35 for 37: Partial Victory for Patent Owner As Board Puts Some, But Not All, Claims into IPR Trial

iStock_000013398807XSmallIn recent decisions, the Board has had a soft spot for Patent Owners.  Shortly after denying only the second petition for inter partes review, as previously discussed, only 29 of 40 challenged claims were put into an inter partes review trial in the case styled MicroStrategy, Inc. v. Zillow, Inc. (IPR2013-00034), involving US Pat. No. 7,970,674.

The ‘674 patent is directed to the field of electronic commerce techniques related to real estate. The ‘674 patent discloses an approach where valuing homes is responsive to owner input, allegedly resulting in a more accurate, inexpensive, and convenient valuation.

The Board first addressed a claim construction dispute between the parties involving the term “user knowledge about the distinguished home.” Patent Owner advocated a narrower construction limited to “the owner or a person with equivalent knowledge to the owner,” apparently trying to avoid prior art references directed more towards agents. The Board was not persuaded.  Relying primarily on the specification, the Board determined that such a “user” could be any person “knowledgeable about the distinguished home” and was not limited to the owner.  Order at 9-10.  Relatedly, the Board went on to construe “owner of a home” and “new geographically-specific home valuation model” based primarily on the specification of the ‘674 patent.

Turning to the specific grounds of challenge, the Board first granted two anticipation grounds after rejecting Patent Owner’s arguments that one or more limitations was missing. A related obviousness challenge, based on the 102 reference in combination with an additional reference, was denied as redundant. Order at 13. It will be interesting to see what will happen if the Board is later convinced that the anticipating reference does not contain all claim limitations.  Given the Board’s reluctance to date to grant any rehearing request, maybe this possibility is extremely remote.

The Board next proceeded through analysis of the remaining obviousness challenge grounds. In some instances the Board found a reasonable likelihood of prevailing, but other times the Board was unpersuaded because of opposing arguments presented by Patent Owner in its Preliminary Response.  For example, for certain of the challenged claims, Patent Owner successfully argued that Patent Challenger’s combination of references still failed to disclose an element of the challenged claim. Order at 18-19.  On the flip side, grounds for other claims were granted where the Patent Owner “did not set forth any reason as to why [Patent Challenger’s] arguments were unpersuasive.” Order at 23, 25.

After completing its detailed obviousness analysis, the Board granted trial on some, but not all of the challenged patent claims. For some claims, the Board found Patent Challenger’s arguments to be more persuasive, but for other claims, Patent Owner’s silence in its Preliminary Response was deafening. Indeed, Patent Owner’s strong arguments that persuaded the Board to not grant some grounds seemed detrimental to Patent Owner’s interests with regard to other grounds.  That is to say, the Board treated Patent Owner’s silence as a kind of acquiescence to Patent Challenger’s arguments.