throbber

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`Trials@uspto.gov
`Tel: 571-272-7822
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`Paper 36
`Entered: May 11, 2017
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`WALGREEN CO., AHOLD USA, INC., DELHAIZE AMERICA, LLC,
`AND PUBLIX SUPER MARKETS, INC.,
`Petitioner,
`
`v.
`
`ADVANCED MARKETING SYSTEMS, LLC,
`Patent Owner.
`
`Case CBM2016-00012
`Patent 8,219,445 B2
`
`Before THOMAS L. GIANNETTI, TREVOR M. JEFFERSON, and
`MITCHELL G. WEATHERLY, Administrative Patent Judges.
`
`WEATHERLY, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a), 37 C.F.R. § 42.73
`
`I.
`
`INTRODUCTION
`
`A. BACKGROUND
`Walgreen Co., Ahold USA, Inc., Delhaize America, LLC, and Publix
`Super Markets, Inc. (collectively “Petitioner”) filed a petition (Paper 2,
`“Pet.”) requesting a covered business method patent review (“CBM review”)
`of claim 9 of U.S. Patent No. 8,219,445 B2 (Ex. 1001, “the ’445 patent”)
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`Patent 8,219,445 B2
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`pursuant to section 18 of the Leahy-Smith America Invents Act (“AIA”).
`Petitioner supported the Petition with the Declaration of Michael Lewis,
`Ph.D. (Ex. 1009). Advanced Marketing Systems, LLC (“Patent Owner”)
`timely filed a Preliminary Response. Paper 6 (“Prelim. Resp.”). On May
`13, 2016, based on the record before us at the time, we instituted a CBM
`review of claim 9. Paper 7 (“Institution Decision” or “Dec.”). We instituted
`the review on the following challenges to claim 9:
`
`Reference
`
`U.S. Patent No. 4,882,675 (Ex. 1007, “Nichtberger”)
`
`International Patent Publication No. WO 96/30851 A1
`(Ex. 1008, “Ovadia”)
`
`Basis
`
`§ 102(b)
`
`§ 102(b)
`
`After we instituted this review, Patent Owner filed a Patent Owner
`Response in opposition to the Petition (Paper 23, “PO Resp.”) that was
`supported by the Declaration of Steven R. Kursh, Ph.D. (Ex. 2015).
`Petitioner filed a Reply in support of the Petition (Paper 32, “Reply”).
`Patent Owner did not move to amend any claim of the ’445 patent. Neither
`party requested oral argument, and none was held.
`We have jurisdiction under 35 U.S.C. § 6(b). The evidentiary
`standard applicable to this proceeding is a preponderance of the evidence.
`See 35 U.S.C. § 326(e); 37 C.F.R. § 42.1(d). This Final Written Decision is
`issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.
`For the reasons expressed below, we conclude that Petitioner has
`demonstrated by a preponderance of evidence that claim 9 is unpatentable.
`B. RELATED PROCEEDINGS
`Patent Owner has asserted the ’445 patent along with related U.S.
`Patent Nos. 8,370,199 B2 (“the ’199 patent) and 8,538,805 B2 (“the
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`Patent 8,219,445 B2
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`’805 patent”) in the following district court proceedings: Advanced Mktg.
`Sys., LLC v. Walgreen Co., No. 6:15-cv-00137 (E.D. Tex.); Advanced Mktg.
`Sys., LLC v. Ahold USA, Inc., No. 1:15-cv-221 (E.D. Va.); Advanced Mktg.
`Sys., LLC v. Delhaize America, Inc., No. 2:15-cv-00074 (E.D. Va.); and
`Advanced Mktg. Sys., LLC v. Publix Super Markets, Inc., No. 3:15-cv-00247
`(M.D. Fla.). Pet. 1–2; Paper 5, 1. Patent Owner has also asserted the
`’445 patent, ’199 patent, and ’805 patent against other parties in the
`following district court proceedings: Advanced Mktg. Sys., LLC v. The
`Kroger Co., No. 3:14-cv-02065 (N.D. Tex.); Advanced Mktg. Sys., LLC v.
`Hy-Vee, Inc., No. 3:15-cv-00103 (W.D. Wis.); Advanced Mktg. Sys., LLC v.
`CVS Pharmacy, Inc., No. 6:15-cv-00134 (E.D. Tex.); Advanced Mktg. Sys.,
`LLC v. Brookshire Grocery Co., No. 6:15-cv-00138 (E.D. Tex.); and
`Advanced Mktg. Sys., LLC v. Ingles Markets Inc., No. 1:15-cv-00007 (W.D.
`Va.). Pet. 2; Paper 5, 2. Petitioner has concurrently filed a petition for CBM
`review of the ’805 patent in CBM2016-00013 and petitions for CBM review
`of the ’199 patent in CBM2016-00014 and -00015. Paper 5, 2.
`C. THE ’445 PATENT
`The ’445 patent issued from an application filed on January 28, 2009,
`and claims priority to a number of prior applications, the earliest of which
`was filed on February 19, 1998. Ex. 1001, 1:6–19. Two of the applications
`in the priority chain are described as continuations-in-part of prior
`applications. See id. Neither party addresses the priority date to which
`claim 9 is entitled. Nevertheless, both Nichtberger and Ovadia would
`qualify as prior art under 35 U.S.C. § 102(b) even if claim 9 were entitled to
`the priority date of February 19, 1998. See Ex. 1007 (issuing November 21,
`1989); Ex. 1008 (publishing October 3, 1996).
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`The ’445 patent relates to “a data processing system and method for
`implementing a customer incentive promotional program for enhancing
`retail sales of select products, such as groceries and the like.” Ex. 1001,
`1:24–27.
`Claim 9 recites:
`9. [a] A distributed discount vehicle for use with a data
`processing system for tracking and processing a plurality of in-
`store discounts to potential purchasers of plural products during
`the checkout process, wherein said discounts are each associated
`with a specific one of said plural products, said discount vehicle
`comprising:
`[b] two or more of said discounts including descriptive material
`to provide information at least identifying the products and
`their associated discounts, wherein
`[c] said vehicle is associated with exactly one select code that
`permits machine reading and tracking of said vehicle and
`of individual purchasers’ purchased products and the
`prices thereof during checkout,
`said select code uniquely identifying all the discounts for all
`of the plural products associated with said vehicle and
`reflecting at least one of varying discounts unique to a
`potential purchaser and identical discounts common to all
`potential purchasers, and
`[d] said select code uniquely identifying said vehicle such that
`said select code can be selectively deactivated for only
`particular discounts, of
`the plurality of discounts,
`associated with the purchased products by redemption of
`the code associated with the vehicle such that the code
`remains active for future use with yet unused ones of the
`plurality of discounts associated with said plural products.
`Id. at 11:46–12:3 (line breaks and subdivisions [a]–[d] used by Petitioner
`and added for clarity).
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`The Specification describes one example of the claimed “discount
`vehicle” as a “multi-discount vehicle” (“MDV”) in the form of freestanding
`insert 300 which is preferably distributed in a newspaper. Id. at 7:30–37.
`Freestanding insert 300 is illustrated in Figures 3A and 3B, which are
`reproduced below.
`
`Figure 3B is a rear view of the
`freestanding insert 300 of Figure 3A.
`
`Figure 3A is a front view of an MDV
`according to claim 9 in the form of
`freestanding insert 300.
`The Specification describes freestanding insert 300 as follows:
`[O]ne embodiment of the MDV is provided in the form of a
`freestanding insert (FSI) 300. The FSI may generally take the
`form of a folded sheets 310, 320, 330 unattached to each other
`(FIGS. 3a-c). Each sheet presents graphically displayed
`information, is folded or creased 352, and may include at least
`one advertisement or commercial 340 of a discounted product.
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`FSI is preferably placed in a newspaper for dissemination to
`potential customers.
`A redemption vehicle 312 is shown attached to one of the
`sheets, but may be attached to any of the sheets, in any position,
`may be printed on any portion, or may simply be loose and
`separate altogether. The redemption vehicle may include a
`barcode 360 or other readable medium, a description 314 of the
`discounted or sale-priced items, a picture or other representation
`318 of the items, and/or the price or discount 316 of the items.
`Id. at 7:30–45. The Specification also describes other physical forms of the
`“discount vehicle” as flat card 400, id. at 7:60, and folded card 500, id.
`at 8:16. Flat card 400 and folded card 500 also include “redemption
`vehicles” having barcodes 460, 560 and descriptions 414, 514. Id. at 7:59–
`8:36. But for the changes in reference numerals, the descriptions of the three
`embodiments of the “discount vehicle” are largely identical. See id. at 7:30–
`8:36.
`
`II. ANALYSIS
`A. WHETHER THE ’445 PATENT IS A COVERED BUSINESS METHOD
`PATENT
`A “covered business method patent,” as defined in the AIA, is “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, except that the term does not
`include patents for technological inventions.” AIA § 18(d)(1); accord
`37 C.F.R. § 42.301(a). In determining whether a patent is eligible for CBM
`patent review, the focus is on the claims. Secure Axcess, LLC v. PNC Bank
`Nat’l Ass’n, 848 F.3d 1370, 1379 (Fed. Cir. 2017) (“It is the claims, in the
`traditional patent law sense, properly understood in light of the written
`description, that identifies a CBM patent.”). One claim directed to a covered
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`business method is sufficient to render the patent eligible for CBM patent
`review. See id. at 1381 (“the statutory definition of a CBM patent requires
`that the patent have a claim that contains, however phrased, a financial
`activity element.”)
`1. Financial Product or Service
`Petitioner argues that the “discount vehicle” of claim 9 is financial in
`nature because it is used during a retail transaction as part of “a customer
`incentive promotional program for enhancing retail sales of select products,
`such as groceries and the like.” Pet. 5 (quoting Ex. 1001, 1:23–36). Patent
`Owner does not contest Petitioner’s argument on this issue, and we find
`Petitioner’s argument to be persuasive. Claim 9, while not a method claim,
`is directed to a “corresponding apparatus for performing data processing or
`other operations used in the practice, administration, or management of a
`financial product or service.” The Specification describes its invention as “a
`data processing system and method for implementing a customer incentive
`promotional program for enhancing retail sales of select products, such as
`groceries and the like.” Ex. 1001, 1:24–26. The Specification describes
`objectives of the invention and the manner in which the “discount vehicle” is
`an apparatus used to implement the “customer incentive promotional
`program for enhancing retail sales” as follows:
`It is a further object of the present invention to provide a
`promotion system for enhancing retail based distribution of
`goods through the use of a multi-product discount vehicle,
`selectively distributed to potential customers, via direct mail or
`newspaper insert.
`It is a further object of the present invention to provide a
`data processing system programmed to track redemptions of a
`specialized multi-product incentive vehicle, so as to insure
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`proper discounting against select products and coordinated
`fulfillment of the incentive-based transaction.
`The above and other objects of the present invention are
`realized in a novel data processing system operable with a
`specialized multi-product discount vehicle associated with a
`specified code. The multi-product discount vehicle has within its
`structure, a coordinated presentation of coupon-like indicia,
`coupled with graphics and text to draw customer attention to the
`salient features of the promoted products.
`Id. at 4:6–23. These portions of the Specification indicate that the “discount
`vehicle” is an apparatus used in conjunction with the provision of discounts
`applied to retail sales. Accordingly, we determine that claim 9, absent
`application of the exception for “technological inventions,” subjects the
`’445 patent to CBM review.
`2. Technological Invention Exception
`Before institution of trial, but not after institution, Patent Owner
`argued that claim 9 recites a technological invention that is exempt from
`CBM patent review. Prelim. Resp. 4–8; see generally PO Resp. (not
`addressing eligibility of ’445 patent for CBM review).
`Patents subject to CBM patent review “do[] not include patents for
`technological inventions.” AIA § 18(d)(1); accord 37 C.F.R. § 42.301(a).
`The technological invention exception in the definition of a covered business
`method patent is not met by “[m]ere recitation of known technologies, such
`as computer hardware, . . . or specialized machines, such as an ATM or point
`of sale device,” or “[c]ombining 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). To
`determine whether a patent is for a technological invention, we consider
`“whether the claimed subject matter as a whole”: (1) “recites a technological
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`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); see
`CBM Final Rules, at 48,736. Both the first and second prong must be met
`for the technological invention exception to apply. Agilysys, Inc. v.
`Ameranth, Inc., Case CBM2014-00014, slip op. at 11 (PTAB Mar. 26, 2014)
`(Paper 19); see Google Inc. v. Inventor Holdings, LLC, Case CBM2014-
`00002, slip op. at 10 (PTAB Apr. 1, 2014) (Paper 16); 157 Cong. Rec. S1364
`(daily ed. Mar. 8, 2011) (statement of Sen. Schumer).
`Petitioner argues that because claim 9 encompasses a paper coupon as
`described in the Specification, claim 9 “is in no way technical.” Pet. 13.
`Before institution of trial, Patent Owner countered that claim 9, when
`“viewed as a whole,” recites novel and unobvious technological features that
`solve a technical problem using a technical solution. Prelim. Resp. 4–8.
`Nevertheless, Patent Owner fails to identify how the recited “discount
`vehicle” encompasses a single feature that is “technological” or how the
`“discount vehicle” provides any technical solution to a technical problem.
`Id. Patent Owner contends that the inventors of the ’445 patent “invented a
`solution rooted in computer technology to overcome a problem specifically
`arising in the realm of computer networks.” Id. at 7. However, Patent
`Owner cites no particular part of claim 9 or evidentiary support for its
`contention that the “discount vehicle” of claim 9 recites anything other than
`the vehicle itself. Id. at 4–8. After institution of trial, Patent Owner did not
`argue that the ’445 patent was not eligible for CBM review.
`As explained in part II.B.1 below, we determine that claim 9 recites a
`“discount vehicle” bearing a “select code” that is intended to be read by
`scanning equipment and used by a “data processing system” to determine
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`how to provide a discount to a potential purchaser of products “during the
`checkout process.” Nevertheless, claim 9 encompasses none of the devices
`used to scan and process the select code. Instead, claim 9 encompasses the
`discount vehicle itself and the markings that make it compatible with the
`unclaimed “data processing system” and the unclaimed “machine” that is
`able to read the select code. Accordingly, Petitioner persuades us that the
`technological exception does not apply to the ’445 patent.
`3. Summary
`For the reasons expressed above, we find that at least claim 9 renders
`the ’445 patent subject to CBM review.
`B. CLAIM INTERPRETATION
`“A claim in an unexpired patent shall be given its broadest reasonable
`construction in light of the specification of the patent in which it appears.”
`37 C.F.R. § 42.200(b); see also Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct.
`2131, 2142 (2016) (affirming that USPTO has statutory authority to construe
`claims according to similarly written Rule 42.100(b)). When applying that
`standard, we interpret the claim language as it would be understood by one
`of ordinary skill in the art in light of the specification, and absent any special
`definition, we give claim terms their ordinary and customary meaning. See
`In re Suitco Surface, Inc., 603 F.3d 1255, 1260 (Fed. Cir. 2010); In re
`Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007) (“The ordinary
`and customary meaning is the meaning that the term would have to a person
`of ordinary skill in the art in question.” (internal quotation marks omitted)).
`Only terms which are in controversy need to be construed, and then only to
`the extent necessary to resolve the controversy. See Vivid Techs., Inc. v. Am.
`Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999). Based on the
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`arguments and evidence adduced by the parties, we interpret various aspects
`of claim 9 as discussed below.
`1. Elements of the “discount vehicle”
`Claim 9 affirmatively recites a “discount vehicle” (e.g., multi-discount
`vehicles (“MDV”) 300, 400, 500) having only two physical elements.
`Namely, claim 9 recites a first physical element of “descriptive material”
`that provides information identifying products (e.g., descriptions 314, 414,
`514 and pictures 318, 418, 518) and associated discounts (e.g., discounts
`316, 416, 516), and second physical element of a “select code” (e.g.,
`barcodes 360, 460, 560). Among other things, the “select code” identifies
`“all the discounts” for all the products. Ex. 1001, 7:30–8:48.
`The claim also recites certain functional capabilities of the discount
`vehicle. For example, the “discount vehicle” is identified as being “for use
`with a data processing system” and the “select code” appearing on the
`discount vehicle “permits machine reading and tracking of said vehicle.” Id.
`at 11:46–12:3. Nevertheless, claim 9, by its plain terms, does not encompass
`the “data processing system” or the “machine” that may read the select code.
`Id.
`
`2. Whether the “discount vehicle” encompasses a website or
`mobile application
`Before trial was instituted, the parties’ competing interpretations of
`“discount vehicle” in claim 9 focused on whether the term narrowly covers
`only paper versions of the vehicle, like those explicitly described in the
`Specification, Pet. 20–26, or more broadly also covers “a website, or a
`mobile application,” Prelim. Resp. 9–16. In our Institution Decision, we did
`not resolve this dispute because Petitioner had demonstrated that claim 9
`was more likely than not anticipated by the paper discount vehicles
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`described by each of Nichtberger and Ovadia. Dec. 8. Based on the record
`before us, we conclude that we still need not resolve this specific dispute
`because Petitioner has demonstrated, by a preponderance of evidence, that
`the paper-based discount vehicles described by each of Nichtberger and
`Ovadia anticipate claim 9.
`3. “select code can be selectively deactivated for only particular
`discounts”
`Claim 9 recites that the “select code can be selectively deactivated for
`only particular discounts . . . by redemption of the code associated with the
`vehicle.” Ex. 1001, 11:64–67. The claim also requires that after such
`selective deactivation of the select code, “the code remains active for future
`use with yet unused” discounts. Id. at 12:1–3. This portion of the claim
`does not expressly state (1) who or what selectively deactivates the select
`code or (2) that the select code is altered when it is “selectively deactivated.”
`Id. at 11:46–12:3.
`The Specification sheds light on the meaning of “selectively
`deactivated” when it describes the process of selectively deactivating the
`select code as follows:
`At check-out, the super market employs conventional
`scanning equipment to read both the MDV and the products
`selected by the customer for purchase. The scanning equipment
`is connected to a computer that compares the purchases with a
`file storing information regarding the products promoted with the
`MDV. This comparison is facilitated by the unique identifier
`provided on the MDV, which comports the promotion to the
`stored file. As promoted items listed on the MDV are scanned
`during checkout, the system flags these items as purchased and
`applies the discount to the price provided to the customer. The
`computer may thereafter deactivate the promotion for that
`product to insure that the MDV is not used again to duplicate the
`discount for the purchased items. The MDV, however, remains
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`active to the extent promoted items were not purchased by the
`customer during this or previous shopping visits, and the time
`period set for the promotion has not expired (typically 45 to 90
`days). This, of course, allows the customer to return to the store
`with the MDV and to take advantage of the remaining
`promotions on the MDV that have not been used.
`Id. at 10:13–32 (emphasis added). This passage indicates that the barcode
`(i.e., “select code”) on the discount vehicle is not modified during the
`process of selectively deactivating the select code for only those products for
`which the customer has redeemed the code and received a discount. Instead,
`a computer modifies a “file storing information regarding the products
`promoted” with the discount vehicle to deactivate the code regarding the
`discount associated with a purchased item while leaving the code active for
`the discounts associated with the promoted items not yet purchased.
`As we have already noted, claim 9 expressly covers only the discount
`vehicle itself. Accordingly, from the foregoing, we determine that claim 9
`neither (1) encompasses the computer that modifies the file (i.e., the recited
`“data processing system”) or the modified file itself, nor (2) requires that the
`select code on the discount vehicle be altered.
`4. “during the checkout process”
`At trial, Patent Owner argues that “all of the terms utilized in the
`preamble are limiting with respect to this claim.” PO Resp. 3. Specifically,
`Patent Owner argues that the term “during the checkout process” recited in
`the preamble limits the “structure and intended purpose” of the discount
`vehicle recited in the body of the claim, such that the discount vehicle must
`be “selectively deactivated” during checkout.1 Id. at 3–4.
`
`1 Patent Owner fails to identify any persuasive evidence that other terms in
`the preamble have limiting effect. See PO Resp. 3–9 (specifically
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`Patent Owner’s argument that neither Nichtberger nor Ovadia
`anticipates claim 9 relies in part upon its contention that selective
`deactivation of discounts must occur during checkout and not later. See id.
`at 41–53 (regarding Nichtberger), 54–61 (regarding Ovadia). Petitioner
`argues, in response, that Patent Owner’s interpretation of the limiting effect
`on the claim of reciting “during the checkout process” in the preamble is
`wrong for two reasons. First, Petitioner argues that reciting “during the
`checkout process” does not limit the scope of claim 9 at all. Reply 2–5.
`Second, Petitioner asserts that reciting “during the checkout process” does
`not limit when the “select code” can be “selectively deactivated.” Id. at 5–
`12. For the reasons expressed below, we agree with Petitioner on both
`arguments.
`Petitioner persuasively argues that we should apply the general rule
`that a preamble which merely recites an intended purpose for an apparatus
`does not limit the apparatus. Reply 2–3. The preamble of claim 9 recites, in
`pertinent part, a “distributed discount vehicle for use with a data processing
`system for tracking and processing a plurality of in-store discounts to
`potential purchasers of plural products during the checkout process.”
`Ex. 1001, 11:46–49. By its plain terms, the phrase “during the checkout
`process” modifies “for tracking and processing,” which in turn modifies the
`“data processing system.”
`As explained in Part II.B.1 above, claim 9 is directed to a “discount
`vehicle” and not to the “data processing system” that is recited in the
`preamble of claim 9. By its plain terms, therefore, at best, “during the
`
`
`addressing only “during the checkout process” from among phrases recited
`in the preamble).
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`checkout process” describes an intended use of the unclaimed “data
`processing system,” namely, by stating when that system is intended to
`perform “tracking and processing . . . of in-store discounts.”
`For the same reasons, even if we were to accept Patent Owner’s
`argument that “during the checkout process” is limiting, the limitation would
`relate to when the unclaimed “data processing system” tracks and processes
`discounts, and not to when the “select code” was “selectively deactivated”
`for particular discounts. As Patent Owner acknowledges, the Specification
`describes a “computer” that deactivates discounts after the items are scanned
`and purchased, as follows:
`As promoted items listed on the MDV are scanned during
`checkout, the system flags these items as purchased and applies
`a discount to the price provided to the customer. The computer
`may thereafter deactivate the promotion for that product to insure
`that the MDV is not used again to duplicate the discount for the
`purchased item. The MDV, however, remains active to the extent
`promoted items were not purchased by the customer during this
`or previous shopping visits, and the time period set for the
`promotion has not expired (typically 45 to 90 days).
`PO Resp. 7 (quoting Ex. 1001, 10:20–29) (emphasis added). This portion of
`the Specification describes two events occurring “[a]s promoted items listed
`on the MDV are scanned during checkout,” namely, flagging items as
`purchased and applying a discount to the price. This passage also indicates
`that the data processing system with which the discount vehicle is used (i.e.,
`the computer) may “thereafter deactivate” discounts. Thus, the Specification
`makes it clear that selective deactivation need not occur during checkout, as
`argued by Patent Owner, but may occur “thereafter.”
`Patent Owner also cites three other portions of the Specification as
`describing “what occurs during checkout,” but those portions fail to
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`demonstrate that deactivation must occur “during the checkout process.”
`See id. at 4 (citing Ex. 1001, 4:43–47, 4:56–58, 5:1–9). The first and third
`cited portions describe the checkout process as using a Point-Of-Sale
`(“POS”) processor that may include a barcode reader and as involving “data
`processing performed locally within the retail outlet and/or remotely via
`network connections.” Ex. 1001, 4:43–47, 5:1–9. The second cited portion
`explains that the discount vehicle may include “coded data located in
`separate locations [other than a “single code”] for reading during the check-
`out process.” Id. at 4:56–58.
`We are not persuaded that these cited portions of the Specification
`support Patent Owner’s argument because none demonstrates that “during
`the checkout process” as recited in the preamble is intended to limit the
`structure of the discount vehicle itself. Accordingly, based on our review of
`the record before us, and for the foregoing reasons, we determine that the
`term “during the checkout process” recited in the preamble does not limit the
`“discount vehicle” of claim 9 in the way asserted by Patent Owner.
`5. “during checkout”
`Similar to its argument based on the preamble of claim 9, Patent
`Owner asserts that “during checkout” as recited in the body of claim 9 limits
`the time at which the select code must be selectively deactivated. E.g., PO
`Resp. 43. For the following reasons, we disagree.
`Patent Owner’s argument is contradicted by the plain language of the
`claim and is, therefore, not persuasive. Claim 9 recites, in pertinent part:
`“said vehicle is associated with exactly one select code that permits machine
`reading and tracking of said vehicle and of individual purchasers’ purchased
`products and the prices thereof during checkout.” Ex. 1001, 11:54–58
`
`16
`
`

`

`CBM2016-00012
`Patent 8,219,445 B2
`
`(emphasis added). Here, the phrase “during checkout” describes an intended
`function of the “select code.” More specifically, “during checkout,” the
`code must permit “reading” by an unclaimed “machine” such as a barcode
`reader and “tracking of said vehicle” by the unclaimed data processing
`system. The code must also permit “tracking . . . of individual purchasers’
`purchased products and the prices thereof.”
`Patent Owner does not persuasively demonstrate why the limitation
`on “reading and tracking . . . during checkout” also limits the point in time
`when the “select code” must be “selectively deactivated.” This separate
`operation is described in another clause of claim 9, providing a different
`functional capability of the select code. See Part II.B.3 above (analyzing the
`phrase in claim 9 that recites “selectively deactivated”). For all these
`reasons, we determine that “during checkout” as recited in the body of claim
`9 does not limit the “select code” such that it must be “selectively
`deactivated” during checkout.
`
`C. THE PARTIES’ POST-INSTITUTION ARGUMENTS
`In our Institution Decision, we concluded that the argument and
`evidence adduced by Petitioner demonstrated more likely than not that
`claim 9 was unpatentable as anticipated by each of Nichtberger and Ovadia.
`Dec. 19–25. We must now determine whether, on the entire record before
`us, Petitioner has established by a preponderance of the evidence that claim
`9 is unpatentable. 35 U.S.C. § 326(e). In this connection, we previously
`instructed Patent Owner that “any arguments for patentability not raised in
`the [Patent Owner Response] will be deemed waived.” Paper 8, 5–6. See In
`re Nuvasive, Inc., 842 F.3d 1376, 1380 (Fed. Cir. 2016) (failure to address
`issue raised in preliminary response during trial held to be a waiver).
`
`17
`
`

`

`CBM2016-00012
`Patent 8,219,445 B2
`
`Additionally, the Board’s Trial Practice Guide states that the Patent Owner
`Response “should identify all the involved claims that are believed to be
`patentable and state the basis for that belief.” Office Patent Trial Practice
`Guide, 77 Fed. Reg. 48,756, 48,766 (Aug. 14, 2012).
`D. THE CHALLENGES TO CLAIM 9
`To prevail in its challenges to the patentability of claim 9, Petitioner
`must establish facts supporting its challenges by a preponderance of the
`evidence. 35 U.S.C. § 326(e); 37 C.F.R. § 42.1(d). In proceedings under the
`AIA, “the petitioner has the burden from the onset to show with particularity
`why the patent it challenges is unpatentable.” See Harmonic Inc. v. Avid
`Tech., Inc., 815 F.3d 1356, 1363 (Fed. Cir. 2016) (citing 35 U.S.C.
`§ 312(a)(3) (requiring inter partes review petitions to identify “with
`particularity . . . the evidence that supports the grounds for the challenge to
`each claim”)). This burden never shifts to Patent Owner. See Dynamic
`Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1378 (Fed. Cir.
`2015) (citing Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1326–
`27 (Fed. Cir. 2008)) (discussing the burden of proof in AIA proceedings).
`“A claim is anticipated only if each and every element as set forth in
`the claim is found, either expressly or inherently described, in a single prior
`art reference.” Verdegaal Bros., Inc. v. Union Oil Co. of Cal., 814 F.2d 628,
`631 (Fed. Cir. 1987). With this standard in mind, we address each challenge
`below.
`
`1. Anticipation by Nichtberger
`Petitioner argues that Nichtberger anticipates claim 9. Pet. 43–61.
`For the reasons expressed below, we determine that Petitioner has
`
`18
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`

`

`CBM2016-00012
`Patent 8,219,445 B2
`
`demonstrated by a preponderance of evidence that Nichtberger anticipates
`claim 9.
`
`a) Overview of Nichtberger
`Nichtberger describes a system in which “[c]ents-off merchandise
`coupons are distributed and redeemed immediately and electronically.”
`Ex. 1007, Abstract. The hub of Nichtberger’s system is a “local coupon
`distribution and redemption (CDR) unit 20.” See, e.g., id. at 5:1–4, Figs. 1,
`5. CDR 20 is located in a store and presents information about available
`discounts to customers who may select one or more of the discounts as being
`of interest. E.g., id. at 5:4–16. After selection, CDR 20 print

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