Kinaxis Inc v. Blue Yonder Group Inc

1. Case Identification

• Case #: IPR2021-01205
• Patent #: 7,050,874
• Filed: July 2, 2021
• Petitioner(s): Kinaxis Inc. and Kinaxis Corp.
• Patent Owner(s): Blue Yonder Group, Inc.
• Challenged Claims: 1-11

2. Patent Overview

• Title: Sourcing of Bills of Materials
• Brief Description: The ’874 patent discloses a bill of materials (BOM) sourcing system that automates the process of procuring parts. The system uses a sourcing engine to receive a BOM, search supplier data, apply sourcing criteria to select the best supplier for each part, and then uses a transaction execution module to generate and communicate purchase orders.

3. Grounds for Unpatentability

Ground 1: Claims 1-11 are anticipated and/or obvious over Szekely.

• Prior Art Relied Upon: Szekely (Pedro Szekely et al., Controlling Supplier Selection in an Automated Purchasing System, AAAI Technical Report WS-99-01, 1999).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Szekely’s “DEALMAKER” system anticipates or renders obvious every limitation of the challenged claims. Szekely’s system is an automated purchasing system that uses a “sourcing module” (the claimed “sourcing engine”) to process electronic “requisitions” (argued to be equivalent to the claimed “BOM”). This module extracts part numbers, queries supplier databases and online catalogs for price and availability, and applies stored rules and policies (the claimed “sourcing criteria”) to select a supplier. Szekely’s system then connects to a separate EDI system (the claimed “transaction execution module”) that generates and transmits valid EDI purchase order transactions to vendors.
  • Motivation to Combine (for obviousness): To the extent Szekely’s single-part “requisition” is not considered a multi-part “BOM,” Petitioner asserted a person of ordinary skill in the art (POSITA) would have been motivated to modify the DEALMAKER system to process multi-part BOMs. This modification would be a predictable design choice to improve the system's efficiency and flexibility by batching multiple part requests into a single, commonly used document format, thereby expanding its applicability to other automated purchasing systems.
  • Expectation of Success: A POSITA would have had a high expectation of success in making such modifications, as it would involve a routine adaptation of the sourcing module to iterate through multiple line items in a BOM, a simple task for a skilled artisan.

Ground 2: Claims 1-11 are obvious over Szekely in view of Khan and Spiller.

• Prior Art Relied Upon: Szekely (as in Ground 1), Khan (Application # 2002/0032611), and Spiller (International Publication No. WO 01/08034).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground reinforces Ground 1 by using secondary references to explicitly disclose features Petitioner argued were inherent or obvious modifications of Szekely. The combination starts with Szekely’s DEALMAKER system as the base framework. Khan was introduced for its explicit teaching of a computer-implemented method for sourcing a multi-part BOM by aggregating vendor data. Spiller was added for its detailed disclosure of an electronic document processing system that functions as a transaction execution module. Spiller’s system receives purchase order data, validates it against supplier-specific rules, determines the required output format (e.g., EDI, fax), generates the corresponding document, and sends it to the supplier.
  • Motivation to Combine: A POSITA starting with Szekely’s system would combine it with Khan to enhance its input capabilities, making it more flexible and efficient by enabling it to process multi-part BOMs, a widely used document format for procurement. Because Szekely only vaguely describes its EDI system, a POSITA would have been motivated to look to a reference like Spiller to provide the necessary implementation details. Combining with Spiller would predictably improve Szekely’s system by enabling it to accommodate suppliers with unique or non-EDI transaction requirements, thus increasing the pool of potential suppliers and improving sourcing outcomes.
  • Expectation of Success: A POSITA would have had a reasonable expectation of success, as the combination involves integrating known, compatible technologies to achieve predictable benefits. Combining Khan’s BOM processing with Szekely’s sourcing logic and Spiller’s transaction processing capabilities represents the application of known techniques to improve a similar system.

4. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial would be inappropriate under both 35 U.S.C. §325(d) and §314(a). The asserted prior art combinations are materially different from the art considered during prosecution, presenting new and distinct teachings.
• Regarding the Fintiv factors, Petitioner argued for institution because the trial date in the parallel district court case is scheduled for months after the Board’s projected Final Written Decision (FWD). Furthermore, the petition was filed promptly after infringement contentions were served, and Petitioner stipulated to not pursue the same invalidity grounds in district court if the IPR is instituted, eliminating concerns of duplicative efforts.

5. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1-11 of the ’874 patent as unpatentable.