Price F X AG v. Vendavo Inc

1. Case Identification

• Case #: CBM2019-00019
• Patent #: 7,308,421
• Filed: December 12, 2018
• Petitioner(s): Price f(x) AG and Price f(x), Inc.
• Patent Owner(s): Vendavo, Inc.
• Challenged Claims: 1-15

2. Patent Overview

• Title: System and Method for Grouping Products in a Catalog
• Brief Description: The ’421 patent discloses computer-implemented methods and systems for preparing a price quote for a product. The technology involves determining if a product belongs to a "product collection" by evaluating a "dynamic selection rule set," and then applying a hierarchical scheme of pricing rules (e.g., inheritance, assertion, arbitration rules) to determine the final price.

3. Grounds for Unpatentability

Ground 1: Claims 1-15 are Unpatentable Under 35 U.S.C. §101

• Core Argument: Petitioner argued that all challenged claims are directed to the patent-ineligible abstract idea of determining a price by applying rules, a fundamental economic concept. The petition applied the two-step framework from Alice Corp. v. CLS Bank Int’l.
  • Step One (Abstract Idea): Petitioner asserted that the focus of the claims is setting product prices by first grouping products and then identifying and applying pricing rules. The use of a "dynamic selection rule set" and various conflict-resolution rules (e.g., inheritance, assertion) were described as mere general concepts for resolving conflicts when multiple price rules apply, written in purely functional terms. Petitioner contended that, but for the recitation of a generic "computer system," the claimed method could be performed entirely as a mental process.
  • Step Two (Inventive Concept): Petitioner argued the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The claims merely recited the use of a generic computer system to perform conventional activities. Petitioner contended that each limitation, viewed individually and as an ordered combination, failed to add anything more than the routine and conventional application of the abstract pricing idea. The petition asserted that the claims do not improve the functioning of a computer itself but only use a computer as a tool to automate a business practice.

Ground 2: Claims 1-15 are Indefinite Under 35 U.S.C. §112, ¶ 2 (Pre-AIA) for Lacking Corresponding Structure

• Core Argument: Petitioner argued that the claims are indefinite because they contain computer-implemented means-plus-function and step-plus-function limitations without the specification disclosing a corresponding algorithm or structure for performing the claimed functions.
  • Functional Claiming: The petition contended that terms in the independent claims invoke treatment under §112, ¶ 6. Specifically, "computerized price quotation system configured to" (claim 9) was argued to be a means-plus-function limitation, as "system" is a generic nonce term and the claim recites functions without structure. Similarly, the limitation in claim 1 "wherein said one or more price rules... are determined in accordance with a pricing scheme" was argued to be a step-plus-function limitation that recites a goal (determining rules) without disclosing the acts for how to perform the determination.
  • Lack of Disclosed Structure: Petitioner asserted that the ’421 patent specification fails to disclose an adequate algorithm, flowchart, or detailed prose to perform the recited functions. For the required conflict-resolution rules (inheritance, assertion, arbitration, connectivity), the specification was said to describe only their functions or goals (e.g., an inheritance rule "may be used to filter out" other rules) rather than providing the specific structure or acts for implementing them. This failure to link the claimed functions to corresponding structure in the specification renders the claims indefinite.

Ground 3: Claims 1-15 are Indefinite Under 35 U.S.C. §112, ¶ 2 (Pre-AIA) for Reciting Conflicting Approaches

• Core Argument: Petitioner asserted that the claims are indefinite because they recite two different and conflicting approaches for determining which price rules to apply, leaving a person of ordinary skill unable to determine the scope of the claims with reasonable certainty.
  • Conflicting Limitations: The petition focused on claim 1, which first requires "identifying one or more price rules associated with said particular product collection" and then "applying said price rules to said product." Petitioner argued this language clearly requires applying all previously identified rules. However, the claim then includes a "wherein" clause stating that the "one or more price rules... are determined in accordance with a pricing scheme," which includes conflict-resolution rules that filter and select from among applicable rules.
  • Insoluble Ambiguity: This structure allegedly creates an insoluble ambiguity: a POSITA would not know whether to apply all of "said price rules" initially identified or the subset of rules that results from applying the "pricing scheme." This conflict makes it impossible to determine the bounds of the claim and, therefore, what would constitute infringement.

4. Key Claim Construction Positions

• "computerized price quotation system configured to" (claims 9-15): Petitioner proposed this term should be construed as a means-plus-function limitation under §112, ¶ 6. The term "system" was argued to be a generic placeholder that fails to recite a sufficiently definite structure, and the remainder of the claim only recites functions to be performed by that system.
• "applying said price rules ... wherein said one or more price rules ... are determined in accordance with a pricing scheme ..." (claim 1): Petitioner proposed this limitation should be construed as a step-plus-function limitation under §112, ¶ 6. The phrase "are determined" was argued to recite a function or result without reciting the specific acts needed to accomplish that determination.
• "inheritance rule," "assertion rule," "arbitration rule," and "connectivity rule" (claims 1 and 9): Petitioner argued these terms are described in the specification in purely functional language, defining their purpose (e.g., to "filter," "ignore," or "define a value") without providing the structure or algorithm for their implementation.

5. Relief Requested

• Petitioner requested institution of a Covered Business Method patent review and cancellation of claims 1-15 of the ’421 patent as unpatentable.