Epicor Software Corporationv.Protegrity Corporation

Patent Trial and Appeal Board

Jun 2, 2016

09027585 (P.T.A.B. Jun. 2, 2016)

Trials@uspto.gov Paper No. 39
571.272.7822 Entered: June 2, 2016

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

EPICOR SOFTWARE CORPORATION,1
Petitioner,

v.

PROTEGRITY CORPORATION,
Patent Owner.
____________

CBM2015-00030
Patent 6,321,201 B1
____________

Before KEVIN F. TURNER, MEREDITH C. PETRAVICK, and
GREGG I. ANDERSON, Administrative Patent Judges.

TURNER, Administrative Patent Judge.

FINAL WRITTEN DECISION
Covered Business Method Patent Review
35 U.S.C. § 328(a) and 37 C.F.R. § 42.73

1 During the course of the proceeding, Petitioner separated one of its
business units from Epicor Software Corporation to APTOS, Inc. Both
entities are indicated as being real parties-in-interest. See Paper 18.
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I. INTRODUCTION
A. Background
Epicor Software Corporation (“Petitioner”) filed a Petition (Paper 1,
“’30 Pet.”) requesting a review under the transitional program for covered
business method patents of U.S. Patent No. 6,321,201 B1 (Ex. 1001, “the
’201 Patent”). Protegrity Corporation (“Patent Owner”) filed a Preliminary
Response (Paper 8). Pursuant to 35 U.S.C. § 324, we instituted this trial on
the following ground:
Ground Prior Art Challenged Claim8
§ 101 n/a 8
Paper 13 (“’30 Dec.”).
Subsequently, Patent Owner filed a Patent Owner’s Response. Paper
26 (“’30 Resp.”). Petitioner filed a Reply to Patent Owner’s Response.
Paper 27 (“’30 Reply”). As well, Patent Owner filed a Motion to Exclude
Evidence. Paper 30 (“Mot. Exclude”). Petitioner filed an Opposition to
Patent Owner’s Motion to Exclude (Paper 32, “Opp. to Mot. Exclude”), and
Patent Owner filed a Reply to the Opposition to the Motion to Exclude
(Paper 35). Patent Owner also filed a Motion for Observation Regarding
Cross Examination of Reply Witness Mr. Bruce Schneier. Paper 31 (“Mot.
Observation”). Petitioner filed an Opposition to Patent Owner’s Motion for
Observation. Paper 33.
An oral hearing was held on November 13, 2015. A transcript of the
hearing is included in the record. Paper 37 (“Tr.”).
We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.

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B. Related Matters
Petitioner identifies Protegrity Corp. v. Epicor Software Corp., No.
3:13-cv-01781-JBA (D. Conn. Dec. 2, 2013) as a related district court
proceeding. ’30 Pet. 4. Patent Owner identifies numerous other related
district court matters that would be affected by a decision in this proceeding.
See Paper 6, 3–5.
The ’201 Patent is also the subject of prior proceedings CBM2015-
00002, CBM2015-00014, and CBM2015-00021. The ’201 Patent was also
the subject of Reexamination No. 90/011,364, with some originally issued
claims confirmed and cancelled, one claim amended, and several claims
added.
U.S. Patent No. 8,402,281 B2 is a continuation of the ’201 Patent (Ex.
1004, “the ’281 Patent”). The ’281 Patent is the subject of prior proceedings
CBM2014-00182, CBM2015-00006, and CBM2015-00010. The ’281
Patent was also the subject of terminated proceedings CBM2014-00024 and
CBM2014-00121, where those proceedings terminated due to settlement
between the parties.
We further note that the grounds alleged in the ’30 Petition are
identical to those proffered in CBM2015-00002, except that those grounds
are raised against only claim 8 in the instant proceeding. See CBM2015-
00002, Paper 8 (“’02 Pet.”). As such, the instant Decision will make
reference to the Decision to Institute (Paper 17, “’02 Decision”) and the
Final Written Decision (Paper 46, “’02 FWD”) in CBM2015-00002.

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C. The ’201 Patent
The ’201 Patent, titled “Data Security System for a Database having
Multiple Encryption Levels Applicable on a Data Element Value Level,”
issued on March 19, 2001, based on Application No. 09/027,585, filed on
February 23, 1998. The ’201 Patent claims priority as a continuation
application to PCT/SE97/01089, filed on June 18, 1997. Further discussion
of the ’201 Patent may be found at ’02 FWD 3–6.
Claim 8 of the ’201 Patent is the sole claim at issue and reads as
follows:
8. An apparatus for processing data that is to be protected,
comprising:
a first database (O-DB) for storing said data as encrypted
data element values (DV) in records (P), said first database (O-
DB) having a table structure with rows and columns, each row
representing a record (P) and each combination of a row and a
column representing a data element value (DV), in said first
database (O-DB) each data element value (DV) is linked to a
corresponding data element type (DT);
a second database (IAM-DB) for storing a data element
protection catalogue (DPC), which contains each individual data
element type (DT) and one or more protection attributes stating
processing rules for data element values (DV), which in the first
database (O-DB) are linked to the individual data element type
(DT);
said apparatus being adapted, in each user-initiated
measure aiming at processing a given data element value (DV)
in the first database (O-DB), to initially produce a calling to the
data element protection catalogue for collecting the protection
attribute/attributes associated with the corresponding data
element types, and
said apparatus being adapted to control the user's
processing of the given data element value in conformity with
the collected protection attribute/attributes.
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II. ANALYSIS
A. Claim Construction
In the Decision to Institute, we construed specific limitations of the
challenged claim. See ’30 Dec. 6–7. The claim terms that we provided
specific constructions for are provided below:
Claim Term Construction
processing rules rules for processing data
data element type identification of a specific category of data
Herein, like in the ’02 proceeding, Patent Owner argues that our
construction for “data element type” should be modified, and that we
implicitly applied “an unreasonably broad definition to the term ‘database,’”
supplying the same arguments presented in CBM2015-00002. ’30 Resp.
15–23. Compare ’30 Resp. 15–23, with ’02 Resp. 17–26. Based on the
language of claim 8, we construe the same claim limitations as discussed in
CBM2015-00002, and we incorporate our prior analysis and discussion
regarding claim construction (’02 FWD 6–14) herein.
In addition, Patent Owner argues that the claim term in claim 8,
“initially produc[ing] a calling,” should be read as “the database itself that
produces the calling to the data element protection catalogue,” as compared
to the operating system or the individual field producing the calling. Resp.
23 (citing Ex. 1001, 3:53–61; Ex. 2047 ¶ 22; Ex. 2046 ¶ 40). We do not
agree. As discussed in ’02 FWD and incorporated above, we are persuaded
that the application 40, control module 20, and program module 30 handle
system calls in the ’201 Patent, and the calling need not be produced by the
first database itself.

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B. Standing to Seek Covered Business Method Patent Review
In our Institution Decision and Final Written Decision for CBM2015-
00002, we considered Petitioner’s standing to seek covered business method
patent review of the ’201 Patent. See ’02 Decision 8–13; ’02 FWD 15–24.
In the instant proceeding, Patent Owner again disputes that standing, arguing
that claim 8 is not directed to a financial product and that it provides a
technical solution to a technical problem, but those arguments are largely
identical, expect for the references to claim 8. Compare ’30 Resp. 50–57,
with ’02 Resp. 53–62.
Although we acknowledge that Patent Owner’s discussion and
arguments focus on claim 8, we note that only one claim of a subject patent
need be shown to be directed to a covered business method patent for
institution of a proceeding to commence. See SAP Am., Inc. v. Versata Dev.
Grp., Inc., slip op. at 26, CBM2012-00001 (PTAB Jan. 9, 2013) Paper No.
36 (“the presence of a single claim is sufficient to institute a covered
business method review”). Having found the same previously (’02 FWD
15–24) for the same patent and parties, we incorporate our prior analysis and
discussion herein. Upon this record, we determine that Petitioner has
established that at least one claim of the ’201 patent recites a method or
corresponding apparatus for performing data processing or other operations
used in the practice, administration, or management of a financial product or
service.

C. 35 U.S.C. § 101
i. Availability of § 101
As an initial matter, Patent Owner argues that § 101 is not available to
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challenge patentability in a covered business method patent review, because
it is not included in 35 U.S.C. §§ 282(b)(2) or (3). ’30 Resp. 24–25.
We disagree. Under the AIA, any ground that could be raised under
§§ 282(b)(2) or (3) can be raised in a post-grant review or (with exceptions
not relevant here) in a covered business method patent review. The final
rules implementing post-grant review and covered business method patent
review in the Federal Register state that the “grounds available for post-grant
review include 35 U.S.C. [§§] 101 and 112, with the exception of
compliance with the best mode requirement.” 77 Fed. Reg. 48,680, 48,682
(Aug. 14, 2012). This interpretation is consistent with both the relevant case
law and the legislative history. See, e.g., Mayo Collaborative Servs. v.
Prometheus Lab., Inc., 132 S. Ct. 1289, 1305 (2012) (addressing invalidity
under § 101 when it was raised as a defense to an infringement claim);
Graham v. John Deere Co., 383 U.S. 1, 12 (1966) (stating that the 1952
Patent Act “sets out the conditions of patentability in three sections,” citing
35 U.S.C. §§ 101, 102, and 103); Dealertrack, Inc. v. Huber, 674 F.3d 1315,
1330 n.3 (Fed. Cir. 2012); H.R. Rep. No.112-98, at 47 (2011); 157 Cong.
Rec. S1375 (daily ed. Mar. 8, 2011).
Additionally, the Federal Circuit has decided that covered business
method patent reviews may include challenges under § 101. See Versata
Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1329–30 (Fed. Cir. 2015).
Thus, § 101 is a proper ground for a review under the transitional program
for covered business method patents.
ii. Section 101 Subject Matter Eligibility
For claimed subject matter to be patentable eligible, it must fall into
one of four statutory classes set forth in 35 U.S.C. § 101: a process, a
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machine, a manufacture, or a composition of matter. Within these statutory
classes, the Supreme Court recognizes three categories of subject matter that
are ineligible for patent protection: “laws of nature, physical phenomena,
and abstract ideas.” Bilski v. Kappos, 561 U.S. 593, 601 (2010) (internal
quotations and citation omitted). A law of nature or an abstract idea by itself
is not patentable; however, a practical application of the law of nature or
abstract idea may be deserving of patent protection. Mayo, 132 S. Ct. at
1293–94. To be patentable, however, a claim must do more than simply
state the law of nature or abstract idea and add the words “apply it.” Id.
In Alice Corp. Pty, Ltd. v. CLS Bank International, 134 S. Ct. 2347
(2014), the Supreme Court recently clarified the process for analyzing
claims to determine whether claims are directed to patent-ineligible subject
matter. In Alice, the Supreme Court applied the framework set forth
previously in Mayo, “for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts.” Alice, 134 S. Ct. at 2355. The first step in
the analysis is to “determine whether the claims at issue are directed to one
of those patent-ineligible concepts.” Id. If they are directed to a patent-
ineligible concept, the second step in the analysis is to consider the elements
of the claims “individually and ‘as an ordered combination’ to determine
whether the additional elements ‘transform the nature of the claim’ into a
patent-eligible application.” Id. (quoting Mayo, 132 S. Ct. at 1298, 1297).
In other words, the second step is to “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. (alteration in original) (quoting Mayo, 132
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S. Ct. at 1294). Further, the “prohibition against patenting abstract ideas
‘cannot be circumvented by attempting to limit the use of the formula to a
particular technological environment’ or adding ‘insignificant postsolution
activity.’” Bilski, 561 U.S. at 610–11 (quoting Diamond v. Diehr, 450 U.S.
175, 191–92 (1981)).
Accordingly, utilizing this framework, we review Petitioner’s
contention that claim 8 of the ’201 Patent is directed to ineligible subject
matter.
iii. Ineligible Concept
Petitioner contends that claim 8 of the ’201 Patent is merely directed
to an abstract idea of protecting sensitive data by control of the user’s
processing of a given data element value in conformity with the collected
protection attributes. ’30 Pet. 21–23. Patent Owner disputes that the claim 8
of the ’201 Patent is directed to an abstract idea. See ’30 Resp. 25–43.
According to Patent Owner, “protection of data in a first database through
rules stored in a second database” provides a solution to a problem
“necessarily rooted in computer technology.” Id. at 26; see id. at 33–39
(citing DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir.
2014)).
Claim 8 is directed to an apparatus for processing data that is to be
protected and is nominally within the machine category of statutory subject
matter. Statutory class, however, is not by itself determinative of whether a
claim is directed to patent eligible subject matter. “Regardless of what
statutory category (‘process, machine, manufacture, or composition of
matter,’ 35 U.S.C. § 101) a claim’s language is crafted to literally invoke,
we look to the underlying invention for patent-eligibility purposes.”
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CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1374 (Fed. Cir.
2011); see Alice, 134 S. Ct. at 2358–59; Bancorp Servs. v. Sun Life
Assurance Co., 687 F.3d 1266, 1275 (Fed. Cir. 2012).
Claim 8 recites an apparatus that grants access to a data element value
if the rules associated with a data element type that is associated with the
requested data element value is satisfied. Ex. 1001, Ex Parte Reexamination
Certificate 1:24–51. Claim 8 requires a database that comprises the data
element values, where the database has a table structure with each
combination of a row and a column representing a data element value. Id.
A data element protection catalogue is in a second database and comprises
data processing rules that must be satisfied before the data element value can
be accessed. Id. The data processing rules are linked with the data element
type and for each user-initiated processing of a given data element value, the
associated protection attributes are collected through a calling produced by
the apparatus. Id. Thus, claim 8 recites a method that grants access to a
requested data element value if the rules associated with a data element type
that is associated with the requested data element value are satisfied. Id.
Given the above, we are persuaded by Petitioner that claim 8 is
directed to the abstract idea of control of user processing of data based on
attributes in a catalogue. ’30 Pet. 22. We agree that claim 8 merely requires
the maintenance of data and attributes in separate databases and controlling a
user’s processing of those data based on the attributes. Id.
Patent Owner raises several counter arguments, but those arguments
are largely identical to those raised in the ’02 proceeding, expect for the
references to claims 8. Compare ’30 Resp. 25–43, with ’02 Resp. 26–43.
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As such, we do not find Patent Owner’s arguments to be persuasive and we
incorporate our prior analysis herein. See ’02 FWD 26–28.
We are also mindful of recent admonishments by the Federal Circuit
that the first step of our analysis should not be pro forma when the claims
are directed to improvements in software. See Enfish, LLC v. Microsoft
Corp., No. 2015-1244, 2016 WL 2756255, at *4 (Fed. Cir. May 12, 2016)
(“We thus see no reason to conclude that all claims directed to improvements in
computer-related technology, including those directed to software, are abstract
and necessarily analyzed at the second step of Alice, nor do we believe that Alice
so directs”). We are not persuaded, however, that the instant claim is
directed to a specific improvement to the way computers operate. As
discussed above and in ’02 FWD, the abstract idea of the instant claim is
directed to determining whether access to data should be granted based on
whether one or more rules are satisfied. The databases and access rules
recited in claim 8 perform their normal functions and achieve expected
results. See ’30 Pet. 21–23. Additionally, storing the rules in a separate
database does not change the expected operation of the rules or the database,
merely the location of those rules. As such, we remain persuaded that the
invention of claim 8 is directed to an abstract idea.
iv. Inventive Concept
Next, we look for additional elements that can “transform the nature
of the claim” into a patent-eligible application of an abstract idea. That is,
we determine whether the claims include an “inventive concept,” i.e., an
element or combination of elements sufficient to ensure that the patent in
practice amounts to significantly more than a patent on the abstract idea
itself. Alice, 134 S. Ct. at 2357. The Supreme Court in Alice cautioned that
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merely limiting the use of abstract idea “to a particular technological
environment” or implementing the abstract idea on a “wholly generic
computer” is not sufficient as an additional feature to provide “practical
assurance that the process is more than a drafting effort designed to
monopolize the [abstract idea] itself.” Alice, 134 S. Ct. at 2358 (quoting
Mayo, 132 S. Ct. at 1297).
Petitioner argues that claim 8 contains “only inconsequential
limitations that are insufficient to render them patent-eligible.” ’30 Pet. 24.
Petitioner argues that independent claim 8 recites only the generic computer
elements and functions that were well known and conventional. Id.
Petitioner argues that the elements of providing a first database for storing
data and a catalogue of attributes as well as calling up the attributes and
controlling a user’s processing (e.g., granting access) are merely pre- or
post-processing steps that are essential to the abstract idea. Id. at 25.
Petitioner states that “[t]he remaining limitations likewise fail practically to
limit the abstract idea of controlling user processing based on obtained
attributes – these are well known and purely conventional limitations.” Id.
Petitioner further argues that even if the claimed limitations are considered
as an ordered combination, they do nothing more than add the use of the
abstract idea on some unspecified generic computer. Id. at 26.
Claim 8 requires first and second databases which store data, where
some data are stored as encrypted data element values, associated with a data
element type, and a plurality of data processing rules, associated with a data
element type, are stored in a separate data protection catalogue. Ex. 1001,
Ex Parte Reexamination Certificate 1:26–40. Data processing computers
having separate databases, which store associated data and associated
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attributes, were well known and conventional at the time of filing the ’201
Patent. See Ex. 1002 ¶ 19; Ex. 1005, 192–194, 202, 213 (describing
relational databases). Storing data and associated rules in separate databases
is nothing more than routine data gathering and does not transform the
abstract idea into a patent-eligible invention. See CyberSource, 654 F.3d at
1370. Claim 8 also recites that the first database has a table structure with
rows and columns, which is also conventional and was well known.
Restricting access to columns or fields of databases is well understood and
conventional activity. See Ex. 1002 ¶ 38; Ex. 1005, 194, 214 (discussing
access right to column and fields within records). Well-understood, routine,
conventional activity does not add significantly more to the abstract idea.
Mayo, 132 S. Ct. at 1298.
Claim 8 further requires that for each user-initiated measure aimed at
the processing of a given data element value, a calling is produced to the
data element protection catalogue for the protection attributes of the data
element type. Ex. 1001, Ex Parte Reexamination Certificate 1:41–47. This
is well-understood, routine, conventional activity that does not add
significantly more to the abstract idea. Mayo, 132 S. Ct. at 1298; see Pet.
24–25; Ex. 1005, 192–194 (discussing decision rules).
Claim 8 finally requires that user’s processing of the requested data
element value occurs in conformity with the collected protection attributes.
Ex. 1001, Ex Parte Reexamination Certificate 1:48–51. Such granting of
access to a user is merely a conventional post-solution activity.
Conventional post-solution activity is not sufficient to transform the abstract
idea into patent-eligible subject matter. See Parker v. Flook, 437 U.S. 584,
590–92 (1978).
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Even when the claim elements are considered as a combination, they
add nothing that is not already present when the elements are considered
separately. Alice, 134 S. Ct. at 2359. Claim 8 conveys nothing more
meaningful than the fundamental concept of determining whether access to
data should be granted based on whether one or more rules are satisfied.
Upon review of Petitioner’s analysis and supporting evidence and
taking into account Patent Owner’s arguments, discussed below, we are
persuaded by Petitioner that claim 8 does not recite additional elements that
transform the claim into a patent-eligible application of an abstract idea.
We are not persuaded by Patent Owner’s arguments that the claims
require additional elements that transform that abstract idea into a patent-
eligible application (Resp. 43–49) because they are based upon an overly
narrow construction of the claimed elements, as discussed in section II(A)(i)
above, i.e., the ability of the first database calling out to the data protection
catalogue, and based on additional elements not recited or required by the
claims, as discussed previously.
Patent Owner raises several counter arguments, but those arguments
are largely identical to those raised in the ’02 proceeding, expect for the
references to claims 8. Compare ’30 Resp. 43–49, with ’02 Resp. 43–49.
As such, we do not find Patent Owner’s arguments to be persuasive and we
incorporate our prior analysis herein. See ’02 FWD 31–34.

III. MOTION TO EXCLUDE
Patent Owner moves to exclude Exhibit 1002, Declaration of
Mr. Bruce Schneier, from the record. Mot. Exclude. This filing is largely
identical to a similar filing in CBM2015-00002, with the exception that the
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instant Motion to Exclude also seeks to exclude Ex. 1014 as well, in addition
to Ex. 1002, by the same affiant on the same basis. Compare CBM2015-
00030, Paper 30, with CBM2015-00002, Paper 37. We are not persuaded by
Patent Owner’s argument that Mr. Schneier’s declarations should be
excluded for the same reasons provided previously. See ’02 FWD 35–36.

IV. MOTION FOR OBSERVATIONS
On October 19, 2015, Patent Owner filed a Motion for Observation
Regarding Cross Examination of Reply Witness Mr. Bruce Schneier. Mot.
Observation. This filing is largely identical to a similar filing in CBM2015-
00002. Compare CBM2015-00030, Paper 31, with CBM2015-00002, Paper
38. Also similar to the CBM2015-00002 proceeding, Petitioner filed its
Opposition to that Observation in response.
Similar to the CBM2015-00002 proceeding, we find that the cross-
examination of Mr. Bruce Schneier occurred before Patent Owner filed its
last substantive paper, making Patent Owner’s Motion for Observation
improper. See ’02 FWD 36-38. We, thus, expunge Patent Owner’s
unauthorized observations from the record. See 37 C.F.R. § 42.7(a).
Additionally, we expunge Petitioner’s Opposition to that Observation (Paper
40) as being unnecessary.

V. CONCLUSION
We determine that Petitioner has demonstrated by a preponderance of
the evidence that claim 8 is unpatentable under 35 U.S.C. § 101 as being
directed to non-statutory subject matter.
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This is a Final Written Decision of the Board under 35 U.S.C.
§ 328(a). Parties to the proceeding seeking judicial review of this Decision
must comply with the notice and service requirements of 37 C.F.R. § 90.2.

VI. ORDER
In consideration of the foregoing, it is hereby:
ORDERED that claim 8 of U.S. Patent No. 6,321,201 B1 is
unpatentable;
FURTHER ORDERED that Patent Owner’s Motion to Exclude is
denied;
FURTHER ORDERED that Patent Owner’s Motion for Observation
(Paper 31) and Petitioner’s Opposition to that Observation (Paper 33) are
expunged from the record.

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PETITIONER:
William Cass
Herbert Bedingfield
CANTOR COLBURN LLP
wcass@cantorcolburn.com
hbedingfield@cantorcolburn.com

PATENT OWNER:
Woodrow H. Pollack
Michael J. Colitz, III
Cole Y. Carlson
GRAY ROBINSON, P.A.
woodrow.pollack@gray-robinson.com
Michael.colitz@gray-robinson.com
cole.carlson@gray-robinson.com