*1 “broadest,” Secretary broad is or sets limits Under of Commerce for Intel parameter. Predictability to this Property, lectual Director of the Unit stability law, legal are rights, ed States Patent and Trademark Of by fuzziness and replaced uncertainty. fice, Intervenor.
(cid:127) designed The AIA the new PTO tribu- No. 2014-1194. validity nal to “review the patent.” of a United States Court of Appeals,
It was expected that the PTO would Federal Circuit. apply validity, the correct law while drawing expertise on PTO in technolo- July gy experience and PTO law.
It cannot have been intended that the
PTO apply would not the correct law
in these post-grant new proceedings. concurrence, in reinforcing denial of
en banc states that claims issued been given have their “broadest”
interpretation years, for a citing hundred interferences and reissues. See
Concurring Op. at Any 1298-99. practi-
tioner of interferences knows that PTO, in determining conception, reduc-
tion practice, corroboration, diligence,
experimental etc., support, did apply ' “broadest” interpretation of anything.
And are reissues directed to correction of error; patentee’s is to purpose correctness,
achieve not breadth. Con-
trary concurrence, question be-
fore this court is not whether to “elimi- BRI,
nate” but whether to it impose patents,
issued where it previously has not
reposed. simple
This is a question, although of
powerful consequence. As urged curiae,
amici it should be cor- answered
rectly.
VERSATA DEVELOPMENT
GROUP, INC., Appellant
v. AMERICA, INC.,
SAP SAP
AG, Appellees. *3 Inc.,
Computer, Corporation, Broadcom (USA) ZTE Corporation, HTC Inc. Byun, Ann A. Compa- Hewlett-Packard PA, ny, Wayne, for amicus curiae Hewlett- Company. Packard Joseffer, Parris, Daryl Ashley Charles LLP, DC, King Spalding Washington, & for amicus curiae The Internet Associa- tion. Joffre, Bostwick,
Michael E. Melanie L. Huber, Hansen, Todd, Kellogg, Evans & PLLC, DC, Figel, Washington, for amici *4 Inc., Inc., Facebook, Inc., eBay curiae Dell Networks, Inc., Inc., Limelight Newegg Inc., Inc., QVC, Rackspace Hosting, Red Hat, Inc., Inc., Vizio, Inc., SAS Institute Xilinx, represented by Inc. Inc. Dell also Peterman, Inc., Rock, Anthony Dell Round TX. Michel, Inc., Google Washing-
Suzanne ton, DC, Google for amicus curiae Inc. Lamken, LLP, Jeffrey A. MoloLamken Fiacco, Ware, Barbara A. Donald Ross DC, Washington, argued appellant. for LLP, Boston, Burg, Foley Hoag Sarah Linck, by Nancy represented Also Jo Mar- MA, for amici curiae 3M Company, Cater- Zoltick, Danny. Hunting- tin Moss Robert Inc., Eli pillar Lilly Company, and General ton, Rosenbloom, Rothwell, Figg, Brian S. Johnson, Company, Electric Johnson & Manbeck, P.C., Washington, Ernst & DC. Company, Amgen The Procter & Gamble Arner, Henderson, Inc., America, Finnegan, Inc., Erika BP Glaxosmithkline Dunner, Reston, Farabow, LLP, Garrett & LLC, Works, Inc., Inc., Illinois Tool Pfizer VA, argued appellees. represent- for Also Qualcomm Incorporated, Sanofi US. Jakes, Morin, by ed J. Michael Michael A. PLAGER, NEWMAN, Before DC; Reines, Weil, Washington, Edward R. HUGHES, Judges. Circuit LLP, Shores, Manges Gotshal & Redwood CA. by Opinion for the court filed Circuit Staff, Patterson, Appellate Melissa N. Judge PLAGER. Division, Department Civil United States concurring part Opinion DC, Justice, Washington, argued for dissenting part by Judge filed Circuit by F. represented intervenor. Also Stuart HUGHES. Freeman; Delery, Mark R. Scott Weiden- feller, Matal, Kelley, Joseph K. Nathan PLAGER, Judge. Circuit Lamarca, Solicitor, William Office Patent and Trademark Of- IntROduction
United States fice, Alexandria, VA. method This is a covered business (“CBM”) case, § 18 under Bagatell, Christopher
Dan L. S. Cole- Act LLP, Phoenix, AZ, Leahy-Smith America Invents man, Perkins Coie 112-29, (“AIA”), 125 Stat. 284 Pub.L. No. Corporation, amici curiae Intel Asustek (2011). It comes to us as an appeal of a special program provided §by 18 is avail final written decision the Patent Trial only able for “covered business method (“PTAB”),1 Appeal Board the recently- patents,” as that term is by defined adjudicatory created arm of the United However, statute. for purposes of con States Patent and Trademark ducting Office proceedings thereunder, § 18 is (“USPTO” “Government”).2 or The case part considered a of the broader chapter originated petition as a USPTO, provisions U.S.Code, of title govern by appellees America, submitted SAP Inc. ing post-grant (“PGR”), 35 U.S.C. “SAP”), and SAP AG (collectively, pursu- §§ 321-329; § expressly incorporates, ant to the provisions of the AIA. with certain exceptions here, not relevant the standards procedures found in requested SAP USPTO insti- 18(a)(1). chapter.5 § tute validity review of the of certain claims (“'350 6,553,350 U.S. Patent No. pat- In addition to the merits of the decision ent”). The '350 is owned (which rendered the PTAB held the appellant, Versata Development Group, invalid), claims issue the parties to the (“Versata”), Inc. had who sued SAP for appeal dispute predicate several issues. infringing the patent. petition to These include: USPTO, alleged SAP (cid:127) if the PTAB makes an initial determi- was a covered business patent. method nation 18 of the AIA that the patented Covered business invention qualifies method are for “cov- *5 subject special to the ered provisions business method” of AIA treatment un- § § 18. der See Stat. at 329-31.3 Section 18 court review that establishes a issue when separately-designated reviewing part transi- of a final program4 tional written which decision the under the invalidation USPTO conducts post-grant claims under review the proceedings §of 18? concerning (cid:127) the validity covered business if the yes, answer is purposes for method patents. As suggests, the title the post-grant the USPTO how argument case, 1. For purposes, oral de- 5.A note on terminology: potential The under I, nominated as Versata was with consolidated the AIA for more than the usual confusion Case No. from the Unit- accompanies congressional new man- ed States District for Court the Eastern Dis- part dates stems in from incidental features of Virginia, trict of involving parties, the same particular, the AIA. In proce- new various patent, the same essentially same dures intersect with procedures earlier of a issues. That case issue will as Versata II. kind, similar-sounding e.g., partes inter re- ("IPR") replaced view has partes inter reex- PTAB, 2. AIA, by § established 7 of the is amination, compare §§ 35 U.S.C. 311-318 the successor to the Board of Appeals Patent (2006) (concerning partes inter reexamina- ("BPAI”). and Interferences Compare 35 tion), (2012) (con- §§ with 35 (2006) U.S.C. 311-319 BPAI) U.S.C. 6 (concerning the with IPR). cerning (2012) employs U.S.C. 6 The statute (concerning PTAB). also iden- tical terminology to mean things, different general, the AIA is codified various in e.g., the heading of AIA 6 is entitled “Post- parts 35of U.S.Code. Section 18 of AIAis Review Proceedings,” Grant 125 Stat. at codified; not however it is found in 125 Stat. while one programs of the thereunder shares References to opinion 18 in this are to "Chapter the same 32—Post-Grant name — pages 329-31 of 125 Stat. Review.” It is not uncommon for the entirety AIAproceedings to be referred informal- program 4. The is called 'transitional' because 'post-grant ly as review.’ it is eight scheduled to years 'sunset' after implementing regulations are issued. 18(a)(3)(A).
13H we must term “covered business method which decide whether is the PTAB understood, applied the substantive for tests be and does the patent” to validity correctly, may a court deter- qualify here as a CBM patent issue mine whether as an initial matter the patent? PTAB chose the correct substantive (cid:127) correctly if the PTAB determines that apply, tests to apply and did the PTAB patent of the AIA a comes correctly them here? of a patent, within the definition CBM determining After to these answers determining what are the criteria for queries, parties, contested as ex- is excluded from patent whether the below, plained application we address their the review under 18 because to the '350 at issue. statutorily-excepted falls within the invention,” “technological category of Background criteria to the apply and hów do those The '350 Patent patent? '850 patent, owns the '350 entitled (cid:127) if, deciding the merits of the case— apparatus pricing prod “method and validity challenged of the claims in product organiza ucts multi-level upon PTAB is called —the groups.” patent, tional '350 col. ll. 1-3. construction, in claim does engage operates para The “invention under the apply general USPTO’s (the digm purchasing organiza of WHO reasonable inter- rule of the “broadest tion) (the buying product).” is WHAT Id. apply judicial or does it pretation,” 3, ll. An example at col. 24-25. of the “one correct construc- standard paradigm, pri- known WHO/WHAT tion”? according patent, depicted or art (cid:127) appeal at the final finally, on written Figure patent, reproduced of the '350 court, during stage
decision to this below: *6 4, ll. 17-18. at col. required large data tables. See id. See id. at col. 1, ll. 52-59. improve said to is however, patent, The '350 states that art and reduce the need for upon prior pricing art tables for prior WHO/WHAT large by, alia, data tables inter arranging organizational organizational hierarchy organizations) customers (purchasing into groups, where group each represents a a hierarchy groups of customer prod characteristic of the organizational group. hierarchy product ucts into a groups. 3, Id. at col. Figure ll. 24-27. 4A of the 3, 24-27, 41-42, 4, Id. at col. ll. below, 66—col. 1. patent, shows example an of an 14. WHO is defined the creation of an arrangement of organizational group: 4, ll. See id. at col. 24-25. 22, 1.12. col. Claim 28 recites a “computer storage readable media comprising: com Similarly, product group hierarchy is puter instructions to implement the meth defined that can be applied products od of claim 27.” Id. at col. ll. 13-14. (WHAT). at col. ll. Id. 41-42. Pricing 29 recites an Claim “apparatus for deter information is then associated with the mining a price of a product offered to a customer product groups. Id. at col. purchasing organization” comprising cer 8, ll. Special 17-25. adjustments pricing tain limitations. Id. at col. ll. 15-35. may be defined as applying to all members specific customer group specific or a Claim 17 representative: product group. Id. at col. ll. 26-49. A method for determining a price of a product
We are
offered to a
concerned with
purchasing organi-
claims 17 and
*7
26-29.
zation comprising:
Claim 17
arranging
recites a
a
“method for
hierar-
determining
price
chy
organizational
of
a
of a product
groups comprising
offered to
a purchasing
a
organization”
plurality of
such
comprising cer
branches
that an or-
tain steps.
20,
ganizational
Id. at
21,
col.
1.
group
66—col.
1.
below a higher or-
29. Claim 26
ganizational
recites a “computer
group
readable
in each of
the
storage media comprising: computer in
branches is a
higher
subset of the
or-
implement
structions to
ganizational
the
group;
method of
arranging a hierar-
claim
17.”
at col.
chy
Id.
ll.
product
61-62. Claim
of
groups comprising plu-
a
27 recites a “computer implemented
rality
meth
of branches such that a product
od for determining
price
a
product
of a
group
a higher product
below
group in
offered to a purchasing organization” com
each of the branches
ain
subset of the
prising
steps.
21, 1.
certain
Id. at col.
63— higher product group; storing pricing
source,
junction
by the district
in a data
wherein
entered
court.
Id.
information
associated,
information is
pricing
the
at 1258. The case was remanded for the
(ii)
(i)
organiza-
the
pricing type,
with
district court to enter an
conforming
order
(iii)
product
groups, and
the
tional
Id.;
opinion.
to our
see also Versata Com
pricing in-
retrieving applicable
groups;
Solutions,
AG,
puter Indus.
Inc. v. SAP
corresponding
product,
formation
to the
(Fed.Cir.2014)
Fed.Appx.
(per
cu
purchasing organization,
prod-
each
riam).
in
group
product group
uct
above the
hierarchy
product
of
each branch
Covered Business Method Patent Review
product
a mem-
groups which the
on,
going
While all that was
SAP on
ber,
organizational group
and each
16, 2012,
September
petitioned the PTAB
purchasing organization
above the
to institute a covered business method re-
hierarchy
organi-
each branch of the
view of Versata’s
'350
on the
groups
purchasing
zational
in which the
grounds that claims 17 and 26-29 of the
member; sorting
organization is
unpatentable
were
for failure to
pricing
according
information
101, 102,
§§
comply with 35 U.S.C.
pricing types,
product,
purchas-
paragraphs.
1st and 2nd
January
On
ing organization,
hierarchy
prod-
9, 2013,
granted
the PTAB
petition
SAP’s
hierarchy
groups,
organi-
uct
and the
and instituted a covered business method
groups; eliminating
zational
patent.
review of the '350
In accordance
that is less restric-
pricing information
tive;
determining
product price
statutory
instituting
with the
standard for
using
pricing
the sorted
information.
the PTAB
determined
likely
claims 17 and 26-29 were more
than
Id. at col.
l. 66—col.l.
unpatentable
§§
under 35 U.S.C.
Litigation
Prior
PTAB
and 102. The
declined to review
20, 2007, Versata,
April
along with
On
because,
§ 112
the claims under
Software,
Versata
Inc. and Versata Com-
view,
PTAB’s
SAP had not met the stan-
Solutions, Inc.,
Industry
puter
sued SAP
regard.
dard in that
did not seek
for,
alia,
inter
of the '350
infringement
rehearing of the decision to institute.
District
for the
the U.S.
Court
Subsequently,
request,
SAP’s
pro-
Eastern District of Texas. The case
PTAB
agreed
forego
trial,
jury
infringe-
ceeded to
and a
found
expedite
101 review. On June
damages.
ment and awarded
The district
11, 2013, the PTAB issued its final written
upheld
infringement
verdict
court
but
cancelling
decision
claims 17 and 26-29 as
rulings
reversed other
unrelated to the
unpatentable
101. Versata
patent, resulting in a new trial on
'350
sought rehearing of the final written deci-
damages.
juryA
then found that SAP’s
sion,
which the
denied. Versata
post-patch
infringe
software continued to
the final written decision to
appealed
then
damages
rea-
lost-profits
and awarded
court; that is the case we decide here.
royalty damages.
sonable
The district
upheld
court
those awards.
Proceedings
the District Court
Before
*8
appealed the district court’s final
SAP
us,
turning
Before
to the case before
In
judgment
to our court.
Versata Soft-
litigation
there is one additional
to be not-
ware,
Am., Inc.,
Inc. v. SAP
decision’: “the [PTAB] shall issue a final Discussion written with respect decision patent- ability Ultimately the issue claim challenged by to be decided on 328(a). petitioner.” concerns the substantive Section 329 fur- merits: whether the PTAB ther provides ruled correctly appeal of that the that decision to challenged earlier-issued Appeals claims of the Court of '350 for the Federal Cir- patent are invalid for the given pursuant reasons cuit 141-144; §§ section 144 PTAB, namely, non-compliance provides with 35 that “[t]he United States Court of U.S.C. 101. Before addressing this Appeals ulti- for the Federal Circuit shall re- *9 appeal from which an is business method patent” view the decision under 18(a)(1)(E), § the Patent and taken on the record before and that the AIA authorizes subject-matter § Trademark Office.” eligibility a ground for CBM review. Before us then are the merits of the by final decision rendered the written The USPTO entered the case as interve- clear, PTAB in To it is the nor, this case. be §by as authorized 143. The USPTO merits of the final written decision that are devotes a part substantial of its brief to appeal; upon on we are not here called to argument jurisdic- that this court lacks by review the determination the PTAB tion to review the Director’s decision to review, whether to institute a CBM post-grant institute a review of the '350 expressly indeed the statute instructs that patent. its argument On face that would we not: curious, appear explained since as earlier by
The determination the Director the issue on court only before the is whether to institute a post-grant review the merits of written decision. final However, under this section shall be final and the USPTO makes the point that nonappealable. question patent whether the at issue scope here falls within the of the PTAB’s 324(e) added). § (emphasis 35 U.S.C. As § authority under 18 as “covered busi- noted, applicable post- this statute is (not patent” claiming ness method one grant proceedings; reviews and CBM invention”) “technological by was decided PTAB acts for the Director in deciding the PTAB at the decision to institute see 35 U.S.C. review, whether to institute a stage, and on that it basis is immunized (2014). 326(c); § § 37 C.F.R. 42.4 judicial from later review at the final deci- merits, PTAB, Turning stage. sion decision, final written held Versata’s CBM SAP, USPTO, but not the makes patent unpatentable claims 17 and 26-29 that, argument specif- additional under the under 35 them U.S.C. ordered judicial ic terms review bar appeal challenges cancelled. on 324(e), supra, not authority we do have holding multiple grounds: any questions to review decided (cid:127) patent Versata’s does not claim a “cov- making PTAB in the course of its initial method,” ered business and in including decision to institute event falls within the safe harbor of ineligibility per- whether 101 is a invention”; “technological ground missible for invalidation under the (cid:127) authority The PTAB does not have authority CBM invoked the PTAB. subject-mat- CBM 101; Thus, eligibility ter under 35 U.S.C. the USPTO contends that (cid:127) CBM-speeific invalidation here must be The PTAB’s claim construction is upheld incorrectly even if the inter- it
wrong, applied the “broadest reason- preted regarding the statute what is a interpretation” able to its claim con- and the not a CBM is CBM struction, have, which it should not law, patent under the correct and SAP correctly analyzed § and had it further contends that the invalidation un- proper under the claim it construction if upheld der 101 must be even not holding would have reached the it PTAB’s CBM-invalidation does did. permit invalidation under that, responds finding SAP absent a challenging This the first non-appealable these issues are either or case 324(e) waived, scope on the at the final written deci- merits USPTO correct- however, are, ly stage. held that the '350 is a “covered sion There several *10 1316 by
recent cases decided this court constru- the inter partes review provisions, the ing a parallel statutory 314(d) language review bar— of section within that 314(d) separate chapter structure, under 31 of the jurisdictional and on our statute AIA, Inter Partes Review. With one ex- read in light of those provisions.” Id. at ception later, to be addressed these cases 1375. have in the attempts arisen context of at day Jude, The same the court issued St.
interlocutory review of PTAB IPR deci- we two opinions issued other reaching the sions to institute. same result statute, under the same Medical,
In St. Jude
Cardiology
though
Divi-
in different procedural contexts.
sion, Inc. v.
Corp.,
Volcano
749
Solutions,
F.3d 1373 See In re Dominion Dealer
(Fed.Cir.2014),
LLC,
(Fed. Cir.2014) (PTAB
the first of the interlocu-
or APA
actions
district
which it
Again,
statutory
cqurt),
references are to
expressly
it
said was not deciding. The
which,
IPR ch.
provisions,
though
court based
holding
“on directly
structure of not
applicable
cases,
to CBM
par-
Inc.,
(Fed.Cir.2014),
provisions
lems
us,
Returning to the case before
Versa-
district courts to hold mini-trials
tend
noted,
ta,
brought
as earlier
had
an action
reviewing the PTAB’s decision
in the
for the Eastern
U.S. District Court
stay
merits of the CBM review.... The
under the Administra-
Virginia,
District of
not the
or the
determination is
time
(“APA”), prevent
Act
tive Procedure
to review the PTAB’s decisions to
place
proceeding
PTAB from
with the
proceeding.
institute a CBM
patent at issue in
CBM review of the '350
Id. at 1313.7
challenged the authori-
this case. Versata
ty PTAB to have instituted the
Funding Systems
And in
LLC v.
Benefit
18;
of the '350
under
SAP
Advance America Cash Advance Centers
GTNX,
INTTBA, Inc.,
ground
Judge
dissented on the
6.
Inc. v.
Nos.
7.
Newman
See also
-1353,
151349, -1350, -1352,
was not
that the district court in its decision
(Fed.Cir.
16, 2015) (a
WL
June
given
to which it was entitled.
the deference
case).
third
and the USPTO
moved
dismiss the com-
tion.
Its nonreviewability argument
plaint.
limited to the contention
that we
review whether
the '350
is a CBM
of its
support
dismiss,
motions to
(Judge Hughes like-
argued,
USPTO
consistent with
sug-
wise limits his Dissent in Part to the CBM
gestion noted
supra
Funding,
Benefit
question.)
that there was an available remedy under
the AIA statute —the
issues
decided
In response to the Government’s new
PTAB at the institution stage
pre-
are
position,
argues
that the Govern-
served for review at the time of
ment is estopped from reconsidering its
to the Federal Circuit of the PTAJB’sfinal position in the district
action,
court APA
*12
written decision.
grant-
The district court
citing
Maine,
New Hampshire v.
532 U.S.
ed the USPTO’s motions and SAP’s motion
742, 749,
121 S.Ct.
first, does the
review bar
authority question
sion of a basic
can make
permit
judicial
when conducted
efficiency
sense as an
matter. There is no
decision,
regard to the final written
with
good
proceeding
reason to launch a
if it is
any requirement
with
compliance
agency
clear that the
will have no authori
that involves the ultimate
ty to act at its conclusion. On the other
second, if
patent;
PTAB to invalidate a
*13
hand,
normally
some determinations
made
§
yes, is the restriction of
18 to CBM
stage may
at the initiation
not affect au
such a limit.
answer both
We
thority to render a final decision whenever
affirmative,
questions
and therefore made.
reject
the contention that we
not re-
determinative,
of
is not
Overlap
issues
the '350
is a CBM
view whether
timing
neither is the
determinative.
In-
§
by
covered
18.
deed,
implicitly agrees.
the Government
question:
first
what
As
SAP,
pointedly
Unlike
it
does
contend
not
324(e) says
§
that
determination
“[t]he
324(e)
§
that
our
of
bars
review whether
by
post-
whether to institute a
[PTAB]
ground
§ 101 is an available
for invalida-
grant review under this section shall be
18,
§
regardless
tion under
of when the
nonappealable.”
final and
35 U.S.C. PTAB considered that issue.
added).
324(e) (emphasis
language
§
That
only
It
run counter to
would
by
apply
does not
its terms
to limits on
324(e)
language
of
to read it as
authority to enter a “final written decision”
barring review of whether the PTAB ex
in
invalidating
patent.
Institution and
statutory
authority
ceeded
limits on its
validation are
distinct actions
two
It
run counter to
invalidate.
would also
being
deeply
PTAB.
addition to
embed
long
judicial
our
tradition
review of
law,8
of
ded in federal administrative
the dis
government
legal
actions that alter the
tinction is built into the structure of this
statute,
above,
person,
an
a hallmark of
particular
explained
rights
AIA
of
affected
APA,
(Fed.Cir.2015)
agency
pro
(adopting
8.
an
initiation of
the Government’s
Under
action,
702,
ceedings
agency
5
is an
U.S.C.
argument that even a
to continue a
decision
commonly
action,
but it
is not a reviewable "final
proceeding
agency
is not a final
which
action,”
agency
id.
704. See Bennett v.
generally
only upon
will occur
conclusion of
1154,
154,
Spear,
117 S.Ct.
137
520 U.S.
-
EPA,
proceeding);
Sackett v.
see also
(1997);
L.Ed.2d 281
FTC v. Standard Oil Co.
-,
1367,
U.S.
132 S.Ct.
It
the law that “[a]d-
has
been
review.
It has never been the policy of
must have a
ministrative determinations
Congress
prevent
the administration
grant
and must be within the
basis
law
of its own
from being judicially
statutes
authority....
agency may
An
not final
ed
scope
authority
confined to the
grant-
ly
statutory power.
decide
limits of its
objectives
ed or to the
specified.
Its
judicial
That is a
function.” Soc. Sec. Bd.
policy
otherwise,
could not be
for in such
Nierotko,
358, 369,
v.
327 U.S.
66 S.Ct.
a case statutes would in effect
blank
be
(1946).
Supreme
90 L.Ed.
checks drawn to the credit of some ad-
repeatedly emphasized
has
Court
“the
ministrative officer or board.
Congress
strong presumption
intends
79-752,
(1945);
S.Rep. No.
at 26
H.R.Rep.
judicial
action,”
review of administrative
(1946)
79-1980,
(same); Bowen,
No.
at 41
beginning
and that
‘our
“[f]rom
cases
invalidating patent. enough It is for us Government, in support of its new-found defining to determine here that the charac- position against judicial notes that patent, as a teristic of CBM sub- only provision of the AIA that allows jecting special power it to a to an appeal post-grant to this court from a invalidate, limit.10 is such a 329; proceeding is that section The Government and SAP have not judicial authorizes review of the “final any identified reason to draw different written decision” of the PTAB pur- made legislative conclusions. It is clear from the 328(a). government suant to The reads AIA history Congress purpose of the that this as limiting only review to the final ly relatively simple set out to create a decision, anything written and not in the See, expedited process. administrative initial decision to institute. But that of 112-98, (2011), e.g., H.R.Rep. No. begs question aspects of course —what However, 2011 U.S.C.C.A.N. noth the final subject written decision are ing purpose precludes argues or review? court, against this in an appeal of a final significance The Government finds decision, deciding written ques contested 328(a) in the fact the PTAB directs regarding premises necessary tions to the respect issue a decision with agency’s ultimate relied-on patentability Putting claim. appeal here, take the action on invalida — this provision with together tion of the patent claims under the CBM argues Government that on appeal just agency because the authorization — only court is limited to what the PTAB is premises first addressed those at the initi directed to do. But is a non-sequitur. stage proceeding. ation The statutory description agency’s of an delays, process, already with inherent necessarily decisional duties does not de Any delay committed. further caused appellate fine the of an ulti scope court’s having the court part decide as the basic mate merits considerations. predicate merits ease a issue such here, Indeed, raised would be limited. parallels The Government also draws *15 predicate when the answers to these issues between the AIA this issue under and the precedent, are decided as a matter of fur in practice prior-established USPTO’s the delay, any, minimal, ther if will be if not parte proceedings, ex reexamination and in essentially disappear. the prior practice now-supersed- under parties, provisions partes The ed for inter reexamina- digging through legisla- the record, up tive come with tion. We do not find that either of those competing state- legislators proceedings, ments from various regard with established under different possible scope statutory provisions dealing of the issues to be with dif- issues, heard on appeal. assuming controlling Even such ferent is here. It relevant, however, thought noting, statements are to be the worth that the pre-AIA variety of conflicting why views illustrates case law made clear that limitations on the we must focus on the structure lan- scope authority of reexamination were re- issue, argue predicate necessary part 10. The Government and SAP that the and a during PTAB found Versata waived this issue appeal. record on explained, the trial. As we have this is 1322 final To in questions the decision even take the two reverse upon
viewable
such limita
the
considered
though
USPTO
order: Cuozzo did not decide
sta-
whether
stage
the initiation
and initi
solely
tions
at
tus as CBM
was
on invali-
limit
long held to be unreview
ation itself was
authority
dation of
It could
NTP, Inc.,
re
Issue Number 2—Is the '350 Patent regulations to “issue establishing a Business Method “Covered a implementing post-grant transitional Patent”? review proceeding for review of the validi- a post- AIA section 18 establishes ty of patents.” covered business method grant proceeding “for review the 18(a)(1). § Pursuant to that broad author- validity method pat of covered business ity, adopted the USPTO regula- extensive 18(a)(1). anyone § In case wished ents.” § governing program. tions See 37 argue question, Congress left no §§ C.F.R. regula- 42.300-.304. Thus the § scope doubt about the 18: “The Di tions, in addition to a definition of “techno- proceed rector institute a transitional invention,” logical 42.301(b), §id. also con- only a ing patent for that is [under 18] tain a definition of “covered business patent.” covered business method 42.301(a). patent,” method id. 18(a)(1)(E). what, We first consider under the stat- The statute defines “covered business ute and the issued regulations, is a “cov- patent” method as: patent,” ered business method and wheth- patent that claims a or method corre- applies er the term at issue sponding apparatus performing for data in this case. Subsequently we consider processing operations or other used in what the regulations, USPTO in the ab- administration, practice, or manage- definition, a statutory sence of understand product ment of a financial or ser- exception for a “technological inven- vice. ... be, again tion” to its application to this 18(d)(1). disagreement A basic between patent. parties broadly to this case is how read, language should be and accordingly, Scope The the Term “Covered ” it encompasses whether the invention set Business Method Patent patent. out in the '350 out statutory We set above the definition In addition to the boundaries inherent of a “covered patent” business method definition, statutory Congress pro- also 18(d)(1). found in regula- The USPTO’s specific exception: vided a “the term [cov- tion, term, defining the same restates ver- patent] ered business method in- does not statutory batim the nothing definition and technological clude inventions.” Though any question more. that avoids Unhelpfully, Id. Congress did not then de- regulation whether the with is consistent invention,” fine a “technological but in- statute, regrettably nothing it adds stead instructed the reg- USPTO to “issue our understanding scope question. for determining ulations whether a In response objection to Versata’s 18(d)(2). is for a technological invention.” the '350 was not a covered business by regulation The USPTO has promulgat- patent, method was therefore ed its version of a definition of a “techno- 42.301(b). left to its own devices. The PTAB under- logical invention.” 37 C.F.R. analysis regarding took an whether Versa- parties disagree whether necessarily ta’s claims 17 and 26-29 must excepted invention this case is such an *17 “technological products be directed to “financial or invention.” ser-
vices,” primarily terms are used the ered to be focused on financial as these that, such.)14 part The PTAB noted definition.13 institutions as implementing the process of the agency The PTAB noted that the sum- proposed notices of published had USPTO Instead, marily rejected proposals. these rulemaking, among and that the final the stated that: USPTO subsequently adopted proposed rules clarify suggestion The to that the term the definition of “covered business was “financial or product service” is limited patent” method contained 37 C.F.R. products to the or of the finan- services 42.301(a), the definition described above. industry adopted. cial services is not PTAB that in its notices observed a narrow construction of the term Such legislative considered the de USPTO limit scope would definition of as the overall history, bates and as well patents beyond covered business method itself. J.A. 21- program transitional See 18(d)(1) intent of section of the AIA. Program for (citing Transitional Cov Id. ered Business Method Patent s —Defini The PTAB thus declined to interpret the tions of Business Method Patent Covered requiring patent’s statute as that the in- Invention, 77 Technological Fed.Reg. literally comprehend vention a financial 2012)). Also, (Aug. product or service: “The term financial is that in final notice of observed adjective simply relating that means to rulemaking agency explained that the monetary matters.” J.A. 23. The PTAB history supported the legislative proposi concluded “Versata’s '350 broadly tion that the definition be inter products claims methods and for determin- preted “encompass patents claiming claims, ing price and that these which nature, that are financial in inci activities complementary activity are to a financial activity dental a financial or comple matters, monetary and relate to are con- a financial mentary activity.” Id. products sidered financial and services un- Further, in the Register Federal notice 18(d)(1).” §der Id. explaining agency’s adopt decision to here, In its Versata renews its rule, agency its final notice observes argument against the PTAB position. responding that one commentator position Congress Versata takes rule proposal suggested regulato- that the phrase used the “financial product or ser- ry definition of covered business method vice” for a plain reason and that the mean- specifically should be limited to the prod- ing of the text of the statute limits the ucts and services the financial services jurisdiction PTAB’s to products or services industry. Fed.Reg. Another 48736. i.e., banks, from the financial suggestion bro- agency was should sector — insurance, kerages, holding make specific companies, reference in the definition to Class 705 of the United States Classifica- similar institutions with a finance focus. If System, Congress scope tion used examiners. had intended the USPTO (This generally Id. classification capture things consid- definition to other ineiden- earlier, See, early As noted this issue was addressed that issued in 2000s. (2011). in the PTAB's decision to institute e.g., Cong. Rec. 3432 Class 705 in its final written decision. apparently original temp- itself served as the late definition of a "covered business history 14. There is a considerable amount of method,” thought but was to be too narrow. regarding technology Class 705—the as- class Id. at 13167. sociated with the volume of business method *18 18(d)(1) so, commerce, any limits AIA to one sector or it could have said tal to Further, industry. legislative history different words. it would have used Thus, supports the broader definition. ar- patent the '350 responds SAP USPTO, gues interpreta- PTAB’s determining price a method “[a] claims . arbitrary capricious. tion was not or organ a purchasing offered to product of Appellees’ (quoting Br. at 45 ization.” that, agree We with the USPTO as 57-58). 19, col. ll. Under patent '350 construction, statutory a matter of the def definition, statutory of the interpretation inition of “covered pat business method SAP, fall argues price plainly calculations is not to products ent” limited and services administration, or “practice, within the only industry, patents of the financial or to product of a financial or ser management by directly affecting owned or the activi 18(d)(1). if language of AIA Even vice” ties of financial institutions such as banks regard could be Congress’s intent this brokerage plain houses. The text of unclear, interpre considered the USPTO’s statutory definition contained 18(d)(1) broadly interpreted tation of § 18(d)(1) “performing operations ... — “encompassing] patents claiming ac administration, practice, used in the or nature, that are financial inciden tivities management product of a financial or ser activity complementary tal to a financial or range vice”—on its face covers wide of is, according to activity,” to a financial statutory finance-related activities. The SAP, Cooper to deference under entitled definition makes no reference financial to Dudas, v. Technologies Co. such, not limit' institutions as and does (Fed.Cir.2008). SAP, According to only itself to those institutions. claims a “method for determin argues To limit the definition as Versata l. ing price,” patent, '350 col. require reading would limitations into the something calls a “hierarchical statute that are not there. This under- engine.” Appellees’ Br. at 49. pricing standing of the text is reinforced specific findings PTAB made that the scope program, of the entire and the ... steps performed claimed “could be concern, including the halls general within pencil paper,” specific, with and “no Congress, regarding litigation abuse software, equip computer unconventional patents. over business method These con- ment, processing capabilities or are tools Congress special cerns caused to create a findings, 27-28. These required.” J.A. in the first program for these SAP, argues support its determination. place. The USPTO in its brief as intervenor Furthermore, expertise interpretation PTAB’s *19 fall if comprises questions granted— it well within the ultimate review is vention statutory definition of a “cov- terms of the did the err in the first instance USPTO patent.” method ered business it originally when determined that the in- vention was novel and nonobvious? “Technological Meaning The Putting part regulation’s this defi- ” Invention aside, nition left with a we are definition of 18(d) states that the term Section “technological essentially a invention” as patent” method does not “covered business having “technological” one a that feature “technological include for inven a problem using solves “technical” a “tech- dispute parties tions.” The whether the Defining nical” solution. in term terms technological for a invention. patent '350 is help. of itself does not seem to offer much requires This that we first determine what short, punt neither the statute’s term, by is meant and then whether agency’s nor the USPTO lateral of the ball finding in pat was correct this anything very offer useful in-understand- ent not such an earlier invention. As ing the meaning “technological of the term noted, term, Congress not define the did invention.” but left it to the to do. USPTO The PTAB, in concluding Thus the it instructions, Congress’s USPTO followed jurisdiction had over the '350 aas 42.301(b) promulgated in 37 C.F.R. covered business method that was its definition. exception not within the for a technical According regulation, a “techno- invention, had to craft its own understand- one in logical invention” is which “the ing by of what is meant a “technological subject claimed matter as a whole recites a First, invention.” the PTAB recited the technological feature that is novel and adopted fact that the USPTO had a defini- art; prior unobvious over and solves a notice, published tion and had a related see problem using technical a technical solu- Guide, Office Patent Trial Practice 77 Fed. regulation specifies tion.” Id. The 2012). Reg. (Aug. 48763-64 The these criteria be considered “on a will notice which, listed certain characteristics case-by-case basis.” Id. This definition is if present, help did not support finding say it notable as much for what does not that the invention was within the “techno- say. for what it does logical invention” exception from CBM First,.the that a requirement technologi- 1) treatment. These are: mere “recitation cal invention should be novel and nonobvi- 2) technologies”; of known “reciting the ous art prior over the could be said to be 3) prior technology”; use of known art obvious, rather and not novel. This is “combining prior art structures to achieve eligible patent- because in order to be normal, expected, predictable or result ing place, the first invention must of that combination.” Id. at 48764. (35 102) be novel U.S.C. and nonobvious PTAB, taking position that the (35 103); presumably U.S.C. the inven- presence single qualifying of a claim is review, tion already since it has sufficient to institute covered business by patent, been covered an issued was method claim 17 for closer selected earlier determined the USPTO to be (Claim analysis. 17 is set out in extenso novel At early stage and nonobvious. section, Yersata, ‘Background’ supra.) process, when the USPTO is first in its effort to avoid CBM review of the determining whether the at issue is CBM, argued even a '350 that claim patent, there would seem to be little like all cause to determine what will be one of the patent, claims recited a novel “ technological ‘leveraged feature. the invention the hierarchal and nonobvious a “hierarchical data This was described as data large companies structures used ” a soft- structure” used combination with information,’ organize pricing agree we ware-implemented pricing procedure. with the PTAB that this is not technical that the claims further contended solution but more akin to creating organi- computer the use of a and the require all (citation management zational charts. Id. numbers that are to use of “denormalized” omitted). PTAB, Like the for many *20 in “run re- be determined time.” SAP reasons, of the same we conclude that sponded that claim 17 lacked a novel and may sweep whatever be the full of the technological nonobvious feature as the invention,” “technological term the inven- merely claim directed to a business was tion that comprises patent '350 is es- process determining product prices of sentially technological not a one as that computer-related lack even minimal recita- ordinarily term would be understood. The PTAB concluded that claim 17 tions. Accordingly, we affirm the PTAB’s con- technological did not recite a invention. clusion that Versata’s '350 is a cov- accept We the PTAB’s use of claim as ered method patent, business and that it correctly As PTAB representative. not fall within the exception does for tech- noted, if required even the invention inventions, nological excep- whatever that not consti computer, use of a the claim did tion otherwise mean.15 tute a invention. As we are technological instructed, of a presence general now Issue Number 3—Claim Construction computer operations to facilitate purpose Standards through steps change uninventive does not addressing the ultimate in When merits character of an fundamental invention. question compliance this case—the of by v. Corp. Pty. See Ltd. CLS Alice Bank requirements with the - Int'l, -, U.S. 134 S.Ct. . PTAB 101—the issue of claim faced (2014) L.Ed.2d 296 PTAB applied construction. The its typified The PTAB viewed the invention interpretation” “broadest reasonable by basically claim 17 as a method of deter (“BRI”) issue, the stan- standard mining price. This was a determination in adopted dard the USPTO for any type that could be achieved “in post-grant proceedings, generally AIA computer system programming pro or or used in USPTO office actions. Versata environment,” cessing accordingly “no challenges application of that standard software, specific, comput unconventional in its claims this case.16 equipment, processing capabili er tools or required.” (citing ties are J.A. 28 Dealer PTAB, decision, The in final written track, Huber, Inc. v. 1333 construed four claim of which the terms (Fed.Cir.2012)). parties sought appeal, construction. On out, points correctly, PTAB’s agree
We
with the
determina-
PTAB
BRI
applied the
standard to each of
tion that claim 17 does not solve a techni-
its claim constructions. Versata conse-
problem using
cal
In-
technical solution.
deed, contrary
quently challenges generally,
the PTAB’s
argument
to Versata’s
Internet
Brief
et al. as Amici Curiae in
See also Brief of The
Association
of Dell Inc.
Intervenor;
Support
Appellees.
as Amicus Curiae in
Support Appellees
Brief of
Corp.
Supporting
Amici Curiae Intel
et al.
Agency’s
Compa-
Intervenors and Affirmance of the
16. See also Amici Curiae Brief of 3M
Party.
ny
Support
et al. in
of Neither
But see
Decision.
standard,
case,
majority approved
in this
particular
the BRI
use of
meaning
“pric-
of the term
use of the BRI in PTAB claim
on the
USPTO’s
its effect
information,” and whether that term construction.
Versata case would be different under a different a permissible not number struction is regime. claim construction This is be- reasons, adversely use im- and that its of cause, applying even the usual court-uti- validity determination of the pacted the formula, lized “one correct construction” analy- PTAB’s 101 '350 under the Versata, interpreta- we conclude that the PTAB’s Accordingly, argues ap- on sis. claims, tion of the for the same reasons for the court is to peal one alternative PTAB analy- given by the after careful consider- and remand for new 101 reverse ation, particularly claim construction. is correct. This is the proper sis under a 17, which, regarding light case claim in of SAP, position whatever its the earlier principles the of claim differentiation and been, may posi have takes the litigation understandings the derived from the writ- PTAB, applying that the tion this above, description, ten as described is BRI, construed the claims properly broad limited to denormalized numbers. to “denormalized num ly as not limited without, points to the fact that Thus, bers.” SAP guidance provid- even dependent claims recite “denormalized Cuozzo, ed under either formulation of independent numbers” and the claims do the claim construction standard the result not, description and the written describes likely is the same in this case. The “ only aspect’ this feature as of the ‘[o]ne PTAB’s claim constructions are affirmed. purported Appellees’ invention.” Br. at Issue Number 4—The Merits 39). 8, (quoting patent, '350 col. l.
57-58 Determination Further, SAP, argues even if the PTAB construction, erred in its the error is decision, In final its written its correction would not harmless because PTAB held that claims 17 and 26-29 of the change the result. unpatentable '350 were 35 § 101 In U.S.C. as “abstract ideas.” re question propriety
On the basic of the whether, sponse, challenges first Versata PTAB BRI applying standard in statutes, governing under the it is within on decision-making, this is an issue which In to invoke 101 we need not elaborate here. Cuozzo, view, argument validity. case that issued after as a test of Versata’s numbers, according during time 17. Denormalized to Ver- mined the software run sata, depending pricing operation do not have fixed units and assume is units, being meaning performed. a different deter- different
1329 goes authorize the PTAB to test review power statutes to the of the PTAB to in a validity challenged Thus, claims CBM presented decide the case to it. like requirements on the basis of the set review the issue we discussed Issue Number §§ not on forth 103 and but supra, it engages analysis the same as did requirements basis of the set forth in that issue. And for the same reasons set Second, §if 101 a permis- even is there, forth the answer must be the same. test, argues that the PTAB sible jurisdiction We have question to decide the finding nothing erred in these claims more decided, though even it is as it inwas idea,” than an “abstract as that is under- case, initially by the PTAB at the decision §in jurisprudence. stood to institute stage. turnWe then to the more chal Is Proper Section the Patent Act a lenging question of whether the PTAB was Cases, in CBM and Is That Referent statutory within its invalidation authority Question Open to Judicial Review? apply § when it chose to jurisprudence matter, preliminary As a we address the in determining validity of the chal question of whether we can aas lenged Admittedly, claims. statutory law, matter of whether the PTAB is au- subject text competing understand thorized to invoke 101 as a test of validi- ings. chapter Under governing post- ty in CBM cases. It was at the decision to grant cases, review and the PTAB stage institute when the PTAB determined “shall issue a final written decision with there All was issue. the same respect patentability arguments against judicial for and *22 ” 328(a) § claim challenged.... (emphasis of an issue first decided the institution added). time, 321(b), § At the same enti stage presumably are available. The ques- “Scope,” tled petitioner states that a in a again
tion is whether can we reach this “may request PGR review to cancel as issue now on of the final written unpatentable 1 or patent more claims of a decision. yes, The answer is and for es- any ground on that could be raised under sentially the same reasons. (2) (3) (re 282(b) paragraph or section First, an appeal of the PTAB’s lating to invalidity any of the or decision, questions final written all that claim).” added.) (Emphasis relate to the ultimate merits of the case 282(b) Section in specifies turn the de- are before us. Since the merits of this fenses that be. in raised an action law, application § case turn on an 101 involving validity or infringement of a step deciding first in those merits is neces patent. Among the defenses listed are: sarily satisfying that ourselves the PTAB’s (b)(2) invalidity of any or — merits decision was based on a correct any ground claim on “specified part in II understanding of the law. Thus we must patentability”; as a condition for assure compliance ourselves that with (b)(3) invalidity any of the or § 101 applicable is the test for — claim comply for failure to with to have used in judging validity of the mode) § requirement of 112 (except best in patent. claims the '350 § or 251. Second, all the same reasons we 324(e) argues that a earlier, post-grant CBM §
discussed does not bar ground must be limited to a that reviewing this court from and deciding this (2) (3) predicate paragraph issue could be raised under or when raised. The authori- 282(b). ty of the PTAB under the relevant of section statutes Versata then reasons 282(b)(2) apply § § 101 law to the claims under that authorizes defenses on 1330 Tech., (Fed.Cir.
any ground “specified
part
657,
in
II as a condi-
661 n. 3
patentability,”
2008).
tion for
and that the
II
part
reference includes under the
in
headings
It
require
hyper-technical
would
compiled
only
statutes
“conditions for
adherence to form rather than an under-
i.e.,
§§
patentability,”
102 and
but not
standing of substance to arrive at a conclu-
§ 101. Based on the
in
headings
part II
sion that
ground
is not a
available to
statutes,
Versata draws a distinction
test
under
either the PGR or
heading
between the
under which
processes.
validity
Section 101
challenges
appears,
patentable,”
“inventions
and “con-
today
major
are
industry,
they
ap-
patentability”
ditions of
under which
pear in case after
case
our court and in
§§ 102 and 103 are listed.
cases,
Supreme Court
not to mention now
SAP counters that it is generally under-
in final written
decisions
reviews under
that
invalidity
stood
101 is an
defense
the AIA. The numerous cases in our court
and that Versata’s reliance
Supreme
Court need no cita-
on the
is
headings
improper. SAP also tion;
sample
cases, see,
for a
of PTAB
e.g.,
argues
legislative
that the
history suggests
America,
Search
Inc. v. Transunion Intel-
any ground
validity
raised,
may be
LLC,
ligence,
CBM2013-00037, 2015 WL
including 101.
(Feb. 3, 2015);
Bancorp
U.S.
v.
The USPTO echoes
arguments,
these
Capital
Retirement
Management
Access
Co.,
and cites to Graham v. John Deere
Co., CBM2013-00014,
Versata’s regarding processes ameliorative in the AIA would Dealertrack, Inc., 674 F.3d at 1330 n. be a substantial change in the law as it is adds it would be particularly ano understood, and requires something more malous to conclude that Congress foreclos *23 than some inconsistent headings section § ed consideration of 101 issues CBM a statute’s codification. agree We with the very reviews since the purpose spe USPTO that, and SAP and we so hold process cial permit CBM was to the USP- looking at the entirety of the statutory TO to validity reconsider the of a salient framework and considering the basic pur- category of patents. business method pose reviews, of CBM the PTAB acted Versata is correct that a strict adher- scope within the of authority its delineated ence to the section titles can support an by Congress in permitting §a 101 chal- argument that 101 is not listed as a lenge under AIA 18. patentability,” “condition of but rather has the heading of patentable.” “inventions Finally, the Merits of However, USPTO, as noted both PTAB Decision our opinions Supreme and the Court’s Having determined that opinions years over the have established PTAB had validity that test the of challenges validity constitute the challenged claims under patentability we turn challenges. See also Co., question Standard now to the Cyanamid Oil Co. v. Am. of whether the conclu (Fed.Cir.1985); F.2d sion reached regard Aristo- with to that test was crat Pty. Techs. Austl. Ltd. v. Int’l Game correct: that challenged claims were (and constituting invalid as an “abstract idea” ments of 101 of the Patent Act constructions) as that term is understood. The PTAB law, as questions of without challenged that “each of the determined deference to the trial forum. Ultramer claims involves the use of an idea: abstract cial, Hulu, LLC, Inc. v.
determining
using organization
a
price
(Fed.Cir.2014). As
necessary predicate
a
hierarchies,
product group
which are akin
conclusions,
to our
briefly
we must
summa
management organizational
charts.”
applicable
rize the
law.
According
PTAB,
J.A. 72.
Versa-
Section 101 of the Patent Act defines
concept
organizational
ta’s
hierarchies
patent-eligible subject matter: “Whoever
products
and customers is abstract be-
any
invents or discovers
new and useful
represents
cause it
a
concept,
disembodied
machine,
process,
manufacture, or compo-
building
ingenu-
a basic
block of human
matter,
sition of
or
new and useful
ity
determining
is little more than
a
—it
thereof,
improvement
may obtain patent
price, essentially
calculating.
a method of
therefor, subject to the conditions and re-
analyzed
The PTAB further
whether
quirements
of this title.” 35 U.S.C.
incorporated
meaningful
claims
“sufficient
Supreme
The
Court
has found
101 an
they
limitations” to ensure that
recited
implicit exception
nature,
for laws of
natu-
idea,
than an
more
abstract
and deter-
phenomena,
ral
and abstract ideas.18 Al-
mined
the claims did not add mean-
ice,
(citing
bich, additionally and found that idea,” understand .an “abstract inventions steps storing, retrieving, claimed sort- thought that are to be based on an ab- ing, eliminating, receiving were “well- stract idea as such are per unpat- se *24 known, routine, and conventional steps.” inventions, level, All entable. at some J.A. 75-77. use, reflect, “embody, rest upon, apply or nature, questions phenomena,
We review
laws of
natural
concerning
or ab-
(citation
compliance
ideas.” Id.
require-
with the doctrinal
stract
quotation
Supreme
alternately
18. The
Pathology
Court has
re-
19. But see Ass’n Molecular
v.
for
-
specific exceptions”
Genetics, Inc.,
U.S. -,
ferred to the "three
to Myriad
133 S.Ct.
101,
Kappos,
section
593, 601,
see Bilski v.
561 U.S.
2107,
(2013) (naturally
whether the claims
issue
604, 130
at
U.S.
S.Ct. 3218.
concepts.
patent-ineligible
one of the
Id.
years
Supreme
In recent
Court
2355;
Mayo
at
see also
Collaborative
this court have examined claims directed
-
Labs., Inc.,
v. Prometheus
U.S.
Servs.
to abstract ideas on number of occasions.
1289, 1296-97,
-,
132 S.Ct.
182 L.Ed.2d
ap-
Extensive discussion of these cases
(2012) (setting
two-step
forth the same
pears
many opinions, and we do not
framework). Second, if the claims are di
repeat
litany
helpful,
here.
It
be
matter,
patent-ineligible subject
rected to
nevertheless,
“
highlight briefly
a few sa-
else is there in the claims
ask
‘[w]hat
”
points
comparison
lient
as a means of
Alice,
(quot
were
the claims
17 and
Claims
26-29 of the '350
are
general
were tied
a
purpose computer
directed to the abstract idea of determin-
buySAFE,
and invoked the Internet.
ing a price, using organizational
prod-
Inc.,
(Fed.
Google,
Inc. v.
1335 analysis PTAB in its followed the er than solely function as an obvious mech in Supreme of the Court Alice and dictates anism for a permitting solution to be examining the claims as a whole Mayo by i.e., quickly, achieved more through the and in terms of each claim’s limitations. computer utilization of a for performing Tech., calculations.” SiRF Inc. v. Int’l argues
Versata
that its claims recite “a
Comm’n,
(Fed.
Trade
specific approach
determining
price
to
Cir.2010);
Bancorp,
see also
at
F.3d
product
computer, using
of a
on a
hier-
1277-78. Versata’s claims do not meet
archies so as to enable the desired benefit
test,
solely
and instead function
as a
computing
for the
environment:
fewer
searches,
mechanism for permitting
price
deter
leading
software tables and
to
performed
mination to be
more
improvements
computer performance
quickly.
Appellant’s
and ease of maintenance.”
Br.
Versata asserts that
the PTAB con
However,
all
parties—
43-44.
strued the claim term “data source” in
including
recognize that
these
Versata —
17, 27,
claim
17—and found
claims
and
supposed benefits are not recited in the
“computer
29—as a
storage medium” and
claims at issue. Versata contends that the
that this is inconsistent with the PTAB’s
Inst.,
benefits are relevant under Genetics
finding
underlying process
that the
could
Diagnostics,
LLC v. Novartis Vaccines &
performed
be
pen
paper.
via
Howev
Inc.,
(Fed.Cir.2011),
I
language or specific legislative history that
outset,
At the
it is important to note that
is a
congressional
reliable indicator of
in-
this is
Congress
case about whether
tent, or
specific congressional
intent to
precluded “judicial
has
govern-
review of
preclude judicial
fairly
review that is
dis-
ment actions that
legal rights
alter the
legislative
cernible
the detail of the
person.”
Maj. Op.
affected
at 1319. To
Bowen,
673,
scheme.”
476
at
U.S.
106
contrary,
the statute clearly provides
(internal quotation
S.Ct. 2133
omit-
marks
for
invalidity
review of the Board’s
deci-
see,
ted);
e.g.,
sion,
Lindahl v.
Pers.
government
which is the
action that
Office of
13,
legal right
Mgmt.,
alters the
470
n.
holder.
U.S.
779-80
105
Rather,
(1985)
See 35 U.S.C.
this ease is S.Ct.
(recog-
tent with the clear division between the 324(e) gress intended to bar review of phases- Congress imprinted two into the the Board’s institution decisions statute, “nonappealable” interpret- is best time, even on from final appeal written appellate ed to maintain this division at the One such decision is whether the decision. level the various institution insulating challenged a “covered business decisions from even from method Act patent.” America Invents separate phase. and distinct merits (AIA), 112-29, 18(a)(1)(E), Pub.L. No. *31 interpretation supported by (2011) (“The This is also 125 Stat. Director purpose post-grant the reviews. Con- may a proceeding institute transitional gress post-grant pro- intended reviews to only patent for a that is a covered business “quick vide a and cost effective alterna- patent.”). method The Board makes this 112-98, litigation.” H.R.Rep. to No. ] tive[ determination. as of its decision to part (2011), pt. at 47-48 2011 U.S.C.C.A.N. institute, and not revisit does issue 324(e) interpret § If 324(e) 77-78. we to Thus, during § the merits phase. second-guess allow this court to precludes review of the Board’s covered- Board’s institution decisions on ap- business-method determination this decision, however, from a final written we peal. “unnecessary create the kind of
will B counterproductive litigation costs” that 324(e) Congress proceedings majority agrees intended these to The bars (2011). By avoid. Id. at 40 the time the review of the Board’s decision to institute final Maj. Board’s final written decision reaches even after a written decision. (“[T]he court, in- parties Op. expressly and the Board will have at 1315 statute may not the deci- [review devoted considerable resources to resolv- structs that we institute].”). ing validity question. majority issues in And to But the re- sion stayed Congress’s will inquiry district courts often have relat- fuses to end the with proceedings, anticipation simpli- keep ed of a intent. To the final plainly expressed say meaning fication of the issues for trial. If this court over the of “covered business authority majority has patent,” reverse Board’s insti- method reframes as a “limit on invalida- [the Board’s]
issue Board’s authority to invalidate because it 18,” under which authority tion falls out- “defines the authority PTAB’s to invalidate 324(e). Maj. scope Op. side the Maj. Op. 18.” at 1320. But no- agree approach. I cannot with this where does the statute describe the CBM requirement a limit as on the au- Board’s The statute describes “covered busi- thority to invalidate. Timken U.S. (CBM patent” requirement Cf. ness method States, Corp. v. United limit requirement) as a on the Board’s (Fed.Cir.2005) (“Not every agency viola- authority institute review. Section 18 tion of a statutory command results in the Director states that institute “[t]he sanction of invalidating agency action only proceeding patent transitional for a statute.”). pursuant taken to the To the business patent.” that is a covered method accurate, extent that statement is it only- 18(a)(1)(E). §AIA The statute then ex- because the provides statute pressly bars our review of the institution “may Board institute a pro- transitional decision: “The determination the Di- ceeding only for a that is a covered post-grant rector whether to institute a business patent.” method AIA review under this section shall be final and 18(a)(1)(E). 324(e). And limit on the nonappealable.” 35 U.S.C. Board’s Thus, authority to plain language under the institute review is in- stat- ute, directly a limit on authority authority the Board has unreviewable to invali- date a patent: decide whether is a “covered If the Board cannot insti- patent.” business method tute review in place, the first it cannot issue final written decision. majority proposes that if we call the requirement CBM something else—not however, This indirect relationship, can- only a authority limit on the Board’s to not be enough to find Congress in- review, institute says, statute but tended this court to review an institution also a limit on the Board’s ultimate author- requirement aas limit on the Board’s ulti- ity to invalidate the can we authority mate to invalidate. Taken to its —then review the issue. But our task is to apply logical conclusion, this approach would statute, the language of the not to rewrite 324(e) eviscerate in the context of an it. language And the of the statute ex- appeal from a final written decision. All pressly requirement ties CBM aspects of the Board’s decision to institute institute, Board’s unreviewable decision to game would be fair because all the Board’s ultimate to inval- statutory limits on the institution decision By using language idate. different *32 than are also indirect limits on the Board’s final that Congress employed, majori- which authority result, to invalidate. As a ty expands scope of our review to 324(e) § only would bar review of the include the same substantive issue— Board’s decision to in institute an interloc- whether a is a “covered business utory appeal, before the final decision has patent” method Congress barred —that 324(e) majority § issued. The agrees that 324(e). § from review in Thus, is not so limited. the majority can- majority justify The fails to not identify statutory treating requirement a the CBM basis for proposed reframing as a limit on the authority of the Board’s ultimate declares, issue. summarily It any solely without to invalidate require- because that citation, supporting that the CBM ment require- authority limits the Board’s to insti- ment should be treated as a limit on the tute.1 Indeed, Congress likely intended the patent” term "covered business method not as a
1341 post-grant of a “covered business review under this section shall requirement The final non-appealable.” be patent” is a limit on the Board’s U.S.C. method 324(e). plain decision. That is how the institution frames the
language of the statute CBM Cuozzo, in holding To avoid the the ma- a limit the Board’s requirement, not as jority rely reframing continues to on its of ma- authority ultimate to invalidate. The requirement the CBM a limit on the issue, jority’s reframing per- of the while authority Board’s to But invalidate. even exercise, interesting academic is haps if refraining that were appropriate, congressional with in- plainly inconsistent in holding Cuozzo still could not be distin- convincing evi-
tent. There is clear guished. in provision The relevant Cuozzo 324(e) Congress dence that intended may only states that the Board institute bar review of the Board’s institution deci- partes an inter review if “the information no evi- sions at all times. And there is presented in ... petition re- Congress dence that intended to exclude sponse ... that a shows there is reason- the institution decision provision from this likelihood that petition pre- able would of whether the is “covered busi- Cuozzo, vail.” (quoting F.3d I patent.” Accordingly, ness method con- 314(a)). 35 U.S.C. The appellant argued 324(e) precludes our review of clude that that the Board violated this provision by a “covered whether Versata’s instituting prior review on the art basis patent.” method business “presented If petition.” Id. correct,
appellant was
then the Board ex-
II
statutory authority
ceeded its
to conduct
partes
an inter
review and issue a final
324(e)
majority’s interpretation
The
decision,
written
because it
violated stat-
permit
pat
review of whether Versata’s
utory limit on
instituting review
patent”
ent is a “covered business method
Thus,
place.
just
first
Cuozzo addressed
directly
precedential
our
de
conflicts with
predicate question
authority
as much a
Speed Technologies,
cision in In re Cuozzo
presented
to invalidate as we are
with
LLC,
14-1301,
No.
793 F.3d
1299-
here.
(Fed.Cir.
July
WL
2015).
case,
In that
we addressed the
majority
makes too much of a note
scope
statutory
judicial
bar on
re
that the
alleged
Cuozzo
defect
314(d),
provides
view in
which
proper
case could have been cured with
determination
the Director
Maj.
“[t]he
pleading.
Op.
See
at 1322. For the
partes
whether to institute an inter
review purpose
determining
whether Cuozzo
final
nonap-
under this section shall be
a limit on the
involved
Board’s
314(d).
invalidate,
pealable.” 35 U.S.C.
We held
it is irrelevant whether the
provision
alleged
review of all
defect could have
“bar[s]
been cured.
decisions,
pleading
institution
even after the Board The fact remains that
was
Cuozzo,
actually
issues
final decision.”
defective and therefore the Board
at 1273. That holding
statutory authority
controls our inter
exceeded its
to insti-
*33
Thus,
of
pretation
analogous
majority’s
bar on review
tute review.
under the
324(e),
states,
preferred framing,
which
“The determination
the Board violated an
the Director whether
limit
institute
indirect
on its ultimate
patents,’’
limitation on the Board’s invalidation authori-
which were of central concern in
(2011)
ty,
focusing
passing
Cong.
but
aas means of
the Board’s
the AIA. 157
Rec. 9952
(remarks
Grimm).
“low-quality
Rep.
business[-]method
resources on
of
invalidate,
least to the same extent
quirement,
at
that
even if we label that require-
allegedly did so here.
the Board
ment a limit on the Board’s ultimate au-
thority to invalidate.
potential
importantly,
More
for a
not limit
proper pleading
holding
did
III
314(d)
plain language
Cuozzo that the
bars review of the Board’s institution
judicial
deci-
The bar on
review of institution
324(e)
only
sions.
It
noted this fact to
establish
decisions
does not mean that
ground
an
declining
alternative
to re-
owners are without recourse in the
institute,
view the Board’s decision to
spe-
extreme case. Even when a statute clear
cifically by aligning ly
case with In re
Congress
demonstrates
intended to bar
Co.,
(Fed.Cir.1998).
judicial
Hiniker
institution even after the Board issues a final decision.” Id. at 1273. IV Cuozzo,
In light of we are bound to day, At the end of majority does 324(e) interpret § to preclude review of a lot waving of hand presump- about the the Board’s assessment judicial CBM re- tion of an agency’s *34 Co., Morgan action. But nowhere tures II LLC v. JP authority to take Chase & that it majority actually suggest (Fed.Cir.2015) does the Congress to inappropriate would be (Hughes, dissenting). J. If this court the CBM decision from our review. remove invalidity vacate the Board’s decision on it, have approved Nor could since courts decision, the basis a threshold the time judicial limitations on our far more drastic spent by and resources the parties and the I. supra review. See Part Board in the proceedings administrative reasonably if make But even we could squandered, will parties have been and the majority pro- the technical distinction likely needlessly will be forced to expend preserve a narrow poses and therefore re-litigating even more resources the valid bar, reading statutory I cannot fath- ity issue in district court. And that is true why Surely to do so. om we would want even if invalidity the Board’s ultimate deci prevent concern is not to the Board sion was correct. instituting from review of a so far meaning outside the of “covered business 324(e) Congress apply intended it patent” any method that exceeds reason- all times to avoid consequences. these of that term. As dis- interpretation able why issue, That is when addressing the III, supra, long cussed in Part courts have Congress plainly said that the Board’s de- statutory an recognized exception bars termination was “final” “nonap- agency plainly on review when an violates pealable.” nothing And in the sug- statute unambiguous statutory mandate. And 324(e) gests applies with less force to event, remotely not even requirement the CBM than in- any other here, all three judges agree case where stitution requirements for 18 reviews. properly the Board exercised its dis- not, therefore, employ We should an un- cretion to institute review of this CBM warranted technical distinction to find au- patent. thority to review the Board’s initial assess- Rather, point majority’s I fear the ment that a is a “covered business final, position is to wrest from the PTO the patent.” method authority patents to decide which are “cov- patent[s]” method appropri- ered business jurisdiction Because we do not have ate for 18 review. But that is not how review the Board’s determination that Ver- AIA Congress designed the to work. Con- sata’s is a “covered business meth- gress gave authority this court the to re- 18(d), patent,” respectfully od AIA I dis- validity view the merits of the Board’s sent-in-part. determinations and to ensure those deci- prevailing sions are correct under law. gave it
And PTO to decide
which merit review in the first from
place, and insulated decision our
review. majority’s desire to revisit the CBM
requirement statutory detracts from this
scheme and the intended benefits of Congress recognized,
reviews. As 18 was “provide
intended to ad cheaper, faster reviewing
ministrative alternative for busi patents.”
ness method Intellectual Ven notes agency to substantial USPTO entitles monetary mat “relating “financial” as deference in how it defines its mission. dictionary comports ters” with defini recognized del Congress broad tion, citing Dictionary The Random House egation rulemaking authority the es (2d ed.1987) English Language of this implementation tablishment and USPTO, (defining, according to the “finan post-grant proceeding. transitional “pertaining relating money cial” as or 18(a)(1). helpful It matters”). said; might See have been interpretation, it is This agency if the had used that readily which embraces '350 understanding of the defi elaborate on its expressly a “method for determin claims provided nition in the statute. Neverthe ing price product” of a in claim 17. '350 less, explained, for the reasons we have we According col. l. patent, in- USPTO, and the in the of the statute conclude that the '350 nothing text