Federal Circuit to Review PTAB Post-Grant Review Proceedings in SAP v. Versata: PTAB Jurisdiction; Grounds On Which Invalidity May Be Asserted; And The Scope Of Claim Construction

Author:Ms Meaghan Hemmings Kent, Carly S. Levin, Fabian M. Koenigbauer and Steven J. Schwarz
Profession:Venable LLP

On September 16, 2012, post-grant proceedings became available as means to challenge patent validity pursuant to the America Invents Act. The post-grant proceedings take place before the Patent Trial and Appeal Board ("PTAB"), and include inter partes review ("IPR"), covered business method patent review ("CBM") and post grant review ("PGR"). Take a look at our snapshot of these options for more detail. Over the last 18 months, the rules and standards for these proceedings have begun to be hashed out, but this area of law is still evolving. A prime example of this is the currently pending appeal to the Federal Circuit from the PTAB's decision in the first CBM review in SAP America, Inc. v. Versata Data Development Group, PTAB Case CBM2012-00001. This case involves several key issues, including the: (1) PTAB's jurisdiction; (2) scope of available grounds of invalidity; and (3) appropriate claim construction. The SAP case concerns U.S. Patent No. 6,553,350, over which the parties have been litigating for many years. In fact, the case proceeded to trial, and a jury found that SAP infringed the patent and awarded Versata damages of lost profits and a reasonable royalty. The Federal Circuit affirmed the jury's verdict on infringement and damages, but remanded as to the injunction. While the appeal was pending, SAP filed a CBM petition with the PTAB, alleging that several claims of the '350 patent were invalid. The PTAB agreed and declared that the patent was invalid under 35 U.S.C. § 101. The '350 patent is directed to a method and apparatus for pricing products and services and the central concept involves hierarchal arrangement of data. Applying the broadest reasonable interpretation standard for claim construction, the PTAB panel found that Versata's claims encompass unpatentable abstract ideas and lack sufficient meaningful limitations beyond the recited abstract idea. Versata has now appealed the PTAB's finding of invalidity to the Federal Circuit on several bases in two companion appeals (Versata v. SAP, Fed. Cir. Case 2014-1194 and Versata v. Lee, 2014-1145), arguing that "[t]he PTAB's jurisdictional determinations were overreaching; its merits analysis legally erroneous; and its ultimate conclusion – holding this detailed, commercially successful software patent to be unpatentably 'abstract' – incorrect." In addition to arguments related to the specific merits of the case, Versata makes three arguments to watch:


To continue reading