[00:00:02] Speaker 02:
Oh, be seated, please.

[00:00:06] Speaker 02:
Judge Moore has turned the floor over to me because I have to make a motion.

[00:00:11] Speaker 02:
In fact, I'm privileged to make a motion today.

[00:00:13] Speaker 02:
I am moving the admission of my law clerk, Stephen Elkin.

[00:00:18] Speaker 02:
He's a member of the Bar in good standing with the highest court of New York.

[00:00:22] Speaker 02:
I have intimate knowledge of his credentials because he's been working for me for almost a year now.

[00:00:28] Speaker 02:
And I have known him for quite a while before that.

[00:00:31] Speaker 02:
Stephen graduated from GW here in DC with a BA and a BS in chemistry, right?

[00:00:42] Speaker 02:
And then went to Berkeley where he got his master's in chemistry and then he went to NYU for law school, which is where I had the privilege to meet him.

[00:00:50] Speaker 02:
He has been working for me and he has definitely accorded himself properly for purposes of being permitted to become a member of this bar.

[00:01:00] Speaker 02:
And perhaps, most importantly, today's a big day, because it's also his 30th birthday.

[00:01:06] Speaker 02:
So might as well do everything all at once.

[00:01:08] Speaker 02:
So I move his admission.

[00:01:12] Speaker 03:
Well, I've consulted with Judge Sean.

[00:01:13] Speaker 03:
It was a tough decision.

[00:01:15] Speaker 03:
But Joseph Malley's words were very convincing, as they often are, actually.

[00:01:21] Speaker 03:
So we are happy to welcome you to the bar.

[00:01:23] Speaker 03:
And I have no doubt after clerking for her,

[00:01:26] Speaker 03:
be an excellent contribution to our bar.

[00:01:28] Speaker 03:
So please turn and be administered the oath.

[00:01:31] Speaker 04:
Please raise your right hand.

[00:01:33] Speaker 04:
Do you solemnly swear or affirm that you will comport yourself as an attorney and counsel of this court, uprightly and according to law, and that you will support the Constitution of the United States of America?

[00:01:41] Speaker 04:
I do.

[00:01:42] Speaker 04:
Welcome to the United States Court of Appeals with the Federal Circuit Court.

[00:01:45] Speaker 03:
Welcome.

[00:01:46] Speaker 03:
Okay, our first case for today

[00:01:51] Speaker 03:
Is case number two zero one four dash one four three five.

[00:01:55] Speaker 03:
Lending tree versus Zillow.

[00:01:58] Speaker 03:
Mr. Korninski please proceed.

[00:02:05] Speaker 05:
Good morning, your honor.

[00:02:07] Speaker 05:
If I may, I'd like to use 10 minutes in the opening and reserve five minutes for rebuttal.

[00:02:13] Speaker 05:
And again, I know this is not the way it goes, but to the extent I can, I'd like to split that opening between claim construction and section 101.

[00:02:22] Speaker 05:
With respect to claim construction, your honor, the first term that we'd like to address is credit data.

[00:02:30] Speaker 05:
One of the issues there was that some of the claims don't require a qualification form, and they only require credit data.

[00:02:37] Speaker 05:
The court's construction information entered on the qualification form, sufficient for a lending institution to extend denied credit, imports that limitation into some of the claims, which we believe is improper.

[00:02:50] Speaker 05:
Number two is that the language sufficient to extend credit was removed during prosecution, as this court had said, until electronics.

[00:02:58] Speaker 05:
Courts are not permitted to read back into claim limitations that were originally removed and were removed during prosecution.

[00:03:05] Speaker 05:
And then the third reason with respect to credit data being improper is that the specification doesn't require that credit data be sufficient for a lending institution to extend or deny credit and that language just doesn't appear in the specification.

[00:03:20] Speaker 02:
But isn't that the whole point of

[00:03:22] Speaker 02:
What the claims are trying to get at is that they're saying that you need the information so that you can decide whether to extend credit.

[00:03:33] Speaker 05:
Your Honor, I think part of the process for claim construction is to provide something that the jury understands, not to prevent legalistic terms, that the jury is not comprised of lawyers.

[00:03:48] Speaker 05:
Number two, one of the things that the court did here was to take an invention, a claimed invention that was focused on applying for credit

[00:03:56] Speaker 05:
and then turn it into an invention for closing a loan.

[00:04:03] Speaker 05:
The objectives of the inventions talk specifically to a process for applying for credit.

[00:04:11] Speaker 05:
None of the claims require closing a loan, and what this does is focusing on extending credit.

[00:04:20] Speaker 05:
With respect to the positive credit decision, again, what the court did was to employ these legalistic terms, a proposal to extend credit that can be accepted by the user to create mutual assent, i.e.

[00:04:35] Speaker 05:
a contract, or depending upon what aspect of the case, a binding promise.

[00:04:40] Speaker 05:
Again, this language is not in the specification and actually contradicts the specification which contemplates

[00:04:47] Speaker 05:
other embodiments which would have non-binding responses from the lender.

[00:04:54] Speaker 05:
We see this in column 5, line 67 to column 6 of line 2 in the 594 patent, column 6, lines 10 to 12 of the 532 patent, which talks about the text message decision contains a loan ID number and a request for more information from the borrower.

[00:05:16] Speaker 02:
Well, even if you didn't

[00:05:18] Speaker 02:
even if you didn't conclude that there had to be a binding offer and acceptance at the end of the day, isn't it clear from the respect that what you're talking about is providing sufficient information so that an actual offer that could become binding gets made?

[00:05:38] Speaker 05:
No, not necessarily, Your Honor.

[00:05:39] Speaker 05:
there are different embodiments disclosed in the specification.

[00:05:43] Speaker 05:
So a positive credit decision would be broader than say an offer or a binding offer in the sense that it could also be a request for information which is a positive decision that says we still want to do business with you but we need more information or we may want to do business with for you.

[00:06:00] Speaker 05:
The other thing, it could be a proposal

[00:06:01] Speaker 05:
or identifying interest rates, for example, but not necessarily binding.

[00:06:08] Speaker 05:
There's nothing that says that these terms are binding contractual requirements.

[00:06:15] Speaker 05:
An offer can also be, for example, a proposal of certain terms that you may qualify for.

[00:06:23] Speaker 02:
So are you distinguishing between a concept of an offer and the concept of a positive credit decision?

[00:06:31] Speaker 05:
Initially, yes, Your Honor, a positive credit decision, I think, would be broader than an offer.

[00:06:37] Speaker 05:
Because a positive credit decision could be an offer, a proposal that's not binding or a binding offer.

[00:06:43] Speaker 05:
It could be a request for additional information.

[00:06:51] Speaker 02:
So you're saying that a positive credit decision doesn't necessarily have to be based on sufficient information to make a positive credit decision?

[00:07:05] Speaker 05:
It needs to be based on credit data, Your Honor.

[00:07:09] Speaker 05:
But then trying to say sufficient information.

[00:07:11] Speaker 05:
Well, sufficient information may be different for one lending institution versus another.

[00:07:18] Speaker 02:
But all lending institutions need some basic information, do they not?

[00:07:22] Speaker 02:
And wouldn't that include a Social Security number?

[00:07:25] Speaker 05:
No, it would not, Your Honor, not necessarily.

[00:07:27] Speaker 05:
So I think that goes to the heart of the claim construction dispute in this case.

[00:07:32] Speaker 05:
Because the way these claims were argued at trial was that the credit data that is transferred to the lender must be, or is required to be, to include social security number.

[00:07:47] Speaker 05:
But what we see, for example, in stage 10,

[00:07:51] Speaker 05:
It says that the social security number, at least in the preferred embodiment, is not obtained until stage nine.

[00:07:57] Speaker 05:
We see that in two places in the specification.

[00:08:00] Speaker 05:
And why would that be?

[00:08:01] Speaker 05:
Well, a lot of borrowers don't want to provide certain private information until later in the process, after they get the acceptance of, after they accept, for example, the proposed interest rate.

[00:08:21] Speaker 05:
So moving to offer, again, same issues, same objections that we had with respect to positive credit decisions we have with respect to the term offer.

[00:08:34] Speaker 05:
The offer could propose loan terms to which the user may qualify.

[00:08:39] Speaker 05:
But the biggest problem that we had with the term offer, Your Honor, is that the term offer was imported into all of the whereby clauses in all of the claims.

[00:08:50] Speaker 05:
However, the term offer only appears in claim one of the, I think, 594 patent.

[00:08:58] Speaker 05:
It doesn't appear in all the other whereby clauses.

[00:09:01] Speaker 05:
The whereby clauses, other than the one claim, merely require competition.

[00:09:06] Speaker 05:
But by putting this offer term in, again, it overly limits the claim.

[00:09:12] Speaker 05:
What we know from the testimony from Zillow's own witnesses is that competition could be more than a binding offer.

[00:09:18] Speaker 05:
Competition can be shown by proposing interest rates.

[00:09:24] Speaker 05:
It could be by

[00:09:25] Speaker 05:
submitting reviews from the industry about your loans.

[00:09:31] Speaker 05:
It could also be advertisements.

[00:09:34] Speaker 02:
So are you saying that the reference to an offer and what that means would mean that the construction was appropriate for claim one but not for the others?

[00:09:47] Speaker 05:
No, Your Honor.

[00:09:48] Speaker 05:
I guess what I'm saying for the whereby clause, the term offer should not have been imported into all the claims but the one.

[00:10:02] Speaker 02:
OK, you want to turn to 101?

[00:10:04] Speaker 05:
Yes, Your Honor.

[00:10:05] Speaker 05:
So with respect to section 101, obviously we would ask that the court affirm the district court's decision with respect to finding that the patent claims are patent eligible.

[00:10:18] Speaker 02:
How can we affirm that decision when we don't even know what it was based on?

[00:10:24] Speaker 02:
There was just a one line statement, right?

[00:10:27] Speaker 05:
Yeah, there were no factual findings by the district court, Your Honor.

[00:10:29] Speaker 03:
Or any analysis of any kind of the issue.

[00:10:32] Speaker 05:
That is correct, Your Honor.

[00:10:34] Speaker 05:
So let's go through that.

[00:10:36] Speaker 05:
What we've done is we've looked at the cases.

[00:10:38] Speaker 05:
We followed the lead from the Federal Circuit, which looks at these business method patents on a case-by-case basis.

[00:10:45] Speaker 05:
What the lending treaty claims present is an inventive application of simultaneous competition by lenders, which is new in the art of credit financing, just as a continuous monitoring of temperature is new in the art of deer.

[00:11:01] Speaker 02:
Which exact claims are at issue here?

[00:11:02] Speaker 02:
Because it looks like before the district court there were certain claims that were at issue, and that there are other claims that appear to be at issue.

[00:11:13] Speaker 02:
Different claims appear to be at issue here on appeal.

[00:11:15] Speaker 02:
What do you understand the claims to be at issue?

[00:11:19] Speaker 05:
Claims 1, 5, 9.

[00:11:23] Speaker 05:
Claims 1 of the 5, 9, 4.

[00:11:24] Speaker 01:
I'm sorry, what claims now?

[00:11:26] Speaker 05:
Claims 1 of the 5, 9, 4 patent.

[00:11:32] Speaker 03:
And claims 6.

[00:11:32] Speaker 05:
And claims 1 and 22.

[00:11:33] Speaker 03:
What about claim 6 of the 5, 9, 4?

[00:11:36] Speaker 03:
It's in the red brief on page 11.

[00:11:39] Speaker 03:
Let's look on page 11 of the red brief.

[00:11:43] Speaker 02:
But that's what my question is.

[00:11:44] Speaker 02:
The red brief lists different ones than were at issue below.

[00:11:48] Speaker 03:
So page 11 of the red brief says claims 1 and 6 of the 594.

[00:11:54] Speaker 03:
And that's what it asks us to look at with regard to the 101 issue.

[00:12:01] Speaker 03:
Below, before the district court, the summary judgment regarding the 594 patent asserted

[00:12:09] Speaker 03:
summary judgment entitlement on 101 for claims 1, 2, 3, 1, 2, and 3, and 6 through 14 of the 5, 9, 4 patent.

[00:12:18] Speaker 03:
So I think part of Judge O'Malley's question likely is the claims upon which you move for summary or upon which the other side move for summary judgment below seem to be a larger set than the claims that are being appealed.

[00:12:35] Speaker 03:
in the red brief.

[00:12:36] Speaker 03:
There's one issue that's even more troubling because of course they can decide to winnow down the issues and maybe only appeal the denial of summary judgment with regard to some claims.

[00:12:45] Speaker 03:
But the bigger issue I have is for the 816 patent in particular, they move for summary judgment below for 1, 2, 4 to 7, 9, 11, 22, and 23 full stop.

[00:12:57] Speaker 03:
On appeal they're asking us to reverse the district court's judgment

[00:13:00] Speaker 03:
which includes a number of claims, including claim 24, upon which they never move for summary judgment below.

[00:13:05] Speaker 03:
So this is not something that you raised, but it is a point of concern for the court.

[00:13:10] Speaker 03:
How do we deal with the red brief's assertion that it's seeking to overturn a judgment, among other things, with regard to a claim that it never moved for judgment on below?

[00:13:21] Speaker 05:
Your Honor, we would submit that they didn't properly move to

[00:13:28] Speaker 05:
reverse or to reverse all of those claims that were addressed below.

[00:13:34] Speaker 05:
I think one of the issues may be that when we went to trial, we narrowed the scope of claims that were being addressed at trial.

[00:13:42] Speaker 05:
And so maybe when the conversion came up here.

[00:13:44] Speaker 03:
When did claim 24 pop in?

[00:13:46] Speaker 03:
Because 24 of 816

[00:13:49] Speaker 03:
In general, they move for summary judgment of a much larger swath of claims than they're now appealing.

[00:13:55] Speaker 03:
So that makes sense, giving your winnowing down of claims.

[00:13:57] Speaker 03:
And that's what should happen in a district court litigation.

[00:14:00] Speaker 03:
But suddenly, they're asking us to reverse the district court's judgment regarding claim 24.

[00:14:04] Speaker 03:
But I don't see any judgment regarding 24, because that wasn't part of the motion.

[00:14:07] Speaker 03:
Is that a claim you added at some point during the process below?

[00:14:12] Speaker 03:
Go ahead.

[00:14:12] Speaker 05:
That claim was added at trial.

[00:14:14] Speaker 03:
Added at trial.

[00:14:15] Speaker 03:
And the district court approved the addition of that claim.

[00:14:19] Speaker 05:
Correct.

[00:14:21] Speaker 02:
So OK, well, we'll ask the other side this.

[00:14:24] Speaker 02:
Sure.

[00:14:25] Speaker 05:
I realize I'm getting into my rebuttal.

[00:14:27] Speaker 05:
I guess let me spend a couple minutes just to.

[00:14:31] Speaker 02:
Well, I guess my question is, at minimum, shouldn't we vacate and remand for the trial court to explain why it thinks this claim is patent eligible?

[00:14:42] Speaker 05:
I think the court has that option of doing that.

[00:14:44] Speaker 05:
I think the other issue is, should the claim construction change?

[00:14:48] Speaker 05:
I guess theoretically, that could also change.

[00:14:51] Speaker 05:
I suppose the section 101 analysis.

[00:14:55] Speaker 02:
But by the same... How do you believe the claim construction affects the section 101 analysis?

[00:15:00] Speaker 05:
Frankly, I actually don't, Your Honor.

[00:15:02] Speaker 05:
I'm just saying that...

[00:15:03] Speaker 05:
I think my position would be that the key issue that helps us to overcome the patent eligibility is the fact that when you look at the claim as a whole, whether it's the way the court construed it now or the way we're proposing that the Federal Circuit construe it.

[00:15:21] Speaker 05:
When you look at the claim as a whole, what we have is an inventive application.

[00:15:25] Speaker 05:
that provides a way to apply for credit.

[00:15:30] Speaker 03:
So Alice gives me this two-part test, which I have to adhere to.

[00:15:35] Speaker 03:
And step one is, are these claims directed to an abstract idea?

[00:15:39] Speaker 03:
That isn't the part that involves the inventive component.

[00:15:42] Speaker 03:
So are you conceding that the claims are directed to an abstract idea?

[00:15:45] Speaker 03:
No, Your Honor.

[00:15:46] Speaker 05:
Then how are they not?

[00:15:47] Speaker 05:
OK, London Tree's position is that we satisfy step one and step two.

[00:15:51] Speaker 03:
How are they not?

[00:15:52] Speaker 05:
The problem we have with step one is when you look at the Supreme Court cases, Mayo, Alice, for example, they don't provide any guidance on how we should go forward and prove that it's not an abstract idea.

[00:16:03] Speaker 05:
The idea is we're trying to prove a negative.

[00:16:08] Speaker 05:
If you look at Deere, Deere says that you can take these concepts that may in and of themselves be not patent eligible, but you can still claim, you can still patent claims that use those if you're providing some new inventive.

[00:16:26] Speaker 03:
Well, that's step two.

[00:16:26] Speaker 05:
Yeah, that would be step two.

[00:16:28] Speaker 05:
But the problem we have with step one, going back to Judge Moore's question, is

[00:16:33] Speaker 05:
All we have is the Disher Court's decision that says it's patent eligible.

[00:16:39] Speaker 05:
We only have, I think there are two potential arguments that were made by Zillow as to what was the abstract idea.

[00:16:46] Speaker 05:
I think one of them was a clearinghouse, which was certainly much more than that.

[00:16:49] Speaker 03:
And the other one, I think- How are you much more than a credit application clearinghouse?

[00:16:54] Speaker 05:
Your Honor, if you look at, I think it's mortgage greater.

[00:16:58] Speaker 05:
What that is, it's a deposit of potential loan terms that are deposited into a database.

[00:17:06] Speaker 05:
And the borrower goes through that and looks for maybe loan terms that they might be interested in.

[00:17:14] Speaker 05:
What we have here is a very specific situation where a borrower submits information to a number of lenders.

[00:17:21] Speaker 05:
those lenders respond specifically back to that borrower based upon that borrower's specific information.

[00:17:28] Speaker 05:
And it's done simultaneously, so that's forcing competition.

[00:17:31] Speaker 03:
So what this invention did is create some- So you just have a credit application clearing house that is competitive.

[00:17:37] Speaker 03:
I'm having a lot of difficulty seeing how these claims survive, Alice, step one.

[00:17:43] Speaker 03:
Your time's almost up.

[00:17:44] Speaker 03:
So if you think you have a better argument on step two, you might want to turn to that.

[00:17:47] Speaker 05:
OK, so on step two, Your Honor, if you look at Deere, what you have in that particular situation was the application of a mathematical formula, the Arrhenius formula, that was applied to curing rubber.

[00:18:01] Speaker 05:
And what the court said in a buy safe was that the only new inventive application in the deer patent invention was this use of this timing element, this continuously monitoring the temperature.

[00:18:16] Speaker 05:
So it's our position, Your Honor, that the simultaneous competition that's created in the Lending Tree claims are no less abstract

[00:18:23] Speaker 05:
than the monitoring of temperature that exists in deer.

[00:18:29] Speaker 01:
Just one real quick question.

[00:18:30] Speaker 01:
This came up in your colloquy with Judge O'Malley.

[00:18:33] Speaker 01:
Are you saying that we can decide the 101 issue?

[00:18:37] Speaker 01:
You're not urging us to send it back.

[00:18:41] Speaker 01:
You're saying we can decide by saying the judge got it right or got it wrong?

[00:18:46] Speaker 05:
Personally, I believe that the court can.

[00:18:48] Speaker 01:
OK.

[00:18:49] Speaker 01:
That's all I want to know.

[00:18:50] Speaker 03:
Thank you.

[00:18:51] Speaker ?:
OK.

[00:18:52] Speaker 03:
Mr. Hayden, Mr. Hayden, please proceed.

[00:18:57] Speaker 03:
Can you just start with this difference in the claims?

[00:19:03] Speaker 03:
Because, you know, then, so if you're wrong and we don't have the ability to address all the claims,

[00:19:11] Speaker 03:
And even if we were to agree with you on 101, we got to go through all the other issues because you got this one claim that wasn't part of your summary judgment below.

[00:19:18] Speaker 03:
So there was never a decision by the district court on that claim for us to possibly review an appeal.

[00:19:23] Speaker 06:
So my understanding, Your Honor, is that as was explained, there was a larger set of claims that were at issue at the time of the original summary judgment motion that we filed and then was renewed again.

[00:19:38] Speaker 03:
It was renewed again when?

[00:19:40] Speaker 06:
Before trial, but then it was renewed a third time after trial.

[00:19:44] Speaker 03:
The summary judgment with regard to 101 was renewed after trial?

[00:19:48] Speaker 06:
Yes, Your Honor.

[00:19:48] Speaker 06:
And so just to cut it a chase, I think what happened was we originally included the supersetted claims that had been asserted pre-trial.

[00:19:58] Speaker 06:
As was indicated, those were cut back, but then there was an additional claim added.

[00:20:03] Speaker 03:
The problem is, so what do I do with the additional claim?

[00:20:06] Speaker 03:
That's only what I'm worried about.

[00:20:07] Speaker 03:
I don't care about you winnowing the claims down.

[00:20:09] Speaker 03:
What I care about is you suddenly asking me on appeal to decide as an appeal an issue that wasn't part of the claim.

[00:20:16] Speaker 03:
Sure.

[00:20:16] Speaker 06:
So my understanding was that in the post-trial renewal at J-Mall of the 101 issue that the court finally decided, which made this an appealable judgment, that included all of the claims.

[00:20:29] Speaker 01:
But where can you show us that?

[00:20:31] Speaker 01:
You list the claims, as Judge Moore pointed out, on page 11, OK?

[00:20:36] Speaker 01:
Yes, Your Honor.

[00:20:38] Speaker 01:
And you're saying these are the claims with respect to which you're asking us to rule on 101 grounds, correct?

[00:20:52] Speaker 06:
Yes, Your Honor.

[00:20:52] Speaker 01:
OK, now, where in the record can we go to see

[00:20:57] Speaker 01:
To really answer the question that Judge Moore has raised, namely, are all these claims properly before us?

[00:21:03] Speaker 01:
Specifically, claim 24.

[00:21:05] Speaker 01:
Just show us now where we can go in the record to have verification on claim 24.

[00:21:12] Speaker 01:
I'm sure that's right at your fingertips, but I don't.

[00:21:18] Speaker 01:
What page of the appendix?

[00:21:23] Speaker 06:
I did not foresee this issue.

[00:21:28] Speaker 06:
It would be a renewal of our motion for some of the judgment

[00:21:41] Speaker 03:
Why don't you go on with your argument, ask your co-counsel to find it while you're standing here, and we can see if we can resolve it before the end of oral argument.

[00:21:50] Speaker 03:
Is that OK, Judge Shaw?

[00:21:50] Speaker 03:
Yeah.

[00:21:51] Speaker 03:
Oh, no.

[00:21:51] Speaker 03:
Definitely.

[00:21:51] Speaker 03:
I don't want to burn up all this time.

[00:21:52] Speaker 03:
Thank you.

[00:21:53] Speaker 03:
Appreciate that.

[00:21:54] Speaker 06:
Going to the 101 issue first, I think Judge Moore is right.

[00:22:00] Speaker 06:
These claims are directed at the abstract idea of a clearinghouse for online loan applications.

[00:22:07] Speaker 06:
And for 101 purposes, these patents are indistinguishable.

[00:22:11] Speaker 06:
and the patents that this court held invalid in mortgage grader and dealer track.

[00:22:16] Speaker 06:
In both those cases like this patent, a user or auto dealer in the case of dealer track submits a loan application to a clearing house.

[00:22:25] Speaker 06:
That loan application is selectively forwarded to a lender.

[00:22:30] Speaker 06:
A lender responds with a response, an offer.

[00:22:34] Speaker 02:
We don't know whether the trial court found this claim eligible

[00:22:39] Speaker 02:
under step one or step two, do we?

[00:22:41] Speaker 06:
No.

[00:22:41] Speaker 06:
So all we know as far as the trial court's reasoning, and it was expressed both in open court and also in a footnote in the Jamal motion, was that the court believed that because it had construed the claims narrowly to require an actual offer that could be accepted to form a contract, the patents were not abstract.

[00:23:01] Speaker 06:
But it did say if the claims were construed more broadly,

[00:23:06] Speaker 06:
cover this sort of lead generation idea that LendingTree was proposing a trial, that it would cover any communications between a borrower and a lender, the claims would likely be invalid.

[00:23:17] Speaker 02:
Well, then that sounds like he was focusing on step one.

[00:23:20] Speaker 06:
I believe so, Your Honor.

[00:23:22] Speaker 02:
All right, so do you agree that there's a distinction between providing enough information to form a contract between a lender and a borrower

[00:23:36] Speaker 02:
and just providing data to create the competition.

[00:23:39] Speaker 06:
So I don't believe that that is a proper distinction for one-on-one purposes.

[00:23:44] Speaker 06:
I believe that the claims do require sufficient information for a lender to make a decision.

[00:23:49] Speaker 06:
That's clear from the patent itself, which is about a universal loan application.

[00:23:53] Speaker 06:
And if you look in Figure 10 in the patent, it's actually a flow chart.

[00:23:57] Speaker 06:
And there is only two options that a letter has when it receives an application.

[00:24:01] Speaker 06:
It can accept it.

[00:24:02] Speaker 06:
or deny it.

[00:24:03] Speaker 06:
There's no request for additional information, as Lenny Treeves Council said.

[00:24:08] Speaker 06:
So this is really about applying for a loan online, and that's what it's about.

[00:24:12] Speaker 06:
You accept an offer, you close the loan, that's what happens.

[00:24:16] Speaker 06:
But whether or not that saves us from 101, I don't think so.

[00:24:20] Speaker 06:
And I think whether

[00:24:21] Speaker 06:
It's a loan application or something less that is received by the borrower.

[00:24:25] Speaker 06:
This is still just economic activity performed using generic computers.

[00:24:30] Speaker 02:
Do you agree with your friend on the other side that whatever you describe this economic activity to be, that there's more detail to it than there was in mortgage credit?

[00:24:40] Speaker 06:
I don't believe there's more detail, certainly not in dealer track.

[00:24:44] Speaker 06:
Dealer track has a much more detailed description of the technology involved.

[00:24:49] Speaker 06:
far more flow charts, but the basic concepts are the same in all of them.

[00:24:53] Speaker 06:
In all of them there is some matching of an application against some loan criteria.

[00:24:58] Speaker 06:
Actually, LendingTree slightly mischaracterizes MortgageGrader.

[00:25:02] Speaker 06:
MortgageGrader does have a database that stores the lending packages from lenders and the applications, but it also includes a program that compares those and provides selected loan packages

[00:25:15] Speaker 06:
to borrowers.

[00:25:16] Speaker 06:
It actually describes it as in a spreadsheet type form.

[00:25:20] Speaker 06:
So the borrowers can choose among these competing loan packages that meet their criteria.

[00:25:26] Speaker 06:
So in that sense, it has exactly the same type of simultaneous competition that Lenny Tree is relying on in these patents.

[00:25:35] Speaker 02:
Whenever you talk about step one, one of the things that people focus on is whether or not

[00:25:43] Speaker 02:
what is claimed could be done manually.

[00:25:45] Speaker 02:
Sure.

[00:25:46] Speaker 06:
And this is essentially what mortgage brokers have done for years, right?

[00:25:50] Speaker 06:
Mortgage brokers accept loan applications from borrowers.

[00:25:53] Speaker 06:
They match them against the requirements they have from multiple lenders.

[00:25:57] Speaker 06:
They forward the applications to the lenders that have matching requirements.

[00:26:03] Speaker 06:
They get an answer back from the lender, and they provide it to the user.

[00:26:06] Speaker 02:
But is there a distinction, or is there something new or novel about being able to avoid the mortgage broker?

[00:26:11] Speaker 06:
Well, it's just computerizing activities that were performed by people before.

[00:26:18] Speaker 06:
But the court has said over and over again, that's not patent.

[00:26:21] Speaker 06:
That's just an economic arrangement automated using computers.

[00:26:25] Speaker 06:
That's the same thing that's going on in dealer track.

[00:26:28] Speaker 06:
But really, I don't see any wiggle room between mortgage grader and dealer track in this patent under 101.

[00:26:36] Speaker 01:
Chad, just to assist your search, and I'll let you go on.

[00:26:39] Speaker 01:
2007 of the joint appendix has the motion for summary judgment of invalidity under 101 and various claims are listed there.

[00:26:54] Speaker 01:
That's the motion, 2007.

[00:26:56] Speaker 01:
I didn't want to interrupt you, but I thought that might help.

[00:27:02] Speaker 02:
But was the renewal post trial, was that done orally or in writing?

[00:27:08] Speaker 06:
Both, Your Honor.

[00:27:09] Speaker 02:
OK.

[00:27:10] Speaker 02:
But in writing, does it mention claim 24?

[00:27:12] Speaker 06:
That's what I'm trying to find out.

[00:27:13] Speaker 03:
OK.

[00:27:14] Speaker 03:
And the renewal you're talking about post-trial, so this is just summary judgment.

[00:27:17] Speaker 03:
You're telling me you moved for Jamal at the close of evidence on the 101 issue.

[00:27:23] Speaker 07:
Yes.

[00:27:24] Speaker 03:
Yeah, because you can't renew a summary judgment.

[00:27:26] Speaker 03:
Obviously, you can only file a Rule 50 and then renew a Rule 50.

[00:27:30] Speaker 03:
Summary judgment becomes irrelevant.

[00:27:31] Speaker 06:
Right.

[00:27:32] Speaker 06:
The issue we had at the end was we never had a ruling on 101 that we could, so it was a final judgment to appeal.

[00:27:39] Speaker 03:
You didn't have a ruling because you won on the inventorship issue.

[00:27:45] Speaker 06:
And the judge just never ruled.

[00:27:47] Speaker 03:
He just never ruled on your summary judgment.

[00:27:49] Speaker 03:
Correct.

[00:27:49] Speaker 03:
On your summary judgment?

[00:27:51] Speaker 03:
No, I thought he denied your summary judgment.

[00:27:54] Speaker 03:
Did he rule on your rule?

[00:27:56] Speaker 03:
No, he didn't.

[00:27:59] Speaker 03:
Really?

[00:28:00] Speaker 03:
I thought he denied.

[00:28:06] Speaker 06:
She's clarifying it.

[00:28:07] Speaker 06:
It was the renewed J-Mall, which is the final thing that he denied, that allowed this appeal to happen.

[00:28:15] Speaker 06:
covered all the claims.

[00:28:16] Speaker 02:
So he just sat on the summary judgment and went to trial.

[00:28:19] Speaker 02:
But he effectively denied it by never ruling on it.

[00:28:22] Speaker 02:
Right.

[00:28:22] Speaker 02:
OK.

[00:28:23] Speaker 03:
And so the renewed Jamal, though, it is your understanding that it included all of the claims that were at issue at trial.

[00:28:30] Speaker 03:
Yes, Your Honor.

[00:28:32] Speaker 03:
Yeah.

[00:28:32] Speaker 01:
All right.

[00:28:34] Speaker 01:
Very good.

[00:28:34] Speaker 01:
This is at 11,346 where he ruled.

[00:28:54] Speaker 01:
He said, based on the court's claim construction, the court does not need to address whether the Patinson suit are invalid under 101 if the court had adopted plaintiff's claim construction.

[00:29:21] Speaker 02:
It's confusing.

[00:29:21] Speaker 02:
OK.

[00:29:22] Speaker 06:
Yes, sir, Your Honor.

[00:29:23] Speaker 03:
Very good.

[00:29:24] Speaker 06:
OK, do you have anything further?

[00:29:28] Speaker 06:
There's issues on the claim construction.

[00:29:31] Speaker 06:
The court, I think, read the patent properly.

[00:29:35] Speaker 06:
The form that is received by the system from the borrower includes the social security number.

[00:29:43] Speaker 06:
It includes all the information required to make a decision.

[00:29:46] Speaker 06:
The claim says how the patent explains that the borrower makes a decision.

[00:29:52] Speaker 06:
Lending Tree is just misreading the patent.

[00:29:54] Speaker 06:
It's very clear.

[00:29:55] Speaker 06:
Figure 3B says the system checks the format in which the social security number was entered on the application before it forwards it to the lender.

[00:30:07] Speaker 06:
So there is no argument that there are alternative embodiments where less information is either received or forwarded to the lender.

[00:30:17] Speaker 06:
It's just false.

[00:30:18] Speaker 06:
There's only sort of one embodiment in this patent, and it's described in the figures in the specification.

[00:30:25] Speaker 06:
And in it, there is an application that includes the user's social security number.

[00:30:30] Speaker 06:
There's a system in figure 3B that checks the format.

[00:30:34] Speaker 06:
It then matches with the lenders and forwards the entire application to the lenders.

[00:30:39] Speaker 06:
In fact, it appeared in their reply brief, the lending tree has dropped this whole argument.

[00:30:44] Speaker 06:
and acknowledged that in the preferred embodiment, the social security number was included as part of the application.

[00:30:51] Speaker 06:
And it's clear from figure 3B.

[00:31:01] Speaker 06:
Beyond that, Your Honor, I really don't see how this patent gets saved under 101.

[00:31:07] Speaker 06:
There's no new technology.

[00:31:09] Speaker 06:
The computer system that is described in the specification

[00:31:13] Speaker 06:
is nearly identical to the figures in the dealer track and mortgage grader patents.

[00:31:18] Speaker 06:
There's a central computer with a database.

[00:31:21] Speaker 06:
It connects over the internet to borrower computers where borrowers can fill out forms.

[00:31:27] Speaker 06:
And it connects to lender computers where it can receive loan information from lenders.

[00:31:32] Speaker 06:
Nearly the identical diagram or its equivalent is in both the dealer track and the mortgage grader patents.

[00:31:38] Speaker 02:
Does Zillow have a patent on its system?

[00:31:43] Speaker 06:
this aspect of the system.

[00:31:45] Speaker 06:
I don't know all of Zillow's patents, but they weren't an issue in this case.

[00:31:50] Speaker 06:
The Zillow system provides just anonymous rate quote information.

[00:31:56] Speaker 06:
It's generated by what's called a rate engine.

[00:31:59] Speaker 06:
It's kind of a real-time program that feeds off the market rates.

[00:32:06] Speaker 03:
Okay, Mr. Haddon, thank you very much.

[00:32:11] Speaker 05:
Your Honor, I know I used up my time, but I can emote your court for just a minute.

[00:32:15] Speaker 03:
No, you have, does he have a minute left or so?

[00:32:17] Speaker 03:
Oh, OK.

[00:32:17] Speaker 03:
Yeah, you have time left.

[00:32:23] Speaker 05:
I guess going back to Section 101, Your Honor, we had a six-week trial.

[00:32:27] Speaker 05:
And at that trial, Zillow had raised a number of Section 102 and 103 defenses in order to invalidate the patent.

[00:32:37] Speaker 05:
And a jury came back and found that all of the claims were not invalid, which supports the finding that this is a new inventive application.

[00:32:45] Speaker 05:
The argument that this can be done by brokers was presented at trial, and it was rejected because a broker is hired by banks.

[00:32:54] Speaker 05:
And one of the things that there's plenty of testimony on was trying to change the leverage from the banks.

[00:33:01] Speaker 05:
If you try to take a loan or force banks to compete,

[00:33:04] Speaker 05:
simultaneously, what you do is you're filing applications, you're waiting for them to come back.

[00:33:09] Speaker 05:
They may or may not come back.

[00:33:11] Speaker 05:
They may reject you outright.

[00:33:13] Speaker 05:
But right here, the mortgage broker, again, is hired by specific banks, and they're pushing specific banks.

[00:33:21] Speaker 05:
And so it's not the same as the system that you have here.

[00:33:26] Speaker 02:
So you're saying it takes out any human bias?

[00:33:29] Speaker 02:
That's correct, Your Honor.

[00:33:31] Speaker 02:
And that changes it from being an abstract idea?

[00:33:37] Speaker 05:
No, I'm not saying that that's what changes it from being.

[00:33:40] Speaker 05:
What I'm saying is when you put it together, you're using technology where you have multiple computers.

[00:33:46] Speaker 05:
You're doing something very specific where you're creating a new change or a new reaction or a new way of doing business.

[00:33:56] Speaker 05:
Lending Tree, the company,

[00:33:58] Speaker 05:
experienced significant commercial success and very rapid rise.

[00:34:02] Speaker 05:
And then you had all these awards that were granted from the industry for the patented technology.

[00:34:08] Speaker 05:
And then you had all of these copycat companies spring up, which didn't exist prior to LendingTree.

[00:34:13] Speaker 05:
They were the first, because this was something new.

[00:34:16] Speaker 05:
And I don't know if it's the right term, secondary indicia, patent eligibility.

[00:34:22] Speaker 05:
But when you look at situations on a case-by-case basis,

[00:34:26] Speaker 05:
That evidence, which is in the record, supports the fact that this is something, it's a new inventive application.

[00:34:40] Speaker 05:
With respect to mortgage, grader, and dealer track, the lending tree claims don't somehow preempt what they're doing there.

[00:34:47] Speaker 05:
I think Zillow argued that somehow that shows some simultaneous competition.

[00:34:53] Speaker 05:
It doesn't.

[00:34:53] Speaker 05:
What it shows is maybe the borrower can submit simultaneous application.

[00:35:00] Speaker 03:
Do you agree that in the absence of simultaneous competition, do you agree that in the absence of the simultaneous competition limitation that these claims would be, for purposes of 101 only, indistinguishable from dealer tracker and mortgage grader?

[00:35:14] Speaker 03:
I don't see how, absent the simultaneous competition limitation, which is the only thing I really see you arguing in your briefs, I don't see how we could possibly distinguish these claims from dealer prepper and mortgage grader.

[00:35:28] Speaker 03:
Would you acquiesce in that and say this case really does hinge on the difference being the simultaneous competition?

[00:35:35] Speaker 05:
That's what you're arguing in your brief.

[00:35:37] Speaker 05:
With the understanding that you've got to look at the claim as a whole, I think that if you take out that simultaneous competition from all of the other aspects, I think it's possible.

[00:35:50] Speaker 05:
It's certainly more abstract.

[00:35:53] Speaker 05:
And you eliminate the new inventive aspect.

[00:35:57] Speaker 05:
In other words, it is true.

[00:35:58] Speaker 05:
that transferring data over a computer is known.

[00:36:03] Speaker 05:
It is true that getting offers back from a lending institution is known.

[00:36:09] Speaker 05:
But when you put them together, the same way that in deer, those elements were put together, you created something new.

[00:36:16] Speaker 05:
And here, I mean, literally, we created, LendingTree created an entire new industry.

[00:36:22] Speaker 05:
One question with respect to the claim construction.

[00:36:27] Speaker 05:
Both patents set forth that there are several embodiments that are covered here.

[00:36:32] Speaker 05:
What I'd like to point the court to is in our brief, but the specific embodiment that we're looking at with respect to this argument that an application or the social security number must be transmitted in the first instance to the lender is not accurate for all the embodiments.

[00:36:50] Speaker 05:
If we turn to the 816 patent at A531,

[00:36:55] Speaker 05:
And we go to column three, line 30 through 33.

[00:36:59] Speaker 05:
It talks about the lender accepts the application.

[00:37:02] Speaker 05:
Then in stage nine, the borrower can reply stating whether he accepts or denies the lender's application.

[00:37:08] Speaker 05:
So that's where he's accepting.

[00:37:09] Speaker 03:
When you go to- Your time is way past over, but I think Judge Schall would like to know- Yes, Ms.

[00:37:15] Speaker 01:
Johanna.

[00:37:17] Speaker 03:
Were you able to discover a precise location where we could find that all the claims are covered by the JMAW?

[00:37:26] Speaker 01:
We have it at 2007.

[00:37:28] Speaker 01:
First of all, am I correct in understanding that at 2007- Why don't you come over for a second?

[00:37:33] Speaker 03:
You'd both be there for this, to see if the same disagree.

[00:37:35] Speaker 01:
We'd both be there if there's any questions.

[00:37:36] Speaker 03:
Stay up there, Mr. Kraninski.

[00:37:38] Speaker 01:
At 2007, it appears you're moving for invalidity of the listed claims there, correct?

[00:37:47] Speaker 03:
Okay, why don't you let her come up?

[00:37:49] Speaker 03:
You just sit down.

[00:37:50] Speaker 01:
You come up here.

[00:37:51] Speaker 03:
I don't want you here anymore.

[00:37:52] Speaker 03:
Go.

[00:37:53] Speaker 01:
What's your name?

[00:37:54] Speaker 00:
Sayina Shamilov.

[00:37:55] Speaker 01:
Ms.

[00:37:55] Speaker 01:
Shamelin.

[00:37:56] Speaker 03:
OK, you're now appearing.

[00:37:57] Speaker 03:
Are you a member of our bar?

[00:37:58] Speaker 03:
I am.

[00:37:58] Speaker 03:
There you go.

[00:37:59] Speaker 03:
You're now appearing before your client.

[00:38:01] Speaker 01:
Go ahead.

[00:38:01] Speaker 01:
Thank you.

[00:38:02] Speaker 01:
OK, at 2,007, are those listed claims, the one that you're claiming, are invalid under 101?

[00:38:08] Speaker 00:
Well, that was the 2,007 that was part of the summary judgment motion.

[00:38:12] Speaker 00:
Post-trial, there were, because the claims got rejiggered at trial, when we renewed our, and the court never ruled on the summary judgment motion and sort of sat on it until then.

[00:38:22] Speaker 00:
We've renewed the request to find both patents invalid.

[00:38:26] Speaker 00:
And the court at A11346 at 4437 lines.

[00:38:30] Speaker 00:
Sorry.

[00:38:31] Speaker 00:
11346 at 4437 lines 3 through 6.

[00:38:36] Speaker 00:
11346.

[00:38:48] Speaker 00:
It was an oral ruling, 4437, lines 3 through 6.

[00:38:51] Speaker 00:
And I can read the language.

[00:38:54] Speaker 00:
Yeah, we have that.

[00:38:55] Speaker 01:
What claims are we talking about?

[00:38:57] Speaker 00:
That is all the claims.

[00:38:58] Speaker 00:
The way the proceedings was, that was all the claims that were issued at trial.

[00:39:02] Speaker 01:
And what claims are those?

[00:39:04] Speaker 00:
That included claim 24.

[00:39:06] Speaker 06:
That's because that's what's- It's a subset of the original claims with semi-judgment motion plus the claim 24.

[00:39:15] Speaker 01:
But where do we have a list?

[00:39:17] Speaker 01:
What were all of the claims that were listed at trial?

[00:39:19] Speaker 01:
Are they at page 11 of the red brief?

[00:39:22] Speaker 03:
Yes, Your Honor, that's correct.

[00:39:24] Speaker 03:
Mr. Kornisky, is there any dispute that what's listed at page 11 of the red brief was what the claims were at trial?

[00:39:39] Speaker 07:
7251.

[00:39:55] Speaker 03:
The only claim that we're really concerned about is claim 24.

[00:40:02] Speaker 03:
So 7251.

[00:40:04] Speaker 00:
That is the exact same list as on page 11 of the red brief.

[00:40:08] Speaker 02:
But when the court says at 11-346 that he went back and looked at the pleadings again, he's talking about the summary judgment, right?

[00:40:19] Speaker 00:
Yes.

[00:40:19] Speaker 00:
But in the context of what we were asking him to do was for the claims that were at issue at trial.

[00:40:26] Speaker 00:
And his sentence there where he says the court finds as a matter of law, he says that

[00:40:31] Speaker 00:
that sentence is related as to the claims as he construed them.

[00:40:35] Speaker 00:
So that's covered.

[00:40:36] Speaker 00:
Our understanding was always that it was related to the claims that were actually at issue.

[00:40:40] Speaker 00:
A trial that included claim 24 was not at issue at the time of the summary judgment motion.

[00:40:44] Speaker 00:
I know it's a little confusing, and it's hard to track paper to control.

[00:40:49] Speaker 03:
OK.

[00:40:50] Speaker 03:
I understand.

[00:40:51] Speaker 03:
I thank all counsel for their argument.

[00:40:54] Speaker 03:
The case is taken under submission.

[00:40:55] Speaker 03:
Thank you.