Takeaway: Attorney argument cannot take the place of evidence.

In its Final Written Decision, the Board found that Petitioner had demonstrated by a preponderance of the evidence that claims 4, 6-8, and 10 of the ‘387 patent are unpatentable. Also, the Board denied Patent Owner’s Motion to Exclude.

Petitioner had sought a covered business method review of claims 1, 2, 4, 6-8, and 10 of the ‘387 patent. The Board then instituted trial with respect to claims 4, 6–8, and 10, but not with respect to claims 1 or 2.

The ‘387 patent “relates to the conditional trading of securities, such as convertible bond ‘swaps,’ risk arbitrage, and combinations thereof in both listed and over-the-counter markets, via one or more electronic networks.” The Board found that Petitioner had standing to file its Petition because it had been sued for infringement of the ‘387 patent inFifth Market, Inc. v. CME Group Inc., No. 08-0520 GMS (D. Del.).

The Board determined that the ‘387 patent is a covered business method patent. Although Patent Owner had argued that the ‘387 patent is directed to a technological invention, the Board disagreed, finding instead that Patent Owner had not adequately explained “how the challenged claims of the “387 patent encompass novel software tools and graphical user interfaces,” and had not “[provided] sufficient or credible evidence to support its assertion.”

Petitioner had asserted that claims 4, 6-8, and 10 are not patentable on the ground that they would have been obvious in view of CFTC and Lupien under 35 U.S.C. § 103(a). The Board then provided its construction for certain claim terms.

Patent Owner next argued that Petitioner had “[failed] to meet its burden of establishing that CFTC qualifies as a prior art printed publication within the meaning of § 102(b).” The Board disagreed, noting that Patent Owner had not raised this challenge in previous related proceedings, and that Patent Owner’s attempts to rebut the supporting testimony relied upon by Petitioner in this respect could not succeed because they were based on mere “attorney argument unsupported by factual evidence.” As stated by the Board, “[a]bsent sufficient evidence presented by [Patent Owner] that undermines Mr. Wheeler’s testimony, we have no reason to question his credibility.” Thus, the Board concluded that “[Petitioner had] demonstrated by a preponderance of the evidence that claims 4, 6-8, and 10 of the ‘387 patent are unpatentable under § 103(a) over the combination of CFTC and Lupien.”

Patent Owner had filed a Motion to Exclude various evidence as not being properly authenticated, as being not relevant, as containing inadmissible hearsay, as lacking foundation, as exceeding the permissible scope of reply testimony, and the like. The Board disagreed, and then went on to deny Patent Owner’s Motion to Exclude.

Chicago Mercantile Exchange, Inc. v. 5th Market, Inc., CBM2014-00114

Paper 35: Final Written Decision

Dated: August 18, 2015

Patent: 7,024,387 B1

Before: Kalyan K. Deshpande, Michael R. Zecher, and Georgianna W. Braden

Written by: Zecher

Related Proceedings: Reexamination Control No. 95/002,032; CBM2015-00061;Chicago Mercantile Exch., Inc. v. 5th Mkt., Inc., Case CBM2013-00027