Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-16-01528/USCOURTS-ca13-16-01528-0/pdf.json

Parties Involved:
Intellectual Ventures II LLC
Appellant
International Business Machines Corporation
Appellee

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

INTELLECTUAL VENTURES II LLC,

Appellant

v.

COMMERCE BANCSHARES, INC., COMPASS 

BANK, FIRST NATIONAL BANK OF OMAHA,

Cross-Appellants

______________________ 

2016-1519, 2016-1520

______________________ 

Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. 

IPR2014-00801.

---------------------------------------------------------------------------

INTELLECTUAL VENTURES II LLC,

Appellant

v.

INTERNATIONAL BUSINESS MACHINES 

CORPORATION,

Appellee

______________________ 

2016-1528

______________________ 

Case: 16-1528 Document: 48-2 Page: 1 Filed: 03/27/2017
 INTELLECTUAL VENTURES II LLC v. COMMERCE BANCSHARES,

INC. 

2

Appeal from the United States Patent and Trademark 

Office, Patent Trial and Appeal Board in No. IPR2014-

00682.

______________________ 

Decided: March 27, 2017

______________________ 

BYRON LEROY PICKARD, Sterne Kessler Goldstein &

Fox, PLLC, Washington, DC, argued for appellant. Also 

represented by LORI A. GORDON. 

MARC WADE VANDER TUIG, Senniger Powers LLP, St. 

Louis, MO, argued for cross-appellants. Also represented 

by ROBERT M. EVANS, JR.; HILDA C. GALVAN, Jones Day, 

Dallas, TX; GEOFFREY K. GAVIN, Atlanta, GA; JASON 

STEWART JACKSON, Kutak Rock LLP, Omaha, NE. Crossappellant Commerce Bancshares, Inc. also represented by 

KYLE G. GOTTUSO, Senniger Powers LLP, St. Louis, MO. 

Cross-appellant Compass Bank also represented by MARK 

HOWLAND, Carrington Coleman Sloman & Blumenthal, 

Dallas, TX.

JOEL ROBERT MERKIN, Kirkland & Ellis LLP, Chicago, 

IL, argued for appellee. Also represented by KENNETH R.

ADAMO, EUGENE GORYUNOV, MEREDITH ZINANNI.

______________________ 

Before NEWMAN, DYK, and TARANTO, Circuit Judges.

TARANTO, Circuit Judge. 

In two inter partes review proceedings, IPR2014-

00682 and IPR2014-00801, the Patent Trial and Appeal 

Board determined that certain claims of U.S. Patent No. 

6,715,084 were unpatentable. The patent owner, Intellectual Ventures II, LLC, appeals, arguing that the Board’s 

determinations of unpatentability relied on an unreasonCase: 16-1528 Document: 48-2 Page: 2 Filed: 03/27/2017
INTELLECTUAL VENTURES II LLC v. COMMERCE BANCSHARES,

INC. 

3

ably broad construction of the claims. The petitioners in 

IPR2014-00801, Commerce Bancshares, Inc., Compass 

Bank, and First National Bank of Omaha (collectively, the 

Banks), cross-appeal the Board’s rejection of their patentability challenge to claim 33 in that proceeding. 

We affirm the Board’s decision in IPR2014-00682. 

The affirmed holding of unpatentability applies to all of 

the claims at issue in the other proceeding, IPR2014-

00801, including claim 33. We therefore dismiss the 

appeals from the Board’s decision in IPR2014-00801 as 

moot. 

I 

The ’084 patent describes and claims systems and 

methods for “broad scope” network-intrusion detection. 

According to the patent, conventional intrusion-detection 

systems analyzed data entering a single host or computer. 

’084 patent, col. 3, line 51 through col. 5, line 42. The 

invention analyzes data that has entered multiple hosts 

and computers, thereby enabling the detection of anomalies that would be more difficult or impossible to recognize

by analyzing data from only a single host or computer. 

Id., col. 5, lines 44–56. The ’084 patent issued from U.S. 

Patent Application No. 10/108,078 and claims a priority 

date of March 26, 2002.

Claim 26 is representative of the claims at issue. 

That claim recites: “A data collection and processing 

center comprising a computer with a firewall coupled to a 

computer network, the data collection and processing 

center monitoring data communicated to the network, and 

detecting an anomaly in the network using network-based 

intrusion detection techniques comprising analyzing data 

entering into a plurality of hosts, servers, and computer

sites in the networked computer system.” ’084 patent, col. 

14, lines 18–25. Claims 28 and 30–33 depend from claim 

26. ’084 patent, col. 14, lines 33–37, 43–56.

Case: 16-1528 Document: 48-2 Page: 3 Filed: 03/27/2017
 INTELLECTUAL VENTURES II LLC v. COMMERCE BANCSHARES,

INC. 

4

In April 2014, International Business Machines Corp. 

(IBM) petitioned for inter partes review of various claims 

of the ’084 patent. In May 2014, the Banks petitioned for 

inter partes review of all claims. The Board instituted 

review in two separate proceedings—for IBM, IPR2014-

00682; for the Banks, IPR2014-00801. In both cases, the 

Board instituted review of claims 26, 28, and 30–33 and 

denied review of the remaining claims. See Int’l Bus. 

Mach. Corp. v. Intellectual Ventures II LLC, No. IPR2014-

00682 (P.T.A.B. Oct. 30, 2014), Paper No. 11; Commerce 

Bancshares, Inc. v. Intellectual Ventures II LLC, No. 

IPR2014-00801 (P.T.A.B. Dec. 1, 2014), Paper No. 7. Only 

claims 26, 28, and 30–33 are at issue in the appeals before 

us.

In IBM’s proceeding, IPR2014-00682, the Board concluded that the challenged claims would have been obvious over Phillip A. Porras & Alfonso Valdes, Live Traffic 

Analysis of TCP/IP Gateways, in Proc. 1998 ISOC Symp. 

on Network & Distributed Sys. Sec. 1 (1997) (Porras), in 

combination with William R. Cheswick & Steven M. 

Bellovin, Firewalls and Internet Security (1st ed. 1994) 

(Ex. 1008) (Cheswick). See Int’l Bus. Mach., No. IPR2014-

00682 (P.T.A.B. Oct. 21, 2015), Paper No. 35 (IPR2014-

00682 Decision). In relevant part, Porras describes a 

hierarchical system of “surveillance monitors” (or “modules”), one at the enterprise level, others at individual

gateways. 16-1528 J.A. 680. “The enterprise monitor is 

identical to the individual gateway monitors (i.e., they use 

the same code base), except that it is configured to correlate activity reports produced by the gateway monitors. 

The enterprise monitor employs both statistical anomaly 

detection and signature analyses to further analyze the 

results produced by the distributed gateway surveillance 

modules, searching for commonalities or trends in the 

distributed analysis results.” Id. at 680–81.

In determining that the challenged claims would have 

been obvious, the Board rejected Intellectual Ventures’ 

Case: 16-1528 Document: 48-2 Page: 4 Filed: 03/27/2017
INTELLECTUAL VENTURES II LLC v. COMMERCE BANCSHARES,

INC. 

5

argument that the relevant claims of the ’084 patent 

require the “data collection and processing center” to

directly analyze some data that enters the network. 

Instead, the Board concluded, the claims in their broadest 

reasonable construction may be satisfied if the “data 

collection and processing center” indirectly analyzes data 

that enters the network by analyzing results of analyses 

conducted by other network devices that directly receive 

the data. Based on that construction, the Board concluded that the required claim elements are disclosed in 

Porras through its descriptions of “anomaly reports” and

“analysis results” sent to a central server. See IPR2014-

00682 Decision 15–16. 

In the Banks’ proceeding, IPR2014-00801, the Board 

instituted review only on the Banks’ anticipation challenge based on U.S. Patent Application Publication No. 

2003/0110392 (Aucsmith). In its Final Written Decision, 

the Board found that Aucsmith anticipated claims 26, 28, 

and 30–32 but not claim 33. Commerce Bancshares, No. 

IPR2014-00801 (P.T.A.B. Oct. 21, 2015), Paper No. 23. 

Intellectual Ventures appeals the Board’s determinations of unpatentability in both proceedings, principally 

on the basis of its rejected claim-construction argument. 

The Banks cross-appeal the Board’s finding of no anticipation of claim 33 in the Banks’ proceeding, IPR2014-

00801. Because we conclude that the Board’s decision in 

IBM’s proceeding, IPR2014-00682, properly determines to 

be unpatentable all of the claims at issue in both proceedings, we address only that decision. We have jurisdiction 

under 28 U.S.C. § 1295(a)(4)(A).

II

In this case, claim construction is dispositive. Intellectual Ventures’ challenge to the ruling in IBM’s proceeding, IPR2014-00682, rests entirely on a claim-construction 

challenge. For the reasons we explain, we reject that 

challenge and therefore affirm the Board’s cancellation of 

Case: 16-1528 Document: 48-2 Page: 5 Filed: 03/27/2017
 INTELLECTUAL VENTURES II LLC v. COMMERCE BANCSHARES,

INC. 

6

claims 26, 28, 30–33 in that proceeding. That affirmance 

moots the appeal in the Banks’ proceeding, IPR2014-

00801. 

The Board adopts the broadest reasonable construction in a matter like this. Cuozzo Speed Techs., LLC v. 

Lee, 136 S. Ct. 2131, 2142–46 (2016). We review that 

construction de novo, because there was no factual evidence introduced that is pertinent to the construction. 

See Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 

840–42 (2015); D’Agostino v. MasterCard Int’l Inc., 844 

F.3d 945, 988 (Fed. Cir. 2016). 

A 

Intellectual Ventures argues that the ordinary meaning of certain claim limitations—“monitoring data communicated to the network,” “detecting an anomaly in the 

network,” and “analyzing data entering into a plurality of 

hosts, servers and computer sites”—excludes systems in 

which other network devices, having received data, forward only anomaly reports or analysis results to the “data 

collection and processing center,” without forwarding any 

of the raw, system-entering data. We disagree. The claim 

language, given its broadest reasonable construction in 

light of the specification and the prosecution history, is 

not limited to direct data analysis.

Intellectual Ventures’ position depends on the simple 

assertion that “analyzing data,” as an ordinary-language 

matter, is limited to directly examining the raw data. But 

Intellectual Ventures does not support that assertion with

any specialized technical linguistic evidence or point to 

anything distinctive about the particular kind of “data” at 

issue here. Rather, it asks us simply to agree with its 

restrictive view of “analyzing data” based on our general 

familiarity with English. 

We do not agree: the permissible ordinary usage of 

“analyzing data” is not limited to direct raw-data analyCase: 16-1528 Document: 48-2 Page: 6 Filed: 03/27/2017
INTELLECTUAL VENTURES II LLC v. COMMERCE BANCSHARES,

INC. 

7

sis. There is nothing unreasonable about saying, in a 

range of circumstances, that a person or computer “analyzes” data by analyzing information about the data 

rather than itself examining the raw data. Suppose that 

a central system relies on several agents each to collect a 

sample of data, to generate sample-size, mean, variance, 

or other information about its sample, and to send the 

information to the central system. It is reasonable to say 

that the central system, when it then directly analyzes 

the received information collectively, is analyzing the 

sample data. Such indirect analysis of the raw data is 

still analysis of the data.

The specification makes such usage a particularly 

reasonable one in the context of this patent. In one 

passage, the specification states that, in at least one 

embodiment, “certain devices can be used as sensors to 

sense data traffic and pass their findings on to the data 

collection and processing center,” suggesting that the 

invention is not limited to direct analysis. ’084 patent, 

col. 7, lines 44–51. Intellectual Ventures’ only response is 

to assert that the passage describes an unclaimed embodiment. But there is no basis for treating the specification 

passage as unclaimed except Intellectual Ventures’ prior 

conclusion that the ordinary meaning of the claim language simply cannot include the described arrangement. 

That is just the conclusion, as just explained, we cannot 

accept.

Intellectual Ventures adds one contention based on 

the “detecting an anomaly” claim language: it says that 

the specification makes clear that “detecting” and “classifying” anomalies are distinct in a way that excludes 

indirect analysis of data. See ’084 patent, col. 4, lines 4–6 

(“Most of the reported anomalies are purely coincidental 

statistical exceptions and do not reflect actual security 

problems.”); col. 4, lines 25–28 (“Expert systems (also 

known as rule-based systems) have had some use in 

misuse detection, generally as a layer on top of anomaly 

Case: 16-1528 Document: 48-2 Page: 7 Filed: 03/27/2017
 INTELLECTUAL VENTURES II LLC v. COMMERCE BANCSHARES,

INC. 

8

detection systems for interpreting reports of anomalous 

behavior.”). The specification does not support the contention. The cited passages establish no more than that 

the claims include direct “detecting,” not that they exclude indirect “detecting” (which Intellectual Ventures 

characterizes as “classifying”). Moreover, in another 

passage, the specification implies that further analysis of 

“suspicious network traffic events” constitutes “detecting” 

an “anomaly,” suggesting that “detecting” is not limited to 

the initial determination of whether the data entering the 

network is statistically aberrational. ’084 patent, col. 8, 

lines 22–31 (“The present invention uses a multi-stage 

technique in order to improve intrusion detection efficacy 

and obtain broader scope detection. First, suspicious 

network traffic events are collected (potentially in context) and forwarded to a central database and analysis 

engine, then the centralized engine uses pattern correlations across multiple customer’s events in order to better 

determine the occurrence and sources of suspected intrusion-oriented activity prior to actually alarming.”). 

Nothing else in the record compels a different result. 

Contrary to Intellectual Ventures’ contention, the prosecution history suggests that the claimed systems differed 

from the prior art because they were limited to broadscope detection, i.e., collecting data from multiple hosts, 

not because the claimed systems were limited to direct 

analysis of raw data. 16-1528 J.A. 1063 (“None of the 

cited prior art, on the other hand, discloses or suggests 

the use of network-based intrusion techniques on the 

analysis of data entering into a plurality of hosts, servers, 

and/or computer sites in the networked computer system 

. . . .”). And the relevant portions of the parties’ expert 

declarations and deposition testimony merely recapitulate 

the parties’ positions regarding the claim language and 

specification evidence. We therefore see no reason to 

disturb the Board’s claim construction.

Case: 16-1528 Document: 48-2 Page: 8 Filed: 03/27/2017
INTELLECTUAL VENTURES II LLC v. COMMERCE BANCSHARES,

INC. 

9

B 

Intellectual Ventures does not argue that Porras fails 

to disclose the required claim elements under the Board’s 

construction of the claims. We therefore affirm the 

Board’s determination in IBM’s proceeding, IPR2014-

00682, that claims 26, 28, and 30–33 would have been 

obvious. The very same claims are at issue in the appeal 

from the Board’s ruling in the Banks’ proceeding, 

IPR2014-00801. Our affirmance of the Board’s cancellation of those claims in IBM’s proceeding leaves no live 

issue in the Banks’ proceeding. We therefore dismiss the 

appeal and cross-appeal in IPR2014-00801. See Synopsys, 

Inc. v. Lee, 812 F.3d 1076, 1077–78 (Fed. Cir. 2016); 13C 

Charles Alan Wright et al., Federal Practice and Procedure § 3533.10 (3d ed. 2017) (“Among the circumstances 

that create mootness are rulings in other adjudicatory 

proceedings, including rulings by the same court in the 

same or companion proceedings . . . .”). 

CONCLUSION

For the foregoing reasons, we affirm the Board’s final 

written decision in IPR2014-00682 cancelling claims 26, 

28, and 30–33. We dismiss Intellectual Ventures’ appeal 

and the Banks’ cross-appeal in IPR2014-00801 as moot.

Costs awarded to IBM and the Banks.

AFFIRMED IN PART (APPEAL NO. 16-1528), 

DISMISSED IN PART (APPEAL NOS. 16-1519, -1520)

Case: 16-1528 Document: 48-2 Page: 9 Filed: 03/27/2017