CBM2014-00021
`
`USP 5,910,988
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`Fidelity National Information Services, Inc.
`
`Petitioner
`
`v.
`
`DATATREASURY CORPORATION
`
`Patent Owner
`
`CBM2014-00021
`
`US. Patent No. 5,910,988
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`US. Patent & Trademark Office
`
`PO. Box 1450
`
`Alexandria, VA 223 13- 145 0
`
`Administrative Patent Judge: Michael P. Tierney
`
`Page 1 of 56
`
`FIS Exhibit 1042
`
`FIS Exhibit 1042
`
`Page 1 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`TABLE OF CONTENTS
`
`1. STATEMENT OF PRECISE RELIEF REQUESTED.................................4
`
`A. ‘988 Patent Does Not Qualify for Petition for CBM .........................4
`
`B. Petitioner’s Statement of Real Party in Interest is Questionable ............ 5
`
`II. PRELIMINARY STATEMENT ..................................................................... 5
`
`A. Background of the Invention..................................................................... 5
`
`B. Prosecution Overview ............................................................................... 6
`
`C. The '988 Patent Claims .............................................................................. 7
`
`III. TREATMENT OF THE '988 PATENT AS A COVERED BUSINESS
`
`METHOD PATENT TO BE REVIEWED UNDER § 18 OF THE
`
`AMERICA INVENTS ACT (“AIA”).......................................................... 10
`
`A. Congressional Discussion of § 18 of the AIA......................................... 10
`
`B. Definitions Regarding “Covered Business Method” Patents ................. 12
`
`1. Section 18 of the AIA ........................................................................ 12
`
`2. 37 C.F.R. §42.301 Definitions ........................................................... 12
`
`3. 77 FR 48756, 48763-48764 Section B.4 (Petition, Covered
`
`Business Method/Technological Invention) ........................................ 13
`
`4. 77 Federal Register 48763, 48765 (PTAB Trial Practice Guide)
`
`Section D. Institution of Review, Subsection (c) Covered
`
`Business Method Patent Review ........................................... 14
`
`C. The '988 Patent is a Technological Invention and Therefore is
`
`1M a Covered Business Method Patent ...................................... 15
`
`IV. PETITIONER FAILS TO DEMONSTRATE THAT ANY CLAIM OF
`
`THE '988 PATENT IS INVALID UNDER 35 U. S.C. § 101 ............... 16
`
`A. Business Methods and “Abstract Ideas” or “Abstract Concepts” ............ 16
`
`1. Bilski v. Kappos Clearly Provides for Business Method Patents. 17
`
`Page 2 of 56
`
`-2-
`
`Page 2 of 56
`
`Page 2 of 56
`
`

`

`CBM2014—00021
`
`USP 5,910,988
`
`2. Bilski v. Kappos Does Not Clearly Define “Abstract Ideas” or
`
`“Abstract Concepts” ........................................................... 17
`
`3. CLS Bank International et al. v Alice Corporation Pty. LTD. and
`
`“Abstract Ideas” ............................................................... 21
`
`4. There are No “Abstract Ideas” or “Abstract Concepts”
`
`In the '988 Patent Claims ................................................... 25
`
`5. Preemption of a Basic Concept ............................................. 31
`
`6. The '988 Patent Claims do n_ot Fail the
`
`Machine-or-Transformation Test ............................................. 32
`
`V. PETITIONER’S DISCUSSION OF 35 U.S.C. § 112, FIRST
`
`PARAGRAPH ISSUES .............................................................................39
`
`A. Claims 1-41 and 51-69 are Not Invalid Because
`
`“Encrypted/Encrypting Subsystem Identification Information”
`
`Does Not Lack Written Description ...................................................... 39
`
`B.
`
`“Within and Between” the Subsystems Does Not Lack Written
`
`Description Support in Claims 1-123 ....................................................42
`
`VI. PETITIONER’S DISCUSSION OF 35 U.S.C. § 112 SECOND
`
`PARAGRAPH ISSUES .............................................................................44
`
`A. Claim 42 is M Indefinite Because the Phrase “Said Data
`
`Processing Subsystem” Is M Ambiguous ............................................44
`
`
`B. Claim 42 is Not Indefinite Because the Terms “Tiered
`
`Architecture” and “Tiered Manner” Do M Render
`
`Claims 42-51 and 70-123 Indefinite and Invalid ................................... 50
`
`VII. LIST OF EXHIBITS ................................................................................ 53
`
`VIII. CONCLUSION ......................................................................................... 54
`
`CERTIFICATE OF SERVICE .............................................. 56
`
`Page 3 of 56
`
`-3-
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`I. STATEMENT OF PRECISE RELIEF REQUESTED
`
`A. Patent 5,910,988 Does Not Qualify for Petition for CBM
`
`Pursuant to 37 C.F.R. § 42.207(a), Patent Owner, DataTreasury Corporation
`
`(“Patent Owner”), submits this Preliminary Response as an Opposition (see Board
`
`Trial Rules and Practice Guide, Final Rule for CBM Patent Review, FR Vol. 77,
`
`No. 157) (Exhibit 2004) to the Petition for Covered Business Method (“CBM”)
`
`Patent Review filed with the USPTO on October 25, 2013 by Fidelity National
`
`Information Services, Inc. (“Petitioner”). Patent Owner respectfully requests that
`
`the Patent Trial and Appeal Board (“PTAB”) deny the Petition for CBM Patent
`
`Review of claims 1-123 of US. Patent No. 5,910,988 (“the '988 Patent”) under §
`
`18 of the America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (“AIA”).
`
`The basis of entitlement under 37 C.F.R. § 41.21 to the relief sought in this
`
`opposition is that the '988 Patent
`
`is n_ot a CBM patent based on all of the
`
`definitions of such a patent and requirements for filing a Petition for CBM Patent
`
`Review. This basis of entitlement resides in the fact that the '988 Patent is directed
`
`to a new, useful and nonobvious invention in which technological systems perform
`
`new, useful and nonobvious methods. However,
`
`in the event that the PTAB
`
`initiates a CBM Patent Review, Patent Owner specifically reserves the right to
`
`respond to all of the issues raised by Petitioner and the Board.
`
`Page 4 of 56
`
`Page 4 of 56
`
`Page 4 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`B. Petitioner’s Statement of Real Party In Interest
`
`Petitioner identifies on page 4 of the Petition, Fidelity National Information
`
`Services, Inc. as “the real party-in-interest”. Patent Owner is in the process of
`
`obtaining confirmation that the Petition violates the statutory requirement in 35
`
`USC 311 of providing complete identification of the real party in interest, i.e., a_ll
`
`real parties in interest. Patent Owner reserves the right to address this issue at a
`
`later date, when the appropriate information can be confirmed.
`
`II. PRELIMNARY STATEMENT
`
`A. Background of the Invention
`
`Claudio R. Ballard conceived the invention embodied in the '988 Patent in
`
`the latter part of July 1994. Mr. Ballard’s inspiration for the invention was
`
`learning that the manager of a diner frequented by Mr. Ballard and his father
`
`maintained receipts from credit cards in a shoebox, and kept those receipts for
`
`seven years.
`
`Mr. Ballard proceeded to sketch out broad stroke elements of an invention
`
`that could be used by any store, restaurant, business or institution on a daily basis
`
`to efficiently handle the storage and retrieval of such transaction papers—for
`
`example, checks and credit card receipts.
`
`Mr. Ballard ultimately conceived of using a computerized system having a
`
`three-tier architecture, with a first
`
`tier that performs the initial
`
`image and
`
`Page 5 of 56
`
`Page 5 of 56
`
`Page 5 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`transaction data capture, along with a second tier that acts as an intermediate stage
`
`for the temporary accumulation and store and forward operation. A third tier
`
`includes a triple-redundant central
`
`repository facility used to perform the
`
`transaction authentication,
`
`storage,
`
`and retrieval
`
`functions
`
`in response to
`
`.
`.
`.
`authorized user commands, and 1S connected to the second her.
`
`1
`
`Mr. Ballard also conceived of interconnecting the tiers by way of any of
`
`several types of network topologies, such as Wide Area Networks (WANs) and
`
`Local Area Networks (LANs).
`
`Beginning in May 1995, Mr. Ballard began to build a working prototype.
`
`By the late summer of 1995, he had built a working model that is now depicted in
`
`various drawing figures found in the '988 Patent. Mr. Ballard filed an application
`
`for patent in August, 1997 which ultimately was issued in February 2000 as the
`
`'988 Patent. Licenses for the '988 Patent have been issued, and when necessary,
`
`successful Actions have been brought against entities that have infringed the
`
`invention claimed in the '988 Patent.
`
`B. Prosecution Overview
`
`The '988 Patent has an extensive record before the USPTO that focuses
`
`primarily on the technological nature of the invention. The record includes ex
`
`parte Reexamination Proceeding 90/007,829 for the '988 Patent that was initiated
`
`1 A preferred embodiment is described in the specification of the '988 Patent at col.
`5, lines 1-19, and at p. 8, first filll paragraph of the originally filed specification.
`
`Page 6 of 56
`
`-6-
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`by a third party on November 25, 2005.
`
`In that Proceeding, at least 300 prior art
`
`documents are listed on the Reexamination Certificate as having been considered
`
`by the Primary Examiner. Ultimately, the originally-allowed 50 claims of the '988
`
`Patent were confirmed as being patentable. Claim 1 was amended to remove a
`
`double inclusion of the words “of the” from the claim. Further, newly-presented
`
`claims 51-123 also were held to be patentable. ex parte Reexamination Certificate
`
`No. US 5,910,988 C1 issued on December 5, 2007 (Exhibit 2001).
`
`A second ex parte Reexamination Control No. 90/012,537 of the '988 Patent
`
`was initiated by another third party requester on September 13, 2012. Prosecution
`
`in that Proceeding is continuing, and is not presently near to conclusion.
`
`C. The '988 Patent Claims
`
`Petitioner has requested that the PTAB initiate a CBM Patent Review with
`
`respect to claims 1-123, i.e., all of the claims of the '988 Patent. The claims are
`
`directed to a system and to methods performed by the system. Claim 1
`
`is an
`
`exemplary system claim, which recites:
`
`1. A system for central management,
`
`storage and report
`
`generation of remotely captured paper transactions from documents
`
`and receipts comprising:
`
`Page 7 of 56
`
`Page 7 of 56
`
`Page 7 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`one or more remote data access subsystems for capturing and
`
`sending paper
`
`transaction
`
`data
`
`and
`
`subsystem identification
`
`information2 comprising at least one
`
`imaging subsystem for capturing the documents and receipts
`
`and at least one data access controller for managing the capturing and
`
`sending of the transaction data;at least one central data processing
`
`subsystem for processing, sending, verifying and storing the paper
`
`transaction data
`
`and the
`
`subsystem identification information
`
`comprising a management subsystem for managing the processing,
`
`sending and storing of the transaction data; and
`
`at least one communication network for the transmission of the
`
`transaction data within and between said one or more data access
`
`subsystems and said at least one data processing subsystem, with the
`
`data access subsystem providing encrypted subsystem identification
`
`information and encrypted paper transaction data to the data
`
`processing subsystem.
`
`Claim 26 is an exemplary method claim that would be performed by claim 1,
`
`and recites:
`
`26. A method for central management, storage and verification
`
`of remotely captured paper transactions from documents and receipts
`
`comprising the steps of:
`
`capturing an image of the paper transaction data at one or more
`
`remote locations and sending a captured image of the paper
`
`transaction data;
`
`Page 8 of 56
`
`Page 8 of 56
`
`Page 8 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`managing the capturing and sending of the transaction data;
`
`collecting, processing, sending and storing the transaction data
`
`at a central location;
`
`managing the collecting, processing, sending and storing of the
`
`transaction data;
`
`encrypting
`
`subsystem identification information
`
`and the
`
`transaction data; and
`
`transmitting
`
`the
`
`transaction
`
`data
`
`and
`
`the
`
`subsystem
`
`identification information within and between the remote location(s)
`
`and the central location.
`
`As a point of clarification, in exemplary claims 1 and 26, and in other claims
`
`in the '988 Patent, “identification information” comprises information such as the
`
`transaction amount, the customer, the DataTreasuryTM System Access Terminal
`
`(DAT) 200 (“defined as the remote data subsystem” defined at col. 4, lines 60-64),
`
`and “the transaction date, the transaction tax, the credit card number, the credit
`
`card expiration date, etc.” (col. 10, lines 61-67).
`
`Figures 1 and 3 of the '988 Patent provide, respectively, an overview of the
`
`three tiers of the DataTreasuryTM System and Figure 3 illustrates the functions
`
`performed by the DATs in the DataTreasuryTM System.
`
`Page 9 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`III.
`
`TREATMENT OF THE '988 PATENT AS A COVERED BUSINESS
`
`METHOD PATENT TO BE REVIEWED UNDER § 18 OF THE
`AMERICA INVENTS ACT (“AIA”)
`
`A. Congressional Discussion of §18 of the AIA
`
`During the process of debating the merits of various provisions of the AIA,
`
`at
`
`least one member of Congress specifically identified the Ballard patents
`
`5,910,988 and 6,032,137 as being “notorious,” and apparently incited other certain
`
`members of Congress to also groundlessly attack the validity of those patents in a
`
`manner that can only be characterized as unsupported and excessive (157 CONG.
`
`REC. at S5432 (daily ed. Sept. 8, 2011) (statement of Senator Schumer) (filed in
`
`Exhibit 1024 in Petition). While Senator Schumer’s trademark fiery political
`
`rhetoric may be effective for rallying support of bills in Congress, for example,
`
`such as those he sponsors in view of his position on the Committee for Banking,
`
`Housing and Urban Affairs (information from “Committee Assignments” as
`
`reported on Schumer website http://www.schumer.senate.gov/), it is obvious that
`
`no weight could possibly be reasonably given to such filibustering because it
`
`completely lacks grounds for support, for example under the knowledgeable and
`
`experienced consideration of a member of the US Patent Examining Corps, or as
`
`composed and prosecuted by the patent craft of an attorney or agent, or even as one
`
`of ordinary skill with some basic knowledge of the state of the art at the time the
`
`invention was made. However, other members of Congress treated the issue of
`
`Page 10 of 56
`
`-10-
`
`Page 10 of 56
`
`Page 10 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`software driven patents with greater restraint,
`
`though they may have favored
`
`institution of proceedings in the US. Patent and Trademark Office directed
`
`especially toward CBM patents. For example, Senator Kyl reiterated comments he
`
`had made in March 2011 about the technological-inventions exception to business
`
`method patents:
`
`As the proviso at the end of the definition makes clear, business
`
`methods do not include “technological inventions.” In other words,
`
`the definition applies only to abstract business concepts and their
`
`implementation, whether in computers or otherwise, but does not
`
`apply to inventions relating to computer operations for other uses or
`
`the application of the natural sciences or engineering.
`
`157 CONG. REC. S1360 at $1379 (daily ed. Mar. 8, 2011) (emphasis in
`
`original) (Exhibit 2002).
`
`During the September 2011 debates on the AIA, Senator Kyle “reiterate[d]”
`
`his March 2011 statement regarding the technological-inventions exception, and
`
`noted that “inventions
`
`in computer operations obviously include software
`
`inventions” (157 CONG. REC. S5402 at S5431 (daily ed. Sept. 8, 2011) (statement
`
`of Sen. Kyl) (Exhibit 2003).
`
`Page 11 of 56
`
`-11-
`
`Page 11 of 56
`
`Page 11 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`B. Definitions Regarding “Covered Business Method” Patents
`
`1. Section 18 of the AIA
`
`(1)
`
`IN GENERAL.
`
`-- For purposes of this section,
`
`the term
`
`“covered business method patent” means 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.
`
`(2)
`
`REGULATIONS. -- To assist in implementing the transitional
`
`proceeding authorized by this section,
`
`the Director shall
`
`issue regulations for
`
`determining whether a patent is for a technological invention.
`
`2. 37 C.F.R. §42.301 Definitions
`
`(a) Covered business method patent means 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.
`
`(b) Technological invention. In determining whether a patent is for
`
`a technological invention solely for purposes of the Transitional Program for
`
`Covered Business Methods (section 42.301(a)), the following will be considered
`
`on a case-by-case basis: whether the claimed subject matter as a whole recites a
`
`Page 12 of 56
`
`-12-
`
`Page 12 of 56
`
`Page 12 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`technological feature that is novel and unobvious over the prior art; and solves a
`
`technical problem using a technical solution.
`
`3. 77 FR 48756, 48763-48764 Section B.4 (Petition, Covered Business
`Method/Technological Invention) (Exhibit 2004)
`
`A Petition for CBM Patent Review must demonstrate that the patent for
`
`which review is sought is a covered business method patent. 37 C.F.R. § 42.304(a).
`
`CBM patents, by the Office’s definition, do not include patents for technological
`
`inventions.
`
`As indicated in the above-noted FR Section, the following are examples of
`
`patents that claim a technological invention that would not be subject to a CBM
`
`Patent Review:
`
`(a) a patent that claims a novel and non-obvious hedging machine for
`
`hedging risk in the field of commodities trading; and
`
`(b) a patent that claims a novel and non-obvious credit card reader for
`
`verifying the validity of a credit card transaction.
`
`Patent Owner urges that the invention claimed in the '988 Patent was not, at
`
`the time the invention was made, merely a recitation of known technologies or a
`
`combination of prior art structures. The claims specified the systems as a whole
`
`and the methods performed by those systems as a whole were new, useful and non-
`
`obvious over the prior art, and were held patentable after competent examination
`
`by the Office. The ‘988 Patent claims were not only found to be patentable during
`
`Page 13 of 56
`
`-13-
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`the original prosecution of the application, but also as the result of a second
`
`consideration in a subsequent ex parte Reexamination Proceeding in which the
`
`original patent claims were confirmed to be patentable over the prior art.
`
`Furthermore, additional system and method claims presented during the ex parte
`
`Reexamination were also held to b patentable over the prior art.
`
`4. 77 FR 48763, 48765 (PTAB Trial Practice Guide) Section D.
`Institution of Review, Subsection (c) Covered Business Method
`Patent Review (Exhibit 2004)
`
`Section 18(a)(l) of the AIA provides that the transitional proceeding for
`
`covered business method patents will be regarded as, and will employ the
`
`standards and procedures of, a Post-Grant Review under Chapter 32 of Title 35
`
`United States Code, subject to certain exceptions. Section 18(a)(1)(B) of the AIA
`
`specifies that a person may not file a petition for a transitional proceeding with
`
`respect to a covered business method patent unless the person or person’s real
`
`party-in-interest or privy has been sued for infringement of the patent or has been
`
`charged with infringement under that patent. A covered business method patent
`
`means 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.
`
`Page 14 of 56
`
`-14-
`
`Page 14 of 56
`
`Page 14 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`C. The '988 Patent is a Technological Invention and is M a
`Covered Business Method Patent
`
`The provisions of Section 18 of the AIA and the regulatory language that has
`
`been adopted with respect
`
`thereto clearly establish that a patent directed to
`
`methods and/or corresponding apparatus that performs such methods is a business
`
`method patent if it employs data processing or other operations in the practice,
`
`administration or management of a financial product or service, if and only if the
`
`patent in question is not for a technological invention.
`
`It is clear that the '988
`
`Patent discloses and claims a technological data processing system that performs a
`
`technological method that is driven by that technological data processing system,
`
`which processes data in the context of processing and administering financial
`
`products and services. Contrary to Petitioner’s voluminous and conflated petition
`
`arguments, it is clearly demonstrated below that the '988 Patent is directed to a
`
`technological data processing system that performs a technological method driven
`
`by that technological data processing system. Accordingly, the '988 Patent does
`
`n_ot qualify for a review as a Covered Business Method.
`
`Page 15 of 56
`
`-15-
`
`Page 15 of 56
`
`Page 15 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`IV.
`
`PETITIONER FAILS TO DEMONSTRATE THAT ANY CLAIM
`
`OF THE '988 PATENT WOULD BE UNPATENTABLE UNDER
`
`35 U. S.C. § 101
`
`A. Business Methods and “Abstract Ideas” or “Abstract Concepts”
`
`Petitioner relies upon the concept that,
`
`in genera , “abstract ideas” and
`
`“abstract concepts” are not patentable subject matter under 35 U.S.C. § 101.
`
`Petitioner alleges, in Section V.A.2. of its Petition, that:
`
`The Ballard patents cover abstract business processes including using
`
`images of checks for transmitting and processing data about the check
`
`transaction (in the '137 patent) and transmitting and processing
`
`financial data using images of “documents and receipts” (in the ’988
`
`patent).
`
`See, e.g., EX. 1001, 25:10-27, 28:17-34; Ex. 1002, 25:42-65.3
`
`Patent Owner notes that Petitioner repeatedly mentions US. Patent No.
`
`6,032,137 (“the '137 Patent”) throughout its Petition. The Petition purports to be
`
`directed only to the '988 Patent. All such references to the '137 Patent are both
`
`unnecessary and improper in the Petition for the '988 Patent, and should be denied
`
`by the PTAB.
`
`Page 16 of 56
`
`-16-
`
`Page 16 of 56
`
`Page 16 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`1. Bilski v. Kappos Clearly Provides for Business Method Patents
`
`In Bilskz' v Kappos, 130 S.Ct. 3218 (Exhibit 2005), the Court reviewed
`
`Gottschalk v. Benson, 409 US. 63 (1972) (Exhibit 2006), Parker v. Flock, 437
`
`US. 584 (1978) (Exhibit 2007) and Diamond v. Diehr, 450 US 175 (1981)
`
`(Exhibit 2008). In so doing, the Court stated that:
`
`Section 101 similarly precludes the broad contention that the term
`
`“process”
`
`categorically excludes business methods. The
`
`term
`
`“method,” which is within § 100(b)’s definition of “process,” at least
`
`as a textual matter and before consulting other limitations in the
`
`Patent Act and this Court’s precedents, may include at least some
`
`methods of doing business.
`
`130 S. Ct. at 3228.
`
`2. Bilski v. Kappos Does Not Clearly Define “Abstract Ideas” or
`“Abstract Concepts”
`
`With respect to so-called “abstract ideas or “abstract concepts,” the Bilski
`
`Court does not purport to arrive at a conclusive definition of “abstract idea” or
`
`“abstract concept.” The Bilski opinion states:
`
`In searching for a limiting principle, this Court’s precedents on the
`
`unpatentability of abstract ideas provide USCflll tools. See infra, at
`
`[3229-3231].
`
`Indeed, if the Court of Appeals were to succeed in
`
`defining a narrower category or class of patent applications that claim
`
`to instruct how business should be conducted, and then rule that the
`
`category is unpatentable because, for instance, it represents an attempt
`
`to patent abstract ideas, this conclusion might well be in accord with
`
`Page 17 of 56
`
`-17-
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`controlling precedent. See ibid. But beyond this or some other
`
`limitation consistent with the statutog text, the Patent Act leaves open
`
`the possibility that there are at least some processes that can be fairly
`
`described as business methods that are within patentable subject
`
`matter under § 101.
`
`130 S. Ct. at 3229 (emphasis added).
`
`At pages 3229-3230 of its opinion, the Bilski Court explained that it regards
`
`the subject matter disclosed and claimed by the applicant to not qualify as a
`
`“process” under § 101, stating:
`
`Rather than adopting categorical rules that might have wide-ranging
`
`and unforeseen impacts, the Court resolves this case narrowly on the
`
`basis of this Court’s decisions in Benson, Flook, and Diehr, which
`
`show that petitioners’ claims are not patentable processes because
`
`they are attempts to patent abstract ideas. Indeed, all members of the
`
`Court agree that the patent application at issue here falls outside of
`
`§ 101 because it claims an abstract idea.
`
`130 S. Ct. at 3229—30.
`
`The Bilskz' Court then surveyed its prior precedents, i.e., the Benson, Flook
`
`and Diehr decisions, to address its current understanding of “abstract idea” and/or
`
`“abstract concept.”
`
`In Benson, the claims at bar were directed to an algorithm to convert binary-
`
`coded decimal numerals into pure binary code.” The Court held the application at
`
`issue not to be a “process” under § 101. 409 U.S. at 64-67.
`
`Instead, the Court
`
`Page 18 of 56
`
`-18-
`
`Page 18 of 56
`
`Page 18 of 56
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`decided that “‘[a] principle,
`
`in the abstract,
`
`is a fundamental truth; an original
`
`cause; a motive; these cannot be patented, as no one can claim in either or them an
`
`exclusive right.”’ Id. at 67 (quoting Le Roy v. Tatham, 14 US. 156, 175 (1853)).
`
`The Court then held that the application at issue was not a “process,” but was
`
`instead directed to an unpatentable abstract idea that could not be patented because
`
`the mathematical formula would be wholly pre-empted and in practical effect
`
`would be a patent on the algorithm itself. Id. at 72.
`
`The Court
`
`then considered Flook, another decision in which the only
`
`innovation was reliance on an algorithm. 437 US. at 5 85-86. The Court conceded
`
`that the invention had been limited so that it could still be freely used outside the
`
`petrochemical and oil-refining industries. Id. at 589-90. Nevertheless, the opinion
`
`in Flook rejected “[t]he notion that post-solution activity, no matter how
`
`conventional or obvious in itself, can transform an unpatentable principle into a
`
`patentable process.” Id. at 590. The Court concluded that the process ultimately
`
`was “unpatentable under § 101, not because it contain[ed] a mathematical
`
`algorithm as one component, but because once that algorithm [wa]s assumed to be
`
`within the prior art,
`
`the application considered as a whole, contain[ed] no
`
`patentable invention.” Id. at 594. As the Court later explained, the decision in
`
`Flook stands for the proposition that the prohibition against patenting abstract ideas
`
`“cannot be circumvented by attempting to limit
`
`the use of the formula to a
`
`Page 19 of 56
`
`-19-
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`particular technological environment” or adding “insignificant post solution
`
`activity.” Diehr, 450 U. S. at 191—92.
`
`In Diehr, the Court established a limitation on the principles articulated in
`
`the Benson and Flook decisions. The application in Diehr claimed a previously
`
`unknown method for “molding raw, uncured synthetic rubber into cured precision
`
`products,” using a mathematical formula to complete some of its several steps by
`
`way of a computer. 450 US. at 177. Diehr explained that while an abstract idea,
`
`law of nature, or mathematical formula could not be patented, “an application of a
`
`law of nature or mathematical formula to a known structure or process may well be
`
`deserving of patent protection.” Id. at 187. Diehr emphasized the need to consider
`
`the invention as a whole, rather than “dissect[ing] the claims into old and new
`
`elements and then .
`
`.
`
`. ignor[ing] the presence of the old elements in the analysis.”
`
`1d. at 188. Finally, the Court concluded that because the claim was not “an attempt
`
`to patent a mathematical formula, but rather [was] an industrial process for the
`
`molding of rubber products,” it fell within § 101’s patentable subject matter. Id. at
`
`192—93.
`
`It should be noted that long prior to the holding in Diehr, the Court had
`
`reached a very similar conclusion in Mackay Radio & Telegraph Co. v. Radio
`
`Corp. ofAmerica, 306 US. 86 ( 1939) (Exhibit 2009).
`
`In that decision, the Court
`
`held that:
`
`Page 20 of 56
`
`-20-
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`While a scientific truth, or the mathematical expression of it, is not
`
`patentable invention, a novel and useful structure created with the aid
`
`of knowledge of scientific truth may be. But we do not stop to solve
`
`the problem whether it was more than the skill of the art to combine
`
`the teaching of Abraham with that of Lindenblad and others who had
`
`pointed out that the arrangement of the wires at an angle enhanced
`
`directional radio activity along their bisector. We assume, without
`
`deciding the point, that this advance was invention, even though it
`
`was achieved by the logical application of a known scientific law to a
`
`familiar type of antenna. But it is apparent that, if this assumption is
`
`correct,
`
`the invention was a narrow one, consisting of a structure
`
`conforming to the teachings of the Abraham formula as to angle and
`
`wire length relative to wavelength, and is to be strictly construed with
`
`regard both to prior art and to alleged infringing devices.
`
`306 US. at 95.
`
`The Bilski Court regarded “abstract ideas” and “abstract concepts” as simply
`
`laws of nature or mathematical formulas that are not within 35 U.S.C. § 101, and
`
`therefore could not properly be claimed in a patent, except that an application of a
`
`law of nature or a mathematical formula could well be deserving of patent
`
`protection if it is applied to a known structure or process, as was the case in Diehr.
`
`3. CLS Bank International et al. v Alice Corporation Pty. LTD. and
`“Abstract Ideas”
`
`CLS Bank is a per curium decision in which the Federal Circuit, sitting en
`
`banc, held asserted method and computer-readable media claims to be not directed
`
`Page 21 of 56
`
`-21-
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`to eligible subject matter under 35 U.S.C. § 101. See CLS Bank Int’l v. Alice Corp.
`
`Ply, 717 F.3d 1269 (Fed. Cir. 2013) (Exhibit 2010).
`
`The CLS Bank decision contains some guidance with respect to patent
`
`eligibility for “abstract ideas.’
`
`The decision discusses the Benson, Flook, Diehr,
`
`’
`
`Bilskz' and Mayo (Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct.
`
`1289 (2012)) decisions and recognizes that
`
`the Benson, Flook and Bilskz'
`
`proceedings were directed to “abstract
`
`ideas” in the nature of mathematical
`
`formulas that would be preempted if patent protection was available pursuant to 35
`
`U.S.C. § 101. The Mayo decision (Exhibit 2011) was discussed with respect to the
`
`“laws of nature” with respect to claims covering medical diagnostic methods. The
`
`CLS Bank opinion clearly states that:
`
`To be clear,
`
`the proper focus is not preemption per se, for some
`
`measure of preemption is intrinsic in the statutory right granted with
`
`every patent
`
`to exclude competitors,
`
`for a limited time,
`
`from
`
`
`
`practicing the claimed invention. See 35 U.S.C. § 154. Rather the
`
`animating concern is that claims should not be coextensive with a
`
`natural law, natural phenomenon, or abstract idea; a patent-eligible
`
`
`
`claim must include one or more substantive limitations that in the
`
`words of the Supreme Court, add “significantly more” to the basic
`
`principle, with the result that the claim covers significantly less. See
`
`Mayo 132 S.Ct. at 1294. Thus, broad claims do not necessarily raise
`
`§ 101 preemption concerns, and seemingly narrower claims are not
`
`necessarily exempt. What matters is whether a claim threatens to
`
`Page 22 of 56
`
`-22-
`
`

`

`CBM2014-00021
`
`USP 5,910,988
`
`subsume the full scope of a fundamental concept, and when those
`
`concerns arise, we must look for meaningful limitations that prevent
`
`the claim as a whole from covering the