Price f(x) AG v. Vendavo, Inc.

1. Case Identification

• Case #: CBM2019-00022
• Patent #: Patent 8,412,598
• Filed: December 14, 2018
• Petitioner(s): Price f(x) AG and Price f(x), Inc.
• Patent Owner(s): Vendavo, Inc.
• Challenged Claims: 1-19

2. Patent Overview

• Title: Causality Analyzer for Price Management Systems
• Brief Description: The ’598 patent discloses a computer-implemented system and method for analyzing changes in business metrics like revenue and profit margin. The invention uses a set of rules and mathematical equations to disaggregate an overall change between two time periods into specific "causality effects," such as the effects of price, cost, volume, product mix, and currency exchange rates.

3. Grounds for Unpatentability

Ground 1: Patent Ineligibility under 35 U.S.C. § 101 - Claims 1-19 are patent-ineligible subject matter.

• Core Argument: Petitioner argued that all challenged claims fail the two-step framework from Alice Corp. v. CLS Bank Int’l because they are directed to an abstract idea without reciting an inventive concept.
  • Alice Step 1 (Abstract Idea): Petitioner asserted that the claims are directed to the patent-ineligible abstract idea of "determining the causes of revenue and profit changes." This was framed as a fundamental economic and business practice performed using mathematical formulas. The claims, at their core, recite a process of receiving input data (transactional information), applying a series of mathematical equations to analyze it, and outputting new information (the disaggregated effects). Petitioner contended this is a classic abstract idea, analogous to other data analysis and economic concepts previously found ineligible by the courts. The independent claims (1 and 12) and all dependent claims were argued to be focused on this abstract analysis, not on a specific, tangible application or technological improvement.
  • Alice Step 2 (No Inventive Concept): Petitioner argued that the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The recitation of a generic "computer system," "processor," and other hardware components was asserted to be a mere instruction to implement the abstract idea on a conventional computer, which is insufficient under Alice. Petitioner highlighted that these generic computer limitations were added during prosecution simply to overcome a pre-Alice §101 rejection and do not represent any improvement to computer functionality itself. Furthermore, claim elements like the "finite difference approach" were characterized as well-known mathematical techniques for data manipulation, which do not provide an inventive step beyond the abstract mathematical calculations. The ordered combination of steps was argued to add nothing more than the routine and conventional application of these abstract principles.

4. Key Claim Construction Positions

• Petitioner argued that several terms are nonce words governed by §112, ¶ 6 (means-plus-function) and that their construction is central to the §101 analysis.
• "causality modeler..." (claim 1) and "causality attributor..." (claim 1): Petitioner argued these terms should be construed as means-plus-function limitations. The rationale was that these terms, coined for the patent, lack a well-understood meaning in the art and do not recite sufficiently definite structure. The claimed functions include "calculate change in total margin" and "disaggregate each of the change... by causality effects." Petitioner asserted that the only corresponding structure disclosed in the specification for performing these functions is the series of mathematical equations and algorithms detailed therein.
• "unbiasing the causality effects" (claims 1 and 12): This was defined as the process of "using equations to reduce overstatements of the effects of various factors on changes in an outcome, such as revenue and/or margin."
• "finite difference approach" (claims 1 and 12): Petitioner argued this term should be construed as "one or more equations for determining the difference in the value of the same function at two different numbers." This construction was based on its well-understood mathematical meaning and its use in the specification to proportionally allocate "shared effects" as part of the "unbiasing" process.

5. Key Technical Contentions (Beyond Claim Construction)

• CBM Eligibility: A central contention of the petition was that the ’598 patent is eligible for a Covered Business Method (CBM) patent review. Petitioner argued the patent satisfies both prongs for CBM eligibility.
  • First, the claims were asserted to be for a financial product or service, as they are "used in the practice, administration, or management of a financial product or service." This argument was based on the claims being directed to analyzing monetary and financial data (revenue, profit, price, cost) for the purpose of price management, which pertains directly to "money matters."
  • Second, Petitioner argued the claims do not fall under the "technological invention" exception. The petition contended that the claimed invention solves a business problem (analyzing profit drivers), not a technical one, and do so using only generic, off-the-shelf computer hardware without any novel or unconventional technological features.

6. Relief Requested

• Petitioner requested institution of a Covered Business Method patent review and cancellation of claims 1-19 of the ’598 patent as unpatentable under 35 U.S.C. § 101.