[00:00:00] Speaker 00:
20-1307, CX Loyalty versus Maritz Holding.

[00:00:05] Speaker 00:
Mr. Lieberman, whenever you're ready.

[00:00:09] Speaker 03:
Thank you, Your Honor.

[00:00:10] Speaker 03:
Chief Judge Prost, and may it please the Court, my name is Steve Lieberman.

[00:00:14] Speaker 03:
I'm counsel for Appellant CX Loyalty with respect to the substitute claims.

[00:00:21] Speaker 03:
As an initial matter, there is an issue that took up a substantial amount of the briefing to this Court.

[00:00:29] Speaker 03:
that I think has now been finally resolved.

[00:00:32] Speaker 03:
Specifically, this court on November 17 issued its decision in CIPCO versus Emerson Electric, which now definitively resolves the point that the PTAP's decision that the patent ensued qualified for CBM review is non-appealable.

[00:00:48] Speaker 03:
So I don't intend to address that point during argument unless any panel members have questions.

[00:00:55] Speaker 03:
I'd like to then move to the ineligibility of the substitute claims.

[00:01:02] Speaker 03:
My first point is that the substitute claims on appeal are directly addressed by this court's decision and the University of Florida Research Foundation case.

[00:01:13] Speaker 03:
That is a case in which the court held, and this was the language from the holding, neither the 251 patent, the patent in that case,

[00:01:24] Speaker 03:
nor its claims explain how the drivers do the conversion.

[00:01:29] Speaker 03:
This was a case where the issue was whether or not a conversion step rendered a claim eligible.

[00:01:38] Speaker 03:
And the word how is actually underlined in the original by the court.

[00:01:42] Speaker 03:
And that's exactly what we have here.

[00:01:45] Speaker 00:
So Mr. Lieberman, it might be helpful for me to know what led the board astray in your view to conclude that these amendments were okay.

[00:01:54] Speaker 03:
Right, so I think the answer is fairly simple and there are two parts to it, your honor.

[00:02:02] Speaker 03:
The first is that the board was faced with example 42 of the PTO guidelines, which had issued after the initial decision, but before this court's ruling in University of Florida.

[00:02:20] Speaker 03:
In example 42, the PTO and its guidelines

[00:02:24] Speaker 03:
gave an example of a claim involving a conversion step, and said because of that conversion step, the claim was eligible.

[00:02:34] Speaker 03:
During the oral argument, we talked about example 42, and I made very clear that example 42, if it applied at all, was no longer good law in light of this court's decision in UFRF.

[00:02:50] Speaker 03:
The panel said quite clearly

[00:02:53] Speaker 03:
that it was bound by example 42.

[00:02:56] Speaker 03:
Now, to deal with example 42, which had conversion language very similar to what we're talking about here, the court went through in a fair amount of detail and distinguished the substitute claim from the claim that was found eligible in example 42.

[00:03:20] Speaker 03:
And this was in the context of

[00:03:23] Speaker 03:
Alice step one, which the PTAB calls step two A prong two.

[00:03:32] Speaker 03:
And the court made specific findings that allowed it to distinguish the claim here from example 42.

[00:03:41] Speaker 03:
However, when the court got to Alice step two, which it calls step two B, the court,

[00:03:52] Speaker 03:
wholly ignored the University of Florida decision, which addressed both ALICE step one and ALICE step two.

[00:04:01] Speaker 03:
It said that when you're dealing with the particular example where there was a claim with the conversion step, that the conversion step does nothing to change the ineligibility of the patent claim unless it describes how the conversion occurs.

[00:04:19] Speaker 03:
In this case,

[00:04:20] Speaker 03:
The evidence is, and I would say the evidence is actually undisputed on this.

[00:04:25] Speaker 03:
You can look at the claim and you can look at the specification of the patent and you can look at two admissions that were made by Maritz's counsel during the trial.

[00:04:34] Speaker 03:
And they're at A941 and A947.

[00:04:38] Speaker 03:
The evidence is undisputed that there was nothing in the specification and nothing in the claim that described how you converted

[00:04:49] Speaker 03:
information in the format of let's say a vendor, an airline or a hotel room provider, to the format that could be read by the GUI of a loyalty program participant.

[00:05:02] Speaker 03:
It's not in the claim, it's not in the specification.

[00:05:05] Speaker 03:
And during the argument, when the panel asked Mr. Evans, Merritt's counsel about this, Mr. Evans admitted that the conversion was a well-understood routine conversion

[00:05:19] Speaker 03:
It was not a specific type of conversion, and it was a conversion that people of skill in the art knew how to accomplish.

[00:05:27] Speaker 03:
There didn't have to be a description of how the conversion would occur, and of course you had to say that because there are only no details in the patent.

[00:05:39] Speaker 03:
So you have the claim, you have the specification, and you have the admission at 8941 and 8947.

[00:05:47] Speaker 03:
What the court then did

[00:05:49] Speaker 03:
I'm sorry, what the PTAB then did is it made inconsistent and contradictory findings.

[00:06:00] Speaker 03:
At pages A80 of the appendix, which is page 80 of the final written decision, the PTAB made very specific findings under ALICE step one.

[00:06:12] Speaker 03:
For example, the PTAB held that the 087PAT does not describe a technical problem.

[00:06:18] Speaker 03:
that it does not describe the converting process of solving a technical problem, that it does not describe the converting process as providing a technical solution over the prior art, and it held that the specification of the patent had a lack of detail regarding the technical problem or the technical improvement.

[00:06:41] Speaker 03:
If you then compare that to the findings

[00:06:44] Speaker 02:
Council, this is Judge Hughes.

[00:06:46] Speaker 02:
Can I just interrupt a minute?

[00:06:48] Speaker 02:
In my understanding, is the problem here really that they just don't describe how to do the conversion, that if they had an algorithm or some structure in the specification that supported it, that explained how technologically it was achieving it, that that might be not an abstract idea, that it might follow along

[00:07:11] Speaker 02:
For instance, like the algorithm in InFish or other cases like that, like DDR, the problem is they've just put in the idea of conversion, which is not patent eligible.

[00:07:23] Speaker 03:
That's exactly correct.

[00:07:25] Speaker 03:
That's exactly correct.

[00:07:26] Speaker 03:
It would be, I think the perfect analogy is let's say that I'm traveling to Europe and I plan to go to both France and to Germany, and I can't speak either French or German, which I can't.

[00:07:37] Speaker 03:
I have enough trouble with English.

[00:07:40] Speaker 03:
and I wanna use an electronic device to help me speak to people in those countries.

[00:07:46] Speaker 03:
If there were a patent which said, I claim a translation engine to translate English to French and French to English and English to German and German to English, but doesn't say how one does that, that would be ineligible.

[00:08:01] Speaker 03:
If you had a patent where the specification said, here's exactly how you would do that, that,

[00:08:08] Speaker 03:
certainly could be patent eligible.

[00:08:11] Speaker 03:
And here the PTAB made very clear that the idea of and ways of doing data conversions were well known, were well known and conventional.

[00:08:26] Speaker 03:
So you have a step with no explanation and no details.

[00:08:31] Speaker 03:
Going back to Chief Judge Prost's point, why did the PTAB make the error?

[00:08:38] Speaker 03:
I think in part the PTIB made the error in addition to the fact that it simply did not apply UFRF.

[00:08:46] Speaker 03:
Or the four other cases from this court which hold essentially the same thing.

[00:08:52] Speaker 03:
Interville, Affinity, Intellectual Ventures, and Amaranth.

[00:08:58] Speaker 03:
And maybe they didn't apply UFRF because they didn't want to essentially hold example 42 to be not good law,

[00:09:09] Speaker 03:
is the panel focused on the fact that we did not provide expert testimony in rebuttal with respect to the substitute claims.

[00:09:19] Speaker 03:
Our view was and is that there was no reason to do that because there was simply nothing in the specification, nothing in the claims, and nothing in the conclusory declaration of their expert, Mr. Wiener, that required any sort of rebuttal.

[00:09:36] Speaker 03:
And in fact, you can search the Wiener declaration

[00:09:39] Speaker 03:
and with respect to the conversion step, you will find nothing in which Mr. Wiener can point to any sort of technical details as to how the conversion occurred.

[00:09:52] Speaker 03:
Now, Maritz waves its arms in its brief.

[00:09:55] Speaker 03:
I guess I mixed my metaphors.

[00:09:57] Speaker 03:
I don't know how you wave your arms in a brief.

[00:09:59] Speaker 03:
But Maritz refers to the Wiener Declaration with broad swaths, 15 or 20 pages.

[00:10:06] Speaker 03:
For example, they refer to appendix at 1661 to 1671 and say there Mr. Wiener talks about the details of conversion and how that is, you know, and what the details are.

[00:10:23] Speaker 03:
But if you look at those pages, you'll only see a reference to conversion at paragraph 88 on page A, 1668.

[00:10:31] Speaker 03:
And there, there are no details, nothing about how the conversion works.

[00:10:36] Speaker 00:
Thank you.

[00:10:37] Speaker 03:
I'd like to reserve the remainder of my time if the panel has no questions.

[00:10:40] Speaker 00:
Yes.

[00:10:41] Speaker 00:
Yes.

[00:10:41] Speaker 00:
Thank you.

[00:10:42] Speaker 00:
Let's hear from the other side.

[00:10:43] Speaker 00:
Mr. Evans.

[00:10:45] Speaker 00:
And Mr. Evans, you might begin by letting us know if you concur with Mr. Lieberman's observation that the CIPCO decision kind of alighted the arguments about CBM review.

[00:10:59] Speaker 01:
Thank you, Judge Post.

[00:11:00] Speaker 01:
May it please the court?

[00:11:02] Speaker 01:
I'm Robert Evans here on behalf of Merits Holdings.

[00:11:06] Speaker 01:
With regard to the CIPCO decision, I agree that if you apply the Brightline rule in CIPCO to the facts of our case, that review of the CBM institution decision is off the table.

[00:11:18] Speaker 01:
I agree with that.

[00:11:19] Speaker 01:
I would point out a couple things.

[00:11:21] Speaker 01:
Thing one, that decision is still subject to requests for reconsideration and appeals to the Supreme Court.

[00:11:28] Speaker 01:
Secondly, the Thrive decision, on which it was based, concerned the timing question

[00:11:35] Speaker 01:
The question was, was a petition timely filed which did not require further factual development?

[00:11:39] Speaker 01:
Here, by contrast, the issues underlying the decision had significant additional factual development and were extensively discussed in the final written decision of the board.

[00:11:53] Speaker 01:
And it was that final written decision of the board that we were appealing.

[00:11:55] Speaker 01:
And so I think factually, there were some differences here between what happened

[00:12:00] Speaker 01:
uh... in our case what happened in friday but i agree that the typical court laid out a very bright rule and if you buy that we are bound by a month it ever overturned by the supreme court right back by the longest yet yet i would also note that there's no issue preclusion or or you know resident how those kind of things because we didn't get to appeal it but anyway so yeah i guess that's my answer at a further questions there should i move back to move on with uh... but i don't think you can't myself wanted to move on to the main appeal

[00:12:29] Speaker 01:
What I would like to point out, first of all, the Director of Court's attention to is the second step of ALIS.

[00:12:35] Speaker 01:
And in particular, the question of whether or not there's an inventive concept here in the patent claims.

[00:12:43] Speaker 01:
And I think where the board and opposing counsel went in the wrong direction is they simply ignored the hidden account.

[00:12:55] Speaker 01:
The testimony was unequivocal.

[00:12:57] Speaker 01:
that if you look at all of the elements of the claim, the combination of those elements was novel.

[00:13:03] Speaker 01:
It was non-obvious.

[00:13:04] Speaker 01:
It was not well understood.

[00:13:05] Speaker 01:
It was not routine.

[00:13:07] Speaker 01:
And it was not conventional.

[00:13:09] Speaker 01:
I don't think anybody disputed that.

[00:13:13] Speaker 01:
Mr. Weiner, the expert for merits, he was a Princeton computer scientist.

[00:13:19] Speaker 01:
He worked at the leading companies that built these systems back in the day in 2000.

[00:13:24] Speaker 01:
He explained at great length how

[00:13:27] Speaker 01:
They tried to get the costs out of programs by moving them to the internet, and couldn't that there were technical barriers to that, and that the claims and the patent here solved those problems.

[00:13:40] Speaker 01:
And so his testimony was not only from the perspective of looking at the claims and the patent and the art that was cited by CX Loyalty, but also from his own experience in the day.

[00:13:52] Speaker 01:
And again, he was from Princeton, very smart gentleman.

[00:13:55] Speaker 01:
He worked at Briarley, who was working on the leading accounts at the time, American Airlines A loyalty program, many of them.

[00:14:04] Speaker 01:
They're set forth in his declaration of paragraph 60 to 70, and also paragraph 38, where he discusses that history.

[00:14:12] Speaker 01:
Cast against that is the testimony from CX Loyalty's expert, Mr. Knowles.

[00:14:17] Speaker 01:
He's been a senior vice president with CX Loyalty.

[00:14:20] Speaker 01:
He's clearly an interested witness.

[00:14:21] Speaker 01:
He's worked for them for 15 years.

[00:14:23] Speaker 01:
He dismissed the hidden account as nothing more than information.

[00:14:29] Speaker 01:
He dismissed that in paragraph 132 of his declaration.

[00:14:33] Speaker 01:
He called the hidden account nothing more than information.

[00:14:36] Speaker 01:
And so he said since it didn't count, he wasn't going to look at it.

[00:14:45] Speaker 01:
And he then just considered the other elements of the claim in isolation.

[00:14:49] Speaker 01:
He never considered the combination.

[00:14:52] Speaker 01:
You just look at the individual elements.

[00:14:53] Speaker 01:
And as this court knows, you have to look at all of the elements of the claim in deciding whether or not something is well understood or conventional or those kinds of tests.

[00:15:04] Speaker 01:
The McRoe case, the Baskin case, the Selsman case, they all stand for that proposition.

[00:15:10] Speaker 01:
The two piece of priority he did cite, the 176 patent and the 283 patent, they just concerned computer reservation systems for airlines.

[00:15:18] Speaker 01:
They had no hidden accounts.

[00:15:19] Speaker 01:
They had none of the features of the combination of the claim.

[00:15:22] Speaker 01:
The board made its final written decision at page 51.

[00:15:26] Speaker 01:
It discussed these concepts for a while, and it kept denying the hidden account as a technical component.

[00:15:35] Speaker 01:
But then finally, it had to admit at page 51 of the final written decision that eligibility and novelty are separate inquiries

[00:15:43] Speaker 01:
from the Section 101 analysis.

[00:15:45] Speaker 00:
I'm sorry to interrupt, but I've been trying to follow your argument.

[00:15:48] Speaker 00:
And I just, maybe it's just I'm missing something.

[00:15:51] Speaker 00:
When we're talking about the hidden account, the claims don't require that the actual dollar amount of the transaction be hidden from the participant, right?

[00:16:01] Speaker 00:
And the specification doesn't even discuss what now it seems you're saying is a purportedly important aspect of the invention.

[00:16:12] Speaker 00:
Am I right about that?

[00:16:14] Speaker 01:
No, I submit that Mr. Wiener gave his declaration where he testified that a person of ordinary skill in the art reading this back and knowing that the account is hidden from the participant, which is required by the claim, that if you hide the account from the participant, you obviously hide the information in the account from the participant.

[00:16:36] Speaker 01:
And Mr. Wiener testified that a person of skill in the art reading this claim would appreciate that since a loyalty program has to work,

[00:16:44] Speaker 01:
where the participant doesn't know what's actually being paid.

[00:16:46] Speaker 01:
Otherwise, the perceived value drops.

[00:16:50] Speaker 01:
The loyalty program doesn't work for intended purpose.

[00:16:54] Speaker 01:
In a personal skill and art reading, the claim would appreciate that, that when you say you have a hidden account, obviously the values in the account are also hidden from the participant.

[00:17:02] Speaker 01:
That was another place, I believe, where the board misunderstood or misstated the record because

[00:17:10] Speaker 01:
Everybody knows that to run a loyalty program, you have to deliver more perceived value than it costs to you.

[00:17:16] Speaker 01:
It's sort of an inherent characteristic of running a successful program.

[00:17:20] Speaker 01:
So the board, in looking at these things, it dismissed the hidden account as a non-technical element.

[00:17:26] Speaker 01:
Didn't look at the combination.

[00:17:28] Speaker 01:
And it just said eligibility is different than novelty and non-obvious if they're separate inquiries.

[00:17:36] Speaker 01:
And I submit that was an admission by the board or a statement or an understanding by the board that they didn't find any prior art, and they didn't find all of this combination of elements to be old or understood.

[00:17:52] Speaker 01:
So here we have a situation where there's oral testimony from an interested witness about things 20 years ago.

[00:17:58] Speaker 01:
The barbed wire offense case would tell you that is inherently unreliable for purposes of validating a claim.

[00:18:05] Speaker 01:
cast against someone who lived back in the day asserting absolutely that this combination of elements was novel and non-obvious, was not well understood, was not routine, was not conventional.

[00:18:16] Speaker 01:
And so you have a dearth of evidence on one side.

[00:18:19] Speaker 01:
You have substantial credible evidence on the other side.

[00:18:22] Speaker 01:
And the party with the dearth of evidence also has the burden of proof.

[00:18:29] Speaker 01:
Mr. Wiener's second declaration went unrebutted.

[00:18:32] Speaker 01:
When I say both declarations did, but the second one in particular, because after neither declaration, both of which came after the declaration of the arrested witness, Mr. Knowles, both declarations he was not deposed.

[00:18:47] Speaker 01:
There was no further evidence submitted to rebut those points.

[00:18:51] Speaker 01:
And he asserted very clearly that the combination of elements was novel and not obvious.

[00:19:00] Speaker 01:
There's no preemption issue here, because as stated, these claims require a hidden account.

[00:19:07] Speaker 01:
And so there's not some kind of a broad preemption issue to worry about.

[00:19:12] Speaker 01:
And it's also, since the hidden account is not a computer element, it's not a conventional computer element, this isn't the kind of case where you say, hey, there's just a collection of standard computer components.

[00:19:22] Speaker 01:
And therefore, we have to decide it's not patent eligible.

[00:19:26] Speaker 01:
With regard to the question of how do you make the conversion, the quote admission that Mr. Lieberman was suggesting that I made during the hearing was not nearly the admission he'd have you believe that it was.

[00:19:41] Speaker 01:
What I said there was in the context of the disclosure in the patent, figure three and figure four, which was what was being discussed at the time during the hearing, that a personal skill in the art would understand how to go from that disclosure and complete the conversion.

[00:19:55] Speaker 01:
If you look at Mr. Wiener's second declaration of paragraphs 28 through about 35, he explains in great detail how a person of ordinary skill in the art would read the spec, would be given the guidance to use that specification to make the conversion, would know how to do it based on the guidance in the specification.

[00:20:18] Speaker 01:
And so this idea that the specification is devoid of how to do this

[00:20:24] Speaker 01:
is simply not accurate.

[00:20:26] Speaker 04:
The case in the University of Florida... Counsel, this is Judge Laurie.

[00:20:31] Speaker 04:
You're defending the patentability of the substitute claims.

[00:20:36] Speaker 04:
No one has used the word substitute claims and original claims, which would have been aided clarity.

[00:20:45] Speaker 04:
But your cross appeal deals with the original claims.

[00:20:49] Speaker 04:
Would you address that a little bit, please?

[00:20:52] Speaker 01:
Yeah, I believe that everything that I've said to this point addresses both sets of claims, because the original claims also had the hidden account.

[00:21:00] Speaker 01:
The original claims, Mr. Wiener testified at great length, I give you those quotes, that the combination of those elements was novel, was non-obvious, was not well understood, it was not routine, it was not conventional, because the combination of elements, including the hidden account, as recited in the original claims, that combination of elements is novel.

[00:21:23] Speaker 01:
The expert for CX Loyalty dismissed the hidden account as not being a technical component, just information.

[00:21:29] Speaker 01:
The board found it was not a technical component and ignored it.

[00:21:32] Speaker 01:
But when you look at the elements in combination for the original claims, that combination of elements is found nowhere in the prior art.

[00:21:41] Speaker 01:
And their expert doesn't even say it's found in the prior art.

[00:21:44] Speaker 01:
He just says, I'm not going to talk about the hidden account because I don't think it counts.

[00:21:47] Speaker 01:
I'm going to talk about the other four elements in isolation.

[00:21:51] Speaker 01:
So he blew it from considering the elements in isolation, he blew it from ignoring one of the elements, and he never considered the combination.

[00:21:57] Speaker 01:
So you have the unrebutted testimony of Mr. Weiner, who was an independent expert who worked in the day, who worked with the leading companies in the day, who says both the original claims and the substitute claims were novel and unobvious and not well understood and not routine and not conventional in view of the art of the day.

[00:22:16] Speaker 01:
I see I'm into my reserve time, so unless there's questions, I will reserve the remainder.

[00:22:21] Speaker 00:
Okay, let's turn back then to Mr. Lieberman.

[00:22:26] Speaker 03:
Thank you, Your Honor.

[00:22:27] Speaker 03:
Your Honor, I went to Princeton and while I appreciate all of Mr. Evans' comments about Princeton grads, my experience indicates that a Princeton grad is not entitled to any degree of infallibility with respect to patent or any other issues.

[00:22:44] Speaker 03:
Let me turn to hidden program account in your Honor's question and first preface the

[00:22:50] Speaker 03:
the point by saying that the hidden program account is probably very close to the classic shadow records example from the Alice case.

[00:23:00] Speaker 03:
What is a hidden program account?

[00:23:02] Speaker 03:
A hidden program account is an abstract idea.

[00:23:05] Speaker 03:
All it is, as Merits's briefs made very clear and as the PTAB appropriately found below, is the idea that you do not let the consumer know

[00:23:17] Speaker 03:
what the loyalty program paid for the airline ticket or the hotel room.

[00:23:23] Speaker 03:
That is, you make the consumer think that if he or she traded in points, 100 points, that he or she got 100 points worth of an airline ticket.

[00:23:36] Speaker 03:
This is nothing different than what merchants on the peers of the markets at Tyre in Lebanon

[00:23:46] Speaker 03:
in Venice, in the Middle Ages, in Chaucer, what any merchant does.

[00:23:53] Speaker 03:
No merchant will tell a customer.

[00:23:56] Speaker 00:
By the way, I'm sorry, but let me interrupt you just for a minute, just because time is short.

[00:24:01] Speaker 00:
I wondered if you could respond.

[00:24:04] Speaker 00:
Your friend spent quite a bit of time dealing with the expert testimony about novelty and the first, and it seems to me the argument against that is that

[00:24:15] Speaker 00:
It invokes the testimony, invoked unconventionality only in the sense the claim subject matter as a whole was novel because the inventors were the first to apply this abstract idea using conventional techniques.

[00:24:30] Speaker 00:
And that clearly is something different than what we look to in step two of our analytical framework.

[00:24:39] Speaker 00:
So I wondered if you could explain or have any comment on that.

[00:24:44] Speaker 03:
Of course, I think Your Honor's comment is exactly correct, that what Mr. Evans is trying to do is a 102 and 103 analysis for a case in which 102 and 103 was not raised.

[00:25:00] Speaker 03:
Taking an abstract idea, like the idea of not disclosing to a consumer what the loyalty program actually paid for the hotel rooms,

[00:25:12] Speaker 03:
even if you layer onto it an internet connection and a server and a going in and API, that doesn't do anything with respect to Alice step one or Alice step two when we're talking about the original or the substitute clamps.

[00:25:32] Speaker 03:
All it does is add details to and narrow the scope of an abstract idea.

[00:25:39] Speaker 03:
And it does not matter one whit under this court's analysis whether taking an abstract idea and doing it on a computer had ever been done before or not.

[00:25:53] Speaker 03:
Two other points I wanted to make quickly, Your Honor.

[00:25:56] Speaker 03:
In the appendix at page 912, that's the site for the PTAB making clear during the argument that at least the one PTAB judge who was speaking

[00:26:07] Speaker 03:
felt that he was not able to hold example 42 to be no longer good law in light of UFRF.

[00:26:17] Speaker 03:
And my concluding point is that there are two entirely different ways that this court can reverse the PTAB with respect to the substitute claims.

[00:26:26] Speaker 03:
One is the failure to follow University of Florida and the four other Federal Circuit cases on point.

[00:26:34] Speaker 03:
The second is,

[00:26:35] Speaker 03:
that under the D.C.

[00:26:36] Speaker 03:
Circuit's decision and A&R and under this court's decision in poly rep, when you have inconsistent findings by an administrative agency such as the PTAB, that as a matter of law means that there is no substantial evidence.

[00:26:55] Speaker 03:
So there are two fully independent and sufficient bases upon which this court can and I submit should reverse the PTAB with respect to the eligibility of the substitute.

[00:27:06] Speaker 00:
Thank you.

[00:27:08] Speaker 03:
If the court has no further questions.

[00:27:11] Speaker 00:
OK, we'll turn back to Mr. Evans then.

[00:27:14] Speaker 00:
And your rebuttal is exclusively related to your cross appeal, which dealt with the original PTAB decision, correct?

[00:27:23] Speaker 00:
We all agree with that?

[00:27:25] Speaker 01:
Yes.

[00:27:26] Speaker 00:
OK, please proceed.

[00:27:29] Speaker 01:
I'd like to just first address the idea that conventional computer elements combined

[00:27:36] Speaker 01:
in a non-conventional way are patent eligible as an inventive concept.

[00:27:42] Speaker 01:
That's been the holding in the Bascom case, the Selspin case, and the Groh case.

[00:27:47] Speaker 01:
Here, we don't even have all conventional computer elements.

[00:27:51] Speaker 01:
We additionally have a hidden account, which is not a conventional computer element.

[00:27:55] Speaker 01:
So all the more here, we have an inventive concept that's patent eligible.

[00:27:59] Speaker 01:
And on that basis, I submit this court should reverse the board's decision if the original claims were not patent eligible.

[00:28:06] Speaker 01:
and we should proceed on the original claims in the underlying lawsuit.

[00:28:10] Speaker 01:
At minimum, the substitute claims are patent eligible, and we should go forward on that basis at least.

[00:28:16] Speaker 01:
I'd like to address the question of the shadow records in ALIS.

[00:28:19] Speaker 01:
The shadow records in ALIS were nothing like the hidden account here.

[00:28:23] Speaker 01:
The shadow records in ALIS were two separate shadow records set up by a third party who shadowed each side to a future potential transactions account.

[00:28:34] Speaker 01:
they shadowed the actual account, and the shadow account was supposed to be identical to the actual account, and the third party maintained a shadow account for each side of the transactions.

[00:28:44] Speaker 01:
There were two shadow accounts.

[00:28:46] Speaker 01:
At the end of the day, each of the shadow accounts were supposed to track the actual account, and then the intermediary would tell the two parties, party A and party B, hey, the first three transactions are fundable by both sides because there's assets there to close them, and the last two, maybe not, because they don't appear to be

[00:29:02] Speaker 01:
the assets there to fund them, according to our shadow account analysis.

[00:29:06] Speaker 01:
The first three transactions have been closed for dollar values and for consideration that both parties would fully understand.

[00:29:13] Speaker 01:
The last two transactions would not close because the shadow account indicated that one party or the other could not perform.

[00:29:19] Speaker 01:
In sharp contrast, here the shadow account is not understood by the participant.

[00:29:23] Speaker 01:
The shadow account never knows what's actually paid in dollars for the goods and services they're buying.

[00:29:29] Speaker 01:
They just know that they gave up points.

[00:29:33] Speaker 01:
And as a result, the shadow account here is very different than the accounts that were used in Alice.

[00:29:38] Speaker 01:
I think that also confused the board because the board thought those accounts were the same.

[00:29:42] Speaker 01:
They're not.

[00:29:42] Speaker 01:
They're very different in how they function, how they work.

[00:29:47] Speaker 01:
The issue that merchants all the time have not disclosed what they've paid for things, that supports our position.

[00:29:54] Speaker 01:
It supports our position because, as Mr. Wiener explained in his declaration, a person of ordinary skill in the art reading these claims would appreciate

[00:30:02] Speaker 01:
that that hidden account would hide the dollar value from the participant so that the program could conduct a successful loyalty program.

[00:30:12] Speaker 01:
The perceived value would be higher than the actual cost, and that's what drives the loyalty program.

[00:30:18] Speaker 01:
Unlike the past, here, the participant gets to shop around directly with the vendors and gets to shop from one vendor to the next and finally decide what they want to buy.

[00:30:31] Speaker 01:
It's a much better program.

[00:30:33] Speaker 01:
It works differently than the old way, where you had to talk to the program administrator, who then talked to the vendor to make a redemption.

[00:30:42] Speaker 01:
And so it's overcoming the technological hurdle that the internet was just too transparent.

[00:30:48] Speaker 01:
It told the participant too much information, and therefore it wasn't available as a loyalty redemption vehicle.

[00:30:54] Speaker 01:
Mr. Wiener, who worked with the leading companies in the day, none of them could solve the problem.

[00:31:00] Speaker 01:
And it took merits.

[00:31:01] Speaker 01:
patented technology to overcome that problem.

[00:31:06] Speaker 01:
So I submit that this is a technological, a significant technological improvement that was not routine.

[00:31:14] Speaker 01:
It involves components that were not routine.

[00:31:16] Speaker 01:
And it's patented.

[00:31:17] Speaker 01:
Unless there's questions, I see I'm out of time.

[00:31:20] Speaker 01:
I will conclude.

[00:31:21] Speaker 01:
Thank you.

[00:31:24] Speaker 00:
Thank both counsel and the cases submitted.

[00:31:27] Speaker 01:
Thank you, Your Honor.