66548 U.S.PTO
`lllllllllllllllllll/lllll1l|l,ll|)ll,l)lllllllllllllllll
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`In re the patent of:
`
`Arthur R. HAIR
`
`U.S. Patent No. 5,675,734
`
`Issued: October 7, 1997
`
`Application No. 08/607,648
`
`Filed: February 27, 1996
`
`For:
`
`SYSTEM FOR TRANSMITTING DESIRED
`DIGITAL VIDEO OR AUDIO SIGNALS
`
`xzg/g/g/y/g/g/g/y/g/g/y/\/g/3
`
`’ PATENT.
`
`56540 "ulsl bro
`90007403
`
`mlillllglulgliiliillumlmlll
`
`Docket No. NAPSP002
`
`Date: January 31, 2005
`
`CERTIFICATE OF EXPRESS MAILING
`I hereby certify that this paper and the documents and/or fees referred to as
`attached herein are being deposited with the United States Postal Service on
`Januag 31, 2005 in an envelope as “Express Mail Post Office to Addressee"
`service under 37 CFR § 1.10, Mailing Label Number EV 577446433 US,
`addressed to the
`'sioner for Patents. P.O. Box 1450, Alexandria, VA
`22313-1450.
`
`REQUEST FOR EX PARTE REEXAMINATION
`TRANSMITTAL FORM
`
`Commissioner for Patents
`
`Mail Stop Ex Parte Reexam
`P.O. Box 1450
`
`Alexandria, VA 22313-1450
`
`1. This is a request for ex parte reexamination pursuant to 37 CFR 1.510 of U.S. Patent No.
`5,675,734, which§sued October 7, 1997 (“the ‘734 patent”). The request is made byia third-party
`requester.
`
`P
`(1
`8
`2. The nafiie and address of the erson re uestin reexamination is:
`
`_ Napsgr, Inc. (formerly Roxio, Inc. and majority owner of Napster, L.L.C.)
`Los Angeles Office
`9044 Melrose Ave.
`
`82/89/2365 PITHIITY 88380696 98607483
`
`Los Angeles, CA 90069.
`
`3. A checlgin the amount of $4 020.00 to cover the ex parte reexamination fee ($2,5%gB0
`and the excess ciagn fees ($1,500.00 for 4 extra independent c1£l1ri‘lE=&£I3°-00.00) and 14 claims in‘
`excess of 20 claimg ($700.00)) is enclosed. 37 CFR 1.20(c)(1).
`
`Up
`
`Atty. Docket No. NAPSP002
`
`Page I of 3
`
`Apple Exhibit 1208 Page 00001
`
`

`
`4. The Commissioner is authorized to charge any fees beyond the amount enclosed which
`may be required, or to credit any overpayment, to Deposit Account No. 50-0805 (Order No.
`NAPSP002).
`
`5. A copy of the ‘734 patent to be reexamined having a double column fomiat on one side
`of a separate paper is enclosed. 37 CFR 1.510(b)(4).
`
`6. Reexamination of claims 1-34 is requested.
`
`7. A copy of every patent or printed publication relied upon is submitted herewith including
`a listing thereof on Fomi PTO-1449.
`
`8. The attached detailed request includes at least the following items:
`a. A statement identifying each substantial new question of patentability based on prior
`patents and printed publications. 37 CFR 1.510(b)(1); and
`
`b. An identification of every claim_for which reexamination is requested, and a detailed
`explanation of the pertinency and manner of applying the cited art to every claim for which
`reexamination is requested. 37 CFR 1.510(b)(2).
`
`9. It is certified that a copy of this request has been served in its entirety on the patent
`owner as provided in 37 CFR 1.33(c). The name and address of the party served and the date of
`service are:
`Ansel M. Schwartz, ‘Registration No. 30,587
`201 N. Craig Street, Suite 304
`Pittsburgh, PA 15213
`
`Date of Service: January 31, 2005 (by overnight courier).
`
`10. Correspondence Address: Direct all communication about the reexamination to:
`
`Albert S. Penilla
`
`MARTINE PENILLA & GENCARELLA, LLP
`
`710 Lakeway Drive, Suite 200
`Sunnyvale, CA 94085 .
`(408) 749-6900
`Customer Number 25920.
`
`Atty. Docket No.‘ NAPSP002
`
`'
`
`Page 2 of 3
`
`Page 00002
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`

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`11. The patent is the subject of the following concurrent proceeding:
`
`Copending litigation styled: SightSound Technologies, Inc. v. Roxio, Inc. and Napster,
`L.L.C., U.S. District Court for the Western District of Pennsylvania, Civil Action No. 04-1549.
`
`Respectfully submitted,
`MARTINE PENILLA & GENCARELLA, LLP
`
`710 Lakeway Drive, Suite 200
`Sunnyvale, CA 94085
`(408) 749-6900
`Customer No. 25920
`
`Atty. Docket No. NAPSP002
`
`Page 3 of3
`
`Page 00003
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`

`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`In re Ex Parte Reexamination of:
`
`Arthur R. Hair t
`
`-
`U.S. Patent No. 5,675,734
`
`Issued: Oct. 7, 1997
`
`A
`
`For:
`
`SYSTEM FOR TRANSMITTING
`DESIRED DIGITAL VIDEO OR
`
`Examiner: Nguyen, Hoa T.
`(Prior Examiner)
`
`Group Art Unit: 2513
`(Prior Examination)
`
`REQUEST FOR Ex Parte
`REEXAMINATION
`
`UNDER 37 CFR§ 1.510
`
`AUDIO SIGNALS
`
`Date: Janu
`
`31, 2005
`
`Mail Stop Ex Parte Reexam
`Honorable Commissioner of Patents and Trademarks
`P.O. Box 1450
`.
`
`Alexandria, VA 22313-1450
`
`TABLE OF CONTENTS
`
`INTRODUCTION............................................................................................................ .. 1
`
`A.
`
`B.
`
`Anticipation and Obviousness ............................................................................. .. 1
`
`Double Patenting .................................................................................................. .. 2
`
`RELATED AND CO—FILED REQUESTS FOR REEXAMINATION .......................... .. 5
`
`CURRENT STATUS OF THE ‘734 PATENT ............................................................... .. 5
`
`CLAIMS FOR WHICH REEXAMINATION IS REQUESTED .................................... .. 5
`
`PRIOR ART PATENTS AND PUBLICATIONS ........................................................... .. 6
`
`STATEMENT POINTING OUT SUBSTANTIAL NEW QUESTIONS OF
`PATENTABILITY.................................................................................................. ..-. ...... .. 7
`
`DESCRIPTION OF THE RELEVANT PRIOR ART ....................... f. ............................ .. 7
`
`A.
`
`GALLAGHER (GB 2 178 275 A): Claims 1 — 34 of the Hair ‘734 Patent
`Are Anticipated Under 35 U.S.C. § 102 by Gallagher and/or Are Rendered
`Obvious Under 35 U.S.C. § 103 by Gallagher in View of Gremillet,
`Freeny, Akashi, Schwartz, Hellman, Ferrarini, Rosch, Elmer-Dewitt,
`Jared, Kramer, Waters, and/or Jordan.................................................................. .. 8
`
`GREMILLET (US. Pat. No. 4,499,568): Claims 1 — 34 ofthe Hair ‘734
`Patent Are Anticipated Under 35 U.S.C. § 102 by Gremillet in view of
`Gallagher Freeny, Akashi, Schwartz, Hellman, Ferrarini, Rosch, Elmer-
`Dewitt, Jared, Kramer, Waters, and/or Jordan................................................... .. 32
`
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT NO. 5,675,734
`
`Page 00004
`
`

`
`DOUBLE PATENTING IS A PROPER BASIS FOR THE REEXAMINATION
`PROCEEDING .............................................................................................................. .. 60
`
`A.
`
`B.
`
`The ’734 Patent Is Invalid For Obviousness-Type Nonstatutory Double
`Patenting. ........................................................................................................... .. 61
`
`Double Patenting Analysis of the Claims of the ‘734 Patent ............................. .. 62
`
`CONCLUSION .............................................................................................................. .. 90
`
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT NO. 5,675,734
`
`Page 00005
`
`

`
`INTRODUCTION
`
`This Request for Ex Parte Reexamination of U.S. Patent No. 5,675,734 (the ‘734
`
`patent”) raises substantial new questions of patentability with respect to the ‘734 patent based on
`
`prior art not cited or considered during the prosecution of the ‘734 patent and based on double
`
`patenting in view of U.S. Patent Nos. 5,966,440 (the “‘440 patent”) and 5,191,573 (the “‘573
`
`patent”), all to Arthur R. Hair (collectively, the “Hair Patents”).
`
`A.
`
`Anticipation and Obviousness
`
`The ‘734 patent is directed to a method and system for transferring desired digital
`
`audio and video signals through telecommunications lines from a first memory of a first party to
`
`a second memory of a second party. During the prosecution of the ‘734 patent, the Gallagher and
`
`Gremillet prior art references were neither disclosed nor considered by the Examiner. Gallagher,
`
`like the Hair Patents, also teaches a method, system and apparatus for selling and transferring
`
`through telecommunications lines, recorded digital audio and video data between a source unit, a
`
`database, which may be housed by a record company, and user units, which belong to the general
`
`public.
`
`Similarly, Gremillet teaches a method and system for the electronic sale of digital
`
`audio signals and recorded information over telecommunications lines, including telephone lines,
`
`cables and optical fibres. The digital audio signals are stored in an information bank at a
`
`distribution center and are distributed to user equipment that includes a recording device.
`
`Gallagher and Gremillet each individually anticipate all of the claims of the ‘440
`
`patent. Additionally, Gallagher and Gremillet in combination with other prior art references
`
`render all claims of the ‘734 patent obvious.
`
`Accordingly, this Request for Reexamination of the ‘734 patent should be granted
`
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT NO. 5,675,734
`
`Page 00006
`
`

`
`because Gallager and Gremillet alone and in combination with other prior art references raise a
`
`substantial new question of patentability.
`
`B.
`
`Double Patenting
`
`— The" ‘734 patent is also invalid under the doctrine of obviousness-type double
`
`patenting. The ‘734 patent claims the same innovation as set forth in the ‘573 patent. The only
`
`limitations that do not represent a mere change in wording that the patentee added in the ‘734
`
`patent are: (1) control unit; (2) speakers; (3) video display; (4) electronic coding or, encryption,
`
`of the signal; (5) hard disk; (6) control panel; (7) integrated circuit; and (8) sales, incoming or
`
`playback RAM chip. As Requestor will demonstrate in the detailed analysis in Section VIII of
`
`this Request, none of these limitations is patentably distinct and all of them would have been
`
`obvious to the person of ordinary skill in the art, in 1988.
`
`The addition of “control unit” and “control panel” is not Qatentably distinct. It
`
`would have been obvious to one skilled in the art in light of claims 1 and 4 of the ‘S73 patent to
`
`have the second memory included in some type of collection of hardware and sofiware called a
`
`"control unit" and to have the digital signals on the second memory to be played through speakers
`
`connected to the second memory. In addition, the limitation of having the second memory
`
`included in some type of collection of hardware and software called a “control unit” was obvious
`
`in view of at least Gallagher, Akashi, Freeny, Schwartz. A control unit for the first party too
`
`would be understood to one of skill in the art. The "first party control unit" was obvious in view
`
`of the “first memory with a transmitter in control and possession of the first party,” of Claim lof
`
`the ‘573 Patent. In order to exercise the “control” disclosed some means for control would have
`
`to exist. Viewed together a “control unit” was disclosed.
`
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT NO. 5,675,734
`
`Page 00007
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`

`
`It would have been obvious to have a “control panel” on the user’s unit. Hair's claimed
`
`invention as described in the original '5 73 specification was an "advanced stereo system." ‘S73
`
`Prosecution History, Original Patent Application Filing at p.6. It is well known, was well known
`
`in 1988, that a stereo system must have a control panel in order to accept user commands (for
`
`example to “play” music).
`
`The addition of “speakers” is not patentably distinct. The limitation of having the
`
`digital signals on the second memory played through speakers connected to the second memory
`
`was obvious to a person skilled in the art in 1988. Namely, it was obvious that a customer would
`
`want to play the purchased music through speakers. Moreover, the addition of this limitation is
`
`obvious in view of at least Gallagher, Schwartz and Gremillet. Finally, Hair's claimed invention
`
`as described in the original ‘S73 specification was an "advanced stereo system" capable of
`
`playing digital audio.
`
`'573 Prosecution History, Original Patent Application Filing at p.6. Such a
`
`unit would obviously be connected to speakers as this was customary for stereo systems and
`
`without speakers such a stereo system would be unable to produce sound.
`
`The addition of “video display” is not patentably distinct. A video display was
`
`obviously required to playback the digital video data disclosed in the claims of the ‘573. As Hair
`
`in prosecution claimed an “advanced stereo system” a person of skill in the artwould know that
`the analogous video system would be a machine akin to a videocassette recorder, which would
`
`naturally be connected to a TV monitor, or something similar; Moreover, digital video was well
`
`I
`known in the late 1980s. Gallagher and Rosch each illustrate the obviousness of a video display
`
`in the context of digital video in that time period.
`
`The addition of “coding” the signal to prevent unauthorized reproduction, or
`
`“encgyption,” is not patentably distinct. One skilled in the art would have known in light of
`
`claims 3 and 6 of the ‘S73 patent to code or encrypt the signals in a way to prevent unauthorized
`
`reproduction. Encryption was widely known and practiced in 1988. Specifically, the limitation
`
`of electronically coding the desired digital video or audio signals was obvious in view of at least
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT NO. 5,675,734
`
`3
`
`Page 00008
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`

`
`Freeny, Gallagher, Waters and a PC Weekly 1987 article. That article stated: “Several sofiware
`
`firms are including encryption as an option for their spreadsheet or database users. Other
`developers sell encryption hardware and software to tighten the lid on computer security.”
`
`The addition of “hard disk” is not patentably distinct. Usage of hard disc was known
`
`in the art well before 1988. Hair himself argued during the prosecution that “[t]he use of
`
`transferring money across telecommunications connections, such as by telephoning the agent
`who has the hard disc over the phone lines, for obtaining data on the hard disc is well known to I
`
`‘ one skilled in the art to be part of electronic sales.”) See ‘5 73 Prosecution History 6/25/92 Hair
`
`Decl.
`
`The addition of “integrated circuit” is not patentably distinct. A second party control
`
`integrated circuit was inherent in the ‘S73 teaching of electronic sales. During the prosecution,
`
`Hair argued that “the ‘second party’ must have a ‘receiver’ (the control IC of the user in figure 1)
`in his ‘possession’ inorder to receive the music electronically from the hard disk of the agent
`
`over the telecommunications lines, such as telephone lines.”) ‘734 Prosecution History, 1/3/94
`
`Hair Decl., p. 3-4 (emphasis added). The limitation of a second party integrated circuit and a
`
`control panel connected to the integrated circuit was further obvious in view of at least
`
`Gallagher, Freeny, Akashi, Schwartz and Gremillet.
`
`The addition of RAM chip is not patentably distinct. The limitation of the incoming
`
`random access memory chip to buffer incoming data before storage to a hard disk and a playback
`
`random access memory chip to buffer digital signals prior to playback was obvious to a person
`
`skilled in am. It was also obvious in view of at least Gallagher, Freeny, Akashi, Schwartz and
`
`Ferrarini. iMoreover, the functions attributed by Hair to the seller’s “sales random access
`
`memory chip” were well known within the field of digital telecommunications.
`
`Accordingly, the ‘44O claims the same invention as the ‘573 patent, and adds only minor
`
`and obvious limitations, all of the claims of the ‘440 patent are invalid for obviousness-type of
`
`double patenting. Because the Examiner had not rejected the claims on the basis of double
`
`. 4
`
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT NO. 5,675,734
`
`Page 00009
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`

`
`patenting during the prosecution of the ‘44O patent, Requestor’s analysis presents substantial new
`
`questions of patentabi_lity.
`
`'
`
`II.
`
`RELATED AND CO-FILED REQUESTS FOR REEXAMINATION
`
`In addition to this Request for reexamination of the ‘734 patent, separate Requests
`
`for reexamination of the ‘573 and ‘440 patents have also been concurrently filed. As stated, the
`
`‘$73, 734 and ‘44O patents are all related, disclose identical inventions, claim priority to the same
`
`June 13, 1988 earliest filing date, and were issued from continuation applications from the same
`
`parent application. Moreover, the three patents also share similar specifications and identical
`
`drawings.
`
`III.
`
`CURRENT STATUS OF THE ‘734 PATENT
`
`The ‘7 34 patent is currently in litigation in the District Court for the Western
`
`District of Pennsylvania in a case styled Sigl_1tSound Technologies, Inc. v. Roxio, Inc. and
`
`Napster, L.L.C., Civil Action No. 04-1549. The case is in its infancy and no formal discovery
`
`has taken place. Pursuant to the Court’s request, Requestor has filed a Motion to Stay the case
`
`pending the outcome of -the Reexamination proceedings.
`
`Previously, the ‘734 patent was in litigation in another case, also in the District V
`
`Court for the Western District of Pennsylvania, styled as Sigl_1tSound.com Incomorated v. NZK,
`Inc. CDnow Inc. and CDnow Online Inc., Civil Action No. 98-0118. That case settled before
`
`trial with no judicial determination of the invalidity of the ‘440 patent.
`
`The ‘573 and ‘44O patents are also at issue in the current litigation, and were also
`
`at issue in the previous litigation.
`
`IV.
`
`CLAIMS FOR WHICH REEXAMINATION IS REQUESTED
`
`Reexamination is requested for all claims, claims 1 through 34.
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT N0. 5,675,734
`
`5
`
`Page 00010
`
`

`
`V.
`
`PRIOR ART PATENTS AND PUBLICATIONS
`
`Pursuant to 37 C.F.R. § 1.555 Requestor brings to the attention of the Examiner
`
`the following references, all of which are listed on the enclosed form PTO—1449, along vyith
`
`copies of the listed references:
`
`Reference Name
`
`“Cam.
`
`'1 r,,
`3 °
`
`“Gremillet” _
`
`Reference Description
`
`Great Britain Patent GB 2 178 275 A, “Recorded Data Transfer
`System,” filed July 16, 1986, published February 4, 1987.
`
`U.S. Pat. No. 4,499,568, “Process for the Teledistribution of
`Recorded Information and a System for Performing This
`Process,” filed December 13, 1982, issued February 12, 1985.
`
`“Freeny”
`
`“Akashi”
`
`. “Schwartz”
`
`‘ U.S. Patent No. 4,528,643, “System For Reproducing
`Information In Material Objects At a Point of Sale Location,”
`filed January 10, 1983, issued on July 9, 1985.
`
`Japanese Patent Application No. S62-284496 to H. Akashi,
`“Automated Music Purchasing System,” filed on June 3, 1986
`and published on December 10, 1987. (Translation included.)
`
`U.S. Pat. No. 4,636,876, “Audio Digital Recording and Playback
`
`System,” filed April 19, 1983, issued January 13, 1987.
`
`U.S. Pat. No. 4,658,093, Software Distribution System, filed July .
`13, 1983, issued on April 14, 1987.
`
`“Ferrarini,,
`
`Ferrarini, “Direct Connections for Software Selections,” Business
`Computer Systems, February 1984.
`
` “ComNet for the PC,” PCMagazine, August 1983.
`“Calling Up an On-Line Cornucopia,” Time, April 7, 1986.
`“The Copy Protection Wars,” PCMagazine, January 14, 1986.
`;EI\Iaergo3r,1<11;}83plications Are AddingEncryption,”PCWeek,
`
`“waters”
`
`“Prospects for Standardization in Cable Audio,” Technical
`Papers-NCTA Annual Convention, 1984.
`
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT NO. 5,675,734
`
`Page 00011
`
`

`
`Communications and Networkingfor the IBMPC, 1983.
`
`For the reasons discussed below, the prior art patents and printed publications
`
`submitted herein raise substantial new questions of patentability of claims 1 through 34 of the
`
`'734 patent.
`
`VI.
`
`STATEMENT POINTING OUT SUBSTANTIAL NEW QUESTIONS OF
`PATENTABILITY
`
`This Request for Ex Parte Reexamination of the ‘734 patent raises the following
`
`substantial new questions of patentability:
`
`1.
`
`2.
`
`Whether claims 1 — 34 are anticipated under 35 U.S.C. § 102 by Gallagher;
`
`Whether claims 1 — 34 are anticipated under 35 U.S.C. § 102 by Gremillet;
`
`Whether claims 1 — 34 are rendered obvious under 35 U.S.C. § 103 by
`Gallagher in view of Gremillet, Freeny, Akashi, Schwartz, Hellman,
`Ferrarini, Rosch, Elmer-Dewitt, Jared, Kramer, Waters, and/or Jordan;
`
`Whether claims 1 — 34 are rendered obvious under 35 U.S.C. § 103 by
`Gremillet in view of Gallagher Freeny, Akashi, Schwartz, Hellman,
`Ferrarini, Rosch, Elmer-Dewitt, Jared, Kramer, Waters, and/or Jordan;
`
`Whether claims 1 — 34 are unpatentable for double patenting in view of U.S.
`Patent No. 5,191,573, also issued to Arthur R. Hair.
`
`VII. DESCRIPTION OF THE RELEVANT PRIOR ART
`
`In the following claim charts, the left hand column lists the claims of the ‘734
`
`patent and the right-hand column identifies the relevant portions of the cited references and
`
`explains their pertinence which anticipates under 35 U.S.C. § 102. The right hand column also
`
`explains how, in combination with other prior art, the cited references render the Hair ‘734 patent
`
`obvious under 35 U.S.C. § 103, as specifically described below.
`
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT NO. 5,675,734
`
`Page 00012
`
`

`
`GALLAGHER (GB 2 178 275 A): Claims 1 — 34 of the Hair ‘734 Patent Are
`Anticipated Under 35 U.S.C. § 102 by Gallagher and/or Are Rendered
`Obvious Under 35 U.S.C. § 103 by Gallagher in view of Gremillet, Freeny,
`Akashi, Schwartz, Hellman, Ferrarini, Rosch, Elmer-Dewitt, Jared, Kramer,
`Waters, and/or Jordan.
`
`Gallagher (GB 2 178 275 A) was not cited or considered by the Examiner during
`
`the prosecution of the Hair ‘734 Patent. Gallagher was filed on July 16, 1986 and published on
`
`February 4, 1987, prior to the earliest priority date of June 13, 1988 of the Hair patent.
`
`Accordingly, Gallagher is prior art to the Hair patent.
`
`Gallagher teaches a method, system and apparatus for transferring recorded digital
`
`. audio and video data between a source unit, a database which may be housed by a record
`
`company and user units. E Gallagher at Abstract. The system includes forming a connection
`
`through telecommunication lines (which include high speed telephone links by way of modems,
`
`or regular telephone links, fibre optic links, electro-magnetic waves or any other suitable
`
`medium) between a first memory of a first party and a second memory of a second party, the first
`
`memory having the digital audio or video signals, selling ‘electronically by the first party to the
`
`second party through the telecommunications lines the desired digital audio or video signals,
`
`transferring the desired digital signals from the first party to the second party through the
`
`telecommunications lines while the second memory is in possession and control of the second
`
`party (at a remote location) and storing the digital signals in the second memory which includes
`
`hard disks. E Gallagher at 1. In addition Gallagher also teaches encryption and decryption of
`
`the digital audio or video signals for the prevention of unlawful copying and piracy. Sfi
`
`Gallagher at 1. Moreover, Gallagher discloses that the sale of the digital audio or video signal is
`
`through the user units, for example through the user’s personal computer. flee Gallagher at 1.
`
`Accordingly, the Gallagher reference raises substantial new questions of
`
`8
`
`REQUEST FOR REEXAMINATION
`OF U.S. PATENT N0. 5,675,734
`
`Page 00013
`
`

`
`patentability of the Hair patent.
`
`GREAT BRITAIN PATENT GB 2 178 275 A TO GALLAGHER
`
`Prior Art Disclosure Rendering Hair Anticipated or Obvious,
`Including Motivation to Combine
`
`1. A method for transferring desired
`digital video or digital audio signals
`comprising the steps of:
`
`Gallagher discloses the transfer of desired digital video audio in a
`“recorded data transfer system’? of “digital data” in the “entertainment
`industry” such as “audio or visual” data. m Gallagher at 1:5, 1:8, 1:6~7,
`1:9l,Figs.2&3.
`-
`
`forming a connection through
`telecommunications lines between a
`first memory of a first party at a first
`party location and a second memory of
`a second party at a second party
`location remote from the first party
`location, said first memory having a
`first party hard disk having a plurality
`of digital video or digital audio signals
`including coded desired digital video
`or digital audio signals, and a sales
`random access memory chip which
`temporarily stores a replica of the
`coded desired digital video or digital
`audio signals purchased by the second
`party for subsequent transfer via
`telecommunications lines to the second
`memory of the second party;
`
`Gallagher discloses forming a connection through telecommunication
`lines. Gallagher at 1228-31 (“The media for data transfer is preferably
`high speed telephone links by way of modems. However, normal
`telephone links, fibre optic links, electro-magnetic waves or any other
`suitable medium may be used.”).
`
`Gallagher discloses a first memory of a first party at a first party location.
`Gallagher at 1:13-16 (The first memory of a first party is a “database
`having a main computer, .
`.
`. a data storage and processing system, means
`for controlling the storage and processing of data .
`.
`. .”) Gallagher at
`1:67-69 (First party can be the “source unit” which can also contain the
`first memory, and it “comprises a storage medium 1 1.”). Gallagher at 1:5,
`1:8, 1:6-7, 1:91, Figs. 1 & 2 (first memory has desired digital video or
`digital audio signals).
`
`Gallagher also discloses a second memory of a second party at a second‘
`party location. Gallagher at 1:21-22 (“means for storing/recalling and/or
`processing data received from the database”).
`
`Gallagher discloses that the first party and second party are at remote
`locations. Gallagher ‘discloses sale is to the general public. Gallagher at
`1:49-50 (‘‘sale to the general public via their user units”). Gallagher also
`discloses that general public is at home and therefore at a remote location.
`Gallagher at 2:92-93 (“home—buying ofmaterial” and “immediate access
`to material”).
`
`Gallagher discloses a hard disk for both memories. Gallagher at 1:32-35
`(“The media for storage of data would be floppy disk, hard disk, optical or
`laser disk, magnetic tape, integrated circuit memory or any other suitable
`medium.’’).
`
`The first party hard disk has a plurality of digital video or digital audio
`signals. gg Gallagher at 1:5, 1:8, 1:6-7, 1:91, Figs. 1 & 2.
`
`The digital video and audio signals are coded. Gallagher at 1:36-38 (“The
`system may incorporate anti-piracy methods such as the encryption or
`encoding of data either generally or uniquely.”). Gallagher at 1:50-54
`(“By arranging for the data to be encoded/encrypted uniquely for each
`user unit, the borrowing or unlawful copying of material could be
`eliminated. This method could also be used to ensure security between all
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`OF U.S. PATENT NO. 5,675,734
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`“encoder/decoder 13”). Gallagher at 1:83, Fig. 2 (the database has an
`“encoder/decoder 22"). Gallagher at 1:90, Fig. 3 (the user unit has a
`“decoder 33").
`
`Gallagher discloses a sales random access memory chip that temporarily
`stores the purchased coded digital video or audio signal. Gallagher at
`1:81-84 (“The database, Figure 2, comprises a parallel transmitter/receiver
`20, a serial/parallel and parallel/serial converter 21, an encoder/decoder
`22 and a buffer store 23.”) A person skilled in the art would realize that a
`“buffer store 23” can be a sales random access memory chip. Moreover,
`Gallagher discloses a “main computer” which inherently has a random
`access memory chip which a person of ordinary skill at the time would
`realize could be used as a sales random access memory chip.
`
`The transfer is via telecommunications lines to the second memory.
`
`K
`
`telephoning the first party controlling
`use of the first memory by the second
`P311;
`
`Gallagher at 1:28-31 (The telecommunication line is “high speed
`telephone links by way of modems. However, normal telephone links,
`fibre optic links, electro-magnetic waves or any other suitable medium
`may be used.”).
`
`providing a credit card number of the
`second party controlling the second
`memory to the first party controlling
`the first memory so the second party is
`charged money;
`
`Gallagher at 1:49-50 (Gallagher discloses “sale to the general public via
`their user units.”). Gallagher at 2292-93 (“home-buying of rnateria ” and
`“immediate access to material.“).
`
`In addition, it would have been obvious to a person skilled in the art at the
`time to electronically sell digital audio and video signals via
`telecommunications lines. Freeny expressly discloses the combination of
`“selling electronically” digital audio and video signals over
`telecommunications lines. Freeny at 12:31-36 (“a consumer credit card
`number also might be communicated .
`.
`. so the owner of the infomiation
`could approve the sale and, in effect, charge the sale to the consumer
`credit card number’ ’).
`
`Hellman also discloses the combination of “selling electronically” digital
`audio and video signals over telecommunications lines. Hellman at 5:57-
`6:2 (“Base unit 12 generates and communicates to authorization and
`billing unit 13 a signal representing a user originated request for software
`use.. BILLING INFORMATION is a credit car[d] number or similar
`means for billing the user of the software.”).
`
`Akashi also discloses the combination of “selling electronically” digital
`audio and video signals over telecommunications lines. Akashi at l
`(Akashi discloses an “Automated Music Purchasing System” which
`"communicates via telephone lines” and “sells recorded music via the
`telephone line.”). Akashi at 2 (Akashi distingiishes the “conventional
`system of selling recorded music,” that is, through “music sales outlets.”).
`Akashi at 2, 5, Fig. 2 (the “automated music purchasing system
`network.”). Akashi at 4 (a record company need “not require the current
`distribution channels” [music sales outlets] and thus the “user would be
`able to easily as well as freely search for and purchase desired music from
`home.”).
`
`Elmer-Dewitt also discloses the combination of “sellin electronicall
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`V OF U.S. PATENT NO. 5,675,734
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`digital audio and video signals over telecommunications lines. Elmer-
`Dewitt at 69 (“Today anybody with a computer, a modem and a deep line
`of credit can buy an airline ticket to Cleveland, rent a Hertz car at the
`airport, book a room at the Sheraton, buy a novel from Waldenbooks,
`check the closing prices on Wall Street and purchase 100 shares of IBM-
`without ever getting up from the computer.”)
`
`Ferrarini also discloses the combination of “selling electronically” digital
`audio and video signals over telecommunications lines. Ferrarini (“If you
`decide to buy, you receive the software, complete with documentation, via
`your microcomputer and the telephone lines. .
`.
`. Recently, a handful of
`companies have established services that allow users to purchase sofiware
`just this way. If they are successful, delivering sofiware via the telephone
`will become a major method of distribution within the next few years.“).
`
`See also ‘573 Prosecution History, Paper No. 27 at 2.: “One skilled in the
`art would know that an electronic sale inherently assumes a transferring of
`money by providing a credit card number (since that is the only way for
`electronic sales to occur) coupled with a transferring of a service or
`product. The use of transferring money across telecommunication
`connections, such as by telephoning the agent who has the hard disc over
`the phone lines, for obtaining data on the hard disc is well known to one
`skilled in the art to be part of electronic sales.”
`
`See also ‘573 Prosecution History, 5/5/94 IDS at 2 (Hair admits that
`“[t]his patent [U.S. Patent No. 4,789,863 to Bush] discloses a pay per
`view entertainment system”).
`
`See also ‘734 Prosecution History, 1/3/94 Hair Decl. at 5 (“‘[E]lectronic
`sales’ as disclosed refers to the well known practices of ‘transferring’ and
`verifying monies across telephone lines such as by a ‘credit card’; or by
`‘charging a fee’ to the second party, so the second party can gain access to
`the first party’s memory through telecommunications lines to select the
`desired digital video or digital audio signals”).
`
`Accordingly, the electronic sale of digital audio and video signals via
`telecommunications lines would have been obvious to one of ordinary
`skill in the art at the relevant time.
`
`E above this Claim, Gallagher disclosure re “desired digital video or
`digital audio signals’? and re “first memory.”
`
`electronically coding the desired
`digital video or digital audio signals to
`form said coded desired digital video
`or digital audio signals into a
`configuration which would prevent
`unauthorized reproduction of the
`desired digital video or digital audio
`signals;
`
`The digital video and audio signals are coded. Gallagher at 1:36-38 (“The
`system mayincorporate anti-piracy methods such as the encryption or
`encoding of data either generally or uniquely.”). Gallagher at 1:50-54
`(“By arranging for the data to be encoded/encrypted uniquely for each
`user unit, the borrowing or unlawful copying of material could be
`eliminated. This method could also be used to ensure sec