 to mean that the
`patent is treated as though the disclaimed claims never existed.”); Guinn v.
`Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996) (“A statutory disclaimer under
`35 U.S.C. § 253 has the effect of canceling the claims from the patent and
`the patent is viewed as though the disclaimed claims had never existed in the
`patent.”); see also Genetics Inst., LLC v. Novartis Vaccines & Diagnostics,
`Inc., 655 F.3d 1291, 1299 (Fed. Cir. 2011) (holding that the Board’s
`interference jurisdiction under 35 U.S.C. § 291 required “the existence of an
`interference, and a claim that ‘never existed’ [due to a statutory disclaimer]
`cannot form the basis for an interference”); Blue Calypso, 815 F.3d at 1340
`(citing previous Board decisions that “properly focuse[d] on the claim
`language at issue”). Petitioner’s arguments regarding claims 5, 7, 14, and
`16, therefore, are not persuasive.
`
`
`
`
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`Patent 9,300,792 B2
`
`
`Claims 1 and 10
`Petitioner also relies on independent claims 1 and 10 in support of its
`contention that the ’792 patent is a covered business method patent. Pet.
`5–6; Reply 1–3. At the outset, we note that Petitioner’s argument in the
`Petition that “the fraud prevention process claimed by the ’792 patent is
`‘financial in nature, incidental to a financial activity or complementary to a
`financial activity’” is incorrect, as it is based on language from the AIA’s
`legislative history that was rejected by the Federal Circuit in Unwired
`Planet. See Pet. 5; 841 F.3d at 1380–82. Rather, the question is whether the
`’792 patent “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,” and we evaluate Petitioner’s
`arguments based on that statutory language. AIA § 18(d)(1).
`Petitioner points to the recitation in claims 1 and 10 of a “service” and
`“notification event,” arguing that a “primary embodiment” in the
`Specification of the ’792 patent is a “financial fraud detection system” with
`notification events “linked to financial activity.” Pet. 6 (citing Ex. 1001,
`col. 11, ll. 10–33, 46–57, claims 5, 14). Claims 1 and 10 recite a
`“computing interface presented to the user as a result of an attempt by the
`user to access a service,” completing a registration that “enables the user to
`access the service,” “maintaining a record of one or more notification events
`associated with actions that require acknowledgement by the user,”
`transmitting a message “indicating the occurrence of the notification event,”
`and receiving an “acknowledgement of an action associated with the
`established notification event” from the user. Thus, as used in the claims,
`“service” and “notification event” are generic, context-neutral terms, without
`
`
`
`10
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`

`

`CBM2016-00099
`Patent 9,300,792 B2
`
`any express or implicit connection to financial products or services. See
`Reply 2 (acknowledging that “[c]laim 1 is not exclusively directed at a
`financial activity”). Petitioner also does not propose interpreting the terms
`such that they would be financial in nature. See Pet. 25–28. Nor do we find
`any other language in claims 1 and 10 relating to financial products or
`services. See Prelim. Resp. 14–16, 24–27, 29–34.
`We agree with Petitioner that the Specification of the ’792 patent
`describes various embodiments pertaining to finance-related services and
`notification events. See Pet. 6; Reply 2; Ex. 1001, col. 1, l. 64–col. 2, l. 12,
`col. 11, ll. 10–33. The Specification, however, characterizes these as merely
`“example[s],” and does not indicate that the disclosed system is limited, or
`even directed primarily, to just finance-related activities. See, e.g., Ex. 1001,
`col. 4, ll. 35–38 (“For example, the registrant or consumer could be an
`individual attempting to access a web-site and set up an account with a
`financial institution.”), col. 11, ll. 15–17 (“For example, the consumer may
`wish to be notified every time a withdrawal of more than one thousand
`dollars is requested from his or her checking account.”).
`In fact, the Specification indicates just the opposite. See id. at col. 2,
`ll. 12–16 (“There are also instances which are not financially based in which
`notification could benefit both the consumer as well as the business.”),
`col. 11, ll. 10–42 (“The alert/notification aspect of the present invention can
`be implemented in a wide variety of scenarios. . . . The present invention is
`not limited to notifying a user of events that occur with respect to a financial
`account. Instead, alerts or notifications can be given to the user for any
`reason.”). The Specification provides multiple examples of services and
`notification events outside the financial context, such as providing access to
`
`
`
`11
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`

`

`CBM2016-00099
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`
`information on a secure website and notifying the user of sports scores,
`airline flight changes, etc. See, e.g., id. at col. 2, ll. 15–16, col. 5, ll. 48–53,
`col. 10, ll. 36–47, col. 11, ll. 38–42; Pet. 26 (acknowledging that the
`Specification of the ’792 patent “uses the term ‘notification event’ broadly,”
`where “[n]otification events can be implemented in ‘a wide variety of
`scenarios,’” such as “a news event” (citations omitted)). Other panels of the
`Board have found patents not to meet the definition of “covered business
`method patent” in similar circumstances.5
`
`
`5 See, e.g., Facebook, Inc. v. Skky, LLC, Case CBM2016-00091, slip op. at
`10–14 (PTAB Nov. 23, 2016) (Paper 7) (claim generically reciting
`“tracking” file selection, where the specification disclosed financial as well
`as “possible technical as well as non-financial reasons why files are to be
`tracked”); Google Inc. v. SimpleAir, Inc., Case CBM2015-00019, slip op. at
`10–13 (PTAB May 19, 2015) (Paper 11) (claim reciting “only generic,
`context-neutral ‘data,’ without any language relating to a financial product
`or service”); Sega of Am., Inc. v. Uniloc USA, Inc., Case CBM2014-00183,
`slip op. at 11–13 (PTAB Mar. 10, 2015) (Paper 11) (claims were “directed to
`technology that restricts the use of software” where the software had “no
`particular relationship to a financial product or service”); Salesforce.com,
`Inc. v. Applications in Internet Time LLC, Case CBM2014-00162, slip op. at
`9–10 (PTAB Feb. 2, 2015) (Paper 11) (patent specification referred to
`“banking, financial and securities activities” as “part of a long list of
`regulated industries . . . that use business software and could benefit from
`the invention”); J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC,
`Case CBM2014-00160, slip op. at 6–12 (PTAB Jan. 29, 2015) (Paper 11)
`(claims pertaining to secure electronic communications had “general utility
`not limited or specific to any application”); PNC Fin. Servs. Group, Inc. v.
`Intellectual Ventures I LLC, Case CBM2014-00032, slip op. at 6–15 (PTAB
`May 22, 2014) (Paper 13) (claims described “software systems that have
`general utility not specific to any application”); Prelim. Resp. 18–20.
`
`
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`12
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`
`In its Reply,6 Petitioner attempts to distinguish the instant facts from
`prior decisions involving generic, context-neutral claim terms, because the
`finance-related embodiments described in the Specification show that “the
`primary purpose of the ’792 [patent] is financially related,” and a claim need
`not be “exclusively for the administration of a financial service” to be
`eligible. Reply 1–3 (emphasis omitted). Again, our focus is on what the
`’792 patent claims, not solely the exemplary embodiments described in the
`Specification, some of which are related to finance and some of which are
`not. See Secure Axcess, 2017 WL 676601, at *6 (“the written description
`alone cannot substitute for what may be missing in the patent ‘claims,’ and
`therefore does not in isolation determine CBM status”). Petitioner’s
`arguments are not persuasive given the generic claim language and broad
`disclosure in the Specification cited above. Further, we do not agree with
`Petitioner that the “primary purpose” of the ’792 patent relates to finance.
`See Reply 3. The ’792 patent describes a need in the art for a more secure
`way to “verify[ ] a registrant’s identity” during online registration and notify
`the registrant of designated events because individuals “often register with
`untraceable or false e-mail addresses and phone numbers,” which “can
`compromise the intended purpose of the registration, create a breach of
`security and constitute fraud on the web-site owners.” Ex. 1001, col. 1,
`ll. 29–30, col. 1, l. 52–col. 2, l. 25, col. 5, ll. 1–7. As explained in the
`
`6 Given our disposition explained herein, we need not decide whether the
`arguments made in Petitioner’s Reply were proper. See Sur-Reply 1; Paper
`8, 2 (authorizing a reply to address “(1) the impact of Unwired Planet, . . .
`and (2) whether certain claims of the challenged patent that were statutorily
`disclaimed by Patent Owner should be considered in determining whether
`the challenged patent is eligible for covered business method patent
`review”).
`
`
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`
`’792 patent, that need existed in contexts beyond those that are financial. Id.
`at col. 2, ll. 12–16, col. 11, ll. 10–42.
`Finally, Petitioner argues that Unwired Planet requires the Board to
`“strike the proper balance between (1) an invention of general usage that
`could also be used in the administration of a financial service and (2) an
`invention that is used in administration of a financial service but that could
`also be used for non-financial purposes.” Reply 1. Petitioner, however,
`does not quote anything in Unwired Planet for this proposition, which
`appears to contradict the Federal Circuit’s direction that covered business
`method patents “are limited to those with claims that are directed to methods
`and apparatuses of particular types and with particular uses ‘in the practice,
`administration, or management of a financial product or service,’” and
`“[i]t is not enough that a sale . . . may occur, or even that the specification
`speculates such a potential sale might occur.” See Unwired Planet, 841 F.3d
`at 1382 (emphasis added).
`For the foregoing reasons, based on the record presented and
`particular facts of this proceeding, Petitioner has not established that the
`’792 patent claims a method or apparatus for performing data processing or
`other operations used in the practice, administration, or management of a
`financial product or service. Therefore, the ’792 patent does not qualify as a
`“covered business method patent” under § 18(d)(1) of the AIA, and we do
`not institute a covered business method patent review on any of the asserted
`grounds as to any of the challenged claims.
`
`
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`
`III. ORDER
`In consideration of the foregoing, it is hereby:
`ORDERED that the Petition is denied as to all challenged claims of
`the ’792 patent.
`
`
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`CBM2016-00099
`Patent 9,300,792 B2
`
`PETITIONER:
`
`Wayne O. Stacy
`Eliot D. Williams
`Sarah J. Guske
`BAKER BOTTS L.L.P.
`wayne.stacy@bakerbotts.com
`eliot.williams@bakerbotts.com
`
`PATENT OWNER:
`
`Jesse J. Camacho
`Amy M. Foust
`Elena S. K. McFarland
`Mary J. Peal
`SHOOK, HARDY & BACON L.L.P.
`jcamacho@shb.com
`afoust@shb.com
`emcfarland@shb.com
`mpeal@shb.com
`
`
`
`
`
`
`
`16
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`