VERSATA DEVELOPMENT GROUP v. LEE — Oral Argument

0:00 Judge Newman First docket, 14-11-45, Versata Development Corporation, Development Group, against Lee,

0:08 and 14-11-94, Versata Development Group, against SAP America.

0:16 Mr. Lankin.

0:17 Judge Hughes Do you want to do the swearing-in first?

0:21 Judge Newman Oh.

0:21 Oh.

0:23 My goodness, usually I have a sign.

0:26 We'll start again.

0:27 We have a motion.

0:29 Appellant Attorney (Jeffrey A. Lamken) Yes.

0:30 Thank you, Presiding Judge Newman.

0:34 I do have a motion.

0:37 Ms. Dutry, if you would rise.

0:39 Thank you.

0:40 I move the admission, colleagues, of Rebecca Parker Dutry, who is a member of the Bar

0:46 and is in good standing with the highest courts of Virginia and the District of Columbia.

0:53 I have knowledge of her credentials and am satisfied that she possesses the necessary qualifications.

1:01 May I add that the reason I have knowledge of her credentials and am so satisfied is that

1:08 for the last year, Ms. Dutry has been my law clerk in chambers and has been superb in every

1:17 possible way I could possibly ask, and I regret that at this point she's leaving us, but fortunately

1:27 we are, again, fortunate to have a very good replacement.

1:31 I have no doubt that the court has chosen for her, but at the same time I think this

1:37 is an appropriate occasion to swear her in, so I move her admission.

1:43 Judge Newman I shall consult with my colleague.

1:45 Are you willing to agree to grant the motion?

1:48 Yes.

1:49 The motion is granted.

1:51 Please proceed to the clerk who will administer the oath.

1:55 Appellee Attorney (Erika H. Arner) You saw her swear.

2:09 Judge Newman Welcome to the court.

2:10 Appellant Attorney (Jeffrey A. Lamken) My business is concluded.

2:21 Thank you.

2:22 Judge Newman All right.

2:23 We shall.

2:24 Thank you.

2:24 We shall start again.

2:26 Do I need to recite the case numbers again for the sake of posterity?

2:32 No, not at all.

2:32 All right.

2:33 In that case, you may proceed, Mr. Lambert.

2:41 Appellant Attorney (Jeffrey A. Lamken) Thank you.

2:42 It may please the court.

2:43 The Board in this case exceeded its authority under the CBM provisions when it construed

2:48 the phrase, financial products and services to include anything relating to unmonetary

2:52 matters, including . . .

2:54 Appellant Attorney (Jeffrey A. Lamken) Right at the outset.

2:55 Let me be sure we're all on the same page.

2:59 You're doing a lot of work.

3:08 Appellant Attorney (Jeffrey A. Lamken) I understand the two have been combined, so I'm arguing together, but we're leaning

3:11 primarily on 1194, review of the Board's decision, and the APA action is simply a backup for

3:18 us in the event that the court were to conclude that it doesn't have jurisdiction in the 1194

3:24 action, review of the Board.

3:27 The short answer is yes, 1194 is my primary argument.

3:30 Unknown Thank you.

3:30 Appellant Attorney (Jeffrey A. Lamken) And in that action, this court has jurisdiction to address the Board's final written order,

3:37 which exceeds its authority, as well as the final written decision insofar as it reaches

3:42 the wrong substantive result on patentability.

3:44 Beginning with this court's jurisdiction, Section 329, the judicial review provision,

3:49 says that any party who is dissatisfied with the Board's final written decision under Section

3:54 328 can seek review in this court.

3:58 Here, Versada is dissatisfied with the Board's decision.

4:01 Not merely because of the merits, but because the Board exceeded its authority when it issued

4:06 that written decision.

4:07 For example, the Board has authority only to invalidate covered business methods under

4:13 this provision, and in our view, this is not a covered business method.

4:17 This court has authority to review the fact that the Board exceeded its authority in issuing

4:22 its final written decision.

4:23 Authority Congress did not give it.

4:25 We don't need to challenge the institution decision at all.

4:29 It is enough that the final decision is something the Board did not have authority to issue,

4:35 especially given the strong presumption of judicial review.

4:38 It's enough that this court has authority to review that final written order.

4:43 In the district court, the PTO and SAP conceded that this court would have authority to review

4:49 the Board's authority to issue its final written decision.

4:52 In fact, they said that the statute not only could be read that way, but should be read

4:56 that way.

4:57 They told the court that nothing in the statutory system would be read that way.

4:59 They also told the court that the adviser and綠e 0, 0, 1, 0, 0, 1, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0.

5:10 They said the execution Kay'toe and Lab inequality claims were so dependent on the

5:10 standard of because there's no

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5:17 Appellant Attorney (Jeffrey A. Lamken) That's all.

5:19 parse these arguments

5:20 and you can lump them all together

5:23 and come up with a lot of

5:25 phrases but that doesn't help me

5:26 anyway. The question

5:29 the first question we have

5:31 to ask is

5:33 what is a covered

5:34 business method and did

5:37 your invention

5:39 fall within the meaning of that term?

5:42 That's an important question

5:43 but there's a predicate

5:45 question isn't there as to whether we can ask

5:47 that question. Now

5:49 it's sort of a chicken and egg problem

5:51 that is how do we

5:54 ask the question

5:56 until we know we can ask the question

5:58 so I'm not sure what the right

6:00 order is to take that question up

6:02 but let's assume hypothetically

6:04 let's assume hypothetically

6:06 that

6:07 we think we have jurisdiction

6:10 to ask the question

6:12 was the

6:14 board correct when it

6:16 said this was a covered business

6:18 method case

6:19 your argument is

6:22 they were not. Correct

6:23 Appellant Attorney (Jeffrey A. Lamken) they were not. Why don't we address that

6:26 Appellant Attorney (Jeffrey A. Lamken) as a narrow issue of

6:27 statutory construction

6:29 leaving aside

6:31 for the moment whether we're actually

6:34 going to ask that question

6:35 that's a separate question. Certainly

6:37 Appellant Attorney (Jeffrey A. Lamken) I was starting with this court's jurisdiction

6:40 but let's start with the board's statutory authority

6:42 which under the CBM provision extends

6:44 to claims and I'm going to shorten it a little bit

6:46 used in

6:47 a financial product

6:50 or service. That's the phrase financial

6:51 product or service. That has an

6:54 ordinary meaning

6:55 in Dodd-Frank for example they define

6:58 the exact phrase to include things such

7:00 as extending credit

7:01 servicing loans, real estate

7:04 settlement, deposit taking

7:05 selling stored value instruments

7:07 financial advisory services

7:10 googling the terms reveals

7:12 things like banking, insurance

7:13 credit advice, investment management

7:16 financials, other financial services

7:18 doesn't include software that

7:20 helps you determine prices or calculators

7:22 or spreadsheets. Before this case

7:25 Judge Hughes So you would

7:26 confine covered business

7:28 methods to the financial industry

7:30 Appellant Attorney (Jeffrey A. Lamken) No I would not

7:31 I think Senator Schumer is correct that

7:34 for example if a car dealer sells me a car

7:36 and then provides financing

7:38 he's not in the financial sector

7:40 or the financial industry but he's provided

7:42 credit to me and that

7:44 is a financial product or service so I

7:46 would include that. So it's not the financial

7:48 sector but it is service

7:50 and products we traditionally think of as financial

7:52 products and services. You can't just

7:54 take the term financial and strip it

7:56 away from the words products and services and I think

7:58 that is the core where the board went wrong.

8:00 When the board looked at this it said well

8:02 the term financial is an adjective

8:03 it simply means leading to monetary matters

8:06 and then it equated that with

8:08 anything complementary to financial

8:10 activity and it may well be

8:12 that when you are using the phrase financial

8:14 activity that could include

8:16 anything that involves the exchange of money

8:18 buying a house is financial activity

8:20 buying a gum could be financial activity

8:22 but a financial product or service

8:24 when you think of that in ordinary meaning

8:26 that doesn't include just purchasing a

8:28 pack of gum. Are you sure?

8:30 Judge Newman Because my impression

8:32 tell me if this is wrong but as

8:34 this was working its way through the system

8:36 that the intention was to

8:38 include the kinds of transactions

8:40 represented in

8:42 Bilski and in Alice

8:44 and yet you can

8:47 redefine or define those

8:48 transactions as you ask us to.

8:50 Should you define this one

8:52 in the same way?

8:53 Appellant Attorney (Jeffrey A. Lamken) No I think that's exactly what this was going after

8:56 is Bilski and Alice. Bilski is

8:57 for example hedging.

8:59 Hedging is clearly the type of financial

9:02 activity. It involves those traditional

9:04 things that if you typed in financial products

9:06 and services being able to do hedges

9:08 or buy securities or

9:10 commodities all those things those

9:12 investment type activities would be covered.

9:14 Judge Hughes So what if there's a business method to

9:16 more efficiently deal with

9:18 purchases on

9:20 using credit card transactions

9:22 you know the swipe thing or something like that.

9:24 Is that a covered business method?

9:27 Appellant Attorney (Jeffrey A. Lamken) Because credit cards

9:28 are the extension of credit

9:29 the answer would be yes that is and in fact

9:32 I think the PTO's in its trial

9:34 handbook refers to that type of machinery

9:36 as the type of thing that would be

9:38 Judge Hughes The method covered by that patent

9:39 is not necessarily related to the credit card

9:42 itself but the

9:44 method by which the store owner

9:46 handles the purchasing.

9:49 Appellant Attorney (Jeffrey A. Lamken) If it's

9:51 I'm not sure I follow the question but I think

9:53 the answer is if it's a covered business

9:55 method if it relates to the financial

9:57 activity and it involves you know what

9:59 we typically think of as a financial product or service

10:01 then it's arguably

10:03 within the CBM.

10:05 If it's a technological solution

10:07 then it's excluded by definition but the one

10:09 thing I can tell you is simply saying that

10:11 involves the transfer of money

10:13 can't be enough because that just means all

10:15 business transactions are covered and that's

10:17 just not the meaning of the phrase

10:19 financial products or services that anybody

10:21 before this case ever ascribed to it.

10:23 Appellant Attorney (Jeffrey A. Lamken) What distinction do you draw

10:25 between a product

10:27 and a service? Obviously

10:29 Congress thought these were

10:31 two different things because the statute

10:33 says a financial

10:35 product or

10:38 financial service.

10:40 I inserted financial there

10:42 but that's proper reading of the phrase.

10:44 What do you think they

10:46 meant when they distinguished

10:48 between a product and a service?

10:50 Appellant Attorney (Jeffrey A. Lamken) Well in product often you

10:52 hear things like a financial product with

10:53 derivatives. It's a type of financial

10:55 product when you're talking about the

10:58 market's derivatives. For example banking

11:00 is traditionally considered a financial service.

11:02 You have a relation to the bank and they cash your

11:04 checks and hold your money and pay you interest.

11:06 So there's a distinction between buying financial products

11:08 securities might be a financial product

11:10 you own the security, own a portion

11:12 that's a financial product.

11:14 Financial service, banking, so that's the

11:16 distinction between the two. But the one thing that

11:18 Congress wasn't doing was when you go and buy a

11:20 pack of gum that's automatically a

11:22 financial product or service. If I buy a car

11:24 for cash no one

11:26 would say you just bought a financial product

11:28 or service and no one would tell the dealer

11:30 you just sold a financial product

11:33 or service even if you priced it using our

11:34 Judge Hughes invention. This isn't talking about buying

11:36 a car or cash. It's not even talking about

11:39 buying certain products.

11:41 It's talking about establishing

11:43 I assume software

11:45 or something like that as a

11:47 pricing mechanism for these.

11:49 And why isn't selling

11:51 a pricing mechanism selling

11:53 a financial service to these companies?

11:55 It makes them more efficiently

11:57 manage their business.

11:59 Appellant Attorney (Jeffrey A. Lamken) And I think the short answer is

12:01 the ordinary meaning of financial product or service

12:03 when you look at it is the traditional

12:05 things like banking investments

12:06 and things like that. A software product

12:08 or a spread. Excel might for example

12:10 Judge Hughes Ask you this hypothetical then. If there was

12:13 a program to

12:16 automatically price

12:17 stocks and bonds

12:19 and stuff like that and you sold this to

12:21 consumers or to brokerage firms

12:23 or things like that and said

12:25 here's something that will make it much more

12:27 easy for you

12:29 to advise

12:31 your customers and choose among the most efficient

12:33 investments and it's the same kind of

12:35 for some reason there's all these different tiers

12:37 and stuff like that. It's the same exact patent you have

12:39 that involves bonds

12:41 and stocks. Would that be a financial

12:43 Appellant Attorney (Jeffrey A. Lamken) product? It would fit in the phrase

12:45 that is used in the practice, administration

12:47 or management of a financial

12:49 product or service. So the stocks and bonds

12:51 are a financial product and your practice

12:53 is practicing the sale and practicing the management

12:55 of the stocks or bonds. So something that helps

12:57 Judge Hughes you price tangible

12:59 goods is not a financial

13:01 service but something that helps you price

13:03 stocks and bonds is?

13:05 Appellant Attorney (Jeffrey A. Lamken) I think the answer is that something that

13:07 helps you price is not itself a

13:09 financial product or service. Remember this has to be

13:11 something that's used in the practice

13:13 administration or management of a financial

13:15 Judge Hughes product or service. Shouldn't we be looking at

13:17 a method to determine whether it's a

13:19 product or service not in sale

13:21 of what it's selling?

13:24 Appellant Attorney (Jeffrey A. Lamken) I think what the question is what is the

13:26 method, what is the invention used

13:27 in and the inventions used in

13:29 Judge Hughes Can I just ask you this?

13:31 If you have two identical

13:34 method claims, one is

13:36 to sell stocks and bonds, one is

13:38 to sell tangible goods. Is

13:40 the one a financial product because

13:42 it sells stocks and bonds and the other

13:44 not because it sells tangible goods?

13:46 Appellant Attorney (Jeffrey A. Lamken) I think they're both going to fall outside

13:47 for the following reason. Sorry, I couldn't hear that.

13:50 I think they're both going to fall outside

13:52 but for a slightly different reason.

13:54 Statute says it has to be used in the practice

13:56 administration or management of a

13:58 financial product or service. That means

14:00 doing things like calculating

14:02 the value of an insurance policy.

14:04 How you manage or operate

14:06 or practice how the bank operates.

14:08 It isn't how it sells

14:10 and engages in financial transactions

14:12 Judge Newman Are those covered or not covered?

14:14 Appellant Attorney (Jeffrey A. Lamken) I don't think they would be. I don't think

14:16 simply pricing anything that you sell

14:18 somebody is, but I would admit because

14:20 you're in the land of something that is actually

14:22 a financial product or service, it's closer.

14:24 It turns on the phrase of used in the practice

14:26 administration or management instead of

14:28 financial product or service. But when you're

14:29 merely setting the price of cars

14:32 or widgets or whatever you have, that's

14:34 just not within the meaning of

14:35 used in the practice

14:37 of management. What if you sell an

14:40 Judge Hughes accounting program to a company

14:42 that it uses to

14:44 track inventory and the like?

14:46 Is that a financial product?

14:48 Appellant Attorney (Jeffrey A. Lamken) No, Your Honor, it would not be. It may

14:50 be a product that's used in business

14:52 but it's not a financial product or

14:54 service because it's not what we all

14:56 understand it to be. If you Google those terms,

14:57 you're not going to come up with accounting software.

15:00 You're going to come up with investment management

15:01 advice, banking.

15:03 Judge Hughes Let me ask you this. If we disagree with you on that

15:06 and we think that

15:07 the Board was right

15:11 here in determining

15:12 that this was a covered business method,

15:14 do we need to reach that jurisdictional question

15:16 you started with about whether the Board

15:18 whether we can review that or

15:20 not or can't we put that aside

15:22 for another day if we

15:24 think that it doesn't matter because

15:25 the Board was correct here?

15:27 Appellant Attorney (Jeffrey A. Lamken) I think the ordinary rule is the Court can't

15:30 assume an answer to a question. It generally

15:32 has to address its jurisdiction first.

15:34 You don't get what the Supreme Court has

15:36 dismissively called derived by jurisdiction.

15:38 In practice, however, Courts have

15:40 sometimes done precisely that.

15:41 So if the Court were to disagree with us

15:44 it probably could go and do that

15:46 but ordinarily the Supreme Court says

15:47 first thing you ask, do you have jurisdiction

15:50 to decide the question, then decide the question.

15:51 You don't assume you have jurisdiction and then

15:54 assuming are you and do you have it.

15:56 And one of the problems is you're creating precedent

15:57 on the assumption you had jurisdiction to decide it.

16:00 Judge Newman You're telling us that there is no

16:02 bright line by which

16:04 one can predict which side

16:06 a particular system is

16:08 on, but

16:10 if that's so, and I suppose that's

16:12 true in the law in general, there is always

16:14 some place where the competing

16:17 interpretations are but

16:18 but what I'm not at all sure that

16:20 I've heard is how

16:22 to define the extremes

16:25 as well to be confident

16:26 for at least the great

16:28 majority of these situations

16:31 whether you are or aren't

16:32 within the statutory purpose.

16:35 Can you provide

16:36 such a definition?

16:38 Appellant Attorney (Jeffrey A. Lamken) I think I would have to do it by example because

16:40 it's a phrase that's used and it has

16:42 a well established meaning in the sense that

16:45 everybody knows what it is.

16:47 So, for example, it would be

16:49 things like banking. The traditional

16:50 things you think of when you're talking about buying

16:52 financial products, securities, banks,

16:55 banking, insurance,

16:57 credit, real estate

16:58 settlement. All the things for example that are listed

17:00 in Dodd-Frank. The one thing it isn't

17:02 and the one thing I know is it isn't everything

17:04 related to financial activity and that's

17:06 what the board said and that's wrong.

17:09 Whatever the

17:10 far extremes, difficult cases

17:13 might exist, the board's definition

17:14 is so far off from anything that's reasonable

17:17 or plausible, it can't be sustained.

17:19 The court cannot perform on that basis.

17:22 Appellant Attorney (Jeffrey A. Lamken) You don't put

17:23 much weight at all on the

17:25 other phrases in

17:27 that statute. The other

17:29 phrases being

17:30 performing data processing

17:32 or other operations

17:35 used in the

17:36 practice, administration, or

17:38 management.

17:41 Those are terribly broad

17:43 phrases suggesting that

17:45 they encompass a whole

17:47 range of activities

17:49 but then you narrow it down

17:51 despite the breadth

17:53 of those sweeping terms

17:55 to a very limited field.

17:58 Appellant Attorney (Jeffrey A. Lamken) I do because the statute does.

17:59 The statute starts with data

18:01 processing and things like that and then it narrows

18:04 it says, not all of them, just

18:05 the ones used in the practice, administration,

18:07 or management, very specific activities,

18:09 of a very specific

18:11 set of things, financial products and services.

18:14 Appellant Attorney (Jeffrey A. Lamken) Just the ones used in practice,

18:16 administration, or management

18:17 can cover almost anything you do.

18:20 Appellant Attorney (Jeffrey A. Lamken) I'm not sure it does, Your Honor,

18:21 because I think setting the...

18:23 I would not, for example,

18:26 say that in the practice of law

18:27 I use something that sets price.

18:29 I do lots of things in practicing law but

18:31 setting a price isn't part of my practice of law.

18:34 The same thing is true when it comes to

18:36 financial management or financial products.

18:37 There's all sorts of things people do actuarially

18:39 or go through for insurance, for example,

18:42 or calculate for purposes loans

18:43 or do things to calculate hedging

18:46 strategies or

18:47 intermediate settlement. They're all financial

18:50 in nature, in the sense of being a

18:52 financial product or service. But simply setting

18:53 a price for an ordinary product,

18:56 your widget, your car, your anything,

18:57 that is not a financial product or service.

18:59 Appellant Attorney (Jeffrey A. Lamken) If you wanted to patent a

19:02 method for determining

19:04 lawyers' fees

19:06 in a competitive market

19:08 based on the nature

19:09 of the claim and

19:11 the financial

19:14 strength of the client

19:16 and you came up with a

19:17 way to do that through a

19:19 data processing invention

19:22 that you wanted to patent,

19:23 would that be within

19:26 Appellant Attorney (Jeffrey A. Lamken) the scope of a business method?

19:29 I don't think so because, again,

19:30 remember it has to say it's something used

19:32 in the practice of administration and management

19:34 as a financial product or service.

19:36 And that's just a well-known term.

19:38 Financial products and services, you type them into Google,

19:41 what does it say? Banking.

19:42 It says insurance. It says

19:44 credit. No one

19:46 until this case has ever thought

19:48 that anything involving a financial

19:50 activity, whether setting a price or having

19:52 an exchange, automatically becomes

19:54 a financial product

19:56 Appellant Attorney (Jeffrey A. Lamken) or service. Is there a footnote in your copy

19:58 of the statute that says check with Google?

20:01 Appellant Attorney (Jeffrey A. Lamken) No, Your Honor. But when you're

20:02 looking at ordinary meaning, you look out to the

20:04 universe to see what it is. And, you know,

20:06 you also look at all the agency statutes

20:08 and how agencies have defined it.

20:10 No agency has ever defined it as being so

20:12 expansive. If the Federal Reserve were given

20:14 authority to regulate financial

20:17 institutions, you wouldn't expect

20:18 them to regulate everybody who has

20:20 accounting software or everybody who

20:22 charges a price.

20:24 Judge Hughes You're moving a little bit, though, when you talk about

20:26 financial institutions, which

20:28 is a much more confined universe

20:30 than financial products or services.

20:33 Somebody that's not a financial

20:35 institution can clearly use

20:37 a financial product. I think that's

20:39 Appellant Attorney (Jeffrey A. Lamken) right, but what I'm trying to illustrate is

20:40 that when you put the word financial next to something

20:42 Judge Hughes else... I understand what you're trying to do, but

20:44 every example you bring us back to involves

20:46 something that actually is in the banking industry

20:48 or is in the finance industry

20:50 that would be linked back to those

20:52 financial institutions. So I'm not sure

20:54 what much more leeway

20:56 we have beyond

20:58 that.

21:00 Appellant Attorney (Jeffrey A. Lamken) Even if you're not in the sector,

21:02 as my car dealer who gives credit

21:04 example shows, even if you're not in the

21:06 financial sector, you may have financial

21:08 products or services. You may use

21:10 financial products or services. So it's not just

21:12 the sector. The key point is when you

21:14 put the word financial next to certain things,

21:16 it has a well-understood meaning, and financial

21:18 products and services does.

21:20 Judge Hughes Can I ask you, why

21:22 is this something that is

21:25 ultimately tied in with

21:27 merits that we should review? Why

21:28 isn't this part of the decision to initiate?

21:31 Appellant Attorney (Jeffrey A. Lamken) And I think the answer

21:33 is that under

21:35 Section 329, which is the provision that

21:37 gives this court a voyage review, it

21:39 says that if you are dissatisfied with the

21:41 decision under Section 328, you can seek review.

21:43 Judge Hughes But the decision is ultimately

21:45 whether your patent's invalid or not.

21:46 And you get to argue whether

21:49 your patent's invalid or not. But you can be

21:51 Appellant Attorney (Jeffrey A. Lamken) dissatisfied for multiple reasons. You can be

21:53 dissatisfied because you thought they got it wrong on the merits,

21:55 but you can also be dissatisfied because the

21:57 decision maker had no authority

21:58 to issue that decision. And that's

22:01 precisely our point. So you can be

22:03 Judge Hughes dissatisfied that your invalid patent

22:05 shouldn't have been invalidated

22:07 because the board didn't have

22:08 authority to invalidate it. You

22:10 Appellant Attorney (Jeffrey A. Lamken) can be dissatisfied that the person,

22:13 whether they're right or wrong, had no

22:14 authority to do what they did. For example,

22:17 if a court assumes authority over a case

22:19 where there's no cause of action, you may have done

22:21 the wrong, you probably should be liable in state court.

22:23 If that court lacks authority,

22:25 because there's no cause of action, it's reviewable

22:27 Judge Hughes at the end of the day. You're doing that to a review decision,

22:29 but you're not noting

22:31 the statute that

22:33 the statutory provision

22:35 that precludes us from reviewing

22:37 initiation decisions. Correct.

22:39 Appellant Attorney (Jeffrey A. Lamken) But we don't need to review the initiation

22:42 because the question we put

22:43 before the court is, does the

22:45 was the final written order within

22:47 the board's authority? And under Section

22:49 18A1, the board does not have authority

22:51 to issue regulations or address

22:53 anything other than a covered business

22:55 method. Under Section 18A2,

22:57 its regulations can't apply to anything

22:59 other than a covered business method.

23:01 So if its final decision is applied

23:03 to something that's not a covered business method,

23:05 that final decision is ultra-virus

23:07 regardless of what

23:08 one might think of the initiation.

23:10 Judge Newman Let's move on to the merits.

23:12 We may continue this

23:15 with the other side. I think it's becoming

23:17 quite clear that what needs

23:19 to be deciphered is the legislative

23:21 purpose when the statute

23:23 is embodied

23:25 in the statute. Right.

23:27 But do assume that we're

23:29 appropriately here this afternoon

23:31 and continue with the merits.

23:33 Appellant Attorney (Jeffrey A. Lamken) Certainly, certainly.

23:35 And so turning to the merits,

23:37 I believe that Alice indicates,

23:40 the Supreme Court's decision on Alice indicates

23:41 that computer implemented processes

23:42 are patent eligible if they, quote,

23:45 improve the functioning of the computer itself

23:47 or otherwise solve a technological

23:49 problem. As this Court's earlier

23:52 Vassada decision recognized, the claims

23:54 here do just that. They make the

23:56 process of computing prices

23:58 faster and more efficient using

24:00 less data. There were computerized

24:02 pricing engines before ours.

24:04 They happen to be slower. They happen to have

24:06 they might take, as the Court noted,

24:08 several days to get an accurate price.

24:10 But Vassada's invention dramatically

24:12 changed the technology. Its hierarchical

24:15 pricing engine, I'm quoting the Court's decision,

24:16 used less data than prior art

24:18 systems and offered dramatic improvements

24:20 Appellant Attorney (Jeffrey A. Lamken) in performance. Are you arguing

24:22 that you fall within 101?

24:24 Is that what you're arguing?

24:26 Appellant Attorney (Jeffrey A. Lamken) Yes, we're arguing that this is patentable subject

24:28 matter, contrary to the Court's decision.

24:30 Appellant Attorney (Jeffrey A. Lamken) You're not challenging the question of

24:32 whether 101 is a valid

24:34 standard for the PTAB

24:37 that I've applied, are you?

24:38 Appellant Attorney (Jeffrey A. Lamken) I'm not waiving that argument, but I was not planning

24:40 on addressing that argument unless the Court had questions

24:42 about it. I was planning on to move to the merits

24:44 as Judge Newman suggested, as opposed to

24:46 the Board's authority, which was

24:48 involved. Is it a CBM patent?

24:50 Is 101 a valid basis? And finally,

24:52 whether or not there was a claim

24:54 Judge Newman preclusion. I think, are you

24:56 willing to assume that

24:58 we can proceed to the merits

25:01 and we'll wait for a higher

25:03 authority to explain 101

25:04 to us?

25:06 Appellant Attorney (Jeffrey A. Lamken) Well, yes,

25:08 I am, if that's where the

25:10 panel wants to go, but I

25:12 thought that the question of

25:14 whether 101

25:16 was within the scope of

25:18 PTAB's authority

25:20 in judging a

25:22 CBM, I thought

25:25 that was a live issue.

25:26 Appellant Attorney (Jeffrey A. Lamken) It is indeed, and we have briefed that, Your Honor.

25:29 I'm happy to address it. I had just transitioned...

25:31 Judge Newman Just a few minutes to address it

25:32 now that it's come up.

25:34 Appellant Attorney (Jeffrey A. Lamken) Certainly.

25:37 The post-grant review...

25:39 Appellant Attorney (Jeffrey A. Lamken) I think I understand the argument

25:41 from your brief, but I

25:43 wanted to know whether you were

25:45 waiving that issue or whether

25:47 that issue yet has to be decided,

25:50 because that also raises

25:51 the same question of whether we can reach

25:53 the question of whether

25:55 in their institution decision

25:57 they said the problem

25:59 with your patent is it doesn't...

26:01 likely or not, whatever the

26:03 phrase is, it's not going to meet

26:05 101's requirements.

26:07 Now, can we reach that

26:09 question? Of whether

26:12 Appellant Attorney (Jeffrey A. Lamken) or not there was...

26:14 Whether it was more probable than not?

26:15 That we can hear on appeal?

26:17 No, I think that that is washed away

26:20 that you cannot

26:22 review the initiation decision itself.

26:24 You can only review the final

26:26 decision, and the final decision doesn't

26:28 encompass a more probable than not analysis.

26:30 It just says this is not patentable subject matter,

26:32 so that's what you would review.

26:33 Now, whether or not the final decision

26:35 was on an authorized basis,

26:38 whether Section 101 is an authorized basis,

26:40 that is reviewable.

26:41 Appellant Attorney (Jeffrey A. Lamken) The Board held only the 101 issue.

26:43 Everything else went away.

26:45 Appellant Attorney (Jeffrey A. Lamken) That's correct. 102 was waived by...

26:47 Appellant Attorney (Jeffrey A. Lamken) Doesn't that mean that the question of

26:49 whether 101 is properly within

26:51 their reach has to, of necessity,

26:54 be reviewable?

26:55 Appellant Attorney (Jeffrey A. Lamken) I would think that is, and I don't think

26:57 it would, in anybody's estimation, be covered

27:00 by Section 324, the preclusion

27:02 or review provision that we've been talking

27:04 about earlier. That is something...

27:06 Appellant Attorney (Jeffrey A. Lamken) Either they had authority or they didn't.

27:08 I wanted to be sure where we stood because

27:09 I want to talk to the government about that.

27:12 Why don't you go to the merits?

27:14 Judge Newman Well, depending on the assumption,

27:16 which I think will bring us

27:18 to the merits, is that

27:20 it was all right for the Board to say

27:22 to rely on 101,

27:23 and let's argue about whether

27:26 their decision under 101 was correct

27:28 Appellant Attorney (Jeffrey A. Lamken) or not. Sure, assuming for the sake of

27:30 argument that it was okay.

27:32 The answer is, no,

27:34 they made a mistake here.

27:35 Alice indicates

27:38 that if you improve the functioning of the

27:40 computer itself, that should

27:42 be patentable subject matter.

27:44 That's precisely what these claims do, as the Court

27:46 has recognized. Abstract ideas

27:48 don't make the computer run faster.

27:50 They don't get your results faster.

27:52 This invention does.

27:54 In that sense, it's very much like,

27:56 for example, a compression

27:58 technique, a patented

28:00 compression technique that compresses data

28:02 much faster or more accurately than its

28:04 predecessors, or a faster technique

28:06 for encryption, or a

28:08 more accurate and less resource-intensive

28:10 technique for error correction

28:12 in computers. All these things make

28:14 the computer run faster through software

28:16 rather than changing the hardware.

28:18 A huge swath of our technological

28:20 progress today comes

28:22 from not increases

28:24 in the hardware,

28:26 but from making the software that turns your

28:28 general-purpose computer into a specific

28:30 purpose computer, work faster

28:32 and better. There's no reason why

28:34 innovations in that art

28:36 should not be rewarded equally

28:38 and protected by the patent laws just as much

28:40 as innovations in the hardware itself.

28:42 Judge Hughes Do you agree that if you have a business

28:44 method that

28:46 this method is more

28:48 efficient and goes faster on a computer,

28:51 assuming that method is abstract,

28:53 that's not eligible

28:55 under 101? That's what Alice says.

28:57 Appellant Attorney (Jeffrey A. Lamken) Yeah, I think the

28:58 answer is if you have a business method that

29:01 might go faster on a computer, that would be correct.

29:03 But it sort of depends on...

29:04 Judge Hughes You're flipping it, I think,

29:07 I'm trying to distinguish your argument,

29:08 is that it's not the computer

29:11 that makes the business method better,

29:13 it's the business method that makes the

29:15 computer method better. I actually think we're not

29:17 Appellant Attorney (Jeffrey A. Lamken) a business method, we're a technological

29:18 solution to an existing problem. The existing

29:21 problem was you had too many tables,

29:23 too many queries, and it

29:25 resulted in too much difficulty

29:27 maintaining things, and the

29:29 results were very slow. And we

29:31 revamped to a completely counterintuitive

29:33 way of doing things.

29:33 Judge Hughes I understand that point.

29:36 If that's the case, then

29:39 if the claim explains

29:41 this business method

29:44 will program a computer

29:45 to work faster, that

29:49 seems like it may escape the

29:50 101 problems. I have a hard time

29:53 finding that in your claims.

29:56 I looked at claim 17,

29:58 and it seems like the

30:00 only reference to a computer at

30:02 all is the word data

30:04 source, which I understand is

30:05 construed to be a computer.

30:08 It doesn't really speak in terms of

30:10 these are methods

30:12 for organizing data on a

30:14 computer to make it work

30:16 better. It seems like it's methods for organizing

30:18 data that references

30:21 a computer, and then in some of the

30:22 other claims it says

30:25 computer instructions to implement

30:27 Appellant Attorney (Jeffrey A. Lamken) this method. And I think claim

30:29 17, because it's talked about the

30:31 data sources, and because it has the

30:33 typical functionalities of storing and retrieving,

30:35 is clearly directed towards computer,

30:37 and the expert testified that you never would

30:39 want to do this on anything but a computer.

30:41 And the reason for this is it's not

30:43 just limited, as you said, towards

30:45 the means of storing the data using the hierarchical

30:47 structure in the first place, but you

30:49 also have specific mechanisms

30:51 and totally counterintuitive ways

30:53 of retrieving that data

30:55 that was totally different than prior art.

30:57 Prior art, you went from table to

30:59 table. You would do individual person,

31:02 county,

31:03 state, and it would be very

31:05 Judge Hughes slow. Can I ask you this? If the phrase

31:07 in a data source, or in

31:09 claim 17, would it be

31:11 passable under 1.01? Yeah, I

31:13 Appellant Attorney (Jeffrey A. Lamken) think it still would be. I know it doesn't refer

31:15 Judge Hughes to anything about a computer,

31:17 and it doesn't necessarily have to be done

31:19 Appellant Attorney (Jeffrey A. Lamken) on a computer. I think it necessarily

31:21 has to be done on a computer, because

31:23 there's just no way to get the

31:25 advantages of the claim except on a

31:27 Judge Hughes computer. See, this is what I was asking you about

31:29 earlier, though, in that

31:32 methods that theoretically

31:33 could be done by hand, but just practically

31:35 speaking, can't be done by hand

31:38 because of the amount of time it would take,

31:39 or the like. Saying, this method

31:41 done on a computer is patentable

31:43 is something I think the Supreme Court has rejected.

31:45 So, that's kind of what I was trying

31:47 to get at. Is 17

31:50 that, or is 17

31:51 is, this is how to program a

31:53 computer to do something better?

31:55 Appellant Attorney (Jeffrey A. Lamken) I think 17, 26, and 9 are all

31:57 ways of programming the computer to

31:59 do it better. We didn't claim

32:01 the 200,000 lines of code. We

32:03 claimed the technique used in that code.

32:05 Judge Hughes The problem for you, at least in 17, is

32:07 that the only reference to

32:09 computer is this vague term in a

32:11 data source. I think that

32:13 Appellant Attorney (Jeffrey A. Lamken) may be the primary thing in

32:15 there, but if I look in light of

32:17 all the spec and everything that's out there,

32:19 it is clearly directed to computer

32:21 implementation. In fact, the board itself

32:23 in its decision says, this is directed to

32:25 a computerized technique for.

32:28 So, I don't think there's any other way to

32:29 read it, but even so, if you take a

32:31 look at steps four,

32:33 from four down, it's clearly talking about

32:35 a computerized technique, because what's

32:37 different from the prior art, it was so

32:39 revolutionary, was the prior art went and got

32:40 your exact right answer by finding the

32:42 right table, and it stopped. What this does

32:45 is it takes the hierarchical table and sweeps

32:46 through the table and it pulls up multiple

32:48 wrong answers, multiple right answers.

32:51 Ones you'll use, ones you don't. And then

32:53 you have to add another step as a result,

32:54 sorting, figuring out which ones are where

32:57 on the hierarchy, and then finally you

32:58 eliminate the ones you don't want. That

33:00 was a revolutionary contribution, because

33:02 counter-intuitively, pulling out too much

33:06 and then sorting works much faster than

33:08 the old method of going through table

33:10 after table after table, so you find the

33:11 precise adjustment you want. I think I'm

33:13 well into my rebuttal time at this point.

33:15 Unless the court has further questions, I

33:17 think I'll find my seat. Thank you.

33:19 Judge Newman Ms. Patterson.

33:27 Amicus Attorney Thank you. May it please the court, Melissa

33:29 Patterson for the Patent and Trademark Office.

33:32 In the AIA, Congress set out two-phase

33:35 procedures for three different types of

33:38 new post-issuance proceedings. In each one of

33:42 those, there is a final and

33:44 non-appealability bar for the first

33:46 phase, for the decision

33:48 whether to institute.

33:49 With respect to the culmination of the second

33:52 phase, the merits phase, where you

33:54 actually look at the patentability of the claims

33:56 before you, that culminates in

33:58 a final written decision with

34:00 respect to patentability.

34:02 The statute provides for a specific

34:04 appeal right, and what do you get to

34:06 appeal? You get to appeal the final

34:08 written decision with respect to

34:10 patentability. The statute also

34:12 has a provision called no appeal.

34:14 Judge Hughes What happens when the PTO makes a

34:16 clearly wrong decision

34:18 on whether it's a covered business method

34:20 in its initiation decision?

34:22 Amicus Attorney I think all its institution

34:24 decisions are only for the agency

34:26 and there's no judicial review of those.

34:28 Judge Hughes So if somebody comes in and says

34:30 please initiate

34:32 review on this method

34:34 to produce a computer

34:36 chip, and the patent

34:38 office inexplicably says

34:40 that sounds like a business method that

34:42 we can't review that question?

34:46 Amicus Attorney That's right, Your Honor, but

34:47 I want to point out, you've just included

34:49 the word inexplicably. We don't

34:51 construe statutes on the presumption

34:53 that agencies will go rogue,

34:55 will start behaving inexplicably.

34:57 Appellant Attorney (Jeffrey A. Lamken) Yes, that may be true,

34:59 but there are unique

35:01 occasions that have come

35:03 before this Court when an agency

35:05 has made a mistake.

35:08 You would concede that possibility.

35:09 Amicus Attorney I am certain that is true, Your Honor.

35:11 Appellant Attorney (Jeffrey A. Lamken) If you concede that possibility, then you have to

35:14 see Judge Hughes' hypothetical

35:16 case. What do we do

35:18 if the agency...

35:20 There are certain statutory provisions

35:22 that are

35:25 prerequisites, if you will,

35:26 or preconditions to

35:28 the PTO's review

35:30 under this post-grant process.

35:33 One of them is a time limit

35:34 in one set of things.

35:36 What do we do if the agency

35:38 decides inexplicably,

35:40 simply because they haven't

35:42 told us why,

35:45 we're going to ignore that

35:46 particular requirement.

35:47 We realize that they don't

35:49 meet it, but this is an important case.

35:51 We're going to take it under

35:53 review anyway, and we will

35:55 initiate.

35:57 And they initiate, and then it

35:59 comes up here on final

36:01 written decision.

36:04 Is it the agency's view?

36:06 Is it the government's view

36:07 that you can

36:10 come up here with a

36:12 case in your favor over

36:16 by everybody's reading you never

36:18 had statutory authority

36:19 to deal with? Yes, Your Honor.

36:21 Amicus Attorney I think that's a function of the judicial review bar.

36:24 Let's note, if we actually

36:26 declare someone's patent

36:27 unpadentable, if you disagree

36:30 with us about patentability,

36:31 you certainly have review of that.

36:33 We can't say you can't review the merits.

36:35 But if you think that

36:37 we have erred in starting the

36:39 proceeding that led to the

36:42 unpadentability declaration,

36:43 no, you can't say no matter how

36:46 valid that patent might be.

36:47 We're going to let the patent owner keep it

36:49 and enforce it against the public because we think

36:51 there was an error in how PTO decided

36:53 to initiate this process.

36:55 That's what we think Section 324E

36:58 does. You're saying we can do that?

37:00 You can review the final written

37:01 decision with respect to

37:03 patentability. And we can review it

37:05 Appellant Attorney (Jeffrey A. Lamken) not on the grounds of whether

37:07 there was prior art

37:09 or whether it met 101,

37:11 but on the grounds that you had no business

37:13 taking it up at all.

37:16 Amicus Attorney Is that correct? I think we're agreeing,

37:18 Your Honor. I do think the 101 is

37:19 relevant to the merits phase, to phase two

37:22 that leads to the final written decision

37:23 Judge Hughes with respect to patentability. I'm not sure you are.

37:25 I want to make that clear. I think

37:28 I don't want to rephrase it, but

37:29 I think your position is

37:32 whether the initiation

37:34 decision and whether

37:36 the PTO's decision about whether this

37:38 actually is a covered business

37:40 method or not is not

37:41 reviewable by us. That is correct.

37:44 Not even after a final

37:46 Amicus Attorney decision. Absolutely, Your Honor. I heard

37:48 Judge Plager refer to Section 101.

37:50 I just want to make clear, I think we're in

37:52 agreement. No, I mean, forget 101

37:53 Appellant Attorney (Jeffrey A. Lamken) because that's a peculiar animal,

37:56 particularly in this case

37:57 because it's both a jurisdictional

38:00 issue and it's a merits issue.

38:02 Yes, Your Honor. Because you happen to have

38:03 held on the merits

38:05 that they fail 101.

38:07 Clearly we can reach it in this

38:10 case because that's what your

38:12 merits case happens to be.

38:13 Whether that would be true in another

38:16 case, we don't need

38:18 to go there. But what I'm reaching for

38:19 and I think what Judge Hughes is

38:22 reaching for is you've just written

38:24 off a couple of centuries

38:26 of doctrine called ultra-virus.

38:28 And what you've told

38:30 us is that doesn't apply

38:32 to the PTO. The PTO

38:34 can do any darn thing it

38:36 wants and

38:38 there's nothing the courts

38:40 can say that you people had

38:42 no business doing that.

38:44 That seems to me to be a rather

38:46 interesting reach for an

38:48 administrative agency. Your Honor,

38:50 Amicus Attorney the idea that judicial review bars

38:53 cabin off some

38:54 swath of agency action

38:56 and no court ever touches it is very

38:58 familiar outside the patent context

39:00 and very familiar to this court too.

39:02 For example, in say the Civil Service Reform

39:04 Act, this court has

39:06 jurisdiction over only

39:08 a very small sliver of

39:10 MSPB decisions. Even if the

39:12 MSPB erred in other decisions,

39:14 if it doesn't fall within

39:16 the category of things appealable to this

39:18 court, that administrative decision

39:20 stands. The APA itself

39:22 provides for a

39:24 swath of such action. It says you don't

39:26 get APA review

39:28 when statutes preclude judicial

39:30 review. That is a function of a

39:32 judicial review bar. It's not a buck.

39:34 Appellant Attorney (Jeffrey A. Lamken) That is the feature of it. That's fine within the range

39:36 of those things over which we

39:38 would normally have

39:40 not have jurisdiction. That is,

39:42 Congress is free to say,

39:44 I don't want the courts dabbling in

39:46 how we treat our staff.

39:48 For many years, that was their position.

39:50 They changed it, which is just as well.

39:53 That was

39:55 not a problem for us. That was a problem

39:56 for Congress. Now, in this case,

39:59 what Congress has said to us

40:00 is, you people

40:02 review the final

40:04 written decision of

40:06 this PTAB operation, right?

40:09 Yes. How can we

40:11 review a final

40:14 written decision

40:16 if it isn't final?

40:18 And how can it be final

40:19 if you never had authority

40:21 to make it? Your Honor, I think

40:24 Amicus Attorney when you have a thing, a piece of paper

40:26 called a final written decision,

40:28 you get to review that. And if we

40:30 have made any errors in our

40:32 patentability analysis, you can tell

40:34 us we're wrong. And how about if you made

40:36 Appellant Attorney (Jeffrey A. Lamken) an error in even thinking

40:38 you had authority to decide it?

40:41 Amicus Attorney I think that's what 324E

40:42 is addressed to. It says that that decision,

40:44 whether to institute,

40:46 shall be final and non-appealable.

40:48 Judge Newman I shall help you.

40:52 The reason

40:54 that seems to come

40:56 clear, excruciatingly

40:58 clear in the legislative history,

41:00 that the reason for that threshold,

41:02 though you can't appeal

41:04 this threshold question,

41:05 is expedition.

41:07 If you can appeal every stage

41:10 as you go along, you'll never

41:12 get through this post-grant

41:14 review. You'll exhaust the life

41:16 of the patent, which is always

41:18 in the interest of one side or another.

41:20 So it is

41:22 just a pragmatic

41:25 business. Leave us alone

41:26 until we get to the end.

41:28 And I had always thought

41:30 that that's what it was about, and

41:32 to me, it's the only reason for

41:34 justifying what seems

41:36 to be very peculiar

41:38 for the reasons Judge Plager

41:40 has mentioned. But it also

41:42 occurs to me, but I haven't heard you say,

41:44 that the

41:46 same substance

41:49 is decided

41:51 anyway after the Board

41:53 decides.

41:54 If the Board says that you

41:56 lose under

41:58 application of the CBN

42:00 rules, then

42:02 they should have had jurisdiction.

42:05 If we can get across

42:07 this threshold,

42:08 complex though it is, and figure

42:10 out some pragmatic

42:13 solution, it would

42:15 be very helpful to get now to the merits

42:17 that are before us

42:19 of the decision. And let's

42:21 figure out which of these

42:23 divergent policies

42:24 we think the legislators

42:26 had in mind.

42:27 Amicus Attorney I can address the merits, and I know Council for SAP

42:30 is prepared to do that too. I do

42:33 want to address your

42:35 supposition about what 324E

42:36 means, and says, well, when it says

42:38 it's final and not appealable, what that

42:41 means is you get appeal later, you get

42:43 appeal at the end of the day. That

42:44 would render that

42:46 provision entirely superfluous,

42:49 because that is the background principle

42:51 that is a basic bedrock

42:53 of APA review, is that

42:54 you don't get to stop an administrative

42:57 proceeding midstream.

42:58 As an FTC v. Standard Oil,

43:00 the FTC was initiating a

43:02 proceeding, and the Supreme Court said...

43:05 Appellant Attorney (Jeffrey A. Lamken) You're jumping around, because

43:06 what I heard Judge

43:09 Newman say is

43:10 that the purpose of this

43:13 non-reviewable provision

43:14 is exactly what

43:17 this Court has been telling

43:19 the interlocutory petitioner

43:21 for the last several months,

43:22 no interlocutory review,

43:25 don't come up here just at the

43:26 end of the first step, because

43:28 we're not going to hear you. And it seems

43:30 to me that's a perfectly sensible thing,

43:33 because that brings about

43:34 expedition and

43:37 consolidation of the issues.

43:38 However, I thought I heard Judge

43:40 Newman say that at the end,

43:43 you get to review

43:44 Amicus Attorney everything. But even if you didn't

43:47 have 324E, that

43:48 would be sensible, and that would be the regime

43:51 required by the APA. You don't

43:52 get to stop an administrative proceeding

43:54 Appellant Attorney (Jeffrey A. Lamken) midstream. Right, but now the question is not

43:57 stopping. Nobody's asking...

43:59 There's no issue here about

44:01 interlocutory review midway

44:03 through the process.

44:04 The question before us

44:07 is, at the end of the

44:08 process, what issues

44:10 remain to be reviewed?

44:13 And if I understand

44:14 you correctly, your answer is

44:16 one issue that's

44:18 not to be reviewed is whether

44:21 you all had any right

44:22 to decide the case in the first place.

44:25 Amicus Attorney That is right, Your Honor. If you

44:26 just wanted to delay review

44:28 until the very end, you would not need

44:31 Section 324E. Do you think

44:33 Judge Hughes it may be that

44:35 we're arguing over

44:37 whether that bar is clear enough,

44:38 or it may be that we're arguing

44:41 over whether Congress has the power to impose

44:43 such a broad bar at all.

44:44 Let me just ask you that.

44:46 Do you think, assuming this

44:49 bar, the statutory bar, is

44:51 read broadly enough

44:53 to say any decision

44:55 connected to the initiation,

44:57 including whether it

44:59 is a CBM

45:00 covered method,

45:02 is not reviewable

45:04 on appeal? Does Congress have the

45:07 authority to do that? Absolutely, Your Honor.

45:09 Amicus Attorney What Congress gives in the statute

45:11 with one hand, it can take judicial review

45:13 for another. There is absolutely

45:14 no problem, statutory, constitutional,

45:17 anywhere

45:18 with Congress doing that. In fact, Congress

45:21 keenly does that. That is what a judicial

45:23 review bar does.

45:25 So I think the real question here is,

45:26 is that what Congress meant to do?

45:29 And we do not think there is a reading

45:31 of 324E

45:33 that leads to a contrary conclusion

45:35 that doesn't run into one

45:37 intractable statutory interpretation problem

45:39 or another. If you read it to just

45:41 delay review, you run into a

45:43 superfluity problem. You wouldn't need this

45:45 bar if all you wanted to do

45:47 is to delay review.

45:48 You don't need this. You cannot

45:51 confine this bar either to this sort of

45:53 non-institution decision. And I think

45:55 the interlocutory decisions

45:57 that Judge Plager referred to, St. Jude

45:59 in particular, recognize

46:01 that this in fact might be

46:02 what Congress meant. They said 314D,

46:05 which is identical in all relevant

46:07 respects to 324E,

46:08 might well preclude judicial review

46:10 by any route. Now the Court did not need

46:13 to decide that, because of course it did not have

46:15 before it a final written decision.

46:17 But that certainly

46:18 is

46:21 a plausible reading of what

46:22 Congress meant to do, and we think it is the right

46:25 reading, because there is no

46:27 other reason for 324E

46:29 being in there. I do want to turn

46:31 to some of the other threshold

46:33 issues

46:35 Judge Hughes that... Could I ask you

46:36 one, particularly before you go away,

46:39 because I think this is probably you

46:41 and not your friend as much.

46:44 The broadest reasonable

46:45 interpretation rule applied here,

46:47 is that an interpretive

46:50 procedural type rule, or is it

46:52 a substantive rule?

46:53 Amicus Attorney I think it's a rule about

46:56 how to conduct proceedings, Your Honor.

46:58 They say, I think it was the...

47:00 Judge Hughes Or is it a rule about how

47:04 substantively

47:04 the patent rights, the scope

47:07 of them are construed? I find this puzzling.

47:08 I mean, frankly, I don't...

47:11 I struggle, and have struggled

47:13 not just here, but for

47:15 20 years on your side, of what the

47:16 difference between substantive and procedural rules

47:18 are. But it seems to me that this

47:21 is a particularly perplexing one,

47:23 because if you read it as

47:24 this is the procedures by which

47:26 the PTO uses to

47:29 adjudge patents, it's procedural.

47:31 But if you think of it in terms of

47:32 this is a rule

47:35 that dictates

47:37 what the scope of the

47:38 examined patent is, then it seems

47:40 Amicus Attorney substantive. No matter what the label is,

47:43 and I agree that the labels run into each other

47:44 and don't have

47:45 a lot of meaning in some

47:48 instances, this was a rule

47:51 promulgated per PTO

47:53 under Section 2B.

47:54 So this

47:55 court, of course, has a line of authority

47:56 about PTO's

47:58 scope of authority under Section 2B.

48:00 With the creation

48:02 of these new proceedings, Congress

48:05 gave PTO some very capacious

48:07 new grants of rulemaking authority.

48:09 In Section 18A1, you have to establish

48:11 and implement the whole review.

48:12 In Section 326,

48:15 you have to establish

48:17 regulations governing

48:18 and establishing and governing

48:23 Judge Hughes a process.

48:23 And you read that to extend

48:25 to substantive standards

48:26 for determining the scope of patents.

48:28 Amicus Attorney Certainly, Your Honor.

48:29 Whatever this particular rule is,

48:33 whatever label applies,

48:35 when you have been tasked with establishing,

48:37 implementing, and governing a process,

48:39 when you say, okay, here's how we're going to go about

48:42 doing our process,

48:43 that has to be within your rulemaking authority.

48:46 However that rulemaking authority is considered.

48:48 Appellant Attorney (Jeffrey A. Lamken) So you're basically arguing that

48:50 in your position, I take it that

48:53 the whole substance

48:54 versus procedural line

48:56 that was so busily drawn

48:58 under the old limited delegation

49:01 of rulemaking authority

49:02 doesn't really work anymore.

49:04 Amicus Attorney I think it's just not relevant anymore

49:06 given the new grants of authority.

49:08 I see that I'm running into

49:10 S.A.P.'s time.

49:12 Judge Newman We'll extend your time because I think

49:14 having raised this question

49:15 of broadest reasonable interpretation

49:17 was really just one question

49:19 that I'm interested in the office's view.

49:23 That is, it isn't

49:25 really questioned,

49:27 at least not as vigorously as here,

49:29 when we're talking about

49:31 the ex parte examination process.

49:33 The initial examination

49:35 or the routine reexamination

49:37 when it was simpler.

49:39 Now we have a system that's supposed

49:41 to substitute

49:43 if it works the way the legislator

49:45 had in mind

49:46 for litigation cheaper,

49:49 faster, conducted by experts,

49:51 more likely to come out right,

49:53 and then it's over and we know

49:55 where we stand.

49:56 Is the office

49:58 taking the same position

50:00 for broadest reasonable interpretation

50:03 now in this new,

50:05 in a sense, first impression

50:08 context for this,

50:09 I'll call it, a rule?

50:11 Or is the office

50:13 keeping its mind open

50:15 or flexible? I know you all

50:17 took a position here.

50:18 It was argued on all sides

50:20 by several amicus briefs.

50:23 Are you drawing that distinction

50:25 or is the position of the office

50:28 is that there's no distinction

50:29 in reasoning, this is how

50:31 the office should work?

50:33 Amicus Attorney I think both, Your Honor.

50:35 We both think the prior reasons

50:37 for having BRI

50:39 as the standard in other earlier

50:41 post-issuance proceedings still hold here.

50:43 You still have the ability to amend.

50:45 You still do not start with a presumption of validity.

50:47 But I think there's an additional reason

50:49 why we need to use BRI

50:51 in these new proceedings, which is that the statute

50:53 specifically contemplates

50:55 the joinder of any other

50:57 post-issuance proceeding going on.

50:59 So if you have both a reexamination

51:00 in which this Court has already blessed

51:02 the use of the broadest reasonable interpretation standard

51:05 going simultaneously with a post-grant review,

51:08 the statute specifically says

51:09 the Director has the discretion to join those.

51:12 And it would be exceedingly strange

51:13 if you had different

51:15 standards of review going when you had

51:17 your reexamination lens on

51:20 as opposed to when you had your BRI

51:21 or your post-grant review lens on

51:23 in the very same proceeding.

51:25 Judge Newman But from the viewpoint of

51:27 finally the judges who have to figure it out

51:30 and presumably

51:31 come up with the right answer,

51:33 isn't it even stranger

51:35 that on exactly

51:37 the same references

51:39 and reasoning and everything else

51:41 that you

51:43 authorize a procedure

51:45 in the trial court

51:46 and a procedure in this new

51:49 Patent Office trial court

51:51 which by definition

51:53 can come out differently?

51:55 Amicus Attorney I don't think that's strange at all

51:56 and I think this Court's decisions

51:58 in Ethicon, in Baxter say

52:00 Judge Newman That wasn't my question.

52:01 Never mind Ethicon and Baxter

52:03 and they weren't dealing with

52:05 the America Invents Act.

52:08 These were all examination

52:10 and at most

52:11 ex parte reexamination.

52:14 Amicus Attorney But they all have the same features

52:15 where you don't start from a presumption of validity.

52:18 You have a different standard of proof.

52:19 Judge Newman I wasn't asking about the presumption of validity.

52:24 Amicus Attorney You have a different standard of proof

52:24 Of course district courts can't narrow

52:26 patent claims.

52:27 Judge Newman Well we don't know.

52:28 The rumors are that it's not so easy to amend

52:30 under the America Invents Act.

52:33 So the entire philosophy

52:35 for the initiation

52:36 in ex parte examination

52:38 as to why, well yes,

52:40 let the author say

52:40 you could read this reference

52:43 in this screwy way

52:44 because it doesn't matter, just fix it.

53:04 Amicus Attorney You don't read a statute

53:05 that explicitly gives parties

53:07 an ability to amend

53:08 and say well we don't think that

53:10 that is really a thing

53:11 despite Congress's provision for it.

53:12 So we are going to say

53:14 that the PTO acted arbitrarily

53:16 and capriciously

53:16 and using the same standard

53:18 it has used in every post-issuance proceeding.

53:20 Judge Newman Can I ask if there was a policy?

53:23 Amicus Attorney Yes, Your Honor.

53:23 I think it's announced in the

53:24 regulation and in the Federal Register notice

53:26 that accompanies this and it says

53:28 Pardon?

53:30 Judge Newman There is a policy even though

53:32 the ability to amend is

53:34 let us presume

53:36 significantly different.

53:38 Amicus Attorney Yes, and I want to note, it's not at all strange

53:39 that the ability to amend would be different.

53:42 When you amend during an initial examination

53:44 that doesn't mean you haven't issued

53:46 amended patent. That means the patent

53:48 is still in examination.

53:49 As soon as the Board, looking at

53:52 granted patents, grants a motion to amend

53:54 that patent goes out the door.

53:56 So you might be a lot more careful

53:58 in how you grant motions to amend

54:00 on an issued patent than you would

54:02 on a patent under examination.

54:04 I am concerned that I am taking too much

54:06 of SAP's time.

54:08 Judge Newman We are running over.

54:09 Are there any more questions for the office?

54:13 More questions for the office?

54:15 Okay. Thank you, Ms. Patterson.

54:17 Thank you very much.

54:18 Appellee Attorney (Erika H. Arner) May it please the Court.

54:34 We've had a lot of discussion about

54:36 whether or not the 350 patent

54:38 is a valid business method.

54:39 We've mentioned whether or not Section 101

54:41 is a grounds for post-grant review.

54:43 I'd like to just bring to the Court's attention

54:45 that the patent owner waived those arguments

54:47 by, they've admitted that the institution's

54:50 decision is not appealable.

54:51 Judge Hughes Speaking of the 101 issue,

54:52 to me, and I've seen you listen

54:57 about what I'm saying,

54:58 I find this very difficult here.

55:01 It's clear to us,

55:02 somewhat clear to me, the Supreme Court

55:03 has said an abstract method

55:05 done more efficiently on a computer

55:09 is not eligible under 101,

55:10 but that a method that improves

55:12 the functioning of a computer

55:15 is eligible.

55:16 Why isn't Claim 17

55:18 which talks about different ways

55:20 to organize data

55:22 on a computer to get faster

55:24 pricing information

55:25 an eligible business method?

55:29 Appellee Attorney (Erika H. Arner) Well,

55:31 Versada argues that the claim

55:32 makes the computer process faster

55:35 or suggests that that changes

55:36 the way the computer works. It doesn't actually.

55:39 It's the pricing math

55:40 happens faster. Those steps that

55:43 the patent owner pointed out,

55:45 those four steps of

55:47 storing and retrieving and sorting

55:49 and eliminating the data,

55:51 that's the price calculation

55:52 itself. And so

55:55 the computer doing those types of functions,

55:57 even actually retrieving data,

55:59 was one of the functions that they looked at

56:01 by the Supreme Court looked at in Alice

56:03 and said that's just a computer doing

56:04 what it ordinarily does.

56:06 So you think this falls on the other side?

56:09 Judge Hughes That this is an abstract

56:10 business method? I don't think the court

56:12 needs to even go to the line.

56:14 Appellee Attorney (Erika H. Arner) I think this one is so clearly

56:16 a business method with a

56:19 computer tacked on. If you look at the

56:20 350 patent,

56:22 it has an abstract idea. Even the patent owner

56:24 has admitted there's this idea of calculating

56:26 prices. And

56:28 the meaningful limitations at most

56:30 are a general purpose computer, although

56:32 Claim 17 doesn't require

56:34 a computer at all.

56:36 But the other claims they recite

56:39 a copy of abstract method Claim 17

56:41 with the word apparatus or process.

56:43 Judge Hughes In addition to the claims here in

56:45 17, they had something like

56:47 a means for programming

56:48 a computer to do this,

56:50 and then in the specification they had

56:52 specific algorithms or

56:54 flow charts. Do you think that might

56:56 change the outcome here? You know, this

56:58 Appellee Attorney (Erika H. Arner) court has been careful not to

57:00 try and draw the, in Ultramershal for

57:03 example, not to try and figure out where the boundary

57:05 is of abstract ideas

57:07 and patentable software.

57:09 It's not necessary here, I don't think.

57:11 Judge Hughes That's why I asked you the hypothetical.

57:12 I know you don't want to answer it.

57:14 I don't know the answer to it myself.

57:17 But it does seem to me that

57:19 at some point out there,

57:21 there has to be some kind of

57:22 thing, unless what the

57:25 Supreme Court has really said is

57:26 software and business methods are

57:28 never eligible, which I think they haven't.

57:30 What would it take to get this

57:33 eligible?

57:35 Appellee Attorney (Erika H. Arner) Well, I think the real question,

57:37 and I agree, it's a very difficult question to answer

57:39 and the Supreme Court has been hesitant to do so.

57:40 Appellant Attorney (Jeffrey A. Lamken) It's actually an easy question to answer.

57:42 It would take a court decision.

57:44 Appellee Attorney (Erika H. Arner) I can give you an example.

57:47 Yes, I would look at Ultramershal as a good

57:49 example where this court looked at a very detailed

57:51 claim with 11 ordered steps

57:53 and said even with all of these steps

57:55 this is an abstract idea

57:57 and all the parties agreed there was a

57:59 computer and still it was

58:01 just doing what computers do.

58:02 I do think there may be

58:05 a line, as you suggest,

58:07 between a business method with a computer

58:09 tacked on. I think we have a whole line

58:11 of cases. Bancorp is a good example

58:13 where that happened.

58:15 But I think that maybe the thing that makes it

58:17 a little easier to analyze this case in particular

58:19 is to look at the claims themselves,

58:21 which is what really matters for 101.

58:23 And when you look at these claims, they

58:25 line up exactly with the types of claims in

58:27 Alice and Ultramershal. An abstract method

58:29 claim 17 that could be performed

58:30 with a pencil and paper. We performed it ourselves

58:33 during the hearing at the PTAB

58:35 with the charts on a slide.

58:37 And then that method claim

58:39 is too abstract to be patentable.

58:40 And the rest of them add words like

58:42 computer-aided method or apparatus or processor.

58:45 And it's sort of a quintessential

58:47 business method patent that

58:49 never should have issued under Section 101.

58:51 And that's really the board,

58:53 it's not even a close call really, and I don't think

58:55 that this court needs to go

58:57 to the edge of software patentability

58:59 or something to resolve it here.

59:00 Appellant Attorney (Jeffrey A. Lamken) Is this patent a technological invention?

59:03 Appellee Attorney (Erika H. Arner) It is definitely not a technological invention

59:05 and I might use that as a segue to the

59:06 covered business method question

59:09 if that's okay with the court.

59:11 Just like this case is not close to the edge

59:13 of 101,

59:15 it's not close to the edge of a covered business method.

59:17 It is plainly the type of patent

59:19 Congress is talking about. It was filed

59:21 in the wake of the State Street Bank case

59:23 at the late 90s, early 2000s.

59:25 It had problems under 101

59:26 and it's being enforced against the public.

59:28 That's exactly the kind of patent that Congress

59:30 was talking about when they wrote Section 18.

59:33 Judge Hughes I mean, if they had just said

59:34 you can initiate review of any

59:37 covered business method, then

59:39 you'd be on extremely firm ground here.

59:42 They did at least have the qualifier

59:43 of financial products and services.

59:45 Appellee Attorney (Erika H. Arner) I'm glad you brought that up.

59:47 The patent owner was making a distinction

59:49 between maybe what you're pricing,

59:51 that if you're pricing things you sell

59:53 in the corner store, that's not a business method,

59:55 but if you're pricing services of some sort,

59:57 financial services.

59:58 Well, if you look at the 350 patent,

60:00 it actually says that a product

60:02 for the purposes of this invention

60:03 can include tangible products

60:08 as well as intangible products

60:09 such as services.

60:11 So the pricing math that is being done

60:13 by the claims in the 350 patent

60:15 can apply to services.

60:17 So even under that sort of interpretation

60:19 of if it matters what you're pricing,

60:21 which I don't think it does,

60:22 and I think if you look at what Congress

60:24 is talking about, the legislative history

60:25 talks about pricing real property,

60:29 appraising or pricing real property

60:30 or personal property is the type of thing

60:32 we're talking about for covered business method.

60:34 Congress talks about that.

60:35 Judge Hughes Can I ask you a hypothetical?

60:36 I want to see where you go on that.

60:38 Suppose you're a rental car company

60:41 and you have come up with a new method

60:44 for making sure that the rental cars

60:46 are most efficiently distributed

60:48 at the pick-up and drop-off point.

60:50 And that's a business method.

60:51 It has a bunch of different steps.

60:52 Look at this, look at this, look at this.

60:56 We're leaving aside all the one-on-one things.

60:58 I'm just trying to decide

60:59 whether this falls under financial products

61:01 or services.

61:01 And the whole point of that is,

61:05 if your operations work better,

61:06 and obviously if your operations

61:08 are more efficient,

61:09 it's saving you money.

61:11 So in that sense, it's a financial service.

61:14 But is that the kind of financial

61:16 product or service they meant here?

61:19 Just because it affects the company's

61:21 finances, or does it have to be

61:23 something more?

61:24 Appellee Attorney (Erika H. Arner) I think Congress said that the

61:26 definition should be interpreted very broadly.

61:29 And Judge Plager, you noted some of the terms...

61:31 Judge Hughes I'm going to question you to answer that.

61:32 Do you think that hypothetical...

61:35 Is the covered business method

61:37 eligible for review?

61:38 Appellee Attorney (Erika H. Arner) It's something that's practiced in commerce,

61:39 which is another word that Congress looked at.

61:41 Those are the types of things.

61:43 And again, the covered business method determination

61:45 is not a determination of whether or not it's patentable.

61:47 As you said, sort of setting aside Section 101

61:49 Congress said, those are two different questions.

61:51 Judge Hughes So it seems like you're taking

61:53 the financial product service term

61:55 about as far this way

61:57 as your opponent was taking it that way.

61:59 Appellee Attorney (Erika H. Arner) Well, and I think one of the other indicators...

62:02 Appellant Attorney (Jeffrey A. Lamken) Is there any boundary to where you're taking it?

62:05 Appellee Attorney (Erika H. Arner) It's not there today, certainly.

62:06 This patent is plainly a covered business method.

62:08 Class 705 is one of the same...

62:10 Appellant Attorney (Jeffrey A. Lamken) Well, it's plainly a covered business method

62:12 only if you take the boundary out to where you want it.

62:15 Appellee Attorney (Erika H. Arner) Well, and I don't think that we're even close to the boundary.

62:17 I think if you read what Congress was

62:18 talking about when they wrote Section 18,

62:20 the time frame that this patent came out,

62:22 the problems with 101 after Bielski,

62:24 this is exactly the type of

62:27 patent they were talking about.

62:29 Also, the technological

62:31 invention is one way...

62:32 You're saying that anything in the world could be a covered business

62:35 method. I'm sorry, go ahead.

62:36 Judge Hughes No, that's okay. Do you think the boundary is

62:38 anything to do with money?

62:41 Appellee Attorney (Erika H. Arner) We would defer to the Patent Office

62:43 on their definition,

62:45 but there is a large swath of things

62:47 that Congress carved out,

62:49 which is technological inventions.

62:51 And they left it to the PTO

62:53 to define technological inventions,

62:55 and the PTO did that. And this patent

62:57 fails every prong of that test,

62:59 and I think that's further evidence

63:01 that this is not sort of the outer boundaries case,

63:03 but a very clearly

63:05 obvious one. For example, one of the prongs is

63:07 is there a novel, non-obvious technological

63:09 feature? Look at Claim 17.

63:11 Appellant Attorney (Jeffrey A. Lamken) What do you understand they mean

63:13 by a technological

63:15 feature? What does that mean?

63:17 Appellee Attorney (Erika H. Arner) So Congress specifically directed

63:19 the PTO to determine

63:21 what that would be. I understand that.

63:23 Appellant Attorney (Jeffrey A. Lamken) And I found the PTO's

63:25 definition remarkable, because

63:27 what they're defining is

63:29 what is a technological

63:31 invention, right?

63:32 And how they define it is they say

63:35 in determining whether a

63:37 patent is for a technological

63:39 invention, what you look

63:41 at is the following

63:43 will be considered.

63:45 Whether the claim subject

63:47 matter as a whole recites a

63:49 technological feature. They use

63:51 the same term to define it.

63:53 That is novel

63:55 and unobvious over the prior

63:57 art, and

63:58 guess what? Solves a technical problem

64:01 using, guess what?

64:03 A technical solution.

64:05 So as long as you don't need a definition

64:07 of what a technical invention

64:09 is, that's a wonderful explanation.

64:12 Appellee Attorney (Erika H. Arner) So I think what they were

64:13 getting at there is they're looking for

64:15 technology, novelty in the

64:17 technology, some advance in technology.

64:19 And while they said it's not the same question

64:21 as 101, I think there is

64:23 some overlap there.

64:25 And I think they're trying to focus on

64:28 Appellant Attorney (Jeffrey A. Lamken) You said this is clearly

64:29 a technological invention.

64:31 Well, it's clearly not a technological invention.

64:33 Appellee Attorney (Erika H. Arner) All those prongs you just

64:35 read, I failed every one.

64:36 Clearly not a technological invention.

64:38 Appellant Attorney (Jeffrey A. Lamken) What do you understand a technological invention to be?

64:41 Appellee Attorney (Erika H. Arner) Well, I don't think you actually need to reach that

64:43 in this case because the board

64:45 found that there's not even a novel or non-obvious

64:47 feature in the claims. When they instituted

64:49 they found every feature in these claims

64:51 present in the prior art. So whether any of

64:53 the features is technological or not,

64:56 they're not, they're

64:57 Appellant Attorney (Jeffrey A. Lamken) You know, you make very nice arguments, but you

64:59 don't want us to reach all the interesting

65:01 issues. That's because

65:02 Appellee Attorney (Erika H. Arner) Versata weighs almost all of them at the

65:05 patent office. Versata waived the challenge

65:07 of whether or not this is a covered business method

65:09 and they waived the argument that Section

65:11 101 is not a proper ground.

65:13 Judge Newman Let me ask you an easy question.

65:16 Please.

65:16 It has to do with collateral estoppel.

65:20 So, here we have

65:22 a case where the

65:23 district court had a

65:25 jury trial. They found their

65:27 patent valid and infringed by

65:29 your client. And

65:31 in the fullness of time, this

65:34 court affirmed. Meanwhile,

65:36 the

65:37 patent office, after the enactment

65:40 of the American Vents Act,

65:42 was one of the first

65:44 to put this patent back

65:46 through the system. And the

65:48 office decided the patent was

65:50 invalid

65:52 for an assortment of reasons that

65:54 we've been dancing around.

65:56 Suppose we had the contrary

65:58 situation. I think

66:00 the position is pretty clear

66:02 in your brief, is that there's no

66:04 estoppel against what the office

66:06 did, just because there was

66:08 a trial and

66:10 that upheld the patent.

66:12 Never mind, the office could overturn

66:14 that, provided

66:16 the procedure starts

66:19 somewheres before the absolute

66:20 finality, or whatever

66:22 reason. I want to ask you

66:24 the converse of that

66:26 situation. Let's say that there's

66:28 a trial in the district court that holds

66:30 the patent invalid and

66:32 not infringed, and

66:34 it's going through the system.

66:36 Meanwhile, for the

66:39 double security, perhaps,

66:41 the defendant, the

66:43 accused infringer, goes to the

66:45 office, and the office upholds

66:47 the patent. Does the same rule

66:50 provide, does that

66:52 PTO ruling

66:54 of validity

66:56 and patentability

66:57 override the prior decision

67:00 in the district court?

67:02 Appellee Attorney (Erika H. Arner) So I think this court decided that issue in

67:04 Fresenius, which is not the issue here,

67:06 which is that as long as there is something

67:08 still alive in the district court proceeding,

67:10 a patent, a final, affirmed patent

67:12 Judge Newman They didn't decide in Fresenius

67:14 that an office decision

67:16 that the patent was valid

67:18 overruled a

67:20 court decision of invalidity.

67:22 That's my question to you.

67:25 Appellee Attorney (Erika H. Arner) Whether the

67:27 patent office wants the finding of

67:28 invalidity cancellation is...

67:30 Judge Newman I'm trying to understand where,

67:32 if any place, the lines are,

67:35 the relationship between

67:37 the office and the court

67:39 is in the context of

67:41 as we have here, it's a good example.

67:42 Sure, I think Congress actually spoke

67:44 I went through it twice.

67:47 Appellee Attorney (Erika H. Arner) I think Congress actually spoke to this.

67:49 There was in the

67:50 inter-parties re-exam statute

67:52 a limitation. There was a specific

67:54 estoppel that would apply and prohibit

67:57 filing of an inter-parties re-exam

67:58 in the situation that you were talking about

68:00 with the district court, once that judgment

68:02 is final and affirmed, you couldn't file

68:04 an inter-parties re-exam thereafter.

68:06 But that was taken out of the statute in the AIA.

68:09 Judge Newman That's my question. My question is

68:11 on the identical sequence of

68:13 events here, except that the

68:15 decisions are reversed.

68:16 Is your view, your understanding

68:18 of the statutory purpose

68:21 that the decision of

68:23 the office under the American

68:25 Events Act will overturn

68:27 and validate

68:28 a patent that's been invalidated

68:31 by the courts? I think that

68:32 Appellee Attorney (Erika H. Arner) Congress intended the PTO

68:35 to reconsider CBM, covered business

68:37 method patents, in exactly the situation you're

68:39 talking about, where they have to have been

68:40 sued on them. So this provision

68:43 is narrowly tailored to

68:45 business method patents. They will all,

68:47 all covered business method proceedings will

68:48 necessarily have that litigation.

68:51 Appellee Attorney (Erika H. Arner) And the point of this...

68:54 Judge Hughes I'm sorry, I'm not trying to...

68:57 I'm not addressing

68:57 the factual scenario here.

69:00 Appellee Attorney (Erika H. Arner) No, obviously not.

69:01 Judge Hughes So you have a district court

69:03 action file on

69:04 a business method patent.

69:07 And the

69:11 district court...

69:11 Leave aside all the statutory

69:12 estoppel provisions. I can't keep them

69:14 straight in my head right now.

69:16 And the defense is going to be

69:19 that it's invalid

69:20 from the accused infringer.

69:22 But somebody, either the patent holder

69:24 or the accused infringer

69:27 goes to the patent office

69:28 and challenges it there, too.

69:30 Now, we have

69:32 the reverse of the situation here

69:34 happens, and that is

69:36 the district court finds the patent invalid

69:41 and therefore doesn't award any

69:43 damages. But the patent office

69:44 says that

69:47 it's valid, and it is enforceable.

69:49 Is the district court bound

69:50 by the PTO's decision that the patent's

69:53 valid? No, because the district court

69:55 Appellee Attorney (Erika H. Arner) asks a different...the question at the district court

69:57 is different. The question at the

69:59 district court is whether the patent is

70:00 proved invalid by clear and convincing evidence.

70:03 And under the statute,

70:04 a post-grant review requires

70:06 only a preponderance of the evidence.

70:09 Judge Newman Let's say the standards are

70:11 met. I think let's try and keep to this.

70:13 Thanks to Judge Hughes, we're

70:15 trying to present a simple question.

70:18 It's tried

70:19 in the court system.

70:22 They hold the patent invalid

70:23 and not infringed.

70:25 I appreciate here, also, we haven't really

70:27 gotten to the fine point that validity

70:29 wasn't appealed, only infringed.

70:32 But alright, so the patent

70:33 office holds it

70:36 invalid.

70:37 Meanwhile, somewheres

70:39 in the procedure, but before some final

70:41 judgment, so we avoid the

70:43 problem. Someone

70:45 puts it in post-grant review.

70:47 The office does what

70:50 it does adequately,

70:52 confidently, meets all of the

70:53 burdens that are the

70:56 most stringent burden and says

70:58 this patent is valid. Does

71:00 that override, in your view,

71:02 what the...

71:04 In my view, that's what the patent office did

71:06 when it was initiated. I'm looking at the statutory purpose here.

71:08 Appellee Attorney (Erika H. Arner) Well, but that happens every time.

71:10 Once a patent issues, that's

71:12 not something unique. Every time

71:14 the patent office issues a patent

71:16 and it is later invalidated by a district

71:18 court, there is a

71:20 disagreement between the two.

71:22 Judge Hughes And so, in your view, it's not any different under these

71:24 new CPM... No, I think

71:26 Appellee Attorney (Erika H. Arner) this court's cases on re-exam are really

71:28 clear on the claim preclusion not

71:30 Judge Hughes applying. Even if the patent is re-examined

71:32 during the pendency of the district court

71:34 litigation and found to be valid by

71:36 the patent office, it doesn't have

71:38 to pay any attention to the

71:40 validity. Well, the questions are different.

71:43 Appellee Attorney (Erika H. Arner) And this court says so.

71:45 Judge Hughes I understand that.

71:47 Assume the questions aren't different.

71:50 We're trying to get at

71:51 collateral stuff. We're not trying to get at standards

71:53 and stuff. I understand that plays into that.

71:55 But I think your answer is

71:57 the district court doesn't have to

71:59 pay attention to the PTO's validity

72:01 decision. My question

72:03 Judge Newman was, does the PTO have

72:05 to pay attention to the district court

72:07 decision?

72:08 And I think that was answered by this court in

72:11 Appellee Attorney (Erika H. Arner) Swanson and construction equipment where

72:13 even on the same prior art, even

72:15 after...

72:15 Judge Newman And they were not American Vents Act.

72:18 They were not post-grant review.

72:20 They were not full inter-parties with all of the

72:23 safeguards that we have

72:25 here. I mean,

72:26 I would like to see this system

72:29 work the way I

72:31 understand it was designed to

72:33 work. That there will be an easy,

72:35 quicker, less expensive

72:38 system

72:39 on which you could have

72:41 confidence, decided by

72:43 experts who know what they're doing,

72:45 who have the time and all the rest of it.

72:47 And I'm trying to understand

72:50 if we're talking about one

72:52 way estoppel or no way estoppel

72:54 or if this is totally independent

72:55 and no one can figure it out.

72:57 Appellee Attorney (Erika H. Arner) I think for the covered business method

72:59 it's a much more limited situation

73:02 and I think it is. This is an example of

73:04 it working just as it should.

73:05 That the AIA is

73:08 working as it should. The covered business method

73:10 provision in particular. If you look at

73:12 the legislative purpose there...

73:14 Judge Newman You're saying that the office

73:15 can overrule an

73:17 invalidity decision by the court?

73:20 That's not

73:21 Appellee Attorney (Erika H. Arner) different than it was under re-exam either.

73:24 Under re-exam,

73:26 Judge Newman the office did not overrule

73:28 the decision of the district court.

73:30 This is a different situation

73:31 with a different statute designed

73:33 to impart

73:35 finality through

73:38 the body that is best

73:40 equipped to make the decision.

73:42 Appellee Attorney (Erika H. Arner) That's right. Over my time, I'm happy to

73:44 keep talking but I didn't want to take the court's time.

73:45 Judge Newman I just want to answer the question yes or no.

73:49 Appellee Attorney (Erika H. Arner) I'm sorry and I disturbed

73:50 myself by saying that.

73:51 Judge Newman Can you ask your question one more time?

73:53 It's your position that the later

73:55 decision of the office

73:58 holding the patent valid

74:01 overrules

74:01 a prior decision of

74:04 the district court that is invalid.

74:07 Appellee Attorney (Erika H. Arner) I think under Fresenius, as long as that

74:09 first case is still alive, there can be an effect.

74:12 But that's not the issue here.

74:15 Versada's argument is that you could

74:16 file the post-grant review petition

74:18 after a final judgment.

74:20 This court's law on re-exam and the fact that

74:22 Congress removed the statutory

74:24 estoppel from inter-parties re-exam

74:26 and the covered business method

74:28 section specifically targeting patents

74:30 that are being sued.

74:32 That's exactly what

74:34 Section 18 is about.

74:35 Judge Newman I appreciate it's not this case but I think the

74:37 principles in converse

74:39 are things that we have to think about as well.

74:42 Appellee Attorney (Erika H. Arner) I think there are a lot of issues that this case

74:44 has raised that don't need to be decided

74:46 for you to decide this case.

74:48 Many of them were waived by Versada

74:49 at the patent office. Claim construction, for example,

74:52 is moot.

74:54 Judge Hughes Can you address

74:55 I think you're, maybe I'm putting words into your

74:58 mouth, but I think your answer seems to

75:00 be that there's not really a

75:02 estoppel on either side here.

75:04 Assuming that is your

75:07 answer, how do you

75:08 deal with the, I can't say

75:10 this right, NASA case involving

75:12 the TTAB? The NASA lock?

75:14 Appellee Attorney (Erika H. Arner) Yeah, I'm not sure of the pronunciation.

75:16 NASA lock was a trademark

75:18 case, as you noted.

75:21 The nature

75:22 of a challenge at the patent office is slightly

75:24 different. Everyone

75:26 agrees that statutory claim preclusion

75:28 doesn't apply here. We're talking about common law

75:30 claim preclusion. For it to apply

75:32 from the final judgment, there has

75:34 to be the same question, same claim.

75:37 This court has explained that,

75:38 and actually in NASA lock they explained

75:40 that the same claim from a patent standpoint

75:42 is patent infringement was the question.

75:44 Even in a declaratory judgment action,

75:46 the claim for the purposes of claim

75:48 preclusion is the underlying

75:49 accused devices.

75:52 If the same devices are not

75:54 accused in a second case,

75:56 then they are

75:58 not the same claim for the purposes

76:00 of claim preclusion. The court

76:02 said as much in NASA lock, although it was

76:04 a trademark case, they specifically said

76:06 in a patent case, a prior

76:08 Judge Hughes finding of no invalidity. What about the second part of

76:10 the opinion, though, that goes on then to say

76:12 you also can't

76:14 go back to the TTAB to collaterally

76:16 attack a prior judgment?

76:18 Appellee Attorney (Erika H. Arner) That's not the question here.

76:21 Versada's argument is that

76:22 you can't file a post-grant

76:24 review after a final judgment.

76:26 That's a very clear question under

76:28 common law principles of claim preclusion.

76:30 By the way, they waived claim preclusion

76:32 Judge Hughes at the patent office. I understand. I'm not sure

76:34 that you're going to get very far in your

76:36 waiver argument.

76:38 We don't need to.

76:39 Why isn't what you were doing

76:42 really a collateral attack on

76:44 the injunction that was issued to

76:46 Appellee Attorney (Erika H. Arner) the district court? Because Congress created

76:48 this law for the situation that SAP found

76:50 itself in. It was being sued for

76:52 infringing a patent that the patent office has now

76:54 said should never have issued.

76:56 Judge Hughes That sounds like you're suggesting that Congress

77:00 can displace this notion

77:02 of collateral

77:04 that's a judgment

77:06 rule and say,

77:09 we're not going to

77:11 require that respect be paid

77:13 in district court judgments.

77:15 Appellee Attorney (Erika H. Arner) I don't think that's the case, but here

77:17 Congress has talked about the coordination

77:19 between these post-grant proceedings at the

77:21 patent office and district courts.

77:24 There are several different provisions that

77:25 prohibit, you can't go and raise the same issue

77:27 you've raised in the covered business.

77:29 Judge Hughes The problem, I think, is that you

77:31 were in litigation at the time this was passed,

77:34 so you're later in the game, and I suspect

77:35 Congress actually

77:37 anticipated for most things going

77:39 forward. Is your

77:42 argument on that, what if there was a complete

77:44 and final judgment in the district court's

77:46 litigation? Nothing

77:48 else there.

77:50 Appellee Attorney (Erika H. Arner) It wouldn't matter. However final

77:52 the judgment of the district court was

77:54 would not matter for the

77:56 principles of claim preclusion.

77:58 No one is arguing there's statutory preclusion.

78:00 Section 18 permits you to file

78:02 Judge Hughes a petition when you have been sued.

78:04 But then that is exactly what

78:06 we'll answer this bit.

78:08 If that's the case, and you go back and you

78:10 get the patent declared

78:13 invalid under

78:15 regular collateral estoppel principles

78:18 or finality principles or whatever,

78:20 are you still precluded from going back to

78:21 the district court and asking to have

78:23 the injunction dissolved?

78:25 Appellee Attorney (Erika H. Arner) I think in Fresenius this court said that as long

78:27 Judge Hughes as there's issues of the remedy...

78:29 No, but my hypothetical ask is it's a completely

78:31 final judgment.

78:34 Appellee Attorney (Erika H. Arner) Oh, after the affirmance of everything.

78:36 Nothing else going on.

78:37 No one argues that you can get your money back

78:39 if a patent that you're sued on is later.

78:41 Judge Hughes I'm talking about the injunction going forward.

78:44 Judge Newman You're not talking about a refund

78:46 of the damages? It doesn't matter here.

78:48 Appellee Attorney (Erika H. Arner) The district court case is...

78:50 So that's not the

78:52 issue that's actually raised.

78:53 Judge Newman Because of the settlement you mean?

78:56 Appellee Attorney (Erika H. Arner) Yes, the district court case is completed

78:58 in this case. So there's the issue...

79:00 Judge Newman You're saying it's because it's completed

79:01 because of the settlement. We saw in the press

79:03 how this finalized.

79:05 Appellee Attorney (Erika H. Arner) The district court case was settled, yes.

79:07 So the effect of the PTAB,

79:10 that issue is not present in this case.

79:15 Okay.

79:16 Can I mention broadest reasonable

79:19 interpretation? You mentioned it earlier.

79:21 I just wanted to point out that a lot

79:23 of people want to talk about it, but even

79:25 the amicus parties who filed briefs on the issue

79:27 noted it doesn't matter here.

79:29 The board found under either interpretation

79:31 the claims would be invalid, and under

79:33 section 101 you don't need claim construction,

79:35 so I would...the court doesn't

79:37 need to reach that issue here.

79:39 Judge Newman Okay. Thank you.

79:40 Mr. Labkin.

79:48 Appellant Attorney (Jeffrey A. Lamken) Thank you. Beginning with

79:49 this court's jurisdiction. I think the

79:51 courts recognize the enormous consequences

79:53 of the PTO's argument that this

79:56 court has no authority to review

79:58 whether or not the board was ultra-virus.

80:00 If the PTO were correct,

80:02 then the board could, for example,

80:03 subject every patent to

80:05 post-grant review, notwithstanding the nine

80:07 month limitation period, by deeming each

80:09 and every one of them a covered business

80:11 method, and this court would be powerless

80:13 to do anything about it.

80:16 Never before has the PTO been

80:18 granted the power to invalidate

80:20 an issued patent destroying property rights

80:21 with no court having authority to address

80:24 whether it is ultra-virus.

80:25 And in that sense, that sort of ultra-virus

80:28 review, I think, is illustrated by

80:29 a strong presumption of judicial review

80:32 of a case that we cited, which is called

80:33 Riley v. OPM. And in Riley, the provision

80:36 was quite similar. It said that

80:37 the decisions of the OPM concerning

80:40 these matters are final and conclusive

80:41 and not subject to review.

80:43 Judge Hughes Are you saying that the question

80:46 I posed to your friend from the

80:48 government, if Congress actually

80:50 made this bar very clear that

80:51 nothing pertaining to initiation,

80:54 including the discretionary

80:56 decision of whether it actually

80:58 is a business method or not,

81:00 is subject to review

81:02 by the court, that they

81:04 couldn't do that? I think it would at the

81:06 Appellant Attorney (Jeffrey A. Lamken) very least raise serious due process

81:08 issues, that an agency would be

81:10 sole adjudicator of its own statutory

81:11 ability and no court would have authority to do it.

81:13 Appellant Attorney (Jeffrey A. Lamken) The question is not whether it would be peculiar,

81:15 nor is the question even whether a rational

81:18 Congress might choose to do it.

81:20 The question is, let's assume

81:22 Congress did it.

81:24 Appellant Attorney (Jeffrey A. Lamken) Then what? I think there are

81:26 serious questions about its constitutionality.

81:28 But there's a strong presumption

81:29 that Congress didn't do that.

81:31 Judge Hughes What is it depriving you of?

81:34 You still have the right to due process,

81:37 to challenge the PPO's

81:38 decision on the validity of your

81:41 patent, which is your

81:42 property right.

81:44 You have a property right in the process.

81:46 Do you have a property right in the patent?

81:48 Appellant Attorney (Jeffrey A. Lamken) That's correct, but it deprives you of your right

81:51 that the legislature is provided

81:52 who determines whether you have a property right or not.

81:55 And when the agency says, I do it

81:57 and no court can review it, and it's beyond

81:59 your authority, that's a significant problem.

82:01 But the courts will not presume that Congress

82:03 did that, and the language here doesn't

82:05 come close to doing it. The PPO admitted

82:06 the language didn't do that in the

82:09 proceedings before the district court.

82:11 It's kind of incongruous for them to say,

82:12 no, it's sufficiently clear to do that here.

82:14 And I just wanted to mention

82:16 the Riley decision. It said,

82:19 decisions are final, conclusive, and not

82:20 subject to review. But this court in Riley v.

82:23 OPM said, well that means we can't look at facts.

82:25 We won't look at factual determinations.

82:27 But the court can still address a

82:29 misconstruction of the governing

82:31 legislation or some other like error

82:33 going to the heart of administrative determinations.

82:35 That's exactly this.

82:37 Does the agency have

82:39 statutory authority

82:41 over these patents? Are they CBM patents?

82:43 Does it extend to Section 101?

82:45 Does it extend

82:47 notwithstanding claim preclusion?

82:49 Those are issues that this court has

82:51 authority to review. If I could turn

82:53 just for a moment to waivers since it came up a few times.

82:55 There is no waiver here

82:57 because we had no ability

82:59 to raise these issues at the trial stage.

83:02 The PTO's

83:03 regulations are clear.

83:05 The trial order here on

83:07 JA 43 was clear and the trial

83:09 handbook are clear. The regulations say the patent

83:11 owner may file a response to the petition

83:13 addressing any ground for

83:15 unpatentability not already denied.

83:17 No authority to address at the

83:19 trial stage anything other than

83:21 unpatentability. The Congress meant

83:23 address anything you want, just

83:26 not grounds already denied. It was said

83:27 you may address any issue but not unpatentability.

83:30 The second is

83:32 the order here which appears at

83:33 JA 43 is very, very clear.

83:36 It says trials limited

83:37 to the grounds identified in 1 and 2 above

83:40 and no other grounds are authorized.

83:42 You look up the page to 1 and 2

83:44 above and what do they say? 35

83:45 USC 101 for claims 17,

83:47 26 to 29.2.

83:49 Section 102 for claims

83:51 27, 26

83:53 to 29. There's no authorization

83:56 in that order for us to address the

83:57 Board's authority on the CBM's proceedings at the trial stage

84:00 claim preclusion or estoppel.

84:01 You can't waive an argument

84:04 that you have no right to make at that

84:06 stage of the proceedings. And the PTO's

84:08 trial handbook makes it especially clear.

84:10 It says any claim or issue not included

84:12 in the authorization for review will not

84:14 be part of the trial. The authorization

84:16 for review on page 43 of the joint

84:18 appendix doesn't say we can raise any issues.

84:20 We couldn't raise them at trial. There's

84:22 no waiver by failing to raise something at

84:24 a time when it is prohibited.

84:26 Turning briefly to the argument about

84:29 superfluity, sections

84:30 324E in terms of

84:32 the jurisdiction of this court wouldn't be

84:33 superfluous if you could review the

84:36 ultra-virus actions by the

84:38 Board at the end of the day. It has two

84:39 effects right off the cuff. One,

84:41 non-initiation decisions, non-institution

84:43 decisions, those would be final

84:46 and potentially reviewable under

84:48 the APA, but they're not reviewable

84:50 because one, it says they're not final

84:52 and reviewable, and two, you get to

84:54 the alternative provision, section 329,

84:56 and you don't have a final written

84:58 decision that's reviewable under

85:00 section 328. So those become unreviewable

85:02 by virtue of 324E.

85:04 Another thing that it has the effect of,

85:06 if for some reason the

85:08 grounds that you say were error for initiation

85:10 sort of get washed away, it was absolutely

85:12 clear that it wasn't

85:14 unpatentable, or more like they're not

85:16 unpatentable at the time the

85:17 decision was issued because of the record, for

85:20 example, but the record later improves

85:22 and the final decision, there

85:24 is enough evidence there, you can't

85:26 say, well, they shouldn't have initiated in the first place

85:28 if the record wasn't good enough. You only get to

85:30 challenge the final decision. But if that

85:32 final decision is ultra-virus, if

85:34 the board had no authority to issue it,

85:36 that is reviewable.

85:39 Turning very quickly

85:40 to the issue of crime collusion,

85:42 this is a significant issue because

85:44 after seven years of litigation and a

85:46 final district court judgment in this case,

85:49 this action was brought

85:51 in an effort to overturn that judgment.

85:53 But the district court had reached

85:55 final judgment, and nobody

85:57 in the board never disputed that that has

85:59 a potentially crime collusion

86:01 or reclusive effect. On page 19,

86:03 it says, flat out,

86:05 Judge Hughes Oh, I think that's actually fairly

86:11 Appellant Attorney (Jeffrey A. Lamken) easy, because Fresenius, remember, was an

86:13 ex parte reexamination, correct?

86:15 There's no other party to it other than

86:17 the PTO, and so

86:19 claim collusion operates against your

86:21 counterparty. It doesn't operate against

86:23 the world at large. And so Fresenius

86:25 doesn't have a claim collusion in it

86:27 of any sort. I assume you would agree

86:29 Judge Hughes though that if somebody other than SIP

86:31 had gone out and

86:33 filed for a CBM review

86:36 on this, that they wouldn't have been

86:37 Appellant Attorney (Jeffrey A. Lamken) precluded. That would be correct, because

86:39 claim collusion simply operates between the parties.

86:42 It says, you've now had your chance to

86:43 legate it in court. The day is over. Anything

86:45 you could have raised, or did raise,

86:47 is done. And the board's sole

86:49 Judge Hughes So given that the reason Congress

86:51 enacted this provision was actually to

86:53 allow the party against

86:55 whom infringement was being alleged

86:57 to go to the PTO in a parallel

86:59 proceeding, why would we reclaim

87:01 a claim collusion into that

87:03 just because a district court decision

87:05 had become final, but then was on appeal?

87:08 That's what I'm really getting at. That goes back

87:09 Appellant Attorney (Jeffrey A. Lamken) to Fresenius. I think the question is why

87:11 you wouldn't, and for the following reason.

87:13 Well, I think we do that in Fresenius.

87:15 Pardon? I mean,

87:17 Judge Hughes I don't understand

87:19 the distinction between ex parte

87:22 invalidation and

87:23 this new provision to be enough

87:25 to distinguish Fresenius. Oh no, it very much

87:27 Appellant Attorney (Jeffrey A. Lamken) does, because the CBM provision

87:30 has a requirement for you to infer

87:31 someone to bring it, and it says that you can

87:33 only bring it if you've been sued for infringement.

87:36 And that means we not only have

87:37 the same counterparty, SAP versus

87:39 RSATA, in an adjudicative

87:41 proceeding meant to replace litigation,

87:43 but we also have the exact same

87:45 products at issue, because the basis

87:47 for their standing to sue us, or to

87:49 bring it, rather the CBM action and petition for it,

87:51 is the fact that we sued them for infringement

87:53 based on specific products.

87:55 So it is exactly this type of thing that would

87:57 Judge Hughes Your whole argument on why

87:59 they're precluded is because there was a

88:01 final decision, but

88:03 our reasoning in Fresenius suggests

88:05 that kind of finality,

88:07 district court finality, is not

88:09 enough when you're considering

88:11 the PTOs and validity

88:13 Appellant Attorney (Jeffrey A. Lamken) decision. Well, it's certainly not

88:15 that sort of finality. Well, Fresenius

88:17 simply doesn't address claim preclusion because

88:19 it wouldn't apply. You didn't have the same

88:21 parties. You've got the same parties here,

88:23 you have the same products. Do you

88:25 apply claim preclusion? The board says

88:27 flat out on estapa, recognized by the

88:29 regulations, may arise from claim preclusion.

88:31 The sole basis, and under Chenery this is

88:33 the only thing the court could review on,

88:35 was it wasn't sufficiently final because it

88:37 was on appeal. That's the only basis the

88:39 board gave for saying there's no claim

88:40 preclusion. The only one. But that is

88:43 clearly wrong and nobody seriously defends

88:45 it. This court and SSIH

88:48 equipment and Wright and Miller both

88:49 say, and I'm quoting section 4433,

88:52 preclusive effect of a lower

88:54 court judgment cannot be suspended

88:55 simply by taking an appeal that remains

88:57 undecided. It's an absolutely

88:59 foreclosed rationale for

89:01 rejecting claim preclusion. Under

89:03 Chenery, this court can't affirm an

89:05 alternative basis. It can only affirm on

89:07 the basis given by the board itself.

89:10 It's entitled to the view

89:11 of the PTO as an agency

89:13 and it can't affirm on the basis of

89:15 alternative rationales given by the government's

89:17 lawyers. And that by itself should

89:19 close this case on claim preclusion.

89:24 Finally, turning back

89:25 slowly to the merits for a very brief

89:27 note because I have 26 seconds left on the clock

89:29 here. This is a

89:32 there's two ways to get

89:34 faster results on a computer. The first

89:37 way to do it is make a faster computer.

89:39 The second way is to program it better,

89:41 come up with a different way of doing it so the

89:43 computer returns the results.

89:45 There is no reason in the patent laws,

89:48 no reason whatsoever in

89:49 the odds of nature that we would

89:52 prefer the fact that

89:54 you can do it by increasing the hardware speed

89:55 as opposed to coming up with a better way

89:58 to do the software. And the software

90:00 does nothing more than convert a general purpose

90:01 computer into a specific purpose computer.

90:04 The method used here

90:06 dramatically through a counterintuitive method

90:08 increased the speed at which you could pull your

90:10 prices. It is a patentable invention

90:11 within the words of Alice because it improves

90:13 the functioning of the computer for pulling prices.

90:16 If there are no further questions,

90:17 thank you very much. Thank you all.

90:21 Judge Newman Thanks to all the counsellors.

90:23 This was well presented. We did

90:25 our best to ask our toughest questions.

90:27 You managed them very well.

90:30 Thank you all.

90:31 We're adjourned until

90:33 tomorrow.

90:35 Appellant Attorney (Jeffrey A. Lamken) All rise for this adjournment.

90:57 .

90:58 .

96:21 Judge Plager .

96:21 .

96:23 .

96:34 Unknown .

96:35 .

96:39 .

96:41 .