Bank of America, National Associationv.Intellectual VenturesDownload PDFPatent Trial and Appeal BoardMay 18, 201510744537 (P.T.A.B. May. 18, 2015) Copy Citation Trials@uspto.gov Paper 47 571-272-7822 Entered: May 18, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ BANK OF AMERICA, NATIONAL ASSOCIATION, Petitioner, v. INTELLECTUAL VENTURES II LLC, Patent Owner. ____________ Case CBM2014-00033 Patent 7,260,587 B2 _____________ Before THOMAS L. GIANNETTI, HYUN J. JUNG, and GREGG I. ANDERSON, Administrative Patent Judges. ANDERSON, Administrative Patent Judge. FINAL WRITTEN DECISION 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73 CBM2014-00033 Patent 7,260,587 B2 2 Bank of America, N.A. (“Petitioner”) filed a Petition (Paper 2, “Pet.”) requesting institution of a covered business method patent review of claims 1–18 of U.S. Patent No. 7,260,587 (“the ’587 patent”) pursuant to 35 U.S.C. § 321. Patent Owner, Intellectual Ventures II LLC, filed a Preliminary Response. Paper 10 (“Prelim. Resp.”). Based on these submissions, we instituted trial as to all claims of the ’587 patent. Paper 11 (“Institution Dec.”). After institution, Patent Owner filed a Response (Paper 21, “PO Resp.”) and Petitioner filed a Reply (Paper 31, “Pet. Reply”). In addition, the parties rely upon expert testimony. Petitioner proffered the Declaration of William T. Freeman, Ph.D. (Ex. 1005, “Freeman Decl.”) with the Petition. Patent Owner proffered the Declaration of K. Bradley Paxton Ph.D. (Ex. 2007, “Paxton Decl.”) with its Response. In addition, a transcript of Dr. Paxton’s deposition (Ex. 1024, “Paxton Dep.”) was submitted by Petitioner. No deposition transcript was filed for Dr. Freeman. Patent Owner filed a Motion to Exclude Evidence. Paper 33 (“PO Mot. Exclude”). Petitioner filed an Opposition to Patent Owner’s Motion to Exclude. Paper 39 (“Opp. Mot. Exclude”). Oral Hearing was held on March 2, 2015. A transcript of the argument is entered in the record as Paper 46 (“Tr.”). We have jurisdiction under 35 U.S.C. § 6(c). This Final Written Decision is entered pursuant to 35 U.S.C. § 328(a). We conclude for the reasons that follow that Petitioner has shown by a preponderance of the evidence that claims 1–18 of the ʼ587 patent are unpatentable. CBM2014-00033 Patent 7,260,587 B2 3 I. INTRODUCTION A. The ’587 Patent (Ex. 1001) The ’587 patent, titled “Method for Organizing Digital Images” issued on August 21, 2007. Ex. 1001. Figure 1 of the ’587 patent is reproduced below. Figure 1 is a flow chart of the method of the ’587 patent. Ex. 1001, 2:44–45. First step 14 comprises obtaining and organizing the images. Id. at 3:36–37. The images are obtained by scanning hard copy or from digital sources. Id. at 3:37–44. At step 16, the goods are ordered. Id. 3:62–64. The output of the order may be by CD, photo-album pages, or images uploaded to the Internet. Id. at 3:64–67. At step 18, the digital images of the images provided at step CBM2014-00033 Patent 7,260,587 B2 4 14 are obtained by a service provider by scanning or from digital memory devices. Id. at 4:12–18. Once the images are obtained by the service provider, they are processed per the customer order at step 20. Id. at 4:21–27. Processing includes removing red-eye, adding texturing or adding content, after which the images are stored at step 22. Id. A product is produced or service performed at step 23, after which the customer has access to the image for review at step 24. Id. at 4:28–32. The image is then sent to storage at step 25. Id. at 4:38–39. The ordered goods are produced or provided at step 26. Id. at 4:40–43. Documents are received by the customer at step 28. Id. at 4:46–47. Additional orders may be placed at step 30 for images stored at step 25. Id. at 4:50–52. B. Related Matters Petitioner has been sued for infringement of the ’587 patent in the following case: Intellectual Ventures I LLC v. Bank of America Corp. No. 3:13-cv-00358 (W.D.N.C.). Pet. 4. (citing Ex. 1006 and 1007). In addition, Petitioner advises us of four additional lawsuits where Patent Owner alleges the ’587 patent is infringed. Id. at 47. C. Illustrative Claim Of the challenged claims, claims 1, 10, and 18 are independent method claims. Claim 1 is reproduced below: 1. A method of automatically organizing digital images obtained from a plurality of hard copy prints, each of said hard copy prints having an image thereon, comprising the steps of: digitally scanning a plurality of hard copy prints that have been grouped into one or more categories, each category CBM2014-00033 Patent 7,260,587 B2 5 separated by an associated machine readable instruction form as to obtain a digital file of each of said images and digitally associating said one or more categories with said digital images in accordance with said associated machine readable instruction form executed by a computer; storing said digital images files and associated categories on a digital storage medium; and producing a product incorporating images from one or more of said categories as requested by a customer. D. Ground Upon Which Trial Was Instituted Trial was instituted on the ground that claims 1–18 of the ’587 patent are unpatentable under 35 U.S.C. § 101. Institution Dec. 18. E. Claim Interpretation The Board will interpret a claim of an unexpired patent using the broadest reasonable construction in light of the specification of the patent in which it appears. See 37 C.F.R. § 42.300(b); In re Cuozzo Speed Techs., LLC, 778 F.3d 1271, 1279–83 (Fed. Cir. 2015); Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,766 (Aug. 14, 2012). Under that standard, claim terms are given their ordinary and customary meaning, as would be understood by one of ordinary skill in the art in the context of the entire disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). Any special definition for a claim term must be set forth with reasonable clarity, deliberateness, and precision. In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994). In instituting trial, we determined constructions for the following terms: “digitally scanning a plurality of hard copy prints”/ “scanning a plurality of hard copy prints;” and “machine readable instruction form”/ “instruction form.” Institution Dec. 5–8. In its Response, Patent Owner argues for a different construction of the following terms: “machine readable CBM2014-00033 Patent 7,260,587 B2 6 instruction form” (claims 1 and 6) and “instruction form” (claims 10 and 18). PO Resp. 7–12. Patent Owner does not present any other terms for construction. Beyond what it is argued for in the Petition, Petitioner does not seek construction of any additional claims terms in its Reply. Therefore, after reviewing the record, we see no reason to change our prior construction for “digitally scanning a plurality of hard copy prints”/“scanning a plurality of hard copy prints” from the Decision on Institution, as set forth there and immediately below. We then address Patent Owner’s arguments relating to “machine readable instruction form”/“instruction form.” 1. “digitally scanning a plurality of hard copy prints”(claims 1 and 18)/“scanning a plurality of hard copy prints”(claim 10) In the Decision on Institution we determined that “digitally scanning a plurality of hard copy prints” / “scanning a plurality of hard copy prints” means “using a scanner to create digital images of hard copy prints.” The differences between the parties’ proposed construction of the terms were in the inclusion of a scanner in Petitioner’s proposal (Pet. 17) and in Patent Owner’s use of “converting,” instead of “scanning” (Prelim. Resp. 5). Otherwise, both parties proposed the inclusion of “scanning” or “converting” the hard copy prints into digital images. See Prelim. Resp. 5. No technology other than a scanner is described in the ’587 patent. Patent Owner confirmed this with an unambiguous statement in the prosecution history that “[t]he specification clearly discloses scanning by a scanner (see page 5, lined 9–21, and page 20, lines 6–9).” Ex. 1008, Amendment, Jan. 15, 2007, 6, lines 19–21. We agree, and thus our CBM2014-00033 Patent 7,260,587 B2 7 construction includes the use of the scanner for scanning, as set forth in the Decision on Institution. 2. “machine readable instruction form” (claims 1 and 6)/“instruction form” (claims 10 and 18) In the Decision on Institution we determined that “machine readable instruction form”/“instruction form” means “a form, configured to be scanned and read by a machine, that provides information regarding the organization and ordering of the images.” Institution Dec. 8. Petitioner originally proposed a construction of “a form, configured to be scanned with a category of hard copy prints and read by a machine, that provides information regarding the organization of the images that follow.”1 Pet. 20 (citing Ex. 1005 ¶ 52). Patent Owner’s proposal in the Preliminary Response, and again in its Response, is “a set of machine readable instructions that govern how the computer should process the images.” PO Resp. 7–8 (citing Ex. 2007 ¶¶ 28–33). Patent Owner frames the remaining construction issue as whether the phrase “configured to be scanned” in our preliminary construction “requires a machine-readable form to be in hard copy form.” PO Resp. 8. Patent Owner contends that ’587 patent teaches that the “instruction form” can be in another medium besides hard copy, i.e., computer instructions. Id. Further, the claims recite a “machine readable instruction form” where “machine readable” means in “a format that a computer can accept or understand.” Id. at 8, 11 (citing Ex. 1013, RANDOM HOUSE WEBSTER’S COMPUTER & INTERNET DICTIONARY 328 (3d ed. 1999); Ex. 1016, THE 1 Patent Owner contends, incorrectly, that we adopted Petitioner’s proposed interpretation. PO Resp. 8. CBM2014-00033 Patent 7,260,587 B2 8 COMPUTER DESKTOP ENCYCLOPEDIA 537 (2d ed. 1991). Patent Owner argues that our prior construction “requires” that the form be hard copy and is not the broadest reasonable interpretation because it “excludes disclosed embodiments,” including audio and visual formats. Id. at 9–10 (citing Ex. 1001, 5:61–6:4). Pointing out claim 18, Patent Owner argues the claim recites “digitally scanning a plurality of hard copy prints,” which is not limited to an instruction form “configured to be scanned,” as in our preliminary construction. Id. at 10–11. Patent Owner argues the Specification supports its position, citing to disclosures of a computer screen and a kiosk which show the “instruction form” may be visually displayed on either. Id. at 10 (citing Ex. 1001, 5:36–39, 6:41–49, 12:14–23, 12:58–62). Petitioner finds support for its construction in the claim language. Pet. 20–21. Petitioner also argues the Specification supports the interpretation by explaining the instruction form is configured to be scanned with a category of hardcopy prints, and the scanner must be able to read the instructions on the form when scanning the form. Id.at 21 (citing Ex. 1001, 2:22–32). Petitioner also alleges that Patent Owner’s arguments made in overcoming prior art rejections during prosecution support its proposed construction. Id. at 21–22 (citing Ex. 1009, 2–3, Ex. 1008, 2–6). There is no description of any computer program or algorithm in the Specification’s description of what “machine readable instructions” are or their function. The words “machine readable” appear only in the context of labels for photographs, e.g., elements 210 (Ex. 1001, Fig. 5, i.e., bar code labels) and 326 (Ex. 1001, Fig. 21, “Customer Order Form”). In the description of Figure 5, the Specification states that “the order form 72 includes the ability for providing instructions in a machine readable form so CBM2014-00033 Patent 7,260,587 B2 9 that it can be scanned and automatically implemented.” Ex. 1001, 6:38–40. Claim 1 recites that the “hard copy prints” are “separated by an associated machine readable form.” Ex. 1001, 20:17–21. Turning to “instruction form,” the Specification of the ’587 patent specifically explains that the claimed “instruction form” is “preferably” both “human readable and machine readable,” so that it can be carried out by either a human or a computer. Ex. 1001, 10:23–26. The claim 10 language states the “instruction form” is grouped with the “hard copy prints,” i.e., both are hard copy. Ex. 1001, 20:53–59. Claim 18 also recites that the “hard copy prints” are associated with the “instruction form,” which provides the category information for the digital images. Id. at 22:5–13. The dictionary evidence cited by Patent Owner (Exs. 1013 and 1016) is consistent with a hard copy form. The dictionaries, respectively, recite that “machine readable” includes optical character recognition (“OCR”) and scanning of paper, i.e., hard copy. Patent Owner’s citations to the Specification do describe other means for categorizing the hard copy prints. However, the Specification is neither reasonably clear nor consistent in its description of either “machine readable form” or “instruction form.” See Lear Siegler, Inc. v. Aeroquip Corp., 733 F.2d 881, 889 (Fed. Cir. 1984)). That the Specification also discloses audio and visual formats (Ex. 1001, 5:61–6:4), in addition to hard copy, does not require us to include those disclosures in the broadest reasonable interpretation when the claim language is more limited. Absent a definitive description in the Specification, the claim language recited above, as well as numerous supporting references in the Specification to a hard copy form, leads us to determine that the broadest reasonable interpretation of the claim CBM2014-00033 Patent 7,260,587 B2 10 language is a form that may be scanned and read by a machine, such as a scanner. Thus “machine readable instruction form”/ “instruction form” means “a form, configured to be scanned and read by a machine, that provides information regarding the organization and ordering of the images.” 3. Other terms Neither party identifies any additional terms for construction and we determine that no further claim construction is required. II. ANALYSIS A. Patentability Under 35 U.S.C. § 101 Section 101 of 35 U.S.C. defines what constitutes patentable subject matter: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” There are, however, three specific exceptions to the broad categories of § 101: “laws of nature, physical phenomena, and abstract ideas.” Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010). “The abstract ideas category embodies the longstanding rule that ‘[a]n idea of itself is not patentable.’” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014) (citing Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (internal quotation marks and citation omitted)). In Alice, the Supreme Court followed the two-step framework set forth in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible CBM2014-00033 Patent 7,260,587 B2 11 applications of those concepts.” Alice, 134 S. Ct. at 2355. In the first step, “we determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. “If so, we then ask, ‘[w]hat else is there in the claims before us?’” Id. (quoting Mayo, 132 S. Ct. at 1297). In the second step, we consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application. Id. Step two of the analysis may be described as a search for an “inventive concept”—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself. Id. (citing Mayo, 132 S. Ct. at 1294). B. Are the ʼ587 Patent Claims Directed to Abstract Ideas? In our Decision on Institution, we agreed with Petitioner and determined that the claims of the ’587 patent are directed to the abstract idea of organizing digital images of hard copy prints according to an instruction form. Pet. 29; Institution Dec. 15. Patent Owner disputes that the claimed invention is an abstract idea because it does not “fall within any of the categories of abstract ideas enumerated by the Supreme Court.” PO Resp. 14. Citing Alice, Patent Owner asserts that the claims are not directed to “an idea itself, or any of the other category of abstract idea found by the Supreme Court or Federal Circuit.” Id. Patent Owner contends that the claims are directed to an “inventive method for organizing digital images based on customer-defined, category-specific, machine-readable instructions associated with hard copy prints.” Id. As characterized by Patent Owner, the “inventive concept” CBM2014-00033 Patent 7,260,587 B2 12 cannot be performed by a human and is not a mental process because digitizing hard copy prints and organizing the prints according to an instruction form requires a machine. Id. at 15–16. Therefore, Patent Owner asserts, the first step in the Alice/Mayo test is not met.2 Id. at 12–18. Petitioner responds that in Alice, the Supreme Court expressly declined to limit the categories of unpatentable abstract ideas as suggested by Patent Owner. Pet. Reply 2. Petitioner also argues that the recitation of “generic general purpose computer hardware” or other conventional tangible components does not avoid making a claimed invention abstract. Id. at 4 (citing SAP Am., Inc. v. Versata Dev. Grp., Inc., Case CBM2012-00001, slip op. at 30 (PTAB June 11, 2013) (Paper 70)). Similarly, Petitioner argues Patent Owner’s contention that the claimed invention cannot be performed by mental steps is also wrong because use of conventionally used computer components alone does not make a claim patent-eligible under § 101. Id. at 5. We are persuaded by the Supreme Court’s opinion in Alice that Petitioner is correct, and that these enumerated categories were not intended as exclusive. Specifically, the Court wrote: “In any event, we need not labor to delimit the precise contours of the ‘abstract ideas’ category in this case.” Alice, 134 S. Ct. at 2357: accord Content Extraction &Transmission LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343, 1347 (Fed. Cir. 2014). We 2 Patent Owner argues separately that the claims do not preempt the abstract idea and, as such, are patent-eligible. PO Resp. 18–21 (citing Alice, 134 S. Ct. 2354, 2355, 2358). Patent Owner does not persuade us that preemption is a separate part of the analysis under Alice. CBM2014-00033 Patent 7,260,587 B2 13 are persuaded by Petitioner’s argument, and therefore conclude that the first step in the Alice/Mayo test is met for claims 1–18. While Patent Owner’s arguments that the abstract idea is an “inventive concept” are more properly a part of Alice’s step 2, we also agree with Petitioner that conventional use of computer components does not make an abstract idea into an inventive concept. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014). In that same regard, we also note the testimony of Patent Owner’s expert, which Petitioner relies on to argue the claimed process can be done “manually” 3 by a human using a computer, mouse, and keyboard, as opposed to “automatically.”4 Pet. Reply 6 (citing Ex. 1024, 55:8–19). Petitioner argues the claimed invention is nothing more than automating a manual process with a computer. Id. at 7. C. Are the Claims Patentable Because They Include Limitations That Represent Sufficiently Inventive Concepts? The second step of our analysis requires us to determine whether the claims do more than describe the abstract idea identified supra. Ultramercial, 772 F.3d at 715. In this step we must examine the limitations of the claims to determine whether the claims contain an “inventive concept” 3Q. Okay. But the concept of digitally associating a category with an image on a computer we can both agree was known before 2000, right? A. Again, you have to define the terms of -- when you say “digitally,” you mean there is no human intervention? What do you mean by it? Q. You could go -- prior to 2000, you could go onto a computer and put an image into one category and another image into another category? A. Using a mouse. Q. You could do it using a mouse, right? A. That would be a manual method. Ex. 1024, 55:8–19. 4Q. Okay. And so what is different about the ’587 invention that it did that process automatically? A. That’s one of the inventive features, yes. Ex. 1024, 56:6–9. CBM2014-00033 Patent 7,260,587 B2 14 to “transform” the claimed abstract idea into patentable subject matter. Id. citing Alice, 134 S. Ct. at 2357 (quoting Mayo, 132 S. Ct. at 1294, 1298). “A claim that recites an abstract idea must include additional features to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea.” Id. (quoting Mayo, 132 S. Ct. at 1297) (internal quotation marks and brackets omitted). Not every included feature will suffice. Those “additional features” must be more than “well-understood, routine, conventional activity.” Mayo, 132 S. Ct. at 1298. See Ultramercial, 772 F.3d at 716 (“[E]ach of those eleven steps merely instructs the practitioner to implement the abstract idea with ‘routine, conventional activit[ies],’ which is insufficient to transform the patent-ineligible abstract idea into patent-eligible subject matter.” (second alteration in original)); Content Extraction, 776 F.3d at 1348 (“[Patentee] conceded at oral argument that the use of a scanner or other digitizing device to extract data from a document was well-known at the time of filing, as was the ability of computers to translate the shapes on a physical page into typeface characters.”); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014)(holding that the subject of the patent claims was “beyond question of ancient lineage”). Patent Owner contends that the claims of the ʼ587 patent “require using a digital scanner to transform the hard copy prints into a digital format” and do not preempt the alleged abstract idea and are “transformed by an inventive concept.” PO Resp. 24. Further, Patent Owner contends digital instructions need to be read, understood, and interpreted by a computer, which then associates the digital prints generated with the correct file. Id. These steps are neither “insignificant” nor “routine.” Id. Patent CBM2014-00033 Patent 7,260,587 B2 15 Owner concludes that specific computer hardware is required to perform the recited methods, which Patent Owner contends takes the claims out of the patent-ineligible generic computer category. Id. at 25–26. Patent Owner argues “[a] general purpose computer could not interpret and execute the instruction form associated with the hard copy prints in order to associate the category information with the digital images.” Id. at 26 (citing Ex. 2007 ¶¶ 48, 59, 64, 72). In response, Petitioner contends Patent Owner’s expert conceded that that the “concept of automatically organizing images into categories using an instruction form—what [Intellectual Ventures II] has characterized as ‘the most fundamental aspect of the inventive concept’ [citing PO Resp. 28] —was known at least five years before the ’587 patent application’s priority date.” Pet. Reply 8 (citing Ex. 1024, 110–111, 114– 115) (emphasis in Reply). The basis for Petitioner’s argument is the testimony of Dr. Paxton concerning his work on the Kodak ImageLink scanner.5 Id. at 8 n.7 (see Ex. 2007 ¶ 8). The testimony cited by Petitioner from Dr. Paxton’s cross-examination is reproduced below: Q. And so we can agree that at least as of 1995, scanners could digitally scan categories of hard copy documents with each category separated by an associated machine readable instruction form; right? A. Well, they certainly don’t call it an instruction form, but there’s a – you could read the bar code and know what category the documents were in. Q. Right. And based on that, and understanding of an instruction form, you would agree that that patch document is an instruction form; right? … 5 The Kodak ImageLink scanner is described in Exhibits 1020–1022. These exhibits are the subject of Patent Owner’s Motion to Exclude discussed below. CBM2014-00033 Patent 7,260,587 B2 16 A. In a limited sense, yes. Ex. 1024, 114–115. Petitioner asserts Dr. Paxton admitted that each of the other claim elements that Patent Owner argues meaningfully limit the claims was well known prior to the filing date of the ’587 patent. Pet. Reply 10. Petitioner disagrees that carrying out the method claims requires a specifically programmed computer, as Patent Owner contends. Pet. Reply 11 (citing PO Resp. 26). Petitioner argues that no special programming is mentioned or disclosed, and that Dr. Paxton admitted the method of the ’587 patent could be carried out by a “simple computer, a host computer.” Id. at 11–12 (citing Ex. 1024, 162–164). In view of the foregoing, we are convinced by Petitioner’s argument that the ʼ587 patent claims do not contain an “inventive concept” sufficient to transform the claimed abstract idea into a patentable invention. Stated another way, we determine that the claims do not “significantly more than simply describe that abstract method.” Ultramercial, 772 F.3d at 715. Instead, “the claims simply instruct the practitioner to implement the abstract idea with routine, conventional activity.” Id. 1. Independent Claims 1, 10, and 18 Patent Owner argues Petitioner’s showing regarding the independent claims, claims 1, 10, and 18 relies impermissibly on dictionary definitions to show that the claim elements are conventional. PO Resp. 27–29. Patent Owner next argues the claim elements are specific components, i.e. not conventional. Id. at 29–31 (citing Ex. 2007 ¶¶ 48, 50). Petitioner contends claim 1 includes nothing beyond conventional hardware components performing their known functions. Pet. 31–32 (citing CBM2014-00033 Patent 7,260,587 B2 17 Ex. 1005 ¶¶ 33, 34). Petitioner argues the claimed machine readable instructions can be human-readable and are, thus, mental steps. Id. at 34 (citing Ex. 1001, 10:23–26). The “storing” step, asserts Petitioner, is the computer equivalent of storing images in a photo album. Id. (citing Ex. 1001, 1:59–62). Petitioner also contends the “producing” step is “insignificant post[-]solution activity.” Id. (citing Bilski, 130 S. Ct. at 3230). Turning to claims 10 and 18, Petitioner repeats its contentions made in connection with claim 1. Pet. 37–39 (claim 10), 40–41 (claim 18). In sum, Petitioner argues claims 10 and 18 recite steps which require a computer to do what a computer does, “accelerate an ineligible mental process,” which is patent-ineligible under § 101. Id. at 39, 41 (citing Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can. (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012). Relative to claim 1, Patent Owner contends Petitioner does not address the claim 1 step that the machine readable instruction form associates categories of the digitally scanned hard copy prints. PO Resp. 31–32 (citing Ex. 2007 ¶¶ 44, 51). Patent Owner argues that just because the instruction form may be human-readable, as well as machine-readable, does not make the form a step that could be performed by a human. Id. at 32–33. The additional recited step of “producing a product” is, according to Patent Owner, unique because the step requires “incorporating images from one or more of said categories” into the produced product. Id. at 34. As it did in connection with claim 1, Patent Owner argues a human cannot perform the steps recited in claim 10. PO Resp. 35–37. Further, the steps were not conventional at the effective filing date of the ’587 patent. Id. at 35. Patent Owner disputes that the claim recites conventional image CBM2014-00033 Patent 7,260,587 B2 18 processing steps because of the combining step, “combining said digital record of said image with said digital record of . . . said instruction form.” Id. at 36 (citing Ex. 2007 ¶ 61). Claim 18 is the last independent claim. Patent Owner argues Petitioner’s showing regarding scanning of the instruction form fails to establish it was a “well-known, routine activity.” PO Resp. 37. Patent Owner also contends that the “automatically grouping” the image files in accordance with the instructions is not a conventional computer activity and could not otherwise be performed by a human. Id. at 38. We agree with Petitioner that claim 1 includes nothing beyond conventional hardware components performing their known functions. Claims 1, 10, and 18 all use conventional computer components in a well understood way to produce, as Petitioner states, a photo album. Pet. 34. We credit the Freeman Declaration that scanning hard copy and categorizing the resulting files is something that was done conventionally by a computer and associated peripheral equipment. See Ex. 1005 ¶¶ 28–32. Dr. Freeman’s testimony is corroborated by Patent Owner’s expert, Dr. Paxton. See Pet. Reply 10 (table including computer elements compared to Dr. Paxton Deposition Testimony, Ex. 1024). The factual background here is similar to that in Content Extraction. There, the Federal Circuit concluded the “claims merely recite the use of this existing scanning and processing technology to recognize and store data from specific data fields such as amounts, addresses, and dates.” Content Extraction, 776 F.3d at 1348. The Content Extraction court determined“[t]here is no ‘inventive concept’ in CET's use of a generic scanner and computer to perform well-understood, routine, and conventional CBM2014-00033 Patent 7,260,587 B2 19 activities commonly used in industry.” Id. (citing Alice, 134 S. Ct. at 2359). Similar to Content Extraction, here Patent Owner’s expert testified to direct knowledge that the scanning technology recited in the claims was previously known. Ex. 1024, 120. 2. Dependent Claims 2–9 and 11–17 Petitioner characterizes claims 2–5 as limiting “the generic ‘product’ of claim 1 to well-known media: an ‘album page’ in claim 2; ‘computer storage media’ in claim 3; a ‘CD’ in claim 4; and a ‘digital image file’ in claim 5.” Pet. 36 (citing Ex. 1005 ¶ 35). Petitioner contends further that claims 6–9 add nothing inventive: claim 6, adds “ordering;” claim 7 adds “additional information” about the images to the instruction form; claim 8 adds “personal information” to the form; and claim 9 adds providing a “product or service.” Id. at 36–37. Petitioner argues the additional steps of dependent claims 2–9 are patent-ineligible mental steps or insignificant post- solution activity. Id. at 35 (citing Mayo, 132 S. Ct. at 1294). Claims 11–17 recite similar steps and, according to Petitioner, are like claims 2–9 either additional mental steps or insignificant post solution activity. Id. at 39–40. We disagree with Patent Owner that the dependent claims add additional inventive concepts to the independent claims. PO Resp. 38–44. Patent Owner’s arguments do not meaningfully distinguish the dependent claims from the basic steps we found conventional in connection with the independent claims and are repetitions of arguments made in connection with the independent claims. For the reason stated above, we are not persuaded by those arguments. CBM2014-00033 Patent 7,260,587 B2 20 D. The Machine-or-Transformation Test Patent Owner disputes Petitioner’s assertion that the claims generally fail the machine-or-transformation test. PO Resp. 44–47 (citing Pet. 41 (citing Bilski, 130 S. Ct. at 3225–3226)). In doing so, Patent Owner repeats its arguments made above, arguing that the claims “recite specific components and specific machine-based steps to achieve a specific result, thus providing meaningful limitations on the scope of the claims.” PO Resp. 45. Patent Owner argues the claims also affect a transformation of hard copy prints into a “product that incorporates images of those prints.” Id. at 46 (citing Ex. 1001, claim 1). We already determined that the claims do not add anything beyond incorporation of a general purpose computer and do not add any inventive concept to the claims, as required by Alice. Neither are we persuaded that a transformation occurs of the hard copy prints “into a different state or thing” such that patent-eligible subject matter is claimed. See Bilski, 130 S.Ct. at 3225–3226. Scanning a hard copy image into a stored digital image is patent-ineligible organization of data. See Content Extraction, 776 F.3d. at 1349. Thus, to the extent the machine-or-transformation test is a useful test for patent eligibility, the claims of the ’587 patent do not meet the test. E. Alleged Failure of the Petition to Address Every Claim Limitation Patent Owner argues Petitioners have not met their burden of proof in failing to address every claim limitation. PO Resp. 47–57 (citing LinkedIn Corp. v. Avmarkets Inc., Case CBM2013-00025, slip op. at 19 (PTAB Nov. 12, 2013) (Paper 13); Volusion, Inc. v. Versata Software, Inc., Case CBM2013-00017, slip op. at 16 (PTAB Oct. 24, 2013) (Paper 8); Apple Inc. v. Sightsound Techs., LLC, Case CBM2013-00021, slip op. at 22 (PTAB CBM2014-00033 Patent 7,260,587 B2 21 Oct. 8, 2013) (Paper 13)). We are not persuaded that any alleged omission would add anything any more meaningful than what has already been discussed. The argument does not change the fact that the claim recites steps that can be performed manually. Finally, we credit the testimony of Dr. Freeman that none of the claims include anything beyond conventional uses of computer technology. Ex. 1005 ¶¶ 28–32. F. Patent Owner’s Argument that the ʼ587 Patent is Not a Covered Business Method Patent Patent Owner repeats its contentions from the Preliminary Response that the ’587 patent is not a covered business patent subject to our review. PO Resp. 58–70. This argument was addressed in the Institution Decision at pages 8–12. Patent Owner contends the claims of the ’587 patent: (1) are not directed to a financial product or service (PO Resp. 59–63); (2) are directed to a technological invention under 37 C.F.R. § 42.301(b) (PO Resp. 63–70); and (3) § 101 is not a ground “specified in part II [of Title 35] as a condition for patentability,” as required by 35 U.S.C. § 282(b)(2)(PO Resp. 70–73).6 In our Decision on Institution, we determined that the ʼ587 patent is a covered business method patent because at least one claim (claim 6) is not directed to a technological invention and meets the other requirements of the statute. Institution Dec. 9. Our reasoning was that “[o]rdering products is representative of the type of activities that are ‘complementary to a financial activity’ and ‘relate to monetary matters.’” Id. Patent Owner challenges this 6 This argument (3) is addressed in II.G. below. CBM2014-00033 Patent 7,260,587 B2 22 determination arguing the Apple7 case we cited found “financial product or service” in the movement of money between entities. PO Resp. 63. Patent Owner argues claim 6 is not directed to a financial activity because it merely recites “providing instructions on said machine readable instruction form relating to said ordering of said product.” Id. Patent Owner concludes that ordering a product by itself does not implicate the “‘movement of money between financial entities.’” Id. This argument is not persuasive. The ʼ587 patent describes entering a method of payment in the order formto order a product; this is movement of money between a buyer and a seller, i.e., financial entities. Ex. 1001, 12:13–48. As set out in the Decision on Institution, ordering products is “complementary to a financial activity” and “relate[s] to monetary matters.” Institution Dec. 9 (citing Apple, Paper 17, slip op. at 12). That is sufficient to establish financial activity. We have reviewed Patent Owner’s argument that the claims are directed to a technological invention. PO Resp. 64–67. This argument is not persuasive because, as detailed above, all the claims are directed to automating a human activity and use conventional components to do so. Neither does the ’587 patent disclose any algorithm or specially programmed computer that might be a technological invention. Patent Owner also argues the ’587 patent solves a technical problem using a technical solution, removing it from consideration as a covered business method patent. PO Resp. 67–68 (citing 37 C.F.R. § 42.301(b) and 37 C.F.R. § 42.304(a)). None of the problems identified by Patent Owner are technical, instead relating to sorting and organizing prints. Nor are we 7 Apple Inc. v. Sightsound Techs., LLC, Case CBM2013-00019, slip op. at 12 (PTAB Oct. 8, 2013) (Paper 17) (internal citations omitted)(“Apple”). CBM2014-00033 Patent 7,260,587 B2 23 persuaded that the ’587 patent is directed to “novel software tools” and thus outside of review as a covered business method patent. Id. at 68–70. Patent Owner does not present evidence or persuasive argument that what is disclosed and claimed is a tool, such as a graphical user interface, as opposed to simply applying conventional technology to a human activity, sorting and categorizing photographs. G. Patent Owner’s Arguments that Section 101 Is Not a Proper Ground Upon Which a Covered Business Method Patent Review May Be Maintained This argument was addressed in the Institution Decision at pages 11– 12. Based on statutory construction, Patent Owner argues that covered business method patent review is available under grounds that could be asserted under § 321(b), which permits post-grant review on any ground that could be raised under paragraph (2) or (3) of § 282(b). PO Resp. 70–71. The two cited sections of § 282(b) reference only §§ 102 and 103. Id. at 71. Further, Patent Owner asserts that the Board may not consider subject matter eligibility challenges under 35 U.S.C. § 101 as part of a covered business method patent review because § 101 is not a “condition for patentability.” PO Resp. 71–72. As we stated in our Institution Decision, the AIA8 makes it clear that Congress intended the Office to consider challenges brought under § 101 for post grant review, covered business method review program employs the same standards and procedures as the post grant review program. AIA § 18(a)(1). Institution Dec. 12. As we determined in our Institution Decision, the specified purpose of the covered business method review program was to 8 Leahy-Smith America Invents Act, Pub. L. No. 112–29 (“AIA”). CBM2014-00033 Patent 7,260,587 B2 24 allow the Office to revisit business method patents and evaluate whether the patents were too abstract to be patentable under § 101. Id. For the reasons stated in our Institution Decision (at 11–12), we are not convinced by Patent Owner’s argument. H. Patent Owner’s Motion to Exclude Patent Owner seeks to exclude Petitioner’s Exhibits 1020–1022 filed with Petitioner’s Reply. PO Mot. Exclude 1. Patent Owner contends the exhibits, which relate to the Kodak ImageLink Scanner, should have been a part of the Petition and should be excluded because they are new evidence. Id. Petitioner argues that Exhibits 1020–1022 are rebuttal to the testimony of Patent Owner’s expert, Dr. Paxton, presented in the Paxton Declaration accompanying the Patent Owner Response. Opp. Mot. Exclude 4. Dr. Paxton testified he was familiar with the ImageLink Scanner and helped develop the product. Id. (citing Ex. 2007 ¶ 8). Petitioner alleges that the exhibits were used at the Paxton Deposition to contradict testimony in the Paxton Declaration. Id. at 4–6. Patent Owner filed a Reply in Support of its Motion to Exclude restating its contention that the exhibits are new evidence improperly added after Patent Owner could not respond, prejudicing Patent Owner. Paper 41 (PO Reply Mot. Exclude, 4–5). We are persuaded that Exhibits 1020–1022 should not be excluded and, therefore, deny the Motion to Exclude. Petitioner had the right to cross examine Dr. Paxton and to use materials authored by him (Ex. 1024, 86 (Ex. 1022)) or with which he was familiar (Ex. 1024, 91–92 (Ex. 1021), 201–202 (Ex. 1020)) for that purpose. A primary goal of cross examination is to raise issues regarding the credibility of the testimony elicited during direct examination. See 37 C.F.R. § 42.53(d)(2). We also agree with Petitioner CBM2014-00033 Patent 7,260,587 B2 25 that the exhibits are proper rebuttal evidence. There is no allegation that Petitioner had or could have had the evidence before it received Patent Owner’s Response and was made aware of the Paxton Declaration and of Dr. Paxton himself. Petitioner represents the exhibits were found after receiving the Patent Owner Response and Paxton Declaration during its follow-up investigation regarding the testimony. Opp. Mot. Exclude 4–5. Patent Owner does not contend or suggest otherwise. Finally, Patent Owner does not seek to exclude the deposition testimony of Dr. Paxton. Dr. Paxton testified to the contents of the exhibits, i.e., the ImageLink Scanner, from his personal knowledge working on the product. See Ex. 1024, 110–111, 114–115. By way of example, see the following testimony of Dr. Paxton: Q. We can both agree that Imagelink, as of 1995, could be used to automatically organize digital image files into categories; correct? A. Yes, to be in this document context, correct. Id. at 120. Even if we were we to exclude the exhibits, there is still evidence of record concerning the capabilities of the ImageLink Scanner. Patent Owner argues it would be prejudiced by admission of the Exhibits. PO Reply Mot. Exclude, 5. The prejudice argued is that Petitioner is making its case improperly after a time within which Patent Owner can respond. Id. Because the evidence was proper rebuttal, this argument is not persuasive. We, therefore, deny the Motion to Exclude. CBM2014-00033 Patent 7,260,587 B2 26 III. CONCLUSION We determine that by a preponderance of the evidence Petitioner has demonstrated that claims 1–18 of the ʼ587 patent are not patentable because they are directed to ineligible subject matter under 35 U.S.C § 101. IV. ORDER In consideration of the foregoing, it is hereby ORDERED that claims 1–18 of U.S. Patent No. 7,260,587 have been shown to be unpatentable; FURTHER ORDERED that Patent Owner’s Motion to Exclude is denied; and FURTHER ORDERED that this is a Final Decision. Parties to the proceeding seeking judicial review of the decision must comply with the notice and service requirements of 37 C.F.R. § 90.2. CBM2014-00033 Patent 7,260,587 B2 27 PETITIONER: Donald R. Steinberg Monica Grewal WILMER CUTLER PICKERING HALE AND DORR LLP Don.Steinberg@wilmerhale.com Monica.Grewal@wilmerhale.com PATENT OWNER: John R. King Brenton R. Babcock Ted M. Cannon Bridget A. Smith KNOBBE, MARTENS, OLSEN & BEAR 2jrk@knobbe.com 2brb@knobbe.com 2tmc@knobbe.com 2bzs@knobbe.com Donald Coulman dcoulman@intven.com Copy with citationCopy as parenthetical citation