Verify Smart Corp. v. Askeladden, L.L.C. ( 2020 )

Case: 19-1076 Document: 123 Page: 1 Filed: 08/05/2020
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
VERIFY SMART CORP.,
Appellant
v.
ASKELADDEN, L.L.C.,
Appellee
UNITED STATES,
Intervenor
______________________
2019-1076
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2017-
00726.
______________________
Decided: August 5, 2020
______________________
STEVEN M. HOFFBERG, Tully Rinckey PLLC, New York,
NY, for appellant. Also represented by JEAN-MARC
ZIMMERMAN, Zimmerman Law Group, Westfield, NJ.
RICHARD L. RAINEY, Covington & Burling LLP, Wash-
ington, DC, for appellee. Also represented by DOUGLAS
ALEXANDER BEHRENS, BRIAN GERARD BIELUCH; MARK
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2 VERIFY SMART CORP. v. ASKELADDEN, L.L.C.
BERKOWITZ, CHARLES R. MACEDO, Amster Rothstein &
Ebenstein LLP, New York, NY.
DENNIS FAN, Appellate Staff, Civil Division, United
States Department of Justice, Washington, DC, for inter-
venor. Also represented by SCOTT R. MCINTOSH, ETHAN P.
DAVIS; THOMAS W. KRAUSE, FARHEENA YASMEEN RASHEED,
Office of the Solicitor, United States Patent and Trade-
mark Office, Alexandria, VA.
______________________
Before LOURIE, SCHALL, and DYK, Circuit Judges.
LOURIE, Circuit Judge.
Verify Smart Corp. (“Verify”) appeals from the final
written decision of the United States Patent and Trade-
mark Office Patent Trial and Appeal Board (“the Board”)
holding claims 1–19 of U.S. Patent 8,825,648 (“the ’648 pa-
tent”) unpatentable as obvious. See Askeladden LLC v.
Verify Smart Corp., No. IPR2017-00726, 2018 WL 3572368(P.T.A.B. July 23, 2018) (“Decision”). Because the Board
did not err in its conclusion that the challenged claims
would have been obvious over the prior art, we affirm.
BACKGROUND
Verify owns the ’648 patent, which is directed to sys-
tems and methods for verifying a user’s identity in elec-
tronic transactions. The patent relates to multi-factor
authentication, which utilizes secure information that the
user knows as well as an electronic communications device
(e.g., a phone) in the user’s possession. For example, the
patent provides that “a user and the user’s communication
device are pre-enrolled in a verification program” adminis-
tered by a verifier (i.e., the user’s bank) and the verifier op-
erates a database that stores a secure identifier for the user
(e.g., a password or personal identification number (“PIN”))
as well as an identifier for the user’s electronic device (e.g.,
an access number). See, e.g., ’648 patent col. 4 ll. 5–8, 27–
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VERIFY SMART CORP. v. ASKELADDEN, L.L.C. 3
29. When the user attempts to make a transaction, the
verifier attempts to open a communications link with the
user’s device, and once the communications link is open,
the verifier sends an identification verification request
(“IVR”) to the device, which displays the request to the
user. Id. col. 4 ll. 38–46. The user then responds to the
IVR by inputting the correct secure identifier and sending
the response back to the verifier through the open commu-
nications link. Id. col. 4 ll. 48–51. The verifier then com-
pares the secure identifier entered by the user with the
secure identifier stored in the database and permits the
transaction to proceed if there is a match. Id. col. 4 ll. 54–
61.
Claim 1 is illustrative and recites:
1. A user identity verification method for verifying
the identity of a user by a verifier in the course of
an electronic transaction, said user identity verifi-
cation method comprising the steps of:
(a) pre-enrolling the user, comprising the steps of:
(a1) assigning to the user a bona fide secure
identifier; and,
(a2) storing the bona fide secure identifier in a
database that is accessible to the verifier;
(b) pre-enrolling a user communications device,
wherein pre-enrolling the user communications de-
vice comprises the steps of:
(b1) obtaining a user access number for the
user communications device, wherein the user ac-
cess number can be used to open a communications
link with the user communications device; and,
(b2) storing the user access number in a data-
base that is accessible to the verifier;
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4 VERIFY SMART CORP. v. ASKELADDEN, L.L.C.
(c) retrieving the user access number stored at Step
(b2);
(d) opening a communications link between the
verifier and the user communications device by us-
ing the user access number retrieved at Step (c);
(e) sending an identity verification request (IVR)
from the verifier to the user through the communi-
cations link opened at Step (d);
(f) inputting by the user a putative secure identi-
fier;
(g) sending through the communications link
opened at Step (d) a response to the IVR of Step (e);
(h) retrieving the bona fide secure identifier stored
at Step (a2);
(i) comparing the putative secure identifier input
at Step (f) with the bona fide secure identifier re-
trieved at Step (h); and,
(j) allowing the transaction to proceed only if the
comparison of Step (i) results in a match between
the putative secure identifier and the bona fide se-
cure identifier.
’648 patent col. 18 l. 63–col. 19 l. 31.
Askeladden, LLC (“Askeladden”) is a single-member
limited liability company formed by The Clearing House
Payments Company, LLC (“TCH”), which in turn is owned
by twenty-five of the world’s largest commercial banks, in-
cluding Bank of America (collectively the “member banks”).
Askeladden filed a petition for inter partes review of claims
1–19 of the ’648 patent, arguing that the claims were un-
patentable as obvious over a combination of U.S. Patent
App. Pub. 2005/0184145 (“Law”), U.S. Patent App. Pub.
2006/0165060 (“Dua”), and U.S. Patent 6,886,741
(“Salveson”).
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VERIFY SMART CORP. v. ASKELADDEN, L.L.C. 5
Law describes a secure wireless authorization system
that allows a user to use a wireless device to authorize a
third-party transaction request in real time. Law ¶ 47. In
Law’s system, when an authorization request is received,
an authorization server (i.e., a bank) sends an authoriza-
tion request to the user’s wireless device through an en-
crypted secure channel. Id. ¶¶ 36, 49. The channel is
encrypted by a pre-established symmetric key, which can
be used as a “device password” or “device key.” Id. ¶¶ 66–
67. If the wireless device receives the request, it displays
the request to the user and allows the user to respond by
inputting a PIN or personal digital signature. Id. ¶ 49. If
the authorization server receives a response within a cer-
tain specified period of time (i.e., a “timeout” period), it con-
firms that the user’s security credentials are correct and
allows the transaction to proceed. Id. ¶¶ 49–50.
The Board instituted review on all claims and all
grounds. After institution, Verify filed a motion to termi-
nate the proceedings, arguing that Askeladden failed to
name TCH and Bank of America as real parties in interest
as required by 35 U.S.C. § 312(a)(2). The Board deter-
mined that TCH should be named as a real party in inter-
est but that neither Bank of America nor any other member
banks is in privity with Askeladden or TCH and need not
be named. J.A. 611, 614. Rather than terminate the pro-
ceedings, the Board allowed Askeladden to update its man-
datory notice to name TCH as a real party interest, which
it did. J.A. 615, 628. Verify continued to argue that the
member banks are real parties in interest in later filings.
Meanwhile, Verify also filed a motion to amend the
claims of the ’648 patent under 35 U.S.C. § 316(d) in which
Verify sought to amend claim 2 and add dependent claims
20–31. J.A. 564–77. Verify later withdrew its proposed
addition of claims 20–22 and 26–30. J.A. 730. Askeladden
responded that amended claim 2 and new claims 25 and 31
would have been obvious over Law and/or Dua. Askelad-
den also argued that new claims 23 and 24 lacked written
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6 VERIFY SMART CORP. v. ASKELADDEN, L.L.C.
description support in the specification of the ’648 patent
and alternatively that the claims would have been obvious
over Law, Dua, and U.S. Patent App. Pub. 2003/0182194
(“Choey”).
The Board issued a final written decision in which the
Board determined that Askeladden had demonstrated the
unpatentability of claims 1–19 of the ’648 patent, denied
Verify’s motion to amend for all claims, and reiterated its
conclusion that none of the member banks are real parties
in interest to the proceeding. Relevant to this appeal, the
Board determined that independent claims 1, 2, and 5, as
well as dependent claim 19, would have been obvious over
Law and Dua. With respect to Verify’s motion to amend,
the Board determined that proposed amended claim 2 and
proposed new claims 25 and 31 would have been obvious
over Law and Dua and that proposed new claims 23 and 24
would have been obvious over Law, Dua, and Choey. The
Board also determined that proposed claims 23 and 24 lack
written description support in the specification of the ’648
patent.
Verify appealed. We have jurisdiction under 28 U.S.C.
§ 1295(a)(4)(A).
DISCUSSION
Verify makes four principal arguments on appeal.
First, Verify argues that the Board erred in concluding that
the claims would have been obvious over the prior art. Sec-
ond, Verify argues that the Board erred in denying its mo-
tion to amend because the amended claims would have
been unpatentable as obvious. Third, Verify argues that
the Board erred in determining that Bank of America is not
a real party in interest. Finally, Verify argues that the ap-
plication of inter partes review to pre-AIA patents is a tak-
ing under the Fifth Amendment. We address Verify’s
arguments in turn.
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VERIFY SMART CORP. v. ASKELADDEN, L.L.C. 7
A. Obviousness
Obviousness is a question of law that “lends itself to
several basic factual inquiries,” Graham v. John Deere Co.,
383 U.S. 1, 17–18 (1966) (citing Great Atl. & Pac. Tea Co.
v. Supermarket Equip. Corp., 340 U.S. 147, 155 (1950)), in-
cluding the scope and content of the prior art, the level of
ordinary skill in the art, differences between the prior art
and the claimed invention, and any relevant secondary con-
siderations. Id. “We review the PTAB’s factual findings
for substantial evidence and its legal conclusions de novo.”
Redline Detection, LLC v. Star Envirotech, Inc., 811 F.3d
435, 449 (Fed. Cir. 2015) (citing Rambus Inc. v. Rea, 731
F.3d 1248, 1251 (Fed. Cir. 2013)). A finding is supported
by substantial evidence if a reasonable mind might accept
the evidence as adequate to support the finding. Consol.
Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). “If two ‘in-
consistent conclusions may reasonably be drawn from the
evidence in record, the PTAB’s decision to favor one conclu-
sion over the other is the epitome of a decision that must
be sustained upon review for substantial evidence.’” Elbit
Sys. of Am., LLC v. Thales Visionix, Inc., 881 F.3d 1354,
1356 (Fed. Cir. 2018) (quoting In re Cree, Inc., 818 F.3d 694,
701 (Fed. Cir. 2016) (internal brackets omitted)).
1. Claims 1 and 5
Verify argues that the Board erred in concluding that
claims 1 and 5 would have been obvious over the prior art.
Independent claim 1 recites, inter alia, “opening a commu-
nications link between the verifier and the user communi-
cations device by using the user access number” and
“sending an identity verification request (IVR) from the
verifier to the user through the communications link.” In-
dependent claim 5 recites substantially similar limitations.
The Board determined that Law discloses opening a com-
munications channel through its description of connecting
an authorization server of the issuing bank (i.e., the veri-
fier) and the user’s wireless device. Decision, 2018 WL
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8 VERIFY SMART CORP. v. ASKELADDEN, L.L.C.
3572368, at *8. The Board also concluded that Law dis-
closes sending an identification verification request
through an open communications link through its descrip-
tion of sending an authorization request from the authori-
zation server to the user’s wireless device. Id.Verify argues that the Board improperly failed to con-
strue the term “open[ing] a communications link with the
user communications device.” Verify further argues that
Law fails to disclose the steps of opening a communications
channel and sending an IVR through the channel because
the authorization server of Law transmits its authorization
request to the user’s wireless device through a third-party
intermediary without having previously opened a commu-
nications channel with the user’s device. Verify also chal-
lenges the Board’s finding of a motivation to combine Law
with Dua.
Askeladden responds that Verify’s claim construction
argument is waived because Verify failed to seek construc-
tion of any claim terms before the Board and that the
Board’s conclusion that Law discloses opening a communi-
cations link is supported by substantial evidence, including
the testimony of its expert, Ivan Zatkovich.
We agree with Askeladden on both counts. Verify did
not file a preliminary response to Askeladden’s petition for
inter partes review, and the Board, in its institution deci-
sion, determined that no claim terms required construc-
tion. Askeladden LLC v. Verify Smart Corp., No. IPR2017-
00726, Paper 6 at 7 (P.T.A.B. July 24, 2017). Thereafter,
Verify failed to request or propose a construction for any
claim terms in its patent owner’s response. See Askeladden
LLC v. Verify Smart Corp., No. IPR2017-00726, 2017 WL
6061669 (P.T.A.B. Nov. 20, 2017). Having failed to present
its claim construction argument before the Board, Verify is
not entitled to present that argument for the first time on
appeal. See In re Baxter Int’l, 678 F.3d 1357, 1362 (Fed.
Cir. 2012) (“Absent exceptional circumstances, we
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VERIFY SMART CORP. v. ASKELADDEN, L.L.C. 9
generally do not consider arguments that the applicant
failed to present to the Board.” (internal citations omit-
ted)).
Under the plain and ordinary meaning of the claim
terms as adopted by the Board, we agree with Askeladden
that the Board’s finding that Law discloses opening a com-
munications channel and sending an IVR through the
channel is supported by substantial evidence. Before the
Board, Verify argued that Law’s authorization system op-
erates using an SMS (short message service) network, in
which communications from the authorization server to the
user’s wireless device are routed through an SMSC (short
message service center), which is operated by the wireless
carrier, not the bank. J.A. 377–80. According to Verify, at
the time that the authorization server transmits the au-
thorization request to the SMSC, no communications link
is open with the user’s device. J.A. 384. In response, rely-
ing on the declaration of Zatkovich, Askeladden argued
that Law’s authorization server establishes an encrypted
communications channel with the user device and subse-
quently transmits its authorization request to the user’s
device through this channel.
Having been presented with competing theories as to
how Law’s authorization server communicates with the
user’s wireless device, the Board found that Law discloses
the claimed communications link. Our task is not to deter-
mine which theory we find more compelling. “[I]t is not for
us to second-guess the Board’s assessment of the evidence.”
Velander v. Garner, 348 F.3d 1359, 1378 (Fed. Cir. 2003).
Rather, the only question before us is whether the finding
adopted by the Board is supported by substantial evidence.
Here, we conclude that it is.
Zatkovich testified that, in his opinion, Law’s authori-
zation server “opens a ‘communications link’ prior to send-
ing a message.” J.A. 3283 ¶ 150. This testimony accords
with the disclosure of Law, which explains that, if a
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10 VERIFY SMART CORP. v. ASKELADDEN, L.L.C.
transaction is not pre-authorized, then the authorization
server will “attempt to connect to the wireless device.” Law
¶ 62. Thereafter, if the user’s device is available, then the
authorization server will “send out an authorization re-
quest” to the user’s wireless device “through an encrypted
secure channel . . . connecting the authorization server and
the user’s wireless device.” Id. With respect to Verify’s ar-
gument that use of SMS precludes establishing a commu-
nications link between the authorization server and the
user’s device, Zatkovich testified that Law discloses estab-
lishing a secure wireless connection between an authoriza-
tion server and the user communications device
“irrespective of the protocol selected,” such as SMS. J.A.
3285 ¶ 153. The disclosure of Law comports with Zatko-
vich’s testimony that Law’s encrypted channel can support
various communication protocols. As Law explains, the
user’s wireless device “must handle various security
schemes and communication channels.” Law ¶ 70. Based
on Law’s disclosure and Zatkovich’s testimony, we conclude
that the Board’s finding that Law discloses opening a com-
munications link between the verifier (Law’s authorization
server) and the user communication device, as well as
sending an identity verification request (Law’s authentica-
tion request) from the verifier to the user through the com-
munications link is supported by substantial evidence.
Substantial evidence also supports the Board’s finding
of a motivation to combine Law with Dua. The Board cred-
ited Zatkovich’s testimony that a skilled artisan would
have been motivated to combine Law with Dua because the
references “are both directed to electronic transaction pro-
cessing and, in particular, verifying and authenticating us-
ers and authorizing financial transactions.” J.A. 988 ¶ 54.
Zatkovich further testified that a person of skill would have
recognized that combining Law with Dua would facilitate
“the convenience and flexibility offered by over-the-air, on
demand, download methods.” J.A. 993 ¶ 64. Accordingly,
we affirm the Board’s finding of a motivation to combine
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VERIFY SMART CORP. v. ASKELADDEN, L.L.C. 11
the references, and hence the obviousness of claims 1
and 5.
2. Claim 19
Claim 19 depends from claim 5 and recites the addi-
tional steps of storing a “device identifier” of the user com-
munications device in the database, obtaining the device
identifier of the user communications device used during
verification, comparing the device identifier obtained dur-
ing verification with the device identifier stored in the da-
tabase, and, if the device identifiers match, allowing the
transaction. ’648 patent col. 22 ll. 16–28. The Board deter-
mined that “device keys” described in Law to encrypt mes-
sages sent through Law’s secure encrypted channel
disclose the device identifier recited in claim 19, and that
Law discloses the remaining steps of claim 19 through its
description of verifying the device credentials of the user’s
device prior to authorizing a transaction. Decision, 2018
WL 3572368, at *11.
Verify argues that Law’s use of device keys to encrypt
communication does not meet the limitations of claim 19
because, while the device keys may be used to verify the
credentials of the user’s device, the key is never transmit-
ted to the authorization server and compared to an identi-
fier stored in the server, as required by the claim.
Askeladden responds that substantial evidence supports
the Board’s conclusion that Law’s device keys disclose a de-
vice identifier and are used in the manner recited in the
claim.
We agree with Askeladden. Law explains that the
symmetric key used to encrypt communications between
the authentication server and user device “can be used as
a device password” or “device key.” Law ¶ 67. Further,
“[u]pon receiving the response from the wireless device, the
authorization server will . . . verify the security credentials
of the user and the wireless device.” Law ¶ 50. In reaching
its conclusion that Law discloses comparing the device key
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12 VERIFY SMART CORP. v. ASKELADDEN, L.L.C.
with a key stored in the authorization server, the Board
credited Zatkovich’s testimony that a skilled artisan
“would have understood that verifying the separate secu-
rity credentials of the wireless device requires retrieving
and comparing the stored value of these credentials . . . to
that retrieved from the user communication device.” J.A.
3294 ¶ 171. The Board was within its discretion to weigh
the credibility of expert testimony, see Yorkey v. Diab, 601
F.3d 1279, 1284 (Fed. Cir. 2010) (citing Velander, 348 F.3d
at 1371), and Verify has not otherwise demonstrated that
the Board’s finding is unsupported by substantial evidence,
or that claim 19 was not obvious.
B. Motion to Amend
Verify argues that the Board erred in denying its mo-
tion to amend the claims under 35 U.S.C. § 316(d). We ad-
dress the challenged amendments and proposed new
claims in turn.
1. Claims 2, 25, and 31
Independent claim 2 recites substantially similar sub-
ject matter as claim 1. In its motion to amend, Verify
sought to amend claim 2 additionally to recite “wherein the
first verifier communication device is configured to open a
communication link with the user communications device,
and thereafter determine whether the open communication
link has been broken.” J.A. 566. Verify also proposed to
amend claim 2 to further limit the condition in which the
transaction proceeds to require that “the open communica-
tions link is not previously broken.” J.A. 566–67. Proposed
dependent claims 25 and 31 similarly require that the
transaction is blocked if the opened communication link is
broken. J.A. 575, 577. The Board determined that Law’s
timeout feature discloses the proposed limitations that the
verifier determine whether the communication link is bro-
ken and that the transaction is made contingent on a de-
termination that it is not. Decision, 2018 WL 3572368, at
*20. Accordingly, the Board concluded that the proposed
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VERIFY SMART CORP. v. ASKELADDEN, L.L.C. 13
amendments are unpatentable as obvious over the prior
art.
Verify argues that Law does not disclose the amended
limitations because Law’s timeout feature only indicates
the failure of a user to respond within a predetermined
amount of time and does not indicate whether the commu-
nications link is broken. Askeladden responds that the
Board’s conclusion was supported by substantial evidence.
We agree with Askeladden. Law explains that “[i]n the
event that the user does not respond to the request within
the specified time limit, the authorization server will . . .
deny the request or wait for the postauthorization model to
take effect . . . .” Law ¶ 63. Zatkovich testified that a per-
son of skill would have understood that “a ‘broken’ commu-
nication link would include a link where the line is
‘dropped’ or a response is not received within a specified
time period.” J.A. 3304 ¶ 192. Indeed, the ’648 patent it-
self describes a communications link being “timed-out” as
one example of when the link is “broken.” ’648 patent col. 8
ll. 28–32. Accordingly, we conclude that the Board’s deter-
mination that amended claim 2 and proposed new claims
25 and 31 would have been obvious over the prior art is
supported by substantial evidence, and that the motion to
amend was properly denied.
2. Claims 23 and 24
Proposed claim 23 depends from claim 5 and further
recites “determining a location of the user communications
device with a GPS locating function on a cell phone.” J.A.
574. Proposed claim 24 includes the same limitation by
virtue of its dependency on claim 23. The Board deter-
mined that the proposed claims lack written description
support in the specification because, while the specification
of the ’648 patent provides written description support for
determining a location of a cell phone via a GPS locating
function, it does not provide support for determining a lo-
cation of other types of devices encompassed by the user
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14 VERIFY SMART CORP. v. ASKELADDEN, L.L.C.
communication device. Decision, 2018 WL 3572368, at *19.
Alternatively, the Board concluded that the proposed
claims would have been obvious over Law, Dua, and Choey.
Id. at *21. Accordingly, the Board denied Verify’s motion
to add claims 23 and 24.
Verify argues that under the broadest reasonable in-
terpretation proposed claims 23 and 24 require only that
the GPS elements of a locating function must be on the re-
cited cell phone, not the communications device itself,
which is supported by the specification. Further, Verify ar-
gues that the Board’s conclusion that the claims would
have been obvious over the prior art is unsupported by sub-
stantial evidence because Choey describes a system in
which the GPS receivers are located on top of cell towers,
not “on a cell phone,” as required by the claims.
Askeladden responds that the Board correctly deter-
mined that the proposed claims lack written description
support because the claims recite determining the location
of a communications device, and the specification only de-
scribes how to determine the location of a cell phone. Even
if the specification provides written description support for
the claims, Askeladden argues, the Board’s conclusion that
Choey discloses using a GPS-enabled mobile phone system
to detect mobile phone location was supported by substan-
tial evidence.
We agree with Askeladden and the Board that Verify’s
proposed claims improperly introduce new matter. Pro-
posed amendments “may not enlarge the scope of the
claims of the patent or introduce new matter.” 35 U.S.C.
§ 316(d)(3). The passage on which Verify relies for support
of its replacement claims recites: “[B]ecause of the GPS lo-
cating functions now universal on cell phones, any at-
tempted false verification query can automatically trigger
a tracking routine to immediately locate the stolen cell
phone.” ’648 patent col. 5 ll. 30–33. But the written de-
scription explains that the term “communications device”
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VERIFY SMART CORP. v. ASKELADDEN, L.L.C. 15
as used in the ’648 patent “is intended broadly to include
communications devices of any nature linked in a commu-
nications system,” including computers. Id. col. 2 ll. 21–27.
Thus, while the written description discloses determining
the location of cell phones, the proposed claims recite de-
termining the location of other types of devices. Even un-
der Verify’s reading of the claims in which only the GPS
function is on a cell phone, the written description does not
disclose using the cell phone to track devices other than the
cell phone—specifically, the user communications device.
Accordingly, we agree that proposed claims 23 and 24 in-
troduce new matter and affirm the Board’s denial of Ver-
ify’s motion to amend as to those claims.
Having affirmed the Board’s conclusion that proposed
claims 23 and 24 introduce new matter to the specification
of the ’648 patent, we need not address the Board’s decision
that those claims would have been obvious over the prior
art.
C. Real Party in Interest
Verify argues that the Board erred in concluding that
Bank of America is not a real party in interest. According
to Verify, Bank of America should be named as a real party
in interest in the proceedings because of the member
banks’ control over TCH. Because Verify asserted the ’648
patent against Bank of America more than one year before
Askeladden filed its petition for inter partes review, Verify
argues that Askeladden’s petition should be dismissed as
time-barred under 35 U.S.C. § 315(b).
Verify’s argument is foreclosed by intervening prece-
dent. In Thryv, Inc. v. Click-To-Call Techs., LP, the Su-
preme Court held that 35 U.S.C. § 314(d) precludes judicial
review of the Board’s application of the one-year time bar
set forth in § 315(b). 140 S. Ct. 1367 (2020). The Court
explained that “a contention that a petition fails under
§ 315(b) is a contention that the agency ‘should have re-
fused to institute an inter partes review,’” and therefore a
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16 VERIFY SMART CORP. v. ASKELADDEN, L.L.C.
challenge to a petition’s timeliness under § 315(b) is a dis-
pute about the application of an institution-related statute
and is barred from appellate review by § 314(d). Id. at
1373–74 (quoting 35 U.S.C. § 314(d)).
Thereafter, in view of Click-To-Call, this court held
that preclusion of judicial review under § 314(d) “extend[s]
to a Board decision concerning the ‘real parties in interest’
requirement of § 312(a)(2).” ESIP Series 2, LLC v. Puzhen
Life USA, LLC, 958 F.3d 1378, 1386 (Fed. Cir. 2020). Ac-
cordingly, we hold that § 314(d) precludes our review of the
Board’s decision that Bank of America is not a real party
in interest.
Somewhat relatedly, Verify also argues that the opera-
tion of TCH by the member banks is an unlawful restraint
of trade under the Sherman Act. Observing that it lacks
jurisdiction to determine Sherman Act violations, the
Board declined to address Verify’s argument. Decision,
2018 WL 3572368, at *15 n.6. The proceedings that may
be addressed by the Board are enumerated by statute. See
35 U.S.C. § 6(b)(1)–(4). Relevant here, the scope of inter
partes review is limited to requests to cancel claims of is-
sued patents as unpatentable under 35 U.S.C. §§ 102 and
103 and does not extend to alleged antitrust violations.
35 U.S.C. § 311(b). Accordingly, we agree with the Board
that it lacked jurisdiction to address Verify’s antitrust al-
legations in the first instance and similarly decline to ad-
dress Verify’s arguments on appeal.
D. Takings Claim
Finally, Verify argues that the retroactive application
of inter partes review to patents that issued prior to the en-
actment of the America Invents Act (“AIA”) is a taking un-
der the Fifth Amendment, but Verify’s argument is
foreclosed by our precedent. In Celgene Corp. v. Peter, we
held that “the retroactive application of IPR proceedings to
pre-AIA patents is not an unconstitutional taking under
the Fifth Amendment.” 931 F.3d 1342, 1362 (Fed. Cir.
Case: 19-1076 Document: 123 Page: 17 Filed: 08/05/2020
VERIFY SMART CORP. v. ASKELADDEN, L.L.C. 17
2019). Accordingly, we hold that the retroactive applica-
tion of IPR proceedings to the ’648 patent, which issued be-
fore the enactment of the AIA, is not an unconstitutional
taking.
We note briefly that Verify also raises due process chal-
lenges to various procedural decisions of the Board. Spe-
cifically, Verify argues that the Board violated due process
by denying Verify’s request for discovery from TCH for ev-
idence of secondary considerations of nonobviousness and
the member banks’ status as real parties in interest. We
review the Board’s application of its rules for trial proceed-
ings for abuse of discretion. Ultratec, Inc. v. CaptionCall,
LLC, 872 F.3d 1267, 1271–72 (Fed. Cir. 2017); Redline De-
tection, 811 F.3d at 442. In denying Verify’s request, the
Board observed that “TCH has not entered any papers or
testimony in this proceeding. Nor has TCH advanced any
positions during this proceeding” and that 37 C.F.R.
§ 42.51(b)(1)(iii) requires routine discovery of only “rele-
vant information that is inconsistent with a position ad-
vanced by the party.” J.A. 648 (emphasis in original).
Since TCH had not advanced any position in the proceed-
ing, the Board determined that it was not subject to routine
discovery. In any event, the Board also determined that
Verify’s requests were untimely. We find that the Board’s
determination that Verify’s motions were overbroad and
untimely was reasonable and that the Board did not abuse
its discretion in denying the motions.
CONCLUSION
We have considered Verify’s remaining arguments but
find them unpersuasive. For the foregoing reasons, the de-
cision of the Board is affirmed.
AFFIRMED