Trials@uspto.gov
`Tel: 571-272-7822
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` Paper 51
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`
` Entered: August 14, 2017
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`
`
`IBG LLC, INTERACTIVE BROKERS LLC,
`TRADESTATION GROUP, INC., and
` TRADESTATION SECURITIES, INC.,
`Petitioner,
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`Patent Owner.
`____________
`
`CBM2016-00032
`Patent 7,212,999 B2
`_______________
`
`
`Before SALLY C. MEDLEY, MEREDITH C. PETRAVICK, and
`JEREMY M. PLENZLER, Administrative Patent Judges.
`
`PETRAVICK, Administrative Patent Judge.
`
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`
`
`Tel: 571-272-7822
`
`
`
`
`
`
`
`
`
`
`
` Paper 51
`
`
` Entered: August 14, 2017
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`
`
`IBG LLC, INTERACTIVE BROKERS LLC,
`TRADESTATION GROUP, INC., and
` TRADESTATION SECURITIES, INC.,
`Petitioner,
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`Patent Owner.
`____________
`
`CBM2016-00032
`Patent 7,212,999 B2
`_______________
`
`
`Before SALLY C. MEDLEY, MEREDITH C. PETRAVICK, and
`JEREMY M. PLENZLER, Administrative Patent Judges.
`
`PETRAVICK, Administrative Patent Judge.
`
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`
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`CBM2016-00032
`Patent 7,212,999 B2
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`
`INTRODUCTION
`
`Background
`A.
`IBG LLC, Interactive Brokers LLC, TradeStation Group, Inc., and
`TradeStation Securities, Inc. (collectively, “Petitioner”) filed a Petition
`requesting a covered business method patent review of claims 1–35 of
`U.S. Patent No. 7,212,999 B2 (Ex. 1001, “the ’999 patent”). Paper 1
`(“Pet.”). Trading Technologies International, Inc. (“Patent Owner”) filed a
`Preliminary Response. Paper 12 (“Prelim. Resp.”).
`On August 8, 2016, we instituted a covered business method patent
`review (Paper 16, “Institution Decision” or “Inst. Dec.”) based upon
`Petitioner’s assertion that claims 1–35 are directed to patent ineligible
`subject matter under 35 U.S.C. § 101. Inst. Dec. 28. Subsequent to
`institution, Patent Owner filed a Patent Owner Response (Paper 24, “PO
`Resp.”) and Petitioner filed a Reply (Paper 29, “Pet. Reply”) to Patent
`Owner’s Response. Pursuant to our authorization, Patent Owner filed an
`additional submission addressing the Federal Circuit’s holding in
`Technologies International, Inc., v. CQG, Inc., 675 Fed.Appx. 1001 (Fed.
`Cir. 2017) (“CQG”) (Paper 36) and Petitioner filed a reply to that
`submission (Paper 37). Petitioner filed a Motion to Exclude Evidence
`(Paper 39, “Pet. MTE”), and Patent Owner filed a Motion to Exclude
`Evidence (Paper 41, “PO MTE”).
`We held a joint hearing of this case and several other related cases on
`May 3, 2017. Paper 50 (“Tr.”).
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`We have jurisdiction under 35 U.S.C. § 6. This Final Written
`Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.
`For the reasons that follow, we determine that Petitioner has shown
`sufficiently that claims 1–35 of the ’999 patent are directed to patent
`ineligible subject matter under 35 U.S.C. § 101.
`B.
`Related Proceedings
`The ’999 patent is involved in the following lawsuits: TT v. IBG LLC,
`No. 1:10-cv-00721 (N.D. Ill.) and TT v. TradeStation Securities, Inc., 1:10-
`cv-884 (N.D. Ill.). Pet. 3.
`Numerous patents are related to the ’999 patent and the related patents
`are or were the subject of numerous petitions for covered business method
`patent review and reexamination proceedings. As noted above, the Federal
`Circuit has issued a non-precedential decision, CQG, which addresses
`whether claims of U.S. Patent Nos. 6,766,304 (“the ’304 patent”) and
`6,772,132 (“the ’132 patent”) are patent eligible under § 101. The ’999
`patent at issue in this case is not related to the ’132 and ’304 patents via
`continuation or divisional filings.
`C.
`Asserted Grounds of Unpatentability
`Petitioner contends that the challenged claims are unpatentable under
`35 U.S.C. § 101. Pet. 19–35.
`D.
`The ’999 Patent
`The ’999 patent describes a graphical user interface (“GUI”) for an
`electronic trading system that allows a remote trader to view trends for an
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`item, which assists the trader to anticipate demand for an item. Ex. 1001,
`2:3–6. Figure 3A of the ’999 patent is reproduced below.
`
`
`Figure 3A depicts a GUI that includes: 1) value axis 332, which
`
`indicates the value at which an item is being traded, 2) multiple offer icons
`304(1)–304(8), and 3) multiple bid icons 300(1)–300(8). Id. at 6:13–15.
`The offer icons and the bid icons represent orders in the marketplace. Id.
`
`A trader can place an order using the GUI in a variety of ways. Id. at
`8:26–27. The trader can use task bar 328 to enter the required information
`and submit the order using the “Place Order” button. Id. at 8:27–33.
`Alternatively, the trader can select offer token 324 or bid token 320 using a
`pointing device, adjust the size of the token to match a desired quantity, and
`drag-and-drop the token to a location that corresponds to the desired value of
`the order. Id. at 8:38–58. Either a Buy pop-up window or a Sell pop-up
`
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`window is displayed, which allows the trader to modify, cancel, or submit
`the order. Id. at 8:54–65; Figs. 3d, 3e.
`E.
`Illustrative Claim
`Claims 1 and 35 are independent claims. Claims 2–34 directly or
`indirectly depend from claim 1. Claim 1 of the ’999 patent is illustrative of
`the subject matter at issue.
`1. A computer based method for facilitating the placement of an
`order for an item and for displaying transactional information to
`a user regarding the buying and selling of items in a system
`where orders comprise a bid type or an offer type, and an order
`is generated for a quantity of the item at a specific value, the
`method comprising:
`
`
`displaying a plurality of bid indicators, each
`corresponding to at least one bid for a quantity of the
`item, each bid indicator at a location along a first scaled
`axis of prices corresponding to a price associated with the
`at least one bid;
`
`displaying a plurality of offer indicators, each
`corresponding to at least one offer for a quantity of the
`item, each offer indicator at a location along a first scaled
`axis of prices corresponding to a price associated with the
`at least one offer;
`
`
`receiving market information representing a new order to
`buy a quantity of the item for a specified price, and in
`response to the received market information, generating a
`bid indicator that corresponds to the quantity of the item
`bid for and placing the bid indicator along the first scaled
`axis of prices corresponding to the specified price of the
`bid;
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`receiving market information representing a new order to
`sell a quantity of the item for a specified price, and in
`response to the received market information, generating
`an offer indicator that corresponds to the [q]uantity of the
`item for which the offer is made and placing the offer
`indicator along the first scaled axis of prices
`corresponding to the specified price of the offer;
`
`displaying an order icon associated with an order by the
`user for a particular quantity of the item;
`
`selecting the order icon and moving the order icon with a
`pointer of a user input device to a location associated
`with a price along the first scaled axis of prices; and
`
`sending an order associated with the order icon to an
`electronic trading exchange, wherein the order is of a bid
`type or an offer type and the order has a plurality of order
`parameters comprising the particular quantity of the item
`and the price corresponding to the location at which the
`order icon was moved.
`
`
`
`ANALYSIS
`Claim Construction
`A.
`In a covered business method patent review, claim terms in an
`unexpired patent are given their broadest reasonable construction in light of
`the specification of the patent in which they appear. 37 C.F.R. § 42.300(b);
`Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2144–46 (2016)
`(upholding the use of the broadest reasonable interpretation approach).
`Under the broadest reasonable construction standard, claim terms are given
`their ordinary and customary meaning, as would be understood by one of
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`ordinary skill in the art in the context of the entire disclosure. In re
`Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). Any special
`definition for a claim term must be set forth with reasonable clarity,
`deliberateness, and precision. In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir.
`1994).
`
`“axis of prices” and “indicators, icons, and tokens”
`1.
`Petitioner proposes constructions for the following claim terms: “axis
`of prices” and “indicators, icons, and tokens,” which are recited at least in
`claims 1, 9, and 35. Pet. 13–17. Patent Owner does not challenge
`Petitioner’s proposed claim constructions. We have reviewed Petitioner’s
`proposed constructions and determined that they are consistent with the
`broadest reasonable constructions for the reason discussed in the Petition.
`Id. We adopt the following claim constructions:
`Claim Term
`Construction
`axis of prices
`a reference line for plotting prices,
`including labeled, unlabeled, visible,
`and invisible reference lines
`a symbol such as an alphanumeric
`character or a graphic representation
`of an item
`
`indicators, icons, and tokens
`
`
`
`Covered Business Method Patent
`B.
`Section 18 of the Leahy-Smith America Invents Act, Pub. L. No. 112–
`29, 125 Stat. 284, 329 (2011) (“AIA”) provides for the creation of a
`transitional program for reviewing covered business method patents.
`Section 18 limits review to persons or their privies who have been sued or
`charged with infringement of a “covered business method patent,” which
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`does not include patents for “technological inventions.” AIA § 18(a)(1)(B),
`(d)(1); see 37 C.F.R. § 42.302. In compliance with 37 C.F.R. § 42.302(a),
`Petitioner certifies that it has been sued for infringement of the ’999 patent.
`Pet. 3.
`Based on the record before us, we are apprised of no reason to change
`the determination in our Institution Decision that at least claim 1 of the ’999
`patent is directed to a covered business method. Inst. Dec. 6–13.
`1. “Method or Corresponding Apparatus for Performing Data
`Processing or Other Operations Used in the Practice,
`Administration or Management of a Financial Product or
`Service”
`The statute defines a “covered business method patent” as
`[a] patent that claims a method or corresponding apparatus for
`performing data processing or other operations used in the
`practice, administration, or management of a financial product or
`service.
`AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). A covered business method
`patent can be broadly interpreted to encompass patents claiming activities
`that are financial in nature. Transitional Program for Covered Business
`Method Patents—Definitions of Covered Business Method Patent and
`Technological Invention, 77 Fed. Reg. 48734, 48735 (Aug. 14, 2012); Blue
`Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1338–41 (Fed. Cir. 2016)
`(determining that a patent was a covered business method patent because it
`claimed activities that are financial in nature); Unwired Planet, LLC v.
`Google, Inc., 841 F.3d 1376, n. 5 (Fed. Cir. 2016) (stating that “we endorsed
`the ‘financial in nature’ portion of the standard as consistent with the
`
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`statutory definition of ‘covered business method patent’ in Blue Calypso”),
`Versata Development Group, Inc. v. SAP America, Inc., 793 F.3d 1306,
`1324–25 (Fed. Cir. 2015) (“[The statute] on its face covers a wide range of
`finance-related activities.”).
`A patent need have only one claim directed to a covered business
`method to be eligible for review. 77 Fed. Reg. at 48,736 (Response to
`Comment 8). We take claim 1 as representative.
`Petitioner contends that the ’999 patent is a covered business method
`patent because the claims recite receiving and displaying market information
`and sending a trade order to an electronic exchange, which are financial
`activities. Pet. 4–5 (citing claim 1 of the ’999 patent); Pet. Reply 22–24.
`Patent Owner does not dispute that the claims are directed to a financial
`product or service and, instead, contends that the ’999 patent is not a covered
`business method patent because the claims are not directed to data
`processing or other business method operations. See PO Resp. 52–55.
`Patent Owner contends that, regardless that some claims recite a method, the
`claims of the ’999 patent are directed to a device, a GUI tool, and not a data
`processing or business method claim. Id. at 59–60.
`Initially we note that a covered business method patent is not limited
`to only patents that claim a method, as opposed to a device. Covered
`business method patents include a patent that claims “a method or
`corresponding apparatus.” AIA § 18(d)(1); see 37 C.F.R. § 42.301(a).
`Claim 1 of the ’999 patent recites: “A computer based method for facilitating
`the placement of an order for an item and for displaying transactional
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`information to a user regarding the buying and selling of items . . . .” Ex.
`1001, 14:7–10. As Petitioner points out, claim 1 recites steps of: 1)
`displaying market information, including indicators of bids and offers in the
`market, 2) receiving and displaying market information, including new bids
`and new offers in the market, 3) displaying, selecting, and moving an order
`icon to a location along an axis of prices, and 4) sending a trade order to an
`electronic trading exchange. Pet. 4; Ex. 1001, 14:7–47.
`Buying and selling items and sending a trade order to an electronic
`exchange are activities that are financial in nature. A method for facilitating
`the placement of an order for an item and for displaying transactional
`information to a user regarding the buying and selling of items is a method
`for performing data processing or other operations used in the practice,
`administration, or management of a financial product or service.
`Patent Owner disputes that the ’999 patent claims data processing.
`PO Resp. 53–55. Patent Owner argues that the statute requires that the “data
`processing” cause a significant change in the data, and that data processing
`that merely displays the data, like the data processing disclosed in the ’999
`patent, is not significant. Id. Patent Owner’s argument is based upon the
`assumption that “data processing” in the statute is interpreted according to
`the definition of “data processing” found in the glossary for class 705 of the
`United States Patent Classification System. See id at 53. Patent Owner,
`however, does not sufficiently explain why this definition is controlling, as
`opposed to the plain meaning of “data processing.” See Ex. 1048 (dictionary
`definition of “data processing” as “the converting of raw data to machine
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`readable form and its subsequent processing (as storing, updating,
`rearranging, or printing out) by a computer.”), Ex. 1049 (dictionary
`definition of “data processing” as “the rapid handling of large amounts of
`information, as business data, by means of mechanical, or esp., computer
`equipment”). We, thus, are not persuaded that “data processing” as recited
`by the statute precludes data processing for the purpose of displaying the
`data. The ’999 patent discloses processing market information for display
`on a client terminal and for sending an order to an exchange. See e.g., Ex.
`1001, 10:54–58 (“the order has been processed by the server 200”) 11:2–
`4(“server 200 then processes the order information”), 11:42–44 (“the
`process is repeated”). We, thus, are not persuaded that the ’999 patent does
`not claim “performing data processing . . . used in the practice,
`administration, or management of a financial product or service” (AIA §
`18(d)(1)).
`In any event, the statute does not limit covered business method
`patents to only those that claim methods for performing data processing used
`in the practice, administration, or management of a financial product or
`service. It includes methods for performing “other operations” used in the
`practice, administration, or management of a financial product or service.
`Patent Owner’s arguments imply that “other operations” must be “business
`operations.” See e.g., PO Resp. 52. The statute states that the “other
`operations” are those that are “used in the practice, administration, or
`management of a financial product or financial service.” AIA § 18(d)(1).
`There appears to be no disagreement that the claimed method steps are
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`operations used in the practice, administration, or management of a
`commodity or trading a commodity on an electronic exchange, e.g., a
`financial service. The ’999 patent, therefore, at least claims “other
`operations used in the practice, administration, or management of a financial
`product or financial service” (AIA § 18(d)(1)).
`Patent Owner additionally contends that the Legislative History
`confirms that the claimed invention is not a covered business method. PO
`Resp. 58–61. We are not persuaded by Patent Owner’s argument. Although
`the legislative history includes certain statements that certain novel software
`tools and graphical user interfaces that are used by the electronic trading
`industry worker are not the target of § 18 of the AIA (see Ex. 2126, S5428,
`S5433), the language of the AIA, as passed, does not include an exemption
`for user interfaces for commodities trading from covered business method
`patent review. Indeed, “the legislative debate concerning the scope of a
`CBM review includes statements from more than a single senator. It
`includes inconsistent views . . . .” Unwired Planet, 841 F.3d at 1381. For
`example, in contrast to the statements cited by Patent Owner, the legislative
`history also indicates that “selling and trading financial instruments and
`other securities” is intended to be within the scope of covered business
`method patent review. See Ex. 2126, S5432 (statements of Sen. Schumer).
`“[T]he legislative history cannot supplant the statutory definition actually
`adopted. . . . The authoritative statement of the Board’s authority to conduct
`a CBM review is the text of the statute.” Unwired Planet, 841 F.3d at 1381.
` Each claimed invention has to be evaluated individually to determine if it is
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`eligible for a covered business method patent review. A determination of
`whether a patent is eligible for a covered business method patent review
`under the statute is made on a case-by-case basis. 37 C.F.R. § 42.301(b).
`
`
`For the reasons stated above, we are persuaded by Petitioner that the
`’999 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” and meets that requirement of
`§ 18(d)(1) of the AIA.
`2. Exclusion for Technological Inventions
`Even if a patent includes claims that would otherwise be eligible for
`treatment as a covered business method, review of the patent is precluded if
`the claims cover only “technological invention[s],” as defined by 37 C.F.R.
`§42.301(b). The definition of “covered business method patent” in §
`18(d)(1) of the AIA does not include patents for “technological inventions.”
`To determine whether a patent is for a technological invention, we
`consider “whether the claimed subject matter as a whole [1] recites a
`technological feature that is novel and unobvious over the prior art; and [2]
`solves a technical problem using a technical solution.” 37 C.F.R. §
`42.301(b). The following claim drafting techniques, for example, typically
`do 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.
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`(b) Reciting the use of known prior art technology to accomplish a
`process or method, even if that process or method is novel and
`non-obvious.
`(c) Combining prior art structures to achieve the normal, expected,
`or predictable result of that combination.
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,763–64 (Aug.
`14, 2012).
`Both prongs must be satisfied in order for the patent to be excluded as
`a technological invention. See Versata, 793 F.3d at 1326–7; Apple Inc. v.
`Ameranth, Inc., 842 F.3d 1229, 1240 (Fed. Cir. 2016).
`Petitioner contends that the ’999 patent is not for a technological
`invention because the claims fail to recite any technological feature that is
`novel and unobvious over the prior art, and do not solve a technical problem
`with a technical solution. Pet. 3–9. In particular, Petitioner argues that the
`claims recite trading software that is implemented using conventional
`computer hardware, servers, and networks, directing attention to a
`description in the ’999 patent that generically refers to “personal computers,
`terminals as part of a network, or any other computing device” and no
`specific hardware to carry out the invention. Id. at 6–7 (citing Ex. 1001,
`4:34–36). Petitioner also argues that electronic trading was well known as
`of the filing date. Id. at 7.
`Patent Owner disagrees (PO Resp. 56–58), but fails to explain
`sufficiently how the claimed subject matter recites a technological feature
`that is novel and unobvious over the prior art or solves a technical problem
`using a technical solution.
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`We are persuaded by Petitioner’s contentions that at least claim 1 of
`the ’999 patent does not recite a novel and non-obvious technological
`feature. For example, the “BACKGROUND OF THE INVENTION”
`section of the ’999 patent explains that it was well known for an exchange to
`record all transactions for a particular item and to replay or post to the
`individual traders outstanding bids with the highest values and outstanding
`offers with the lowest value, along with a quantity specified for each order,
`to facilitate trading a commodity. Ex. 1001, 1:31–41. There is no indication
`in the ’999 patent that the inventors invented gathering market information,
`displaying it to a trader, and using the information to facilitate trading a
`commodity. See PO Resp. 57–58 (“This is correct.”). The use of a
`computer to perform these functions also was known in the art at the time of
`the invention, and the ’999 patent does not claim any improvement of a
`computing device.
`Patent Owner argues that the ’999 patent is for a technological
`invention because the claims are directed to a novel and nonobvious GUI
`tool that improves, and transforms, a computer so it can perform functions it
`previously could not. PO Resp. 56–58. We disagree that claim 1, for
`example, is directed to a novel and nonobvious GUI tool that improves, and
`transforms, a computer so it can perform functions it previously could not.
`Patent Owner’s arguments in that regard are conclusory, and not directed to
`any specific language from the claims themselves. As explained above,
`claim 1 is directed to a method for facilitating the placement of an order for
`an item and for displaying transactional information to a user regarding the
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`buying and selling of items, that requires receiving and displaying market
`information, including indicators of bids and offers in the market and
`displaying, selecting, and moving an order icon to a location along an axis of
`prices, and sending a trade order to an electronic trading exchange. Ex.
`1001, 14:7–47. Moreover, there is no specific computer, program, or
`processing described in the ’999 patent beyond what was known in the art at
`the time of the invention.
`Given the above, we determine that claim 1 does not recite a
`technological feature that is novel and unobvious over the prior art. Because
`both prongs must be satisfied for a patent to be excluded from covered
`business method patent review for being a technological invention, we find
`that the ’999 patent is eligible for a covered business method patent review
`for at least the reason that claim 1 fails to recite a technological feature that
`is novel and unobvious.
`Notwithstanding our determination above, we also are persuaded by
`Petitioner that the ’999 patent does not solve a technical problem with a
`technical solution.
`Petitioner also argues that the claimed subject matter does not solve a
`technical problem using a technical solution, because the problem is a
`financial one and the solution is to rearrange available market data on a
`display. Pet. 8–9. In contrast, Patent Owner argues that the claimed subject
`matter recites a new GUI design (a new technology) that addressed the
`problem with the old GUI design, and, thus, is directed to solving a technical
`problem using a technical solution. PO Resp. 56–58. Patent Owner states
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`“GUI design is a technology, so new GUIs designed to improve
`conventional GUIs are necessarily technological solutions to technological
`problems.” Id. at 56.
`We are persuaded by Petitioner that the problem disclosed in the ’999
`patent is not a technical one. The ’999 patent’s specification highlights the
`problem and importance of informing a trader of certain stock market events
`so that the trader may use such information to facilitate trading a
`commodity. Ex. 1001, 2:19–26. The ’999 patent states:
`The successful trader anticipates the rise or fall of the value of
`an item and performs his or her own transaction before[]the rest
`of the market is aware of the item’s potential gain or loss in
`value. Thus, anticipation of the market is specifically of the
`future demand for an item of interest is critical to the success of
`a trader.
`Ex. 1001, 1:20–26.
`The ’999 patent explains that traders use latest order information and
`other information, including historical transaction data, to anticipate the
`market and that “it is often difficult for a trader to quickly assemble this
`information from diverse and often unrelated sources or even effectively
`process all of this information in order to make an informed transaction
`decision.” Id. at 1:51–54. Informing a trader of certain stock market trends
`or events is more of a financial problem than a technical problem. The ’999
`patent solves this problem by “present[ing] this information in an intuitive
`format, allowing the trader to make informed decisions quickly.” Id. at
`2:39–41. We are persuaded by Petitioner that the ’999 patent does not solve
`a technical problem with a technical solution. Further, as discussed above,
`
`
`
`17
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`CBM2016-00032
`Patent 7,212,999 B2
`
`claim 1 requires the use of only known technology.
`Patent Owner proffers the testimony of Eric Gould-Bear and Dan
`Olsen to show that GUIs are technology and the claimed invention is a
`technical solution to a technical problem. See, e.g., PO Resp. 19–21 (citing
`Ex. 2168 ¶¶ 23–38, Ex. 2174 ¶¶ 13–15, Ex. 2169 ¶¶ 16–18 testimony of Eric
`Gould-Bear, Dan Olsen, and Christopher Thomas, respectively). The
`testimony of Mr. Gould-Bear, Dr. Olsen, and Mr. Christopher Thomas is
`unpersuasive because, although their testimony addresses related patents, it
`does not specifically address the claimed invention of the ’999 patent. For
`example, Mr. Gould-Bear’s testimony is directed to U.S. Patent No
`7,904,374. See Ex. 2168 ¶ 1. Likewise, Dr. Olsen’s testimony is not
`directed to the claimed invention of the ’999 patent. See Ex. 2174 ¶ 6, Ex.
`2169 ¶ 2. The claims of U.S. Patent No 7,904,374 recite features not recited
`by the claims of the ’999 patent.
`Given this, we are persuaded that at least claim 1 does not solve a
`technical problem using a technical solution and does not satisfy the second
`prong of 37 C.F.R. § 42.301(b).
`3. Conclusion
`In view of the foregoing, we conclude that the ’999 patent is a covered
`business method patent under AIA § 18(d)(1) and is eligible for review
`using the transitional covered business method patent program.
`C.
`Section 101 Patent-Eligible Subject Matter
`Petitioner challenges claims 1–35 of the ’999 patent as directed to
`patent-ineligible subject matter under 35 U.S.C. § 101. Pet. 19–35. Patent
`Owner disagrees. PO Resp. 3–50
`
`
`
`18
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`CBM2016-00032
`Patent 7,212,999 B2
`
`
`Under 35 U.S.C. § 101, we must first identify whether an invention
`fits within one of the four statutorily provided categories of patent-
`eligibility: “processes, machines, manufactures, and compositions of
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–14 (Fed. Cir.
`2014).
`Initially, we note that Petitioner asserts that independent claim 35 of
`the ’999 patent is invalid because it encompasses a transitory, propagating
`signal that is encoded, which is subject matter that does not fall into any of
`the four statutory classes of § 101. Pet. 25 (citing In re Nuijten, 550 F.3d
`1346, 1352 (Fed. Cir. 2007)); Pet. Reply 18. In our Institution Decision, we
`determined that the broadest reasonable interpretation, in light of the
`specification of the ’999 patent, encompasses transitory media, but we noted
`that our construction was preliminary and specifically indicated that “[t]he
`broadest reasonable interpretation, in light of the specification, of ‘recorded’
`is an issue that requires further development of the record.” Inst. Dec. 15.
`Patent Owner responds that there is no evidence to support
`Petitioner’s contention that one skilled in the art would have understood
`“computer readable medium having program code recorded thereon” to
`encompass a signal at the time of the invention. PO Resp. 48. Petitioner
`responds to Patent Owner’s contentions by simply asserting that “the Board
`should apply the same BRI of ‘computer readable medium’ that the PTO has
`applied in thousands of matters.” Pet. Reply 22–24 (citing Manual of Patent
`Examining Procedures § 2106, Ex parte Mewherter, 107 USPQ2d
`1857(PTAB 2013) (precedential)).
`
`
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`19
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`CBM2016-00032
`Patent 7,212,999 B2
`
`
`Petitioner’s response is unhelpful. Petitioner fails to offer sufficient
`evidence or persuasive argument as to how one skilled in the art would have
`understood the phrase “computer readable medium having program code
`recorded thereon” as it relates to the ’999 patent. At oral hearing, when
`asked why no evidence was provided in this regard, Petitioner had no
`explanation other than “it would be difficult . . . because this is a term of art
`in the patent field” and “you can[not] go to an IEEE dictionary and find
`necessarily a dictionary definition that would be helpful here.” Tr. 71:4–10.
`Accordingly, on this record, we are not persuaded by Petitioner that at
`the time of the invention one skilled in the art would have understood
`“computer readable medium having program code recorded thereon” as
`encompassing transitory, propagating signals.
`Even if claim 35 fits within one of the categories of patent-eligibility,
`we are persuaded that claims 1–35 do not recite patent-eligible subject
`matter for the reasons that follow.
`1. Eligibility
`
`Patent-eligible subject matter is defined in § 101 of the Patent Act,
`
`which recites:
`Whoever invents or discovers any new and useful process,
`machine, manufacture, or composition of matter, or any new and
`useful improvement thereof, may obtain a patent therefor, subject
`to the conditions and requirements of this title.
`There are, however, three judicially created exceptions to the broad
`categories of patent-eligible subject matter in § 101: laws of nature, natural
`phenomena, and abstract ideas. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134
`
`
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`20
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`CBM2016-00032
`Patent 7,212,999 B2
`
`S. Ct. 2347, 2354 (2014); Mayo Collaborative Servs. v. Prometheus Labs.,
`Inc., 132 S. Ct. 1289, 1293 (2012). Although an abstract idea, itself, is
`patent-ineligible, an application of the abstract idea may be patent-eligible.
`Alice, 134 S. Ct. at 2355. Thus, we must consider “the elements of each
`claim both individually and ‘as an ordered combination’ to determine
`whether the additional elements ‘transform the nature of the claim’ into a
`patent-eligible application.” Id. (citing Mayo, 132 S. Ct. at 1297–98). The
`claim must contain elements or a combination of elements that are
`“sufficient to ensure that the patent in practice amounts to significantly more
`than a patent upon the [abstract idea] itself.” Id. (
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