UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEALS BOARD

Transcription

1 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEALS BOARD CARE N CARE INSURANCE COMPANY and TRIZETTO CORPORATION, Petitioners v. INTEGRATED CLAIMS SYSTEMS, LLC, Patent Owner Case No.: To Be Assigned Patent No.: 7,178,020 PETITION FOR TRANSITIONAL POST-GRANT REVIEW OF A COVERED BUSINESS METHOD PATENT UNDER SECTION 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT AND 37 C.F.R Mail Stop Patent Board Patent Trial and Appeal Board United States Patent and Trademark Office P.O. Box 1450 Alexandria, VA

2 TABLE OF CONTENTS Page I. 37 C.F.R. 42.8: MANDATORY NOTICES... 1 A. 37 C.F.R. 42.8(b)(1): Real Party-In-Interest... 1 B. 37 C.F.R. 42.8(b)(2): Related Matters... 1 C. 37 C.F.R. 42.8(b)(3) and (4): Designation of Lead and Back- Up Counsel and Identification of Service Information... 2 II. 37 C.F.R : PAYMENT OF FEES... 2 III. 37 C.F.R (a): GROUNDS FOR STANDING... 3 A. The 020 Patent Is a Covered Business Method Patent B. 37 C.F.R (a): Petitioners Are Eligible to File a CBMR C. 37 C.F.R (b): Petitioners Are Not Estopped IV. 37 C.F.R (b): IDENTIFICATION OF CHALLENGE... 3 A. 37 C.F.R (b)(1): Claims for Which CBMR Is Requested... 3 B. 37 C.F.R (b)(2): Statutory Grounds On Which the Challenge Is Based... 3 C. 37 C.F.R (b)(3): Claim Construction identities unitary data stream... 4 D. 37 C.F.R (b)(4): How the Claims Are Unpatentable... 5 E. 37 C.F.R (b)(5): Evidence Supporting Challenge... 5 V. PRELIMINARY STATEMENT... 5 VI. THE 020 PATENT IS A COVERED BUSINESS METHOD PATENT... 7 i

3 TABLE OF CONTENTS (CONT D) Page A. The 020 Patent Claims a Method or Corresponding Apparatus for Performing Data Processing or Other Operations Used in the Practice, Administration, or Management of a Financial Product or Service Claims 8, 21, and 36 Are Expressly Directed to a Method and Corresponding Apparatus for Performing Data Processing Used in the Administration of a Financial Product The 020 Patent Describes its Claimed Invention as Being Directed to Data Processing Used in the Administration of a Financial Product ICS s Own Characterizations of the 020 Patent Confirm It Relates to a Financial Product or Service That the 020 Patent Has Been Asserted against Insurance Companies and ICS s Infringement Allegation, Confirm It Relates to a Financial Product or Service The Challenged Claims Do Not Recite a Technological Invention The Challenged Claims Do Not Recite a Technological Feature that is Novel and Non-obvious over the Prior Art The Challenged Claims Do Not Solve a Technical Problem Using a Technical Solution a. The Alleged Problem Is Non-Technical b. To the Extent The Challenged Claims Solve Any Alleged Problem, They Do So Only By Reciting Well-Known Prior Art Technology VII. IT IS MORE LIKELY THAN NOT THAT THE CHALLENGED CLAIMS ARE UNPATENTABLE A. Description of the Alleged Invention of the 020 Patent B. Ground 1: The Challenged Claims Are Not Patent-Eligible Under 35 U.S.C Claims That Recite Abstract Ideas Implemented Using General-Purpose Computer Components Are Not Patent- Eligible ii

4 TABLE OF CONTENTS (CONT D) Page 2. Alice Step 1: The Challenged Claims are Drawn to an Abstract Idea Alice Step 2: Nothing in the Challenged Claims Supplies an Inventive Concept a. Claim b. Claim c. Claim d. Claim e. Claim f. Claim g. Claim h. Claim i. Claim j. Claim C. Ground 2: Challenged Claims 27, 42, 43, 44, 45, 49, 50, 51, and 52 Are Anticipated by U.S. Patent No. 5,258,855 ( Lech ), Rendering Them Unpatentable Under 35 U.S.C Overview of Lech Lech Is Prior Art and Eligible for Use in CBMR Lech Anticipates Claim Lech Anticipates Claims 42 and Lech Anticipates Claims 43 and Lech Anticipates Claim Lech Anticipates Claims 45 and Lech Anticipates Claim D. Ground 3: Challenged Claims 30, 36, and 42 are Obvious in View of Lech Alone or in Combination with U.S. Patent No. 5,054,096 ( Beizer ) Rendering Them Unpatentable Under 103(a) Beizer is Prior Art and Eligible for Use in CBMR One of Ordinary Skill in the Art Would be Motivated to Combine Lech and Beizer Claim 30 is Obvious in View of Lech iii

5 TABLE OF CONTENTS (CONT D) Page 4. Lech in Combination with Beizer Disclose all Elements of Claim Lech In Combination with Beizer Disclose All Elements of Claim Lech in Combination with Beizer Disclose all Elements of Claim VIII. CONCLUSION iv

6 TABLE OF AUTHORITIES Cases Page Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013) Alice Corp. Pty. Ltd. v. CLS Bank Int l, 134 S. Ct (2014)... passim Am. Express Co. v. Lunenfeld, CBM , Paper 17 (PTAB June 18, 2014)... 15, 16 Apple Inc. v. SightSound Techs., LLC, CBM , Paper 14 (PTAB Oct. 8, 2013)... 8 Bell Comm ns Research, Inc. v. Vitalink Commc ns Corp., 55 F.3d 615 (Fed. Cir. 1995) Bilski v. Kappos, 561 U.S. 593 (2010)... passim Bloomberg Inc. v. Markets-Alert PTY Ltd., CBM , Paper 18 (PTAB Mar. 29, 2013) Content Extraction and Transmission v. Wells Fargo Bank, N.A., No , et al., 2014 WL (Fed. Cir. Dec. 23, 2014)... passim Coresource, Inc. v. Quality Healthcare Intermediary, LLC, CBM , Paper 9 (PTAB July 28, 2014) Coupa Software, Inc. v. Ariba, Inc., CBM , Paper 11 (PTAB July 25, 2014) CRS Advanced Techs., Inc. v. Frontline Techs., Inc., CBM , Paper 17 (PTAB Jan. 23, 2013)... 9, 16 Cyberfone Sys., LLC v. CNN Interactive Grp., Inc., 558 F. App x 988 (Fed. Cir. 2014)... passim CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011)... passim v

7 TABLE OF AUTHORITIES (CONT D) Page DDR Holdings, LLC v. Hotels.com, L.P., No , 2014 WL (Fed. Cir. Dec. 5, 2014)... 7, 42, 43 Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012)... passim DeGeorge v. Bernier, 768 F.2d 1318 (Fed. Cir. 1985)... 41, 50 Gillman v. StoneEagle Servs., Inc., CBM , Paper 11 (PTAB Feb. 18, 2014) In re Bilski, 545 F.3d 943 (Fed. Cir. 2008)... passim KSR Int l Co. v. Teleflex Inc., 550 U.S. 398 (2007) Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM , Paper 66 (PTAB Jan. 23, 2014)... 9 Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM , Paper 15 (PTAB Feb. 12, 2013) Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM , Paper 13 (PTAB Jan. 27, 2013) Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct (2012)... passim Parker v. Flook, 437 U.S. 584 (1978) PNC Fin. Servs. Grp., Inc. v. Intellectual Ventures I LLC, CBM , Paper 13 (PTAB May 22, 2014) SAP Am., Inc. v. Versata Dev. Grp., Inc., CBM , Paper 36 (PTAB Jan. 9, 2013)... 8 SiRF Tech., Inc. v. Int l Trade Comm n, 601 F.3d 1319 (Fed. Cir. 2010)... passim vi

8 TABLE OF AUTHORITIES (CONT D) Page Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014)... passim Statutes 157 Cong. Rec. S (daily ed. Mar. 8, 2011)... 8, 13, U.S.C 102(a) U.S.C 102(b)... 6, 7, 58, U.S.C passim 35 U.S.C , 6, 33, U.S.C , 6, U.S.C. 325(e)(1)... 3 P.L (a)(1)(C)... 58, 73 P.L (a)(1)(C)(i) P.L (d)(1)... 8, 9, 14 Regulations 37 C.F.R (b) C.F.R (a) C.F.R (b) C.F.R (a)... 8, 9, C.F.R (b)... 14, 15, Fed. Reg. 57,526 (Oct. 10, 2007) Fed. Reg. 48,735 (Aug. 14, 2012)... 8, Fed. Reg. 48,736 (Aug. 14, 2012)... 9, 14 vii

9 TABLE OF AUTHORITIES (CONT D) Page 77 Fed. Reg. 48,756 (Aug. 14, 2012)... 16, 17, 18, Fed. Reg. 48,764 (Aug. 14, 2012)... 16, 17, 18, 19 viii

10 Care N Care Insurance Company, Inc. ( Care N Care ) and TriZetto Corp. ( TriZetto ) (collectively, Petitioners) request CBMR of Claims 27, 30, 36, 42, 43, 44, 45, 49, 50, 51, and 52 ( Challenged Claims ) of U.S. Patent No. 7,178,020 ( 020 Patent ) (Ex. 1003). I. 37 C.F.R. 42.8: MANDATORY NOTICES A. 37 C.F.R. 42.8(b)(1): Real Party-In-Interest Care N Care and TriZetto are the real parties-in-interest. B. 37 C.F.R. 42.8(b)(2): Related Matters Patent Owner Integrated Claims Systems, LLC ( ICS ) has asserted the 020 Patent in numerous lawsuits in various federal district courts: (1) Aetna Dental, Inc., 1 No. 2:13-cv-649 (E.D. Tex.), transferred to No. 3:14-cv-1524 (D. Conn.); (2) Care N Care Ins. Co., No. 2:14-cv-735 (E.D. Tex.); (3) Cmty. Health Choice, Inc., No. 2:14-cv-737 (E.D.Tex.); (4) Molina Healthcare of Tex., Inc., No. 2:14-cv- 866 (E.D. Tex.); (5) S. Vanguard Ins. Co.,* No. 2:14-cv-83 (E.D. Tex.); (6) United Dental Care of Tex., Inc., No. 2:14-cv-72 (E.D. Tex.); (7) Wellcare of Tex., Inc., No. 2:14-cv-73 (E.D. Tex.); (8) Aetna Health Inc., No. 2:13-cv-650 (E.D. Tex.); (9) Allstate Tex. Lloyd s, No. 2:13-cv-651 (E.D. Tex.); (10) Amerisure Mut. Ins. Co., No. 2:13-cv-652 (E.D. Tex.); (11) Cigna Healthcare of Tex., Inc., No. 2:13- cv-653 (E.D. Tex.); (12) Delta Dental Ins. Co., No. 2:13-cv-654 (E.D. Tex.); 1 For brevity, only the party adverse to ICS is listed in these case names. 1

11 (13) Travelers Lloyds of Tex. Ins. Co., 2:13-cv-656 (E.D. Tex.), transferred to No. 3:14-cv-892 (D. Conn.); (14) Zenith Ins. Co., No. 2:13-cv-658 (E.D. Tex.); (15) Tex. Mut. Ins. Co., No. 1:13-cv-1070 (W.D. Tex.); (16) Tex. Mut. Ins. Co., No. 1:13-cv-128 (W.D. Tex.). The 020 Patent is also the subject of a pending petition for CBMR filed by Travelers Lloyds of Texas Insurance Company and The Travelers Indemnity Company (CBM ). These cases and proceedings may affect, or be affected by, decisions here. C. 37 C.F.R. 42.8(b)(3) and (4): Designation of Lead and Back-Up Counsel and Identification of Service Information Lead: Gianni Cutri (Reg. No ) gianni.cutri@kirkland.com Back-Up: Jared Barcenas (Reg. No ) jared.barcenas@kirkland.com Postal/Hand-Delivery Address: Kirkland & Ellis LLP 300 North LaSalle Street Chicago, Illinois Telephone: (312) Facsimile: (312) Petitioners submit a Power of Attorney. 37 C.F.R (b). Petitioners consent to service: TriZetto-CBMR-SVC@kirkland.com. II. 37 C.F.R : PAYMENT OF FEES The undersigned authorize the Office to charge the fee set forth in 37 C.F.R (a) for this Petition to Deposit Account No Review of eleven (11) claims is requested; no excess claim fee is submitted. The undersigned further authorize payment for any additional fees that may be due in connection with this Petition to be charged to the above-referenced Deposit Account. 2

12 III. 37 C.F.R (A): GROUNDS FOR STANDING A. The 020 Patent Is a Covered Business Method Patent. The 020 Patent is a covered business method patent. (See Section VI.) B. 37 C.F.R (a): Petitioners Are Eligible to File a CBMR. Care N Care has been sued for alleged infringement of the 020 Patent in Case No. 2:14-cv-735 (E.D. Tex.), and TriZetto is indemnifying Care N Care. C. 37 C.F.R (b): Petitioners Are Not Estopped. Petitioners certify the 020 Patent is available for CBMR and Petitioners are not estopped from requesting CBMR of the Challenged Claims on the identified grounds. Petitioners certify: (1) they do not own the 020 Patent; (2) they have not filed a civil action challenging the validity of any claim of the 020 Patent; (3) the estoppel provisions of 35 U.S.C. 325(e)(1) do not prohibit CBMR of the 020 Patent; and (4) this Petition is filed after the 020 Patent was granted. IV. 37 C.F.R (B): IDENTIFICATION OF CHALLENGE Petitioners request the Challenged Claims be found unpatentable. A. 37 C.F.R (b)(1): Claims for Which CBMR Is Requested Petitioners request CBMR of the Challenged Claims. B. 37 C.F.R (b)(2): Statutory Grounds On Which the Challenge Is Based CBMR is requested pursuant to 35 U.S.C. 101, 102, and

13 C. 37 C.F.R (b)(3): Claim Construction A claim of an unexpired patent in CBMR is given the broadest reasonable interpretation in light of the specification to one having ordinary skill in the art. 37 C.F.R (b). Petitioners contend that preambles of the independent claims are not limiting. Petitioners submit, for this CBMR only, proposed constructions of certain terms under the broadest reasonable interpretation standard. For all other terms, Petitioners propose the plain and ordinary meaning should be used. 1. identities Independent Claims 42, 43, 45, 50, 51, and 52 refer to identities of the identifiable fields. ICS has proposed in district court that the term identities be construed as labels. Ex at Ex. A at 3. The claims of the 020 state that the fields are identifiable, and the Abstract of the 020 states the fields can be identified by references to field labels. Ex at Abstract. Thus, the patentee describes the identities of the fields synonymously as field labels. Furthermore, dependent Claims 43 and 51 state that the identities of the fields are field names. The construction of the term identities therefore must be broad enough to cover names, which labels does. Thus, the broadest reasonable interpretation of identities is labels. 1. unitary data stream ICS has proposed in district court that this phrase be construed as transmitted set of information. Ex at Ex. A at 2; Ex at Ex. A at 1. 4

14 In support of this position, ICS referred to the 020 Patent stating that it teaches the transmission of a set of information as multiple related files: For example, the format of the PAC application advantageously may consist of a text file and an associated image file. (emphasis removed). Ex at 14 (quoting 020 patent at 15:2-10). ICS further pointed to the 020 Patent at 2:26-3:3, stating that the 020 patent discloses transmitting a standard text claim form together with an attachment. Ex at 16. These portions of the specification confirm that transmitted set of information is the broadest reasonable interpretation of the term unitary data stream. ICS did not dispute this conclusion in its Patent Owner Preliminary Response to Traveler s petition in CBM ( -187 POPR ). See Ex D. 37 C.F.R (b)(4): How the Claims Are Unpatentable A detailed explanation of unpatentability is provided in Section VII. E. 37 C.F.R (b)(5): Evidence Supporting Challenge An Appendix of Exhibits is attached. Relevance of the evidence, including specific portions, are provided in Section VII. V. PRELIMINARY STATEMENT The 020 Patent is eligible for CBMR because it clearly claims methods and corresponding apparatuses for performing data processing... used in the practice, administration, or management of a financial product or service and does not claim a technological invention. 5

15 Patent Owner ICS claims that the alleged invention of the 020 Patent is computerizing the processing of insurance claims that have attachments. There is no dispute that insurance claims processing was already performed using a process that contained both computerized and manual steps. The 020 Patent states that its purported invention, computerizing those manual steps, is simply [t]he next stage in the development of claims processing systems. Ex at 3: But the Supreme Court and the Federal Circuit have confirmed this approach simply reciting a well-known, abstract idea while adding the words apply it with a computer, render the claims ineligible under 35 U.S.C Alice Corp. Pty. Ltd. v. CLS Bank Int l, 134 S. Ct. 2347, 2350 (2014). The Challenged Claims are also invalid under 35 U.S.C. 102 and 103 in view of the prior art, in particular based on: (1) U.S. Patent No. 5,258,855 ( Lech ) (Ex. 1009), and (2) U.S. Patent No. 5,054,096 ( Beizer ) (Ex. 1010), both prior art under pre-aia 35 U.S.C 102(b). Secondary considerations do not support a finding of nonobviousness. There is no evidence ICS will be able to show commercial success, long-felt need, failure of others, skepticism, praise, teaching away, recognition of a problem, or copying by competitors. Should ICS put forth any allegations regarding secondary considerations of nonobviousness, Petitioners request an opportunity to respond. 6

16 As noted, Travelers also filed a petition for CBMR of the Challenged Claims (CBM ). The Board should nonetheless institute review based on Petitioners petition. First, Petitioners are not affiliated with Travelers, and have not coordinated with Travelers regarding their respective petitions. Second, Petitioners challenge more claims beyond those challenged by Travelers. Third, Petitioners prior art is different from Travelers. Fourth, Petitioners expert is not the same as Travelers. Fifth, Petitioners prior art while still prior art under pre- AIA 102(b)) is later in date than Travelers. As such, Petitioners prior art explains the state of the art in with more precision than earlier prior art, due to the evolution of the state of the art. Sixth, Petitioners cite and apply additional Federal Circuit and PTAB case law beyond that cited by Travelers, including some that issued after Travelers filed its petition, most notably the recent Federal Circuit decisions in Ultramercial (issued Nov. 14, 2014), DDR Holdings (issued Dec. 5, 2014), and Content Extraction and Transmission (issued Dec. 23, 2014). These additional decisions further support a finding that the 020 Patent is a CBM patent and is patent-ineligible under 35 U.S.C VI. THE 020 PATENT IS A COVERED BUSINESS METHOD PATENT The AIA and USPTO Rules define a covered business method ( CBM ) patent as one that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or 7

17 management of a financial product or service, except that the term does not include patents for technological inventions. AIA 18(d)(1); 37 C.F.R (a). The AIA and USPTO Rules thus define a two-part test to determine whether a patent is a covered business method patent and the 020 Patent satisfies the test. A. The 020 Patent Claims a Method or Corresponding Apparatus for Performing Data Processing or Other Operations Used in the Practice, Administration, or Management of a Financial Product or Service. According to the AIA s legislative history, patents should be eligible for CBMR if they cover any ancillary activities related to a financial product or service, including... marketing, customer interfaces, Web site management and functionality, transmission or management of data, servicing, underwriting, customer communications, and back office operations-e.g., payment processing, stock clearing. 157 CONG. REC. S (daily ed. Mar. 8, 2011) (statement of Sen. Schumer) (Ex. 1011) (emphasis added). The Board has explained that the phrase financial product or service should be interpreted broadly. Apple Inc. v. SightSound Techs., LLC, CBM , Paper 14 at 11 (Oct. 8, 2013); see also 77 Fed. Reg. 48,735 (Aug. 14, 2012) (Ex. 1024) ( financial product or service should be interpreted broadly ). It has also explained that the word financial is just an adjective that simply means relating to monetary matters. SAP Am., Inc. v. Versata Dev. Grp., Inc., CBM , Paper 36 at 23 (Jan. 9, 2013). Consequently, the definition encompasses patents that claim activities that are 8

18 financial in nature, incidental to a financial activity or complementary to a financial activity. CRS Advanced Techs., Inc. v. Frontline Techs., Inc., CBM , Paper 17 at 7 (Jan. 23, 2013). In addition, [a] patent having one or more claims directed to a covered business method is a covered business method patent for purposes of the review, even if the patent includes additional claims. 77 Fed. Reg. at 48,736 (Aug. 14, 2012) (Ex. 1024); see also Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM , Paper 66 at 6 (Jan. 23, 2014) (entire patent eligible for CBMR where the subject matter of at least one claim is directed to a covered business method ). In other words, as Patent Owner ICS has conceded, [a] patent need have only one claim directed to a covered business method to be eligible for review. Ex at Claims 8, 21, and 36 Are Expressly Directed to a Method and Corresponding Apparatus for Performing Data Processing Used in the Administration of a Financial Product. The 020 Patent contains at least three Claims 8, 21, and 36 that are expressly directed to a method or corresponding apparatus for performing data processing... used in the practice, administration, or management of a financial product or service, namely, processing insurance forms. AIA 18(d)(1); 37 C.F.R (a). Method Claim 36 is challenged in this petition (while Claims 8 and 21 are challenged in a separate petition filed by Petitioners) and is directed to 9

19 an insurance claim form. Ex at Claims 27, 36 ( A method for operating a digital device... comprising: receiving a unitary data stream... wherein the unitary data stream comprises an insurance claim form. ). 2 Apparatus Claim 8 is similarly directed to processing insurance claim forms as it is essentially an apparatus counterpart of method Claim 36. Id. at Claims 1, 8 ( A digital device operatively coupled to a computer network, said network comprising... the digital device receiving a unitary data stream... wherein the unitary data stream comprises an insurance claim form. ) Apparatus Claim 21 is likewise in essence an apparatus counterpart to method Claim 36, with only minor differences from Claim 8. Id. at Claims 15, 21. These three claims are a method and corresponding apparatuses for processing data in an insurance claim form and thus expressly relate to insurance, which is quintessentially a financial product or service. See Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM , Paper 13 at 6 (Jan. 27, 2013) (noting that health insurance, property-casualty insurance, and liability insurance are all financial product[s] ); see also AMERICAN HERITAGE COLLEGE DICTIONARY at 705 (3d ed. 1997) (Ex. 1012) (defining insurance as an agreement to indemnify another against specified loss in return for premiums paid ). Indeed, the Board has explained that [a]djudicating an insurance claim 2 Emphasis has been added in the language citing the 020 Patent throughout this petition for ease of review. 10

20 and processing payment for that claim are inherently financial activities for purposes of CBM standing. Gillman v. StoneEagle Servs., Inc., CBM , Paper 11 at 8 (Feb. 18, 2014) (denying institution on other grounds). In its -187 POPR, ICS argues that the claimed invention ha[s] no bearing on the practice, administration or management of insurance. Ex at 19 (emphasis added). But the Background of the Invention in the 020 patent states that [h]igh administrative costs for filing and processing health insurance claims have been the bane of the health insurance industry from its inception. Ex at 1: (emphasis added). The patent goes on to state that [i]t is also estimated that if a coherent electronic system could be implemented, it would reduce these administrative costs to $15 per PAC and $5 per Final Payment claim. Ex at 4:35-38 (emphasis added). As explained below, the patent purports to address these administrative costs (albeit merely by attempting to computerize the well-known idea of processing and administering insurance claim forms). Thus, ICS s claim that the 020 Patent does not relate to the administration of a financial product is untenable. ICS also states in its -187 POPR that the claim [sic] inventions have no affect [sic] on... the determination by an insurance company whether the insurance claim is approved, and the extent to which any money is paid from the insurance company to the medical professional. Ex at 19. But that 11

21 assertion is undermined by the same filing, wherein ICS characterizes the 020 Patent as related to the approval of claims and payment to medical professionals: Insurance companies often require service providers (e.g. doctors, dentists) to submit a PAC [Prior Authorization Claim] Application before the insurance company approves an expensive medical procedure. Ex at 10. The specification explains that [i]n the area of Prior Approval claims, the goals of the insurance companies are to validate the necessity of the procedure and to determine whether the patient s insurance policy obligates the insurance company to pay for [it]. Ex at 4: The 020 Patent Describes its Claimed Invention as Being Directed to Data Processing Used in the Administration of a Financial Product. The specification of the 020 Patent confirms that the claimed invention is directed to CBM subject matter. The alleged invention of the 020 Patent relates to an AIC [attachment integrated claims] system for preparing and processing digital insurance claims.... (Ex at 1:23 25), and the first purpose attributed to the alleged invention is to create a coherent system that allows for the electronic filing, transmission, and processing of insurance claims with attachments Id. at 8: Processing insurance claims electronically (with or without attachments) is obviously data processing, and insurance claims are one facet of the administration of an insurance policy. 12

22 3. ICS s Own Characterizations of the 020 Patent Confirm It Relates to a Financial Product or Service. Patent Owner ICS has asserted the 020 Patent in Tex. Mut. Ins. Co., No. 1:13-cv-1070 (W.D. Tex.). In its Opening Claim Construction Brief there, ICS said that the asserted patents (of which the 020 Patent was one) cover... systems and methods for processing insurance claims and the attachments that typically accompany them. Ex at 1 (emphasis added). In addition, ICS summary of the Claimed Technology in the -187 POPR mentions insurance 15 times and describes the 020 Patent s claimed invention as being directed to insurance claims processing. Ex at That the 020 Patent Has Been Asserted against Insurance Companies and ICS s Infringement Allegation, Confirm It Relates to a Financial Product or Service. That the 020 Patent relates to a financial product or service is confirmed both by (1) ICS s assertion of it against numerous insurance companies, and (2) ICS s assertions as to what specific instrumentality allegedly infringes the 020 Patent. According to the AIA s legislative history, if a patent holder alleges that a financial product or service infringes its patent, that patent shall be deemed to cover a financial product or service. 157 CONG. REC. S1365 (daily ed. Mar. 8, 2011) (statement of Sen. Schumer) (Ex. 1011). While not dispositive, the Board views infringement allegations as one factor to be considered in deciding 13

23 whether a patent is directed to CBM subject matter. PNC Fin. Servs. Grp., Inc. v. Intellectual Ventures I LLC, CBM , Paper 13 at 14 (May 22, 2014). ICS has asserted the 020 Patent in litigation against at least 14 insurance and insurance claims processing companies, including well known insurance companies such as Allstate, Travelers, and Aetna, see Section I.B, supra, and ICS s infringement allegations confirm that ICS is targeting the processing of insurance claims. In Care N Care Ins. Co., No. 2:14-cv-735 (E.D. Tex.), for example, the very first sentence of ICS court-mandated infringement contentions for the 020 Patent claim state that ICS contentions are directed to Defendant Care N Care s insurance claim processing systems and methods that allow for the electronic submission and processing of insurance claims. Ex at The Challenged Claims Do Not Recite a Technological Invention. The definition of a CBM patent does not include patents for technological inventions. AIA 18(d)(1); 37 C.F.R (a). This exception excludes only those patents whose claimed subject matter as a whole (1) recites a technological feature that is novel and unobvious over the prior art and (2) solves a technical problem using a technical solution. 37 C.F.R (b); see also 77 Fed. Reg. 48,736 (Aug. 14, 2012) (Ex. 1024) ( a technical problem using a technical solution is with respect to the claimed subject matter as a whole ); 157 CONG. REC. S1364 (daily ed. Mar. 8, 2011) (statement of Sen. Schumer) (only those 14

24 patents whose novelty turns on a technological innovation over the prior art and [which] are concerned with a technical problem which is solved with a technical solution and which requires the claims to state the technical features which the inventor desires to protect should be excluded from CBMR). Ex The Patent Office and the PTAB have made clear that both prongs must be met for a patent to be excluded from CBMR. 77 Fed. Reg (Ex. 1024) (explaining that conjunctive test represents the best policy choice ); see also Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM , Paper 15 at 10 (Feb. 12, 2013) ( To qualify under the technological invention exception, the claimed subject matter as a whole must satisfy both of the following prongs. ). If at least one challenged claim fails the technological invention exception, the entire patent is not exempt from CBMR. See Am. Express Co. v. Lunenfeld, CBM , Paper 17 at 13 (June 18, 2014). None of the Challenged Claims meet either prong of the test. 6. The Challenged Claims Do Not Recite a Technological Feature that is Novel and Non-obvious over the Prior Art. None of the challenged claims meet the first prong, namely, recit[ing] a technological feature that is novel and unobvious over the prior art. 37 C.F.R (b). Mere recitation of known technologies, such as computer hardware, communication or computer networks, software, memory, computer-readable storage medium, scanners, display devices or databases, or [r]eciting the use of 15

25 known prior art technology to accomplish a process or method, even if that process or method is novel and non-obvious, or [c]ombining prior art structures to achieve the normal, expected, or predictable result of that combination will not typically render a patent a technological invention. 77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012) (Ex. 1025) (emphasis added); Am. Express Co., CBM , Paper 17 at A claim recites a technological invention only if it recites novel technological features. See Bloomberg Inc. v. Markets-Alert PTY Ltd., CBM , Paper 18 at 6 7 (Mar. 29, 2013); CRS Advanced Techs., Inc., CBM , Paper 17 at 9. The Challenged Claims recite only the use of well-known technology that was common-place when the 020 Patent s application was filed. Claim 27 is a method for operating a digital device that recites only generic computer hardware consisting of: (1) a digital device that is operatively coupled to (2) a first networked component and (3) a second networked component. [D]igital device[s] and networked component[s] are the epitome of generic and wellknown technologies (Ex at 1:48 54, 2:35 54), and simply operatively coupl[ing] them does not transform the claim into a technological invention. See 77 Fed. Reg. 48,756, 48,764 (Ex. 1025). Claim 30 depends from Claim 27 and adds only that the first networked component comprises a mainframe computer. The 020 Patent admits that mainframe computers are generic, well- 16

26 known prior art technologies. Ex at 4:42 51 ( An example of a hybrid system of claim processing currently in use... typically has at least one mainframe computer 350. ) Indeed, Patent Owner ICS admits that [a]t the time the application leading to the 020 Patent was filed, mainframe computers were widely adopted by large corporate and government entities, including insurance companies. Ex at 7 8 (emphasis added). Claim 36 also depends from Claim 27 and simply adds that the data being processed comprises an insurance claim form. Insurance claim forms are not a technological feature at all and existed long before the 020 Patent s application. (Ex at 1:36 37.) Claim 42 (an apparatus claim) recites only generic computer hardware consisting of a server having software for receiving a first file and copying a subset of its contents to a second file. Neither a server nor software were novel or unobvious technology. Instead, software is just an inherent feature of the generic server, as confirmed by Patent Owner ICS s admission that [l]ike any common computer, the server... would be unable to function without computer software. Ex at 11 (emphasis added). Moreover, the process performed by the recited server is not novel or non-obvious, but even if it were, that would not transform the server into a technological invention. See 77 Fed. Reg. 48,756, 48,764 (Ex. 1025) (not enough merely to [r]ecit[e] the use of known prior art technology to accomplish a process or method, even if that process or method is 17

27 novel and non-obvious ). Claim 43 depends from Claim 42 and simply adds that fields within the first file are identifiable by field names. The use of field names is of course not novel and unobvious technology. Claim 44 also depends from Claim 42 and simply describes a manner in which the process of copying contents of the first file to the second file can be carried out i.e., based solely on the field identities in the first and second files. This is not a technical approach, but rather a narrowed version of the well-known use of a field concept in Claim 42. It is also not a novel or non-obvious refinement of the process, but even if it were, that would not transform the claimed server into a technological invention. See 77 Fed. Reg. 48,756, 48,764 (Ex. 1025). Claim 49 also depends from Claim 42 and once again just a particular way the recited process can be carried out i.e., that it occurs in response to the first file being opened. This adds no technology. Claim 45 also depends from Claim 42 and simply adds that corresponding fields within the first and second files have corresponding identities. Utilizing fields that have corresponding identities is not a novel and non-obvious technology. Claim 50 is a method for processing files that, like Claim 42, recites the wellknown feature of receiving a first file and copying a subset of its contents to a second file. Claim 51 depends from Claim 50 and, like Claim 43, adds only that fields within the first file are identifiable by field names. This adds no novel and unobvious technology to what is claimed in Claim 51. Claim 52 depends from 18

28 Claim 51 and adds only that corresponding fields within the first and second files have corresponding identities, which likewise adds no novel and non-obvious technology to Claim The Challenged Claims Do Not Solve a Technical Problem Using a Technical Solution. By its own admission, the 020 Patent does not solve a technical problem with a novel technical solution. Rather, it purports to solve an alleged commercial or business problem, and it purportedly does this simply by [c]ombining prior art structures to achieve the normal, expected, or predictable result of that combination. 77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012) (Ex. 1025). This is an independent reason that the technological invention exception does not apply. See 37 C.F.R (b). a. The Alleged Problem Is Non-Technical. The 020 Patent attempts to address an alleged business problem, namely: how to process insurance claims that have attachments. Ex at 8:14 19 (purpose of present invention is to create a coherent system that allows for the electronic filing, transmission, and processing of insurance claims with attachments ). According to the 020 Patent, insurance claims have been processed entirely on paper. Id. at 1: A coherent system for the electronic filing, transmission, and processing of insurance claims already existed and was employed by thousands of [healthcare] providers and hundreds of insurance 19

29 companies at the time the 020 Patent s application was filed. Id. at 2: However, according to the 020 Patent, there were still some types of claims known as claims with attachments that were handled using a hybrid system involving some electronic and some manual (i.e., hard copy / paper) processing. Id. at 2:62 66, 3: In other words, the process for claims with attachments was well-known, but partially manual (i.e., paper-based). Continuing to process these claims partially in paper form was allegedly labor intensive, prone to problems, and slow, which the patentee says made it time-consuming, costly and irritating. Id. at 3:66 4:2. The 020 Patent s invention allegedly was motivated by the desire to overcome the problems associated with the... hybrid system for processing claims with attachments. Id. at 7:66 8:1. The 020 Patent s proposed solution to the alleged problems of paper-based processing of insurance claims with attachments was to computerize[] this process, which it described as [t]he natural next stage in the development of claims processing systems. Id. at 3: The alleged problems associated with the hybrid system for processing claims with attachments that it was labor intensive, prone to problems, and slow, and time-consuming, costly and irritating are not technical problems. No scientific or technical knowledge is needed to understand the alleged problem that the 020 Patent seeks to solve. This demonstrates that the alleged problem is 20

30 not technical but rather is a generic business process problem faced by any business that relies on paper forms. In Coupa Software, Inc. v. Ariba, Inc., the Board addressed a patent whose goal was making a business process more efficient, and concluded that such a goal does not qualify as solv[ing] a technical problem : Petitioner also argues that the... patent makes clear that the problem being addressed was to make more efficient the business process of purchasing which is not a technical problem.... [W]e agree with Petitioner that the... patent s suggestion that the invention improves the efficiency of the procurement process is not a technical solution to a technical problem. Rather, the solution is based on the improvement of a business process, which is directed to the problem of how that process is presented to users, as opposed to being a technical problem. CBM , Paper 11 at 9 10 (July 25, 2014) (emphasis added). Here, similarly, the 020 Patent is directed at solving an alleged problem of (in)efficiency in a particular business process namely, paper-based insurance claims processing which is not a technical problem. b. To the Extent The Challenged Claims Solve Any Alleged Problem, They Do So Only By Reciting Well-Known Prior Art Technology. The Challenged Claims do not us[e] a technical solution to the alleged problems and therefore do not qualify for the technological invention exception. 21

31 Challenged Claims 50, 51, and 52 recite no technological features at all. They simply recite a pure method of receiving a first file and copying a portion of its contents to a second file. The remaining Challenged Claims do recite certain well-known, prior art technological features, such as a digital device and a networked component (Claim 27), a mainframe computer (Claim 30), and a server with software (Claim 42). However, for purposes of the technological invention exception, it is not enough that the invention makes use of technological systems, features, or components, because [u]se of technology is ubiquitous and on some level underlies virtually every invention. Coresource, Inc. v. Quality Healthcare Intermediary, LLC, CBM , Paper 9 at 8 (July 28, 2014). Moreover, as already explained, every technological feature recited in the Challenged Claims is generic, well-known computer hardware that was in the prior art. See Section VI.B.i, supra. VII. IT IS MORE LIKELY THAN NOT THAT THE CHALLENGED CLAIMS ARE UNPATENTABLE. A. Description of the Alleged Invention of the 020 Patent The 020 Patent attempts to solve an alleged problem related to processing insurance claim forms. See Section VI.A.2. It admits that at the time of the alleged invention, insurance claims processing had already largely been computerized more specifically, that a coherent system already existed that 22

32 allowed for the electronic filing, transmission, and processing of insurance claims, and that this system was employed by thousands of providers and hundreds of insurance companies. Ex at 2:51 54; 1:48 56; 2:4 15. According to the 020 Patent, however, claims with attachments were still handled using a hybrid system that involved some electronic and some manual (i.e., hard copy / paper) processing. Id. at 2:62 66; 3:58 4:2. It proposed to solve this problem by computerize[ing] this process, which it describes as [t]he natural next stage in the development of claims processing systems. Id. at 3:18 20; 7:66 8:10. Consistent with this understanding, the 020 Patent s exemplary embodiment of the essential steps of the claimed invention (id. at 12:30 34) amounts to little more than describing the existing paper-based process and saying do it on a computer. Compare, e.g., id. at 5:7 6:49 ( the PAC form is filled out entirely by hand... [t]he form and the x-rays are placed in the envelope... the envelope is mailed ) with id. at 12:30 67 (alleged invention calls for [f]iling out [the] PAC form on the computer screen; [d]igitizing, e.g., scanning, the patient s x- ray [and]... [t]ransmitting... to the designated insurance company ). Indeed, that the 020 Patent simply says do it on a computer is well illustrated by Patent Owner ICS s own summary of the alleged invention. Ex at 9 (patentee sought to eliminate, to the maximum extent possible, all processing steps which are in any way connected with the presence of a hard copy attachment. ) ICS goes 23

33 on to assert that the claimed invention was intended to replace the traditional system that involved paper submissions (id. at 41) in other words, computerizing a paper process which it purports to do simply by reciting well known, conventional, and generic computer technology. B. Ground 1: The Challenged Claims Are Not Patent-Eligible Under 35 U.S.C The Challenged Claims are not patent eligible under 35 U.S.C They embody the abstract idea of transmitting or copying information from a source to a destination, and add little more than a token, conventional, and wholly generic computer implementation. Also, none of the Challenged Claims satisfy the Federal Circuit s machine-or-transformation test, which is a useful and important clue that they are not patent-eligible. See Bilski v. Kappos, 561 U.S. 593, (2010). 1. Claims That Recite Abstract Ideas Implemented Using General-Purpose Computer Components Are Not Patent- Eligible. Section 101 of the Patent Act has long had an important implicit exception, that [l]aws of nature, natural phenomena, and abstract ideas are not patentable. Alice, 134 S. Ct. at In Mayo Collaborative Servs. v. Prometheus Labs., Inc. and Alice Corp. Pty. Ltd. v. CLS Bank Int l, the Supreme Court established a twostep framework for applying this exception to 101 patent eligibility. Alice,

34 S. Ct. at 2355; see Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, (2012). The first step is to determine whether the claims at issue are directed to one of those patent-ineligible concepts laws of nature, natural phenomena, or abstract ideas. Alice, 134 S. Ct. at 2355; see Mayo, 132 S. Ct. at Regardless of what statutory category... a claim s language is crafted to literally invoke, it is necessary to look to the underlying invention for patent-eligibility purposes. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1374 (Fed. Cir. 2011). In other words, the claimed invention should be viewed in its simplest form. See Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012). [W]ell-established, fundamental concepts fall within the category of abstract ideas. Cyberfone Sys., LLC v. CNN Interactive Grp., Inc., 558 F. App x 988, 991 (Fed. Cir. 2014) (Ex. 1022). If they are directed to a patent-ineligible concept, the second step is to ask what else is there in the claim...? Alice, 134 S. Ct. at 2355; Mayo, 132 S. Ct. at This second step is a search for an inventive concept, that is, an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself. Alice, 134 S. Ct. at 2355; Mayo, 132 S. Ct. at A claim that recites an abstract idea must include additional features to ensure that the claim is more 25

35 than a drafting effort designed to monopolize the abstract idea. Alice, 134 S. Ct. at 2357; see also Mayo, 132 S. Ct. at Simply appending conventional steps, specified at a high level of generality, [is] not enough to supply an inventive concept. Alice, 134 S. Ct. at 2357; see also Mayo, 132 S. Ct. at For example, mere recitation of a generic computer cannot transform a patentineligible abstract idea into a patent-eligible invention, because [g]iven the ubiquity of computers... wholly generic computer implementation is not generally the sort of additional feature that provides any practical assurance that the process is more than a drafting effort designed to monopolize the abstract idea itself. Alice, 134 S. Ct. at 2358; see also Mayo, 132 S. Ct. at It is also not enough to limit[] an abstract idea to one field of use, or add token postsolution components, Kappos, 561 U.S. at , or limit the use of the idea to a particular technological environment, Alice, 134 S. Ct. at In addition to the two-step framework of Mayo and Alice, the Supreme Court has said that the Federal Circuit s machine-or-transformation test can play a part in analyzing patent eligibility under 101. See Kappos, 561 U.S. at 593. The machine-or-transformation test asks whether the claimed invention (1) is tied to a particular machine or apparatus or (2) transforms a particular article into a different state or thing. In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008). To satisfy the test, the use of a specific machine or transformation of an article must 26

36 impose meaningful limits on the claim s scope. Id. at 961. Simply manipulating public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances. Ultramercial, 772 F.3d at 717. While not dispositive, the test can provide a useful and important clue to patent eligibility. Kappos, 561 U.S. at When analyzing patent eligibility under 101, the Supreme Court endorsed the notion that, where the system claims are no different from the method claims in substance, they should rise and fall together. Alice, 134 S. Ct. 2360; see also Ultramercial, 772 F.3d at 712 (expressly analyzing only 1 of 16 patent claims under 101 because other claims of the patent [were] drawn to a similar process and thus suffer[ed] from the same infirmity ). This is to avoid letting patent eligibility depend simply on the draftsman s art. Id. (quoting Mayo, 132 S. Ct. at 1294). This is particularly true where method and system claims [are] so closely related that the system claim essentially implement[s] the process of the method claim on a general purpose computer. Id. 2. Alice Step 1: The Challenged Claims are Drawn to an Abstract Idea. The concern underlying the exception to 101 is one of pre-emption. Alice, 134 S. Ct. at First, in the district court case against Petitioner Care N Care, ICS claims that a system and method allowing the electronic submission 27

37 and processing of insurance claims and corresponding electronic attachments, and the auto adjudication of insurance claims (the Insurance Claim System ) infringes the 020 patent. Ex at 4. ICS made the exact same allegations against at least a dozen insurers and medical providers in a spate of lawsuits filed over the last year and half. ICS further claims that not only those companies but their vendors, insurance providers, customers and others infringe the 020 patent (Ex at 5) and that, further, anyone processing claims according to an industry standard for formatting insurance claims (the ANSI ASC X12 standard) is also an infringer. Ex at 2. ICS seeks to preempt the entire field of the electronic submission and processing of insurance claims and corresponding electronic attachments as well as the auto adjudication of insurance claims. Ex at 4. And ICS claims that despite the [insurance] industry examples described in the specification, the 020 Patent is not limited to insurance claim processing. Ex at 12. Instead (again according to ICS), the 020 Patent covers wide swaths of electronic data processing, including for example processing research data at academic universities whenever non-text information (e.g., scanning microscope images, graphs) [are] generated as part of that research, and use of mainframe computers by law enforcement whenever images such as photographs of crime scenes and finger prints are associated with text data. Id. But in doing so, the Challenged Claims risk disproportionately tying up the use of the underlying 28

38 idea[], Alice, 134 S. Ct. at This is strong evidence that the Challenged Claims are ineligible for patent protection. As noted, the first step in the 101 analysis is to determine whether the claims at issue are directed to one of those patent-ineligible concepts such as an abstract idea. Alice Corp., 134 S. Ct. at 2355; see Mayo, 132 S. Ct. at The Challenged Claims clearly are. Claim 50 reads: 50. A method of processing files formed of identifiable fields, the method comprising: receiving an incoming first file comprising a set of N identifiable fields; and using identities [labels] of the identifiable fields of the first file, copying contents of a first subset of the set of N identifiable fields to correlated fields of a second file. Ex at Claim 50. Importantly, Claim 50 claims a pure method, devoid of any apparatus or machine to to carry it out. Distilled to its essence Claim 50 is simply directed to the abstract idea of transmitting or copying information from a source (a first file ) to a destination (a second file ). Tellingly, this is almost exactly how the claims themselves refer to this process. Specifically, Claim 50 has an apparatus counterpart in Claim 42, which recites the exact same steps as Claim 50 but has a different (apparatus) preamble. Claim 44, which depends from Claim 42, refers back to this recited process as the process of copying contents from the first file to the second file. Ex at Claim 44 (emphasis added). In other 29

39 words, the patentee himself described the process recited identically in Claims 42 and 50 as the mere copying contents from the first file to the second file. Copying information from a source to a destination is something that humans have been doing on paper for thousands of years indeed, essentially since the dawn of written language. For example, until they were largely supplanted by the printing press, scribes in the Middle Ages would laboriously hand-produce verbatim copies of written works; these were known as manuscripts (from the Latin manu scriptus, literally written by hand ). See Peter K. Yu, Of Monks, Medieval Scribes, and Middlemen, 2006 Mich. St. L. Rev. 1, 3 4, 10 (2006) (Ex. 1015). Scribes would begin with an existing written text (a first file ) and copy each word ( identifiable field ) onto new parchment or vellum (a second file ). The 020 Patent itself offers another, more recent example from the field of insurance claims processing; it describes that in the prior art, mainframe computers were purchased and installed internally at the insurance companies.... There were many virtues to these early systems, primarily with respect to decreased administrative costs, but a major drawback was that the data for each paper claim had to be entered into the computer to form an electronic claim. This necessitated the manual transcription of exactly the same information that had been handwritten into the original paper claim before it was sent to the insurance company. 30

40 Ex at 1:55 2:3. Thus, the applicant acknowledged that then-existing processes for handling insurance claims involved receiving hard copy / paper claim forms (i.e., a first file ), and manually transcribing (i.e., copying ) information like patient information, date, provider name, etc. (i.e., the identifiable fields ) into corresponding fields in a document (i.e., a second file ) on the mainframe computer. Id.; see also id. at 5:7 6:49. More examples from other times and other fields of endeavor could fill volumes. Copying information from a source to a destination is indisputably one of those well-established, fundamental concepts that falls within the category of abstract ideas. See Cyberfone, 558 F. App x at 991. Claims 51 and 52, because they both depend from Claim 50, are likewise directed to this abstract idea. As noted, Claim 42 is just the apparatus counterpart to method Claim 50. Thus, for the same reasons explained above with respect to Claim 50, Claim 42 is similarly directed to the abstract idea of transmitting or copying information. See Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1341 (Fed. Cir. 2013) (system and method claims should rise and fall together where they are so closely related that the system claim essentially implement[s] the process of the method claim on a general purpose computer ). Claims 43 and 45 are likewise directed to this abstract idea, because they depend from Claim 42, and because they are apparatus counterparts to method Claims 51 and 52, respectively. 31

41 Id. Claims 44 and 49 are likewise directed to the abstract idea because also depend from Claim 42 and add, at best, only minor refinements of the recited process. Claim 27 is directed to the same abstract idea found in Claims 50 and 42: 27. A method for operating a digital device operatively coupled to first and second networked components, comprising: receiving a unitary data stream including N fields of data; parsing the unitary data stream to determine a first portion of the N fields to be routed to the first networked component and a second portion of the N fields to be routed to the second networked component; and routing the first and second portions of the N fields to the first and second networked components, respectively, where N is a positive integer. Ex at Claim 27. Claim 27 is like Claims 50 and 42 directed to the abstract idea of transmitting or copying information from a source (a unitary data stream ) to destinations ( networked components ). Indeed, the differences between Claim 27 and Claims 50 and 42 are that the information is transmitted to operatively coupled networked components (i.e., over a network) and that some of the information is also transmitted to a second destination (a second networked component ). In CET, the Federal Circuit recently found patent-ineligible claims that are remarkably similar to the Challenged Claims. See CET, 2014 WL , at *4. In CET, the patent at issue, U.S. Pat. No. 5,258,855, issued to Robert Lech, et al. 32

42 (hereinafter Lech ). Importantly, this same patent provides the basis for Petitioners 102/103 arguments below. Thus, given the substantial overlap between Lech and the Challenged Claims, the Federal Circuit s holdings are particularly instructive. The claims at issue in CET were patent-ineligible because they were drawn to the abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data. Id. at *3. The Federal Circuit explained that the concept of data collection, recognition, and storage is undisputedly well-known. Indeed, humans have always performed these functions. Id. at *3. The same is true in the instant case, including because the patentee himself confirmed that the copying of data from one file to another was already well known by the time of the invention. See Ex at 1:55 2:3 (admitting that, in the prior art systems, the data for each paper claim had to be entered into the computer to form an electronic claim which was accomplished by transcribing exactly the same information that had been handwritten into the original paper claim before it was sent to the insurance company. ). And like the patentee in CET, ICS cannot escape the conclusion that its patents are drawn to an abstract idea by pointing to the use of a computer, scanner, or other bit-processing device. The Federal Circuit explicitly rejected the argument that claims do not cover an abstract idea because human minds are 33

43 unable to process and recognize the stream of bits output by a scanner holding that the claims in Alice also required a computer that processed streams of bits, but nonetheless were found to be abstract. See Content Extraction, 2014 WL , at *3. Cyberfone Sys., LLC v. CNN Interactive Grp., Inc., likewise concerned patent claims very similar to the Challenged Claims, holding that they were directed to an abstract concept and patent-ineligible under 101. See 558 F. App x 988, (Fed. Cir. 2014). The claims in Cyberfone recited a method comprising (1) obtaining data transaction information, from a single transmission, (2) forming a plurality of different exploded data transactions from the single transmission, and (3) sending said different exploded data transactions over a channel to said different destinations.... Id. at 990. In the court s view, the claimed method essentially required obtaining data, exploding the data, i.e., separating it into component parts, and sending those parts to different destinations. Id. Noting that using categories to organize, store, and transmit information is well-established, the Federal Circuit concluded that the idea of collecting information... then separating and transmitting that information according to its classification, is an abstract idea that is not patent-eligible. Id. at 992. The Challenged Claims are like the claims in Cyberfone but even more abstract because they do not require any data be classified or categorized before 34

44 being sent on. Indeed, nearly all of the Challenged Claims can clearly be described as directed to methods of obtaining data... separating it into component parts, and sending those parts to different destinations that the Federal Circuit in Cyberfone held embodied an abstract idea. Cyberfone, 558 F. App x at Alice Step 2: Nothing in the Challenged Claims Supplies an Inventive Concept. Nothing in the Challenged Claims, either individually or viewed as an ordered combination (Alice, 134 S. Ct. at 2355), supplies an inventive concept sufficient to transform the embodied abstract idea into a patent-eligible invention. At best, the Challenged Claims add only token, conventional computer hardware, set forth, if at all, at a high level of generality. In other words, the Challenged Claims do precisely what the Supreme Court has said is insufficient for 101: they recite an abstract idea and then say apply it with a computer. Alice, 134 S. Ct. at And sometimes, the Challenged Claims do not even add this much, for example as in the pure method of Claim 50. Consequently, the Challenged Claims all fail step two of the Mayo-Alice framework. The Challenged Claims also all fail the Federal Circuit s machine-ortransformation test because none of the machines recited impose meaningful limits on the claim s scope (indeed, some of the Challenged Claims recite no machines at all) and because they are directed merely at collection and organization of data. This fact is a useful clue in the second step of the Alice framework that they are 35

45 not patent-eligible. Ultramercial, 772 F.3d at 716; see also Kappos, 561 U.S. at 603. Here again, CET is instructive. Examining the claims in Lech, which overlaps almost entirely with the Challenged Claims here, the Federal Circuit explained that the claims in Lech: merely recite the use of this existing scanning and processing technology to recognize and store data from specific data fields such as amounts, addresses, and dates. There is no inventive concept in CET s use of a generic scanner and computer to perform wellunderstood, routine, and conventional activities commonly used in industry. See Alice, 134 S.Ct. at At most, CET s claims attempt to limit the abstract idea of recognizing and storing information from hard copy documents using a scanner and a computer to a particular technological environment. Such a limitation has been held insufficient to save a claim in this context. See CET, 2014 WL , at *4. Here, the Challenged Claims are also nothing more than an abstract idea, in some cases also accompanied by the recitation of generic computer elements. a. Claim 50 Independent Claim 50 recites a simple method of copying information from a first file to a second file. See Section VII.B.2, supra. It recites no additional features supplying an inventive concept beyond the abstract idea already discussed. Though it specifies that information in the fields of the first file are copied to 36

46 correlated fields of the second file this is not a patent-eligible concept. CET, 2014 WL , at *4 (idea of recogniz[ing] and stor[ing] data from specific data fields such as amounts, addresses, and dates not patent-eligible.) Indeed, a person could perform the recited method of Claim 50 with just pen and paper. Just as a common example, anyone who has ever filled out a tax return using salary information from their W-2 has carried out this precise method, because they would have received a first file (i.e., a W-2), copied information from fields on it (e.g., Box 1, Wages, tips, other compensation ) to the correlated fields (e.g., Line 7, Wages, salaries, tips, etc. ) of a second file (i.e., a Form 1040). Claim 50 also fails the machine-or-transformation test. It fails the machine prong of the test because it plainly does not require the method to be performed by a particular machine, or even a machine at all. See CyberSource, 654 F.3d at 1370; Ex at 1:55 2:3 (prior art systems already utilized handwritten transcription). This is because [t]he mere collection and organization of data which is all Claim 50 does is insufficient to meet the transformation prong of the test. CyberSource, 654 F.3d at 1370, 1375; Cyberfone, 558 F. App x at 993; CET, 2014 WL , at *3 ( the concept of data collection, recognition, and storage is undisputedly well-known. Indeed, humans have always performed these functions. ). Claim 50 is likewise very similar to the claims at issue in Ultramercial, in that it merely manipulates abstractions in this case, fields of 37

47 information. See Ultramercial, 772 F.3d at 712. But these are not physical objects or substances, and... are not representative of physical objects or substances, so manipulating them cannot meet the transformation prong of the test. Id. at 717. b. Claim 51 Claim 51 depends from Claim 50 and recites: 51. The method of claim 50, wherein the identities of the identifiable fields are field names. Ex at Claim 51. This claim recites no additional features supplying an inventive concept. Specifying that the identities [labels] of the fields are field names adds nothing because supplying a name is a natural way to identi[fy] something. See CET, 2014 WL , at *4 ( recogniz[ing] and stor[ing] data from specific data fields not patent eligible subject matter). CET likewise confirms that including functionality related to a field in dependent Challenged Claims is insufficient to render any Challenged Claim patent-eligible. See id. In CET, the patentee argued that dependent claims in Lech that included additional steps, such as extracting and detecting specific data fields, repeating some steps, and storing data as images or text, render[ed] those claims patent-eligible. Id. at *5 (emphasis added). The Federal Circuit rejected this argument, holding that all of the additional limitations in the claims cited in CET s appeal brief recite wellknown, routine, and conventional functions of scanners and computers. Id. The 38

48 same is true of the narrower, dependent Challenged Claims at issue here, including Claim 51. Claim 51 also fails the machine-or-transformation test. It fails the machine prong of the test because, like Claim 50, Claim 51 plainly does not require the method to be performed by a particular machine, or even a machine at all. See CyberSource, 654 F.3d at Like Claim 50, Claim 51 can be carried out by a person on pen and paper. It also fails the transformation prong because [t]he mere collection and organization of data which is all Claim 51 does is insufficient to meet the transformation prong of the test. Id. at 1370, 1375; Cyberfone, 558 F. App x at 993; see also Ultramercial, 772 F.3d at 717 (manipulating abstractions insufficient to meet transformation prong). c. Claim 52 Claim 52 depends from Claim 51 and recites: 52. The method of claim 51, wherein the correlated fields of the second file have field identities [labels] corresponding to the field identities [labels] of the first subset of the set of N identifiable fields. Ex at Claim 52. This claim recites no additional features supplying an inventive concept. Claim 52 merely specifies that the identities of the fields in the first file (where information is copied from) correspond[] to the identities of the correlated fields in the second file (where information is copied to). In other words, it adds only the concept that (for example) information in a source field 39

49 labeled First Name should be copied to a destination field also labeled First Name, and not to a destination field labeled Social Security Number or Birth Date. This is not a patent-eligible concept (CET, 2014 WL , at *4 ( recogniz[ing] and stor[ing] data from specific data fields is an abstract idea that is not patent eligible)). Claim 52 also fails the machine-or-transformation test because, like claims 50 and 51, the method in Claim 52 does not need to be carried out by a machine. See CyberSource, 654 F.3d at 1370; Ex at 1:55 2:3 (prior art systems already utilized manual transcription of the data for each paper claim... into the computer ). It also fails the transformation prong because it merely collects and organizes data, which is insufficient. CyberSource, 654 F.3d at 1370, 1375; Cyberfone, 558 F. App x at 993; see also Ultramercial, 772 F.3d at 717; CET, 2014 WL , at *4. d. Claim 42 As noted before, apart from having an apparatus rather than method preamble, Claim 42 is identical to Claim 50. It recites: 42. A server having specialized software for causing the server to perform a process, the process comprising: receiving an incoming first file comprising a set of N identifiable fields; and using identities of the identifiable fields of the first file, copying contents of a first subset of the set of N identifiable fields to correlated fields of a second file. 40

50 Ex at Claim 42. Like its method counterpart Claim 50, Claim 42 recites no additional features supplying an inventive concept. Although the preamble recites a server having specialized software, preambles are generally not considered limiting. See DeGeorge v. Bernier, 768 F.2d 1318, 1322 n.3 (Fed. Cir. 1985). In any event, the recited server is still precisely the kind of wholly generic computer implementation that the Supreme Court warned in Alice and Mayo will not confer patent eligibility. See Alice, 134 S. Ct. at 2358; see also Mayo, 132 S. Ct. at Claim 42 does little more than simply repeat the method of Claim 50 and say [do] it with a computer. This does not pass 101 muster. See Alice, 134 S. Ct. at Reciting unspecified specialized software does not render this claim patent-eligible. Patent Owner ICS has admitted, [l]ike any common computer, the server... would be unable to function without computer software. Ex at 11 (emphasis added). In other words, the specialized software is simply an inherent feature of the wholly generic server. Moreover, that the specialized software is recited generically (without any detail on what it is or how it functions) is likewise fatal, as confirmed by Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012). In Dealertrack the Federal Circuit assessed the 101 patent eligibility of a claim that recited A computer aided method... the method comprising and listed the steps of the method. Id. at The patentee argued 41

51 that the computer-aided preamble sufficiently limit[ed] the claims to an application of the [abstract] idea. Id. at The Federal Circuit disagreed, noting that the computer aided language does not specify how the computer hardware... [was] specially programmed to perform the steps claimed in the patent. Id. (emphasis added) Similarly here, Claim 42 s preamble recites that the server has specialized software, but does not specify what that specialized software is, or how the server uses it to perform the steps recited in Claim 42. Claim 42 thus fails step two of the Mayo-Alice framework. In addition, Claim 42 is unlike the claims at issue in the Federal Circuit s decision in DDR Holdings, LLC v. Hotels.com, L.P., No , 2014 WL , at *10 (Fed. Cir. Dec. 5, 2014) (Ex. 1019). Those claims, in the court s view, covered a solution necessarily rooted in computer technology to a problem specifically arising in the realm of computer networks. DDR Holdings, 2014 WL , at *10. In contrast, the alleged problems the 020 Patent seeks to solve are generic business or commercial problems faced by any business that relies on paper forms. See Section VI.A.2. They are not technical problems, let alone problems specifically arising in the realm of computer networks. See id. Nor is computer technology needed for the claimed solution, as is evident from the fact that the process carried out by Claim 42 s server is also recited as a pure method in Claim 50. Moreover, the claims in DDR Holdings achieved their aims 42

52 by departing from the conventional functioning of Internet... protocol. Id. Claim 42, in contrast, clearly relies on the conventional functioning of computer technology; there is nothing in the claim suggesting the server or its specialized software do anything but conventional things that computers and software do. Claim 42 also fails the machine-or-transformation test because, although it recites a machine a generic server this does not impose meaningful limits on the claim s scope. See Bilski, 545 F.3d at 961. [F]or the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer. SiRF Tech., Inc. v. Int l Trade Comm n, 601 F.3d 1319, 1333 (Fed. Cir. 2010); see also CyberSource, 654 F.3d at 1375 ( [T]he basic character of a process claim drawn to an abstract idea is not changed by claiming only its performance by computers. ). Here, Claim 42 does exactly that: it recites a perfunctory and obvious computer mechanism a generic server for completing a recited process. Again, note that the server of Claim 42 performs exactly the same method that Claim 50 recites without the server. But the Federal Circuit has indicated that if a method... can be performed without a machine, a claim to a machine performing that method will not satisfy the machine prong of the machine-or-transformation test. See SiRF Tech.,

53 F.3d at Thus, Claim 42 s server does not play a significant part in permitting the claimed method to be performed, see id., and it therefore fails the machine prong of the machine-or-transformation test. Claim 42 also fails the transformation prong of the test because [t]he mere collection and organization of data which is all Claim 42 does is insufficient to meet the transformation prong of the test. CyberSource, 654 F.3d at 1370, 1375; Cyberfone, 558 F. App x at 993; see also Ultramercial, 772 F.3d at 717; CET, 2014 WL , at *4. e. Claim 43 Claim 43 depends from Claim 42. It is essentially an apparatus counterpart to method Claim 51 and recites: 43. The server of claim 42, wherein the identities [labels] of the fields of the set of N identifiable fields are field names. Ex at Claim 43. Like its method counterpart Claim 51, Claim 43 recites no additional features supplying an inventive concept. Although the preamble recites a server having specialized software, this does not supply an inventive concept for reasons already explained above with respect to Claim 42. See Alice, 134 S. Ct. at 2358, 2350 (not enough to claim an abstract idea and say apply it with a computer ); see also Mayo, 132 S. Ct. at 1297; Dealertrack, 674 F.3d at In addition, recitation of wherein the identities [labels] of the fields... are field names similarly does not add an inventive concept, for reasons already explained above regarding method Claim 51. See CyberSource, 654 F.3d at 1375; 44

54 Cyberfone, 558 F. App x at 993; see also Ultramercial, 772 F.3d at 717. Specifically, in CET, the Federal Circuit held that additional steps, such as extracting and detecting specific data fields recite well-known, routine, and conventional functions of scanners and computers, and is thus unpatentable. See CET, 2014 WL , at *5. Claim 43 thus fails step two of the Mayo-Alice framework. Claim 43 also fails the machine-or-transformation test for the same reason as Claim 42: although it recites a machine (a generic server, ) this does not impose meaningful limits on the claim s scope. See Bilski, 545 F.3d at 961. Claim 43 s method counterpart Claim 51 recites the same process that the generic server of Claim 43 is supposed to carry out, but recites it without the server. This makes clear that the method... can be performed without a machine such that the claimed server functions solely as an obvious mechanism for permitting a solution to be achieved more quickly. SiRF Tech., 601 F.3d at 1333; see also CyberSource, 654 F.3d at 1375 ( [T]he basic character of a process claim drawn to an abstract idea is not changed by claiming only its performance by computers. ). Thus, Claim 43 s server does not play a significant part in permitting the claimed method to be performed, and it therefore fails the machine prong of the machine-or-transformation test. See id. Claim 43 also fails the transformation prong of the test because it simply collects and organizes data. CyberSource,

55 F.3d at 1370, 1375; Cyberfone, 558 F. App x at 993; see also Ultramercial, 772 F.3d at 717; see also CET, 2014 WL , at *3. f. Claim 44 Claim 44 depends from Claim 42 and recites: 44. The server of claim 42, wherein the process of copying contents from the first file to the second file is based solely on the field identities in the first and second files. Ex at Claim 44. Claim 44 recites no features supplying an inventive concept over the abstract idea. As already explained, the preamble s server having specialized software (inherited from independent Claim 42) does not supply an inventive concept. See Alice, 134 S. Ct. at 2350, 2358; Mayo, 132 S. Ct. at 1297; Dealertrack, 674 F.3d at 1331; see also CET, 2014 WL , at *5. Specifying that the copying process is based solely on the field identities adds no inventive concept. See CET, 2014 WL , at *5 (rejecting the argument that additional steps, such as extracting and detecting specific data fields, repeating some steps, and storing data as images or text makes the claim patentable). As in the tax return example above, when a person copies information from their W-2 (e.g., their Box 1 Wages, tips, other compensation ) to corresponding fields on a Form 1040 tax return (e.g., to Line 7, Wages, salaries, tips, etc. ), they naturally do it based solely on the field identities by examining the identities [labels] 46

56 of the fields on the two documents and matching them up. As held in CET, there is no inventive concept in extracting data from specific fields. Id. at *5. Claim 44 also fails the machine-or-transformation test for essentially the same reason as Claim 42: although it recites a machine (a generic server, ) this does not impose meaningful limits on the claim s scope. See Bilski, 545 F.3d at 961. That the entire process of Claim 44 (including the requirement that it be based solely on the field identities ) can be performed on pen and paper makes clear that the method... can be performed without a machine such that the claimed server functions solely as an obvious mechanism for permitting a solution to be achieved more quickly. SiRF Tech., 601 F.3d at 1333; see also CyberSource, 654 F.3d at 1375; see also CET, 2014 WL , at *3. Claim 44 s server is insignificant in performing the claimed method, so it fails the machine prong of the machine-or-transformation test. See id. Also, because it only collects and organizes data, Claim 44 fails the transformation prong of the test. CyberSource, 654 F.3d at 1370, 1375; Cyberfone, 558 F. App x at 993; see also Ultramercial, 772 F.3d at 717; see also CET, 2014 WL , at *3. g. Claim 45 Claim 45 depends from Claim 42. It is an apparatus counterpart to (substantially identical) Claim 52 and recites: 47

57 45. The server of claim 42, wherein the correlated fields of the second file have field identities corresponding to the field identities of the first subset of the set of N identifiable fields. Ex at Claim 45. Like Claim 52, Claim 45 recites no additional features supplying an inventive concept. Although the preamble recites a server having specialized software, this does not supply an inventive concept for reasons already explained above with respect to Claim 42. See Alice, 134 S. Ct. at 2358; id. at 2350 (not enough to say apply it with a computer ); Mayo, 132 S. Ct. at 1297; Dealertrack, 674 F.3d at 1331; see also CET, 2014 WL , at *5. In addition, reciting wherein the correlated fields... have field identities [labels] corresponding to the field identities [labels] of the first subset of... identifiable fields similarly does not add an inventive concept, for reasons already explained above regarding method Claim 52. See, CET, 2014 WL , at *5 (rejecting the argument that additional steps, such as extracting and detecting specific data fields, repeating some steps, and storing data as images or text makes the claim patentable). Claim 45 thus fails step two of the Mayo-Alice framework. Claim 45 also fails the machine-or-transformation test for the same reason as Claim 42: although it recites a machine (a generic server, ) this does not impose meaningful limits on the claim s scope. See Bilski, 545 F.3d at 961. Claim 45 s method counterpart Claim 52 recites the same process that the generic server of Claim 45 is supposed to carry out, but recites it without the server. This makes 48

58 clear that the method... can be performed without a machine such that the claimed server functions solely as an obvious mechanism for permitting a solution to be achieved more quickly. SiRF Tech., 601 F.3d at 1333; see also CyberSource, 654 F.3d at 1375 ( [T]he basic character of a process claim drawn to an abstract idea is not changed by claiming only its performance by computers. ). Thus, Claim 45 s server is insignificant in performing the claimed method, so it fails the machine prong of the machine-or-transformation test. See id. Also, because it only collects and organizes data, Claim 45 fails the transformation prong of the test. CyberSource, 654 F.3d at 1370, 1375; Cyberfone, 558 F. App x at 993; see also Ultramercial, 772 F.3d at 717; see also CET, 2014 WL , at *3. h. Claim 27 Claim 27 is an independent method claim and recites: 27. A method for operating a digital device operatively coupled to first and second networked components, comprising: receiving a unitary data stream including N fields of data; parsing the unitary data stream to determine a first portion of the N fields to be routed to the first networked component and a second portion of the N fields to be routed to the second networked component; and routing the first and second portions of the N fields to the first and second networked components, respectively, where N is a positive integer. Ex at Claim 27. As noted above (see Section VII.C.1), Claim 27 simply recites a method of taking information (the unitary data stream ) and sending 49

59 some of it to one place (a first networked component ), and some of it to another place (a second networked component ). It recites no additional features supplying an inventive concept beyond the underlying abstract idea of transmitting or copying information from a source to a destination. Simply repeating the abstract idea twice sending some of the information to one place, then sending some of it to a second place is not inventive. See CET, 2014 WL , at *5 (rejecting the argument that additional steps, such as... repeating some steps makes the claim patentable). Nor is parsing the data to determine what to send where. Cyberfone (discussed above, see Section VII.C.1, supra) is instructive. The claims at issue in Cyberfone recited a method for obtaining data, exploding the data, i.e., separating it into component parts, and sending those parts to different destinations. Cyberfone, 558 F. App x at The Federal Circuit concluded that the idea of collecting information... then separating and transmitting that information according to its classification, is an abstract idea that is not patent-eligible. Id. at 992 (emphasis added). This is essentially what Claim 27 does. Although the preamble of Claim 27 recites a digital device, this does not add an inventive concept. First, preambles are generally not limiting, particularly where, as here, digital device does not serve as an antecedent basis for any substantive claim language. See DeGeorge, 768 F.2d at 1322 n.3. Moreover, the 50

60 digital device and networked components recited by Claim 27 are precisely the kind of wholly generic computer implementation that the Supreme Court confirmed in Alice and Mayo will not confer patent eligibility. See Alice, 134 S. Ct. at 2358; see also Mayo, 132 S. Ct. at Again, Cyberfone is instructive. There, the patentee argued that its method claims for obtaining data,... separating it into component parts, and sending those parts to different destinations were sufficiently limited because they require[d] a telephone, and that the recited telephone was a specific machine that play[ed] an integral role in the method. 558 F.3d at 990. The Federal Circuit disagreed and held the claimed method patent-ineligible, noting that a generic telephone is not a specific machine, and adds nothing of significance to the claimed abstract idea. Id. at 992. Exactly the same can be said of Claim 27 s digital device and networked components. Reciting that information is transmitted between networked components also adds no inventive concept, because it is merely attempt[s] to limit the use of the abstract idea to a particular technological environment. Ultramercial, 772 F.3d at 716 (internal quotations omitted). Claim 27 is also similar to the claims found patent-ineligible in Dealertrack v. Huber (discussed above), which recited A computer aided method... the method comprising and listed the steps of the method. Dealertrack, 674 F.3d at The patentee in Dealertrack argued that the computer-aided limitation 51

61 preamble sufficiently limit[ed] the claimed method, but the Federal Circuit disagreed, noting that the computer aided language d[id] not specify how the computer hardware... [was] specially programmed to perform the steps claimed in the patent. Id. (emphasis added). Similarly here, Claim 27 does not explain how (if at all) the generic computer implementation recited in Claim 27 is used to perform the claimed method. Moreover, the digital device and network components in Claim 27 are even more generic than the computer recited in the Dealertrack claims, and closer to the generic scanner and computer held not to be inventive in CET. See CET, 2014 WL , at *4. Claim 27 thus fails step two of the Mayo-Alice framework. Claim 27 also fails the machine-or-transformation test. Kappos, 561 U.S. at It fails the machine prong of the test because the only tangible items recited digital device and networked components are just token postsolution components and do not play a significant part in permitting the claimed method to be performed. Id. at ; CyberSource, 654 F.3d at The underlying method of Claim 27 clearly can be performed entirely without a machine (for example, by putting the information on paper and routing it through the mail or by hand delivery to first and second destinations). Indeed, the recited digital device appears only in the preamble, so it is not clear what role it even plays in the claimed method. But to the extent the recited digital device plays a 52

62 role at all, it is only as an obvious mechanism for permitting a solution to be achieved more quickly. SiRF Tech., 601 F.3d at As for the first and second networked components, these are just passive endpoints destinations for data; they do not actually do anything in the claimed method. This is insufficient to satisfy the machine prong of the machine-or-transformation test. See id.; see also CyberSource, 654 F.3d at 1375 ( [T]he basic character of a process claim drawn to an abstract idea is not changed by claiming only its performance by computers. ). Claim 27 also fails the transformation prong of the test because [t]he mere collection and organization of data which is all Claim 27 does is insufficient to meet the transformation prong of the test. CyberSource, 654 F.3d at 1370, 1375; Cyberfone, 558 F. App x at 993; see also Ultramercial, 772 F.3d at 717; see also CET, 2014 WL , at *3. i. Claim 30 Claim 30 depends from Claim 27 and recites: 30. The method as recited in claim 27, wherein the first networked component comprises a mainframe computer. Ex at Claim 30. Claim 30 fails to supply an inventive concept for substantially the same reasons described above for its independent claim, Claim 27. It further specifies that the first networked component comprises a mainframe computer, but both the 020 Patent itself and Patent Owner ICS admit that mainframe computers were well-known prior art technologies. Ex at 4:42 53

63 51; Ex at 7 8. This added language is, at best, just a token postsolution component and precisely the kind of recitation of a generic computer [that] cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Kappos, 561 U.S. at ; Alice, 134 S. Ct. at 2358; see also CET, 2014 WL , at *4. Claim 30 also fails the machine-or-transformation test for substantially the same reasons described above for Claim 27. The added recitation of a mainframe computer in Claim 30 does not change this. Though a mainframe computer is a machine, it clearly does not play a significant part in permitting the claimed method to be performed (CyberSource, 654 F.3d at 1375) because the mainframe is still just a passive endpoint a destination where data is routed. The mainframe and the second networked component that comprise it don t actually do anything in the claimed method. This is also evident from the fact that Claim 30 adds no steps to the claimed method, which is already completely described in Claim 27. Claim 27 therefore fails the machine prong of the machine-ortransformation test. Claim 30 also fails the transformation prong because it adds no steps to the method of Claim 27 let alone steps that would transform[] a particular article into a different state or thing. See Bilski, 545 F.3d at 954; see also CET, 2014 WL , at *4. 54

64 j. Claim 36 Claim 36 depends from Claim 27 and recites: 36. The method as recited in claim 27, wherein the unitary data stream comprises an insurance claim form. Ex at Claim 36. Claim 36 fails to supply an inventive concept for substantially the same reasons described above for its independent claim, Claim 27. Though Claim 36 specifies that the unitary data stream comprises an insurance claim form, this merely narrows the abstract idea to a particular field of use, namely to insurance claims forms. But limiting an abstract idea to one field of use does not make it patentable. Kappos, 561 U.S. at 612; see also Parker v. Flook, 437 U.S. 584, 590 (1978) ( [T]he Pythagorean theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula... could be usefully applied to existing surveying techniques. ). Claim 36 also fails the machine-or-transformation test. It adds no machine to what is recited in Claim 27, nor does it add any steps to the claimed method let alone steps that would transform[] a particular article into a different state or thing. See Bilski, 545 F.3d at 954; see also CET, 2014 WL , at *4. 55

65 C. Ground 2: Challenged Claims 27, 42, 43, 44, 45, 49, 50, 51, and 52 Are Anticipated by U.S. Patent No. 5,258,855 ( Lech ), Rendering Them Unpatentable Under 35 U.S.C U.S. Patent No. 5,258,855 ( Lech ) discloses all elements of Challenged Claims 27, 30, 42, 43, 44, 45, 49, 50, 51, and 52, arranged as in the claims. It therefore anticipates these claims, rendering them unpatentable under 35 U.S.C Overview of Lech Lech, entitled Information Processing Methodology, discloses methods and apparatuses for electronically extracting and processing data received from hard copy documents in a way that minimizes the need to manually process hard copy documents. Ex at 1:5 10. In general, the systems and methods of Lech allow[] a user to select specific portions of information extracted from a diversity of hard copy documents and... direct portions of this information to several different users in accordance with the needs of the particular user. Id. at 2:14 18; Bysinger Decl. 50 (Ex. 1001). 3 In an exemplary embodiment, a hard copy document such as a bill is fed into an automated digitizing unit such as a conventional scanner. Bysinger Decl. 52; Ex at 15:58 60, 5:59 65, 4:53 61, Fig. 1. The document image, the extracted textual information, or both are then 3 All references to Bysinger Decl. refer to the Declaration of Dr. Wallace G. Bysinger, submitted as Exhibit

66 sent to a computer. Bysinger Decl. 52; Ex at 5:1 2. The computer then pars[es] information extracted from the hard copy document and... direct[s] this parsed information to specific users or application programs as an input file. Ex at 4:45-49; 5:25 29; 9:27 30; 10: The extraction and parsing of information can happen either automatically in accordance with predefined content instructions (for example, templates which specify the location of information on the hard copy document) or interactively with user input. Id. at 2:60 3:25; 8:68 9:2; 13:67 14:10; Bysinger Decl. 54. These application programs to which the input files are sent can be, for example, specific departments within a company, such as the accounting department or mailroom, and each department has its own application program which utilizes information in the input files. Bysinger Decl. 53; Ex at 1:34 44, 13:57 64, 13:67 14:10. Thus, as an example, three separate departments within a company may require information from a hard copy bill. The accounting department may request financial information such as the vendor name, account number, statement date, and amount due; the second and third departments may require only mail-to information and previous balance information. Bysinger Decl. 53; Ex at 13: The systems and methods of Lech extract information off the received hard copy bill, parse the extracted information, generate input files comprising the specific information needed by each department, and electronically transmit those 57

67 input files to the appropriate destination, i.e., to applications programs within each department. The Federal Circuit, in CET confirmed that these disclosures were insufficient to render any of the claims in Lech patent-eligible under section 101. CET, 2014 WL , at *4. 2. Lech Is Prior Art and Eligible for Use in CBMR. The earliest application to which the 020 Patent could claim priority is provisional application No. 60/014,427 ( the 427 Provisional Application ), filed March 28, Ex Lech issued November 2, 1993, more than two years earlier. Ex It is thus prior art to the 020 Patent under pre-aia 35 U.S.C. 102(b) and meets the requirements of AIA 18(a)(1)(C) for two independent reasons: (1) it clearly is described by section 102(a) of pre-aia 35 U.S.C., in accordance with AIA 18(a)(1)(C)(i); and (2) it issued more than 1 year before the date of the application for the 020 Patent, in accordance with AIA 18(a)(1)(C)(i). 3. Lech Anticipates Claim 27. Lech discloses a method for operating a digital device (Claim 27 preamble), e.g., computer 230. Ex at 15:58 60, Claims 38, Petitioners do not concede that the 020 Patent is in fact entitled to claim priority to the 427 Application. 58

68 The computer in Lech is operatively coupled to first and second networked components, e.g., to multiple computer application units to 270-N, as shown in Fig. 1. The computer application units to 270-N are networked components because they can be connected to computer 230 through any routing or connecting link, implemented in hardware or software or both, including on a sophisticated computer network. Ex. 1009, 5:29 32, 1:34 35; Bysinger Decl. 62. Lech discloses receiving a unitary data stream including N fields of data, e.g., a hard copy document 100 such as a bill from XYZ Corporation to customer ABC Corporation which contains multiple fields of data, as illustrated in Fig. 2. Ex at 5: Patent Owner ICS has conceded that fields can be met by boxes on an insurance claim form. Ex at 47. Lech Fig. 2 illustrates an example of a hard copy document 100 which contains information to be processed by the instant invention (Ex at 5:59 65) and shows at least 12 fields of data in boxes on a paper form (highlighted in yellow). The exemplary hard copy document 100 of Fig. 2 is preferably scanned in and fields of 59

69 information on it are recognized using standard optical character recognition software. Bysinger Decl. 64; Ex at 5:66 6:8. The scanned image of the document and/or the textual fields of information can then be sent to a computer 230. Bysinger Decl. 64; Ex at 6:1 16. Lech discloses parsing the unitary data stream to determine a first portion of the N fields to be routed to the first networked component and a second portion of the N fields to be routed to the second networked component, e.g., parsing information extracted from the hard copy document and... directing this parsed information to specific users or application programs as an input file. Ex at 4: Lech Fig. 11 lists data corresponding to the hard copy document of FIG. 2. Id. at 3:

70 [C]ontent instructions... parse the information shown in FIG. 11 to various application programs.... Id. at 14:7 10. In an exemplary embodiment, three separate departments of ABC Corporation require information from the XYZ Corporation bill [shown in Fig. 2]. The first department requires vendor, account number... and new balance information. The second and third departments require mail to information and previous balance information. Id. at 13: The parsed information to be transmitted to each of the three departments is illustrated in Fig. 12A (first department), 12B (second department), and 12C (third department). Id. at 14:3 7. Lech discloses routing the first and second portions of the N fields to the first and second networked components, respectively, e.g., that the parsed information from the hard copy document is transmitted to a selected computer application unit. Id. at 9: Again, in an exemplary embodiment of Lech, Fig. 12A illustrates the contents of the information to be transmitted to the first department, Fig. 12B illustrates the information to be transmitted to the second department, and Fig. 12C illustrates the information to be transmitted to the third 61

71 department. Id. at 14:3 7. Lech discloses that N (the number of fields of data) is a positive integer. In the example of Fig. 2 in Lech, N is at least 12 because there are at last 12 fields of data. 4. Lech Anticipates Claims 42 and 50. Challenged Claims 42 and 50 are addressed together because they are substantively identical, differing only in their preambles, which are not limiting. See Section IV.C, supra. Lech discloses a server having specialized software for causing the server to perform a process (Claim 42 preamble), e.g., interface 200, which includes a computer 230 as shown in Lech Fig. 1. Id. at 5:1 2. The computer 230 in the interface... receive[s] from an applications program... content instructions. Id. at 3:26-28; see also id. at 5:8-11 ( The computer 230 is used to select portions of the stored document information contained in memory in accordance with content instructions which define portions of the stored document information required by an application unit. ). The computer 230 then serves responses to the application units, based on the requested information ( Portions of the stored document information are selected in accordance with content instructions which define portions of the stored document information required by a particular application unit. ) Id. A person of skill in the art would know that based on this functionality, computer 230 is considered a server. Bysinger Decl. 70. Lech 62

72 further discloses that the alleged invention includes... software necessary to extract, retrieve, and process information from the hard copy document. Ex at 4: And as Patent Owner ICS admits [l]ike any common computer, the server, personal computers and mainframe computer would be unable to function without computer software (Ex at 11), and all software is specialized, e.g., to perform its intended task. Bysinger Decl. 71. Thus, Lech discloses a server having specialized software for causing the server to perform a process. Lech also discloses a method of processing files formed of identifiable fields (Claim 50 preamble), e.g., a method of processing documents like exemplary hard copy document 100. Bysinger Decl. 72. Lech Fig. 2 illustrates an example of a hard copy document 100 which contains information to be processed by the instant invention (Ex at 5:59 65) and shows at least 12 identifiable fields of data. Bysinger Decl. 72. Lech discloses receiving an incoming first file comprising a set of N identifiable fields (first limitation of claims 42 and 50), e.g., that information from scanner memory 220 or main memory 250 is transmitted to computer 230. Ex at 5:1 2. Thus the exemplary hard copy document 100 of Lech is an incoming first file comprising a set of N identifiable fields and is receive[d] by the computer 230 after it is scanned in by scanner 210. Bysinger Decl. 73; Ex

73 at 5:59 6:16. The fields are identifiable, as the hard copy document clearly labels each field with a name. Ex at Fig. 2. Lech discloses using identities of the identifiable fields of the first file, copying contents of a first subset of the set of N identifiable fields to correlated fields of a second file, e.g., a second mode of operation illustrated in Fig. 3B in which the display of computer 230 is split into two portions, [a] left-hand portion 232L display[ing] the image of the hard copy document and a right-hand portion 232R display[ing] the required application program information. Id. at 6:45 50; Bysinger Decl In Lech, the user can input instructions to associate specific pieces of information on the hard copy document (for example, the vendor name indicated by the mouse arrow 232A) with particular subfiles in memory (for example, the vendor field next to which the cursor 232C appears). Id. at 6:53 58 (emphasis added). As annotated on Lech Fig. 3B, the computer 230 copies information from fields on the left side of the display 232L to correlated fields on the right side of the display 232R, when the user identifies the correct 64

74 field based on the field identities. Bysinger Decl For example, the prompt message can ask the user to identify the location of account number information on the hard copy document. Ex at 6:23-25 (emphasis added). The user finds the field labeled [a]ccount number and then the information is copied by the computer. Id. at 6: Lech further discloses the use of a template to extract information off the document and to associate the extracted information with a particular variable or subfile. Ex at 8:68 9:2; 4:39 40 ( The interface can also extract specific pieces of information using a predefined template. ). The template is created using field identities. When creating the template, the user assigns specific names to information located at specific portions of the document. Ex at 13:1 3. The specific names disclosed are field names such as [a]ccount number...[s]tatement date...[p]ayment date...[p]revious balance etc. Ex at 13:6 13. Thus, when the template is used to extract information from the document image, the template uses the field identities entered by the user to determine which information to copy. Lech further discloses search[ing] hard copy documents for a particular character... located on the hard copy documents. The information... to be extracted off of the hard copy document is specified relative to the location of this 65

75 character... Ex at 3: This is yet another way that field identities are used in Lech to copy the data contained in the fields. 5. Lech Anticipates Claims 43 and 51. Challenged Claims 43 and 51 are addressed together because, as noted, they are substantively the same (apparatus and method counterparts to one another, see Section VII.B.3.e). Lech discloses the server of claim 42 and the method of claim 50. See Section VII.C.5. Lech further discloses wherein the identities of the... identifiable fields are field names, e.g., the names of fields of data as shown in the exemplary hard copy document 100 of Lech Fig. 2. For example, the account number of customer ABC Corporation is shown (at right) on exemplary hard copy document 100 next to the text Account Number, which is its identity. The text Account Number is a field name. Bysinger Decl Lech Anticipates Claim 44. Lech further discloses that the process of copying contents from the first file to the second file is based solely on the field identities [labels] in the first and second files. Lech discloses three methods of copying the data fields. The first allows the user to identify the data, based on prompts from the computer, discussed 66

76 above, in which the display of computer 230 is split into two portions, one displaying an image of the hard copy document and the other displaying a destination file or application program. Id. at 6:45 50; Bysinger Decl. 78. The user can then input instructions to associate specific pieces of information on the hard copy document (for example, the vendor name...) with particular subfiles... (for example, the vendor field next to which the cursor 232C appears). Id. at 6: The user does this by clicking on the corresponding field name, or identity to the field name prompted by the computer. Id. at 6: A second method of copying data is disclosed where a user can define a template which is used to extract information off a document. Ex at 7:1 7. As discussed above, the template is defined by the user identifying the relevant field name and assigning location information so that the template can extract the correct data fields. Therefore, this method of copying is based on the field identities. The third method disclosed to identify data fields to be copied teaches that the information sought to be extracted is specified relative to the location of [a] character or symbol... Ex at 8:68 9:2, 3:22 25; Bysinger Decl. 79. The characters on the document used to identify the information to be extracted would be considered field identities. Bysinger Decl. 79. Lech also discloses a select definitions module which allows the user to store and select a set of definitions to be used for processing the document and that these definitions 67

77 identify pieces of information on the document by, for example... proximity to key words.... Ex at 9:43 50 (emphasis added). The key words used to identify pieces of information on the document to be extracted would also be considered field identities. Bysinger Decl Lech Anticipates Claims 45 and 52. Challenged Claims 45 and 52 are addressed together because, as noted, they are substantively the same (apparatus and method counterparts to one another, see Section VII.B.3.g. Lech discloses the server of claim 42 and the method of claim 51. See Sections VII.C.5 and VII.C.6. Lech further discloses wherein the correlated fields of the second file have field identities corresponding to the field identities of the first subset of the set of N identifiable fields. For example, in an exemplary embodiment, the user indicates the location of the account number [on the document of Fig. 2] and [t]he account number is then read-in to a subfile named Account Number. Ex at 12:43 50; Bysinger Decl. 80. Furthermore, the process of copying information off the document of Fig. 2 repeats for other fields until all of the desired information has been read-in and stored. Ex at 12: As noted, the exemplary document of Lech Fig. 2 shows that the account number field has a field identity of Account Number, which correspond[s] to the field identity of the field in the second file to which it is copied. Bysinger Decl

78 8. Lech Anticipates Claim 49. Lech further discloses that the process of copying the contents of a first subset of the set of N identifiable fields to correlated fields of a second file occurs in response to the first file being opened, e.g., that in the operation discussed above (see Section VII.C.5) [t]he interface can also extract specific pieces of information using a predefined template. Ex at 4: Lech explains that instructions from computer 230 can direct the scanner 210 and scanner memory 220, and/or main memory 250, to scan and/or store only specific portions of hard copy document 100. Ex :8 11. In this way [t]his template is stored for future use when another hard copy document in the same format is received. Ex at 7:5 7. Thereafter, scanning of a second identical document can be limited to only those portions of the document which contain needed information. Ex at 7: Lech explains that in FIG. 2, the lines 10 drawn around certain portions of the document represent the areas which the user has previously identified as the portions of a document to be extracted by the scanner 210 and stored in scanner memory 220 and/or main memory 250. Ex at 7:

79 When a second identical document is scanned in, [s]ince the user has previously associated each of the areas 10 with a specific subfile of information, e.g., the account number, the scanned information is stored in memory locations corresponding to that subfile. Ex at 7: These are the contents of a first subset of the set of N identifiable fields set forth in Claim 49. Lech explains how these contents are extracted and subsequently copied in response to the first file being opened as set forth in Claim 49. In particular, the template extraction process described above can be carried out by the extract data module [which] extracts data off of the document in accordance with the user s instructions, for example, the user-defined template. Ex at 9: If a user desires to extract specific portions of data from an image copy of a hard 70

80 copy document which has already been stored in memory, the user uses the extract data module to identify a document to be processed. The document is then retrieved.... Ex at 11:67 12:3. The identification of a document to be processed is the opening of the first file contemplated by Claim 49 and in response, the extract data module then extracts pieces of data from the image copy of the document, as defined by the document template definition.... Id. at 12:9 12. This document data is then passed to preapplication process module The interface generates input file(s) by use of the preapplication process module The preapplication process module assembles the input file, id. at 12:12 21, i.e. the copying the contents of a first subset of the set of N identifiable fields to correlated fields of a second file, which here is the input file. Lech explains that FIG. 13A illustrates the transmission input file corresponding to FIG. 12A. 14:53 55: 71