PTAB

CBM2017-00061

Commvault Systems Inc v. Realtime Data LLC

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Data Compression Method and System
  • Brief Description: The ’204 patent describes methods for processing data by recognizing a characteristic of the data, selecting an associated encoder, compressing the data to achieve a specific compression ratio, and transmitting the compressed data. The patent and its claims are particularly directed to applications involving the accelerated transmission of financial data, such as stock quotations, bids, and options information.

3. Arguments Regarding CBM Eligibility

  • Directed to a Financial Product or Service: Petitioner argued the ’204 patent is eligible for a Covered Business Method (CBM) review because it is directed to a financial product or service. This was based on the patent’s explicit disclosure and claims related to financial activities. Specifically, Petitioner noted that independent claim 22 and dependent claims 5-7, 15-17, and 23-30 expressly recite processing "financial data," "stock information," or "options information," thus satisfying the first prong of the CBM eligibility test. The patent’s specification was also cited as confirming its focus on data processing for financial markets.

  • Not a Technological Invention: Petitioner contended the claims are not directed to a "technological invention" and thus do not qualify for the CBM exception. It was argued that the claims fail both parts of the test for a technological invention.

    • The claims were said to not recite a novel and unobvious technological feature, but rather the abstract idea of recognizing, compressing, and transmitting data using generic, well-known computer components.
    • The claims were also said to not solve a technical problem with a technical solution. Instead, Petitioner asserted they address an economic problem (the cost of managing financial data) with abstract, result-oriented steps that are not tied to any specific technology.

4. Grounds for Unpatentability

Ground 1: Claims 1-30 are unpatentable under 35 U.S.C. §101.

  • Core Argument: Petitioner argued that all challenged claims are directed to patent-ineligible subject matter under the two-step framework from Alice Corp. v. CLS Bank Int’l.
    • Alice Step 1 (Abstract Idea): Petitioner asserted that the claims are directed to the abstract idea of recognizing, compressing, and transmitting information. It was argued that the claimed steps are fundamental concepts that can be performed as mental steps or with pencil and paper. Petitioner presented analogies to a person manually addressing an envelope or a judge abbreviating legal citations, both of which involve recognizing data types (e.g., a street name, a case reporter), applying a rule-based encoding scheme to shorten them (e.g., "St." for "Street", "F.3d" for "Federal Reporter, Third Series"), and transmitting the result. The claims were characterized as being result-oriented, focusing on achieving a compression ratio without specifying any particular inventive technique.
    • Alice Step 2 (Inventive Concept): Petitioner contended that the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The recitation of an "encoder," a "state machine," and a "data packet" was argued to be the mere addition of generic and conventional computer components performing their well-understood functions. Petitioner claimed these elements do not provide a specific technical solution to a technical problem but are simply generic placeholders for the abstract functions.

Ground 2: Claims 1-21 lack written description support under §112.

  • Core Argument: Petitioner argued the specification fails to provide adequate written description for the full scope of the claimed genus of "recognizing any characteristic, attribute, or parameter of the data" as recited in independent claims 1 and 12.
    • Prior Art Mapping: The argument centered on the concept of "descriptor-free analysis," which Petitioner asserted is required by dependent claims 11 and 21. These claims specify that recognition "excludes analyzing based on a descriptor that is indicative of the recognized characteristic." Petitioner argued that the specification provides no disclosure for performing such descriptor-free data recognition, as its only discussion of analysis is in the context of decompression that relies on a descriptor.
    • Key Aspects: Because the specification allegedly fails to describe the "descriptor-free" species, Petitioner argued it cannot support the broader genus in independent claims 1 and 12, which would encompass both descriptor-based and descriptor-free recognition. Petitioner cited a PTAB decision in a related case (CME Group v. Realtime Data LLC) involving a patent from the same family, where a nearly identical claim was found to lack written description support for the same reason.

Ground 3: Claims 1-30 are not enabled under §112.

  • Core Argument: Petitioner argued the specification fails to enable the full scope of the claims because they recite an open-ended compression ratio.
    • Prior Art Mapping: Claim 1 requires a compression ratio "of over 10:1," and claim 12 requires one "of over 4:1." Petitioner argued these limitations establish a lower bound but no upper bound, meaning the claims cover ratios up to infinity. The specification, however, was said to only describe achieving average compression ratios of around 9.5:1 for specific types of financial data, failing to teach a person of ordinary skill in the art how to achieve the full, open-ended range of claimed ratios (e.g., 100:1 or 1000:1) on all types of data.
    • Key Aspects: Petitioner drew a direct analogy to the Federal Circuit's decision in MagSil Corp. v. Hitachi Global Storage Techs., Inc., where claims reciting a lower threshold ("at least 10%") but no upper limit were invalidated for lack of enablement because the patent's disclosure did not support the full scope of the claim.

5. Key Claim Construction Positions

  • "data packet" (Claims 4, 14, 22): Petitioner noted that in a proceeding on a related patent sharing the same specification, the Board had construed this term to mean "a segregation of data that does not require a specific internal structure."
  • "recognizing" and "analyzing" (Claims 1, 11, 12, 21): Petitioner highlighted that the Board, in the same related proceeding, had declined to construe these terms to require an "active step."

6. Relief Requested

  • Petitioner requested institution of a Covered Business Method Review of claims 1-30 of Patent 8,717,204 and a final judgment canceling those claims as unpatentable.