Docket No. 2014-1194
NEWMAN, PLAGER, HUGHES
July 9, 2015
Brief Summary: FC determined it “has the authority to review whether the ‘350 patent is within the PTAB’s § 18 authority” if the issue is “part of or a predicate to the ultimate merits” and the “broadest reasonable interpretation” (BRI) claim construction standard in a CBM review is correct.
Summary: During litigation regarding infringement of Versata’s US 6,553,350 patent entitled “method and apparatus for pricing products in multi-level product and organizational groups” by SAP, SAP petititioned the PTAB to institute a covered business method (CBM) review of the ‘350 patent. The PTAB granted the petition and issued a final written decision that claims 17 and 26-29 are unpatentable under § 101. Versata sought rehearing but was denied, and then sued the USPTO in DC to set aside the decision to institute CBM review. The DC granted the USPTO motion to dismiss for lack of subject matter jurisdiction (not a final agency action as contemplated by 5 USC § 704). Both of these issues are addressed in this appeal. The decision explains that the merits of the PTAB final decision are at issue here, that the court has not been asked to review the PTAB CBM review determination (“indeed the statute expressly instructs that we may not…The dermination by the Director whether to institute a post-grant review under this section shall be final and nonappealable.”), but also that it “has the authority to review whether the ‘350 patent is within the PTAB’s § 18 authority” (if the issue is “part of or a predicate to the ultimate merits”). The next question was whether the ‘350 patent is a CBM patent. Versata unsuccessfully attempted to limit the definition of patents defined as CBM patents under § 18 as those “owned by or directly affecting the activities of financial institutions such as banks and brokerage houses”. The FC instead relied upon the plain language of § 18(d)(1) (“peforming…operations used in the practice, administration, or management of a financial product or service” (but does not include patents for “technological inventions”)) and concluded the ‘350 patent covers a CBM. It was also concluded that “the invention that comprises the ‘350 patent is essentially not a technological one as that term ordinarily would be understood” and “does no fall within the exception for technological inventions, whatever that exception may otherwise mean” (e.g., not simply “the presence of a general purpose computer to facilitate operations through univentive steps”, Alice US 2014). Versata also unsuccessfully challenged the PTO’s use of the “broadest reasonable interpretation” (BRI) claim construction standard “adopted in 2012 for AIA post-grant proceedings, and generally used in USPTO office actions” (approved in Cuozzo, FC 2015). On the merits, the FC agreed with the PTAB analysis of patent ineligibility under the § 101 “Alice/Mayo framework”, “recognize[ing] that any given analysis in a § 101 ‘abstract idea’ case is hardly a clear guidepost for future cases arising under § 101-each case stands on its own, and requires separate analysis by the judges who must make the decision.” Judge Hughes’ dissented with the majority on whether the FC may “second-guess the Board’s initial determination that the patent at issue is a” CBM.