PTAB

IPR2018-01412

DTN LLC v. Farms Technology LLC

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Key Events
Petition
petition Intelligence

1. Case Identification

2. Patent Overview

  • Title: Methods and Systems for Purchase of Commodities
  • Brief Description: The ’685 patent relates to a computer-implemented system for automating the purchase of commodities. The system purports to enable an automatic commodity purchase at a desired basis level when a seller's price matches a buyer's bid, while concomitantly placing an electronic order to hedge the buyer's purchase against price fluctuations.

3. Grounds for Unpatentability

Ground 1: Obviousness over Reding and Adam - Claims 1-14 are obvious over Reding in view of Adam.

  • Prior Art Relied Upon: Reding (Application # 2002/0046127) and Adam (Application # 2002/0069156).
  • Core Argument for this Ground:

    • Prior Art Mapping: Petitioner argued that Reding and Adam collectively disclose every element of the challenged claims. Reding was asserted to teach a commodity exchange system with the core functionalities of automatic hedging and dynamic bid pricing. Specifically, Reding discloses a system where a buyer (elevator operator) inputs a "basis" (profit margin and anticipated costs), and the system calculates a real-time bid price by subtracting this basis from a live price feed from a commodities exchange. Reding also explicitly teaches automatically executing a hedge transaction (e.g., a futures contract) to offset the buyer's risk upon a successful purchase.

    • Petitioner contended that Adam, while not explicitly teaching automated hedging, discloses the necessary user interface and marketplace elements that Reding lacks. Adam describes an electronic marketplace for agricultural goods with a graphical user interface where a buyer can view sell data from a plurality of sellers in real-time. Petitioner argued this teaching from Adam supplies the functionality for claim limitations requiring a buyer interface that displays sell data from multiple sellers. For limitations related to sellers creating specific offers for specific buyers based on transaction costs, Petitioner argued that Reding implicitly discloses this functionality. Reding states its system, described from a buyer's perspective, can be provided for sellers as well, making the logic transposable. A POSITA would understand that a seller's offer price would necessarily be calculated by adding transaction costs (like freight) to a "net sell price," mirroring how Reding's buyers calculate bids using a basis.

    • Motivation to Combine: Petitioner asserted two primary motivations for a person of ordinary skill in the art (POSITA) to combine the references. First, a POSITA would combine Reding’s automated hedging functionality with Adam’s more comprehensive marketplace to create a superior, more commercially attractive system. Adding automated hedging, a known method for risk mitigation, would be a valuable feature for buyers on Adam's platform, saving them the tedious manual process of securing separate futures contracts. Second, a POSITA would be motivated to improve upon both prior art systems by integrating their respective features to achieve greater automation of well-known, routine business practices in commodity trading. Both references express a goal of increasing efficiency over manual processes, providing a clear reason to combine their distinct automated features into a single, more robust platform.

    • Expectation of Success: Petitioner argued a POSITA would have had a reasonable expectation of success in combining the references. The functionalities were complementary, not conflicting; Reding’s back-end hedging and basis-pricing engine would integrate predictably with Adam’s front-end marketplace interface. The integration would involve known software programming techniques to add Reding’s features to Adam’s system, such as allowing buyers to input a basis and hedge parameters. Reding’s own disclosure that its system could be adapted for sellers further supported the predictability of implementing symmetric functionality for sell-side offers.

4. Key Claim Construction Positions

  • "Net sell price": Petitioner argued for a construction of this term, which appears in independent claim 1. Based on its use in the specification, Petitioner contended the term refers to the component of a seller's total sell price that does not include the variable cost of delivery to a particular buyer. This construction was important to Petitioner’s argument that the prior art teaches the claimed method of calculating a buyer-specific offer price, wherein the system adds a buyer-specific "transaction cost" (e.g., freight) to this base "net sell price."

5. Relief Requested

  • Petitioner requests institution of an inter partes review and cancellation of claims 1-14 of the ’685 patent as unpatentable.