Secure Axcess, LLC v. PNC Bank Nat'l Ass'n

• Decision Date: 06 June 2017
• Docket Number: 2016-1353
• Citation: 859 F.3d 998 (Mem)
• Parties: SECURE AXCESS, LLC, Appellant v. PNC BANK NATIONAL ASSOCIATION, U.S. Bank National Association, U.S. Bancorp, Bank of the West, Santander Bank, N.A., Ally Financial, Inc., Raymond James & Associates, Inc., Trustmark National Bank, Nationwide Bank, Cadence Bank, N.A., Commerce Bank, Appellees
• Court: U.S. Court of Appeals — Federal Circuit

859 F.3d 998 (Mem)

SECURE AXCESS, LLC, Appellant

v.PNC BANK NATIONAL ASSOCIATION, U.S. Bank National Association, U.S. Bancorp, Bank of the West, Santander Bank, N.A., Ally Financial, Inc., Raymond James & Associates, Inc., Trustmark National Bank, Nationwide Bank, Cadence Bank, N.A., Commerce Bank, Appellees

2016-1353

United States Court of Appeals, Federal Circuit.

Date June 6, 2017

Taranto, Circuit Judge, with whom Moore, Circuit Judge, joins, concurs in the denial of rehearing en banc.

O'Malley, Circuit Judge, concurs in the denial of rehearing en banc.

Reyna, Circuit Judge, concurs in the denial of rehearing en banc.

Lourie, Circuit Judge, with whom Prost, Chief Judge, Dyk, Wallach, and Hughes, Circuit Judges, join, dissents from the denial of rehearing en banc.

Dyk, Circuit Judge, with whom Wallach and Hughes, Circuit Judges, join, dissents from the denial of rehearing en banc.

Plager, Circuit Judge, concurs in the denial of panel rehearing.

ON PETITIONS FOR REHEARING EN BANC

Per Curiam.

ORDER

Appellees U.S. Bank National Association and U.S. Bancorp and appellees PNC Bank National Association; Santander Bank, N.A.; and Nationwide Bank filed separate petitions for rehearing en banc. A response to the petitions was invited by the court and filed by the appellant Secure Axcess, LLC. Two motions for leave to file amici curiae briefs were also filed and granted by the court.

The petitions were referred to the panel that heard the appeal, and thereafter the petitions, response, and briefs of amici curiae were referred to the circuit judges who are in regular active service. A poll was requested, taken, and failed.

Upon consideration thereof,

IT IS ORDERED THAT:

The petitions for panel rehearing are denied.

The petitions for rehearing en banc are denied.

The mandate of the court will be issued on June 13, 2017.

Taranto, Circuit Judge, with whom Moore, Circuit Judge, joins, concurring in the denial of rehearing en banc.

This case involves a targeted and time-limited program—"a transitional post- grant review proceeding for review of the validity of covered business method [CBM] patents." Leahy–Smith America Invents Act (AIA) § 18(a)(1), Pub. L. No. 112-29, 125 Stat. 284, 329 (2011). The program is now more than halfway through its specified eight-year life; it is set to expire in a little over three years. AIA § 18(a)(3). The program has consistently been small in scale, unlike the permanent program for inter partes reviews (IPR), 35 U.S.C. §§ 311 –319, and the issue presented in this case has arisen only rarely. Although the statute grants relevant rulemaking authority to the Director of the Patent and Trademark Office (PTO), AIA § 18(a)(1), the legal issue comes to this court unaccompanied by any regulation except one that, regarding this issue, merely incorporates the statutory language. 37 C.F.R. § 42.301(a). On the question thus presented, the panel opinion in this case adopts a resolution that soundly resolves an ambiguity in the statutory language and is consistent with every one of our precedents and with a number of Patent Trial and Appeal Board decisions dating to when the program began. In these circumstances, further review of the CBM issue here would be a poor use of judicial resources. Should an extension of the CBM program in some form be deemed desirable, congressional redrafting is a better process through which to address the issues raised by the statute's current language.¹

The statutory language defines the essential gateway qualification for entry into the CBM program: a CBM patent is one "that claims 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...." AIA § 18(d)(1) (emphasis added). That language makes one thing unambiguously clear and leaves a familiar ambiguity as to a second textual issue.

The clear prescription is that what counts is what the patent claims —which, as the panel explained, is a matter of proper claim construction, in which the specification plays a large role (the roster of litigation defendants does not). In this case, there is not even a contention that any claim, properly construed, incorporates any requirement based on the specification's mention of banks or any reference to "use[ ] in the practice, administration, or management of a financial product or service." AIA § 18(d)(1). It is undisputed that the claims in this case all apply to certain computer access technologies, whether or not they are used in the practice, administration, or management of a financial product or service.

The second textual issue, addressing the words that follow "claims" in section 18(d)(1), is whether the verb "claims" applies to both the "method or corresponding apparatus" language and the "used in the practice, administration, or management of a financial product or service" language or, instead, applies just to the "method or corresponding apparatus" language. This is a common type of ambiguity where a verbal phrase precedes a predicate that expressly or implicitly has two parts. Cf. Global-Tech Appliances, Inc. v. SEB S.A. , 563 U.S. 754, 760–61, 766, 131 S.Ct. 2060, 179 L.Ed.2d 1167 (2011) (recognizing ambiguity as to whether, in the phrase "induces infringement," the implicit knowledge requirement in "induce" applies not just to the act that infringes but also to its infringing character; resolving the ambiguity by requiring knowledge of both). The panel resolved the ambiguity by reading "claims" as reaching both parts of the predicate (much as Global-Tech did for its similar ambiguity): the latter portion ("used in ...") as well as the former ("method or corresponding apparatus ...") must be referenced among what is claimed, explicitly or implicitly, in at least one claim of the patent.

That resolution is not just a textually familiar one; it is in accord with all of our court's precedents. Even before Unwired Planet, LLC v. Google Inc. , 841 F.3d 995 (Fed. Cir. 2016), we read section 18(d)(1) in this way. In Blue Calypso, LLC v. Groupon, Inc. , 815 F.3d 1331 (Fed. Cir. 2016), we explained that "§ 18(d)(1) directs us to examine the claims when deciding whether a patent is a CBM patent." Id. at 1340. And in approving the standard applied by the Board in a number of decisions that had rejected CBM status, we said: "each of these cases properly focuses on the claim language at issue and, finding nothing explicitly or inherently financial in the construed claim language, declines to institute CBM review." Id. (emphases added). The panel opinion in the present case reflects the same interpretation.

All of our precedents also accord with this interpretation on their facts. Each of our cases finding a petition proper under the CBM program has involved a reference to a financial element (shorthand for the statutory "used in ..." phrase) in at least one claim. In Blue Calypso , the language of claim 1 of the patent at issue—"subsidizing the qualified subscriber according to the chosen subsidy program," id. at 1339 (quoting U.S. Patent No. 7,664,516, col. 7, lines 39–40)—established that "the claims of the Blue Calypso Patents are directed to methods in which advertisers financially induce ‘subscribers' to assist their advertising efforts," id. at 1340. Financial claim elements were present, too, in SightSound Technologies, LLC v. Apple Inc. , 809 F.3d 1307, 1311, 1315–16 (Fed. Cir. 2015) (claiming methods for "selling the desired digital video or digital audio signals to [a party] for a fee through telecommunications lines"), and Versata Development Group, Inc. v. SAP America, Inc., 793 F.3d 1306, 1311–13, 1327 (Fed. Cir. 2015) (claiming product grouping and pricing software).

The same is true of DataTreasury's Ballard patents, U.S. Patent Nos. 5,910,988 and 6,032,137, which helped prompt enactment of the CBM program. See DataTreasury Corp. v. Fid. Nat'l Info. Servs., Inc. , 669 Fed.Appx. 572, 573 (Fed. Cir. 2016) (affirming the Board's rejection of challenged claims of the '988 and '137 patents in CBM proceedings), cert. denied , ––– U.S. ––––, 137 S.Ct. 1338, 197 L.Ed.2d 520 (2017). Each of the two Ballard patents contains at least one claim directed to "the practice, administration, or management of a financial product or service." For example: In the '137 patent, every independent claim (thus every claim) contains a requirement regarding "transactions from checks." '137 patent, claims 1, 26, 42, 43. In the '988 patent, claims 3–8, 28, 45, 50, 87, 92, 96, 101, and 113 refer to "electronic transactions from credit cards, smart cards[,] and debit cards"; claims 51, 55, 64, 70, 75–77, and 102–109 refer to credit cards, debit cards, credit-card transactions or statements, or bank statements; and more generally, every independent claim (thus every claim) contains a requirement regarding "receipts" (and some also refer to "transactions"), '988 patent, claims 1, 16, 42, 46, 84, 88, 93, 97, 102, 106, 110, 114, 118, 121. Those patents plainly are CBM patents under the panel ruling in the present case. Nothing similar appears, expressly or by construction, in the claims of the patent at issue here.

The panel's reading of the statute accords as well with several Board decisions, dating back to the launching of the CBM program, that rejected CBM status for similar reasons. See Fairchild Semiconductor Corp. v. In-Depth Test LLC , CBM2015-00060, 2015 WL 4652717, at *5–6 (P.T.A.B. Aug. 3, 2015) (rejecting CBM status for semi-conductor devices, despite ubiquitous use in the financial system, because the "statutory language ... requires us to focus on the challenged claims rather than speculate on possible uses of products recited in the claims"); Par Pharm., Inc. v. Jazz Pharm., Inc. , CBM2014-00149, –00150, –00151, –00153, 2015 WL 216987, at *5–6 (P.T.A.B. Jan. 13, 2015) (rejecting CBM status because "our focus is firmly on the claims" and petitioner had not "analyze[d] the claim language, in...