Unwired Planet, LLC v. Google Inc., 2015-1812

• Decision Date: 21 November 2016
• Docket Number: 2015-1812
• Parties: Unwired Planet, LLC, Appellant v. Google Inc., Appellee
• Court: U.S. Court of Appeals — Federal Circuit

841 F.3d 1376

Unwired Planet, LLC, Appellant

v.Google Inc., Appellee

2015-1812

United States Court of Appeals, Federal Circuit.

Decided: November 21, 2016

William M. Jay , Goodwin Procter LLP, Washington, DC, argued for appellant. Also represented by Eleanor M. Yost ; Brett M. Schuman , David Zimmer , San Francisco, CA.

Jon Wright , Sterne Kessler Goldstein & Fox, PLLC, Washington, DC, argued for appellee. Also represented by Michael V. Messinger , Joseph E. Mutschelknaus , Deirdre M. Wells ; Peter Andrew Detre , Munger, Tolles & Olson, LLP, San Francisco, CA; Adam R. Lawton , Los Angeles, CA.

Before Reyna, Plager, and Hughes, Circuit Judges.

Reyna

, Circuit Judge.

Unwired Planet, LLC (“Unwired”) appeals from the final written decision of the Patent Trial and Appeal Board (“Board”) in Covered Business Method Patent Review No. 2014–00006. Google Inc. v. Unwired Planet, LLC, CBM2014–00006, 2015 WL 1570274 (P.T.A.B. Apr. 6, 2015)

(“CBM Final Decision ”). Because the Board relied on an incorrect definition of covered business method (“CBM”) patent in evaluating the challenged patent, U.S. Patent No. 7,203,752 (the “ '752 patent”), we vacate and remand .

BACKGROUND

U.S. Patent No. 7,203,752

The '752 patent

is entitled “Method and System for Managing Location Information for Wireless Communications Devices.” It describes a system and method for restricting access to a wireless device's location information. The specification describes a system that allows users of wireless devices (e.g., cell phones) to set “privacy preferences” that determine whether “client applications” are allowed to access their device's location information. '752 patent col. 1 ll. 60–65. The privacy preferences used to determine whether client applications are granted access may include, for example, “the time of day of the request, [the device's] current location at the time the request is made, the accuracy of the provided information and/or the party who is seeking such information.” Id . at col. 1 l. 65 to col. 2 l. 1. “In operation, a client application will submit a request over a data network to the system requesting location information for an identified wireless communications device.” Id . at col. 3 ll. 30–33. The system then determines, based on the user's privacy preferences, whether to provide the requested location information to a client application. Id . at col. 3 ll. 38–50.

Claim 25 is representative for the purposes of this appeal. It claims:

A method of controlling access to location information for wireless communications devices operating in a wireless communications network, the method comprising:

receiving a request from a client application for location information for a wireless device;retrieving a subscriber profile from a memory, the subscriber profile including a list of authorized client applications and a permission set for each of the authorized client applications, wherein the permission set includes at least one of a spatial limitation on access to the location information or a temporal limitation on access to the location information;

querying the subscribe[r] profile to determine whether the client application is an authorized client application;

querying the subscriber profile to determine whether the permission set for the client application authorizes the client application to receive the location information for the wireless device;

determining that the client application is either not an authorized client application or not authorized to receive the location information; and

denying the client application access to the location information.

Id. at col. 16 ll. 18–40.

CBM 2014–00006

On October 9, 2013, Google Inc. (“Google”) petitioned for CBM review of claims 25–29 of the '752 patent

. See Leahy–Smith America Invents Act (“AIA”), Pub. L. No. 112–29, § 18, 125 Stat. 284, 329–31 (2011).¹ On April 8, 2014, the Board instituted CBM review of all the challenged claims. As a threshold matter, the Board reviewed whether the '752 patent is a CBM patent. See AIA § 18(d); 37 C.F.R. § 42.301. The Board based its review on “whether the patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.” Google Inc. v. Unwired Planet, LLC , CBM2014–00006, 2014 WL 1396978, at *7 (P.T.A.B. Apr. 8, 2014) (“CBM Institution Decision ”) (citing Board decisions). After examining the '752 patent's specification, the Board found the '752 patent to be a CBM patent, reasoning:

The '752 patent

disclosure indicates the “client application” may be associated with a service provider or a goods provider, such as a hotel, restaurant, or store, that wants to know a wireless device is in its area so relevant advertising may be transmitted to the wireless device. See [' 752 patent col. 11 ll.] 12–17. Thus, the subject matter recited in claim 25 of the '752 patent is incidental or complementary to the financial activity of service or product sales. Therefore, claim 25 is directed to a method for performing data processing or other operations used in the practice, administration, or management of a financial product or service.

Id .

The Board instituted the CBM review on four grounds: (1) claims 25–29 for unpatentable subject matter under 35 U.S.C. § 101, (2) claim 26 for lack of written description under 35 U.S.C. § 112, (3) claim 25 for obviousness under 35 U.S.C. § 103 over two references, and (4) claim 25 for obviousness over a different combination of two references. CBM Institution Decision , 2014 WL 1396978, at *1, *4, *20–21.

The Board issued its final written decision on April 6, 2015. The Board upheld only the first ground, finding that the challenged claims were directed to unpatentable subject matter under section 101

. CBM Final Decision , 2015 WL 1570274, at *18. Unwired appeals. Google does not cross-appeal. The only issues on appeal are whether the patents are CBM patents and whether the challenged claims are directed to patentable subject matter under section 101. We have jurisdiction under

28 U.S.C. § 1295(a)(4)(A)

and 35 U.S.C. § 329. Our jurisdiction includes review of whether the '752 patent is a CBM patent. Versata Dev. Grp., Inc. v. SAP Am., Inc. , 793 F.3d 1306, 1323 (Fed. Cir. 2015).

STANDARD OF REVIEW

We review Board determinations under the standards provided in the Administrative Procedure Act (“APA”), 5 U.S.C. § 706

. Pride Mobility Prods. Corp. v. Permobil, Inc. , 818 F.3d 1307, 1313 (Fed. Cir. 2016) ; Power Integrations, Inc. v. Lee , 797 F.3d 1318, 1323 (Fed. Cir. 2015). “Under 5 U.S.C. § 706(2)(A), (E), the Board's actions here are to be set aside if ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law’ or ‘unsupported by substantial evidence.’ ” Pride Mobility , 818 F.3d at 1313.² We review the Board's statutory interpretation de novo. Belkin Int'l, Inc. v. Kappos , 696 F.3d 1379, 1381 (Fed. Cir. 2012).

DISCUSSION

Unwired argues that the Board erred in applying a standard that is broader than the AIA contemplates to determine whether the '752 patent

was a CBM patent. It notes that the challenged claims themselves do not disclose or otherwise describe a financial product or service. In Unwired's view, the Board's reliance on the sections of the specification discussing ways to monetize the invention by selling advertising is improper speculation. Unwired further argues that the Board erred by looking to whether the claims are “incidental” or “complementary” to financial activity because these broad terms conflict with the AIA's limits on covered patents.

Google responds that the Board applied the correct definition of CBM patents in light of the comments the United States Patent and Trademark Office (“PTO”) made during the regulatory process. Google argues that the “Board's broad application of CBM review is well-known and has been recognized by this Court.” Google Br. 24 (citing Versata , 793 F.3d at 1324

). Google further notes that the specification discusses using the claimed method to facilitate advertising, which would thereby facilitate financial activity.³ In Google's view, proposed use of the claimed method in facilitating advertising is sufficient to support the Board's determination that the '752 patent is a CBM patent. We disagree.

In accordance with the statute, a CBM review is available only for a “covered business method patent,” which the AIA defines as “a patent 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, except that the term does not include patents for technological inventions.” AIA § 18(d)(1).⁴

The PTO adopted the statutory definition of CBM patents by regulation without alteration. Transitional Program for Covered Business Method Patents—Definitions of Covered Business Method Patent and Technological Invention, 77 Fed. Reg. 48,734 (Aug. 14, 2012)

(“Transitional Program”).

We have noted that the PTO has a “broad delegation of rulemaking authority in the establishment and implementation of” CBM review. Versata , 793 F.3d at 1325

. “It might have been helpful if the [PTO] had used [its] authority to elaborate on its understanding of the definition [of CBM] provided in the statute.” Versata , 793 F.3d at 1325. But the PTO did not do so, instead adopting by regulation the statutory definition of a CBM patent. 37 C.F.R. § 42.301(a).

To reach its decision in this case, the Board did not apply the statutory definition. Instead, the Board stated that the proper inquiry “is whether the patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.” CBM Institution Decision , 2014 WL 1396978, at *7

(citing Board cases). The Board determined that the '752 patent was a CBM patent because the location service could involve an eventual sale of services. The Board noted that the specification provides that “client...