Trials@uspto.gov
`Tel: 571-272-7822
`
`
`Paper 13
`Entered: November 20, 2018
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`XEROX CORP., ACS TRANSPORT SOLUTIONS, INC.,
`XEROX TRANSPORT SOLUTIONS, INC.,
`CONDUENT INC., and
`NEW JERSEY TRANSIT CORP.,
`Petitioner,
`
`v.
`
`BYTEMARK, INC.,
`Patent Owner.
`_______________
`
`Case CBM2018-00018
`Patent 9,239,993 B2
`_______________
`
`
`
`
`Before JOSIAH C. COCKS, BRIAN J. McNAMARA, and
`BARRY L. GROSSMAN, Administrative Patent Judges.
`
`
`COCKS, Administrative Patent Judge.
`
`
`
`
`
`DECISION
`Denying Request for Rehearing
`37 C.F.R. § 42.71
`
`
`Tel: 571-272-7822
`
`
`Paper 13
`Entered: November 20, 2018
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`XEROX CORP., ACS TRANSPORT SOLUTIONS, INC.,
`XEROX TRANSPORT SOLUTIONS, INC.,
`CONDUENT INC., and
`NEW JERSEY TRANSIT CORP.,
`Petitioner,
`
`v.
`
`BYTEMARK, INC.,
`Patent Owner.
`_______________
`
`Case CBM2018-00018
`Patent 9,239,993 B2
`_______________
`
`
`
`
`Before JOSIAH C. COCKS, BRIAN J. McNAMARA, and
`BARRY L. GROSSMAN, Administrative Patent Judges.
`
`
`COCKS, Administrative Patent Judge.
`
`
`
`
`
`DECISION
`Denying Request for Rehearing
`37 C.F.R. § 42.71
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`
`I. INTRODUCTION
`
`Xerox Corp., ACS Transport Solutions, Inc., Xerox Transport
`
`Solutions, Inc., Conduent Inc., and New Jersey Transit Corp. (collectively
`
`“Petitioner”) timely filed a Request for Rehearing (Paper 12, “Req. Reh’g.”)
`
`requesting rehearing of our decision denying institution of a Covered
`
`Business Method (“CBM”) patent review of claims 1–17 and 22–24 of U.S.
`
`Patent No. 9,239,993 B2 (Ex. 1001, “the ’993 patent”). Paper 11
`
`(“Decision” or “Dec.”). The reason for our denial was that “we
`
`determine[d] that Petitioner has not established that the ’993 patent is a
`
`‘covered business method patent’ pursuant to the statutory definition in
`
`§ 18(d)(1) of the AIA.”1 Dec. 3.
`
`Petitioner seeks rehearing because, in Petitioner’s view, the Board (1)
`
`overlooked the recited financial activities of claims 1, 8, 11, 14, and 23
`
`(Req. Reh’g. 2), and (2) misapprehended the standard for CBM review (id.).
`
`For the reasons stated below, we deny Petitioner’s Request.
`
`II. ANALYSIS
`
`When rehearing a decision on institution, the Board reviews the
`
`decision for an abuse of discretion. 37 C.F.R. § 42.71(c). An abuse of
`
`discretion may arise if the decision is based on an erroneous interpretation of
`
`law, if a factual finding is not supported by substantial evidence, or if an
`
`unreasonable judgment is made in weighing relevant factors. Star Fruits
`
`S.N.C. v. U.S., 393 F.3d 1277, 1281 (Fed. Cir. 2005); Arnold P’ship v.
`
`
`1 See § 18(d)(1) of the Leahy-Smith America Invents Act (“AIA”), Pub. L.
`No. 112-29, 125 Stat. 284 (2011).
`
`2
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004); In re Gartside, 203 F.3d
`
`1305, 1315–16 (Fed. Cir. 2000).
`
`The burdens and requirements of a request for rehearing are stated in
`
`37 C.F.R. § 42.71(d):
`
`(d) Rehearing. . . . The burden of showing a decision
`should be modified lies with the party challenging the decision.
`The request must specifically identify all matters the party
`believes the Board misapprehended or overlooked, and the place
`where each matter was previously addressed in a motion, an
`opposition, or a reply.
`
`We address below, in the order presented in the Request for
`
`Rehearing, the matters Petitioner asserts we overlooked or misapprehended.
`
`A. Claim 23
`
`Claim 23 depends from independent claim 8. Claim 8 is directed to a
`
`“system for validating previously purchased electronic tickets for utilization
`
`of a service monitored by a ticket taker” and includes recitation of a “central
`
`computer system,” a “remove display device,” and a “secured validating
`
`display object.” Ex. 1001, 14:61–15:24. 2 Claim 23 adds the feature:
`
`“wherein the central computer system transmits the secured validating
`
`display object to the remote display device in dependence on completion of
`
`a purchase of the previously purchased electronic ticket.” Id. at 16:27–30.
`
`Thus, claim 23 specifies that a ticket taker cannot validate an electronic
`
`ticket unless it has been purchased. Purchasing an electronic ticket is a
`
`condition precedent to validating the ticket.
`
`
`2 It appears the claims of the ’993 patent refer to a “secured validation
`display object” interchangeably with a “secured validating display object.”
`
`3
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`
`Petitioner asserts we “overlooked the recited financial activities of
`
`claim 23 that comprise active, contemporaneous financial operations.” Req.
`
`Reh’g. 3–4. Petitioner states:
`
`Claim 23 recites “wherein the central computer system transmits
`the secured validating display object to the remote display
`device in dependence on completion of a purchase of the
`previously purchased electronic ticket.” As such, the claimed
`financial activity in claim 23 recites transmitting the display
`object “in dependence on completion of a purchase.”
`“Completion of a purchase” is an active, affirmance, and
`contemporaneous recitation of a financial operation. In addition,
`“dependence on completion of a purchase” is actively,
`affirmatively, contemporaneously, and directly conditioned on a
`financial operation.
`
`Id. at 3 (quoting language from claim 23, with emphasis added by
`
`Petitioner). According to Petitioner, the panel “overlooked the financial
`
`activities in claims 23 that actively and contemporaneously cover the
`
`management or administration of a financial product or service for a
`
`previously purchased electronic ticket.” Id. at 4.
`
`In particular, in the Decision, we addressed specifically the scope of
`
`claim 23. Dec. 20. In that regard, we concluded that, in connection with
`
`certain dependent claims, including claim 23, “Petitioner also does not
`
`present any persuasive evidence that the content of any of those dependent
`
`claims establishes a system for performing data processing or other
`
`operations used in the practice, administration, or management of a financial
`
`product or service.” Id. at 21. In reaching that conclusion, we were, and are,
`
`unpersuaded that Petitioner had identified adequate evidence or authority to
`
`support its argument that an act of transmitting a particular component, here
`
`a secured validating display object, based on a prior event, i.e., the act of
`
`4
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`completion of a purchase of a ticket, is a “recitation of a financial operation”
`
`sufficient to establish that claims 23 recite a covered business method. See
`
`37 C.F.R. § 42.304(a) (“The petitioner must demonstrate that the patent for
`
`which review is sought is a covered business method patent . . . .”).
`
`Petitioner simply does not now explain persuasively why the transmission of
`
`a secured validating display by a computer system in the course of validating
`
`a ticket that had been purchased constitutes activity that is “active[] and
`
`contemporaneous[]” with the “management or administration of a financial
`
`product or service.” See Req. Reh’g 3–4.
`
`In order to be eligible for a CBM review, the challenged patent must
`
`“claim[] 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 . . . .” AIA § 18(d)(1). After
`
`considering the Petition, we determined that Petitioner did not meets its
`
`burden of demonstrating that the patent for which review is sought is a
`
`covered business method patent. Although Petitioner may disagree with our
`
`determination as to claim 23, disagreement is not, itself, a proper basis for
`
`requesting rehearing. Here, Petitioner does not identify persuasively that we
`
`misapprehended or overlooked any matter in reaching a determination other
`
`than that desired by Petitioner.
`
`B. Claims 11 and 14
`
`Claims 11 and 14 also ultimately depend from claim 8. Claim 11 adds
`
`“wherein the remote display device receives and stores the secured
`
`validation display object prior to verification of the purchase of the
`
`previously purchased electronic ticket.” Ex. 1001, 15:29–34. Claim 14 adds
`
`“wherein the secured validation display object is further comprised of data
`
`5
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`parameters that are configured to be used by the remote display device to
`
`perform the purchase validation.” Id. at 15:40–44.
`
`Petitioner contends that recitation in claims 11 and 14 pertaining to
`
`“verification of the purchase” of the electronic ticket and “purchase
`
`validation” are “financial activities.” Req. Reh’g 5. Petitioner also contends
`
`that “claims 11 and 14 recite operations directly dependent on the financial
`
`activities – ‘prior to verification of the purchase’ and ‘data parameters to be
`
`use[d]’ ‘to perform the purchase validation.” Id. Petitioner then urges that
`
`“[c]laims 11 and 14 positively recite active and contemporaneous
`
`verification of a financial operation within the claim language.” Id. In
`
`essence, Petitioner is of the view that the recited acts in claims 11 and 14
`
`directed to “verification” or “validation” of a purchased ticket in association
`
`with the system of claim 8 constitute “contemporaneous financial activities”
`
`that render those claims eligible for CBM review. Id.
`
`
`
`As we observed in the Decision, the abstract of the ’993 patent
`
`summarizes the invention as “a novel system and method for distributing
`
`electronic ticketing such that the ticket is verified at the entrance to venues
`
`by means of an animation or other human perceptible verifying visual object
`
`that is selected by the venue for the specific event.” Dec. 4. To that end, we
`
`noted that the ’993 patent employs validation procedures that serve to limit
`
`piracy and prevent the use of tickets that have not been purchased from
`
`being used to access an event. See id. at 5. Those validation procedures
`
`serve to validate “purchased” tickets as opposed to tickets that are invalid or
`
`non-purchased. Independent claim 8 describes a system that validates a
`
`purchased ticket, and dependent claims 11 and 14 recite features pertaining
`
`to “verification” or “validation” of such purchase. Tickets are only valid if
`
`6
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`thy have been purchased. A “purchase” of a ticket, thus, is understood
`
`simply as a condition precedent to trigger successful employ of ticket
`
`validation procedures described and claimed in the ’993 patent, with a goal
`
`towards preventing ticket piracy. In our view, Petitioner does not explain
`
`persuasively why the initial or preliminary act or acts associated with
`
`validating a ticket’s status as “purchased” to give rise to piracy preventing
`
`ticket validation procedures becomes “contemporaneous financial activity.”
`
`We, thus, are not persuaded that we misapprehended or overlooked any
`
`matter in declining to institute a CBM review in connection with claims 11
`
`and 14.
`
`C. Claims 1, 17, and 18
`
`Claims 1, 17, and 18 are independent claims. Petitioner argues that
`
`“the Board overlooked the recited financial activities of claims 1, 17 and 18
`
`for the management or administration of a purchased electronic ticket.”
`
`Req. Reh’g. 5. Petitioner takes the position that “the claimed validation,
`
`purchase verification, purchase confirmation, and activation” are
`
`“independently financial in nature.” Id. Petitioner cites no evidence or
`
`authority to support this argument. Petitioner also argues that the claimed
`
`validation, purchase verification, purchase confirmation, and activation “are
`
`directed to the management or administration of the purchased ticket.” Id.
`
`Again, Petitioner does not cite any evidence or authority to support this
`
`argument. Petitioner concludes that “the Board overlooked the
`
`administration or management of the previously purchased ticket by way of
`
`the claimed operations.” We disagree.
`
`It is undisputed that the determination of whether a patent is eligible
`
`for CBM review is based on the challenged claims of the patent. E.g. see
`
`7
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016),
`
`(Ҥ 18(d)(1) directs us to examine the claims when deciding whether a
`
`patent is a CBM patent.”). In our Decision, we reviewed the claim language
`
`(Dec. 11–13) and the Specification (id. at 13–15) to construe the challenged
`
`claims. Based on this review, we held:
`
`The claims are directed to a person validating an electronic ticket
`based on a visual object. We find nothing explicitly or inherently
`financial in the claim language. There are no limitations recited
`that are directed to the practice, administration, or management
`of a financial product or service.
`
`Dec. 14. Thus, contrary to Petitioner’s argument, we did not overlook
`
`the claim language or consideration of the statutory standard of whether
`
`claims 1, 17, and 18 recite 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. See AIA
`
`§ 18(d)(1). We applied the proper legal test to the properly construed
`
`claims. The fact that a claim involves a past, present, or future purchase is
`
`not enough to convert the claim into a claim eligible for a CBM review.
`
`Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1382 (Fed. Cir. 2016).
`
`As stated in Unwired Planet, and in our Decision (see Dec. 11), whether a
`
`patent “claims activities ‘incidental to’ or ‘complementary to’ a financial
`
`activity” is not “the legal standard to determine whether a patent is a CBM
`
`patent.” Unwired Planet at 1382. For example, a patent “does not become a
`
`CBM patent because of its incidental or complementary use in banks.” Id.
`
`Similarly, a patent covering a method and corresponding apparatuses does
`
`not become a CBM patent “because its practice could involve a potential
`
`sale of a good or service.” Id. “It is not enough that a sale has occurred or
`
`8
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`may occur, or even that the specification speculates such a potential sale
`
`might occur.” Id. (emphasis added). As the Federal Circuit noted, “[a]ll
`
`patents, at some level, relate to potential sale of a good or service. Id.
`
`As discussed above, the claims are directed to validating a ticket.
`
`Petitioner does not provide persuasive evidence, authority, or argument that
`
`validating a ticket is the practice, administration, or management of a
`
`financial product or service. And, similar to our observations above, we are
`
`not persuaded that acts of initial verification as purchased before such ticket
`
`validation gives rise to a different conclusion.
`
`D. “Financial in Nature”
`
`Petitioner also generally argues that “[t]he Board misapprehended the
`
`standard for CBM review by failing to consider that the challenged claims
`
`are financial in nature.” Req. Reh’g. 7–11. Again, we disagree. We
`
`expressly recognized that consideration of whether a claimed invention was
`
`“financial in nature” was consistent with the statutory definition of covered
`
`business method patent. Dec. 10, n.5. We also recognized the breadth of
`
`products and services to which CBM review applies. Id. at 11.
`
`Petitioner criticizes our “financial in nature” analysis because it was
`
`cited in a discussion of the Specification of the ’993 patent. Req. Reh’g. 9.
`
`Petitioner does not appreciate that our discussion of the Specification was in
`
`the context of our claim construction analysis. In discussing the
`
`Specification, we stated “[t]he Specification fully supports the construction
`
`of the claims as being directed to validating a previously purchased ticket,
`
`and not directed to the practice, administration, or management of a financial
`
`product or service.” Dec. 13. Following our analysis, we concluded that
`
`“[w]e find nothing explicitly or inherently financial in nature in these
`
`9
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`passages from the Specification, which support the claimed invention.
`
`These disclosures are not directed to the practice, administration, or
`
`management of a financial product or service. Id. at 14 (emphasis added).
`
`We did not misapprehend the standard for CBM review by failing to
`
`consider that the challenged claims are “financial in nature.” We cited,
`
`discussed, and specifically considered whether the claims are “financial in
`
`nature.” We concluded they are not.
`
`E. Incidental or Complementary Activities
`
`Petitioner further argues that “[t]he Board also misapprehended the
`
`standard for CBM review by failing to distinguish between the expressly
`
`recited financial activities of the challenged claims and the unclaimed
`
`incidental or complementary activities as in Unwired Planet.” Req. Reh’g.
`
`10 (emphasis added). According to Petitioner, the Unwired Planet decision
`
`applies to unclaimed incidental or complimentary activities in a
`
`specification, and not, as we have here, expressly claimed financial
`
`activities.” Id. at 10–11(emphasis added). Petitioner misconstrues our
`
`analysis and Unwired Planet.
`
`In our Decision, after construing the scope of representative claim 1,
`
`we stated:
`
`At best, validating a purchased ticket may be complementary to
`the purchase of a ticket. Complementary activity, however, does
`not establish CBM review eligibility. Unwired Planet, 841 F.3d
`at 1382 (Whether a patent “claims activities ‘incidental to’ or
`‘complementary to’ a financial activity” is not “the legal standard
`to determine whether a patent is a CBM patent.”)
`
`Dec. 13. Petitioner’s analysis misconstrues the clear and specific holding of
`
`Unwired Planet. In Unwired Planet, the Federal Circuit stated:
`
`10
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`
`We hold that the Board’s reliance on whether the patent claims
`activities “incidental to” or “complementary to” a financial
`activity as the legal standard to determine whether a patent is a
`CBM patent was not in accordance with law.
`
`Unwired Planet, 841 F.3d 1382 (emphasis added). The clear holding in
`
`Unwired Planet is directed to the patent claims, i.e., the claimed invention.
`
`The holding is not limited to “unclaimed incidental or complimentary
`
`activities in a specification,” as argued by Petitioner. Req. Reh’g. 10. We
`
`applied this clear holding to the claimed invention in our analysis. We are
`
`not persuaded that we “misapprehended the standard for CBM review,” as
`
`argued by Petitioner.
`
`F. Post-Sale or After Purchase Activities
`
`Lastly, Petitioner asserts that “[t]he Board additionally
`
`misapprehended the standard for CBM review by disqualifying the
`
`challenged claims on the basis that they recite “post-sale” or “after
`
`purchase” activities. Req. Reh’g. 112 (citing Dec. 9, 11, and 13). Petitioner
`
`misconstrues our Decision.
`
`On the page 11 of our Decision, we discussed the challenged claims:
`
`The challenged claims each recite that the claimed invention is
`limited to obtaining visual validation of a previously purchased
`electronic ticket. The visual validation occurs at the time the
`electronic ticket is presented to a ticket taker when the ticket
`purchaser is seeking entry to the ticketed event. Thus, the
`claimed activity, visual validation, occurs after the purchase has
`occurred.
`
`We followed this statement with an analysis of the claim language and the
`
`patent Specification that supported our statement. Id. at 11–15. Thus, we
`
`construed the challenged claims as limited to obtaining visual validation of a
`
`previously purchased electronic ticket.
`
`11
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`
`We did not establish a bright-line test that excluded the challenged
`
`claims from a CBM review because they recited “post-sale” or “after
`
`purchase” activities. We merely construed the scope of the challenged
`
`claims and stated that the claimed activity, visual validation, occurs after the
`
`purchase has occurred. Id. at 11. We also stated that “a patent does not
`
`become a CBM patent merely because it involves the sale of a good or
`
`service. Id. (citing 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.”)). Thus, under the interpretation of the
`
`statutory standard by our reviewing court that we applied, the recitation in
`
`the claim that a sale has occurred does not automatically establish, or
`
`automatically preclude, that the claim is eligible for a CBM. The statutory
`
`test is that the claim must recite “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 . . . .” AIA
`
`§ 18(d)(1). We concluded that the test was not satisfied here.
`
`III. CONCLUSION
`
`Based on the analysis above, the Decision was not based on an
`
`erroneous interpretation of law, and all factual findings were supported by
`
`substantial evidence. Petitioner has not established that the Decision was
`
`based on an abuse of discretion, or that the Decision misapprehended or
`
`overlooked any substantive matter. Accordingly, we deny the request for
`
`rehearing.
`
`12
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`
`IV. ORDER
`
`In consideration of the foregoing, it is ORDERED that the request for
`
`rehearing is denied.
`
`
`
`
`
`
`
`
`
`13
`
`
`
`CBM2018-00018
`Patent 9,239,993 B2
`
`
`
`
`PETITIONER:
`
`Douglas LaLone
`dlalone@fishstewip.com
`
`Michael Fluhler
`mfluhler@fishstewip.com
`
`Thomas Donohue
`tdonohue@fishstewip.com
`
`
`
`
`
`PATENT OWNER:
`
`Jennifer Meredith
`jmeredith@meredithkeyhani.com
`
`
`
`
`
`
`
`
`
`14
`
`
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