MICROSTRATEGY, INC.v.ZILLOW, INC.

Patent Trials and Appeals Board

Mar 27, 2014

11347024 - (D) (P.T.A.B. Mar. 27, 2014)

Trials@uspto.gov Paper 42
571-272-7822 Entered: March 27, 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

MICROSTRATEGY, INC.
Petitioner

v.

ZILLOW, INC.
Patent Owner
____________

Case IPR2013-00034
Patent 7,970,674
____________

Before JAMESON LEE, JOSIAH C. COCKS, and
MICHAEL W. KIM, Administrative Patent Judges.

KIM, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 318(a) and 37 C.F.R. § 42.73

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I. INTRODUCTION
MicroStrategy, Inc. (“Petitioner”) filed a petition on November
13, 2012, requesting an inter partes review of claims 1-40 of U.S.
Patent No. 7,970,674 (“the ‟674 patent”) pursuant to 35 U.S.C. §§
311-319 Paper 7 (“Pet.”). Zillow, Inc. (“Patent Owner”) filed a
patent owner preliminary response. Paper 16 (“Prelim. Resp.”).
Taking into account Patent Owner‟s preliminary response, the Board
determined that the information presented in the petition demonstrated
that there was a reasonable likelihood that the challenged claims are
unpatentable. Pursuant to 35 U.S.C. § 324, the Board instituted this
trial on April 2, 2013, on the patentability of claims 2, 5-17, and 26-40
of the ‟674 patent. Paper 17 (“Dec.”).
During the trial, Patent Owner filed a patent owner response
(Paper 24, “PO Resp.”), and Petitioner filed a reply to the patent
owner response (Paper 28, “Reply”). An oral hearing was held on
November 21, 2013.
1

The Board has jurisdiction under 35 U.S.C. § 6(c). This
decision is a final written decision, under 35 U.S.C. § 318(a), on the
patentability of claims 2, 5-17, and 26-40 of the ‟674 patent. We hold
that claims 15 and 17 of the ‟674 patent are unpatentable under
35 U.S.C. § 102(b), and that claims 2, 5-11, 13, 14, 16, 26, 28-33, 35-
37, 39, and 40 are unpatentable under 35 U.S.C. § 103(a). We also

1
A transcript of the oral hearing is included in the record as Exhibit
3001.
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Patent 7,970,674
3
hold that Petitioner has not met its burden of proof, by a
preponderance of the evidence, that claims 12, 27, 34, and 38 of
the ‟674 patent are unpatentable.
A. Related Proceedings
Petitioner indicates that the ‟674 patent is involved in: Zillow,
Inc. v. Trulia, Inc., Case No. 2:12-cv-1549 (W.D. Wash). Pet. 1. The
‟674 patent also is subject to a covered business method patent review
in CBM2013-00056.
B. The ’674 patent
The ‟674 patent states:
[The invention] is directed to the field of electronic
commerce techniques, and, more particularly, to the field
of electronic commerce techniques relating to real estate.
Ex. 1001, 1:9-12. As explained in the ‟674 patent, it is difficult to
determine accurately a value for real estate properties. The most
reliable method for valuing a home, if it recently was sold, is to regard
the selling price as its value. Ex. 1001, 1:25-26. Only a small
percentage of homes, however, are sold at any given time. Ex. 1001,
1:26-30. Another widely used approach is professional appraisal. Ex.
1001, 1:33-34. Appraisals are subjective, however, and they “[are]
expensive, can take days or weeks to complete, and may require
physical access to the home by the appraiser.” Ex. 1001, 1:37-44.
Moreover, designing automatic valuation systems that only consider
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information available from public databases may be inaccurate. Ex.
1001, 1:45-51. Accordingly, the ‟674 patent discloses an approach
where valuing homes is responsive to owner input, allegedly resulting
in a more accurate, inexpensive, and convenient valuation. Ex, 1001,
1:52-56.
Claims 2 and 15 are independent. Claims 5-8 and 14 depend
directly from claim 2; claims 9-13 depend indirectly from claim 2;
claims 16, 17, 26, 29, 30, and 40 depend directly from claim 15; and
claims 27, 28, and 31-39 depend indirectly from claim 15. Claim 15,
reproduced below, is illustrative of the claimed subject matter of the
‟674 patent.
15. A method in a computing system for
refining an automatic valuation of a distinguished home
based upon input from a user knowledgeable about the
distinguished home, comprising:
obtaining user input adjusting at least one aspect of
information about the distinguished home used in the
automatic valuation of the distinguished home;
automatically determining a refined valuation of
the distinguished home that is based on the adjustment of
the obtained user input; and
presenting the refined valuation of the
distinguished home.
C. Prior Art Relied Upon
Petitioner relies upon the following prior art references:
Dugan US 5,857,174 Jan. 5, 1999 Ex. 1003
Kim US 2005/0154657 July 14, 2005 Ex. 1004
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Shinoda US 2004/0049440 Mar. 11, 2004 Ex. 1006
Sklarz US 2002/0087389 July 4, 2002 Ex. 1010

Internal Revenue Service Publication 946, How to Depreciate
Property (“IRS Pub. 946”) 2004 Ex. 1009
D. Grounds of Unpatentability
The Board instituted inter partes patent review of the ‟674
patent based on the following grounds of unpatentability:
Claims Basis References
15 and 17 § 102 Dugan
2, 5-10, 13, 14, 16,
26, 27, 29-33, 35-
37, 39, and 40
§ 103 Dugan and Kim
11 and 12 § 103 Dugan, Kim, and Shinoda
28 § 103 Dugan, Kim, and IRS Pub. 946
34 and 38 § 103 Dugan, Kim, and Sklarz
II. ANALYSIS
A. Claim Construction
In an inter partes review, claim terms in an unexpired patent are
interpreted according to their broadest reasonable construction in light
of the specification of the patent in which they appear. 37 C.F.R.
§ 42.100(b); Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756,
48,766 (Aug. 14, 2012). Claim terms are also given their ordinary and
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customary meaning as would be understood by one of ordinary skill in
the art in the context of the entire disclosure. In re Translogic Tech.,
Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007).
If an inventor acts as his or her own lexicographer, the
definition must be set forth in the specification with reasonable
clarity, deliberateness, and precision. Renishaw PLC v. Marposs
Societa’ per Azioni, 158 F.3d 1243, 1249 (Fed. Cir. 1998).
If a feature found in the specification is not necessary to give
meaning to what the inventor means by a claim term, it would be
“extraneous” and should not be read into the claim. Renishaw PLC,
158 F.3d at 1249; E.I. du Pont de Nemours & Co. v. Phillips
Petroleum Co., 849 F.2d 1430, 1433 (Fed. Cir. 1988). The
construction that stays true to the claim language and most naturally
aligns with the inventor‟s description is likely the correct
interpretation. Renishaw PLC, 158 F.3d at 1250.
1. “automatic valuation of a distinguished home”
Independent claim 15 recites “automatic valuation of a
distinguished home.” As reflected in their analysis of the prior art,
Patent Owner asserts that “automatic valuation of a distinguished
home” should be construed as an Automated Valuation Model
(“AVM”), which Patent Owner contends is a term of art indicating a
particular valuation model that includes very specific features, such as
an absence of an appraiser, a regression based on values generated by
a data set, and a capability of performing mass valuations. PO Resp.
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19-26. Petitioner counters that “automatic valuation of a
distinguished home” is not a term of art, and should be construed as “a
calculation of a value of a distinguished property or home performed
without human intervention.” Reply 5-9. We agree with Petitioner
for the reasons set forth below.
The Specification of the ‟674 patent does not set forth expressly
a definition of “automatic valuation.” Nor is it apparent what
definition is implicit within the Specification. The parties also do not
identify any prosecution history that purportedly would offer a
definition for the term. Instead, Petitioner proposes that “automatic
valuation of a distinguished home” should be construed with its
ordinary and customary meaning as “a calculation of a value of a
distinguished property or home performed without human
intervention.” For support, Petitioner cites the testimony of their
expert, Dr. Borst (Ex. 1023 ¶¶ 13-18). This construction is consistent
with the Specification, which discloses using computer system 100 to
perform home valuations (Ex. 1001, Fig. 1), and thus is appropriately
broad and reasonable in light of the Specification, as required by our
rules. It is also consistent with dictionary definitions of “automatic”
2

2
automatic: pertaining to a function, operation, process, or device
that, under specified conditions, functions without intervention by a
human operator. THE AUTHORITATIVE DICTIONARY OF IEEE
STANDARDS TERMS 64 (7
th
ed. 2000).
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and “valuation”
3
which, when combined for a definition of “automatic
valuation,” results in the following: pertaining to an estimation or
determination of a market value of a thing that, under specified
conditions, functions without intervention by a human operator.
Accordingly, we construe “automatic valuation of a distinguished
home” as “a calculation of a value of a distinguished property or home
performed without human intervention.”
Patent Owner asserts that one of ordinary skill would have
understood “automatic valuation” more narrowly as a term of art
indicating an AVM or “computer assisted mass appraisal”
(“CAMA”). For support, Patent Owner cites the testimony of their
expert Dr. Kilpatrick and the cross-examination testimony of
Petitioner‟s expert Dr. Borst, and further asserts that the Specification
discloses only one type of “automatic valuation”: an AVM. PO Resp.
12-13. Petitioner counters that the Specification including the claims
does not recite the term “AVM.” Petitioner further counters that
because AVMs were known at the time of the invention, if Patent
Owner desired to limit “automatic valuation” to an AVM, either the
claims should recite “AVM,” or the Specification should expressly
define “automatic valuation” as an AVM. Petitioner cites the
testimony of Dr. Borst in support of this position, who in turn cites
several industry documents as extrinsic evidence in support. Ex. 1023

3
valuation: the estimated or determined market value of a thing.
MERRIAM WEBSTER‟S COLLEGIATE DICTIONARY 1382 (11
th
ed. 2003).
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¶¶ 13-18. After reviewing all arguments and the testimony of both
Dr. Kilpatrick and Dr. Borst, we credit the testimony of Dr. Borst over
that of Dr. Kilpatrick, and thus, agree with Petitioner. See Yorkey v.
Diab, 601 F.3d 1279, 1284 (Fed. Cir. 2010).
The testimony of Dr. Kilpatrick and the cross-examination of
the testimony of Dr. Borst cited by Patent Owner concerning this
construction largely falls into three categories, which collectively are
insufficient to outweigh the contrary testimony of by Dr. Borst. First,
Dr. Kilpatrick testifies that there are two types of valuations:
traditional appraisals and AVMs. Ex. 2001 ¶¶ 26, 36, 40. It is not
apparent how that assertion supports Patent Owner‟s position that
“automatic valuation” is a term of art indicating an AVM. Dr.
Kilpatrick does not state that traditional appraisals are not automatic,
or that, aside from AVMs, there are no other automatic types of
valuation. Even assuming such conclusions are what Dr. Kilpatrick
intended to draw, we are not persuaded by his testimony, for reasons
discussed below.
Patent Owner has asserted throughout this proceeding that
traditional appraisals require an appraiser, and that AVMs have very
specific features such as the absence of an appraiser, a regression
based on values generated by a data set, and a capability of
performing mass valuations. Given those positions, it logically
follows that traditional appraisals and AVMs do not cover the
universe of valuations. For example, a valuation conducted by a non-
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appraiser but without regression would not fall into either category.
Accordingly, given that AVMs cannot logically occupy all the space
in the valuation universe unoccupied by traditional appraisals, we are
not persuaded that every automatic valuation - something that is not a
traditional appraisal - is covered by AVM, which Patent Owner
asserts is synonymous with “automatic valuation.”
Second, Dr. Kilpatrick testifies that Dugan does not disclose an
AVM. Ex. 2001. ¶¶ 33, 41, 45. It is not apparent how this assertion is
relevant to Patent Owner‟s position that “automatic valuation” is a
term of art indicating an AVM. Patent Owner appears to be asserting
that because Dugan discloses traditional appraisals, it does not
disclose an AVM, but that is inapposite to the claim construction of
“automatic valuation.”
Third, Patent Owner cites the testimony of Dr. Kilpatrick and
the cross-examination testimony of Dr. Borst as supporting the
proposition that the only type of “automatic valuation” disclosed in
the Specification is an AVM. Ex. 2001 1013 ¶ 12; Ex. 2016, 60:2-5,
61:5-6. That alleged fact is not disputed by Petitioner. Patent Owner
appears to be asserting that, because the Specification only discloses
an AVM, this lone embodiment in the Specification should be
imported into the claims. We decline to do so. CollegeNet, Inc. v.
ApplyYourself, Inc., 418 F.3d 1225, 1231 (Fed. Cir. 2005) (stating that
while the specification can be examined for proper context of a claim
term, limitations from the specification will not be imported into the
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claims). Indeed, the Specification recites the following: “[w]hile the
foregoing description makes reference to particular embodiments, the
scope of the invention is defined solely by the claims that follow and
the elements recited therein.” Ex. 1001, 19:23-26.
Alternatively, Patent Owner indicates that they disavow
expressly, in this proceeding, any claim scope of “automatic
valuation” that is broader than an AVM, and that the Board should
take this express disavowal into account and construe “automatic
valuation” as an AVM. Patent Owner cites several cases that they
assert both support and oppose their position that an adjudicative body
can take such express disavowals into account in the same proceeding
in which the disavowal was made. Petitioner asserts that it would be
unfair and confusing to Petitioner and the public to permit Patent
Owner to disavow claim scope in this manner, especially where Patent
Owner has the option of amending their claim to clarify claim scope.
We agree with Petitioner.
Generally speaking, in applying for a patent, Patent Owner is
requesting a right to exclude others that is provided by the United
States government. In return, it is incumbent upon Patent Owner to
define adequately the limits of that right to exclude through claims,
such that the public is on notice as to the scope of that right.
We are not aware of any proceeding where a tribunal has taken
into account a disavowal made in the same proceeding (“same
proceeding disavowal”). Instead, we are only aware of situations
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where a tribunal has taken into account disavowals made in prior,
completed proceedings. Specifically, in district court infringement
suits, claims have a presumption of validity. And as district courts are
tasked with construing claims with an eye toward preserving their
validity over the prior art, the district court considers all materials at
its disposal, which would include the prosecution history, and,
specifically, any previous disavowals made by the patentee that are set
forth in the prosecution history.
Furthermore, even if a tribunal were permitted, generally, to
take into account a disavowal made during the same proceeding, as
opposed to a prior, completed proceedings, absent extraordinary
circumstances, we are not persuaded that such same proceeding
disavowals are proper in a proceeding where amendments are
available. This is because when claim amendments are available, a
patent owner has an opportunity to amend claims to a scope it desires,
so as to have the substance of any purported same proceeding
disavowal reflected in the claim language expressly. The public
should not be burdened with inadequate notice concerning the scope
of claims, where the Patent Owner has been provided with an
opportunity to amend claims to reflect the scope it desires. If Patent
Owner chooses not to avail itself of the opportunity to amend, it is
reasonable to accord the claims their scope under the broadest
reasonable construction, without regard to the substance of any same
proceeding disavowal.
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Patent Owner cites the following cases to show that federal
courts have relied on statements made in pending re-examination
proceedings in construing claims: Grober v. Mako Prods., Inc., 686
F.3d 1335, 1341-42 (Fed. Cir. 2012); RMail Ltd. v. Amazon.com, Inc.,
2013 WL 968246, at *2, *20 (E.D. Tex. March 12, 2013); Life Techs.
Corp. v. Illumina, Inc., 2010 WL 5343177, at *18 (D. Del. Dec. 15.
2010). Patent Owner‟s citations are inapposite, because the patent
owner in the aforementioned cases did not have the opportunity to
amend their claims in the same proceeding. Patent Owner may be
asserting that when the federal courts construe the claims, the federal
courts will take into account any express disavowals of claim scope
made before the Board. As we are the tribunal before which such
disavowals are made and not a court reviewing such proceedings,
Patent Owner‟s assertion is inapposite. Patent Owner‟s same
proceeding disavowal here is a post-litigation position, which does not
affect our broadest reasonable construction of claim terms. Also,
absent extraordinary circumstances, which are absent here, same
proceeding disavowals do not apply where the patent owner has an
opportunity to amend the claims to limit their scope to that
commensurate with an application of the desired same proceeding
disavowal.
Patent Owner further cites the following cases to show that a
disavowal may be considered in pending examination appeals and re-
examination proceedings, and thus should also be considered in the
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instant proceeding: Tempo Lighting, Inc. v. Patent of Tivoli LLC,
2012 WL 627809, at *3 (BPAI Feb. 24, 2012); Ex Parte Jacobus,
2009 WL 2137370, at *4-5 (BPAI July 16, 2009); Ex Parte Aloni,
2013 WL 3324253, at *2, n. 1 (PTAB May 14, 2013). We are not
persuaded. Concerning whether the PTO should consider disavowals,
generally, our reviewing court has held the following: “[t]his court
also observes that the PTO is under no obligation to accept a claim
construction proffered as a prosecution history disclaimer, which
generally only binds the patent owner.” Tempo Lighting, Inc. v.
Patent of Tivoli LLC, ___ F.3d ___, 2014 WL 503128, at *4 (Fed. Cir.
2014). Moreover, while in a reexamination proceeding conducted at
the PTO prior to appeal, the patent owner has an opportunity to amend
the claims, when the reexamination is appealed to the Board,
however, prosecution has closed. Thus, consideration of disavowals,
made at an earlier stage during prosecution, by the Board during a
reexamination appeal, may be appropriate. In the instant proceeding,
however, Patent Owner has an opportunity to amend the claims to
make the scope of the same proceeding disavowal manifest. If Patent
Owner chooses not to avail themselves of this opportunity, it is
reasonable to resolve any claim ambiguity against Patent Owner,
notwithstanding any same proceeding disavowal.
At oral hearing, Patent Owner explained its reasons for not
amending its claims in the following exchange:
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JUDGE LEE: Why didn‟t you amend your claims to say
automatically determining a valuation for a subject home
without substantial involvement of an appraiser?
MR. AL-SALAM: Because we felt that was implicit based on
the disclosure --
JUDGE LEE: But it would take you a few pages in an
amendment with hardly anything more to argue.
MR. AL-SALAM: But that would suggest an admission that it
was not already -- it would not already be construed in that
manner by somebody of ordinary skill in the art.
JUDGE LEE: But it‟s a substitution amendment. It‟s a
contingent. You know, if the Board didn't agree with you, you
end up with that claim.
MR. AL-SALAM: I understand and certainly that is something
we could do. These claims are in litigation, so making that
amendment would suggest that we‟re admitting that already the
claims would not be construed to --
JUDGE LEE: All right. So, that‟s a litigation choice.
Ex. 3001, 62:17-63:11. Patent Owner‟s choice limits its options, but
it is free to make that choice. In this case, the Board does not accept
Patent Owner‟s same proceeding disavowal as a basis to alter the
meaning of claims which have been properly construed under a
broadest reasonable construction. Patent Owner has presented no
persuasive arguments to permit it to take the route of same proceeding
disavowal, rather than to file a motion to amend claims so that the
claim scope reflects the desired scope after application of the same
proceeding disavowal.
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Patent Owner additionally asserts the following:
In exhibit ZILLOW 2016, at 145:21-149:10,
[Petitioner‟s expert] Dr. Borst testified that several of his
earlier publications related to mass appraisal and CAMA
systems do not use the word “AVM” and that a CAMA
system is fundamentally the same as an AVM. This
testimony is relevant to the assertion on page 6 of the
Reply that “the term of art „Automated Valuation Model‟
was not included anywhere in the specification of
[Cheng], nor was it ever before mentioned by the Patent
Owner during the original prosecution of [Cheng].” The
testimony is relevant because it illustrates that an AVM
system can be described, and has been described, without
using the terms “AVM” or “Automated Valuation
Model.”
Paper 31 at 1-2. Patent Owner‟s assertion is inapposite. We agree
that AVM can be described in other terms such as “mass appraisal”
and “CAMA.” However, independent claim 15 does not recite those
terms; it recites “automatic valuation.” Patent Owner has not shown
adequately that “automatic valuation” is a term of art indicating an
AVM.
Patent Owner asserts that “automatic valuation” refers to a
“market valuation [that] is not based on individual preferences of the
buyer or seller, but on the value generated by the data set.”
PO Resp. 22-23 (citing Ex. 2001 ¶¶ 45, 46) (emphasis omitted).
Petitioner asserts that neither Patent Owner nor Dr. Kilpatrick cite any
intrinsic or extrinsic evidence in support of their assertions. We agree
with Petitioner. As referenced earlier in the Declaration of Dr.
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Kilpatrick, a value generated by a data set is a feature of an AVM.
Ex. 2001 ¶ 12. As set forth above, we are not persuaded that
“automatic valuation” is a term of art indicating an AVM.
Furthermore, Patent Owner‟s assertion and Dr. Kilpatrick‟s testimony
that “automatic valuation” refers to a “market valuation [that] is not
based on individual preferences of the buyer or seller” appears in a
context of distinguishing Dugan in a conclusory manner, which we do
not prescribe much weight. Neither Patent Owner nor Dr. Kilpatrick
explains how the Specification or the state of the art supports this
construction. Velander v. Garner, 348 F.3d 1359, 1371 (Fed. Cir.
2003) (“In giving more weight to prior publications than to
subsequent conclusory statements by experts, the Board acted well
within [its] discretion”). Indeed, in preceding paragraphs 42-44 of the
Declaration, Dr. Kilpatrick testifies “[t]here is no one universally-
accepted standard definition of market value,” casting doubt on the
assertion that all plausible definitions of “automatic valuation,” in the
context of the Specification, would exclude market valuation based on
individual preferences of the buyer or seller.
Patent Owner and Petitioner dispute whether an AVM includes
various features, such as an absence of an appraiser, a regression
based on values generated by a data set, and a capability of
performing mass valuations. However, the disagreement is
inconsequential, because we have determined that the recited
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limitation “automatic valuation” is not a term of art that indicates an
AVM.
Apart from whether “automatic valuation” is an AVM, Patent
Owner asserts the following:
MR. AL-SALAM: As Cheng [the ‟674 patent] itself
says, Cheng itself defines automatic valuation. I mean, I
keep hearing that Cheng didn‟t tell us what automatic
valuation means when I think it‟s very clear it does. It
tells us precisely that automatic valuation is based on
what‟s in a public database and without input from a
homeowner or presumably from anybody that‟s
knowledgeable about the property, such as an appraiser
who could become knowledgeable if he or she were
going to do an appraisal inspection.
Ex. 3001, 40:1-8. In effect, Patent Owner asserts that the inventor
acted as his or her own lexicographer, and that the Specification
defines “automatic valuation” to include very specific features. We
disagree. If an inventor acts as his or her own lexicographer, the
definition must be set forth in the specification with reasonable
clarity, deliberateness, and precision. Renishaw PLC, 158 F.3d at
1249. To that end, Patent Owner cites the following portion of the
Specification as defining “automatic valuation”:
While it might be possible to design systems that
automatically value homes, such automatic valuations
would generally be performed based upon the contents of
a public database, and without input from each home's
owner or other information not in the public database.
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Ex. 1001, 1:45-49 (quoted at Ex. 3001, 46:1-47:5, 62:3-10) (emphasis
added). However, this disclosure in the Specification does not rise to
the level of a definition because the use of the word “systems”
indicates that there is more than one type of “automatic valuation,”
and the purported definition is qualified by the term “generally.” This
was confirmed by Patent Owner as follows:
JUDGE LEE: We‟re beginning to understand. So, AVM
is just a name that people tag onto automatic valuation.
It‟s not as though there's some other AVM model of, you
know, having this algorithm. It‟s just a name people --
MR. AL-SALAM: It is a name --
JUDGE LEE: -- automatic valuation.
MR. AL-SALAM: It is a name that had become more
and more accepted as the term to cover a generic -- not a
generic, but a class of automatic valuations. There are
different types of automatic valuations and AVM –
JUDGE LEE: So it doesn't cover all automatic
valuations. Some are excluded from the term AVM?
MR. AL-SALAM: I would say it covers all automatic
valuations that have the properties that I‟ve mentioned;
those properties being there‟s not an appraiser involved.
Ex. 3001, 50:15-51:5. As is evident from the above-noted exchange
between the Board and counsel, any special “definition” stemming
from the Specification is less than reasonably clear, deliberate, and
precise. See Renishaw PLC, 158 F.3d at 1249. If anything, it
indicates that “automatic valuation” covers more than AVM.
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By a preponderance of the evidence, we determine that
“automatic valuation of a distinguished home” is not a term of art and
was not defined in the Specification, and thus should be construed
broadly, but reasonably, as “a calculation of a value of a distinguished
property or home performed without human intervention.”
Independent claim 2 recites “automatic valuation of a
distinguished property.” For the same reasons as set forth above, we
construe “automatic valuation of a distinguished property” broadly,
but reasonably, as “a calculation of a value of a distinguished property
or home performed without human intervention.”
2. “user knowledgeable about the distinguished home”
Independent claim 15 recites “user knowledgeable about the
distinguished home.” The Board construed “user knowledgeable
about the distinguished home” as any person “knowledgeable about
the distinguished home,” not limited to the owner of a home or
someone with equivalent knowledge to the owner of a home. Dec. 9-
10. Patent Owner asserts “user knowledgeable about the
distinguished home” should be construed as “the owner or a person
with equivalent knowledge to the owner,” because Patent Owner has
expressed in this proceeding a disavowal of any broader construction.
PO Resp. 18-19. Petitioner asserts that it would be unfair and
confusing to Petitioner and the public to permit Patent Owner to
disavow claim scope in this manner, especially where Patent Owner
has the option of amending their claim to reflect a claim scope that
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takes into account the substance of the same proceeding disavowal.
Reply 2-5. Again, we agree with Petitioner. Our analysis as to the
impropriety of same proceeding disavowals is set forth above in the
analysis of our construction of “automatic valuation,” and thus need
not be repeated here.
Through their analysis of the prior art, Patent Owner attempted
to distinguish an appraisal from “automatic valuation.” For example,
at oral hearing, Patent Owner stated as follows:
MR. AL-SALAM: We believe that based on the
specification, the only reasonable interpretation of
automatic valuation in Cheng is that valuation is done
without any appraiser input.
Ex. 3001, 33:12-14. We are not persuaded, for the reasons set forth
above. However, although the above assertions were set forth in
another context, we believe those assertions are applicable to a proper
construction of “user knowledgeable about the distinguished home.”
To that end, we are persuaded that in light of the Specification, a
broadest reasonable construction of “user knowledgeable about the
distinguished home” excludes appraisers. Specifically, the
Specification discloses the shortcomings of appraisals done by
appraisers, and excludes appraisers from the list of user from which
input is sought. Ex. 1001, 1:33-44, 2:64-67, 3:64-67, 4:5-10, 4:21-24.
Indeed, Petitioner does not dispute its own expert Dr. Borst‟s cross-
examination testimony that the process described in the Specification
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does not result in an appraisal. Paper 34 at 4-5 (citing Ex. 1023 ¶ 31;
Ex. 2016, 120:2-21).
We modify our previous construction of “user knowledgeable
about the distinguished home” to the following: “any person, other
than an appraiser, knowledgeable about the distinguished home.”
Under this construction, such a person is not limited to the owner of a
home or someone with equivalent knowledge to the owner of a home.
Independent claim 2 recites “obtaining user input from the
owner.” For the same reasons as set forth above, we determine that
“obtaining user input from the owner” excludes obtaining user input
from an appraiser.
3. “owner . . . of the distinguished property”
Independent claim 2 recites “owner . . . of the distinguished
property.” Petitioner sets forth a claim construction of “owner” as
“seller.” Pet. 12, 37, 40-41. The Board construed “owner . . . of the
distinguished property” simply by its terms, i.e., owner of the
distinguished property, who may or may not be selling. Dec. 10.
When the owner is selling, the owner becomes a seller. Patent Owner
proposes that “owner” be construed as “the person that has title to the
property.” Ex. 3001, 34:3-4. The Specification is consistent with
Patent Owner‟s proposed construction. Accordingly, we construe
“owner . . . of the distinguished property” as “the person that has title
to the distinguished property.” When the owner is selling, the owner
becomes a seller.
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B. Claims 15 and 17 as Anticipated by Dugan
“A claim is anticipated only if each and every element as set
forth in the claim is found, either expressly or inherently described, in
a single prior art reference.” Verdegaal Bros., Inc. v. Union Oil Co. of
Cal., 814 F.2d 628, 631 (Fed. Cir. 1987).
Petitioner asserts that claims 15 and 17 are unpatentable under
35 U.S.C. § 102(b) as anticipated by Dugan. Pet. 3, 17, 38-39. Upon
review of Petitioner‟s petition and supporting evidence, as well as
Patent Owner‟s response and supporting evidence, we determine that
Petitioner has demonstrated that, by a preponderance of the evidence,
claims 15 and 17 are anticipated by Dugan.
1. Dugan
Dugan relates to a manual or computer-implemented method
for appraising real estate. Ex. 1003, 1:9-10. Dugan discloses that a
primary object of its invention is to provide a real estate appraisal that
is highly efficient and trustworthy and can be relied upon by sellers,
buyers, appraisers, banks, investors, and the like. Ex. 1003, 4:31-34.
As shown below, Figure 3 of Dugan shows an exemplary appraisal
process where, if an operator decides to appraise a subject property at
step 32, the process will proceed in the manner of the flow chart in
Figure 4. Ex. 1003, 7:47-49.
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Figure 3 is a general flow diagram of an
overall operation of the system of Dugan.
Ex. 1003, Fig. 3. If the operator chooses to revise a record at step 36
of Figure 3, the method described in the flow chart of Figure 5 will be
followed. Ex. 1003, 7:50-52. If the operator decides to appraise a
subject property, the appraiser and prospective buyer of a property
assign points based upon an Ideal Point System (IPS), which is based
upon desirability factors for each of five categories of elements.
Ex. 1003, 4:65-5:3. Once the IPS values are determined, the property,
subsequently, may be used as a comparable property. Ex. 1003, 5:5-6.
The appraiser need only select a subject property and obtain the IPS
values for the seller of the subject property. Ex. 1003, 5:6-8. The sale
price of each comparable property then is adjusted based upon a
relative difference between the total IPS value for the comparable
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properties and the total IPS value of the subject property. Ex. 1003,
5:8-11. The average adjusted sale price for all of the comparable
properties then is used as an appraised value for the subject property.
Ex. 1003, 5:23-25. Once the appraised value is determined for the
subject property, the operator will have the option to perform another
appraisal, or revise a previously performed appraisal record at step 36.
Ex. 1003, 8:50-60. Such revision may include correcting information,
or inputting a new set of IPS values. Ex. 1003, 8:21-24. The system
of Dugan may be used independently, or in conjunction with other
appraisal techniques. Ex. 1003, 14:63-64.
2. Analysis
Upon review of Petitioner‟s petition and supporting evidence,
as well as Patent Owner‟s response and supporting evidence, we
determine that Petitioner has demonstrated, by a preponderance of the
evidence, that Dugan discloses each and every limitation of claims 15
and 17.
Patent Owner asserts that Dugan only discloses determining
appraised values, and not “automatic valuation of a distinguished
home,” as recited in independent claim 15. PO Resp. 19-24.
Specifically, Patent Owner asserts that Dugan only discloses
appraisals conducted by appraisers, and not an AVM conducted
without appraiser involvement. Indeed, Patent Owner asserts that
Dugan criticizes AVMs. Petitioner counters that Patent Owner‟s
assertions are inapposite, because “automatic valuation” is not an
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AVM. Reply 5-9. We agree with Petitioner. As set forth above, we
decline to adopt Patent Owner‟s construction of “automatic valuation”
as an AVM, and instead, construe “automatic valuation of a
distinguished home” as “a calculation of a value of a distinguished
property or home performed without human intervention.” Dugan
discloses a manual or computer-implemented method for appraising
real estate. Ex. 1003, 1:9-10. Specifically, Dugan discloses the
following:
Once the selected records are to the appraiser‟s
satisfaction, steps 50 and 54, the system 10 will determine
the appraised value of the real estate, step 62. This
appraisal is based upon a comparison of the total IPS
value for each comparable property and the total IPS
value of the subject property. The appraised value is
displayed on monitor 14, along with a high and low
appraised value, step 64. Once these values are
displayed, the system returns, at step 66, to step 34 of
FIG. 3.
Ex. 1003, 8:50-58 (emphasis added).
Patent Owner asserts that because Dugan‟s appraisal is based
on subjective preferences of a particular buyer and seller, it cannot
correspond to the recited “automatic valuation.” Petitioner counters
that a broadest reasonable construction of “automatic valuation” does
not support Patent Owner‟s assertion. We agree with Petitioner. As
set forth above in our claim construction analysis, we are not
persuaded that “automatic valuation” excludes valuations based on
subjective preferences of a particular buyer or seller.
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Based on Patent Owner‟s assertions concerning the limitation
“automatic valuation” and Dugan, Patent Owner implies that Dugan
does not disclose “obtaining user input” based on “input from a user
knowledgeable about the distinguished home,” as recited in
independent claim 15. Specifically, Patent Owner implies that
because Dugan only discloses appraisals conducted by appraisers,
Dugan does not disclose “obtaining user input” from a proper
construction of “user knowledgeable about the distinguished home.”
PO Resp. 19-24. Petitioner counters that Dugan does disclose
receiving IPS values from buyers and sellers, who are not appraisers.
We agree with Petitioner.
As set forth above, we construe “user knowledgeable about the
distinguished home” as follows: any person, other than an appraiser,
“knowledgeable about the distinguished home,” and is not limited to
the owner of a home or someone with equivalent knowledge to the
owner of a home. Dugan discloses receiving IPS values from a buyer
and a seller, which meets the aforementioned construction of
“obtaining user input,” where user input is “input from a user
knowledgeable about the distinguished home.” Ex. 1003, 4:65-5:8.
These IPS values are then used to determine a value of a subject
property. Ex. 1003, 5:8-11, 5:23-25.
Patent Owner asserts that because “Dugan‟s IPS values are not
based on a regression over sales but, rather, are manual human inputs,
„opinions in effect,‟” Dugan does not disclose “automatic valuation.”
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Paper 31 at 5 (citing Ex. 2016, 42:12-18). Relatedly, Patent Owner
also asserts that comparable properties are selected manually in
Dugan, and not automatically selected, as required to meet the recited
“automatic valuation.” Petitioner counters that Patent Owner‟s
assertion is inapposite, because “automatic valuation” does not
exclude manual human input of IPS values. We agree with Petitioner.
As set forth above, we determine that “automatic valuation” is not a
term of art indicating an AVM, and a broadest reasonable construction
of “automatic valuation” does not set forth any restrictions on input
types. Independent claims 2 and 15 do recite “obtaining user input,”
but that limitation also does not specify any input restrictions.
3. Conclusion
We determine that Dugan discloses “automatic valuation of the
distinguished home” and “obtaining user input,” as required by claims
15 and 17. For the foregoing reasons, we conclude that Petitioner has
demonstrated, by a preponderance of the evidence, that claims 15 and
17 are anticipated by Dugan.
C. Claims 2, 5-10, 13, 14, 16, 26, 27, 29-33, 35-37, 39, and
40 as Obvious over Dugan and Kim
A patent claim is unpatentable under 35 U.S.C. § 103(a) if the
differences between the claimed subject matter and the prior art are
such that the subject matter, as a whole, would have been obvious at
the time the invention was made to a person having ordinary skill in
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the art to which said subject matter pertains. KSR Int'l Co. v. Teleflex
Inc., 550 U.S. 398, 406 (2007). The question of obviousness is
resolved on the basis of underlying factual determinations including:
(1) the scope and content of the prior art; (2) any differences between
the claimed subject matter and the prior art; (3) the level of skill in the
art; and (4) where in evidence, so-called secondary considerations.
Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966).
We analyze the instituted grounds of unpatentability in
accordance with the above-stated principles. We also recognize that
prior art references must be “considered together with the knowledge
of one of ordinary skill in the pertinent art.” In re Paulsen, 30 F.3d
1475, 1480 (Fed. Cir. 1994). Moreover, “it is proper to take into
account not only specific teachings of the reference but also the
inferences which one skilled in the art would reasonably be expected
to draw therefrom.” In re Preda, 401 F.2d 825, 826 (CCPA 1968).
That is because an obviousness analysis “need not seek out precise
teachings directed to the specific subject matter of the challenged
claim, for a court can take account of the inferences and creative steps
that a person of ordinary skill in the art would employ.” KSR, 550
U.S. at 418; see also Translogic, 504 F.3d at 1259.
Petitioner asserts that claims 2, 5-10, 13, 14, 16, 26, 27, 29-33,
35-37, 39, and 40 are unpatentable under 35 U.S.C. § 103(a) over a
combination of Dugan and Kim. Pet. 3, 11-12, 22-31, 33-36. In
support of that asserted ground of unpatentability, Petitioner provides
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explanations as to how each claim limitation is met by the
combination of the cited prior art references (Pet. 22-31, 33-36) and
rationales for modifying the cited prior art references (Pet. 11-12).
Upon review of Petitioner‟s petition and supporting evidence,
as well as Patent Owner‟s response and supporting evidence, we
determine that Petitioner has demonstrated, by a preponderance of the
evidence, that claims 2, 5-10, 13, 14, 16, 26, 29-33, 35-37, 39, and 40
are unpatentable over the combination of Dugan and Kim. We also
determine that Petitioner has not demonstrated, by a preponderance of
the evidence, that claim 27 is unpatentable over the combination of
Dugan and Kim.
1. Kim
Kim discloses system 100, including appraiser valuation engine
102 that incorporates subject characteristics of a subject property, and
subjective characteristics of “comparable properties,” so as to obtain a
more accurate valuation for the subject property. Ex. 1004 ¶¶ 7, 31.
A user may request an estimated value of a property by adjusting the
ranking of comparable properties, and then applying a weighting
value method to the ranked comparable properties. Ex. 1004 ¶ 93. A
user may enter weightings associated with the properties. Ex. 1004,
Fig. 5, ¶ 47). Certain entered weightings can be saved as defaults.
Ex. 1004, Fig. 6. The appraiser may add additional characteristics to
the profile of the subject property data to improve the description of
the property, and thereby improve the odds of retrieving more similar
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reference properties. Ex. 1004 ¶ 36. Kim discloses a user entering
property conditions of interest, such as “kitchen updated”, “new
furnace”, and others. Ex. 1004 ¶ 46. Based on the entered property
conditions, appraiser valuation engine 102 assigns condition points to
those entered property conditions. Ex. 1004 ¶¶ 55, 59. The amount of
condition points assigned by the appraiser evaluation engine is based
on the estimated “cost to build/replace/renovate” the associated
property condition. Ex. 1004 ¶ 59. Map 702 marks locations of
comparable properties and the subject property. Ex. 1004 ¶ 50.
2. Claims 2, 5-10, 13, and 14
Patent Owner asserts that Dugan only discloses determining
appraised values, and not “automatic valuation of the distinguished
property,” as recited in independent claim 2. PO Resp. 24-26.
Specifically, Patent Owner asserts that Dugan only discloses
appraisals conducted by appraisers, and not an AVM conducted
without appraiser involvement. Petitioner counters that Patent
Owner‟s assertions are inapposite, because “automatic valuation” is
not an AVM. Reply 5-9. We agree with Petitioner. Our analysis is
the same as set forth above with respect to the same limitation recited
in independent claim 15, and need not be repeated here.
Patent Owner applies the same assertions to Kim. The
assertions are equally unpersuasive. Specifically, Kim discloses
system 100, including appraiser valuation engine 102 that
incorporates subject characteristics of a subject property, and
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subjective characteristics of “comparable properties,” so as to obtain a
more accurate valuation for the subject property. Ex. 1004 ¶¶ 7, 31.
We find that this properly corresponds to “automatic valuation of the
distinguished property,” as recited in independent claim 2.
Patent Owner asserts that it would not have been obvious to
replace the appraiser of Dugan and Kim with the “owner,” as recited
in independent claim 2, because both Dugan and Kim are directed to
appraisal processes which must be controlled by an appraiser.
PO Resp. 26-28. Petitioner counters that both Dugan and Kim
disclose that the discussions of appraisers in the process are merely
exemplary, and that there is nothing preventing a non-appraiser from
using the systems set forth in Dugan and Kim. We agree with
Petitioner.
Dugan discloses the following: “[o]nce the system 10 is
formatted, step 30, the operator, here an appraiser, will have two
options.” Ex. 1003, 7:44-45. By using the term “operator” in
conjunction with system 10, and indicating that an example of an
“operator” is an appraiser, Dugan at least suggests that operators other
than appraisers are contemplated. Furthermore, Dugan discloses that
because the appraisals are relied upon by sellers, buyers, appraisers,
bankers, investors and the like, it is desirable that the appraisal is
trustworthy. Ex. 1003, 4:30-33. Accordingly, we are persuaded that
it would have been obvious to have a seller as an operator in Dugan
because the seller would have interest in obtaining an accurate
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valuation of his or her property. And as set forth above in our
construction of “owner,” a seller is merely an owner who is selling
their property.
Similarly, Kim discloses the following: “login page 200
includes a name field and a password field in which a user (e.g., an
appraiser) enters his/her name and password to access the appraiser
valuation engine.” Ex. 1004 ¶ 42 (emphasis added). Patent Owner
asserts that the use of the term “e.g.,” by itself, does not show that the
system in either Dugan or Kim was intended for use by someone other
than an appraiser. Petitioner counters that the use of the term “e.g.”
signals exactly that: that both Dugan and Kim contemplated users
other than an appraiser. We agree with Petitioner. When words are
used they are presumed to convey meaning, and we find that the
deliberate use of the term “e.g.” shows that Kim explicitly
contemplates users other than the appraiser. And as an owner would
have interest in obtaining an accurate valuation of their property, we
are persuaded that it would have been obvious to replace the appraiser
with the owner as the user in Kim.
Patent Owner cites the testimony of Dr. Kilpatrick in support of
its position. PO Resp. 26-28 (citing Ex. 2001 ¶ 31). Petitioner
counters that Dr. Kilpatrick acknowledges that sellers could use the
systems of Dugan and Kim. Reply 12-14 (citing Ex. 1022, 152:22-
153:8, 156:3-157:4). We have reviewed Dr. Kilpatrick‟s testimony
and agree with Petitioner.
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Fundamentally, independent claim 2 recites a “computer
readable medium,” which is, at best, an apparatus claim. As an
apparatus claim, Petitioner only needed to show that Dugan and Kim
suggest a system capable of receiving input from an owner. To
counter, Patent Owner needed to show not only that Dugan and Kim
disclose an appraiser controlling the appraisal process, but also that
Dugan and Kim disclose systems that could not be used by individuals
other than appraisers. Patent Owner has failed to do so, as
Dr. Kilpatrick agrees that both buyers and sellers could use the
systems disclosed in Dugan and Kim. Ex. 1022, 152:15-153:8, 156:3-
157:4.
Patent Owner presents essentially the same arguments for
dependent claims 8, 13, 14, as they assert above for independent claim
2. PO Resp. 28-29, 31-32. Our analysis is the same as set forth above
for independent claim 2, and need not be repeated here.
Patent Owner does not set forth any additional arguments
concerning dependent claims 5-7, 9, and 10.
We determine that Petitioner has demonstrated, by a
preponderance of the evidence, that claims 2, 5-10, 13, and 14 are
unpatentable over the combination of Dugan and Kim.
3. Claims 16, 26, 29-33, 35-37, 39, and 40
Claims 16, 26, 29-33, 35-37, 39, and 40 ultimately depend from
independent claim 15. Of these claims, Patent Owner only argues
claim 30, and sets forth essentially the same arguments for
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patentability of claim 30 as Patent Owner asserts above for
independent claims 2 and 15. PO Resp. 30. Our analysis for claim 30
is the same as set forth above for independent claims 2 and 15, and
dependent claim 8, and need not be repeated here. We determine that
Petitioner has demonstrated, by a preponderance of the evidence, that
claims 16, 26, 29-33, 35-37, 39, and 40 are unpatentable over the
combination of Dugan and Kim.
4. Claim 27
Claim 27 ultimately depends from independent claim 15, and
recites “determining the valuation of the described improvement by
applying a localized improvement cost recovery rate for the identified
improvement type to the identified cost.” Petitioner asserts that Kim
discloses the aforementioned claim limitation. Pet. 31 (citing
Ex. 1004 ¶¶ 30, 36, 37, 93, 140-141). Patent Owner asserts that the
aforementioned portions of Kim only disclose estimating a value of
property improvements, but does not disclose using any “localized
improvement cost recovery rate.” We agree with Patent Owner.
While the aforementioned portions of Kim disclose estimated values
of certain improvements, the Petitioner has not shown that Kim
discloses how these estimated values are calculated, let alone whether
they are calculated using a “localized improvement cost recovery
rate.”
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We determine that Petitioner has not demonstrated, by a
preponderance of the evidence, that claim 27 is unpatentable over the
combination of Dugan and Kim
5. Conclusion
For the foregoing reasons, we conclude that Petitioner has
demonstrated, by a preponderance of the evidence, that claims 2, 5-10,
13, 14, 16, 26, 29-33, 35-37, 39, and 40 are obvious over Dugan and
Kim. We also conclude that Petitioner has not demonstrated, by a
preponderance of the evidence, that claim 27 is unpatentable over the
combination of Dugan and Kim.
D. Claims 11 and 12 as Obvious over Dugan, Kim, and
Shinoda
Petitioner asserts that claims 11 and 12 are unpatentable under
35 U.S.C. § 103(a) over a combination of Dugan, Kim, and Shinoda.
Pet. 3, 43-45. In support of that asserted ground of unpatentability,
Petitioner provides explanations as to how each claim limitation is
met by the combination of the cited prior art references (Pet. 44-45)
and rationales for modifying the cited prior art references (Pet. 43-44).
Upon review of Petitioner‟s petition and supporting evidence,
as well as Patent Owner‟s response and supporting evidence, we
determine that Petitioner has demonstrated, by a preponderance of the
evidence, that claim 11 is unpatentable over the combination of
Dugan, Kim, and Shinoda. We also determine that Petitioner has not
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demonstrated, by a preponderance of the evidence, that claim 12 is
unpatentable over the combination of Dugan, Kim, and Shinoda.
1. Shinoda
Figure 10 of Shinoda is set forth below.

Figure 10 is a diagram showing
a land value calculation location.
Shinoda discloses that solid circle location 42 is a location to be
appraised specified by using a mouse click or the like. Ex. 1006 ¶ 61.
2. Claim 11
Upon review of Petitioner‟s petition and supporting evidence,
as well as Patent Owner‟s response and supporting evidence, we
determine that Petitioner has demonstrated, by a preponderance of the
evidence, that a combination of Dugan, Kim, and Shinoda discloses or
suggests each and every limitation of claim 11.
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3. Claim 12
Claim 12 ultimately depends from independent claim 2, and
recites “selecting a control in a popup balloon associated with its
location on the displayed map.” Petitioner asserts that Kim discloses
the aforementioned claim limitation, because selecting solid circle
location 42 of Kim “performs the same function as a control in a pop-
up balloon in substantially the same way to achieve the same result”
as the aforementioned limitation of claim 12. Pet. 45 (citing Ex. 1006
¶ 61). Patent Owner asserts that solid circle location 42 of Kim does
not properly correspond to the recited “pop-up balloon,” because
Petitioner fails to cite any authority for applying a function/way/result
test for determining whether a limitation is met by the prior art, where
the limitation is not a means-plus-function limitation under 35 U.S.C.
§ 112, sixth paragraph. We agree with Patent Owner. The
function/way/result test is applied with respect to doctrine of
equivalents and means-plus-function limitations under 35 U.S.C.
§ 112, sixth paragraph. Neither situation is present here. Patent
Owner does cite MPEP § 2144.06(II) (citing In re Ruff, 256 F.2d 590
(CCPA 1958)) as possibly supporting Petitioner‟s position. However,
that case is directed to Markush groups for amino compounds, which
we determine are not applicable to this situation.
We determine that Petitioner has not demonstrated, by a
preponderance of the evidence, that claim 12 is unpatentable over the
combination of Dugan, Kim, and Shinoda.
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4. Conclusion
For the foregoing reasons, we conclude that Petitioner has
demonstrated, by a preponderance of the evidence, that claim 11
would have been obvious over Dugan, Kim, and Shinoda. We also
conclude that Petitioner has not demonstrated, by a preponderance of
the evidence, that claim 12 is unpatentable over the combination of
Dugan, Kim and Shinoda.
E. Claims 34 and 38 as Obvious over Dugan, Kim, and
Sklarz
Petitioner asserts that claims 34 and 38 are unpatentable under
35 U.S.C. § 103(a) over a combination of Dugan, Kim, and Sklarz.
Pet. 3, 49-50. In support of that asserted ground of unpatentability,
Petitioner provides explanations as to how each claim limitation is
met by the combination of the cited prior art references (Pet. 49-50)
and rationales for modifying the cited prior art references (Pet. 50).
Upon review of Petitioner‟s petition and supporting evidence,
as well as Patent Owner‟s response and supporting evidence, we
determine that Petitioner has not demonstrated, by a preponderance of
the evidence, that claims 34 and 38 are unpatentable over the
combination of Dugan, Kim, and Sklarz.
1. Sklarz
Sklarz discloses taking a quick estimate of a home value in a
particular zip code or neighborhood by taking a recent price per
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square foot and multiplying by respective living area values.
Ex. 1010 ¶ 220.
2. Claims 34 and 38
Claim 34 ultimately depends from independent claim 15, and
recites “multiplying the determined average selling price per square
foot by the floor area of the distinguished home to obtain an alternate
valuation of the distinguished home; and before presenting the refined
valuation of the distinguished home, blending into the refined
valuation of the distinguished home the obtained alternate valuation.”
Petitioner asserts that Sklarz discloses the aforementioned claim
limitation, because Sklarz discloses taking a quick estimate of a home
value in a particular zip code or neighborhood by taking a recent price
per square foot and multiplying by respective living area values.
Pet. 49 (citing Ex. 1010 ¶ 220). Petitioner further asserts that “[i]t
would have been obvious to a person of ordinary skill in the art to
apply the teachings of Sklarz on recent sale price per square foot to
the combination of Dugan and Kim in order to increase the accuracy
of the underlying models used to value and appraise real estate and
property.” Pet. 49. Patent Owner did not separately challenge this
asserted ground of unpatentability in the Patent Owner Preliminary
Response. Based on the above, the Board instituted a trial on this
ground. Dec. 25-26.
In the Patent Owner Response, Patent Owner asserts that, while
Sklarz may disclose “multiplying the determined average selling price
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per square foot by the floor area of the distinguished home to obtain
an alternate valuation of the distinguished home,” the Petitioner has
not shown subsequently that a combination of Dugan, Kim, and
Sklarz discloses “blending into the refined valuation of the
distinguished home the obtained alternate valuation.” PO Resp. 59.
Petitioner does not respond to this assertion in its Reply. We agree
with Patent Owner. While Petitioner recites in the petition that “[i]t
would have been obvious to a person of ordinary skill in the art to
apply the teachings of Sklarz on recent sale price per square foot to
the combination of Dugan and Kim in order to increase the accuracy
of the underlying models used to value and appraise real estate and
property” (Pet. 49), Petitioner has not set forth any further analysis as
to how the quick estimate of Sklarz would be combined with Dugan
and Kim, so as to suggest the aforementioned claim limitation, let
alone an adequate rationale as to why such a combination would be
desirable.
Claim 38 ultimately depends from independent claim 15, and
recites “multiplying the obtained selling price per square foot metric
by the floor area of the distinguished home to obtain a product; and
combining the product with the result to obtain the determined refined
valuation.” Petitioner and Patent Owner make the same assertions for
claim 38 as were set forth for claim 34. Our analysis is the same, and
need not be repeated here.
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5. Conclusion
For the foregoing reasons, Petitioner has not demonstrated, by a
preponderance of the evidence, that claims 34 and 38 are unpatentable
over the combination of Dugan, Kim, and Shinoda.
F. Claim 28 as Obvious over Dugan, Kim, and IRS Pub 946
Petitioner asserts that claim 28 is unpatentable under
35 U.S.C. § 103(a) over a combination of Dugan, Kim, and IRS Pub
946. Pet. 3, 48-49. In support of that asserted ground of
unpatentability, Petitioner provides an explanation as to how each
claim limitation is met by the combination of the cited prior art
references (Pet. 49) and a rationale for modifying the cited prior art
references (Pet. 48-49). Patent Owner does not respond to this
asserted ground of unpatentability.
Upon considering Petitioner‟s assertions and supporting
evidence, we determine that Petitioner has demonstrated, by a
preponderance of the evidence, that claim 28 is unpatentable over the
combination of Dugan, Kim, and IRS Pub 946.
III. CONCLUSION
The ‟674 patent lists claims 1-40. Petitioner challenged claims
1-40. Pet. 1. The Board instituted trial on claims 2, 5-17, 26-39, and
40. Dec. 26. Petitioner has met its burden of proof, by a
preponderance of the evidence, in showing that claims 2, 5-11, 13-17,
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26, 28-33, 35-37, 39, and 40 of the ‟674 patent are unpatentable based
on the following grounds:
a. Claims 15 and 17 as anticipated by Dugan under
35 U.S.C. § 102(b);
b. Claims 2, 5-10, 13, 14, 16, 26, 29-33, 35-37, 39, and 40
as obvious over Dugan and Kim under 35 U.S.C. § 103.
c. Claim 11 as obvious over Dugan, Kim, and Shinoda
under 35 U.S.C. § 103.
d. Claim 28 as obvious over Dugan, Kim, and IRS Pub 946
under 35 U.S.C. § 103.
Petitioner has not met its burden of proof, by a preponderance
of the evidence, in showing that claims 12, 27, 34, and 38 of the ‟674
patent are unpatentable.
This is a final decision. Parties to the proceeding seeking
judicial review of the decision must comply with the notice and
service requirements of 37 C.F.R. § 90.2.
IV. ORDER
In consideration of the foregoing, it is
ORDERED that claims 2, 5-11, 13-17, 26, 28-33, 35-37, 39,
and 40 of the ‟674 patent are unpatentable.
FURTHER ORDERED that claims 12, 27, 34, and 34 of the
‟674 patent have not been shown to be unpatentable.

IPR2013-00034
Patent 7,970,674
44
Petitioner:
Walter Renner
axf@fr.com

Thomas Rozylowicz
rozylowicz@fr.com

Lauren Degnan
degnan@fr.com

Patent Owner:

Steven Lawrenz
slawrenz@perkinscoie.com

Ryan McBrayer
rmcbrayer@perkinscoie.com

Ramsey Al-Salam
ralsalam@perkinscoie.com