Takeaway: A patent owner’s motion to amend will not be granted when the proposed claims enlarge the scope of the original claims by rewriting limitations.

In its Final Written Decision, the Board found that claims 33-60 of the ’281 Patent are unpatentable, granted Patent Owner’s Motion to Amend to cancel claims 1-32 of the ’281 Patent, and denied Patent Owner’s Motion to amend to add proposed substitute claims 61-68. The ’281 Patent discloses an apparatus for protecting data.

The Board first granted Patent owner’s Motion to Amend to cancel claims 1-32 of the ’281 Patent, noting that this request was not contingent on the claims being determined to be unpatentable or the entry of the proposed substitute claims.

The Board then turned to claim construction, stating that the claims will be interpreted using the broadest reasonable construction in light of the specification. Petitioner proposed that “database” be construed to mean “any organization of structured data.” Patent owner argued that this was unreasonably broad, and offered the construction of ‘a data processing system for managing an organized collection of structured data.” The Board began with the claim language, noting that none of the challenged claims recite that the database performs any function other than comprising or storing data portions, and this is consistent with the Petitioner’s construction. The Board then reviewed the written description, and found that it also supports Petitioner’s construction. The Board then reviewed the testimony of Patent Owner’s two declarants. The Board did not find the testimony persuasive because it is inconsistent with the ’281 Patent, and also gave little weight to the testimony of one of the declarants because he is Patent Owner’s Chief Technology Officer and co-founder. The Board also reviewed a database manual and technical entry for “database management system” that was proffered by Patent Owner, but the Board was not persuaded by that evidence either. Therefore, the Board adopted Petitioner’s construction.

The Board then reviewed the term “data portion.” Patent Owner proposed the construction of “data element value,” but Petitioner objected that this construction improperly attempts to import a limitation from the specification into the claims, and offered the proposed construction of “a part or share of the database.” The Board agreed with Petitioner that Patent Owner’s construction was overly narrow, and adopted Petitioner’s construction. The Board also adopted its constructions from the Decision on Institution of “data category” and “data processing rule.”

The Board then reviewed standing to seek covered business method patent review. The Board began by discussing whether the ’281 Patent claims a method or apparatus that is directed to a financial product or service. Patent Owner contends that the ’281 Patent does not claim a financial product or service because the words of the claims do not support that determination. The Board stated that it does not interpret the statute as requiring a literal recitation of the terms of data processing of financial products or service, but the claims must only be broad enough to cover a financial product or service. The Board noted that the claimed method is likely to be used in banking, a field where protection against unauthorized access to databases is desired, and banking is a financial activity. The Board also noted the patent’s classification in 705/51 of the Office’s patent classification system. The Board also noted that it was not persuaded by prior decisions of the Board, finding that whether a patent is a covered business method patent is a fact-specific inquiry.

Next, the Board reviewed whether the ’281 Patent recites a technological feature that is novel. Patent owner argued that the claims of the ’281 Patent recite technological features that were novel and unobvious, however, Patent owner did not particularly point out what evidence or which elements of the claims demonstrate the novel and unobvious technological feature. Therefore, the Board agreed with Petitioner that at least claim 33 does not recite a technological feature that is novel or unobvious. The Board also agreed with Petitioner that the ’281 patent does not solve a technical problem with a technical solution, noting that none of the alleged technical problems cited by Patent Owner are described in the ’281 Patent.

The Board then turned to the one ground of unpatentability – that the challenged claims are unpatentable under 35 U.S.C. § 101 for failing to claim patent eligible subject matter. Petitioner argued that the claims of the ’281 Patent are directed to an abstract idea of determining whether access to data should be granted based on whether one or more rules are satisfied. Patent Owner disagreed, stating that “protection of data at the data element level based on rules stored in a separate database, where the first database calls out to the second database, is not an abstract idea.” The Board, however, was persuaded by Petitioner that the claims are directed to an abstract idea, and found that Patent Owner’s arguments are based on elements not required in the claims. Next, the Board reviewed whether the claims include an “inventive concept” (an element or combination of elements sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea itself). Petitioner argues that the claims contain “only inconsequential limitations that are insufficient to render them patent-eligible.” The Board agreed that the claims convey nothing more meaningful than the fundamental concept of determining whether access to data should be granted bases on whether one or more rules are satisfied. The Board further found that Patent Owner’s arguments on this topic are not persuasive because they are based upon an overly narrow construction of the claimed elements.

The Board then reviewed Patent Owner’s motion to Amend seeking to substitute new claims 61-68 for challenged claims 2 and 5-18. The Board noted that 37 C.F.R. § 42.221(a)(2)(i) states that a proposed claim ins nonresponsive to an alleged ground of unpatentability when it does not either include or narrow each feature of the challenged claim being replaced. Petitioner argued that the proposed claims substantially rewrite the challenged claims and eliminate certain requirements of the challenged claims. The Board agreed that the substitute claims enlarges the scope of the claims. The Board also found that the proposed claims introduce new elements or limitations which are not supported by the original specification. Therefore, the Board denied the Motion to Amend.

Square, Inc. v. Protegrity Corporation, CBM2014-00182

Paper 60: Final Written Decision

Dated: March 2, 2016

Patent 8,402,281 B2

Before: Kevin F. Turner, Meredith C. Petravick, and Gregg I. Anderson

Written by: Petravick