UNITED STATES PATENT AND TRADEMARK OFFICE
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________
`
`
`
`FORD MOTOR COMPANY
`Petitioner,
`
`v.
`
`VERSATA SOFTWARE, INC.
`Patent Owner.
`
`______________
`
`U.S. Patent No. 8,805,825
`
`CBM Case No.: 2016-00100
`
`
`
`______________
`
`
`
`REQUEST FOR REHEARING
`UNDER 37 C.F.R. § 42.71(d)
`
`
`
`
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________
`
`
`
`FORD MOTOR COMPANY
`Petitioner,
`
`v.
`
`VERSATA SOFTWARE, INC.
`Patent Owner.
`
`______________
`
`U.S. Patent No. 8,805,825
`
`CBM Case No.: 2016-00100
`
`
`
`______________
`
`
`
`REQUEST FOR REHEARING
`UNDER 37 C.F.R. § 42.71(d)
`
`
`
`
`
`Atty. Dkt. No.: FPGP0130CBMR1
`
`Case No.: CBM 2016-00100
`Patent No.: 8,805,825
`
`Introduction
`
`
`
`I.
`
`On March 20, 2017, the United States Patent Trial and Appeal Board denied
`
`institution of a covered business method patent review of claims 1–4, 6–9, 11–14,
`
`and 17–19 of U.S. Patent No. 8,805,825 B1 (“the ‘825 patent”). Pursuant to 37
`
`C.F.R. § 42.71(d), Ford asks for rehearing.
`
`II. Background
`
`On January 11, 2017, Ford filed a Petition for Post-Grant Review (Covered
`
`Business Method Review) under 35 U.S.C. § 321 and § 18 of the Leahy-Smith
`
`America Invents Act with respect to claims 1-20 of the ‘825 patent. (Paper 1.)
`
`Claims 1, 6, and 11 are independent claims.
`
`In its Petition, Ford argued, “[t]he ‘825 Patent is a covered business method
`
`because the claims cover sorting (i.e., prioritizing) configurations based on financial
`
`attributes such as price and cost.” (Paper 1 at 7, see also Paper 1 at 10, “In other
`
`words, the claimed inventions of the ‘825 Patent are applicable to sales of products
`
`and ‘financial services’ as well as other financial applications such as sales.”) For
`
`example, dependent claim 5 of the ’825 patent expressly confirms that the
`
`“products” being configured in claim 1 are “vehicles, computers, and financial
`
`1
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`
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`products.”1 Thus, Ford’s primary argument was that claims 1-20 are used in the
`
`practice, administration, or management of a financial product or service under AIA
`
`§ 18. (Paper 1 at 7-10.) Ford mentioned, only secondarily and only in a single
`
`sentence, that the claims are “at least ‘incidental to’ or ‘complimentary to’ a financial
`
`activity.” (Paper 1 at 10-11.)
`
`Before filing its Preliminary Response (Paper 6), Patent Owner disclaimed
`
`dependent claims 5, 10, and 15 which expressly recited “financial products.” (See
`
`Paper 6 at 13.) Soon after the disclaimer was filed, but before Patent Owner filed its
`
`Preliminary Response, the Federal Circuit issued its decision in Unwired Planet,
`
`LLC v. Google, Inc., 841 F.3d 1376 (Fed. Cir. 2016). Thus, Patent Owner was able
`
`to address both the disclaimer and Unwired Planet in its Preliminary Response.
`
`Because the disclaimer and Unwired Planet occurred after Ford filed its
`
`Petition, the Board allowed both parties to file 3-page briefs addressing the effects
`
`of: (1) Patent Owner’s disclaimer of claims 5, 10, and 15, and (2) Unwired Planet.
`
`In its Preliminary Reply, Ford again argued that the properly construed claims recite
`
`“‘finance-related activities’ covered by the CBM statute.” (Paper 10 at 1.)
`
`
`1 Throughout this document, all emphasis is added unless otherwise stated.
`
`Dependent claims 10 and 15 define “products” identically for their respective
`
`independent claims.
`
`2
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`
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`Case No.: CBM 2016-00100
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`
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`The decision denying institution was based on the Board’s conclusion that:
`
`(1) Versata’s disclaimer removed claims 5, 10, and 15 from consideration, and (2)
`
`the remaining claims of the ‘825 patent were not CBM eligible after the disclaimer
`
`and Unwired Planet. All three Administrative Patent Judges held that institution
`
`should be denied, but each did so on somewhat different grounds. Judge Medley
`
`and Judge Turner relied on their view that Unwired Planet, Secure Axcess, LLC v.
`
`PNC Bank Nat’l Ass’n,2 and Blue Calypso, LLC v. Groupon, Inc.,3 created a standard
`
`that prevents claims from serving as the basis for CBM review where the claims
`
`cover financial products and services but also cover more than just those products
`
`or services. Judge Arpin concurred because the “Patent Owner’s disclaimer of
`
`claims 5, 10, and 15 [] narrowed the scope of [independent] claims 1, 6, and 11,”
`
`and thus made the claims ineligible for CBM review. (Paper 12 at 6, Arpin, APJ
`
`concurring.)
`
`III. Argument
`
`A. Versata’s disclaimer did not remove claims 5, 10, and 15
`from consideration
`
`On April 17, 2017, the Federal Circuit issued a precedential opinion in
`
`
`2 No. 2016-1353, 2017 WL 676601, at *9 (Fed. Cir. Feb. 21, 2017).
`
`3 815 F.3d 1331 (Fed. Cir. 2016).
`
`3
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`Atty. Dkt. No.: FPGP0130CBMR1
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`Case No.: CBM 2016-00100
`Patent No.: 8,805,825
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`
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`Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., Case No. 2016-
`
`1729 (Fed. Cir. Apr. 17, 2017). In that decision, the Federal Circuit distinguished a
`
`disclaimer’s effect on the patent owner from its effect on the public.
`
`In Rembrandt, patent owner had licensed claim 40 of its patent to a third party,
`
`who did not mark the products it sold with the patent’s number. Rembrandt then
`
`sued Samsung, who raised a marking defense. Within days, Rembrandt disclaimed
`
`claim 40 and asserted that the marking defense did not apply. The district court
`
`agreed:
`
`The court accepted Rembrandt’s argument that any prior obligation to
`
`mark products embodying claim 40 vanished once it disclaimed claim
`
`40. Adopting the Magistrate Judge’s recommendation, the District
`
`Judge relied on the proposition that “[u]nder Federal Circuit
`
`precedent, a disclaimed patent claim is treated as if it never existed.”
`
`Id., slip op. at 19 (citation omitted).
`
`The Federal Circuit reversed the district court’s ruling. The Federal Circuit
`
`explained that a disclaimer does not relinquish the public’s rights:
`
`[W]hile we have held that a disclaimer relinquishes the rights of the
`
`patent owner, we have never held that the patent owner’s disclaimer
`
`relinquishes the rights of the public. Indeed, our precedent and that of
`
`other courts have not readily extended the effects of disclaimer to
`
`situations where others besides the patentee have an interest that relates
`
`to the relinquished claims.
`
`4
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`
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`Id., slip op. at 21 (citation omitted).
`
`For support, the court cited Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir.
`
`1996) as “holding disclaimer of an allegedly interfering claim did not divest the
`
`Board of jurisdiction over interference proceeding.” Id. The Federal Circuit
`
`concluded that Rembrandt’s disclaimer of claim 40 did not defeat Samsung’s
`
`marking defense because “the marking statute’s focus is not only the rights of the
`
`patentee, but the rights of the public.” Id., slip op. at 21-22.
`
`The CBM statute, AIA § 18, focuses on the rights of the public to be free of
`
`patent claims that do not meet the statutory requirements for patentability. Because
`
`the statute protects the public, Versata’s disclaimer of claims 5, 10, and 15 after
`
`Ford filed its CBM petition does not remove those claims from consideration by the
`
`Board under Rembrandt. A district court cannot ignore disclaimed claims under the
`
`marking statute. Rembrandt, Case No. 2016-1729, slip op. at 21-22. Likewise, the
`
`Board cannot ignore disclaimed claims 5, 10, and 15 under AIA § 18.
`
`From the Board’s opinions, it is apparent that at least judges Turner and Arpin
`
`would have found claims 5, 10, and 15 CBM-eligible but for the disclaimer.4 (Paper
`
`
`4 Judge Medley may also have held that view, although it is not clear from her
`
`opinion.
`
`5
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`12 at 2, Turner, APJ concurring;5 Paper 12 at 6, Arpin, APJ concurring.6) The stated
`
`basis for ignoring claims 5, 10, and 15 was the view rejected in Rembrandt (and
`
`Guinn) that those claims must “be treated as if they never existed.” (Paper 12 at 8,
`
`Medley, APJ; Paper 12 at 1, Turner, APJ concurring; Paper 12 at 4, Arpin, APJ
`
`concurring.) Applying the Federal Circuit’s Rembrandt analysis to AIA § 18, the
`
`Board wrongly disregarded claims 5, 10, and 15 in deciding whether claims of the
`
`‘825 patent are directed to financial products or services. Because those dependent
`
`claims, which cannot be ignored, explicitly recite financial products, the ‘825 patent
`
`remains eligible for CBM review. For this reason alone, the Board should grant this
`
`Petition for Rehearing and reconsider its decision denying institution of CBM
`
`review.
`
`
`
`
`5 “Had claim 5 not been disclaimed, it is readily apparent that claim 5 would have
`
`been found to be a method or apparatus for performing data processing or other
`
`operations used in the practice, administration, or management of a financial product
`
`or service.”
`
`6 “Thus, initially, I would find that the broadest reasonable interpretation of the term
`
`‘product,’ in independent claims 1, 6, and 11, encompasses ‘financial services.’”
`
`6
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`Atty. Dkt. No.: FPGP0130CBMR1
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`
`
`B.
`
`The Board is reading the recent Unwired Planet, Secure
`Axcess, and Blue Calypso cases too narrowly
`
`Putting aside claims 5, 10, and 15, the remaining claims of the ‘825 patent are
`
`well-within § 18 of the America Invents Act. While the disclaimed claims are no
`
`longer enforceable, the remaining claims, including claim 1, remain eligible for a
`
`CBM given that the statutory language defines eligibility of a CBM as “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.” See Section 18(d)(1).
`
`In the decision denying the petition, the Board applied the Federal Circuit’s
`
`Unwired Planet, Secure Axcess, and Blue Calypso cases too narrowly and
`
`determined that the remaining claims in the patent were not CBM eligible. Due to
`
`this misapprehension of the statute and mistaken interpretation of the Federal
`
`Circuit’s decisions, the Board abused its discretion when it denied Ford’s CBM
`
`Petition.
`
`In the decision, Judge Turner found that “independent claims 1, 6, and 11 are
`
`sufficiently broad to cover their use with financial products, and the clear intent was
`
`for them to be applied to financial products . . . .” (Paper 12 at 2, Turner, APJ
`
`concurring.) Judge Turner even noted that the Board’s decision not to institute the
`
`trial was troubling because it “allows for a broader claim, intended to be directed to
`
`7
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`Atty. Dkt. No.: FPGP0130CBMR1
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`
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`a financial product, to escape review.” (Id. at 3.) Nonetheless, he concluded that
`
`the result was mandated by Unwired Planet. (Id.)
`
`But, contrary to the Board’s interpretation, the Federal Circuit’s opinion in
`
`Unwired Planet does not require that claims, which are directed to a financial
`
`product or service, be denied CBM review merely because the claims also cover
`
`other products or services. Unwired Planet does not require that a claim must cover
`
`only financial products or services to be eligible for CBM review.
`
`In Unwired Planet, the Federal Circuit did away with the Board’s prior CBM
`
`review standard, which captured claims that were only “incidental to” or
`
`“complementary to” a financial activity. Unwired Planet, 841 F.3d at 1382. The
`
`Federal Circuit held, “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 produce or service.’” Id.
`
`Unwired Planet set a floor for CBM review eligibility, but it did not set a ceiling—
`
`i.e., it did not prohibit a CBM review for an otherwise-covered business method
`
`claim that also covers other, non-financial, products or activities.
`
`In Ford’s view, the Board has misapplied Federal Circuit law to set an
`
`artificially low ceiling for CBM eligibility, which results in nearly every patent –
`
`whether the patent can be asserted against financial products or not – CBM
`
`ineligible. It is not the case that
`
`8
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`Atty. Dkt. No.: FPGP0130CBMR1
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`Case No.: CBM 2016-00100
`Patent No.: 8,805,825
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`
`
` [u]nder Unwired Planet and Blue Calypso, to provide CBM eligibility,
`
`a claim must be limited, explicitly or inherently, to ‘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.” AIA § 18(d)(1). The fact that a claim is
`
`broad enough to encompass a finance-related activity does not
`
`necessarily mean that the claim, as a whole, is limited to that finance-
`
`related activity.
`
`Kayak Software Corp. v. Int’l Bus. Mach. Corp., CBM2016-00078, Paper 15 at 9
`
`(Dec. 15, 2016), see also Ford, CBM2016-00100, Paper 12 at 2 (Turner, APJ,
`
`concurring) (“even though independent claims 1, 6, and 11 are sufficiently broad to
`
`cover their use with financial products, and the clear intent was for them to be
`
`applied to financial products, they cannot render the ’825 patent to be subject to a
`
`covered business method patent review.”).
`
`Ford does not dispute that, under Unwired Planet, a claim is not eligible for
`
`CBM review merely because “a sale has occurred or may occur, or even that the
`
`specification speculates such a potential sale might occur.” But, the Federal Circuit
`
`never indicated a claim is rendered ineligible simply because it is directed to more
`
`than financial services. Id. Such a reading is unsupported by the statute or the
`
`holding of Unwired Planet.
`
`AIA § 18(d) only requires that a claim be “directed to methods and
`
`9
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`Atty. Dkt. No.: FPGP0130CBMR1
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`
`
`
`apparatuses of particular types and with particular uses ‘in the practice,
`
`administration, or management of a financial produce or service.” Unwired Planet,
`
`841 F.3d at 1382. Nowhere does the text of the statute, or the legislative history for
`
`that matter, support the interpretation that directed to means “solely directed to” or
`
`“primarily directed to.” Determining which claims are “primarily” directed to
`
`financial services would lead to arbitrary results because there is no clear way to
`
`measure whether such matters exist.
`
`The Federal Circuit was concerned with the PTAB’s “incidental to” or
`
`complimentary to” standard because it could render virtually every claim CBM
`
`review eligible because “[a]ll patents, at some level, relate to potential sale of a good
`
`or service.” Id. at 1382. This concern is embodied in the Federal Circuit’s example
`
`of a patent for a novel lightbulb that is found to work particularly well in bank vaults.
`
`Id. The financial nature of the hypothetical light bulb is at best incidental or
`
`complementary, as the light bulb is not directly related to “methods and apparatuses
`
`of particular types and with particular uses ‘in the practice, administration, or
`
`management of a financial produce or service.” Id.
`
`To remedy the problem, the Federal Circuit only established a floor for
`
`review: “[i]t is not enough that a sale has occurred or may occur, or even that the
`
`specification speculates such a potential sale might occur.” Id. The Federal Circuit’s
`
`analysis does not require the Board to impose a ceiling.
`
`10
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`
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`Atty. Dkt. No.: FPGP0130CBMR1
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`Case No.: CBM 2016-00100
`Patent No.: 8,805,825
`
`
`
`Reading the Federal Circuit cases as creating a ceiling frustrates the very
`
`purpose of CBM reviews by allowing patentees to escape review by merely
`
`broadening their claims, as Judge Turner points out. (Paper 12 at 3, Turner, APJ
`
`concurring.) If a patentee can evade CBM review by simply claiming financial
`
`products and more, it becomes virtually impossible to find a patent claim eligible
`
`for CBM review, essentially eliminating all CBM reviews. “Such a result should be
`
`troubling for accused infringers, utilizing such financial products, who cannot avail
`
`themselves of post-grant proceedings for patents directed to what such reviews were
`
`intended to cover.” Id.
`
`In the present case, Ford’s primary argument, in its Petition and in its
`
`Preliminary Reply, was that the challenged claims themselves are directed to
`
`financial activities, as opposed to being merely “incidental” or “complimentary” to
`
`a financial activity. (Paper 1 at 6-11; Paper 10 at 1-2.)
`
`Judge Arpin found that, absent the Patent Owner’s disclaimer, the term
`
`“product” in the independent claims “encompasses ‘financial services.’” (Paper 12
`
`at 6, Arpin, APJ concurring.) Judge Turner agreed, saying, “the clear intent was for
`
`[the independent claims] to be applied to financial products.” (Paper 12 at 2, Turner,
`
`APJ, concurring.) Yet, Judges Medley and Turner denied CBM review premised on
`
`the view that such claims are not “directed to methods and apparatuses . . . with
`
`particular uses ‘in the practice, administration, or management of a financial produce
`
`11
`
`
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`Atty. Dkt. No.: FPGP0130CBMR1
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`Case No.: CBM 2016-00100
`Patent No.: 8,805,825
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`
`
`or service’” under Unwired Planet, Secure Axcess, and Blue Calypso.
`
`Under Judge Medley’s and Judge Turner’s analyses, Versata’s disclaimer did
`
`not remove “financial products” from the scope of claim 1.7 Accordingly, under
`
`those analyses, claim 1 still covers “financial products,” which are definitionally,
`
`“performing data processing or other operations used
`
`in
`
`the practice,
`
`administration, or management of a financial product or service.” AIA § 18. But
`
`for the improper interpretation of the Federal Circuit cases, Judges Medley and
`
`Turner should have held that claim 1 remains eligible for CBM review despite
`
`Versata’s statutory disclaimer.
`
`
`
`
`7 In contrast, Judge Arpin held that Versata’s disclaimer narrowed claim 1 by
`
`removing the products enumerated in claim 5, including “financial products,” from
`
`the scope of the term “products” in claim 1. (Paper 12 at 7, Arpin, APJ concurring.)
`
`12
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`
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`Atty. Dkt. No.: FPGP0130CBMR1
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`Case No.: CBM 2016-00100
`Patent No.: 8,805,825
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`
`
`IV. Conclusion
`
`For the reasons given above, the Board should reconsider and institute trial on
`
`claims 1– 4, 6–9, 11–14, and 17–19 of the ‘825 patent.
`
`
`Dated: April 19, 2017
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
` /Christopher C. Smith/
`Christopher C. Smith (Reg. No. 59,669)
`John S. LeRoy (Reg. No. 48,158)
`Thomas A. Lewry (Reg. No. 30,770)
`Frank A. Angileri (Reg. No. 36,733)
`John P. Rondini (Reg. No. 64,949)
`Jonathan D. Nikkila (Reg. No. 74,694)
`Brooks Kushman P.C.
`1000 Town Center, 22nd Floor
`Southfield, MI 48075
`
`Attorneys for Petitioner
`
`
`13
`
`
`
`Atty. Dkt. No.: FPGP0130CBMR1
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`Case No.: CBM 2016-00100
`Patent No.: 8,805,825
`
`
`
`Certificate of Service
`
`The undersigned hereby certifies that the foregoing REQUEST FOR
`REHEARING UNDER 37 C.F.R. § 42.71(d) was served in its entirety on April
`19, 2017, upon the following parties by electronic mail at PTAB@skgf.com, rsterne-
`PTAB@skgf.com; sbezos-PTAB@skgf.com; holoubek@skgf.com;
`jmutsche-
`PTAB@skgf.com;
`jtuminar-PTAB@skgf.com;
`kchambers@tcchlaw.com;
`sharoon.saleem@jonesspross,com:
`
`Lead Counsel
`Robert Greene Sterne
`Reg. No. 28,912
`rsterne-PTAB@skgf.com
`STERNE, KESSLER,
`GOLDSTERN & FOX P.L.L.C.
`1100 New York Avenue, N.W.
`Washington, D.C. 20005
`
`
`Back Up Counsel
`Salvador M. Bezos, Reg. No. 60,889
`Michelle K. Holoubek, Reg. No. 54,179
`Joseph E. Mutschelknaus, Reg. No. 63,285
`Jonathan Tuminaro, Reg. No. 61,327
`STERNE, KESSLER, GOLDSTEIN &
`FOX P.L.L.C.
`1100 New York Avenue, N.W.
`Washington, D.C. 20005
`
`Back Up Counsel
`Sharoon Saleem, Reg. No. 63,711
`Sharoon.saleem@jonesspross,com
`JONES & SPROSS, P.L.L.C.
`1605 Lakecliff Hills Ln., Suite 100
`Austin, TX 78732-2437
`
`
`
` /Christopher C. Smith/
`Christopher C. Smith (Reg. No. 59,669)
`Brooks Kushman P.C.
`1000 Town Center, 22nd Floor
`Southfield, MI 48075
`
`Attorneys for Petitioner
`
`14
`
`Back Up Counsel
`Kent B. Chambers
`Reg. No. 38,839
`kchambers@tcchlaw.com
`TERRILE, CANNATTI,
`CHAMBERS, HOLLAND, L.L.P.
`11675 Jollyville Road, Suite 100
`Austin, TX 78759
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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