Trials@uspto.gov
`571.272.7822
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`Paper No. 8
`Filed: August 2, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SALLY BEAUTY HOLDINGS, INC., SALLY BEAUTY SUPPLY LLC,
`SALLY HOLDINGS LLC, SALLY INVESTMENT HOLDINGS LLC, and
`BEAUTY SYSTEMS GROUP LLC
`Petitioner,
`
`v.
`
`INTELLECTUAL VENTURES I LLC,
`Patent Owner.
`_______________
`
`Case CBM2016-00030
`Patent RE43,715
`_______________
`
`
`
`Before KARL D. EASTHOM, KEVIN F. TURNER, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`
`TURNER, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
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`571.272.7822
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`Paper No. 8
`Filed: August 2, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SALLY BEAUTY HOLDINGS, INC., SALLY BEAUTY SUPPLY LLC,
`SALLY HOLDINGS LLC, SALLY INVESTMENT HOLDINGS LLC, and
`BEAUTY SYSTEMS GROUP LLC
`Petitioner,
`
`v.
`
`INTELLECTUAL VENTURES I LLC,
`Patent Owner.
`_______________
`
`Case CBM2016-00030
`Patent RE43,715
`_______________
`
`
`
`Before KARL D. EASTHOM, KEVIN F. TURNER, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`
`TURNER, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`CBM2016-00030
`Patent RE43,715
`
`
`I. INTRODUCTION
`A. Background
`Sally Beauty Holdings, Inc., Sally Beauty Supply LLC, Sally Holdings
`LLC, Sally Investment Holdings LLC, and Beauty Systems Group LLC
`(“Petitioner”) filed a Petition (Paper 1, “Pet.”) requesting a review under the
`transitional program for covered business method patents of U.S. Patent No.
`RE43,715 (Ex. 1001, “the ’715 Patent”). Intellectual Ventures I LLC (“Patent
`Owner”) filed a Preliminary Response (Paper 6, “Prelim. Resp.”). We have
`jurisdiction under 35 U.S.C. § 324.
`The standard for instituting a covered business method patent review is
`set forth in 35 U.S.C. § 324(a), which provides as follows:
`THRESHOLD.—The Director may not authorize a post-grant
`review to be instituted unless the Director determines that the
`information presented in the petition filed under section 321, if
`such information is not rebutted, would demonstrate that it is more
`likely than not that at least 1 of the claims challenged in the petition
`is unpatentable.
`Petitioner challenges the patentability of claims 1–50 of the ’715 Patent
`
`under 35 U.S.C. §§ 101, 103, and 112. Patent Owner has disclaimed claim 1–
`19 (Ex. 2011), such that claims 20–50 (“the challenged claims”) remain to be
`challenged in the instant proceeding. .
`Taking into account Patent Owner’s Preliminary Response, we
`determine that the Petition does not demonstrate that the ’715 Patent is a
`covered business method patent. Pursuant to 35 U.S.C. § 324, we decline to
`institute a covered business method patent review of the challenged claims of
`the ’715 Patent.
`
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`2
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`CBM2016-00030
`Patent RE43,715
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`B. Related Matters
`The parties inform us that the ’715 Patent is the subject of the following
`lawsuit: Intellectual Ventures I LLC et al. v. Sally Beauty Holdings, Inc. et
`al., Case No. 2-15-cv-001414 (E.D. Tex.). Pet. 3; Paper 4, 1.
`C. The ’715 Patent
`The ’715 Patent is a reissue of U.S. Patent No. 6,941,376, issued
`September 6, 2005, with the patent being reissued October 2, 2012. Petitioner
`supplies the file histories for both patents. Exs. 1003, 1004. The ’715 Patent
`relates to integrating public data and private data to form integrated data, and
`delivering the integrated data to a user system. Ex. 1001, Abs. The ’715
`Patent asserts that the prior art computer networking architecture did not
`sufficiently allow an individual to access and view both public and private
`data simultaneously. Id. at 2:5–8. The ’715 Patent then explains that
`“viewing combinations of public and private data usually includes jumping
`between two or more websites, viewing only one at a time, or using two
`separate digital viewing devices, such as two computer screens.” Id. at 2:8–
`12. The ’715 Patent attempts to create a new computer networking
`architecture by connecting computer hardware and software elements in a
`unique architecture with specifically defined inter-relationships that enable the
`new computer networking architecture to integrate and deliver public and
`private data to a user. Id. at 6:26-49.
`D. Illustrative Claim
`Claims 20, 35, and 41 are independent, claim 1 is considered
`
`representative of the claims challenged, and claim 1 is reproduced below:
`20. A method of integrating and delivering data available over a
`network, said method including the steps of:
`
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`3
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`CBM2016-00030
`Patent RE43,715
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`acquiring public data from at least one publicly available data store
`coupled to said network, wherein said public data is determined
`by private data;
`acquiring said private data from at least one private data store
`coupled to said network;
`integrating said public data and said private data to form integrated
`data; and
`delivering said integrated data to a user system.
`Id. at 15:7–16.
`
`Evidence of Record
`E.
`Petitioner relies on the following references and declarations:
`Reference or Declaration
`Exhibit No.
`U.S. Patent No. 5,819,284 (“Farber”)
`Ex. 1007
`Ex. 1015
`
`Steve Davis, CompuServe Information Manager for
`Windows, Prima Publishing (1994) (“CompuServe”)
`
`U.S. Patent No. 5,983,227 (“Nazem”)
`U.S. Patent No. 5,696,965 (“Dedrick”)
`Oracle 8.1.5 SQL Reference, Oracle Corp. (1999) (“Oracle
`SQL”)
`U.S. Patent No. 5,877,759 (“Bauer”)
`Declaration of Dr. Philip Greenspun
`Declaration of Dr. Sylvia Hall-Ellis
`
`Ex. 1010
`Ex. 1008
`Ex. 1013
`
`Ex. 1014
`Ex. 1005
`Ex. 1020
`
`Asserted Grounds of Unpatentability
`F.
`Petitioner asserts that the challenged claims are unpatentable on the
`following grounds (see Pet. 19–79)1:
`Claim(s) Challenged
`Basis Reference(s)
`20–50
`§ 101
`
`20, 25, 27–32, 35–42,
`§ 103
`Farber and CompuServe
`44, and 47–49
`
`
`1 The Petition contains additional grounds and asserts the above grounds
`against additional claims; the claims and grounds omitted above were directed
`to disclaimed claims.
`
`
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`4
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`CBM2016-00030
`Patent RE43,715
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`Claim(s) Challenged
`22–24, 26, 34, 39, 46,
`and 50
`33
`21 and 43
`45
`
`Basis Reference(s)
`§ 103
`Farber, CompuServe, and Nazem
`
`§ 103
`§ 103
`§ 103
`
`Farber, CompuServe, and Dedrick
`Farber, CompuServe, and Oracle SQL
`Farber, CompuServe, and Bauer
`
`II. ANALYSIS
`A.
`Standing to Seek Covered Business Method Patent Review
`Section 18 of the AIA2 provides for the creation of a transitional
`program for reviewing covered business method patents. Section 18 limits
`review to persons or their privies that have been sued or charged with
`infringement of a “covered business method patent,” which does not include
`patents for “technological inventions.” AIA §§ 18(a)(1)(B), 18(d)(1).
`37 C.F.R. § 42.302 states “[c]harged with infringement means a real and
`substantial controversy regarding infringement of a covered business method
`patent exists such that the petitioner would have standing to bring a
`declaratory judgment action in Federal court.”
`Petitioner states that it was charged with infringement of at least one
`claim of the ’715 Patent, as identified in Section I.B above. Pet. 4. Patent
`Owner does not dispute this statement.
`i. Financial Product or Service
`A covered business method 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,
`except that the term does not include patents for technological inventions.”
`
`
`2 Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284, 329
`(Sept. 16, 2011) (“AIA”).
`
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`AIA § 18(d)(1). The “legislative history explains that the definition of
`covered business method patent was drafted to encompass patents ‘claiming
`activities that are financial in nature, incidental to a financial activity or
`complementary to a financial activity.’” Transitional Program for Covered
`Business Method Patents—Definitions of Covered Business Method Patent
`and Technological Invention, 77 Fed. Reg. 48,734, 48,735, 37 C.F.R.
`§ 42.301(a) (Aug. 14, 2012) (Final Rule) (quoting 157 Cong. Rec. S5432
`(daily ed. Sept. 8, 2011) (statement of Sen. Schumer)). The legislative history
`indicates that “financial product or service” should be interpreted broadly. Id.
`A patent need have only one claim directed to a covered business method to
`be eligible for review. Id. at 48,736 (Response to Comment 8).
`Petitioner argues that the ’715 Patent claims relate to a financial product
`or service, citing claim 1 and its recitation of public and private data, and
`asserting that these relate specifically to financial data. Pet. 6. Petitioner
`argues that the instant Specification discloses examples of public and private
`information, with examples of private information including “bank account
`records, 401k account information, and credit card balance information.” Id.
`(citing Ex. 1001, 1:47–55). Petitioner also cites claim 14 as being directed to
`a financial product or service, but also provides that “[c]laims 17, 19, [] 33,
`and 46 include similar limitations.” Id. at 6–7. Patent Owner disputes those
`findings and raises several arguments in rebuttal. Prelim. Resp. 6–10.
`Patent Owner argues that the determination of whether the instant
`patent is a covered business method patent must be based on the claims, and
`that examples from the specification do not establish that unless they show
`that the claimed invention has particular application involving financial
`activities. Id. at 6–9. Additionally, Patent Owner argues that such a
`
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`determination cannot be made on the basis of disclaimed claims. Id. at 6–9,
`13.
`
`Although Petitioner’s analysis is largely based on claims now
`disclaimed, we are persuaded that the remaining claims are directed to a
`financial product or service as well. Looking to claim 20, although no explicit
`mention of a financial product or service is made, the Specification of the ’715
`Patent makes clear that the method is applicable to private information which
`can include “bank account records, 401k account information, and credit card
`balance information.” Ex. 1001, 1:47–55. This understanding is reinforced
`by claim 33, which recites “private data includes acquiring private transaction
`data.”
`Patent Owner also argues that the claims and the Specification of the
`’715 Patent are common in business environments that have no particular
`relation to the financial services sector. Prelim. Resp. 11–25. Patent Owner
`also argues that Petitioner’s interpretation of “CBM patent” is overly
`expansive and not properly focused on the claims. Id. at 35–42. We do not
`agree.
`We are not persuaded that an exclusivity to the financial sector test is a
`proper inquiry to make, given the legislative history indicating that “financial
`product or service” should be interpreted broadly, as discussed above. See
`Versata Dev. Group, Inc. v. SAP Am., Inc., 793 F.3d 1306, 1325 (Fed. Cir.
`2015) (“We agree with the USPTO that, as a matter of statutory construction,
`the definition of ‘covered business method patent’ is not limited to products
`and services of only the financial industry, or to patents owned by or directly
`affecting the activities of financial institutions such as banks and brokerage
`houses.”), cert. denied 84 USLW 3530 (2016). Moreover, given that the
`
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`CBM2016-00030
`Patent RE43,715
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`dependent claims here do recite a financial product or service as we have
`found above, Patent Owner’s arguments do not persuade us that Petitioner’s
`interpretation of the definition of “covered business method” is overly broad.
`Upon this record, we determine that Petitioner has established that at
`least one claim recites a method directed to a financial product or service
`sufficient to meet a criterion for instituting a covered business method patent
`review.
`
`ii. Technological Invention
`The definition of “covered business method patent” in Section 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 recites a technological feature
`that is novel and unobvious over the prior art; and solves a technical problem
`using a technical solution.” 37 C.F.R. § 42.301(b). Both prongs must be
`satisfied in order for the patent to be excluded as a technological invention.
`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.
`(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.
`77 Fed. Reg. 48,756, 48,763–64 (Aug. 14, 2012).
`
`
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`Petitioner argues that the ’715 Patent is not for a technological
`invention because none of the claims recite a technological feature that is
`novel and nonobvious over the prior art. Pet. 9–11. Petitioner, further, argues
`that the ’715 Patent is not for a technological invention because none of the
`claims solve a technical problem using a technical solution. Id. at 11–12.
`According to Petitioner, most of the terms recited in the claims are directed to
`generic, well-known components when the ’715 Patent application was filed.
`Id. at 9–10 (citing Ex. 1005 ¶¶ 59, 62, 65). Petitioner also alleges that the
`point of novelty of the claims, as raised during the original prosecution and
`the reissue prosecution, does not amount to a technological invention, and
`using a computer to integrate public and private data was not novel at the time
`the subject application was filed. Id. at 10–11. Petitioner also argues that
`simultaneously presenting public and private data is not a technical problem,
`and cites a brokerage statement sent to an investor that contains private data,
`such as the investor’s shares, and public data determined by the private data,
`such as an indication of the market value of each held share. Id. at 11–12
`(citing Ex. 1005 ¶¶ 36, 59, 63).
`Patent Owner argues that Petitioner analyzed only a single claim, claim
`14, in asserting that the claimed invention is not directed to a technological
`invention, but that claim has been disclaimed, such that the Petition fails on
`that basis alone. Prelim. Resp. 29–30. We do not agree. The statutory
`disclaimer (Ex. 2011) was filed after Petitioner filed the Petition, such that we
`must decide if the arguments and evidence presented is sufficient with respect
`
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`to the remaining claims, and not merely dismiss the Petition.3
`Patent Owner also argues that Petitioner merely concludes that “public
`data [being] determined by private data” using a computer was not novel, and
`is not an analysis of the claimed subject matter as a whole. Prelim. Resp. 30.
`Additionally, Patent Owner argues that Petitioner’s example of a brokerage
`statement ignores the technical, computer implementation covered by the
`claims. Id. at 30–32. We agree with Patent Owner. Petitioner’s analysis
`considers the “point of novelty of the claims” (Pet. 10–11), but does not
`consider the claims as a whole. Claim 20, for example, recites that “said
`public data is determined by private data” and “integrating said public data
`and said private data to form integrated data.” Petitioner concludes, without
`persuasive evidence, that “using a computer to integrate public and private
`data was not novel at the time that the subject application was filed” and refers
`to the next section of the Petition. Pet. 11. This analysis fails to demonstrate
`that aspects of the claims are neither novel nor unobvious over the prior art, at
`least because it contains no citations to prior art, other than that overcome
`during the original and reissue prosecutions. As such, we are not persuaded
`that Petitioner has demonstrated that the subject matter of at least one claim as
`a whole does not recite a technological feature that is novel and unobvious
`over the prior art.
`With respect to the technical problem/solution analysis, Patent Owner
`argues that the ’715 Patent is directed to a technical problem that existed on
`prior art computer networks, explaining that such network architectures did
`
`
`3 An alternate result would allow a patent owner to avoid a covered business
`method patent review by disclaiming an analyzed claim, even though all other
`claims might be explicitly drawn to covered business methods.
`10
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`not sufficiently allow an individual to access and view both public and private
`data simultaneously. Prelim. Resp. 32–33 (citing Ex. 1001, 2:5–12). Patent
`Owner continues that this was an issue with prior art computer networking
`architectures and required a technical solution that would facilitate the
`delivery of integrated public and private data from disparate web sites. Id.
`at 33–35. We agree with Patent Owner.
`As discussed above, claim 20 recites that “said public data is
`determined by private data” and “integrating said public data and said private
`data to form integrated data.” The integrated data are delivered over a
`network, as recited in claims 20 and 35, or delivered to at least one client
`computer device, as recited in claim 41. Petitioner’s analogy of a paper
`brokerage statement may demonstrate the utility of providing public data
`based on private data, but it ignores the specific language of the claims. It is
`difficult to determine that claimed processes, necessarily rooted in computer
`technology in order to overcome a problem specifically arising in the realm of
`computer networks, are not technical solutions to technical problems. As
`such, we are not persuaded that Petitioner has demonstrated that the remaining
`claims of the ’715 Patent are not directed to a technical solution to a technical
`problem.
`
`For the reasons discussed above, we are not persuaded by Petitioner
`that the ’715 Patent is eligible for covered business method patent review.
`
`
`III. ORDER
`In consideration of the foregoing, it is hereby:
`ORDERED that pursuant to 35 U.S.C. § 324(a), a covered business
`method patent review is not instituted as to any claim of the ’715 Patent.
`
`
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`11
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`CBM2016-00030
`Patent RE43,715
`
`PETITIONER:
`Robert C. Hilton
`Jason W. Cook
`MCGUIREWOODS LLP
`rhilton@mcguirewoods.com
`jcook@mcguirewoods.com
`sallybeauty-iv@mcguirewoods.com
`
`
`
`PATENT OWNER:
`Brenton R. Babcock
`Ted M. Cannon
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`2brb@knobbe.com
`2tmc@knobbe.com
`
`Tim R. Seeley
`Donald J. Coulman
`INTELLECTUAL VENTURES
`tim@intven.com
`dcoulman@intven.com
`
`
`
`
`12
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