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PTAB Gouges Patent Owner and Counters District Court in CBMP Review
Practical Law Legal Update 7-556-5434 (Approx. 4 pages)
PTAB Gouges Patent Owner and Counters District Court in CBMP Review
by Practical Law Intellectual Property & Technology
| Published on 04 Feb 2014 • USA (National/Federal) |
In Interthinx v. CoreLogic Solutions, a covered business method patent review, the US Patent Trial and Appeal Board (PTAB) determined that certain claims of an expired patent did not cover patent-eligible subject matter and were anticipated or obvious in view of the prior art. This decision came despite an earlier district court decision that entered judgment upholding the validity of certain of these patent claims.
On January 30, 2014, the US Patent Trial and Appeal Board (PTAB) issued an opinion in Interthinx v. CoreLogic Solutions holding that certain claims in an expired patent directed to a computer-implemented method for appraising real estate were:
- Not patentable under 35 USC § 101.
- Anticipated under 35 USC § 102 or obvious under 35 USC § 103.
The PTAB rendered its decision in this covered business method patent (CBMP) review despite an earlier district court decision which entered judgement rejecting the petitioner's assertion that certain claims are invalid as anticipated or obvious.
US Patent No. 5,361,201 ('201 patent), which is now expired, relates to a computer-implemented method for appraising real estate. Specifically, the patent uses:
- Predictive modeling techniques to generate real estate price estimates.
- Error models such as regression models to estimate errors in the price.
The '201 patent was the subject of a jury verdict in litigation before the US District Court for the Eastern District of Texas, which entered judgment that:
- Interthinx did not infringe CoreLogic's patents.
- Claims 1 and 10 of the '201 patent were not invalid.
The parties filed post-trial motions, which included the petitioner's JMOL motions that:
- The '201 patent is invalid under 35 U.S.C. § 101.
- Claims 1 and 10 are invalid under 35 U.S.C. § 102 and/or 35 U.S.C. § 103.
The district court denied all of the post-trial motions and the parties subsequently settled. Neither party appealed the district court decision.
The petitioner of this covered business method patent review is no longer a party to the review because the parties settled and the PTAB terminated the petitioner's involvement (35 U.S.C. § 327(a)). However, the PTAB retained jurisdiction to issue this decision.
Res Judicate and Collateral Estoppel
The patent owner argued that:
- Res judicata and collateral estoppel bar the petitioner's case under Section 101.
- Collateral estoppel bars the petitioner's case under Sections 102 and 103.
The PTAB rejected both of the patent owner's arguments noting that:
- On the Section 101 case, the issue decided by the PTAB is not identical to the one decided or litigated in district court because:
- the district court's decision applied the clear and convincing evidence standard; and
- the PTAB applies the preponderance of evidence standard to determine claim patentability rather than validity.
- On the case under Sections 102 and 103:
- the issues are different, as noted above concerning the Section 101 case and, even though the '201 patent has expired, the PTAB still applies the preponderance of evidence standard; and
- the petitioner is no longer a party to the CBMP review and that the patent owner did not demonstrate that the USPTO had a full and fair opportunity to litigate the patentability issues in the district court litigation.
Unpatentability of the Claims
The PTAB concluded that claims 1, 6, 9 and 10 were unpatentable under Section 101. In particular, the PTAB determined that the claims recite abstract concepts because:
- On the pricing estimate:
- one inventor considered the invention to be a process for predicting the selling price of a home using statistical analysis;
- the patent owner's expert characterized the invention as a way to determine the sales price of a property; and
- determining price was found to be abstract in another CBMP review, citing SAP America, Inc. v. Versata Dev. Group, Inc., DBM2012-00001, (PTAB, June 11, 2013).
- The inventor's and expert's testimony indicated that an error can be accomplished using the same well-known techniques as those applied to the predictive model.
The PTAB also analyzed the prior art and concluded that claims 1, 6, 9 and 10 were unpatentable as anticipated or obvious.