Trials@uspto.gov Paper No. 12
`571.272.7822
`
`Entered: September 12, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`CQG, INC. and CQG, LLC (f/k/a CQGT, LLC),
`Petitioner,
`
`v.
`
`CHART TRADING DEVELOPMENT, LLC,
`Patent Owner.
`____________
`
`Case CBM2016-00048
`Patent No. 8,060,435 B2
`____________
`
`Before JAMESON LEE, KEVIN F. TURNER, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`
`CHERRY, Administrative Patent Judge.
`
`
`
`
`
`DECISION
` Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`

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`CBM2016-00048
`Patent 8,060,435 B2
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`
`I. INTRODUCTION
`
`A. Background
`CQG, Inc. and CQG, LLC (collectively, “Petitioner”) filed a Petition
`
`(Paper 5, “Pet.”) requesting review under the transitional program for
`covered business method patents of the AIA1 of claims 1–31(“the challenged
`claims”) of the U.S. Patent No. 8,060,435 B2 (Ex. 1001, “the ’435 patent”).
`Chart Trading Development LLC (“Patent Owner”) filed a Preliminary
`Response. Paper 10 (“Prelim. Resp.”).
`Under 35 U.S.C. § 324, a post-grant review may not be instituted
`“unless . . . the information presented in the petition . . . would demonstrate
`that it is more likely than not that at least 1 of the claims challenged in the
`petition is unpatentable.”
`For the reasons that follow, we determine that the Petition
`demonstrates that it is more likely than not that the challenged claims are
`unpatentable under 35 U.S.C. § 101 as directed to ineligible subject matter,
`and we institute a covered business method patent review of claims 1–31 of
`the ’435 patent.
`
`B. Related Matters
`The ’435 patent is the subject of several related U.S. district court
`
`proceedings: Chart Trading Development, LLC v. CQG, Inc., No. 6:15-cv-
`01133-JRG-JDL (E.D. Tex.); Chart Trading Development, LLC v.
`Interactive Brokers, LLC, No. 6:15-cv-01135-JDL (E.D. Tex.); and Chart
`Trading Development, LLC v. TradeStation Group, Inc., No. 6:15-cv-01136-
`
`
`1 Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284, 329
`(2011) (“AIA”).
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`Patent 8,060,435 B2
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`JDL (E.D. Tex.). Pet. 7–8; Paper 7, 2. A number of patents are related to
`the ’435 patent and some of the related patents are the subject of petitions
`for covered business method patent review. Paper 7, 2.
`C. The ’435 Patent
`The ’435 patent is titled “Systems and Methods for Providing a
`
`Trading Interface.” Ex. 1001, at [54]. According to the ’435 patent, at the
`time of the invention, electronic trading was becoming more popular and
`there was a need for new systems and methods to enter trade commands in a
`quick, efficient, and accurate manner. Id. at 1:20–23. The ’435 patent
`contends that “in one method of electronic trading, bids and offers are
`submitted by traders to a trading system, those bids and offers are then
`displayed by the trading system to other traders, and the other traders may
`then respond to the bids and offers by submitting sell (or hit) or buy (or lift
`or take) commands to the system.” Id. at 1:23–28. According to the ’435
`patent, many implementations of electronic trading, while generally
`accurate, are slow because the traders are forced to use both a keyboard and
`a mouse to trade. Id. at 1:29–32. The ’435 patent also explains that using a
`keyboard to execute a trade is faster than with a mouse. Id. at 1:38–42. Yet,
`the ’435 patent explains that traders, at the time of the invention, still
`continued to use a mouse because “it is considered easy to use, and thus
`traders feel that they are less likely to make unwarranted trading mistakes
`with a mouse” and many professional traders “prefer to forgo speed and
`efficiency for peace of mind.” Id. at 1:43–49.
`The ’435 patent contends that traders using mouse-based trading
`interfaces are at a disadvantage when competing with full-time keyboard
`traders because of the time it takes to “physically move a mouse pointer
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`from an indicator for the desired instrument, [which] is at one point on a
`trading screen, to some other point on the screen where bidding/offering and
`bidding/selling commands can be entered.” Id. at 1:50–60. Thus, the ’435
`patent states that it offers a solution to this problem describing a system and
`method where the trader can use various trading interfaces to initiate trading
`commands, configure various display features and default command
`settings, and control a level of command entry verification that is provided
`to protect against inadvertent entry of incorrect trading commands. Id. at
`2:2–7.
`Figure 1 of the ’435 patent is reproduced below:
`
`
`Figure 1 shows a market cell 100 or main trading window that may be used
`to display one or more bid and/or one or more offer 101 for an item to be
`traded. Id. at 3:21–24. Bid and offer 101 indicates price 102 that a buyer is
`willing to pay for selected item 103 at given size 106 (i.e., a number of the
`item) and price 104 that a seller is willing to accept for selected item 103 at
`given size 108. Id. at 3:24–28. In order to bid for, offer to sell, buy, and/or
`
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`sell an item through market cell 100, a trader may submit a trading
`command indicating the action to be taken using, for example, a command-
`line interface or using a graphical interface. Id. at 3:42–48. “A trader may
`also indicate a desire to bid, offer, buy, and/or sell an item by clicking on
`different portions of a bid and offer 101 for that item in market cell 100.”
`Id. at 3:56–58. In particular, these features allow the user to click on a bid
`price, offer price, bid size, or offer size in a market cell to indicate a desire to
`submit a bid or offer or to sell or buy an item, respectively. Id. at 3:58–64.
`“[A]fter clicking on a component [(i.e., a field)] of a bid and offer 101
`in a market cell 100, an entry verification feature of the present invention
`may display a graphical interface to a trader to allow the trader to alter
`and/or confirm the command being submitted.” Id. at 5:12–16. Specifically,
`the entry verification feature displays a dialog window 200 (Fig. 2). Id. at
`5:21–27, 5:35–38, 6:66–7:2.
`
`Figure 2 of the ’435 patent is reproduced below:
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`Figure 2 illustrates one embodiment of a graphical user interface for
`submitting trading commands. Id. at 4:10–11. As shown, the graphical user
`interface comprises dialog window 200 with various buttons and entry fields
`202–242. Id. at 4:11–13. Using these buttons and entry fields, a trader may
`submit a bid command, an offer command, or a sell command for an item
`corresponding to market cell 100. Id. at 4:13–16. Dialog window 200 also
`provides numeric keypad 202, buy button 204, sell button 210, bid button
`212, offer button 214, cancel bid button 216, cancel offers button 218,
`cancel all button 220, cancel all for instruments button 222, price entry field
`224, price up and down buttons 226, bid price up and down buttons 228,
`offer price up and down buttons 234, size entry field 230, size up and down
`buttons 232, and preference field 236. Id. at 4:26–56.
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`D. Illustrative Claim
`The ’435 patent has three independent claims—claims 1, 19, and 31.
`
`Claim 1 is a method claim and claims 19 and 31 are apparatus claims.
`Claim 1 of the ’435 patent is illustrative of the challenged claims and is
`reproduced below:
`1. A method, comprising:
`displaying, by a processor of a computing device, a first
`interface that comprises a first variable associated with trading
`an item, in which the first variable comprises a price of the item;
`displaying, by the processor, data in a second interface in
`response to a selection of the first variable at the first interface,
`in which the second interface comprises:
`a price field, in which a price displayed in the price field
`is adjustable;
`a size field, in which a size displayed in the size field is
`adjustable, and in which the price and the size are associated with
`trading the item;
`a first button, in which the first button, when selected
`causes a trading command to be submitted;
`a size up button and a size down button, in which the size
`up button when selected increases the size displayed in the size
`field and in which the size down button when selected decreases
`the size displayed in the size field;
`a price up button and a price down button, in which the
`price up button when selected increases the price displayed in the
`price field and in which the price down button when selected
`decreases the price displayed in the price field; and
`one or more numeric buttons;
`receiving a selection of the first button; and
`submitting, by the processor, the trading command for
`execution in response to receiving the selection.
`Ex. 1001, 12:10–38.
`
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`
`Reference
`Patterson
`
`Belden
`
`E. Evidence Relied Upon
`Exhibit
`Date
`U.S. Patent No. 5,797,002 Aug. 18, 1998 Ex. 1016
`
`European Pub. Application
`EP 0 388 162 A2
`
`Sept. 19, 1990 Ex. 1021
`
`Petitioner also relies on the Declaration of Ian Allport, dated Mar. 17,
`
`2016. Ex. 1003.
`
`
`F. Alleged Grounds of Unpatentability
`Petitioner sets forth grounds of unpatentability of the challenged
`
`claims as follows:
`Basis
`§ 101
`§ 103(a)
`
`Reference(s)
`N/A
`Belden and
`Patterson
`
`Challenged Claims
`1–31
`1–3, 8–10, 13, 14, 17–20, 24, and
`25
`
`
`
`II. ANALYSIS
`A. Requirements for Covered Business Method Patent Review
`
`Section 18 of the AIA provides for the creation of a transitional
`program for reviewing covered business method patents. Section 18 limits
`review to persons or their privies who 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); see
`37 C.F.R. § 42.302.
`
`Standing
`i.
`Petitioner and Patent Owner indicate that Petitioner was sued for
`infringement of the ’435 patent. Pet. 7–8; Paper 7, 2. Accordingly, we
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`agree Petitioner has shown that it has standing to petition for covered
`business method review.
`ii. Covered Business Method Patent
`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.”
`AIA § 18(d)(1); 37 C.F.R. § 42.301(a). To determine whether a patent is
`eligible for a covered business method patent review, the focus is on the
`claims. See Transitional Program for Covered Business Method Patents—
`Definitions of Covered Business Method Patent and Technological
`Invention, 77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (Final Rule). A
`patent need have only one claim directed to a covered business method to be
`eligible for review. Id.
`Also, the legislative history of the AIA “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.’” Id. at 48,735 (quoting 157 Cong.
`Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
`1. Financial Product or Service
`
`Petitioner contends that the ’435 patent is a covered business method
`patent because it 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. Pet. 10–13. Petitioner argues
`that patents subject to covered business method patent review are typically
`classifiable in Class 705 of the Office’s patent classification system. Pet. 10
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`(citing Transitional Program for CBM Patents, 77 Fed. Reg. at 48,739). The
`’435 patent is classified in Class 705, primarily in class 705/37. Id.
`Petitioner contends that based on this classification the ’435 patent is
`financial in nature and falls under the definition of a “covered business
`method.” Id.
`Petitioner further argues that claims 1, 19, and 31, are directed to two
`financial activities: (1) processing information with a tradable item for
`display; and (2) submitting trade orders to an electronic trade system for
`execution. Id. at 12–13. The claim elements directed to processing
`information with a tradable item for display include: “displaying . . . a first
`variable associated with trading an item;” “displaying . . . a price field, in
`which a price displayed in the price field is adjustable,” “displaying . . . a
`size field, in which a size for the tradeable item is displayed and adjustable;”
`“displaying . . . a size up button and a size down button [for adjusting the
`size in the size field];” “displaying . . . a price up button and a price down
`button [for adjusting the price in the price field];” and “displaying . . . one or
`more numeric buttons.” Id. at 12 (citing Ex. 1001, 12:10–38 (claim 1).
`Claims 19 and 31 have similar elements. See Ex. 1001, 13:45–14:9
`(Claim 19), 15:1–16:17 (Claim 31).
`As for submitting trade orders to an electronic trade system for
`execution, Petitioner identifies the following claim elements: having “a first
`variable associated with trading an item . . . [that] comprises the price of the
`item;” “display[ing] . . . a first button . . . [that] causes a trading command to
`be submitted [when selected];” “receiving a selection of the first button;”
`and “submitting . . . the trading command for execution in response to
`receiving the selection.” Id. (citing Ex. 1001, 12:11–15, 12:23–24, 12:36–38
`
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`(claim 1)). Petitioner submits that both of these activities have been found
`to be financial by other panels of the Board. Id. at 12–13. Claims 19 and 31
`have similar elements. See Ex. 1001, 13:45–14:9 (Claim 19), 15:1–16:17
`(Claim 31).
`Patent Owner does not, at this time, dispute that at least one claims of
`the ’435 patent is directed to 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.” Instead,
`Patent Owner directs its argument to whether the ’435 patent claims a
`“technological” invention. See Prelim. Resp. 26–31. We address Patent
`Owner’s argument in section II.A.ii.2 below.
`Claims 1, 19, and 31 encompasses processing financial data,
`associated with an item, for display and processing financial data for sending
`a trade order for an item to an exchange. See id. at 1:16–20 (“This invention
`provides a trading interface that allows a trader to use a pointing device such
`as a mouse to execute a trade quickly and accurately.”); 2:37–43 (“[T]he
`present invention may be implemented with any type of trading system for
`the trading of any type of item[, f]or example, . . . the invention may be used
`with a bid/offer, buy/sell trading system for trading of financial instruments,
`such a[s] bonds [and] with a matching system, wherein bids and offers are
`submitted by various traders and matched, for the trading of other items,
`such a materials and supplies for manufacturing.”). This processing of
`financial data is used in the practice, administration, or management of a
`commodity, which is a financial product, and in the practice, administration,
`or management of electronic trading with an exchange, which is a financial
`service or activity. Displaying financial market information for a
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`commodity or security and placing trade orders for a commodity or security
`are activities that are financial in nature.
`
`We determine, based on this record, at least, claims 1, 19, and 31 of
`the ’435 patent satisfies the “financial product and service requirement” for
`the covered business method patent determination because it “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” and claims “activities that are financial in nature,
`incidental to a financial activity or complementary to a financial activity.”
`AIA § 18(d)(1); 77 Fed. Reg. at 48,735.
`2. Technological Invention Exception
`Even if a patent includes claims that meet the “financial product and
`service” requirement for the covered business method patent determination,
`review of the patent is precluded if the claims cover only “technological
`inventions,” as defined by 37 C.F.R. § 42.301(b). The definition of
`“covered business method patent” in § 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).
`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
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`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. at 48,763–64.
`Both parts of the definition for a technological invention must be
`satisfied in order for the patent to be excluded as a technological invention.
`See Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1326–27 (Fed.
`Cir. 2015).
`Petitioner contends that the ’435 patent recites the ordinary
`application of old, well-understood, and routine data display and graphical
`user interface features and solves a non-technical problem (i.e., a problem of
`a human trader) with a non-technical solution. Pet. 13–19. According to
`Petitioner, the ’435 patent and claims 1, 19, and 31 only require generic,
`non-specific, and conventional components: a display device, a graphical
`user interface, a user input device, and a computer processor with memory
`storing computer readable code. Id. at 14–16. Petitioner further contends
`that the ’435 patent does not solve a technical problem, but instead solves a
`business or financial problem of “entering trade commands quickly,
`efficiently, and accurately and without inadvertent entry of incorrect trade
`commands.” Id. at 16 (citing Ex. 1001, 1:22–23, 2:2–7).
`Patent Owner responds that Petitioner has not met its burden to prove
`that the claims are not drawn to a technological invention. Prelim. Resp. 30.
`Patent Owner characterizes the ’435 patent as directed to an improvement in
`graphical user interfaces, specifically a specialized graphical user interface
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`(“GUI”) that provides improved functionality and features that allow traders
`to quickly and easily submit trading commands to electronic trade systems to
`ensure accurate trading in response to rapidly changing markets. Id. at 1.
`Patent Owner states that the claims are directed to “unique, configurable
`GUI platforms that allow traders to directly interact with the electronic
`trading system to make trades more efficiently and accurately than
`previously accomplished in the prior art.” Id. Patent Owner contends that
`Petitioner does not consider the invention as a whole. Id. at 31–34.
`According to Patent Owner, Petitioner isolates features of claim 1, including
`the display, input, processor, memory, and a GUI, and ignores the critical
`nature of its interaction with other claim elements, e.g., displaying a price
`field, a size field, and buttons that can alter the price and size field. Id. at
`27–30. Paten Owner argues that these components “play a critical role by
`facilitating the patent’s goal of providing configurable trading interfaces that
`allow the trader to quickly and easily submit trading commands to a trading
`system.” Id. at 29.
`The ’435 patent discloses that:
`In one method of electronic trading, bids and offers are
`submitted by traders to a trading system, those bids and offers
`are then displayed by the trading system to other traders, and the
`other traders may then respond to the bids and offers by
`submitting sell (or hit) or buy (or lift or take) commands to the
`system.
`Many implementations of this method of electronic
`trading, while generally accurate, lack in desired speed mainly
`because traders are forced to use both a standard PC keyboard
`and a mouse to execute a trade. This dual process causes much
`delay for traders because the traders must follow several steps
`prior to accomplishing a trade. For example, many traders using
`typical trading systems are required to (1) click on an issue of
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`choice, (2) click on a buy or sell button, and (3) use the keyboard
`to enter a price and size for the trade.
`The benefit of using a keyboard to execute a trade is that a
`trader may execute a trade with a great deal more speed than with
`a mouse. Specifically, with a keyboard, the trader may use all ten
`fingers, while with a mouse the trader may use two fingers at
`most.
`
`Despite the drawbacks associated with using a mouse,
`many traders continue to use a mouse because it is considered
`easy to use, and thus traders feel that they are less likely to make
`unwarranted trading mistakes with a mouse. Because trading
`professionals frequently have large amounts of money at stake
`when trading, many professionals prefer to forgo speed and
`efficiency for peace of mind.
`While mouse-based interfaces have existed for years,
`these interfaces have put traders using them at a disadvantage
`when competing with full-time keyboard traders. One reason the
`existing mouse-based interfaces place those traders at a
`disadvantage is that those traders are forced to physically move
`a mouse pointer from an indicator for a desired instrument, that
`is at some given point on a trading screen, to some other point on
`the screen where bidding/offering and buying/selling commands
`can be entered. This approach is very time consuming.
`Thus, it is an object of the invention to provide systems
`and methods that enable a trader to execute trades quickly,
`efficiently, and accurately using a pointing device interface.
`
`Ex. 1001, 1:15–63.
`
`As can be seen from the above quotation, technology already existed
`
`for traders to trade more quickly and accurately. The problem was that some
`traders declined to use that technology. Thus, the problem was not a
`technological one, but one of human preference or behavior.
`
`The ’435 patent’s alleged solution to this problem — a GUI that
`allows a trader to rapidly and to accurately place trading orders, Ex. 1001,
`1:66–2:7— simply recycles known graphical components in a new
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`arrangement. Patent Owner argues that the claimed GUI, taken as a whole,
`is a technical solution. See, e.g., Prelim. Resp. 30. However, claims 1, 19,
`and 31 taken as a whole, simply recites using conventional, generic
`computer technology to achieve a particular arrangement and sequence of
`information—e.g., prices—that should be placed on the screen of a user and
`a particular way to receive inputs from the user—e.g., size and price up and
`down buttons and numeric buttons. Put differently, although phrased as an
`apparatus, claims 19 and 31 explain an optimal way to use known computer
`technology to sequence the presentation of electronic versions of
`conventional paper forms to allow the user’s mind to process the information
`more quickly and accurately so as to allow the user to fill in the forms more
`quickly and accurately. This solution is not a technological one—e.g., to
`improve the operation of the computer systems or networks—but one of
`graphic design—arranging the data and forms on the screen in such a way
`and such an order (in this case two screens (or interfaces) instead of one) as
`to make the information more easily processed by the mind of the trader.
`Patent Owner’s arguments regarding alleged novelty of the claims as
`providing interfaces that are “configurable,” Prelim. Resp. 29, are not
`persuasive because there is nothing recited in claims 1, 19, or 31 about
`configurability of the interfaces.
`We agree with Petitioner that the claimed solution simply uses
`conventional, well-known, generic technology, such as displays, general
`purpose computers, and graphical user interface components. As set forth
`above, the ’435 patent admits that electronic trading systems and mouse-
`based trading was well-known and have “existed for years.” Ex. 1001,
`1:15–63. The ’435 patent discloses that the trading server “may be any
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`suitable server, processor, computer, or data processing device, or
`combination of the same,” that the network “may be any suitable computer
`network,” that the communication links may be “any suitable
`communication links,” and that the user’s computers may be “any suitable
`computers, processors, computer terminals, displays, portable computers,
`personal digital assistants, or any other suitable data processing devices, or
`combinations of the same.” Ex. 1001, 11:48–12:3. As discussed above,
`mere recitations of known computer technology, such as display devices or
`software, and combinations of prior art structures to achieve the normal,
`expected, or predictable result of that combination do not render an
`invention technological.
`The ’435 patent is not for a technological invention that improves the
`functionality of computers, but instead uses conventional computer tools in
`the aid of processes focused on abstract ideas. On this record, we determine
`that the ’435 patent does not solve a technical problem using a technical
`solution. The ’435 patent, thus, is eligible for covered business method
`patent review.
`
`B. Real Party In Interest
`
`Patent Owner contends that the Petition fails to name all of the real
`parties in interest as required by 35 U.S.C. § 322(a)(2). Prelim. Resp. 7–19.
`According to Patent Owner, Cobra Trading, Inc.; CV Futures, LLC;
`Crossland LLC; Dorman Trading Co., Inc.; Dorman Trading, LLC; ED&F
`Man Capital Markets Inc.; Gar Wood Securities, LLC; RJ O’Brien &
`Associates LLC; Redcape LLC; Rosenthal Collins Group, LLC; The Price
`Futures Group, Inc.; Trade FX Futures; Trade Futures 4 Less; TradePro
`Futures, Inc.; and Wedbush Futures (collectively, “the customer
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`defendants”) are real parties in interest that are not identified in the Petition
`and, thus, institution should be denied. Id. at 7–19.
`Whether a non-identified party is a real party in interest to a
`proceeding is a highly fact-dependent question. Office Patent Trial Practice
`Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 12, 2012) (citing Taylor v.
`Sturgell, 553 U.S. 880 (2008)). “A common consideration is whether the
`non-party exercised or could have exercised control over a party’s
`participation in a proceeding.” 77 Fed. Reg. at 48,759 (citing Taylor, 553
`U.S. at 895). “The concept of control generally means that ‘it should be
`enough that the nonparty has the actual measure of control or opportunity to
`control that might reasonably be expected between two formal coparties.’”
`Id. (quoting CHARLES WRIGHT, ET AL., 18A FED. PRAC. & PROC. §§ 4449,
`4451 (2d ed. 2011).
`Patent Owner’s main argument focuses on actions by the customer
`defendants in the related lawsuits pending in the Eastern District of Texas.
`Prelim. Resp. 10. Patent Owner submits that as part of their request for a
`stay in the related district court litigation, the customer defendants agreed to
`be bound by the estoppel provisions of the AIA with respect to the outcome
`of this proceeding. Id. at 10–11. Patent Owner argues that, based on this
`representation to the district court, “the customer defendants effectively
`admitted they are [real parties in interest], i.e., that they desire review of the
`’435 patent, have a financial interest in the outcome of this CBM, and agree
`to be bound by all estoppel provisions imposed by the AIA on a CBM
`petitioner.” Id. at 10–11. Patent Owner further argues that because the
`customer defendants received a stay based on their representation to the
`district court that they would be bound by the estoppel provisions, they are
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`Patent 8,060,435 B2
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`judicially estopped from asserting that they are not real parties in interest.
`Id. at 17–18. Patent Owner also contends that unless we find that the
`customer defendants are real parties in interest, the customer defendants will
`escape certain estoppel provisions. Id. at 14–17.
`We are not persuaded that Patent Owner’s evidence reasonably
`establishes or brings into question that the customer defendants are real
`parties in interest in this proceeding. To begin with, none of the statements
`identified by Patent Owner, see Prelim. Resp. 10–11, amounts to an
`admission that the customer defendants are real parties in interest; at best,
`these statements represent the customer defendants’ stipulation to the district
`court that they would accept the estoppel consequences of the outcome of
`this Petition. However, status as a co-defendant of a joint defense group is
`insufficient to establish that the customer defendants had the required
`control over the filing of the Petition in this proceeding. 77 Fed. Reg. at
`48,760.
`Moreover, as our case law makes clear, the central determination as to
`whether a party is a real party in interest is whether “a party[,] other than the
`named petitioner[,] was controlling, or capable of controlling, the
`proceeding before the Board.” Reflectix, Inc. v. Promethean Insulation
`Tech. LLC, Case IPR2015-00039, slip op. at 9–10 (PTAB Apr. 24, 2015)
`(Paper 18). “While complete control is not required, ‘if a nonparty can
`influence a petitioner’s actions in a proceeding before the Board, to the
`degree that would be expected from a formal copetitioner, that nonparty
`should be considered [a real party in interest] to the proceeding.’” Id.
`(quoting Aruze Gaming Mac., Ltd. v. MGT Gaming, Inc., Case IPR2014-
`01288, slip op. at 12 (PTAB Feb. 20, 2015) (Paper 13). Here, Patent Owner
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`has failed to present any persuasive evidence that the customer defendants
`have any influence or control over Petitioner’s actions in this proceeding.
`The mere fact that they are customers of Petitioner and share a common
`litigation counsel (Prelim. Resp. 13–14) does not elevate them to real parties
`in interest in this proceeding. Thus, on this record, we are not persuaded that
`the customer defendants are real parties in interest in this proceeding.
`As for Patent Owner’s complaints that customer defendants will
`escape certain estoppel provisions unless we find that they are real parties in
`interest, this argument conflates the issues of real party in interest and the
`scope of the estoppel agreed upon in the district court. The latter issue is not
`before this panel, and can be addressed by a future court or panel of the
`Board should it arise.
`In sum, each customer-defendant’s determination that its best interests
`lie in obtaining a litigation stay by agreeing to the application of all AIA
`estoppel provisions implicated by the outcome of this CBM proceeding does
`not demonstrate any customer defendant has any measure of control or
`influence over Petitioner’s conduct of this proceeding. On this record, the
`facts presented by Patent Owner do not persuade us that the customer
`defendants have funded, directed, or controlled or influenced this pr