The Software IP Report

Statutory Disclaimer Saves Remaining Claims from CBM

By Bryan Hart

Categories: The Software IP Report

Using statutory disclaimer on some of the claims of its challenged patent, Realtime Data saved the remaining claims from scrutiny under covered business method review in response to a petition by Commvault. Commvault System, Inc. v. Realtime Data LLC, Case CBM2017-00061, Paper 10 (PTAB Jan. 18, 2018).

Commvault challenged Realtime’s U.S. Patent No. 8,717,204 under Covered Business Method Patent Review (CBM). CBMs were created by the America Invents Act for patents claiming “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.” The ’204 patent certainly focused on finance; the embodiments related to handling financial data, and the technical field was listed as “systems and method for providing accelerated transmission of data, such as financial trading data, financial services data, financial analytical data, company background data and news feeds, advertisements, and all other forms or information over a communication channel using data compression and decompression.” Several of the claims include explicitly financial elements such as “financial data,” “stock information,” “options information,” etc.

But Realtime disclaimed all but six of the thirty claims. Statutory disclaimer is always an option for a patent owner. 35 U.S.C. § 253. And the rules for CBMs explicitly contemplate including a disclaimer in the patent owner’s response to the petition. 37 C.F.R. 42.207(e). Once claims are disclaimed, it is “as if they never existed.” As noted previously on this blog, there isn’t anything the petitioner can do about disclaimer.

After the disclaimer, what was left? Here is the sole remaining independent claim:

12. A method for processing data, the data residing in data fields, comprising:

recognizing any characteristic, attribute, or parameter of the data;

selecting an encoder associated with the recognized characteristic, attribute, or parameter of the data;

compressing the data with the selected encoder utilizing at least one state machine to provide compressed data having a compression ratio of over 4:1; and

point-to-point transmitting the compressed data to a client;

wherein the compressing and the transmitting occur over a period of time which is less than a time to transmit the data in an uncompressed form.

The PTAB held that the remaining claims were not covered business method claims because they “are directed to a very general processing of data and are not limited to financial services or activities.” Even though the specification focuses heavily on financial data, some language characterizes processing financial data as exemplary of processing any type of data. Thus, institution was denied.

Lessons for Practice

Both parties here seem to have followed optimal strategies. By filing the petition, Commvault knocked out 24 claims, which is nothing to sneeze at. Realtime performed a likely necessary amputation and saved the remaining claims to continue its (many, many) fights in district courts. Disclaiming can be a useful strategy for patent owners, and the rules allow patent owners to basically wait until the last minute—the response to the CBM petition—to disclaim.