Paper 11 Tel: Entered: August 3, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD

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1 Paper 11 Tel: Entered: August 3, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD FAIRCHILD SEMICONDUCTOR CORPORATION, Petitioner, v. IN-DEPTH TEST LLC, Patent Owner. Case CBM Before LINDA M. GAUDETTE, BARRY L. GROSSMAN, and PETER P. CHEN, Administrative Patent Judges. CHEN, Administrative Patent Judge. DECISION Denying Institution of Covered Business Method Review 37 C.F.R

2 I. INTRODUCTION Fairchild Semiconductor Corporation ( Petitioner ) filed a Petition (Paper 1, Pet. ) to institute a covered business method review of claims 1 20 ( the challenged claims ) of U.S. Patent No. 6,792,373 B2 (Ex. 1001, the 373 patent ). In-Depth Test LLC ( Patent Owner ) filed a Preliminary Response (Paper 8, Prelim. Resp. ). We have jurisdiction under 35 U.S.C. 324, and pursuant to 35 U.S.C 324(a), the Director may not authorize a covered business method patent review unless the information in the petition, if unrebutted, would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable. After considering the Petition and Preliminary Response, we determine that the 373 patent is not a covered business method patent. Accordingly, we deny institution of a covered business method patent review of claims 1 20 of the 373 patent. A. Related Matters II. BACKGROUND Patent Owner filed suit against Petitioner alleging infringement of the 373 patent in In-Depth Test LLC v. Fairchild Semiconductor Corp., Case No cv (D. Del. Aug. 22, 2014). Paper 5, 1. The 373 patent is also the subject of another petition for inter partes review, Linear Technology Corp. v. In-Depth Test LLC, Case IPR (PTAB December 11, 2014), in which we denied institution (Paper 15). Paper 5, 2. B. The 373 patent (Ex. 1001) The 373 patent is titled, Methods and Apparatus for Semiconductor Testing, and relates to a test system that executes an enhanced test process for testing components, such as semiconductor devices on a wafer, circuit 2

3 boards, packaged devices, or other electrical or optical systems, and collecting and analyzing test data. Ex. 1001, Abstract, 3:27 30, 5: Test system 100 includes tester 102 compris[ing] any test equipment that tests components 106 and generates output data relating to the testing. Id. at 3: Tester 102 operates in conjunction with computer system 108 including processor 110 and memory 112. Id. at 3:42 43, [T]est system 100 [] uses a predetermined set of initial parameters and, if desired, information from the operator to configure the test system 100. Id. at 5: When the initial configuration process is complete, tester 102 executes [a] test program to apply signals to connections on the components 106 and read output test data from the components 106. Id. at 6: Each test generates at least one result for at least one of [] components [106]. Id. at 6: [T]ester 102 may[, however,] perform multiple tests on each component 106 on a wafer, and each test may be repeated several times on the same component 106. Test data from the tester 102 is stored for quick access and supplemental analysis as the test data is acquired. The data may also be stored in a long-term memory for subsequent analysis and use. Id. at 6: Exemplary test results may include both results with statistically similar values as well as results that stray from these similar values. Id. at 6: If any of these latter results exceeds an upper or lower control limit, the tested component may be classified as a bad part. Id. at 6: The 373 patent describes results that stray from the statistically similar values but do not exceed control limits as outliers. Id. at 6:

4 Computer 108 receives the data file from tester 102 and uses a supplementary data analysis element 206 to analyze the data and provide enhanced output results Id. at 6:64 66, 9: Data analysis element 206 includes outlier classification element 212, which is configured to identify and/or classify the various outliers in the data according to selected algorithms. Id. at 14:7 14. The outliers in the test results may be identified and analyzed for any appropriate purpose, such as to identify potentially unreliable components (id. at 6:45 48), [f]or example,... to classify the components 106 into critical/marginal/good part categories (id. at 14:59 61). The outliers may also be used to identify various potential problems and/or improvements in the test and manufacturing processes. Id. at 6: C. Representative Claims Petitioner challenges the patentability of all claims in the 373 patent, claims 1, 8, and 15 of which are independent. See Pet. 1. The independent claims are reproduced below: 1. A test system, comprising: a tester configured to test a component and generate test data; and a computer connected to the tester and configured to receive the test data, identify an outlier in the test data, and generate an output report including the identified outlier. Ex. 1001, 19: A data analysis system for semiconductor test data, comprising a computer system, wherein the computer system is configured to operate: a supplementary data analysis element configured to identify outliers in the semiconductor test data; and 4

5 an output element configured to generate an output report including the identified outliers. Id. at 19:48 20: A method for testing semiconductors, comprising: generating test data for multiple components; and automatically identifying an outlier in the test data at run time using a computer system. Id. at 20: D. Asserted Ground of Unpatentability Petitioner challenges the patentability of the 373 patent claims based on patent-ineligible subject matter under 35 U.S.C Pet. 27. III. ANALYSIS Section 18 of the Leahy-Smith America Invents Act, Pub. L. No , 125 Stat. 284 (2011) ( AIA ), provides for the creation of a transitional program for reviewing covered business method patents, and limits reviews to persons or their privies that have been sued or charged with infringement of a covered business method patent. AIA 18(a)(1)(B); see 37 C.F.R Petitioner bears the burden of demonstrating that the 373 patent is a covered business method patent. See 37 C.F.R (a). When determining whether a patent is eligible for covered business method patent review, the focus is on what the patent claims. See Transitional Program for Covered Business Method Patents Definitions of Covered Business Method Patent and Technological Invention; Final Rule, 77 Fed. Reg. 48,734, 48, (Aug. 14, 2012) ( CBM Rules ). A patent need have only one claim directed to a covered business method to be eligible for review. Id. A covered business method patent is a patent that claims a method 5

6 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) (emphasis added); see 37 C.F.R (a). Petitioner asserts the legislative history reflects that the definition of covered business method patent was drafted to encompass patents claiming activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity. Pet. 15. See CBM Rules, at 48, (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)). As the Federal Circuit Court of Appeals recently stated: We agree with the USPTO that, as a matter of statutory construction, the definition of covered business method patent is not limited to products and services of only the financial industry, or to patents owned by or directly affecting the activities of financial institutions such as banks and brokerage houses. The plain text of the statutory definition contained in 18(d)(1) performing... operations used in the practice, administration, or management of a financial product or service on its face covers a wide range of finance-related activities. Versata Development Group v. SAP America, Inc., No , 2015 WL , at *16 (Fed. Cir. July 9, 2015). Petitioner contends [t]he activities claimed in the 373 patent are incidental to a financial activity or complementary to a financial activity for at least three reasons. Pet. 16. First, Petitioner argues the systems and methods claimed in the 373 patent are used in statistical process control ( SPC ) activities, which are inherently part of a manufacturing company s 6

7 cost-saving (i.e., financial) activities. Pet According to Petitioner, the claimed method of identifying outliers reduces variability and leads to increased product quality and lower repair costs. Id. Patent Owner argues that Petitioner s reasoning is applicable to any patent.... this same logic can be used to justify any patent as a CBM.... all petitioner really argues is that a semiconductor patent is a CBM because it can be used to increase the quality of a semiconductor manufacturer s parts, but the same can be said of any patent regarding its subject matter. Prelim. Resp. 19, Patent Owner adds that Petitioner does not analyze the claim language to explain how the identification of outliers in semiconductor testing involves the movement of money or exchange of credit in exchange for a product, such as the sale of a semiconductor. Id. at 23 (citing Roxane Labs., Inc. v. Jazz Pharm., Inc., CBM (PTAB Feb. 9, 2015) (Paper 16)). We agree with Patent Owner. Petitioner s argument that the systems and methods claimed in the 373 patent are incidental or complementary to a financial activity, because they improve product quality and save costs, unduly expands the intended scope of covered business method review reflected in the AIA legislative history and the CBM Rules. The 373 patent claims recite systems for testing components (claims 1 7) and for analyzing semiconductor test data (claims 8 14), and methods for testing semiconductors (claims 15 20). Petitioner does not cite to and we do not find any language in claims 1 20 constituting or otherwise describing lower repair costs, reduced variability, product quality, or cost saving activities, let alone any specific financial product or service or finance- 7

8 related activity. Nor does Petitioner cite to and, again, we do not find any language in the specification of the 373 patent relating to a financial product or service. Second, Petitioner argues that tests on semiconductors are at least incidental or complementary to financial transactions because semiconductors are ubiquitous components in the modern financial system, (Pet. 18), citing to the Declaration of Brooks Felton (Ex. 1005), an engineering manager employed by Petitioner. Patent Owner asserts Petitioner s argument looks to potential uses of any product related to a patent, untethered to the claim language of the patent itself, and contravene[s] the actual wording of the AIA. Prelim. Resp. 25 (footnote omitted). We agree with Patent Owner. Petitioner s position, in essence, would confer covered business method patent review eligibility on any patent claiming something used in the modern financial system. We are not persuaded that Petitioner s position is consistent with the statutory language, which requires us to focus on the challenged claims rather than speculate on possible uses of products recited in the claims. Third, Petitioner theorizes that for claims 1 7, which do not expressly recite semiconductors, but instead include such generic claim limitations as component and tester, those claims might be construed so broadly as to encompass such activities as liquidity stress testing on banks (as a component of the financial system) to identify outliers. Pet We first note that contrary to Petitioner s assertion, claim 3 recites components on a [semiconductor] wafer. Second, Patent Owner correctly asserts that Petitioner s proposed construction of component is belied by the 373 patent specification, which lacks any mention of the banking industry or 8

9 financial system, but is replete with descriptions of semiconductors and components used in the semiconductor industry. See, e.g., Ex. 1001, Title, Abstract, Figs. 5, 10 12, 1:25 (Field of the Invention), 1:28 43 (Background of the Invention), 2:18 27 (Summary of the Invention); see generally 3:1 18:65 (Detailed Description of Exemplary Embodiment. In addition, as Patent Owner notes, Petitioner s argument would lead to impermissibly different constructions for the term component (Prelim. Resp ), and Petitioner acknowledges that claims 8 20 explicitly concern semiconductor testing. Pet. 5. We agree with Patent Owner that Petitioner has failed to rebut the presumption that the same term in different claims has the same meaning, and, because the claim is directed towards testing a semiconductor device, it is in no way related to a financial product or service. Prelim. Resp. 32; see, e.g., claims 3, 10, 17 (reciting components on a wafer ); Ex. 1001, 19:34 35, 20:9 11, 20: Finally, Patent Owner readily distinguishes the facts of the present case from those of the four PTAB authorities cited by Petitioner as purported support for the arguments made in the Petition. Prelim. Resp In summary, although we agree with Petitioner that the definition of covered business method patent and in particular, financial product or service should be interpreted broadly, the statute requires our focus on what the challenged patent claims, and the legislative history reflects that focus. See AIA 18(d)(1); CBM Rules, 77 Fed. Reg. at 48,735 36; 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer); 157 Cong. Rec. S5441 (daily ed. Sept. 8, 2011) (statement of Sen. Leahy) (stating that the definition is not intended to cover technologies common in business environments across sectors and that have no particular relation to the 9

10 financial services sector, such as computers, communications networks, and business software ). The focus of our inquiry is on the claims and whether the 373 patent claims a method of performing data processing or other operations used in the practice, administration, or management of a financial product or service as the Versata court stated, finance-related activities. Versata, 2015 WL , at *16; see AIA 18(d)(1); CBM Rules, 77 Fed. Reg. at 48,736. As discussed herein, the challenged claims in the 373 patent recite systems and methods of testing components such as semiconductors, without any reference or connection to financial products or services or financerelated activities. Thus, similar to findings in other Board decisions, the 373 patent claims are not financial in nature. See, e.g., Sony Corp. of Am. v. Network-1 Techs., Inc., Case CBM , slip op. at 8 13 (PTAB July 1, 2015) (Paper 7) ( Claim 23 describes a method of remotely powering access equipment, without any particular connection to financial products or services. ); Sega of Am., Inc. v. Uniloc USA, Inc., Case CBM , slip op. at (PTAB Mar. 10, 2015) (Paper 11) (claims were directed to technology that restricts the use of software where the software had no particular relationship to a financial product or service ); Salesforce.com, Inc. v. Applications in Internet Time LLC, Case CBM , slip op. at 9 10 (PTAB Feb. 2, 2015) (Paper 11) ( [T]he claims on their face are directed to technology common in business environments across sectors with no particular relationship to the financial services sector. ) (citation and quotation marks omitted); J.P. Morgan Chase & Co. v. Intellectual Ventures II LLC, Case CBM , slip op. at 6 12 (PTAB Jan. 29, 2015) (Paper 11) (claims pertaining to secure electronic communications had 10

11 general utility not limited or specific to any application ); PNC Fin. Servs. Group, Inc. v. Intellectual Ventures I LLC, Case CBM , slip op. at 6 15 (PTAB May 22, 2014) (Paper 13) (claims described software systems that have general utility not specific to any application ). For the foregoing reasons, based on the present record and particular facts of this proceeding, we determine that the information presented in the Petition does not establish that the 373 patent qualifies as a covered business method patent under 18(d)(1) of the AIA. Therefore, we do not institute a covered business method patent review on the asserted ground as to any of the challenged claims. IV. CONCLUSION Upon consideration of the Petition and Patent Owner s Preliminary Response, we determine Petitioner has not satisfied the grounds for standing under 37 C.F.R (a) and, therefore, deny institution of a covered business method patent review. For the reasons given, it is V. ORDER ORDERED that the Petition is denied, and no trial is instituted. 11

12 PETITIONER: Daniel Lev Robert Stier PATENT OWNER: Joshua Wyde Daniel Noblitt 12

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