`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`FEDERAL RESERVE BANK OF ATLANTA, FEDERAL RESERVE BANK OF
`BOSTON, FEDERAL RESERVE BANK OF CHICAGO, FEDERAL RESERVE
`BANK OF CLEVELAND, FEDERAL RESERVE BANK OF DALLAS,
`FEDERAL RESERVE BANK OF KANSAS CITY, FEDERAL RESERVE BANK
`OF MINNEAPOLIS, FEDERAL RESERVE BANK OF NEW YORK, FEDERAL
`RESERVE BANK OF PHILADELPHIA, FEDERAL RESERVE BANK OF
`RICHMOND, FEDERAL RESERVE BANK OF SAN FRANCISCO,
`and FEDERAL RESERVE BANK OF ST. LOUIS,
`
`Petitioners,
`
`v.
`
`BOZEMAN FINANCIAL LLC,
`
`Patent Owner.
`
`
`
`Case No.: CBM2017-00036
`U.S. Patent No. 8,768,840
`
`
`
`PETITIONERS’ SURREPLY
`
`
`
`
`
`
`
`
`I.
`
`TABLE OF CONTENTS
`Bozeman Has Failed To Demonstrate That The Statutory And Procedural
`Grounds For Granting Motions To Amend Are Met. ..................................... 1
`
`II.
`
`The Amended Claims Are Not Patent Eligible Under Section 101. ............... 3
`
`A.
`
`Step 1 ..................................................................................................... 4
`
`1.
`
`2.
`
`The Amended Claims Are Not Directed to Improvements in
`Computer Functionality. ............................................................. 4
`
`The Amended Claims Are Not Directed to a Physical Process.
` ...................................................................................................10
`
`B.
`
`Step 2: The Amended Claims Do Not Contain an Inventive Concept.
` .............................................................................................................11
`
`III. Conclusion .....................................................................................................12
`
`
`
`i
`
`
`
`
`
`Petitioners hereby submit this surreply in further support of their Opposition
`
`to Bozeman Financial LLC’s (“Bozeman”) Contingent Motion to Amend.
`
`I.
`
`
`
`Bozeman Has Failed To Demonstrate That The Statutory And
`Procedural Grounds For Granting Motions To Amend Are Met.
`
`Bozeman’s Response (Paper 31) only underscores its failure to satisfy the
`
`statutory and procedural grounds for granting motions to amend. While Bozeman
`
`dismisses these requirements as elevating “form over substance,” see Resp. at 5, a
`
`failure to satisfy them is fatal to its motion.1 See SalesForce.com, Inc. v.
`
`Virtualagility, Inc., CBM2013-00024, 2014 WL 4675293, at *25 (P.T.A.B. Sept.
`
`1
`Bozeman’s Response is 20 pages – 8 pages over the page limit (or more,
`
`since it appears not to comply with the font size requirements). Bozeman has not
`
`shown good cause for exceeding the page limit, and the Board should expunge
`
`Bozeman’s Response. See Illumina, Inc. v. Colombia University, IPR2012-00006,
`
`Paper 12 at 3 (P.T.A.B Nov. 9, 2012) (expunging from record brief that exceeded
`
`page limit without showing good cause). In the alternative, the Board should
`
`disregard those arguments that appear on pages that exceed the page limit. See Par
`
`Pharm., Inc. v. Novartis AG, IPR2016-00084, 2018 WL 389192, at n.8 (refusing
`
`to consider arguments raised in pages over page limit). Notwithstanding the
`
`foregoing, Petitioners respond herein to all of the arguments presented in
`
`Bozeman’s Response.
`
`
`
`1
`
`
`
`
`
`16, 2014) (denying motion where substitute claims did not address section 101
`
`grounds raised in the petition); Smith & Nephew, Inc. v. Convatec Techs., Inc.,
`
`IPR2013-00102, 2014 WL 2466143, at *30-31 (P.T.A.B. May 29, 2014) (denying
`
`motion where patentee attempted to show support for substitute claims in issued
`
`patent rather than the original patent disclosure as required); Epicor Software
`
`Corp. v. Protegrity Corp., CBM2015-00006, 2016 WL 1566568, at *23 (P.T.A.B.
`
`2016) (denying motion where patentee added new matter to the claims).
`
`Bozeman contends that its proposed amended claims do not add new matter
`
`because the additions further limit the claims’ scope. See Resp. at 6. Bozeman’s
`
`argument, however, reflects a fundamental misunderstanding of the law of new
`
`matter. While it is true that a proposed substitute claim must not enlarge the scope
`
`of the claims, that is a separate issue from new matter. See 35 U.S.C. § 316(d)(3)
`
`(“An amendment under this subsection may not enlarge the scope of the claims of
`
`the patent or introduce new matter) (emphasis added). A substitute claim adds
`
`new matter when it “introduce[s] elements or limitations which are not supported
`
`by the original disclosure of the patent.” Apple Inc. v. Personalized Media
`
`Comm’s LLC, IPR2016-00754, 2017 WL 4175017, at *26 (P.T.A.B. Sept. 19,
`
`2017). As demonstrated in Petitioners’ Opposition, Bozeman’s newly-added claim
`
`limitations are not disclosed in or supported by the specification, and therefore,
`
`
`
`2
`
`
`
`
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`they add new matter to the claims. See Paper 29 at 5-9. Accordingly, Bozeman’s
`
`Motion should be denied.
`
`II. The Amended Claims Are Not Patent Eligible Under Section 101.
`
`The amended claims are not patent eligible, as (1) they are directed to the
`
`abstract idea of collecting, analyzing, and presenting information for financial
`
`transaction fraud or error detection, see, e.g., Elec. Power Grp, LLC v. Alstom S.A.,
`
`830 F.3d 1350 (Fed. Cir. 2016), without reciting any improvement to computing
`
`functionality, see Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016),
`
`and (2) they fail to describe any inventive concept sufficient to warrant patent
`
`protection, see, e.g., FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089 (Fed.
`
`Cir. 2016). Bozeman’s Response provides no factual or legal basis to find
`
`otherwise, relying instead on conclusory statements and unsupported attorney
`
`argument. Such statements are insufficient to overcome Petitioners’ challenge of
`
`the amended claims. See, e.g., IBG LLC, et al. v. Trading Techs. Int’l, Inc.,
`
`CBM2016-00051, 2017 WL 3394061, at *7-9 (P.T.A.B. Aug. 7, 2017) (rejecting
`
`Patent Owner’s “conclusory statements” that the claims are directed to “a specific
`
`graphical user interface”).
`
`
`
`3
`
`
`
`
`
`A.
`
`Step 1
`1.
`The Amended Claims Are Not Directed to Improvements in
`Computer Functionality.
`As best Bozeman’s arguments can be understood, Bozeman appears to
`
`contend that the amended claims are directed to improvements in computer
`
`functionality, rather than an abstract idea. Specifically, Bozeman contends that
`
`“the ‘840 Patent discloses a technical solution which embodies a new and unique
`
`system” for various entities “to present a checking-account payment to a 3rd party
`
`through a universal system which vastly improves the accuracy and efficiency of a
`
`payment clearing process.” Resp. at 7. Bozeman underscores purported “key
`
`components of the invention such as the timing, speed and accuracy of the
`
`universal matching of data, the authentication and settlement of the transaction and
`
`the notification mechanisms which are significant in the patented invention.” Id.
`
`Yet, the amended claims do not recite any technical details concerning any
`
`alleged improvement in computer functionality, nor do the claims illuminate how
`
`the claimed conventional computing components operate to improve the “timing,
`
`speed and accuracy” associated with collecting, analyzing, and presenting data.
`
`Where a patentee only recites “the what of the invention, but none of the how that
`
`is necessary to turn the abstract idea into a patent-eligible application,” the claims
`
`fail. See TDE Petroleum Data Sols., Inc. v. AKM Enter., Inc., 657 Fed. App’x 991,
`
`993 (Fed. Cir. 2016) (citing Elec. Power, 830 F.3d at 1353) (emphasis in original);
`
`
`
`4
`
`
`
`
`
`see also Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1057 (Fed.
`
`Cir. 2017) (“Significantly, the claims do not provide details as to any non-
`
`conventional software for enhancing the financing process.”); Dealertrack, Inc. v.
`
`Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012) (finding claims abstract because the
`
`patent did “not specify how the computer hardware and database are specially
`
`programmed to perform the steps claimed in the patent”).
`
`
`
`The amended claims stand in stark contrast to those found patent eligible in
`
`Enfish. See 822 F.3d at 1339. The Enfish patent was directed to improvements in
`
`the way a computer stores and retrieves data in memory through the use of an
`
`unconventional self-referential table. See id. at 1337-39. Thus, unlike the
`
`amended claims at issue here, the Enfish claims were “directed to a specific
`
`implementation of a solution to a problem in the software arts.” Id. at 1339. They
`
`did not comprise “general-purpose computer components [] added post-hoc to a
`
`fundamental economic practice…,” id., like the proposed amended claims.
`
`The amended claims are also readily distinguishable from the claims at issue
`
`in McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016)
`
`and Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir. 2016)
`
`cited by Bozeman. See Resp. at 9-10 (citing McRO), 11-14 (citing Amdocs). In
`
`McRO, the claims were directed to an “improvement … allowing computers to
`
`produce ‘accurate and realistic lip synchronization and facial expressions in
`
`
`
`5
`
`
`
`
`
`animated characters’ that previously could only be produced by human animators.”
`
`837 F.3d at 1313. The invention realized this improvement “through ‘the use of
`
`rules, rather than artists, to set the morph weights and transitions between
`
`phonemes.’” Id. The claims were deemed patent eligible because “the automation
`
`goes beyond merely ‘organizing [existing] information into a new form’ or
`
`carrying out a fundamental economic practice”; “[t]he claimed process uses a
`
`combined order of specific rules that renders information into a specific format that
`
`is then used and applied to create desired results: a sequence of synchronized,
`
`animated characters.” Id. at 1315.
`
`Bozeman attempts to argue that, like McRO, the amended claims are
`
`“directed to particular methods through the use of [a] process to produce a more
`
`accurate and timely financial transaction clearing process and settlement,” but this
`
`comparison does not hold up. Resp. at 16. Whereas the claims in McRO required
`
`a specific set of rules to render information in a specific format to create desired
`
`results (837 F.3d at 1307-08), the amended claims require only generic
`
`conventional computer technologies to carry out generic, conventional steps:
`
`“receiving … a first record,” “storing on a computer usable medium … a first
`
`record,” “receiving … a second record” where each of the first and second records
`
`have at least two parameters in common, “automatically determining … when
`
`there is a match” between at least two of the parameters in the first and second
`
`
`
`6
`
`
`
`
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`records, “dynamically sending … a notification to said payee bank … with
`
`authorization to process said electronic financial transaction when said parameters
`
`match,” “dynamically sending … a notification to said payee bank … to not
`
`process said electronic financial transaction when said parameters do not match,”
`
`and “in response to said notification, either dynamically or selectively via said
`
`computerized system permitting or disallowing said transaction to proceed….”
`
`Paper 25 at Claim 21.
`
`Bozeman’s added recitations of a “Universal Positive Pay Database,” a
`
`“Positive Pay File Format,” an “Issue File Format,” a “point-of-sale terminal,” and
`
`a “portable electronic device” do not make the claims any less abstract.
`
`Converting electronic data from one format to another is abstract, and the
`
`specification provides no substantive details concerning these formats that suggest
`
`they are inventive. See Digitech Image Techs., LLC v. Elecs. for Imaging, Inc.,
`
`758 F.3d 1344, 1351 (Fed. Cir. 2014) (finding that a process of transforming
`
`electronic data into another form is not patent eligible); see generally Ex. 1001 at
`
`27:27-41. Moreover, “claims do not become patentable under § 101 simply by
`
`reciting a computer element.” SAP Am., Inc. v. Versata Dev. Group, Inc.,
`
`CBM2013-00042, 2014 WL 1252847, at *13 (P.T.A.B. Feb. 26, 2014).
`
`While the patent appears to contend that the claimed system is an improved
`
`system because it provides every participant in the payment clearing process access
`
`
`
`7
`
`
`
`
`
`to the Universal Positive Pay Database, the ‘840 Patent does not recite or disclose
`
`any novel way of providing such “universal” access. See Ex. 1001 at 5:49-53;
`
`13:34-41; 15:42-45; 28:24-26. Thus, the amended claims are merely directed to
`
`the use of conventional computer technologies to carry out a method of collecting,
`
`analyzing, and presenting information. “Claims directed to generalized steps to be
`
`performed on a computer using conventional computer activity are not patent
`
`eligible.” Two-Way Media Ltd. v. Comcast Cable Commc'ns, LLC, 874 F.3d 1329,
`
`1337 (Fed. Cir. 2017) (citing Internet Patents Corp. v. Active Network, Inc., 790
`
`F.3d 1343, 1348-49 (Fed. Cir. 2015)).
`
`
`
`Bozeman borrows liberally from Judge Reyna’s dissenting opinion in
`
`Amdocs to support its claim that the amended claims are not abstract. See Paper 31
`
`at 11-12. What Bozeman omits is that the Amdocs majority did not expressly find
`
`that the claims at issue there survived Step 1.2 Rather, the majority sidestepped
`
`any decision on Step 1, and notably, warned that the dissent’s “creative way” of
`
`finding some claims patent eligible under Alice Step 1 is “not the law.” Amdocs,
`
`
`2
`The panel majority found the challenged claims to be patent eligible under
`
`Alice Step 2, discussed infra. For the reasons discussed below, Bozeman’s claims
`
`are not saved under Step 2, either.
`
`
`
`8
`
`
`
`
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`841 F.3d at 1295. Accordingly, Judge Reyna’s analysis is not controlling or
`
`persuasive here.
`
`
`
`Bozeman’s reliance on Apple, Inc. v. Mirror World, CBM2016-00019 and
`
`Trading Techs. Int’l, Inc. v. CQG, Inc., 675 Fed. Appx. 1001 (Fed. Cir. 2017), is
`
`similarly misguided. See Resp. at 8, 10. In Mirror World, the patent provided a
`
`solution to several problems outlined in the specification that did not exist in a pre-
`
`computer world. See CBM2016-00019, Paper 12 at 14. The claimed solution was
`
`“necessarily rooted in computer technology” and reflected an improvement in
`
`computer functionality
`
`that was distinguishable from
`
`the way
`
`in which
`
`conventional computers operate. See id. at 14-17.
`
`
`
`Likewise,
`
`in Trading Technologies,
`
`the patents were directed
`
`to
`
`improvements in existing graphical user interface devices that have no “pre-
`
`electronic trading analog,” and recited more than “‘setting, displaying, and
`
`selecting’ data or information that is visible on the [graphical user interface]
`
`device.” Trading Techs., 675 F. App’x at 1004. Rather, the claims required “a
`
`specific, structured graphical user interface paired with a prescribed functionality
`
`directly related to the graphical user interface’s structure that is addressed to and
`
`resolves a specifically identified problem in the prior state of the art.” Id.
`
`
`
`In contrast to Mirror Worlds and Trading Technologies, the amended claims
`
`do not recite any novel technical solution for verifying financial transaction
`
`
`
`9
`
`
`
`
`
`information or detecting fraud, or any improvements in the underlying computer
`
`functionality that would achieve these results. Bozeman fails to identify any novel
`
`feature of the amended claims that improves the way a general purpose computer
`
`can detect fraud, aside from the “mere automation of manual processes using
`
`generic computers,” but that alone “does not constitute a patentable improvement
`
`in computer technology.” Credit Acceptance Corp., 859 F.3d at 1055.
`
`2.
`
`The Amended Claims Are Not Directed to a Physical
`Process.
`
`Bozeman further contends that the amended claims are not abstract under
`
`U.S. Bancorp v. Solutran, Inc., CBM2014-00076, Paper 16, at 13 (P.T.A.B. Aug.
`
`7, 2014) because the claims “are directed to the concept of processing financial
`
`transactions including paper checks.” See Resp. at 10-11. Bozeman’s reliance on
`
`Solutran (a non-precedential opinion) is misplaced.
`
`In Solutran, the Board concluded that claims directed to a physical process
`
`of processing paper checks was not abstract. See Solutran, Paper 16 at 13. “It was
`
`significant to the Board’s § 101 analysis in Solutran that the claim was for ‘a
`
`method of processing paper checks, which is more akin to a physical process than
`
`an abstract idea.’” See Care N’ Care Ins. Co., Inc. v. Integrated Claims Sys., LLC,
`
`CBM2015-00064, 2016 WL 3438926, at *9 (P.T.A.B. June 21, 2016). Here, the
`
`amended claims are directed to a computer-implemented method for detecting
`
`
`
`10
`
`
`
`
`
`fraud in electronic financial transactions – an electronic process, not a physical
`
`process. Accordingly, the reasoning in Solutran does not apply here.
`
`B.
`
`Step 2: The Amended Claims Do Not Contain an Inventive
`Concept.
`
`At Step 2, Bozeman claims that the ‘840 Patent “is directed to a unique
`
`system … by utilizing disparate databases accessible from multiple data entry
`
`points and computerized systems with multi-factor authentication to gain a more
`
`efficient, more accurate system and with the result being faster, more secure
`
`payments….” Resp. at 14. Bozeman’s arguments are not persuasive, however,
`
`because no inventive concepts directed to “disparate databases” and “multi-factor
`
`authentication” to achieve “a more efficient, more accurate system” or “faster,
`
`more secure payments” are recited anywhere in the claims. See RecogniCorp, LLC
`
`v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017) (“To save a patent at step
`
`two, an inventive concept must be evident in the claims.”).
`
`Bozeman tellingly avoids any discussion about the claims, and instead lists
`
`purported “[e]xamples of certain non-abstract, inventive concepts which are
`
`directed to technological improvements [ ] in the ‘840 Patent Specification[.]”
`
`Paper 31 at 16-21. The main problem that Bozeman “cannot overcome is that the
`
`claim—as opposed to something purportedly described in the specification—is
`
`missing an inventive concept.” Two-Way Media, 874 F.3d at 1338. Here, even if
`
`
`
`11
`
`
`
`
`
`the specification were to describe purportedly inventive technologies that achieve
`
`“faster and more secure payments” (which Petitioners dispute), the claims do not.
`
`Finally, Bozeman mistakenly alleges that Petitioners’ “analysis omits any
`
`consideration of the elements of the claims as an ordered combination to determine
`
`whether the additional elements transform the nature of the claims into a patent-
`
`eligible application.” Resp. at 15. In fact, Petitioners’ Opposition explains
`
`precisely why “the ordered combination of the steps of collecting and analyzing
`
`information and presenting the results … does not present an inventive concept.”
`
`Paper 29 at 24-25 (citing, e.g., Cyberfone Sys., LLC v. CNN Interactive Grp., Inc.,
`
`558 Fed. App’x 988, 993 (Fed. Cir. 2014); TDE Petroleum Data Sol’ns, Inc. v.
`
`AKM Enter., Inc., 657 Fed. App’x 991, 993 (Fed. Cir. 2016)).
`
`III. Conclusion
`
`For all the reasons set forth in Petitioners’ Opposition and cited herein,
`
`Bozeman’s Motion to Amend should be denied.
`
`Respectfully submitted, this 1st day of March, 2018.
`
`
`
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`
`
`
`
`
`/Natasha H. Moffitt, Reg. No. 53,340/
`Natasha H. Moffitt
` Reg. No. 53,340
`Holmes J. Hawkins III
` Reg. No. 38,913
`KING & SPALDING LLP
`1180 Peachtree Street, NE
`Atlanta, GA 30309
`
`12
`
`
`
`
`
`
`
`Tel.: (404) 572-4600
`Fax: (404) 572-5134
`nmoffitt@kslaw.com
`hhawkins@kslaw.com
`
`Abby L. Parsons
` Reg. No. 61,473
`KING & SPALDING LLP
`1000 Louisiana Street
`Suite 4000
`Houston, TX 77002
`Tel.: (713) 751-3294
`Fax: (713) 751-3290
`aparsons@kslaw.com
`
`
`
`13
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`
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`CERTIFICATION UNDER 37 C.F.R. § 42.24
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`Under the provisions of 37 C.F.R. § 42.24(d), the undersigned hereby
`
`certifies that the page count for the foregoing Petitioners’ Surreply totals 12 pages.
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`
`
`/Natasha H. Moffitt, Reg. No. 53,340/
`Natasha H. Moffitt
` Reg. No. 53,340
`
`
`
`1
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that on this 1st day of March, 2018, a true and
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`correct copy of the foregoing PETITIONERS’ SURREPLY was served by UPS
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`NEXT DAY AIR on the attorneys of record for the patent owner at the following
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`addresses:
`
`John W. Goldschmidt, Jr.
`FERENCE & ASSOCIATES LLC
`409 Broad Street
`Pittsburgh, Pennsylvania 15143
`
`Thomas J. Maiorino
`Maiorino Law Group LLC
`224 Amberfield Drive
`Mt. Laurel, New Jersey 08054
`
`This 1st day of March, 2018.
`
`
`/Natasha H. Moffitt, Reg. No. 53,340/
`Natasha H. Moffitt
`
`Reg. No. 53,340
`
`KING & SPALDING LLP
`1180 Peachtree Street, NE
`Atlanta, GA 30309
`
`Tel.: (404) 572-4600
`
`Fax: (404) 572-5134
`Email: nmoffitt@kslaw.com
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`2
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