Archive for the ‘Phillips-type construction’ Category

PTAB CBM: Versata Patent Claims Unpatentable under 35 U.S.C. § 101

Thursday, June 13th, 2013

On June 11, 2013, the Patent Trial and Appeal Board (PTAB) issued a decision holding claims 17 and 26-29 of Versata’s 6,553,350 patent  unpatentable under 35 U.S.C. § 101.  This decision arises from a petition filed on Sep. 16, 2012, in a proceeding that was accelerated when SAP agreed to focus its challenge on its proffered 101 grounds.  As discussed in prior posts, there are parallel actions in the courts, including:  a Federal Circuit decision affirming of portions of a district court decision and remanding the injunctive portion to the district court for correction; and Versata’s challenge of the PTO’s institution of this covered business method (CBM) trial in the Eastern District of Virginia by Versata.

The PTAB explained its decision in detail, and carefully set forth its bases for applying the Broadest Reasonable Interpretation standard:

Versata states that claim construction is a question of law and that claim terms should be accorded only one definition: that which is based on a district court interpretation standard. PO Resp. 62. There are, however, two claim construction standards: the Office’s BRI construction and the district court standard set forth in Phillips v. AWH [415 F.3d 1303, 1313 (Fed. Cir. 2005) (en banc)].  The difference in standards generally arises from the ability of an applicant or patent owner in Office proceedings to amend their claims, and the fact that there is no presumption of validity before the Office.[Whereas a patent is presumed “valid” unless overcome by clear and convincing evidence before a district court, a petitioner’s burden before the Office is limited to proving “unpatentability” by a preponderance of the evidence. Compare 35 U.S.C. § 282(a) and § 326(e).] Through the use of the broadest reasonable interpretation standard, the Office is able to encourage inventors to amend their claims to remove uncertainties and over breadth of claim scope.

For at least a century, the Office has encouraged clear and unambiguous claim drafting by utilizing the broadest reasonable interpretation. For example, a 1906 Commissioner of Patent’s Decision held that there is no better method of construing claims before the Office. Specifically, this early decision explains the rationale for BRI as follows:

No better method of construing claims is perceived than to give them in each case the broadest interpretation which they will support without straining the language in which they are couched. This method would seemingly give more uniform and satisfactory results than are obtained by methods largely in vogue – such, for example, as that of importing limitations from the specification according to the exigencies of the particular situation in which the claim may stand at a given moment. The method suggested also seems to have the advantage according in its results with the probable intentions of the inventor at the time when the claim is drawn. In presenting claims to the Office the object constantly sought is breadth. Where a limited meaning is intended when a claim is drawn, what possible objection can there be to imposing that meaning unmistakably upon the claim by its express terms? That a claim which does not carry its true meaning on its face misleads those affected by the patent instead of guiding them to its true scope is alone sufficient reason why the Patent Office should refuse to recognize proposed limitations of claims which have not been clearly expressed therein.

Podlesak and Podlesak v. McInnerney, 123(2) O.G. 1989, 1990 (Dec. Com. Pat. 1906, emphasis added). This standard of claim construction and its rationale have been upheld consistently by the Federal courts, including both the Court of Customs and Patent Appeals (“CCPA”) and the Federal Circuit. . . .

The Board then continued on to discuss its constructions and how it held claims 17 and 26-29 “unpatentably abstract.”  The Board concluded:

This is a final written decision of the Board under 35 U.S.C. § 328(a). We hold Versata’s claims 17, and 26-29 to be unpatentable under 35 U.S.C. §101. Specifically, the claims recite unpatentable abstract ideas and the claims do not provide enough significant meaningful limitations to transform these abstract ideas into patent-eligible applications of these abstractions.

The Board ordered that claims 17 and 26-29 of the ’350 patent are cancelled as unpatentable.

You may recall from earlier posts, that SAP also filed an ex parte reexamination to raise the prior art challenges that it passed on in this CBM to accelerate this proceeding to trial on the 101 issues.  Versata had a motion to stay that pending reexamination which the Board declined in light of this final written decision.  The Board ordered that its claim construction in this CBM is binding on the patent owner in the reexamination and that a copy of this decision be placed in the reexamination file.

Now that this PTAB CBM decision is before us, we will monitor the parties’ next steps as this conflict progresses through the various other parallel actions.

Parallel Litigation and PTAB Review Create Complex Interplay of Patentability and Validity

Sunday, September 30th, 2012

A company called CoreLogic Solutions, LLC owns U.S. Patent No. 5,361,201, relating to a process for appraising real estate property.  The ‘201 patent was filed on Oct. 19, 1992 and issued on Nov. 1, 1994.  Absent some kind of patent term extension, the ‘201 patent will expire soon.  The ‘201 patent is the subject of both a litigation and a covered business-method (CBM) patent review with an accused infringer/petitioner Interthinx, Inc.  The litigation is CoreLogic Information Solutions, Inc. v. Fiserv, Inc., et al., Civil Action No. 2:10-CV-132-RSP (E.D. Texas).  The CBM patent review is CBM2012-00007.  Claim 1 of the ‘201 patent is as follows:

1. A computer-implemented process for appraising a real estate property, comprising the steps of:

collecting training data;

developing a predictive model from the training data;

storing the predictive model;

obtaining individual property data for the real estate property;

generating a signal indicative of an appraised value for the real estate property responsive to application of the obtained individual property data to the stored predictive model;

developing an error model from the training data;

storing the error model; and

generating a signal indicative of an error range for the appraised value responsive to application of the individual property data to the stored error model.

PACER reveals a jury verdict form just entered in the Texas litigation on September 28, 2012, where Interthinx was found to not have infringed claims 1 and 10 of the ‘201 patent, and that Interthinx failed to show claims 1 or 10 invalid.  This jury decision comes only 9 days after the CBM petition was filed in the USPTO/PTAB.

What will happen next is anyone’s guess.  Interthinx may elect to wait and see if a CBM trial is instituted.  It may settle with CoreLogic to avoid appeal.  Or it may do a little of both.  It may also pursue the CBM in an effort to challenge the patent  and extinguish any possible reversal and remand by the Federal Circuit on appeal of the trial court action by CoreLogic.

If the CBM PTAB trial is pursued, it will be interesting to see how the PTAB regards a prior litigation decision, such as the one in this case, given the differences between administrative review and litigation.  The differences in  interpretive standards and burdens of proof are  summarized in the slide below:

We already learned from cases such as  In re Baxter International (Fed. Cir. 2012), that the PTO can find a patent unpatentable even after the Federal Circuit affirmed a lower court decision that the patent was not invalid.  As stated in Baxter:

“[T]he PTO in reexamination proceedings and the court system in patent infringement actions “take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions.’[citing Swanson, quoting Ethicon]”

But that does not mean that the PTAB trial judges will ignore district court decisions and that courts will ignore PTAB decisions.  It remains to be seen how much one process defers to the other.

Liberty Mutual Covered Business Method Patent Review Petition Tailored to Address Prior Art “Mischaracterized” During Reexamination

Saturday, September 29th, 2012

Liberty Mutual Insurance filed two more covered business method (CBM) patent review petitions dated September 29.  The petitions both relate to U.S. Pat. No. 7,124,088 owned by Progressive Casualty Insurance, that relates to an on-line insurance policy service system as recited in claim 1 of the reexamined patent:

1.  An on-line insurance policy service system comrprising:

a web browser for accessing remote insurance information by an insurance policyholder and software linked to the remote insurance information;

a publicly accessible distributed network for transferring data from the web browser;

an information module, remote from the web browser coupled to the publicly accessible distributed network, that identifies the insurance policyholder and verifies an insurance policy parameter of an existing insurance policy of the insurance policyholder in real-time in response to first data received from the insurance policyholder through the publicly accessible distributed network and the web browser;

where the first data comprises a personal security code that allows access to insurance policy parameters of the insurance policyholder;

an insurance policy adjustment module, remote from the web browser coupled to the publicly accessible distributed network, that adjusts the insurance policyholder’s insurance policy parameter in real-time in response to second data received from the insurance policyholder through the publicly accessible distributed network and the web browser,

where the second data comprises a selection of the insurance policy parameter;

where the insurance policy adjustment module provides an acknowledgement to the web browser in response to the adjustment of the selected insurance policy parameter within the existing insurance policy, and implements the adjustment to the existing insurance policy; and

where an insurer’s computer generates an insurance document customized to the insurance policyholder as identified by the personal security code and sends the customized insurance document to the web browser in response to the second data received from the insurance policyholder through the publicly accessible distributed network and the web browser.

Liberty Mutual’s petitions (CBM2012-00010 and CBM2012-00011) request review of the same claims, but using different prior art challenges.  The petition for the 00010 matter at footnote 3 states:

As noted above, Petitioner has simultaneously filed an additional Petition seeking review and judgment against the same claims based on different art—including, e.g., the Peterson patent discussed (but mischaracterized) during reexamination. Petitioner acknowledges with appreciation the procedural guidance provided by the Lead Trial Judge and others at the Patent Trial and Appeal Board regarding the appropriateness of such a division of grounds under the transitional program. Petitioner further notes that the references cited in that petition in combination with those cited here, including in particular NAIC, ComputerGuard and Lockwood, would also render all claims obvious based on their disclosures cataloged in the furnished claim charts.

So  it appears that Petitioner Liberty Mutual’s strategy is to file a separate review petition on separate prior art it alleges was mischaracterized in reexamination.  The use of post-issuance review to “correct” assertions made in reexamination is an interesting approach that may gain momentum if successful in cases like these.

Another interesting observation from the Petition is the way that Liberty Mutual proffers interpretations of claim limitations that are arguably subject to 35 U.S.C. § 112(6).  Liberty Mutual asserts differences between interpretive standards for review and reexamination (broadest reasonable interpretation or BRI per In re Yamamoto) and litigation (Phillips-type constructions, such as those used in Markman proceedings) in its petition.  For example, starting on page 11 of the petition, Liberty Mutual states:

Pursuant to § 42.300(b), and solely for purposes of this review, Petitioner construes the claim language such that claim terms are given their broadest reasonable interpretation. For terms not specifically listed and construed below, and in the absence, to date, of detailed arguments from Progressive indicating a need for construction or a disagreement regarding the meaning of the vast majority of terms, Petitioner interprets them for purposes of this review in accordance with their plain and ordinary meaning under the broadest reasonable interpretation. Because this standard is different than that used in litigation, see In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364, 1369 (Fed. Cir. 2004), Petitioner expressly reserves the right to argue in litigation a different construction for any term as appropriate to that proceeding.

At footnote 8, the Petition adopts a “plain meaning” BRI approach to claim limitations that are arguably subject to 35 U.S.C. § 112(6):

Petitioner reserves the right to argue in an appropriate forum that, under the standards of construction appropriate to district court litigation, these claim terms should be construed as means-plus-function limitations under § 112(6) and, indeed, fail to meet the requirements for means-plus-function limitations under § 112(6). For purposes of this Review, however, Petitioner broadly construes these terms as required by the applicable standard. See § 42.300(b).

This comment assumes that a claim limitation that is subject to 35 U.S.C. § 112(6) is properly  interpreted using “plain meaning” according to BRI, and that BRI may be different than a Phillips-type construction used in court proceedings for mean-plus-function limitations.  It will be interesting to see whether Patent Owner (Progressive) will have something to say about that assumption in its response.

Comparative Study of Post Issuance Review Options

Friday, September 21st, 2012

Today I had the pleasure of co-presenting at the Midwest IP Institute on various post-issuance proceedings with Kevin Rhodes, Chief Intellectual Property Counsel and President of 3M Innovative Properties Company.  A PDF of our joint presentation is found here.

The presentation provides a comparison between IPR (inter partes review), PGR (post grant review), and CBM (covered business method) patent review.  It contrasts these proceedings to ex parte reexamination (EPX).  The goal was to present the available options for review of patents now that inter partes reexamination is no longer available.

The presentation further covered administrative trials in the PTAB.  A hypothetical was used to demonstrate the use of litigation, IPR, PGR, CMB, and EPX depending on strength of 35 USC § 101 and § 112 arguments as opposed to 35 USC § 102 and § 103 prior art invalidity arguments.  Different scenarios were used to demonstrate the complexity of the analysis.

My thanks to Kevin Rhodes and 3M for allowing me to post these slides.

More IPR Filings on Day 2

Tuesday, September 18th, 2012

If you are monitoring adoption of post-issuance filings you may have noticed that five more IPR filings were filed on the second day of operation of the PTAB trials portal pursuant to the new IPR and CBM patent review options from the America Invents Act.  The list of today’s filings is reproduced below:

4 IPRs were filed by Intellectual Ventures Management, LLC and one by Ariosa Diagnostics.  This brings the total count to 13 pending petition matters (10 IPRs and 3 CBMs) on the petitions docket.

It is interesting to note different styles presented by the petitioners in the various petitions.   Some rely more on declaration evidence than others.  Some include substantial legal background for positions taken and some are more direct and pointed in arguing their positions.

It is also interesting to see the way that claim construction is being postured in these early petition filings.  For example, for matters that are in more advanced stages of litigation petitioners have resorted to admissions by the patent owner and Markman decisions for proposed claim constructions.  In a presentation to our local bar I predicted that PGR, IPR, and CBM would provide a kind of intermediate state of claim interpretation somewhere between BRI and a Phillips-type construction.  I believe that is starting to take shape as evidence from both prosecution and district court is relied upon for claim construction proposals.

It is encouraging to see highly technical arguments being pursued in these early filings.  For example, CBM (and PGR in general) may provide an attractive vehicle to challenge statutory subject matter and indefiniteness before the PTAB, as opposed to making these challenges in district court litigation.   The patent community may well embrace these post-grant proceedings if it sees consistently high quality decisions by the PTAB.

Claim Interpretation for Post-Grant Review and Inter Partes Review under the AIA – Part II

Thursday, June 21st, 2012

In Part I of this topic, I posted some of the reasons why the Patent Office has taken the position that the broadest reasonable interpretation (BRI) standard should be used in post-grant review and inter partes review.  Yet another reason for use of BRI (as opposed to a district court construction) was provided by Director Kappos in recent testimony before the United States Senate.  Besides the reasons mentioned in Director Kappos blog, he explained that certain portions of the America Invents Act relating to post-grant procedures refers to “patentability” which is associated with administrative procedures and the use of BRI (and which can be contrasted with “validity” which is associated with the courts and a Phillips-type construction). (more…)

Claim Interpretation for Post-Grant Review and Inter Partes Review under the AIA – Part I

Wednesday, June 20th, 2012

Today, USPTO Director David Kappos posted a comment advocating the use of  the broadest reasonable interpretation standard (BRI) for claim interpretation in post grant review and inter partes review under the America Invents Act.  This is a topic of great interest among those conducting post-grant review of patents because of numerous conflicts occuring in practice due to different intepretive standards used in reexamination (now also post-grant review and inter partes review) and litigation.

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