Covered Business Method Review
`CBM2012‐00001
`
`US Patent No. 6,553,350
`Method and Apparatus for Pricing
`Products in Multi‐Level Product and
`Organizational Groups
`
`Oral Hearing: April 17, 2013, 2 p.m.
`
`
`CBM2012‐00001
`
`US Patent No. 6,553,350
`Method and Apparatus for Pricing
`Products in Multi‐Level Product and
`Organizational Groups
`
`Oral Hearing: April 17, 2013, 2 p.m.
`
`
`
`Patent owner did not invent:
`
`Pricing based on
`customer and
`product data
`SX1001, Figs. 1‐2.
`
`Computerized pricing systems
`SX1001, 2:56‐63.
`
`Hierarchical organization of customers
`and products
`ID at 30.
`
`2
`
`
`
`Patent describes no
`advance in computing
`
`SX1001, 5:8‐11.
`
`SX1001, 10:58‐61.
`
`SX1001, 5:55‐58.
`
`3
`
`
`
`Patent owner explains:
`no data structures required
`
`SX1011 at 24.
`
`SX1011 at 11.
`
`4
`
`
`
`Claims 17, 26‐29 do not recite:
`
`• Database
`• Database tables
`• Database queries
`• Run time
`• Execution flow
`• Computer screens
`• A number of database tables
`• A number of database queries
`E.g., POR at 21, 27‐31.
`
`5
`
`
`
`Patent owner explains: at “runtime”
`software does not change numbers
`
`SX1011 at 37.
`
`SX1034 at 17‐18.
`
`6
`
`
`
`Patent describes “entirely arbitrary”
`hierarchies
`
`SX1001, 3:25‐32; 3:42‐45.
`
`SX1001, 7:64‐67.
`
`7
`
`
`
`Patent describes business method of
`product pricing
`
`SX1001, 3:50‐65.
`
`8
`
`
`
`Abstract ideas in
`claims 17, 26
`
`Customer and product
`hierarchies
`
`Calculating product price
`
`SX1001, 20:66‐21:28; 21:61‐62.
`9
`
`
`
`Abstract ideas in
`claims 27‐29
`
`Customer
`and
`product
`hierarchies
`
`Calculated
`product
`price
`
`SX1001, 21:63‐22:34.
`10
`
`
`
`Supreme Court 101 Framework
`
`• Patent may be obtained for a new and useful
`process, machine, manufacture, or
`composition of matter. 35 USC § 101.
`• Excluded from patent protection are “laws of
`nature, natural phenomena, and abstract
`ideas.” Mayo, 132 S. Ct. at 1293; Diehr, 450
`US at 185.
`
`11
`
`
`
`Supreme Court 101 Framework
`• When an abstract idea is involved, ask: “What else is there
`in the claims before us?” Mayo, 132 S. Ct. at 1297.
`– “[M]ust do more than simply state the [abstract idea] while
`adding the words ‘apply it.’” Mayo, 132 S. Ct. at 1294; Benson,
`409 US at 71‐72.
`– Claims must “also contain other elements or a combination of
`elements . . . sufficient to ensure that the patent in practice
`amounts to significantly more” than the abstract idea itself.
`Mayo, 132 S. Ct. at 1294; Flook, 437 US at 594.
`– Improper to “depend simply on the draftsman’s art.” Mayo, 132
`S. Ct. at 1294; Flook, 437 US at 593.
`– Limiting claims to field of use or adding token post‐solution
`activity does not make an abstract concept patentable. Bilski,
`130 S. Ct. at 3231; Diehr, 450 US at 191‐92.
`
`12
`
`
`
`Supreme Court:
`Unpatentable Abstract Idea
`
`Gottschalk v. Benson
`• Abstract idea: converting BCD numbers
`to binary. 409 US at 71.
`• 7‐step process could be “done
`mentally” using a table printed in the
`patent. Id. at 66, 73‐74.
`• Process with “no substantial practical
`application except in connection with a
`digital computer” was still
`unpatentable abstract idea. Id. at 71‐
`72.
`• The prohibition on patenting abstract
`ideas applies equally to “product” and
`“process” claims. Id. at 67‐68.
`
`409 US at 73‐74.
`
`13
`
`
`
`Supreme Court:
`Unpatentable Abstract Idea
`Parker v. Flook
`• Abstract idea: method for calculating
`alarm limit values. 437 US at 594‐95.
`• Unpatentable even though “abstract
`of disclosure makes it clear that the
`formula is primarily useful for
`computerized calculations . . . .” Id. at
`586.
`Process can be performed “by pencil
`and paper.” Id.
`Even if claim does not “wholly
`preempt” an abstract idea, “post‐
`solution activity” cannot transform an
`unpatentable principle into a
`patentable process. Id. at 589‐90.
`
`•
`
`•
`
`437 US at 596‐97.
`
`14
`
`
`
`Supreme Court:
`Unpatentable Abstract Idea
`Bilski v. Kappos
`• Abstract idea: basic concept of
`hedging. 130 S. Ct. at 3231.
`• While the Patent Act “appears to
`leave open the possibility of some
`business method patents, it does
`not suggest broad patentability of
`such claimed inventions.” Id. at
`3229.
`Limiting claims to field of use or
`adding token postsolution activity
`does not make an abstract
`concept patentable. Id. at 3231.
`
`•
`
`130 S. Ct. at 3223‐24.
`
`15
`
`
`
`Supreme Court:
`Unpatentable Law of Nature
`Mayo v. Prometheus
`•
`Law of nature: relationships between
`concentrations of metabolites and
`likelihood of ineffectiveness or harm.
`132 S. Ct. at 1296‐98.
`Claims add only “well‐understood,
`routine, conventional activity”
`insufficient to transform unpatentable
`law of nature into patentable
`application. Id. at 1298.
`Claim not patentable unless “process
`has additional features that provide
`practical assurance that the process is
`more than a drafting effort” to claim
`fundamental principle. Id. at 1297.
`
`•
`
`•
`
`132 S. Ct. at 1295.
`
`16
`
`
`
`Supreme Court:
`Patentable Industrial Process
`Diamond v. Diehr
`• Abstract idea: Arrhenius
`equation. 450 US at 177‐78.
`Excluded from patent
`protection are “laws of nature,
`natural phenomena, and
`abstract ideas.” Id. at 185.
`To analyze patentability under §
`101, “claims must be
`considered as a whole” and not
`dissected “into old and new
`elements.” Id. at 188.
`Claims are not “an attempt to
`patent a mathematical
`formula” but rather drawn to
`“an industrial process for the
`molding of rubber products.”
`Id. at 192‐93.
`
`•
`
`•
`
`•
`
`450 US at 180‐81.
`
`17
`
`
`
`Fed Cir: Unpatentable Abstract Idea
`Bancorp Servs. v. Sun Life
`• Abstract idea: managing a stable value protected life
`insurance policy and using well‐known calculations
`to establish inputs into the equation. 687 F.3d at
`1278.
`• No technological advance is claimed because “the
`computer simply performs more efficiently what
`could otherwise be accomplished manually.” Id. at
`1279.
`The equivalence of system and method claims is
`“readily apparent” because “[t]he only difference
`between the claims is the form in which they were
`drafted.” Id. at 1277.
`
`•
`
`687 F.3d at 1271‐72.
`
`18
`
`
`
`Fed Cir: Unpatentable Abstract Idea
`CyberSource v. Retail Decisions
`• Abstract idea: detecting credit card fraud using
`information relating credit card transactions to
`Internet addresses. 654 F.3d at 1368.
`Even if some steps “are required to obtain
`information from the database” such “data‐
`gathering steps cannot alone confer patentability.”
`Id. at 1372.
`“Merely claiming a software implementation of a
`purely mental process that could otherwise be
`performed without the use of a computer” does not
`satisfy 101. Id. at 1375.
`
`•
`
`•
`
`654 F.3d at 1368.
`
`654 F.3d at 1374.
`
`19
`
`
`
`Fed Cir: Unpatentable Abstract Idea
`Dealertrack v. Huber
`• Abstract idea: the basic concept of
`processing information through a
`clearinghouse. 674 F.3d at 1333.
`The claimed steps do not “impose
`meaningful limitations on the claim’s
`scope.” Id.
`“Simply adding a ‘computer aided’
`limitation to a claim covering an abstract
`concept, without more, is insufficient to
`render the claim patent eligible.” Id.
`• Algorithms that may be disclosed in the
`specification do not change the outcome
`because “[i]n considering patent eligibility
`under § 101, one must focus on the claims.”
`Id. at 1334.
`
`•
`
`•
`
`674 F.3d at 1331.
`
`20
`
`
`
`Claim 17
`“arranging a hierarchy of organizational groups comprising a plurality of branches such
`that an organizational group below a higher organizational group in each of the
`branches is a subset of the higher organizational group;”
`SX1033, 119:4‐120:12; SX1029 (top right).
`
`21
`
`
`
`Claim 17
`“arranging a hierarchy of product groups comprising a plurality of branches
`such that a product group below a higher product group in each
`of the branches in a subset of the higher product group;”
`SX1033, 120:13‐121:4; SX1029 (bottom right).
`
`22
`
`
`
`Claim 17
`“storing pricing information in a data source, wherein the pricing information is associated,
`with (i) a pricing type, (ii) the organizational groups, and (iii) the product groups;”
`SX1033, 121:5‐123:6, 131:10‐14; SX1029 (“1st table”).
`23
`
`
`
`Claim 17
`“retrieving applicable pricing information corresponding to the product, the
`purchasing organization, each product group above the product group in each branch
`of the hierarchy of product groups in which the product is a member, and each
`organizational group above the purchasing organization in each branch of the
`hierarchy of organizational groups in which the purchasing organization is a member;”
`SX1033, 131:15‐135:21; SX1031.
`24
`
`
`
`Claim 17
`“sorting the pricing information according to the pricing types, the product, the purchasing
`organization, the hierarchy of product groups, and the hierarchy of organizational groups;”
`SX1033, 135:21‐138:16; SX1032 (arrows representing sorting).
`
`25
`
`
`
`Claim 17
`“eliminating any of the pricing information that is less restrictive;”
`SX1033, 138:17‐141:10; SX1032 (blue lines representing eliminating).
`
`26
`
`
`
`Claim 17
`“determining the product price using the sorted pricing information.”
`SX1033, 141:11‐143:10; SX1032 (determining $65 price by applying remaining
`20% and 15% discounts from sorted pricing information).
`
`27
`
`
`
`. . .
`
`VX2091 at 12.
`
`VI.
`
`The Solution Described and Claimed in the “350 Patent
`
`VX2091 at 12.
`
`35.
`
`This is best illustrated with a specific example. I will use the simple
`
`pricing scenario described above to illustrate the advantages of the inventioi --
`
`advantages that are magnified as the pricing scenario becomes more complex and
`
`takes into account additional customer—specific discoimts as well as product-
`
`specific discounts. In this pricing scenario, the seller applies a discount to the base
`
`price of a particular CPU, where the amount of the discount depends on the
`
`particular CPU being purchased. Specifically, in this scenario, the seller would
`
`like to have a particular discoimt amoimt that applies to all CPUs (e.g., 10%), a
`
`more specific discomit amoimt that applies to 486 CPUs (e. g. 15%), and an even
`
`more specific discoimt amomit for 486K}: CPUs (e.g., 25%).
`
`VX2091 ¶ 35.
`28
`
`
`
`VI.
`
`The Solution Described and Claimed in the “350 Patent
`
`VX2091 at 12.
`
`VX2091 at 12.
`
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`
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`
`VX2091 ¶ 19.
`
`FIGURE 1
`
`VX2091 1] 19.
`
`29
`
`
`
`VI.
`
`The Solution Described and Claimed in the “350 Patent
`
`
`
`VX2091 at 12.
`
`VX2091 at 12.
`
`__ 355
`
`/.
`
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`
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`
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`
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`
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`
`
`
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`
`VX2091 ¶ 19.
`
`VX2091 1] 19.
`
`\_
`
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`
`-Pantiumfx
`
`-. 5“ Pentium/y
`
`37.
`
`In this particular example, three discount values would be obtained
`
`VX2091 ¶ 37.
`
`from the database: (i) a 10% discount applicable to all CPUS; (ii) a 15% discount
`
`applicable to any 486 CPU; and (iii) a 25% discount applicable to the 486/x CPU.
`
`VX2091 1] 37.
`
`30
`
`
`
`. . .
`
`VX2091 at 12.
`
`VI.
`
`The Solution Described and Claimed in the “350 Patent
`
`VX2091 at 12.
`
`38. After obtaining the discount values, the pricing software then
`
`determines the price “according to the hierarchy.” That is, for example, the pricing
`
`software may “sort the pricing information according to
`
`the hierarchy of product
`
`groups,” SK 1001, 21:23—25, and “eliminate any of the pricing infonnatiou that is
`
`less restrictive,” SK 1001, 21:26-27. Doing this would result in the pricing
`
`VX2091 ¶ 38.
`
`software using the 25% discoimt by eliminating the 10% and 15% discotmts from
`
`the price calculation.
`
`VX2091 1] 38.
`
`31
`
`
`
`Case CBM2012-00001
`Patent 6,553,350
`Attorney Docket No: 09449.0025-00000
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that the foregoing PETITIONER SAP’S
`
`
`
`
`
`
`DEMONSTRATIVE EXHIBIT was served on April 15, 2013, to Nancy J. Linck
`
`and Martin M. Zoltick, Lead and Back-up Counsel for Versata, respectively, at the
`
`service e-mail address of VERSATA-PGR@rfem.com provided in Versata’s
`
`Mandatory Notices. The parties have agreed to electronic service.
`
`
`
` /Jacob T. Mersing/
`Jacob T. Mersing
`Legal Assistant
`FINNEGAN, HENDERSON,
`FARABOW, GARRETT &
`DUNNER, L.L.P.
`
`
`
`4
`
`
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