PNC Financial Services Group, Inc. and PNC Bank, N.A.v.Intellectual Ventures I LLC

Patent Trial and Appeal Board

May 19, 2015

11591696 (P.T.A.B. May. 19, 2015)

Trials@uspto.gov Paper 38
571-272-7822 Date: May 19, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

BANK OF AMERICA, N.A.,
PNC FINANCIAL SERVICES GROUP, INC., and PNC BANK, NA,
Petitioner,
v.
INTELLECTUAL VENTURES I LLC,
Patent Owner.
____________

Case CBM2014-00029
Patent 7,664,701 B2

Before THOMAS L. GIANNETTI, HYUN J. JUNG, and
GREGG I. ANDERSON, Administrative Patent Judges.
JUNG, Administrative Patent Judge.
FINAL WRITTEN DECISION
35 U.S.C. § 328(a) and 37 C.F.R. § 42.73

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Bank of America, N.A., PNC Financial Services Group, Inc., and
PNC Bank, N.A. (collectively “Petitioner”) filed a Petition (Paper 1, “Pet.”)
requesting institution of a covered business method patent review of claims
1–18 of U.S. Patent No. 7,664,701 B2 (“the ’701 patent”) pursuant to
35 U.S.C. § 321. Intellectual Ventures I LLC (“Patent Owner”) filed a
preliminary response (Paper 13, “Prelim. Resp.”). Based on these
submissions, we instituted trial as to all claims of the ’701 patent. Paper 14
(“Institution Dec.”).
After institution, Patent Owner filed a Response (Paper 19, “PO
Resp.”), and Petitioner filed a Reply (Paper 22, “Reply”). In addition, the
parties rely upon expert testimony. Petitioner proffered the Declaration of
John Gregory Morrisett, Ph.D. (Ex. 1005, “Morrisett Decl.”) with its Petition
and a Supplemental Declaration of Dr. Morrisett with its Reply (Ex. 1017,
“Morrisett Supp. Decl.”). Patent Owner proffered the Declaration of Peter
M. Martin (Ex. 2006, “Martin Decl.”) with its Response. In addition, a
transcript of Mr. Martin’s deposition (Ex. 1016, “Martin Dep.”) was
submitted by Petitioner. No deposition transcript was filed for Dr. Morrisett.
Patent Owner filed a Motion to Exclude Evidence (Paper 26);
Petitioner filed an Opposition to Patent Owner’s Motion to Exclude
Evidence (Paper 31); and Patent Owner filed a Reply to Petitioner’s
Opposition to Motion to Exclude Evidence (Paper 33).
A combined oral hearing in this proceeding and Cases CBM2014-
00028, CBM2014-00030, and CBM2014-00033 was held on March 2, 2015,
and 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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We conclude for the reasons that follow that Petitioner has shown by a
preponderance of the evidence that claims 1–18 of the ’701 patent are
unpatentable.
I. INTRODUCTION
A. The ’701 Patent (Ex. 1001)
The ’701 patent, titled “Masking Private Billing Data by Assigning
Other Billing Data to Use in Commerce with Businesses,” issued on
February 16, 2010. The ’701 patent issued from Application 11/591,696,
filed November 1, 2006.
The ’701 patent relates to facilitating electronic purchases while
maintaining privacy of customer billing data. Ex. 1001, 1:17–19.
Reproduced below is Figure 1 of the ’701 patent.

Figure 1 illustrates client 100 in communication with network 104.
Id. at 2:27, 49–50. Servers 102 for business websites are also attached to
network 104. Id. at 2:50–51. Client 100 and servers 102 are also in
communication with billing service 106 through network 104. Id. at 3:3–4.
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Billing service 106 is configured to allow client 100 to reduce the risk of
disclosing billing data to servers 102, and in one embodiment, billing service
106 facilitates commercial transactions by generating substitute billing data
for client 100. Id. at 3:4–11. The phrase “substitute billing data” refers to
valid billing data that is owned and/or controlled by billing service 106 and
that is temporarily or permanently distributed to client 100 to replace
personal and/or private billing data of the client. Id. at 3:11–16.
In one embodiment, client 100 registers with server 102 to purchase
goods from the business. Id. at 3:64–67, Fig. 2. The user uses a computing
device to register with a first web site maintained by a first business. Id. at
4:29–31, Fig. 2. In response, the web site sends an acknowledgement. Id. at
4:35–36, Fig. 2.
After contacting billing service 106, billing service 106 asks the user
to identify the business associated with the website of server 102. Id. at
5:26–28, Fig. 3. Billing service 102 generates billing data that can be used
in future transactions between the user and identified business. Id. at 5:32–
35, Fig. 3. Once the billing data is known, client 100 can contact the
identified business to purchase goods. Id. at 5:38–39, Fig. 3. The business
sends a payment request to receive payment for the goods. Id. at 5:40–42,
Fig. 3. In response to the payment request, client 100 can send the generated
billing data instead of personal credit card data or other payment data. Id. at
5:42–46, Fig. 3. The generated billing data for client 100 can be associated
uniquely with a particular business from which client 100 intends to
purchase goods. Id. at 5:56–58.
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B. Related Matters
Petitioner states that it has been sued for infringement of the ’701
patent in the following cases: Intellectual Ventures I LLC v. PNC Financial
Services Group, Inc., No. 2:13-cv-00740 (W.D. Pa., filed May 29, 2013) and
Intellectual Ventures I LLC v. Bank of America Corp., No. 3:13-cv-00358
(W.D.N.C., filed June 12, 2013). Pet. 4–5 (citing Exs. 1006–1009). Patent
Owner has identified four additional lawsuits involving the ’701 patent.
Paper 11.
In addition, Petitioner has submitted a December 18, 2014
Memorandum Opinion in Intellectual Ventures I LLC v. Manufacturers &
Traders Trust Co., Civil Action No. 13-1274-SLR (D. Del.). Ex. 1022.
C. Illustrative Claim
The ’701 patent has 18 claims, all of which are being challenged in
this proceeding. Claims 1, 5, 10, 15, and 17 are independent. Claims 1 and
5 are method claims; claims 10 and 15 are apparatus claims; and claim 17 is
an article of manufacture claim. Claim 1 is reproduced below:
1. A method for a user to provide substitute billing data
in lieu of personal billing data, comprising:
an electronic device facilitating a request to a billing
service for first and second distinct credit card numbers,
including identifying each business with which the first and
second distinct credit card numbers are to be used;
the electronic device obtaining the first and second
distinct credit card numbers from the billing service for use by
the user as a substitute for said personal billing data, the first
and second distinct credit card numbers associated with each
said business by the billing service;
the electronic device facilitating one or more purchasing
transactions with a first associated business using the first credit
card number; and
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the electronic device facilitating one or more purchasing
transactions with a second associated business using the second
credit card number.

D. The Asserted Ground
Trial was instituted on the ground that claims 1–18 of the ’701 patent
are unpatentable as being directed to patent-ineligible subject matter under
35 U.S.C. § 101. Pet. 15; Institution Dec. 36.
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 the absence of such a definition, limitations
are not to be read from the specification into the claims. In re Van Geuns,
988 F.2d 1181, 1184 (Fed. Cir. 1993). Furthermore, claim construction is
“is not an inviolable prerequisite to a validity determination under § 101.”
Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d
1343, 1349 (Fed. Cir. 2014) (citations omitted).
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1. Previously Interpreted Terms
In the Decision on Institution, we interpreted various claim terms of
the ’701 patent as follows:
Term Interpretation
“billing service” “a service that provides substitute
billing data for particular businesses
for use in commercial transactions
with businesses”
“billing data” “data that can be used to pay for
goods or services”
“personal billing data” “billing data that is personal”
“substitute for personal billing data” “valid billing data that is owned
and/or controlled by the billing
service and distributed to clients to
replace personal and/or private
billing data of the client”
“a first and a second billing data” “substitutes for personal billing data
associated with the first and second
businesses respectively”
“subsequent purchasing transactions” “purchasing transactions that occur
after the billing service provides the
first and second billing data for use
by the user”
See Institution Dec. 6–16.
We also construed the structure corresponding to the means-plus-
function limitations of claims 15 and 16 to be a client computing device. Id.
at 17–19. As discussed below, Patent Owner disputes these interpretations.
2. “Substitute Billing Data”
“Substitute billing data” was not interpreted in the Decision on
Institution and appears only in the preambles of method claim 1 and
apparatus claim 15. Claim 1 further recites “the electronic device obtaining
first and second distinct credit card numbers . . . as a substitute for said
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personal billing data,” and claim 15 further recites “means for obtaining . . .
first and second distinct credit card numbers . . . for use . . . as a substitute
for said personal billing data.” Independent claims 5, 10, and 17 do not
recite “substitute billing data,” but each recites “a substitute for said personal
billing data” or “substitutes for personal billing data.” Patent Owner also
provides separate arguments for “personal billing data,” which are discussed
below. PO Resp. 19–20.
Patent Owner argues that “substitute billing data” is defined in the
Specification of the ’701 patent and that the definition “makes specific
reference to ‘client 100’ – a reference to the architecture diagram of Figure
1.” PO Resp. 9–11 (citing Ex. 1001, 3:11–16; Martin Decl. ¶¶ 29, 32–34;
Pet. 56). Patent Owner also argues that “[o]ne of ordinary skill in the art
would only understand the word ‘clients’ as used in this definition as
referring to a client in the server/client sense of the word and not in the sense
of the word ‘customer.’” Id. at 6–9 (citing Ex. 1001, 2:26–28, 2:48–63,
4:51–63, 8:3–11, Fig. 1; Martin Decl. ¶¶ 29–31).
Petitioner replies, and we agree, that “‘client’ is not a claim term.”
Reply 3. Moreover, even if “client” were construed, while portions of the
Specification of the ’701 patent appear to use “client” to refer to a
computing device, we agree that the Specification’s use of “‘client’
encompasses both human users and computer devices,” as argued by
Petitioner. Id. We determine, as Petitioner argues, that the ’701 patent
“indicates that the ‘client’ manifests human attributes, such as awareness,
discretion, and intent.” See id. at 4–5 (citing Ex. 1001, 3:4–8, 4:47–50 (“the
client 100 tells the business 102 it is interested in registering with the
business 102”), 5:32–35, 38–39 (“the client 100 can then contact 310 a
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business and decide 312 on a good to purchase”), 6:6–13 (“the charge is
contested 324 so as to allow the client to investigate the validity of the
charge before being billed for the charge”), 6:18–21, 35–37, 62–67, 7:18–29
(“the client can elect to be billed electronically, in addition to or in lieu of
receiving a physical bill printed on paper”); Morrisett Supp. Decl. ¶¶ 5–6);
see also Reply at 6 (arguing the ’701 patent refers to a client interacting with
a billing service, not a server). Further, the ’701 patent defines “substitute
billing data” as “valid billing data . . . temporarily or permanently distributed
to clients 100 to replace personal and/or private billing data of the client.”
Ex. 1001, 3:11–16. Although “clients 100” may refer to a computing
device, Petitioner’s witness testified that the “billing data of the client” could
refer to the billing data of a human user. Morrisett Supp. Decl. ¶¶ 7–8.
Thus, in view of the broad use of “client” by the ’701 patent to refer to a
computing device and its user, we are not persuaded that the ’701 patent’s
use of “client” would lead one of ordinary skill in the art to understand
“client” only “in the server/client sense of the word,” as argued by Patent
Owner.
Patent Owner further argues that “‘substitute billing data’ refers to
valid billing data that is owned and/or controlled by the billing service 106”
because “[t]o one of ordinary skill in the art, ‘valid’ billing data requires that
the data be tied to an actual financial account” and “that this valid billing
data will be tested by the existing payment system.” PO Resp. 11 (citing
Martin Decl. ¶¶ 35, 36). Patent Owner argues that “‘substitute billing data’
must be owned or controlled by the billing service” and “would indicate to
one of ordinary skill in the art that the billing service has access to a
significant tranche of valid credit card numbers or bank accounts.” Id.
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(citing Ex. 1001, 3:11–16; Martin Decl. ¶ 36). Patent Owner argues that
“‘substitute billing data’ is distributed by the billing service to clients.” Id.
(citing Martin Decl. ¶ 37).
Petitioner replies, and we agree, that the claims of the ’701 patent do
not require that “substitute billing data” be tied to an actual financial account
or be tested by an existing payment system. Also, we determine that the
Specification does not describe how billing data becomes valid. The portion
of Patent Owner’s expert declaration cited in Patent Owner’s Response does
not refer to any portion of the Specification. PO Resp. 11; Martin Decl.
¶¶ 35–37. Thus, Patent Owner’s arguments regarding “valid billing data” do
not persuade us that “substitute billing data” applies only to electronic
transactions.
Based on our conclusions from the Specification of the ’701 patent
regarding “client” and the lack of any disclosure for validating billing data
and the complete record before us, we are not persuaded that the broadest,
reasonable interpretation of “substitute billing data” requires only electronic
transactions. We determine that the broadest, reasonable interpretation of
“substitute billing data” in view of the Specification is “valid billing data
that is owned and/or controlled by a billing service, where billing data is
temporarily or permanently distributed to clients to replace personal and/or
private billing data of the client.” See Ex. 1001, 3:11–16. Also, Patent
Owner’s arguments for “substitute billing data” do not persuade us to
modify our interpretation of “a substitute for said personal billing data” and
“substitutes for personal billing data.”
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3. “Business”
Patent Owner argues that the Specification of the ’701 patent defines
“business” as “e-commerce websites with which the client and billing
services communicate” and “clearly indicates each ‘Business’ represents a
‘Web Server’ 102.” PO Resp. 11–12 (citing Ex. 1001, 2:63–66, Fig. 1;
Martin Decl. ¶ 38).
Patent Owner’s asserted definition of “business” is based on the ’701
patent’s statement “[i]t is further assumed that each of the network locations
to which a client may communicate provide[s] a ‘web site’ for engaging in
commercial transactions, and will collectively be referred to as
‘businesses.’” PO Resp. 11–12 (citing Ex. 1001, 2:63–66). Patent Owner
asserts that “businesses” is defined to mean the network locations and web
sites. Petitioner does not dispute Patent Owner’s proposed interpretation of
“business.”
The Specification of the ’701 patent also states that, “[f]or the
purposes of this description, the phrase ‘web site’ is intended to be a general
reference to a network ‘presence’ maintained by a business as well [as] a
logical presence maintained on behalf of a business.” Ex. 1001, 2:66–3:2.
When this statement is considered together with Patent Owner’s asserted
definition of “businesses”—that “each of the network locations to which a
client may communicate provide[s] a ‘web site’ for engaging in commercial
transactions”—the ’701 patent uses “businesses” or “business” to refer to the
network locations, web sites, network presences or logical presences
maintained by or on behalf of a business.
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Thus, we interpret “business” or “businesses” to mean the “network
locations, web sites, network presences or logical presences maintained by
or on behalf of a business.” In re Paulsen, 30 F.3d at 1480.
4. “Billing Service”
Patent Owner argues that “in light of the proper understanding of
‘client,’ ‘substitute billing data,’ and ‘business’ one of ordinary skill in the
art could not conclude that the ‘billing service’ was anything other than an
electronic service” which “is consistent with the ’701 patent specification.”
PO Resp. 13–15 (citing Ex. 1001, 3:3–8, 3:54–63, Fig. 1). Patent Owner
also argues that our interpretation of “billing service” relies on “the actions
of the implicit human agent that would operate the billing service” but “the
actions of this implicit agent are not actually claimed by the ’701 patent.”
Id. at 15 (citing Martin Decl. ¶¶ 40–46).
Petitioner replies that “‘client’ is not limited to a computer” and
Patent Owner’s construction is inconsistent with the Specification. Reply 7.
Petitioner also argues that the ’701 patent “refers to the third-party
intermediary that provides substitute billing data as a service, not a server”
and contrasts the ’701 patent’s description of billing service with an
encryption server. Id. at 7–8 (citing Ex. 1001, 2:49–54, 3:17–35).
In our Decision on Institution, we construed “billing service” as “a
service that provides substitute billing data for particular businesses for use
in commercial transactions with businesses,” and found that the
Specification of the ’701 patent used “billing service” in a manner that
implicated human actions as well as a computing device, similar to “client.”
See Institution Dec. 7–8. In particular, we concluded that the Specification
states “the billing service 106 is responsible for honoring a charge made by
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the business against credit card data provided by the client 100” (Ex. 1001,
6:15–18), “the billing service obtains the billing data to distribute to clients
by entering into agreements with banking institutions (or equivalent)” (id. at
5:47–49), “the billing service may also set up internal invoice accounts and
the like” (id. at 5:51–52), and “the client informs the billing service of the
items purchased . . . so that the billing service may audit a particular charge
to ensure only expected purchases appear on the charge” (id. at 5:63–66).
We also found portions of the Specification that describe “billing service” as
connected with network 104, a database, web pages, or remote devices.
Institution Dec. 8. Thus, a broadest, reasonable interpretation of “billing
service” in view of the Specification does not require limiting “billing
service” to an “electronic service.” Moreover, the ’701 patent states that
“[h]aving described and illustrated the principles of the invention with
reference to illustrated embodiments, it will be recognized that the illustrated
embodiments can be modified in arrangement and detail without departing
from such principles.” Ex. 1001, 8:20–24.
Thus, based on our findings from the Specification of the ’701 patent
and the complete record before us, we are not persuaded that the broadest,
reasonable interpretation of “billing service” requires only an “electronic
service,” and see no reason to modify our construction of the term in the
Decision on Institution.
5. “Register a User”
Patent Owner argues that “register a user” requires an electronic form
because the ’701 patent describes “using a special computing port for
registration,” “use of XML encoding of the form,” and the proper
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construction of “billing service” is an electronic service. PO Resp. 15–16
(citing Ex. 1001, 4:64–68, 5:1–7; Martin Decl. ¶¶ 47–49).
The portions of the ’701 patent cited by Patent Owner state that
“[c]ompletion of the form can be automated” (Ex. 1001, 4:64–65), “[i]n one
embodiment, the extensible markup language (XML) is used to encode
forms” (Ex. 1001, 4:66–67), “[i]n an alternate embodiment, the user is
allowed to review and complete a form” (Ex. 1001, 5:1–3, emphasis added),
and “[i]n another embodiment, a special communication port . . . is used to
send and receive registration data” (Ex. 1001, 5:5–7, emphasis added). The
Decision on Institution cited the alternate embodiment that does not limit
registering a user only to electronic forms and does not exclude
unambiguously registering non-electronically. See Institution Dec. 9.
Therefore, based on our findings from the Specification of the ’701
patent and the complete record before us, regarding a user completing a
form, we are not persuaded to modify our interpretation of “register a user”
to require electronic forms.
6. “Receive Identification of a First and a Second Business”
We did not need to construe “receive identification of a first and a
second business with which the user intends to conduct one or more
purchasing transactions” before instituting trial. See Institution Dec. 10–11.
Patent Owner argues that, because “billing service” is an electronic service,
the “step of receiving identification of first and second businesses is an
electronic commerce communication.” PO Resp. 16–17 (citing Martin Decl.
¶ 50). Patent Owner does not provide any explicit proposed construction
based on the Specification.
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For reasons above regarding “billing service,” and based on the
complete record before us, we are not persuaded of the need to interpret
“receive identification of a first and a second business with which the user
intends to conduct one or more purchasing transactions” in a manner that
requires electronic communications. For the purposes of this Decision, we
apply the plain and ordinary meaning.
7. “Billing Data”
In the Decision on Institution, we construed “billing data” as “data
that can be used to pay for goods or services.” Patent Owner argues “billing
data” is electronic data based on its asserted meaning of “client” and that the
’701 patent distinguishes “billing information” from “billing data,” the risk
of disclosing of which a billing service reduces. PO Resp. 17–19 (citing
Ex. 1001, 2:44–48, 3:4–8, 4:26–28; Martin Decl. ¶¶ 52–54).
In view of our discussion of “client” and “billing service” above, we
are not persuaded to modify our interpretation of “billing data” to be limited
to electronic data.
8. “Personal Billing Data”
In the Decision on Institution, we construed “personal billing data” as
“billing data that is personal.” Patent Owner’s argument for construing
“personal billing data” as limited to electronic data is that “a customer would
necessarily need to engage in electronic commercial communications to
‘establish accounts with websites’” and “would be accomplished with the
‘substitute billing data’ which is electronic.” PO Resp. 19–20 (citing Martin
Decl. ¶ 63).
For the reasons discussed above, the broadest, reasonable
interpretation of “substitute billing data” in view of the Specification of the
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’701 patent does not require such data to be electronic data. Thus, based on
our findings from the Specification of the ’701 patent, we see no reason to
modify our interpretation of “personal billing data” to be limited to
electronic data. See Institution Dec. 14 (citing Ex. 1001, 2:44–48).
9. “A First and a Second Billing Data”
Patent Owner quotes our earlier interpretation and states that it
“agrees with the proviso that ‘substitute billing data’ and ‘businesses’ are
properly construed as outlined above.” PO Resp. 20.
In view of our discussion of “substitute billing data” and “business”
above and the complete record before us, we see no reason to modify our
interpretation of “a first and a second billing data.”
10. “Subsequent Purchasing Transactions”
Patent Owner quotes our earlier interpretation and states that it
“agrees and would simply note that ‘for use by the user’ is accomplished by
way of the client software operating on the user’s computing device.” PO
Resp. 20 (citing Martin Decl. ¶ 64).
Thus, based on the complete record before us, we see no reason to
modify our interpretation of “subsequent purchasing transactions.”
11. “Electronic Device,” “Storage Medium,” “Processor,”
and “Computer-Readable Medium”
Patent Owner states that it “agrees that these terms should be
construed to comport with their plain and ordinary meaning to those of skill
in the art.” PO Resp. 21 (citing Institution Dec. 17). Patent Owner also
argues that the electronic device is part of the client. Id. (citing Ex. 1001,
2:55–58; Martin Decl. ¶ 65).
Thus, we apply the plain and ordinary meaning to these terms.
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12. Means-Plus-Function Limitations
For each of the means-plus-function limitations, Patent Owner states
that it “agrees that the client 100 is appropriately identified as corresponding
structure” but argues that “other structures in the ’701 patent are necessary
to carry out the claimed functions,” such as network 104, database 110,
records 112, servers 102, and billing service 106. PO Resp. 21–23 (citing
Martin Decl. ¶¶ 66–71).
A claim limitation expressed in means-plus-function form “shall be
construed to cover the corresponding structure . . . described in the
specification and equivalents thereof.” 35 U.S.C. § 112. Patent Owner’s
arguments do not explain how the Specification of the ’701 patent clearly
links or associates any one or more of network 104, database 110, records
112, servers 102, or billing service 106 to the functions recited by claims 15
and 16. Patent Owner’s arguments do not cite any portion of the
Specification. PO Resp. 20–23. Patent Owner, instead, cites paragraphs 66–
71 of the Martin Declaration, but those paragraphs only refer to the asserted
definition of “substitute billing data” and a description of billing service and
do not discuss network 104, database 110, records 112, or servers 102.
Martin Decl. ¶ 69 (citing Ex. 1001, 3:11–16), ¶ 71 (citing Ex. 1001, 5:47–
52). The portion of the Specification cited for including billing service 106
as a corresponding structure does not address explicitly the billing service
“facilitating one or more purchasing transactions,” as asserted by Patent
Owner. See PO Resp. 23 (citing Martin Decl. ¶ 69).
Thus, based on the complete record before us, we see no reason to
modify our interpretations of the means-plus-function limitations of claims
15 and 16.
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II. ANALYSIS
A. Patent Owner’s Argument that the ’701 Patent is Not a Covered
Business Method Patent
Patent Owner argues that “the Petition fails to allege or put forth any
evidence that the claims are not novel under 35 U.S.C. § 102 or obvious
under 35 U.S.C. § 103.” PO Resp. 63. Patent Owner also argues that
Petitioner “failed to even make any attempt to support their conclusory
statement that the claims are not novel or unobvious.” Id. at 64. Patent
Owner, thus, argues that “[b]ecause the Petition does not raise any grounds
of rejection under §§ 102 and 103 or present any evidence to support such
grounds, it is legally impossible for Petitioners to satisfy their burden of
proof under 37 C.F.R. § 42.20(c) to show that the claimed invention is not
‘novel and unobvious.’” Id. at 64–65.
Petitioner replies that the Petition cited the ’701 patent, its expert
declaration, and Board authority for these contentions. Reply 14 (citing Pet.
8–13). Petitioner argues that Patent Owner fails to refute the citations and
only argues that they are “conclusory.” Id. (citing PO Resp. 63–64).
The definition of “covered business method patent” in Section
18(d)(1) of the America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
(2011) (“AIA”) excludes patents for “technological inventions.” To
determine whether a patent is for a technological invention, we consider
“whether the claimed subject matter as a whole recites a technological
feature that is novel and unobvious over the prior art; and solves a technical
problem using a technical solution.” 37 C.F.R. § 42.301(b). The Petition
provides evidence that the claims do not recite a technological feature that is
novel and unobvious over the prior art. Pet. 10–14 (citing Ex. 1001, 1:21–
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24, 2:15–17, 2:55–62, 3:4–11, 6:22–27, 7:49–58; Morrisett Decl. ¶ 21). In
particular, Petitioner identifies which features of claims 1–4, 7, 8, 10, 12, 13,
17, and 18 could be considered technological features and explains why
those same features were well-known at the time the application for the ’701
patent was filed. Id. In the Decision on Institution, we were persuaded by
Petitioner’s arguments and evidence and determined that the claims were not
directed to a technological invention and did not address a technical problem
or a technical solution. Institution Dec. 21–23. Patent Owner does not
address Petitioner’s identified features and evidence and provides no
argument or evidence of its own to show that “the claimed subject matter as
a whole recites a technological feature that is novel and unobvious over the
prior art.” AIA § 18(d)(1); 37 C.F.R. § 42.301(b). Patent Owner’s expert
declaration provides an opinion regarding the interpretation of certain claim
terms, not whether the claims recite a technological feature that is novel and
unobvious. See Martin Decl. ¶¶ 26–27.
Thus, based on the complete record before us, we are not persuaded
by Patent Owner’s arguments.
B. 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, 561 U.S. 593, 601 (2010). “The ‘abstract ideas’ category embodies
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‘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) (quoting
Gottschalk v. Benson, 409 U.S. 63, 67 (1972)).
In Alice, the Supreme Court followed the two-step framework set
forth in Mayo Collaborative Services v. Prometheus Laboratories, 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
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).
C. Are the ’701 Patent Claims Directed to Abstract Ideas?
Petitioner argues that “the claims are directed to the basic idea of
protecting personal billing data from thieves and hackers by providing
‘substitute billing data’ to a consumer for making online purchasing
transactions.” Pet. 21. Patent Owner responds that Petitioner’s proposed
abstract idea “does not rise to the level of a ‘fundamental building block’ of
technology, of economic behavior, or of human organization.” PO Resp.
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24–25 (citing Pet. 21), 27–28 (citing Martin Decl. ¶ 76); Tr. 56:15–22.
Patent Owner also argues that, even if online purchasing transactions were a
“fundamental building block,” the claims are directed to “a very specific
subset of transactions that use a specific subset of ‘substitute billing data.’”
Id. at 28–29 (citing Martin Decl. ¶ 17). Petitioner replies that “there is no
rule that an idea is abstract only if it falls within a particular category of
abstract ideas.” Reply 8–9.
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.” 134 S. Ct. at 2357; accord Content Extraction, 776 F.3d at 1347.
Furthermore, providing substitute billing data is similar in principle to using
a purchasing agent.
We, therefore, conclude that the first step in the Alice/Mayo test is met
for claims 1–18 of the ’701 patent.
D. 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, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014). In this
step we must examine the limitations of the claims to determine whether the
claims contain an “inventive concept” to “transform” the claimed abstract
idea into patentable subject matter. Id. “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
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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 responds that the ’701 patent does not claim Petitioner’s
proposed abstract idea “such that the field is pre-empted” because
“[p]roperly construed the claim term ‘substitute billing data’ is not
coextensive with” the abstract idea. PO Resp. 25–26. Patent Owner argues
that the ’701 patent expressly defines “substitute billing data” and thus,
represents a specific application of the Petitioner’s abstract idea. Id. at 29–
30 (citing Ex. 1001, 3:11–16). Patent Owner also argues that “substitute
billing data” as defined by the ’701 patent requires that “the substitute
billing data be tied to an actual financial account,” it “must be distributed to
a client device,” and it must be owned or controlled by a billing service. Id.
at 30 (citing Martin Decl. ¶¶ 66–72). Patent Owner asserts the claims of the
’701 patent “bear little resemblance” to the computerized risk hedging of
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Bilski and third party clearing houses of Alice. Id. at 30–31. Patent Owner
further argues that, because the Examiner cited another reference for
substitute billing data during the prosecution of the ’701 patent, the
prosecution history evidences that the claims of the ’701 patent do not
preempt an abstract idea. Id. at 31 (citing Exs. 2004, 2005).
Petitioner replies that “merely ‘limiting the application of an abstract
idea to one field of use does not necessarily guard against preempting all
uses of the abstract idea.’” Reply 9 (quoting Accenture Global Servs.,
GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir. 2013)).
Petitioner also argues that Patent Owner “does not explain how being ‘tied’
to an account avoids the preemption risk.” Id. at 10.
Patent Owner’s arguments are not persuasive. Patent Owner’s
position depends on its construction of “substitute billing data,” a phrase
which appears only in the preamble of claims 1 and 15. For the reasons
discussed above, we do not agree with Patent Owner’s construction. Also,
the conclusory assertion that the claims do not resemble the ones in Bilski or
Alice does not identify a difference in the claims of the ’701 patent that
would preclude preemption. Furthermore, the argument that the claims of
the ’701 patent were amended to overcome another reference during
prosecution does not persuade us that the claims do not preempt because the
argument does not explain how the claim amendments include additional
features to ensure that the claims are more than a drafting effort designed to
monopolize the abstract idea.
Patent Owner argues that “the ’701 patent represents an improvement
to the technology embodied in the pre-existing merchant/purchaser payment
system used in online transactions.” PO Resp. 26 (citing Martin Decl. ¶¶ 17,
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22–23). In particular, Patent Owner argues that the ’701 patent “increase[s]
the security and trust in this system by deploying ‘substitute billing data’ via
a billing service to shield the private billing data of users that engage in
online transactions.” Id. at 32 (citing Martin Decl. ¶¶ 66–67). Petitioner
argues that the “only improvements are nominal and non-technological” and
mitigating risk is not inventive. Reply 12–13.
To the extent Patent Owner’s arguments rely on its proposed
construction of “substitute billing data,” they are not persuasive. We do not
agree with Patent Owner’s interpretation of “substitute billing data,” a
phrase which appears only in the preamble of claims 1 and 15 for the
reasons previously discussed.
Patent Owner additionally argues that “the claims of the ’701 patent,
when properly construed, are more than sufficiently limited to transform the
claims into an ‘inventive concept’” or “a patent eligible application of an
abstract idea rather than the abstract idea itself.” PO Resp. 26. Patent
Owner argues the claims of the ’701 include limitations that are more than
mere computerization of Petitioner’s abstract idea and not conventional or
highly generalized. Id. at 34–35.
1. Claim 1
Patent Owner argues that claim 1 recites limitations “such that it
claims significantly more than ‘substitute billing data.’” PO Resp. 36.
Specifically, Patent Owner argues that claim 1 requires the interaction of the
“electronic device,” “billing service,” and “businesses” and thus, is not
merely a mental process accelerated by computers. Id. at 36–37. Patent
Owner also argues that the “electronic device” and other computing devices
are integral to the invention. Id. at 37 (citing Martin Decl. ¶¶ 65–77).
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Patent Owner also argues claim 1 recites limitations that “are not
‘highly generalized’” because the “method requires several communications
between the user’s electronic device . . . and the billing service computers,”
purchasing transactions with websites, and separate substitute billing data
for each website. PO Resp. 36, 37–38.
Petitioner replies that the ’701 patent “does not specify how the
claimed processes are carried out,” such as generating billing data or
associating billing data with a business. Reply 11–12 (citing Martin
Dep. 147:5–148:25, 152:6–10, 197:1–198:22). Petitioner also argues that
the ’701 patent does not teach how a client or billing service, if computing
devices, would be programmed or what software is used. Id. at 12 (citing
Martin Dep. 122:19–24). Petitioner, thus, argues that the ’701 patent is
highly generalized.
Three of the four steps of claim 1 recite an “electronic device
facilitating . . .” and the last step recites the “electronic device obtaining”
The plain and ordinary meaning of “electronic device” does not tie claim 1
“to any particular novel machine or apparatus, only a general purpose
computer.” See Ultramercial, 772 F.3d at 716. In arguing that the
“electronic device” is integral to the claim, Patent Owner cites its expert
declaration, but the declaration relies on Patent Owner’s proposed
interpretations of “substitute billing data” and “billing service,” which we
did not adopt. See Martin Decl. ¶¶ 69–77. Also, the words of the claim do
not specify how the electronic device facilitates or obtains the recited
activities. Claim 1 generally recites the activities of requesting credit card
numbers, obtaining credit card numbers as a substitute for personal billing
data, and purchasing from businesses associated with the credit card
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numbers. We find no persuasive evidence in the record that claim 1 recites
more than “well-understood, routine, conventional activity.” Mayo, 132 S.
Ct. at 1298.
Thus, based on the complete record before us, we conclude that
method claim 1, which merely requires generic computer implementation,
fails to transform an abstract idea into a patent-eligible invention. See Alice,
134 S. Ct. at 2357.
2. Claims 2–4
Patent Owner argues that these claims have additional limitations that
indicate the claims are more than a drafting effort to monopolize an abstract
idea. PO Resp. 38–39. Patent Owner asserts certain limitations of these
claims are not inherent to substitute billing data and further limit the
application of substitute billing data. Id.
Claims 2 and 3 recite that “the electronic device is a portable digital
assistant.” Thus, these claims are not tied “to any particular novel machine
or apparatus, only a general purpose computer.” See Ultramercial, 772 F.3d
at 716. Claims 2 and 3 generally recite selecting a credit card number, and
claim 4 generally recites that the electronic device notifies the billing service
that the credit cards were used in purchasing transactions. We determine
that these claims, like claim 1, recite no more than “well-understood,
routine, conventional activity.” Mayo, 132 S. Ct. at 1298. In sum, based on
the complete record before us, we conclude that claims 2–4 do not “require[]
‘more than simply stat[ing] the [abstract idea] while adding the words ‘apply
it’” and, thus, fail to transform an abstract idea into a patent-eligible
invention. Alice, 134 S. Ct. at 2357.
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3. Claim 5
Patent Owner argues that, when properly construed, the limitations of
claim 5 are not highly generalized and not inherent to substitute billing data.
PO Resp. 39. Patent Owner cites the limitation “a billing service registering
a user” as requiring communications with an electronic service and the
limitation “the billing service providing the first and second billing data for
use by the user as substitutes for personal billing data for subsequent
purchasing transactions” as requiring electronic distribution to the user’s
client software. Id. at 39–40.
Patent Owner’s arguments are not persuasive. Claim 5 does not
require expressly an electronic billing service, electronic communications, or
electronic distribution to software. As discussed above, we determine that
the broadest, reasonable interpretation of “billing service” in view of the
Specification does not limit “billing service” to only an electronic service.
Therefore, based on the complete record before us, we conclude that claim 5
fails to transform an abstract idea into a patent-eligible invention. Alice, 134
S. Ct. at 2357.
4. Claims 6–9
Patent Owner argues that claims 6–9 are not highly generalized
because they “recite nothing inherent in the use of substitute billing data that
requires these features.” PO Resp. 41.
Claim 7 recites an “electronic device,” which does not tie the claim
“to any particular novel machine or apparatus, only a general purpose
computer” for reasons discussed for claims 1–4. See Ultramercial, 772 F.3d
at 716. Claims 6–9 recite data for charging, data for billing, providing
billing data in real time, and receiving notification of the use of billing data,
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which are no more than “well-understood, routine, conventional activity.”
Mayo, 132 S. Ct. at 1298. Based on the complete record before us, we
conclude that these claims do not contain an “inventive concept” to
“transform” the claimed abstract idea into patentable subject matter. Alice,
134 S. Ct. at 2357.
5. Claims 10–14
Patent Owner relies on its arguments for claims 5–9 for these claims.
PO Resp. 42. For the reasons discussed for claims 5–9, we are not
persuaded that those claims contain an “inventive concept” to “transform”
the claimed abstract idea into patentable subject matter. Alice, 134 S. Ct. at
2357. Therefore, based on the complete record before us, we, also, conclude
that claims 10–14 do not recite limitations that transform the claimed
abstract idea into patentable subject matter. Id.
6. Claims 15 and 16
Patent Owner argues “claim 15 is not a repackaging of claim 5” and
“is more similar to claim 1.” PO Resp. 42–43. Patent Owner also relies on
its proposed construction of the means-plus-function limitations to include
software and network 104 to argue that claims 15 and 16 are limited to a
specific application . Id. at 43.
For the reasons discussed above, we are not persuaded to adopt Patent
Owner’s proposed interpretations for the means-plus-function limitations of
claims 15 and 16. Even if we were to accept Patent Owner’s proposed
corresponding structure for each of the means-plus-function limitations, a
client computing device with any one or more of network 104, database 110,
records 112, or servers 102 does not tie these claims “to any particular novel
machine or apparatus.” See Ultramercial, 772 F.3d at 716. “Any
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transformation from the use of computers or the transfer of content between
computers is merely what computers do and does not change the analysis.”
772 F.3d at 716. Also, for the reasons discussed above, the broadest,
reasonable interpretation of “billing service” is not limited to an electronic
service. Thus, we are not persuaded that the asserted, additional structure
add to the limitations such that they “transform” the claimed abstract idea
into patentable subject matter. Alice, 134 S. Ct. at 2357. Therefore, based
on the complete record before us, we conclude that claims 15 and 16 do not
contain an “inventive concept” to “transform” the claimed abstract idea into
patentable subject matter. Id.
7. Claims 17 and 18
Patent Owner relies on its arguments for claim 5 for these claims. PO
Resp. 43. For the reasons discussed above, we are not persuaded that claim
5 contains an “inventive concept” to “transform” the claimed abstract idea
into patentable subject matter. Alice, 134 S. Ct. at 2357. Thus, based on the
complete record before us, we conclude that claims 17 and 18, also, do not
recite limitations that transform the claimed abstract idea into patentable
subject matter. Id.
E. Patent Owner’s Arguments that Section 101 is not a Proper
Ground upon Which a Covered Business Method Patent Review
May Be Maintained
Patent Owner argues that the Board may not consider subject matter
eligibility challenges under 35 U.S.C. § 101 as part of the transitional
program for covered business method patents. PO Resp. 44–63. Patent
Owner’s arguments regarding its statutory interpretation and citations from
legislative history are almost verbatim the same as those presented in its
Preliminary Response. Compare PO Resp. 44–63 with Prelim. Resp. 43–62.
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Patent Owner does not provide any reasons for reconsidering the same
arguments that were unpersuasive for the reasons stated in our Institution
Decision based on case law and legislative history. See Institution Dec. 23–
25.
Therefore, because Patent Owner’s previous arguments regarding
subject matter eligibility under 35 U.S.C. § 101 were unpersuasive, we need
not address the same arguments again in this decision.
F. Motion to Exclude
Patent Owner moves to exclude Exhibits 1018 (U.S. Patent No.
6,018,721 to Aziz), 1019 (U.S. Patent No. 6,697,960 to Clark), and 1020
(“Software Engineering Code of Ethics and Professional Practice”).
Paper 26, 3. This decision does not rely on these exhibits, so we see no
reason to reach the issues raised in Patent Owner’s motion to exclude.

III. CONCLUSION
We determine that Petitioner has demonstrated, by a preponderance of
the evidence, that claims 1–18 of the ’701 patent are not patentable because
they are drawn 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. 7,664,701 B2 have
been shown to be unpatentable;
FURTHER ORDERED that Patent Owner’s Motion to Exclude is
dismissed as moot; and
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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 requirement of 37 C.F.R. § 90.2.

PETITIONER:
Donald R. Steinberg
Monica Grewal
WILMER CUTLER PICKERING HALE AND DORR LLP
don.steinberg@wilmerhale.com
monica.grewal@wilmerhale.com

PATENT OWNER:
Henry A. Petri
James P. Murphy
NOVAK DRUCE CONNOLLY BOVE + QUIGG LLP
henry.petri@novakdruce.com
james.murphy@novakdruce.com

Don Coulman
dcoulman@intven.com