author: PLAGER, Circuit Judge. LOURIE, Circuit Judge,

text:
    SECURE AXCESS, LLC, Appellant v. PNC BANK NATIONAL ASSOCIATION, U.S. Bank National Association, U.S. Bancorp, Bank of the West, Santander Bank, N.A., Ally Financial, Inc., Raymond James & Associates, Inc., Trustmark National Bank, Nationwide Bank, Cadence Bank, N.A., Commerce Bank, Appellees
    2016-1353
    United States Court of Appeals, Federal Circuit.
    Decided: February 21, 2017

      Andrew J. Wright, Bruster PLLC, Southlake, TX, argued for appellant. Also represented by Anthony Kyle Bruster; Eric M. Albritton, Albritton Law Firm, Longview, TX; Andre J. Bahou, Secure Axcess, LLC, Plano, TX; Gregory J. Gon-salves, Falls Church, VA.
    Gregory H. Lantier, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, argued for all appellees. Appellee PNC Bank National Association also represented by Brittany Blueitt Amadi; Wei Wang, Palo Alto, CA.
    Terence P. Ross, Katten Muchin Rosen-man LLP, Washington, DC, for appellees U.S. Bank National Association, U.S. Ban-corp.
    Anthony H. Son, Barnes & Thornburg LLP, Washington, DC, for appellees Bank of the West, Ally Financial, Inc., Cadence Bank, N.A. Appellee Cadence Bank, N.A. also represented by Tonya Gray, Andrews Kurth LLP, Dallas, TX; Sean Wooden, Washington, DC.
    Scott Wesley Parker, Parker Ibrahim & Berg LLC, Somerset, NJ, for appellee Santander Bank, N.A. Also represented by Diane Ragosa.
    Jason Stewart Jackson, Kutak Rock LLP, Omaha, NE, for appellee Raymond James & Associates, Inc.
    Eric C. Cohen, Brinks Gilson & Lione, Chicago, IL, for appellee Trustmark National Bank.
    Garret A. Leach, Kirkland & Ellis LLP, Chicago, IL, for appellee Nationwide Bank.
    Marc Wade Vander Tuig, Senniger Powers LLP, St. Louis, MO, for appellee Commerce Bank.
    Before LOURIE, PLAGER, and TARANTO, Circuit Judges.
   Dissenting opinion filed by Circuit Judge LOURIE.

PLAGER, Circuit Judge.

This is a patent case — the issue turns on what is a covered business method patent. Appellant Secure Axcess, LLC (“Secure Axcess”) challenges a Final Written Decision of the Patent Trial and Appeal Board (“Board” or “PTAB”). As part of that decision, the Board reaffirmed its determination that the patent at issue, U.S. Patent No. 7,681,191 (“T91 patent”), owned by Secure Axcess, was a covered business method (“CBM”) patent under § 18 of the. Leahy-Smith America Invents Act •(“ALA”), Pub. L. No. 112-29, 125 Stat. 284 (2011). The Board further held that claims 1-32, all the claims in the patent, were unpatentable under that statute on the grounds that they would have been obvious under the cited prior art.

On appeal, Secure Axcess challenges the Board’s determination to decide the case as a covered business method patent, as well as the Board’s obviousness determination. We agree with Secure Axcess on the first point and therefore do not reach the second. Recently, in Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1379-82 (Fed. Cir. 2016), we concluded that the Board-adopted characterization of CBM scope in that case was contrary to the statute. We draw the same conclusion here, and further conclude that the patent at issue is outside the definition of a CBM patent that Congress provided by statute.

Background

1. The Patent-at-Issue

Secure Axcess owns the ’191 patent, which issued from a continuation application of U.S. Patent Application No. 09/656,-074. That parent application issued as U.S. Patent No. 7,203,838 (“’838 patent”). The ’191 and ’838 patents have substantially the same written descriptions.

The ’191 patent is entitled “System and Method for Authenticating a Web Page.” According to the patent, the “invention relates generally to computer security, and more particularly, to systems and methods for authenticating a web page.” ’191 patent at 1:16-18. The claims generally support this broad understanding. Claims 1 and 17 are illustrative.

1. A method comprising:

transforming, at an authentication host computer, received data by'inserting an authenticity key to create formatted data; and
returning, from the authentication host computer, the formatted data to enable the authenticity key to be retrieved from the formatted data and to locate a preferences file,
wherein an authenticity stamp is retrieved from the preferences file.

Id. at 12:9-18; ’191 Certificate of Correction.

17. An authentication system comprising:
an authentication processor configured to insert an authenticity key into formatted data to enable authentication of the authenticity key to verify a source of the formatted data and to retrieve an authenticity stamp from a preferences file.

’191 patent at 12:62-67; ’191 Certificate of Correction.

Similarly, the written description of the ’191 patent generally discusses computer security with a focus on authenticating a web page. However, on occasion, the written description contains references that might be considered to concern (at least facially) activities that are financial in nature, a consideration in determining CBM patent status.

For example, in discussing the invention, the written description explains that an Internet user might be misled to the wrong website without proper authentication. To illustrate the problem, the patent uses “ ‘www.bigbank.com’ vs. ‘www.b[l] gbank.com’ (with an T instead of an ‘i’).” T91 patent at 1:31-33, see also id. at 8:22-24 (again, by way of example, using “ ‘bigbank.com’ ”). Also, despite typically referring to Internet “users,” the patent occasionally refers to “customers,” id. at 1:28-29, and “consumers,” id. at 1:44. The written description further explains that “[t]he web server can be any site, for example a commercial web site, such as a merchant site, a government site, an educational site, etc.” Id. at 3:34-37.

In contrast to such brief references, the last several paragraphs of the written description provide several more detailed and possibly relevant references:

Moreover, while the exemplary embodiment will be 'described as an authentication system, the system contemplates the use, sale or distribution of any goods, services or information over any network having similar functionality described herein.

’191 patent at 11:17-21.

The customer and merchant may represent individual people, entities, or business. The bank may represent other types of card issuing institutions, such as credit card companies, card sponsoring companies, or third party issuers under contract with financial institutions. It is further noted that other participants may be involved in some phases of the transaction, such as an intermediary settlement institution, but these participants are not shown.

Id. at 11:22-29. (There is no previous mention of “the bank” in the patent — there is only the “www.bigbank.com” reference. Similarly, the only previous mention of a “merchant” is the “merchant site” at 3:36, and the only previous mention of a “customer” is the “customers” at 1:28-29.)

Each participant is equipped with a computing system to facilitate online commerce transactions. The customer has a computing unit in the form of a personal computer, although other types of computing units may be used including laptops, notebooks, hand held computers, set-top boxes, and the like. The merchant has a computing unit implemented in the form of a computer-server, although other implementations are possible. The bank has a computing center shown as a main frame computer. However, the bank computing center may be implemented in other forms, such as a mini-computer, a PC server, a network set of computers, and the like.

Id. at 11:30-40. (There is no previous mention of “commerce” or a “commerce transaction” in the patent.)

For instance, the customer computer may employ a modem to occasionally connect to the internet, whereas the bank computing center might maintain a permanent connection to the internet.

Id. at 11:46^9.

Any merchant computer and bank computer are interconnected via a second network, referred to as a payment network. The payment network represents existing proprietary networks that presently accommodate transactions for credit cards, debit cards, and other types of financial/banking cards. The payment network is a closed network that is assumed to be secure from eavesdroppers. Examples of the payment network include the American Express®, VisaNet® and the Veriphone® network. In an exemplary embodiment, the electronic commerce system is implemented at the customer and issuing bank. In an exemplary implementation, the electronic commerce system is implemented as computer software modules loaded onto the customer computer and the banking computing center. The merchant computer does not require any additional software to participate in the online commerce transactions supported by the online commerce system.

Id. at 11:52-67.

2. Procedural History

At the initial decision-to-institute stage, the Board determined that the T91 patent was a CBM patent. After consolidating three separate CBM review proceedings with regard to the T91 patent, in each of which the patent was treated as a CBM patent, the Board issued the Final Written Decision at issue on appeal. See PNC Bank, N.A. v. Secure Axcess, LLC, CBM2014-00100; Bank of the West v. Secure Axcess, LLC, CBM2015-00009; T. Rowe Price Inv. Servs., Inc. v. Secure Axcess, LLC, CBM2015-00027.

In its Final Written Decision, the Board maintained (in keeping with its institution decisions) that the ’191 patent was a CBM patent. On the merits, the Board held that claims 1-32 of the ’191 patent were unpat-entable because they would have been obvious under 35 U.S.C. § 103 in light of the cited prior art.

In applying the statutory test for determining whether a patent is a CBM patent, the Board quoted the statute, which is found in AIA § 18(d)(1) and which is repeated verbatim in the rules of the Patent and Trademark Office (“PTO”) at 37 C.F.R. § 42.301(a). Invoking the PTO’s rulemaking discussion and this court’s opinion in Versata, the Board rejected the patent owner’s contention that the ’191 patent was not a CBM patent.

The Board first rejected the patent owner’s contention that the statutory phrase “financial product or service” included “only financial products such as credit, loans, real estate transactions, check cashing and processing, financial services and instruments, and securities and investment products.” J.A. 9 (citation omitted).

The Board acknowledged the scope of the patent: “[t]he T91 patent relates to authenticating a web page and claims a particular manner of doing so.” J.A. 10 (citing the T91 patent at 1:16-18, 12:9-18). However, the Board reasoned that because “[t]he ’191 patent is directed to solving problems related to providing a web site to customers of financial institutions ... the T91 patent covers the ancillary activity related to a financial product or service of Web site management and functionality and so, according to the legislative history of the AIA, the method and apparatus of the T91 patent perform operations used in the administration of a financial product or service.” J.A. 10-11.

Despite recognizing our guidance in Versata Development Group, Inc. v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015), questioning the use of various legislators’ competing statements in the legislative history of the AIA, the Board “note[d] nonetheless that at least one legislator viewed ‘customer interfaces’ and Web site management and functionality,’ which are at issue here, as ancillary activities intended to be encompassed by the language ‘practice, administration and management’ of a financial product or service.” J.A. 11 (quoting 157 Cong. Rec. S1364-65 (daily ed. Mar. 8, 2011) (statement of Sen. Schumer)).

Further, while recognizing that the factor was not determinative, the Board observed that the patent owner’s allegations of infringement by “approximately fifty financial institutions is a factor weighing toward the conclusion that the ’191 patent claims a method or apparatus that at least is incidental to a financial activity, even if other types of companies also practice the claimed invention.” J.A. 11.

The Board stated that the ’191 patent disclosed “a need by financial institutions to ensure customers are confident that the financial institution’s web page is authentic.” J.A. 10 (citing the ’191 patent at 1:28-33). The Board also stated that the patent disclosed “alternative embodiments of the invention as being used by financial institutions.” Id. (citing 191 patent at 8:21-23, 11:23^0,11:52-67).

The Board then analyzed whether the 191 patent was for a “technological invention” — the exception to the CBM definition pursuant to AIA § 18(d)(1) and 37 C.F.R. § 42.301(b) — and determined that the 191 patent was not for a technological invention. The Board concluded its analysis of the issues, including the question of obviousness, and determined that all 32 claims of the 191 patent would have been obvious over the cited prior art and were therefore unpatentable.

Secure Axcess timely appeals the Board’s Final Written Decision; we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).

Discussion

As we have noted, appellant raises two issues on appeal. First, “whether United States Patent No. 7,631,191 is a ‘covered business method’ patent subject to review under Section 18 of the AIA.” Appellant’s Br. at 6. Appellant states that “[t]his is a patent-specific question that involves an issue of first impression that has broad implications for other CBM cases: Should a patent’s eligibility for CBM review be determined on its claim language in light of the specification as understood at the earliest effective filing date, or should the PTAB also consider post-grant evidence such as a patent owner’s litigation history?” Id.

The second issue raised by appellant relates to particular claim constructions made by the Board, which appellant alleges are unreasonable even under the ‘broadest reasonable interpretation’ standard the Board applied. According to appellant, the Board’s claim constructions fatally tainted the obviousness analysis.

1. Jurisdiction and Standard of Review

Neither party challenges this court’s authority to review on appeal a Final Written Decision of the Board, including, when challenged, whether the Board correctly determined that a particular patent was subject to Board review under the special provisions of AIA § 18 dealing with CBM patents. See 35 U.S.C. §§ 329,141-44; Versata, 793 F.3d at 1314-23.

We review the Board’s determination regarding whether the 191 patent is within the scope of the CBM statute under the Administrative Procedure Act (“APA”), specifically 5 U.S.C. § 706(2): “The reviewing court shall ... hold unlawful and set aside agency action, findings, and conclusions found to be — (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law ... [or] (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right. .. .”

Both appellant and appellees are of the view that the applicable standard of review in this case is whether the Board’s decision was arbitrary and capricious. That is incorrect. The issue here is not whether a particular patent falls within the properly-understood scope of the statutory definition of a CBM patent; rather, the issue here is whether the Board properly understood the scope of the statutory definition. That is a question of law. As we shall explain, we conclude that, as a matter of law, the statutory definition of a CBM patent precludes the Board’s determination. Thus the Board acted “not in accordance with law,” and “in excess of statutory jurisdiction, authority, [and] short of statutory right.”

2. The Statute and the Board’s Understanding

As the Supreme Court forcefully reminds, “in i interpreting a statute ... courts must presume that a legislature says in a statute what it means and means what it says.” Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992). In the statute before us, Congress did not leave the decision of what qualifies as a CBM patent to chance. The statute first states that “The Director may institute a [CBM proceeding under § 18] only for a patent that is a covered business method patent.” AIA § 18(a)(1)(E).

Congress then defined a “covered business method patent” as:

a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service ....

Id. § 18(d)(1).

a. A Patent That Claims ...

The statutory definition by' its terms makes what a patent “claims” determinative of the threshold requirement for coming within the defined class. The first definitional question presented by this statutory provision is whether the ™ requirement that the patent claim ‘something’ applies only to the first clause — a method or corresponding apparatus for performing data processing or other operations — or whether it applies to that clause and the second clause — used in the practice, etc., of a financial product or service. In order for a patent to qualify as a CBM patent, is it enough if the patent be one “that claims a method or corresponding apparatus,” as long as that method or apparatus is in fact “used in the practice ... of a financial product or service,” even if that use is not recited, whether explicitly or implicitly, by the patent’s claims? Or must the patent contain at least one claim to the effect that the method or apparatus is “used in the practice ... of a financial product or service”?

To sharpen the question in a way relevant to this case, we must first ask, what is meant by the phrase “a patent that claims” something? Claims how, and in what terms? Must that ‘something’ be found in that part of the patent document that is toward the end of the document and preceded typically by “I (or we) claim” or “the invention claimed is,” or the equivalent? If we look to the claim as such, what role do we assign to the written description?

Though this particular statutory phrasing — “patent that claims” — is not common, when viewed in context this language would seem to have a clear meaning, whether in the usual noun form of “claim,” or, as in this case, the verb form “claims.” It invokes one of the most familiar, settled concepts in patent law, derived directly from § 112(b). It is referring to the claims of the patent, which, as properly construed, define “the scope of the paten-tee’s rights.” See Teva Pharm. USA, Inc. v. Sandoz, Inc., — U.S. -, 135 S.Ct. 831, 835, — L.Ed.2d - (2015) (quoting Markman v. Westview Instruments, Inc., 517 U.S. 370, 372, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996)). And, as the Supreme Court instructs in such circumstances, it is therefore incorporating the established meaning of “claim.” See Evans v. United States, 504 U.S. 255, 259-60, 112 S.Ct. 1881, 119 L.Ed.2d 57 (1992) (quoting Morissette v. United States, 342 U.S. 246, 263, 72 S.Ct. 240, 96 L.Ed. 288 (1952)).

The matter does not end there, however. A claim in a patent does not live in isolation from the rest of the patent, as if it can be cut out of the document and read with Webster’s Dictionary at hand. Established patent doctrine requires that claims must be properly construed — that is, understood in light of the patent’s written description; that is a fundamental thesis in claim construction. Phillips v. AWH Corp., 415 F.3d 1303, 1312-17 (Fed. Cir. 2005) (en banc). Indeed, patent drafters can be their own lexicographers, using ordinary words in unordinary ways if the drafter, in the written description, clearly so indicates. It follows that under § 18(d)(1) the written description bears importantly on the proper construction of the claims. But the written description alone cannot substitute for what may be missing in the patent “claims,” and therefore does not in isolation determine CBM status.

Returning to our earlier question, reading the statute as applying only to the first phrase in the statutory definition would give the CBM program a virtually unconstrained reach. Under that reading, a patent would qualify if it claimed a method or corresponding apparatus for performing any operations that happen to be used in “the practice, administration, or management of a financial product or service.” The “practice, administration, or management of a financial product or service” phrase, as earlier noted, is not limited to the financial services industry, but reaches a wide range of sales and similar transactional activity. In fact, nearly everything that is invented can and likely will be used in someone’s sale of a good or service. If that use does not have to be part of the claim as properly construed, essentially every patent could be the subject of a CBM petition — a petition filed by any person sued for or charged with infringement at any time during the life of the CBM program.

Congress intended that the CBM program was to be more limited in scope than that. Its restriction to “covered business method” patents, and its temporary nature (eight years), make clear that it is a program established for a defined set of patents, not for virtually every patent. Moreover, in the AIA, the same statute that established the CBM program, Congress carefully set out limits on the inter partes review (“IPR”) program for review of patents after issuance. Persons sued for infringement had no more than one year to petition for IPR, and were restricted to presenting only certain §§ 102 and 103 grounds of unpatentability, thus excluding grounds based on, for example, § 101 or § 112. It is not sensible to read AIA § 18(d)(1) as obliterating these important limits for review of essentially ahy patent, subject only to the “technological invention” exception. See note 3, supra.

It follows that bifurcating the statute so that the phrase “a patent that claims” should apply only to the first phrase, and not to the entire definition Congress provided, would be radically out of keeping with the statute and congressional intent, considered in the context of other provisions in the statute.

Finally then, how are we to understand the phrase “a patent that claims”? It is the claims, in the traditional patent law sense, properly understood in light of the written description, that identifies a CBM patent. And for the reasons set out, what a qualifying patent must “claim” requires compliance with the clauses of the statutory definition.

We turn then to the second clause.

b. ... a financial product or service

The patent owner argued to the Board that the T91 patent was ineligible for CBM review because its invention was not directed to a financial product or service and can be used by institutions other than financial institutions. Specifically, the patent owner contended that covered financial products and services were limited to products and services such as credit, loans, real estate transactions, securities and investment products, and similar financial products and services.

The Board correctly pointed out that both the Patent Office in its rulemaking discussion, and this court in its then-recent Versata opinion, rejected that narrow view. (The patent owner submitted its argument before the Versata opinion issued.) We agree that the patent owner’s position before the Board is incorrect as too limiting, particularly since the argument is essentially the same one made to and rejected by us in Versata.

The Board, however, as part of its broader consideration of what is a “financial product or service,” concluded that “[t]he method and apparatus claimed by the ’191 patent perform operations used in the practice, administration, or management of a financial product or service and are incidental to a financial activity.” J.A. 10 (emphasis added). In Versata, to decide this part of the case it was enough to establish our jurisdiction to adjudge the question of the Board’s authority in a CBM case, and to conclude, as the Board had, that the patent in that case was a CBM patent under the statute. It was unnecessary to go further and opine about where the boundaries of the CBM definition lay.

More recently, in Unwired Planet, 841 F.3d at 1379-82, we were called upon to determine if the Board in that case had misstated the meaning of the statutory definition of what is a CBM patent. The Board, in determining that the patent under review was a CBM, did not limit itself to the express language of the statutory definition of a CBM patent. The Board explained that the inquiry of whether a particular patent is a CBM patent involved determining “whether the patent claims activities that are financial in nature, incidental to a financial activity, or' complementary to a financial activity.” Id. at 1378 (emphases added and citation omitted).

We. concluded in Unwired Planet that the emphasized phrases are not part of the statutory definition, and when used “as the legal standard to determine whether a patent is a CBM patent [that standard] was not in accordance with law.” Id. at 1382. We vacated the Board’s decision and remanded for the Board to decide, in the first instance using a correct statutory definition, whether the patent at issue is a CBM patent.

In arriving at its mistaken legal standard, the Board had cited to language used by the PTO in its comments during the process of adopting regulations regarding the AIA. See, comments of the Director upon promulgation of the regulation in 2012: “[T]he legislative history explains that the definition of covered business method patent was drafted to encompass patents ‘claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity.’ ” Transitional Program for Covered Business Method Patents — Definitions of Covered Business Method Patent and Technological Invention, 77 Fed. Reg. 48,-734, 48,735 (Aug. 14, 2012) (Final Rule) (quoting 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).

Despite these comments, in its final regulation defining what is a CBM patent the PTO simply adopted the statutory definition of a CBM patent without alteration or expansion. 37 C.F.R. § 42.301(a); see also Versata, 793 F.3d at 1323. The Board also referred to legislative history for remarks made by Senator Schumer. In Unwired Planet we found that no such extra-statutory sources were persuasive when the plain words of the statute did not support such additional interpretive phrases. See Unwired Planet, 841 F.3d at 1381-82.

In the case before us, the Board as part of its broader discussion of what is a “financial product or service,” concluded that “[t]he method and apparatus claimed by the 191 patent perform operations used in the practice, administration, or management of a financial product or service and are incidental to a financial activity.” J.A. 10 (emphasis added). Consistent with Un-wired Planet, we hold that the emphasized phrase is not a part of the statutory definition of what is a CBM patent, and, as we did in Unwired Planet, we conclude that such a definition of a CBM patent is beyond the scope of the statutory standard and thus “not in accordance with law.”

Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331 (Fed. Cir. 2016), is not to the contrary. There the phrase used by the Board was “financial in nature,” which does not involve the statutory broadening at issue in Unwired Planet. And the court in Blue Calypso agreed with the Board that “financial in nature” was an accurate overall description of the challenged claims, and therefore the patent was adjudged properly under the CBM rubric. See Blue Calypso, 815 F.3d at 1340.

This is not a quibble over abstract phrasing. In this case, the Board’s broadened definition of a CBM patent led it, in deciding the status of the 191 patent, to reach out beyond the question of whether the claims, as understood in light of the written description, met the statutory definition. The Board, in addition to relying on language found in the legislative history and in the PTO’s regulatory proceedings, took into consideration the litigation history of patent owner Secure Axcess in which it sued a large number of defendants who could be described as “financial” in their business activities.

But a patent owner’s choice of litigation targets could be influenced by a number of considerations, such as the volume of a particular target’s perceived infringement; the financial condition of the target; which targets are most likely to be willing to settle rather than bear the cost of litigating; available and friendly venues; and so on. Those choices do not necessarily define a patent as a CBM patent, nor even necessarily illuminate an understanding of the invention as claimed.

To be clear: the phrasing of a qualifying claim does not require particular talismanic words. When properly construed in light of the written description, the claim need only require one of a “wide range of finance-related activities,” examples of which can be found in the cases which we have held to be within the CBM provision. See Versata, 793 F.3d at 1312-13, 1325-26; Blue Calypso, 815 F.3d at 1339-40; SightSound, 809 F.3d at 1315-16.

In sum, if a patent that fits the term covered business method patent, as defined in AIA § 18(d)(1), is to be usefully distinguished from all other patents, the distinction will not lie based on non-statutory phrases like “incidental to” or “complementary to” financial activity. Such phrases can have unintended consequences. For example, it is safe to assume that most, if not virtually all, inventors of methods or products claimed in a patent have some expectation that complementary financial activity will result — stated another way, that eventually their invention will produce financial rewards for their efforts. A definition that could sweep that broadly obviously will not do. Necessarily, the statutory definition of a CBM patent requires that the patent have a claim that contains, however phrased, a financial activity element.

3. The Remedy

Having determined that the Board erred in deciding this case ás a CBM under its overly-broad statutory definition, we are confronted with determining the appropriate remedy. Secure Axcess, believing that the Board misapplied the statute, asks that we vacate the Board’s determination that this is a CBM patent, and remand for the Board to decide the CBM question under the correct definition.

The Board considered claims 1 and 17, among others, reproduced above, as illustrative of the claimed subject matter. J.A. at 7-8. In the course of its decision, the Board made several claim construction determinations based on its ‘broadest reasonable construction’ standard, approved by the Supreme Court in Cuozzo. See Cuozzo Speed Techs., LLC v. Lee, — U.S. -, 136 S.Ct. 2131, 2142-46, 195 L.Ed.2d 423 (2016). Secure Axcess objects to several of these rulings, specifically those related to the issue of whether the patent requires an authenticity key to be used to, or provide the ability to, determine the location of a preferences file, and that these claim constructions tainted the court’s obviousness determinations. However that may be, for purposes of deciding whether the claims qualify the patent as a CBM patent, we find that the Board’s constructions are reasonable in light of the Board’s standard of review.

In that light, and giving the paten-tee the broad scope available for claiming “the practice, administration, or management of a financial product or service,” we have examined with care the relevant claims as set forth earlier. Based on the record before us, and applying the definition of a CBM patent provided by Congress in AIA § 18(d), and viewed as of the earliest effective filing date, we do not find in the ’191 patent, when the claims are properly construed in light of the written description, a single claim that could qualify this patent as a “patent that claims ... a method or corresponding apparatus ... used in the practice [etc.] of a financial product or service.” Like the lightbulb example in Unwired Planet, just because an invention could be used by various institutions that include a financial institution, among others, does not mean a patent on the invention qualifies under the proper definition of a CBM patent.

A remand to the Board for further consideration of the question whether this patent qualifies as a CBM thus would be a wasteful act, since an affirmative finding, applying the proper statutory definition, that this patent so qualifies would be, in terms of the APA standard, arbitrary or capricious. The Board’s conclusion that this is a CBM patent is reversed. The Board’s other determinations, including claim constructions as they bear on obviousness and the obviousness determination itself, are vacated.

Conclusion

Reversed in part; vacated in part.

Costs

No costs.

LOURIE, Circuit Judge,

dissenting.

I respectfully dissent from the majority’s conclusion that the claims of the ’191 patent are not directed to a covered business method (“CBM”) and hence are not subject to review under AIA § 18. See Leahy-Smith America , Invents Act (“AIA”), Pub. L. No. 112-29, § 18, 125 Stat. 284, 329-31 (2011).

The statute defines a CBM patent ás “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.” Id. at § 18(d)(1). The claims of the T91 patent are surely claims to “a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.” Id. (emphasis added).

Claim 1 recites “[a] method comprising: transforming ... received data ... to create formatted data....” ’191 patent col. 12 11. 9-18. Claim 17 recites “[a]n authentication system comprising: an authentication processor configured to insert an authenticity key into formatted data to enable authentication of the authenticity key to verify a source of the formatted data....” Id. col. 12 11. 62-67. There can be little doubt that such claims meet the “method or apparatus for performing data processing” limitation of the statute.

They also meet the “financial product or service” language of the statute. Examination of the T91 patent makes clear that the invention is to be used in the management of a financial service. The exemplary embodiment is described, inter alia, as follows:

The customer and merchant may represent individual people, entities, or business. The bank may represent other types of card issuing institutions, such as credit card companies, card sponsoring companies, or third party issuers under contract with financial institutions ...'. The bank has a computing center shown as a main frame computer. However, the bank computing center may be implemented in other forms, such as a mini-computer, a PC server, a network set of computers, and the like.... Any merchant computer and bank computer are interconnected via a second network, referred to as a payment network. The payment network represents existing proprietary networks that presently accommodate transactions for credit cards, debit cards, and other types of financial/banking cards. The payment network is a closed network that is assumed to be secure from eavesdroppers. Examples of the payment network include the American Express®, VisaNet® and the Yeriphone® network. In an exemplary embodiment, the electronic commerce system is implemented at the customer and issuing bank. In an exemplary implementation, the electronic commerce system is implemented as computer software modules loaded onto the customer computer and the banking computing center. The merchant computer does not require any additional software to participate in the online commerce transactions supported by the online commerce system.

Id. col. 11 11. 22-67. Similarly, the ’191 patent uses “bigbank.com” as the only exemplary URL. Id. col. 1 11. 29-33, col. 8 11. 21-23. No other applications of the invention are described in the patent.

And, if there were any doubt of the use of the invention in financial management, the identity of the companies Secure Ax-' cess, LLC (“Secure Axcess”) has sued for infringement of the 191 patent should settle the matter. Their litigation pattern speaks volumes about what they believe their invention is “used” for.

Secure Axcess filed complaints alleging that the following companies infringe the 191 patent by “using” the invention: PNC Bank National Association, PNC Financial Services Group, Inc., U.S. Bank National Association, U.S. Bancorp, Bank of the West, BNP Paribas, Cantander Bank, N.A., Ally Financial Inc., Ally Bank, GE Capital Retail Bank, GE Capital Bank, General Electric Capital Corporation, General Electric Company, Raymond James & Associates, Inc., Raymond James Financial, Inc., Trustmark National Bank, Trust-mark Corporation, Nationwide Financial Services, Inc., Nationwide Corporation, Nationwide Mutual Insurance Company, Nationwide Bank, Cadence Bank, N.A., Commerce Bank, Commerce Bancshares, Inc., Santander Bank, N.A., Vanguard Group Inc., Vanguard Marketing Corporation, Charles Schwab Bank, Charles Schwab Corporation, Ocwen Financial Corporation, Orange Savings Bank, SSB, First Financial Bank National Association, First Financial Bankshares, Inc., Texas Capital Bank, N.A., Texas Capital Banc-shares, Inc., T. Rowe Price Investment Services, Inc., T. Rowe Price Associates, Inc., T. Rowe Price Group, Inc., Bank of America Corporation, Bank of America, N.A., A.N.B. Holding Company, Ltd., American National Bank of Texas, Arvest Bank Group, Inc., Arvest Bank, Austin Bankcorp, Inc., Austin Bank, Texas N.A., Bank of the Ozarks, Inc., Bank of the Ozarks, Citizens 1st Bank, Compass Banc-shares, Inc., Compass Bank, Cullen/Frost Bankers, Inc., the Frost National Bank, Diboll State Bancshares, Inc., First Bank & Trust East Texas, First Community Bancshares, Inc., First National Bank Texas, First National of Nebraska, Inc., First National Bank of Omaha, First National Bank Southwest, Sterling- Bancshares, Inc., Sterling Bank, Harris Bankcorp., Inc., Harris N.A., Intouch Credit Union, Credit Union, ING Direct Bancorp, ING Bank, FSB, North Dallas Bank & Trust Co., Zions Bancorportion, Zions First National Bank, and Amegy Bank N.A.

Moreover, at oral argument, Secure Ax-cess’s counsel, in response to a question, stated that no companies have been sued other than financial institutions. Oral Argument at 7:15-7:30, Secure Axcess, LLC v. PNC Bank N.A., No. 16-1353 (Fed. Cir. Nov. 2, 2016), available at http://www.cafc. uscourts.gov/oral-argument-recordings?-title=&field_case_number_value=2016-1353&íielcLdate_-value2% 5Bvalue% 5D% 5Bdate% 5D=&=Search.

It is true that the word “financial” does not appear in the claims. However, that fact should not decide this case. See Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1325 (Fed. Cir. 2015) (holding that “the definition of ‘covered business method patent’ is not limited to products and services of only the financial industry, or to patents owned by or directly affecting the activities of financial institutions”); see also Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1338 (Fed. Cir. 2016) (affirming Board’s decision “declinfing] to limit application of CBM review to patent claims tied to the financial sector”); SightSound Techs., LLC v. Apple Inc., 809 F.3d 1307, 1315 (Fed. Cir. 2015) (explaining Ver-sata “foreclosed” limiting the CBM patent definition to patents “directed to the management of money, banking, or investment or credit”). As a matter of patent law, claims do not necessarily need to recite uses of products. Certainly, claims to products or apparatuses do not (note that AIA § 18(d)(1) refers to a “method or corresponding apparatus”). And, if a method claim otherwise satisfies the requirements of 35 U.S.C. § 112, it need not recite an ultimate use.

The written description of the T91 patent, in accordance with the requirements of the statute, see 35 U.S.C. § 112 (“The specification shall contain a written description of the invention, and of the manner and process of ... using it....”), tells us that the invention is to be used for financial management. See T91 patent col. 11 11. 22-67; see also id. col. 1 11. 29-33, col. 8 11. 21-23. The inventors, complying with the statute, thus told us what the invention is to be used for. The claims recite an invention used in the practice of a financial product, and the uses are described in the written description of the patent.

In my view, the Board correctly concluded that the “method and apparatus claimed by the ’191 patent perform operations used in the practice, administration, or management of a financial product or service,” in accordance with the CBM patent statutory definition. PNC Bank, N.A. v. Secure Axcess, LLC, No. CBM2014-00100, 2015 WL 5316490, at *5 (P.T.A.B. Sept. 8, 2015). It is true that the Board also used overly broad language in stating in the alternative that the “method and apparatus claimed by the T91 patent ... are incidental to a financial activity.” Id. (emphasis added). And the Board did state .that “the T91 patent claims a method or apparatus that at least is incidental to a financial activity, even if other types of companies also practice the claimed invention.” Id. at *6. But overstatement does not change the basic fact that, as the written description of the patent itself indicates, the invention is directed to a method and apparatus used in financial management, as referred to in the statute. See, e.g., Blue Calypso, 815 F.3d at 1339 n.2 (explaining the Board correctly concluded that claims referring to “an incentive program” were eligible for CBM review where the patent “repeatedly, and almost exclusively discloses ‘incentive’ and ‘incentive program’ in a financial context”) (internal citation omitted).

I do recognize that the Board’s overly broad language, ie., “incidental to a financial activity,” has now been cabined by our recently issued decision in Unwired Planet, LLC v. Google Inc., 841 F.3d 1376 (Fed. Cir. 2016). That curtailment should not cause this panel to topple over an otherwise sound decision by the Board in this case that the ’191 patent is directed to financial management. Such a decision was not based only on the forbidden language. See PNC Bank, 2015 WL 5316490, at *10 (“Having determined that the T91 patent claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service and does not fall within the exception for technological inventions, we maintain our determination that the T91 patent is eligible for a covered business method patent review.”).

The majority attempts to escape the clear purport of the invention by ranging into a discussion of the meaning of claims in patent law. Its use of language such as “on occasion,” “might be considered,” and “at least facially” pointedly overlooks the nature of the invention and the meaning of the statute. The opinion has subsections headed “A patent that claims ...” and “... a financial product or service,” but it virtually ignores the statutory language “used in the practice.” The written description clearly describes how this invention is “used in the practice” of a financial product. And, while not conclusive, the post-issuance litigation history makes the point unmistakable. To ignore that is to close one’s eyes to the obvious.

The majority disparages the clear use of this invention in the practice of a financial product or service by worrying that the CBM program would have “virtually unconstrained reach” and that “a patent would qualify [for CBM review] if it claimed a method or corresponding apparatus for performing any operations that happen to be used in ‘the practice, administration, or management of a financial product or service.’ ” The answer to such concerns' is that we need not probe the limits of the statutory language by reciting all sorts of non-financial products to show that a sensible interpretation of this statute must include what Secure Axcess itself considers a financial product. Common sense is not precluded from use in interpreting statutes and claims. Suffice it to say that the relation of this invention to the financial world is one of substantial identity compared with an incidentally-used invention like a lightbulb or ditch-digging. Cf. Unwired Planet, 841 F.3d at 1382.

I therefore respectfully dissent from the conclusion that the ’191 patent is not a CBM patent.

      . In a separate proceeding, the Board declined to institute a fourth CBM review of the '191 patent. PNC Bank, N.A. v. Secure Axcess, LLC, CBM2015-00039, 2015 WL 4467374 (PTAB July 10, 2015).

      . See Dickinson v. Zurko, 527 U.S. 150, 119 S.Ct 1816, 144 L.Ed.2d 143 (1999) (the United States Patent and Trademark Office is an administrative agency and as such is subject to the APA).

      . SightSound Technologies, LLC v. Apple Inc., 809 F.3d 1307 (Fed. Cir. 2015), is miscited for the arbitrary or capricious standard. In Sight-Sound, this court observed that there was no statutory-interpretation issue to be decided, because "the only legal questions regarding application of AIA § 18 were decided” by an earlier precedent of this court. Id. at 1315. All that was presented for decision was whether the particular patents came within the legal standards that themselves were no longer subject to dispute in the case.' On that patent-specific law-application question, the court asked whether the Board's determination was arbitrary or capricious, and supported by substantial evidence. Id. at 1315-16. A question of legal interpretation, the statutory interpretation question that is dispositive here, is not reviewed under the 'arbitrary or capricious’ or 'substantial evidence’ portions of 5 U.S.C. § 706.

      .There is an exception, not relevant here, for "technological inventions.” For a discussion of the meaning of that term, at least as best it can be understood, see Versata, 793 F.3d at 1323, 1326-27.

      . It appears on only two other occasions and is nowhere defined. See 35 U.S.C. § 291 (2016); 42 U.S.C. § 262; see also 35 U.S.C. § 156 ("patent which claims”).

      . "[W]here Congress borrows terms of art in which are accumulated the legal tradition and meaning of centuries of practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken and the meaning its use will convey to the judicial mind unless otherwise instructed. In such case, absence of contrary direction may be taken as satisfaction with widely accepted definitions, not as a departure from them.”

      . See, e.g., In re Morris, 127 F.3d 1048 (Fed. Cir. 1997) (holding that, in reviewing a claim construction decided under the 'broadest reasonable interpretation’ standard, we determine whether the interpretation is within the range of reasonableness).

      . Section 18 of the AIA, pertaining to CBM review, is not codified. References to AIA § 18 herein are to the statutes at large,


source: Caselaw Access Project

author: KAYATTA, Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. Oscar DELGADO-SÁNCHEZ, Defendant, Appellant.
    No. 15-2262
    United States Court of Appeals, First Circuit.
    February 17, 2017

      Thomas J. O’Connor, Jr. for appellant.
    Mainon A. Schwartz, Assistant United States Attorney, with whom Rosa Emilia Rodríguez-Vélez, United States Attorney, and Mariana E. Bauzá-Ahnonte, Assistant United States Attorney, Chief, Appellate Division, were on brief, for appellee.
    Before HOWARD, Chief Judge, TORRUELLA and KAYATTA, Circuit Judges.
   KAYATTA, Circuit Judge.

Oscar Delgado-Sánchez (“Delgado”) pled guilty to one count of being a prohibited person in possession of a firearm in violation of 18 U.S.C. § 922(g)(1). Delgado now appeals his upwardly variant sentence of seventy-two months in prison. He contends that his guidelines sentencing range was miscalculated because the district court erroneously found at least one of his prior convictions to be for a “crime of violence.” He also takes issue with what he claims were procedural missteps at sentencing, and he argues that the district court based his above-guidelines sentence on factors that should not have been considered. For the following reasons, we disagree and affirm Delgado’s sentence in full.

I. Background

In March 2015, police obtained a search warrant for Delgado’s residence after they observed him carrying an AK-47 outside of his home. When officers arrived to execute the search, Delgado allowed them inside, confessed that he had the firearm, and told the officers where they could find ah additional magazine and ammunition. The police arrested Delgado and seized the weapon, which was capable of automatic fire and which was loaded with one magazine containing twenty-nine rounds of ammunition. They also seized one more magazine and sixteen additional rounds of ammunition. Delgado pled guilty to being a prohibited person in possession of a firearm in violation of 18 U.S.C. § 922(g)(1).

The U.S. Probation Office’s presentence investigation report assigned Delgado a criminal history score of seven, the sum of the criminal history points attributable to three prior convictions. The first conviction, worth three criminal history points under U.S.S.G. § 4A1.1(a), arose out of a 2008 arrest in San Lorenzo, Puerto Rico, for violating Article 404 of the Puerto Rico Controlled Substances Law, P.R. Laws Ann. tit. 24, § 2404. The second conviction, also worth three criminal history points under U.S.S.G. § 4A1.1(a), arose out of Delgado’s 2009 arrest in Las Piedras, Puerto Rico. In that case, Delgado pled guilty to one count of violating Article 198 of the Puerto Rico Penal Code (Robbery) (“Article 198”), P.R. Laws Ann. tit. 33, § 4826, and three counts of violating Article 5.15 of the Puerto Rico Weapons Law (Discharging or Pointing Firearms) (“Article 5.15”), P.R. Laws Ann. tit. 25, § 458n(a). The presentence report explained that “[a]ccording to certified court documents,” Delgado and an accomplice “through the use of violence and intimidation” and “using a dangerous weapon ... robbed $60.00 in cash ... in the immediate presence of [a person],” and Delgado “aimed [a] firearm at [the person] and announced the robbery.”

Delgado’s third conviction, worth one criminal history point pursuant to U.S.S.G. § 4A1.1(e), followed a guilty plea to three counts of robbery under Article 198 and three counts of unlawfully discharging or pointing a firearm in violation of Article 5.15. According to the presentence report, “certified court documents” revealed that these offenses arose out of two separate robberies and a shooting in Yabucoa on March 24, 2009. First, Delgado “robbed a cash register, $413[ ] in cash and between 12 and 15 cigarette boxes from [a store] through the use of violence and/or intimidation in the immediate presence of [a person]. He also robbed $177 in cash belonging to [another person] through the use of violence and/or intimidation.” Second, at 4:15 P.M., Delgado, “in possession of a black 9mm firearm,” robbed a business of all of the proceeds from the day’s sales and some horse products totaling about $800. During the robbery, Delgado asked an individual victim where he could find the safe and instructed that individual to “hit the safe in order to open it and give me all the money.” Finally, “[a]ccording to certified court documents,” Delgado “shot 4 to 5 rounds into the air from a black 9mm firearm” at 5:00 P.M.

The presentence report also alerted the parties and the court that probation was aware that Delgado had been arrested on at least four other occasions.

First, the report indicated that Delgado had been arrested in San Lorenzo in July 2008 and charged with two counts of violating the Puerto Rico Weapons Law for possessing and carrying without a license a loaded weapon with an obliterated serial number. These charges, probation reported, were dismissed in a preliminary hearing upon a finding of no probable cause.

Second, the report stated that Delgado was arrested in Yabucoa in November 2008 on grounds that (1) he committed two violations of the Puerto Rico Controlled Substances Law, and (2) he possessed two loaded firearms, one of which he used to rob a bar of cash and goods “through the use of violence and intimidation” in violation of the robbery statute and the Weapons Law. The Controlled Substances Law charges were dismissed for lack of probable cause, and, because Delgado was detained for more than thirty days without a preliminary hearing, the robbery and firearms charges were dismissed pursuant to Rule 64(n)(5) of the Puerto Rico Rules of Criminal Procedure, P.R. Laws Ann. tit. 34, App. II, § 64(n)(5).

Third, the report detailed another November 2008 arrest in Yabucoa on charges that Delgado violated two provisions of the Weapons Law by carrying two loaded firearms without a license, one of which had an obliterated serial number. These charges were dismissed under the Commonwealth’s Rule 64(n)(4), id. § 64(n)(4), because Delgado was not tried within 120 days after his arraignment.

Fourth and finally, the report alerted the parties that probation was aware that Delgado was facing pending charges stemming from a December 2013 arrest. In that case, Delgado was charged with discharging or pointing a firearm in violation of Article 5.15 and unlicensed carrying/using of a firearm in violation of Article 5.04 of the Weapons Law, along with Aggravated Robbery in violation of Article 190(e) of the Puerto Rico Penal Code. The report noted that Delgado’s trial on these charges was scheduled for early September 2015.

In a separate section of the presentence report, probation concluded that Delgado should be subject to U.S.S.G. § 2K2.1(a)(3), which provides that when an individual is convicted of an offense involving certain types of firearm and was previously convicted of a felony “crime of violence,” his base offense level is twenty-two. Probation did not specify which of Delgado’s previous convictions served as the basis for the “crime of violence” designation. Subtracting three levels based on Delgado’s demonstrated acceptance of responsibility, probation proposed that Delgado’s total offense level should be set at nineteen.

In the nearly two months that passed between the date he was served with the presentence report and the date he appeared for sentencing, Delgado lodged no objections to the presentence report. Rather, he submitted a sentencing memorandum limited to urging the court to engage in a downward variance on account of a chronic medical condition (the nature of which is not germane to this appeal). When Delgado appeared before the district court for sentencing on September 24, 2015, his attorney informed the court that he had nothing to say on Delgado’s behalf “other than what I have expressed in my sentencing memorandum.” Delgado, too, declined the court’s offer to speak on the record.

The district court determined that the presentence report’s calculations were correct: Delgado’s base offense level was twenty-two “because Mr. Delgado has been convicted of possessing a firearm which is described in Title 26, United States Code, Section 5845(a) after having been convicted for a crime of violence, robbery and brandishing a firearm during the robbery.” With adjustments for acceptance of responsibility, his total offense level was nineteen. And he was in Criminal History Category TV with a criminal history score of eight—the seven points described above plus one additional point that Delgado earned when a jury convicted him at some point in the intervening months on the charges arising from his December 2013 arrest. The advisory guidelines, the court found, thus recommended a sentence of forty-six to fifty-seven months’ imprisonment, plus a fine and a term of supervised release.

The district court then proceeded to consider the sentencing factors in 18 U.S.C. § 3553(a). The court took note of Delgado’s age, education, employment, and history of drug addiction. It also observed that Delgado had numerous convictions and dismissed charges for firearms offenses, and it expressed concern with Delgado’s statement to probation that he committed robberies because he “liked to.” Finding that, in light of these facts and the Commonwealth’s serious gun violence problem, a sentence within the proposed guidelines range of forty-six to fifty-seven months would not achieve the goals of punishment, the district court sentenced Delgado to seventy-two months’ imprisonment followed by a three-year term of supervised release. Delgado timely appealed.

II. Discussion

A. “Crime of Violence”

Delgado’s lead argument is that the district court erred in calculating his guidelines sentencing range because it improperly classified one of his prior convictions as a conviction for a “crime of violence” under U.S.S.G. § 2K2.1(a)(3). That provision advises courts sentencing defendants convicted of certain firearms offenses to assign a base offense level of twenty-two if “the defendant committed any part of the instant offense subsequent to sustaining one felony conviction of ... a crime of violence.” A felony “crime of violence” is “any offense under federal or state law, punishable by imprisonment for a term exceeding one year, that ... has as an element the use, attempted use, or threatened use of physical force against the person of another.” U.S.S.G. § 4B1.2(a)(1); see also id. § 2K2.1 cmt. n.1 (adopting definition of “crime of violence” in § 4B1.2). Physical force is “violent force—that is, force capable of causing physical pain or injury to another person.” United States v. Martinez, 762 F.3d 127, 133 (1st Cir. 2014) (quoting Johnson v. United States, 559 U.S. 133, 140, 130 S.Ct. 1265, 176 L.Ed.2d 1 (2010)). If a criminal defendant has no prior convictions, or none of his prior convictions is for a crime of violence, § 2K2.1(a)(3) cannot be applied to set the defendant’s base offense level.

Delgado did not raise this argument at sentencing. Indeed, he raised no objections at all at sentencing. For this reason, we are faced at the outset with a dispute concerning whether, and by what standard, we may review Delgado’s arguments on appeal.

Ordinarily, a party who fails to lodge an objection or raise an argument below is deemed to have forfeited the argument and faces plain error review. See, e.g., United States v. Sánchez-Berríos, 424 F.3d 65, 74 (1st Cir. 2005). But where a party “intentionally] relinquish[es] or abandon[s] ... a known right” and that right is waivable, he may not revive his waived argument on appeal at all. United States v. Olano, 507 U.S. 725, 732-34, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993) (quoting Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938)). We treat differently waived and forfeited claims because “waiver implies an intention to forgo a known right, whereas forfeiture implies something less deliberate— say, oversight, inadvertence, or neglect in asserting a potential right.” United States v. Eisom, 585 F.3d 552, 556 (1st Cir. 2009). The government asks us to deem waived and therefore not reviewable Delgado’s challenge to the presentence report’s designation (and the district court’s decision to adopt it) that § 2K2.1(a)(3) applies. Delgado admits that he failed to preserve the arguments he advances on appeal, but nevertheless urges us to review the district court’s decision for plain error.

We have noted that “a powerful case for waiver” is presented where a defendant “eschews a warrantable objection to a conclusion reached in a presentence report” because doing so “lulls both the prosecution and the sentencing court into what will prove to be a false sense of security if he is later allowed to do an about-face.” United States v. Turbides-Leonardo, 468 F.3d 34, 38 (1st Cir. 2006). This argument carries particular weight where, as here, “given the appellant’s ready acquiescence in the characterization of his earlier conviction ... few prosecutors would have felt a need to bring in the original record of conviction and few judges would have felt a responsibility to probe the point more deeply.” Id. And, as the government points out, Delgado may have had some incentive not to encourage the district court to delve deeply into his criminal history: in light of his having been convicted on multiple occasions of both robbery and discharging or pointing firearms, it is possible that the district court might have found that his record showed he had committed more than one crime of violence and thus set his base offense level even higher than the presentence report recommended. See U.S.S.G. § 2K2.1(a)(1) (setting the base offense level at twenty-six for defendants convicted of an offense involving a firearm described in 26 U.S.C. § 5845(a) who have been convicted of two or more felony crimes of violence).

Still, “[w]here a defendant’s claim would fail even if reviewed for plain error, we have often declined to decide whether the defendant’s failure to raise the issue below constituted waiver or mere forfeiture.” United States v. Acevedo-Sueros, 826 F.3d 21, 24 (1st Cir. 2016) (citing United States v. Aguasvivas-Castillo, 668 F.3d 7, 13-14 (1st Cir. 2012)); see also, e.g., United States v. Delgado-López, 837 F.3d 131, 135 n.2 (1st Cir. 2016); United States v. Arsenault, 833 F.3d 24, 28 & n.2 (1st Cir. 2016). Because Delgado’s arguments fail under plain error review, we decline to decide whether Delgado’s failure to object to the presentence report constitutes a waiver. Instead, applying plain error review, we ask whether Delgado can show “(1) that an error occurred (2) which was clear or obvious and which not only (3) affected [his] substantial rights, but also (4) seriously impaired the fairness, integrity, or public reputation of the judicial proceedings.” Arsenault, 833 F.3d at 29 (alteration in original) (quoting United States v. Ruiz-Huertas, 792 F.3d 223, 226 (1st Cir. 2015)).

To determine whether a defendant’s prior convictions were for crimes of violence, we apply the “categorical approach” set forth by the Supreme Court in Taylor v. United States, 495 U.S. 575, 600-02, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990). In short, we “look to the elements of the prior convictions as defined by the relevant statute[s] — not to the particular facts underlying the convictions.” United States v. Castro-Vázquez, 802 F.3d 28, 35 (1st Cir. 2015) (citing Descamps v. United States, — U.S. -, 133 S.Ct. 2276, 2283, 186 L.Ed.2d 438 (2013)). If the state (or, as in this case, the Commonwealth of Puerto Rico) defines the crime of conviction broadly enough that it may be committed without the “use, attempted use, or threatened use of physical force against the person of another,” U.S.S.G. § 4B1.2(a)(l), then the conviction cannot be used to set the defendant’s base offense level under § 2K2.1(a)(3) based on it being for a “crime of- violence” under § 4B1.2(a)(1). United States v. Serrano-Mercado, 784 F.3d 838, 842-44 (1st Cir. 2015), cert. denied, — U.S. -, 137 S.Ct. 812, 196 L.Ed.2d 599, 2017 WL 160457 (2017).

If the statute under which the defendant was previously convicted is divisible, meaning “it comprises multiple, alternative versions of a crime not all of which qualify as a predicate offense,” courts apply a “modified” categorical approach. Castro-Vázquez, 802 F.3d at 35; see also Mathis v. United States, — U.S. —, 136 S.Ct. 2243, 2249, 195 L.Ed.2d 604 (2016). Under this approach, we may refer to “Shepard” documents, see Shepard v. United States, 544 U.S. 13, 17, 25-26, 125 S.Ct. 1254, 161 L.Ed.2d 205 (2005), including “charging documents, plea agreements, plea colloquies, jury instructions, and verdict forms,” in order “to determine which of a statute’s alternative elements formed the basis of the prior conviction.” Castro-Vázquez, 802 F.3d at 35.

The district court’s explanation for applying § 2K2.1(a)(3) to Delgado was that he had previously been convicted of “a crime of violence, robbery and brandishing a firearm during the robbery.” But prior to Delgado’s conviction in this case, he had never been convicted of any single offense whose elements could be said to include both the forceful taking of property and the brandishing of a firearm. See P.R. Laws Ann. tit. 33, § 4826 (robbery does not involve brandishing of a firearm); P.R. Laws Ann. tit. 25, § 458n(a) (brandishing need not occur in the course of a robbery to be unlawful discharge or pointing of a firearm). Delgado argues that this error in describing what conviction the court found to be a crime of violence requires that the finding be set aside.

We disagree. True, the district court could have been more explicit when it identified the predicate offense that it viewed as justifying the application of § 2K2.1(a)(3). But we think it reasonably clear, based on the way the court described the crime, that the court was referring to the several convictions that arose out of Delgado’s March 2009 arrest for aiming a firearm at a person and announcing and carrying out a robbery. As a result of that arrest, Delgado pled guilty to one count of robbery in violation of Article 198 and three counts of discharging or pointing a firearm in violation of Article 5.15. We encourage district courts to identify predicate crimes of violence with care and precision, but we do not find any error here, where the record makes plain our task on appeal.

Our discussion begins and ends with Delgado’s 2009 convictions under Article 5.15, which provides, in relevant part:

(a) Any person shall be found guilty of a felony ... who, except in cases of self defense or defense of third parties, or actions in the performance of official duties or legitimate sports activities:
(1) Willfully fires any weapon in a public place or any other place where there is any person who could be harmed, even though he/ she causes no harm whatsoever to any person, or
(2) intentionally, although without malice aforethought, points a weapon towards a person, even though he/she causes no harm whatsoever to any person.

P.R. Laws Ann. tit. 25, § 458n(a). In his opening brief, Delgado argued that a conviction under Article 5.15 cannot be a predicate offense meriting application of § 2K2.1(a)(3) because it “can be completed without the intentional use of violen[t] force on any individual.” At' oral argument and on reply, Delgado expounded this argument, claiming that Article 5.15 is an indivisible statute that sets forth a single crime that is not categorically violent. He also argued that whether indivisible or divisible, Article 5.15 cannot serve as a predicate offense justifying application of § 2K2.1(a)(3).

We are unpersuaded by Delgado’s contention that Article 5.15 is indivisible. Where a statute is indivisible but lists multiple, alternative means of satisfying an element, one or more of which can be achieved without violence, the crime defined therein is not categorically a “crime of violence” even if the defendant committed it by violent means identified in the statute. Cf. Mathis, 136 S.Ct. at 2251. A divisible statute, on the other hand, “list[s] elements in the alternative, and thereby define[s] multiple crimes”; if one of those crimes is categorically violent, it can serve as a predicate offense so long as the defendant’s conviction under the statute was for that version of the crime. Id. at 2249. To determine whether statutory alternatives are “elements” or “means,” we look to case law interpreting the statute, unless the “statute on its face ... resolvefc] the issue.” See id at 2256. When the statute and the case law do not provide a clear answer, courts may look to other relevant documents for the purpose of determining what elements must be proved to secure a conviction under the statute. Id. at 2256-57.

Neither party points us to any case law interpreting Article 5.15, but the statute’s plain text and structure strongly suggest that it is divisible, providing two alternative sets of elements for two different crimes. The statute sets a criminal penalty for two entirely distinct courses of conduct with entirely distinct required mental states. The statute’s structure makes clear that a defendant is guilty of “discharging” but not “pointing” when he willfully fires a weapon in a public place but does not aim the weapon at anyone, and that a defendant is guilty of “pointing” but not “discharging” when he intentionally aims a firearm at another person but does not fire it.

The Commonwealth’s pattern jury instructions for Article 5.15 suggest the same. In the English-language translation Delgado has provided, judges are tasked with determining which crime the government charged under the statute and describing only that crime to the jury. The instructions then provide the judge with a menu of options, one of which is “[discharging a weapon in a public place or in another location where a person could have suffered harm, even if no person was harmed,” and another of which is “[ijnten-tionally, even if without malice, aiming a firearm towards a person, even if no person was harmed.” The judge is directed to choose whether the criminal act charged is “aiming” or “discharging” and instruct the jury about the applicable “essential element! ]” accordingly. Delgado contends that the instructions show the statute to be indivisible, but they do not; rather, to the extent they lend any insight, they confirm our. reading by providing alternative versions of the crime’s elements, negating any possibility that a jury need not find unanimously that the selected version has been proven beyond a reasonable doubt.

Having determined the statute is divisible, we proceed to determine whether either version of the crime provided under Article 5.15 is categorically a “crime of violence.” The elements of the offense described in Article 5.15(a)(2) (intentionally pointing a weapon towards a person) might comprise one. The government argues that to point a firearm at someone intentionally — when not done in self-defense, defense of another, or in the performance of official duties or legitimate sports activities — is, in all cases, to threaten the use of physical force against that person. Delgado, in opposition, contends, first, that Puerto Rico’s decision to explicitly provide in the statute that pointing under Article 5.15 can be committed without malice aforethought shows that the crime can be committed unintentionally or without the threatened use of force. He argues, second, that pointing is not categorically a crime of violence because a person can be convicted under this version of the offense even where, for instance, the victim is unaware that a gun is being pointed at him, or is aware of the pointing but knows that the offender is joking or the gun is not loaded. This, he argues, does not constitute use, attempted use, or threatened use of force against the person of another.

Delgado’s first argument is easily dismissed. The definition of a crime of violence does not include malice as an element; intentionality suffices. See, e.g., United States v. Tavares, 843 F.3d 1, 13 (1st Cir. 2016) (when performed with a dangerous weapon, ‘“the intentional and unjustified use of force upon the person of another, however slight’ — constitutes a crime of violence under § 4B1.2(a)(1) of the Guidelines”); United States v. Whindleton, 797 F.3d 105, 113-16 (1st Cir. 2015) (same), cert. dismissed, — U.S. —, 137 S.Ct. 23, 195 L.Ed.2d 896 (2016), and cert. denied, — U.S. —, 137 S.Ct. 179, 196 L.Ed.2d 147 (2016).

Delgado’s second argument, however, is not so easily dismissed. The challenge is how to define the phrase “threatened use of physical force” in U.S.S.G. § 4B1.2(a)(1). One might read the phrase narrowly to require “communieat[ing] intent to inflict harm,” see Threat, Black’s Law Dictionary (10th ed. 2014) (definition #1), in which case pointing a firearm at a person without that person’s knowledge— arguably a method of committing the offense described in Article 5.15(a)(2)— would not qualify. Or, one might read the phrase as also including the creation of some “thing that might well cause harm.” Id. (definition #3). If this broader definition of “threat” is the one we should be using to interpret “threatened use of force” in the guidelines, a violation of Article 5.15(a)(2) would seem to fit. It would make no difference, for the purposes of determining whether pointing “might well cause” the use of force against the victim, whether the person at whom the firearm is aimed is 'aware of the threat that has been created.

Ultimately, we need not definitively answer this question. Delgado points to no precedent (nor are we aware of any) that construes U.S.S.G. § 4B1.2(a)(1) as excluding the latter definition of a “threatened use of physical force against the person of another.” See also United States v. Cortez-Arias, 403 F.3d 1111, 1116 (9th Cir. 2005) (observing that “ ‘threatened use of physical force against the person of another’ must logically include ... acts suggesting that physical force against [a] person may be impending”). We therefore cannot say that the district court committed error that was clear or obvious. See United States v. Vanvliet, 542 F.3d 259, 270 (1st Cir. 2008) (finding the practice of not giving an Allen charge before a jury retires not plainly erroneous because “[w]e have not even discussed the desirability of this practice in our own circuit precedents”); United States v. Marcano, 525 F.3d 72, 74 (1st Cir. 2008) (“[Pjlain error cannot be found in case law absent clear and binding precedent....”); United States v. Caraballo-Rodriguez, 480 F.3d 62, 73 (1st Cir. 2007) (“[Sjince we have not yet adopted the [statutory] construction [defendant] urges, there is no plain error..”).

We are left to decide only whether any of Delgado’s convictions under Article 5.15 was for intentionally pointing a firearm at another person. The presentence report’s findings, which the district court adopted as its own findings of fact with no objection from Delgado, state that Delgado pled guilty to three counts of violating Article 5.15 and that “certified court documents” show Delgado aimed a firearm at a person as he announced his intent to rob her. But the presentence report fails to identify which certified court documents it is referring to, and it does not attach or include any so-called Shepard documents. Whether the presentence report is describing factual conduct or describing the actual offense charged or admitted by Delgado remains unclear.

Delgado, however, makes no claim that, had the district court examined any Shepard documents, it would have discovered that the presentence report inaccurately characterized the charged offense. Therefore, even assuming that the district court clearly erred by failing, sua sponte, to require the government to clear up the problematic ambiguity in the presentence report, Delgado’s challenge falls short on-the third prong of plain error review. That prong, in this context, requires him to make a showing he does not even attempt to make: that he was actually prejudiced by the absence of the Shepard documents describing the offense to which he pled. Serrano-Mercado, 784 F.3d at 848.

B. Other Alleged Procedural Errors

Delgado claims his sentence is procedurally unreasonable on five other bases, all of which, for the reasons already stated, we review for plain error. See United States v. Cortés-Medina, 819 F.3d 566, 569 (1st Cir.), cert. denied, — U.S. —, 137 S.Ct. 410, 196 L.Ed.2d 319 (2016). His first few arguments concern a second pre-sentence report that was docketed on the day of his sentencing. This second report was identical to the presentence report Delgado received two months earlier in all but four respects. First, it reclassified the charges stemming from Delgado’s December 2013 arrest as a prior conviction worth one criminal history point (rather than as pending charges) because between the time the first presentence report was filed and the date of sentencing, a jury had convicted Delgado on those charges. Second, the report added the point associated with that conviction to the criminal history score previously calculated, raising Delgado’s score from seven to eight. Third, the report represented that Delgado’s first Ya-bucoa conviction, which had originally been assigned one criminal history point, was worth zero criminal history points. Fourth, the report included a paragraph addressing the medical issues raised in Delgado’s sentencing memorandum and discussed on the record at sentencing.

Delgado argues that it was error for him to discover only on the date of sentencing that an additional criminal history point had been inserted into a new presentence report upon which the court would rely. He also argues that the district court erred because it failed to ask him at sentencing whether he had discussed the new presentence report with his attorney.

We doubt that any error occurred here at all in light of the fact that the new report appears to have been prepared after sentencing. During the sentencing colloquy, the district court observed that it lacked medical records confirming that Delgado suffered from a medical condition. Delgado’s counsel informed the court that he had brought with him to the hearing a record from an emergency visit Delgado had made to Ryder Hospital in Bayamón, Puerto Rico. Delgado’s counsel delivered the medical record to the court and agreed, in open court, to furnish a copy to probation. The new report, in turn, noted that “[d]uring sentencing, defense counsel provided the Court and the undersigned with a copy of the defendant’s record at the Emergency Department of the Ryder Hospital” and summarized the contents of the medical record delivered at sentencing. In other words, the new presentence report refers retrospectively to the sentencing hearing, so it seems unlikely that the report was available to the district court at sentencing.

Moreover, aside from the .new report’s recalculation of the criminal history points attributable to the first Yabucoa conviction (which we will discuss momentarily), the new report differed from the old one only by including a reference to medical records that Delgado’s counsel asked be added to the presentence report and by confirming a new conviction that had occurred between the production of the first report and the sentencing hearing. The conviction was discussed at sentencing, and Delgado does not dispute either that it did in fact occur or that it was worth one criminal history point. Even if one were to assume error here, prejudice would be lacking.

Delgado does challenge the inconsistent treatment of his criminal history score from one presentence report to the other, and he disputes the district court’s calculation of his criminal history score at sentencing. These claims, and the array of others Delgado . makes concerning his criminal history score, all boil down to an argument that he was assigned eight criminal history points “when he had 7 at most.”

We need not determine whether Delgado’s correct criminal history score is seven or eight. We have previously held that a court does not commit plain error when it incorrectly calculates and applies a criminal history score that nonetheless results in the defendant being placed in the correct Criminal History Category, because a Criminal History Category recommends one guidelines sentencing range in all cases, irrespective of the defendant’s criminal history score. See United States v. Albanese, 287 F.3d 226, 229 (1st Cir. 2002) (per curiam). Delgado concedes on reply that by any calculation, he would have been placed in Criminal History Category IV. “Thus, even assuming error occurred, it was not prejudicial because it did not affect [Delgado’s] sentence.” Id.

For his fourth argument that his sentence is procedurally unreasonable, Delgado claims that it was error for the district court to take note of Puerto Rico’s significant problem with gun violence. Our precedent flatly rejects this argument. See, e.g., United States v. Narváez-Soto, 773 F.3d 282, 286 (1st Cir. 2014) (“In weighing the impact associated with a particular crime, a sentencing court may consider the pervasiveness of that type of crime in the relevant community.”).

Delgado’s final procedural unreasonableness argument is that the district court plainly erred in placing weight on Delgado’s dismissed weapons charges. We confronted a similar argument in Cortés-Medina. In applying plain error review, we noted that, in light of the Supreme Court’s holding in United States v. Watts, 519 U.S. 148, 117 S.Ct. 633, 136 L.Ed.2d 554 (1997) (per curiam), “the Supreme Court might well hold that a sentencing court may not accord any significance to a record of multiple arrests and charges without convictions unless there is adequate proof of the conduct upon which the arrests or charges were predicated.” Cortés-Medina, 819 F.3d at 570. But we also observed that “our own precedent contains dicta, repeated several times, positing that a series of arrests ‘might legitimately suggest a pattern of unlawful behavior even in the absence of any convictions.’ ” Id. (quoting United States v. Lozada-Aponte, 689 F.3d 791, 792 (1st Cir. 2012)). We “eaution[ed] district courts against placing weight on such speculation,” but because the state of the law was unclear, we found that the district court did not plainly err. Id.

The district court here sentenced Delgado eight months before we issued our decision in Cortés-Medina, so, like the district court in that case, it did not have any reason to know that we would discourage district courts from placing weight on unsubstantiated charges. Still, plain error review requires us to evaluate whether the law is clear now, at the time we are conducting appellate review, regardless of whether the law was unclear at the time of sentencing. See Henderson v. United States, — U.S. -, 133 S.Ct. 1121, 1127, 185 L.Ed.2d 85 (2013). Delgado urges us to find that, in the wake of Cortés-Medina, inferring that past arrests suggest a pattern of criminal behavior is a clear error of law.

We find that it is not. Cortés-Medina held only that the law on this question was unclear. True, Cortés-Medina certainly warns district courts that, when the occasion presents itself, we very well may sustain a preserved challenge to a sentence that treats arrests as proof of unlawful conduct or evidence that a defendant is likely to recidivate. But Delgado’s plain-error appellate challenge provides no such occasion.

C. Substantive Unreasonableness

Finally, Delgado contends that his sentence is substantively unreasonable as a result of the combined effects of the alleged errors discussed above, and because the district court did not provide an explanation sufficient for the sentence it was imposing to be reviewed effectively on appeal. Having already found that the district court did not plainly err in its calculations and evaluation of the sentencing factors under 18 U.S.C. § 3553(a), we need not tarry here. The district court adequately explained itself: Upon accurately calculating Delgado’s guidelines sentencing range, the court measured the need for additional specific deterrence and evaluated the seriousness of the offense by explaining the impact of crimes like this one in Puerto Rico. It is well established in this circuit that a sentence is substantively reasonable “so long as it rests on a ‘plausible sentencing rationale’ and embodies a ‘defensible result.’ ” Ruiz-Huertas, 792 F.3d at 228 (quoting United States v. Martin, 520 F.3d 87, 96 (1st Cir. 2008)). The district court’s sentence does both. It is accordingly not substantively unreasonable.

III. Conclusion

For the foregoing reasons, we affirm Delgado’s sentence in all respects.

      . The guidelines also provide an alternative definition of a felony "crime of violence” as "any offense under federal or state law, punishable by imprisonment for a term exceeding one year, that ... is burglary of a dwelling, arson, or extortion, involves use of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another.” U.S.S.G. § 4B1.2(a)(2) (2015). This case does not involve burglary of a dwelling, arson, extortion, or the use of explosives, and the government has waived any argument that one or more of Delgado’s past convictions is for an offense "that presents a serious potential risk of physical injury to another.”

      . Because we find that applying- U.S.S.G. § 2K2.1(a)(3) based on Delgado's conviction under Article 5.15 was not plainly erroneous, we decline to address whether robbery under Article 198 is a "crime of violence” justifying application of U.S.S.G. § 2K2.1(a)(3).

      . The translation reads as follows:
      In this case, the defendant is charged with the crime of: [The Judge shall provide the instruction that corresponds to the facts charged.]
      1) Discharging a weapon in a public place or in another location where a person could have suffered harm, even if no person was harmed.
      2) Intentionally, even if without malice, aiming a weapon towards a person, even' if no person was harmed.

      4) Intentionally, even if without malice, aiming a firearm towards a person, even if no person was harmed.
      The essential elements of this offense are the following:
      1) [Aiming] [Discharging] a [weapon] [firearm].
      2) In a public place or any other place where a person could suffer harm.

      . The Ninth Circuit has abrogated Cortez-Arias, holding that the predicate state-law offense at issue in that case does not categorically constitute a crime of violence because it may be committed recklessly. See United States v. Narvaez-Gomez, 489 F.3d 970, 976-77 & n.3 (9th Cir. 2007). This development does not affect our analysis, which relies on Cortez-Arias only for the narrow proposition that the district court did not plainly err in declining to read "threatened use of physical force” to require communication of intent to inflict harm.


author: PER CURIAM:

text:
    FLO & EDDIE, INC., a California Corporation, individually and on behalf of all others similarly situated, Plaintiff-Appellee, v. SIRIUS XM RADIO, INC., a Delaware Corporation, Defendant-Appellant, Does, 1 through 10, Defendants.
    Docket No. 15-1164-cv
    August Term, 2015
    United States Court of Appeals, Second Circuit.
    Argued: February 2, 2016
    Question Certified: April 13, 2016
    Certified Question Answered: December 20, 2016
    Decided: February 16, 2017

      HARVEY GELLER (Henry Gradstein, Maryann R. Marzano, on the brief), Grad-stein & Marzano, P.C., Los Angeles, CA; (Evan S. Cohen, on the brief), Los Ange-les, CA; Michael Gervais, Arun S. Subra-manian, Susman Godfrey LLP, New York, NY; Robert Rimberg, Goldberg Rimberg & Weg PLLC, for Plaintiff-Appellee
    DANIEL M. PETROCELLI (Cassandra L. Seto, on the brief), O’Melveny & Myers LLP, Los Angeles, CA; (Johnathan D. Hacker, on the brief), O’Melveny & Myers LLP, Washington, DC; for Defendant-Appellant
    BRANDON BUTLER, American University Washington College of Law, Washington, DC, for Amici Curiae Law Professors Gary Pulsinelli, Julie Ross, and Peter Jaszi, in support of Defendant-Appellant
    EUGENE VOLOKH, UCLA School of Law, Los Angeles, CA, for Amici Curiae Howard Abrams, Brandon Butler, Michael Carrier, Michael Carroll, Ralph Clifford, Brian Frye, William Gallagher, Eric Goldman, James Grimmelmann, Yvette Liebes-man, Brian Love, Tyler Ochoa, David Olson, David Post, Michael Risch, Matthew Sag, Rebecca Tushnet, and David Welkow-itz, in support of Defendant-Appellant
    MITCHELL STOLTZ, VERA RANI-ERI, Electronic Frontier Foundation, San Francisco, CA, for Amicus Curiae Electronic Frontier Foundation, in support of Defendant-Appellant
    R. BRUCE RICH, BENJAMIN E. MARKS, GREGORY SILBERT, TODD LARSON, KAMI LIZARRAGA, Weil, Gotshal & Manges LLP, New York, NY, for Amicus Curiae Pandora Media, Inc., in support of Defendant-Appellant
    SHERWIN SIY, JOHN BERGMAYER, RAZA PANJWANI, Public Knowledge, Washington, DC, for Amicus Curiae Public Knowledge, in support of Defendant>-Appellant
    STEPHEN B. KINNAIRD, Paul Hastings LLP, Washington, DC; RICK KAP-LAN, National Association of Broadcasters, Washington, DC; for Amicus Curiae National Association of Broadcasters, in support of Defendant-Appellant
    ADAM R. BIALEK, STEPHEN J. BARRETT, Wilson Elser Moskowitz Edelman & Dicker LLP, New York, NY; DAVID L. DONOVAN, New York State Broadcasters Association, Inc., Albany, NY; for Amicus Curiae New York State Broadcasters Association, Inc., in support of Defendant-Appellant
    Before: CALABRESI, CHIN, and CARNEY, Circuit Judges.
   PER CURIAM:

On September 3, 2013, Flo & Eddie, Inc. (“Appellee”), a California corporation that asserts it owns the recordings of “The Turtles,” a well-known rock band with a string of hits in the 1960s, sued Sirius XM Radio, Inc. (“Appellant”), a Delaware corporation that is the largest radio and internet-radio broadcaster in the United States. The suit was brought on behalf of itself and a class of owners of pre-1972 recordings; it asserted claims for common-law copyright infringement and unfair competition under New York law. In particular, Appellee alleged that Appellant infringed Appellee’s copyright in The Turtles’ recordings by broadcasting and making internal reproductions of the recordings (e.g., library, buffer and cache copies) to facilitate its broadcasts.

In due course, Appellant moved for summary judgment on two grounds. Appellant contended first that there is no public-performance right in pre-1972 recordings under New York copyright law, and hence that its internal reproductions of these recordings were permissible fair use. Second, Appellant argued that a state law public performance right, if recognized, would be barred by the Dormant Commerce Clause. On November 14, 2014, the District Court (McMahon, /.) denied this motion. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 62 F.Supp.3d 325, 330 (S.D.N.Y. 2014).

On the first issue, the court concluded that New York does afford a common-law right of public performance to copyright holders, and that Appellant’s internal reproductions were correspondingly not fair use. Id. at 344-46. On the second issue, the court found that the recognition of a performance right did not implicate the Dormant Commerce Clause. It noted that, pursuant to Sherlock v. Alling, 93 U.S. 99, 23 L.Ed. 819 (1876), such a right did hot constitute a “regulation” of commerce. Flo & Eddie, Inc., 62 F.Supp.3d at 351-53.

Soon after, Appellant, with new counsel, filed a motion for reconsideration of the November 14, 2014 order. In the alternative, it asked the District Court to certify its summary judgment order for interlocutory appeal. The District Court denied Appellant’s motion for reconsideration, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5784, 2014 WL 7178134 (S.D.N.Y. Dec. 12, 2014), but did certify both the summary judgment and reconsideration orders for interlocutory appeal, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 13-cv-5784, 2015 WL 585641 (S.D.N.Y. Feb. 10, 2015).

Appellant then petitioned us to permit the interlocutory appeal, which we did. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. 15-cv-497, 2015 WL 3478159 (2d Cir. May 27, 2015). After extensive briefing and oral argument, we concluded that the appeal raised a significant and unresolved issue of New York law that is determinative of this appeal: Is there a right of public performance for creators of pre-1972 sound recordings under New York law and, if so, what is the nature and scope of that right?

Accordingly, we certified this question to the New York Court of Appeals. Flo & Eddie, Inc., 821 F.3d 265. The Court of Appeals accepted certification, and on December 20, 2016, responded that New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 2016 WL 7349183 (N.Y. Dec. 20, 2016).

Following the Court of Appeals’ answer, we ordered the parties to submit letter briefs addressing the effect of the Court of Appeals’ decision on the appeal before this court. In its letter brief, Appellee argued that the Court of Appeals “did not resolve [Appellant’s] liability for unauthorized copying of [Appellee’s] recordings and engaging in unfair competition by publicly performing those copies for profit, which the District Court had identified as separate and independent grounds for finding [Appellant] liable.” Letter Brief for Appellee, Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 821 F.3d 265 (2d Cir. 2016) (No. 15-1164), ECF No. 215.

In our opinion certifying the question to the Court of Appeals, however, we noted and held that

The fair-use analysis applicable to this copying ... is bound up with whether the ultimate use of the internal copies is permissible. As a result, the certified question is determinative of Appellee’s copying claims.... Similarly, Appellee’s unfair-competition claim depends upon the resolution of the certified question.

Flo & Eddie, Inc., 821 F.3d at 270 n.4 (emphasis added).

The answer to the certified question being determinative of the other claims, we REVERSE the district court’s denial of Appellant’s motion for summary judgment and REMAND to that court with instructions to grant Appellant’s motion for summary judgment and to dismiss the case with prejudice.