Patent Docs

LendingTree, LLC v. Zillow, Inc. (Fed. Cir. 2016)

July 25, 2016

Claims of Another "Loan Application" Patent Invalidated under Section 101

By Joseph Herndon —

In a nonprecedential opinion issued earlier today, the Federal Circuit invalidated claims under 35 U.S.C. § 101 that had survived the District Court in LendingTree, LLC, v. Zillow, Inc., Nextag, Inc., & Adchemy, Inc. This case is eerily similar both in terms of subject matter and outcome as the Federal Circuit's recent decision in Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1318 (Fed. Cir. 2016). Both cases involved loan application software patents, and both had claims held invalid under 35 U.S.C. § 101. The Federal Circuit's analysis here, by comparing claims-in-suit being challenged under section 101 to prior claims held invalid, continues to be the strongest evidence considered by the Court when analyzing patentable subject matter.

LendingTree filed suit against Zillow and other defendants in the U.S. District Court for the Western District of North Carolina, asserting claims of U.S. Patent Nos. 6,385,594 and 6,611,816 (the '816 patent is a continuation of the '594 patent, and thus, the patents in suit share a common specification). Zillow moved for summary judgment of invalidity under 35 U.S.C. § 101 with respect to the asserted claims of both patents, but the District Court delayed ruling on the motion until after trial, at which point the Court orally denied it from the bench. Following trial, the jury returned a verdict finding that Zillow and the other defendants did not infringe the asserted claims of the patents in suit and that all claims of the patents in suit were invalid for improper inventorship. All of these issues were appealed, respectively.

The only substantive issue with respect to the claims that the Federal Circuit resolved on appeal was the patentability under 35 U.S.C. § 101. This rendered other issues moot.

The patents in suit relate to a process for coordinating loans on a loan processing computer over the Internet. According to the '594 patent, which was filed in May 1998, traditional methods of applying for a loan were tedious and time consuming because there was no way to apply without physically going to or calling each lender and filling out an application or credit qualification form. The inventors sought to combine the vast resources and speed of the Internet with additional knowledge of various lending institution's selection criteria to create a simple mechanism whereby an Internet user can submit a single credit application to a plurality of lending institutions who then make offers to the customer via the Internet. The loan coordination process of the '594 patent includes ten general stages. Independent claim 1 of the '594 patent is representative of the claimed subject matter, and is reproduced below.

1. A method for coordinating an electronic credit qualification form between an Internet user and a plurality of lending institutions via the Internet, comprising the steps of:
    a) receiving selection criteria from the plurality of lending institutions;
    b) storing the selection criteria in a database;
    c) displaying a plurality of documents in a web site;
    d) receiving a plurality of credit data sent from the Internet user;
    e) applying said credit data to a filter comprising the plurality of selection criteria of the database to select without manual intervention each one of said plurality of lending institutions associated with a match of said credit data to said selection criteria;
    f) determining an appropriate transfer method to transmit said electronic credit qualification form to the lending institutions associated with a match of said credit data;
    g) transmitting said electronic qualification form comprising said credit data to said plurality of lending institutions associated with a match of said credit data via said appropriate transfer method, the transmission of said electronic qualification form comprising said credit data occurring without a delay for reception of any credit decisions from said lending institutions;
    h) receiving a plurality of positive credit decisions from said plurality of lending institutions associated with a match of said credit data regarding an offer of credit or a loan to the Internet user;
    i) simultaneously displaying the plurality of positive credit decisions to the Internet user on the web site;
    j) receiving via the web site at least one decision from the Internet user regarding at least one of the positive credit decisions, the Internet user's decision comprising an acceptance, denial or request for more information regarding a positive decision for one of said lending institutions associated with a match of said credit data; and
    k) transmitting the at least one Internet user's decision to at least one lending institution corresponding with a positive credit decision so that said Internet user can obtain credit or a loan from one of said lending institutions associated with a match of said credit data, whereby said lending institutions associated with a match of said credit data compete with each other for business with the Internet user.

Invalidity under 35 U.S.C. § 101

Abstract Idea—Zillow contended that the patents in suit are directed to the idea of "comparing credit information to lending criteria" (i.e., a "credit application clearinghouse"). In Zillow's view, that idea represents a fundamental economic practice not meaningfully different from practices previously found by the Supreme Court to be abstract and is thus ineligible for patenting under § 101.

The Federal Circuit found that on its face, claim 1 is directed to an abstract idea; namely, a loan-application clearinghouse or, more simply, coordinating loans. The Federal Circuit found similarities of these concepts to those of risk hedging in Bilski, and intermediated settlement in Alice since each is something long prevalent in our financial system. The Federal Circuit found that the patents in suit use a computer program on a loan-processing computer to organize the process to be of no consequence because the use of a third-party intermediary (or clearing house) is also a building block of the modern economy.

The Federal Circuit noted that within Mortg. Grader, similar claims were also held to be directed toward abstract ideas (finding claims directed to the idea of "anonymous loan shopping" to be abstract).

Inventive Concept—The Federal Circuit next held that claim 1 does not recite any elements that individually, or as an ordered combination, transform the abstract idea of coordinating loans into a patent-eligible application of that idea. The Federal Circuit thought, at best, claim 1 describes the automation of a fundamental economic concept through the use of generic-computer functions.

LendingTree contended that the particular limitation relating to "simultaneous competition" amounts to an inventive concept sufficient to render the claims patent eligible. But the Federal Circuit noted that similar claims with similar limitations have been addressed and found to lack an inventive concept.

In Mortg. Grader, the representative claim of the patents at issue required a computer system that was configured to enable a borrower "to search [a] database to identify a set of loan packages" from a plurality of lenders and "to compare the loan packages within the set," and that also was configured "to display to the borrower an indication of a total cost of each loan package in the set." This was summarized as multiple lenders competing simultaneously for the potential borrower's business. In Mortg. Grader, the claims were found to not include an inventive concept.

Similarly, here, the Federal Circuit found that using a generic computer to display a "plurality of positive credit decisions," as recited in claim 1 of the '594 patent, is not meaningfully different from using a generic computer to display competing loan packages or to issue instructions. Consequently, the Federal Circuit stated that, like the claims in Mortg. Grader and Alice, claim 1 is patent ineligible because it does nothing more than facilitate the claimed loan-application process using generic technology.

In addition to comparing the claims to those previously held invalid under section 101, the Federal Circuit searched for and did not find any technological problem solved by the claims. Rather, the claims were found to merely provide a generic, technological environment (i.e., computers and the Internet) in which to carry out the abstract idea of coordinating loans. Likewise, the Federal Circuit further noted that the claims are not directed to improvements in computer-related technology (as in Enfish). Simply speeding up the loan-application process by enabling borrowers to avoid physically going to or calling each lender and filling out an application was an insufficient technological improvement, in the eyes of the Federal Circuit, so as to satisfy the "inventive concept" requirement of the section 101 analysis.

Accordingly, the Federal Circuit found that the asserted claims of the patents in suit are directed to an abstract idea and do not present an "inventive concept," and thus, are directed to ineligible subject matter under 35 U.S.C. § 101. The District Court's denial of Zillow's motion for summary judgment was reversed.

Inventorship

At trial, the jury found all claims of the patents in suit invalid for improper inventorship. The conclusion on the § 101 issue — that some claims of the '594 patent and the '816 patent are invalid — still leaves a number of claims intact, and so the Federal Circuit evaluated the inventorship issue.

During trial, LendingTree moved to correct inventorship of the patents in suit pursuant to 35 U.S.C. § 256. The PTO issued Certificates of Correction (adding James F. Bennett, Jr. as a named inventor) for the patents in suit. In LendingTree's view, the PTO's actions rendered moot the inventorship dispute.

The Federal Circuit agreed, and remanded to permit LendingTree, if it chooses to do so, to file a motion under Fed. R. Civ. P. 60(b) to vacate the judgment of invalidity for improper inventorship with respect to the remaining claims of the patents in suit.

LendingTree, LLC v. Zillow, Inc. (Fed. Cir. 2016)
Nonprecedential disposition
Panel: Circuit Judges Moore, Schall, and O'Malley
Opinion by Circuit Judge Schall
Shortridge v. Foundation Construction Payroll Service, LLC (Fed. Cir. 2016)

July 24, 2016

By Michael Borella —

Douglas M. Shortridge, the named inventor of U.S. Patent No. 8,744,933, sued Foundation Construction Payroll Service, LLC ("Foundation") for infringement thereof in the U.S. District Court for the Northern District of California. Foundation filed a Rule 12(c) motion to dismiss on the pleadings, alleging that the claims of the '933 patent are directed to ineligible subject matter under 35 U.S.C. § 101. The District Court agreed with Foundation, and invalidated the claims. Shortridge appealed to the Federal Circuit.

As a representative example, claim 1 of the '933 patent recites:

1. A method of public works construction payroll processing for a contractor comprising:
    processing payroll related data with a computer implemented core payroll calculation and processing engine, the processing including:
        sharing between conjoined computer processor components, input data stored in a relational database, said input data required for core payroll processing and calculation, said input data also required for production of at least one certifiable public works construction payroll record report (CPR), the CPR defined in accordance with jurisdiction-specific rules drawn from a plurality of stored rules;
        distinguishing between public works projects and private sector projects based on the input data and identifying the project as a public works project based on the input data;
        verifying input data is compliant with requirements of the core payroll processing and calculation engine and the requirements of the CPR;
        processing the verified input data to produce calculated core payroll data, the calculated core payroll data used for core payroll processing, production of core payroll processing reports, and production of the CPR;
        sharing, between conjoined computer processor components, the calculated core payroll data;
        sharing, between the conjoined computer processor components, non-calculated payroll related data as required for production of the CPR;
        storing the non-calculated payroll related data and the calculated core payroll data redundantly or individually;
        producing the CPR based on the calculated core payroll data and the non-calculated payroll related data only if the input data identifies the project as a public works project, the CPR produced in conjunction with and simultaneously with core payroll processing; and
        producing public works contractor management supporting reports using the input data only if the input data identifies the project as a public works project, the public works contractor management supporting reports indicating whether the contractor is in compliance with the jurisdiction-specific rules of a jurisdiction to which the public works construction contractor is subject.

As explained by the Court, "many jurisdictions mandate that public works construction contractors pay their workers certain minimum wages, but that the exact amount that must be paid varies depending on work location and the specific type of work performed." Thus, "[c]ontractors must verify to the governing jurisdiction(s) that they have paid these wages using 'certified payroll records' ('CPRs') [that] are intended to serve as prima facie evidence of the wages paid and any fringe benefit contributions made, to or on behalf of each worker on the project, broken down by craft, type, or classification of work, per hour, and per day, along with various information items related to the project, the awarding body, and the employees working thereupon." Particularly, "[t]he content, format, and configuration requirements of CPRs may vary by jurisdiction, which can complicate CPR generation for contractors whose employees work across public works projects in different jurisdictions, or between public works and private projects, in a given pay period." The '933 patent claims a way of solving this problem so that CPRs can be generated for a jurisdiction simultaneously with core payroll processing.

Under § 101, patent claims can be invalidated if they fail to meet the eligibility requirements set forth by the Supreme Court's two prong test in Alice Corp. v. CLS Bank Int'l. First, one must determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exception. Notably, generic computer implementation of an otherwise abstract process does not qualify as "significantly more."

In its substantive analysis, the Court rapidly dismissed with prong one, because Shortridge conceded that his claims were directed to an abstract idea. According to the District Court, this abstract idea was one of "cataloging labor data." Thus, the Court quickly moved on to prong two.

Shortridge also conceded that "generation of CPRs using core processing data is a business method predating the '933 patent." Moreover, the specification of the '933 patent stated that, in the past, it was known to manually track and report CPRs. Citing to Ultramercial, Inc. v. Hulu, LLC for support, the Court concluded that such "use of a general purpose computer to perform this business method does not in and of itself render [the invention] patent-eligible."

Shortridge's main argument in favor of patent-eligibility was that the CPRs were generated "in conjunction with and simultaneous with core payroll processing." This feature, however, was described in the specification as merely adding relational databases to the CPR generation, and thus was conventional and known to the industry. Shortridge further argued that this process was difficult for a human to perform manually. But the Court simply referred to a statement in OIP Techs., Inc. v. Amazon.com, Inc. that "relying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible."

Finally, Shortridge asserted that his claims were analogous to the eligible claims of DDR Holdings, LLC v. Hotels.com, L.P. The Court also dismissed this position, noting that the claims in the latter case were "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks," whereas Shortridge's claims were directed to using technology for performance of an abstract business practice.

As a result, the Federal Circuit agreed with the conclusion of the District Court, and the claims of the '933 patent remained ineligible.

On its face, the '933 patent appears to disclose a useful, time-saving invention — a computer program that can perform calculations that would otherwise take tens or hundreds of hours manually. However, the Supreme Court and Federal Circuit have taken the position that this type of invention is not worthy of a patent. Under current jurisprudence, a technical solution to a "non-technical" problem does not pass muster under § 101, while a similar technical solution to a problem occurring in a "technical" field would. The line between what is technical and non-technical however, is quite thin, especially when considering the ineligible claims of Ultramercial. Also, the Court may have effectively used § 101 as a proxy for obviousness, and invalidated the claims because programming a well-known solution on a computer is not worthy of a patent.

But with respect to § 101, Shortridge may have been at the wrong place at the wrong time, with the wrong type of patent. Prior to Alice, the claims of the '933 patent would likely have survived a § 101 challenge. Perhaps in the future, once the dust has further settled, similar types of inventions will once again be eligible, and obviousness will be determined separately.

Shortridge v. Foundation Construction Payroll Service, LLC (Fed. Cir. 2016)
Nonprecedential disposition
Panel: Circuit Judges O'Malley, Linn, and Stoll
Per curiam opinion
Conference & CLE Calendar

July 24, 2016

July 26, 2016 – "The Defend Trade Secrets Act of 2016: Leveraging the New Federal Framework to Protect IP — Navigating the New IP Landscape, Evaluating Federal and State Causes of Action, Weighing Trade Secret vs. Patent Protection" (Strafford) – 1:00 to 2:30 pm (EDT)

July 26, 2016 – "Pharma and Chemical Patent Applications: Meeting Written Description Requirement — Demonstrating Evidence of Possession of the Invention, Navigating the Guidelines, Maintaining Chain of Priority" (Strafford) – 1:00 to 2:30 pm (EDT)

July 28-29, 2016 – Women Leaders in Life Sciences Law (American Conference Institute) – Boston, MA

July 28-30, 2016 - Annual Meeting & Conference (National Association of Patent Practitioners) – Alexandria, Virginia

August 4, 2016 – "Challenging Patents in IPR: Strategies for Filing Petitions — Determining Whether and When to File, Filing Multiple Petitions on the Same Patent, Constructing Claims" (Strafford) – 1:00 to 2:30 pm (EDT)

August 4-5, 2016 - Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

August 8-9, 2016 - Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

August 9, 2016 - European biotech patent law update (D Young & Co) – 4:00 am, 7:00 am, and 12:00 pm (ET)

August 17, 2016 – "Navigating Patent Eligibility: Leveraging New USPTO Guidance and the Enfish and TLI Communications Decisions" (Strafford) – 1:00 to 2:30 pm (EDT)

August 18-19, 2016 - Advanced Patent Prosecution Workshop 2016: Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

August 25, 2016 – "The Next Wave of Data Privacy: What the GDPR, Privacy Shield and Brexit Mean for U.S. Intellectual Property Litigation" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

September 14-15, 2016 - Advanced Patent Prosecution Workshop 2016: Claim Drafting & Amendment Writing (Practising Law Institute) – Chicago, IL

***Patent Docs is a media partner of this conference or CLE
Webinar on Patent Eligibility

July 23, 2016

Strafford will be offering a webinar/teleconference entitled "Navigating Patent Eligibility: Leveraging New USPTO Guidance and the Enfish and TLI Communications Decisions" on August 17, 2016 from 1:00 to 2:30 pm (EDT). Michael L. Kiklis and Stephen G. Kunin of Oblon McClelland Maier & Neustadt will examine recent Federal Circuit decisions on patent eligibility, discuss guidance from the U.S. Patent and Trademark Office, and offer best practices for demonstrating patent eligibility. The webinar will review the following issues:

• How are the courts applying the framework for patent eligibility created in Alice Corp.?
• How can patent litigation defendants take advantage of the guidance for Section 101 challenges?
• What are best practices for patent counsel to demonstrate patent eligibility?

The registration fee for the webinar is $297. Those interested in registering for the webinar, can do so here.
ACI Women Leaders in Life Sciences Law Conference

July 23, 2016

American Conference Institute (ACI) will be holding the 3rd annual Women Leaders in Life Sciences Law on July 28-29, 2016 in Boston, MA. ACI faculty will offer presentations on the following topics:

• Becoming Powerful Champions and Supporters of Other Women in the Life Sciences Legal Community
• Tales from the Top on Effective Leadership: Concrete Tips for Influencing and Motivating Others in the Life Sciences Legal Space
• Substantive Updates Part One: What Women Leaders in Life Sciences Law Must Know About Products Liability, Mass Torts, and "Bet-the-Company" Litigation
• Substantive Updates Part Two: What Women Leaders in Life Sciences Law Must Know About Crucial Intellectual Property Protection and Enforcement Strategies
• Missed Opportunities at Life Sciences Companies and Law Firms: Recognizing Implicit and Affinity Biases and Implementing Sustainable Diversity Practices to Move Forward
• Substantive Updates Part Three: Preparing for Increased Criminal and Civil Enforcement Against Life Sciences Companies – Off-Label, Individual Liability, and More
• The Five Year Plan for Continual Progress: Taking the Next Step in One's Career and Getting and Keeping a Seat at the Table
• Small Group Breakouts and Interactive Town Hall: Identifying Tactical Next Steps in the Quest for Professional and Personal Development
• Substantive Updates Part Four: Key Regulatory and Pricing Developments Affecting How Life Sciences Companies Bring Products to Market
• Women Leaders in Government Round Table: Power, Progress, and Gender Politics in the Public Sector

A pre-conference workshop entitled "'I Wish Someone Had Told Me': Advice from Life Sciences General Counsel on Embracing Influence and Power and Running a Successful Legal Department" will be offered on July 27, 2016 from 1:30 to 4:30 pm. A post-conference master class entitled "Building Executive Presence for Women Leaders: Concrete Professional Development Plans to Take Your Communications, Negotiation, and Management Skills to the Next Level" will be offered on July 29, 2016 from 1:30 to 4:30 pm.

An agenda for the conference can be found here, and additional information regarding the workshop and master class can be found here. A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee is $1,295 (conference alone), $1,595 (conference and workshop or master class), or $1,995 (conference, workshop, and master class). Those interested in registering for the conference can do so here, by e-mailing CustomerService@AmericanConference.com, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

Patent Docs notes that MBHB attorneys Alison Baldwin, Paula Fritsch, Lisa Hillman, and Sarah Fendrick will be attending next week's conference.
European Biotech Patent Law Webinar

July 23, 2016

D Young & Co will be offering its next European biotech patent law update on August 9, 2016. The webinar will be offered at three times: 4:00 am, 7:00 am, and 12:00 pm (ET). D Young & Co European Patent Attorneys Simon O'Brien and Matthew Caines will provide an essential update and live Q&A on EPO biotechnology case law.

While there is no fee to participate, attendees must register in advance. Those wishing to register can do so here.
Amgen and Allergan Report Progress in Herceptin® Biosimilar Clinical Trial

July 21, 2016

By Kevin E. Noonan —

In the late 1980's, Dennis Slamon discovered a new oncogene, Her2/neu,that was amplified in 25-33% of human breast cancers. Slamon et al., "Studies of the HER2/neu ProtoOncogene in Human Breast and Ovarian Cancer," Science 244: 707-12 (1989). Following up on this discovery, Dr. Slamon and his collaborators found that a monoclonal antibody against the protein product of this gene, an epidermal growth factor receptor (EGFR) expressed on the cell surface of breast cancer cells, could be used to reduce proliferation of breast cancer cells in vitro and in vivo. This further discovery led to the development of one of the first therapeutic monoclonal antibody therapies, marketed by Genentech as Herceptin® (trastuzumab). Shepard et al., "Monoclonal antibody therapy of human cancer: Taking the HER2 protooncogene to the clinic," J. Clin. Immunol. 11: 117-27 (1991).

Trastuzumab is approved for treatment of epidermal growth factor receptor (HER2)-positive primary and metastatic breast cancer. It is a "recombinant DNA-derived humanized monoclonal immunoglobulin G1 kappa antibody." Today, Herceptin® is the 25th ranked pharmaceutical in the U.S. (February 2014), with $1.879 billion in sales in 2013. Thus, it is an attractive target for biosimilar competition, and Amgen and Allergan have teamed up to produce a bioimilar competitor. Yesterday the companies announced results from a Phase 3 clinical trial on their biosimilar drug, as reported by PRNewswire.

The Phase 3 clinical study was performed to compare branded Heceptin® with Amgen/Allergan's biosimilar candidate (ABP 980). ABP 980 has the same amino acid sequence as Herceptin® and is administered at the same pharmaceutical dosage form and strength as Herceptin®.

The clinical study was randomized, multicenter, double blind, and active-controlled (No. 20120283) for safety and efficacy. Participants were 725 adult female early breast cancer patients, with 364 being given ABP 980 and 361 given Herceptin®. All patients were HER2 positive.

There were two phases of the trial: the neoadjuvant phase and the adjuvant phase. Patients in the neoadjuvant phase received chemotherapy (epirubicin and cyclophosphamide) every three weeks for four cycles. Thereafter, the patient pool was randomized with regard to Herceptin®/ABP 980 treatment which was administered with paclitaxel every three weeks for four cycles. Surgery was then performed 3-7 weeks after the last dose of the antibody products and the patients were then evaluated for pathologic complete response.

In the adjuvant phase, post-surgical patients received either ABP 980 or Herceptin® every three weeks for up to one year from the first administration of the antibody in the neoadjuvant phase. The species of administered antibody remained consistent between the neoadjuvant and adjuvant phases for ABP 980, but the species of antibody administered during the adjuvant phase was randomized during the adjuvant phase.

The study is not complete, and will not be completed until the last patient has completed the adjuvant phase.

Clinical equivalence between ABP 980 and Heceptin® was evaluated based on the "confidence interval of the risk difference and risk ratio of the pathological complete response in breast tissue and axillary lymph nodes with prespecified equivalence margins" – i.e., comparing the results normalized by the extent of disease in individual patients. The top line results (the statistics that show whether clinical trial end points were met or not) reportedly "ruled out inferiority but could not rule out superiority" for ABP 980. The primary endpoint of the study had a "prespecified equivalence margin" of +\- 13%, and the observed upper end of the confidence interval was 13.4%. Observed adverse effects were comparable overall, with more serious adverse events reported for ABP 980 in the neoadjuvant phase compared with Herceptin®, but were unlikely to be related to the antibody. The incidence of adverse events were similar in the adjuvant phase of the study, and overall comparable immunogenicity was found between the reference product and the biosimilar.

Genentech's patents on its Herceptin® product are scheduled to expire in 2019 and 2020.
HP Inc. v. Big Baboon, Inc. (PTAB 2016)

July 20, 2016

Business Method Patent Not Invalid under 35 U.S.C. § 101

By Joseph Herndon —

HP Inc. and SAP America, Inc. filed a Petition seeking a covered business method (CBM) patent review of claims 15 and 20–34 of U.S. Patent No. 6,343,275 owned by Big Baboon, Inc. The PTAB, however, determined that the Petitioner failed to establish that it is more likely than not that at least one of the challenged claims is unpatentable, and thus, the CBM review was denied.

It was argued that the claims were unpatentable under 35 U.S.C. § 101 as being directed to an abstract economic concept, but even though the PTAB found that the '275 patent was a business method patent, in a rare instance, the CBM review was denied.

The '275 patent is directed to a software system that enables business-to-business Web commerce and "automates to the greatest degree possible, in a unified and synergistic fashion and using best proven business practices, the various aspects of running a successful and profitable business." The patent states that Web business and business automation are both greatly facilitated using a computing model based on a single integrated database management system ("DBMS"). The effect of such integration on the business cycle is profound, allowing the sale of virtually anything in a transactional context (goods, services, insurance, subscriptions, etc.) to be drastically streamlined. In particular, the Specification discloses that the automated business process may be imagined as a kind of information assembly line in which each worker in turn builds upon the information base established by preceding workers.

The DBMS stores files belonging to different business domains, e.g., a products domain, a payments domain, a financial performance domain, and a personnel domain. The '275 patent is very large having 392 sheets of Figures and being 415 pages in total. The Figures are largely screen shots of the various web interfaces provided to access the DBMS.

The claims of the '275 patent were amended in a reexamination certificate, U.S. Patent No. 6,343,275 C1, issued on August 19, 2015, in which claims 1-14 and 16-19 were canceled, claim 15 was confirmed, and new claims 20-34 were added.

Of the challenged claims, claim 15 is representative and reproduced below:

15. A method comprising the steps of:
    providing an end-to-end, business-to-business, e-commerce business automation software for automation business functions across multiple business domains;
    identifying multiple modules of the software; and
    via Web administration, producing a software configuration in which selected ones of the modules are enabled or disabled;
    wherein the software producing a workscope/workflow structured display of complex database records each comprising multiple lines of text and pertaining to both a first party to a business transaction and a second party to the business transaction, the structured display constituting an integrated decision-making environment for a particular business function.

CBM Patent

A "covered business method patent" is one that "claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions." AIA § 18(d)(1); 37 C.F.R. § 42.301(a).

The PTAB found that claim 15 of the '275 patent expressly recites finance-related activities, namely providing "an end-to-end, business-to-business, e-commerce automation software" for "multiple business domains" and "pertaining to both a first party to a business transaction and a second party to a business transaction." Given the express finance-related language of the claims, the PTAB found a sufficient showing that at least one challenged claim satisfies the "financial product or service" requirement of Section 18.

Further, because claim 15 does not solve a technical problem using a technical solution, the "technological inventions" exception was not found to apply here. As a result, the PTAB easily found that the '275 patent was eligible for CBM patent review.

Asserted Ground of Unpatentability under 35 U.S.C. § 101

The Petitioner asserted that the challenged claims of the '275 patent are unpatentable under 35 U.S.C. § 101 as being "directed to the abstract economic concept of gathering information from across a business and using the information to make decisions." The Petitioner gave a hypothetical in which "when deciding whether to create a new product, a business must consult with its engineering department about design and manufacturing capabilities, its human resources department about staffing requirements, and its sales department about marketing and sales prospects." Similarly, Petitioner argued that "a decision to purchase a new piece of equipment would require information from the purchasing department (why the equipment is needed) and the accounting department (whether there is money in the budget for the purchase)."

The PTAB, however, found that claim 15 was absent any "gathering" steps, and Petitioner did not explain sufficiently how the limitations of claim 15 are directed to the concept of "gathering" information.

The PTAB further scolded the Petitioner's analysis for not addressing sufficiently the specific language of claim 15 and explaining why claim 15 is in fact directed to the alleged abstract idea.

As a result, the PTAB simply found that the Petitioner failed to establish the first step of the Mayo framework; i.e., to identify sufficiently an abstract idea to which claim 15 is directed. Moreover, the PTAB itself was not about to decide whether claim 15 is directed to a different abstract idea, and only determined that Petitioner did not show sufficiently that claim 15 is directed to the alleged abstract idea that Petitioner proposed.

Thus, the PTAB concluded that the Petitioner failed to establish that claim 15 and 20-34 are more likely than not directed to patent ineligible subject matter under 35 U.S.C. § 101.

The Petitioner made additional arguments alleging that the challenged claims were also obvious under 35 U.S.C. § 103 based on prior art, but these too were not persuasive for similar reasoning (i.e., the Petitioner failed to identify specific documentary evidence indicating that the claim elements would have been obvious to a person of ordinary skill in the art at the time of the '275 patent).

While the specific Petition here failed, the claim at issue here will likely face additional § 101 challenges in the future. Simply reciting "providing" automation software and producing a software configuration in which selected ones of modules are enabled or disabled, is quite broad and abstract, to say the least. Further, "producing a workscope/workflow structured display of complex database records each comprising multiple lines of text" is quite generic.

It's important to note that estoppel under CBM review extends only to grounds actually asserted, and not to grounds that reasonably could have been asserted. Also, here, the PTAB was specific in the decision denying institution of CBM review indicating that the Petition simply failed to provide a sufficient basis. Thus, as we have seen in the past (e.g., Motorola Mobility, LLC v. Intellectual Ventures I, LLC (CBM2015-00004)), petitioners are free to file a second petition with new, updated, modified arguments in an attempt to persuade the PTAB in their favor.

Before Administrative Patent Judges Justin T. Arbes, Trenton A. Ward, and Robert J. Weinschenk
Decision by Administrative Patent Judge Trenton A. Ward
USPTO Implements Pilot Program to Support President’s National Cancer Moonshot

July 19, 2016

By Donald Zuhn –-

Last month, the U.S. Patent and Trademark Office published a notice in the Federal Register (81 Fed. Reg. 42328) regarding the implementation of a new pilot program that will provide for earlier review of patent applications pertaining to cancer immunotherapy in support of the "National Cancer Moonshot," a White House initiative to achieve ten years' worth of cancer research in the next five years that was announced earlier this year (see "FACT SHEET: Investing in the National Cancer Moonshot"). Under the Cancer Immunotherapy Pilot Program, applications containing at least one claim reciting a method of treating a cancer using immunotherapy will be advanced out of turn for examination if the applicant files a grantable petition to make special, with the goal of completing examination of the application within twelve months of special status being granted.

In order to participate in the Cancer Immunotherapy Pilot Program, an applicant must satisfy the following requirements:

(1) File a petition to make special under 37 C.F.R. § 1.102(d) in a non-reissue, nonprovisional utility application filed under 35 U.S.C. § 111(a), or an international application that has entered national stage under 35 U.S.C. § 371. According to the notice, the petition must be filed at least one day prior to the date that notice of a first Office action (which may be an Office action containing only a restriction requirement) appears on PAIR, or with a Request for Continued Examination (RCE). For applications in which the claimed cancer immunotherapy is the subject of an active Investigational New Drug (IND) application, a petition to make special may be accepted any time prior to appeal or final rejection. The Office recommends that applicants use form PTO/SB/443 for filing the petition, as the form contains check boxes that will allow the applicant to comply with several certification requirements under the new pilot program (as discussed in the Office's notice).

(2) The application cannot contain more than three independent claims, more than twenty total claims, or any multiple dependent claims. For applications not meeting this requirement, an applicant must file a preliminary amendment to cancel the excess claims or multiple dependent claims at the time the petition to make special is filed.

(3) The application must include at least one claim to a method of treating a cancer using immunotherapy. The notice explains that such claim must "encompass[] a method of ameliorating, treating, or preventing a malignancy in a human subject wherein the steps of the method assist or boost the immune system in eradicating cancerous cells." Among the examples of acceptable claims provided in the notice are those directed to "the administration of cells, antibodies, proteins, or nucleic acids that invoke an active (or achieve a passive) immune response to destroy cancerous cells," "the co-administration of biological adjuvants (e.g., interleukins, cytokines, Bacillus Comette-Guerin, monophosphoryl lipid A, etc.) in combination with conventional therapies for treating cancer such as chemotherapy, radiation, or surgery," "administering any vaccine that works by activating the immune system to prevent or destroy cancer cell growth," or "in vivo, ex vivo, and adoptive immunotherapies, including those using autologous and/or heterologous cells or immortalized cell lines."

(4) If restriction is required, the applicant must agree to make an election without traverse in a telephonic interview, and elect an invention directed to a method of treating a cancer using immunotherapy. The notice indicates that the applicant will be given two working days to respond to an examiner's request for an election, and in the event that the applicant fails to respond within that period, the examiner will treat the first group of claims directed to a method of treating a cancer using immunotherapy as being constructively elected without traverse.

(5) The application cannot have been previously granted special status.

(6) The petition to make special must be filed electronically via the EFS-Web (the Office notes that the document description "Petition for Cancer Immunotherapy Pilot" must be selected for the petition).

(7) If the application has not been published, the applicant must file a request for early publication in compliance with 37 C.F.R § 1.219 with the petition to make special (or a rescission of a nonpublication request if one was filed).

For the purposes of the pilot program, the Office has waived the fee for a petition to make special under 37 C.F.R. § 1.102(d).

In the event that an application does not comply with the sequence listing requirements, has an outstanding Office action, or does not meet all the formal requirements of the pilot program (with one exception described below), the applicant will be given one opportunity to correct the deficiency within the longer of one month or thirty days from the Office's notice of noncompliance (with the deadline being non-extendable). According to the notice, the lone exception will be failure to present a method claim complying with the requirements above, for which applicant's petition will be dismissed without opportunity to correct the deficiency. In addition, if an applicant files an amendment that results in noncompliance with the claim requirements or cancels all method claims for treating a cancer using immunotherapy, an examiner may provide — at his or her discretion — an opportunity to file a response that complies with the requirements of the pilot program.

According to the notice, a participating application's special status will be terminated if an applicant files an extension of time under 37 C.F.R. § 1.136(a), an RCE, or a Notice of Appeal. Special status will also be terminated (and the 12-month objective of the pilot program satisfied) by a final disposition, which under the pilot program will include the mailing of a final Office action or notice of allowance.

The Office began accepting petitions under the new pilot program on June 29, 2016, and will continue to accept petitions until June 29, 2017 (although the Office has reserved the right to extend or terminate the program depending on the workload and resources needed to administer the program, feedback from the public, and effectiveness of the program). The notice indicates that questions relating to a specific petition should be directed to Supervisory Patent Examiners Gary B. Nickol or Brandon J. Fetterolf.

Additional information regarding the Cancer Immunotherapy Pilot Program can be found in the Office's notice.
USPTO Releases Memorandum on Subject Matter Eligibility

July 18, 2016

By Kevin E. Noonan —

On May 4th the U.S. Patent and Trademark Office issued its latest Guidance on how Examiners are to apply recent U.S. Supreme Court and Federal Circuit precedent related to subject matter eligibility (see "USPTO Issues Update to Subject Matter Eligibility Guidance"). Absent from this analysis was the Federal Circuit's decision in Ariosa v. Sequenom, then on petition for certiorari before the Supreme Court. Since the issue date of this Guidance, the Supreme Court denied certiorari in the Sequenom case, and the Federal Circuit handed down its decision in Rapid Litigation Management v. CellzDirect. Last Friday, the Office issued a Memorandum on these decisions.

The Memorandum, under Deputy Commissioner for Patent Examination Policy Robert Bahr's signature, comes right to the point:

These cases do not change the subject matter eligibility framework, and the USPTO's current subject matter eligibility guidance and training examples are consistent with these cases.

and then discusses each case and its relationship to how the PTO will implement the recent case law.

With regard to CellzDirect, the Memorandum cites the Federal Circuit decision as "highlight[ing] several important points." The first is the Court's emphasis on whether a claim is "directed to" a law of nature, which "requires more than 'merely identify[ing] a patent-ineligible concept underlying the claim.'" Rather, the Office understands the CellzDirect decision to require "an analysis of whether 'the end result of the process, the essence of the whole, was a patent-ineligible concept.'" By focusing on "a process for achieving this desired outcome," according to the Memorandum, the Federal Circuit concluded the claims at issue were patent eligible, "like thousands of other claims that recite methods of producing things [the mixed cultures of hepatocytes that were the subject of the claims] or methods of treating disease" (a welcome extrapolation of the Federal Circuit's decision but an extrapolation just the same and one not supported expressly by the Court's decision). The Memorandum also referenced the Federal Circuit's Enfish decision, and asserts that the distinction between the CellzDirect decision and the Sequenom and Supreme Court's Mayo decision was that the latter decisions "amounted to nothing more than observing or identifying the ineligible concept itself." This section of the Memorandum concludes with the statement that "[t]he USPTO's current subject matter eligibility guidance [set out in the 2014 Interim Eligibility Guidance, July 2015 Update, and the May 2016 Update memoranda to examiners] and training examples are consistent with these points."

Turning to the denial of certiorari in the Sequenom case, the Memorandum is succinct: its Guidance was consistent with the Federal Circuit's decision, and denial of Sequenom's certiorari petition changes nothing ("While this panel decision is a precedential Federal Circuit panel decision, the denial of the petition for a writ of certiorari does not elevate its significance in this regard"). While true, this statement does not resolve the apparent conflict between the Federal Circuit's affirmance that Sequenom's claim 1:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
    amplifying a paternally inherited nucleic acid from the serum or plasma sample and
    detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

is patent ineligible, with the Guidance's treatment of claim 1 of Example 29

1. A method of detecting JUL-1 in a patient, said method comprising:
    a. obtaining a plasma sample from a human patient; and
    b. detecting whether JUL-1 is present in the plasma sample by contacting the plasma sample with an anti-JUL-1 antibody and detecting binding between JUL-1 and the antibody.

to be patent eligible. The Federal Circuit reasoned in Sequenom that:

It is undisputed that the existence of cffDNA in maternal blood is a natural phenomenon. Sequenom does not contend that Drs. Lo and Wainscoat created or altered any of the genetic information encoded in the cffDNA, and it is undisputed that the location of the nucleic acids existed in nature before Drs. Lo and Wainscoat found them. The method ends with paternally inherited cffDNA, which is also a natural phenomenon. The method therefore begins and ends with a natural phenomenon. Thus, the claims are directed to matter that is naturally occurring.

While the Office provides the following reasoning regarding claim 1 of Example 29:

[C]laim 1 is eligible because steps (a) and (b) of the claim "do not recite or describe any recognized exception" [the example cites Mayo Collaborative Services v. Prometheus Laboratories, Inc. in support of this determination, which the example indicates stands for the proposition that the recited steps of administering a drug to a patient and determining the resultant level of 6-thioguanine in the patient "are not themselves natural laws"]. As a result, the analysis of this claim ends with Step 2A of analytic framework set forth in the Interim Guidance (i.e., determining whether the claim is directed to a judicial exception), and the example notes that there is no need to proceed with Step 2B of the analytic framework (i.e., determining whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exception).

The extent to which these disparate analyses can be reconciled will depend, of course, on future case law, leaving the question of subject matter eligibility in its current state of uncertainty.

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