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`__________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`__________________
`
`ASKELADDEN L.L.C.,
`Petitioner,
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`v.
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`NEXTCARD, LLC,
`Patent Owner.
`
`__________________
`
`Case IPR2017-00105
`Patent 7,552,080
`__________________
`
`PATENT OWNER PRELIMINARY RESPONSE
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`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-14
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`TABLE OF CONTENTS
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`I.
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`INTRODUCTION ................................................................................................. 1
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`II. OVERVIEW OF THE ’080 PATENT ................................................................ 1
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`III. SUMMARY OF GROUNDS FOR REVIEW ..................................................... 2
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`IV. CLAIM CONSTRUCTION .............................................................................. 2
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`V. PETITIONER HAS NOT ESTABLISHED A REASONABLE
`LIKELIHOOD OF PREVAILING ............................................................................ 7
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`A. The Board Should Deny Institution on Ground 1 Because Petitioner Has Not
`Established That Tengel, Walker I, and Nabors, in Combination, Meet All the
`Limitations of each of Claims 1 to 6 and 9 to 11. ...................................................... 8
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`1. Tengel Does Not Disclose Any of Elements A, C, D, E .................................. 10
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`2. Nabors Does Not Disclose Limitations B, C, D, or E .................................... 12
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`3. Walker I Does Not Disclose Limitations A, C, D and E ................................ 12
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`4. The Combination of Tengel, Walker I, and Nabors Does Not Teach Element D
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`13
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`B. The Board Should Deny Institution on Ground 2 Because Petitioner Has Not
`Established That Tengel, Walker I, Nabors, and Walker II, in Combination, Render
`Claim 7 Obvious. ...................................................................................................... 16
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`C. The Board Should Deny Institution on Ground 2 Because Petitioner Has Not
`Established That Tengel, Walker I, Nabors, and Watson, in Combination, Render
`Claim 8. .................................................................................................................... 16
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`VI. CONCLUSION ..................................................... Error! Bookmark not defined.
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`IPR2017-00105
`U.S. Patent No. 7,552,080
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`I.
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`INTRODUCTION
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`NextCard LLC (“NextCard” or “Patent Owner”) submits this preliminary
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`response to the petition (Paper 1, the “Petition”) filed on October 19, 2016, by
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`Askeladden LLC (“Petitioner”) and challenging claims of U.S. Patent No. 7,552,080
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`(Ex. 1001, “the ’080 patent”). The Board should deny institution because Petitioner
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`has not established a reasonable likelihood of prevailing as to any of the independent
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`claims and, therefore, because Petitioner applies same evidence and reasoning to the
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`dependent claims, as to all the claims.
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`II. OVERVIEW OF THE ’080 PATENT
`The ‘080 patent describes and claims a computer implemented method,
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`system and computer program product for determining and transmitting to an
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`applicant offers based on the terms required by requested terms and applicant’s
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`preferred terms. The specification describes several different ways the program
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`determines which terms are preferred. The system, which is embodied by one or
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`more computers running software, receives over a network a plurality of terms
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`requested by the applicant, wherein at least one of the requested terms is indicated
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`by the applicant as preferred over at least another one of the requested terms. It then
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`determines with one or more computers a set of offers for the applicant. If the set of
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`offers includes at least one offer that meets all the requested terms, the system
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`IPR2017-00105
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`selects from among the set of offers at least one offer that meets all the requested
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`terms. If the set of offers does not include at least one offer that meets all the
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`requested terms, but includes at least one offer that meets at least one of the
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`preferred requested terms, the systems selects from among the set of offers at least
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`one offer that meets the at least one of the preferred requested terms. Otherwise, the
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`system does not select an offer from the set of offers. The system then transmits any
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`offers selected from the set of offers to the applicant.
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`III. SUMMARY OF GROUNDS FOR REVIEW
`The Petition asserts three grounds of alleged unpatentability:
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`• Ground 1: Claims 1-6, and 9-11 are obvious under 35 USC § 103 over US
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`5,940,812 (“Tengel”) (Exhibit 1006), US 7,552,080 (“Walker I”) (Exhibit
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`1007), and US 7,236,983 (“Nabors”) (Exhibit 1008).
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`• Ground 2: Claim 7 is obvious under 35 USC § 103 over Tengel, Walker I,
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`Nabors, and US 5,970,478 (“Walker II”) (Exhibit 1010).
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`• Ground 3: Claim 8 is allegedly obvious under 35 USC §103 over Tengel,
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`Walker I, Nabors, and US 8,271,379 (“Watson”) (Exhibit 1011).
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`IV. CLAIM CONSTRUCTION
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`Patent Owner does not take issue with the following interpretations offered by
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`Petitioner:
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`• “terms requested by the applicant” and “the requested terms” both mean
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`“terms specified by the applicant.”
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`• “desired changes to those terms” (claim 7) means “desired changes to the
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`terms of the current card of the applicant.”
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`• “the requested term” (claim 9) means “at least one of the plurality of terms
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`requested by the applicant.”
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`Patent Owner, however, disagrees with Petitioner’s contention that several
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`conditional statements in the independent claims must be treated as optional
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`elements that are not required to be shown under the broadest reasonable
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`interpretation. (Petition at 7). The conditional statements or limitations in claim 1
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`are:
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`• “if the set of offers includes at least one offer that meets all of the
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`requested terms, selecting with the one or more computer from among the
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`set of offers at least one offer that meets all of the requested terms;
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`• “if the set of offers does not include at least one offer that meets all of the
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`requested terms but includes at least one offer that meets at least one of the
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`preferred requested terms, selecting with the one or more computers from
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`among the set of offers at least one offer that meets the at least one of the
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`preferred requested terms;
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`• “otherwise, not selecting an offer from the set of offers”
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`Independent claims 10 and 11 contain similar conditional elements.
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`Petitioner contends that, “it is not possible for a set of offers to meet more
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`than one of these elements” and therefore a prior art reference need only teach one
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`of the three elements, presumably because the performance of only one of the three
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`elements would infringe. See, Bristol- Myers Squibb Co. v. Ben Venue Labs, Inc.,
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`246 F.3d 1368, 1378 (Fed. Cir. 2001) ("[I]t is axiomatic that that which would
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`literally infringe if later anticipates if earlier.")
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`Although system claim 10 and computer product claim 11 recite functions
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`that are substantially like the steps recited in the method of claim 1, these claims
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`must be interpreted, even under the broadest reasonable interpretation standard, to
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`require structure to be present perform that function. Claim 10, for example,
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`includes a “a processor coupled with the interface and with a memory for storing
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`program instructions, the processor configured by the program instructions to ...”
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`Similarly claim 11 requires a computer program product embodied in a computer
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`readable medium with instructions that, when read by a computer, are capable of
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`carrying out the functions.
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`The Board’s precedential decision Ex Parte Schulhauser, Appeal 2013-
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`007847, Application 12/184,020 (PTAB 2006) is directly on point. The Board
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`explains at page 14 that “the broadest reasonable interpretation of a system claim
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`having structure that performs a function, which only needs to occur if a condition
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`precedent is met, still requires structure for performing the function should the
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`condition occur.” The unpublished Federal Circuit decision relied on by Petitioner,
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`Cybersettle, Inc. v. Nat’l Arbitration Forum, Inc., 243 Fed. Appx. 603 (Fed. Cir.
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`2007) concerned only a method claim. Id. at 607. The Board relied Cybersettle when
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`considering the method claim in that case, but not the claims requiring structure.
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`As in Schulhauser system claim 10 requires structure — a processor and
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`instructions for carrying out the steps listed in claim 10 — be present in the system
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`capable of performing each of the conditioned steps regardless of whether the
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`condition is met and the function is actually performed. Similarly, the computer
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`program product of claim 11 requires computer instructions embodied in a computer
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`readable medium for carrying out the stated algorithm. Therefore, the conditioned
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`functions in claims 10 and 11 cannot be treated as optional limitations under the
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`broadest reasonable interpretation. All of them must be met.
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`Furthermore, with regard to each of the claims in the patent, when the claim
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`as a whole is considered, the conditioned statements should be interpreted under the
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`broadest reasonable interpretation standard as, in effect, a step of selecting credit
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`offers for transmission to an applicant from a set of offers determined by the one or
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`computers using the following criteria: (1) whether or not an offer contains all of the
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`requested terms; (2) if an offer does not contain all of the requested terms, whether
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`an offer contains a requested term that the applicant has indicated is a preferred
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`term; and (3) whether none of the requested terms are contained in the offer. The
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`“if” statements are criteria that are limitations on the step of selecting. Each of the
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`criteria necessarily involve evaluation of how many of the applicant requested terms
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`are present in an offer, and how of those that are present are preferred by the
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`applicant.
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`Even if the “if” limitations are treated as separate steps in a selection process,
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`they are not optional in the sense that only one of them needs to be satisfied for
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`infringement or to show invalidity. For example, the second of these limitations is
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`necessarily dependent on the first on, as it says “if the set of offers does not include
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`at least one offer that meets all of the requested terms.” Similarly, the third
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`limitation — not selecting an applicant an offer — is necessarily dependent on
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`evaluating the other two selection criteria in the preceding two steps. In other words,
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`you do not get to the second step or the third step without considering the prior step
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`or steps in the selection process.
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`Therefore, even under the broadest reasonable interpretation, the “if”
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`statements in claim 1 must not be interpreted as optional, as urged by Petitioner, but
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`rather as criteria for selecting which, if any, of the set of offers to transmit to an
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`applicant.
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`V.
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`PETITIONER HAS NOT ESTABLISHED A REASONABLE
`LIKELIHOOD OF PREVAILING
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`There are several reasons for why the three grounds advanced by Petitioner
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`are insufficient to demonstrate obviousness. To the extent that Petitioner’s reasoning
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`relies treating the “if” statements as optional (meaning only one of the three need to
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`be met), they are fatally flawed and cannot demonstrate even a reasonable likelihood
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`of prevailing, particularly as to claims 10 and 11. To the extent that Petitioner’s
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`grounds do not depend on this claim construction, the evidence advanced by
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`Petitioner fails to demonstrate that all the limitations of the claims are met.
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`A. The Board Should Deny Institution on Ground 1 Because
`Petitioner Has Not Established That Tengel, Walker I, and
`Nabors, in Combination, Meet All the Limitations of each of
`Claims 1 to 6 and 9 to 11.
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`Claim 1 requires:
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`1. A computer implemented method of transmitting a customized
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`offer to an applicant comprising:
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`[A] receiving over a network a plurality of terms requested by
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`the applicant, wherein at least one of the requested terms is indicated by
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`the applicant as preferred over at least another one of the requested
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`terms;
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`[B] determining with one or more computers a set of offers for
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`the applicant;
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`[C] if the set of offers includes at least one offer that meets all of
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`the requested terms, selecting with the one or more computer from
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`among the set of offers at least one offer that meets all of the requested
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`terms;
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`[D] if the set of offers does not include at least one offer that
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`meets all of the requested terms but includes at least one offer that
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`meets at least one of the preferred requested terms, selecting with the
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`one or more computers from among the set of offers at least one offer
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`that meets the at least one of the preferred requested terms;
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`[E] otherwise, not selecting an offer from the set of offers; and
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`[F] transmitting any selected offer from the set of offers to the
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`applicant.
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`Patent Owner has labeled the elements or limitations of claim 1 with the same
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`letter used by Petitioner for easy reference.
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`System claim 10 and computer program product claim 11 contain elements
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`substantially like elements or limitations A, B, C, D, E and F. Therefore, Patent
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`Owner’s remarks concerning elements A, B, C, D, E and F apply to claims 1, 10 and
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`11 unless otherwise noted.
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`Petitioner initially contends that Tengel, Walker 1 and Nabors meet
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`limitations A and B, and at least one of limitations C, D, E and F, contending that
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`only one limitations C to E need to be met because they are optional. Under Patent
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`Owner’s proposed construction for Claims 1, 10 and 11, this reasoning plainly fails
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`to demonstrate a reasonable likelihood of prevailing.
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`However, Petitioner also contends that all the elements of each of claims 1-6
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`and 9-11 are met by the combination of Tengel, Walker I and Nabors. The following
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`arguments address that contention.
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`Petitioner appears to treat Tengel as the primary reference. To the extent that
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`Tengel does not disclose or teach an element — Petitioner appears to admit that
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`element D is not found in Tengel — Petitioner relies on Walker I and/or Nabors to
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`teach the missing element, arguing it would it would have been obvious to make the
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`combination. However, none of these references disclose, either by themselves or in
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`combination with each other, a number of claim limitations.
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`1. Tengel Does Not Disclose Any of Elements A, C, D, E
`Tengel discloses a system in which an applicant may use a computer network
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`to fill out a loan application for a particular loan product. At the initial stage,
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`applicant selects “the” loan product he is applying for. Tengel; 8:50-54; Fig. 5. The
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`applicant does not appear to be able to specify terms, such as interest rate, annual
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`fees, etc. Rather, the borrower simply provides “borrower attributes.” See Tengel
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`4:22-27(“Borrower attributes” mean information about a potential borrower that a
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`lender may use to estimate borrower’s default risk.) As shown by Figures 2A and
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`2B, Tengel then compares the borrower attributes with acceptance criteria stored in
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`a database for each type of loan to determine which loans the borrower may qualify
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`for. See Id., Fig. 3. A list of loans available to the borrower based on the matching is
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`generated, with the loans ranked by loan attribute and/or by a composite score based
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`on weighting of loan attributes. Id. As indicated by steps 216 and 218, these
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`rankings are displayed to the borrower and the borrower selects the loan to apply
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`for.
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`Though the system and process of Tengel might determine a set of offers for
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`which an applicant qualifies, it does not receive any indication of requested terms
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`(loan attributes in Tengel) or any indication of preference of for any particular loan
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`attribute before a set of offers is prepared. The ability of change the weighting used
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`to generate the composite score for one of the rankings based on input from the
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`borrower appears to be appears to be available only on the screen displaying the lists
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`of loans for which the borrower qualifies. See id. at 9:32-52.
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`Furthermore, Tengel’s system does not select from the set of offers prior to
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`transmitting the offers to the client, much less do so using the selecting step or
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`process set out in claims 1, 10 and 11. Therefore, because it does not receive
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`multiple requested terms for an offer, and select from among offers using requested
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`terms or preferred requested terms, Tengel does not teach or suggest any of one of
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`the limitations A, C, D, and E, standing alone, or collectively as a process or system
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`2. Nabors Does Not Disclose Limitations B, C, D, or E
`As best illustrated by FIG. 4, Nabors discloses an intermediary system
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`through which a prospective car purchaser can put together a request for quote
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`(RFQ) that is distributed to a “target set” of automobile sellers. The request includes
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`at least a general description (“GA”) of the automobile wanted (for example a Ford
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`Taurus), and may also include and exact description (“EA”) of the automobile in
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`terms of an additional set of attributes. Nabors, 7:6-14. The seller may also indicate
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`in the request rankings of the attributes, referred to as “flexibility information.” Id
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`Fig. 10, step 206. The request is then transmitted to the systems of the targeted
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`sellers. Each seller may respond to the intermediary system with a quote, as shown
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`in Figure 5. All quotes are then passed on by the intermediary to the customer, and
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`the customer evaluates the “adequacy” of each quote. Id, 9:46-51.
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`The intermediary system of Nabors does no more than help a prospective
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`purchaser assemble and communicate a request for quote to multiple automobile
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`dealers, and pass back to the prospective purchaser the quotes received back. It
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`involves no selection from among the set of offers that its system solicits from third
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`parties, much less the selecting step or process of elements C, D and E.
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`3. Walker I Does Not Disclose Limitations A, C, D and E
`Walker I discloses a system that is fundamentally different from the system
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`and computer processes that are the subject of the claims. In Walker I’s system, a
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`user may submit a binding, but conditioned, purchase offer (CPO) for a good. As
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`shown by Figure 5 in Walker I, the user selects from a subject list of goods at step
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`510, such as an airline ticket, hotel room, or mortgage. The user describes the goods
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`and places other conditions on the offer at step 530. This CPO is stored and posted
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`to a particular subject. Id, Fig. 7. Meanwhile, a seller may login into the system to
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`view the CPO and accept it, as shown by Figure 10. Alternatively, as shown by
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`Figure 19, a seller of the good may select a CPO and make a counteroffer by
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`modifying the terms, the counteroffer being transmitted to the buyer for acceptance.
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`Under no reasonable interpretation does the reverse auction process taught by
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`Walker I describe the claimed process. Although an offer to purchase may include
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`terms, these are not requested terms. No set of offers are determined by the system
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`or the computer process. There is no process of selecting from the set of offers is
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`performed, much less one based on the criteria contained in steps C, D and E.
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`4. The Combination of Tengel, Walker I, and Nabors Does Not
`Teach Element D
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`To illustrate further the inadequacy of Petitioner’s evidence to support its
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`grounds cancellation, consider specifically its arguments involving limitation D.
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`Petitioner implicitly admits it is missing from Tengel, but contends that Walker I
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`and Nabors teach this limitation.
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`On pages 32-33 of the Petition, Petitioner argues that:
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`Nabors teaches that if a target seller does not have the exact product
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`configuration wanted by a customer, but has a product configuration that
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`satisfies the customer’s flexibility terms, then the target seller can submit a
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`quote with this alternative configuration. Nabors, 9:4-14. Because the offer
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`does not include every requested term (automatic transmission), but includes
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`at least one preferred term (one or more of the other features specified by the
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`customer), Nabors teaches element D.
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`However, as explained above, the intermediary system simply passes along all
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`quotes to the prospective customer. There is no selecting from among the quotes
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`based on the terms or preferences specified by the customer.
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`As for Walker I, Petitioner contends that,
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` Walker I teaches that sellers can provide offers to an applicant by
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`modifying conditions requested by the applicant. See Walker I, 22:40-23:5,
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`Figures 1 and 18. Therefore, Walker I teaches that (1) if a seller provides an
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`offer to an applicant by modifying conditions requested by the applicant, and
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`(2) the offer does not modify all the conditions preferred by the applicant,
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`then the offer does not include all of the requested terms requested by the
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`applicant but does include at least one of the preferred terms requested by the
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`applicant. See id.; Tygar, 8.6.1.6.5-8.6.1.6.8. Further, a POSITA reading
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`Walker I would understand that for a particular request, sellers might provide
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`only offers to the applicant that modify conditions requested by the applicant
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`but leave one of the applicant’s preferred conditions unchanged.
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`As explained above, the system of Walker I neither determines offers nor
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`selects among them. This argument about how a seller may make a counter offer
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`plainly does not supply the missing limitation D, or suggest in any way modifying
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`Tengel to perform a selecting step or process meeting any of the limitations of C, D
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`or E.
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`For these reasons, Petitioner has failed to show that its evidence teaches a
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`number of claim limitations, including any one or all the conditional limitations.
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`Thus, it is not likely to prevail on cancelling any of the claims. For these reasons,
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`Petitioner’s request for institution should be denied.
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`B.
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`The Board Should Deny Institution on Ground 2 Because
`Petitioner Has Not Established That Tengel, Walker I, Nabors,
`and Walker II, in Combination, Render Claim 7 Obvious.
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`Petitioner relies on Walker II only to address the additional limitations of
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`claim 7. Walker II does not address the fundamental flaws in the reasoning
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`identified above regarding to claim 1, from which claim 7 depends. Petitioner
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`therefore has failed to demonstrate a reasonable likelihood of prevailing in its
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`request to cancel claim 7.
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`C. The Board Should Deny Institution on Ground 2 Because
`Petitioner Has Not Established That Tengel, Walker I, Nabors,
`and Watson, in Combination, Render Claim 8.
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`Watson is used only to address the additional limitation of dependent claim 8.
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`Watson does not address the fundamental flaws in the reasoning identified above
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`regarding claim 1, from which claim 8 depends. Petitioner therefore fails to
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`demonstrate a reasonable likelihood of prevailing in its request to cancel claim 8.
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`VI. CONCLUSION
`The Board should deny institution on the Petition entirely. Petitioner has not
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`established a reasonable likelihood of prevailing as to any claim.
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`Patent Owner has not presented, for the sake of brevity, all its claim
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`construction and validity arguments in this preliminary response. Accordingly, if the
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`Board institutes trial, Patent Owner reserves the right to raise additional claim
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`construction and validity arguments in its Patent Owner’s response.
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`January 19, 2017
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`Respectfully submitted,
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`/Marc Hubbard/
`Marc A. Hubbard
`Reg. No. 32,506
`HUBBARD JOHNSTON, PLLC
`4849 Greenville Ave, Suite 1490
`Dallas, Texas 75206
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`Lead Counsel for Patent Owner
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`CERTIFICATE OF SERVICE
`Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies that on January 19, 2017,
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`a complete copy of the foregoing was served on counsel of record for the Petitioner by
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`filing this document through the PTAB E2E System and by sending this document via
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`electronic mail to the following:
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`John Steven Gardner
`Alton L Absher III
`Bryan S. Foster
`KILPATRICK TOWNSEND & STOCKTON LLP
`AskeladdenWillardIPR@kilpatricktownsend.com
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`/Marc Hubbard/
`Marc A. Hubbard
`Reg. No. 32,506
`HUBBARD JOHNSTON, PLLC
`4849 Greenville Ave, Suite 1490
`Dallas, Texas 75206
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`Lead Counsel for Patent Owner
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