Paper No. 7
`Trials@uspto.gov
`571-272-7822
`
`Date Entered: February 5, 2014
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`DELL INC.
`Petitioner
`
`v.
`
`DISPOSITION SERVICES LLC
`Patent Owner
`____________
`
`Case CBM2013-00040
`Patent 5,424,944
`____________
`
`Before SALLY C. MEDLEY, KEVIN F. TURNER, and
`MATTHEW R. CLEMENTS, Administrative Patent Judges.
`
`CLEMENTS, Administrative Patent Judge.
`
`
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`Petitioner Exhibit 1021 p.1
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`CBM2013-00040
`Patent 5,424,944
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`I.
`INTRODUCTION
`Dell Inc. (“Petitioner”) filed a petition seeking covered business
`method patent review of claims 1–23 (the “challenged claims”) of U.S.
`Patent No. 5,424,944 (Ex. 1001, “the ’944 patent”) pursuant to section 18 of
`the Leahy-Smith America Invents Act (AIA)1. Paper 1 (“Pet.”). The
`petition challenges all of the claims (1–23) of the ’944 patent as
`unpatentable under 35 U.S.C. § 101. Patent Owner filed a preliminary
`response opposing institution of the review. Paper 6 (“Prelim. Resp.”). We
`have jurisdiction under 35 U.S.C. § 324.
`The standard for instituting a covered business method patent review
`is set forth in 35 U.S.C. § 324(a), which provides as follows:
`THRESHOLD.—The Director may not authorize a post-grant
`review to be instituted unless the Director determines that the
`information presented in the petition filed under section 321, 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.
`We determine that the ’944 patent is a covered business method
`patent. Petitioner has demonstrated that it is more likely than not that the
`challenged claims are directed to non-statutory subject matter and, thus,
`unpatentable under 35 U.S.C. § 101. Thus, we institute a covered business
`method patent review for the challenged claims of the ’944 patent based
`upon Petitioner’s challenge that those claims are unpatentable under § 101.
`
`
`1 Pub. L. No. 112-29, 125 Stat. 284 (2011).
`
`2
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`Petitioner Exhibit 1021 p.2
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`CBM2013-00040
`Patent 5,424,944
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`Related Litigation
`A.
`In compliance with 37 C.F.R. § 42.302(a), Petitioner certifies that it
`has been sued for infringement of the ’944 patent (the “Dell Litigation”).
`Pet. 5 (citing Ex. 1002). Patent Owner does not challenge the certification.
`
`The ’944 Patent
`B.
`The ’944 patent “relates to a system and method for the controlled
`disposition of selected capital assets.” Ex. 1001, col. 1, ll. 6–7. According
`to the ’944 patent, there was a need for managing various types of
`dispositions of surplus or obsolete assets, such as an older model mainframe
`computer. Id. at ll. 20–27. It was known in the prior art to provide a surplus
`asset to an outside vendor for disassembly. Id. at ll. 27–30. However,
`according to the ’944 patent, such vendors inadvertently or fraudulently
`mismanaged the disassembly and disposition of the surplus asset, such that,
`for example, parts that should have been kept out of the market were instead
`sold on a black market. Id. at ll. 30–34.
`To solve these problems, the ’944 patent discloses a disposition
`process supported by an interactive multimedia system that combines images
`of the assets with relevant data, audio records, and disposition instructions.
`Id. at ll. 44–49. The major processes are the transport process, the receipt
`process, the sort process, the disposition process, and the certification or
`verification process. Id. at col. 2, ll. 7–10. Figures 1A and 1B are
`reproduced below:
`
`3
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`Petitioner Exhibit 1021 p.3
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`Patent 5,424,944
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`Figures 1A and 1B depict a functional block diagram of the preferred
`embodiment of the ’944 patent. Id. at col. 4, ll. 10–11. As depicted in
`Figure 1A, an asset to be disposed of is initially located at customer facility
`4 and is first prepared for transport to the disposition facility at transport
`preparation station 8 that is located either at or proximate customer facility
`4. Id. at ll. 22–26. At transport station 8, the asset is loaded onto a transport
`vehicle, such as an airplane, locomotive, or truck, “[t]he transport vehicle is
`sealed by means known in the art in order to guard against tampering with or
`theft of the asset during transport, and a transport record is created.” Id. at ll.
`27–32. “After arrival at the disposition facility, the transport vehicle is
`unsealed at the asset receiving station 12.” Id. at ll. 63–66. After
`confirmation that the asset has been transported validly, the asset is routed to
`sort station 14. Id. at col. 5, ll. 16–17. Sort station 14 comprises system
`terminal 108, interactive multimedia device 110, and data capture device
`104. Id. at ll. 17–22. Disposition facility personnel operate sort station 14 in
`accordance with instructions previously provided by the customer regarding
`the desired manner of disposition of the asset, which instructions are
`displayed on multimedia device 110. Id. at ll. 28–32. The asset may be
`routed to as-is sale station 16, refurbish station 18, dismantle station 20,
`dysfunction station 22, reclaim station 24, destruct station 26, storage station
`
`4
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`Petitioner Exhibit 1021 p.4
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`Patent 5,424,944
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`28, or some combination thereof. Id. at ll. 32–36. At the appropriate station,
`the asset is sold, dismantled, dysfunctioned, reclaimed, destroyed, or stored.
`Id. at col. 5, l. 36 to col. 7, l. 52. In some cases, a record of the action taken
`is created in database 10. Id. at col. 5, ll. 48–51, col. 6, ll. 45–48, and col. 7,
`ll. 36–40 and ll. 46–51. “After disposition, the asset, component parts and/or
`reclaimed materials may be sold in the appropriate market to a purchaser,
`returned to the customer, or stored on-site for subsequent disposition.” Id. at
`col. 3, ll. 65–68.
`
`Exemplary Claim
`C.
`Of the challenged claims, claims 1, 2, 15, and 16 are the only
`independent claims. Claim 1 is representative and is reproduced below:
`1.
`A method for verifiably controlling the disposition of an
`asset, said method comprising the steps of:
`(a) creating an asset record uniquely associated with said
`asset;
`(b) securely sealing said asset in a tamper-proof transport
`means;
`(c) creating a transport record associating said asset with
`said tamper-proof transport means;
`(d) transporting said asset from a customer facility to a
`disposition facility;
`(e) unsealing said asset from within said tamper-proof
`transport means;
`(f) creating a receipt record associating said asset with
`said tamper-proof transport means, said receipt record being
`reconcilable with said transport record;
`(g) sorting said asset in accordance with a preselected
`method of disposition; and
`(h) disposing of said asset in accordance with said
`preselected method of disposition and creating a disposition
`
`5
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`Petitioner Exhibit 1021 p.5
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`CBM2013-00040
`Patent 5,424,944
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`record uniquely associated with said asset to be maintained for
`customer verification.
`
`The Asserted Grounds
`D.
`Petitioner challenges claims 1–23 of the ’944 patent on the grounds
`that the claims do not recite patent-eligible subject matter under 35 U.S.C.
`§ 101.
`
`II.
`
`ANALYSIS
`
`A. Standing
`The parties disagree as to whether Petitioner has standing to file a
`petition for a covered business method patent review of the ’944 patent. See
`Pet. 5–14; Prelim. Resp. 1–16.
`Section 18 of the AIA provides for the creation of a transitional
`program for reviewing covered business method patents. Section 18 limits
`reviews to persons or their privies that have been sued or charged with
`infringement of a “covered business method patent,” which does not include
`patents for “technological inventions.” AIA §§ 18(a)(1)(B), 18(d)(1); see 37
`C.F.R. § 42.302. It is undisputed that Petitioner has been sued for
`infringement of the ’944 patent. The Dell Litigation was filed in the U.S.
`District Court for the Eastern District of Texas on April 19, 2013, and is
`pending. Pet. 5. The only dispute is whether the ’944 patent is a “covered
`business method patent” as defined in the AIA. Pet. 5–14; Prelim. Resp. 1–
`16. For the reasons explained below, we conclude that the ’944 patent is a
`“covered business method patent,” and that Petitioner has standing to file a
`petition for a covered business method patent review of the ’944 patent.
`
`6
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`Petitioner Exhibit 1021 p.6
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`Patent 5,424,944
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`1. Financial Product or Service
`A covered business method patent “claims a method or corresponding
`apparatus for performing data processing or other operations used in the
`practice, administration, or management of a financial product or service,
`except that the term does not include patents for technological inventions.”
`AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). For purposes of determining
`whether a patent is eligible for a covered business method patent review, the
`focus is on the claims. See Transitional Program for Covered Business
`Method Patents—Definitions of Covered Business Method Patent and
`Technological Invention; Final Rule, 77 Fed. Reg. 48734, 48736 (Aug. 14,
`2012) (“CBM Rules”). A patent need have only one claim directed to a
`covered business method to be eligible for review. Id.
`In promulgating rules for covered business method patent reviews, the
`Office considered the legislative intent and history behind the AIA’s
`definition of “covered business method patent.” Id. at 48735–36. The
`legislative history of the AIA “explains that the definition of covered
`business method patent was drafted to encompass patents ‘claiming
`activities that are financial in nature, incidental to a financial activity or
`complementary to a financial activity.’” Id. at 48735 (quoting 157 Cong.
`Rec. S5432 (daily ed. Sept. 8, 2011)). The legislative history indicates that
`“financial product or service” should be interpreted broadly. Id.
`Claim 1 of the ’944 patent is directed to a method for verifiably
`controlling the disposition of an asset. Claim 1 recites “disposing of said
`asset in accordance with said preselected method of disposition.” This step
`encompasses an “as-is sale” of the asset. See, e.g., Ex. 1001, col. 2, l. 38 and
`
`7
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`Petitioner Exhibit 1021 p.7
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`ll. 50–65; col. 5, ll. 37–58; col. 6, ll. 22–24; col. 8, ll. 65–67. As described
`in the ’944 specification:
`The service provider creates a marketing record of the asset,
`which consists of pertinent data such as the asset type, model,
`serial number, size, color, age, condition, etc. The sale is
`advertised to potential buyers in accordance with an industry-
`based mailing list, which is provided by the customer or outside
`source. The image/data record previously created is used for
`distribution to the potential buyers, and an auction or other type
`of sale of the product is carried out accordingly. After sale, the
`asset is shipped to the purchaser by means of station 30.
`Ex. 1001, col. 5, ll. 48–58. Moreover, claim 7 also describes that “disposing
`of said asset in accordance with said preselected method of disposition”
`comprises the steps of, inter alia, “selling said asset in as-is condition.”2,3 A
`sale of an asset is a financial activity, and selling an asset on behalf of a
`customer amounts to providing a financial service. We are persuaded that
`claim 1 recites a method for performing data processing or other operations
`used in the practice, administration, or management of a financial product or
`service, as required by Section 18(d)(1) of the AIA.
`In its preliminary response, Patent Owner contends that the
`“disposing” step of claim 1 is “wholly unrelated to a financial product or
`services” and that “any potential sale of the asset would be considered a part
`
`
`2 Although claim 7 depends from claim 2, not from claim 1, it further
`defines the step of “disposing of said asset in accordance with said
`preselected method of disposition,” which is recited in both claims.
`3 Patent Owner indicates that it disclaimed claim 7 in a filing on Nov. 6,
`2013. Prelim. Resp. 2 (citing Ex. 2001). Patent Owner’s disclaimer will be
`considered during the trial. At this juncture of the proceeding, it is not
`necessary for us to act on the disclaimer because the ’944 patent is eligible
`for a covered business method patent review even if claim 7 is cancelled. 37
`C.F.R. § 42.5(a)(b).
`
`8
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`Petitioner Exhibit 1021 p.8
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`Patent 5,424,944
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`of the final realized disposition, and as such outside of the scope of the
`claimed invention.” Prelim. Resp. 10. As support for its contention, Patent
`Owner relies upon the prosecution history. Prelim. Resp. 10 (citing Ex.
`1010 at p. 12). The Amendment states:
`As reflected by their absence from the claims added herewith,
`the elements objected to by the examiner as not being supported
`by specific structure (e.g. “means for selling said asset”) are not
`part of the invention claimed. Further, those elements which do
`comprise
`the present
`invention are fully supported and
`sufficiently shown to enable one skilled in the art to practice the
`invention.
`Ex. 1010 at p. 12 (emphasis added). However, this statement indicates only
`that the claims, as amended at that time, no longer recited a “means for
`selling said asset.” It does not suggest that the sale of an asset is not within
`the scope of the step of “disposing of said asset in accordance with said
`preselected method of disposition,” as recited in claim 1.
`Patent Owner also argues that “the ’944 patent claims ‘technologies
`common in business environments across sectors’ with ‘no particular
`relation to the financial services sector’ . . . .” Prelim. Resp. 11. It is the
`statutory language, however, that controls whether a patent is eligible for a
`covered business method patent review. The AIA does not require a
`“particular relation” to “the financial services sector,” but rather 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.” 157 Cong. Rec. S5441; AIA § 18(d)(1). The legislative
`history indicates that the phrase “‘financial product or service’” is not
`limited to the products or services of the “financial services sector” and is to
`
`9
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`Petitioner Exhibit 1021 p.9
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`Patent 5,424,944
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`be interpreted broadly. CBM Rules, 77 Fed. Reg. at 48,735–36. Senator
`Schumer, for example, stated:
`Nothing in the America Invents Act limits use of section 18 to
`banks, insurance companies or other members of the financial
`services industry. Section 18 does not restrict itself to being
`used by petitioners whose primary business is financial
`products or services. Rather, it applies to patents that can apply
`to financial products or services. Accordingly, the fact that a
`patent is being used by a company that is not a financial
`services company does not disqualify the patent from section 18
`review. . . .
`The plain meaning of “financial product or service”
`demonstrates that section 18 is not limited to the financial
`services industry. At its most basic, a financial product is an
`agreement between two parties stipulating movements of money
`or other consideration now or in the future. . . .
`157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)
`(emphasis added). Even assuming that claim 1 of the ’944 patent does not
`relate to a financial services business, it does encompass the sale of an asset,
`which the ’944 patent describes as involving a “financial control process”
`and resulting in a “financial record.” See, e.g., Ex. 1001, col. 2, l. 38 and ll.
`50–65; col. 5, ll. 37–58; col. 6, ll. 22–24; col. 8, ll. 65–67.
`Finally, Patent Owner contends that a determination that the ’944
`patent is a covered business method patent would be “not only grossly over-
`inclusive and contrary to the plain meaning of the statutory wording, but
`would also essentially subsume every business method patent under the
`purview of the CBM review program.” Prelim. Resp. 11–12 (footnote
`omitted). Patent Owner’s argument is not persuasive. The Board reviews
`petitions on their own facts to determine whether the challenged patent is a
`“covered business method patent” under the AIA definition. Petitioner’s
`
`10
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`Petitioner Exhibit 1021 p.10
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`argument that every patented method that may ultimately result in a sale
`would be subject to covered business method patent review ignores the
`specific language of claim 1 (“disposing of said asset in accordance with
`said preselected method of disposition”). Further, we do not agree with
`Patent Owner that the ’944 patent has nothing to do with finance. The
`Specification of the ’944 patent states repeatedly that the disclosed method
`involves the “sale” of an asset, which involves a “financial control process”
`and results in a “financial record.” See, e.g., Ex. 1001, col. 2, l. 38 and ll.
`50–65; col. 5, ll. 37–58; col. 6, ll. 22–24; col. 8, ll. 65–67. For the reasons
`stated above, and based on the particular facts of this proceeding, we
`conclude that claim 1 of the ’944 patent meets the “financial product or
`service” component of the definition in Section 18(d)(1) of the AIA.
`2. Not a Technological Invention
`In view of the “technological inventions” exception of AIA
`Section 18(d)(1), the legislative history of Section 18(d)(1), and the
`definition of “technological invention” under 37 C.F.R. § 42.301(b), the
`Office Patent Trial Practice Guide provides the following guidance with
`respect to claim content that typically would not render a patent a
`technological invention:
`(a) Mere recitation of known technologies, such as computer
`hardware, communication or computer networks, software,
`memory, computer-readable storage medium, scanners, display
`devices, or databases, or specialized machines, such as an ATM
`or point of sale device.
`(b) Reciting the use of known prior art technology to
`accomplish a process or method, even if the process or method
`is novel and non-obvious.
`
`11
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`Petitioner Exhibit 1021 p.11
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`(c) Combining prior art structures to achieve the normal,
`expected, or predictable result of that combination.
`77 Fed. Reg. 157 at 48,763–64 (Aug. 14, 2012).
`Petitioner contends that the challenged claims “do not recite a
`‘technological feature’ that is novel and nonobvious,” and that
`“[i]ndependent claims 1 and 15 do not recite any ‘technologies’
`whatsoever.” Pet. 10. Patent Owner, in response, contends that, “the
`creation and reconciliation of a transport record, receipt record, and
`disposition record, along with the use of a central database in conjunction
`with multimedia devices and image records for a physical asset, were all
`technical features of the present invention that were not known in the prior
`art.” Prelim. Resp. 14. However, Patent Owner’s arguments that allege a
`technological invention are not commensurate with the claimed subject
`matter as a whole of claim 1, which does not require the use of a database,
`multimedia device, or image record.
`Petitioner further contends that the “technologies” recited in claims 2–
`14 and 16–23 are merely generic technology components that are well-
`known in the art. Pet. 10–12 (citing Ex. 1010). Patent Owner, in response,
`contends that while certain of these features may have been known in the
`prior art, the combination of these features, taken as a whole, was novel and
`nonobvious. Prelim. Resp. 14. Because claim 1 is directed to a covered
`business method and a patent need have only one claim directed to a covered
`business method to be eligible for review, we need not reach this issue for
`purposes of this decision.
`Patent Owner acknowledges there are two requirements for a
`technological invention; namely, (1) the claimed subject matter as a whole
`
`12
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`Petitioner Exhibit 1021 p.12
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`must recite a technological feature that is novel and unobvious over the prior
`art; and (2) it must solve a technical problem using a technical solution.
`Prelim. Resp. 13; 37 C.F.R. § 42.301(b). Claim 1 fails on the first prong.
`Specifically, we are persuaded that none of these elements recited in claim 1
`represents a technological feature that is novel and unobvious over the prior
`art: An asset, an asset record, a tamper proof transport means, a transport
`record, customer and disposition facilities, a receipt record, sorting and
`disposing of an asset, and a disposition record. We have considered whether
`the claimed subject matter solves a technical problem using a technical
`solution, as contended by Patent Owner. Because we conclude that claim 1
`does not recite a technological feature that is novel and nonobvious over the
`prior art, however, the ’944 patent is a “covered business method patent”
`that is not excluded for being a “technological invention” and, therefore, is
`eligible for a covered business method patent review.
`3. Conclusion
`A single claim is sufficient to institute a covered business method
`patent review. In view of the foregoing, we conclude that the presence of
`claim 1 means that the ’944 patent is a covered business method patent
`under AIA § 18(d)(1).
`
`B. Claim Construction
`The ’944 patent expired on February 2, 2014. “[T]he Board’s review
`of the claims of an expired patent is similar to that of a district court’s
`review.” In re Rambus, Inc., 694 F.3d 42, 46 (Fed. Cir. 2012). The
`principle set forth by the court in Phillips v. AWH Corp., 415 F.3d 1303,
`1312 (Fed. Cir. 2005) (words of a claim “‘are generally given their ordinary
`and customary meaning’” as understood by a person of ordinary skill in the
`
`13
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`Petitioner Exhibit 1021 p.13
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`art in question at the time of the invention) should be applied since the
`expired claims are not subject to amendment.
`The parties propose constructions for the following claim terms:
`“preselected method of disposition” and “tamper-proof transport means for
`securely sealing said asset for transport from a customer facility to a
`disposition facility.” Pet. 16–18; Prelim. Resp. 16–20. For this decision to
`institute, we construe each of these claim terms in turn.
`1. “preselected method of disposition” (claims 1, 2, 15, and 16)
`Petitioner contends that this phrase means that the customer must
`preselect the method of disposition. Pet. 16–17. Patent Owner contends that
`the phrase is not so limited because the method of disposition could be
`selected by an entity other than the customer, such as the asset owner,
`disposition service provider, or an unrelated outside party. Prelim. Resp.
`16–19. Apart from the claims, the ’944 patent uses this phrase only in the
`first paragraph of the Summary of Invention, which itself is merely a
`paraphrase of the claims. Petitioner relies upon the ’944 patent’s description
`of “instructions” from the customer. Pet. 16–17. For example, the ’944
`patent refers to “predetermined customer instructions.” Ex. 1001, col. 1, l.
`57 to col. 2, l. 3 and col. 2, ll. 37–43; see also id. at claim 12. However, that
`phrase is used in the context of instructions for how to refurbish, dismantle,
`or dysfunction an asset, not in the context of selecting a method of
`disposition. The ’944 patent also refers to “the customer’s instructions” and
`“the requirements of the customer” as indicating which of the alternative
`methods of disposition the asset should undergo. Ex. 1001, col. 2, ll. 37–43
`and ll. 50–52. While these passages describe an embodiment in which the
`customer selects the method of disposition, we decline to import such a
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`14
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`Petitioner Exhibit 1021 p.14
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`limitation from the embodiment described into the claim phrase “preselected
`method of disposition.” On this record, “preselected method of distribution”
`does not require an express construction for purposes of this decision.
`2. “tamper-proof transport means for securely sealing said asset for
`transport from a customer facility to a disposition facility” (claims
`1, 2, 15, and 16)
`Petitioner contends that “tamper-proof transport means for securely
`sealing said asset for transport from a customer facility to a disposition
`facility” is a means-plus-function element invoking 35 U.S.C. § 112 ¶ 6
`(now recodified as 35 U.S.C. § 112(f)). Pet. 17–18. Patent Owner contends
`that the term is not a means-plus-function limitation. Prelim. Resp. 19–20.
`A limitation using the phrase “means for” and reciting functional
`language creates a rebuttable presumption that the drafter intended to invoke
`35 U.S.C. § 112 ¶ 6. Personalized Media Commc’ns LLC v. Int’l Trade
`Comm’n, 161 F.3d 696, 703–04 (Fed. Cir. 1998). That presumption is
`overcome when the limitation includes the structure necessary to perform
`the recited function. TriMed, Inc. v. Stryker Corp., 514 F.3d 1256, 1259–60
`(Fed. Cir. 2008) (“Sufficient structure exists when the claim language
`specifies the exact structure that performs the functions in question without
`need to resort to other portions of the specification or extrinsic evidence for
`an adequate understanding of the structure.”); see also Altiris, Inc. v.
`Symantec Corp., 318 F.3d 1363, 1376 (Fed. Cir. 2003).
`Here, the term “tamper-proof transport means for securely sealing said
`asset for transport from a customer facility to a disposition facility” uses
`“means for” language and recites functional language, and therefore, is
`presumed to invoke 35 U.S.C. § 112 ¶ 6. On this record, we determine that
`
`15
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`Petitioner Exhibit 1021 p.15
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`the function of the “tamper-proof transport means” is “securely sealing said
`asset for transport from a customer facility to a disposition facility.”
`The sole dispute is whether “tamper-proof transport means” conveys
`to a person of ordinary skill in the art the structure necessary to perform the
`recited function. According to Patent Owner, sufficient structure is
`conveyed by the requirement that the “transport means” is “tamper-proof”
`and is adapted for “securely sealing” the asset sufficient to accomplish the
`“transport from a customer facility to a disposition facility.” Prelim. Resp.
`20. However, Patent Owner merely restates the claim language without
`identifying the structure that would have been conveyed to a person of
`ordinary skill in the art by that language. Thus, we are not persuaded that
`the term “tamper-proof transport means” conveys sufficient structure to a
`person of ordinary skill in the art to perform the recited function. Based
`upon our review of the ’944 patent, the only structure disclosed for
`performing the function of “securely sealing said asset for transport from a
`customer facility to a disposition facility” is a transport vehicle sealed by
`means known in the art. Ex. 1001, 4:27–32. Accordingly, we determine
`that the structure of the “tamper-proof transport means for securely sealing
`said asset for transport from a customer facility to a disposition facility” is a
`transport vehicle sealed by means known in the art at the time of the ’944
`patent.
`
`Section 101 Challenge
`C.
`Petitioner contends that all of the claims of the ’944 patent are
`directed to the abstract idea of handling a customer’s physical item in such a
`way that the customer can verify that its handling instructions were
`followed. Pet. 19.
`
`16
`
`Petitioner Exhibit 1021 p.16
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`

`

`CBM2013-00040
`Patent 5,424,944
`
`
`Method claim 1
`Petitioner contends that claim 1 is directed to the abstract idea of
`handling a customer’s physical item in such a way that the customer can
`verify that its handling instructions were followed. Pet. 20–23. We agree
`that claim 1 is directed to an abstract idea.
`Petitioner further contends that “the entire method can be performed
`using a pencil, paper, and a truck.” Pet. 21. We agree that the recited steps
`of “creating an asset record,” “creating a transport record,” and “creating a
`receipt record,” can be performed by the human mind, or by a human using a
`pen and paper. A method that consists of steps that can be performed in the
`human mind, or by a human using a pen and paper is not patent eligible. See
`CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir.
`2011) (“All of claim 3’s method steps can be performed in the human mind,
`or by a human using a pen and paper.”).
`Claim 1 also recites steps of “sealing said asset,” “transporting said
`asset,” “unsealing said asset,” “sorting said asset,” and “disposing of said
`asset.” A question arises whether these basic and conventional steps
`performed by a human being place meaningful limitations on the abstract
`idea specified in claim 1. We are not persuaded that they do. In this regard,
`the relevant inquiry is whether “additional substantive limitations” work to
`“narrow, confine, or otherwise tie down the claim so that, in practical terms,
`it does not cover the full abstract idea itself.” Accenture Global Servs,
`GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344-45 (Fed. Cir. 2013)
`(quotation omitted). Based on the information presented at this stage of the
`proceeding, we are not persuaded that claim 1, “as a whole, includes
`meaningful limitations restricting it to an application, rather than merely an
`
`17
`
`Petitioner Exhibit 1021 p.17
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`

`

`CBM2013-00040
`Patent 5,424,944
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`abstract idea.” Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1344 (Fed.
`Cir. 2013); see Prelim. Resp. 24 (arguing that “the features and components
`claimed by the ’944 patent comprise meaningful limitations and are much
`more than mere abstract ideas” but nowhere identifying any feature of
`claim 1 that, in fact, ties down the claim in practical terms).
`Patent Owner contends that the method “was not well known in the art
`at the time of the filing of the ’944 patent application.” Prelim. Resp. 22–25.
`Patent Owner’s argument is not persuasive. Even a novel and nonobvious
`claim directed to a purely abstract idea is patent ineligible.
`We are persuaded that Petitioner has demonstrated that it is more
`likely than not that claim 1 is directed to non-statutory subject matter and,
`thus, unpatentable under 35 U.S.C. § 101.
`Method claims 2–14
`Petitioner contends that claim 2 adds only conventional, routine
`elements to the abstract idea of claim 1. Pet. 23–24. The first eight steps of
`method claim 2 are identical in substance to the steps of method claim 1—a
`claim that we have determined to be more likely than not directed to patent-
`ineligible subject matter. However, claim 2 recites an additional step: “(i)
`storing said transport record, said receipt record and said disposition record
`in a database, said database being coupled to a system process controller,
`said system process controller being coupled to a communications network.”
`Thus, claim 2, unlike claim 1, requires “a database.” However, the storing
`of records in a database is not a meaningful limitation on the recited method
`of verifiably controlling the disposition of an asset. Such storing is, at most,
`insignificant extra-solution activity that cannot save subject matter from
`patent ineligibility. See Parker v. Flook, 437 U.S. 584, 590 (1978) (“The
`
`18
`
`Petitioner Exhibit 1021 p.18
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`CBM2013-00040
`Patent 5,424,944
`
`notion that post-solution activity, no matter how conventional or obvious in
`itself, can transform an unpatentable principle into a patentable process
`exalts form over substance.”).
`Petitioner contends that dependent claims 3–14 merely add “‘well-
`understood, routine, conventional activity.’” Pet. 25–27. Claim 3 recites an
`additional “storing” step, while claims 4–14 further limit the steps recited in
`claim 2. As with independent claim 2, many of the recited steps can be
`performed in the human mind, or by a human using pen and paper. To the
`extent that these claims recite steps that cannot be performed by human
`activity, such as “transmitting . . . to said system process controller via said
`communications network,” or