IP Law Daily Patent claims for peer-to-peer advertising system did not lack adequate written description
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Tuesday, March 1, 2016

Patent claims for peer-to-peer advertising system did not lack adequate written description

By Mark Engstrom, J.D.

The Patent Trial and Appeal Board erroneously concluded that 23 claims of a Blue Calypso patent on a “peer-to-peer advertising system” lacked an adequate written description, the U.S. Court of Appeals for the Federal Circuit has ruled (Blue Calypso, LLC v. Groupon, Inc., March 1, 2016, Chen, R.). However, the Board correctly found that 45 claims in 4 Blue Calypso patents were invalid as anticipated, and it properly rejected arguments by Groupon Inc.—the company that petitioned the Board for covered business method (CBM) reviews of five Blue Calypso patents—that multiple claims of those patents were anticipated or obvious in light of a prior reference (“Ratsimor”) that was not, in the Board’s view, a printed publication within the meaning of 35 U.S.C. §102(b). The rulings of the Board were affirmed in part and denied in part.

Blue Calypso and Groupon filed cross-appeals from rulings that the Board (or “PTAB”) had made in its CBM reviews of five related patents that were owned by advertising technology developer Blue Calypso. The patents generally described a “peer-to-peer advertising system” that used mobile communication devices. The advertising system included subsidy programs that were designed to induce subscribers to increase the exposure of advertisements by forwarding them to like-minded peers.

Blue Calypso argued that the Board had incorrectly found that: (1) the patents at issue claimed a covered business method; (2) a single prior art reference—“Paul”—had anticipated many of the patent claims at issue; and (3) the contested claims of one of the patents were invalid because they lacked written description support. In its cross-appeal, Groupon argued that the Board had erroneously concluded that the Ratsimor reference was not prior art.

Covered Business Method

The court noted that CBM review was limited to patents that claimed a method or apparatus for performing data processing or other operations that were used in the practice, administration, or management of a “financial product or service,” except that the term did not include patents for “technological inventions.”

Financial product or service. Blue Calypso argued that the challenged patents were not CBM patents because they described a method for managing and distributing advertising content, which was not a “financial product or service” that traditionally originated in the “financial sector.” The circuit court disagreed.

According to the Federal Circuit, the Board’s refusal to limit the application of CBM review to patent claims that were tied to the “financial sector” was consistent with its recent case law. More specifically, in SightSound Technologies, LLC v. Apple Inc., 809 F.3d 1307 (2015), the Federal Circuit agreed with the Board that a “financial activity” that was not directed to money management or banking could constitute a “financial product or service.”

Technological invention exception. Blue Calypso alternatively argued that the challenged claims fell within the “technological invention” exception for CBM review because the claims were “computer-based.” According to Blue Calypso, the claims contemplated hardware, software, a network, and communication devices.

Nevertheless, the Federal Circuit had already found that the mere recital of “computer use” was insufficient to satisfy the technological invention exception because “the presence of a general purpose computer to facilitate operations through uninventive steps” in a patent did not change the fundamental character of an invention. The Federal Circuit thus concluded that the Board had correctly rejected Blue Calypso’s proposed interpretation of the term “technological invention.”

For those reasons, the court had to determine whether the Board had correctly applied the definitions of “covered business method” and “technological invention” to the Blue Calypso patents.

Application of “CBM” definition. The Federal Circuit was unpersuaded by Blue Calypso’s argument that the Board had acted in an arbitrary or capricious manner through an “unpredictable application” of the definition of a CBM. Blue Calypso relied on a handful of Board decisions that refused to institute CBM review of patents that were unrelated to the Blue Calypso patents, but each of those cases properly focused on the claim language at issue. Finding nothing explicitly or inherently financial in the construed claim language, the Board declined to institute CBM review.

In this case, however, the claims at issue had an express financial component in the form of a subsidy—a financial inducement that encouraged consumers to participate in the distribution of advertisements. The court noted that the subsidy was central to the operation of the claimed invention.

For those and other reasons, the circuit court affirmed the Board’s finding that the challenged claims of the Blue Calypso patents met the statutory definition of a CBM patent.

Application of “technological invention” definition. Blue Calypso also argued that the claims at issue represented technological inventions because the claims were directed to a solution that remedied the technological limitations of traditional broadcast advertising.

The Federal Circuit disagreed. According to the court, Blue Calypso failed to identify any technological aspect of its claims that rose above the general and conventional, and conventional computer components could not change the fundamental character of those claims.

Ultimately, the Federal Circuit concluded that the Board’s findings—that the patents at issue were CBM patents that did not claim a technological invention—were neither arbitrary nor capricious. Furthermore, the Board’s findings were supported by substantial evidence. The court thus concluded that the Board had acted within its authority when it conducted CBM reviews of the challenged claims of the Blue Calypso patents.

Anticipation by Paul. The Board found that the Paul prior art disclosed an Internet-based e-mail communications system for “members.” The system used several “tools,” including: (1) a tool that allowed users to develop and manage an email direct marketing campaign that sent personalized e-mail messages to members whose records matched the parameters that were identified for the campaign and (2) a tool that implemented a “refer-a-friend” advertising campaign, which provided a coupon to members who successfully referred friends to a business’s website. Both of those tools used hyperlinks to allow viewers to access an advertising website.

Blue Calypso did not dispute Paul’s disclosure of those tools or Paul’s teaching of the other elements in the Blue Calypso patents claims. Instead, Blue Calypso argued that: (1) the “targeted-marketing campaigns” tool and the “refer-a-friend” tool were separate and distinct tools and (2) the Board’s anticipation finding had erroneously combined them, even though that combination was not explicitly found in Paul. Blue Calypso further argued that Figure 5 in Paul showed that the “targeted-marketing campaigns” tool was separate and independent from the “refer-a-friend campaign” tool. According to Blue Calypso, that separation precluded the combination of the two tools to arrive at the claimed invention.

The Board found that a person of ordinary skill in the art would understand that both tools were used in conjunction with each other to send “refer-a-friend” email incentives to a subset of members based on their demographic characteristics.

On appeal, Blue Calypso argued that the Board’s analysis was contrary to the Federal Circuit’s case law, which required the purportedly anticipatory reference to disclose all of the elements of the claim, “arranged as in the claim.”

In Kennametal, Inc. v. Ingersoll Cutting Tool Co., 780 F.3d 1376 (2015), the Federal Circuit recognized that a reference could anticipate a claim even if that reference “did not expressly spell out” all of the limitations that were “arranged or combined as in the claim,” if a person of skill in the art, reading the reference, would “at once envisage” the claimed arrangement or combination.

In affirming the Board’s anticipation finding, the Kennametal court noted that, to anticipate, a reference did not always need to include an express discussion of the actual combination. Instead, a reference could anticipate if it taught that the disclosed components or functionalities could be combined and one of skill in the art would be able to implement that combination. Thus, in Kennametal, the Federal Circuit found substantial evidentiary support for the Board’s finding that the relevant reference had anticipated the disputed claims without a particular disclosure of the specific combination that was recited in those claims.

In this case, the Board found that Figure 5 of Paul and the corresponding passages of its written description disclosed a limited number of tools. The Board further found that, given Paul’s discussion of combining features, a skilled artisan would “at once envisage” the combination of two of the disclosed tools—the “targeted-marketing campaigns” tool and the “refer-a-friend” tool—to arrive at the system that was claimed in the Blue Calypso patents.

The circuit court agreed. As in Kennametal, nothing in the record suggested that a person of skill in the art would lack the ability to use the option for the “direct e-mail campaign” tool in conjunction with the option for the “refer-a-friend” tool to send “refer-a-friend” e-mail incentives to a subset of members based on their demographic characteristics.

For those reasons, the circuit court concluded that the Board’s findings were supported by substantial evidence. The court thus affirmed the Board’s determination that the disputed claims were anticipated by Paul.

Written description. On appeal, Groupon argued that the term “endorsement tag” and the term “token” lacked written description support because those terms were absent from the written description of the relevant patent. Blue Calypso argued that: (1) a skilled artisan would realize that those terms referred to an executable link and (2) the written description specifically described the use of an executable link in the same way that the claims recited the use of an “endorsement tag” or “token.”

The Board acknowledged that the specification did not need to explicitly use the “tag” or “token” terms or exactly describe the claimed subject matter. Nevertheless, the Board rejected Blue Calypso’s argument and stated that Groupon had provided the “most persuasive” evidence of all: that the underlying patent application did not recite an “endorsement tag” or “token.”

The court noted that it had previously found that, when examining the written description for support of the claimed invention, the exact terms appearing in the claim “need not be used in haec verba.” For that reason, the court was troubled by the Board’s failure to cite any evidence in support its finding of unpatentability, other than the fact that the challenged terms were not present in the specification.

The court thus concluded that the Board had placed undue weight on the absence of the terms “token” and “endorsement tag” in the specification. Ultimately, the court ruled that the Board had erred by giving undue weight to the mere fact that the terms “tag” and “token” were absent from the text of the written description. Because none of Groupon’s arguments persuaded the court that the Board’s finding was nevertheless supported by substantial evidence, the court reversed the Board’s ruling that 23 claims were unpatentable because they lacked an adequate written description.

Prior art character of Ratsimor. The Board concluded that, even if the Ratsimor reference was available on the Internet, Groupon’s evidence was insufficient to find that the report was publicly accessible. The Board thus ruled that Ratsimor was not a printed publication and thus could not be used to prove unpatentability under §102 or §103. Groupon appealed that ruling.

The Federal Circuit agreed with the Board. Other than testimony by Groupon’s expert that Ratsimor was “publicly available around November 2003,” Groupon proffered no evidence to show that Ratsimor was disseminated to the interested public before the critical date. Even if the court assumed that Ratsimor was available online—on Dr. Ratsimor’s personal page—before the critical date, Groupon did not proffer any evidence to show that Ratsimor was viewed or downloaded, according to the court.

Further, the record was devoid of testimonial evidence that would indicate that a person who was interested in e-commerce and peer-to-peer marketing would be independently aware of the web address for Dr. Ratsimor’s personal page. In other words, the record lacked evidence to show that an artisan of ordinary skill would know about Dr. Ratsimor’s personal webpage or web address.

Groupon argued that an Internet search engine would have located the report, but the court could not infer that the relevant webpage had been indexed, such that a search engine could locate it. According to the court, the record was devoid of any evidence that a search engine query would have discovered the Ratsimor reference.

Ultimately, the court agreed with the Board that Groupon failed to show that the Ratsimor reference was publicly accessible. The court thus affirmed the Board’s rejection of all of Groupon’s anticipation and obviousness arguments that relied on the Ratsimor reference.

Conclusion

The Federal Circuit affirmed the Board’s rulings that: (1) the Paul prior art anticipated the challenged claims of the Blue Calypso patents and (2) the Ratsimor reference was not a printed publication within the meaning of 35 U.S.C. §102(b). However, the court reversed the Board’s ruling that the claim terms “endorsement tag” and “token” lacked written description support.

The case is Nos. 2015-1391, 2015-1393, and 2015-1394.

Attorneys: David Brandon Conrad, Carl Edward Bruce, John C. Phillips, and John A. Dragseth (Fish & Richardson P.C.) for Blue Calypso, LLC. Jeanne Marie Gills, Jason Jon Keener, and Aaron Jacob Weinzierl (Foley & Lardner LLP) for Groupon, Inc. Kakoli Caprihan, U.S. Patent and Trademark Office, for intervenor Michelle K. Lee.

Companies: Blue Calypso, LLC; Groupon, Inc.

MainStory: TopStory Patent FedCirNews

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