PTAB

CBM2019-00016

Teradata Operations Inc v. Berkeley IEOR

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Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Process for Determining Object Level Profitability
  • Brief Description: The ’521 patent describes a computer-implemented process for determining the profitability of an "object" (e.g., a product, customer, or organization). The process uses a relational database to calculate and combine marginal profit values with fully absorbed profit adjustment values to create a comprehensive profitability measure.

3. Grounds for Unpatentability

Ground 1: Patent-Ineligible Subject Matter under §101 - Claims 2, 6-9, and 27-32 are unpatentable as directed to an abstract idea.

  • Prior Art Relied Upon: Not applicable (legal ground based on claim language).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that the challenged claims, which depend from un-challenged claim 1, are directed to the abstract idea of "calculating object level profitability." This was characterized as a fundamental economic practice, analogous to hedging risk or determining a price, which can be performed as a mental process or with pen and paper. The claims recite calculating values (marginal profit, fully absorbed profit adjustment) and combining them.
    • Motivation to Combine (for §103 grounds): Not applicable.
    • Expectation of Success (for §103 grounds): Not applicable.
    • Key Aspects: Petitioner contended that the claims lack an inventive concept sufficient to transform the abstract idea into patent-eligible subject matter. The recitation of generic computer components—a "computer," "relational database management system," and "structured query language (SQL)"—was argued to be mere post-solution activity, invoking technology as a tool without improving computer functionality itself. The dependent claims were argued to add only further conventional financial calculations (e.g., for taxes, provisioning, indirect expenses), failing to add an inventive concept.

Ground 2: Anticipation and Obviousness over E&Y - Claims 2, 6-9, and 27-32 are anticipated or obvious over E&Y.

  • Prior Art Relied Upon: E&Y (The Ernst & Young Guide to Performance Measurement for Financial Institutions (1995)).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner asserted that E&Y, a guide for financial practitioners, taught all elements of the challenged claims. E&Y allegedly disclosed a financial systems architecture using a relational database platform as a "central data repository" to aggregate data for profitability analysis. Petitioner argued E&Y taught calculating marginal values (e.g., direct expenses, net interest, provisioning) and fully absorbed values (e.g., indirect expenses via a "fully absorbed approach") for various objects, including products, customers, and organizational units, and combining them to determine overall profitability.
    • Motivation to Combine (for §103 grounds): For the obviousness contentions, Petitioner argued a person of ordinary skill in the art (POSITA) would be motivated to implement the various profitability calculation methods taught throughout E&Y within the disclosed database architecture to achieve the guide's stated goal of comprehensive performance measurement.
    • Expectation of Success (for §103 grounds): A POSITA would have an expectation of success because E&Y described the components as parts of an integrated system for financial analysis.

Ground 3: Obviousness over E&Y, Blain, and SAP-IS-B - Claims 2, 6-9, and 27-32 are obvious over the combination of E&Y, Blain, and SAP-IS-B.

  • Prior Art Relied Upon: E&Y (1995 guide), Blain (Using SAP R/3 (1996)), and SAP-IS-B (1996 SAP technical paper for the banking industry).

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground combined the teachings of the references to argue that the claimed invention was an obvious implementation of known concepts. E&Y provided the fundamental financial accounting principles for object-level profitability. Blain described the widely-used SAP-R/3 enterprise software, a computer-implemented system with a relational database and SQL capabilities suitable for performing financial calculations. SAP-IS-B, a banking-specific module for SAP-R/3, provided the exact implementation details, teaching the use of "costing rules," "risk management rules," and analysis of profitability segments to calculate marginal and fully absorbed costs for individual transactions.
    • Motivation to Combine (for §103 grounds): Petitioner argued a POSITA seeking to implement the financial methods of E&Y would naturally turn to a known, powerful enterprise tool like SAP-R/3 (disclosed in Blain). For a financial institution, it would be a logical next step to integrate an industry-specific module like SAP-IS-B, which Blain itself noted was compatible, to provide the necessary detailed rules and functionality.
    • Expectation of Success (for §103 grounds): Success would be expected because the combination represented using a standard enterprise system (Blain) and its specialized module (SAP-IS-B) for their intended purpose: implementing established financial accounting methods (E&Y).

  • Additional Grounds: Petitioner asserted additional challenges including anticipation and obviousness over Blain alone and SAP-IS-B alone. Further obviousness grounds combined E&Y, Blain, and/or SAP-IS-B with Kimball (a 1993 article on risk-adjusted returns) for claim 31 (regarding Shareholder Value Add) and with McKenzie (a 1996 paper on dividend taxation) for claim 32 (regarding two-tier tax calculation), relying on similar theories of applying specific, known financial formulas to the established computer systems.

4. Relief Requested

  • Petitioner requested institution of a Covered Business Method review and cancellation of claims 2, 6-9, and 27-32 of the ’521 patent as unpatentable.