Amazon.com, Inc. v. Uniloc Luxembourg S.A.

____________
____________
____________
____________
Trials@uspto.gov
571-272-7822
Paper No. 34
Entered: January 18, 2019
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
AMAZON.COM, INC., AMAZON DIGITAL SERVICES, INC.,
AMAZON FULFILLMENT SERVICES, INC., HULU, LLC,
and NETFLIX, INC,
Petitioner,
v.
UNILOC LUXEMBOURG S.A.,
Patent Owner.
Case IPR2017-00948
Patent 8,566,960 B2
Before DAVID C. M CKONE, BARBARA A. PARVIS, and
MICHELLE N. WORMMEESTER, Administrative Patent Judges.
MCKONE, Administrative Patent Judge.
DECISION
PATENT OWNER’S REQUEST FOR REHEARING
37 C.F.R. § 42.71(d)

IPR2017-00948
Patent 8,566,960 B2
I. 	INTRODUCTION
Amazon.com, Inc., Amazon Digital Services, Inc., Amazon
Fulfillment Services, Inc., Hulu, LLC, And Netflix, Inc. (collectively
“Petitioner”) filed a Petition (Paper 1, “Pet.”) requesting an inter partes
review of claims 1–25 of U.S. Patent No. 8,566,960 B2 (Ex. 1001, “the ’960
patent”). Pursuant to 35 U.S.C. § 314, in our Institution Decision
(Paper 10), we instituted this proceeding as to claims 1–25. Inst. Dec. 34.
Patent Owner1 filed a Patent Owner’s Response (Paper 15, “PO Resp.”), and
Petitioner filed a Reply to the Patent Owner’s Response (Paper 18, “Reply”).
Patent Owner also filed a Contingent Motion to Amend (Paper 17,
“Mot. to Amend”), seeking to replace claims 1, 22, and 25 with substitute
claims 26, 27, and 28 if claims 1, 22, and 25 were found unpatentable.
Petitioner filed an Opposition to the Motion to Amend (Paper 19, “Opp. to
Mot. to Amend”), and Patent Owner filed a Reply supporting its Motion to
Amend (Paper 24, “Mot. to Amend Reply”). Because we found that claims
1, 22, and 25 are unpatentable, we considered, and ultimately denied, Patent
Owner’s Motion to Amend, concluding that the proposed substitute claims
are directed to non-statutory subject matter under 35 U.S.C. § 101.
Paper 31, Final Written Decision (“FWD”) 53, 63, 70.
In a Request for Rehearing (Paper 33, “Req.”), Patent Owner contends
that we misapprehended the law and improperly considered whether
substitute claims 26–28 constitute statutory subject matter under § 101.
1 Patent Owner represents that Uniloc 2017 LLC is the owner of the
’960 patent, and that Uniloc USA, Inc. and Uniloc Licensing USA LLC are
real parties-in-interest. Paper 6; Paper 32.
2

IPR2017-00948
Patent 8,566,960 B2
Req. 2–3. For the reasons explained below, we deny Patent Owner’s
Request for Rehearing.
II. BACKGROUND
In a related matter, a district court determined that independent claims
1, 22, and 25 are non-statutory subject matter under § 101. See Uniloc USA,
Inc. v. Amazon.com, Inc., 243 F. Supp. 3d 797, 811 (E.D. Tex. 2017) (“For
the reasons listed above, the Court finds that all claims of the ’960 Patent are
drawn to ineligible subject matter under 35 U.S.C. § 101.”). The Federal
Circuit has affirmed the District Court’s decision. 	See Uniloc USA, Inc. v.
Amazon.com, Inc., 2017-2051 (Fed. Cir. Aug. 9, 2018) (Fed. Cir. R. 36
decision). 	Substitute claims 26, 27, and 28 propose amendments to claims 1,
22, and 25, respectively. Mot. to Amend, 1, App. A.
Petitioner opposed Patent Owner’s Motion to Amend, inter alia, on
the ground that substitute claims 26–28 are non-statutory subject matter
under § 101. Opp. to Mot. to Amend 1–11. Patent Owner did not respond
substantively to this argument; rather, Patent Owner argued that Petitioner
was not permitted to raise § 101 in opposition to a motion to amend in an
inter partes review. Mot. to Amend Reply 12–13. We fully considered and
rejected Patent Owner’s argument and found that a preponderance of the
evidence showed that substitute claims 26–28 are non-statutory subject
matter. FWD 57–63, 69.
III. 	ANALYSIS
The burden of showing that the Decision should be modified is on
Patent Owner, the party challenging the Decision. 	See 37 C.F.R. § 42.71(d).
3

IPR2017-00948
Patent 8,566,960 B2
In addition, “[t]he request must specifically identify all matters the party
believes the Board misapprehended or overlooked, and the place where each
matter was previously addressed in a motion, an opposition, or a reply.” Id.
Patent Owner argues that, by overruling the Board’s practice of
placing on the patent owner the burden of showing patentability of amended
claims in Aqua Products Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en
banc), the Federal Circuit also foreclosed review of proposed amended
claims under § 101. Req. 3–4. Under Patent Owner’s theory, Board cases
such as Ariosa Diagnostics v. Isis Innovation Limited, Case IPR2012-00022
(PTAB Sept. 2, 2014) (Paper 166), considered § 101 only as part of a patent
owner’s burden to show patentability of the amended claims, and the Federal
Circuit’s removal of that burden “overruled the very basis for Ariosa
Diagnostic’s holding that a motion to amend must address patent eligibility
under § 101.” Req. 3–4. However, as we explained in our Final Written
Decision, Aqua Products makes clear that Patent Owner does not bear the
burden of persuasion on issues of patentability in a motion to amend,2 but
does not foreclose an analysis of whether substitute claims comply with
2 To be clear, our Decision did not place the burden of showing patentability
of substitute claims 26–28 on Patent Owner. FWD 59–63. The District
Court determined that claims 1, 22, and 25 are non-statutory subject matter
(which the Federal Circuit affirmed) and Petitioner introduced persuasive
evidence and argument that the amendments proposed in substitute claims
26–28 did not address the statutory defect in claims 1, 22, and 25. 	Id.
Patent Owner was silent as to whether the substitute claims recite statutory
subject matter. Id. at 57 (citing Mot. to Amend Reply 12–13; Tr. 50:13–17).
On the complete record, Petitioner proved by a preponderance of the
evidence that substitute claims 26–28 recite non-statutory subject matter.
Id. at 59, 62–63, 69.
4

IPR2017-00948
Patent 8,566,960 B2
§ 101. FWD 58–59. Although the panel in Ariosa Diagnostic noted that the
burden to show patentability of amended claims required the patent owner to
address § 101, the panel did not find that § 311(b) precludes us from
considering the patentability of amended claims under other statutory
provisions, such as § 101. Case IPR2012-00022, slip op. at 51–52.
By its terms, § 311(b) limits a petitioner to requesting cancellation of
existing claims of a patent only under § 102 and § 103. 35 U.S.C. § 311(b)
(“A petitioner in an inter partes review may request to cancel as
unpatentable 1 or more claims of a patent only on a ground that could be
raised under section 102 or 103 . . . .” (emphasis added)). It does not,
however, limit the grounds of unpatentability that can be raised in response
to proposed substitute amended claims presented in a motion to amend. In
contrast to § 311(b), the statutory provision providing a right to a motion to
amend, 35 U.S.C. § 316(d), does not prevent us from considering
unpatentability under sections other than § 102 and § 103 with respect to
substitute claims.3
This distinction between claims of a patent and amended claims is
further reflected in the statute. For example, the statute makes clear that
amended claims are proposed claims until they are added following a final
written decision and action of the Director. See 35 U.S.C. §§ 318(a)–(b).
Specifically, § 318(a) (emphases added) directs us to “issue a final written
3 Section 316(d)(1) provides that “(1) In general.—During an inter partes
review instituted under this chapter, the patent owner may file 1 motion to
amend the patent in 1 or more of the following ways: (A) Cancel any
challenged patent claim. (B) For each challenged claim, propose a
reasonable number of substitute claims.”
5

IPR2017-00948
Patent 8,566,960 B2
decision with respect to the patentability of any patent claim challenged by
the petitioner and any new claim added under section 316(d).”
Section 318(b) (emphases added) reiterates this distinction, providing that, if
we issue a final written decision, “the Director shall issue and publish a
certificate canceling any claim of the patent finally determined to be
unpatentable, confirming any claim of the patent determined to be
patentable, and incorporating in the patent by operation of the certificate any
new or amended claim determined to be patentable.”
Aqua Products says nothing to the contrary. Instead, the lead opinion
in Aqua Products recognizes that substitute claims sought to be added to a
patent are not claims of that patent. See Aqua Prods., 872 F.3d at 1304
(“The ‘request’ made by a motion to amend is—in the PTO’s own words—
for ‘entry’ into the IPR, not for entry of an amended claim into the patent.
Once entered into the proceeding, the amended claims are to be assessed for
patentability alongside the original instituted claims.”). 	Although not
binding on this point, the Aqua Products lead opinion recognizes this
distinction, in the statute, between the claims challenged by a petitioner and
substitute claims introduced by a patent owner:
For example, §§ 316(a)(9) and 316(d) distinguish a “challenged
claim’ from ‘substitute claims.” Similarly, § 314(a) only
applies to “claims challenged in the petition.” In § 318(a),
Congress distinguished between “any patent claim challenged
by the petitioner” and “any new claim added under section
316(d).” And in § 318(b), Congress explained the procedure
for issuing a certificate confirming the patentability of claims
“and incorporating in the patent . . . any new or amended claim
determined to be patentable.” In § 318(c), Congress provided
for intervening rights with respect to “proposed amended or
6

IPR2017-00948
Patent 8,566,960 B2
new claim[s] determined to be patentable” and incorporated
into the patent following an IPR.
Aqua Prods., 872 F.3d at 1306. As the lead opinion notes, “Congress is
presumed to have acted intentionally when it made the distinction between
challenged and amended claims in multiple parts of the AIA statutory
scheme . . . .” Id. at 1306–07 (citing Bates v. United States, 522 U.S. 23,
29–30 (1997)).
This understanding is consistent with the Board’s practice of relying
on provisions other than § 102 and § 103 to evaluate amended claims for
unpatentability. 	See, e.g., Apple Inc. v. Valencell, Inc., Case No. IPR2017-
00315, 2018 WL 2552323, at *18 (PTAB May 31, 2018) (“[W]e agree with
Petitioner that the proposed substitute claims do not pass muster under 35
U.S.C. § 112 because they are indefinite.”); Cook Grp. Inc. v. Bos. Sci.
Scimed, Inc., Case No. IPR2017-00440, 2018 WL 6828874, at *34 (PTAB
Dec. 28, 2018) (“[W]e determine, based on the final record before us, that
Petitioner has not shown, by a preponderance of the evidence, that proposed
substitute claims 21, 30, and 38 are unpatentable for failing to comply with
the requirements of 35 U.S.C. § 112, ¶¶ 1, 2.”); Intel Corp., Cavium, LLC v.
Alacritech, Inc., Case No. IPR2017-01409, 2018 WL 5992621, at *10
(PTAB Nov. 14, 2018) (“[W]e are not persuaded by Petitioner that substitute
claims 61–78 are indefinite under 35 U.S.C. § 112, second paragraph.”).
Patent Owner does not point us to authority that § 311(b) precludes
Petitioner from raising, or us from considering, other grounds of
unpatentability, including § 101, as to substitute claims not yet part of a
patent, in the context of a motion to amend. Patent Owner’s only authority
for its contention that we may only consider § 102 and § 103 as to substitute
7

IPR2017-00948
Patent 8,566,960 B2
claims is the Secure Axcess case. Req. 2–3 (citing Secure Axcess, LLC
v. PNC Bank Nat’l Ass’n, 848 F.3d 1370, 1379 (Fed. Cir. 2017), cert.
granted, judgment vacated sub nom. PNC Bank Nat. Ass’n v. Secure Axcess,
LLC, 138 S. Ct. 1982 (2018)). In Secure Axcess, the Federal Circuit
explained:
Congress intended that the CBM program was to be more
limited in scope than that. Its restriction to “covered business
method” patents, and its temporary nature (eight years), make
clear that it is a program established for a defined set of patents,
not for virtually every patent. Moreover, in the AIA, the same
statute that established the CBM program, Congress carefully
set out limits on the inter partes review (“IPR”) program for
review of patents after issuance. Persons sued for infringement
had no more than one year to petition for IPR, and were
restricted to presenting only certain §§ 102 and 103 grounds of
unpatentability, thus excluding grounds based on, for example,
§ 101 or § 112. It is not sensible to read AIA § 18(d)(1) as
obliterating these important limits for review of essentially any
patent, subject only to the “technological invention” exception.
848 F.3d 1370 at 1379. Secure Axcess, however, only considered eligibility
of a patent for covered business method patent review and with respect to
claims as issued in the patent under consideration. Its statements regarding
inter partes reviews were included as statutory background with regard to
issued claims to illustrate why the threshold eligibility requirements should
not be reduced to a technological invention test in a covered business
method patent review. We do not read those statements as defining the
scope of an inter partes review with respect to proposed substitute claims,
which was not at issue in Secure Axcess. In the instant case, Petitioner did
not request cancellation of previously issued patent claims based on § 101 in
the Petition. Rather, consistent with § 311(b) and the language of Secure
8

IPR2017-00948
Patent 8,566,960 B2
Axcess cited by Patent Owner, Petitioner presented in the Petition only
grounds based on § 102 and § 103. Petitioner did not raise § 101 until
Patent Owner proposed substitute claims not yet added to the ’960 patent
and asserted that argument only against the substitute claims. Opp. to Mot.
to Amend 1–11.
Finally, Patent Owner asserts that we relied improperly on Western
Digital Corp. v. SPEX Technologies., Inc., Case IPR2018-00082 (PTAB
Apr. 25, 2018) (Paper 13) (informative). Req. 3. Patent Owner argues that
Western Digital “did not hold that a motion to amend must address § 101
eligibility” and that “[i]t does not even hold that it is permissible for a Board
to consider § 101 eligibility.” 	Id. at 4. According to Patent Owner, “[t]hat a
patent owner may seek narrowing amendments to make the claims more
robust against a potential § 101 challenge outside an IPR proceeding does
not mean that the Board may consider such a § 101 challenge in the IPR in
which those amendments are entered.” Id. at 4–5. We did not, however, cite
Western Digital as holding that a motion to amend must address § 101
eligibility. 	Rather, by recognizing that § 101 issues can be introduced and
corrected through a motion to amend, Western Digital reinforces that Aqua
Products did not divest us of the power to consider a § 101 challenge to
proposed amended claims.
According to the lead opinion in Aqua Products, “the Board must
consider the entirety of the record before it when assessing the patentability
of amended claims under § 318(a) and must justify any conclusions of
unpatentability with respect to amended claims based on that record.”
872 F.3d at 1296; accord id. at 1309 (“When read in conjunction with the
directive of § 318, we believe that the Board must assess the patentability of
9

IPR2017-00948
Patent 8,566,960 B2
all claims in the proceeding, including amended claims that have been
entered into the proceeding after satisfying the requirements outlined in
§ 316(d), and must do so through the lens of § 316(e).”). Here, the record4
indicates that the existing claims of the ’960 patent have been determined to
be non-statutory subject matter by a district court and the Federal Circuit.
When we considered the record in its entirety, we determined that Petitioner
proved, by a preponderance of the evidence, that the substitute claims are
not patentable. Patent Owner has not argued persuasively, either in the
Motion to Amend Reply or the Request for Rehearing, that any authority
precludes Petitioner from arguing, or us from considering, whether a
substitute claim in a motion to amend constitutes statutory subject matter
under § 101. Accordingly, Patent Owner does not show that we
misapprehended the law.
4 This evidence was introduced into the record by Petitioner. Paper 19, 1–2.
Nevertheless, as Petitioner pointed out (id. at 2), Patent Owner had a duty of
candor, under 37 C.F.R. § 42.11(a), to introduce this evidence. See also
Memorandum of Chief Administrative Patent Judge, Guidance on Motions
to Amend in view of Aqua Products, 2 (Nov. 21, 2017) (“[U]nder 37 C.F.R.
§ 42.11, all parties have a duty of candor, which includes a patent owner’s
duty to disclose to the Board information that the patent owner is aware of
that is material to the patentability of substitute claims, if such information is
not already of record in the case.”); 37 C.F.R. § 42.8(b)(2) (“Each of the
following notices must be filed: . . . (2) Related matters. Identify any other
judicial or administrative matter that would affect, or be affected by, a
decision in the proceeding.”). Thus, the adverse decisions should have been
part of the record regardless of Petitioner’s choice to introduce them.
10

IPR2017-00948
Patent 8,566,960 B2
IV. 	CONCLUSION
Patent Owner has not shown that we misapprehended the law.
Accordingly, we decline to change our Decision.
V. ORDER
For the reasons given:
Patent Owner’s Request for Rehearing is denied.
11

IPR2017-00948
Patent 8,566,960 B2
PETITIONER:
Daniel T. Shvodian
PERKINS COIE LLP
dshvodian@perkinscoie.com
PATENT OWNER:
Brett Mangrum
Ryan Loveless
ETHERIDGE LAW GROUP
brett@etheridgelaw.com
ryan@etheridgelaw.com
Sean D. Burdick UNILOC USA, INC.
sean.burdick@unilocusa.com
12