By Aparna Nemlekar
On April 23, 2013, the United States Patent and Trademark Office (USPTO) released a transcript of the first oral hearing conducted before the Patent Trials and Appeals Board (PTAB) in an America Invents Act (AIA) post-grant proceeding. The oral hearing was conducted on April 17, 2013 in case number CBM2012-00001 (SAP America Inc. and Versata Development Group Inc.) challenging U.S. Patent No. 6,553,350 under the transitional program for covered business method patents (TPCBM). The ‘350 Patent is also involved in co-pending litigation (Versata Software Inc. et al. v. SAP America Inc. et al., case number 2:07-cv-00153 in the U.S. District Court for the Eastern District of Texas, and case number 12-1029 in the U.S. Court of Appeals for the Federal Circuit.) A request for Ex Parte Reexamination of the ‘350 Patent was filed on April 25, 2013 by SAP.
The ‘350 Patent is directed generally to determining a product price based on customer and product hierarchical groups. The petitioner’s challenge to the ‘350 Patent is under 35 U.S.C. §101, alleging that claims 17 and 26-29 of the ‘350 Patent cover an abstract idea. Notably, of the three judges on the panel, Judge Michael P. Tierney asked nearly all the questions. This is consistent with historic practice before the PTAB, as one judge on the panel is assigned at the outset to write the opinion and usually takes the lead in questioning the parties.
During the oral hearing, which lasted about two hours (one hour total, including rebuttal time, was given to each Petitioner and Patent Owner), the parties were peppered with questions from Judge Tierney. There was no live witness or evidence typical of trials. Under PTAB practice rules, parties are required to file a motion in advance if they plan to use live testimony. However, the Board has stated that it “does not envision that live testimony is necessary at oral argument.” 77 F.R. 157 (August 14, 2012).
The hearing resembled other USPTO administrative hearings, such as patent interferences or oral hearings during appeal. Similar to other administrative hearings held at the USPTO, many of the questions from the technically savvy panel were focused on issues raised in the pre-hearing briefs and the precise claim language. Furthermore, the panel quizzed the parties on deposition testimony from opposing counsel and comparisons of the present fact situation to precedential decisions. Each party produced demonstrative exhibits and focused their arguments on technical questions relating to the §101 issues, with the petitioner arguing that the challenged claims do not cover more than abstract ideas such as customer and product hierarchies and determining prices based on such ideas and the patent owner alleging that the claims add meaningful patentable subject matter.
The PTAB has yet to hear any other oral hearings in an AIA post grant proceeding. If this first oral hearing is any indication, oral hearings in front of the PTAB are not breaking new ground. The transcript of the oral hearing may be found here.
By Aparna Nemlekar