Trials@uspto.gov Paper 19
`571-272-7822 Entered: May 24, 2018
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`TICKETNETWORK, INC.,
`Petitioner,
`
`v.
`
`CEATS, LLC,
`Patent Owner.
`____________
`
`Case CBM2018-00004
`Patent 8,229,774 B2
`____________
`
`
`
`Before MICHAEL W. KIM, WILLIAM V. SAINDON, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`
`CHERRY, Administrative Patent Judge.
`
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`35 U.S.C. § 324
`
`
`
`
`
`
`571-272-7822 Entered: May 24, 2018
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`TICKETNETWORK, INC.,
`Petitioner,
`
`v.
`
`CEATS, LLC,
`Patent Owner.
`____________
`
`Case CBM2018-00004
`Patent 8,229,774 B2
`____________
`
`
`
`Before MICHAEL W. KIM, WILLIAM V. SAINDON, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`
`CHERRY, Administrative Patent Judge.
`
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`35 U.S.C. § 324
`
`
`
`
`
`
`
`CBM2018-00004
`Patent 8,229,774 B2
`
`I. INTRODUCTION
`TicketNetwork, Inc. (“Petitioner”) filed a Petition (Paper 2, “Pet.”)1
`for a covered business method patent review of U.S. Patent No. 8,229,774
`B2 (Ex. 1001, “the ’774 patent” or “the challenged patent”) under section 18
`of the Leahy-Smith America Invents Act, Pub. L. No. 112–29, 125 Stat. 284,
`331 (2011) (“AIA”). Patent Owner, CEATS, LLC, filed a Preliminary
`Response (“Prelim. Resp.”) opposing institution. Paper 10.2 By an Order
`(Paper 13), we allowed Petitioner to file a Reply (Paper 14) and Patent
`Owner to file a Sur-Reply (Paper 17). Under 35 U.S.C. § 324(a)3, a covered
`business method patent review may not be instituted “unless . . . the
`information presented in the petition . . ., if such information is not rebutted,
`would demonstrate that it is more likely than not that at least 1 of the claims
`challenged in the petition is unpatentable.” 35 U.S.C. § 324(a).
`For reasons that follow, we determine that Petitioner has failed to
`show that it has standing to bring this proceeding. Accordingly, we deny the
`Petition and do not institute a covered business method patent review of the
`challenged claims.
`
`
`1 Petitioner filed the Petition under seal and a redacted version as Paper 3.
`2 Patent Owner filed the Preliminary Response under seal and a redacted
`version as Paper 11.
`3 GTNX, Inc. v. INTTRA, Inc., 789 F.3d 1309, 1310 (Fed. Cir. 2015)
`(describing transitional program for review of covered business method
`patent under 35 U.S.C. §§ 321–329, pursuant to the AIA, as subject to “the
`standards and procedures of[] a post-grant review under . . . 35 U.S.C.
`§§ 321–329,” absent exceptions not applicable here).
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`Patent 8,229,774 B2
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`A. Related Matters
`As required by 37 C.F.R. § 42.8(b)(2), each party identifies various
`judicial or administrative matters that would affect or be affected by a
`decision in this proceeding. Pet. 6; Paper 7 (Patent Owner’s Mandatory
`Notices). The parties identify the following pending district court lawsuit as
`related to the ’774 patent: TicketNetwork, Inc. v. CEATS, Inc., No. 2:15-cv-
`01470 (E.D. Tex.) (“the Current Action”). Several related patents are
`subject to pending petitions for inter partes review. Pet. 6.
`
`B. Illustrative Claim
`Petitioner challenges all eight claims of the challenged patent.
`Claims 1, 4, and 8 are independent claims. Claim 4 is illustrative of the
`claimed subject matter:
`
`4. A system for reserving seats, the system comprising:
`a data storage system storing a plurality of entries denoting a
`plurality of available individual seats on one or more
`flights; and
`a server programmed via executable instructions to:
`query the data storage system for information descriptive of the
`available individual seats on the one or more flights;
`transmit first data to an application running on a general purpose
`computer associated with a first user and a general purpose
`computer associated with a second user, the first data
`including
`information descriptive of
`the available
`individual seats on the one or more flights, the first data
`encoded to cause the application to generate graphical user
`interfaces on the general purpose computers associated
`with the first and second users that comprise interactive
`seating maps representing individual seats on the one or
`more flights;
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`CBM2018-00004
`Patent 8,229,774 B2
`receive, from the general purpose computer associated with the
`first user, second data representing a seat selected by the
`first user;
`receive, from the general purpose computer associated with the
`second user, third data representing a seat selected by the
`second user, wherein the seat selected by the second user
`is the same as the seat selected by the first user;
`receive from the general purpose computer associated with the
`first user fourth data representing payment information;
`request acceptance of the received payment information; and
`if the received payment information is accepted, then transmit
`fifth data to the general purpose computer associated with
`the second user, the fifth data including information
`indicating that the seat selected by the second user is no
`longer available.
`Ex. 1001, 7:40–8:21.
`
`C. Standing to File a Petition for
`Covered Business Method Patent Review
`1. Legal Standards
`A petition for covered business method review must set forth the
`petitioner’s grounds for standing. 37 C.F.R. § 42.304(a). Rule 42.304(a)
`states it is Petitioner’s burden to “demonstrate that the patent for which
`review is sought is a covered business method patent, and that the petitioner
`meets the eligibility requirements of § 42.302.” Id. One of those eligibility
`requirements is that only persons (or their privies) who have been sued or
`charged with infringement under a patent are permitted to file a petition
`seeking a covered business method patent review of that patent. AIA
`§ 18(a)(1)(B); 37 C.F.R. § 42.302(a). Under our rules, “[c]harged with
`
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`CBM2018-00004
`Patent 8,229,774 B2
`infringement means a real and substantial controversy regarding
`infringement of a covered business method patent exists such that the
`petitioner would have standing to bring a declaratory judgment action in
`Federal court.” 37 C.F.R. § 42.302(a).
`The Declaratory Judgment Act provides that “[i]n a case of actual
`controversy within its jurisdiction, . . . any court of the United States, upon
`the filing of an appropriate pleading, may declare the rights and other legal
`relations of any interested party seeking such declaration.” 28 U.S.C.
`§ 2201(a). In MedImmune, Inc. v. Genentech, Inc., the Supreme Court stated
`that the test for whether an “actual controversy” exists is “whether the facts
`alleged, under all the circumstances, show that there is a substantial
`controversy, between parties having adverse legal interests, of sufficient
`immediacy and reality to warrant the issuance of a declaratory judgment.”
`549 U.S. 118, 127 (2007) (internal quotation marks omitted).
`Although it relaxed the test for establishing jurisdiction, MedImmune
`“did not change the bedrock rule that a case or controversy must be based on
`a real and immediate injury or threat of future injury that is caused by the
`defendants—an objective standard that cannot be met by a purely subjective
`or speculative fear of future harm.” Prasco, LLC v. Medicis Pharm. Corp.,
`537 F.3d 1329, 1339 (Fed. Cir. 2008). “The immediacy requirement is
`concerned with whether there is an immediate impact on the plaintiff and
`whether the lapse of time [between the filing of the declaratory judgment
`action and the liability-creating event] creates uncertainty.” Sandoz Inc. v.
`Amgen Inc., 773 F.3d 1274, 1277 (Fed. Cir. 2014). As the Federal Circuit
`
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`CBM2018-00004
`Patent 8,229,774 B2
`recently explained in AIDS Healthcare Foundation, Inc. v. Gilead Sciences,
`Inc.:
`
`The Sandoz court summarized the application of the law:
`“We have assessed ‘immediacy’ by considering how far in the
`future the potential infringement is, whether the passage of time
`might eliminate or change any dispute, and how much if any
`harm the potential infringer is experiencing, at the time of suit,
`that an adjudication might redress.” 773 F.3d at 1278. In Cat
`Tech LLC v. TubeMaster, Inc., 528 F.3d 871, 880 (Fed. Cir.
`2008), the court elaborated that “the issue of whether there has
`been meaningful preparation to conduct potentially infringing
`activity remains an important element in the totality of
`circumstances which must be considered in determining whether
`a declaratory judgment is appropriate,” . . . For “[i]f a declaratory
`judgment plaintiff has not taken significant, concrete steps to
`conduct infringing activity, the dispute is neither ‘immediate’ nor
`‘real’ and the requirements for justiciability have not been met.”
`Cat Tech, 528 F.3d at 880. Thus “meaningful preparation to
`conduct potentially infringing activity” is “an important element
`in the totality of circumstances which must be considered in
`determining whether a declaratory judgment is appropriate.”
`Prasco, 537 F.3d at 1336 n.4 (quoting Cat Tech, 528 F.3d at
`880).
`No. 2016-2475, 2018 WL 2168658, at *3 (Fed. Cir. May 11, 2018).
`
`
`2. The Prior and Current Litigation
`There is one prior action that we must mention to give context to this
`dispute. In 2010, Patent Owner sued Petitioner, among others, for patent
`infringement in an action captioned CEATS, Inc. v. Continental Airlines,
`Inc., Case No. 6:10-cv-120 (E.D. Texas) (“the Prior Action”). In the Prior
`Action, Patent Owner alleged that Petitioner infringed U.S. Patent
`No. 7,548,869, which is related to the ’774 patent. Ex. 1011 ¶¶ 9, 11. Other
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`CBM2018-00004
`Patent 8,229,774 B2
`patents owned by Patent Owner were asserted in the action against other
`defendants. Id. ¶ 9, n.1. The prior action proceeded to trial on March 12,
`2012. Pet. 14. On March 14, 2012, Petitioner and Patent Owner settled their
`dispute, and Petitioner received a license to certain patents in Patent
`Owner’s portfolio of patents related to online ticketing technology, including
`the ’774 patent (“the License Agreement”). Id. at 14–15; Ex. 1011 ¶ 14;
`Prelim. Resp. 4; Ex. 1012, 2 n.1 (listing patents in the License Agreement).
`The License Agreement includes certain royalty obligations for Petitioner to
`Patent Owner. Ex. 1011 ¶¶ 18, 24; Ex. 1012, 4 n.3 (describing royalty
`provisions of the License Agreement).
`The remaining defendants in the Prior Action proceeded to trial, and
`the asserted claims in the Prior Action were all found to be invalid by the
`jury. Id. ¶ 15. The district court entered a judgement finding the claims
`invalid. Id. ¶ 16. The Federal Circuit affirmed this decision on April 26,
`2013. Id. ¶ 17.
`On December 3, 2014, Petitioner sent a letter to Patent Owner
`purporting to terminate the License Agreement. Ex. 1009. On July 31,
`2015, an attorney for Patent Owner responded to Petitioner’s letter.
`Ex. 1010 (“July 2015 Letter”). The July 2015 Letter stated in part:
`We encourage you to review CEATS’ patents and to compare
`them to your website and other applications. Based upon the
`information we have, we have determined that you are directly
`and indirectly infringing on CEATS’ patent rights, including
`U.S. Patent Nos. 7,454,361, 7,685,009, 7,547,866, 7,660,728,
`7,885,839, 7,664,663, 7,881,953, 7,660,729, 7,881,954,
`7,548,867, 7,548,868, 7,548,869, 7,548,870, 7,669,727,
`
`7
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`CBM2018-00004
`Patent 8,229,774 B2
`7,657,449, 7,640,178, 8,355,937, 8,775,223, 8,219,448,
`8,229,774, 8,244,561, and 8,239,225.
`Id. As Petitioner explains, the July 2015 Letter accused Petitioner of
`infringing Patent Owner’s patent rights, “including not only the ’774 Patent
`but also each of the other patents covered by the [License] Agreement.” Pet.
`15; Ex. 1012, 2 n.1 (explaining the patents covered by the license).
`
`Following receipt of the July 2015 Letter, Petitioner filed the Current
`Action bringing claims for (1) declaratory judgment that the royalty
`provisions in the License Agreement are unenforceable; (2) declaratory
`judgment of non-infringement of all of the patents listed in Patent Owner’s
`letter; and (3) declaratory judgment of invalidity of all of the patents listed in
`Patent Owner’s letter, including the ’774 patent. Pet. 16; Ex. 1011 ¶¶ 22–33.
`Patent Owner counterclaimed for breach of the License Agreement, and
`sought unpaid royalties it contended Petitioner owed. See Ex. 1004.
`Petitioner and Patent Owner moved for summary judgment on the royalty
`claims, but the magistrate judge denied those motions on October 24, 2016.
`Ex. 1012.
`
`On June 1, 2017, Petitioner moved to voluntarily dismiss its
`declaratory judgment claims for non-infringement and invalidity without
`prejudice. Ex. 1013, 1–3 (“Voluntary Dismissal Request”). With respect to
`the non-infringement and invalidity claims, Petitioner stated:
`TicketNetwork requests that Counts Two and Three of the
`Complaint be dismissed without prejudice. These Counts assert
`claims for declaratory relief of non-infringement and invalidity
`of the CEATS Patents. . . . Further, TicketNetwork’s claims for
`declaratory judgments of non-infringement and invalidity were
`premised on allegations of patent infringement made by CEATS
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`CBM2018-00004
`Patent 8,229,774 B2
`to TicketNetwork.
`letter directed
`in a July 31, 2015
`. . . TicketNetwork understands that CEATS’s claims against
`TicketNetwork have been limited to royalties under the
`Settlement and License Agreement and that there is no present
`intent
`to assert claims for patent
`infringement against
`TicketNetwork. To the extent CEATS later elects to assert such
`patent infringement claims, TicketNetwork should be entitled to
`assert defenses of non-infringement and invalidity.
`Ex. 1013 ¶ 13. The district court granted this request. See Pet. 16.
`
`On November 27, 2017, Petitioner filed this Petition for CBM review.
`The trial in the Current Action was held before a jury on January 22–25,
`2018. Ex. 2005, 2. On January 25, 2018, a jury rendered a verdict in favor
`of Patent Owner, finding that Petitioner breached the License Agreement
`and awarding damages of $459,800. Id. at 3.
`3.
`The Parties’ Contentions
`Petitioner concedes that neither Petitioner nor its privies has been sued
`for infringement of the ’774 patent. Pet. 13. Petitioner, instead, bases its
`claim for standing on its contention that it has standing sufficient to bring a
`declaratory judgment action. Id. at 13–19; Reply 1–7. In particular,
`Petitioner argues that Patent Owner “has accused Petitioner of patent
`infringement in connection with the Current Action, and Patent Owner has
`indicated to the Court that it believes Petitioner’s activities constitute patent
`infringement should the underlying license agreement between the parties be
`invalidated, which is one of the possible outcomes of the Current Action.”
`Pet. 13–14. Petitioner asserts that Patent Owner “explicitly threatened
`[Petitioner] with legal action for patent infringement at the outset of the
`Current Action.” Id. at 18 (citing Ex. 1010). Petitioner further contends
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`Patent 8,229,774 B2
`that, at the hearing for the summary judgment motion in the Current Action,
`Patent Owner’s attorney in the Current Action “acknowledged that the threat
`of patent infringement remains ever present.” Id. at 19 (citing Ex. 1014, 46–
`47). Petitioner argues that its underlying dispute with Patent Owner is
`“intimately tied to and intertwined with the validity of [Patent Owner’s]
`patent portfolio.” Id. Petitioner asserts that it
`pursued the termination option in Federal Court, only to
`voluntarily dismiss those claims to focus its efforts on disputing
`[Patent Owner’s]
`breach
`of
`contract Counterclaims.
`Nevertheless, since the validity of the Agreement is still under
`dispute on other grounds, the infringement threat regarding the
`[’774] Patent remains present, as acknowledged by [Patent
`Owner’s] own counsel.
`
`Id.
`
`Patent Owner argues that the letter and the statement at the summary
`judgment hearing are not specific enough to meet the “charged for
`infringement” prong for CBM standing. See Prelim. Resp. 12–17; Sur-
`Reply 1–6. Patent Owner asserts that there is no evidence that Petitioner
`offers any products that could meet the “immediacy” requirement under
`MedImmune. Prelim. Resp. 14. Patent Owner also has offered a covenant-
`not-to-sue to Petitioner to “extinguish[] even a hypothetical controversy
`between the parties.” Id. at 16.
`In its Reply, Petitioner argues that the time for determining whether it
`has standing is the date of filing of the Petition, and that any post-filing
`conduct is irrelevant. Reply 1–2, 5. Petitioner contends that in view of the
`totality of the evidence its statements in the voluntary dismissal of its
`declaratory judgment actually supports standing because “it [is] clear from
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`statements made by Petitioner in the months just prior to filing the Petition
`that [Petitioner] believed that the agreement between the parties was either
`void or had been terminated, and that the infringement charge continued.”
`Id. Petitioner argues that Patent Owner can point to no communications
`where Patent Owner withdrew the charge of infringement. Id. at 3.
`Petitioner contends that it was “charged with infringement” because (1) “the
`charge of infringement of the ’774 Patent was explicitly included in the
`original charge of infringement dated July 31, 2015”; (2) “Patent Owner
`never withdrew the charge of infringement”; and (3) “evidence that Patent
`Owner believed that a charge of infringement still existed as of the Petition’s
`filing date exists, as Patent Owner provided Petitioner with a covenant not to
`sue under the ’774 Patent subsequent to the filing of the Petition.” Id. at 3–
`4. In particular, with respect to its contention that Patent Owner never
`withdrew the charge of infringement, Petitioner points to a Supplemental
`Disclosure Statement that it filed in the Current Action on October 4, 2017.
`Id. at 4. In that paper, Petitioner stated that:
`TicketNetwork contends that the royalty provisions contained in
`the Settlement and License Agreement (“the Agreement”) are
`unenforceable and that such agreement has terminated based on
`one or more reasons disclosed in TicketNetwork’s Initial
`Disclosures served on June 17, 2016. In addition, TicketNetwork
`contends that the Agreement is invalid based on public policy
`and/or mutual mistake.
`Ex. 1028, Ex. A, 2.
`Petitioner argues that this statement shows that “as of October
`4, 2017, Petitioner maintained that the license agreement had been
`terminated, or was void ab initio, and since Patent Owner’s counsel
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`acknowledged to the Court that without a license agreement there
`would be infringement, the charge of patent infringement was present
`at this time.” Reply 4.
`Petitioner further argues that Patent Owner’s offer of a
`covenant not to sue has “no bearing on Petitioner’s standing to file the
`Petition because it was proffered to Petitioner after the filing date of
`the Petition, and thus it did not exist at the time the Petition was
`filed.” Id. at 5. Instead, Petitioner contends that “Patent Owner’s
`decision to proffer a covenant not to sue after filing of the Petition
`establishes that Patent Owner felt there was a need to put that existing
`infringement charge to rest by providing the covenant not to sue.” Id.
`Petitioner also argues that Patent Owner attempts to introduce
`“unsupported standing requirements into the statute.” Id. at 5. In particular,
`Petitioner argues that the statute does not “require specific state-of-mind for
`a patent owner who brings a charge of infringement” or impose any
`requirement that it practice the ’774 patent. Id. at 6.
`4.
`Analysis
`We agree with Patent Owner that Petitioner has failed to show
`sufficiently that it has standing to bring this covered business method patent
`review on the date the Petition was filed.4 Specifically, we agree with Patent
`Owner that considering the totality of the circumstances that Petitioner has
`
`
`4 Because we determine, even accepting Petitioner’s argument we should
`determine standing as of the date the Petition was filed, Petitioner failed to
`show standing as of the date the Petition was filed, we need not resolve
`whether post-filing conduct may also be considered.
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`not established sufficiently there is a real and immediate controversy
`regarding the ’774 patent. Petitioner’s allegations rest heavily on the July
`2015 Letter, but, whatever weight in favor of standing the July 2015 Letter
`had when it was sent, that weight has been considerably diminished in the
`nearly 28 months between when that letter was sent and the filing of the
`Petition. Indeed, Petitioner’s contentions are undermined by its own
`assertions made to the district court in the Current Action in seeking
`dismissal of its declaratory judgment claims of invalidity and non-
`infringement. Ex. 1013 ¶ 13. In that filing, Petitioner acknowledged that it
`understood that Patent Owner did not intend to seek claims for infringement
`at that time. Id. These statements weigh heavily against a finding that a real
`and substantial conflict regarding the infringement of the ’774 patent
`currently exists between the parties.
`Petitioner attempts to distance itself from its statement in the
`Voluntary Dismissal Request by pointing to its Supplemental Disclosure
`Statement in the Current Action on October 4, 2017. Reply 4 (citing
`Ex. 1028, 2). However, the statement that Petitioner now relies on merely
`reiterates Petitioner’s position, in the litigation that the License Agreement
`was terminated—a position that the brief states Petitioner had first disclosed
`on June 17, 2016. See Ex. 1028, 2, Ex. A, 2. It does not equate to finding a
`continued charge of patent infringement by Patent Owner. Moreover, it is
`not apparent, as suggested by Petitioner (Reply 4), that Patent Owner
`“acknowledged” Petitioner’s assertion that the license agreement had been
`terminated, as Patent Owner cited Petitioner’s Supplemental Disclosure
`Statement for a wholly different reason, i.e., tardiness in raising a different
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`affirmative defense. See Ex. 1028, 2. Thus, Petitioner’s paper merely
`represents the same facts that existed when Petitioner made the Voluntary
`Dismissal Request and in no way alters the significance of Petitioner’s
`statements in its Voluntary Dismissal Request.
`The weight we should give the July 2015 Letter is further limited by
`its vague and conclusory nature. Ex. 1010. The July 2015 Letter points only
`generally to Petitioner’s website and lists 22 different patents, including the
`’774 patent. See id. This letter does not present the type of definite and
`concrete controversy that normally gives rise to declaratory judgment
`jurisdiction with respect to a particular patent. See Hewlett-Packard Co. v.
`Acceleron LLC, 587 F.3d 1358, 1362 (Fed. Cir. 2009) (noting “a
`communication from a patent owner to another party, merely identifying its
`patent and the other party’s product line, without more, cannot establish
`adverse legal interests between the parties, let alone the existence of a
`‘definite and concrete’ dispute”).
`Petitioner further argues that Patent Owner’s offer of a covenant not
`to sue “establishes that Patent Owner felt there was a need to put that
`existing infringement charge to rest by providing [a] covenant not to sue.”
`Reply 5. Setting aside Petitioner’s other contention that we should ignore
`the covenant not to sue entirely because the “only relevant time is November
`28, 201[7],” we disagree that the offer of a covenant not to sue “establishes”
`that there was a charge of infringement. Patent Owner did not concede that
`standing existed, and was free to attempt to remove any shadow of a doubt
`regarding the ’774 patent. Thus, we do not believe offering of a covenant
`not to sue weighs in favor of standing.
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`As for Petitioner’s reliance on the statement made by Patent Owner’s
`attorney at the summary judgment hearing, we agree with Patent Owner that
`that statement, made in response to a hypothetical posed by the district court,
`is no help to Petitioner. To begin with, counsel’s acknowledgement that, if
`the license were terminated, Patent Owner could sue for infringement of
`some unnamed patents is not disputed. Counsel, however, never said Patent
`Owner planned to sue Petitioner. See Ex. 1014, 46–47. Moreover, we
`believe that this general acknowledgement that there could be an
`infringement suit in the future on some unnamed patent or patents, if the
`license was terminated, is too tentative and vague to give rise to “real” and
`“substantial” controversy. See MedImmune, 549 U.S. at 240–41 (noting a
`justiciable controversy exists only where a dispute is “definite and concrete,
`touching the legal relations of parties having adverse legal interests,” and
`will “admi[t] of specific relief through a decree of a conclusive character, as
`distinguished from an opinion advising what the law would be upon a
`hypothetical state of facts”).
`Even taken together with the letter, the evidence Petitioner presented
`only establishes that, if the License Agreement was found to be terminated,
`then Patent Owner may sue on one of the twenty-two patents at some time in
`the future. We do not believe this shows a real and substantial controversy
`with respect to the ’774 patent.
`Our conclusion that Petitioner has failed to demonstrate standing is
`further supported by the lack of any allegation or evidence from Petitioner
`that it engages in any conduct remotely within the scope of the claims of the
`’774 patent, which are limited to the sale of airline tickets. Indeed, the only
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`evidence in the record suggests that Petitioner sells concert and theater
`tickets, not airline tickets. See Prelim. Resp. 3–4 (citing Exs. 2002, 2003,
`1014, 31:14–22). Petitioner does not dispute this, but instead argues that
`“the statute does not impose such a requirement for CBM petition standing.”
`Reply 6. Petitioner’s argument, however, ignores 37 C.F.R. § 42.302(a),
`which defines “charged with infringement” as “a real and substantial
`controversy regarding infringement of a covered business method patent
`exists such that the petitioner would have standing to bring a declaratory
`judgment action in Federal court.” The Federal Circuit’s law of declaratory
`judgment standing makes clear that the party seeking to invoke the court’s
`jurisdiction must show that the threat of suit is real and immediate to
`establish jurisdiction. Asia Vital Components Co. v. Asetek Danmark A/S,
`837 F.3d 1249, 1254 (Fed. Cir. 2016) (citing MedImmune, 549 U.S. at 127).
`As the Federal Circuit explained, “[i]f a declaratory judgment plaintiff has
`not taken significant, concrete steps to conduct infringing activity, the
`dispute is neither ‘immediate’ nor ‘real’ and the requirements for
`justiciability have not been met.” Cat Tech, 528 F.3d at 880. Petitioner has
`not only failed to meet its burden that there is such an “immediate” and
`“real” dispute regarding the ’774 patent, but it has failed to make any
`showing on this ground. This weighs heavily against finding standing in this
`case. See, e.g., AIDS Healthcare Found., 2018 WL 2168658, at *3;
`Matthews Int’l Corp. v. Biosafe Eng’g, LLC, 695 F.3d 1322, 1330 (Fed. Cir.
`2012) (noting a showing of actual infringement is not necessary, but “when
`it is unclear when any even arguably infringing activity will occur, a dispute
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`will lack the immediacy necessary to support the exercise of declaratory
`judgment jurisdiction”).
`As for Petitioner’s economic interest in not paying any further
`royalties by terminating the License Agreement (Pet. 19), we determine that
`also is insufficient. The law is clear that such a purely economic interest
`does not give rise to the type of legal interest to create standing for a
`declaratory judgment regarding infringement. See AIDS Healthcare Found.,
`2018 WL 2168658, at *5 (“The district court recognized that an actionable
`legal interest is not here present, for neither Healthcare nor any producer of
`TAF products is infringing or preparing to infringe any TAF patent.
`Precedent clearly counsels that an adverse economic interest is not of itself
`an adverse legal interest.”).
`Accordingly, considering the totality of the circumstances, we
`determine that Petitioner has not made an adequate showing that it has
`standing to bring this covered business method patent review.
`
`II. CONCLUSION
`Petitioner has failed to establish adequately that it has standing to
`bring this covered business method patent review.
`
`
`17
`
`
`
`CBM2018-00004
`Patent 8,229,774 B2
`
`III. ORDER
`For the foregoing reasons, it is
`ORDERED that the Petition is denied; and
`FURTHER ORDERED that no covered business method patent
`review is instituted.
`
`
`
`
`
`
`
`
`
`
`For PETITIONER:
`
`P. Weston Musselman, Jr.
`Ricardo J. Bonilla
`FISH & RICHARDSON P.C.
`musselman@fr.com
`rbonilla@fr.com
`
`
`For PATENT OWNER:
`
`Donald Daybell
`Johannes Hsu
`Orrick Herrington & Sutcliffe, LLP
`d2dptabdocket@orrick.com
`ptabdocketj1h1@orrick.com
`
`Brian Billett
`bsbillett@gmail.com
`
`18
`
`
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