Versata Development Group, Inc. v. SAP America, Inc.
793 F.3d 1306
| Fed. Cir. | 2015Background
- Versata owned U.S. Patent No. 6,553,350 covering computer-implemented methods, media, and apparatus for determining product prices using hierarchical organizational and product groups; claims at issue: 17, 26–29.
- SAP petitioned the USPTO for a Covered Business Method (CBM) review under AIA § 18; the PTAB instituted review and later cancelled the challenged claims as patent-ineligible under 35 U.S.C. § 101.
- Versata appealed the PTAB’s final written decision to the Federal Circuit (Versata I); parallel district-court APA litigation challenging institution was dismissed for lack of jurisdiction (Versata II).
- Core contested procedural questions: whether the Federal Circuit may review at the final-decision stage issues the PTAB decided at institution (notably CBM status and whether § 101 is a proper ground); and whether the PTAB applied correct claim-construction standards.
- On the merits the PTAB applied the Alice two-step framework and found the claims directed to an abstract idea (price determination using hierarchies) and lacking an inventive concept; the Federal Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (Versata) | Defendant's Argument (SAP/USPTO) | Held |
|---|---|---|---|
| Reviewability of PTAB institution determinations (including CBM status) on appeal from a final written decision | Institution decisions are "final and nonappealable"; court should not review issues decided at institution stage | Court may review predicate questions that limit PTAB’s ultimate authority to invalidate when raised on appeal from final decision | Court may review, on appeal of a final written decision, predicate questions that define PTAB’s authority (including CBM status) despite § 324(e) bar to interlocutory appeals |
| Scope of "covered business method patent" under § 18(d)(1) | Definition should be limited to patents tied to the financial services industry | Definition covers activities "relating to monetary matters," including pricing methods; USPTO regulation and history support a broad reading | Definition is not limited to financial-industry entities; the '350 patent qualifies as a CBM patent |
| "Technological invention" exception to CBM coverage | The '350 patent embodies a technological invention (hierarchical data structures, denormalized numbers) and thus is excluded | The claims solve no technical problem with a technical solution; using a generic computer or data structures is not enough | PTAB correctly found the '350 patent is not a "technological invention" and thus is subject to CBM review |
| Use of § 101 in CBM reviews and claim construction standard | § 101 is not a "condition for patentability" under § 282(b)(2); PTAB should not use § 101 in CBM; PTAB misapplied claim construction (BRI vs. judicial standard) | § 101 challenges are within the scope of CBM/PGR; USPTO rule permits BRI but result would be the same under judicial standard | Court held § 101 is a permissible ground in § 18 reviews; PTAB’s claim constructions affirmed (BRI acceptable; even under judicial standard constructions would stand) |
| Merits under § 101 (abstract idea / inventive concept) | Claims recite concrete computer-based improvements (fewer tables, better performance); not an abstract idea | Claims are directed to price-determination using hierarchies — an abstract idea — and add only conventional computer implementation | PTAB correctly applied Alice/Mayo: claims are directed to an abstract idea and lack an inventive concept; claims invalid under § 101 |
Key Cases Cited
- Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (U.S. 2014) (two-step framework for patent-eligibility and transformative "inventive concept" inquiry)
- Mayo Collaborative Servs. v. Prometheus Labs., 132 S. Ct. 1289 (U.S. 2012) (applies two-step § 101 framework used with Alice)
- Bilski v. Kappos, 561 U.S. 593 (U.S. 2010) (claims directed to abstract ideas not patent eligible)
- Diamond v. Diehr, 450 U.S. 175 (U.S. 1981) (computer-implemented process patent-eligible where claims improve a technological process)
- Cuozzo Speed Techs., LLC v. Lee, 793 F.3d 1268 (Fed. Cir. 2015) (addressed scope of statutory bar on review of PTAB institution decisions under related IPR statute)
- Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d 1348 (Fed. Cir. 2014) (claims for data extraction and storage held abstract)
- Ultramercial, LLC v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) (claims using the Internet for an advertising-exchange concept held abstract)
- CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) (method and computer-readable medium claims for verifying credit-card transactions held abstract)
- DDR Holdings, LLC v. Hotels.com, 773 F.3d 1245 (Fed. Cir. 2014) (distinguishes claims rooted in computer technology solving a network-specific problem as patent-eligible)
- St. Jude Med. v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014) (statutory bar on interlocutory review of PTAB institution decisions under IPR statute)