PTAB

IPR2018-01525

DTN LLC v. Farms Technology LLC

Log In
Key Events
Petition
petition Intelligence

1. Case Identification

2. Patent Overview

  • Title: System and Method for Automated Commodities Transactions Including an Automatic Hedging Function
  • Brief Description: The ’979 patent discloses a computerized system for executing agricultural commodities transactions. The system functions as a net market that connects sellers (producers) and buyers (elevator operators), automates the calculation of buyer-specific flat prices by combining real-time exchange prices with a buyer’s specific “basis” (costs plus margin), and automatically executes hedging transactions via futures contracts to mitigate price risk for the buyer.

3. Grounds for Unpatentability

Ground 1: Obviousness over Lindsey, Admitted Prior Art, and Adam - Claims 1-38 are obvious over Lindsey in view of the Admitted Prior Art (APA) and Adam.

  • Prior Art Relied Upon: Lindsey (Patent 5,063,507), Admitted Prior Art (APA) from the ’979 patent’s specification, and Adam (Application # 2002/0069156).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that the combination of the three references discloses every element of the challenged claims. Independent claim 1, representative of the core invention, recites a method for executing a commodities transaction on a net market system. Petitioner asserted that Lindsey and Adam both teach electronic commodity trading systems that function as net markets, receive offers from sellers, and receive bids from buyers, including quantity and pricing information. Adam further discloses a web-based interface for these functions. The APA (the ’979 patent’s own background section) was cited for its admission that it was well-known in the art for a commodity buyer to calculate a "flat price" by subtracting its "basis" (costs and margin) from the current commodity exchange price. The APA also admits it was a known practice for a buyer to hedge risk by securing a futures contract before completing a commodity purchase. Petitioner contended that combining these known business practices from the APA with the electronic platforms taught by Lindsey and Adam renders the claimed automated method obvious. The automation of the transaction steps, a key limitation, was taught by both Lindsey’s "Firm Offer" feature and Adam’s rules-based automatic purchasing system.
    • Motivation to Combine (for §103 grounds): Petitioner argued a person of ordinary skill in the art (POSITA) would have been motivated to combine the references to improve existing electronic trading systems. A POSITA would have sought to automate the "slow and tedious" manual processes of price calculation and hedging, which the APA acknowledges. The motivation would be to create a more efficient, commercially desirable, and less risky trading platform by integrating these well-understood, conventional business practices into the automated frameworks provided by Lindsey and Adam. Lindsey itself suggested expanding its cotton-specific system to other commodities like grain, and Adam provided a more modern, web-based platform for doing so, making their combination logical for creating an improved, comprehensive system.
    • Expectation of Success (for §103 grounds): A POSITA would have reasonably expected success in combining the references because it involved automating known, predictable business methods using conventional computer programming. The integration required adding features for basis input and linking a cash transaction to a subsequent, standard futures trade—tasks that were well within the skill of an ordinary programmer and would predictably result in a more efficient automated system.

4. Key Claim Construction Positions

  • "buyer-specific basis": Petitioner adopted the Board's construction from a prior reexamination of a related patent, defining the term to include "the costs plus margin for the buyer." This construction was critical to mapping the teachings of the APA, which describes how buyers manually calculate offer prices, to the claim limitations.
  • "customer exchange structure": Petitioner proposed that the broadest reasonable interpretation of this term is "the information contained in an offer to sell or buy—i.e., the commodity type, quantity, and price—exchanged with the other party." This construction allows the graphical user interface elements and data displays in Adam, which present offer and bid information to users, to be mapped to the claimed "structure."

5. Relief Requested

  • Petitioner requests institution of an inter partes review and cancellation of claims 1-38 of the ’979 patent as unpatentable.