CBM Review of U.S. Patent No. 8,484,111

04554.00001/6553244.6

IN THE UNITED STATES PATENT & TRADEMARK OFFICE

______________________

BEFORE THE PATENT TRIAL AND APPEAL BOARD

______________________

salesforce.com, inc.,

Petitioner,

v.

Applications In Internet Time LLC,

Patent Owner.

______________________

Case CBM: 2014-00162

Patent U.S. 8,484,111

______________________

PETITIONER’S REQUEST FOR REHEARING

Mail Stop PATENT BOARD

Patent Trial and Appeal Board

Commissioner for Patents

P.O. Box 1450

Alexandria, Virginia 22313-1450

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I. RELIEF REQUESTED

Pursuant to 37 C.F.R. § 42.71(d), salesforce.com, inc. (“Salesforce”)

requests rehearing of the panel’s February 2, 2015 decision (Paper 11, “Decision”)

declining institution of covered business method review of U.S. Patent No.

8,484,111 (“the ‘111 patent”). Salesforce respectfully submits the panel erred in

concluding Salesforce had not established the ‘111 patent is a “covered business

method patent” pursuant to Section 18(d)(1) of the America Invents Act (“AIA”),

and in particular, erred by applying an incorrect legal standard regarding the basis

for CBM subject matter jurisdiction under Section 18(d)(1). In view of the

exceptional importance of this issue both to this Petition (Paper 6), and to the CBM

process generally, Salesforce respectfully suggests that an expanded panel of the

PTAB consider this request for rehearing. Salesforce further requests the PTAB

grant this Petition and institute CBM review of claims 13-18 of the ‘111 patent.

II. SUMMARY

First, the panel’s Decision misapprehended Section 18(d)(1) of the AIA in

requiring that challenged claims must “expressly claim[]” a “particular relation” to

financial products or services. See Decision, at 9.1 More particularly, the panel

erred in interpreting Section 18(d)(1) to support a finding that AIT’s claims are

ineligible for covered business method review because the “claims on their face are

1 All emphases herein added, unless otherwise noted.

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directed to technology ‘common in business environments across sectors’ with ‘no

particular relation to the financial services sector.’” Id. Neither Section 18(d)(1),

nor the relevant legislative history, nor previous decisions of the PTAB, suggest

that CBM review is premised upon an analysis that the patent in question must

“expressly claim[]” a “particular relation to the financial services sector.”

The interpretation of Section 18(d)(1) is of exceptional importance to the

present proceeding, other CBM review proceedings, and the CBM review process

generally. This statute defines the very scope of the subject matter jurisdiction of

the PTAB with respect to covered business method review, which Congress

expressly intended be interpreted broadly. This broad view was confirmed by the

Patent Office’s own stated interpretation of 37 C.F.R. § 42.301(a). See infra, at pp.

5-7. Interpretations of this statute that are at odds with the express statutory

language, Congressional intent, and numerous prior PTAB decisions would result

in a significant lack of certainty for the public regarding the PTAB’s role in

connection with such post grant review procedures. As such, Salesforce suggests

that an expanded panel rehear and address the foundational interpretation issues

raised in this Request for Rehearing. See Target Corp. v. Destination Maternity

Corp., IPR2014-00508, Paper 28, at 3-6 (Feb. 12, 2015).

Second, the Decision overlooked Salesforce’s analysis in its Petition of the

claims and specification of the ‘111 patent, which established that the scope of the

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claims, and in particular, claim 13’s limitation “fourth portion of the server being

configured to automatically detect changes that affect [] information,” covers

“performing data processing or other operations used in the practice,

administration, or management of a financial product or service.”

III. LEGAL STANDARD

A party may request rehearing of a decision by the PTAB declining

institution of a trial where “the party believes the PTAB misapprehended or

overlooked” matters in its decision. 37 C.F.R. § 42.71(d). When rehearing a

decision on a petition to institute CBM review, the PTAB “will review the decision

for an abuse of discretion.” 37 C.F.R. § 42.71(c). An abuse of discretion may be

determined “if a decision is based on an erroneous interpretation of law … or if the

decision represents an unreasonable judgment in weighing relevant factors.”

Arnold Partnership v. Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004).

IV. ARGUMENT

A. The Panel Applied an Erroneous Interpretation of Section

18(d)(1) of the AIA

Contrary to the panel’s Decision, neither Section 18(d)(1) nor 37 C.F.R. §

42.301(a) require a petitioner to demonstrate that a patent “expressly claims” a

“particular relation to the financial services sector.” Rather, Section 18(d)(1) states

generally that a “covered business method patent” is “a patent that claims a method

or corresponding apparatus for performing data processing or other operations used

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in the practice, administration, or management of a financial product or service.”

See also 37 C.F.R. § 42.301(a). That is, a patent is eligible for CBM review so

long as it claims “a method or corresponding apparatus for performing data

processing or other operations,” where that method or apparatus can be “used in the

practice, administration, or management of a financial product or service.” Thus,

there is no requirement of an “express” claiming of financial products or services

or a relation to the financial services industry.

The Decision’s interpretation of Section 18(d)(1) diverged from both this

plain statutory language and from the Patent Office’s own interpretation of 37

C.F.R. § 42.301(a). See Petition, at 8. In pertinent part, the Office indicated in its

comments to this regulation that Section 18(d)(1) should be “interpreted broadly,”

such that it would be sufficient to establish that a patent claims technology

“incidental to a financial activity or complementary to a financial activity”:

Comment 1: Several comments suggested that the Office interpret

“financial product or service” broadly.

Response: . . . [T]he legislative history explains that the definition of

covered business method patent was drafted to encompass patents “claiming activities that are financial in nature, incidental to a

financial activity or complementary to a financial activity.” 157

Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen.

Schumer). This remark tends to support the notion that “financial

product or service” should be interpreted broadly.

77 Fed. Reg. 157, at 48735.

The Office expressly rejected the view, adopted in the panel’s Decision, that

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CBM review is limited to patents claiming subject matter with a “particular relation

to the financial services sector”:

Comment 3: One comment suggested that the Office should clarify

that the term “financial product or service” should be limited to the

products or services of the financial services industry. . . .

Response: Such a narrow construction of the term would limit the

scope of the definition of covered business method patents beyond

the intent of section 18(d)(1) of the AIA. For example, the legislative

history reveals that “[t]he plain meaning of ‘financial product or

service’ demonstrates that section 18 is not limited to the financial

services industry.” 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011)

(statement of Sen. Schumer). This remark tends to support the notion

that “financial product or service” is not limited to the products or

services of the financial services industry.

77 Fed. Reg. 157, at 48736.

1. The Panel Erred in Its Interpretation of the Legislative

History of the AIA

The panel’s narrow interpretation of Section 18(d)(1) is also inconsistent

with pertinent legislative history regarding the scope of CBM review. In declining

to institute a trial, the panel placed undue (and inappropriate) emphasis on

statements by Sen. Leahy to hold that CBM review is improper for claims which

“on their face are directed to technology ‘common in business environments across

sectors’ with ‘no particular relation to the financial services sector.’” Decision, at

9. This overreliance is inconsistent with relevant authority on statutory

interpretation, the prior decisions of the PTAB, and the explicit guidance of the

Federal Register.

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First, it is not the comments of Sen. Leahy, but the comments of the

coauthors of Section 18 of the AIA, Sen. Charles Schumer and Jon Kyl, that

strongly merit consideration in interpreting Section 18. Ginsburg, Feldman &

Bress v. Fed. Energy Admin., 591 F.2d 717, 722 (D.C. Cir. 1978) (holding that the

“interpretation [that] conforms to statements of … the principal House author of

the Act … is certainly an important principle to be followed when construing the

provisions of the Act.”). Indeed, the panel’s disregard of Sen. Schumer and Sen.

Kyl’s comments in view of Sen. Leahy’s is inconsistent with the PTAB’s past

interpretation of Section 18. See, e.g., JPMorgan Chase & Co. v. Intellectual

Ventures II LLC, CBM2014-00157, Paper 8, at 13 (Jan. 14, 2015) (finding

unpersuasive Patent Owner’s argument that the PTAB should adopt Sen. Leahy’s

statements regarding the “financial product or service” requirement over the

construction of Sen. Schumer); Apple, Inc. v. Sightsound Techs., LLC, CBM2013-

00020, Paper 14, at 11 (rejecting Patent Owner’s characterization of the legislative

history based on Sen. Leahy’s comments).

The relevant legislative intent as expressed in the comments of Sen.

Schumer, and repeatedly cited by the PTAB, confirm that CBM eligibility should

extend to claims that “cover any ancillary activities related to a financial product or

service, including . . . customer interfaces, Web site management and functionality,

transmission or management of data, [and] customer communications . . . .” 157

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Cong. Rec. S1365 (daily ed. March 8, 2011) (Sen. Schumer); Petition, at 8.

Confirming the relevance of Sen. Schumer’s comments in interpreting

Section 18, the binding regulatory guidance explicitly incorporates his definition of

CBM patents (not any comments by Sen. Leahy), noting that this definition

encompasses “activities that are financial in nature, incidental to a financial

activity or complementary to a financial activity,” and does not require a particular

relationship to “the financial services sector” as set forth in the panel’s reasoning.

CBM Rules, 77 Fed. Reg. 157, at 48735–36 (quoting 157 Cong. Rec. S5432 (daily

ed. Mar. 8, 2011) (statement of Sen. Schumer)).

The AIA’s other coauthor, Senator Jon Kyl, in fact recognized that

determining eligibility for CBM review may even require looking beyond the

patent itself to determine if the patent related to a financial product or service:

Given the protean nature of many business-method patents, it often

will be unclear on the face of the patent whether it relates to a

financial product or service. To make such a determination, the

Office may look to how the patent has been asserted.

157 Cong. Rec. S1379 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl). Again, this

contradicts the panel’s interpretation requiring that a CBM patent “expressly”

claim a financial product or service or relation to the financial services industry.

2. The Panel’s Decision Regarding CBM Eligibility Conflicts

with Previous PTAB Decisions Interpreting Section 18(d)(1)

The Panel’s interpretation of Section 18(d)(1) requiring “express” claiming

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of a financial product or service or a “particular relation to the financial services

sector” also conflicts with numerous prior PTAB decisions.2 In these decisions, the

PTAB concluded that challenged claims were CBM eligible despite not

“expressly” claiming financial activities or any particular relation to the financial

services industry, and indeed encompassed technology “common in business

environments across sectors.” The PTAB instead found eligibility in these

decisions because challenged claims were directed to technology “incidental to a

financial activity or complementary to a financial activity,” or otherwise

encompassed “activities that are financial in nature” in accordance with a literal

interpretation of Section 18(d)(1) and express legislative intent.

In United States Postal Service v. Return Mail, Inc., CBM2014-00116, Paper

11, at 11-12 (Oct. 16, 2014), the PTAB found subject matter eligibility for a patent

related to a method for distributing encrypted data where the challenged claims did

not expressly recite a relationship with or connection to financial services or

products. Id. The PTAB concluded that “the “subject matter is financial in nature”

because it recites “a method for easing the administrative burden” for businesses,

including those in the financial services industry. Id. at 12. The PTAB found the

patent eligible for review, despite its conclusion that the patent is “applicable to

2 There is an extraordinary need for the PTAB to resolve this conflict between the

standard set forth in the panel’s Decision and these other PTAB decisions, so that Petitioners and

the public know which standard will be applied in determining CBM subject matter jurisdiction.

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any mail user” who deals with significant returned mail. Id. at 12.

Likewise, in Google Inc. v. Unwired Planet, LLC, CBM2014-00005, Paper

10, at 9-10 (May 9, 2014) (“Unwired Planet”), the PTAB found subject matter

eligibility where the challenged patent claimed a method and system for managing

location information for wireless communications devices, where none of the

challenged claims expressly claimed a connection to financial service, products, or

industry. Id. at 2-4. Instead, the PTAB recognized the specification’s discussion of

the claimed “client application” as being possibly “associated with a service

provider or a goods provider, such as a hotel, restaurant, or store.” Id. at 11. The

PTAB concluded, accordingly, that “the subject matter recited in [the challenged

claim] is incidental or complementary to the financial activity of service or product

sales,” and therefore that subject matter eligibility had been met. Id.

In CRS Advanced Techs, Inc. v. Frontline Techs, Inc., CBM2012-00005,

Paper 17, at 6-8 (Jan. 23, 2013), the PTAB instituted CBM review where the

claims related to a human resource management system using “substitute

fulfillment,” i.e., assigning a replacement worker during a permanent worker’s

absence. The challenged claims were silent as to financial products or services and

were instead directed to “a plurality of organizations.” Id. at 8. The PTAB

nonetheless concluded that “[n]othing in the statute, its legislative history, or the

rules requires that a covered business method patent include claim elements that

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map directly to financial products or services.” Id. The claims, the PTAB noted,

“are broad enough to include substitute fulfillment for retail banks,” and are thus at

least “incidental” and/or “complementary to a financial activity.” Id.

Thus, the PTAB has repeatedly concluded that subject matter eligibility for

CBM review is broader than the standard applied by the panel. See, e.g., Volusion

Inc. v. Versata Software, Inc., CBM2013-00017, Paper 8, at 5-6 (Oct. 24, 2013)

(instituting review where the claims recited a method of hierarchically representing

and arranging items in a database because “a person of ordinary skill in the art

would have understood” that the items displayed “may be associated with financial

services”); Google Inc. v. Inventor Holdings, LLC, CBM2014-00002, Paper 16, at

6-9 (Apr. 1, 2014) (instituting review where the challenged claim, silent as to

financial products or services, related to a method and system for facilitating

anonymous communications and exchange of identities between terminals, routed

through a central controller); Experian Mktg. Solutions, Inc. v. Rpost Commc’ns

Ltd., CBM 2014-00010, Paper 20, at 5-7 (Apr. 22, 2014) (finding the “financial

product or service” requirement met where the claim, silent as to financial products

or services, recited a method of authenticating e-mail messages using digital

signatures, because the specification “details that the claimed electronic messaging

systems and methods” are directed to “financial, monetary, and commercial

applications”); Google Inc. v. SimpleAir, Inc., CBM2014-00170, Paper 13, at 6-7

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(Jan. 22, 2015) (holding that the claim, which recited a method of transmitting data

to selected remote locations, met the “financial product or service” requirement

because the specification “contemplate[d]” using the method for managing a

financial product or service.); Apple, Inc. v. Sightsound Techs., LLC, CBM2013-

00020, Paper 14, at 11-15 (Oct. 8, 2013) (instituting review where the challenged

patent claimed accessing downloadable content after receiving a payment because

a “patent need not be used by a financial services company or involve a traditional

financial services business to qualify as a covered business method patent”); Dell

Inc. v. Disposition Services LLC, CBM2013-00040, Paper 7, at 7-11 (Feb. 5, 2014)

(instituting review where the patent disclosed a surplus asset disassembly and

disposition process because the AIA does not require a “particular relation to the

financial services sector”); Hulu, LLC v. Intertainer, Inc., CBM2014 -00053, Paper

11, at 11-12 (June 23, 2014) (finding the “financial product or service” test met

where an embodiment in the specification allowed consumers to purchase items).

As the above decisions further reflect, contrary to the panel’s reasoning, the

PTAB has previously based its holdings on whether a challenged patent is a

covered business method patent through not just an examination of the claims, but

also explicitly relying on the specification or prosecution history as informing that

inquiry. See, e.g., Experian, CBM 2014-0010, Paper 20, at 5, 7; Hulu, LLC,

CBM2014-00053, Paper 11, at 12; Volusion, CBM2013-00017, Paper 8, at 5;

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Google, CBM2014-00170, Paper 13, at 6.

Finally, in addition to the mistaken “express claim[ing]” requirement

discussed above, the panel misapprehended that, as prior Board decisions and

legislative intent confirm, when a patent is classified in Class 705 (as is the ‘111

patent), this in and of itself “raises a presumption that a patent is a covered business

method.” Hulu, CBM2014-00053, Paper 11, at 12 (June 23, 2014) (citing Sen.

Kyl). The panel did not address the creation or impact of this presumption.

Under the broader standard for eligibility consistently applied in these

decisions, Salesforce demonstrated that, based on the claims, specification, and the

Office’s classification of the ‘111 patent, that the technology of the ‘111 patent

claims is at the least “incidental to a financial activity or complementary to a

financial activity.” See Petition, at 4-15; see also infra, Section IV.B. In applying

a narrower standard for eligibility based on a requirement of “expressly claim[ing]”

and a “particular relation” to the financial services sector, the panel erred in

denying the Petition.

B. The Panel Overlooked The Petition’s Discussion of The Claimed

Change Management Layer That Manages Changes to Published

Financial Regulations

The panel did not provide further detail in its Decision as to the requirement,

discussed in Section IV.A, to “expressly” claiming a financial product or service.

However, to the extent that the panel’s (erroneous) standard requires claims to

CBM Review of U.S. Patent No. 8,484,111

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“expressly” encompass such financial embodiments3, the panel erred by

overlooking that the ‘111 patent claims expressly encompass a change management

system for managing, inter alia, changes to published financial regulations.

The Petition established that the claims (including claim 13) are directed to a

change management mechanism for monitoring and detecting changes pertinent to

the operation of a business. See Petition, at 4-6, 8-11. Claim 13 provides:

13. A system, comprising:

a server accessible by a browser executed on a client device,

...

the fourth portion of the server being configured to automatically

detect changes that affect the information in the first portion of the

server or the information in the second portion of the server.

SFDC 1001, at cols. 33-34; see Declaration of Benjamin B. Bederson, SFDC 1012

¶ 48 (“Bederson Decl.”); Petition, at 12, 15 (stating, with reference to claim 1, that

the purported ‘111 Patent invention “combin[es] regulation databases, document

management systems, … and software for tracking and monitoring for relevant

changes in external databases. . .”), 21 (stating independent claims 1 and 7 are

directed to “a system with a graphical user interface that (1) monitors an

information source and (2) updates other, stored information in response to changes

observed or otherwise detected in that information source.”), 22 (reciting change

3 To the extent that the panel instead is requiring that challenged claims

“expressly” recite a financial product, service or relation to the financial services

sector, as discussed in Section IV, supra, such a standard is clearly erroneous.

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management element). Notably, the Decision itself recognized the

“correspond[ence]” of the “fourth portion … configured to automatically detect

changes” of claim 13 with the disclosure of the embodiment of the change

management layer in Fig. 1, which “includes one or more change agents that

‘cruise the Web’; and identify and bring to the user’s attention relevant regulatory

and non-regulatory changes found on the Web that may affect a user’s business.”

Decision, at 9; SFDC 1001, 9:38-42.

Salesforce further established, through citation to the claims, specification,

and expert declaration, that this claimed change management system can be used to

manage regulatory changes affecting a business. Petition, at 4 (noting that the ‘111

Patent describes a “system that (1) provides one or more databases that contain

information on operations and requirements concerning an activity or area of

business; (2) monitors and evaluates the relevance of information on regulatory

and non-regulatory changes that affect operations of the business and/or

information management requirements “) (quoting SFDC 1001, Col. 8:36-52);

Bederson Decl. ¶ 78; see also Petition, at 14 (quoting ‘111 patent specification:

“Other workers have created … partial solutions for tracking changes in, and

compliance with, regulations and similar requirements . . .”).

Salesforce further noted the specification’s disclosure that the claimed

change management “invention” “monitors, responds to, and incorporates changes

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in, federal, state and local laws, statutes, ordinances and regulations (referred to

collectively herein as ‘regulations’) and changes in technology in one or more

regulated areas of commercial activity.” Petition, at 5-6. Further, Salesforce

demonstrated that these embodiments are directed to (a) managing changes in

financial and securities regulations and (b) managing other changes impacting a

business’ finance department. See Petition, at 8-9. Salesforce also noted the

specification expressly contemplates using the claimed change management system

in connection with regulatory change in areas that clearly encompass the financial

services sector, i.e., “banking, financial and securities activities and foreign trade”:

Examples of activities that are regulated by such regulations include: .

. . banking, financial and securities activities and foreign trade . . .

commercial trade practices . . . transportation of persons and cargo . .

. firearms production and trade . . . mining and related activities . .

. postal service activities . . . telecommunications.

See Petition, at 8-9; SFDC 1001, at col. 1, lines 28-56. Thus, as set forth in the

Petition, the claims of the ‘111 patent all cover this change management system,

which as disclosed in the specification encompasses management of regulatory

changes in the financial services sector.

V. CONCLUSION

For the foregoing reasons, Salesforce respectfully requests rehearing and

institution of covered business method review of claims 13-18 of the ‘111 patent.

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Respectfully submitted,

KEVIN P.B. JOHNSON

Dated: March 4, 2015 /Kevin P.B. Johnson/

Kevin P.B. Johnson

Registration No. 38,927

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CERTIFICATE OF SERVICE

I hereby certify that, on March 4, 2015, I caused a true and correct copy of

the foregoing document to be served via FedEx to the below addresses:

Applications in Internet Time LLC

711 S. Carson St., Ste 4

Carson City, NV 89701

Steven C. Sereboff (Reg. No. 37,035)

M. Kala Sarvaiya (Reg. No. 58,912)

SoCal IP Law Group LLP

310 N. Westlake Blvd, Ste 120

Westlake Village, CA 91362

/Kevin P.B. Johnson/

Kevin P.B. Johnson

Registration No. 38,927