In re Varma v. IBM Corp., (In re Varma). (Fed. Cir. Mar. 10, 2016) (Before Wallach, Clevenger, and Taranto, J.) (Opinion for the court, Taranto, J.). Click Here for a copy of the opinion.
On March 10, 2016 the Federal Circuit sent two Patent Trial and Appeal Board (“PTAB” or “Board”) reexaminations back to the Patent Office. In proceedings initiated by IBM and SAS Institute Inc., the PTAB rejected claims for analyzing investment data in two patents owned by InvestPic LLC. The Board’s ruling turned upon two claim terms: (1) a “bias parameter” that determines a degree of randomness in sample selection in a resampling process”; and (2) “a statistical analysis request corresponding to two or more selected investments.” The claims were held to be anticipated or obvious in light of a prior art reference describing a bootstrap method to gain better information about expected returns on an asset. InvestPic appealed and focused its challenge on the Board’s claim construction.
Agreeing with InvestPic, the Federal Circuit held that “bias parameter” had only one reasonable meaning when “considered alone and in light of the specification” and that this limitation was not in the prior art. The claim explicitly states that the bias parameter “determines a degree of randomness in sample selection in a resampling process.” This language made clear that a bias parameter is used to select samples from the sample space, not to create a sample space, and not to combine statistical measures previously calculated from separate, resampled analyses. This contradicted the PTAB’s interpretation, which failed to account for how samples are selected. The Federal Circuit reversed the PTAB’s rejections based on this erroneous interpretation, because the prior art did not disclose a properly construed “bias parameter.”
With respect to the “statistical analysis request,” the Federal Circuit found the PTAB’s interpretation “unreasonable” and remanding for further proceedings under the correct claim construction. InvestPic asserted that the statistical analysis requested is one that covers two or more investments. The PTAB found this limitation in the prior art, but only after determining that the claims provide no “temporal limitation . . . indicating that ‘two or more investments’ are analyzed at the same time.” The Federal Circuit disagreed, because the plain language of the full claim term required “a statistical analysis request corresponding to two or more selected investments.” (emphasis added). Thus, a single request must correspond to at least two investments. The Court remanded for further consideration of anticipation and obviousness based on the proper construction.