Trials@uspto.gov
`571-272-7822
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`
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`Paper No. 34
`Entered: January 18, 2019
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`AMAZON.COM, INC., AMAZON DIGITAL SERVICES, INC.,
`AMAZON FULFILLMENT SERVICES, INC., HULU, LLC,
`and NETFLIX, INC,
`Petitioner,
`
`v.
`
`UNILOC LUXEMBOURG S.A.,
`Patent Owner.
`____________
`
`Case IPR2017-00948
`Patent 8,566,960 B2
`____________
`
`
`
`Before DAVID C. MCKONE, BARBARA A. PARVIS, and
`MICHELLE N. WORMMEESTER, Administrative Patent Judges.
`
`MCKONE, Administrative Patent Judge.
`
`
`
`
`DECISION
`PATENT OWNER’S REQUEST FOR REHEARING
`37 C.F.R. § 42.71(d)
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`
`
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`
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`

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`IPR2017-00948
`Patent 8,566,960 B2
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`I. INTRODUCTION
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`Amazon.com, Inc., Amazon Digital Services, Inc., Amazon
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`Fulfillment Services, Inc., Hulu, LLC, And Netflix, Inc. (collectively
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`“Petitioner”) filed a Petition (Paper 1, “Pet.”) requesting an inter partes
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`review of claims 1–25 of U.S. Patent No. 8,566,960 B2 (Ex. 1001, “the ’960
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`patent”). Pursuant to 35 U.S.C. § 314, in our Institution Decision
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`(Paper 10), we instituted this proceeding as to claims 1–25. Inst. Dec. 34.
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`Patent Owner1 filed a Patent Owner’s Response (Paper 15, “PO Resp.”), and
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`Petitioner filed a Reply to the Patent Owner’s Response (Paper 18, “Reply”).
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`Patent Owner also filed a Contingent Motion to Amend (Paper 17,
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`“Mot. to Amend”), seeking to replace claims 1, 22, and 25 with substitute
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`claims 26, 27, and 28 if claims 1, 22, and 25 were found unpatentable.
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`Petitioner filed an Opposition to the Motion to Amend (Paper 19, “Opp. to
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`Mot. to Amend”), and Patent Owner filed a Reply supporting its Motion to
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`Amend (Paper 24, “Mot. to Amend Reply”). Because we found that claims
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`1, 22, and 25 are unpatentable, we considered, and ultimately denied, Patent
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`Owner’s Motion to Amend, concluding that the proposed substitute claims
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`are directed to non-statutory subject matter under 35 U.S.C. § 101.
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`Paper 31, Final Written Decision (“FWD”) 53, 63, 70.
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`In a Request for Rehearing (Paper 33, “Req.”), Patent Owner contends
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`that we misapprehended the law and improperly considered whether
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`substitute claims 26–28 constitute statutory subject matter under § 101.
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`1 Patent Owner represents that Uniloc 2017 LLC is the owner of the
`’960 patent, and that Uniloc USA, Inc. and Uniloc Licensing USA LLC are
`real parties-in-interest. Paper 6; Paper 32.
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`2
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`

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`IPR2017-00948
`Patent 8,566,960 B2
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`Req. 2–3. For the reasons explained below, we deny Patent Owner’s
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`Request for Rehearing.
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`
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`II. BACKGROUND
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`In a related matter, a district court determined that independent claims
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`1, 22, and 25 are non-statutory subject matter under § 101. See Uniloc USA,
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`Inc. v. Amazon.com, Inc., 243 F. Supp. 3d 797, 811 (E.D. Tex. 2017) (“For
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`the reasons listed above, the Court finds that all claims of the ’960 Patent are
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`drawn to ineligible subject matter under 35 U.S.C. § 101.”). The Federal
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`Circuit has affirmed the District Court’s decision. See Uniloc USA, Inc. v.
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`Amazon.com, Inc., 2017-2051 (Fed. Cir. Aug. 9, 2018) (Fed. Cir. R. 36
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`decision). Substitute claims 26, 27, and 28 propose amendments to claims 1,
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`22, and 25, respectively. Mot. to Amend, 1, App. A.
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`Petitioner opposed Patent Owner’s Motion to Amend, inter alia, on
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`the ground that substitute claims 26–28 are non-statutory subject matter
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`under § 101. Opp. to Mot. to Amend 1–11. Patent Owner did not respond
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`substantively to this argument; rather, Patent Owner argued that Petitioner
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`was not permitted to raise § 101 in opposition to a motion to amend in an
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`inter partes review. Mot. to Amend Reply 12–13. We fully considered and
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`rejected Patent Owner’s argument and found that a preponderance of the
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`evidence showed that substitute claims 26–28 are non-statutory subject
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`matter. FWD 57–63, 69.
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`
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`III. ANALYSIS
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`The burden of showing that the Decision should be modified is on
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`Patent Owner, the party challenging the Decision. See 37 C.F.R. § 42.71(d).
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`3
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`IPR2017-00948
`Patent 8,566,960 B2
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`In addition, “[t]he request must specifically identify all matters the party
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`believes the Board misapprehended or overlooked, and the place where each
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`matter was previously addressed in a motion, an opposition, or a reply.” Id.
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`Patent Owner argues that, by overruling the Board’s practice of
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`placing on the patent owner the burden of showing patentability of amended
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`claims in Aqua Products Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en
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`banc), the Federal Circuit also foreclosed review of proposed amended
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`claims under § 101. Req. 3–4. Under Patent Owner’s theory, Board cases
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`such as Ariosa Diagnostics v. Isis Innovation Limited, Case IPR2012-00022
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`(PTAB Sept. 2, 2014) (Paper 166), considered § 101 only as part of a patent
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`owner’s burden to show patentability of the amended claims, and the Federal
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`Circuit’s removal of that burden “overruled the very basis for Ariosa
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`Diagnostic’s holding that a motion to amend must address patent eligibility
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`under § 101.” Req. 3–4. However, as we explained in our Final Written
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`Decision, Aqua Products makes clear that Patent Owner does not bear the
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`burden of persuasion on issues of patentability in a motion to amend, 2 but
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`does not foreclose an analysis of whether substitute claims comply with
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`2 To be clear, our Decision did not place the burden of showing patentability
`of substitute claims 26–28 on Patent Owner. FWD 59–63. The District
`Court determined that claims 1, 22, and 25 are non-statutory subject matter
`(which the Federal Circuit affirmed) and Petitioner introduced persuasive
`evidence and argument that the amendments proposed in substitute claims
`26–28 did not address the statutory defect in claims 1, 22, and 25. Id.
`Patent Owner was silent as to whether the substitute claims recite statutory
`subject matter. Id. at 57 (citing Mot. to Amend Reply 12–13; Tr. 50:13–17).
`On the complete record, Petitioner proved by a preponderance of the
`evidence that substitute claims 26–28 recite non-statutory subject matter.
`Id. at 59, 62–63, 69.
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`4
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`IPR2017-00948
`Patent 8,566,960 B2
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`§ 101. FWD 58–59. Although the panel in Ariosa Diagnostic noted that the
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`burden to show patentability of amended claims required the patent owner to
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`address § 101, the panel did not find that § 311(b) precludes us from
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`considering the patentability of amended claims under other statutory
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`provisions, such as § 101. Case IPR2012-00022, slip op. at 51–52.
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`By its terms, § 311(b) limits a petitioner to requesting cancellation of
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`existing claims of a patent only under § 102 and § 103. 35 U.S.C. § 311(b)
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`(“A petitioner in an inter partes review may request to cancel as
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`unpatentable 1 or more claims of a patent only on a ground that could be
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`raised under section 102 or 103 . . . .” (emphasis added)). It does not,
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`however, limit the grounds of unpatentability that can be raised in response
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`to proposed substitute amended claims presented in a motion to amend. In
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`contrast to § 311(b), the statutory provision providing a right to a motion to
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`amend, 35 U.S.C. § 316(d), does not prevent us from considering
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`unpatentability under sections other than § 102 and § 103 with respect to
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`substitute claims.3
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`This distinction between claims of a patent and amended claims is
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`further reflected in the statute. For example, the statute makes clear that
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`amended claims are proposed claims until they are added following a final
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`written decision and action of the Director. See 35 U.S.C. §§ 318(a)–(b).
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`Specifically, § 318(a) (emphases added) directs us to “issue a final written
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`3 Section 316(d)(1) provides that “(1) In general.—During an inter partes
`review instituted under this chapter, the patent owner may file 1 motion to
`amend the patent in 1 or more of the following ways: (A) Cancel any
`challenged patent claim. (B) For each challenged claim, propose a
`reasonable number of substitute claims.”
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`IPR2017-00948
`Patent 8,566,960 B2
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`decision with respect to the patentability of any patent claim challenged by
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`the petitioner and any new claim added under section 316(d).”
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`Section 318(b) (emphases added) reiterates this distinction, providing that, if
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`we issue a final written decision, “the Director shall issue and publish a
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`certificate canceling any claim of the patent finally determined to be
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`unpatentable, confirming any claim of the patent determined to be
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`patentable, and incorporating in the patent by operation of the certificate any
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`new or amended claim determined to be patentable.”
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`Aqua Products says nothing to the contrary. Instead, the lead opinion
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`in Aqua Products recognizes that substitute claims sought to be added to a
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`patent are not claims of that patent. See Aqua Prods., 872 F.3d at 1304
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`(“The ‘request’ made by a motion to amend is—in the PTO’s own words—
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`for ‘entry’ into the IPR, not for entry of an amended claim into the patent.
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`Once entered into the proceeding, the amended claims are to be assessed for
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`patentability alongside the original instituted claims.”). Although not
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`binding on this point, the Aqua Products lead opinion recognizes this
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`distinction, in the statute, between the claims challenged by a petitioner and
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`substitute claims introduced by a patent owner:
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`For example, §§ 316(a)(9) and 316(d) distinguish a “challenged
`claim’ from ‘substitute claims.” Similarly, § 314(a) only
`applies to “claims challenged in the petition.” In § 318(a),
`Congress distinguished between “any patent claim challenged
`by the petitioner” and “any new claim added under section
`316(d).” And in § 318(b), Congress explained the procedure
`for issuing a certificate confirming the patentability of claims
`“and incorporating in the patent . . . any new or amended claim
`determined to be patentable.” In § 318(c), Congress provided
`for intervening rights with respect to “proposed amended or
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`IPR2017-00948
`Patent 8,566,960 B2
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`new claim[s] determined to be patentable” and incorporated
`into the patent following an IPR.
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`Aqua Prods., 872 F.3d at 1306. As the lead opinion notes, “Congress is
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`presumed to have acted intentionally when it made the distinction between
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`challenged and amended claims in multiple parts of the AIA statutory
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`scheme . . . .” Id. at 1306–07 (citing Bates v. United States, 522 U.S. 23,
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`29–30 (1997)).
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`This understanding is consistent with the Board’s practice of relying
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`on provisions other than § 102 and § 103 to evaluate amended claims for
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`unpatentability. See, e.g., Apple Inc. v. Valencell, Inc., Case No. IPR2017-
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`00315, 2018 WL 2552323, at *18 (PTAB May 31, 2018) (“[W]e agree with
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`Petitioner that the proposed substitute claims do not pass muster under 35
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`U.S.C. § 112 because they are indefinite.”); Cook Grp. Inc. v. Bos. Sci.
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`Scimed, Inc., Case No. IPR2017-00440, 2018 WL 6828874, at *34 (PTAB
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`Dec. 28, 2018) (“[W]e determine, based on the final record before us, that
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`Petitioner has not shown, by a preponderance of the evidence, that proposed
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`substitute claims 21, 30, and 38 are unpatentable for failing to comply with
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`the requirements of 35 U.S.C. § 112, ¶¶ 1, 2.”); Intel Corp., Cavium, LLC v.
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`Alacritech, Inc., Case No. IPR2017-01409, 2018 WL 5992621, at *10
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`(PTAB Nov. 14, 2018) (“[W]e are not persuaded by Petitioner that substitute
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`claims 61–78 are indefinite under 35 U.S.C. § 112, second paragraph.”).
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`Patent Owner does not point us to authority that § 311(b) precludes
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`Petitioner from raising, or us from considering, other grounds of
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`unpatentability, including § 101, as to substitute claims not yet part of a
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`patent, in the context of a motion to amend. Patent Owner’s only authority
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`for its contention that we may only consider § 102 and § 103 as to substitute
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`claims is the Secure Axcess case. Req. 2–3 (citing Secure Axcess, LLC
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`v. PNC Bank Nat’l Ass’n, 848 F.3d 1370, 1379 (Fed. Cir. 2017), cert.
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`granted, judgment vacated sub nom. PNC Bank Nat. Ass’n v. Secure Axcess,
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`LLC, 138 S. Ct. 1982 (2018)). In Secure Axcess, the Federal Circuit
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`explained:
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`Congress intended that the CBM program was to be more
`limited in scope than that. Its restriction to “covered business
`method” patents, and its temporary nature (eight years), make
`clear that it is a program established for a defined set of patents,
`not for virtually every patent. Moreover, in the AIA, the same
`statute that established the CBM program, Congress carefully
`set out limits on the inter partes review (“IPR”) program for
`review of patents after issuance. Persons sued for infringement
`had no more than one year to petition for IPR, and were
`restricted to presenting only certain §§ 102 and 103 grounds of
`unpatentability, thus excluding grounds based on, for example,
`§ 101 or § 112. It is not sensible to read AIA § 18(d)(1) as
`obliterating these important limits for review of essentially any
`patent, subject only to the “technological invention” exception.
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`848 F.3d 1370 at 1379. Secure Axcess, however, only considered eligibility
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`of a patent for covered business method patent review and with respect to
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`claims as issued in the patent under consideration. Its statements regarding
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`inter partes reviews were included as statutory background with regard to
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`issued claims to illustrate why the threshold eligibility requirements should
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`not be reduced to a technological invention test in a covered business
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`method patent review. We do not read those statements as defining the
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`scope of an inter partes review with respect to proposed substitute claims,
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`which was not at issue in Secure Axcess. In the instant case, Petitioner did
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`not request cancellation of previously issued patent claims based on § 101 in
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`the Petition. Rather, consistent with § 311(b) and the language of Secure
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`Axcess cited by Patent Owner, Petitioner presented in the Petition only
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`grounds based on § 102 and § 103. Petitioner did not raise § 101 until
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`Patent Owner proposed substitute claims not yet added to the ’960 patent
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`and asserted that argument only against the substitute claims. Opp. to Mot.
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`to Amend 1–11.
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`Finally, Patent Owner asserts that we relied improperly on Western
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`Digital Corp. v. SPEX Technologies., Inc., Case IPR2018-00082 (PTAB
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`Apr. 25, 2018) (Paper 13) (informative). Req. 3. Patent Owner argues that
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`Western Digital “did not hold that a motion to amend must address § 101
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`eligibility” and that “[i]t does not even hold that it is permissible for a Board
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`to consider § 101 eligibility.” Id. at 4. According to Patent Owner, “[t]hat a
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`patent owner may seek narrowing amendments to make the claims more
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`robust against a potential § 101 challenge outside an IPR proceeding does
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`not mean that the Board may consider such a § 101 challenge in the IPR in
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`which those amendments are entered.” Id. at 4–5. We did not, however, cite
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`Western Digital as holding that a motion to amend must address § 101
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`eligibility. Rather, by recognizing that § 101 issues can be introduced and
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`corrected through a motion to amend, Western Digital reinforces that Aqua
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`Products did not divest us of the power to consider a § 101 challenge to
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`proposed amended claims.
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`According to the lead opinion in Aqua Products, “the Board must
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`consider the entirety of the record before it when assessing the patentability
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`of amended claims under § 318(a) and must justify any conclusions of
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`unpatentability with respect to amended claims based on that record.”
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`872 F.3d at 1296; accord id. at 1309 (“When read in conjunction with the
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`directive of § 318, we believe that the Board must assess the patentability of
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`all claims in the proceeding, including amended claims that have been
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`entered into the proceeding after satisfying the requirements outlined in
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`§ 316(d), and must do so through the lens of § 316(e).”). Here, the record4
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`indicates that the existing claims of the ’960 patent have been determined to
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`be non-statutory subject matter by a district court and the Federal Circuit.
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`When we considered the record in its entirety, we determined that Petitioner
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`proved, by a preponderance of the evidence, that the substitute claims are
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`not patentable. Patent Owner has not argued persuasively, either in the
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`Motion to Amend Reply or the Request for Rehearing, that any authority
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`precludes Petitioner from arguing, or us from considering, whether a
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`substitute claim in a motion to amend constitutes statutory subject matter
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`under § 101. Accordingly, Patent Owner does not show that we
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`misapprehended the law.
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`4 This evidence was introduced into the record by Petitioner. Paper 19, 1–2.
`Nevertheless, as Petitioner pointed out (id. at 2), Patent Owner had a duty of
`candor, under 37 C.F.R. § 42.11(a), to introduce this evidence. See also
`Memorandum of Chief Administrative Patent Judge, Guidance on Motions
`to Amend in view of Aqua Products, 2 (Nov. 21, 2017) (“[U]nder 37 C.F.R.
`§ 42.11, all parties have a duty of candor, which includes a patent owner’s
`duty to disclose to the Board information that the patent owner is aware of
`that is material to the patentability of substitute claims, if such information is
`not already of record in the case.”); 37 C.F.R. § 42.8(b)(2) (“Each of the
`following notices must be filed: . . . (2) Related matters. Identify any other
`judicial or administrative matter that would affect, or be affected by, a
`decision in the proceeding.”). Thus, the adverse decisions should have been
`part of the record regardless of Petitioner’s choice to introduce them.
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`IV. CONCLUSION
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`Patent Owner has not shown that we misapprehended the law.
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`Accordingly, we decline to change our Decision.
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`V. ORDER
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`For the reasons given:
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`Patent Owner’s Request for Rehearing is denied.
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`IPR2017-00948
`Patent 8,566,960 B2
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`PETITIONER:
`
`Daniel T. Shvodian
`PERKINS COIE LLP
`dshvodian@perkinscoie.com
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`PATENT OWNER:
`
`Brett Mangrum
`Ryan Loveless
`ETHERIDGE LAW GROUP
`brett@etheridgelaw.com
`ryan@etheridgelaw.com
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`Sean D. Burdick UNILOC USA, INC.
`sean.burdick@unilocusa.com
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`12
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