Takeaway: The Board is not likely to exercise its discretion and deny institution of review based upon a previously-instituted proceeding where the petitioner in the later proceeding was not also the petitioner in the previously-instituted proceeding.

In its Decision, the Board found that Petitioner demonstrated “it is more likely than not that at least one of the challenged claims is unpatentable.” Thus, the Board instituted covered business method patent review of claims 1-60 of the ’281 patent.

The ’281 patent concerns “protecting data against unauthorized access” and particularly states that “in . . . fields, such as industry, defen[s]e, banking, insurance, etc[.], improved protection is desired against unauthori[z]ed access to the tools, databases, applications[,] etc.[,] that are used for administration and storing of sensitive information.”

Patent Owner first argued that the Board should exercise discretion under 35 U.S.C. § 325(d) to deny the Petition because the arguments were substantially the same as considered during prosecution of the ’281 patent, reexamination of the parent of the ’281 patent, and CBM2014-00024. The Board was not persuaded. In particular, even though a covered business method patent review was instituted in CBM2014-00024 on the same prior art and similar arguments, the petitioner in CBM2014-00024, Voltage Security, is not Petitioner in the instant proceeding. Further, Voltage Security and Patent Owner entered into a settlement agreement such that Voltage Security terminated early in the proceeding. Therefore, the Board declined to exercise its discretion to deny the Petition.

Turning to standing, the Board stated that “Section 18 [of the AIA] limits review to persons or their privies that have been sued or charged with infringement of a ‘covered business method patent,’ which does not include patents for ‘technological inventions.’”

It was undisputed that Petitioner had been charged with infringement of the ’281 patent. Patent Owner did dispute that the ’281 patent satisfied the requirement that the patent have at least one claim directed to a “financial product or service.” The Board agreed with Petitioner that “at least claim 1 claims a method for performing data processing or other operations that are at least incidental or complementary to the practice, administration, or management of a financial product or service.” In particular, the Board found the claim was directed to banking, which is a financial activity.

The Board was also persuaded that the ’281 patent was not for a technological invention, which requires considering “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.” The Board found the first prong not to be satisfied because claim 1 merely recited “[d]ata processing computers having databases, which store the data” as was known at the time the ’281 patent was filed.

With respect to claim construction, the Board agreed with Petitioner that the term “data processing rules” means “rules for processing data.” The Board then found Patent Owner’s proposed definition of “data portion” to be too narrow, defining the term to mean “a part or share of the database.” Finally, the Board agreed with Petitioner’s proposed definition of “data category” as meaning “any class or division of data sharing one or more characteristics or attributes.”

The Board next addressed the asserted grounds, first finding, contrary to Patent Owner’s position, that Section 101 could be raised in a covered business method patent review. Addressing Section 101, the Board found Petitioner’s evidence established that the claims are “directed to the abstract idea of determining whether access to data in a database should be granted based on whether one or more rules are satisfied.” The Board was also persuaded that the computer limitations “are not meaningful limitations that can salvage these claims and make them patent eligible, and that [] these computer-related limitations require nothing more than the routine and conventional use of a computer.” Thus, Petitioner established more likely than not that claims 1, 17, 33, and 47, as well as the dependent claims, are not patent eligible.

With respect to the alleged anticipation by Denning, the Board found Petitioner’s arguments persuasive with respect to some of the challenged claims. The Board was not persuaded that Denning disclosed the limitations of claims 5, 10, 12-16, 21, 26, 28-34, 37, 38, 41, 43-48, 51, 52, 55, and 57-60 arranged as recited in the claims. Thus, the Board instituted CBM review of claims 1, 2, 6, 9, 17, 18, 22, and 25 as anticipated by Denning.

With regard to obviousness in light of Denning, the Board found that Petitioner had not established that Denning describes limitations of claims 10, 15, 26, 31, 33, 34, 37–38, 41, 43–48, 51, 52, 55, and 57–60, and that no evidence or rationale was provided as to why the limitations would have been obvious. The Board then exercised its discretion to deny institution of review of claims 1, 2, 6, 9, 17, 18, 22, and 25 “for reasons of administrative necessity, and to ensure timely completion of the instituted proceeding.” However, the Board instituted review of claims 5, 12-14, 16, 21, 28-30, and 32 based on obviousness in light of Denning.

Finally, with respect to alleged obviousness over Denning and FIPS PUB 140-1, the Board agreed with Patent Owner that the disclosure of FIPS PUB140-1 does “not meet the claimed level of encryption” as argued by Petitioner. Thus, the ground based upon the alleged combination of Denning and FIPS PUB 140-1 was denied institution.

Square, Inc. v. Protegrity Corp., CBM2014-00182
Paper 16: Decision on Institution of Covered Business Method Patent Review
Dated: March 5, 2015
Patent: 8,402,281 B2
Before: Kevin F. Turner, Meredith C. Petravick, and Gregg I. Anderson
Written by: Petravick
Related Proceedings: Square, Inc. v. Protegrity Corp., No. 3:14-cv-03423-EDL (N.D. Cal. July 28, 2014); CBM2013-00024; CBM2014-00121; CBM2015-00006; CBM2015-00010; CBM2015-00002; CBM2015-00014; CBM2015-00030; Reexamination No. 90/011,364