Sony Corporation of Americav.Network-1 Technologies, Inc.Download PDFPatent Trial and Appeal BoardJul 1, 201509520350 (P.T.A.B. Jul. 1, 2015) Copy Citation Trials@uspto.gov Paper 7 571-272-7822 Entered: July 1, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE ____________ BEFORE THE PATENT TRIAL AND APPEAL BOARD ____________ SONY CORPORATION OF AMERICA, Petitioner, v. NETWORK-1 TECHNOLOGIES, INC., Patent Owner. ____________ Case CBM2015-00078 Patent 6,218,930 B1 ____________ Before JONI Y. CHANG, JUSTIN T. ARBES, and GLENN J. PERRY, Administrative Patent Judges. ARBES, Administrative Patent Judge. DECISION Denying Institution of Covered Business Method Patent Review 37 C.F.R. § 42.208 CBM2015-00078 Patent 6,218,930 B1 2 Petitioner Sony Corporation of America filed a Petition (Paper 2, “Pet.”) requesting covered business method patent review of claims 6 and 8–23 of U.S. Patent No. 6,218,930 B1 (Ex. 1001, “the ’930 patent”) pursuant to 35 U.S.C. §§ 321–29. Patent Owner Network-1 Technologies, Inc. filed a Preliminary Response (Paper 5, “Prelim. Resp.”). We have jurisdiction under 35 U.S.C. § 324. Pursuant to 35 U.S.C. § 324(a), the Director may not authorize a covered business method patent review unless the information in the petition, if unrebutted, “would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.” For the reasons that follow, we have decided not to institute a covered business method patent review. I. BACKGROUND A. The ’930 Patent The ’930 patent relates to “the powering of 10/100 Ethernet compatible equipment,” specifically “automatically determining if remote equipment is capable of remote power feed and if it is determined that the remote equipment is able to accept power remotely then to provide power in a reliable non-intrusive way.” Ex. 1001, col. 1, ll. 13–19. The ’930 patent describes how it generally was known in the prior art to power telecommunications equipment, such as telephones, remotely, but doing so had not “migrated to data communications equipment” due to various problems, such as the high power levels required by data communications equipment. Id. at col. 1, ll. 22–32. The ’930 patent describes a need in the art to power data communications equipment remotely and to “reliably determin[e] if a remote piece of equipment is capable of accepting remote CBM2015-00078 Patent 6,218,930 B1 3 power.” Id. at col. 1, ll. 42–44. Figure 3 of the ’930 patent is reproduced below. Figure 3 depicts remote telephone 62, which is capable of receiving and transmitting both voice and data. Id. at col. 3, ll. 60–66. Telephone 62 is connected to access node 64 at the customer’s premises, and access node 64 is connected to one of the ports of Ethernet switch 68 via wiring 66 comprising “a Category 5 Ethernet 100BaseX cable of 4 sets of unshielded twisted pairs.” Id. Ethernet switch 68 comprises automatic remote power detector 22 (shown in Figure 1) and remote power supply 34 (shown in Figure 2). Id. at col. 4, ll. 1–4. The preferred embodiment described in the ’930 patent operates as follows. A remote access device, such as the telephone shown in Figure 3, normally is powered by “an [alternating current] ac transformer adapter plugged in to the local 110 volt supply,” but may or may not be capable of being powered remotely. Id. at col. 2, ll. 40–44. The system detects whether the access device is capable of being powered remotely by CBM2015-00078 Patent 6,218,930 B1 4 “delivering a low level current (approx. 20 [milliamperes (mA)])” over existing twisted pairs of an Ethernet cable used for data signaling and “measuring a voltage drop in the return path.” Id. at col. 2, l. 66–col. 3, l. 2, col. 3, ll. 44–48. If there is no voltage drop or a fixed voltage level is detected, the device is not capable of accepting remote power. Id. at col. 3, ll. 2–11. If a varying or “sawtooth” voltage level occurs (caused by the access device repeatedly beginning to start up but being “unable to sustain the start up” due to the low current level), the device is capable of accepting remote power. Id. at col. 3, ll. 12–22. The system then increases the power being supplied remotely to the access device. Id. Once the access device is operating under remote power, the system looks for removal of the access device and decreases the power being supplied when the device is no longer connected. Id. at col. 3, ll. 49–58. B. Illustrative Claim Claim 23 of the ’930 patent recites: 23. Method for remotely powering access equipment in an Ethernet data network, comprising: (a) providing an access device adapted for data transmission; (b) connecting said access device to at least one data signaling pair connected between the access device and a data node adapted for data switching, wherein said at least one data signaling pair is arranged to transmit data therebetween; (c) receiving at said access device a low level current from a main power source over said data signaling pair, wherein said main power source is connected to supply power to the data node; and wherein a voltage level is generated on the data signaling pair in response to the low level current; CBM2015-00078 Patent 6,218,930 B1 5 (d) producing a voltage level on the data signaling pair in response to the low level current, wherein said voltage level can be sensed; (e) receiving at said access device controlled power supplied by a secondary power source arranged to supply power from the data node via said data signaling pair to the access device, in response to a preselected condition of said voltage level. C. The Prior Art Petitioner relies on the following prior art: U.S. Patent No. 5,345,592, issued Sept. 6, 1994 (Ex. 1024, “Woodmas”); International Patent Application Publication No. WO 96/23377, published Aug. 1, 1996 (Ex. 1025, “Hunter”); Japanese Unexamined Patent Application Publication No. H10-13576, published Jan. 16, 1998 (Ex. 1027) (Ex. 1028, English translation, “Matsuno”); Ron Whittaker, TELEVISION PRODUCTION 232–56 (1993) (Ex. 1026, “Television Production”). D. The Asserted Grounds Petitioner challenges claims 6 and 8–23 of the ’930 patent on the following grounds: Reference(s) Basis Claim(s) Challenged Woodmas 35 U.S.C. § 102(b) 6, 8, 9, 12–17, 19, and 22 Woodmas and Hunter 35 U.S.C. § 103(a) 6 and 8–23 Woodmas and Television Production 35 U.S.C. § 103(a) 6, 8, 9, 12–17, 19, and 22 CBM2015-00078 Patent 6,218,930 B1 6 Reference(s) Basis Claim(s) Challenged Matsuno 35 U.S.C. § 103(a) 22 Matsuno and Hunter 35 U.S.C. § 103(a) 20, 21, and 23 E. Related Proceedings The ’930 patent was challenged previously in a number of petitions seeking inter partes review. In Case IPR2013-00071 (“the -71 Case”), Avaya Inc. (“Avaya”) challenged claims 6 and 9 based on certain prior art, including Matsuno, and we instituted an inter partes review. In Case IPR2013-00092, Sony Corporation of America (Petitioner in this proceeding), Axis Communications AB, and Axis Communications Inc. challenged claims 6, 8, and 9 based on certain prior art, including Woodmas, and we denied institution. In Case IPR2013-00385, Dell Inc. challenged claims 6 and 9 based on the same grounds as Avaya, and we instituted a review and joined the proceeding with the -71 Case. In Case IPR2013-00386, Sony Corporation of America, Axis Communications AB, Axis Communications Inc., and Hewlett-Packard Company challenged claims 6, 8, and 9, and we denied institution and joinder with the -71 Case. In Case IPR2013-00495, Sony Corporation of America and Hewlett-Packard Company challenged claims 6 and 9 based on the same grounds as Avaya and Dell, and we instituted a review and joined the proceeding with the -71 Case. On May 22, 2014, we entered a final written decision in the -71 Case concluding that claims 6 and 9 had not been shown to be unpatentable. The decision is currently on appeal. CBM2015-00078 Patent 6,218,930 B1 7 The ’930 patent also has been the subject of two ex parte reexaminations. In Reexamination Control No. 90/012,401, which was stayed pending resolution of the -71 Case, the Office confirmed the patentability of claims 6, 8, and 9, as well as new claims 10–23 added to the ’930 patent during the reexamination. The corresponding reexamination certificate (Ex. 1008) issued on October 14, 2014. In Reexamination Control No. 90/013,444, Sony Corporation of America filed a request for ex parte reexamination concurrently with its Petition in this proceeding, based on the prior art references asserted in this proceeding and additional prior art. See Pet. 3. The Office granted the request on April 3, 2015, and the reexamination is ongoing. II. DISCUSSION The parties raise a number of preliminary issues in their papers, including (1) whether Petitioner is estopped under 35 U.S.C. § 315(e)(1) from challenging claims 6 and 9 based on the final written decision in the -71 Case, (2) whether the Petition should be denied under 35 U.S.C. § 325(d) because it allegedly presents the same or substantially the same prior art or arguments as in Petitioner’s earlier petitions, and (3) whether the ’930 patent is a “covered business method patent” eligible for covered business method patent review. See Pet. 11–27; Prelim. Resp. 4–62. We need not address the first two issues, however, because Petitioner has not established that the ’930 patent is a covered business method patent. Section 18 of the Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (“AIA”), provides for the creation of a transitional program for reviewing covered business method patents, and CBM2015-00078 Patent 6,218,930 B1 8 limits reviews to persons or their privies that have been sued or charged with infringement of a “covered business method patent,” which does not include patents for “technological inventions.” AIA §§ 18(a)(1)(B), 18(d)(1); see 37 C.F.R. § 42.302. Petitioner bears the burden of demonstrating that the ’930 patent is a covered business method patent. See 37 C.F.R. § 42.304(a). A “covered business method patent” is “a patent 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.” AIA § 18(d)(1) (emphasis added); see 37 C.F.R. § 42.301(a). In promulgating rules for covered business method patent reviews, the Office considered the legislative intent and history behind the AIA’s definition of “covered business method patent.” See Transitional Program for Covered Business Method Patents—Definitions of Covered Business Method Patent and Technological Invention; Final Rule, 77 Fed. Reg. 48,734, 48,735–36 (Aug. 14, 2012) (“CBM Rules”). The “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.’” Id. at 48,735 (emphasis added) (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)). When determining whether a patent is eligible for covered business method patent review, the focus is on “what the patent claims.” Id. at 48,736. A patent need have only one claim directed to a covered business method to be eligible for review. Id. Petitioner cites claim 23 and makes four arguments in support of its contention that the ’930 patent is a covered business method patent. Pet. CBM2015-00078 Patent 6,218,930 B1 9 11–19. First, Petitioner argues that claim 23 is “broad enough to cover a financial product or service” because it covers “remote equipment, which includes a variety of financial products and products incidental or complementary to financial activities.” Id. at 13–14. We disagree. Claim 23 recites a method of remotely powering access equipment in an Ethernet data network, where the method comprises the steps of (a) providing an access device (e.g., a Voice over IP (VoIP) telephone), (b) connecting the access device to a data signaling pair and data node (e.g., an Ethernet switch), (c) receiving a low level current at the access device, (d) producing a voltage level on the data signaling pair in response to the low level current, and (e) receiving controlled power at the access device in response to a preselected condition of the voltage level. The claim recites a specific way of providing remote power to an access device using a “low level current” and “preselected condition” of a resulting voltage level. Petitioner does not point to—and we do not find—any language in claim 23 relating to a financial product or service. Nor does Petitioner cite any language in the Specification of the ’930 patent relating to a financial product or service. Rather, Petitioner only cites a statement in the Background of the Invention that “[t]he desire to add remotely powered devices to a data network is being pushed by the convergence of voice and data technologies.” Ex. 1001, col. 1, ll. 33–35; see Pet. 13. We do not see how this statement relates to financial products or services, or how it supports Petitioner’s position that claim 23 recites data processing or other operations used in the practice, administration, or management of a financial product or service, as required by § 18(d)(1) of CBM2015-00078 Patent 6,218,930 B1 10 the AIA. We have reviewed the remainder of the Specification as well and find no mention of anything pertaining to a financial product or service. Second, Petitioner argues that the ’930 patent is a covered business method patent because claim 23 “covers a large number of PoE [Power-over-Ethernet] devices used in retail services.” Pet. 14–17. Petitioner cites documents and web pages purportedly describing devices (at least some of which Patent Owner allegedly has accused of infringing claims of the ’930 patent) that use PoE, such as video surveillance systems for retail point-of-sale terminals, point-of-sale credit card equipment, and radio frequency identification (RFID) readers used by retailers for inventory control and supply chain management. Id. (citing Exs. 1010–19). From this documentation, Petitioner draws various broad conclusions, including that “claim 23 covers a financial service—transaction data analysis,” and that the ’930 patent “covers all aspects of the retail industry: from day-to-day front-end operations—sales and credit card transactions, and monitoring of store operation—to the back-end of inventory control and supply chain management.” Id. Petitioner’s argument is not persuasive. The fact that certain devices may be equipped for PoE does not mean that claim 23 “covers” activities like transaction data analysis, inventory control, or supply chain management. Claim 23 is concerned solely with providing remote power to an access device and how that remote powering is accomplished. Again, the focus of our inquiry is on the claims and whether the ’930 patent claims a method of performing data processing or other operations used in the practice, administration, or management of a financial product or service. See AIA § 18(d)(1); CBM Rules, 77 Fed. Reg. at 48,736. Claim 23 CBM2015-00078 Patent 6,218,930 B1 11 describes a method of remotely powering access equipment, without any particular connection to financial products or services. See, e.g., Sega of Am., Inc. v. Uniloc USA, Inc., Case CBM2014-00183, slip op. at 11–13 (PTAB Mar. 10, 2015) (Paper 11) (claims were “directed to technology that restricts the use of software” where the software had “no particular relationship to a financial product or service”); Salesforce.com, Inc. v. Applications in Internet Time LLC, Case CBM2014-00162, slip op. at 9–10 (PTAB Feb. 2, 2015) (Paper 11) (“the claims on their face are directed to technology common in business environments across sectors with no particular relationship to the financial services sector”) (citation and quotation marks omitted); J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC, Case CBM2014-00160, slip op. at 6–12 (PTAB Jan. 29, 2015) (Paper 11) (claims pertaining to secure electronic communications had “general utility not limited or specific to any application”); PNC Fin. Servs. Group, Inc. v. Intellectual Ventures I LLC, Case CBM2014-00032, slip op. at 6–15 (PTAB May 22, 2014) (Paper 13) (claims described “software systems that have general utility not specific to any application”). Third, similar to its argument based on the use of PoE in retail services, Petitioner contends that claim 23 “covers a large number of PoE devices used in banking and financial services.” Pet. 18. For example, Petitioner argues that two alleged licensees of the ’930 patent use PoE in their bank kiosks and financial trading products. Id. (citing Exs. 1020–21). Petitioner further asserts that Patent Owner “broadly asserts that any PoE device infringes the ’930 patent.” Id. (citing Ex. 1002). Again, the fact that PoE-equipped devices may have uses other than receiving remote power, such as uses pertaining to banking, does not mean that claim 23 “covers” CBM2015-00078 Patent 6,218,930 B1 12 such activities. Petitioner’s position, in essence, would mean that any patent claiming something that can be used in connection with a financial service (e.g., an Ethernet cable, a generic computer monitor, or even a ballpoint pen) would be eligible for covered business method patent review, regardless of what the patent claims. We are not persuaded that Petitioner’s position is consistent with the statutory language, which requires us to focus on what the challenged patent claims. Fourth, Petitioner argues that the definition of “covered business method patent” should be interpreted broadly, and cites a statement in the legislative history of the AIA that “‘if a patent holder alleges that a financial product or service infringes its patent, that patent shall be deemed to cover a ‘financial product or service’ for purposes of this amendment regardless of whether the asserted claims specifically reference the type of product o[r] service accused of infringing.’” Id. at 11–12 (citing 157 Cong Rec. S1365 (daily ed. Mar. 8, 2011) (statement of Sen. Schumer) (Ex. 1023)). According to Petitioner, Patent Owner has asserted in related district court cases that the claims of the ’930 patent “are infringed in conducting financial activities.” Id. at 12. Although we agree that the definition of “covered business method patent” should be interpreted broadly, the statute requires that we focus on what the challenged patent claims, and the legislative history reflects that focus. See AIA § 18(d)(1); CBM Rules, 77 Fed. Reg. at 48,735–36; 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer) (“section 18 is intended to cover not only patents claiming the financial product or service itself, but also patents claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity”) (emphasis added); 157 Cong. Rec. S5441 (daily ed. CBM2015-00078 Patent 6,218,930 B1 13 Sept. 8, 2011) (statement of Sen. Leahy) (stating that the definition is not intended to cover “technologies common in business environments across sectors and that have no particular relation to the financial services sector, such as computers, communications networks, and business software”). Moreover, even if Petitioner’s view of the statute is correct, we are not persuaded that Patent Owner has accused financial products or services of infringing the claims of the ’930 patent. Rather, as Patent Owner points out, it has accused “Ethernet data nodes (such as switches and hubs) and Ethernet powered devices (such as IP telephones and wireless access points).” See Prelim. Resp. 39 (citing Ex. 2009). For the foregoing reasons, based on the present record and particular facts of this proceeding, we determine that the information presented in the Petition does not establish that the ’930 patent qualifies as a “covered business method patent” under § 18(d)(1) of the AIA. Therefore, we do not institute a covered business method patent review on any of the asserted grounds as to any of the challenged claims. III. ORDER In consideration of the foregoing, it is hereby: ORDERED that the Petition is denied as to all challenged claims of the ’930 patent. CBM2015-00078 Patent 6,218,930 B1 14 PETITIONER: Lionel M. Lavenue Theresa Weisenberger FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP lionel.lavenue@finnegan.com theresa.weisenberger@finnegan.com PATENT OWNER: Charles F. Wieland III Robert G. Mukai BUCHANAN INGERSOLL & ROONEY PC Charles.Wieland@bipc.com robert.mukai@bipc.com Copy with citationCopy as parenthetical citation