Unified Patents Inc.v.III Holdings 1, LLC

Patent Trial and Appeal Board

May 21, 2015

11367038 (P.T.A.B. May. 21, 2015)

Trials@uspto.gov Paper 7
571-272-7822 Entered: May 21, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

UNIFIED PATENTS INC.,
Petitioner,

v.

III HOLDINGS 1, LLC,
Patent Owner.
____________

Case IPR2015-00232
Patent 7,702,781 B2

Before JUSTIN T. ARBES, FRANCES L. IPPOLITO, and
MINN CHUNG, Administrative Patent Judges.

CHUNG, Administrative Patent Judge.

DECISION
Denying Institution of Inter Partes Review
37 C.F.R. § 42.108

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I. INTRODUCTION
Unified Patents Inc. (“Petitioner”) filed a Petition (Paper 1, “Pet.”)
requesting an inter partes review of claims 1, 3–11, 16, 17, 21, 23, 26–30,
35, and 38 (the “challenged claims”) of U.S. Patent No. 7,702,781 B2
(Ex. 1001, “the ’781 patent”). III Holdings 1, LLC (“Patent Owner”) filed a
Preliminary Response (Paper 6, “Prelim. Resp.”). We have jurisdiction
under 35 U.S.C. § 314, which provides that an inter partes review may not
be instituted “unless . . . there is a reasonable likelihood that the petitioner
would prevail with respect to at least 1 of the claims challenged in the
petition.”
Upon consideration of the Petition and the Preliminary Response, we
conclude that the information presented in the Petition does not establish a
reasonable likelihood that Petitioner would prevail in showing the
unpatentability of any of the challenged claims on the ground set forth in the
Petition. Accordingly, we deny Petitioner’s request to institute an inter
partes review of claims 1, 3–11, 16, 17, 21, 23, 26–30, 35, and 38.
A. Related Proceedings
According to Petitioner, the ’781 patent has not been asserted in any
patent infringement cases or other proceedings. Pet. 4.
B. The ’781 Patent
The ’781 patent describes a system and method for transferring data
files from a client to a remote storage facility across a network. See
Ex. 1001, col. 1, ll. 8–10. In an embodiment, “[a] user may pay a fee, such
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as a periodic fee or a per one or more accesses fee, for storing to and/or
accessing data from the remote storage facility.” Id. at col. 5, ll. 14–17.
Alternatively, “a company may purchase or contract to use the remote
storage facility (RSF) [] for use by the employees of the company to backup
important data files.” Id. at col. 5, ll. 17–20.
Figure 3 of the ’781 patent is reproduced below.

Figure 3 illustrates a method for transferring a data file from a client to a
remote storage facility for storage. Id. at col. 5, ll. 48–50. In steps 302 and
306, a user selects a “store as” command and provides a file name to store
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the file remotely at a remote storage facility. Id. at col. 5, ll. 54–60; col. 6,
ll. 7–8. Subsequently in step 308, the user may select parameters associated
with the file transfer, such as a compression level, a security level, or a
transfer time. Id. at col. 6, ll. 18–26. In step 310, the data file is placed in an
outbound queue according to the parameter selection for transmission across
the network to the remote storage facility. Id. at col. 7, ll. 12–15.
At the transfer time, “the transmission software application program []
may identify a service level agreement and may verify that the client [] may
send the data file.” Id. at col. 7, ll. 19–21. The service level agreement
(SLA) may include
an agreement that may indicate the amount of bandwidth
available to the user, the number of data files a user may be
allowed to transfer to the remote storage facility [], the
maximum size and/or amount of storage available to a user for
storing data files, the amount of storage available and/or used
by the user, and/or other data transmission or storage
agreements.
Id. at col. 7, ll. 19–29. “The SLA may permit transfer and/or storage of the
data file, or may prevent the transfer if transferring the data file would
violate the SLA.” Id. at col. 7, ll. 29–32. If the transmission of the data file
is permitted by the SLA, in steps 312 and 314, the file is transmitted across
the network and the remote storage facility receives and stores the data file.
Id. at col. 7, ll. 32–44.

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C. Illustrative Claim
Of the challenged claims, claims 1, 21, and 38 are independent.
Claim 1 is illustrative of the challenged claims and is reproduced below:
1. A method comprising:
receiving by at least one computer, at a client device of a first
entity, a selection by a user of a store as command at a
graphical user interface (GUI) executing on said client device,
the first entity being at least one of an individual, the user, or a
company;
receiving by the at least one computer a selection of a data file
on said client device by the user for transfer across a network
for storage at a remote storage facility of a second entity, the
user having an associated login account with the second entity,
the second entity being at least one of a network service
provider or an internet service provider (ISP);
prompting by the at least one computer the user for a file name
for said data file at said GUI;
associating by the at least one computer said file name with said
data file;
receiving by the at least one computer a parameter selection at
said GUI, said parameter selection coupled to said account and
coupled to a service level agreement (SLA) between the first
entity and the second entity, said parameter selection
comprising a scheduled transfer time, an encryption selection,
and at least one of:
an administrative parameter, wherein said administrative
parameter comprises a user selectable remote storage
retention duration for said data file and at least one of a
default parameter, a previously selected parameter, or a
synchronize option;
indexing information;
a compression level; or
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a security level;
applying by the at least one computer said parameter selection
to said data file;
identifying by the at least one computer said SLA;
determining by the at least one computer whether to transfer
said data file based on enforcing said SLA;
queuing, if transfer is determined to be permitted, by the at least
one computer said data file in a queue for scheduled upload
transmission to said remote storage facility of the second entity
at said scheduled transfer time; and
transferring, if transfer is determined to be permitted, by the at
least one computer said data file to said remote storage facility
at said transfer time automatically without user interaction
based on said parameter selection.

II. ASSERTED GROUND OF UNPATENTABILITY
Petitioner relies upon the following prior art references.
Ipswitch, Inc., WS_FTP Pro User’s Guide, Software Version 8.0, May
2003 (“WS_FTP”) (Ex. 1002).
Ipswitch, Inc., Ipswitch WS_FTP Professional Security Guide,
Software Version 9.0, June 2004 (“WS_FTP Security Guide”) (Ex. 1003).
Ipswitch, Inc., Ipswitch WS_FTP Server User’s Guide, Software
Version 5.0, May 2004 (“WS_FTP Server”) (Ex. 1004).
Brian Korver & Lisa Dusseault, Quota and Size Properties for DAV
Collections, February 7, 2005, https://tools.ietf.org/html/draft-ietf-webdav-
quota-06 (“WebDAV Quota”) (Ex. 1005).
Petitioner asserts the following ground of unpatentability (Pet. 5, 20–
60):
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Claims Challenged Statutory Basis Ground
1, 3–11, 16, 17, 21,
23, 26–30, 35, and
38
§ 103(a) Obvious over WS_FTP, WS_FTP
Security Guide, WS_FTP Server,
and WebDAV Quota

III. CLAIM CONSTRUCTION
In an inter partes review, claim terms in an unexpired patent are given
their broadest reasonable construction in light of the specification of the
patent in which they appear. 37 C.F.R. § 42.100(b); see In re Cuozzo Speed
Tech., LLC, 778 F.3d 1271, 1281–82 (Fed. Cir. 2015) (“Congress implicitly
adopted the broadest reasonable interpretation standard in enacting the
AIA,” and “the standard was properly adopted by PTO regulation.”). Under
the broadest reasonable interpretation (BRI) standard, and absent any special
definitions, claims terms are given their ordinary and customary meaning, as
would be understood by one of ordinary skill in the art in view of the
specification. In re Translogic Tech. Inc., 504 F.3d 1249, 1257 (Fed. Cir.
2007). Any special definitions for claim terms or phrases must be set forth
with reasonable clarity, deliberateness, and precision. In re Paulsen, 30 F.3d
1475, 1480 (Fed. Cir. 1994).
For purposes of this Decision, we need only assess the constructions
offered by the parties for the claim term “service level agreement.” See,
e.g., Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed.
Cir. 1999) (only those terms that are in controversy need to be construed,
and only to the extent necessary to resolve the controversy).
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Service Level Agreement (SLA)
The challenged independent claims recite a “service level agreement
(SLA) between the first entity and the second entity.” The challenged
independent claims further recite a parameter selection “coupled to a service
level agreement (SLA).” Claim 1 additionally recites “identifying . . . said
SLA” and “determining . . . whether to transfer said data file based on
enforcing said SLA,” and claims 21 and 38 recite “the scheduled upload
transmission determined to be permitted based on enforcement of an identified
service level agreement (SLA) between the first entity and the second entity.”
Petitioner contends the term “service level agreement” should be
construed to mean “any information accessible to the client application that
may permit or prevent the transfer of a data file.” Pet. 14–16 (citing
Ex. 1001, col. 2, ll. 1–3; col. 7, ll. 21–32). In support of its construction,
Petitioner contends the ’781 patent “discloses that the purpose of the SLA is
that it may permit or prevent the transfer and/or storage of the data file.” Id.
at 15 (citing Ex. 1001, col. 7, ll. 29–32). Petitioner further contends,
because claim 4, which depends from claim 1, specifically limits the
“service level agreement” to indicate a maximum size of data the first entity
is permitted to store at the remote storage facility, the doctrine of claim
differentiation compels that “[the term] SLA should be interpreted to include
not only maximum data size, but also other permissions or restrictions as
well.” Id.
Patent Owner argues Petitioner’s proposed construction is improper
because it would read the claim limitation “agreement” out of the claim
term. Prelim. Resp. 5 (citing Interactive Gift Express, Inc. v. Compuserve
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Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001)). Patent Owner further contends
the phrase “any information” used in Petitioner’s proposed construction is
overly broad and not commensurate in scope with the Specification, which
never describes a service level agreement as “any information.” Id. at 5–6.
Citing column 7, lines 21–29 of the ’781 patent, Patent Owner contends the
term “service level agreement” should be construed instead to mean “an
agreement between the supplier of a service and a user of that service that
sets out the levels of service that will be offered.” Id. at 4. Patent Owner
also cites a computing dictionary in support of its claim interpretation. Id. at
4–5 (citing Ex. 2001 at 445
1
(defining “service level agreement (SLA)” as
“[a]n agreement between the supplier of a service and the users of that
service that sets out the levels of service that will be offered, preferably in
quantitative terms, and the obligations on the user of the service”)).
We agree with Patent Owner that Petitioner’s proposed construction is
overly broad and unsupported by the ’781 patent Specification. In
particular, the portions of the Specification cited by Petitioner do not support
Petitioner’s construction. For example, column 7, lines 19–29 of the ’781
patent relied upon by Petitioner describes a “service level agreement” as
follows:
The service level agreement (SLA) may include . . . an
agreement that may indicate the amount of bandwidth available
to the user, the number of data files a user may be allowed to
transfer to the remote storage facility [], the maximum size

1
The page numbers for the exhibits discussed in this Decision refer to the
original page numbers.
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and/or amount of storage available to a user for storing data
files, the amount of storage available and/or used by the user,
and/or other data transmission or storage agreements . . . .
Ex. 1001, col. 7, ll. 19–29 (emphases added). The Specification also
describes
For the remote storage service, in an exemplary embodiment,
the user may pay a fee, such as a periodic fee or a per one or
more accesses fee, for storing to and/or accessing data from the
remote storage facility []. Alternatively, a company may
purchase or contract to use the remote storage facility (RSF) []
for use by the employees of the company to backup important
data files.
Id. at col. 5, ll. 13–20 (emphases added). Contrary to Petitioner’s
contentions, these portions of the Specification indicate a “service level
agreement” includes or reflects an agreement relating to a service that is
made available to users. Petitioner does not identify, nor do we find, any
disclosure in the Specification that supports taking out the expressly recited
limitation “agreement” from the meaning of “service level agreement” and
replacing it with “any information.” Petitioner’s claim differentiation
argument and argument relating to “the purpose of the SLA” are not
persuasive because they do not explain why reading out “agreement” from
“service level agreement” is justified.
On this record, we conclude one of ordinary skill in the art in view of
the ’781 patent Specification would understand a “service level agreement”
to include or reflect an agreement relating to the levels of a service available
to users. See Translogic Tech. Inc., 504 F.3d at 1257; In re Papst Licensing
Digital Camera Patent Litigation, 778 F.3d 1255, 1261 (Fed. Cir. 2015)
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(“The construction that stays true to the claim language and most naturally
aligns with the patent’s description of the invention will be, in the end, the
correct construction.”) (citations omitted); In re Imes, 778 F.3d 1250, 1252–
53 (Fed. Cir. 2015) (holding that the construction of the term “wireless
communication” under the BRI standard cannot be so broad to include
communications along metal contacts in view of the specification that
consistently uses the term “wireless” to refer to methods and devices that
carry waves through atmospheric space). Nonetheless, Patent Owner’s
proposed construction, “an agreement between the supplier of a service and
a user of that service that sets out the levels of service that will be offered,”
is unnecessarily narrow because the Specification describes an embodiment
where the service agreement may not necessarily be an agreement between a
supplier of a service and a user of that service. See Ex. 1001, col. 5, ll. 13–
20 (describing “a company may purchase or contract to use the remote
storage facility (RSF) [] for use by the employees of the company”).
Therefore, on this record, consistent with the term as described in the
Specification, the term “service level agreement” is construed as “an
agreement that specifies the level of service available to users of the
service.”
IV. ANALYSIS OF PETITIONER’S PRIOR ART CHALLENGES
Obviousness Based on the Combination of
WS_FTP, WS_FTP Security Guide, WS_FTP Server, and WebDAV Quota
Petitioner contends claims 1, 3–11, 16, 17, 21, 23, 26–30, 35, and 38
are unpatentable under 35 U.S.C. § 103(a) over the combination of
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WS_FTP, WS_FTP Security Guide, WS_FTP Server, and WebDAV Quota.
Pet. 20–60. We are not persuaded that Petitioner has established a
reasonable likelihood of prevailing on the asserted ground for the reasons
explained below.
1. WS_FTP
WS_FTP is a user’s guide to WS_FTP Pro, version 8, which is FTP
(File Transfer Protocol) client software from Ipswitch, Inc. See Ex. 1002, 1–
2. The WS_FTP Pro software typically is installed on a user’s computer and
allows the user to access various FTP sites running FTP server software to
transfer files to and from the FTP sites. Id. at 2.
2. WS_FTP Security Guide
WS_FTP Security Guide describes the security protocols available in
the Ipswitch WS_FTP Pro software. Ex. 1003, 1. The document also
describes how to configure WS_FTP Pro to use these protocols to make
secure connections to FTP sites. Id.
3. WS_FTP Server
WS_FTP Server is a user’s guide to the WS_FTP Server software,
version 5, which is an FTP server application from Ipswitch, Inc. that allows
the creation of FTP sites. See Ex. 1004, 1. The WS_FTP Server application
allows setting up multiple “FTP hosts,” each with its own users, directories,
and folders. Id. at 2. Each FTP host functions as a separate FTP site. Id.
For each FTP host, user accounts may be created for specific users. Id. To
log on from an FTP client, a user enters its user ID and password specified
in the user account. Id. In addition, the “anonymous logon” feature may be
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enabled, which allows a user to log on to the FTP site without having its
own individual user account. Id.
When an FTP site is operational, the FTP server program running on a
server computer monitors the network port for a connection request from an
FTP client. See id. Upon detecting a client connection request, the FTP
server verifies the logon user ID and password, and, if valid, allows the
connection and listens on the connection channel for the next command. See
id. After a user logs on, the user’s access to the FTP host’s file system is
determined by permissions assigned to directories and folders of the host file
system by a system administrator of the FTP server system. Id. at 2, 31–35.
4. WebDAV Quota
WebDAV Quota describes an extension to the WebDAV standard
relating to quotas on WebDAV servers. See Ex. 1005, 3; Pet. 10. The
WebDAV (Distributed Authoring and Versioning on the Web) standard is a
protocol standard that allows users to create, edit, and share web documents.
Pet. 10. WebDAV Quota defines two additional WebDAV properties:
quota-available-bytes and quota-used-bytes. Ex. 1005, 3–5. The quota-
available-bytes property indicates the amount of remaining disk space
available for a resource on a WebDAV server, such as a collection. Id. at 4.
The quota-used-bytes value represents the amount of space used by the
resource. Id. at 5.
5. Analysis
Claims 1, 21, and 38
Independent claims 1, 21, and 38 recite a “service level agreement
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(SLA) between the first entity and the second entity.” The claims further
recite a parameter selection “coupled to a service level agreement (SLA),”
and claim 1 recites identifying the SLA and determining whether to transfer
a data file to a remote storage facility based on enforcing the SLA. With
respect to claim 1, Petitioner contends WebDAV Quota teaches a “service
level agreement (SLA) between the first entity and the second entity” and
“identifying . . . the SLA” because the reference discloses “associating file
quotas with users or collections.” Pet. 36–38, 43 (emphasis omitted) (citing
Ex. 1005, 1, 3–4). Petitioner argues “WebDAV Client applications can
retrieve the quota-available-bytes property from a server using the
PROPFIND operation defined by WebDAV (RFC2518). WebDAV Client
applications use the value of this property to determine the remaining space
that may be used to store data files by the user.” Id. at 38 (emphasis
omitted). Petitioner further contends WebDAV Quota discloses “a
collection of properties that a WebDAV client application can use to
determine whether to transfer a data file based on enforcing a Service Level
Agreement between the client and the server” because “[t]he client accesses
the DAV:quota-available-bytes property from the server using the
PROPFIND WebDAV request, and if it is less than the size of the data file,
then the transfer is not permitted.” Id. at 43–44 (emphasis omitted) (citing
Ex. 1005, 3–4, 6).
Petitioner also contends that WS_FTP Server “discloses global and
per-user disk quotas controlling the maximum number of bytes a user can
consume on the FTP host’s drives” (id. at 38 (citing Ex. 1004, 37–38)) and
that “[t]he establishment of quotas forms a Service Level Agreement (SLA)
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between the user and the service” (id. at 22). With respect to claim 38,
Petitioner contends WS_FTP Server teaches the recited limitation “the user
having an account associated with the first entity, the scheduled upload
transmission determined to be permitted based on enforcement of an
identified service level agreement (SLA) between the first entity and the
second entity,” because “WS_FTP Server supports user accounts and SLAs
between the users and the ISP.” Id. at 28 (citing Ex. 1004, 1–2, 105).
Patent Owner contends Petitioner does not explain “where the prior
art teaches an agreement between two entities for these quota restrictions.”
Prelim. Resp. 9. Patent Owner argues neither the cited references nor
Petitioner’s declarant explain how “associating file quotas with users” is the
same as a “service level agreement (SLA) between the first entity and the
second entity.” Id. Patent Owner further argues WebDAV Quota teaches
that a client can determine how much space is available on the WebDAV
server, but “a client merely determining a level of service provided by a
server is not the same as agreement between two entities as to that level of
service.” Id. at 11. Patent Owner contends the references cited by Petitioner
teach that “the server administrator unilaterally sets the storage quotas rather
than a storage quota being set by agreement of the user and the server
administrator” (id. (citing Ex. 1004, 37, 57; Ex. 1005, 3), and, therefore,
“any service level restrictions in the cited references are not based upon an
agreement between two entities but rather on a unilateral action taken by a
single party, namely the server administrator” (id.).
As discussed above, we interpret “service level agreement” to mean
“an agreement that specifies the level of service available to users of the
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service.” Under this claim construction, we agree with Patent Owner that
Petitioner has not explained in sufficient detail how “associating file quotas
with users” described in WebDAV Quota teaches a “service level agreement
(SLA) between the first entity and the second entity” or how determining
how much space is available on the WebDAV server to decide whether to
allow file transfer teaches “enforcing [the] SLA.” In support of its
arguments, Petitioner lists excerpts from the WebDAV Quota and WS_FTP
Server references, but does not explain sufficiently where in the quoted
passages an agreement relating to a service is found. Pet. 37–39 (quoting
Ex. 1005, 1, 3–4; Ex. 1004, 37–38), 43–44 (quoting Ex. 1005, 3–4, 6).
Petitioner also cites to various portions of the Declaration of Norman
Hutchinson, Ph.D. (“Hutchinson Decl.,” Ex. 1006), which are essentially
identical to the arguments and evidence presented in the Petition. See, e.g.,
id. at 36–39 (citing Ex. 1006, 44–46), 22–23 (citing Ex. 1006 ¶ 35), 28
(citing Ex. 1006 ¶ 40). Because, as Patent Owner has shown, quotas and
access privileges on the WebDAV server or the FTP server may be
established by a system administrator “unilaterally” without involving any
other person or entity, we are persuaded by Patent Owner’s rebuttal
arguments that Petitioner’s arguments and evidence relating to establishment
and enforcement of quotas are insufficient, without further explanations or
evidence, to show the cited references teach a “service level agreement
(SLA) between the first entity and the second entity,” “identifying . . . [the]
SLA,” and “enforcing [the] SLA,” as recited in claim 1.
With respect to independent claim 21, Petitioner refers to and relies on
the same arguments and evidence Petitioner presented with respect to claim
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1 discussed above to argue the cited references teach the limitations of claim
21 relating to “service level agreement.” See Pet. 53–54. Similarly,
Petitioner refers to and relies on the same arguments and evidence discussed
above to argue unpatentability of claim 38. See Pet. 60.
Accordingly, on this record, the information presented in the Petition
does not demonstrate a reasonable likelihood of Petitioner prevailing in its
challenge to independent claims 1, 21, and 38 under 35 U.S.C. § 103(a) as
obvious over the combination of WS_FTP, WS_FTP Security Guide,
WS_FTP Server, and WebDAV Quota. Petitioner’s arguments and evidence
presented with respect to claims 3–11, 16, 17, 23, 26–30, and 35, which
depend from claim 1 or 21, do not remedy the deficiencies in Petitioner’s
analysis of the challenged independent claims. Hence, Petitioner fails to
demonstrate a reasonable likelihood of Petitioner prevailing in its challenge
to these dependent claims under 35 U.S.C. § 103(a) as obvious over the
combination of WS_FTP, WS_FTP Security Guide, WS_FTP Server, and
WebDAV Quota.
V. CONCLUSION
Based on the arguments and evidence presented in the Petition, we
conclude Petitioner has not demonstrated a reasonable likelihood that
Petitioner would prevail in showing at least one of the challenged claims of
the ’781 patent is unpatentable based on the asserted ground. Therefore, we
do not institute an inter partes review with respect to any of the challenged
claims of the ’781 patent.
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VI. ORDER
In consideration of the foregoing, it is hereby:
ORDERED that the Petition is denied as to all challenged claims of
the ’781 patent.

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PETITIONER:
Michael L. Kiklis
Scott A. McKeown
OBLON, McCLELLAND, MAIER & NEUSTADT, L.L.P.
CPdocketkiklis@oblon.com
CPdocketmckeown@oblon.com

PATENT OWNER:
Henry A. Petri, Jr.
James P. Murphy
Margaux A. Aviguetero
Ryan M. Murphy
NOVAK DRUCE CONNOLLY BOVE + QUIGG LLP
henry.petri@novakdruce.com
james.murphy@novakdruce.com
margaux.aviguetero@novakdruce.com
ryan.murphy@novakdruce.com

Donald J. Coulman
dcoulman@intven.com