`
`Trials@uspto.gov
`571.272.782
`
`Paper No. 14
` Entered: November 27, 2017
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`FACEBOOK, INC. and INSTAGRAM, LLC,
`Petitioner,
`
`v.
`
`SKKY, LLC,
`Patent Owner.
`_______________
`
`Case CBM2017-00002
`Patent 9,203,870 B2
`_______________
`
`
`
`
`
`Before KARL D. EASTHOM, WILLIAM V. SAINDON, and
`CHRISTOPHER G. PAULRAJ, Administrative Patent Judges.
`
`
`SAINDON, Administrative Patent Judge.
`
`
`
`
`DECISION ON PETITIONER’S REQUEST FOR REHEARING
`37 C.F.R. § 42.71
`
`
`
`
`
`
`
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`
`
`
`I. INTRODUCTION
`Petitioner, collectively Facebook, Inc. and Instagram, LLC, requests a
`rehearing (Paper 12, “Reh’g Req.” or “Rehearing Request”), under
`37 C.F.R. § 42.71(c) of our Decision Denying Institution (Paper 11, “Dec.
`Den’g Inst.”) denying its Petition (Paper 1, “Pet.”). We denied institution on
`the sole ground that the U.S. Patent No. 9,203,870 B2 (Ex. 1001, “the ’870
`patent”) was not eligible for covered business method (“CBM”) patent
`review because the challenged claims existing at the time of the Decision
`Denying Institution did not require a financial activity. Dec. Den’g Inst. 15.
`Upon reconsideration of the record, we maintain our determination
`that the ’870 patent is not a covered business method patent. Accordingly,
`we deny the Rehearing Request to the extent it seeks a modification of our
`Decision Denying Institution.
`Prior to its Rehearing Request, Petitioner filed a Petition requesting
`CBM patent review of claims 1–14 of the ’870 patent under Section 18 of
`the Leahy-Smith America Invents Act, Pub. L. No. 112–29, 125 Stat. 284,
`329 (2011) (“AIA”). Patent Owner, Skky, LLC, filed a Preliminary
`Response. Paper 8 (“Prelim. Resp.”). With its Preliminary Response, Patent
`Owner provided evidence (Ex. 2001) that it filed with the Office a statutory
`disclaimer of claims 1–7 and 9 of the ’870 patent pursuant to 37 C.F.R. §
`1.321(a). Prelim. Resp. 2 (citing Ex. 2001). After the Preliminary
`Response, Petitioner filed a Preliminary Reply to Patent Owner’s
`Preliminary Response, as authorized by the panel pursuant an e-mail request
`by Petitioner, to address the consequences of Patent Owner’s disclaimer of
`claims 1–7 and 9. Paper 9 (“Pet. Prelim. Reply”). In response to the
`
`2
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`Preliminary Reply, Patent Owner filed a Preliminary Sur-Reply, also as
`authorized by the panel. Paper 10 (“PO Sur-Reply”).
`II. ANALYSIS
`A. Standard of Review
`When rehearing a decision on petition, the Board will review the
`decision for an abuse of discretion. 37 C.F.R. § 42.71(c). “An abuse of
`discretion occurs 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.”
`Arnold P’ship v. Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004). The party
`requesting rehearing bears the burden of showing an abuse of discretion, and
`“[t]he request must specifically identify all matters the party believes the
`Board misapprehended or overlooked.” 37 C.F.R. § 42.71(d).
`B. The ’870 Patent
`The ’870 patent describes a method for delivering audio and/or visual
`media files, including recordings of songs, musical compositions, ringtones,
`video, films, television shows, and personal recordings, wirelessly or non-
`wirelessly to devices for playback of the content, with or without an Internet
`connection. Ex. 1001, Abstract, 1:63–2:9.
`
`
`
`C. A Covered Business Method (CBM) Patent
`A “covered business method (CBM) patent” 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); 37 C.F.R. § 42.301(a). Under
`AIA § 18(a)(1)(E), “[t]he Director may institute a transitional proceeding
`
`3
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`only for a patent that is a covered business method patent.” (Emphasis
`added). A patent is eligible for CBM review if it has at least one claim
`directed to a covered business method. Transitional Program for Covered
`Business Method Patents—Definitions of Covered Business Method Patent
`and Technological Invention; Final Rule, 77 Fed. Reg. 48,734, 48,736
`(Response to Comment 8).
`
`D. Discussion
`Petitioner refers the panel to a related CBM proceeding that also
`involved a disclaimer of claims, Facebook, Inc. v. Skky, LLC, Case
`CBM2016-00091 (PTAB) (“’091 CBM”). See Reh’g Req. 1. In deciding a
`rehearing request in the ’091 CBM proceeding, the Chief Judge expanded
`the panel “to provide guidance regarding the effect of . . . disclaimers on
`CBM patent review eligibility.” ’091 CBM, Paper 12, 3 (rehearing
`decision). In that case, the expanded panel denied petitioner’s request for
`rehearing, holding that “CBM patent review eligibility is determined based
`on the claims of the challenged patent as they exist at the time of the decision
`whether to institute, and statutorily disclaimed claims must be treated as if
`they never existed.” ’091 CBM, Paper 12, 11 (emphasis added). The instant
`Rehearing Decision tracks the reasoning and holding of the ’091 CBM
`rehearing decision.
`Similar to petitioner’s arguments in the ’091 CBM proceeding,
`Petitioner argues “a patent owner filing a statutory disclaimer of certain
`claims after the filing of the CBM petition does not extinguish the right of
`accused infringers (Petitioners here) to challenge the patent in CBM review
`and should not unilaterally strip the Board of its authority to institute CBM
`review.” Reh’g Req. 1–3. Citing Rembrandt Wireless Techs., LP v.
`
`4
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`Samsung Elecs. Co., 853 F.3d 1370, 2017 (Fed. Cir. Apr. 17, 2017),
`Petitioner contends that the decision “clarifies the impact of post-filing
`statutory disclaimers and underscores the points Petitioners previously
`explained in their preliminary reply.” Id. at 3. Namely, Petitioner explains
`federal courts apply a “time-of-filing” rule for determining federal court
`jurisdiction, and argues that the Board should use the same rule. Id. at 4–9.
`Although federal courts apply the rule that “the jurisdiction of the
`court depends upon the state of things at the time of the action brought,”
`Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 570 (2004)
`(quoting Mollan v. Torrance, 22 U.S. 537, 539 (1824)) (citation omitted), as
`an administrative agency, the Board has limited authority defined by statute,
`see Kilip v. Office of Personnel Mgmt., 991 F.2d 1564, 1569 (Fed. Cir. 1993)
`(“An agency is but a creature of statute. Any and all authority pursuant to
`which an agency may act ultimately must be grounded in an express grant
`from Congress.”).
`The Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat.
`284 (2011) (“AIA”) created a transitional program for the Board to conduct
`post-grant reviews of a limited set of patents designated as “covered
`business method patents.” AIA § 18(a). The AIA defines a “covered
`business method patent” as “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.”
`Id. § 18(d)(1). Thus, in order to institute a CBM review proceeding, the
`statute requires a patent that claims a particular type of method or apparatus.
`See Secure Axcess, LLC v. PNC Bank Nat’l Ass’n, 848 F.3d 1370, 1381
`(Fed. Cir. 2017) (“Necessarily, the statutory definition of a CBM patent
`
`5
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`requires that the patent have a claim that contains, however phrased, a
`financial activity element.” (emphasis added)); Unwired Planet, LLC v.
`Google Inc., 841 F.3d 1376, 1382 (Fed. Cir. 2016) (CBM patents “are
`limited to those with claims that are directed to methods and apparatuses of
`particular types and with particular uses ‘in the practice, administration, or
`management of a financial product or service’” (emphasis added)); Blue
`Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016) (citing
`previous Board decisions that “properly focuse[d] on the claim language at
`issue” (emphasis added)).
`Under AIA § 18(a)(1)(E), “[t]he Director may institute a transitional
`proceeding only for a patent that is a covered business method
`patent.” (Emphases added). In other words, the decision at the time of
`institution is based upon on what “is a covered business method patent,” id.
`(emphasis added), instead of what was “a covered business method patent”
`prior to the disclaimer. See also AIA § 18(d)(1) (using the present tense
`“claims”); 37 C.F.R. § 42.207(e) (when a patent owner files a statutory
`disclaimer, “[n]o post-grant review will be instituted based on disclaimed
`claims”). Petitioner’s proposed rule would require the Director to institute a
`CBM patent review “for a patent that is [not] a covered business method
`patent,” contrary to AIA § 18(a)(1)(E).
`Petitioner’s “time-of-filing” rule also would require the Board to
`ignore 35 U.S.C. § 253(a) and its effect, as interpreted by the Federal
`Circuit. 35 U.S.C. § 253(a) authorizes statutory disclaimer of claims as
`follows:
`A patentee, whether of the whole or any sectional interest therein,
`may, on payment of the fee required by law, make disclaimer of
`any complete claim, stating therein the extent of his interest in
`
`6
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`
`such patent. Such disclaimer shall be in writing, and recorded in
`the Patent and Trademark Office; and it shall thereafter be
`considered as part of the original patent to the extent of the
`interest possessed by the disclaimant and by those claiming
`under him.
`The Federal Circuit has held consistently that claims disclaimed under
`§ 253(a) should be treated as though they never existed. See Vectra Fitness,
`Inc. v. TWNK Corp., 162 F.3d 1379, 1383 (Fed. Cir. 1998) (“This court has
`interpreted the term ‘considered as part of the original patent’ in section 253
`to mean that the patent is treated as though the disclaimed claims never
`existed.”); Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996) (“A statutory
`disclaimer under 35 U.S.C. § 253 has the effect of canceling the claims from
`the patent and the patent is viewed as though the disclaimed claims had
`never existed in the patent.”); see also Genetics Inst., LLC v. Novartis
`Vaccines & Diagnostics, Inc., 655 F.3d 1291, 1299 (Fed. Cir. 2011) (holding
`that the Board’s interference jurisdiction under 35 U.S.C. § 291 required
`“the existence of an interference, and a claim that ‘never existed’ [due to a
`statutory disclaimer] cannot form the basis for an interference”).
`According to Petitioner, Rembrandt clarifies that disclaimers under 35
`U.S.C. § 253(a) extinguish only a patent owner’s legal rights—not the rights
`of others—with regard to the disclaimed claims, pointing to the following
`language in the decision:
`[W]hile we have held that a disclaimer relinquishes the rights of
`the patent owner, we have never held that the patent owner’s
`disclaimer relinquishes the rights of the public. Indeed, our
`precedent and that of other courts have not readily extended the
`effects of disclaimer to situations where others besides the
`patentee have an interest that relates to the relinquished claims.
`
`7
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`Reh’g Req. 3–4 (quoting Rembrandt, 853 F.3d at 1383–84 (emphases by
`Petitioner)). Petitioner argues that the principle annunciated in Rembrandt
`“squarely applies to the rights Congress and the PTO granted to accused
`infringers under the Covered Business Method patent review program.” Id.
`at 4.
`
`Contrary to Petitioner’s arguments, Rembrandt does not address the
`AIA § 18(a)(1)(E) provision requiring CBM institution to be based on what
`“is a covered business method patent.” Rather, it involves the patent
`marking statute, which pertains to giving “notice to the public” that an
`article is patented. See 35 U.S.C. § 287(a); Rembrandt, 853 F.3d at 1382–
`84. In Rembrandt, the plaintiff disclaimed claims to avoid a limitation on
`damages due to a failure to mark in accordance with the marking statute.
`853 F.3d at 1382–84. The Federal Circuit vacated and remanded the district
`court’s denial of the defendant’s motion to bar recovery of pre-notice
`damages based on the disclaimer, emphasizing the purpose of the marking
`statute—to protect the public from liability for unknown infringement. Id.
`Because the purpose of marking is to provide public notice, the court
`reasoned that it was “irreconcilable” for a disclaimer to extinguish the right
`of the public to utilize unmarked features of a product until receiving notice.
`Id. Protecting the public’s rights was central to the decision, as reflected in
`the court’s narrow holding:
`the marking statute’s focus is not only the rights of the
`patentee, but the rights of the public . . . . Considering these
`rights held by the public, we hold that disclaimer cannot serve
`to retroactively dissolve the § 287(a) marking requirement for a
`patentee to collect pre-notice damages.
`
`
`Id. at 1384.
`
`8
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`
`In contrast to the patent marking statute at issue in Rembrandt, which
`expressly pertains to rights of the “public,” as well as a defendant’s statutory
`right to patent infringement defenses and counterclaims, the public generally
`does not have an analogous right to institution of a CBM patent review.1
`See Rembrandt, 853 F.3d at 1383–84. Although certain individuals or
`entities who have standing and otherwise meet the statutory requirements
`may petition for CBM patent review, institution is discretionary, and in
`exercising this discretion, “[t]he Director may institute a transitional
`proceeding only for a patent that is a covered business method patent.” See
`AIA § 18(a)(1) (emphases added); 35 U.S.C. § 324(a):
`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.
`
`
`(emphasis added); AIA §§ 18(a)(1)(B), 18(d)(1) (standing–– petitioner must
`be “charged with infringement”); 37 C.F.R. §§ 42.4(a) (“The Board
`institutes the trial on behalf of the Director.”), 42.208(b) (“At any time prior
`to institution of post-grant review, the Board may deny some or all grounds
`for unpatentability for some or all of the challenged claims.”), 42.208(b)
`(petitioner must be “charged with infringement”).
`
`
`1 In Secure Axcess, LLC v. PNC Bank Nat’l Ass’n, 859 F.3d 998 (Fed. Cir.
`2017), the court did not decide the issue controlling the outcome here (i.e.,
`the effect of a pre-institution statutory disclaimer). See 859 F.3d at 1003 n.5
`(Taranto, J., concurring), 1005 (Lourie, J., dissenting).
`
`
`9
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`
`Petitioner’s arguments do not show that Rembrandt requires claims
`disclaimed prior to institution to be considered when determining whether a
`patent is eligible for CBM patent review at the time of institution.
`Based on the foregoing discussion, Petitioner has not carried its
`burden of demonstrating that we abused our discretion in not considering
`disclaimed claims 1–7 and 9 and denying institution in this proceeding.
`III. ORDER
`It is ORDERED that Petitioner’s Rehearing Request is denied.
`
`
`
`
`10
`
`
`
`CBM2017-00002
`Patent 9,203,870 B2
`
`PETITIONER:
`
`Heidi Keefe
`Andrew Mace
`COOLEY LLP
`hkeefe@cooley.com
`amace@cooley.com
`
`
`PATENT OWNER:
`
`Ryan M. Schultz
`Andrew J. Kabat
`ROBINS KAPLAN LLP
`rschultz@robinskaplan.com
`akabat@robinskaplan.com
`
`
`
`
`
`
`
`kis
`
`11
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
