Trial@uspto.gov Paper No. 15
`571-272-7822 Entered: January 31, 2013
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`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`INTERTHINX, INC.
`Petitioner
`
`v.
`
`CORELOGIC SOLUTIONS, LLC
`Patent Owner
`____________
`
`Case CBM2012-00007
`Patent 5,631,201
`____________
`
`
`
`Before, MICHAEL P. TIERNEY, JONI Y. CHANG and
`BRIAN J. McNAMARA, Administrative Patent Judges.
`
`McNAMARA, Administrative Patent Judge.
`
`
`DECISION
`Institution of Covered Business Method Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
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`Monster Worldwide, Inc. Exhibit 1009 (p.1/50)
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`
`571-272-7822 Entered: January 31, 2013
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`INTERTHINX, INC.
`Petitioner
`
`v.
`
`CORELOGIC SOLUTIONS, LLC
`Patent Owner
`____________
`
`Case CBM2012-00007
`Patent 5,631,201
`____________
`
`
`
`Before, MICHAEL P. TIERNEY, JONI Y. CHANG and
`BRIAN J. McNAMARA, Administrative Patent Judges.
`
`McNAMARA, Administrative Patent Judge.
`
`
`DECISION
`Institution of Covered Business Method Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
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`Monster Worldwide, Inc. Exhibit 1009 (p.1/50)
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`Case CBM2012-000007
`Patent 5,631,201
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`
`BACKGROUND
`
`Pursuant to 35 U.S. C. § 321 and § 18 of the America Invents Act (AIA),
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`Interthinx (Petitioner) requests that the Patent Trial and Appeal Board initiate a
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`Transitional Post-Grant Review Proceeding for a Covered Business Method
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`Patent to review of claims 1, 5, 6, 9 and 10 (the challenged claims) of U.S.
`
`Patent 5,631,201 (the ‘201 Patent). We have jurisdiction under 35 U.S.C.
`
`§§ 6(b)(4) and 324. The standard for instituting a Transitional Covered Business
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`Method Proceeding is the same as that for a Post-Grant Review. (§ 18(a)(1) of the
`
`AIA). The standard for instituting Post-Grant Review is set forth in 35 U.S.C.
`
`§ 324(a), which provides:
`
`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 [35 U.S.C. §] 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 conclude that Petitioner has satisfied this threshold.
`
`Petitioner contends that pursuant to 37 CFR §§ 42.301 and 42.304(a) the
`
`‘201 Patent meets the definition of a covered business method patent and does not
`
`qualify as a technological invention. (Pet. 5-7). Petitioner further contends that
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`claims 1, 5, 6, 9 and 10 all fail to comply with the patentable subject matter
`
`requirements of 35 U.S.C. § 101 (Pet. 13-20) and that the challenged claims are
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`2
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`Monster Worldwide, Inc. Exhibit 1009 (p.2/50)
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`Patent 5,631,201
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`invalid under 35 U.S.C. §§ 102 - 103 for the following reasons outlined in the
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`Petition (Pet. 20-80):
`
`1. Claims 1, 5, 9, and 10 should be cancelled under 35 U.S.C. § 102(a)
`for anticipation by Tay et al., “Artificial Intelligence and the Mass
`Appraisal of Residential Apartments,” 10 Journal of Property
`Valuation and Investment (Issue 2 of 4) 525-540 (1991-1992)
`(Interthinx Exhibit 1007, “Tay”).
`
`2. Claim 6, and, to the extent that they are not cancelled for anticipation
`by Tay, claims 5, 9, and 10 should be cancelled under 35 U.S.C. § 103
`as obvious in view of Tay.
`
`3. Claims 1, 5, 6, 9, and 10 should be cancelled under 35 U.S.C. § 102(a)
`as anticipated by Lu et al., “Neurocomputing Approach to Residential
`Property Valuation,” 4 Journal of Microcomputer Systems
`Management 21-30 (Spring 1992) (Interthinx Exhibit 1008, “Lu”).
`
`4. To the extent that they are not cancelled for anticipation by Lu,
`Claims 5, 6, 9 and 10 should be cancelled under 35 U.S.C. § 103(a) as
`obvious in view of Lu.
`
`5. Claims 1, 5, 9, and 10 should be cancelled under 35 U.S.C. § 102(b)
`as anticipated by Boyle, “An Expert System for Valuation of
`Residential Properties,” 2 Journal of Property Valuation and
`Investment 271 – 286 (1984) (“Boyle”) (Interthinx Exhibit 1009,
`“Boyle”).
`
`6. Claim 6, and, to the extent that they are not cancelled for anticipation
`by Boyle, claims 5, 9, and 10 should be cancelled under 35 U.S.C.
`§ 103(a) as obvious in view of Boyle.
`
`7. Claims 1, 5, 9, and 10 should be cancelled under 35 U.S.C. § 102(b)
`as anticipated by Jensen, “Artificial Intelligence in Computer-Assisted
`Mass Appraisal,” 9 Property Tax Journal 5-24 (1990) (Interthinx
`Exhibit 1010, “Jensen-2”).
`
`
`
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`3
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`Monster Worldwide, Inc. Exhibit 1009 (p.3/50)
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`Case CBM2012-000007
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`8. Claim 6, and, to the extent that they are not cancelled for anticipation
`by Jensen-2, claims 5, 9, and 10 should be cancelled under 35 U.S.C.
`§ 103(a) as obvious in view of Jensen-2 alone.
`
`9. Claims 1, 5, 9, and 10 should be cancelled under 35 U.S.C. § 102(b)
`for anticipation by Carbone et al., “A Feedback Model for Automated
`Real Estate Assessment,” 24 Management Science 241-248 (1977)
`(Interthinx Exhibit 1011, “Carbone”).
`
`10. Claim 6, and, to the extent that they are not cancelled for anticipation
`by Carbone, claims 5, 9, and 10 should be cancelled under 35 U.S.C.
`§ 103(a) as obvious in view of Carbone.
`
`11. Claims 1, 5, 9, and 10 should be cancelled under 35 U.S.C. § 102(a)
`as anticipated by Des Rosiers et al., “Integrating Geographic
`Information Systems to Hedonic Price Modeling: An application to
`the Quebec Region,” 11 Property Tax Journal 29-58 (March 1992)
`(Interthinx Exhibit 1012, “Des Rosiers”).
`
`12. Claim 6, and, to the extent that they are not cancelled for anticipation
`by Des Rosiers, claims 5, 9, and 10 should be cancelled under 35
`U.S.C. § 103(a) as obvious in view of Des Rosiers.
`
`13. Claims 1, 5, 9, and 10 should be cancelled under 35 U.S.C. § 102(b)
`as anticipated by Eckert et al., “Property Appraisal and Assessment
`Administration,” The International Association of Assessing Officers
`(June 1990) (Interthinx Exhibit 1013, “Eckert”).
`
`14. Claim 6, and, to the extent that they are not cancelled for anticipation
`by Eckert, claims 5, 9, and 10 should be cancelled under 35 U.S.C.
`§ 103(a) as obvious in view of Eckert.
`
`15. Claims 1, 5, 6, 9, and 10 should be cancelled under 35 U.S.C. §
`102(b) as anticipated by Jensen, “Alternative Modeling Techniques in
`Computer-Assisted Mass Appraisal,” 6 Property Tax Journal 193-237
`(1987) (Interthinx Exhibit 1014, “Jensen- 1”).
`
`
`
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`4
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`16. To the extent that they are not cancelled for anticipation by Jensen-1,
`claims 5, 6, 9, and 10 should be cancelled under 35 U.S.C. § 103(a) as
`obvious in view of Jensen-1.
`
`CoreLogic Solutions, LLC (the Patent Owner) was previously known as
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`Corelogic Information Solutions, Inc. (Pet. 2; Ex. 2007, p. 16). Generally, the
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`Preliminary Response of the Patent Owner (Response), timely filed on
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`January 2, 2013, contends that the ‘201 Patent is not a covered business method
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`patent, is not invalid under 35 U.S.C. § 101, that Petitioner has applied the wrong
`
`claim construction standard because the ‘201 patent expired on October 29, 2012,
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`and that the assertions in the Petition For Post-Grant Review under 35 U.S.C.
`
`§§ 321 and 18 of the AIA (the Petition) are not supported by evidence. (Response
`
`1-2).
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`PENDING LITIGATION
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`A person may not file a petition for a Transitional Program for Covered
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`Business Method Patents unless the person or the person’s real party in interest or
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`privy has been sued for infringement or has been charged with infringement under
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`that patent. (§18 (a)(1)(B) of the AIA). The ‘201 Patent is the subject of a jury
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`verdict rendered on September 28, 2012 and a judgment entered in CoreLogic
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`Information Solutions, Inc. v. Fiserv, Inc. et al, No. 2;10-CV-132-RSP (E.D. Tex.
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`Oct. 2, 2012). Among other things, the District Court entered judgment in favor of
`
`
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`5
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`Monster Worldwide, Inc. Exhibit 1009 (p.5/50)
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`CoreLogic rejecting Petitioner’s claim that patent claims 1 and 10 of the
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`‘201 patent are invalid as anticipated or obvious. (Ex. 2006). Several days earlier,
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`on September 23, 2012, the District Court denied Defendant’s Motion for
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`Summary Judgment That The Patent-In-Suit [the ‘201 Patent] is Invalid Under
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`35 U.S.C. § 101. (Ex. 2003). Among the post-trial motions currently pending
`
`before the District Court are Petitioner’s Motion for Judgment As a Matter of Law
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`that claims 1 and 10 of the ‘201 patent are invalid under 35 U.S.C. § 102 and/or
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`§ 103 and Petitioner’s Motion for Judgment As a Matter of Law that the
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`‘201 patent is invalid under 35 U.S.C. § 101. The District Court has not ruled on
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`these motions.
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`EFFECT OF PATENT OWNER’S STATUTORY DISCLAIMER
`
`On December 26, 2012, “for the sole purpose of avoiding the time and
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`expense of defending against the CBM Proceeding [CBM2010-00007]” the
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`Patent Owner filed a statutory disclaimer under 35 U.S.C. § 253(A) stating
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`that “Corelogic Solutions, LLC hereby disclaims claim 5 of U.S. Patent
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`No, 5,361,201.” (Response 13, Ex. 2007).
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`The Patent Owner contends that Petitioner’s arguments concerning whether
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`the ‘201 patent satisfies the threshold criteria for instituting a covered business
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`method (CBM) proceeding are based on claim 5 and that there is virtually no
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`6
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`Monster Worldwide, Inc. Exhibit 1009 (p.6/50)
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`analysis of the other claims. (Response 13). Having disclaimed claim 5, the Patent
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`Owner asserts that the basis for instituting a CBM proceeding is now moot.
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`Using the term “for example” the Petition discusses claim 5 as illustrative of
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`the challenged claims. (Pet. 6). Noting that claim 5 “is directed to a process for
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`appraising a real estate property” and recites a series of steps that culminate in the
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`step of “generating a signal indicative of an appraised value for the real estate
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`property” the Petition specifically states that “[o]ther claims of the ‘201 Patent are
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`of a similar nature.” (Id.). Indeed, this same language from claim 5 is recited in
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`challenged claims 1, 6 (which depends from disclaimed claim 5, but is not itself
`
`disclaimed), 9 and 10 (which depends from claim 9). The Patent owner has not
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`disclaimed any of these challenged claims. In addition, the Petition includes sixty
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`pages of claim charts specifically addressing claims 1, 5, 6, 9, and 10. (Pet. pp. 20-
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`80). Thus, we conclude that Patent Owner’s post expiration disclaimer of claim 5
`
`does not moot the basis for instituting a CBM proceeding in this case.
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`
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`RES JUDICATA AND COLLATERAL ESTOPPEL
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`The Patent Owner contends res judicata and collateral estoppel preclude
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`Petitioner from challenging the ‘201 patent under 35 U.S.C. § 101 (Response 20-
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`26) and that res judicata bars Petitioner’s challenge under 35 U.S.C. §§ 102 and
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`103 (Response 29).
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`7
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`Monster Worldwide, Inc. Exhibit 1009 (p.7/50)
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`1. Res Judicata Concerning 35 U.S.C. §§ 102 and 103
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`The Patent Owner argues that because Petitioner advanced an unsuccessful
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`counterclaim under §102 and § 103, Petitioner may not re-litigate issues that were
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`or could have been raised in the District Court. (Response 29). However, the
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`Patent Owner does not indicate what specific invalidity issues were tried or
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`whether the references cited in the Petition were subjects of the litigation.
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`Petitioner’s amended counterclaim in the District Court alleged that each of the
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`claims of the '201 patent to be invalid for failure to meet the conditions for
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`patentability specified in 35 U.S.C. §§ 101, 102, 103 and 112. (Ex. 2009, p. 15).
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`There was no jury verdict rendered or judgment entered on infringement or validity
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`concerning claims 5, 6, 9, and 10, which are also the subject of the Petition. The
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`absence of space on the verdict form the District Court provided the jury indicates
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`that these claims were not tried and that res judicata does not apply to these claims.
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`In addition, the jury verdict in the District Court indicates that Petitioner
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`did not prove by clear and convincing evidence that claim 1 or claim 10 of the
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`'201 patent was invalid. (Ex. 2005, p.1). Under the standard of proof applicable to
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`this proceeding, Petitioner has the burden of proving a proposition of
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`unpatentability by a preponderance of the evidence. 35 U.S.C. § 326(e). Because
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`unpatentability has not been litigated under a preponderance of the evidence
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`8
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`standard, res judicata does not apply to the Petition’s challenges to patentability of
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`the claims under 35 U.S. C. §§ 102 and 103. See, In re Baxter international, Inc.,
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`678 F.3d 1357 (Fed Cir. 2012), In re Swanson, 540 F. 3d 1368, 1377 (Fed. Cir.
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`2008).
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`
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`2. Res Judicata and Collateral Estoppel Concerning 35 U.S.C. § 101
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`The Petition in this case was accorded a filing date of September 19, 2012,
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`several days earlier than the District Court’s denial of Petitioner’s summary
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`judgment motion of invalidity under 35 U.S.C. § 101. Patent Owner argues that
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`collateral estoppel precludes Petitioner from raising issues under 35 U.S.C. § 101
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`in this Petition, citing Restatement § 27 for the proposition that when an issue of
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`law or fact is actually litigated and determined by a valid and final judgment and
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`the determination is essential to the judgment, collateral estoppel (or issue
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`preclusion) applies. (Response 22). Citing In re Freeman, 30 F.3d 1459, 1465
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`(Fed. Cir. 1994), the Patent Owner notes that one of four factors relevant to
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`collateral estoppel is whether resolution of the issue was essential to a final
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`judgment in the first action. (Response 22).
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` “[F]or purposes of issue preclusion ..., ‘final judgment’ includes any prior
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`adjudication of an issue in another action that is determined to be sufficiently firm
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`to be accorded conclusive effect.” Christo v. Padgett, 223 F.3d 1324, 1339 n. 47
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`9
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`(11th Cir.2000) (citing Restatement (Second) Judgments § 13 (1980)). See also,
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`RF Delaware, Inc. v. Pacific Keystone Technologies, Inc., 326 F. 3d 1255 (Fed.
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`Cir. 2003). On October 31, 2012, the Petitioner filed a Motion for Judgment as a
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`Matter of Law that the '201 patent is invalid under 35 U.S.C. § 101 (Petitioner’s
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`§ 101 JMOL). The Patent Owner filed a Response In Opposition on
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`November 19, 2012, Petitioner filed a Brief in Reply to the Response In
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`Opposition on December 4, 2012 and Patent Owner filed a Sur- Reply on
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`December 14, 2012. The District Court has not ruled on Petitioner’s § 101 JMOL
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`nor has any appeal been filed or decided. For a judgment to be “final” for purposes
`
`of preclusion before the Board, the decision needs to be immune, as a practical
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`matter, to reversal or amendment. See, e.g., Vardon Golf Co., Inc. v. Karsten Mfg.
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`Corp., 294 F.3d 1330, 1333 (Fed. Cir. 2002) (citing Miller Brewing Co. v. Jos.
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`Schlitz Brewing Co., 605 F.2d 990, 996 (7th Cir. 1979). Thus, we cannot conclude
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`that the District Court’s adjudication of the issues under 35 U.S.C. § 101 by a
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`summary judgment order, which issued without an opinion, is sufficiently firm to
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`be given conclusive effect.1
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`
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`1 The same is true for issues under 35 U.S.C. §§ 102 and 103, where similar
`motions are pending before the District Court.
`10
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`EVIDENTIARY SUPPORT/HEARSAY
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`The Patent Owner argues that Petitioner’s prior art is unsupported by
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`evidence because Petitioner provides no authentication evidence and does not
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`prove that the references constitute prior art. (Response 29-30). The Patent Owner
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`admits that the references contain date information but argues that there is no
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`evidence the references were publicly available on such dates. (Id.). In addition,
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`referring to Exhibits 1007 and 1009, Patent Owner states that the documents
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`contain more than one date, rendering date information unreliable. (Id.).
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`The documents referenced by the Patent Owner purport to be printed
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`material from periodicals, which are self-authenticating. FRE 902(6). The second
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`dates on the documents mentioned by the Patent Owner appear to refer to
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`secondary sources from which Petitioner obtained the document and do not
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`necessarily contradict the original dates of publication in the relevant periodicals.
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`In the event that the Patent Owner later raises significant doubt about whether the
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`documents were available to the public on the dates indicated or do not constitute
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`prior art, during trial the Patent Owner may have an opportunity to move for
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`limited discovery concerning the veracity of the documents. In the absence of
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`evidence casting doubt on the reliability of these self-authenticating documents, it
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`is premature for us to conclude that Petitioner cannot rely on these documents as
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`prior art.
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`THE INVENTION OF THE ‘201 PATENT
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`All of the challenged claims are drawn to “A computer implemented method
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`for appraising a real estate property.” Noting that traditional statistical techniques
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`such as multiple linear regression and logistical regression have been tried in the
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`past, the ‘201 patent identifies uncertainty as to the optimal temporal and
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`geographical sample size among the difficulties of applying a regression model to
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`the appraisal problem. (Co1 1, l. 56 - col. 2, l. 16). The ‘201 patent addresses
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`these problems with a model development component and a property valuation
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`component. (Col. 6, ll. 4-6). Using predictive modeling techniques, such as neural
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`networks and regression modeling, the model development component uses
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`training data describing a number of real estate properties, characteristics and
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`prices to build models containing information representing learned relationships
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`among a number of variables and to develop error models, which are typically
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`regression models, to estimate error in predicted sales prices. (Col. 6, ll. 2-22).
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`The property valuation component feeds input data describing the subject property
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`and its geographic area to the neural network models and error models to generate
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`price estimates, error ranges and other codes to be output to a display device or
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`printer or database for future access. (Col. 6, ll. 23-30).
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`With the construed terms indicated by italics, claim 1 recites:
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`A computer implemented method (which does not require a general purpose
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`computer and does not exclude human interaction or input) for appraising a real
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`estate property, comprising the steps of:
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` collecting training data (data which is available regarding real estate
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`properties);
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`developing a predictive model (which is not limited to a neural network and
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`does not exclude a regression model) from the training data (data which is
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`available regarding real estate properties);
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`storing the predictive model (which is not limited to a neural network and
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`does not exclude a regression model);
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`obtaining individual property data for the real estate property;
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`developing an error model (a model that estimates error in the predicted
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`sales price of the subject property generated by the predictive model) from the
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`training data (data which is available regarding real estate properties);
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`storing the error model (a model that estimates error in the predicted sales
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`price of the subject property generated by the predictive model) ; and
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`generating a signal indicative of an error range for the appraised value
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`responsive to the application of the individual property data to the stored error
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`model (a model that estimates error in the predicted sales price of the subject
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`property generated by the predictive model).
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`13
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`We do not consider claim 5 because the Patent Owner’s disclaimer operates
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`to effectively cancel claim 5.
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`Claim 6, which depends from disclaimed independent claim 5 and
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`incorporates all the limitations of claim 5, differs from claim 1 in several ways.
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`Claim 6 limits the training data to individual property training data describing past
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`real estate sales which is aggregated into area training data sets describing a
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`plurality of sales within a geographic area. The aggregating step is repeated using
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`successively larger geographic areas until the number of sales within the
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`geographic area over a predetermined time period exceeds a predetermined
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`number. Another important difference between claims 1 and 6 is that claim 6 does
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`not recite an error model.
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`Claim 9 differs from claim 1 by reciting the selection of a geographic area
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`surrounding the real estate property and obtaining area data for the geographic
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`area. Claim 9 also does not recite an error model.
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`Claim 10 depends from claim 9 and recites the same steps of developing an
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`error model and generating a signal indicative of an error range that are recited in
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`14
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`claim 1.
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`CLAIM CONSTRUCTION
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`Petitioner noted that five disputed claim terms were construed by the District
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`Court and proposed that the District Court’s constructions be treated as the
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`broadest reasonable constructions solely for purposes of this review proceeding.
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`(Pet. 13). Although the ‘201 patent was in effect on Petitioner’s filing date, the
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`Patent Owner contends that Petitioner applied the wrong claim construction
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`standard (broadest reasonable construction) because the ' 201 patent has now
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`expired. (Response 2, 28). Arguing that Petitioner has failed to meet its burden,
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`the Patent Owner proposes no alternative constructions. (Id).
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`The Board’s review of the claims of an expired patent is similar to that of a
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`district court’s review. In re Rambus, Inc., 694 F.3d 42, 46 (Fed. Cir. 2012). The
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`principle set forth by the court in Phillips v. AWH Corp., 415 F.3d 1303, 1316
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`(Fed. Cir. 2005) (words of a claim “are generally given their ordinary and
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`customary meaning” as understood by a person of ordinary skill in the art in
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`question at the time of the invention) should be applied since the expired claims
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`are not subject to amendment. Petitioner points out that the District Court
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`construed three of the five disputed claim terms to have their plain and ordinary
`
`meaning, although they are somewhat qualified for context. (Pet. 13). The District
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`Court construed the remaining two terms to have a meaning in the context of real
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`estate appraisal, which is the subject matter of the ‘201 patent. We have reviewed
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`the district court’s claim construction and hold that they are consistent with the
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`ordinary and customary meaning as understood by one of ordinary skill in the art.
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`Accordingly, we adopt the District Court’s claim constructions as follows:
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`Claim Term
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`Construction
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`“computer-implemented process”
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`“training data”
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`“developing/development”
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`“predictive model”
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`“error model”
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`Plain and ordinary meaning, which does
`not require a general-purpose computer
`and which does not exclude human
`interaction or input
`Data which is available regarding real
`estate properties
`Plain and ordinary meaning
`
`Plain and ordinary meaning, which is
`not limited to a neural network and
`which does not exclude a regression
`model
`Model that estimates error in the
`predicted sales price of the subject
`property generated by the predictive
`model
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`
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`
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`THE ‘201 PATENT IS NOT A PATENT FOR A TECHNOLGICAL
`INVENTION
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`Petitioner notes that real estate appraisal is a financial product or service and
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`that because the ‘201 patent identifies reduction of human bias in conventional
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`appraisal methods as the problem and the use of statistical techniques as the
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`solution, the patent does not solve a technical problem using a technical solution.
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`(Pet. 6-7).
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`16
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`Monster Worldwide, Inc. Exhibit 1009 (p.16/50)
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`Patent 5,631,201
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`Citing 37 C.F.R. § 42.301(b), the Patent Owner contends that the
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`technological nature of the ‘201 Patent places it outside the definition of a covered
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`business method because the claimed subject matter as a whole recites a technical
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`feature that is novel and non-obvious over the prior art and solves a technical
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`problem using a technical solution. (Response 14). The Patent Owner argues that
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`because the ‘201 patent provides a specific automated system using predictive
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`models such as neural networks to address prior art problems, including those
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`found with statistical techniques, and to generate estimates of real estate values,
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`both the problem and the solution are technical. (Response 17).
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`As threshold matter, we are not persuaded that the ‘201 Patent solves a
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`technical problem. The claims are all drawn to a process for appraising a real
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`estate property. The Patent Owner has not demonstrated that appraising real estate
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`is a technical problem. The Patent Owner notes that the ‘201 Patent explains that
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`traditional statistical techniques have been tried to overcome problems associated
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`with human appraisers, but that those solutions experienced problems such as
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`difficulty implementing automated model redevelopment. (Id.). Difficulty
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`implementing an automated or technical solution to a problem that is not technical
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`does not transform that non-technical problem into a technical one. Here the
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`problem is appraising a real estate property accurately, which remains a non-
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`technical problem.
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`17
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`Monster Worldwide, Inc. Exhibit 1009 (p.17/50)
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`Patent 5,631,201
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`We are also not persuaded that the solution is a technical one. The Patent
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`Owner contends that the claims of the ‘201 Patent are closely tied to a machine,
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`just like the CBM-ineligible claims at page 37 of the Office Patent Trial Practice
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`Guide (Trial Guide). (Response 19). The Trial Guide, which distinguishes
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`between CBM eligible methods, such as a method for validating a credit card
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`transaction, and patents that claim a CBM ineligible device, such as a novel and
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`non-obvious credit card reader for verifying the validity of a credit card
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`transaction, does not support Patent Owner’s position. The Trial Guide
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`specifically states that mere recitation of known technologies such as computer
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`hardware or specialized machines would not typically render a patent a
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`technological invention. (Trial Guide 36). The challenged claims are all drawn to
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`a “computer implemented method for appraising real estate property.” We
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`conclude that the mere recitation that the method is computer implemented or that
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`the process is automated, using known techniques such as storing information,
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`does not preclude the patent from qualifying as a covered business method patent.
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`Similarly, we are not persuaded by the Patent Owner’s contention that the
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`Examiner’s statements in the April 4, 1994 Notice of Allowability recognized the
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`claimed predictive model as structure and thus technological. (Response 16). The
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`portion of the Notice of Allowability quoted by the Patent Owner merely indicates
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`that a computer implemented process for carrying out the appraisal of real estate
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`18
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`Monster Worldwide, Inc. Exhibit 1009 (p.18/50)
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`property where the predictive model is used as set forth in the claims is structurally
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`supported and defined in the specification as a neural network. (Ex. 2001, p. 3).
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`The Examiner does not state that the predictive model itself is structure, nor does
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`the Examiner indicate that the computer implemented process using a predictive
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`model as claimed solves a technical problem using a technical solution. The
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`Examiner’s statement indicates that the computer implemented process is a process
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`for carrying out the appraisal of real estate, which is not a technical problem. As
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`discussed above, the mere implementation of the process using known
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`technologies does not preclude the patent from qualifying as a covered business
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`method patent. Thus, we conclude that the ‘201 patent is a covered business
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`method patent.
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`ART CITED IN THE PETITION
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`Petitioner cites the following references to support its contentions that the
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`claims of the ‘201 patent should be found invalid. Petitioner’s specific contentions
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`with respect to the challenged claims are found in Tables 1-16 of the Petition.
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` Tay (Exhibit 1007)
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`Tay discloses applying an artificial neural network (ANN) to the valuation
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`of residential apartments and compares the performance of a back propagation
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`(BP) model in estimating sales prices of apartments against a traditional
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`19
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`Monster Worldwide, Inc. Exhibit 1009 (p.19/50)
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`multiple regression analysis (MRA) model. (p. 525). Applied to a data set of
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`1,055 apartments in four prime and three semi-prime residential districts in
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`Singapore, Tay discloses dividing the data into a training set of 833 properties for
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`building the BP and MRA models and a test set of 222 properties for testing the
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`estimation performance of the two models. (Id., 529). Tay’s ANN model has an
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`input layer, which accepts a normalized input vector containing 10 property
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`attributes and a bias node, a hidden layer with additional nodes and an output layer
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`with an output node that provides the estimated sales price. (pp. 526, 529-30).
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`Some of the key attributes in Tay’s real estate sales appraisal model include floor
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`level, built in floor area, postal district number and the type of apartment. (p. 529).
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`Interconnections between the input-to-hidden layers and the hidden-to-output
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`layers are represented by weight matrices. (p. 531).
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`During training Tay’s model initially outputs an estimated sale price using a
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`“forward pass” procedure. (p. 532). The forward pass procedure compares the
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`estimated sale price with the normalized actual sales price and generates an error
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`signal, which is accumulated over the 832 training vectors following the initial one
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`to obtain the mean error signal per input vector epoch. (p. 532). Tay then uses a
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`“backward pass” procedure which, based on the mean error signal per input vector
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`per epoch, automatically applies a weight correction to all the connections in the
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`hidden-to-output weight matrix and subsequently changes the weights in the input-
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`20
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`Monster Worldwide, Inc. Exhibit 1009 (p.20/50)
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`to-hidden matrix. (p. 533). This recursive process of using the weight matrices to
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`compute the estimated sales prices in the forward pass and self-adjusting the
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`weights in the backward pass terminates when the root mean square error at the
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`output node falls below a predetermined tolerance level or converges to a
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`minimum. (Id.).
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`Lu (Exhibit 1008)
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`As an alternative to a rule based expert system for appraising real estate
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`disclosed by Lu and Mooney in 1989, in this reference Lu applies neurocomputing
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`to assess residential properties for tax purposes. (p. 23-24, 29). Lu discloses that
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`neural networks can be used alone or integrated with other information processing
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`systems, including expert systems. (p. 22-23). Like Tay, Lu discloses that a
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`neural network can be trained by a training set containing a number of training
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`cases and that the network attempts to minimize the magnitude of errors between
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`the actual output and the expected output by changing interconnection weights
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`between processing elements over a network of interconnects. (p. 22). After a
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`network training session was completed, the characteristics of houses in the testing
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`set were fed into the network and estimated sales prices were generated by the
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`network. (p. 25). Initially, data for homes sold in last 24 months in a particular
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`section of the city were collected. (p. 24). Eventually, data for a total of 336 cases
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`21
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`Monster Worldwide, Inc. Exhibit 1009 (p.21/50)
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`were collected from a population of
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