Trials@uspto.gov
`571-272-7822
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` Paper 81
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`Entered: September 13, 2013
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
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`SAP AMERICA, INC.
`Petitioner,
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`v.
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`VERSATA DEVELOPMENT GROUP, INC.
`Patent Owner.
`____________
`
`Case CBM2012-00001
`Patent 6,553,350
`____________
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`
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`Before SALLY C. MEDLEY, MICHAEL P. TIERNEY, and RAMA G. ELLURU,
`Administrative Patent Judges.
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`MEDLEY, Administrative Patent Judge.
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`
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`DECISION
`Request for Rehearing
`37 C.F.R. § 42.71(d)
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`Case CBM2012-00001
`Patent 6,553,350
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`I. INTRODUCTION
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`Versata requests rehearing (Paper 71, Rehearing Req.) of the Final Written
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`Decision (Paper 70, Final Decision) cancelling Versata’s claims 17 and 26-29 of
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`U.S. Patent 6,553,350 (the ’350 patent) as unpatentable under 35 U.S.C. § 101.
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`Rehearing Req. 1. SAP filed an opposition (Paper 74, Opposition).1 The request
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`for rehearing is denied.
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`A. Summary of the Final Decision
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`In the Final Decision, the Board explained that the broadest reasonable
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`interpretation standard is the claim construction standard for post-grant reviews.
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`Final Decision 7-19. The Board construed Versata’s claims, applying the broadest
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`reasonable interpretation standard. Id. 19-24. The Board held that Versata’s
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`claims 17 and 26-29 are unpatentable under 35 U.S.C. § 101. Id. 34.
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`B. Summary of Rehearing Request
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`According to Versata, the Board misapprehended or overlooked that (1) the
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`’350 patent is not a “covered business method patent”; (2) claim and issue
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`preclusion bar the post-grant review initiated by SAP; (3) 35 U.S.C. § 101 is not a
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`permissible basis for review; (4) the broadest reasonable interpretation standard is
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`not the proper standard for interpreting the claims in the review; (5) even if the
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`broadest reasonable interpretation standard applies, the Board’s claim
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`constructions are unreasonable; and (6) claims 17 and 26-29 of the ’350 patent
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`recite patent eligible subject matter. Rehearing Req. 1. Versata requests that the
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`Board vacate the Final Decision and/or terminate the proceeding. Id. 15.
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`1 The Board authorized SAP to file an opposition for the limited purpose of
`addressing whether two recent Federal Circuit decisions impact the Board’s Final
`Decision. Paper 73.
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`2
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`Case CBM2012-00001
`Patent 6,553,350
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`II. ANAYLSIS
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`Versata raised issues (1)-(3), supra, in its Preliminary Response (Paper 29,
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`Prelim. Resp.). However, Versata did not identify or maintain any of those issues
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`once the trial was instituted. For example, Versata did not raise issues (1)-(3) in its
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`Patent Owner Response (Paper 51, PO Resp.), and both the Board and SAP
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`understood that Versata waived issues (1)-(3). Ex. 2098 at 8:13-9:2. SAP relied
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`on Versata’s representation that it waived issues not discussed in Versata’s Patent
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`Owner Response. In so doing, SAP did not respond to or address issues (1)-(3) in
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`its Petitioner Reply. Paper 58 at 1 (n. 1), Reply.
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`A request for rehearing of a final decision is not an opportunity for a party to
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`raise issues that were waived. We find Georgia Pacific Consumer Products, LP, et
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`al., v. Von Drehle Corporation, et al., 710 F.3d 527,533-534 (Fed. Cir. 2013),
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`instructional on the issue, and quote from that opinion here:
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`Under Rule 8(c)(1) of the Federal Rules of Civil Procedure, the
`defenses of claim preclusion and issue preclusion are affirmative
`defenses that must be pleaded. Blonder-Tongue Labs., Inc. v. Univ. of
`Ill. Found, 402 U.S. 313, 350 (1971) (citing Fed. R. Civ. P. 8(c)). A
`party may be held to have waived such preclusion defenses when that
`party has not properly and timely asserted them. See Arizona v.
`California, 530 U.S. 392, 410 (2000) (“[R]es judicata [is] an
`affirmative defense [that is] ordinarily lost if not timely raised.”); see
`also Mun. Resale Serv. Customers v. FERS, 43 F.3d 1046, 1052 n.4
`(6th Cir. 1995) (“Res judicata and collateral estoppel are affirmative
`defenses which are waived if not timely asserted.”).
`Even when a preclusion defense is not available at the outset of
`a case, a party may waive such a defense arising during the course of
`litigation by waiting too long to assert the defense after it becomes
`available. See Arizona, 530 U.S. at 413 (holding that party could not
`raise preclusion as a defense when party could have raised the defense
`earlier but did not, “despite ample opportunity and cause to do so”);
`Davignon v. Clemmey, 322 F.3d 1, 15 (1st Cir. 2003) (holding that
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`district court abused its discretion by allowing defendant to assert
`preclusion defense “at the eleventh hour.”)
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`The Board determines that it would not be just or efficient to consider issues
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`(1)-(3) (issues that Versata waived) at this stage, after completion of briefing and
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`after a final decision has been rendered. Accordingly, we need not, and will not,
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`address Versata’s arguments directed to items (1)-(3).2
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`Versata argues that the broadest reasonable interpretation (BRI) standard is
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`an examination tool, citing In re Skvorecz, 580 F.3d 1262, 1267-68 (Fed. Cir.
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`2009), and that none of the authority cited by the Board stands for the proposition
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`that BRI is “substantive law applicable in any proceeding at the PTO.” Rehearing
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`Req. 6-7. Contrary to Versata’s assertions, the Board did cite to authority that
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`supports the Board’s position that the broadest reasonable interpretation standard
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`applies in inter partes proceedings at the PTO. Final Decision 9, citing In re
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`Yamamoto, 740 F.2d 1569 (Fed. Cir. 1984).
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`We also are not persuaded that the Final Decision overlooked Versata’s
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`arguments that the promulgation of substantive Rule 42.300(b) exceeded the
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`PTO’s procedural rulemaking authority by imposing substantive legal
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`requirements. Rehearing Req. 7. The Final Decision addressed Versata’s
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`arguments in that regard, explaining that “the AIA has provided the Office with
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`new statutory and rulemaking authority, particularly with respect to post-grant
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`2 To the extent that Versata “raised” claim and issue preclusion again, during the
`Trial (see Rehearing Req. 5:4-7), the Board determined that the issue was not an
`issue for trial. For example, once a trial is instituted, the Patent Trial and Appeal
`Board shall issue a final written decision with respect to the patentability of any
`patent claim challenged by the petitioner. 35 U.S.C. § 328. To make such a
`determination, the Petitioner need not be a party. Therefore, the defense of issue
`and claim preclusion would have no effect on the Board’s statutory duty to
`determine patentability.
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`reviews, including covered business method patent reviews. See, e.g., Title 35,
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`Chapter 32.” Final Decision 11 (footnote omitted). Versata disagrees with the
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`Final Decision’s explanation in that regard. Rehearing Req. 7-8. A request for
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`rehearing is not an opportunity to express disagreement with a decision. The
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`proper course for Versata is to appeal, not to file a request for rehearing to re-argue
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`issues that already have been decided. See 35 U.S.C. § 329.
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`Versata argues that the new AIA reviews are trials, not examinations,
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`reexaminations, or reissues, and that, therefore, it was improper for the Board to
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`look to authority addressing the claim construction standard for examinations,
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`reexaminations, or reissues. Rehearing Req. 8. We are not persuaded by this
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`argument. Again, Versata merely disagrees with the Final Decision, which is not
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`the proper basis for rehearing. In any event, we disagree that broadest reasonable
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`interpretation should not apply to proceedings such as the one before us, as we
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`explained in the Final Decision. In particular, the Board explained how the
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`legislative history, for example, supports the adoption of the broadest reasonable
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`interpretation standard in post-grant reviews. Final Decision 16, citing to 157
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`Cong. Rec. S1375 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl).
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`We are not persuaded by Versata’s argument that post-grant review
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`proceedings are district-court-like trials. Versata reasons that because post-grant
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`review proceedings are district-court-like trials, the claim construction standard
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`enunciated in Phillips v. AHW Corp., 415 F.3d 1303 (Fed. Cir. 2005) should apply.
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`Rehearing Req. 8-9. We disagree with Versata that post-grant review proceedings
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`are district-court-like trials. As set forth per 35 U.S.C. § 328(a), the Patent Trial
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`and Appeal Board shall issue a final written decision with respect to the
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`patentability of any patent claim challenged by the petitioner and any new claim
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`added under § 326(d). Nothing in 35 U.S.C. § 328(a) suggests that a petitioner
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`must be a party for the Board to issue a final written decision, or that the Board is
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`limited in its patentability determination only to consider those issues raised by a
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`petitioner. For at least this reason, post-grant review proceedings are not like
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`district court trials.
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`Versata argues that stare decisis requires that the Board apply the district
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`court’s claim construction. Rehearing Req. 10. The Board did not misapprehend
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`or overlook this argument. Indeed, we addressed this argument. Final
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`Decision 18. Versata’s argument is unavailing for the same reasons we provided
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`in the Final Decision.
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`Versata argues that, even assuming that the broadest reasonable
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`interpretation standard applies, the Final Decision misapprehends or overlooks the
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`broadest reasonable interpretation of Versata’s ’350 claims 17 and 26-29.
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`Rehearing Req. 11. In particular, Versata argues that claim 17 requires that the
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`sorting step is performed after the retrieving step, and that claims 17 and 26-29,
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`when read in light of the specification, require the use of denormalized numbers,
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`that SAP agreed to this interpretation as the broadest reasonable interpretation, and
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`that the Board overlooked SAP’s acknowledgement in that regard. Rehearing
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`Req. 11. The Board disagrees with Versata’s characterization of SAP’s
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`“acknowledgment.” Rather, SAP agreed with the Board that the claims do not
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`require the use of denormalized numbers. Final Decision 23, Reply 17.
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`Moreover, the Final Decision, at pages 19-24, explains in detail the Board’s claim
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`construction. In its rehearing request, Versata merely disagrees with our
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`construction, but has not shown how we misapprehended or overlooked any
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`arguments made.
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`Versata argues that claims 17 and 26-29 of the ’350 patent recite patent-
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`eligible subject matter under 35 U.S.C. § 101, and that the Board was incorrect to
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`Patent 6,553,350
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`conclude otherwise. Rehearing Req. 12. First, Versata argues that the Board
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`found that the ’350 patent claims contain two abstract ideas, and that no precedent
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`exists where claims with multiple abstract ideas were found unpatentable. Id. 12.
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`Versata does not direct us to where it raised this argument previously. We could
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`not have overlooked or misapprehended an argument that is made for the first time
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`in a rehearing request. Moreover, Versata does not explain, in any meaningful
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`way, why a claim having more than one abstract idea becomes patent-eligible
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`simply because the claim recites more than one abstract idea. While the Board did
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`identify the concept of organizational hierarchies for products and customers as an
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`abstract concept, and characterized determining a price as “also abstract” (Final
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`Decision 29), we agree with SAP that breaking a single abstract idea into two
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`concepts does not limit meaningfully a claim to a patentable application
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`(Opposition 4-5). Versata has not directed us to authority that suggests otherwise.
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`Next, Versata argues that the Board misapprehended or overlooked the
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`requirement that the claims be considered as a whole, for example, by addressing
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`the claimed subject matter in each of the specific steps of storing, retrieving,
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`sorting, eliminating, and determining of claim 17. Rehearing Req. 13. The Board
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`did not misapprehend or overlook this requirement. It is clear from the Final
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`Decision that the Board did consider the claims as a whole. Final Decision 31-33.
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`Versata argues that the Board misapprehended or overlooked the
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`significance of the computer hardware limitations that are included in the claims
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`and applied the wrong analysis in determining whether the claim limitations are
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`meaningful, citing the Federal Circuit’s decision in Ultramercial, Inc. v. Hulu,
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`LLC, No. 2010-1544, 2013 U.S. App. LEXIS 12715 (Fed. Cir. 2013). Rehearing
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`Req. 13-14. Ultramercial was decided after the Board’s Final Decision, and
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`therefore was not discussed per se. However, the Final Decision did take into
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`account Versata’s arguments regarding the significance of “the computer hardware
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`limitations” in the claims. Final Decision at 29-30. We agree with SAP
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`(Opposition 5) that the use of an unspecified computer in Versata’s claims does not
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`make the ’350 patent claims patentable, either before or after Ultramercial. As we
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`stated in our Final Decision, “claims do not become patentable under § 101 simply
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`for reciting a computer element.” Final Decision 29 (citing Gottschalk v. Benson,
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`409 U.S. 63, 68 (1972)). The Final Decision explained in detail why Versata’s
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`claimed invention did not recite anything more than “general purpose computer
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`hardware.” Id. 30. The Ultramercial decision, therefore, does not warrant
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`granting Versata’s rehearing request.
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`Lastly, Versata argues that the Board overlooked that the challenged claims
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`are limited to a specific way of pricing products and do not preempt all practical
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`uses of the alleged abstract idea. Rehearing Req. 15. This argument is based on
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`Versata’s disagreement with the Final Decision that Versata’s claims add
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`insignificant, conventional, and routine steps that are implicit in the abstract idea
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`itself (Final Decision 31-33). However, as stated previously, mere disagreement
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`with a decision is not the proper basis for rehearing. Versata’s argument is
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`unavailing for the same reasons we provided in the Final Decision.
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`Versata’s request for rehearing is denied.
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`Case CBM2012-00001
`Patent 6,553,350
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`PETITIONER:
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`Erika Arner
`Finnegan, Henderson
` Farabow, Garrett & Dunner, LLP
`SAP-PGR@finnegan.com
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`and
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`J. Steven Baughman
`Ropes & Gray, LLP
`Steven.baughman@ropesgray.com
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`PATENT OWNER:
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`Nancy Linck
`Martin Zoltick
`Rothwell, Figg, Ernst & Manbeck, PC
`nlinck@rfem.com
`mzoltick@rfem.com
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