SAP wins complicated patent war

The Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office has ruled that a key patent used in a case against SAP case is too abstract.

The ruling came as part of a case where SAP was being taken to the cleaners by Versata Development Group.

Since 2007, Versata had made five challenged claims against SAP of under US Patent 6,553,350.

SAP asked the PTAB to make a ruling that the patent was invalid because it described a “Method and apparatus for pricing products in multi-level product and organisational groups”.

Its lawyers argued that such things were not patent eligible and it turned out to be the first ever covered business method (CBM) review trial initiated under the new Leahy-Smith America Invents Act of 2011 (AIA).

In a ruling the Board agreed with SAP that Versata’s claims 17, and 26-29 were not patentable.

“Specifically, the claims recite unpatentable abstract ideas and the claims do not provide enough significant meaningful limitations to transform these abstract ideas into patent-eligible applications of these abstractions,” the ruling said.

Yesterday’s ruling follows another earlier this week demanding that SAP pay Versata a damages award of $345 million.

Versata alleged SAP infringed its patents concerning computer-based product pricing. The technology enabled efficient factoring of variables such as product type and customer type, size, and geographic location, called ‘hierarchical pricing’. Versata commercialised its invention in 1995 and applied for the first patent in 1996.

It did rather well until in October 1998, SAP launched its hierarchical pricing product as part of its enterprise software.

Versata’s sales plummeted.

The case was tried twice. The first jury awarded $138 million in damages, and the trial court granted SAP a new trial on damages. Before the second trial, SAP adopted a software patch to avoid infringement, but the second jury found that the infringement was continuing, and awarded $345 million in damages. SAP had to pay $260 million in lost profits and a $85 million royalty award. At this point it is not clear where the new ruling will leave the old one.