GSI Commerce Solutions, Inc.v.Lakshmi Arunachalam

Patent Trial and Appeal Board

Oct 7, 2014

12628066 (P.T.A.B. Oct. 7, 2014)

Trials@uspto.gov
571-272-7822
Paper No. 10
Date Entered: October 7, 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

GSI COMMERCE SOLUTIONS, INC.,
Petitioner,

v.

LAKSHMI ARUNACHALAM,
Patent Owner.
____________

Case CBM2014-00101
Patent 8,346,894 B2

____________

Before KARL D. EASTHOM, WILLIAM V. SAINDON, and
BRIAN J. McNAMARA, Administrative Patent Judges.

McNAMARA, Administrative Patent Judge.

DECISION
Denial of Institution of Covered Business Method Patent Review
37 C.F.R. § 42.208

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BACKGROUND
Pursuant to 35 U.S.C. § 321 and section 18 of the America Invents
Act (AIA), GSI Commerce Solutions, Inc. (“Petitioner”) requests that the
Patent Trial and Appeal Board institute a covered business method patent
review to review claims 1–19 (the challenged claims) of U.S. Patent No.
8,346,894 B2 (the ’894 Patent). Paper 2 (“Pet.”). Lakshmi Arunachalam
(“Patent Owner”)
1
did not file a Patent Owner Preliminary Response. We
have jurisdiction under 35 U.S.C. § 324. The standard for instituting a
covered business method patent review is the same as that for a post-grant
review. (§ 18(a)(1) of the AIA). The standard for instituting post-grant
review is set forth in 35 U.S.C. § 324(a), which provides:
THRESHOLD.—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 [35 U.S.C. §]
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.
Petitioner contends that pursuant to 37 C.F.R. §§ 42.301 and
42.304(a), the ’894 Patent meets the definition of a covered business method
patent and is not a patent for a technological invention. Pet. 2–6. Petitioner
also contends that the claims of the ’894 Patent are unpatentable under 35
U.S.C. § 112 and 35 U.S.C. § 103.

1
When the Petition was filed, the ’894 Patent was owned by Pi-Net
International, Inc. On September 10, 2014 an assignment was recorded at
Reel 33715 Frame 0569 indicating that the ’894 Patent was assigned by Pi-
Net International, Inc. to the inventor, Lakshmi Arunachalam (“Patent
Owner”). On September 10, 2014, Patent Owner filed a Mandatory Notice
indicating that she is now acting pro se. Paper 7.
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For the reasons discussed herein, Petitioner has failed to show that
that the claims of the ’894 Patent are not drawn to a technological invention.
Therefore, we decline to institute a covered business method patent review.
STANDING AND PENDING LITIGATION
A person may not file a petition under the Transitional Program for
Covered Business Method Patents unless the person or the person’s real
party in interest or privy has been sued for infringement or has been charged
with infringement under that patent. See § 18(a)(1)(B) of the Leahy-Smith
America Invents Act, Pub. L. 112-29, 125 Stat. 284, 329 (2011) (“AIA”).
Petitioner represents that several of its customers, including Aeropostale,
Inc., Bath & Body Works Brand Management, Inc., and Toys “R” Us-
Delaware, Inc., have been sued for infringing the ’894 Patent based on their
use of Petitioner’s systems and software, and that Petitioner is obligated to
indemnify these customers as a result of their use of Petitioner’s systems and
software. Pet. 2, Exs. 1015, 1016, 1017. Petitioner does not specify whether
its customers have sought such indemnification or whether Petitioner has
assumed control of the identified litigation. However, for purposes of
determining standing at this stage of the proceeding, we assume that
Petitioner ultimately is required to indemnify its customers.
The suits against Petitioner’s customers were filed by Pi-Net
International, Inc., who is the previous owner of the ’894 Patent. Although
we do not know whether Patent Owner or the previous patent owner, Pi-Net
International, Inc., is continuing to prosecute the actions against Petitioner’s
customers,
2
the docket in the U.S. District Court for the Eastern District of

2
The cases against Petitioner’s customers have been consolidated with Civil
Action No. 2:13-cv-1016.
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Texas does not indicate that the actions against Petitioner’s customers have
been dismissed. As Petitioner represents that the defendants in the Texas
litigation are customers of Petitioner and that it is obligated to indemnify its
customers, and Patent Owner has not disputed Petitioner’s representations,
we are persuaded that Petitioner has standing to petition for covered business
method patent review. See SAP Am. v. Pi-Net Int’l., Inc., CBM2013-00013,
slip op. at 4 (Dec. to Inst., Paper 15) (PTAB Sep. 19, 2013).

THE ’894 PATENT (EXHIBIT 1001)
The ’894 Patent contains the same disclosure as U.S. Patent 8,108,492
B2 (the ’492 Patent), which is the subject of related proceeding IPR2013-
00194. The references to the column and line numbers in this section of this
Decision only are those of the ’492 Patent. Elsewhere in this Decision,
references to Exhibit 1001 in this proceeding refer to the lines and numbers
of the ’894 Patent.
The invention purports to facilitate real-time two-way transactions, as
opposed to deferred transactions, e.g., e-mail. ’492 Patent, col. 1, ll. 39–48.
The invention also purports to be an improvement over browse-only
transactions, id. at col. 1, ll. 49–64, and limited two-way services on the
Web through Common Gateway Interface (CGI) applications customized for
particular types of applications or services. Id. at col. 1, l. 65–col. 2, l. 45.
The patent describes a service network running on top of the Internet
having five interacting components: an exchange agent, an operator agent, a
management agent, a management manager, and a graphical user interface
(GUI). Id. at col. 6, ll. 1–5. As shown in Figure 8, a user connects to a Web
server. Id. at col. 9, ll. 25–26. The Web server runs the exchange
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component. Id. Exchange 501 creates and allows for the management or
distributed control of the service network, operating within the boundaries
on an internet protocol (IP) facilities network. Id. at col. 6, ll. 28–30.
A user connected to the Web server running the exchange component
issues a request for a transactional application. Id. at col. 9, ll. 25–26. The
Web server receiving the user’s request to perform a real-time transaction
hands the request over to the exchange agent the Web server is running. Id.
at col. 6, ll. 8–11, col. 9, ll. 27–29. The exchange 501 includes a Web page
505 that uses a GUI to display a list of point-of-service (POSvc) applications
510 accessible to the user by the exchange. Id. at col. 6, ll. 18–20, ll. 39–41,
col. 9, ll. 28–30. The POSvc applications are transactional applications that
can execute the type of transaction the user is interested in performing. Id.
at col. 6, ll. 22–23, ll. 41–44. Exchange 501 also includes a switching
component and an object routing component. Id. at col. 6, ll. 20–22. When
the user selects a POSvc application, the switching component in the
exchange switches the user to the selected POSvc application. Id. at col. 9,
32–33. The object routing component executes the user’s request. Id. at col.
9, ll. 34–35. The exchange and a management agent thus perform the
switching, object routing, application, and service management functions. Id.
at col. 6, ll. 30–38, col. 9, ll. 32–34.
The exchange 501 and management agent together constitute a value-
added network (VAN) switch, which provides multi-protocol object routing
via a proprietary TransWeb
TM
Management Protocol (TMP), depending
upon the services chosen. Id. at col. 7, ll. 52–54, ll. 62–65, col. 8, ll. 41–42.
In one embodiment, TMP and distributed on-line service information data
bases (DOLSIBs) perform object routing. Id. at col. 8, ll. 3–5, col. 9, ll. 34–
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37. In DOLSIBs, which are described as virtual information stores
optimized for networking, information entries and attributes are associated
with a networked object identity that identifies the information entries and
attributes in the DOLSIB as networked objects. Id. at col. 8, ll. 7–13. Each
networked object is assigned an internet address based on the IP address of
the node at which the networked object resides. Id. at col. 8, ll. 13–15. As a
result, networked objects branch from a node in a hierarchical tree structure
that establishes the individual object as an “IP–reachable” node on the
internet, so that TMP can use this address to access the object from the
DOLSIB. Id. at col. 8, ll. 16–26. Each object in the DOLSIB has a name,
which is an administratively assigned object ID specifying an object type.
Id. at col. 8, ll. 27–29. The object type together with the object instance
uniquely identifies a specific instantiation of the object, e.g., an instance of
an object about car models, and provides the user with specific information
about a particular model. Id. at col. 8, ll. 31–35. Each object in the
DOLSIB also has a syntax, which defines the abstract data structure
corresponding to that object type, and an encoding that defines how the
object is represented by the object type syntax while being transmitted over
the network. Id. at col. 8, ll. 36–39.
VAN switch 520 has a layered architecture, as shown in Figure 7.
Boundary service 701 provides the interface between the VAN switch, the
Internet and the Web, multi-media end user devices and the interface to an
on-line service provider. Id. at col. 8, ll. 42–48. Switching service 702,
which is described as an OSI application layer switch, represents the core of
the VAN switch. Id. at col. 8, ll. 52–54. Interconnected application layer
switches form the application network backbone and are described as a
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significant aspect of the Subject Patents. Id. at col. 8, ll. 60–63. Switching
service 702 routes user connections to remote VAN switches and facilitates
connectivity with the Internet (a public switched network) and private
networks, including back office networks, such as banking networks. Id. at
col. 8, ll. 57–60. Management service 703 contains tools used by the end
users to manage network resources, including VAN switches, and provides
applications that perform OAM&P functions, such as security management,
fault management, performance management, and billing management. Id.
at col. 8, l. 64–col. 9, l. 8. Application service 704 contains application
programs that deliver customer services, including POSvc applications for
banking, multi-media messaging, conferencing, financial services. Id. at col.
9, ll. 9–14. Depending upon the type of VAN service, the characteristics of
the network elements will differ. Id. at col. 9, ll. 19–20.
ILLUSTRATIVE CLAIM
Claim 2, reproduced below, is illustrative:
2. An apparatus for completing a real-time Web transaction
from a Web application in an on-line service over a digital network on
the Web, the apparatus comprising:
a processor;
a machine-readable storage device including one or more
instructions executable by the processor for
accepting a first signal comprising a request from a point-of-
service (POSvc) Web application for a real-time Web
transaction specific to a Web merchant's value-added network
service on the Web;
utilizing an object in the Web application and the information
entries and the attributes of an individual data structure in the
POSvc Web application in said request to connect in real-time
to the value-added network service of the Web merchant
without executing Common Gateway Interface (CGI) scripts,
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and further wherein the object in the POSvc Web application is
not an SNMP object;
executing said connection at the OSI application layer, routing said
individual data structure with the infonnation entries and
attributes together from said Web application over the service
network on the Web, wherein said individual data structure in
the POSvc Web application in said request is an object identity
in the POSvc Web application, and further wherein said routing
performed at the OSI application layer is distinct from routing
at the transport layer of the OSI model or network layer of the
OSI model or lower layers of the OSI model; and
completing a real-time Web transaction from said Web application.
BASIS OF PETITION
Under 35 U.S.C. § 112, Petitioner proposes the following three
challenges to the claims of the ’894 Patent: (i) that claims 1–19 lack a
written description as required by 35 U.S.C. § 112(a) (Pet. 20–32), (ii) that
claims 1–19 are unpatentable because they are indefinite under 35 U.S.C.
§ 112(b) (Pet. 32–39), and (iii) that claims 1, 3, 4, 10, 11, and 19 are
unpatentable because they are not enabled under 35 U.S.C. § 112(a) (Pet.
39–40).
Petitioner also challenges the claims based on the prior art as follows:
Reference Basis Claims Challenged
Lawlor
3
,
Computerworld
4
, and
NSPG,
5

§103 1–19

3
Lawlor et al., U.S. Patent No. 5,220,501, issued Jun. 15, 1993 (“Lawlor”).
Ex. 1007.
4
The Cyberbanks, Computerworld, 80, ProQuest Telecommunications (June
26, 1995) (“Computerworld”). Ex. 1008.
5
Netscape Servers Programmer’s Guide, Silicon Graphics, Inc. (1995)
(“NSPG”). Ex.1011.
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Lawlor,
Computerworld,
CMOT
6
and NSPG
§103 1–19
Electronic Banking
7
,
SFCU
8
, NSPG, and
CMOT
§103 1–19
Electronic Banking,
SFCU, NSPG, and
CMOT, and Bartlett
9

§103 11 and 19

THE ’894 PATENT CLAIMS A TECHNOLGICAL
INVENTION
A threshold question is whether at least one claim of the ’894 Patent
qualifies for covered business method patent review. Petitioner bears the
burden of demonstrating that the ’894 Patent is a covered business method
patent. 37 C.F.R. § 304(a). A covered business method patent is “a patent
that claims a method or corresponding apparatus for performing data
processing” or other operations used in the practice, administration, or
management of a financial product or service. 37 C.F.R. § 42.301(a). As
Petitioner notes, at least one of the claims in the ’894 Patent recites
operations in the practice, administration, or management of a financial
product or service. Pet. 2–4. For example, claim 17 recites a retail banking

6
Network Working Group Request For Comments: 1095, The Common
Management Information Services and Protocol IP over TCP/IP (“CMOT”)
(Apr. 1989). Ex. 1012.
7
Allen H. Lipis, et al., Electronic Banking, The Stock Market, 4th Edition,
1–220, John Wiley & Sons, New York (1985) (“EB”). Ex. 1009.
8
Stanford Federal Credit Union Pioneers Online Financial Services,
http://www.thefreelibrary.com/_/print/PrintArticle.aspx?id=17104850 (last visited Mar. 15,
2013), (“SFCU”). Ex. 1010.
9
Joel F. Bartlett, Experience With a Wireless World Wide Web Client, WRL
Technical Note TN-46 (Western Research Library) (1995). Ex. 1013.
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Web application, claim 18 recites a real-time Web transaction performed
from a group selected from a number of financial services (e.g., brokerage,
trading accounts, commercial banking, real estate), and claim 19 recites a
transaction performed from an asset and wealth management point-of-
service Web application.
However, a covered business method patent “does not include
patents for technological inventions.” 37 C.F.R. § 42.301(a). A
technological invention is determined by considering “whether the claimed
subject matter as a whole recites a technical feature that is novel and
unobvious over the prior art, and solves a technical problem using a
technical solution.” 37 C.F.R. § 42.301(b). A patent is not drawn to a
technological invention merely by (a) employing claim drafting techniques
reciting known technologies, such as computer hardware, software,
networks, and devices; (b) reciting use of a prior art technology to
accomplish a process or method, even if that process or method is novel and
non-obvious; and (c) by combining prior art structures to achieve the
normal, expected, or predictable result of that combination. Office Trial
Practice Guide, 77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012).
Using claim 2 as an example, Petitioner argues that the ’894 Patent
does not recite a technological invention because claim 2 recites only known
technologies, such as a processor, a machine readable storage device, a
signal, an application, a network, the Web, an object, and a data structure.
Pet. 5. Petitioner also argues that the ’894 Patent recites a combination of
structures to achieve the normal, expected, and predictable result of the
combination. Id. In particular, Petitioner argues that the ’894 Patent is
directed to a financial or business problem, i.e., allowing a user to complete
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from a Web application the types of transactions he or she can already
perform in person. Id. at 5–6. Patent Owner contends that these are
financial or business problems, not technical problems. Id. at 6.
Petitioner addresses only part of the analysis. Even if Petitioner
demonstrates that the claims recite certain known elements and have
application to financial transactions, Petitioner does not address whether the
claims are drawn to solving a technical problem using a technical solution.
Indeed, claim 2 recites several features that are, facially, a technical solution
that Petitioner does not discuss.
For example, claim 2 recites that the apparatus accepts a request from
a point-of-service (POSvc) application for a real-time transaction specific to
the Web merchant’s service. Ex. 1001, col. 10, ll. 44–47. Claim 2 next
recites that the apparatus utilizes an object in the Web application and the
information entries and attributes of an individual data structure in the point-
of-service POSvc application to connect to the value–added network service
of the Web merchant. Id. at col. 10, ll. 48-55. Claim 2 further recites that
the connection is executed by routing a data structure with information
entries and attributes at the application layer of the OSI model, as
distinguished from routing the data structure at the transport or network
layers of the OSI model. Id. at col. 10, ll. 56–65. The recitation in claim 2 of
using an object and information entries and attributes to complete the
connection at a specific layer of the OSI model appears to be a technical
solution. As such, the claim is drawn to solving the technical problem of
connecting to a Web merchant’s service. Therefore, Petitioner has not
shown that claim 2 and claims 5–19, which depend from claim 2, qualify for
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covered business method patent review because Petitioner has not shown
that these claims do not recite a technical solution to a technical problem.
Independent claims 1 and 3, and claim 4, which depends from claim
1, recite limitations similar to those discussed above as recited in claim 2.
Therefore, we also are not persuaded that Petitioner has shown that claims 1,
3, and 4 qualify for covered business method patent review.
We note that our decision in this case is different from our decision in
CBM2013-00013, where we instituted a covered business method patent
review. CBM2013-00013 involved U.S. Patent No. 8,037,158 (“the ’158
Patent”), which has the same specification as that of the ’894 Patent, but
claims different subject matter. Claim 1 of the ’158 Patent, which is drawn
to transferring funds, recites the steps of providing a Web page with POSvc
applications that can be selected, accepting signals indicating the selection of
the POSvc application and other information, and transferring funds using “a
routed transactional data structure.” In CBM2013-00013, we were not
persuaded by Patent Owner’s argument that Figure 5D of the ’158 Patent
exemplifies an “object” as a transactional data structure. See SAP Am. Inc.,
v. Pi-Net Int’l., Inc., CBM2013-00013, Dec. to Inst. (Paper 15) at 18–19. In
CBM2013-00013, we instituted a covered business method patent review
because claim 1 of the ’158 Patent recites transferring funds from checking
to savings “utilizing a routed transactional data structure” but does not recite
a particular technical implementation. Id. Thus, claim 1 of the ’158 Patent
does not solve a technical problem using a technical solution. In contrast,
independent claims 1, 2 and 3 of the ’894 Patent recite using the object to
make a specific connection to the Web merchant’s service (solving a
technical problem) using a specific technique, i.e., by routing a data structure
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with the information entries and attributes at the application layer of the OSI
model, as distinguished from routing the data structure at the transport or
network layers of the OSI model. Thus, although they have application to
financial transactions and recite known elements, Petitioner has not shown
that the claims of the ’894 Patent do not recite solving a technical problem
using a technical solution and are subject matter for business method patent
review.
CONCLUSION
Petitioner has not shown that claims 1–19 of the ’894 Patent do not
recite solving a technical problem using a technical solution. Thus, we do
not authorize a covered business method patent review.
Our decision addresses only the threshold question of whether the
claims of the ’894 Patent qualify for covered business method patent review.
We do not reach the merits of Petitioner’s challenges to the patentability of
claims 1–19, and no implications can be drawn from this decision
concerning Petitioner’s challenges under 35 U.S.C. § 112 or 35 U.S.C.
§ 103.
ORDER
In consideration of the above, it is
ORDERED that the Petition is DENIED.

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PETITIONER:
Richard D. Mc Leod
Garth Winn
Klarquist Sparkman LLP
Rick.mcleod@klarquist.com
garth.winn@klarquist.com

PATENT OWNER
Lakshmi Arunachalam
laks22002@yahoo.com