Dell Inc v. DISPOSItION Services LLC

1. Case Identification

• Case #: CBM2013-00040
• Patent #: 5,424,944
• Filed: August 2, 2013
• Petitioner(s): Dell Inc.
• Patent Owner(s): Disposition Services LLC
• Challenged Claims: 1-23

2. Patent Overview

• Title: System and Method for Controlled Asset Disposition
• Brief Description: The ’944 patent describes systems and methods for verifiably controlling the disposition of a physical asset according to preselected instructions. The process involves creating various records (asset, transport, receipt, disposition) to create an auditable trail that allows a customer to verify that their instructions for handling the asset (e.g., selling, dismantling, destroying) were followed.

3. Ground for Unpatentability

Ground 1: Claims 1-23 are Unpatentable under 35 U.S.C. §101 as Directed to an Abstract Idea

• Core Argument for this Ground: Petitioner argued that all challenged claims are directed to the patent-ineligible abstract idea of handling a customer's physical item in a way that allows the customer to verify that its instructions were followed. Petitioner contended the claims lack any inventive concept sufficient to transform this abstract idea into patent-eligible subject matter and fail the machine-or-transformation test.
  • The Abstract Idea: Petitioner asserted that independent method claim 1 recites a fundamental business practice that can be performed entirely by a human using only a pencil, paper, and a truck. The steps involve creating paper records, sealing an item in a vehicle, transporting it, and then handling it according to instructions. Limiting this abstract concept to the field of "asset disposition" was argued to be insufficient to confer patent eligibility.
  • Lack of Inventive Concept: Petitioner contended that independent method claim 2 and its dependent claims (3-14), as well as the corresponding system claims (15-23), add nothing more than well-understood, routine, and conventional elements. The addition of generic computer components—such as a "database," "system process controller," and "communications network"—was argued to be mere recitation of known technologies used for their basic functions of storing and transmitting data. Petitioner highlighted that the patent applicants themselves described these elements during prosecution as "conventional components well known to one skilled in the art," which merely permit the abstract idea to be achieved more quickly.
  • System Claims Analysis: Petitioner argued that system claims 15-23 are the unpatentable counterparts to method claims 1-14. Because the patent-eligibility analysis applies equally to both system and method claims directed to the same underlying invention, Petitioner contended that claims 15-23 are invalid for the same reasons. The hardware elements recited were described as conventional and generic, adding no inventive concept to the underlying abstract business method.
  • Failure of Machine-or-Transformation Test: Petitioner argued the claims fail the machine-or-transformation test. They were not considered tied to a particular machine because the recited computer components (e.g., "database," "remote computer") are generic and not "specially programmed." Further, Petitioner asserted the claims do not satisfy the transformation prong, as the mere creation and reorganization of data (records) is insufficient. Any physical transformation of the asset itself (e.g., dismantling) was characterized as insignificant "extra-solution activity," pointing to the applicant's admission that the invention is the method of controlling disposition, not the disposition itself.

4. Key Claim Construction Positions

• "preselected method of disposition": Petitioner argued that while the ordinary meaning is broad, the specification imparts a special meaning requiring that the customer must be the one to preselect the method of disposition. This construction was based on repeated references in the specification to "predetermined customer instructions" and the claim requirement for creating a record for "customer verification." Petitioner proposed the construction: "predetermined customer instructions for the handling of an asset."
• Means-Plus-Function Limitations: Petitioner identified the term "a tamper-proof transport means for securely sealing said asset" in claims 15 and 16 as a means-plus-function limitation under 35 U.S.C. §112(f). The recited function is "securely sealing [an] asset for transport," with the corresponding structure disclosed in the specification.

5. Key Technical Contentions (Beyond Claim Construction)

• Claims Are Not a "Technological Invention": A central contention for establishing eligibility for Covered Business Method (CBM) review was that the ’944 patent is not directed to a "technological invention." Petitioner argued the claims fail both prongs of the relevant test.
  • First, the claims do not recite a technological feature that is novel and nonobvious, but instead recite only generic, well-known computer hardware like databases, networks, and terminals. Independent claim 1 recites no technology at all.
  • Second, the claims do not solve a technical problem with a technical solution. Petitioner asserted that the problem solved by the patent—preventing mismanagement of assets by outside vendors—is a business problem, not a technical one. The patent's solution was argued to be a business method, not a technical solution, as it provides no improvement to computer or database technology itself.

6. Relief Requested

• Petitioner requested institution of a Covered Business Method review and cancellation of claims 1-23 of the ’944 patent as unpatentable under 35 U.S.C. §101.