APPLIED PREDICTIVE TECHNOLOGIES, INC.

Patent Trials and Appeals Board

Mar 3, 2021

CBM2020-00025 (P.T.A.B. Mar. 3, 2021)

Trials@uspto.gov Paper 8
571-272-7822 Entered: March 3, 2021

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

MARKETDIAL, INC.,
Petitioner,
v.
APPLIED PREDICTIVE TECHNOLOGIES, INC.,
Patent Owner.

CBM2020-00025
Patent 8,571,916 B1

Before JUSTIN T. ARBES, MIRIAM L. QUINN, and
FRANCES L. IPPOLITO, Administrative Patent Judges.
ARBES, Administrative Patent Judge.
DECISION
Denying Institution of Covered Business Method Patent Review
35 U.S.C. § 324
I. INTRODUCTION
A. Background and Summary
Petitioner MarketDial, Inc. filed a Petition (Paper 1, “Pet.”) requesting
a covered business method patent review of claims 1–35 of U.S. Patent
No. 8,571,916 B1 (Ex. 1001, “the ’916 patent”) pursuant to 35 U.S.C.
§ 321(a). Patent Owner Applied Predictive Technologies, Inc. filed a
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Preliminary Response (Paper 6, “Prelim. Resp.”) pursuant to 35 U.S.C.
§ 323. Pursuant to 35 U.S.C. § 324(a), the Director may not authorize a
covered business method patent review unless the information in the
petition, if unrebutted, “would demonstrate that it is more likely than not that
at least 1 of the claims challenged in the petition is unpatentable.” For the
reasons that follow, we do not institute a covered business method patent
review.

B. Related Matters
The parties indicate that the ’916 patent is asserted in Applied
Predictive Technologies, Inc. v. MarketDial, Inc., Case No. 2-19-cv-00496
(D. Utah) (“the district court case”), which was transferred from the
U.S. District Court for the District of Delaware in Applied Predictive
Technologies, Inc. v. MarketDial, Inc., Case No. 1-18-cv-00963 (D. Del.),
filed on June 28, 2018. See Pet. 15; Paper 4, 2; Paper 5, 1.

C. The ’916 Patent
The ’916 patent discloses “[a] system, method, and article of
manufacture . . . for determining optimal parameter settings for a business
initiative testing model used for testing initiatives for business locations
included in a business network.” Ex. 1001, code (57). The disclosed
method includes “performing virtual tests on a set of virtual test sites based
on [a] defined test type,” “determining a set of optimal parameter settings for
[a] first test type of the business initiative testing model based on results
from the virtual test,” and “configuring the business initiative testing model
using the optimal parameter settings from the set for the first test type to test
a business initiative to apply to the business network.” Id.
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D. Illustrative Claim
Challenged claims 1, 18, 34, and 35 of the ’916 patent are
independent. Claim 1 recites:
1. A method for determining optimal parameter settings
for business initiative testing software used for testing initiatives
for business locations included in a business network,
comprising:
identifying, by a computer, a business initiative testing
model having a set of parameter settings;
selecting a first parameter setting set for performing the
virtual test, the first parameter setting set including a set of
selected parameter setting options each respectively
corresponding to one of the parameter settings for the business
initiative testing model;
performing, by a computer, a virtual test on a set of virtual
test sites, each virtual test site reflecting a selected business
location in the business network, wherein each virtual test is a
simulated business initiative test performed on test sites where
no actual initiative test has been implemented at those test sites,
and wherein the virtual test is performed on the virtual test sites
using a variation of each parameter setting;
determining, by a computer, actual performance data
associated with the set of virtual test sites;
determining, by a computer, actual performance data
associated with a set of control group sites reflecting second
selected business locations in the business network using the
tested parameter settings;
determining a noise value for the first parameter setting
set, the noise value reflecting an inconsistency between
performance data associated, with the set of virtual test sites and
performance data associated with the set of control group sites
reflecting second selected business locations in the business
network using the tested parameter settings;
determining, by a computer, a set of optimal parameter
settings for the business initiative testing model based on results
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from the virtual test whereby the optimal parameter settings best
minimize noise from the results; and
configuring, by a computer, the business initiative testing
model using the optimal parameter settings to test a business
initiative for application in the business network.

E. Asserted Ground
Petitioner challenges claims 1–35 of the ’916 patent on the ground
that the claims do not recite patent-eligible subject matter under 35 U.S.C.
§ 101. Pet. 18, 33–74.

II. ANALYSIS
A. History of the District Court Case
Patent Owner sued Petitioner for infringement of the ’916 patent on
June 28, 2018, in the U.S. District Court for the District of Delaware.
Ex. 2001. The complaint included a count of patent infringement (alleging
infringement of “at least” claim 1) as well as two counts alleging trade secret
misappropriation. Id. at 19–35.1 Petitioner moved to dismiss the patent
infringement count on the basis that all claims of the ’916 patent are invalid
under 35 U.S.C. § 101. See Exs. 1014–1016 (motion, opposition, and reply).
Petitioner separately moved to dismiss the other counts and also moved to
transfer the case to the U.S. District Court for the District of Utah. See
Ex. 2002. On July 1, 2019, the court granted Petitioner’s motion to transfer.
Ex. 2003.
Petitioner then requested that the transferee court decide its pending
motions to dismiss. Ex. 2004, 2–3. The court permitted Petitioner to file a

1 For ease of reference, when referring to documents filed in the district
court case, we refer to the page numbers in the original documents.
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single motion to dismiss all asserted counts and address certain
choice-of-law questions. Ex. 2005, 4–5. Patent Owner later amended its
complaint to add a count of unfair competition. Ex. 1013. Petitioner filed
its motion to dismiss on September 10, 2019, arguing that claims 1–35 (with
claim 1 as representative) are directed to the abstract idea of “optimizing
mathematical business models before the initiative is deployed in the field,
by testing for the parameter configuration that produces the least noise,” and
thus are ineligible under § 101. Ex. 1017, 3–20. Patent Owner filed an
opposition and Petitioner filed a reply. See Exs. 1018, 1019. The court
conducted a hearing on September 4, 2020, and Petitioner filed three Notices
of Supplemental Authority citing case law pertaining to § 101 eligibility.
See Exs. 2006–2009.
Petitioner filed its Petition in this proceeding on September 15, 2020
(shortly after the hearing in the district court case), asserting that claims
1–35 (with claim 1 as representative) are directed to the same abstract idea
of “optimizing mathematical business models before the initiative is
deployed in the field, by testing for the parameter configuration that
produces the least noise.” Pet. 7, 34. On November 25, 2020, the court
granted Petitioner’s motion to dismiss as to the patent infringement and
unfair competition counts and denied the motion as to the trade secret
misappropriation counts. Ex. 3001, 51;2 see Paper 5, 1. In a lengthy
analysis, the court held all claims of the ’916 patent to be invalid under
§ 101 (with claim 1 as representative), concluding that the claims are
“directed to an abstract concept and that no inventive concept in the patent

2 Patent Owner appears to have filed an incorrect document as Exhibit 2010.
Accordingly, we enter the district court’s motion to dismiss decision into the
record as Exhibit 3001.
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transforms [them] into an eligible application.” Ex. 3001, 3–39. Patent
Owner states that the district court’s decision granting-in-part the motion to
dismiss “will be the subject of an appeal to the Federal Circuit Court of
Appeals once the other non-patent claims are ruled upon by the District
Court.” Prelim. Resp. 3.

B. Discretionary Denial Under 35 U.S.C. § 324(a)
Institution of a covered business method patent review is
discretionary. See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140
(“[T]he agency’s decision to deny a petition is a matter committed to the
Patent Office’s discretion.”); 35 U.S.C. § 324(a) (“The Director may not
authorize a post-grant review to be instituted unless the Director determines
that the information presented in the petition filed under section 321, if such
information is not rebutted, would demonstrate that it is more likely than not
that at least 1 of the claims challenged in the petition is unpatentable.”
(emphasis added)). In the Preliminary Response, Patent Owner argues that
we should exercise our discretion to deny the Petition because the district
court already has held all claims of the ’916 patent invalid under § 101 and
“it would be a waste of the Board’s, and the party’s, resources to revisit the
Section 101 issues that have already been fully addressed in [the] District
Court decision.” Prelim. Resp. 4–12. Patent Owner contends that petitions
have been denied in similar circumstances. Id. at 1–2 (citing Snap Inc. v.
BlackBerry Ltd., IPR2020-00391, Paper 8 (PTAB July 13, 2020) (“Snap”);
Snap Inc. v. BlackBerry Ltd., IPR2020-00392, Paper 8 (PTAB July 13,
2020)).
The Board has held that the advanced state of a parallel district court
action is a factor that may weigh in favor of denying a petition under
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35 U.S.C. § 314(a). See NHK Spring Co. v. Intri-Plex Techs., Inc.,
IPR2018-00752, Paper 8 at 20 (PTAB Sept. 12, 2018) (precedential)
(“NHK”); Patent Trial and Appeal Board Consolidated Trial Practice Guide
(Nov. 2019), 58 & n.2, available at https://www.uspto.gov/
TrialPracticeGuideConsolidated (“Trial Practice Guide”). We consider the
following factors to assess “whether efficiency, fairness, and the merits
support the exercise of authority to deny institution in view of an earlier trial
date in the parallel proceeding”:
1. whether the court granted a stay or evidence exists that one
may be granted if a proceeding is instituted;
2. proximity of the court’s trial date to the Board’s projected
statutory deadline for a final written decision;
3. investment in the parallel proceeding by the court and the
parties;
4. overlap between issues raised in the petition and in the
parallel proceeding;
5. whether the petitioner and the defendant in the parallel
proceeding are the same party; and
6. other circumstances that impact the Board’s exercise of
discretion, including the merits.
Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 5–6 (PTAB Mar. 20,
2020) (precedential) (“Fintiv”). In evaluating these factors, we “take[] a
holistic view of whether efficiency and integrity of the system are best
served by denying or instituting review.” Id. at 6.
NHK and Fintiv apply the Director’s discretion pursuant to 35 U.S.C.
§ 314(a) rather than 35 U.S.C. § 324(a), which is the relevant statute for
post-grant reviews (including covered business method patent reviews).
The pertinent statutory language, however, is the same in both sections.
Moreover, the policy justifications associated with the exercise of
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discretion—inefficiency, duplication of effort, and the risk of inconsistent
results—apply equally to covered business method patent reviews under
35 U.S.C. § 324(a). Accordingly, we apply the Fintiv factors here. See Trial
Practice Guide at 55–58. Upon consideration of the factors, we exercise our
discretion to deny the Petition.3

1. Whether the Court Granted a Stay or Evidence Exists That One
May Be Granted if a Proceeding Is Instituted
The Fintiv panel indicated that, in previous Board decisions, the
existence of a district court stay pending Board resolution of a post-grant
proceeding has weighed strongly against discretionary denial, while a denial
of such a stay request sometimes weighs in favor of discretionary denial.
Fintiv, Paper 11 at 6–8. Patent Owner argues that Petitioner has not
requested a stay of the district court case and “[a] stay regarding the
Section 101 challenge cannot be obtained from the District Court because it
already decided the matter.” Prelim. Resp. 6 (citing Snap, Paper 8 at 13).
The district court case currently is proceeding with respect to Patent
Owner’s trade secret misappropriation counts, following dismissal of the
patent infringement and unfair competition counts.
Absent specific evidence, we decline to speculate how a district court
would rule on a stay request. Cf. Sand Revolution II, LLC v. Continental
Intermodal Group – Trucking LLC, IPR2019-01393, Paper 24 at 7 (PTAB
June 16, 2020) (informative) (“In the absence of specific evidence, we will

3 Because we exercise our discretion to deny the Petition under 35 U.S.C.
§ 324(a), we need not decide other issues presented by the Petition, such as
whether the ’916 patent is eligible for covered business method patent
review.
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not attempt to predict how the district court in the related district court
litigation will proceed because the court may determine whether or not to
stay any individual case, including the related one, based on a variety of
circumstances and facts beyond our control and to which the Board is not
privy.”); Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 12 (PTAB
May 13, 2020) (informative) (“We decline to infer, based on actions taken in
different cases with different facts, how the District Court would rule should
a stay be requested by the parties in the parallel case here. This factor does
not weigh for or against discretionary denial in this case.”). No specific
evidence in this case suggests that the district court would grant a stay
pending a covered business method patent review of the ’916 patent.
Accordingly, this factor is neutral to the exercise of our discretion. See
Amazon.com, Inc. v. Vocalife LLC, IPR2020-00864, Paper 22 at 9 (PTAB
Oct. 28, 2020) (finding the factor to be neutral where the district court trial
had already occurred and the petitioner had not sought a stay).

2. Proximity of the Court’s Trial Date to the Board’s Projected
Statutory Deadline For a Final Written Decision
The proximity factor in Fintiv, on its face, asks us to evaluate our
discretion in light of trial dates that have been set in parallel litigations. See
Fintiv, Paper 11 at 3, 5 (“NHK applies to the situation where the district
court has set a trial date to occur earlier than the Board’s deadline to issue a
final written decision in an instituted proceeding.”; “When the patent owner
raises an argument for discretionary denial under NHK due to an earlier trial
date, the Board’s decisions have balanced the [six] factors [listed in
Fintiv].”) (citing NHK, Paper 8 (footnote omitted)). Patent Owner argues
that this factor weighs in favor of denial because “the District Court’s
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decision came before both the [Preliminary Response] and the Board’s
institution decision.” Prelim. Resp. 6–7 (citing Snap, Paper 8). We agree.
There will be no trial as to patent infringement because the district court
already concluded that all claims of the ’916 patent are invalid under § 101.
Patent Owner indicates that it will appeal that decision once the remainder of
the district court case concludes. Id. at 3. The statutory deadline for a final
written decision in this proceeding would be one year from institution.
Under the particular factual circumstances of this case, we find that this
factor strongly weighs in favor of exercising our discretion to deny the
Petition.

3. Investment in the Parallel Proceeding by the Court and the Parties
If, at the time of the institution decision, the district court has issued
substantive orders related to the challenged patent, such as a claim
construction order, this fact weighs in favor of denial. See Fintiv, Paper 11
at 9–10. On the other hand, if the district court has not issued such orders,
this fact weighs against discretionary denial. Id. at 10.
Patent Owner argues that all briefing on Petitioner’s motion to dismiss
and a hearing had been completed by the time Petitioner filed its Petition.
Prelim. Resp. 8. Patent Owner contends that “the [p]arties have invested
over two years of extensive briefing, argument and analysis of the Section
101 arguments.” Id. We agree that the investment by the district court and
the parties on the issue of patent eligibility under § 101 is substantial.
Petitioner filed its original motion to dismiss on October 5, 2018, then filed
its second motion on September 10, 2019, after the case was transferred; full
briefing on the § 101 issue took place in both instances. See
Exs. 1014–1019, 2007–2009. The district court conducted a hearing and
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rendered a detailed decision holding all claims invalid under § 101. See
Ex. 2006; Ex. 3001, 3–39.
Petitioner’s lack of diligence in filing its Petition also weighs in favor
of exercising our discretion to deny institution. Specifically, Petitioner filed
the Petition in this proceeding more than two years after being sued,
approximately two years after filing its original motion to dismiss arguing
invalidity under § 101, and after all briefing on the § 101 issue had been
completed in the district court case and the parties were merely awaiting a
decision. See Exs. 1014, 2001, 2006. Petitioner in its Petition provides no
explanation for this significant delay. To the contrary, Petitioner takes
advantage of the progression of the district court case by citing materials
filed in that case in support of its arguments in the Petition. See Pet. 8, 19,
26, 36 (relying on Exs. 1013, 1018).
Under the particular factual circumstances of this case, we find that
this factor strongly weighs in favor of exercising our discretion to deny the
Petition.

4. Overlap Between Issues Raised in the Petition and
in the Parallel Proceeding
“[I]f the petition includes the same or substantially the same claims,
grounds, arguments, and evidence as presented in the parallel proceeding,
this fact has favored denial.” Fintiv, Paper 11 at 12. “Conversely, if the
petition includes materially different grounds, arguments, and/or evidence
than those presented in the district court, this fact has tended to weigh
against exercising discretion to deny institution under NHK.” Id. at 12–13.
Patent Owner argues that “Petitioner challenged the exact same claims
of the exact same patent, both on Section 101 eligibility grounds, in both the
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District Court action and before the Board.” Prelim. Resp. 9. According to
Patent Owner, “[t]here is no need for the Board to address the same
Section 101 challenge to the same ’916 patent that the District Court found
ineligible. Those issues can be addressed in full by the Federal Circuit
without any further action by the Board.” Id. at 10. Patent Owner argues
that “[t]he District Court already decided the claims are invalid under
Section 101, so institution here would unnecessarily increase the burden for
both Patent Owner and the Board.” Id. We agree. The issue presented—
whether claims 1–35 of the ’916 patent recite patent-eligible subject matter
under § 101—is identical in this proceeding and the district court case.
We also note that many of Petitioner’s arguments in this proceeding mirror
those presented in its motion to dismiss in the district court case. Compare
Pet. 12–13, 34–41, 44–46, with Ex. 1017, 11–18, 20. The alleged abstract
idea in both papers also is identical. See Pet. 34; Ex. 1017, 11. Under the
particular factual circumstances of this case, we find that this factor strongly
weighs in favor of exercising our discretion to deny the Petition.

5. Whether the Petitioner and the Defendant in the Parallel Proceeding
Are the Same Party
If the petitioner here was unrelated to the defendant in the parallel
proceeding, that might weigh against discretionary denial. See Fintiv,
Paper 11 at 13–14. Here, however, Petitioner is the defendant in the district
court case. This fact could weigh either in favor of, or against, exercising
discretion to deny institution, depending on which tribunal was likely to
address the challenged patent first. As explained above, the district court
held all claims of the ’916 patent to be invalid under § 101. This factor
weighs in favor of exercising our discretion to deny the Petition.
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6. Other Circumstances That Impact the Board’s Exercise of Discretion,
Including the Merits
Additional factors we can consider include the merits. Fintiv,
Paper 11 at 14–15.
For example, if the merits of a ground raised in the petition seem
particularly strong on the preliminary record, this fact has
favored institution. In such cases, the institution of a trial may
serve the interest of overall system efficiency and integrity
because it allows the proceeding to continue in the event that the
parallel proceeding settles or fails to resolve the patentability
question presented in the PTAB proceeding.
Id. (footnotes omitted). Here, the district court resolved the same issue
presented in this proceeding, namely whether claims 1–35 recite
patent-eligible subject matter under § 101. Under the particular factual
circumstances presented, we do not see how instituting a covered business
method patent review on the same ground would “serve the interest of
overall system efficiency and integrity.” See id. This factor weighs in favor
of exercising our discretion to deny the Petition.

7. Holistic Assessment of Fintiv Factors
We consider the above factors and take “a holistic view of whether
efficiency and integrity of the system are best served by denying or
instituting review.” Fintiv, Paper 11 at 6. On the record presented, all of the
Fintiv factors are either neutral or weigh in favor of exercising our discretion
to deny the Petition. No trial will occur in the district court case with respect
to Patent Owner’s patent infringement claim due to the court
granting-in-part Petitioner’s motion to dismiss. The parties completed two
rounds of briefing, the district court conducted a hearing and rendered a
detailed decision on the § 101 issue, and Petitioner waited more than two
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years to file its Petition. Petitioner’s sole ground of unpatentability under
§ 101 is the same issue as presented in the district court, and the parties are
the same in both proceedings. After considering the factors outlined in the
precedential order in Fintiv, we exercise our discretion to deny institution
under § 324(a).

III. CONCLUSION
For the foregoing reasons, and based on the district court’s decision
holding all claims of the ’916 patent to be invalid under 35 U.S.C. § 101,
we exercise our delegated discretion to deny the Petition seeking covered
business method patent review on the same basis.

IV. ORDER
In consideration of the foregoing, it is hereby:
ORDERED that the Petition is denied and no covered business
method patent review is instituted.

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FOR PETITIONER:
Sanjeet Dutta
GOODWIN PROCTER LLP
sdutta@goodwinlaw.com

FOR PATENT OWNER:

Kevin Greenleaf
Scott W. Cummings
Jennifer Bennett
Nicholas Jackson
DENTONS US LLP
kevin.greenleaf@dentons.com
scott.cummings@dentons.com
jennifer.bennett@dentons.com
nicholas.jackson@dentons.com