Takeaway: The Board may find a covered business method standing challenge to be unpersuasive when it concludes that the patent owner has neither explained the recitation of financial activities in specification and claims nor asserted that the exclusion for technological inventions applies.

In its Decision, the Board instituted a covered business method review of each of challenged claims 1-23 (i.e., all claims) of the ‘854 patent. In doing so, the Board indicated that it had been persuaded that it was more likely than not that the challenged claims are unpatentable based on multiple obviousness grounds.

The ‘854 patent relates to a “Transaction System for Transporting Media Files from Content Provider Sources to Home Entertainment Devices.” The asserted grounds included: obviousness of claims 1, 2, 6, 12, and 14 under 35 U.S.C. § 103(a) in view of Hooper and Li; obviousness of claims 3-5 and 15-18 under 35 U.S.C. § 103(a) in view of Hooper, Li, and Kohl; obviousness of claims 7-11 and 19-22 under 35 U.S.C. § 103(a) in view of Hooper, Li, and Hickey; and obviousness of claims 13 and 23 under 35 U.S.C. § 103(a) in view of Hooper, Li, and Garcia-Molina.

As for covered business method review standing, Patent Owner had argued that “the technology covered by the ‘854 patent ‘has no relation to the financial services sector’” and that, instead, “the claims ‘are drawn to systems and methods for delivering digital media files from content provider sites to home user entertainment systems via the Internet.’” The Board was not persuaded, finding that “Patent Owner [did] not explain the recitation of financial activities (electronic banking transactions) in the patent specification and claims” and did not “assert that the exclusion for technological inventions applies here.” Thus, the Board concluded that “Petitioner [had] met the standing requirement by demonstrating that the ‘854 patent is a covered business method patent eligible for review.”

The Board interpreted various claim terms under the broadest reasonable interpretation (BRI) standard. Specifically, the Board construed “connectivity device” to mean “a device capable of connecting to a network”; interpreted “user interface” to mean “a component by which a user can enter commands and view information”; and determined that the supported structure for the recited “means for displaying a program guide” is “a conventional, television/video display.”

Petitioner had challenged claims 1-23 as being patent-ineligible under 35 U.S.C. § 101, citing Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012); and Ultramercial, Inc. v. Hulu, 772 F.3d 709 (Fed. Cir. 2014). Patent Owner, in response, additionally citedDDR Holdings, LLC v.Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). The Board ended up agreeing with Patent Owner that “the ‘854 patent claims, like those upheld in DDR Holdings, differ in substance from those in Ultramercial” and that “like the claims in DDR, they are ‘rooted’ in non-abstract computer network technology.” Thus, the Board concluded that “Petitioner had not demonstrated that it is more likely than not to succeed on its challenge under 35 U.S.C. § 101.”

The Board was persuaded that Petitioner had shown that it was more likely than not that claims 1-23 of the ‘854 patent are unpatentable based on each of the asserted obviousness grounds. With respect to the obviousness ground based on Hooper and Li, for example, the Board was persuaded that Petitioner had set forth a rationale for combining Hooper and Li (e.g., “encryption and decryption techniques were known and commonly used in various video transmission systems predating the filing of the ‘854 patent ‘by decades[,]’”), and that this rationale was supported by the Long Declaration that Petitioner had submitted.

Hulu, LLC, Netflix, Inc., Spotify USA Inc., and Vimeo, LLC v. iMTX Strategic, LLC, CBM2015-00147

Paper 14: Decision on Institution of Covered Business Method Patent Review

Dated: November 30, 2015

Patent: 7,269,854 B2

Before: Thomas L. Giannetti, James B. Arpin, and Matthew R. Clements

Written by: Giannetti

Related Proceedings: IPR2015-01061; and various related proceedings involving the ‘854 patent in the Northern District of California and the District of Delaware