UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD. FAIRCHILD SEMICONDUCTOR CORPORATION Petitioner

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1 Patent No. 6,792,373 Petition for Covered Business Method Patent Review Paper No. Date: January 13, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD FAIRCHILD SEMICONDUCTOR CORPORATION Petitioner v. IN-DEPTH TEST LLC Patent Owner Patent No. 6,792,373 CBM PETITION FOR COVERED BUSINESS METHOD REVIEW UNDER 35 U.S.C. 321 AND 37 C.F.R et seq. {W }

2 Table of Contents Page I. INTRODUCTION... 4 A. Overview of the 373 Patent... 4 B. Brief Overview of the Prosecution History... 6 C. Reexamination of the 373 Patent II. GROUNDS FOR STANDING A. The 373 Patent Is Directed to a Covered Business Method Patent That Is Not a Technological Invention Financial Product or Service Technological Invention B. Fairchild Has Been Sued for Infringement of the 373 Patent and Is Not Estopped III. MANDATORY NOTICES UNDER 37 C.F.R IV. STATEMENT OF THE PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED V. CLAIM CONSTRUCTION A. tester B. component C. connected D. outlier VI. EXPLANATION OF GROUNDS FOR UNPATENTABILITY A. The Claims of the 373 Patent Are Directed to an Abstract Idea B. The Claims of the 373 Patent Fail to Transform the Abstract Idea into Patent-Eligible Subject Matter VII. CONCLUSION {W } -ii-

3 VIII. PAYMENT OF FEES UNDER 37 C.F.R (a) AND IX. APPENDIX LIST OF EXHIBTS {W } -ii-

4 I. INTRODUCTION Pursuant to the provisions of 35 U.S.C. 321 et seq., 18 of the Leahy- Smith America Invents Act ( AIA ), and 37 C.F.R et seq., Fairchild Semiconductor Corporation ( Fairchild ) respectfully requests review of each of claims 1-20 of U.S. Patent No. 6,792,373 to Tabor ( the 373 patent, Ex. 1001), issued on September 14, 2004, and currently assigned to In-Depth Test LLC ( In- Depth ). This Petition demonstrates, by a preponderance of the evidence, that it is more likely than not that claims 1-20 of the 373 patent are patent-ineligible under 35 U.S.C. 101 ( Section 101 ) because each claim is directed to an abstract idea. Accordingly, claims 1-20 of the 373 patent should be found patent-ineligible and canceled. A. Overview of the 373 Patent The 373 patent generally concerns the interpretation of test data, most typically data that is collected during the course of statistical process control ( SPC ). SPC refers to the use of statistical methods to measure and control quality, and reduce costs related to quality defects, as part of a manufacturing process. More particularly, the 373 patent claims a computer programmed to identify outliers in test data and an analogous method for identifying outliers. Outliers are measurements or test data points that fall within established specifications, but that deviate from a set of related data points by some significant {W }{W } 4

5 degree. According to the specification, [t]he outlier classification [software] may classify data in accordance with conventional SPC control rules to characterize the data. Ex. 1001, col. 15, ll The 373 patent is entitled Methods and Apparatus for Semiconductor Testing, but the claims are not limited to semiconductor testing. Indeed, the specification notes that the present invention may be practiced in conjunction with any number of test environments. Ex. 1001, col. 3, ll The 373 patent has three independent claims. Claim 1 is to a test system that combines a generic test device and a generic computer, where the computer is programmed to receive data from the test device, to identify outliers in that data, and to generate a report. In claim 1, the object being tested is also generic: simply a component. Claim 8 is to a computerized data analysis system, where the computer is programmed to identify outliers in semiconductor test data and generate a report of those outliers. Claim 15 is to a computerized method for testing semiconductors comprising the steps of generating test data and automatically identifying outliers at run time. The specification does not describe any new or improved test devices, any new or improved computer hardware or software, or even any new algorithms. All the components of the claimed systems are existing, off-the-shelf products. As explained in detail below, because the 373 patent claims an abstract idea a {W }{W } 5

6 computer programmed to identify and report on outliers in test data and because it constitutes a CBM patent that is not patent-eligible under 101, the Board should institute a review. B. Brief Overview of the Prosecution History U.S. Patent Application No. 10/154,627 ( the 627 application ), which became the 373 patent, was filed on May 24, 2002, as a continuation-in-part of U.S. Patent Application No. 09/872,195 (now abandoned). The 627 application claims priority to three provisional applications filed between May 24, 2001 and April 21, The 627 application and its parent applications list a single inventor, Eric Paul Tabor. The 627 application was filed with 20 claims. The original claims are analogous to the issued claims, except that the original claims did not require a computer system. The three independent original claims are: 1. A test system, comprising: a tester configured to test a component and generate test data; and an outlier identification element configured to receive data and identify an outlier in the test data A data analysis system for semiconductor testing data, comprising: a supplementary data analysis element configured to identify {W }{W } 6

7 outliers in the test data; and an output element configured to generate an output report including the identified outliers A method for testing semiconductors, comprising: generating test data for multiple components; and identifying an outlier in the test data at run time. The Examiner initially rejected all of the original claims as directed to patent-ineligible subject matter because the claimed method and system are abstract ideas used for testing. The Examiner stated: Claims must define the physical structure of a programmed [sic] in terms [of] its hardware/software components in many [sic] manner that can be clearly understood by a person skilled in the relevant art. Claims should identify the elements of [a] computer system and indicate how those elements are configured in either hardware or in combination of hardware and specific software. File History of U.S. Patent No. 6,792,373 (Ex. 1002), Non-Final Rejection (dated Sept. 26, 2003), at 2. The Examiner also rejected all of the original claims under 35 U.S.C. 112, 2, on the ground that the broad functional language in the claims, specifically regarding an outlier identification element or a supplementary data analysis element or identifying an outlier, is indefinite. Id. at 2-3. The Examiner also rejected claims 1, 2, 5-9, 12-16, and under 35 {W }{W } 7

8 U.S.C. 102(a) as anticipated by the non-patent reference Becker, Performance Criteria for Multivariate Outlier Identification Procedures. The Examiner stated that Becker disclosed the claimed method and apparatus for identifying outliers in multivariate test data, as well as each feature of the dependent claims, except claims 3, 4, 10, 11, 17, and 18. Id. at 4. The Examiner also rejected claims 1-3, 5-10, and under 35 U.S.C. 102(b) as anticipated by U.S. Patent No. 5,835,891 to Stoneking. The Examiner stated that Stoneking disclosed the claimed method and apparatus for testing and generating test data and identifying outliers in the test data. Stoneking also disclosed each feature of the dependent claims, except claims 4 and 11. Id. at 4-5. The Examiner found that claims 4 and 11 would be allowable if amended to address the Section 101 and Section 112 issues with the claims from which they depend. Id. at 5. In response to the initial rejection of all the original claims, Tabor amended the independent claims to add a requirement for a general purpose computer. He also amended claim 1 to state that the computer, in addition to being configured to receive test data and identify an outlier in the data, is configured to generate an output report including the identified outlier. Ex. 1002, Amendment and Response (dated Dec. 29, 2003), at 2-5. Tabor asserted that the amendments conformed the claims to the Section 101 and Section 112 requirements. Id. at 6. {W }{W } 8

9 Regarding Becker, Tabor argued that the reference did not disclose all the limitations of the claims that the Examiner said it anticipated. Specifically, Tabor stated that Becker failed to disclose the tester of claim 1, the supplemental data analysis element of claim 8, and the generating test data step of claim 15. Id. at 6. Tabor also asserted that each limitation of the dependent claims was not anticipated by Becker. Regarding Stoneking, Tabor similarly argued that the reference did not disclose all the limitations of the claims that the Examiner said it anticipated. Tabor asserted that Stoneking lacks the report generation element of claims 1 and 8 and claim 15 s identification of outliers at run time, i.e., within a short time after generating the test data. Tabor purported to explain why the elements of the dependent claims were not disclosed in Stoneking. Id. at 8. In addition, applying the pre-ksr standard, Tabor stated that neither Becker nor Stoneking contain a disclosure or suggestion that would render the subject matter obvious. In response to Tabor s arguments, the Examiner issued a Notice of Allowability, allowing claims 1-20, as amended, without explanation. Ex. 1002, Notice of Allowability (dated Mar. 2, 2004). Tabor submitted an after-final amendment to correct typographical errors in the specification and paid the issue fee. Ex. 1002, Amendment Pursuant to 37 C.F.R (dated June 2, 2004); Issue Fee Payment (dated June 2, 2004). {W }{W } 9

10 C. Reexamination of the 373 Patent Tabor originally assigned the patent to Test Advantage, Inc. ( Test Advantage ) File History of Ex Parte Reexamination of U.S. Patent 6,792,373, Control No. 90/008,313 (Ex. 1003), Title Report (dated Nov. 14, 2006). In October 2005, Test Advantage sued Tabor, his wife, and a company called Rizon Software, LLC for infringing the 373 patent. Ex. 1003, Reexam Litigation Search (dated Dec. 28, 2006). On November 2, 2006, Tabor filed a request for ex parte reexamination of all the claims of the 373 patent. Ex. 1003, Request for Ex Parte Reexamination (dated Nov. 2, 2006) ( Reexam Request ). The Examiner found that the Reexam Request presented a substantial new question of patentability for each of the claims of the 373 patent and ordered reexamination of claims Ex. 1003, Order Granting Request for Ex Parte Reexamination (dated Jan. 4, 2007), at 1-2. Specifically, the Examiner found that a reference titled Measurement Related and Model Parameter Related Statistics by Gneiting and Sichka teaches the method of claim 15 comprising generating test data for multiple components and automatically identifying an outlier in the test data using a computer system. Id. at 5. The Examiner also found that the Gneiting reference could be interpreted to teach each limitation of claims 1 and 8, which the Examiner viewed as being similar to claim 15. In addition, the Examiner noted that the other ten references {W }{W } 10

11 cited in the Reexam Request, particularly Process Average Testing (PAT), Statistical Yield Analysis (SYA), and Junction Verification Test (JVT) by Motorola, Inc. and The Identification of Multiple Outliers in Online Monitoring Data by Bauer et al., raised a substantial new question of patentability. Id. at 5-6. Test Advantage filed a reply in which it responded to the references discussed in the Order Granting Request for Reexamination and the Reexam Request. Ex. 1003, Patent Owner s Statement (dated Mar. 9, 2007). Test Advantage argued that each reference did not anticipate or render obvious applying the pre-ksr standard any of the claims of the 373 patent. Id. at Tabor submitted a Reply to Patent Owner s Statement arguing that it incorrectly distinguished the prior art cited in the Reexam Request, particularly the Gneiting, Motorola, and Bauer references. Ex. 1003, Petitioner s Reply to Patent Owner s Statement in Support of Request for Ex Parte Reexamination of U.S. Patent No. 6,972,373 (dated May 7, 2007). The Examiner initially rejected all the claims of the 373 patent. Ex. 1003, Office Action in Ex Parte Reexamination (dated July 3, 2008), at 1. First, the Examiner rejected claims 1-4, 6-11, 13-18, and 20 under 35 U.S.C. 102(e) as anticipated by U.S. Patent No. 6,574,760 to Mydill. Regarding independent claims 1, 8, and 15, the Examiner noted that Mydill teaches a tester controlled by a computer that generates test data and describes how to identify {W }{W } 11

12 outliers from the test data. Id. at 4-5. The Examiner then described how Mydill teaches the additional limitations of the applicable dependent claims. Id. at 5-7. Second, the Examiner rejected the remaining claims as obvious over Mydill in view of Gneiting. Although Mydill failed to teach the data correlation element of claims 5, 12, and 19, the Examiner noted that Gneiting overcomes that deficiency by providing a data correlation method for test data. Id. at 8. In response to the non-final rejection, Test Advantage did not amend the claims. Instead, it argued that the Examiner s rejections were improper. Ex. 1003, Response to Office Action (dated Sept. 3, 2008). Regarding the Section 102(e) rejection, Test Advantage argued that Mydill did not disclose the elements of apparatus claims 1 and 8 because, although Mydill admittedly relates to outliers, it did not disclose identifying the outliers in a report. Id. at 3. Regarding claim 15, Test Advantage argued that Mydill did not disclose identifying outliers in the test data at run time and that the Examiner did not specifically address this limitation in the rejection. Id. at 4-5. Test Advantage also argued that Mydill did not disclose each element of the applicable dependent claims. Id. at 5-6. Finally, regarding the Section 103 rejection, Test Advantage argued that, in addition to the deficiencies of Mydill, Gneiting does not disclose the claimed data correlation element, even though it admittedly discloses correlation. Test Advantage further argued that Gneiting teaches away from the claimed invention {W }{W } 12

13 because Gneiting teaches the user identifying outliers, which are then discarded and not reported, as claimed in the 373 patent. Id. at 8-9. Test Advantage also argued that the rejection did not set forth a prima facie case of obviousness because it did not follow the requirements of the KSR v. Teleflex opinion. Id. at The Examiner issued a final rejection reiterating the same grounds of rejection set forth in the first, non-final rejection. Ex. 1003, Office Action in Ex Parte Reexamination (dated Jan. 30, 2009). In response, Test Advantage appealed and requested reconsideration of the final rejection. Ex. 1003, Notice of Appeal (dated Mar. 30, 2009); Request for Reconsideration (dated Mar. 30, 2009). Test Advantage again argued (a) regarding claims 1 and 8, that Mydill only discloses an illustration of outliers, not an output report including the identified outliers, id. at 3; and (b) regarding claim 15, that Mydill did not disclose automatically identifying outliers at run time, id. at 6. Test Advantage also reiterated its arguments regarding the dependent claims and the obviousness rejection over Mydill in view of Gneiting. Id. at Test Advantage s Appeal Brief comprised nearly identical arguments as the Request for Reconsideration. Ex. 1003, Appeal Brief (dated June 1, 2009). For over 18 months, nothing substantive occurred in the reexamination. Then, the Examiner issued a Notice of Intent to Issue Ex Parte Reexamination {W }{W } 13

14 Certificate confirming claims Ex. 1003, Notice of Intent to Issue Ex Parte Reexamination Certificate (dated Sept. 23, 2010). In the Reasons for Allowance, the Examiner focused on the perceived failure of the references to disclose generating output reports: Mydill fails to teach configuring a computer with software modules to automate the analysis, identification, and generating an output report of an outlier of the generated test data (id. at 4); Stoneking fails to explicitly disclose output reports (id. at 5); Gneiting... fails to teach configuring a computer... to generate and output reports (id. at 5). The Examiner also addressed the remaining references cited in the Reexam Request, including two references (Bauer and Nigh), which the Examiner had previously determined in the first rejection did not qualify as prior art to the 373 patent. Id. at 6. Approximately three months later, the Office issued the Reexamination Certificate in the 373 patent. Ex. 1003, Ex Parte Reexamination Certificate (dated Dec. 14, 2010). II. GROUNDS FOR STANDING As set forth in this Petition, Fairchild asserts that, under 37 C.F.R (a), the 373 patent is a covered business method patent, as defined in 37 C.F.R Additionally, Fairchild is eligible to file this petition under 37 C.F.R (a) and (b). {W }{W } 14

15 A. The 373 Patent Is Directed to a Covered Business Method Patent That Is Not a Technological Invention The 373 patent is a covered business method patent as defined under 18 of the AIA and 37 C.F.R Section 18(d)(1) of the AIA identifies a covered business method patent as a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service. See also 37 C.F.R (a). As supported by the legislative history, the USPTO has indicated that it understands the term covered business method patent to encompass patents claiming activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity. See Fed. Reg. Vol. 77, No. 157 at ; see also SAP Am., Inc. v. Versata Dev. Grp., Inc., No. CBM , Decision Institution of Covered Business Method Review (Paper No. 36) at 23 (P.T.A.B. Jan. 9, 2013) ( Decision to Institute ). Moreover, the Congressional Record makes clear that the language practice, administration, or management is intended to cover any ancillary activities related to a financial product or service, including [ ] marketing, customer interfaces [and] management of data Cong. Rec. S1360, S1365 (Mar. 8, 2011). The co-author of Section 18, Senator Schumer, emphasized that financial product or service should be interpreted broadly. 157 Cong. Rec. S5432 (Sept. 8, 2011). Moreover, to meet the {W }{W } 15

16 requirements for CBM review the patent need not recite a specific financial product or service. Id. In addition, the Board has interpreted the statute and corresponding rules to mean that only a single claim need be directed to a non-technological invention for a CBM review to be instituted. See SAP, CBM , Decision to Institute at Financial Product or Service The activities claimed in the 373 patent are incidental to a financial activity or complementary to a financial activity for at least the following three reasons. First, even assuming a narrow scope for the 373 patent consistent with claims 8-20, the analytical systems and methods claimed in the 373 patent are used in statistical process control ( SPC ) activities, which are inherently part of a manufacturing company s cost-saving (i.e., financial) activities. A manufacturer seeks to identify outliers in order to reduce variability in the products being manufactured. Since quality is inversely proportional to variability, reducing variability results in increased quality, and increased quality translates directly into lower repair costs and fewer warranty claims. As one expert in statistical process controls notes: [Q]uality truly is inversely proportional to variability. Furthermore, it can be communicated very precisely in a {W }{W } 16

17 language that everyone (particularly managers and executives) understands namely, money. 1 But quality control is not only a part of a company s cost-saving efforts; it is also incidental to revenue generation because higher-quality products naturally sell better. Thus, the systems and methods claimed in the 373 patent are incidental to the most fundamental cost-saving and revenue-generating financial activities of semiconductor manufacturers. These are the kind of activities that Section 18 of the AIA was intended to cover. As the Board has recognized, even when a claimed method does not expressly refer to financial activity, if it allegedly improves the financial health of the organization, it falls within the definition of a covered business method. Salesforce.com, Inc. v. VirtualAgility, Inc., CBM , Decision Institution of Covered Business Method Review (Paper No. 16) at 11 (P.T.A.B. Nov. 19, 2013). In addition, when it passed Section 18, Congress contemplated that its reach would extend to patents that do not expressly refer to financial activities: Any business that sells or purchases goods or services practices or administers 1 Prof. Douglas C. Montgomery, Regents Professor of Industrial Engineering and Statistics and the Arizona State University Foundation Professor of Engineering, in INTRODUCTION TO STATISTICAL QUALITY CONTROL (6 th Ed. 2009), at 6-7 (Ex. 1004). {W }{W } 17

18 a financial service by conducting such transactions. 157 Cong. Rec. S5432 (Sept. 8, 2011) (statement of Sen. Schumer). The fact that a multitude of industries will be able to make use of section [18] is evident by the broad based support for the provision, including the U.S. Chamber of Commerce and the National Retail Federation, among many others. Id. Second, tests on semiconductors are at least incidental or complementary to financial transactions because semiconductors are ubiquitous components in the modern financial system. For example, semiconductors that are manufactured (and tested) by Fairchild are used in point-of-sale terminals, in supercomputers that create bitcoins, and in ATMs, just to cite three financial applications pertinent to Fairchild. See Declaration of Brooks Felton (Ex. 1005). But the patent claims are not limited to semiconductors in those financial applications that currently use chips made by Fairchild. For example, regardless of the manufacturer, the claims of the 373 patent also cover tests on semiconductors that are incorporated directly into smart cards, which are increasingly being used in modern consumer commercial transactions as a replacement for standard debit and credit cards. See id. In all these ways, the semiconductor testing systems and methods are ancillary activities that make it possible to manufacture financial products comprising semiconductors. Third, turning attention to claim 1 and its dependent claims, and based on {W }{W } 18

19 the broadest reasonable interpretation of such generic claim limitations as component and tester, those claims might be construed so broadly as to encompass such activities as liquidity stress testing on banks (as a component of the financial system) to identify outliers. See, e.g., O. Darne et al., Calibrating Initial Shocks in Bank Stress Test Scenarios: An Outlier Detection Based Approach, Banque de France, Working Paper No. 426 (Mar. 2013) (Ex. 1006). The point is that claim 1 of the 373 patent is so broad that the subject of the test is not limited to a semiconductor chip, but instead concerns any generic component of some larger system. Therefore, the claim reads on a broad category of tests performed on components that concern financial products and services. Examples include tests that identify outliers in such diverse contexts as: credit card purchase data, 2 security prices that vary over time, 3 computer network intrusions, 4 2 C. Aggarwal, OUTLIER ANALYSIS (Springer Science+Business Media 2013), at 2, (Ex. 1007). Chapter 1: Introduction is also available on-line at (last accessed Jan. 12, 2015). 3 C.K. Leung, et al., An Efficient System for Detecting Outliers from Financial Time Series, in FLEXIBLE AND EFFICIENT INFORMATION HANDLING: LECTURE NOTES IN COMPUTER SCIENCE (eds. D. Bell and J. Hong), v4042 (2006), (Ex. 1008). 4 H. Om and T. Hazra, Statistical Techniques in Anomaly Intrusion Detection {W }{W } 19

20 wireless sensor networks, 5 Medicare payments to hospitals, 6 and pharmaceutical quality control, 7 among others. Fairchild s interpretation of the financial product or service requirement is consistent with the position that the Board has taken in granting CBM patent System, Intl. J. of Adv. in Eng. & Tech., v5 (Nov. 2012) , at 388 ( Outlier detection is the most important tasks [sic] in data analysis. ) (Ex. 1009). 5 Y. Zhang, et al., Outlier Detection Techniques For Wireless Sensor Networks: A Survey, Centre for Telematics and Information Technology University of Twente, Tech. Rep. TR-CTIT (Oct. 2008) (Ex. 1010). 6 SAS White Paper, Combating Health Care Fraud, (last visited Jan. 13, 2015), at 6-7 ( Outliers or anomalies could indicate a new or previously unknown pattern of fraud. ) (Ex. 1011). 7 S. Walfish, A Review of Statistical Outlier Methods, Pharmaceutical Technology (Nov. 2, 2006), available at (last accessed Jan. 12, 2015), at 1 ( Statistical outlier detection has become a popular topic as a result of the US Food and Drug Administration s out of specification (OOS) guidance and increasing emphasis on the OOS procedures of pharmaceutical companies. ) (Ex. 1012). {W }{W } 20

21 review in other cases. For example, in PNC Bank v. Secure Axcess, LLC, the owner argued that a patent on authenticating a web page was not a CBM because the claimed invention could be used by businesses generally and because the claim language was devoid of financial or monetary terms. CBM , Decision Institution of Covered Business Method Review (Paper No. 10) at (P.T.A.B. Sept. 9, 2014). The Board rejected that argument and found that the method and apparatus claimed were incidental to a financial activity because financial institutions need to ensure that customers are confident in the authenticity of their web pages. Id. In Rackspace Hosting, Inc. v. Clouding IP, LLC, the Board found that a patent on a system and method for providing on-demand, scalable computational resources over a distributed network was a CBM patent. CBM , Decision Institution of Covered Business Method Review (Paper No. 8) at (P.T.A.B. May 15, 2014). It rejected the argument that there must be a rather close tie between the claimed subject matter and a financial activity to warrant consideration as being incidental or complimentary to that financial activity. Id. Instead, the Board found that [a]llowing use of on-demand resources and monitoring the amount of resources used in order to charge for that is complimentary to the financial activity of charging for the resources used. Id. In Google Inc. v Unwired Planet, LLC, the Board found that a method for {W }{W } 21

22 receiving an advertisement over a mobile network was incidental or complimentary to the financial activity of product sales. CBM , Decision Institution of Covered Business Method Review (Paper No. 8) at 10 (P.T.A.B. April 8, 2014). In the same way, quality control testing of components such as semiconductors is incidental or complimentary to the subsequent financial activity of selling those components, as well as incidental to their use in a wide variety of financial products and services such as point-of-sale terminals, ATM machines and credit cards that incorporate semiconductor chips. 2. Technological Invention The definition of covered business method patent in Section 18 of the AIA expressly excludes patents for technological inventions. AIA 18(d)(1). To determine whether a patent is for a technological invention, the Board considers whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution. 37 C.F.R (b). The following claim drafting techniques, for example, typically do not render a patent a technological invention : (a) 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 specialized machines, {W }{W } 22

23 such as an ATM or point of sale device. (b) Reciting the use of known prior art technology to accomplish a process or method, even if that process or method is novel and non-obvious. (c) Combining prior art structures to achieve the normal, expected, or predictable result of that combination. OFFICE PATENT TRIAL PRACTICE GUIDE, 77 Fed. Reg , (Aug. 14, 2012). The 373 patent is appropriate for CBM review because the claims, when taken as a whole, are not directed to a technological invention. As an example, in its entirety claim 15 reads: A method for testing semiconductors, comprising: generating test data for multiple components; and automatically identifying an outlier in the test data at run time using a computer system. That claim is about data, not technology. The computer system and other hardware that are used to obtain and analyze the data are not unique. On the contrary, the specification emphasizes the use of conventional test equipment, Ex. 1001, col. 3, ll , together with a computer system having any suitable processor, any appropriate memory, Ex. 1001, col. 3, ll , and a conventional device interface, Ex. 1001, col. 4, ll The {W }{W } 23

24 computer system employs any number of conventional techniques for data analysis, component interfacing, data processing, component handling and the like. Ex. 1001, col. 3, ll Even the key operation, the identification of outliers, is accomplished according to any suitable algorithm. Ex. 1001, col. 14, ll A method or system is not transformed into a technological invention just because known technology is described and claimed. Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., CBM , Decision Institution of Covered Business Method Review (Paper No. 10) at (P.T.A.B. Mar. 28, 2013). Here, the 373 patent claims do not recite any novel technological feature; all the tangible components are in the prior art. Like claim 15, the two other independent claims, 1 and 8, add no technological detail. Claim 8 does recite a supplementary data analysis element and an output element, but these are only two software module[s] operating on the computer 108 to perform various tasks. Ex. 1001, col. 5, ll Dependent claims 2, 9 and 16 add more software in the form of a recipe file containing configuration data. Dependent claims 3, 10 and 17 specify that the test data corresponds to components on a wafer. Dependent claims 4, 11 and 18 concern calibrating the sensitivity of the program for identifying outliers. Dependent claims 5, 12 and 20 involve correlating the test data. Claims 6 and 13 {W }{W } 24

25 state that the outlier is identified at run time. And finally, dependent claims 7, 14 and 19 concern software operations to smooth the test data. None of the claim limitations, taken alone or in combination (i.e., the claims as a whole), rises to the level of a technological feature; no specific, unconventional software, computer equipment, tools or processing capabilities are required. SAP, CBM , Decision to Institute at 28. Thus, the claimed subject matter as a whole does not recite a technological feature that is novel and unobvious over the prior art. Moreover, the claimed subject matter does not solve a technical problem using a technical solution. Instead, the 373 patent concerns the collection, analysis and reporting of data. Accordingly, Covered Business Method Review is appropriate for the 373 patent. B. Fairchild Has Been Sued for Infringement of the 373 Patent and Is Not Estopped In-Depth sued Fairchild for infringement of one or more claims of the 373 patent on August 22, In-Depth Test LLC v. Fairchild Semiconductor Corp., Civ. A. No cv (D. Del. Aug. 22, 2014), Complaint (Ex. 1013). Fairchild is not estopped from challenging the claims on the grounds identified in the petition. Thus, Fairchild meets the requirement of AIA 18(a)(1)(B) and 37 C.F.R III. MANDATORY NOTICES UNDER 37 C.F.R Real Party: In accordance with 37 C.F.R. 42.8(b)(1), Petitioner identifies {W }{W } 25

26 Fairchild Semiconductor Corporation as the real party-in-interest. Related Matters: In accordance with 37 C.F.R. 42.8(b)(2), Fairchild identifies the following pending litigation: In-Depth Test LLC v. Linear Tech. Corp., Civ. A. No cv (D. Del. Aug. 22, 2014); In-Depth Test LLC v. Fairchild Semiconductor Corp., Civ. A. No cv (D. Del. Aug. 22, 2014); In-Depth Test LLC v. Vishay Intertechnology, Inc., Civ. A. No cv (D. Del. July 8, 2014); In-Depth Test LLC v. Maxim Integrated Prods., Inc., Civ. A. No cv (D. Del. July 8, 2014); In-Depth Test LLC v. Intersil Corp., Civ. A. No cv (D. Del. July 8, 2014). In addition, on December 11, 2014, Linear Technology Corporation filed a Petition for Inter Partes Review of the 373 patent, IPR Lead and Back-Up Counsel: In accordance with 37 C.F.R. 42.8(b)(3), Fairchild identifies: Lead Counsel: Daniel A. Lev (Reg. No. 67,471) Backup Counsel: Robert H. Stier, Jr. (to be admitted pro hac vice) Service Information: In accordance with 37 C.F.R. 42.8(b)(4), Fairchild identifies: (i) dlev@pierceatwood.com; rstier@pierceatwood.com (Fairchild consents to electronic service.) (ii) Post: Pierce Atwood LLP, Merrill s Wharf, 254 Commercial Street, {W }{W } 26

27 Portland, ME (iii) Telephone: (lead counsel); (backup counsel) (iv) Facsimile: (lead counsel); (backup counsel) IV. STATEMENT OF THE PRECISE RELIEF REQUESTED FOR EACH CLAIM CHALLENGED Fairchild challenges claims 1-20 of the 373 patent and request Covered Business Method Review of those claims under Section 18 of the AIA and 37 C.F.R et seq. Fairchild asserts that each of claims 1-20 of the 373 patent should be canceled as invalid and patentable ineligible as follows: Ground Claims Description Invalid as patent-ineligible under 101 V. CLAIM CONSTRUCTION A claim subject to covered business method patent review receives the broadest reasonable construction in light of the specification of the patent in which it appears. See 37 C.F.R (b). Claim terms are given their ordinary and accustomed meaning as would be understood by one of ordinary skill in the art. Phillips v. AWH Corp., 415 F.3d 1303, (Fed. Cir. 2005) (en banc). The broadest reasonable interpretation standard applicable here is typically broader {W }{W } 27

28 than the claim construction standard applied by a district court. See Facebook, Inc. v. Pragmatus AV, LLC, 582 Fed. Appx. 864, 869 (Fed. Cir. 2014). As such, the constructions set forth herein should not be viewed as constituting Fairchild s own construction of such terms for the purposes of the related district court litigation. Without further limiting the claims to other than their broadest reasonable construction, Fairchild submits the following proposed constructions relevant to the issues in this CBM patent review. A. tester The term tester should be construed to mean any equipment that tests components and generates output data relating to the testing. This follows the language in the specification of the 373 patent. Ex. 1001, col. 3, ll ; see also Ex. 1001, col. 1, ll ( Automatic testers apply signals to the components and read the corresponding output signals. ). Moreover, although the embodiments depicted in the 373 patent concern the testing of semiconductors, the specification expressly notes that this single embodiment is not limiting: The present invention has been described above with reference to a preferred embodiment. However, changes and modifications may be made to the preferred embodiment without departing from the scope of the present invention. Ex. 1001, col. 19, ll B. component The term component should be construed in keeping with its plain {W }{W } 28

29 meaning as a constituent part. See, e.g., Component, Merriam-Webster On-line Dictionary, (last visited Jan. 13, 2015) (Ex. 1014). The system of which the component is a part could be an integrated circuit, electrical system or optical system, as set forth in the specification, Ex. 1001, col. 3, ll , but it is not necessarily limited to that kind of system. C. connected The term connected should be construed in keeping with its plain meaning as joined or linked together, as in a network. See, e.g., Connected, Merriam- Webster On-line Dictionary, (last visited Jan. 13, 2015) (Ex. 1015).This construction is consistent with the specification of the 373 patent: The computer system 108 may comprise a separate computer, such as a personal computer or workstation, connected to or networked with the tester 102 to exchange signals with the tester 102. Ex. 1001, col. 3, ll D. outlier The term outlier should be construed in keeping with its plain meaning as test results that stray from other values in a data set. 8 This construction is 8 An outlier is an observation that lies outside the overall pattern of a distribution. Outlier, Wolfram MathWorld, {W }{W } 29

30 consistent with the specification of the 373 patent. See, e.g., Ex. 1001, col. 6, ll VI. EXPLANATION OF GROUNDS FOR UNPATENTABILITY Claims 1-20 of the 373 patent are invalid as patent-ineligible under 35 U.S.C As the Supreme Court recently confirmed, abstract ideas are not eligible for patent protection under Section 101. Alice Corp. Pty. Ltd. v. CLS Bank Int l., 134 S. Ct (2014); see also Bilski v. Kappos, 561 U.S. 593 (2010); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014). A claim must incorporate enough meaningful limitations to ensure that it claims more than just an abstract idea and is not just a mere drafting effort designed to monopolize [an abstract idea] itself. See Mayo v. Prometheus, 132 S. Ct (2012). Claims that recite a business method on a computer and do no more than merely recite the use of the computer for its ordinary function of performing repetitive calculations are not patent eligible. See SAP, CBM , Decision to Institute at (last visited Jan. 13, 2015) (Ex. 1016). An outlier is an observation that lies an abnormal distance from other values in a random sample from a population What are outliers in the data?, ENGINEERING STATISTICS HANDBOOK, National Institute of Standards and Technology, (last visited Jan. 13, 2015) (Ex. 1017). {W }{W } 30

31 The Supreme Court laid out a two-part test for determining whether a claim impermissibly covers patent-ineligible subject matter. Alice, 134 S. Ct. at First, the panel determines whether the claims are directed to a patent-ineligible concept, such as an abstract idea. Id. Second, if the claims recite such patentineligible subject matter, the next inquiry is whether the claims contain 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. Id. (quoting Mayo, 132 S. Ct. at 1294) (alteration in original). A claim that recites an abstract idea must include additional features to ensure that the [claim] is more than a drafting effort designed to monopolize the [abstract idea]. Id. at 2357 (quoting Mayo, 132 S. Ct. at 1297) (alterations in original). Those additional features must be more than well-understood, routine, conventional activity. Mayo, 132 S. Ct. at Claim elements that simply involve conventional steps to implement an abstract idea with a generic computer fail to transform abstract ideas into patent-eligible inventions. Id. None of claims 1-20 of the 373 patent meaningfully limits the claimed subject matter to something narrower than the abstract idea of automatically identifying outliers in test data. A. The Claims of the 373 Patent Are Directed to an Abstract Idea The claims of the 373 patent are all directed to the abstract idea of {W }{W } 31

32 generating test data for certain components being tested, analyzing that test data with a computer programmed to identify outliers automatically, and reporting the results. The specification explicitly states that the invention may be described in terms of functional block components and various process steps and that those functional blocks and steps may be realized by any number of hardware or software components configured to perform the specified functions. Ex. 1001, col. 3, ll Figure 1 is an illustration of the so-called inventive concept. The summary of the invention explains that it is a test system comprising an outlier identification element configured to identify significant data in a set of test results. Ex. 1001, col. 2, ll The outlier identification element is just a generic computer programmed to identify certain test results as outliers. See, e.g., {W }{W } 32

33 Ex. 1001, col. 13, ll The method described and claimed is even more starkly abstract: generating test data... and automatically identifying an outlier in the test data at run time using a computer system. The observations of the Federal Circuit in Ultramercial are equally valid here: This ordered combination of steps recites an abstraction an idea, having no particular concrete or tangible form. 772 F.3d at 715. For similar reasons, the panel should conclude that the claims of the 373 patent are directed to an abstract idea. B. The Claims of the 373 Patent Fail to Transform the Abstract Idea into Patent-Eligible Subject Matter The second step of the test set forth in Alice and Mayo requires an examination of claim limitations to see whether they significantly narrow the scope of the invention claimed. A claim that recites an abstract idea must include additional features to ensure that the [claim] is more than a drafting effort designed to monopolize the [abstract idea]. Alice, 134 S.Ct. at 2357 (quoting Mayo, 132 S.Ct. at 1297) (alterations in original). Those additional features must be more than wellunderstood, routine, conventional activity. Mayo, 132 S.Ct. at The introduction of a computer into the claims does not alter the analysis of Mayo step {W }{W } 33

34 two. Alice, 134 S. Ct. at Indeed, mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention. Id. at Here, none of the claims pass muster under the Alice and Mayo principles. Independent system claim 1 recites a tester that comprises any test equipment that tests components, such as a conventional automatic tester, such as a Teradyne tester. Ex. 1001, col Claim 1 also recites a computer connected to the tester, which is a generic computer programmed to receive, analyze and report on the data from the tester: The computer system 108 includes a processor 110 and a memory 112. The processor 110 comprises any suitable processor, such as a conventional Intel, Motorola, or Advanced Micro Devices processor, operating in conjunction with any suitable operating system, such as Windows 98, Windows NT, Unix, or Linux. Ex. 1001, col. 3, ll During prosecution, Tabor added the generic computer to the claims to overcome an initial rejection based on patent-ineligible subject matter, but simply adding a computer and an associated storage device to the abstract idea... does not impose meaningful limits on the claims. Salesforce.com, No. CBM , Final Written Decision (Paper No. 47) at 24 (P.T.A.B. Sept. 16, 2014). In addition to a conventional tester and a conventional {W }{W } 34

35 computer, any additional components of the test system were well-known and conventional: the present invention may employ any number of conventional techniques for data analysis, component interfacing, data processing, component handling, and the like. See Ex. 1001, col. 3, ll ; col. 4, ll Moreover, the generic computer hardware is configured or programmed using conventional software. For example, the supplementary data analysis element 206 may provide any appropriate analysis of the tester data to achieve any suitable objective. Ex. 1001, col. 6, l. 66-col. 7, l. 1. Such computer functions [that] are well-understood, routine, conventional activit[ies] previously known to the industry are generic and cannot confer patentability. Alice, 134 S. Ct. at As in Alice, each step [of claim 1 of the 373 patent] does no more than require a generic computer to perform generic computer functions. Thus, an abstract idea is not transformed into a patent-eligible invention. See id. The claims that depend on claim 1 do not recite any meaningful limitations, but simply indicate that the generic computer is used to carry out rudimentary, conventional activities relating to the analysis of the test data. Claim 2 states that the computer operates with configuration data that is in a recipe file. Claim 3 requires that the test data correspond to components on a wafer. Claim 4 recites an automatic sensitivity calibration by the computer. Claim 5 recites a data correlation element. But as the specification notes, the computer software {W }{W } 35

36 suitably applies conventional correlation techniques to the data, for example to identify potentially redundant or related tests. Ex. 1001, col. 13, ll (emphasis added). Claim 6 specifies that the computer identify the outlier at run time, which the specification defines as within a matter of seconds or minutes following generation of the test data. Ex. 1001, col. 7, ll Claim 7 adds a data smoothing element to the analysis. But again, data smoothing does not limit the claimed invention in any significant way. In the disclosed embodiments, smoothing is a conventional exponential smoothing process. Ex. 1001, col. 10, ll ; col. 11, ll (emphasis added). Smoothing is suitably implemented on the computer and suitably comprises multiple phases but [a]ny number of phases and types of data smoothing may be applied or considered according to the data analysis. Ex. 1001, col. 11, ll Independent system claim 8 recites a generic computer system programmed to do two things: identify outliers in semiconductor test data and generate a report including the outliers. That idea is not eligible for patent protection for the reasons recited above. Similarly, the claims that depend on claim 8 add no significant limitation to the attempt at monopoly. Independent method claim 15 is, if that is possible, even more abstract: (1) generate test data and (2) automatically identify an outlier. The words using a computer system were tacked on to the end of the claim to overcome an initial {W }{W } 36

37 rejection based on patent-ineligible subject matter, and without them the claim would cover the purely mental process of identifying outliers. But saying perform the method on a generic computer cannot rescue the claim from its fatally defective abstraction. Alice, 134 S.Ct. at 2358 ( [W]holly generic computer implementation is not generally the sort of additional featur[e] that provides any practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself. ) (quoting Mayo, 132 S. Ct. at 1297) (alterations in original)). Again, the claims that depend on claim 15 only recite conventional, computer-implemented steps added to the abstract idea of identifying outliers in semiconductor test data. Even when the claim limitations are considered as an ordered combination, the computer components... ad[d] nothing... that is not already present when the steps are considered separately. Alice, 134 S. Ct. at Viewed as a whole, claim 15 merely requires that the abstract idea simply be performed on a generic computer, amount[ing] to nothing significantly more than an instruction to apply the abstract idea... using some unspecified generic computer. See id. at 2360 (quoting Mayo, 132 S. Ct. at 1298). Thus, as in Alice, the claims do not purport to improve the functioning of the computer itself.... Nor do they effect an improvement in any other technology or technical field. Id. at {W }{W } 37

38 Most telling, the key operation in the entire claimed method, identifying the outlier, is never limited in a meaningful way. The specification states, for example: The computer 108 may perform additional analysis functions upon the generated statistics and the output test data, such as automatically identifying and classifying outliers (step 432). Analyzing each relevant datum according to the selected algorithm suitably identifies the outliers. If a particular algorithm is inappropriate for a set of data, the supplementary data analysis element 206 may be configured to automatically abort the analysis and select a different algorithm. Ex. 1001, col. 13, ll Although the specification thus mentions algorithms, it places no limitation on their content or function besides being suitable. Notably, no specific algorithm or specialized computer for carrying out the algorithm is required by any of the claims. Instead, the 373 patent attempts to monopolize any algorithm for identifying outliers, despite the fact that the various models for outlier analysis have been researched extensively, and have been studied widely in the literature, according to a recent review of the field by an expert from the IBM T.J. Watson Research Center. 9 9 C. Aggarwal, OUTLIER ANALYSIS, Ex. 1007, at 36. {W }{W } 38