Safeway, Inc.v.Kroy IP Holdings, LLC

Patent Trial and Appeal Board

Oct 29, 2014

09412147 (P.T.A.B. Oct. 29, 2014)

Trials@uspto.gov Paper 13
Tel: 571-272-7822 Entered: October 29, 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
_______________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
_______________
SAFEWAY, INC. and THE KROGER CO.,
Petitioner,
v.
KROY IP HOLDINGS, LLC,
Patent Owner.
_______________

Case IPR2014-00685
Patent 7,054,830
_______________

Before MICHAEL J. FITZPATRICK, BARRY L. GROSSMAN, and
JEREMY M. PLENZLER, Administrative Patent Judges.

PLENZLER, Administrative Patent Judge.

DECISION
Denying Petitioner’s Request for Rehearing
37 C.F.R. § 42.71

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I. INTRODUCTION
A. Background
On October 14, 2014, Safeway, Inc. (one of the petitioners; hereafter,
“Petitioner”) filed a Request for Rehearing (Paper 12, “Req. Reh’g”) of our
Decision (Paper 11, “Dec.”) denying inter partes review of claims 1 and 19–
25 of US Patent No. 7,054,830 (“the ’830 patent”). The Petition (Paper 1,
“Pet.”) challenged claims 1 and 19–25 of the ’830 patent. We determined
that the information presented did not show a reasonable likelihood that
Petitioner would prevail at trial with respect to claims 1 and 19–25. Dec. 17.
Accordingly, we declined to institute trial. Id. at 18.
Petitioner’s Request is based on alleged error in claim construction as
applied to the anticipation challenges to claims 1 and 19. For the reasons
that follow, we deny the Request for Rehearing.

II. STANDARD OF REVIEW
Under 37 C.F.R. § 42.71(c), “[w]hen rehearing a decision on petition,
a panel will review the decision for an abuse of discretion.” The burden of
showing a decision should be modified lies with the party challenging the
decision, and the dissatisfied party must identify the place in the record
where it previously addressed each matter it submits for review. 37 C.F.R.
§ 42.71(d).

III. ANALYSIS
Petitioner contends that we erred in our construction of “inventory
management system” and “sponsor-selected geographic location for
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fulfillment.” Req. Reh’g 1–7. Petitioner further contends that we erred in
determining that Barnett
1
, Narasimhan
2
, and Scroggie
3
each fail to disclose
the “inventory management system” and “sponsor-selected geographic
location for fulfillment,” recited in claims 1 and 19, due to the alleged errors
in claim construction. Id. at 7–14.
A. Claim Construction
1. “inventory management system”
In our decision, we construed “inventory management system” as
requiring “a system that manages the available quantity (i.e., inventory) of
an item.” Dec. 7. This construction was based on the plain meaning of the
term “inventory” in the context of the ’830 patent. Id. at 6–7.
Petitioner acknowledges that it was appropriate for us to look to a
dictionary definition of “inventory” (Req. Reh’g 3), but argues that our
construction incorporates “the narrowest definition of ‘inventory’ as the
basis of [the] construction” and that “[i]n view of the broader dictionary
definitions, a construction of ‘inventory’ to require a ‘quantity’ is not the
broadest reasonable construction” (id. at 5). Specifically, Petitioner argues
that the “broader” dictionary definitions “require identification of materials
in stock, but not the quantity of the materials in stock.” Id. at 4. These
alleged “broader” definitions include: “a. [a] detailed, itemized list, report,
or record of things in one’s possession, especially a periodic survey of all
goods and materials in stock;” “b. [t]he process of making such a list, report,

1
US Patent No. 6,321,208 B1, issued Nov. 20, 2001 (Ex. 1004, “Barnett”).
2
US Patent No. 6,237,145 B1, issued May 22, 2001 (Ex. 1005,
“Narasimhan”).
3
US Patent No. 5,970,469, issued Oct. 19, 1999 (Ex. 1006, “Scroggie”).
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or record,” and “c. [t]he items listed in such a report or record.” Id. (citing
https://www.ahdictionary.com/word/search.html?q=inventory
4
)).
Initially, we note that the first two definitions (“a” and “b”) relate to
lists, reports, or records, rather than the actual “goods or materials in stock.”
As noted in our Decision, the inventory system discussed in the ’830 patent
“reflects the current inventory of an item (e.g., merchandise, coupons,
points, cash, services or other forms of incentives).” Dec. 6. Although the
third definition (“c”) is directed to the actual goods or materials from the list,
report, or record, Petitioner fails to explain persuasively why “[t]he items
listed in such a report or record” (i.e., the “things in one’s possession”)
would not include a quantity for each type of item. Nor does Petitioner
explain persuasively why a definition of “inventory” that does not
require a quantity associated with each type of item is consistent with the
’830 patent’s written description.
For these reasons, we are not apprised of error and maintain our
construction of “inventory management system” as requiring “a system that
manages the available quantity (i.e., inventory) of an item.”
2. “sponsor-selected geographic location for fulfillment”
As Petitioner notes (Req. Reh’g 5), we did not explicitly construe
“sponsor-selected geographic location for fulfillment” in our Decision
(Pet. 5). Petitioner contends that we erred by implicitly construing this
claim language to “impose a geographic restriction such that awards cannot
be fulfilled in other locations.” Req. Reh’g 5. Petitioner proposes

4
Petitioner notes this is the public version of the American Heritage
Dictionary (Req. Reh’g 4, fn. 3), which is the basis for the definition in our
Decision (see Dec. 6).
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construing “sponsor-selected geographic location for fulfillment” as
“requiring that a sponsor select a geographic location where an award can be
fulfilled.” Id. at 7. Petitioner does not offer a persuasive explanation as to
why the limitation should be construed to require the sponsor to select a
geographic location where an award can be fulfilled but not to require
fulfillment in the selected location. For example, Petitioner does not explain
how its proffered construction is consistent with the ’830 patent’s written
description. Instead, Petitioner simply alleges that its proffered construction
is the proper construction.
The claim language clearly requires that the fulfillment location is
selected by the sponsor. We also read the limitation as imposing a sponsor-
selected geographic constraint “for fulfillment,” which is consistent with the
’830 patent’s written description. Although we do not read limitations from
a patent’s written description into the claims, the claims are interpreted in
view of the patent’s written description. See In re Translogic Tech., Inc.,
504 F.3d 1249, 1257 (Fed. Cir. 2007). The ’830 patent explains that “[e]ach
prize also must have a selected mode of fulfillment, which is entered by the
sponsor at step 410.” Ex. 1001, 20:14–15. For example, the ’830 patent
explains that “at a step 432, the award database 204 may be queried to
determine the available geographic locations of prizes of the type won by the
consumer” and “at a step 434, the host computer 18 executes an algorithm
that selects the appropriate fulfillment option for the prize . . . by comparing
the geographic information of the consumer in the consumer database 200
and the information in the award database 204.” Id. at 21:61–22:1. The
’830 patent explains that a benefit of the system is that “[s]ponsors are able
to target awards for giveaway by demographic preferences or geography” to
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“create[] increased traffic to retail outlets.” Id. at 42:42–48. In one
example, the ’830 patent explains that when a consumer wins, “the
consumer is instructed at a step 524 to go to store Y located a given distance
from the consumer’s home to pick up the award unit.” Id. at 45:33–36. In
another example, the ’830 patent similarly explains that “[a]t a step 608 the
consumer is instructed to visit a retailer to obtain a prize.” Id. at 45:5-6.
For these reasons, when read in view of the ’830 patent’s written
description, “sponsor-selected geographic location for fulfillment” limits or
constrains fulfillment options to the location selected. Thus, consistent with
our Decision, a “sponsor-selected geographic location for fulfillment”
imposes a sponsor-selected geographic constraint on fulfillment. The award
cannot be fulfilled at all geographic locations. It can be fulfilled only at
geographic locations selected by the sponsor. Petitioner does not apprise us
of error in this construction.
B. Asserted Grounds of Unpatentability
Petitioner’s arguments are directed solely to alleged error in our
Decision not to institute trial of the challenges directed to claims 1 and 19
being anticipated by Barnett, Narasimhan, or Scroggie due to the contentions
discussed above regarding alleged error in our claim constructions. Req.
Reh’g 7-14. Because we are not persuaded of error in our construction of
these claim limitations, we are also not persuaded of error in our Decision
not to institute trial based on these constructions.

IV. CONCLUSION
Petitioner’s Request for Rehearing is denied.

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For PETITIONER:

Marc Kaufman
mskaufman@reedsmith.com

Gerard Donovan
gdonovan@reedsmith.com

For PATENT OWNER:

Mark W. Hetzler
mwhetz@fitcheven.com

Nicholas T. Peters
ntpete@fitcheven.com