[00:00:03] Speaker 01:
All right, there are five cases before the court today, one of which is submitted on the briefs.

[00:00:11] Speaker 01:
So we have four cases for oral argument.

[00:00:14] Speaker 01:
The first is docket number 181635, SIPCO versus Emerson Electric.

[00:00:23] Speaker 01:
I understand, Mr. Barney, that you want five minutes for rebuttal?

[00:00:28] Speaker 01:
Yes, Your Honor.

[00:00:32] Speaker ?:
OK.

[00:00:32] Speaker 01:
This is an appeal from a decision-dependent trial in a, we have the wrong briefs.

[00:00:39] Speaker 01:
Sorry.

[00:00:42] Speaker 01:
From the PTO.

[00:00:45] Speaker 01:
Sorry.

[00:00:47] Speaker 01:
Anyway, we're going to get organized before you start.

[00:00:50] Speaker 01:
In any event, are we ready?

[00:00:55] Speaker 00:
Yes.

[00:00:56] Speaker 01:
We are ready, so you may begin.

[00:01:00] Speaker 02:
Thank you, Your Honor.

[00:01:01] Speaker 02:
May it please the Court?

[00:01:03] Speaker 02:
I'd like to begin with the threshold question of whether the Board had jurisdiction over this case.

[00:01:07] Speaker 02:
The Board's decision should be vacated because the 842 patent is not a covered business method patent under the statute.

[00:01:14] Speaker 02:
Instead, it falls into the exception for technological inventions that Congress specifically excluded from the CBM jurisdiction.

[00:01:21] Speaker 02:
The claims here are directed to hardware components and technical aspects of a communication system.

[00:01:26] Speaker 02:
Specifically, the patent describes the invention I'm quoting now as a general-purpose radio frequency transceiver having an open-ended architecture that readily adapts it for a wide variety of uses and applications.

[00:01:38] Speaker 01:
Is it your position that we have to decide whether it's a CBM on a claim-by-claim basis?

[00:01:46] Speaker 02:
I believe that's what this Court's holdings have

[00:01:51] Speaker 02:
have indicated that it's incumbent upon the petitioner to identify a claim in the patent that falls within the CBM jurisdiction.

[00:02:03] Speaker 01:
Okay, but if there's even a single claim, then the patent is a CBM patent, right?

[00:02:07] Speaker 02:
I would concede that, Your Honor.

[00:02:08] Speaker 00:
Okay.

[00:02:09] Speaker 00:
What makes this a CBM patent?

[00:02:12] Speaker 00:
For example, let's say that the figure 1A, if we didn't have that,

[00:02:19] Speaker 00:
What's left that would make this a CBN patent?

[00:02:24] Speaker 02:
Your Honor, my answer is it's not a CBN patent.

[00:02:29] Speaker 02:
The board felt that what made it a CBM patent is that there are two claims that associate the communication system with a vending machine or an ATM machine.

[00:02:38] Speaker 02:
In our briefs, we dispute that, that actually satisfies the financial aspect of a CBM patent.

[00:02:46] Speaker 02:
What I'd like to focus on here today is whether it falls within the technological invention exception to the statute.

[00:02:54] Speaker 02:
But to be clear, we don't think this is a CBN patent.

[00:02:56] Speaker 02:
This is a communication system.

[00:02:58] Speaker 02:
It's technological in nature.

[00:03:00] Speaker 02:
In 1997, when this patent was filed, it addressed technological problems that existed at the time.

[00:03:07] Speaker 02:
One of those problems was the fact that specialized systems required specialized transceivers.

[00:03:13] Speaker 02:
And the patent addressed that by

[00:03:16] Speaker 02:
describing an open architecture transceiver.

[00:03:20] Speaker 00:
Let's put aside the CVM question.

[00:03:22] Speaker 00:
What is a transceiver in this pen?

[00:03:27] Speaker 00:
Look at figure 1A again.

[00:03:28] Speaker 00:
I see a transmitter and I see a receiver, but I don't see a transmitter.

[00:03:39] Speaker 02:
Transceiver.

[00:03:41] Speaker 02:
Your honor, I'm not sure you would see it in 1A.

[00:03:43] Speaker 02:
I believe that the transceiver is... So 1A does not speak to claim one?

[00:03:52] Speaker 02:
I don't think... I don't know that 1A in and of itself is commensurate with claim one.

[00:03:58] Speaker 02:
I think you would have to look at other figures such as 2A and 2B.

[00:04:02] Speaker 03:
Or would it be figure 1B?

[00:04:05] Speaker 03:
1B shows you the innards of the ATM, and then you have an RF receiver box, and then you have a transmitter box.

[00:04:13] Speaker 03:
That's correct.

[00:04:14] Speaker 03:
So overall, what we're looking at are the innards of the ATM along with the controller.

[00:04:19] Speaker 02:
That's one aspect of it.

[00:04:22] Speaker 02:
The claims also require the transceiver, and they also require the

[00:04:27] Speaker 03:
Yeah, claim one doesn't say the magic word transceiver.

[00:04:31] Speaker 03:
Right.

[00:04:32] Speaker 03:
I mean, I understand different parts of the specification say transceiver.

[00:04:36] Speaker 03:
But we're just talking about a network of addressable devices, I think, is the way that the claim one is written.

[00:04:46] Speaker 02:
Well, claim one definitely does talk about a transceiver.

[00:04:49] Speaker 02:
It requires a low-powered transceiver that's configured to wirelessly transmit a signal.

[00:04:54] Speaker 03:
Oh, OK.

[00:04:54] Speaker 03:
Well, then for figure 1A, that's the key fob, isn't it?

[00:04:57] Speaker 02:
No, Your Honor, my understanding is that the transceiver does not correlate to the key fob.

[00:05:03] Speaker 02:
It would correlate to what is integrated, for instance, into figure

[00:05:11] Speaker 02:
Three, you would see, for instance, a wireless host transceiver.

[00:05:16] Speaker 02:
I believe that's the transceiver that's being referred to in figure one, not the key fob.

[00:05:20] Speaker 01:
Now the board's focus was on claims three and four.

[00:05:24] Speaker 01:
So does your argument depend on your contention that you can't look at claims three and four because they weren't challenged or because they were disclaimed?

[00:05:36] Speaker 02:
no your honor I'm not asserting that here today we for my purposes today I will concede that claims three and four are properly analyzed by the board and can be properly looked at to determine whether this is a cbm patent my position is that even if you look at claims three and four this is not a cbm patent because among other reasons it falls within the technical technological invention except exception that congress uh... excluded from cbm jurisdiction so let's

[00:06:05] Speaker 01:
Focus on three and four there, though, because is that not a claims that relate to a financial product in that they talk about the ability to communicate with the ATM, for instance?

[00:06:21] Speaker 02:
Your honor, I'll concede that's a closer call.

[00:06:24] Speaker 02:
As you can tell, I'd like to focus my arguments today on the other aspect, which is whether it falls into the technological invention exception.

[00:06:29] Speaker 02:
However, in our briefs, we did challenge whether that actually satisfies, whether it's sufficiently related to our financial service to actually satisfy that first prong of the CBM analysis.

[00:06:40] Speaker 02:
And I do maintain that.

[00:06:43] Speaker 02:
There's a line of cases that this court analyzed where the PTO had been misapplying the statute

[00:06:50] Speaker 02:
and essentially saying anything that even remotely relates or could tangentially relate to a financial service is included.

[00:06:58] Speaker 02:
And this court said, no, you have to hew close to the statute.

[00:07:01] Speaker 02:
The statute doesn't say related or tangentially related.

[00:07:05] Speaker 02:
It says it has to be used in the practice of a financial

[00:07:08] Speaker 02:
service.

[00:07:09] Speaker 02:
I could argue, and I would argue, that having a generalized communication system where one component of that is associated with an ATM is really not that much different than what this Court said is an improper analysis, and I believe it was Blue Clip so, and saying that just because something is associated with a financial aspect does not make it a financial related patent.

[00:07:35] Speaker 02:
That's still our position, however, I concede that's a closer call.

[00:07:41] Speaker 02:
What I think is less of a close call is whether this is a technological invention under the exception that Congress carved out for CBO patents.

[00:07:49] Speaker 03:
So the board said the claim elements are all bold, conventional, generically recited devices, right?

[00:07:59] Speaker 02:
Yes, the board followed its own regulation, and one aspect of that regulation is whether the claims are

[00:08:05] Speaker 02:
novel and non-obvious.

[00:08:07] Speaker 02:
This court has criticized that aspect of the test.

[00:08:09] Speaker 03:
Well, wait a second.

[00:08:10] Speaker 03:
I didn't see the board's decision keying off on that prong of its regulatory definition of technological invention.

[00:08:19] Speaker 03:
As I understood the board's decision, it was devoted to the question of whether this claim is directed to a technological solution for a technological problem.

[00:08:31] Speaker 03:
And it didn't address the other prong, the prong you just referred to, as to whether or not this claimed invention represents a novel and non-obvious

[00:08:42] Speaker 03:
technical improvement.

[00:08:44] Speaker 02:
Fair enough, Your Honor.

[00:08:45] Speaker 02:
Just to be clear, this Court has criticized that first prong, and you may be right that the PTO is keying off this Court's criticism and focusing more on the second prong.

[00:08:53] Speaker 02:
So let me address that second prong.

[00:08:54] Speaker 02:
The second prong merely recites or restates the language of the statute, and this Court has held that that second prong of the regulation doesn't offer any additional help to the Court in determining what is a technical

[00:09:08] Speaker 02:
technological invention.

[00:09:09] Speaker 03:
You're saying the statute says technological solution for a technological problem?

[00:09:14] Speaker 02:
The statute says that what's excluded are technological inventions.

[00:09:18] Speaker 03:
The regulation, second prong, says that... Right, so I thought you just said that the statute said technological solution for a technological problem, and that's not right.

[00:09:27] Speaker 02:
That's not correct.

[00:09:28] Speaker 03:
It only says technological invention.

[00:09:30] Speaker 02:
That's correct.

[00:09:30] Speaker 03:
And then the PTO, through its regulation, defined that to mean, among other things, a technological solution to a technological problem.

[00:09:39] Speaker 02:
Well, it doesn't say among other things.

[00:09:41] Speaker 02:
Actually, that's the only thing the regulation says.

[00:09:42] Speaker 03:
Well, the other thing it says is a novel and non-obvious technological link.

[00:09:45] Speaker 03:
Correct.

[00:09:45] Speaker 03:
So there is another thing.

[00:09:47] Speaker 02:
There is another thing.

[00:09:47] Speaker 03:
This court has- You're wrong to say that's the only thing in the regulation.

[00:09:51] Speaker 02:
No.

[00:09:51] Speaker 02:
This court has criticized the first prong of being novel and non-obviousness.

[00:09:56] Speaker 02:
And there's no connection between being novel and non-obvious and whether or not it's technological in nature.

[00:10:01] Speaker 02:
Clearly, you can have a technological invention.

[00:10:03] Speaker 03:
Can you get down into the facts of the case and explain why, in your view, this is a technological solution to a technological problem?

[00:10:09] Speaker 03:
Sure.

[00:10:09] Speaker 02:
The patent overcame at least two technological problems in the prior art.

[00:10:14] Speaker 02:
One was the problem that you had to use specialized transceivers for specialized networks.

[00:10:19] Speaker 02:
It overcame that problem using what it called an open architecture transceiver.

[00:10:24] Speaker 02:
The open architecture transceiver allows different companies

[00:10:27] Speaker 02:
to program the instruction codes to perform different functions, even though they're still using the same generic open architecture transceiver.

[00:10:36] Speaker 02:
And that is reflected in the instruction data limitation and all of the claims at issue.

[00:10:42] Speaker 02:
That is a technological solution to a technological problem.

[00:10:45] Speaker 02:
The other technological solution was the use of a low-power transceiver.

[00:10:49] Speaker 02:
The inventor explained that the purpose of the low-power transceiver was to avoid the problem

[00:10:55] Speaker 02:
of interference in unlawful interception of data.

[00:10:59] Speaker 02:
That's a technological problem, and the technological solution to it was to use a low-power transceiver that's reflected in all the claims.

[00:11:06] Speaker 02:
The board did not give credence to those problems and solutions.

[00:11:10] Speaker 01:
What the board said was... Explain to me how those are reflected in claims three and four.

[00:11:15] Speaker 02:
They are both reflected in claims three and four, correct, Your Honor.

[00:11:19] Speaker 02:
The open architecture limitation or problem is reflected in the instruction data limitation, which is in all of the claims, including three and four.

[00:11:28] Speaker 02:
And the preventing interference and unlawful collection of data is reflected in the low power transceiver limitation, which is in all of the claims, including claims three and four.

[00:11:39] Speaker 02:
And what the board focused on was the board said, well,

[00:11:43] Speaker 02:
This is really just solving the problem of automating what was previously a manual process of monitoring ATMs and vending machines.

[00:11:50] Speaker 02:
We disagree that that's the only problem that was solved here, but even if it was, automating a manual process is a technical solution.

[00:11:58] Speaker 03:
If you want to automate a manual process like the... Claim one doesn't say anything about ATMs or vending machines, right?

[00:12:04] Speaker 03:
Claims three and four.

[00:12:05] Speaker 03:
I'm talking about claim one.

[00:12:07] Speaker 02:
That's correct, Your Honor.

[00:12:08] Speaker 03:
So claim one is more generally directed to the idea of

[00:12:11] Speaker 03:
How do you establish a communication between some remote device and a central location?

[00:12:20] Speaker 02:
I think that's fair.

[00:12:20] Speaker 02:
That's fair.

[00:12:21] Speaker 03:
And then rather than going through the trouble of setting up some direct network line between any remote device and a central location, it decides to use some form of wireless communication between that remote device and some intermediate node.

[00:12:40] Speaker 03:
And that intermediate node is, in fact, networked to the central location somehow.

[00:12:47] Speaker 03:
I think that's fair.

[00:12:48] Speaker 00:
You're not claiming anything involving the central location.

[00:12:53] Speaker 02:
I believe that the claims do recite a central server.

[00:12:57] Speaker 00:
Well, they recite transmitting to a central location.

[00:13:01] Speaker 00:
But, for example, with ATM example, the central location would be a bank.

[00:13:07] Speaker 02:
It could be.

[00:13:08] Speaker 00:
That's correct.

[00:13:09] Speaker 00:
So you're not claiming the bank.

[00:13:10] Speaker 00:
No, Your Honor.

[00:13:11] Speaker 00:
Right?

[00:13:12] Speaker 00:
That's correct.

[00:13:12] Speaker 00:
So really, that particular part of the patent is only the communication between what we see in the figure with the key fob and the ATM.

[00:13:21] Speaker 00:
That's correct.

[00:13:22] Speaker 00:
So the only thing that this invention does is give you access to the ATM.

[00:13:27] Speaker 02:
I think that would be fair characterization.

[00:13:29] Speaker 00:
Right.

[00:13:30] Speaker 00:
So it just allows you to use the ATM.

[00:13:32] Speaker 00:
It has nothing to do with the financial transaction itself.

[00:13:36] Speaker 00:
That's right.

[00:13:37] Speaker 03:
But for that embodiment, as I understand it, the true purpose is to try to communicate between the customer with the key fob and the central location, I guess the bank, not just this intermediate node that I'll call the ATM machine.

[00:13:56] Speaker 02:
There is an embodiment in there that talks about that.

[00:13:59] Speaker 02:
I'm talking about claim one.

[00:14:01] Speaker 03:
There's a wireless communication between some device and some other device.

[00:14:09] Speaker 03:
And then that second device has a communication link set up with the central location.

[00:14:14] Speaker 02:
That's right.

[00:14:14] Speaker 02:
It's completely agnostic to what

[00:14:17] Speaker 02:
use you're making of this communication system.

[00:14:19] Speaker 02:
Claim one is completely agnostic.

[00:14:21] Speaker 02:
It is purely a communication system claim.

[00:14:24] Speaker 02:
Claims three and four associated with an ATM or a vending machine.

[00:14:29] Speaker 01:
All right, you're way into your rebuttal time.

[00:14:31] Speaker 01:
We'll give you two minutes for rebuttal.

[00:14:33] Speaker 02:
Thank you, Your Honor.

[00:14:44] Speaker 04:
May it please the court?

[00:14:45] Speaker 04:
I'd like to respond to the arguments with respect to whether this was properly instituted in the CBM proceeding.

[00:14:53] Speaker 04:
The statute uses the phrase used in practice, administration, or management of a financial product or service, and clearly claims three and four

[00:15:05] Speaker 00:
The device is used in the financial product or service being the vending machine Well, it's used in relation to we just heard that the only thing that happens between the Remote device and the ATM is access to the ATM.

[00:15:19] Speaker 00:
Well, your honor what what the statue can you use the can you use a remote device to?

[00:15:25] Speaker 00:
Say I want to deposit

[00:15:28] Speaker 04:
it would include those financial transactions.

[00:15:33] Speaker 00:
I think at that point you have to go back to the ATM and use a keypad in order to complete the financial transactions.

[00:15:43] Speaker 04:
It does not specify or limit the instructions that can be given, but what's clear is that as the statute provides, it's an apparatus

[00:15:54] Speaker 04:
for performing operations used in the practice of a financial product or service.

[00:16:01] Speaker 04:
The financial product or service here is not something that is just a hypothetical or speculative use of the invention.

[00:16:08] Speaker 04:
Their argument is as though we were saying claim one itself establishes that this is a CBN patent.

[00:16:14] Speaker 04:
And that's not the argument, and that's not what the board held.

[00:16:17] Speaker 04:
What the board held was that claims three and four specifically recite

[00:16:23] Speaker 04:
the ATM and the vending machine.

[00:16:25] Speaker 04:
And so this apparatus of claim one is now being used in the practice of the financial service or product, which is the vending machine or ATM machine.

[00:16:38] Speaker 04:
And so that was the basis of their conclusion.

[00:16:41] Speaker 01:
And there's an exception.

[00:16:44] Speaker 01:
I'm sorry.

[00:16:44] Speaker 01:
Does the statute provide any guidance as to what a technological invention is?

[00:16:51] Speaker 04:
Well, no, Your Honor, and the board's rule, which basically just recites the statute and says not a technological solution to a technological problem, has been criticized as not providing a lot of additional guidance.

[00:17:09] Speaker 04:
But I think here, this statute, that test actually applies fairly clearly, because we know

[00:17:16] Speaker 04:
from the patent what the problem was that was being solved.

[00:17:20] Speaker 04:
And it's not a technological problem.

[00:17:22] Speaker 04:
It's a financial problem.

[00:17:23] Speaker 04:
And that's what the board said at page 819.

[00:17:27] Speaker 04:
The problem being addressed is cost, the cost of sending a service person out to do the periodic checks on the vending machines or the ATMs.

[00:17:37] Speaker 04:
and that there might be a lengthy period between those checks.

[00:17:42] Speaker 04:
That's at the bottom of column one and top of column two.

[00:17:47] Speaker 03:
Yes, the problem I have with that argument is that the patent talks about other things as well.

[00:17:53] Speaker 03:
You are right that it talks about, as a prominent example, the need for servicemen to, I guess, blindly and periodically go and check on certain machines to see if they're still operating.

[00:18:06] Speaker 03:
Aside from that, the patent also talks about how there are a wide variety of circumstances in which it is desired or desirable to communicate information to a single location, or to communicate from a remote device to a predetermined location.

[00:18:22] Speaker 03:
And so that now kind of scopes out what the patent is trying to accomplish, which is the general idea of

[00:18:30] Speaker 03:
some remote device that can't otherwise directly communicate to some central location and now it wants to try to build up some kind of communication link between this remote device and the central location.

[00:18:44] Speaker 04:
But what we have here is exactly what the court has considered in cases such as Versada and Affinity Labs where

[00:18:54] Speaker 04:
There is a long-standing human endeavor, such as taking a video and taking it to a new region or calculating a price.

[00:19:04] Speaker 04:
And what the patent is doing is saying, we're going to use computers and their elements to

[00:19:11] Speaker 04:
perform that same human endeavor.

[00:19:13] Speaker 04:
And that's what this patent is doing.

[00:19:17] Speaker 04:
Forever, we've sent service people out to check on ATMs and vending machines, and this is now going to automate that process.

[00:19:24] Speaker 04:
That's all that's happening.

[00:19:25] Speaker 03:
In order to automate that process... Let's take this out of the vending machine ATM

[00:19:31] Speaker 03:
embodiments because, as I look at claim one, it's not restricted to just vendors and ATMs.

[00:19:39] Speaker 03:
So now we're just talking about the challenge of remote device trying to

[00:19:44] Speaker 03:
communicate for whatever reason, who cares what the information content is, to that central location.

[00:19:51] Speaker 03:
And here they've decided it's not just let's send an email from node A to node B or let's just transmit somehow, anyhow.

[00:20:01] Speaker 03:
They've decided to create this two-step process where instead of

[00:20:06] Speaker 03:
using a direct link, you do a wireless communication from that remote device to some intermediate node, and then the intermediate node has a direct communication link to that central location.

[00:20:19] Speaker 03:
So you've got now a two-step process here, which to me sounds a little more specific than just some broad-based generic notion of communicating from node A to node B.

[00:20:31] Speaker 04:
But what's the problem?

[00:20:33] Speaker 04:
Each of those things, and this is what the board analyzed, each of those things is a generic element being used in its traditional conventional manner.

[00:20:44] Speaker 04:
And so all they're doing is using these generic elements to do what humans have long done, which is to go out, see that there's a problem, and then go and call that information back in

[00:20:57] Speaker 04:
to the central location.

[00:20:57] Speaker 03:
But do you agree it's a two-step process?

[00:20:59] Speaker 03:
One, the first step is a wireless communication with a low-power transceiver.

[00:21:05] Speaker 03:
And then the second step is some direct communication link from that intermediate node to the central location.

[00:21:11] Speaker 04:
But that's not a technical solution to a technical problem.

[00:21:15] Speaker 04:
That's just automating something that is always happening.

[00:21:18] Speaker 03:
Well, I guess arguably it could be a technical solution if you look at it in this way.

[00:21:24] Speaker 03:
you're not going to go through the process of setting up a direct communication network between every remote device in the central location.

[00:21:32] Speaker 03:
Instead, you're going to rely on these intermediate nodes, which do have a direct communication link.

[00:21:37] Speaker 03:
Then you use a wireless system to

[00:21:43] Speaker 03:
used to have these remote devices communicate to the intermediate node.

[00:21:48] Speaker 03:
And you do that with a low-power transceiver so you avoid contention as well as the possibility of unwanted interceptions of that wireless transmission.

[00:21:59] Speaker 03:
So I'm beginning to see at least something here that looks like a little more thought has been put into the communication process beyond just this broad-based idea of automating the Pony Express.

[00:22:11] Speaker 04:
Your Honor, let me point to, and this is again in column one and column two, that what has happened historically is that the service person goes out, discovers that there's a problem, and has to, quote, communicate that information back to

[00:22:26] Speaker 04:
the central location.

[00:22:28] Speaker 04:
So the service person goes and uses a telephone.

[00:22:31] Speaker 04:
And that's all that's claimed because the interface is linked to the public telephone system.

[00:22:38] Speaker 04:
So all you have to do, that's already part of the traditional process.

[00:22:42] Speaker 04:
Use the public telephone system to call back to the central location.

[00:22:46] Speaker 04:
So now usually that's been done by a human.

[00:22:49] Speaker 04:
Now it's being done by a

[00:22:51] Speaker 04:
wireless radio link that's going to call using the same telephone system.

[00:22:57] Speaker 04:
That is not a technological problem because those wireless low-power radio transmitters are ubiquitous.

[00:23:05] Speaker 04:
That was something that they conceived.

[00:23:07] Speaker 04:
They cited the FCC guidelines on that.

[00:23:10] Speaker 04:
They acknowledge that.

[00:23:11] Speaker 01:
Let me just make sure that I understand the board's analysis and make sure that we're on the same page as to what it is.

[00:23:22] Speaker 01:
that if claim three or claim four fell within the scope of CBM and did not fall within the technological invention exception, that that's the end of the inquiry, right?

[00:23:36] Speaker 01:
That, in other words, once even one claim in a patent falls in CBM, then the whole patent is CBM for purposes of being able to institute, right?

[00:23:49] Speaker 01:
That's right.

[00:23:52] Speaker 01:
Can you, I mean, I don't understand that there's really a dispute on that.

[00:23:57] Speaker 04:
That there's no dispute on that, Your Honor.

[00:23:59] Speaker 04:
So it's just, but those are dependent claims and they depend from the independent claim one.

[00:24:05] Speaker 04:
Now, what this court held in Versada, and this is cited at page 17, is that the technical

[00:24:13] Speaker 04:
feature is not satisfied if the elements are nothing more than general computer system components used to carry out the claimed process.

[00:24:23] Speaker 04:
So if they're just generic computer elements used in their conventional manner, then that's not going to satisfy the technological process requirement.

[00:24:33] Speaker 03:
The devil's in the details, though.

[00:24:35] Speaker 03:
I mean, VASCOM, for example, was all conventional components and technology.

[00:24:41] Speaker 03:
Nevertheless, there was

[00:24:42] Speaker 03:
an interesting arrangement where the internet filter wasn't located at the person's computer, it was at the server.

[00:24:51] Speaker 04:
That's right, your honor.

[00:24:52] Speaker 04:
And the board goes through and traces through each of the elements.

[00:24:56] Speaker 04:
Claim 1 has five elements, a low-power transceiver, an interface circuit, controller, communication link, central station.

[00:25:03] Speaker 04:
And each of those is conceded in the specification to be

[00:25:07] Speaker 04:
a routine generic element.

[00:25:10] Speaker 04:
The low power transceiver is reflected, this is appendix 82, the abstract, directed to a general purpose transceiver.

[00:25:18] Speaker 04:
Having a receiver for receiving information, signal transmitter, configured to transmit.

[00:25:23] Speaker 04:
It was well known, this is at A2095, comm 662 to 64, by those skilled in the art, a variety of transducers can perform this functionality.

[00:25:34] Speaker 04:
converting the electrical signal to electromagnetic.

[00:25:38] Speaker 04:
They acknowledged, this is 895, column 5, 23 to 25, that wireless communication using low-power transmitters was, quote, known for activating automobile alarms, for example.

[00:25:50] Speaker 04:
CIPCO cited the FCC bulletin confirming that low-power transmitters were

[00:25:55] Speaker 04:
quote, used virtually everywhere.

[00:25:58] Speaker 04:
The interface circuit.

[00:25:59] Speaker 04:
The interface circuit is designed to interface with typical standard telephone circuitry.

[00:26:04] Speaker 04:
The interface will be appreciated by persons skilled in the art and need not be described in detail herein.

[00:26:09] Speaker 04:
That's Appendix 97.

[00:26:11] Speaker 04:
Controller, the controller can be a general purpose microprocessor or microcontroller.

[00:26:15] Speaker 04:
Communications link, that's the public switch telephone network that was always used.

[00:26:20] Speaker 04:
Central station, the actual structure is not necessary to describe.

[00:26:23] Speaker 01:
I still don't think you're answering Judge Tennis' question, and his question is not whether or not all of those things were known, but whether the way they were put together in this particular circumstance were not known.

[00:26:35] Speaker 01:
I mean, that's where Bascom is.

[00:26:36] Speaker 04:
Well, Your Honor, each of those elements is being used in its normal, conventional function.

[00:26:45] Speaker 04:
And the things that they cited to the board as distinguishing it, as being the sort of technological problem that was being solved,

[00:26:56] Speaker 04:
all relate to features that are not claimed.

[00:26:59] Speaker 04:
For example, they say that it addressed the problem of interference or addressed the problem of interception.

[00:27:07] Speaker 04:
Those two problems are specifically tied in column six to an extremely low-power transmitter.

[00:27:15] Speaker 04:
The extremely low-power transmitter is conceded at the bottom of column five to the top of column six as preferably.

[00:27:23] Speaker 04:
It is not required.

[00:27:24] Speaker 04:
And therefore, if the technological problem that they're claiming is solved is only solved by something that is not required but only a preferred embodiment, then the claims are directed to them.

[00:27:36] Speaker 03:
What if we read low power as it's used in all the claims to refer to short range transmissions, short distance transmissions?

[00:27:45] Speaker 03:
Then it's consistent with what's being described in the ATM embodiment to avoid contention and possible interception.

[00:27:59] Speaker 04:
Well, Your Honor, that's not something that they claimed about

[00:28:04] Speaker 04:
They only identified that as solved by extremely low power, meaning within a few feet.

[00:28:10] Speaker 04:
What the board found, and it's supported by ample evidence with Mr. Geier's testimony, is that low power transmitter is actually something that the FCC regulates.

[00:28:20] Speaker 04:
It has a whole brochure on this, and that would include

[00:28:24] Speaker 04:
for this type of thing, something that could be powered up to a watt and would have transmission up to a mile.

[00:28:29] Speaker 03:
I'm just saying, hypothetically, what if we read the patent as an integrated document and conclude that the term low-power transceiver as used in the claim is referencing the notion described in the spec of wanting to avoid contention and interception, and therefore low-power transceiver

[00:28:48] Speaker 03:
is about short-range transmissions.

[00:28:51] Speaker 04:
Then what?

[00:28:52] Speaker 04:
Well, first of all, I would disagree because that's not what it recites.

[00:28:56] Speaker 04:
It recites only low power, and low power conveys only that it uses, consumes little power, not something specifically with respect to the transmission range.

[00:29:06] Speaker 04:
And I also want to point to

[00:29:08] Speaker 04:
report to the fact that the board made specific factual findings that are reviewed only for substantial evidence about what a posita would have understood low power to mean.

[00:29:19] Speaker 03:
But if it's de novo, if reading the patent

[00:29:24] Speaker 03:
it's clear enough to us, then you don't have to resort to extrinsic evidence, right?

[00:29:29] Speaker 04:
But the underlying factual finds of what a Pesido would have understood low power to mean is a factual finding based upon Mr. Geier's testimony, which is supported by the FCC regulation.

[00:29:43] Speaker 03:
If it's ambiguous after looking at the intrinsic evidence, I understand.

[00:29:46] Speaker 03:
So can you get back to my question of what next?

[00:29:51] Speaker 03:
if we read low-power transceiver to not really encompass short-range transmitters.

[00:29:57] Speaker 04:
It still would not satisfy the test, as explained by Versada and established in the PTO's regulations, because it would still be merely a generic component.

[00:30:08] Speaker 04:
And they concede that low-power transmitters are generic.

[00:30:12] Speaker 04:
And whatever meaning you have, they can see that those are generic, ubiquitous, used almost everywhere.

[00:30:18] Speaker 04:
And they're being used for precisely their normal process, which is to transmit wirelessly to a receiver.

[00:30:27] Speaker 04:
And so nothing that is done here is novel or unobvious.

[00:30:33] Speaker 04:
And it goes to that element as well, which also has to be satisfied.

[00:30:37] Speaker 04:
The board focused on the fact that it was not a technological solution to a technological problem.

[00:30:43] Speaker 03:
So hypothetically, hypothetically, what if the court were to conclude that based on our reading of this patent, these claims have a technological solution to a technological problem, and the board was wrong to conclude otherwise because it just chopped up the claim into individual pieces without looking at the larger claim and what it was trying to accomplish

[00:31:06] Speaker 03:
Would we have to mend it back for the novel and non-obvious problem?

[00:31:11] Speaker 04:
No, because that, for two reasons.

[00:31:14] Speaker 03:
Well, I don't see the board addressing that problem.

[00:31:16] Speaker 04:
Well, Your Honor, they didn't address it in the context of the CBM, but that's also the test, obviously, under 101 and the obviousness.

[00:31:25] Speaker 04:
They made all of the underlying... Well, I can't be sure.

[00:31:27] Speaker 03:
I mean, I'm not sure...

[00:31:29] Speaker 03:
what they really mean by novel and non-obvious technical solution, because yes, it does sound like 102 and 103, but as we all know from cases like Versada, this court's a little suspicious of the idea of putting the whole

[00:31:48] Speaker 03:
I don't know, cart before the horse and at the institution phase deciding every single patentability issue to figure out whether to even institute a CBM.

[00:32:00] Speaker 03:
And so I guess maybe the better call would be to have the board tell us

[00:32:07] Speaker 03:
what it thinks on how it should apply its own regulation about this novel, non-obvious provision.

[00:32:14] Speaker 04:
Your Honor, I don't think that's necessary because the board has already told us that this patent is addressed to automating a long-standing human activity in order to solve a financial issue, which is price.

[00:32:30] Speaker 04:
It's just trying to do it cheaper.

[00:32:32] Speaker 04:
And they've said that there is no

[00:32:36] Speaker 04:
technological invention here because all of the elements are generic they're used in their common so you're saying we should pull out of the 101 analysis and the 103 analysis the

[00:32:49] Speaker 01:
the analysis that probably should have been done up front if that regulation means what it says.

[00:32:55] Speaker 04:
Well, I don't think that it needed to have been done up front because these are alternative grounds.

[00:33:01] Speaker 04:
Either of them is sufficient and many of this court's own cases

[00:33:06] Speaker 04:
address the CBM threshold question on either of the two, whether it's novel and unobvious or whether it solves a technological problem with a technological solution.

[00:33:22] Speaker 01:
I don't see in the statute where Congress

[00:33:27] Speaker 01:
directed the PTO to issue regulations that would essentially bring in, as Judge Chen said, all the other provisions of Title 35.

[00:33:41] Speaker 04:
entirely comfortable with the court going back to the statutory test because there is no question that in this case what is claimed is being used in the practice of a financial product or service.

[00:33:56] Speaker 04:
The financial product or service are explicitly recited which are an ATM and a vending machine.

[00:34:02] Speaker 04:
I can't think of a more quintessential financial product or service and that this

[00:34:08] Speaker 04:
purported invention is being used in it is recited in the claim itself, because it's associated with that.

[00:34:14] Speaker 04:
And associated has to mean used in connection with.

[00:34:18] Speaker 04:
And that is in itself.

[00:34:20] Speaker 04:
This is not the case.

[00:34:21] Speaker 04:
I understand the court's frustration, and the court has expressed it in many instances.

[00:34:25] Speaker 04:
But in each case, the court has found that they didn't need to really resolve that, send it back to the board, make a point, because the case didn't require it.

[00:34:35] Speaker 04:
This case is one that is on all fours with the statutory test.

[00:34:40] Speaker 04:
And so I would urge the court, and it is de novo in that sense, to say that because this claim explicitly recites an ATM and a vending machine, and that the apparatus

[00:34:53] Speaker 04:
that is claimed is used in performing the operations of those financial product or service that it satisfies the test.

[00:35:02] Speaker 04:
And I don't know that the court needs to go any further.

[00:35:04] Speaker 01:
Is it your view that the regulation really makes no sense in light of the statute?

[00:35:09] Speaker 04:
I think that it is helpful, Your Honor, and I think that it is helpful here.

[00:35:13] Speaker 04:
And this court has found it helpful, as it did in Versada, when it engaged in precisely the same analysis, saying that because what is claimed are using well-established generic elements of a computer in their customary manner, that can't be a technological solution to a technological problem.

[00:35:34] Speaker 01:
Okay, we're way over time.

[00:35:35] Speaker 01:
I'll give you five minutes for rebuttal.

[00:35:37] Speaker 01:
I'll store all your rebuttal time because we went over with him.

[00:35:42] Speaker 02:
I actually don't have that much, Your Honor, unless you have questions.

[00:35:45] Speaker 02:
I think the issues have been well ventilated.

[00:35:47] Speaker 02:
One point I did want to make is I cited to Blue Calypso earlier.

[00:35:51] Speaker 00:
I have a question to start off with.

[00:35:52] Speaker 00:
Yes, Your Honor.

[00:35:53] Speaker 01:
Maybe you'll have to use all that time.

[00:35:55] Speaker 00:
Let's look at the vending machine figure.

[00:35:59] Speaker 00:
And basically it seems to me, so you have the transmitter, is letting the central station know we're out of barbecue chips, come and put some more chips in the machine, correct?

[00:36:11] Speaker 02:
That's one aspect, yes.

[00:36:12] Speaker 00:
How is that a technical problem?

[00:36:16] Speaker 00:
How involving, I'm recording a technical solution.

[00:36:20] Speaker 00:
What the practice has been is that the potato chip man makes his rounds and sees that there's a need for more barbecue chips and puts them in there.

[00:36:30] Speaker 00:
And now this invention purportedly replaces the potato chip man and lets the central station know we need more barbecue chips.

[00:36:40] Speaker 00:
Someone's gotta go out there and put them in.

[00:36:41] Speaker 00:
What's the technical problem here?

[00:36:44] Speaker 02:
Well, first of all, disagree that that's the only technical problem addressed here.

[00:36:48] Speaker 02:
But I'll take your question at face value, because that's what the board said.

[00:36:50] Speaker 02:
The board said, hey, the technical problem here is automating what was previously done manually.

[00:36:55] Speaker 02:
Even if you take that at face value as the alleged technical problem, the solution to that is still a technological solution.

[00:37:03] Speaker 02:
Automating a manual process is a technical problem.

[00:37:06] Speaker 02:
When you want to automate something that's being done manually, you call an engineer to develop a system to automate it.

[00:37:11] Speaker 02:
You don't call a financial planner.

[00:37:13] Speaker 02:
You don't call an economist.

[00:37:14] Speaker 01:
Are you saying that we should ignore the analysis where the board said, well, it may be automating it, but it's all done with generic components.

[00:37:25] Speaker 01:
It's not novel or unobvious.

[00:37:29] Speaker 02:
Well, certainly I don't think this court should ignore anything the board did.

[00:37:32] Speaker 02:
You should take everything the board did and analyze it.

[00:37:35] Speaker 02:
That portion of the board's analysis, by the way, doesn't come from its own regulation, and it doesn't come from the statute.

[00:37:41] Speaker 02:
It comes from a series of guidelines that the PTO has published.

[00:37:44] Speaker 02:
subsequent to some of this court's rulings.

[00:37:46] Speaker 02:
The actual regulation, step one, is it novel and unobvious?

[00:37:50] Speaker 02:
I think we're all in agreement that that's not a very workable step of the analysis, and this court has criticized that first step.

[00:37:58] Speaker 02:
Second step of the PTO's regulations simply asks, is this a technical solution to a technological problem, which is really just parroting the statute.

[00:38:07] Speaker 02:
I would argue that if what this

[00:38:09] Speaker 01:
If a regulation impairs a statute, then you don't owe it any deference.

[00:38:13] Speaker 02:
Right.

[00:38:13] Speaker 02:
I would argue that, respectfully, if what the board did here and said that these claims are really just solving a financial problem rather than a technical problem, really that's where the rubber meets the road.

[00:38:24] Speaker 02:
That's the basis of the board's decision.

[00:38:26] Speaker 02:
I would argue that that would swallow almost the entirety of all patents.

[00:38:30] Speaker 02:
All patents that are designed to make something faster, quicker, cheaper, more efficient are ultimately solving a financial problem.

[00:38:37] Speaker 02:
The cotton gin solved a financial problem, but it did it through a very technological solution.

[00:38:42] Speaker 02:
And so I think that's where the rubber meets the road here.

[00:38:45] Speaker 03:
What you need to do is explain why the manner of automation here, as recited in the claim, is not just mere generic automation, but there's something nifty to your

[00:39:01] Speaker 03:
a so-called technological solution.

[00:39:03] Speaker 03:
So why don't you talk like that instead of this more high-level stuff.

[00:39:07] Speaker 01:
But it's your position that it doesn't have to be nifty if in order to

[00:39:12] Speaker 01:
get out of the CBM and maybe be subject to IPR instead?

[00:39:16] Speaker 02:
My position is, according to the statute and the board's regulations, it actually doesn't have to be so-called nifty.

[00:39:23] Speaker 02:
It has to be technological in nature.

[00:39:25] Speaker 03:
Congress did not want... Where's the technological solution in your claim?

[00:39:28] Speaker 02:
Right.

[00:39:29] Speaker 02:
Well, I've gone through the technological solutions.

[00:39:31] Speaker 02:
The low-power transceiver solved a problem now.

[00:39:34] Speaker 02:
My colleague says that's not in the claim, but it is in the claim.

[00:39:37] Speaker 00:
It's low-power transceiver.

[00:39:38] Speaker 00:
What's the technological problem that is solved here?

[00:39:40] Speaker 02:
That is a logical problem.

[00:39:41] Speaker 00:
Technological problem.

[00:39:43] Speaker 00:
What's the technology that has been revised or rethought as a result of this invention?

[00:39:50] Speaker 02:
One was the need, in the prior art, for specialized transceivers for each type of specialized communication network.

[00:39:58] Speaker 02:
A big part of this pattern is open.

[00:40:00] Speaker 00:
You don't have specialized transceivers here.

[00:40:02] Speaker 02:
I know, we have open architecture, non-specialized transceivers.

[00:40:05] Speaker 02:
That was the technological invention.

[00:40:07] Speaker 02:
The patent talks about that.

[00:40:08] Speaker 02:
That is the improvement.

[00:40:09] Speaker 02:
That you went from having to program these specialized transceivers in the prior art, now you don't.

[00:40:15] Speaker 02:
You just use a generalized generic transceiver and you do the programming at the central site so that you assign functions to these instruction codes that are then decoded, not by the transceiver, but at a central site in order to perform functions.

[00:40:31] Speaker 02:
That was the technological solution to a technological problem that existed in 1997.

[00:40:36] Speaker 02:
The other problem that was solved was this idea of interception of data and interference, a very much real-world problem at that time.

[00:40:45] Speaker 02:
And it was solved through the use, as Judge Chen went through earlier, of instead of using either using long-range wireless transmissions to try to reach a far away central server,

[00:40:56] Speaker 02:
you use very short range transmissions and you use a series of generic intermediaries so that you can relay information essentially in confidence in a very short, in a very small area and have that information picked up with very little risk of interference and unlawful interception and then relay to the central service for further processing.

[00:41:19] Speaker 03:
So it's a two step short hop long hop communication system.

[00:41:22] Speaker 02:
That's right.

[00:41:23] Speaker 03:
From the remote device to the central location.

[00:41:26] Speaker 02:
Correct.

[00:41:27] Speaker 02:
That is definitely part of this.

[00:41:29] Speaker 03:
The briefing had some debate about how to understand the quaint limitation, establish a communication link.

[00:41:35] Speaker 03:
I didn't understand it.

[00:41:37] Speaker 02:
Your Honor, I'm no longer arguing that, so I think it's safe for you not to focus on it.

[00:41:45] Speaker 01:
Okay.

[00:41:45] Speaker 01:
And you're out of time, so that's perfect.

[00:41:47] Speaker 01:
Thank you, Your Honor.