Trial@uspto.gov
`571-272-7822
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` Paper No. 12
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`Entered: April 6, 2017
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`KLAUSTECH, INC.,
`Patent Owner.
`____________
`
`Case CBM2016-00096
`Patent 6,128,651 C1
`____________
`
`
`
`
`
`Before MICHAEL R. ZECHER, CHRISTOPHER M. KAISER, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`
`ZECHER, Administrative Patent Judge.
`
`
`DECISION
`Denying Petitioner’s Request for Rehearing
`37 C.F.R. § 42.71(d)
`
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`571-272-7822
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` Paper No. 12
`
`Entered: April 6, 2017
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`KLAUSTECH, INC.,
`Patent Owner.
`____________
`
`Case CBM2016-00096
`Patent 6,128,651 C1
`____________
`
`
`
`
`
`Before MICHAEL R. ZECHER, CHRISTOPHER M. KAISER, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`
`ZECHER, Administrative Patent Judge.
`
`
`DECISION
`Denying Petitioner’s Request for Rehearing
`37 C.F.R. § 42.71(d)
`
`
`
`
`
`
`
`
`
`CBM2016-00096
`Patent 6,128,651 C1
`
`I. INTRODUCTION
`Petitioner, Google Inc. (“Google”), timely filed a Request for
`Rehearing under 37 C.F.R. § 42.71(d). Paper 11 (“Req. Reh’g”). Google’s
`Request for Rehearing seeks reconsideration of the Decision not to institute
`a covered business method (“CBM”) patent review of U.S. Patent No.
`6,128,651 C1 (Ex. 1001, “the ’651 patent”). Paper 10 (“Decision” or Dec.”).
`In particular, we denied institution as to claims 20, 21, 23–26, 28, and 29
`(“challenged claims”) of the ’651 patent because the information presented
`in the Petition did not establish that this patent qualifies as a CBM patent
`that is eligible for review, as defined by § 18(d)(1) of the America Invents
`Act (“AIA”). Dec. 2–3, 16.
`In its Request for Rehearing, Google contends that our determination
`not to institute a CBM patent review was improper for two reasons. First,
`Google argues that we misapprehended or overlooked unrebutted testimony,
`cited in the Petition, regarding the scope of “retaining . . . a record,” as
`recited in each of independent claims 20 and 25. Req. Reh’g 3–7. Second,
`Google argues that, in assessing the scope of the “retaining . . . a record”
`claim element, we misapprehended or overlooked statements by Patent
`Owner, KlausTech, Inc. (“KlausTech”), and supporting testimony regarding
`these statements that were against KlausTech’s own interest. Id. at 7–13.
`Google argues that proper consideration of either of these two pieces of
`evidence compels a conclusion that the challenged claims recite operations
`used in the practice, administration, or management of a financial product or
`service, such that the ’651 patent should be found eligible for a CBM patent
`review. Id. at 2.
`
`2
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`CBM2016-00096
`Patent 6,128,651 C1
`We have considered the arguments presented by Google in its Request
`for Rehearing, but we discern no reason to modify the Decision not to
`institute a CBM patent review. We, therefore, deny Google’s Request for
`Rehearing.
`
`
`II. STANDARD OF REVIEW
`A party requesting rehearing bears the burden of showing that the
`decision should be modified. 37 C.F.R. § 42.71(d). The party must identify
`specifically all matters we misapprehended or overlooked, and the place
`where each matter was addressed previously in a motion, an opposition, or a
`reply. Id. When rehearing a decision on a petition, we review the decision
`for an abuse of discretion. 37 C.F.R. § 42.71(c). An abuse of discretion
`may be indicated if a decision is based on an erroneous interpretation of law,
`if a factual finding is not supported by substantial evidence, or if the
`decision represents an unreasonable judgment in weighing relevant factors.
`Star Fruits S.N.C. v. United States, 393 F.3d 1277, 1281 (Fed. Cir. 2005);
`Arnold P’ship v. Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004); In re
`Gartside, 203 F.3d 1305, 1315–16 (Fed. Cir. 2000). With this in mind, we
`address the arguments presented by Google in turn.
`
`
`III. ANALYSIS
`
`A.
`Google contends that our determination that the ’651 patent is not a
`CBM patent eligible for review—because the “retaining . . . a record” claim
`element is not financial in nature—is arbitrary, based on an erroneous
`conclusion of law, and based on clearly erroneous fact findings, thereby
`
`3
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`CBM2016-00096
`Patent 6,128,651 C1
`resulting in an abuse of discretion. Req. Reh’g 3. Google asserts that we are
`required to evaluate all testimonial evidence from its expert, Mr. Andrew
`Schulz (Ex. 1003), cited in the Petition, and we must do so “in the light most
`favorable to the petitioner” in deciding whether to institute a CBM review.
`Id. at 3–4 (quoting 37 C.F.R. § 42.208(c)).
`According to Google, we did not follow these requirements because
`we misapprehended or overlooked Mr. Schulz’s testimony that a person of
`ordinary skill in the art would have understood that the claimed “record” in
`the ’651 patent is generated and retained solely to process payments for ad
`placements. Req. Reh’g 4. In particular, Google quotes Mr. Schulz’s
`testimony that a person of ordinary skill in the art “would have understood
`that the only reason ‘records’ are generated and retained in [independent]
`claims 20 and 25 (and their dependent claims) is for processing payments for
`ad placements.” Id. at 5 (emphasis omitted) (quoting Ex. 1003 ¶ 31).
`Google states that it cited to this specific testimony from Mr. Schulz in the
`Petition at pages 15 and 21 and in the Reply at pages 3–4, but we never
`acknowledged or discussed this cited testimony in our Decision. Id. at 5.
`Google then argues that, based on Mr. Schulz’s testimony, we did not have
`to “speculate or assume” the express or inherent scope of the “retaining . . . a
`record” claim element because Mr. Schulz’s testimony establishes that it is
`solely for the purpose of compensation and billing and, therefore, is
`expressly or inherently financial in nature. Id. at 5–7.
`We disagree that we misapprehended or overlooked Mr. Schulz’s
`testimony as it was presented to us in the Petition and Reply. The Reply did
`not cite to Mr. Schulz’s testimony at all, but instead relied on citations to the
`Petition and disclosures in the ’651 patent in arguing that the “retaining . . . a
`
`4
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`CBM2016-00096
`Patent 6,128,651 C1
`record” claim limitation is financial in nature. See Reply 3–4 (citing Pet.
`13–15; Ex. 1001, Abstract, 2:28–33, 3:32–35, 3:40–43, 4:32–37, Fig. 1).
`The Petition relied on the same disclosures from the ’651 patent and
`provided an additional citation to Mr. Schulz’s testimony in support of
`Google’s argument that “[t]he sole disclosed reason for retaining these
`claimed ‘records’ of the displayed advertisements, as the specification
`explains, is to provide a mechanism for ‘compensating’ publisher websites
`and for ‘billing’ advertisers on the basis of ad content presentation times.”
`Pet. 14–15 (citing Ex. 1001, Abstract, 2:28–33, 3:32–35, 3:40–43, 4:32–37,
`Fig. 1; Ex. 1003 ¶¶ 26, 28, 31, 37, 40); see also id. at 15 (“[T]he patent
`discloses ‘retaining’ of records for the purpose of ‘compensating’ publisher
`websites and ‘billing’ advertisers on the basis of ad content presentation
`times.” (citing Ex. 1003 ¶ 31)). Mr. Schulz, in turn, relies on the same
`portions of the ’651 patent’s disclosure cited in the Petition and Reply as a
`basis for his opinion. See Ex. 1003 ¶ 31 (citing Ex. 1001, Abstract, 2:28–33,
`3:32–35, 3:40–43, 4:32–37, Fig. 1)
`Our Decision explicitly addressed Google’s argument that the sole
`purpose of the record retention required by the challenged claims is for
`compensation and billing, and relying on the ’651 patent’s disclosure—as
`the Petition, Reply, and Mr. Schulz’s testimony directed us to—we
`determined Google’s position was not persuasive. Dec. 9–10, 12–13. In
`particular, we noted that the language used in the abstract and specification
`of the ’651 patent was permissive and optional (e.g., “audit trail from which
`websites can be compensated for ad display and advertisers billed for the ad
`display,” “record may be used to compensate,” and “[u]tilizing this record,
`advertisers can be billed”), and we did not find this language to limit the
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`CBM2016-00096
`Patent 6,128,651 C1
`scope of the challenged claims. Id. at 12–13 (citing Ex. 1001, Abstract,
`2:46–48, 4:34–36, 4:44–45).
`In the Request for Rehearing, Google improperly attempts to re-argue
`its position, quoting for the first time a sentence from Mr. Schulz’s
`testimony repeating Google’s position that “the only reason ‘records’ are
`generated and retained in [independent] claims 20 and 25 (and their
`dependent claims) is for processing payments for ad placements,” and
`characterizing Mr. Schulz’s testimony as “unrebutted.” Req. Reh’g 5
`(emphasis omitted) (quoting Ex. ¶ 31). This newly-quoted testimony is
`flawed for the same reasons we discussed in our Decision. That is, Mr.
`Schulz relies on permissive and optional language as a basis for his opinion.
`See Ex. 1003 ¶ 31 (quoting Ex. 1001, Abstract (“websites can be
`compensated for ad display and advertisers billed for the ad display”
`(emphasis added)); id. at 4:32–37 (“record may be used to compensate”
`(emphasis added))). These optional compensation and billing aspects,
`however, are nowhere recited in the challenged claims. See Blue Calypso,
`LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016) (“[AIA]
`§ 18(d)(1) directs us to examine the claims when deciding whether a patent
`is a CBM patent.”); see also Secure Axcess, LLC v. PNC Bank Nat’l Ass’n,
`848 F.3d 1370, 1378–79 (Fed. Cir. 2017) (“[T]he written description alone
`cannot substitute for what may be missing in the patent ‘claims,’ and
`therefore does not in isolation determine CBM status.”).
`Moreover, the ’651 patent itself rebuts Mr. Schulz’s testimony that the
`“only reason ‘records’ are generated and retained . . . is for processing
`payments for ad placements,” Ex. 1003 ¶ 31 (emphasis added). On the
`contrary, the ’651 patent teaches retaining the record for the reason of
`
`6
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`CBM2016-00096
`Patent 6,128,651 C1
`allowing “advertising control to be maintained.” Ex. 1001, 3:40–43. In
`other words, the existing data in the record identifying which ads have
`already been displayed and timed out is used for the purpose of altering the
`ads and ad content available for the next display. See id. at 3:12–23.
`Independent claims 20 and 25 are illustrative of this use as they recite using
`the record for “retaining . . . the timer timeout of the ad content,” and
`“transmitting . . . new ad content . . . in response to receipt of the timer
`timeout report.” Id. at Reexamination Certificate, 2:43–49, 3:40–45.
`According to the ’651 patent, an added benefit is that a database,
`having been automatically generated as a necessary control for distributed
`advertising, also “can be used for compensation of the website and a billing
`record.” Ex. 1001, 3:59–60 (emphasis added). But these unclaimed
`compensation and billing aspects that are described in the specification of
`the ’651 patent are, at most, complementary and incidental to the claimed
`use of the record for allowing new ad and ad content to be determined based
`on the timer timeout data retained in the record. Moreover, if an advertiser
`entered into an alternative billing arrangement with the website operator that
`was not based on the time in which the advertisements were displayed on the
`website, such as a flat fee billing arrangement, the record need not be used
`for any financial purpose at all. Regardless, even if we were to assume that
`the record is used for compensation and billing as mentioned in the
`specification of the ’651 patent, because this billing feature is unclaimed
`and, therefore, only complementary or incidental to the use of the record that
`is actually recited in the challenged claims, it is insufficient to qualify the
`’651 patent as a CBM patent eligible for review. See Secure Axcess, 848
`
`7
`
`
`
`CBM2016-00096
`Patent 6,128,651 C1
`F.3d at 1381; Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1382
`(Fed. Cir. 2016).
`In summary, we are not persuaded by Google’s arguments that we
`abused our discretion in the Decision, or misapprehended or overlooked Mr.
`Schulz’s supporting testimony, in determining that the “retaining . . . a
`record” claim element does not qualify the ’651 patent as a CBM patent
`eligible for review. As discussed above, we directly addressed and found
`unpersuasive Google’s arguments that the claimed “record” is solely for the
`purpose of compensation and billing. Mr. Schulz’s testimony to the same
`point, moreover, is based on the same permissive and optional language
`concerning the compensation and billing aspects disclosed in the abstract
`and specification of the ’651 patent that Google relied on, and which we
`addressed in our Decision. Put simply, Mr. Schulz draws conclusions
`regarding CBM eligibility that are unsupported by the intrinsic evidence of
`the ’651 patent, and are entitled to little or no weight.
`B.
`Google also contends that the Decision misapprehended or overlooked
`Mr. Schulz’s testimony regarding KlausTech’s statements against its interest
`in assessing the scope of the “retaining . . . a record” claim element. Req.
`Reh’g 7–13. Google states that KlausTech and the named inventor of the
`’651 patent made several statements in the co-pending district court case that
`characterize the claim scope of the ’651 patent as being financial in nature
`and, although we acknowledged this testimony in the Decision, we
`“explicitly chose to disregard this evidence.” Id. at 8–10. Google argues
`that these statements must be accounted for in the original formulation of
`claim scope, and for the first time, cites to three cases from the U.S. Court of
`
`8
`
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`CBM2016-00096
`Patent 6,128,651 C1
`Appeals for the Federal Circuit in contending that our conclusion was based
`on a legal error. Id. at 10–12. Furthermore, Google asserts that Mr. Schulz
`presented unrebutted testimony regarding the statements against interest, and
`testified that these statements confirmed Mr. Schulz’s own assessment as to
`the scope of the challenged claims. Id. at 8–9.
`We do not agree with Google that, in our Decision, we
`misapprehended or overlooked evidence of KlausTech’s and the named
`inventor’s statements in the co-pending district court case regarding their
`characterizations of the ’651 patent. We did not “explicitly cho[o]se to
`disregard” this evidence as Google states, but on the contrary, we explicitly
`considered this evidence. Dec. 15–16. We acknowledged Google’s
`argument that in the co-pending district court case, KlausTech and the
`named inventor characterized the ’651 patent as being financial in nature,
`and we also acknowledged that the specification of the ’651 patent indicates
`that retaining a record of a displayed advertisement may be used for
`compensation and billing purposes. Id. at 15. We further found, however,
`that Google did not propose any claim constructions that are financial in
`nature, nor could we find any limitations in the claims directed to the
`compensation and billing aspects discussed in the specification. Id. at 12,
`15. Accordingly, because we have been instructed by the Federal Circuit
`that the focus must be on the claims for purposes of determining CBM
`eligibility, we found that the specification and district court statements were
`insufficient to overcome the language of the claims for purposes of
`determining whether the ’651 patent is a CBM patent eligible for review. Id.
`at 15–16.
`
`9
`
`
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`CBM2016-00096
`Patent 6,128,651 C1
`We also disagree with Google that our conclusion in this regard was
`based upon a legal error. Google contends that Federal Circuit case law
`establishes that inventor admissions are used as evidence to limit claims to
`particular embodiments. Req. Reh’g 11–12. Here, we are not presented
`with the issue of whether any of the challenged claims should be limited to a
`particular embodiment, but rather whether any of the challenged claims
`contain language that is financial in nature that would qualify the ’651 patent
`as a CBM patent eligible for review. Although KlausTech’s and the named
`inventor’s statements envision that a billing transaction will occur, this
`billing transaction would occur outside of the recited claim steps at a later
`time than the ad display being performed in those claim steps. And although
`the claimed “record” would be used to facilitate this future billing
`transaction, the fact that an element of a recited claim may be used later in
`the practice of a financial transaction is not enough to qualify a patent as
`eligible for CBM review when that use is not recited explicitly or inherently
`in the claim itself. See Secure Axcess, 848 F.3d at 1378–79.
`The alleged admissions against interest that Google offers as evidence
`do not concern any particular claim limitation, but instead are general
`characterizations of the ’651 patent, its claims, and how they may be used.
`See Req. Reh’g 8–9. Such general characterizations do not qualify a patent
`as eligible for CBM review when the construed claim language does not
`contain anything explicitly or inherently financial. See Blue Calypso, 815
`F.3d at 1340 (finding unpersuasive an argument comparing the titles of
`patents in assessing whether a patent is eligible for CBM review because
`“[AIA] § 18(d)(1) directs us to examine the claims when deciding whether a
`patent is a CBM patent”). Here, the same document that Google relies on as
`
`10
`
`
`
`CBM2016-00096
`Patent 6,128,651 C1
`containing KlausTech’s statements against interest likewise contains
`KlausTech’s proposed constructions of the terms of the challenged claims,
`albeit under the district court claim construction standard. See Ex. 1007, 11–
`26.1 Notably, Google does not point to any of these proposed constructions
`as being financial in nature. See Secure Axcess, 848 F.3d at 1379 (use of
`invention as a sale of a good or service must “be part of the claim as
`properly construed”).
`For all these reasons, we disagree with Google that KlausTech cannot,
`on the one hand, generally state that “[t]he invention taught and claimed in
`the ’651 patent [allows website owners] to simply and easily monetize their
`traffic,” and at the same time “exclude such operations to ‘monetize’ the
`traffic.” Req. Reh’g 10–11 (quoting Ex. 1007, 7 (emphasis omitted)). The
`issue for purposes of determining whether the ’651 patent is a CBM patent
`eligible for review is not whether KlausTech may be excluded from using its
`claimed invention to monetize traffic, as “nearly everything that is invented
`can and likely will be used in someone’s sale of a good or service.” Secure
`Axcess, 848 F.3d at 1379; see also Unwired Planet, 841 F.3d at 1382
`(“Likewise, it cannot be the case that a patent covering a method and
`corresponding apparatuses becomes a CBM patent because its practice could
`involve a potential sale of a good or service.”). Instead, the issue is whether
`the challenged claims include financial language that would qualify the ’651
`patent as a CBM patent eligible for review. The statements that Google
`relies on merely foresee the claimed invention as having the benefit of
`making it simpler and easier for website owners to receive advertising
`
`
`1 All references to the page numbers in Exhibit 1007 are to the page numbers
`inserted by Google at the bottom-center of each page.
`
`11
`
`
`
`CBM2016-00096
`Patent 6,128,651 C1
`revenue. See Req. Reh’g 8, 11. Without claims directed to a method or
`apparatus “used in the practice, administration, or management of a financial
`product or service,” the facilitation of future sales is not enough to qualify
`the ’651 patent as a CBM patent eligible for review. See Unwired Planet,
`841 F.3d at 1382 (“It is not enough that a sale has occurred or may occur, or
`even that the specification speculates such a potential sale might occur.”).
`Lastly, Google contends that we also misapprehended or overlooked
`Mr. Schultz’s testimony regarding the alleged statements against interest.
`Req. Reh’g 8–9. Mr. Schulz offers testimony regarding these statements at
`paragraphs 27 and 30 of his declaration. Ex. 1003 ¶¶ 27, 30. Neither the
`Petition nor the Reply, however, presents and develops this testimony in a
`manner that explains how it adds anything to Google’s arguments.
`Specifically, the Request for Rehearing directs us to pages 14–15 of the
`Petition (Req. Reh’g 8–9), but only page 14 of the Petition cites to Mr.
`Schulz’s paragraph 30, and only in support of Google’s statement that the
`named inventor described the main objective of the ’651 patent as being the
`underlying “business model.” See Pet. 13–14. This is, again, yet another
`generic characterization that does not focus on the challenged claims and is
`insufficient to qualify the ’651 patent as a CBM patent eligible for review.
`The Request for Rehearing also directs us to pages 23 and 53 of the
`Petition (Req. Reh’g 8–9), but these pages contain arguments as to whether
`the challenged claims are directed to a technological invention, and whether
`these claims include additional elements amounting to significantly more
`than the underlying abstract idea of presenting and monetizing online
`advertisements. See Pet. 23, 53. The discussion at pages 23 and 53 of the
`Petition cites to Mr. Schulz’s declaration not in regard to the alleged
`
`12
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`CBM2016-00096
`Patent 6,128,651 C1
`statements against interest, but in regard to Google’s contentions that the
`’651 patent addresses a business problem and provides a business process
`for tracking ad placements. See id. We did not misapprehend or overlook
`these issues, but rather did not reach them because the Petition failed to
`establish in the first instance that the challenged claims satisfy the financial
`prong of the definition of a CBM patent set forth in § 18(d)(1) of the AIA.
`
`
`IV. CONCLUSION
`
`For the foregoing reasons, Google has not demonstrated that we
`abused our discretion in determining not to institute a CBM patent review of
`the ’651 patent. In particular, Google has not persuaded us that we
`incorrectly determined that the challenged claims are not financial in nature,
`that we did not give appropriate consideration to statements made in the co-
`pending district court case by KlausTech and the named inventor, or that we
`misapprehended or overlooked Mr. Schultz’s testimony as to either of these
`issues.
`
`
`V. ORDER
`
`Accordingly, it is ORDERED that Google’s Request for Rehearing is
`DENIED.
`
`13
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`
`
`14
`
`CBM2016-00096
`Patent 6,128,651 C1
`For PETITIONER:
`
`Michael T. Hawkins
`Christopher C. Hoff
`John Phillips
`FISH & RICHARDSON P.C.
`hawkins@fr.com
`hoff@fr.com
`phillips@fr.com
`CBM19473-0342CP1@fr.com
`
`For PATENT OWNER:
`
`Amedeo F. Ferraro
`Thomas H. Martin
`Wesley C. Meinerding
`Alfred Y. Chu
`MARTIN & FERRARO, LLP
`aferraro@martinferraro.com
`tmartin@martinferraro.com
`wmeinerding@martinferraro.com
`alfred.chu@martinferraro.com
`docketing@martinferraro.com
`
`
`
`
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