IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`Attorney Docket No.:
`§
`
` 104677-5005-803
`§ Customer No. 28120
`
`Petitioner: Apple Inc.
`
`§
`Inventor: Hair
`United States Patent No.: 5,966,440
`Formerly Application No.: 08/471,964
`Issue Date: October 12, 1999
`§
`Filing Date: June 6, 1995
`§
`Former Group Art Unit: 380
`§
`Former Examiner: Hoa T. Nguyen
`§
`
`For: System and Method for Transmitting Desired Digital Video or Digital Audio
`Signals
`
`MAIL STOP PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`Post Office Box 1450
`Alexandria, Virginia 22313-1450
`
`
`DECLARATION OF DR. JOHN P. J. KELLY IN SUPPORT OF APPLE
`INC.’S PETITION FOR COVERED BUSINESS METHOD PATENT
`REVIEW OF UNITED STATES PATENT NO. 5,966,440 PURSUANT TO 35
`U.S.C. § 321, 37 C.F.R. § 42.304
`
`
`
`
`
`
`
`Page 00001
`
`
`
`
`
`Attorney Docket No.:
`§
`
` 104677-5005-803
`§ Customer No. 28120
`
`Petitioner: Apple Inc.
`
`§
`Inventor: Hair
`United States Patent No.: 5,966,440
`Formerly Application No.: 08/471,964
`Issue Date: October 12, 1999
`§
`Filing Date: June 6, 1995
`§
`Former Group Art Unit: 380
`§
`Former Examiner: Hoa T. Nguyen
`§
`
`For: System and Method for Transmitting Desired Digital Video or Digital Audio
`Signals
`
`MAIL STOP PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`Post Office Box 1450
`Alexandria, Virginia 22313-1450
`
`
`DECLARATION OF DR. JOHN P. J. KELLY IN SUPPORT OF APPLE
`INC.’S PETITION FOR COVERED BUSINESS METHOD PATENT
`REVIEW OF UNITED STATES PATENT NO. 5,966,440 PURSUANT TO 35
`U.S.C. § 321, 37 C.F.R. § 42.304
`
`
`
`
`
`
`
`Page 00001
`
`
`
`I, John Kelly, hereby declare as follows:
`
`
`
`I. INTRODUCTION
`
`1.
`
`I have been retained to provide assistance regarding U.S. Patent No.
`
`5,966,440 (“’440 patent”). Attached hereto as Appendix A is a true and correct
`
`copy of my Curriculum Vitae describing my background and experience. I have
`
`personal knowledge of the facts and opinions set forth in this declaration, and, if
`
`called upon to do so, I would testify competently thereto.
`
`2.
`
`I hold Bachelor of Arts and Master of Arts degrees with Honors in
`
`Mathematics from the University of Cambridge, England. I hold a Ph.D. in
`
`Computer Science from U.C.L.A. From 1982 through 1986, I was a professor in
`
`the Computer Science Department at U.C.L.A. From 1986 through 1997, I was a
`
`professor in the Electrical and Computer Engineering Department of the University
`
`of California, Santa Barbara, where I held tenure.
`
`3.
`
`I am the principal of Kelly Computing, Inc. I teach and consult in
`
`many different aspects of computer science and engineering, including computer
`
`hardware and software architecture and design, software engineering and fault
`
`tolerance. My particular areas of expertise include computer architecture, software
`
`engineering and “clean-room” development and evaluation, reverse engineering,
`
`operating systems (including real-time and embedded), network computing
`
`
`
`
` 2
`
`
`
`Page 00002
`
`
`
`
`
`(including Internet computing), storage systems, fault tolerance, parallel and
`
`distributed computing systems, transaction processing systems, database systems,
`
`and program management.
`
`4.
`
`As a result of my education and professional experience, I have
`
`extensive development experience and knowledge of computer operating systems
`
`including access control concepts, data encryption/decryption techniques,
`
`networking technologies, database systems, communication protocols including
`
`network communication protocols, user interfaces including graphical user
`
`interfaces and computer hardware design, and software analysis, design, and
`
`development. I have developed computer software and hardware for many
`
`different computer systems and applications including programming
`
`microprocessors. I have also analyzed several software products related to access
`
`control, audio and video playback, network transmission of audio and video,
`
`storage of audio and video in multimedia databases, and content delivery networks
`
`and distribution systems. For example, I have analyzed databases and repositories
`
`used to store and access audio file repositories, network based distribution of
`
`electronic media, set top boxes, and content delivery network architecture of
`
`leading content delivery network providers. I have also analyzed the source code
`
`for computer operating systems such as Apple’s Mac OS X, Microsoft Windows,
`
`
`
`
` 3
`
`
`
`Page 00003
`
`
`
`
`
`Linux, etc. I have also testified in Court on several occasions as a computer
`
`science expert to report my analysis and opinions.
`
`5.
`
`I have worked in the area of computer software, hardware and system
`
`design and development for over thirty-five years. I have extensive experience in
`
`the design and development of small and large scale software systems. I have been
`
`involved in the specification, development, integration, and testing of computer
`
`systems with a wide range of requirements, sizes and types. These have included,
`
`by way of example, custom hardware and software for a US Air Force fighter
`
`plane, a distributed real-time system for US FAA air traffic control, and a
`
`distributed geographical information system for the US Department of Energy.
`
`6.
`
`From 1978 to 1995, I specified, designed and implemented distributed
`
`database architectures, systems and applications for Los Alamos National
`
`Laboratory and NASA’s Jet Propulsion Laboratory and database machine design
`
`and implementation at Transaction Technology Incorporated, Ordain, Inc. and
`
`Teradata.
`
`7.
`
`From 1985 to 1998, I consulted for AT&T GIS, NCR, Symbios Logic,
`
`and LSI Logic, including working as a member of the AT&T GIS Science
`
`Advisory Committee (“SAC”). The SAC evaluated AT&T’s organization,
`
`technical direction and product strategy and made recommendations to the Vice
`
`President of Technology and Development.
`
`
`
`
`
` 4
`
`Page 00004
`
`
`
`
`
`8.
`
`A listing of testimony that I have provided in the last four years and
`
`my compensation is attached hereto as Appendix B. I am being compensated for
`
`my time spent in connection with this case. I have no financial interest in the
`
`outcome of this case.
`
`9.
`
`In preparing my opinions, I have considered the following materials:
`
`• ’440 patent [Ex. 1201],
`
`• ‘440 patent file history [Ex. 1202],
`
`• ‘440 reexam [Ex. 1203]
`
`• United States Patent No. 5,191,573 (“’573 patent”) [Ex. 1204],
`
`• ’573 patent file history [Ex. 1205],
`
`• ’573 patent reexamination [Ex. 1206],
`
`• United States Patent No. 5,675,734 File History (“’734 File history”) [Ex.
`
`1207],
`
`• United States Patent No. 5,675,734 Reexamination (“’734 Reexam”) [Ex.
`
`1208]
`
`• United States Patent No. 5,675,734 (’734 patent”) [Ex. 1209],
`
`• United States Patent No. 4,124,773 (“Elkins patent”) [Ex. 1213],
`
`• Claim constructions entered by the U.S. District Court in the matter of
`
`SightSound Technologies, LLC v. Apple, Inc., [Exs. 1214, 1215]
`
`
`
`
` 5
`
`
`
`Page 00005
`
`
`
`
`
`• Arthur Hair Dec. 11, 2012 Dep. Tr. [Ex. 1219],
`
`• Scott Sander Dec. 18-19, 2012 Dep. Tr. [Ex. 1220],
`
`• U.S. Patent No. 4,682,248 (“Schwartz patent”) [Ex. 1221],
`
`• Larry Israelite, Home Computing: Scenarios for Success, Billboard, Dec. 15,
`
`1984 (“Israelite article”) [Ex. 1225],
`
`• U.S. Patent No. 4,528, 643 (“Freeny patent”) [Ex. 1229],
`
`• Inside Macintosh Volumes I, II and III, 1985 (“Inside Macintosh”) [Ex.
`
`1231],
`
`• The Technical Development of Internet Email” by Craig Partridge, IEEE
`
`Annals of the History of Computing (Berlin: IEEE Computer Society) 30
`
`(2): 3–29 (“Partridge article” [Ex. 1232],
`
`• U.S. Patent 4,667,088 (“Kramer patent”) [Ex. 1233],
`
`• Hyun Heinz Sohn, A High Speed Telecommunications Interface for Digital
`
`Audio Transmission and Reception, 76th AES Convention, Oct. 1984 (“Sohn
`
`article”) [Ex. 1235],
`
`• 1987 Stanford lecture (“Stanford lecture”) [Ex. 1236],
`
`• Jennifer Sullivan, “The Battle Over Online Music,” Wired.com (Jan. 29,
`
`1999) [Ex. 1237].
`
`
`
`
` 6
`
`
`
`Page 00006
`
`
`
`
`
`II. LEGAL STANDARDS
`
`A.
`
`UNPATENTABLE SUBJECT MATTER
`
`10.
`
`I understand that claims of a patent are unpatentable if they are
`
`directed to an abstract idea. This is because, in part, claims directed to an abstract
`
`idea may be preemptive of a fundamental concept or idea that would foreclose
`
`innovation in an area. Even if the claims limit an abstract idea to one field of use
`
`or add insignificant extra-solution elements, they are not patentable if the abstract
`
`idea is combined with nothing more than well-understood, routine, conventional
`
`activities. I understand that mere implementation of an abstract idea with the
`
`Internet and/or a general purpose computer does not make the abstract idea
`
`patentable. I also understand that the “machine or transformation” test can be an
`
`important tool in determining the patentability of claims. The “machine or
`
`transformation” test examines whether the claims are tied to a particular machine
`
`or apparatus, or transform a particular article into a different state or thing. If
`
`neither, then the test points to unpatentability. I understand that a general purpose
`
`computer is not a “particular machine or apparatus” under this test.
`
`
`
`
` 7
`
`
`
`Page 00007
`
`
`
`B.
`
`OBVIOUSNESS-TYPE DOUBLE PATENTING
`
`
`
`11.
`
`It is my understanding that the judicially created doctrine of
`
`obviousness-type double patenting prevents the extension of the term of one patent
`
`by the later patenting of an obvious variation of the claims of the original patent.
`
`Under obviousness-type double patenting, a patent claim is invalid when it is
`
`merely an obvious variation of an invention claimed in an earlier patent by the
`
`same inventor. The focus is on the scope of the claims of the earlier and later
`
`patents, and whether the claims of the later patent are merely an obvious variation
`
`of the subject matter claimed in the earlier patent. As such, the disclosure of the
`
`earlier patent may not be used as prior art, but it may be referenced in order to
`
`determine the proper interpretation of the claims of the earlier patent and to assess
`
`their scope. It is also permissible to use the disclosure of the earlier patent to
`
`determine whether the variation on that invention that is claimed in the later patent
`
`would have been obvious in light of the claims of the earlier patent. For example,
`
`the earlier patent might set forth at least one tangible embodiment within its
`
`disclosure that is claimed in the earlier patent, and it may be less difficult and more
`
`meaningful to judge whether the claims in the later patent are obvious in light of
`
`the tangible embodiment in the earlier patent that is covered by the claims of the
`
`
`
`
` 8
`
`
`
`Page 00008
`
`
`
`
`
`earlier patent. Use of the disclosure of the earlier patent in this way is permitted,
`
`since only the disclosure of the invention claimed in the earlier patent is examined.
`
`III. OPINIONS REGARDING A PERSON OF ORDINARY SKILL IN THE
`ART
`
`12.
`
`I understand that the factors considered in determining the ordinary
`
`level of skill in the art include the level of education and experience of persons
`
`working in the field; the types of problems encountered in the field; and the
`
`sophistication of the technology.
`
`13.
`
`In my opinion, a person of ordinary skill in the art relating to the
`
`technology of the ’440 patent at the time at which the patent was filed would have
`
`had a bachelor’s degree or equivalent in computer engineering or computer science
`
`and approximately two years of experience in developing software and hardware
`
`that transmit and receive files over a network.
`
`14.
`
`I understand that the U.S. District Court in the matter of SightSound
`
`Technologies, LLC v. Apple, Inc. has determined that a person of ordinary skill in
`
`the art relating to the technology of the asserted patents at the time at which the
`
`patents were filed is a person having an undergraduate degree in electrical
`
`engineering or computer science and/or approximately 2-4 years of industry
`
`experience in the design of systems and methods for storing and transmitting
`
`
`
`
` 9
`
`
`
`Page 00009
`
`
`
`
`
`digital information. [See Ex. 1215 (Claim Construction Recommendation) at p.
`
`12, fn.12; see also Ex. 1214]
`
`15.
`
`In 1988, I would have exceeded the level of skill required by either
`
`definition, and I am in a position to opine on the understanding of a person of
`
`ordinary skill in the art. In addition, my opinions are the same under both
`
`definitions.
`
`IV.
`
`CLAIM CONSTRUCTION
`
`16. For the purposes of this declaration, I have been asked to assume
`
`constructions for certain claim terms as presented in the following table. For all
`
`remaining claim terms, I have assumed their plain and ordinary meaning.
`
`Term
`First Party
`Second Party
`Second Party Control
`Unit
`
`Telecommunication Lines
`
`“Electronic” Terms
`
`“Connecting
`Electronically” Terms
`“Transferring
`Electronically” Terms
`
`Claim Construction
`a first entity, whether a corporation or a real person
`a second entity, whether a corporation or a real person
`
`control unit of the second party
`
`an electronic medium for communicating between
`computers.
`pertaining to devices or systems which depend on the
`flow of electrons.
`connecting through devices or systems which depend
`on the flow of electrons.
`transferring through devices or systems which depend
`on the flow of electrons.
`
`
`
`
`10
`
`Page 00010
`
`
`
`
`
`Claim Construction
`Term
`providing payment electronically (i.e., through devices
`“Transferring Money
`or systems which depend on the flow of electrons).
`Electronically” Terms
`requesting payment electronically
`“Charging a Fee” Terms
`providing a product or service electronically in
`“Electronically Selling”
`exchange for transferring money electronically
`Terms
`No construction needed
`Sold
`digital representations of sound waves
`Digital Audio Signal
`a permanent, rigid, magnetic storage device
`Hard Disk
`“Second Party Hard Disk” non-volatile storage portion of the second memory
`
`
`V. THE ’440 PATENT
`
`A. OVERVIEW OF THE ’440 PATENT
`
`Figure 1. Overview of the ’440 patent. The first party’s system (components
`on the left side of the figure) are connected to the second party’s system
`(components on the right side of the figure) by telephone lines. [See Ex. 1201
`(’440 patent) at Fig. 1]
`
`
`
`
`
`
`
`
`11
`
`Page 00011
`
`
`
`
`
`17. The ’440 patent issued on Oct. 12, 1999, from U.S. Patent Application
`
`No. 08/471,964 (“’964 application”), which was filed on June 6, 1995. For the
`
`purpose of this declaration only, I have been asked to assume that the priority date
`
`of the ‘440 patent is June 13, 1988.
`
`18. The’440 patent is directed to a system and method for the sale and
`
`transmission of audio and data signals. [See, e.g., Ex. 1201 (’440 patent) at
`
`Abstract] The audio and/or data signals are stored on the system of the seller
`
`(“first party”). [See, e.g., Ex. 1201 (’440 patent) at 4:11-13] A buyer (“second
`
`party”) can purchase audio or video signals, transfer these signals over telephone
`
`lines, and store the signals on the buyer’s system. [See, e.g., Ex. 1201 (’440
`
`patent) at 3:62-4:63, Fig. 1] The buyer can then play the audio or video signals
`
`stored on the buyer’s system. [See Ex. 1201 (’440 patent) at 5:1-18]
`
`19. U.S. Patent No. 5,191,573 (“’573 patent”) – issued on March 2, 1993,
`
`from U.S. Patent Application No. 07/586,391 (“’391 application”), which was filed
`
`on Sept. 18, 1990 – is the grandparent of the ’440 patent. The specification of the
`
`’440 patent very similar to the specification of the ’573 patent. The specifications
`
`of the’440 patent contains references to “digital video” and seven paragraphs of
`
`new matter [Ex. 1201 (’440 patent) at 6:20-8:42] that are not in the specification of
`
`the ’573 patent. The other portions of the specification of the’440 patent are nearly
`
`
`
`
`12
`
`Page 00012
`
`
`
`the same as the corresponding portions in the specification of the ’573 patent, as
`
`
`
`issued.
`
`B.
`
`FILE HISTORY OF THE ’573 PATENT
`
`20. Prosecution of the claims that eventually issued in U.S. Patent No.
`
`5,191,573 commenced with the filing of U.S. Patent Application No. 07/206,497
`
`on June 13, 1988. The originally filed claims were directed to electronically
`
`transferring the binary structure of Digital Audio Music via telephone lines from a
`
`hard disk of a seller to the hard disk of a user in a software configuration that
`
`allowed for repeated future playback. The originally filed claims made no
`
`reference to electronic sale or digital video signals, and the application as a whole
`
`made no reference to “telecommunication lines.”
`
`21.
`
`In a Preliminary Amendment filed on December 19, 1988, the
`
`applicant cancelled all initially filed claims and added new claims 11-13. These
`
`new claims introduced the steps of “transferring money to a party,” “searching the
`
`first memory,” “selecting the desired digital audio music signal from the first
`
`memory” and “providing a credit card number ... so the party controlling the
`
`second memory is charged money.” Additionally, these new claims introduced the
`
`limitations of “controlling use of the first memory” and “controlling use of the
`
`second memory.”
`
`
`
`
`13
`
`Page 00013
`
`
`
`
`
`22. The Examiner issued a first Office Action on November 30, 1989, in
`
`which the Examiner objected to the specification and rejected pending claims 11-
`
`13 as being anticipated by U.S. Patent No. 3,718,906 (“Lightner patent”).
`
`23.
`
`In response, on February 26, 1990, the applicant amended pending
`
`independent claim 11 to specify that the “second party [is] financially distinct from
`
`the first party,” added new independent claim 15 directed to “a method for
`
`transmitting a desired digital, a video or audio music signal” and added new
`
`dependent claims 16-20. The new claims introduced the steps of “charging a fee”
`
`and “placing by the second party the second memory.” Finally, the applicant also
`
`amended the abstract to refer to “Video” as well as “Digital Audio Music.” The
`
`applicant also argued that “Lightner does not teach or suggest ‘transmitting the
`
`digital signal from the first memory to the second memory’ with the ‘second party
`
`controlling use of the second memory.’” Instead, in the Lightner patent, “the party
`
`controlling the master recording is ‘controlling use of the second memory’ up until
`
`transmission, and that “the second memory is in the possession of the vending
`
`machine.” Additionally, the applicant argued that “Lightner teaches and suggests
`
`that the vending machine is at a location determined by the ‘first party,’” whereas
`
`new dependent claims 14, 17 and 19 require the second memory to be “at a
`
`location determined by the second party.”
`
`
`
`
`14
`
`Page 00014
`
`
`
`
`
`24. On May 14, 1990, the Examiner again rejected claims 11-18 in view
`
`of the Lightner patent. In particular, the Examiner said, since the claims’ recitation
`
`of “controlling” is interpreted to mean “authority to guide or manage,” and the
`
`Lightner patent discusses that a second party can select information to be
`
`duplicated onto the second memory, the claims are anticipated by the Lightner
`
`patent. Additionally, the Examiner argued that a second party using Lightner’s
`
`system can determine the location of the second memory, since the second party
`
`can “pick which vending machine of the vending machines to use.” Finally, the
`
`Examiner rejected claims 11, 14, 17, 19 and 20 as being anticipated by U.S. Patent
`
`No. 3,990,710 (“the Hughes patent”).
`
`25.
`
`In response, on August 20, 1990, the applicant amended the
`
`independent claims to recite that the second memory is “in possession and control
`
`of the second party” and “at a location determined by the second party,” while a
`
`transmitter is “in control and possession of the first party.” Applicant then argued
`
`that neither the Lightner patent nor the Hughes patent discloses, and instead each
`
`teaches away from, this limitation since the receiver is in the possession of the first
`
`party.
`
`26. The Examiner ruled on September 5, 1990, that the added limitation
`
`of “the receiver in possession and control of the second party” was a new issue. In
`
`order to continue prosecuting the rejected claims, on September 18, 1990, the
`
`
`
`15
`
`Page 00015
`
`
`
`
`
`applicant filed a new application (U.S. Patent Application No. 07/586,391) as a
`
`continuation of the ’497 application. The applicant also filed the amendments and
`
`arguments presented in the August 20, 1990 response.
`
`27. On September 9, 1991, the Examiner again rejected the pending
`
`claims, stating that “Hughes fails to specifically teach the claimed method and
`
`steps,” but that “the claimed method and steps are seen to obviously correspond to
`
`the apparatus and its features show[n] by Hughes.”
`
`28. An Examiner interview was conducted on October 21, 1991, in which
`
`the applicant explained the claimed invention, and the Examiner explained “how
`
`the references were applied against claim 11.” Subsequently, on December 9,
`
`1991, the applicant amended the specification to introduce the term
`
`“telecommunications line,” amended the specification and claims to introduce the
`
`term “telecommunications link,” and inserted additional material into the
`
`specification. Applicant then argued that Hughes fails to show “transferring
`
`money (or fee) to a first party at a location remote from the second memory and
`
`controlling use of the first memory from a second party financially distinct from
`
`the first party,” which the applicant characterized as “critical to the operation of the
`
`applicant’s invention,” since in Hughes money is instead stored locally at Hughes’
`
`recording machine. Additionally, the applicant argued that the Hughes patent does
`
`not teach or suggest “said receiver in possession and control of second party.”
`
`
`
`16
`
`Page 00016
`
`
`
`
`
`29. On February 24, 1992, the Examiner issued an Office Action objected
`
`to the specification “as failing to provide support for the now claimed invention”
`
`and rejecting all pending claims. In particular, the Examiner indicated that the step
`
`of “transferring money,” the phrase “second party financially distinct from the first
`
`party,” the phrase “said receiver in possession … of the second party,” and the
`
`steps of telephoning and providing a credit card “do not have basis in the original
`
`specification.” The Examiner also objected to the material inserted into the
`
`specification. Moreover, the Examiner rejected the claims for being indefinite
`
`because “‘at a location remote from the second memory’ is unclear and confusing
`
`as to what is meant by ‘at a remote location’” and because “‘telecommunication
`
`link’ is not well connected in the system.” Finally, the Examiner repeated her
`
`rejection of all pending claims in view of the Hughes patent.
`
`30. On June 22, 1992, the applicant amended the pending independent
`
`claims to require “transferring money electronically via a telecommunication line”
`
`and added a new independent claim that required “selling electronically via
`
`telecommunication lines.” The applicant also argued that the step of “transferring
`
`money,” the phrase “second party financially distinct from the first party,” and the
`
`steps of telephoning and providing a credit card are inherent in the phrase
`
`“electronic sales.” The applicant also simultaneously filed a declaration by the
`
`inventor, Arthur Hair, in support of these arguments. This declaration further
`
`
`
`17
`
`Page 00017
`
`
`
`
`
`alleged that “the ‘second party’ must have a ‘receiver’ (the control IC of the user in
`
`figure 1) in his ‘possession’ in order to receive the music electronically from the
`
`hard disc of the agent over the telephone lines.” The applicant further argued that
`
`“[t]he objectionable phrase ‘at a location remote from the second memory’ is
`
`acceptable since[,] by definition … memories [that] are at different locations and
`
`[that are] connected by telecommunication lines have to be remote” and by
`
`pointing out that “‘link’ has been amended to the more familiar term ‘line.’”
`
`Additionally, the applicant argued that the Hughes patent fails to teach or suggest
`
`“transferring money electronically via a telecommunications line to the first party
`
`from the second party,” because the Hughes patent performs the sale locally to the
`
`recording machine by allowing the user to insert coins. The application also
`
`argued that, unlike the recording machines in the Hughes patent, the claimed
`
`receiver is in the possession and control of the second party and can be at a
`
`location chosen by the second party. Finally, the applicant argued that these
`
`limitations were also not shown by the Lightner patent.
`
`31. On September 21, 1992, the Examiner indicated that pending claims
`
`11-13, 15 and 21-22 were allowable over the prior art of record and that only
`
`pending claim 23 was rejected as anticipated by the Lightner patent and for lacking
`
`antecedent basis for the phrase “the second memory.” In allowing the claims that
`
`issued, the Examiner explained that the claims were being allowed because the
`
`
`
`18
`
`Page 00018
`
`
`
`
`
`prior art did not teach a transmitter that was “in control and possession of the first
`
`party,” or a receiver “in possession and control of the second party” and with a
`
`second memory “at a location determined by the second party.”
`
`32. The applicant responded on September 30, 1992, by cancelling
`
`rejected claim 23. The Examiner subsequently issued a Notice of Allowability on
`
`October 19, 1992, and the application issued as the ’573 patent on March 2, 1993.
`
`C.
`
`RE-EXAMINATION OF THE ’573 PATENT
`
`33. Napster, Inc. filed a request for Ex Parte re-examination for the ’573
`
`patent on January 31, 2005. The request raised substantial new questions of
`
`patentability due to Great Britain Patent No. 2 178 275 (“Gallagher patent”), U.S.
`
`Patent No. 4,499,568 (“Gremillet patent”), U.S. Patent No. 4,528,643 (“Freeny
`
`patent”) and other prior art.
`
`34. On March 18, 2005, the Examiner granted the request because the
`
`Gallagher, Gremillet and Freeny patents “were not previously cited or considered
`
`by the Examiner during the prosecution of the ’573 patent or its application,” and
`
`because “[a] reasonable examiner would consider the Gallagher and Gremillet
`
`references important in deciding whether or not the claims are patentable.”
`
`35. Subsequently, on June 21, 2005, the Examiner rejected all issued
`
`claims of the ’573 patent as unpatentable over the Gallagher patent in view of the
`
`
`
`19
`
`Page 00019
`
`
`
`
`
`Freeny patent. In particular, the Examiner noted that the Gallagher patent
`
`disclosed the connecting, transmitting and storing steps of the claims of the ’573
`
`patent, but does not “go into specific detail about how this electronic sale of the
`
`digital data is made to the general public via their user units.” However, as the
`
`Examiner explained, “Freeny discloses a method of electronically distributing and
`
`selling audio and video data by way of having the requesting user transmit a
`
`consumer credit card number along with their request for the audio and video
`
`data,” and that it would have been obvious to incorporate this into the system
`
`disclosed in the Gallagher patent because “this method of electronic sale allows the
`
`owner of the information to receive directly the compensation for sale of a
`
`recording.”
`
`36. The Examiner was not persuaded by the patentee’s responses and
`
`continued to reject the claims in view of Freeny and other prior art, including
`
`Japanese Patent Application No. S62-284496 (“Akashi patent”).
`
`37. Subsequently, the case was transferred to a different Examiner, who
`
`vacated the Final Office Action and issued a new Office Action on September 29,
`
`2006. In the new Office Action, the Examiner asserted that the issued claims were
`
`not entitled to the claimed June 13, 1988 priority date, but were instead at best
`
`entitled to a September 18, 1990 priority date. In particular, the Examiner noted
`
`that a significant amount of unsupported new text was added by amendment to the
`
`
`
`20
`
`Page 00020
`
`
`
`
`
`specification and claims after the claimed 1988 priority date. The Examiner
`
`specifically concluded that “how money is transferred from a second party to the
`
`first party, a fee is charged, or how a credit card number is provided are not
`
`disclosed or required by the original, generic statement ‘electronic sales and
`
`distribution of music …’” The Examiner noted, for example, that an “electronic
`
`sale” could involve money transferred by a third party, and that the claimed
`
`transferring step was not inherently disclosed by the specification’s recitation of
`
`“electronic sale.” The Examiner also concluded that “the ability to control and
`
`possess a transmitter, a receiver, and memory and to determine the location to
`
`which data is transmitted is not disclosed or required by the original, generic
`
`statements such as ‘control unit of the user.’” Finally, the Examiner observed that
`
`“[t]he specific video download features added to the original specification and
`
`claims by the above amendments are not disclosed nor required by the one
`
`sentence, generic statement at the end of the original specification that ‘this
`
`invention is not to be limited to Digital Audio Music and can include Digital Video
`
`….’” The Examiner then rejected all pending claims due to U.S. Patent No.
`
`4,789,863 (“Bush patent”), U.S. Patent No. 4,870,515 (“Stokes patent”), the
`
`Akashi patent, the Freeny patent, and U.S. Patent No. 4,949,187 (“Cohen patent”).
`
`38.
`
`In a series of responses, the patentee disputed the Examiner’s
`
`authority to challenge the priority date and challenged the other bases for rejection.
`
`
`
`21
`
`Page 00021
`
`
`
`
`
`The issue went to the Board of Patent Appeals and Interferences, which issued a
`
`decision on September 4, 2009. The BPAI held that the Examiner’s 35 U.S.C. §
`
`112 rejections were made in error because they addressed whether the claims were
`
`supported by the parent application instead of the present application.
`
`Additionally, the Board accepted appellant’s arguments that “the Examiner cannot
`
`be allowed to reexamine the sufficiency of the Specification,” because the fact
`
`“[t]hat the original Examiner allowed the application after the Patentee’s response
`
`to the objection indicates to us that the original Examiner believed the issue to be
`
`resolved.” The BPAI also concluded that the Examiner improperly imported
`
`requirements regarding “quality, size, or bandwidth” into the claims when rejecting
`
`claims directed at digital video signals due to lack of enablement. Since the BPAI
`
`thus concluded that the ’573 patent is entitled to a June 13, 1988 priority date, it
`
`determined that the Cohen patent is not prior art and overturned rejections based on
`
`the Cohen patent. The Board overturned the remaining rejection by noting that
`
`“the combination of Akashi and Freeny II1 does not teach or suggest storing the
`
`digital signal in a non-volatile portion of the second memory that is not a tape or
`
`CD, where the second memory is controlled by and in the possession of the second
`
`party.”
`
`
`1 “Freeny II” is the Freeny patent, U.S. Patent No. 4,528,643.
`
`
`
`22
`
`Page 00022
`
`
`
`
`
`39. Since the ’573 patent expired during reexamination, all amendments
`
`made during reexamination were effectively withdrawn. The Examiner
`
`accordingly issued a new Office Action on March 25, 2010, reopening prosecution
`
`and rejecting all claims as anticipated by the Bush patent, as unpatentable over the
`
`Gallagher patent in view of the Freeny patent, and as unpatentable over the Akashi
`
`patent in view of the Freeny patent. In doing so, the Examiner noted that
`
`“telecommunications lines are reasonably interpreted to not be limited to the
`
`preferred embodiment – telephone lines,” and that this interpretation was
`
`“consistent” with the interpretation proffered by the patent owner, “who argues
`
`‘telecommunication lines’ requires electronic mediums for communicating
`
`between computers, which requires end-to-end connectivity.” The Examiner relied
`
`on the Freeny patent to show the “transferring money” step. Additionally, the
`
`Examiner rejected all claims under obviousness-type double patenting as being
`
`unpatentable over the claims of U.S. Patent No. 5,675,734 (“the ’734 patent”)
`
`because “the claims in the Hair patent under reexamination are broader than the
`
`claims in the [’734] patent.”
`
`40. On May 25, 2010, the patentee argued that, since the ’573 patent
`
`expired and the broadest reasonable construction standard no longer applied,
`
`“second memory” has to be construed as excluding removable media such as CDs
`
`or cassette tapes. The patentee then argued that, because the cited prior art
`
`
`
`23
`
`Page 00023
`
`
`
`
`
`discloses only “cassette tapes and CDs,” in the case of the Bush patent, “video tape
`
`or optical disk,” in the case of the Gallagher patent, and “recordable optical discs
`
`or digital audio tape,” in the case of the Akashi patent, the cited art fails to disclose
`
`“storing the digital signal in the seco
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
