Sony Corporation of Americav.Network-1 Technologies, Inc.

Patent Trial and Appeal Board

Sep 29, 2015

09520350 (P.T.A.B. Sep. 29, 2015)

Trials@uspto.gov Paper 9
571-272-7822 Entered: September 29, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

SONY CORPORATION OF AMERICA,
Petitioner,

v.

NETWORK-1 TECHNOLOGIES, INC.,
Patent Owner.
____________

Case CBM2015-00078
Patent 6,218,930 B1
____________

Before JONI Y. CHANG, JUSTIN T. ARBES, and GLENN J. PERRY,
Administrative Patent Judges.

ARBES, Administrative Patent Judge.

DECISION
Petitioner’s Request for Rehearing
37 C.F.R. § 42.71
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Introduction
Petitioner filed a Request for Rehearing (Paper 8, “Req. Reh’g”) of
our Decision (Paper 7, “Dec.”) not to institute a covered business method
patent review of claims 6 and 8–23 of U.S. Patent No. 6,218,930 B1
(Ex. 1001, “the ’930 patent”). For the reasons stated below, Petitioner’s
Request for Rehearing is denied.

Analysis
In determining whether to institute a covered business method patent
review, the Board may “deny some or all grounds for unpatentability for
some or all of the challenged claims.” 37 C.F.R. § 42.208(b). When
rehearing a decision on petition, the Board will review the decision for an
abuse of discretion. 37 C.F.R. § 42.71(c). “An abuse of discretion occurs if
a decision is based on an erroneous interpretation of law, if a factual finding
is not supported by substantial evidence, or if the decision represents an
unreasonable judgment in weighing relevant factors.” Arnold P’ship v.
Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004). The party requesting
rehearing bears the burden of showing an abuse of discretion, and “[t]he
request must specifically identify all matters the party believes the Board
misapprehended or overlooked.” 37 C.F.R. § 42.71(d).
Petitioner contends that we abused our discretion in three ways in
concluding that the information presented in the Petition (Paper 2, “Pet.”)
did not establish that the ’930 patent qualifies as a “covered business method
patent” under § 18(d)(1) of the Leahy-Smith America Invents Act, Pub.
L. No. 112-29, 125 Stat. 284 (2011) (“AIA”). Req. Reh’g 1. First,
Petitioner argues that we took an unduly narrow view of the scope of
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covered business method patent eligibility that is inconsistent with the
decision of the U.S. Court of Appeals for the Federal Circuit in Versata
Dev. Group, Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015). Req.
Reh’g 2–7. According to Petitioner, we improperly required that a claim
have “literal recitation of financial products or services” to be eligible. Id. at
5–7. Petitioner also takes issue with the statements in the Decision that
Petitioner did not point to—and we did not find—any language in claim 23
or the Specification of the ’930 patent “relating to” any financial product or
service. See Dec. 9; Req. Reh’g 4–5.
Petitioner’s arguments mischaracterize the Decision and are not
persuasive of an abuse of discretion. We did not deny the Petition because
claim 23 (the only claim relied upon by Petitioner) does not recite literally a
financial product or service, but rather because it does not recite a method
for performing data processing or other operations “used in the practice,
administration, or management of a financial product or service.” See Dec.
8–13 (citing and applying AIA § 18(d)(1)). As explained in the Decision,
claim 23 recites a method of remotely powering access equipment in an
Ethernet data network by using a “low level current” and “preselected
condition” of a resulting voltage level. Id. at 9–10. Nothing in claim 23 or
the Specification relates to any financial product or service; the ’930 patent
is directed solely to providing remote power to a physical device. Id. Thus,
we concluded that claim 23 does not recite a method for performing data
processing or other operations used in the practice, administration, or
management of a financial product or service. Id. at 9–11 (citing analogous
cases where patent claims had general utility and no particular connection to
any financial product or service).
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We also are not persuaded that the Decision is inconsistent with
Versata. The Court in that case held the following:
We agree with the USPTO that, as a matter of statutory
construction, the definition of “covered business method
patent” is not limited to products and services of only the
financial industry, or to patents owned by or directly affecting
the activities of financial institutions such as banks and
brokerage houses. The plain text of the statutory definition
contained in § 18(d)(1)—“performing . . . operations used in the
practice, administration, or management of a financial product
or service”—on its face covers a wide range of finance-related
activities. The statutory definition makes no reference to
financial institutions as such, and does not limit itself only to
those institutions.
Versata, 793 F.3d at 1325. In the Decision, we did not limit covered
business method patent eligibility to products and services of the financial
industry or to activities of financial institutions. See Dec. 8–13. Also, our
determination, as part of the overall analysis, that claim 23 and the
Specification include no language “relating to” any financial product or
service, id. at 9–10, is consistent with the statement above from Versata that
the statutory definition “covers a wide range of finance-related activities,”
793 F.3d at 1325 (emphasis added).
Second, Petitioner argues that we (1) “overlooked that claim 23 is a
method claim, which supports that the ’930 patent is a [covered business
method] patent, because the scope of claim 23 covers activities incidental
and complementary to financial activities,” and (2) overlooked examples of
products that allegedly practice the method, such as point-of-sale terminals,
radio frequency identification readers, and trading turrets. Req. Reh’g
7–12. We did not overlook the fact that claim 23 is a method claim, or the
specific examples cited by Petitioner. We specifically noted, for example,
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that claim 23 “recites a method of remotely powering access equipment in
an Ethernet data network” comprising five steps. Dec. 4–5, 8–13. We also
reviewed all of Petitioner’s contentions regarding the cited examples and
found them unpersuasive, given the language of claim 23 and the focus of
the covered business method patent inquiry on what a patent claims. Id. at
10–12. Mere disagreement with a decision is not a proper basis for
rehearing when a party’s arguments were considered and addressed in the
decision.
Third, Petitioner argues that we “overlooked the fact that Patent
Owner has accused Petitioner’s products,” which are “used for transaction
data analysis—an activity incidental or complementary to financial
activities.” Req. Reh’g 12–14. Again, we reviewed all of Petitioner’s
contentions regarding accused products in the Petition, and explained in the
Decision why we found them unpersuasive. See Dec. 11–12. In particular,
we noted that, contrary to Petitioner’s position, “the fact that [Power-over-
Ethernet] equipped devices may have uses other than receiving remote
power, such as uses pertaining to banking, does not mean that claim 23
‘covers’ such activities.” Id.; see also Req. Reh’g 8 (acknowledging that the
covered business method patent inquiry “should include what the claim
scope actually covers”).
Petitioner further disputes the statement in the Decision that Patent
Owner accused only “Ethernet data nodes (such as switches and hubs) and
Ethernet powered devices (such as IP telephones and wireless access
points)” of infringing claims of the ’930 patent. See Req. Reh’g 12–13;
Dec. 12–13 (citing Prelim. Resp. 39, Ex. 2009). According to Petitioner,
Patent Owner also has accused Petitioner’s “surveillance systems.” Req.
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Reh’g 12–13 (citing Pet. 15). We did not overlook this argument. See
Dec. 10–11 (citing Pet. 14–17, pertaining to “video surveillance systems”).
Moreover, we do not see why such systems, if accused of infringing claim
23, would not be considered “Ethernet powered devices,” as stated in the
Decision. See id. at 12–13.
Petitioner has not carried its burden of demonstrating that we
misapprehended or overlooked any matters argued in the Petition. As such,
Petitioner has not shown an abuse of discretion in the Decision not to
institute a covered business method patent review.
In consideration of the foregoing, it is hereby:
ORDERED that Petitioner’s Request for Rehearing is denied.

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PETITIONER:

Lionel M. Lavenue
Theresa Weisenberger
FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP
lionel.lavenue@finnegan.com
theresa.weisenberger@finnegan.com

PATENT OWNER:

Charles F. Wieland III
Robert G. Mukai
BUCHANAN INGERSOLL & ROONEY PC
Charles.Wieland@bipc.com
robert.mukai@bipc.com