in the united states patent trial and...

IN THE UNITED STATES PATENT TRIAL AND APPEAL BOARD In re Post-Grant Review of: ) ) U.S. Patent No. 6,292,547 ) U.S. Class: 379/93.12 ) Issued: September 18, 2001 ) ) Inventor: Ronald A. Katz ) ) Application No. 09/270,241 ) ) Filed: March 15, 1999 ) ) FILED ELECTRONICALLY For: TELEPHONIC-INTERFACE ) PER 37 C.F.R. § 42.6(b)(1) STATISTICAL ANALYSIS ) SYSTEM ) Mail Stop Patent Board Patent Trial and Appeal Board U.S.P.T.O. P.O. Box 1450 Alexandria, VA 22313-1450 PETITION FOR POST-GRANT REVIEW UNDER 35 U.S.C. § 321 AND § 18

OF THE LEAHY-SMITH AMERICA INVENTS ACT

Pursuant to 35 U.S.C. § 321 and § 18 of the Leahy-Smith America Invents

Act (“AIA”) and pursuant to 37 C.F.R. § 42.300 et seq., FedEx Corporation

(“Petitioner”) hereby requests post-grant review of claims 11 and 18 of U.S. Patent

No. 6,292,547 (“the ’547 patent,” Ex. 1001), now purportedly assigned to Ronald

A. Katz Technology Licensing, L.P. (“Katz” or “Patent Owner”).

Covered Business Method Patent ReviewUnited States Patent No. 6,292,547

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An electronic payment in the amount of $30,000 for the post-grant review

fee specified by 37 C.F.R. § 42.15(b)(1)—comprising the $12,000.00 request fee

and the $18,000.00 post-institution fee—is being paid at the time of filing this

petition. If there are any additional fees due in connection with the filing of this

paper, please charge the required fees to our Deposit Account No. 06-0916.


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TABLE OF CONTENTS

TABLE OF AUTHORITIES ................................................................................... vi

LIST OF EXHIBITS .................................................................................................. x

I. PRELIMINARY STATEMENT ...................................................................... 1

II. MANDATORY NOTICES ............................................................................. 1

A. Real Party-in-Interest ............................................................................ 1

B. Related Matters ...................................................................................... 2

C. Lead and Backup Counsel and Service Information ............................. 3

III. BACKGROUND ............................................................................................. 3

A. The ’547 Patent ..................................................................................... 3

B. Claim 18 of the ’547 Patent ................................................................... 4

IV. GROUNDS FOR STANDING ........................................................................ 6

A. Claims 11 and 18 Are Unpatentable ...................................................... 6

B. The ’547 Patent Is a Covered Business Method Patent ........................ 6

C. Claims 11 and 18 Are Not Directed to a “Technological Invention” .............................................................................................. 8

1. Claims 11 and 18 of the ’547 Patent Do Not Recite a Novel and Nonobvious Technological Feature .......................... 9

2. The Patent Does Not Solve a Technical Problem Using a Technical Solution .................................................................... 13

D. Patent Owner Has Asserted Claim 18 of the ’547 Patent Against Petitioner’s Ordering Process, and Petitioner Is Not Estopped .......... 17

V. STATEMENT OF PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED .............................................................................. 17

A. Claims for Which Review Is Requested ............................................. 17


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B. Statutory Grounds of Challenge .......................................................... 18

C. Claim Construction ............................................................................. 18

1. Communication Facility ............................................................ 19

2. Interface Structure ..................................................................... 21

3. Record Testing Structure .......................................................... 22

4. Analysis Structure ..................................................................... 24

5. Personal Identification Data ...................................................... 26

VI. CLAIMS 11 AND 18 OF THE ’547 PATENT ARE UNPATENTABLE UNDER § 101 ............................................................... 27

A. Legal Framework Under Alice and Its Predecessors .......................... 27

B. Claims 11 and 18 of the ’547 Patent Are Directed to the Abstract Idea of Item Ordering ........................................................... 27

1. Item Ordering Is a Fundamental Economic Practice ................ 28

2. Claims 11 and 18 Are Directed Only to the Abstract Idea of Item Ordering ........................................................................ 31

C. Claims 11 and 18 of the ’547 Patent Do Not Recite “an Inventive Concept” or “Significantly More” Than the Abstract Idea ...................................................................................................... 33

1. Claims 11 and 18 Lack an Inventive Concept Beyond Conventional Computerized Systems Used in a Conventional Business Process ................................................ 34

a. The “Interface Structure” Is Conventional ..................... 41

b. The “Record Testing Structure” Is Conventional ........... 45

c. The “Storage Structure” Is Conventional ....................... 46

d. The “Analysis Structure” Is Conventional ..................... 47


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2. Even as a Combination, Claims 11 and 18 Do Not Recite or Use Computer Components in a Patent-Eligible Way ......... 48

a. The ’547 Patent Does Not Improve the Functionality of the Computer ........................................ 49

b. The ’547 Patent Does Not Improve the Technology in Another Technical Field ......................... 50

3. Claims 11 and 18 Also Fail the Alternative Machine-or-Transformation Test for Patent Eligibility ................................ 53

VII. CLAIMS 11 and 18 OF THE ’547 PATENT ARE UNPATENTABLE UNDER § 103 ................................................................................................ 54

A. The Level of Skill in the Art at the Time of Invention ........................ 54

B. The Combination of Jordan and Michlin renders Claims 11 and 18 Obvious .......................................................................................... 54

1. Jordan and Michlin Teach Every Feature of Claims 11 and 18 ........................................................................................ 57

2. The Combination of Jordan and Michlin Is Obvious ............... 66

VIII. CONCLUSION .............................................................................................. 67


vi

TABLE OF AUTHORITIES

Page(s) Cases

Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014) ................................................................................ passim

Amdocs (Israel) Ltd. v. Openet Telecom, Inc., No. 1:10-cv-910, Dkt. No. 301 (E.D. Va. Oct. 24, 2014) .................................. 30

Apple Inc. v. SightSound Technologies, LLC, CBM2013-00019, Paper 17 (PTAB Oct. 8, 2013) ............................................. 36

Bilski v. Kappos, 130 S. Ct. 3218 (2010) ..................................................................... 29, 31, 39, 53

Cisco Systems, Inc. v. AIP Acquisition LLC, IPR2014-00247, Paper 20 (PTAB July 10, 2014) .............................................. 18

CLS Bank International v. Alice Corp., 717 F.3d 1269 (Fed. Cir. 2013) ................................................................... 29, 39

Content Extraction & Transmission LLC v. Wells Fargo Bank, National Association, No. 2013-1588 (Fed. Cir. Dec. 23, 2014) .............................................. 31, 32, 35

CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) .......................................................................... 28

DDR Holdings, LLC v. Hotels.com, L.P., No. 2013-1505, 2014 WL 6845152 (Fed. Cir. Dec. 5, 2014) ..................... 37, 38

DealerSocket, Inc. v. AutoAlert, Inc., CBM2014-00146, Paper 19 (PTAB Dec. 9, 2014) ............................................. 12

Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012) ................................................................... 16, 35

Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014) .......................................................................... 53


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Fidelity National Information Services, Inc. v. CheckFree Corp., CBM2013-00030, Paper 51 (PTAB Dec. 22, 2014) .................................... 16, 35

Fidelity National Information Services, Inc. v. DataTreasury Corp., CBM2014-00021, Paper 14 (PTAB Apr. 29, 2014)............................................ 15

Fort Properties, Inc. v. American Master Lease LLC, 671 F.3d 1317 (Fed. Cir. 2012) ................................................................... 16, 35

Gottschalk v. Benson, 409 U.S. 63 (1972) .............................................................................................. 34

Intellectual Ventures I LLC v. Mfrs. & Traders Trust Co., No. 1:13-cv-01274 (D. Del. Dec. 18, 2014) ....................................................... 39

Katz Interactive Call Processing Patent Litigation, In re, 639 F.3d 1303 (Fed. Cir. 2011) ............................................................... 2, 25, 39

Katz Interactive Call Processing Patent Litigation, In re, MDL No. 07-ML-1816 (C.D. Cal. Feb. 21, 2008), Dkt. No. 1448 ............. 12, 26

Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co., CBM2012-00002, Paper 10 (PTAB Jan. 25, 2013) .............................................. 9

Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012) ..................................................................... 33, 41, 50, 51

Parker v. Flook, 437 U.S. 584 (1978) ............................................................................................ 33

Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) .......................................................................... 18

Rambus, Inc., In re, 694 F.3d 42 (Fed. Cir. 2012) .............................................................................. 18

Ronald A. Katz Technology Licensing, L.P. v. AT&T Corp., 63 F. Supp. 2d 583 (E.D. Pa. 1999) ............................................................ passim

SAP America, Inc. v. Versata Development Group, Inc., CBM2012-00001, Paper 36 (PTAB Jan. 9, 2013) ................................................ 7


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Schreiber, In re, 128 F.3d 1473 (Fed. Cir. 1997) ........................................................................... 10

SiRF Tech., Inc. v. International Trade Commission, 601 F.3d 1319 (Fed. Cir. 2010) ............................................................. 16, 35, 38

SmartGene, Inc. v. Advanced Biological Laboratories, SA, 555 F. App’x 950 (Fed. Cir. 2014) (nonprecedential) ........................................ 32

Tomita Technologies USA, LLC v. Nintendo Co., No. 14-1244 (Fed. Cir. Dec. 8, 2014) ................................................................. 25

Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) ............................................................................ 32

Statutes

35 U.S.C. § 101 ................................................................................................ passim

35 U.S.C. § 103 ................................................................................................ passim

35 U.S.C. § 112, ¶ 6 .......................................................................................... 22, 25

35 U.S.C. § 324(a) .............................................................................................. 6, 67

AIA § 18(d)(1) .................................................................................................. 6, 8, 9

Other Authorities

157 Cong. Rec. S5432 (daily ed. Sept. 8, 2001) ........................................................ 7

77 Fed. Reg. 48,734 (Aug. 14, 2012) (Transitional Program for Covered Business Method Patents—Definitions of Covered Business Method Patent and Technological Invention; Final Rule) .......................................................................................6, 8

77 Fed. Reg. 48,756 (Aug. 14, 2012) (Office Patent Trial Practice Guide) ..................................................................... 9

79 Fed. Reg. 74,618 (Dec. 16, 2014) (2014 Interim Guidance on Patent Subject Matter Eligibility) .......................... 32


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Regulations

37 C.F.R. § 42.301 .................................................................................................6, 8

37 C.F.R. § 42.302(b) ............................................................................................... 17


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LIST OF EXHIBITS

Petition Exhibit 1001: U.S. Patent No. 6,292,547 to Katz Petition Exhibit 1002: File History for Application No. 09/270,241 Petition Exhibit 1003: Declaration of S. Thomas Emerson Petition Exhibit 1004: List of ’547 Patent Related Matters Petition Exhibit 1005: Complaint - Ronald A. Katz Technology Licensing, L.P.

v. American Airlines, Inc., et al., No. 2:06-cv-00334-DF (E.D. Tex. Aug. 21, 2006)

Petition Exhibit 1006: Ronald A. Katz Technology Licensing, L.P. v. AT&T

Corp., 63 F. Supp. 2d 583 (E.D. Pa. 1999) Petition Exhibit 1007: In re Katz Interactive Call Processing Patent Litigation,

639 F.3d 1303 (Fed. Cir. 2011) Petition Exhibit 1008: U.S. Patent No. 4,191,402 to Michlin Petition Exhibit 1009: U.S. Patent No. 4,313,035 to Jordan et al. Petition Exhibit 1010: “Mail Order,” Oxford English Dictionary

(3d ed. June 2000) Petition Exhibit 1011: Montgomery Ward’s 1895 Mail Order Catalogue Petition Exhibit 1012: Order RE: Claim Construction - In re Katz Interactive

Call Processing Patent Litigation, No. 2:07-ml-01816 (C.D. Cal. Feb. 21, 2008), Dkt. No. 1448

Petition Exhibit 1013: Excerpts from Infringement Report of Expert David

Lucantoni in Ronald A. Katz Technology Licensing L.P., v. American Airlines, et al., No. 2:07-cv-02196 (E.D. Tex.)

Petition Exhibit 1014: Reexam Control No. 90/013,182, Notice of Intent to

Issue Ex Parte Reexamination Certificate


xi

Petition Exhibit 1015: U.S. Patent No. 3,727,003 to Paraskevakos Petition Exhibit 1016: U.S. Patent No. 4,792,968 to Katz Petition Exhibit 1017: Declaration of Arthur Brody, as submitted in

Reexamination Proceeding Control No. 90/013,182 Petition Exhibit 1018: Periphonics Corporation: Bank from Home Product

Description, 1980 Petition Exhibit 1019: Periphonics Corporation: Automated Student

Registration Using Touch-Tone Telephone Voice Response: An Application Note, Apr. 29, 1986

Petition Exhibit 1020: U.S. Patent No. 3,983,389 to Cowardin et al. Petition Exhibit 1021: U.S. Patent No. 3,743,793 to Emerson


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I. PRELIMINARY STATEMENT

U.S. Patent No. 6,292,547, entitled “Telephonic-Interface Statistical Analysis

System,” issued September 18, 2001, to Ronald A. Katz. Ex. 1001. Petitioner

challenges claims 11 and 18 of the ’547 patent. Claim 18 depends from claim 11 and

recites a method of collecting, comparing, and storing information for an order using

telephony equipment. Over 900 claims have issued under this patent specification

between 1989 and 2004. Despite such a multiplicity of claims under a single

specification, however, the ’547 patent does not purport to disclose any new

hardware or software. Indeed, the ’547 patent acknowledges that conventional

hardware and conventional software already exist for the purpose of collecting,

comparing, and storing data. Id. at 1:42-45. Rather, claim 18 (and its underlying

independent claim 11) is the high-water mark for linguistic—as opposed to

technological—inventiveness under the ’547 patent specification. Ultimately, claims

11 and 18 fail to pass muster under 35 U.S.C. § 101 because they fail to define an

“inventive concept” that is not abstract, and they fail to recite “significantly more”

than an abstract idea. Moreover, the prior art cited in this petition renders obvious the

combination recited in claims 11 and 18 under 35 U.S.C. § 103.

II. MANDATORY NOTICES

A. Real Party-in-Interest

The real party-in-interest is FedEx Corporation (“Petitioner”).


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B. Related Matters

The ’547 patent is the subject of the litigation captioned Ronald A. Katz

Technology Licensing, L.P. v. American Airlines, No. 2:06-cv-00334 (E.D. Tex.),

previously pending in the United States District Court for the Central District of

California under civil docket No. 2:07-cv-02196 (C.D. Cal.) pursuant to the

multidistrict litigation In re Katz Interactive Call Processing Patent Litigation, No.

07-ML-1816 (C.D. Cal.) (hereinafter “the MDL court” or “the MDL litigation”).

The ’547 patent and related patents have been the subject of numerous district

court actions and U.S. Patent and Trademark Office (“PTO” or “Office”)

proceedings over the years. Patent Owner appealed certain issues in the MDL

litigation to the United States Court of Appeals for the Federal Circuit. In re Katz

Interactive Call Processing Patent Litig., 639 F.3d 1303 (Fed. Cir. 2011) (Ex. 1007).

A more complete list is attached as Exhibit 1004.

During prosecution of the ’547 patent, a court in the Eastern District of

Pennsylvania construed claim terms in patents that share the specification of the ’547

patent, and a number of those claim terms were contemporaneously adopted verbatim

in claims 11 and 18 prior to issuance of the ’547 patent in 2001. Ronald A. Katz

Technology Licensing, L.P. v. AT&T Corp., 63 F. Supp. 2d 583 (E.D. Pa. 1999) (Ex.

1006) (hereinafter “the AT&T litigation”).


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C. Lead and Backup Counsel and Service Information

Lead Counsel Backup Counsel Jeffrey A. Berkowitz

Reg. No. 36,743

Finnegan, Henderson, Farabow,

Garrett & Dunner, LLP

Two Freedom Square

11955 Freedom Drive

Reston, VA 20190-5675

Telephone: 571.203.2710

Facsimile: 202.408.4400

E-mail: [email protected]

James J. Boyle

Reg. No. 46,570

Finnegan, Henderson, Farabow,

Garrett & Dunner, LLP

Two Freedom Square

11955 Freedom Drive

Reston, VA 20190-5675

Telephone: 571.203.2724

Facsimile: 202.408.4400

E-mail: [email protected]

III. BACKGROUND

A. The ’547 Patent

The ’547 patent relates to a telephonic interface system used for collecting data

from callers and “statistically analyz[ing]” the collected data in combination with

other data. Ex. 1001 at 1:55-64. As shown in the ’547 patent’s Figure 1 (reproduced

below), remote terminals (T) and processing systems (P) are connected to a

communication facility (C).


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As the ’547 patent admits, these are all conventional components, well known before

the priority date for the patent. Ex. 1003, ¶¶ 14-52. Further, according to the ’547

patent specification, the processing system itself is a generic computer and capable of

being programmed to perform a variety of business functions, e.g., processing

information for mail order (Ex. 1001 at 10:26-11:62), lottery (id. at 12:21-14:7),

auction (id. at 14:8-15:61), game show (id. at 15:62-19:61), or poll (id. at 19:62-

21:20).

B. Claim 18 of the ’547 Patent

The ’547 patent has fifty claims. Petitioner requests review only of claim 18

(and by necessity claim 11, from which it depends). Contrary to the ’547 patent title,


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claims 11 and 18 lack any recitation of details involved in a “statistical analysis” of

collected data. Id. at 22:50-23:5, 23:36-37. In full, claim 11 recites:

11. An analysis control system for use with a communication

facility including remote terminals for individual callers, wherein each

of said remote terminals comprises a telephonic instrument including

a voice communication device and digital input device in the form of

an array of alphabetic numeric buttons for providing data and wherein

said communication facility has a capability to automatically provide

terminal digital data, indicating a calling telephone number, said

analysis control system comprising:

interface structure coupled to said communication facility

to interface said remote terminals for voice and digital

communication and including means to provide caller data

signals representative of data relating to said individual callers

provided from said remote terminals or automatically provided

by the communication facility with respect to the remote

terminals prior to the close of communication with the caller,

including caller personal identification data entered by the

caller via the digital input device and said terminal digital data

indicative of a calling telephone number;

record testing structure connected to receive and test said

caller data signals indicative of said terminal digital data

representative of said calling telephone number and said caller

personal identification data against previously stored terminal

digital data and caller personal identification data;


6

storage structure for storing certain of said data provided

by said individual callers including item data for ordering

particular items; and

analysis structure for receiving and processing said caller

data signals under control of said record testing structure.

Id. at 22:50-23:15. Claim 18 includes the additional recitation: “wherein the

data identifying the order is number data.” Id. at 23:36-37.

IV. GROUNDS FOR STANDING

A. Claims 11 and 18 Are Unpatentable

For the reasons set forth below, it is more likely than not that claims 11 and 18

of the ’547 patent are invalid under 35 U.S.C. §§ 101 and 103. 35 U.S.C. § 324(a).

B. The ’547 Patent Is a Covered Business Method Patent

The AIA defines a Covered Business Method (“CBM”) patent as any patent

having claims directed to “performing data processing or other operations used in the

practice, administration, or management of a financial product or service . . . .” AIA

§ 18(d)(1); see also 37 C.F.R. § 42.301. The Office has stated that “financial product

or service” should be “interpreted broadly,” encompassing patents “claiming

activities that are financial in nature, incidental to a financial activity or

complementary to a financial activity.” Transitional Program for Covered Business

Method Patents—Definitions of Covered Business Method Patent and Technological

Invention; Final Rule, 77 Fed. Reg. 48,734, 48,735 (Aug. 14, 2012) (quoting 157


7

Cong. Rec. S5432 (daily ed. Sept. 8, 2001) (statement of Sen. Schumer)). And the

Board has explained that the term “financial” is an “adjective that simply means

relating to monetary matters.” SAP Am., Inc. v. Versata Dev. Grp., Inc., CBM2012-

00001, Paper 36 at 23 (PTAB Jan. 9, 2013). Under this guidance, the ’547 patent

qualifies as a CBM patent.

The PTO classified the ’547 patent in Class 379/93.12 (“Sales, ordering, or

banking system: . . . Subject matter wherein the transmitted digital message signal is

used for financial transactions.”) and Class 379/91.02 (“Subject matter including a

switching facility having structure or circuitry for credit transaction processing.”).

Thus, it is squarely a patent for which CBM review was intended.

Further, claims 11 and 18 of the ’547 patent specifically relate to a system that

is financial in nature and complementary to financial matters. Claim 11, from which

claim 18 depends, requires that callers enter data “including item data for ordering

particular items.” Ex. 1001 at 22:50-23:15. Item ordering is a financial process. The

specification also confirms that the claims are directed to financial systems, such as

systems used “to automate a promotion or mail-order operation, even to the extent of

including inventory control.” Id. at 3:39-42. These statements comport with disclosed

embodiments that describe order-entry processes. See, e.g., id. at 11:38-15:36. And

claim 12, which, like claim 18, depends from claim 11, recites the use of a credit card

number in connection with the ordering process. Clearly, the claimed order-entry


8

system recited in claims 11 and 18 is “financial in nature” or, at the very least,

incidental or complementary to a financial activity.

The litigation behavior of Patent Owner is also telling, where it has asserted in

district court that Petitioner’s “customer service and revenue service systems”

infringe the ’547 patent. See, e.g., Ex. 1005, ¶¶ 63-64; supra at 2, Section II.B.

Therefore, the ’547 patent is subject to a CBM proceeding.

C. Claims 11 and 18 Are Not Directed to a “Technological Invention”

The AIA excludes “patents for technological inventions” from the definition of

CBM patents. AIA § 18(d)(1). To determine whether a patent is for a technological

invention, “the following will be considered on a case-by-case basis: 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). To institute a CBM post-grant review, a patent need

only have one claim directed to a CBM, rather than a technological invention, even if

the patent includes additional claims. 77 Fed. Reg. at 48,736 (comment 8).

Importantly, a claim does not recite a technological invention merely by using

the following techniques: “(a) Mere recitation of known technologies, such as

computer hardware, communication or computer networks, software, memory,

computer-readable storage medium, scanners, display devices or databases, or

specialized machines, such as an ATM or point of sale device[;] (b) Reciting the use


9

of known prior art technology to accomplish a process or method, even if that

process or method is novel and non-obvious[; or] (c) Combining prior art structures

to achieve the normal, expected, or predictable result of that combination.” Office

Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012).

Because claims 11 and 18 of the ’547 patent fail to define a novel and

nonobvious technological feature and fail to recite a technical solution to a technical

problem, the claimed subject matter is not a technological invention. Ex. 1003, ¶¶ 45,

47-52.

1. Claims 11 and 18 of the ’547 Patent Do Not Recite a Novel and Nonobvious Technological Feature

Rather than reciting a novel and nonobvious technological feature that would

make a technological invention under AIA § 18(d)(1), claims 11 and 18 only recite

basic, well-known computing components and functions. See id. And conventional

and routine hardware is not enough to render a patent a technological invention. See,

e.g., Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00002, Paper 10 at

7-8 (PTAB Jan. 25, 2013).

The basic and well-known computing components and functions appear

throughout claims 11 and 18: (1) an “interface structure”; (2) a “record testing

structure”; (3) a “storage structure”; and (4) an “analysis structure.” Each of these

elements is merely a functional aspect of general-purpose computing hardware or a

conventional telephony component. As explained below, generic structures like these


10

for performing recited functions cannot form the basis for a novel and nonobvious

technological feature. Moreover, the claims recite no structure “configured” in a

manner to alter the generic structure or otherwise create a novel and nonobvious

technological feature. Cf. In re Schreiber, 128 F.3d 1473 (Fed. Cir. 1997) (noting that

functional limitations may be added to claims but do not change the structure and

therefore leave such claims subject to prior art with the same capabilities).

The “interface structure” to interface remote terminals is the interface 20, a

conventional component connecting telephone terminals to the processors. Ex. 1001

at 4:26-29, 4:48-51, 5:8-10. Indeed, the specification states that the interface “may be

a commercially available Centrum 9000 unit,” confirming that no novel hardware or

software was required for the interface structure. Id. at 4:48-51.

The “record testing structure” is nothing more than a generic processor. For

example, the specification indicates that “the processor PR1 [is] for testing the

telephone number as valid or entitled.” Id. at 6:64-65. Further, the specification states

that “the processing operation usually involves comparison testing which compares

caller data from individual memory cells of the processors P1-Pn (FIG. 1) with test

data that is supplied through the command terminal.” Id. at 9:25-28. Accordingly, the

“testing” function is accomplished by a processor; therefore, the claimed “record

testing structure” must be construed as a processor. And the specification describes a

generic processor: “Exemplary detailed structures for the processors PR1–PRn are


11

described below; however, in general, the units may comprise a microcomputer, for

example, programmed as suggested above and as disclosed in detail below to

accomplish specific operating formats.” Id. at 5:25-29.

The “storage structure” is nothing more than a generic computer memory. For

example, Figure 4 confirms that the “storage structure” is nothing more than

“memory” unit 98, connected to the processing unit. See also id. at 13:4-5 (“[D]ata

for the transaction is established in the buffer 97 then set in a cell of the memory 98

(FIG. 4).”). Thus, the storage structure comprises nothing more than a generic

computer memory for use with a conventional processor.

The “analysis structure” is also nothing more than a generic processor. For

example, the specification explains that “major analysis is explained with reference

to processors.” Id. at 4:56-57. Figure 4 depicts “an exemplary structural form for the

processors PR1–PRn.” Id. at 9:50-52. While Figure 4 shows other functional

elements in addition to “processing unit 92,” including a “qualification unit 93,”

claim 18 recites neither functions nor structures to which those elements correspond.

See infra at 24. This comports with statements from Patent Owner’s litigation expert,

who did not assert that the qualification unit was a necessary part of the

corresponding, disclosed structure for the “analysis structure.” Ex. 1013, ¶ 356.

Accordingly, the processing unit 92 performs the receiving and processing of said

caller data signals, and therefore must be interpreted to be the “analysis structure.”


12

Indeed, the district courts in the AT&T litigation (Ex. 1006) and the MDL

litigation (No. 2:07-ml-01816 (C.D. Cal. Feb. 21, 2008), Dkt. No. 1448 (Ex. 1012)),

both of which construed many of the claim terms, recognized the generic structure

when they construed the claims as requiring nothing more than conventional

computing components; the courts construed the terms as they appear in the claims

of a different patent sharing the specification with the ’547 patent. See Ex. 1006 at

16; see also infra at 18, Section V.C. The AT&T court construed “communication

facility” (Ex. 1006 at 6-7), “interface structure” (id. at 8-10), “record testing

structure” (id. at 15-16), and “analysis structure” (id. at 16-18). The MDL court

construed “analysis structure.” Ex. 1012 at 33-34.

Because each of the recited claim elements is merely a conventional computer

or telephony component, or can be implemented on a general-purpose computer, the

claim fails to recite a technological invention. That is because “[e]ven if the claimed

method, as a whole, is novel and non-obvious, reciting the use of known prior art

technology to perform that method does not render a patent a technological

invention.” DealerSocket, Inc. v. AutoAlert, Inc., CBM2014-00146, Paper 19 at 12

(PTAB Dec. 9, 2014).

Additional support for this conclusion comes from the findings of the Office in

Reexamination Control No. 90/013,182, which considered a previous rejection of the

combination of elements of claim 18 as anticipated by Canadian Patent No.


13

1,162,336 to De Bruyn by the Board in Reexamination Nos. 90/006,978 and

90/007,074 and Appeal No. 2008-5127 (BPAI Feb. 26, 2009). Although the Board

had previously determined that De Bruyn taught all aspects of claim 18, the Office

withdrew a similar rejection of claim 18 because it interpreted “personal

identification data” in the claim as something not taught by De Bruyn. Ex. 1014 at

8-10 (Reexam Control No. 90/013,182, Notice of Intent to Issue Ex Parte

Reexamination Certificate at 6-8). This sole basis for distinguishing claim 18 over

the De Bruyn prior art—i.e., the addition of “personal identification data”—

demonstrates that claims 11 and 18 do not recite a novel and nonobvious technical

feature because the interpretation of personal identification data as information

identifying the caller to the world at large, rather than a secret code, cannot possibly

be characterized as a technological feature. Ex. 1003, ¶¶ 34-36.

2. The Patent Does Not Solve a Technical Problem Using a Technical Solution

Claims 11 and 18 do not address a technical problem. Although the ’547 patent

describes several applications for a system, it provides no explanation of a technical

problem. For example, the ’547 patent states that the system may be implemented “to

automate a mail-order facility.” Ex. 1001 at 10:29-31. The ’547 patent merely

provides a computerized method for conducting an item-ordering transaction. Id. at

3:39-41, 10:29-31. Item ordering was well known prior to the earliest effective filing

date of the ’547 patent. Ex. 1003, ¶¶ 4-7; see also Exs. 1008, 1010, 1011. Thus, the


14

process of item ordering itself presents no technical problem to be solved. In fact,

item ordering by phone, as is described in the present patent, was well known prior to

the earliest effective filing date of the ’547 patent. Ex. 1003, ¶¶ 4-5; see also Exs.

1008 at 4:48-49, 1010. Accordingly, providing a technique to automate a telephonic

item-ordering process, as claimed in the ’547 patent, fails to present a technical

solution to a technical problem, as there was no technical problem to begin with.

The ’547 patent does not, nor could claim to, improve the mail-order or item-

ordering business beyond simply “facilitating” those businesses. Indeed, ordering

items by mail or even by telephone has long been a fundamental economic and

business activity. Ex. 1003, ¶¶ 4-7; see also Exs. 1008, 1010, 1011. Persons of

ordinary skill already knew methods for taking and fulfilling orders by telephone

without any contribution from the claim at issue here. Ex. 1003, ¶¶ 4-7. Furthermore,

not only does the system of claims 11 and 18 fail to recite a complete mail-order

system (for example, failing to provide for the actual verification of a caller’s

identity), the partial system of these claims simply facilitates portions of an age-old

practice by placing it in the context of generic automation. Even assuming that prior

manual order-entry and inquiry systems were slow and inefficient, any purported

improvement in speed and efficiency by the ’547 patent would fall short of

addressing a technical problem because there was nothing in the capability of the

technology at the time that precluded its application to such systems. See generally


15

Ex. 1003. This is confirmed by the ’547 patent’s use of conventional and generic

hardware to implement the claimed features.

Moreover, claims 11 and 18 do not limit the claimed system to any particular

implementation. Instead, they attempt to encompass a broad range of systems that

use data in a very generic way to process data associated with callers and the items

they would like to order. The district court in the AT&T litigation, for example,

remarked that the claimed “interface structure” connects “the processors upon which

the [interactive voice application] is running to the communication facility.” Ex. 1006

at 10. Each element of the disclosed system amounts to a conventional telephony

component or a simple processor connected to the communication facility (or

telephone network). See supra at 9. Each of these systems was known and used well

before the earliest effective filing date of the ’547 patent. Ex. 1003, ¶¶ 8-53. Because

each of the four elements of the claims is merely a generic processor or computer

memory, as described above (see supra at 9), the system described in the ’547 patent

exists only as software running on generic processors and does not offer anything in

the way of a technical solution. Simply improving speed by implementing a process

on computers without specifying any unique or innovative aspect of the computers is

not a technological solution sufficient to avoid review as a CBM. See Fid. Nat’l Info.

Servs., Inc. v. DataTreasury Corp., CBM2014-00021, Paper 14 at 12 (PTAB Apr. 29,

2014) (holding that a process using software on an arrangement of conventional


16

hardware was subject to CBM review); Fid. Nat’l Info. Servs., Inc. v. CheckFree

Corp., CBM2013-00030, Paper 51 at 10-11 (PTAB Dec. 22, 2014) (holding that

“receiving a payment request, selecting a form of payment, and directing the

payment in accordance with the selected form” were not technological solutions

because “comparing the payer account number to the merchant account scheme or

the payment amount with the merchant credit limit” required nothing more than

routine computer functions and therefore was not a technological solution);

Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012) (holding that the

fact that a computer might be “an obvious mechanism for permitting a solution to be

achieved more quickly, i.e., through the utilization of a computer for performing

calculations,” did not make an otherwise abstract claim patent eligible because the

computer does not “impose a meaningful limit on the scope of [the] claim” (quoting

SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010)); Fort

Props., Inc. v. Am. Master Lease LLC, 671 F.3d 1317, 1322-1324 (Fed. Cir. 2012)

(holding that a claim element requiring use of “a computer to ‘generate a plurality of

deedshares’” did not render abstract idea patentable because the “computer limitation

[was] simply insignificant post-solution activity”).


17

D. Patent Owner Has Asserted Claim 18 of the ’547 Patent Against Petitioner’s Ordering Process, and Petitioner Is Not Estopped

Petitioner has been sued for infringement of claim 18 of the ’547 patent.1

Ex. 1005. Patent Owner has asserted claim 18 against an ordering process of FedEx

Corporate Services, Inc. Petitioner is not estopped from challenging the claim on the

grounds identified in the petition. 37 C.F.R. § 42.302(b). Petitioner has not been party

to any other AIA post-grant review of the challenged claims.

V. STATEMENT OF PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED

A. Claims for Which Review Is Requested

Petitioner respectfully requests review under 35 U.S.C. § 321 and AIA § 18 of

claims 11 and 18 of the ’547 patent, and the cancellation of these claims as

unpatentable.

1 Plaintiff has asserted the ’547 patent against FedEx Corporation, Federal Express

Corporation, FedEx Corporate Services, Inc., and FedEx Customer Information

Services, Inc. Pending before the district court is a motion by FedEx Corporation for

summary judgment of noninfringement because, inter alia, the FedEx Corporation

holding company does not “operate automated telephone systems,” as Plaintiff

alleges in its Complaint.


18

B. Statutory Grounds of Challenge

Petitioner requests that claims 11 and 18 be cancelled as unpatentable under

35 U.S.C. §§ 101 and 103. The claim constructions, reasons for unpatentability, and

specific evidence supporting this request are detailed below. Because claim 18

depends from claim 11, all of the arguments for the cancellation of claim 18 apply

equally to claim 11.

C. Claim Construction

If a patent expires prior to rendering a final written decision, “the Board’s

review of the claims is similar to that of a district court,” and claims should be given

“their ordinary and customary meaning, as would be understood by a person of

ordinary skill in the art, at the time of the invention.” Cisco Sys., Inc. v. AIP

Acquisition, LLC, IPR2014-00247, Paper 20 at 2-3 (PTAB July 10, 2014) (citing In

re Rambus, Inc., 694 F.3d 42, 46 (Fed. Cir. 2012); Phillips v. AWH Corp., 415 F.3d

1303, 1313-17 (Fed. Cir. 2005) (en banc)). Even then, however, “there still would be

no presumption of validity,” and the Board should not apply “a rule of construction

with an aim to preserve the validity of [the] claims.” Id. at 3. The ’547 patent expired

in 2005. Under the foregoing principles, the following claim terms and phrases from

the claims of the ’547 patent require construction for this post-grant review

proceeding. The ordinary and customary meanings should also be applied to any

claim terms not specifically addressed below.


19

Because several of the claim terms have been construed by the Eastern District

of Pennsylvania, the Central District of California, the Federal Circuit, and the Patent

Trial and Appeal Board as they arise in patents related to the ’547 patent and as they

arise in ’547 claim 18, Petitioner submits that those constructions are relevant to this

proceeding and has referenced them accordingly. In particular, the court in the AT&T

litigation construed claims from U.S. Patent Nos. 5,561,707; 5,255,309; and

5,684,863 (Ex. 1006 at 1), which all share a specification with the ’547 patent and

recite some claim terms also recited in the ’547 patent. Further, prosecution of the

’547 patent by Patent Owner was ongoing while Patent Owner was

contemporaneously briefing claim construction in the AT&T litigation. Ex. 1002 at

344 (application for ’547 patent filed on Mar. 15, 1999), 288-90 (Notice of

Allowability dated Nov. 17, 2000); Ex. 1006 (AT&T court’s claim-construction

decision issued Aug. 26, 1999). Because certain claim terms construed in that district

court action were adopted verbatim in the claims of the ’547 patent during

prosecution, the district court’s claim constructions (Ex. 1006) provide relevant and

useful information for this petition.

1. Communication Facility

The claimed “communication facility” is part of a telephone network that

enables a caller to connect to a system running an interactive voice application. The

communication facility may be publicly provided. For example, the specification


20

provides that “conventional telephone terminals . . . are coupled to a communication

facility C which may take the form of a comprehensive public telephone system for

interconnecting any associated terminals.” Ex. 1001 at 3:9-13. The specification also

states that “communication facility C has a customer billing structure B that is

interfaced by the system.” Id. at 5:43-45. Such a billing structure is characteristic of

the Public Switched Telephone Network (“PSTN”). Ex. 1003, ¶ 37. Because the

specification expressly states that the “communication facility” may take the form of

a “comprehensive public telephone system,” it should be construed as part of a

telephone network that enables a caller to connect to the claimed system.

The court in the AT&T litigation confirmed this construction, as it construed

the “communication facility” as “that part of a telephone network that enables a

caller to connect to the Katz system.” Ex. 1006 at 5-8. The court in that case further

concluded that “there is no support for a construction of ‘communication facility’ to

require that the [claimed] system be operated only outside the entire PSTN nor that

the ‘communication facility’ encompass the elements or processes of the entire

PSTN.” Id. at 8. Petitioner submits that the court’s construction is thus the ordinary

and customary meaning. See also Ex. 1013, ¶ 335 (Patent Owner’s litigation expert

acknowledging the AT&T litigation court’s construction).


21

2. Interface Structure

The “interface structure” is the hardware and software required to connect

processors upon which software is running to the communication facility. Figure 9 of

the ’547 patent shows this connection in blocks IA1-IAn and IB1-IBn.

Patent Owner’s litigation expert (No. 2:06-cv-00334 (E.D. Tex.), formerly

MDL No. 2:07-ml-01816), David Lucantoni, agreed that the “interface structure”

recited as “an interface structure coupled to said communication facility to interface

said remote terminals for voice and digital communication” is nothing more than “the

hardware and software required to connect the processors upon which the system is

running to the communications facility such that the information from the

communication facility and the remote terminals may be provided to and received by

the system.” Ex. 1013, ¶ 134. This construction comports with the district court’s


22

construction of the entire “interface structure” element as recited above in the AT&T

litigation. Ex. 1006 at 8-10.

The “interface structure” also recites a means-plus-function element under

35 U.S.C. § 112, ¶ 6. The claimed function is “provid[ing] caller data signals

representative of data relating to said individual callers provided from said remote

terminals.” The corresponding structure, as shown in Figure 9 (reproduced above),

can be any of the hardware elements implemented to connect the processors to the

communication facility, including interfaces IA1-IAn. See Ex. 1001 at Fig. 9.

Patent Owner’s litigation expert explained that “the structure in the patent

specification [corresponding to this means is] (a) interface 20, including call data

analyzer 20a; (b) Centrum 9000; or (c) one or more of interface units IA1-IAn, IB1-

IBn.” Ex. 1013, ¶¶ 340-341 (emphasis added). Thus, even Lucantoni agrees that an

“interface” that simply provides or passes data signals requires only conventional

computing equipment.

3. Record Testing Structure

The record testing structure is a processor. This claim term invokes 35 U.S.C.

§ 112, ¶ 6, according to Patent Owner’s litigation expert. Ex. 1013, ¶ 346. The

claimed function is “receiv[ing] and test[ing] said caller data signals indicative of

said terminal digital data representative of said calling telephone number and said


23

caller personal identification data against previously stored terminal digital data and

caller personal identification data,” as recited in the claims. Ex. 1001 at 23:3-8.

The specification explains that “the processor PR1 is for testing the telephone

number as valid or entitled.” Id. at 6:64-65. Further, the specification states that “the

processing operation usually involves comparison testing which compares caller data

from individual memory cells of the processors P1-Pn (FIG. 1) with test data that is

supplied through the command terminal.” Id. at 9:25-28. Accordingly, the “testing”

function is accomplished by a processor, and the claimed “record testing structure”

must therefore be construed as a processor. This construction is also consistent with

the district court’s construction in the AT&T litigation. Ex. 1006 at 15-16.

Patent Owner’s litigation expert agreed that the “record testing structure” is

nothing more than a generic processor. Ex. 1013, ¶¶ 346-347. He explained that the

corresponding structure disclosed in the specification is “(1) interface 20,

qualification unit 93, and look-up table 99; (2) Centrum 9000, qualification unit 93,

and look-up table 99; (3) processing unit 251; or (4) one or more of processors PR1-

PRn.” Id. (emphasis added). Thus, even Lucantoni supports a construction that the

“record testing structure” consists of conventional functions (receiving and testing)

performed by conventional computer equipment.


24

4. Analysis Structure

The analysis structure is simply a generic processor. According to the

specification, “major analysis is explained with reference to processors.” Ex. 1001 at

4:56-57. Figure 4 (reproduced below) is described as a “processor or function unit.”

Id. at 2:43-44.

The claims recite that the analysis structure is “for receiving and processing said

caller data signals” (id. at 23:13-15), and the specification notes various ways that

data might be processed (e.g., id. at 11:25-30). Notwithstanding that Figure 4 and the

specification describe various other possible components or functions for the

processor (e.g., qualification unit 93), claims 11 and 18 do not require an analysis


25

structure that performs any functions beyond simply “processing.” Thus, “analysis

structure” in claims 11 and 18 should be interpreted as only a generic processor.

Tomita Techs. USA, LLC v. Nintendo Co., No. 14-1244, slip op. at 9-10 & n.1 (Fed.

Cir. Dec. 8, 2014) (rejecting additional structures contained with the figure

describing an “offset presetting means” because only certain elements in the figure

contributed to the claimed function).

Patent Owner’s litigation expert agreed that the “analysis structure” is nothing

more than a generic processor—specifically, “processing unit 92.” Ex. 1013, ¶ 356.

This construction is also consistent with the district court’s construction in the AT&T

litigation (Ex. 1006 at 16) as well as the Federal Circuit’s construction (Ex. 1007 at

8-9).

This claim term invokes 35 U.S.C. § 112, ¶ 6, according to Patent Owner’s

expert. Ex. 1013, ¶ 355. The function is “receiving and processing said caller data

signals under control of said record testing structure,” as recited in the claim.

Ex. 1001 at 23:13-15. The corresponding structure, according to Patent Owner’s

litigation expert, is: “(1) interface 20; (2) Centrum 9000; (3) processing unit 251; or

(4) one or more of processors PR1-PRn.” Ex. 1013, ¶¶ 355-356 (emphasis added).

Thus, even Patent Owner’s expert supports a construction that the “analysis

structure” consists of a conventional function (receiving) of conventional computer

equipment.


26

5. Personal Identification Data

“Personal identification data” means data that is personal or specific to a

caller, that permanently identifies the caller to the world at large, and is distinct from

caller customer number data, a password, and PIN numbers. For example, the

specification states that “the processors might . . . verify identification data proffered

by a caller,” and that “[s]uch data might take the form of a credit card number or a

personal identification number.” Ex. 1001 at 9:42-45. Because “it may be important

that the caller’s identity be subject to reliable verification,” there is “a critical need

for positively verifiable identification.” Id. at 6:18-23. Accordingly, the personal

identification data must be specific to a caller to the world at large, and must be

distinct from other customer number data.

Patent Owner’s litigation expert agreed that the term “personal identification

data” means “data that is personal or specific to a caller that permanently identifies

the caller to the world at large and is distinct from caller customer number data, a

password, and PIN numbers.” Ex. 1013, ¶ 339. This construction is also consistent

with the MDL court’s construction. Ex. 1012 at 9-11.


27

VI. CLAIMS 11 AND 18 OF THE ’547 PATENT ARE UNPATENTABLE UNDER § 101

A. Legal Framework Under Alice and Its Predecessors

Patent claims to abstract ideas alone cannot be patented. Alice Corp. v. CLS

Bank Int’l, 134 S. Ct. 2347, 2352 (2014). When a patent claims abstract ideas, like

the idea of item ordering claimed in the ’547 patent, it must add “significantly more”

to be patent eligible. Id. at 2360. Adding token, nonspecific computer references, as

the ’547 patent does, makes no difference to patent eligibility. Instead, a computer-

implemented invention must “improve[] an existing technological process” or must

“improve the functioning of the computer itself” to be patent eligible. Id. at 2358-59.

B. Claims 11 and 18 of the ’547 Patent Are Directed to the Abstract Idea of Item Ordering

Claims 11 and 18 of the ’547 patent are directed to the abstract idea of item

ordering. Claim 11, from which claim 18 depends, recites a system that facilitates a

telephone-based item-ordering process using a computer. It recites no hardware or

structure other than conventional components of a general-purpose computer. Claim

18 merely adds the requirement that certain data is number data. Accordingly, claims

11 and 18 of the ’547 patent cover nothing but steps to facilitate order entry, as has

been timelessly practiced in business. Ex. 1003, ¶¶ 4-7, 52-53. Thus, as in Alice,

claims 11 and 18 attempt to cover a fundamental economic or commercial practice

long prevalent in our system of commerce. 134 S. Ct. at 2356. Indeed, the claims


28

recite receiving and testing data relating to an item being ordered—collecting,

organizing, and analyzing data, which has also been found unpatentably abstract.

See, e.g., CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1370 (Fed.

Cir. 2011) (finding the “mere collection and organization of data” insufficient to

satisfy § 101).

1. Item Ordering Is a Fundamental Economic Practice

From the beginning of modern business transactions, item-ordering processes

have relied on recording data associated with orders. Ex. 1003, ¶ 4; see also Exs.

1008, 1010, 1011. When an order is received, data about the order and ordered items

are recorded. And when an order is fulfilled, information about the fulfillment is also

recorded. Indeed, item-ordering processes require the following elements:

(1) identification of the person placing the order;

(2) identification of the item ordered;

(3) identification of an address for delivery; and

(4) recording the order.

Ex. 1003, ¶ 6. Any ordering transaction imaginable (from ordering products from a

19th century mail-order catalog to ordering a pizza to purchasing from Amazon.com

or the Home Shopping Network) requires gathering and processing this basic

information. Id. ¶¶ 5-7. Thus, the concept of item ordering, which simply refers to

facilitating the process of people ordering items in a commercial transaction, plays an


29

absolutely fundamental role in modern society and is as much a “basic building block

of human ingenuity” (CLS Bank Int’l v. Alice Corp., 717 F.3d 1269, 1286 (Fed. Cir.

2013)) as the risk hedging at issue in Bilski or the intermediated settlement at issue in

Alice. Bilski v. Kappos, 130 S. Ct. 3218 (2010); Alice, 134 S. Ct. at 2356-57.

As technology unrelated to the practice of item ordering progressed (e.g.,

telecommunications, computing, etc.), the commercial-economic practice likewise

progressed. Soon it became commonplace to order items by phone, including through

computerized telecommunication systems. Ex. 1003, ¶¶ 4-12. Despite advances in

technology, the fundamental practice of item ordering has not changed.

For example, in Michlin, a standard item order form is disclosed. Ex. 1008 at

Fig. 1.


30

The form includes positions for recording information about the item ordered,

customer name, purchase price, address, and other information, as shown.

Accordingly, the expression of order entry is directed to a fundamental

commercial-economic practice and, therefore, to an abstract idea under the guidance

of the Supreme Court in Alice. This comports with the Supreme Court’s holding that

“electronic recordkeeping” was “one of the most basic functions of a computer.” 134

S. Ct. at 2359; see also Memorandum Opinion at 20, Amdocs (Israel) Ltd. v. Openet

Telecom, Inc., No. 1:10-cv-910 (E.D. Va. Oct. 24, 2014), Dkt. No. 301 (“Collecting,


31

filtering, aggregating, and completing network information amounts to ‘electronic

recordkeeping,’ which is ‘one of the most basic functions of a computer.’” (quoting

Alice, 134 S. Ct. at 2359)).

2. Claims 11 and 18 Are Directed Only to the Abstract Idea of Item Ordering

Claims 11 and 18 can be broken into three basic functions: (1) receiving data

from a customer identifying the customer and the item to be ordered; (2) testing

received data against stored information; and (3) storing data. These three functions

are present in any item-ordering process, whether or not conducted in person, over

the phone, or over a computer. See generally Ex. 1008 (disclosing receiving data

from a customer and recording or storing it in a ledger for later use). Accordingly,

the way claims 11 and 18 are phrased, each covers virtually all item-ordering systems

and processes. Ex. 1003, ¶ 46; see also Alice, 134 S. Ct. at 2354 (emphasizing that

preemption of an idea can be a consideration to patentability). And as the Federal

Circuit recently explained, “[t]he concept of data collection, recognition, and storage

is undisputedly well-known.” Content Extraction & Transmission LLC v. Wells

Fargo Bank, Nat’l Ass’n, No. 2013-1588, slip op. at 7 (Fed. Cir. Dec. 23, 2014).

The claim elements beyond the three discussed above simply place the claimed

item-ordering process within the context of a telephone system. That has no

significance here because, like the claims in Alice or Bilski, limiting claim scope to a

particular field or application does not benefit patent eligibility. E.g., Bilski, 130


32

S. Ct. at 3231 (treating claims to hedging in commodities and energy markets the

same as the more general claims); 2014 Interim Guidance on Patent Subject Matter

Eligibility, 79 Fed. Reg. 74,618, 74,624 (Dec. 16, 2014) (advising that “generally

linking the use of the judicial exception [abstract idea] to a particular technological

environment” is insufficient to confer eligibility (citing Alice, 134 S. Ct. at 2360)).

The simple fact remains that the elements of claims 11 and 18 are those elements

present in all item-ordering processes, and thus the claims are directed to an abstract

idea. See SmartGene, Inc. v. Advanced Biological Labs., SA, 555 F. App’x 950, 955

(Fed. Cir. 2014) (nonprecedential) (holding that “abstract ideas” include claims to

methods that can be performed mentally, such as comparing new and stored

information, and using rules to identify options). The Federal Circuit has explained

that adding additional conventional hardware elements such as a scanner or computer

does not change whether a claim is drawn to an abstract concept. Content Extraction,

No. 2013-1588, slip op. at 8. Moreover, even if there were any claim elements

beyond those establishing the fundamental abstract idea, they would not change the

result because “any novelty in implementation of the idea is a factor to be considered

only in the second step of the Alice analysis.” Ultramercial, Inc. v. Hulu, LLC, 772

F.3d 709, 715 (Fed. Cir. 2014).


33

C. Claims 11 and 18 of the ’547 Patent Do Not Recite “an Inventive Concept” or “Significantly More” Than the Abstract Idea

The claims here are drafted to give the impression of tangibility, but the

Supreme Court has “long warn[ed] . . . against interpreting § 101 in ways that make

patent eligibility depend simply on the draftsman’s art.” Alice, 134 S. Ct. at 2351

(citing Mayo, 132 S.Ct. at 1294). The claims are directed to an abstract idea and lack

an “inventive concept” “sufficient to ensure that the patent in practice amounts to

significantly more than a patent upon the [abstract idea] itself.” Id. at 2355 (citations

omitted).

To be patentable, claims involving abstract concepts like fundamental

economic or business practices must contain “additional elements [sufficient to]

‘transform the nature of the claim’ into a patent-eligible application.” Alice, 134

S. Ct. at 2355 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct.

1289, 1298, 1297 (2012)). In other words, claims to abstract ideas must amount to

“significantly more than a patent upon the [ineligible concept] itself” to be patent

eligible. Id. (alteration in original) (citing Mayo, 132 S. Ct. at 1294); see also Parker

v. Flook, 437 U.S. 584, 593-94 (1978). The claims of the ’547 patent fail to meet this

standard, either when analyzing the elements of the claim individually or when doing

so as an ordered combination. Alice, 134 S. Ct. at 2355.


34

1. Claims 11 and 18 Lack an Inventive Concept Beyond Conventional Computerized Systems Used in a Conventional Business Process

Rather than add anything of significance, claims 11 and 18 of the ’547 patent

recite the basic elements of the abstract concept as performed by routine and

conventional components of a general-purpose computer. Claims that “merely

require generic computer implementation[] fail to transform [the] abstract idea into a

patent-eligible invention.” Alice, 134 S. Ct. at 2357. Even the ’547 patent itself

recognizes that the particular hardware components recited are unimportant by noting

that the entire system may be implemented on an off-the-shelf general-purpose

computer. Ex. 1001 at 4:48-51. Indeed, stating that “the processing system . . . may

be a commercially available Centrum 9000 unit” (id.) suggests that the entire

functionality of claims 11 and 18 may be implemented on a commercially available

computer. As the Supreme Court has held, claims that “can be carried out in existing

computers long in use, [with] no new machinery being necessary,” are not patent

eligible under § 101. Gottschalk v. Benson, 409 U.S. 63, 67 (1972).

The structures in claims 11 and 18 were conventional when the application

was filed and the claims recite no improvement to those structures. Instead, they

recite a configuration for performing part of a known method of ordering items. But

even where it provides a practical benefit, the use of a computer, by itself, does not

impart patent eligibility. Alice, 134 S. Ct. at 2358 (noting that “mere recitation of a


35

generic computer cannot transform a patent-ineligible abstract idea into a patent-

eligible invention”). Thus, adding what might be “an obvious mechanism for

permitting a solution to be achieved more quickly, i.e., through the utilization of a

computer for performing calculations,” does not make an otherwise-abstract claim

patent eligible, because the computer does not “impose a meaningful limit on the

scope of [the] claim.” Dealertrack, 674 F.3d at 1333 (quoting SiRF, 601 F.3d at

1333); see also Content Extraction, No. 2013-1588, slip op. at 9 (“There is no

ʻinventive concept’ in CET’s use of a generic scanner and computer to perform well-

understood, routine, and conventional activities commonly used in industry.”); Fort

Props., 671 F.3d at 1322, 1323-24 (a claim element requiring use of “a computer to

‘generate a plurality of deedshares’” did not render abstract idea patentable because

the “computer limitation [was] simply insignificant post-solution activity”); see also

CheckFree, CBM2013-00030, Paper 51 at 13-14 (noting that “specialized

programming” could not be read into the claims where it was not described by the

specification, and invaliding claims with means-plus-function limitations construed

as a computer programmed to execute steps from a flowchart—“[a] computer used

for its most basic function, the performance of repetitive calculations”). So too here,

use of a telephone entry and storage system through vaguely mentioned components

(processors and memory) does not impart patentability to the ’547 patent’s claims to

“ordering particular items.”


36

This case is distinguishable from Apple Inc. v. SightSound Technologies, LLC,

CBM2013-00019, Paper 17 (PTAB Oct. 8, 2013), a proceeding in which the PTAB

declined to institute proceedings on a ground based on § 101 because

[t]he “first memory,” “second memory,” “transmitter,” “receiver,” and “telecommunications line” components, and the specific functions performed using those components, represent meaningful limitations on the scope of the claim that take it beyond the abstract concept of selling music.

Id. at 18-19 (emphasis added). In contrast, claims 11 and 18 of the ’547 patent

do not recite any “specific structure” such as a “transmitter,” “receiver,” or

“telecommunications line” and, more significantly, does not recite any specific

function that might meaningfully limit the claim scope to something less than

the abstract concepts of order entry or item ordering. Figures 1 and 4 of the

’547 patent depict only generic computer components and applications

conventional in the telecommunications industry. Ex. 1001 at Figs. 1, 4. In

claims 11 and 18, the interface structure can be a conventional processor (id. at

Fig. 9), the record testing structure can be a conventional processor (id. at

6:63-65), the storage structure can be a conventional computer memory (id. at

6:26-28), and the analysis structure can be a conventional processor (id. at

11:25-30).

Unlike the situation in Apple v. SightSound, the elements here require only the

functionality of generic computers and processors—initiating communication,


37

transmitting data, and performing mathematical calculations. See Alice, 134 S. Ct. at

2359 (indicating that “[n]early every computer will include a ‘communications

controller’ and ‘data storage unit’ capable of performing the basic calculation,

storage, and transmission functions”). The claims fail to define any “specific

hardware” specially designed for a particular purpose, in contrast to the Board’s

finding in Apple v. SightSound. Thus, the limitations of claims 11 and 18 fail to

comprise meaningful limitations that would limit the scope of the claims and take the

claims beyond the abstract concept of item ordering.

The claims here are also different from those at issue in DDR Holdings, LLC v.

Hotels.com, L.P., --- F.3d ---, No. 2013-1505, 2014 WL 6845152 (Fed. Cir. Dec. 5,

2014). In DDR Holdings, the Federal Circuit held that claims to a system and method

for presenting information on Web pages were patent eligible because both the

problem and solution were rooted in the computer technology itself. Id. at *10.

Unlike the claims in DDR Holdings, where “the claimed solution [was] necessarily

rooted in computer technology in order to overcome a problem specifically arising in

the realm of computer networks,” claims 11 and 18 “merely recite the performance

of some business practice known from the pre-[PSTN] world along with the

requirement to perform it on the [PSTN].” Id. (substituting “Internet” with “PSTN”).

Both the item-ordering process and the claimed solution existed long before claims

11 and 18, i.e., using a conventional telephone system for data collection within the


38

item-ordering process. Claims 11 and 18 require no new technology, combinations of

technology, or even specialized programming of existing technology, and thus stand

in stark distinction from the unique-to-the-Internet claims at issue in DDR Holdings.2

Patent owners faced with § 101 challenges like this typically argue that: (1) a

computer (or some other generic device) is used in a specific way to perform the

claims and implements the integral steps of the claims; (2) practicing the invention

without a computer is impossible because it would require too much manpower and

overhead for personnel; and (3) while a computer was well known or generic, using a

specially programmed computer in the way claimed by the ’547 patent was not

generic or known at the time. Even if asserted here, these arguments fail under the

Alice framework for analyzing § 101 issues. That the abstract idea implemented on a

computer allows for more or faster processing is not the crux of the patentability

analysis. See SiRF, 601 F.3d at 1333 (“In order for the addition of a machine to

impose a meaningful limit on the scope of a claim, it must play a significant part in

permitting the claimed method to be performed, rather than function solely as an

obvious mechanism for permitting a solution to be achieved more quickly, i.e.,

through the utilization of a computer for performing calculations.”). The computer

2 The panel’s decision in DDR Holdings drew a strong dissent, signaling that not all

Federal Circuit judges agree even with the majority’s distinction.


39

and components (central processor) described in the ’547 patent specification are

generic. The Supreme Court has explained that

what petitioner characterizes as specific hardware—a “data

processing system” with a “communications controller”

and “data storage unit,” . . . is purely functional and

generic. Nearly every computer will include a

“communications controller” and “data storage unit”

capable of performing the basic calculation, storage, and

transmission functions required by the method claims. See

[CLS Bank v. Alice Corp.,] 717 F.3d, at 1290 (Lourie, J.,

concurring). As a result, none of the hardware recited by

the system claims “offers a meaningful limitation beyond

generally linking ‘the use of the [method] to a particular

technological environment,’ that is, implementation via

computers.” Id., at 1291 (quoting Bilski, 561 U.S., at 610-

611, 130 S.Ct. 3218).

Alice, 134 S. Ct. at 2360 (emphasis added) (alteration in original) (citation omitted).

That the system of claims 11 and 18 recites a “record testing structure,” a “storage

structure,” and an “analysis structure” does not change the analysis, as only generic

computers and components are disclosed in the specification. Memorandum Opinion

at 15, Intellectual Ventures I LLC v. Mfrs. & Traders Trust Co., No. 1:13-cv-01274

(D. Del. Dec. 18, 2014), Dkt. No. 27 (citing In re Katz, 639 F.3d at 1316 (Ex. 1007 at

8) (in analyzing means-plus-function claims, finding that “the functions of


40

‘processing,’ ‘receiving,’ and ‘storing’ are coextensive with the structure disclosed,

i.e., a general purpose processor,” such “functions can be achieved by any general

purpose computer without special programming”)).

Additionally, although the ’547 patent specification defines multiple uses for

the telephone entry and storage system, some of which may embody specific

structures or functionality, claims 11 and 18 fail to require any such components

other than a general-purpose computer or processor. See Ex. 1001 at 5:25-29. The

specification confirms that the method embodied in claims 11 and 18 may be

performed on conventional computing components, as it describes that “the

arrangement of the function unit (or units) may be variously embodied in a single

processor or many processors, depending on various considerations as time sharing,

multiplexing, paralleling and so on.” Id. at 21:22-25. Accordingly, the elements of

claims 11 and 18 are intended by the patentee to be implemented on a general-

purpose computer with conventional processors. Indeed, the district court in the

AT&T litigation, when it construed “interface structure,” remarked that the structure

connects “the processors upon which the [interactive voice application] is running to

the communication facility.” Ex. 1006 at 10; see supra at 21, Section V.C.2. The

court did not identify any specialized hardware that might be required to run the

“interactive voice application,” showing that it viewed the system as essentially

software without limitation to a particular machine.


41

“[S]imply appending conventional steps, specified at a high level of generality,

to laws of nature, natural phenomena, and abstract ideas cannot make those laws,

phenomena, and ideas patentable . . . .” Mayo, 132 S. Ct. at 1300. Here, the ’547

patent claims nothing more than elements of an abstract concept for order entry using

an arrangement of generic, conventional computer components well known at the

time of filing:

(1) connecting to a “communication facility”;

(2) “receiv[ing] and test[ing]” signals indicative of data (numeric data);

(3) “stor[ing]” data for ordering an item; and

(4) “receiving and processing” signals.

Although the claim language appears to recite a “structure” for each of these claimed

elements, each recited structural element amounts to no more than generic and

conventional components of a general-purpose computer. Moreover, the structure

associated with storing “item data” for ordering does not have any claimed functional

or structural association with any other structural element of claims 11 and 18.

a. The “Interface Structure” Is Conventional

The first element of claims 11 and 18 is an “interface structure coupled to said

communication facility to interface said remote terminals for voice and digital

communication.” The interface structure is hardware and software required to

connect the processors upon which the claimed system is running to the


42

communication facility. See supra at 21. A district court has confirmed that it is

merely a generic component, namely, “the hardware and software required to

connect the processors upon which the [interactive voice application] is running to

the communication facility.” Ex. 1006 at 10. This hardware and software are nothing

but conventional technology. Ex 1001 at 3:52-55 (“[T]he communication facility C

comprises a public telephone network and the individual terminals T1–Tn take the

various forms of existing traditional or conventional telephone instruments.”).

Indeed, the interface structure is much like the “communications controller” relied on

by the patentee in Alice, which offered no benefit to patentability because such a

“purely functional and generic” component had such widespread presence in generic

hardware. 134 S. Ct. at 2360. Indeed, telephonic data systems, which Patent Owner

cannot claim to have invented, necessarily include an interface structure. Ex. 1003,

¶¶ 13-33.

Further, no other component of the “interface structure” makes use of any

nonconventional technology. The “remote terminals,” as recited in the claims, are

conventional touchtone telephones. Ex. 1001 at 3:8-13 (“[T]he remote terminals T1

through Tn represent the multitude of conventional telephone terminals that are

coupled to a communication facility C . . . .”). The specification also indicates that

the “alphabetic numeric buttons” are, in fact, the twelve-button array of a

conventional touchtone telephone. Id. at 3:64-66 (“In accordance with conventional


43

telephone practice, alphabetic and numeric designations are provided on the buttons

14.”).

The claims recite a system for use with a “communication facility” and not the

facility itself. In fact, this was the court’s construction in the AT&T litigation.

Ex. 1006 at 5-8. Thus, whether a “communication facility” is or is not a special

machine or device is not a relevant inquiry for the patent-eligibility analysis in this

instance.

The specification also instructs that the telephonic “communication facility”

can include the PSTN (see Ex. 1001 at 3:8-13), and a court has confirmed that the

“communication facility” may operate within the PSTN, either partially or wholly

(Ex. 1006 at 5-8). Given the lack of specificity, such claim scope confirms that the

interface structure is nothing more than a combination of generic computing

components. Ex. 1003, ¶¶ 32-33.

For example, the claim element recites “including means to provide caller data

signals representative of data relating to said individual callers provided from said

remote terminals.” Because touchtone signals are analog signals carried over the

voice channel, the PSTN necessarily includes structures capable of providing “caller

data signals representative of data” entered by callers using touchtone telephones.

Moreover, the transmission of audio signals is a conventional function of the PSTN

communication facility. Id. The claim element goes on to recite “including means to


44

provide caller data signals representative of data relating to said individual callers . . .

automatically provided from said communication facility.” The PSTN includes

structures capable of providing “caller data signals . . . automatically provided by the

communication facility.” The provision of these caller data signals (often referred to

as ANI signals) is a conventional function of the PSTN communication facility, as all

interconnections to the PSTN central offices must carry the calling telephone

number, or ANI. Id. ¶ 8.

The PSTN is a long-standing network of structures for interfacing

telecommunications systems. Id. ¶¶ 8-11, 37. And as the district court in the AT&T

litigation has held, the claimed “communication facility” may operate within the

PSTN, either partially or wholly. Ex. 1006 at 5-8. Thus, the interface structure may

properly read on the prior-art PSTN. Ex. 1003, ¶¶ 32-33, 37; Ex. 1001 at 3:51-53.

Accordingly, because there is nothing in claims 11 and 18 that distinguishes

the “interface structure” from preexisting, long-standing, conventional phone-

network structures, the “interface structure” alone fails to provide any basis for

concluding that the claim requires anything more than generic general-purpose

hardware. Accordingly, an interface structure, such as that recited in claims 11 and

18, and construed as “hardware and software required to connect the processors upon

which the [interactive voice application] is running to the communication facility,”

fails to provide any basis for concluding that the claim requires any structure other


45

than a conventional general-purpose computer implementing an item-ordering

concept.

b. The “Record Testing Structure” Is Conventional

Claims 11 and 18 also recite a “record testing structure” to receive and test

“signals indicative of” the calling telephone number and the “caller personal

identification data” against previously stored “terminal digital data and personal

identification data.” The record testing structure is a processor. The court in the

AT&T litigation has also construed this term to include the structural elements of “the

Processing Unit 96, the Qualification Unit 93, and the Look–Up Table 99 in Figure

4. See Column 10, lines 1 through 25 of the ‘707 patent.” Ex. 1006 at 15-16. Patent

Owner’s litigation expert, Lucantoni, also agreed that the corresponding structure is

“(1) interface 20, qualification unit 93, and look-up table 99; (2) Centrum 9000,

qualification unit 93, and look-up table 99; (3) processing unit 251; or (4) one or

more of processors PR1-PRn.” Ex. 1013, ¶¶ 346-347 (emphasis added). The

specification confirms that this component is a conventional processor by noting that

“processing unit 92 may take the form of a minicomputer.” Ex. 1001 at 9:59-67

As described by the Supreme Court in Alice, it is a conventional “use of a

computer to obtain data, adjust account balances, and issue automated instructions.”

134 S. Ct. at 2359. That is exactly what the “record testing structure” requires. The

record testing structure “receive[s] . . . signals indicative of . . . data,” “obtains data,”


46

and thereby further “test[s] . . . signals . . . indicative of . . . data . . . against

previously stored . . . data.” Ex. 1001 at 23:3-8. The construction of this claim term

as a processor further proves that the “record testing structure” recites nothing more

than general-purpose computing hardware implementing generic functions—a

processor that receives and tests signals indicative of data. It is not a technical

innovation. Ex. 1003, ¶¶ 34-37.

c. The “Storage Structure” Is Conventional

Claims 11 and 18 further recite a “storage structure.” There can be no genuine

question that the recited “storage structure” is merely a conventional computer-

memory component. Id. ¶ 38. Computer memory, or storage, is one of the most basic

components of any general-purpose computer. Figure 4, reproduced below, confirms

that the “storage structure” is nothing more than “memory” unit 98, connected to the

processing unit. See also Ex. 1001 at 13:4-5 (“[D]ata for the transaction is

established in the buffer 97 then set in a cell of the memory 98 (FIG. 4).”). Thus, the

storage structure comprises nothing more than a generic computer memory for use

with a conventional processor. As such, it contributes nothing to the patentability of

claims 11 and 18. Alice, 134 S. Ct. at 2360 (holding that a “data storage unit” did not

make the claim at issue less abstract because it was a component of nearly every

computer).


47

d. The “Analysis Structure” Is Conventional

Lastly, the claims recite an “analysis structure for receiving and processing

said caller data signals under control of said record testing structure.” The analysis

structure is a processor. In fact, even on its face, this element recites conventional

functionality of a computer: receiving and processing signals. As described above,

even Patent Owner’s litigation expert agrees that the analysis structure structurally

corresponds to “Processing Unit 92.” See supra at 24, Section V.C.4. “Processing

Unit 92” comprises merely a generic processor for receiving and analyzing data and

signals. Ex. 1003, ¶ 39. In other words, “processing unit 92” performs the same


48

functions that computers have always performed; those conventional functions,

performed by conventional and generic hardware, cannot contribute to patentability.

The specification confirms that this component is a conventional processor by

noting that “processing unit 92 may take the form of a minicomputer.” Ex. 1001 at

9:59-61. Because the analysis structure is nothing more than a generic processor that

may take the form of a conventional minicomputer to perform standard computer

processing, it adds nothing significant to the claim and fails to salvage the claims’

eligibility.

In sum, claims 11 and 18 are directed to only a basic economic activity (item

ordering) performed using routine and conventional components. They are not patent

eligible under 35 U.S.C. § 101 and should be cancelled.

2. Even as a Combination, Claims 11 and 18 Do Not Recite or Use Computer Components in a Patent-Eligible Way

In addition to considering the inventive concept of each component,

patentability also considers whether the claimed combination of elements adds

something not present when the elements were considered separately. Alice,

134 S. Ct. at 2359. It is possible, for example, that a claim requiring only

conventional computer components could nonetheless improve the functionality of a

computer itself or effect an improvement in another technical field. Id. at 2359-60.

Claims 11 and 18 do neither.


49

a. The ’547 Patent Does Not Improve the Functionality of the Computer

Claims 11 and 18 of the ’547 patent do not improve the functionality of the

computer itself. They recite no new structure or hardware not previously known in

the art. Ex. 1003, ¶¶ 50-52. Rather, as discussed above, the claims recite nothing

more than generic computing elements. See supra at 8, Section IV.C; Ex. 1003, ¶¶

50-52. Indeed, the specification itself acknowledges that the disclosed system “may

be [implemented on] a commercially available Centrum 9000 unit.” Ex. 1001 at

4:48-51. As a “commercially available” element, the Centrum 9000 shows that the

claim requires only conventional hardware. See Alice, 134 S. Ct. at 2359.

Moreover, claims 11 and 18 are devoid of any recitation of new functions that

could be construed as an improvement to software. Rather, claims 11 and 18 require

only conventional software. As set forth above (see supra at 33, Section VI.C), the

recited functions are simply the generic functions of “provid[ing] caller data signals,”

“receiv[ing] and test[ing] said caller data signals indicative of . . . data . . . against

previously stored . . . data,” “storing certain . . . data,” and “receiving and processing

said caller data signals.” Further still, the claim recites no meaningful link or

relationship between the “receiving,” “processing,” and “test[ing]” of signals

indicative of data, and the economic activity of “ordering particular items.” These

two aspects of claims 11 and 18 are completely adrift of each other.


50

If the system can be implemented on a commercially available computer with

conventionally available software, it cannot rightfully claim to have improved the

functionality of computers. Alice, 134 S. Ct. at 2359. As discussed, claims 11 and 18

allow for implementations described in the specification as using conventional

processors with straightforward software. Therefore, claims 11 and 18 of the ’547

patent fail to recite “significantly more” than the abstract concept by improving the

functioning of the computer itself. There can be no question that claims 11 and 18

provide no improvement to computers.

b. The ’547 Patent Does Not Improve the Technology in Another Technical Field

The ’547 patent does not improve the technology in another technical field.

Although the ’547 patent is loosely related to the field of telecommunications, claims

11 and 18 provide no innovation in that field. Rather, the claims recite only known

components (e.g., telephones, computers, etc.) with only a peripheral connection to

the well-known, fundamental economic concept of item ordering.

In Alice, the representative method claim at issue “require[d] the use of a

computer to create electronic records, track multiple transactions, and issue

simultaneous instructions,” which were deemed to be purely conventional functions

of generic computers. 134 S. Ct. at 2359 (“Taking the claim elements separately, the

function performed by the computer at each step of the process is ‘[p]urely

conventional.’” (alteration in original) (quoting Mayo, 132 S. Ct. at 1298)). When a


51

computer is used to perform conventional functions of a computer, the state of

technology has not been advanced. Instead, such claims simply invoke “well-

understood, routine, conventional activity,” which does not make an idea eligible for

patent protection. Mayo, 132 S. Ct. at 1298.

Like the claims of Alice, claims 11 and 18 of the ’547 patent employ

conventional technology in a business/financial field. As discussed above, claims 11

and 18 contain only four main functional elements: (1) connecting to a telephone

system; (2) receiving and testing signals indicative of data (numeric data); (3) storing

data for ordering an item; and (4) receiving and processing signals. Moreover, the

recitation of the third functional element, storing data for ordering an item, is only

peripherally connected to any of the other recited structures or functions. As each of

these elements is directed to the functionality of a general-purpose computer, it does

nothing more than recite well-known technology already known and used in the field

of telecommunications. Ex. 1003, ¶¶ 50-52. Indeed, like the elements in Alice—

“(a) creating a shadow credit record and a shadow debit record . . . ; (b) obtaining

. . . a start-of-day balance for each . . . record; (c) . . . adjusting each respective

party’s . . . record . . . , and (d) . . . instructing [an] exchange institution[],” 134 S. Ct.

at 2352 n.2 (citation omitted)—each of the elements in claims 11 and 18 requires

only conventional functionality of a generic computer. The claims use a computer to

merely receive and test signals, store data, and process received signals. See id. at


52

2359. Thus, nothing in these claimed elements goes beyond a conventional computer,

and therefore provides no technical innovation to the field of telecommunications.

For example, the ’547 patent specification is littered with technical jargon

including “ANI” and “DNIS,” although these specifics were left out of claims 11 and

18. Each of these acronyms, although technical in nature, refers to technology and

functionality well established before the earliest effective filing date of claims 11 and

18. Ex. 1003, ¶¶ 5, 8-11. Specifically, the use of ANI and DNIS signals (which

provide calling-number and called-number information, respectively) had been in use

for well over a century, as such signals were necessary in the billing and routing

functions of telephone-company systems. Id. ¶¶ 8-11. According to the plain

meaning of the phrase, the recitation in claims 11 and 18, “receiv[ing] and test[ing]

said caller data signals indicative of said [ANI] . . . against previously stored [ANI],”

does not put ANI to any use other than the everyday use it has been put to for over a

century for purposes of billing and routing: receiving and testing against previously

stored ANI. Moreover, the claims’ recited use of ANI is completely peripheral to all

other activity in the claims because they define no connection between the

“receiv[ing] and test[ing]” of signals and any other activity associated with item

ordering. Because the only such technical jargon that can potentially be associated

with claims 11 and 18 is ANI (through the broader claim term “terminal digital data

indicative of a calling telephone number” that encompasses more than ANI), and


53

because ANI was well known and used at the time of the claim, there is no

improvement to the technical field associated with claims 11 and 18.

Because claims 11 and 18 of the ’547 patent are directed to an abstract concept

and fail to recite “significantly more” than that abstract concept (by failing to either

improve the functioning of a computer or improve the technology of another

technical field), they are patent ineligible under § 101 and should be cancelled.

3. Claims 11 and 18 Also Fail the Alternative Machine-or-Transformation Test for Patent Eligibility

Although the framework described above most directly applies to determine

the patent eligibility of abstract ideas, claims 11 and 18 fail regardless of the test

applied. Of note is the “machine or transformation” test, which can be a “useful and

important clue” to patent eligibility. Bilski, 130 S. Ct. at 3227.

Patent Owner could not argue that claims 11 and 18 recite a physical

transformation. Moreover, they do not recite a transformation of any type. Merely

gathering data, testing it against stored information, and storing data (see supra at 31,

Section VI.B.2) does not require a transformation even of data. And regardless, even

a transformation of data falls short of the transformation required to establish patent

eligibility. Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344,

1351 (Fed. Cir. 2014) (“Without additional limitations, a process that employs

mathematical algorithms to manipulate existing information to generate additional

information is not patent eligible.”).


54

Claims 11 and 18 fail the “particularity” requirement of the machine prong of

the machine-or-transformation test because the specification instructs that generic

hardware and conventional functionality suffices in the claimed system. See supra at

33, Section VI.C.

VII. CLAIMS 11 and 18 OF THE ’547 PATENT ARE UNPATENTABLE UNDER § 103

A. The Level of Skill in the Art at the Time of Invention

As of the February 24, 1987 priority date asserted by Patent Owner for claim

18,3 a person of ordinary skill in the art would have in-depth working knowledge of

telephone networks, which would typically require a degree in Electrical Engineering

or Computer Science or the equivalent, and three to four years of experience in the

field.

B. The Combination of Jordan and Michlin renders Claims 11 and 18 Obvious

U.S. Patent No. 4,313,035 to Jordan (“Jordan,” Ex. 1009) issued on January

26, 1982. Because the earliest priority date for claims 11 and 18 of the ’547 patent is

February 24, 1987, the publication date of Jordan is more than a year prior to the

3 Reexam No. 90/013,182, Response by Patentee to Non-Final Office Action in Ex Parte Re-Examination, Aug. 18, 2014, at 6 (asserting a priority date of February 24, 1987 for the ’547 patent).


55

earliest effective filing date of claims 11 and 18. Jordan is therefore prior art under

pre-AIA § 102(b).

Jordan discloses a system that provides a person with a telephone number that

can be used to call the person regardless of their physical location. Ex. 1009 at 2:65-

3:3. The system of Jordan allows an individual to provide updated location and call-

routing information from any location in the United States.

U.S. Patent No. 4,191,402 to Michlin (“Michlin,” Ex. 1008) issued on March 4,

1980. Because the earliest priority date for claims 11 and 18 of the ’547 patent is

February 24, 1987, the publication date of Michlin is more than a year prior to the

earliest effective filing date of claims 11 and 18. Michlin is therefore prior art under

pre-AIA § 102(b).

Michlin discloses an order-entry form that may be used for recording an order

of an item by a consumer. Ex. 1008. Although the system in Michlin is not

automated, it discloses the recording of customer data, including numeric data, in

relation to item ordering. Figure 1 of Michlin, displaying the order-entry system, is

shown below.


56

Id. at Fig. 1. Particularly, Michlin discloses the storing of information related to an

ordered item, and because the system of Michlin is a ledger, the stored data entries

can be referred back to as needed. Id.

As further detailed in the claim charts and discussion below, the combination of

Jordan and Michlin discloses all elements of claims 11 and 18 of the ’547 patent in a

predictable combination and therefore renders these claims obvious. See Exs. 1008,

1009; Ex. 1003, ¶¶ 55-73.


57

1. Jordan and Michlin Teach Every Feature of Claims 11 and 18

As shown in the chart below, all features of claims 11 and 18 are taught by the

combination of Jordan and Michlin. See also Ex. 1003, ¶¶ 55-72. Although Jordan

discloses the majority of features of claim 11, any deficiencies found in the

disclosure of Jordan are remedied by the disclosures of Michlin.

Jordan discloses all of the structural elements that are claimed to make up the

“analysis control system,” and discloses that all of these structural elements are for

use with a communication facility (e.g., telephone system) including remote

terminals (e.g., calling party device) for individual callers (e.g., calling party),

wherein each of said remote terminals comprises a telephonic instrument including a

voice communication device and digital input device in the form of an array of

alphabetic numeric buttons for providing data and wherein said communication

facility has a capability to automatically provide terminal digital data, indicating a

calling telephone number (e.g., ANI). Id. ¶¶ 56-57.

’547 Claims 11/18 Exemplary Disclosure 11. [11.0] An analysis control system for use with a communication facility

Ex. 1009 at 2:67-3:7 (“The method is implemented in a stored program controlled telephone system having a centralized data base . . . . Information specifying the status of a telephone subscriber for call completing is stored at the centralized data base. The information includes a call completion number for completing calls to the subscriber . . . .”). Id. at 3:7-14 (“The status information may be modified at any time over a telephone and data communications


58

network connection under direct control of the subscriber. The status information at the data base under the control of the subscriber includes a plurality of indications that specify, in general, that the subscriber is unavailable for receiving calls.”).

including remote terminals for individual callers, wherein each of said remote terminals comprises a telephonic instrument including a voice communication device and digital input device in the form of an array of alphabetic numeric buttons for providing data and wherein said communication facility has a capability to automatically provide terminal digital data, indicating a calling telephone number, said analysis control system comprising:

Id. at 3:28-32 (“A calling party alerted that a called subscriber is unavailable may request, by keying-in a special code from his station, that the subscriber return the call. In response to the special code, the caller’s station number is transmitted to and stored at the data base.”). Id. at 3:33-41 (“At any time the subscriber may initiate an inquiry telephone call to the data base from any station to determine if any return call, or callback, requests are present. The stored numbers of parties that have requested callback are returned to a telephone office associated with the subscriber’s inquiry call, preferably one at a time. The subscriber may ignore any such request or, if he wishes, have the telephone office automatically complete any one or all of the calls.”).

Jordan discloses an interface structure (e.g., element 58 of Figure 6) coupled to

said communication facility (e.g., data base) to interface said remote terminals (e.g.,

calling device 11 of Figures 1 and 6) for voice and digital communication and


59

including means to provide caller data signals (e.g., touchtones) representative of

data relating to said individual callers (e.g., Person Locator Number (PLN) and call

completion numbers) provided from said remote terminals (e.g., calling parties) or

automatically provided by the communication facility with respect to the remote

terminals (e.g., ANI) prior to the close of communication with the callers, including

caller personal identification data (e.g., Person Locator Number (PLN) and status

information) entered by the caller via the digital input device and said terminal

digital data indicative of a calling telephone number (e.g., call completion number

transmitted as ANI data). Ex. 1003, ¶¶ 58-60.

[11.1] interface structure coupled to said communication facility to interface said remote terminals for voice and digital communication and including means to provide caller data signals representative of data relating to said individual callers provided from said remote terminals or automatically provided by the communication facility with respect to the remote terminals prior to the close of communication with the caller, including caller

Ex. 1009 at 3:3-7 (“Information specifying the status of a telephone subscriber for call completing is stored at the centralized data base. The information includes a call completion number for completing calls to the subscriber . . . .”).

Id. at 3:7-14 (“The status information may be modified at any time over a telephone and data communications network connection under direct control of the subscriber. The status information at the data base under the control of the subscriber includes a plurality of indications that specify, in general, that the subscriber is unavailable for receiving calls.”).

Id. at 3:28-32 (“A calling party alerted that a called subscriber is unavailable may request, by keying-in a special code from his station, that the subscriber return the call. In response to the special code, the caller’s


60

personal identification data entered by the caller via the digital input device and said terminal digital data indicative of a calling telephone number;

station number is transmitted to and stored at the data base.”).

Id. at 3:33-41 (“At any time the subscriber may initiate an inquiry telephone call to the data base from any station to determine if any return call, or callback, requests are present. The stored numbers of parties that have requested callback are returned to a telephone office associated with the subscriber’s inquiry call, preferably one at a time. The subscriber may ignore any such request or, if he wishes, have the telephone office automatically complete any one or all of the calls.”).

Id. at 16:62-64 (“forwarding to the centralized data base a telephone number and a person locator number received on a person locator update call from a first station”). Id. at 4:24-27 (“The PLN [Personal Locator Number] is assumed to have been assigned to subscriber A when he initially subscribed to the service. Illustratively, the PLN is assumed to be a seven digit number personally identifying him.”). Id. at 9:30-34 (“If local office 50 has Automatic Number Identification (ANI) and has supplied TSPS 51 with the number of station 11, the announcement might be . . . .”).

Jordan discloses a record testing structure (e.g., Traffic Service Position

System (TSPS) 23) connected to receive and test said caller data signals indicative of

said terminal digital data representative of said calling telephone number (e.g., ANI)


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and said caller personal identification data (e.g., PLN) against previously stored

terminal digital data and caller personal identification data (e.g., stored ANI data for

purposes of routing and billing in a conventional PSTN, and stored PLN data

associated with the caller). Ex. 1003, ¶¶ 61-62.

[11.2] record testing structure connected to receive and test said caller data signals indicative of said terminal digital data representative of said calling telephone number and said caller personal identification data against previously stored terminal digital data and caller personal identification data;

Ex. 1009 at 3:28-32 (“A calling party alerted that a called subscriber is unavailable may request, by keying-in a special code from his station, that the subscriber return the call. In response to the special code, the caller’s station number is transmitted to and stored at the data base.”).

Id. at 3:33-41 (“At any time the subscriber may initiate an inquiry telephone call to the data base from any station to determine if any return call, or callback, requests are present. The stored numbers of parties that have requested callback are returned to a telephone office associated with the subscriber’s inquiry call, preferably one at a time. The subscriber may ignore any such request or, if he wishes, have the telephone office automatically complete any one or all of the calls.”). Id. at 4:50-57 (“A TSPS is an operator and automatic services facility . . . . It comprises a processor, memory, software program, switching network, and other equipment for automatically handling certain types of calls.”). Id. at 9:30-34 (“If local office 50 has Automatic Number Identification (ANI) and has supplied TSPS 51 with the number of station 11, the announcement might


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be . . . .”).

Jordan discloses a storage structure (e.g., centralized data base) for storing

certain of said data provided by said individual callers (e.g., PLN, callback number,

status information, and call completion number). Although Jordan does not expressly

disclose that the data provided by said individual callers include item data for

ordering particular items, Michlin discloses this explicitly. For example, Michlin

discloses that the order sheet “includes an item space 17 for receiving information

concerning an ordered item, a name and address space 18 for identifying a

customer ordering the item, a space 19 for indicating the time of ordering, a space 20

to indicate the telephone number of the customer, a space 21 for ordering additional

items, for example, soft drinks and finally a space 22 for the total price of the ordered

items.” Ex. 1008 at 3:16-26 (emphasis added). Accordingly, Michlin teaches that

“[the] data provided by said individual callers includes item data for ordering

particular items,” as recited in the claim. See also Ex. 1003, ¶¶ 63-68.

[11.3] storage structure for storing certain of said data provided by said individual callers including item data for ordering particular items; and

Ex. 1009 at 3:3-7 (“Information specifying the status of a telephone subscriber for call completing is stored at the centralized data base. The information includes a call completion number for completing calls to the subscriber . . . .”).

Id. at 3:7-14 (“The status information may be modified at any time over a telephone and data communications


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network connection under direct control of the subscriber. The status information at the data base under the control of the subscriber includes a plurality of indications that specify, in general, that the subscriber is unavailable for receiving calls.”).

Id. at 4:50-57 (“A TSPS is an operator and automatic services facility . . . . It comprises a processor, memory, software program, switching network, and other equipment for automatically handling certain types of calls.”).

Ex. 1008 at Fig. 1.

Id. at 3:16-26 (“As shown in FIG. 1, the face sheet 11


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includes an ordered array of sets of designated spaces 16 which are preprinted and disposed in horizontal fashion. For example, each set of spaces includes an item space 17 for receiving information concerning an ordered item, a name and address space 18 for identifying a customer ordering the item, a space 19 for indicating the time of ordering, a space 20 to indicate the telephone number of the customer, a space 21 for ordering additional items, for example, soft drinks and finally a space 22 for the total price of the ordered items.”).

Jordan discloses an analysis structure (e.g., processor) for receiving and

processing said caller data signals (e.g., subscriber inquiry call) under control of said

record testing structure. Ex. 1003, ¶¶ 69-70.

[11.4] analysis structure for receiving and processing said caller data signals under control of said record testing structure.

Ex. 1009 at 3:33-41 (“At any time the subscriber may initiate an inquiry telephone call to the data base from any station to determine if any return call, or callback, requests are present. The stored numbers of parties that have requested callback are returned to a telephone office associated with the subscriber’s inquiry call, preferably one at a time. The subscriber may ignore any such request or, if he wishes, have the telephone office automatically complete any one or all of the calls.”). Id. at 9:30-34 (“If local office 50 has Automatic Number Identification (ANI) and has supplied TSPS 51 with the number of station 11, the announcement might be . . . .”).


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Claim 18 adds one limitation to those of claim 11: “wherein the data

identifying the order is number data.” Michlin discloses this feature. Ex. 1003, ¶ 71.

In Michlin, many of the categories of data provided to “identify the order”

include “number data.” For example, and likely most commonly, the customer’s

telephone number may be used to identify the order, and this comprises “number

data. Id. Further, the customer’s address may also be used to “identify the order” and

it also is “number data.” Id. The time the order was placed may also be used to

“identify the order” and also is “number data.” Id. Any one of these disclosures from

Michlin satisfies the limitation of claim 18. Id.

wherein the data identifying the order is number data

Ex. 1008 at 3:20-26 (“[A] name and address space 18 for identifying a customer ordering the item, a space 19 for indicating the time of ordering, a space 20 to indicate the telephone number of the customer, a space 21 for ordering additional items, for example, soft drinks and finally a space 22 for the total price of the ordered items.”).

Thus, based on the foregoing charts and arguments, the combination of Jordan

and Michlin teaches each and every feature of claims 11 and 18, and therefore render

claims 11 and 18 obvious under 35 U.S.C. § 103. Ex. 1003, ¶¶ 55-72.


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2. The Combination of Jordan and Michlin Is Obvious

It would have been obvious to one skilled in the art at the time of the alleged

invention of the ’547 patent to combine the teachings of Jordan and Michlin, and this

combination renders obvious claims 11 and 18 of the ’547 patent. Id. ¶ 73.

Because telephone ordering was already commonplace at this time, it would

have been obvious to one of skill in the art to implement the systems of Jordan in

commercial transactions, such as those disclosed in Michlin. See id. Indeed, data

entry is an essential activity in financial/business transactions. Id. ¶¶ 4, 6-7.

Additionally, telephone-based contact information that enables a caller to be

contacted based upon a unique, publicly available telephone number associated with

the caller regardless of the customer’s physical location is useful if the commercial

transaction is item ordering. A merchant taking orders for items over a telephone

would be motivated to record telephone-based contact information for a caller, such

as a PLN, because that would permit the merchant to contact the caller regarding the

order regardless of the physical location of the caller. Thus, the features of location-

independent, telephone-based contact information and remote data entry are

invaluable to the process of item ordering over a telephone, and it would have been

obvious to one skilled in the art to combine such features in an item-ordering system.

Id. ¶ 73.


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VIII. CONCLUSION

For the foregoing reasons, claims 11 and 18 of the ’547 patent are

unpatentable. Petitioner therefore requests that a post-grant review of these claims be

instituted under 35 U.S.C. § 324.

The undersigned attorneys welcome a telephone call should the Office have

any requests or questions. If there are any additional fees due in connection with the

filing of this paper, please charge the required fees to our Deposit Account

No. 06-0916.


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Respectfully submitted,

Dated: January 12, 2015 By: /Jeffrey A. Berkowitz/ Jeffrey A. Berkowitz Reg. No. 36,743 Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Two Freedom Square 11955 Freedom Drive Reston, VA 20190-5675 Telephone: 571.203.2710 Facsimile: 202.408.4400 Email: [email protected] James J. Boyle Reg. No. 46,570 Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Two Freedom Square 11955 Freedom Drive Reston, VA 20190-5675 Telephone: 571.203.2724 Facsimile: 202.408.4400 Email: [email protected]

CERTIFICATE OF SERVICE

The undersigned certifies that the foregoing Petition for Post-Grant Review

Under 35 U.S.C. § 321 and § 18 of the Leahy-Smith America Invents Act was

served on January 12, 2015, by Express Mail at the following addresses of record

for the subject patent. The associated Exhibits 1001 through 1021 and Power of

Attorney were served along with the Petition.

Erik Milch Frank Pietrantonio

Cooley LLP ATTN: Patent Group

1299 Pennsylvania Avenue, NW Suite 700

Washington, DC 20004

Date: January 12, 2015

/Ashley F. Cheung/ Ashley F. Cheung Case Manager

FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, L.L.P.

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