PTAB

CBM2013-00053

Callidus Software Inc v. Versata Development Group Inc

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1. Case Identification

2. Patent Overview

  • Title: Method and Apparatus for Processing Sales Transaction Data
  • Brief Description: The ’024 patent discloses methods and systems for processing sales transaction data to manage compensation for sales representatives. The core claimed process involves capturing sales data, determining if sales representatives conform to a set of regulatory conditions, computing compensation based on that data and conformity, and executing payment.

3. Grounds for Unpatentability

Ground 1: Claims 1, 2, and 35-47 are unpatentable under 35 U.S.C. § 101 as being directed to an abstract idea.

  • Prior Art Relied Upon: While this is not a prior art-based challenge under §102 or §103, Petitioner submitted declarations from industry experts (DeHaven, Ex. 1011; McGuffey, Ex. 1012) as evidence that the claimed process is a fundamental, long-standing business practice.
  • Core Argument for this Ground:
    • Petitioner argued that all challenged claims are directed to the abstract idea of "computing compensation for sales representatives that conform to a set of regulatory conditions." Petitioner asserted this is a fundamental economic and business practice that has been performed manually by companies in the financial and insurance industries for decades, long before the patent's priority date. The core steps of capturing transaction data, checking for regulatory compliance (e.g., proper licensing), calculating commissions for compliant sales, and paying those commissions are all routine, conventional activities that can be performed by a human with pencil and paper.
    • Petitioner contended that the claims fail to add an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The recitation of a "distributer management system" or a general-purpose computer, processor, and memory merely applies the abstract idea using conventional technology without adding meaningful limitations. The use of a computer only lends speed and efficiency to the otherwise abstract mental process, which is insufficient to confer patent eligibility.
    • Independent Claims Mapping:
      • Claim 1 (Method): This claim recites the core abstract method. Petitioner argued its steps—"capturing," "determining," "computing," and "executing"—are generic data-gathering and manipulation steps followed by insignificant post-solution activity (paying the calculated amount).
      • Claim 40 (System): This means-plus-function claim was argued to be a mere restatement of the method in Claim 1. The only structure disclosed in the specification for the recited "means" is a generic "computer," which does not tie the claim to a specific apparatus and fails to add patentable substance.
      • Claim 42 (Computer-Readable Medium): This "Beauregard" claim was asserted to be another purely formalistic redrafting of the abstract method of Claim 1 onto a computer-readable medium, which does not change the patent-ineligible nature of the underlying process.
      • Claim 45 (System with Processor/Memory): This claim recites a generic system comprising a processor and memory to execute the steps of Claim 1. Petitioner argued this is simply a recitation of a conventional, general-purpose computer, which is not a meaningful limitation.
    • Dependent Claims Argument: Petitioner argued that the challenged dependent claims fail to save the invention from abstractness. The limitations added were characterized as either insignificant post-solution activity (e.g., claims 35, 36, 38, 39 generating reports) or mere field-of-use limitations (e.g., claims 37, 43, 46 specifying that regulatory constraints are from government organizations), neither of which is sufficient to tie down the abstract idea.

4. Key Claim Construction Positions

Petitioner argued that under the Broadest Reasonable Interpretation, key claim terms should be construed in a way that highlights their generic and non-technical nature, supporting the §101 challenge.

  • "distributer management system" (claims 1, 2): Petitioner proposed the construction "software for managing information about a sales force." This construction was based on the specification's description of the system as a "suite of applications" and was intended to establish that the claims recite generic software, not a particular machine or apparatus.
  • "regulatory conditions applicable to said sales" (claims 1, 37, 40, 42): Petitioner proposed the construction "any internal or external constraint, regulation, requirement, policy or objective with which a sales representative must comply to receive compensation for said sales." This broad construction supported the argument that the claims cover a fundamental and abstract business concept, not a specific technical solution.
  • "means for..." (claim 40): Petitioner argued that for all four "means for" limitations in claim 40, the only corresponding structure disclosed in the specification is "a computer." This was central to the argument that Claim 40 is merely the abstract method of Claim 1 performed on a generic computer.

5. Relief Requested

  • Petitioner requested institution of a Covered Business Method (CBM) patent review and cancellation of claims 1, 2, and 35-47 of the ’024 patent as unpatentable under 35 U.S.C. § 101.