Takeaway: The Board will not institute a review proceeding on claims with means-plus-function limitations if the Petitioner does not identify corresponding structure for the limitations.

In its Decision, the Board instituted a Covered Business Method Patent Review of claims 1, 5, and 11 of U.S. Patent No. 7,774,280 but declined to institute a CBM review of claims 12 and 22. The ’280 patent relates to “a method and system for managing the transfer of rights associated with digital works using variable state variables.”

The Board began by examining whether the ’280 patent is a “covered business method patent,” as the Board may institute CBM review proceedings only for covered business method patents. For a patent to be a covered business method patent, it must be 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.” Petitioner contended that the challenged claims “encompass embodiments that are, at the very least, incidental or complementary to a financial activity,” that the invention claimed in claims 1 and 12 is described using “economic terms,” and that the specification “confirms the financial nature of a consumer acquiring a digital work from a supplier, as required by independent claims 1 and 12.” Patent Owner argued that Petitioner had not met its burden of demonstrating that the ’280 patent is a covered business method patent “because the challenged claims, as a whole, do not recite processes or operations for a financial product or service.” The Board was not persuaded by Patent Owner’s arguments, finding that “they narrowly focus on whether the challenged claims explicitly recite financial products or services” when “the definition of a covered business method patent should be interpreted broadly to encompass patents claiming activities that are incidental orcomplementary to a financial activity.” The Board concluded that at least a limitation of claim 1 (“transferring rights adapted to be associated with items from a rights supplier to a rights consumer”) satisfies the “financial product or service” component of the definition for a CBM patent. The Board then concluded that claim 1 is not directed to a “technological invention.” Accordingly, the Board determined that Petitioner “met its burden of demonstrating that the ’280 patent is a covered business method patent eligible for [CBM] review.”

Turning to the asserted grounds of unpatentability, the Board then considered the proper scope of the claim terms “meta-rights,” “state variable,” and “repository.” With respect to “meta-rights” and “state variable,” the Board concluded that the terms were explicitly defined in the specification. With respect to “repository,” it adopted a construction consistent with the construction given to the term in three inter partes review proceedings brought against other ContentGuard patents “that share a similar disclosure” with a reference that is incorporated by reference in the ’280 patent.

The Board then addressed several means-plus-function limitations in claims 12 and 22. The Board noted that Petitioner did not “identify the corresponding structure for the means-plus-function limitations” or “attempt to rebut the presumption that § 112 ¶ 6 governs their construction.” It then concluded that Petitioner “essentially has placed the burden on [the Board] to construe the means-plus-function limitations . . . and then apply the asserted prior art” when it is Petitioner “who bears the burden to provide constructions for these means-plus-function limitations so that it can demonstrate that the asserted prior art renders independent claim 12 and dependent claim 22 of the ’280 patent more likely than not unpatentable.” The Board “decline[d] to shoulder [Petitioner’s] burden and, as a consequence,” did not “attempt to construe the means-plus-function limitations recited in independent claim 12 and dependent claim 22 of the ’280 patent.”

The Board next considered whether the challenged claims are directed to patent-ineligible subject matter under § 101. Petitioner argued that “the challenged claims are directed to an abstract idea, and there are no other features recited in these claims that would transform the patent-ineligible concept to a patent-eligible application.” In particular, Petitioner argued that “the challenged claims recite steps and elements that implement the abstract idea of ‘providing consumers with rights to an item, such as a movie or book’” and “do not purport to disclose a new approach or method of licensing or sub-licensing content.” Patent Owner argued that features of the claims “collectively represent computer security concepts having no corollary outside the realm of computer security.” For example, claim 1 “specifies rights associated with an “item” of digital content, and includes “at least one usage right,” “at least one meta-right,” and a “repository” that enforces the “meta-rights” using certain specific security and rights enforcement “integrities.” The Board concluded that “the invention embodied in the challenged claims of the ’280 patent is similar to the invention determined to be a patent-eligible application in” DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), and was not persuaded that Petitioner had demonstrated that the challenged claims are directed to a patent-ineligible abstract idea. Accordingly, it determined that Petitioner had not shown that it is more likely than not that the challenged claims are directed to patent-ineligible subject matter.

Next, the Board analyzed whether the challenged claims are anticipated by Stefik or obvious in view of Stefik and the knowledge of one of ordinary skill in the art. With respect to both proposed grounds of unpatentability, the Board was persuaded by Petitioner’s analysis and supporting evidence as to claims 1, 5, and 11, but was not persuaded as to claims 12 and 22 because, as discussed above, Petitioner did not account for the means-plus-function limitations recited in those claims. In its analysis of whether Stefik anticipates claim 1, the Board was not persuaded by Patent Owner’s argument that the reference teaches away from certain claim limitations, stating “[i]t is well settled that ‘[t]eaching away is irrelevant to anticipation.”

Accordingly, the Board instituted a CBM review as to claims 1, 5, and 11 as being (a) anticipated under § 102(b) by Stefik, and (b) unpatentable under § 103(a) over the combination of Stefik and the knowledge of one of ordinary skill in the art.

Google Inc. v. ContentGuard Holdings, Inc., CBM2015-00040

Paper 9: Decision on Institution of Covered Business Method Patent Review

Dated: June 24, 2015

Patent: 7,774,280 B2

Before: Michael R. Zecher, Benjamin D.M. Wood, and Georgianna W. Braden

Written by: Zecher

Related Proceedings: ContentGuard Holdings, Inc. v. Google Inc., No. 2:14-cv-00061-JRG-RSP (E.D. Tex); Google Inc. v. ContentGuard Holdings, Inc., No. 3:14-cv-00498-WHA (N.D. Cal.); and ContentGuard Holdings, Inc. v. Amazon.com Inc., No. 2:13-cv-01112-JRG (E.D. Tex.); CBM2015-00043