Covered Business Method Patent Review CBM2013-00023
`United States Patent No. 5,966,440
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5005-804
`Customer No. 28120
`
`
`§
`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: 2785
`§
`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
`
`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. § 42.3041
`
`
`
`Pursuant to 35 U.S.C. § 321 and 37 C.F.R. § 42.304, the undersigned, on behalf
`
`of and acting in a representative capacity for petitioner, Apple Inc. (“Petitioner” and
`
`the real party in interest), hereby petitions for review under the transitional program
`
`for covered business method patents of claims 1, 64, and 95 of U.S. Patent No.
`
`5,966,440 (“the ’440 Patent”), issued to Arthur R. Hair and currently assigned to
`
`SightSound LLC (“SightSound,” also referred to as “Applicant,” “Patent Owner,” or
`
`
`1 As directed by the Board in Paper No. 4, Petitioner hereby resubmits the Petition
`
`and accompanying Exhibits to address formality issues identified therein.
`
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` Covered Business Method Patent Review CBM2013-00023
`United States Patent No. 5,966,440
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`“Patentee”). Petitioner hereby asserts that it is more likely than not that at least one
`
`of the challenged claims is unpatentable for the reasons set forth herein and
`
`respectfully requests review of, and judgment against, claims 1, 64, and 95 as
`
`unpatentable under 35 U.S.C. §§ 102 and 103.
`
`As discussed in Section I, infra, Petitioner has concurrently filed a Petition
`
`seeking covered business method review of the ’440 Patent, requesting judgment
`
`against these same claims under § 101 for claiming patent-ineligible subject matter and
`
`for obviousness-type double patenting. Petitioner has additionally filed Petitions
`
`seeking covered business method reviews of the ’573 Patent, requesting judgment
`
`against claims in that patent under §§ 101 and 112 in one Petition, and under §§ 102
`
`and 103 in a second concurrent Petition. Petitioner notes that the Director, pursuant
`
`to Rule 325(c), may determine at the proper time that merger of these proceedings, or
`
`at minimum coordination of proceedings involving the same patent, is appropriate.
`
`
`
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`United States Patent No. 5,966,440
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`
`
`
`V. 
`
`B. 
`
`TABLE OF CONTENTS
`I. 
`INTRODUCTION ....................................................................................................... 1 
`II.  OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 4 
`III.  PETITIONER HAS STANDING ............................................................................ 9 
`A. 
`The ’440 Patent Is a Covered Business Method Patent .......................................... 9 
`B. 
`Related Matters; Petitioner Is a Real Party In Interest Sued for and
`Charged With Infringement .................................................................................. 15 
`IV.  OVERVIEW OF SPECIFIC GROUNDS FOR WHICH IT IS MORE
`LIKELY THAN NOT THAT THE CHALLENGED CLAIMS
`(1, 64, and 95) OF THE ’440 PATENT ARE UNPATENTABLE .................. 15 
`BACKGROUND INFORMATION FOR THE ’440 PATENT ...................... 16 
`A. 
`The ’440 Patent and Its Prosecution History ........................................................ 16 
`1. 
`The ’440 Patent Family ....................................................................... 16 
`2. 
`File History of the Parent ’573 Patent .............................................. 17 
`3. 
`File History of the ’440 Patent ........................................................... 21 
`Reexamination History of the ’440 Patent and Related Patents ........................... 26 
`1. 
`Reexamination of the Parent ’573 Patent ......................................... 26 
`2. 
`Reexamination of the ’440 Patent...................................................... 31 
`VI.  DETAILED EXPLANATION OF REASONS FOR RELIEF
`REQUESTED, SHOWING IT IS MORE LIKELY THAN NOT
`THAT AT LEAST ONE CHALLENGED CLAIM IS
`UNPATENTABLE .................................................................................................... 36 
`A. 
`Claim Construction ............................................................................................... 37 
`B. 
`The Challenged Claims Are Invalid Under § 102 and/or § 103 ........................... 42 
`1. 
`The Challenged Claims Are Anticipated By the
`CompuSonics System and Are Invalid Under § 102 ...................... 42 
`The Challenged Claims Are At Minimum Rendered
`Obvious by Synth-Bank, Standing Alone or In Light of
`Additional References, and Are Invalid Under § 103 ..................... 64 
`VII.  CONCLUSION........................................................................................................... 79 
`
`2. 
`
`iii
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`United States Patent No. 5,966,440
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`United States Patent 5,966,440
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`
`EXHIBITS
`Exhibit 1301
`
`Exhibit 1302
`
`United States Patent 5,966,440 File History
`
`Exhibit 1303
`
`Application No. 90/007,407 (‘440 Patent Reexamination)
`
`Exhibit 1304
`
`United States Patent No. 5,191,573
`
`Exhibit 1305
`
`United States Patent No. 5,191,573 File History
`
`Exhibit 1306
`
`Application No. 90/007,402 (‘573 Patent Reexamination)
`
`Exhibit 1307
`
`Exhibit 1308
`
`Exhibit 1309
`
`Exhibit 1310
`
`Exhibit 1311
`
`Exhibit 1312
`
`Exhibit 1313
`
`Exhibit 1314
`
`Exhibit 1315
`
`Exhibit 1316
`
`Exhibit 1317
`
`Deposition Transcript of Arthur Hair, dated Dec. 11, 2012
`SightSound Techs., LLC v. Apple Inc., No. 11-1292 (W.D. Pa.)
`Deposition of Scott Sander, dated Dec. 18-19, 2012
`SightSound Techs., LLC v. Apple Inc., No. 11-1292 (W.D. Pa.)
`“Joint Telerecording Push: CompuSonics, AT&T Link,” Billboard
`(Oct. 5, 1985)
`David Needle, “From the News Desk: Audio/digital interface for
`the IBM PC?,” InfoWorld, vol. 6, no. 23, p. 9, June 4, 1984
`Larry Israelite, “Home Computing: Scenarios for Success,” Billboard,
`Dec. 15, 1984
`International Patent Application WO85/02310, filed on November
`14,1984, and published on May 23,1985 (“Softnet”)
`United States Patent No. 3,718,906 filed on June 1, 1971, issued on
`February 27,1973 (“Lightner”)
`United States Patent No. 3,990,710 filed on March 1, 1971, issued
`on November 9, 1976 (“Hughes”)
`Image titled, “CompuSonics Digital Audio Telecommunication
`System”
`7/16/84 CompuSonics Letter from David Schwartz to Shareholders
`
`Hyun Heinz Sohn, “A High Speed Telecommunications Interface
`for Digital Audio Transmission and Reception,” presented at the
`76th AES Convention, October 8-11, 1984
`
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`United States Patent No. 5,966,440
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`
`EXHIBITS
`Exhibit 1318
`
`Exhibit 1319
`
`Exhibit 1320
`
`Exhibit 1321
`
`Exhibit 1322
`
`Exhibit 1323
`
`Exhibit 1324
`
`10/10/85 CompuSonics Letter from David Schwartz to
`Shareholders
`CompuSonics Video Application Notes – CSX Digital Signal
`Processing (1986)
`Image titled, “CompuSonics Digital Audio Software Production/
`Distribution”
`Excerpts of Lecture at Stanford by D. Schwartz and J. Stautner,
`1987 (video)
`Bryan Bell, “Synth-Bank: The Ultimate Patch Library,” Electronic
`Musician (Sept. 1986)
`United States Patent No. 4,682,248 filed on September 17, 1985,
`issued on July 21, 1987 (“Schwartz Patent”)
`“The Search for the Digital Recorder,”Fortune, Nov. 12, 1984
`
`Exhibit 1325
`
`2/22/1986 Agreement between Synth-Bank and Artist
`
`Exhibit 1326
`
`Exhibit 1327
`
`Exhibit 1328
`
`Exhibit 1329
`
`Exhibit 1330
`
`Exhibit 1331
`
`Exhibit 1332
`
`Exhibit 1333
`
`3/17/1987 United States Patent & Trademark Office Notice of
`Acceptance and Renewal, Serial No. 73/568543
`“SynthBank Bulletin Board,” Keyboard Magazine (March 1987)
`
`“Inside Macintosh,” Volumes I, II, and III, Addison-Wesley
`Publishing Company, Inc. (1985)
`Craig Partridge, “The Technical Development of Internet Email,”
`BBN Technologies
`United States Patent No. 4,124,773 filed on November 26, 1976,
`issued on November 7, 1978 (“Elkins”)
`United States Patent No. 4,667,088 filed on November 1, 1982,
`issued on May 19, 1987 (“Kramer et al.”)
`United States Patent No. 4,528,643 filed on January 10, 1983, issued
`on July 9, 1985 (“Freeny”)
`Photo of CompuSonic equipment
`
`Exhibit 1334
`
`Declaration of Dr. J. Kelly In Support of Petition for Covered
`Business Method Patent Review
`Exhibit 1335 Declaration of David Schwartz In Support of Petition for Covered
`Business Method Patent Review
`
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` Covered Business Method Patent Review CBM2013-00023
`United States Patent No. 5,966,440
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`
`EXHIBITS
`Exhibit 1336
`
`Exhibit 1337
`
`Exhibit 1338
`
`11/19/12 Special Master’s Report and Recommendation on Claim
`Construction (D.I. 142) SightSound Techs., LLC v. Apple Inc. No. 11-
`1292 (W.D. Pa)
`2/13/13 Order re Claim Construction (D.I. 175), SightSound Techs.,
`LLC v. Apple Inc., No. 11-1292 (W.D. Pa.)
`United States Patent No. 5,675,734 File History
`
`Exhibit 1339
`
`Excerpt from Chambers Science and Technology Dictionary (1988)
`
`Exhibit 1340
`
`Excerpt from Webster’s II New Riverside University Dictionary (1988)
`
`Exhibit 1341
`
`Declaration of Dr. John P.J. Kelly, dated Sept. 7, 2012
`
`Exhibit 1342
`
`Exhibit 1343
`
`Exhibit 1344
`
`Exhibit 1345
`
`Exhibit 1346
`
`Exhibit 1347
`
`New Telerecording Method for Audio, Broadcast
`Management/Engineering, pp. 14-15, Oct. 1985
`Excerpt of Plaintiff SightSound Techs., LLC’s Expert Report of Dr.
`J. Douglas Tygar Regarding Infringement, dated April 22, 2013
`Declaration of Flora D. Elias-Mique In Support of Petition for
`Covered Business Method Patent Review
`Declaration of Roberto J. Gonzalez In Support of Petition for
`Covered Business Method Patent Review
`Declaration of Megan F. Raymond In Support of Petition for
`Covered Business Method Patent Review
`Declaration of Ching-Lee Fukuda In Support of Petition for
`Covered Business Method Patent Review
`
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`United States Patent No. 5,966,440
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`I.
`
`INTRODUCTION
`
`The challenged claims of the ’440 Patent—method claims 1, 64 and 95—
`
`merely recite steps well-known in the art of selling digital data, including audio and
`
`video. The patent’s independent Claim 1, for example, recites the rudimentary steps
`
`of (A) forming a connection between the buyer’s device and seller’s device; (B) selling
`
`and charging electronically for the desired digital video or audio signal; (C, D, F)
`
`transferring the desired signal from the seller’s device to the buyer’s device (not a tape
`
`or CD); and (E) playing the signal through speakers (Ex. 1301):
`
`1. A method for transferring desired digital video or digital audio signals
`comprising the steps of:
`
`[A] forming a connection through telecommunications lines between a
`first memory of a first party and a second memory of a second party
`control unit of a second party, said first memory having said desired
`digital video or digital audio signals;
`
`[B] selling electronically by the first party to the second party through
`telecommunications lines, the desired digital video or digital audio
`signals in the first memory, the second party is at a second party location
`and the step of selling electronically includes the step of charging a fee
`via telecommunications lines by the first party to the second party at a
`first party location remote from the second party location, the second
`party has an account and the step of charging a fee includes the step of
`charging the account of the second party; and
`
`[C] transferring the desired digital video or digital audio signals from the
`first memory of the first party to the second memory of the second party
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`United States Patent No. 5,966,440
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`control unit of the second party through telecommunications lines while
`the second party control unit with the second memory is in possession
`and control of the second party;
`
`[D] storing the desired digital video or digital audio signals in a non-
`volatile storage portion the second memory;
`
`[E] and playing through speakers of the second party control unit the
`digital video or digital audio signals stored in the second memory, said
`speakers of the second party control unit connected with the second
`memory of the second party control unit;
`
`[F] wherein the non-volatile storage portion is not a tape or CD.[ 2]
`
`Storing data, including audio and video data, at a remote server was well
`
`known. Downloading data over phone lines from a remote server to a local computer
`
`and storing it there was well-known. And the electronic sale of merchandise,
`
`including digital data, and then using that data was also well-known.
`
`Indeed, as its language makes clear, Claim 1 involves no “technology” at all
`
`
`2 Claims 64 and 95 are similar (Ex. 130), also reciting “first memory” and “a second
`
`memory,” as well as “telecommunications lines.” Likewise, a control unit is men-
`
`tioned in claim 64 only in the context of a “second memory” and “speakers of the
`
`second party control unit . . .,” and in claim 95 only in the context of placing the unit
`
`“at a desired second party location” and of a “second party hard disk with the second
`
`party control unit” (i.e., part of the second memory).
`
`2
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`United States Patent No. 5,966,440
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`other than “a first memory” and “a second memory of a second party control unit,”
`
`“telecommunications lines,” and “speakers.” And the patent itself concedes these
`
`were all well known and entirely commonplace at the time, stating, for example, that
`
`the first and second parties’ memories (“agent’s Hard Disk” and “user’s Hard Disk”),
`
`telecommunication lines (“Telephone Lines”), and speakers (“Stereo Speakers”) are
`
`“already commercially available.” Ex. 1301 at 4:33-38. Further, the “control unit”
`
`mentioned in the claims as associated with the conventional “second” memory is
`
`described as a functional feature that can be implemented with a general purpose
`
`computer: the patent provides no disclosure of specific algorithms, and expressly
`
`states that the specification’s description of such a “unit” does not indicate any
`
`particular requirements—it “is not restrictive with respect to the exact number of
`
`components and/or its actual design.” Ex. 1301 at 4:65-67; See Ex. 1336 at 19-20.
`
`Indeed, during prosecution of the ’440 Patent Applicant himself equated the control
`
`unit in the claims to a generic computer, arguing that Napster and N2K copied the
`
`claimed invention when they enabled a generic computer (equated by Applicant to the
`
`second control unit) to access a website and purchase digital audio signals. Ex. 1302
`
`(01/08/98 Decl. at 2-3). Thus, as the intrinsic record reflects, Claim 1 recites nothing
`
`more than a method for electronically selling digital audio or video between a seller
`
`and buyer, using conventional, commercially available hardware and a general purpose
`
`3
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`United States Patent No. 5,966,440
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`computer with no specific algorithm.3
`
`Indeed, each and every element of the challenged claims of the ’440 Patent has
`
`been disclosed in the prior art, either by individual references or systems, or by those
`
`references or systems in combination. Accordingly, each of the challenged claims is
`
`invalid under 35 U.S.C. §§ 102 and 103.4
`
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`
`The concept of selling and transmitting digital audio and video over telephone
`
`lines was well known long before the ’440 Patent’s claimed June 13, 1988 priority
`
`date. The pervasive and basic concept of selling and transmitting digital audio and
`
`video over telephone lines was touted in a range of books and periodicals,
`
`presentations and lectures long before the ’440 Patent’s claimed June 13, 1988 priority
`
`date. As is detailed below in Section VI.B., this concept also was the subject of prior
`
`commercialization efforts by, among others, a company called CompuSonics.
`
`
`
`Computer scientists, engineers, and users have long recognized the advantages
`
`of connecting computers together so that they can share information. Since most
`
`homes had telephone lines, the telephone system was a popular method of connecting
`
`
`3 Sole named inventor Hair admitted he did not invent electronic sale, electronic
`transmission of digital audio signals, electronic transmission of digital video signals, or
`electronic transmission of computer programs for electronic sale. See Ex. 1307 at
`49:3-52:2. SightSound’s CEO similarly admitted that Applicant did not invent
`computers, computer networks, the Internet, telephone lines, or telecommunications
`lines. Ex. 1308 at 42:12-44:5.
`4 In litigation, Petitioner is also demonstrating invalidity for numerous other reasons.
`
`4
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`United States Patent No. 5,966,440
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`a home computer to a remote computer. Computer users have accessed remotely-
`
`stored data in a wide variety of ways, such as email, Bulletin Board Systems (BBSs),
`
`and online services. See Ex. 1334 (Kelly Decl.) at ¶¶ 19-24, 26-27. Electronic sale of
`
`digital products, including digital audio and video, was also well known.
`
`For example, as Billboard reported on October 5, 1985, CompuSonics
`
`and AT&T announced a partnership to create an “electronic record store,” and
`
`conducted related press demonstrations. See Ex. 1309 at 3. As that article
`
`recognized, the “electronic record store” concept was well-known: “David
`
`Schwartz, the president of CompuSonics, is a strong proponent of the
`
`‘electronic record store’ concept, an idea that has been bandied about for some
`
`time, but which Schwartz says is now poised to ‘become a reality.’” See id.
`
`CompuSonics had developed digital recorder/players that could store and play
`
`digital data transmitted over telephone lines, and offered robust editing features
`
`that could be used to manipulate digital audio regardless of its origin.
`
`One key underpinning to the prevalence of this idea was the nature of
`
`digital audio and video. These forms of digital data are just that—data in digital
`
`form—and it was both obvious and widely discussed in the art that they could
`
`be transmitted, including as part of electronic sales, just like any other digital
`
`data. For example, in May 1984 InfoWorld reported that CompuSonics was
`
`“looking at potential electronic distribution of music whereby you would be
`
`5
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`United States Patent No. 5,966,440
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`able to download music onto your PC in the same manner as other digital
`
`information. The CompuSonic system has a built-in communications device that
`
`that receives information via an existing phone line.” See Ex. 1310 at 1.5
`
`A December 1984 Billboard article similarly described various scenarios for
`
`selling and distributing music over telephone and cable lines. As the article outlined,
`
`such a recording/playback device like CompuSonics’ would provide for sale and
`
`distribution of digital audio over telephone and cable lines:
`
`One medium that is currently used for shipping digital data over
`long distances is telephone lines. Unfortunately, the speed at which
`data can be shipped over existing phone lines is relatively slow (1,200
`single pieces of information per second), and the error rate is relatively
`high. . . . In the very near future, however, a service will be available that
`will allow the shipment of 144,000 pieces of information per second
`over telephone lines with an extremely low error rate. . . . A second
`means of shipping digital data to the home is over cable television lines.
`With current cable technology, it should be possible to ship enough data
`to equal a 45-minute LP in less than 15 minutes. . . . [A]ssum[ing] there
`are low-cost, high-speed techniques for shipping digital data into the
`home . . ., in the not-too-distant future consumers will be able to
`buy music at home, over telephone lines or through cable
`
`television hookups, and play it back through an audio device
`resembling a microcomputer.
`
`
`5 All emphases herein added unless otherwise noted.
`
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`See Ex. 1311 at 44. That article further explained that these same scenarios would
`
`likewise be available for other forms of digital data, such as digital video (id.):
`
`First, although the scenarios presented above relate only to music, the
`same data-transmission techniques will be available for all digital data.
`Thus, as other forms of entertainment (e.g., video) are digitized, they,
`too, will become candidates for these scenarios. Very simply, music
`(and other home entertainment options) will become just another
`type of computer software.
`
`
`
`The bandwidth constraints described—constraints that the ’440
`
`Patent did nothing to overcome, but that would later be alleviated by
`
`technological advances—impacted all digital data, but hit digital audio and
`
`digital video particularly hard, given the relatively large size of those files and
`
`the correspondingly greater
`
`requirements
`
`for memory, storage, and
`
`transmission. See Ex. 1334 (Kelly Decl.) at ¶¶ 28-31. Indeed, as discussed
`
`below, during the reexamination of the ’440 Patent Examiner recognized that
`
`improvements in technology had alleviated some of these constraints, and
`
`noted “[t]he existence and profitability of [allegedly embodying systems] are
`
`due to the advances in recent technology and not [Patentee’s] claimed
`
`invention.” Ex. 1303 (10/26/05 OA at 3). In addition, as Examiner
`
`recognized, Applicant admitted that record industry reluctance to license its
`
`wares for digital distribution via electronic sales was an additional issue that had
`
`frustrated commercialization. Ex. 1303 (10/26/05 OA at 2-3).
`
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`Although the companies seeking to commercialize the well-known concept of
`
`an “electronic record store” were concerned with bandwidth and related constraints,
`
`as well as obtaining permission to sell content—all issues not addressed in or
`
`alleviated by the claims of the ’440 Patent—selling and transmitting digital audio and
`
`video over telephone lines (which the ’440 Patent Applicant did attempt to claim as his
`
`own invention) was indisputably well-known. Also well known was the sale of other
`
`digital products over telephone lines. For example, WO85/02310 (“Softnet”),
`
`published May 23, 1985, discloses the sale of digital products—in particular,
`
`software—over telephone lines. See Ex. 1312. Softnet describes allowing a user to
`
`connect his or her computer, via a modem and telephone lines, to a host computer.
`
`Id. at 12. The user can then use a menu to select a software package for purchase. Id.
`
`After the host computer performs a credit card authorization, the purchased software
`
`package is transmitted to the user’s computer for storage to a disk. Id. The user’s
`
`computer can then execute the purchased software from the disk. Id. at 14.
`
`Other elements of the ’440 Patent claims, such as a speaker, were similarly
`
`known in the art, as the specification itself concedes. See, e.g., Ex. 1301 at 4:33-38
`
`(“Stereo Speakers” are “already commercially available”).
`
`Thus, as these examples illustrate, the prior art was rife with awareness and
`
`discussion of the same supposed “invention” now memorialized in the challenged
`
`claims of the ’440 Patent. Long before the ’440 Patent’s first purported priority date,
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`disclosures abounded of the very same abstract notion that Applicant later sought to
`
`claim as his exclusive property. As outlined in more detail below, the challenged
`
`claims are therefore invalid under §§ 102 and 103.
`
`III. PETITIONER HAS STANDING
`A.
`The ’440 Patent is a “covered business method patent” under § 18(d)(1) of the
`
`The ’440 Patent Is a Covered Business Method Patent
`
`Leahy-Smith America Invents Act, Pub. L. 112-29 (“AIA”) and § 42.301. As
`
`discussed above, the ’440 Patent is directed to activities that are financial in nature—
`
`the electronic sale of digital music or video. See AIA § 18(d)(1); 37 C.F.R. § 42.301(a).
`
`See also 77 Fed. Reg. 48,734, 48,735 (Aug. 14, 2012) (“[T]he 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.’”) (citation omitted). The patent states, for example, that “it is an
`
`objective . . . to provide a new and improved methodology/system to electronically
`
`sell and distribute Digital Audio Music or digital video,” Ex. 1301 at 2:22-25, and
`
`explains that “[t]he method comprises the steps of transferring money via telecom-
`
`munications lines to the first party from the second party or electronically selling to
`
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`the second party by the first party.” Id. at 5:46-49. 6 Applicant confirmed again
`
`during prosecution that the invention relates to a “method for the electronic sales and
`
`distribution of digital audio or video signals . . . [in] which a user may purchase and
`
`receive digital audio or video signal from any location which the user has access to
`
`telecommunications lines.” Ex. 1302 (06/09/98 Appeal Brief at 33). See also Ex.
`
`1307 at 33:1-11. A SightSound executive similarly described the invention as nothing
`
`more than “a method for selling a desired digital audio or digital video signal over
`
`networks versus the old way of distributing hard media on trucks through stores.”
`
`Ex. 1308 at 36:23-37:5. Indeed, SightSound has taken the same view in seeking to
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`enforce the ‘440 Patent in litigation, with its own expert stating that the ‘440 Patent
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`“generally relate[s] to the field of electronic sale and distribution of digital audio or
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`digital video. More specifically, the patented technology pertains to selling or
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`purchasing digital audio or video via telecommunications lines.” Ex. 1343 ¶¶ 22 & 24.
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`While the claims at issue reference certain conventional components, the ‘440
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`Patent is not a “technological invention” because it does not claim “subject matter as
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`a whole [that] recites a technological feature that is novel and unobvious over the
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`prior art[] and solves a technical problem using a technical solution.” § 42.301(b).
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`6 While the specification also speaks vaguely of manipulation of digital music (sorting,
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`selection, etc.) and protection from unauthorized copying (e.g., Ex. 1301 at 2:30-37),
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`these do not appear in any challenged claim, and in any event were not inventive.
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`United States Patent No. 5,966,440
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`First, no “technological feature” is novel and unobvious. Claim 1 is exemplary:
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`1. A method for transferring desired digital video or digital audio signals
`comprising the steps of:
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`[A] forming a connection through telecommunications lines between a
`first memory of a first party and a second memory of a second party
`control unit of a second party, said first memory having said desired
`digital video or digital audio signals;
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`[B] selling electronically by the first party to the second party through
`telecommunications lines, the desired digital video or digital audio
`signals in the first memory, the second party is at a second party location
`and the step of selling electronically includes the step of charging a fee
`via telecommunications lines by the first party to the second party at a
`first party location remote from the second party location, the second
`party has an account and the step of charging a fee includes the step of
`charging the account of the second party; and
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`[C] transferring the desired digital video or digital audio signals from the
`first memory of the first party to the second memory of the second party
`control unit of the second party through telecommunications lines while
`the second party control unit with the second memory is in possession
`and control of the second party;
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`[D] storing the desired digital video or digital audio signals in a non-
`volatile storage portion the second memory;
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`[E] and playing through speakers of the second party control unit the
`digital video or digital audio signals stored in the second memory, said
`speakers of the second party control unit connected with the second
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`United States Patent No. 5,966,440
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`memory of the second party control unit;
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`[F] wherein the non-volatile storage portion is not a tape or CD.
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`The PTO has confirmed that “[m]ere recitation of known technologies, such as
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`computer hardware, communication or computer networks, software, memory,
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`computer-readable storage medium, scanners, display devices or databases, or
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`specialized machines, such as an ATM or point of sale device,” or “[r]eciting the use
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`of known prior art technology to accomplish a process or method, even if that
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`process or method is novel and non-obvious” will “not typically render a patent a
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`technological invention.” See, e.g., 77 Fed. Reg. 48,756 48,764 (Aug. 14, 2012).
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`Indeed, as its language makes clear, Claim 1 involves no “technology” at all
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`other than “a first memory” and “a second memory of a second party control unit,”
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`“telecommunications lines,” and “speakers.” And the patent itself concedes these
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`were all well known and entirely commonplace at the time, stating that the first and
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`second parties’ memories
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`(“agent’s Hard Disk” and “user’s Hard Disk”),
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`telecommunication lines (“Telephone Lines”) and speakers (“Stereo Speakers”) are
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`“already commercially available.”7 Ex. 1301 at 4:33-38. Further, the “control unit”
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`mentioned in the claims as associated with the conventional “second” memory is
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`7 SightSound’s CEO has admitted that Applicant did not invent computers, computer
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`networks, the Internet, telephone lines, or telecommunications lines. Ex. 1308 at
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`42:12-44:5.
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`described as a functional feature that can be implemented with a general purpose
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`computer: the patent provides no disclosure of specific algorithms, and expressly
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`states that the specification’s description of such a “unit” does not indicate any
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`particular requirements—it “is not restrictive with respect to the exact number of
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`components and/or its actual design.” Ex. 1301 at 4:65-67; see Ex. 1336 at 19-20.
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`Indeed, during prosecution of the ’440 Patent Applicant himself equated the control
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`unit in the claims to a generic computer, arguing that Napster and N2K copied the
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`claimed invention when they enabled a generic computer (equated by Applicant to the
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`second control unit) to access a website and purchase digital audio signals. Ex. 1302
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`(1/08/98 Decl. at 2-3). Thus, as the intrinsic record reflects, Claim 1 recites nothing
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`more than a method for electronically selling digital audio or video between a seller
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`and buyer, using conventional, commercially available hardware and a general purpose
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`computer with no specific algorithm. The generic level at which this hardware is
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`disclosed is further illustrated in the patent’s Figure 1 (Ex. 1301):
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`The subject matter as a whole also