Blue Calypso, LLC v. Groupon, Inc.

• Citation: 815 F.3d 1331
• Decision Date: 01 March 2016
• Docket Number: Nos. 2015–1391,2015–1399,2015–1394,2015–1401.,2015–1398,2015–1396,2015–1393,2015–1397,s. 2015–1391
• Parties: BLUE CALYPSO, LLC, Appellant v. GROUPON, INC., Cross–Appellant. Groupon, Inc., Appellant Blue Calypso, LLC, Appellee Blue Calypso, LLC, Appellant Groupon, Inc., Cross–Appellant Blue Calypso, LLC, Appellant Groupon, Inc., Cross–Appellant
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

815 F.3d 1331

BLUE CALYPSO, LLC, Appellant

v. GROUPON, INC., Cross–Appellant.Groupon, Inc., AppellantBlue Calypso, LLC, AppelleeBlue Calypso, LLC, AppellantGroupon, Inc., Cross–AppellantBlue Calypso, LLC, AppellantGroupon, Inc., Cross–Appellant

Nos. 2015–1391

2015–1393

2015–1394

2015–1396

2015–1397

2015–1398

2015–1399

2015–1401.

United States Court of Appeals, Federal Circuit.

March 1, 2016.

David Brandon Conrad, Fish & Richardson P.C., Dallas, TX, argued for appellant. Also represented by Carl Edward Bruce; John C. Phillips, San Diego, CA; John A. Dragseth, Minneapolis, MN.

Jeanne Marie Gills, Foley & Lardner LLP, Chicago, IL, argued for appellee and cross-appellant. Also represented by Jason Jon Keener, Aaron Jacob Weinzierl.

Kakoli Caprihan, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor Michelle K. Lee. Also represented by Thomas W. Krause, Scott Weidenfeller, Benjamin T. Hickman.

Before REYNA, SCHALL, and CHEN, Circuit Judges.

Opinion for the court filed by Circuit Judge CHEN

. Opinion dissenting-in-part filed by Circuit Judge SCHALL.

CHEN

, Circuit Judge.

These related appeals arise from five Covered Business Method (CBM) reviews of five patents owned by Blue Calypso, LLC (Blue Calypso): U.S. Patent No. 7,664,516 (the '516 patent)

, U.S. Patent No. 8,155,679 (the '679 patent), U.S. Patent No. 8,457,670 (the '670 patent), U.S. Patent No. 8,438,055 (the '055 patent), and U.S. Patent No. 8,452,646 (the '646 patent) (collectively, the Blue Calypso Patents). The United States Patent and Trademark Office, Patent Trial and Appeal Board (Board) granted the petitions, filed by Groupon, Inc. (Groupon), for review under the transitional program for covered business method patents. In its final written decisions, the Board found various claims of the Blue Calypso Patents unpatentable under 35 U.S.C. § 102. The Board further found certain claims of the '516 patent unpatentable under § 112. In addition, the Board rejected Groupon's remaining argument that additional claims were unpatentable under 35 U.S.C. § 103.

Blue Calypso now appeals the Board's decisions to review its patents, asserting that they are not "covered business method" patents. Blue Calypso also appeals the Board's unpatentability determinations. In its cross-appeal, Groupon contends that the Board erred in rejecting its obviousness arguments. For the reasons stated in this opinion, we affirm-in-part and reverse-in-part.

BACKGROUND

I

The Blue Calypso Patents are all related and generally describe a peer-to-peer advertising system that uses mobile communication devices. The '516 patent¹

explains how advertising can be made to be more effective, compared to traditional broadcast advertising, when an advertiser enlists one of its customers to electronically forward advertisements to his like-minded peers. See '516 patent, 1:31–35. The '516 patent further discloses the use of a "subsidy program" to induce customers ("subscribers") to increase exposure of an advertisement. Id., Abstract. An advertiser using this system may customize its subsidy program by specifying the nature of the subsidy or incentive—e.g., product discounts or rewards points—and by identifying necessary demographic criteria that a user must meet before being eligible for the advertiser's subsidy program. Id. at 3:21–27; see also id. at 3:15–20. A user of a mobile communication device can then subscribe to that program by creating a profile that contains demographic information. Id. at 4:11–16. After the subscribers create their profiles, the advertiser can then determine which subscribers satisfy the advertiser's criteria and are therefore eligible for the subsidy program. Id. at 4:33–35. Each subscriber may then select from the subsidy programs for which it qualified. Id. at 4:40–46. Only after this mutual ("bidirectional") selection does an advertiser transmit advertisements to that subscriber. Id. at 4:49–5:16. The advertisement includes a link, which, when executed, connects the subscriber to the advertiser's website for additional information, offers, or coupons. Id. at 5:16–22. The subscriber, using a "source communication device" may then forward this advertisement to his peer's "destination communication device." Id. at 2:30–37.

Neither party argues the challenged claims separately. We therefore use claim 2 of the '516 patent

as representative:

2. A method for providing access to an advertisement from an advertiser to a source communication device possessed by a subscriber and distributing the access to the advertisement from the source communication device to a destination communication device possessed by a recipient, wherein the destination communication device is compatible with the source communication device, and the recipient having a relationship to the subscriber, the method comprising the steps of:

comparing a desired demographic profile to a subscriber demographic profile to derive a match;

establishing a bi-lateral endorsement between the subscriber and the advertiser; providing a subsidy program to the subscriber based on the match;

sending a token related to the advertisement to the source communication device;

activating an endorsement manager in the source communication device; initiating a communication session between the source communication device and the destination communication device;

transmitting a message, including the token, from the source communication device to the destination communication device contemporaneously with the communication session; and

recognizing a subsidy, according to the subsidy program, for the subscriber after a termination of the communication session.

Id. at 7:45–8:3 (claim 2) (emphases added).

II

Groupon petitioned the Board for CBM review of the Blue Calypso Patents under § 18(a) of the Leahy–Smith America Invents Act (AIA). Groupon asserted that the claims were unpatentable under either 35 U.S.C. § 102

or § 103. In addition, Groupon asserted that a number of claims of the '516 patent were unpatentable for failing to satisfy the written description requirement of 35 U.S.C. § 112. After examining the claims, the Board concluded that they met the statutory definition of a "covered business method patent," granted the petition, and instituted review.

In its final written decisions, the Board found that claims 2–15, 20–23, and 29 of the '516 patent

; claims 7–16 and 23–27 of the '679 patent ; claims 1–5 of the '670 patent ; and claims 1, 4–6, 10, and 14 of the '055 patent were all anticipated by United States Patent Application Publication No.2002/0169835 (Paul). In addition, the Board found that claims 1–19, 23–25, and 29 of the '516 patent were unpatentable under 35 U.S.C. § 112 as lacking adequate written description. The Board then rejected Groupon's assertions that claims 4–9 of the '646 patent, as well as additional claims from the remaining four patents, were unpatentable as anticipated or obvious in light of a report published on a webpage by a graduate student at the University of Maryland Baltimore County Department of Computer Science and Electrical Engineering (Ratsimor). The Board found that Groupon failed to prove that Ratsimor was sufficiently publicly available to qualify as prior art.

Blue Calypso filed a timely appeal from the Board's decision, Groupon filed a cross-appeal, and the Director intervened for the limited purpose of defending the Board's determination that the challenged patent claims are "covered business methods." We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A)

.

DISCUSSION

We review the Board's conclusions of law de novo and its findings of fact for substantial evidence. 5 U.S.C. § 706(2)(E)

; In re Sullivan, 498 F.3d 1345, 1350 (Fed.Cir.2007). "Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 217, 59 S.Ct. 206, 83 L.Ed. 126 (1938).

In this appeal, Blue Calypso raises three primary arguments. First, Blue Calypso argues that the Board should not have conducted CBM review of the patents at issue because, in Blue Calypso's view, they do not claim "covered business methods." Second, Blue Calypso asserts that the Board incorrectly found that Paul anticipated many of Blue Calypso's patent claims. Finally, Blue Calypso objects to the Board's finding that the contested claims of the ' 055 were unpatentable for lacking written description support. In its cross-appeal, Groupon contends that the Board erred in concluding that Ratsimor was not prior art.

I. Eligibility for CBM Review

Blue Calypso begins by arguing that the PTO and the Board exceeded their statutory authority by interpreting the statutory CBM definition in an overly broad way that improperly sweeps in Blue Calypso's patents. In Blue Calypso's view, the Board never should have instituted the CBM review of its patents. Although the Board's decision to institute a CBM review is, per the AIA, "final and nonappealable," see AIA § 18(a)(1); 35 U.S.C. § 324(e)

, we have held that the question of whether a challenged patent claim is a CBM relates to the Board's authority to issue a final decision in a CBM review. Versata Dev. Grp., Inc. v. SAP Am., Inc. (Versata II ), 793 F.3d 1306, 1318–23 (Fed.Cir.2015). Thus, because we have jurisdiction to review the Board's final decisions in CBM reviews, see AIA § 18(a)(1); 35 U.S.C. § 329, the AIA does not preclude us from reviewing the Board's conclusion that the challenged patent claims are "covered business methods" that lack any "technological invention," Versata II, 793 F.3d at 1323.

A

CBM review is limited to patents "that claim[ ] a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions." AIA § 18(d)(1). Blue Calypso asserts that...