`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`___________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`___________________________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`___________________________
`
`Case CBM2014-001021
`Patent 8,118,221 B2
`
`
`
`
`
`
`PETITIONER’S REPLY TO PATENT OWNER’S RESPONSE
`
`
`
`
`1 Case CBM2014-00103 has been consolidated with the instant proceeding.
`
`

`

`
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`V.
`
`Petitioner’s Response To PO’s Statement Of Facts ................................................ 3
`PO Incorrectly Interprets Petitioner’s Proposed Construction Of “Pay-
`ment Data” And Ignores The Explicit Teachings Of The ’221 Patent ................ 3
`III. PO Fails To Rebut The Obviousness Of Claims 1, 11, And 12 In View
`Of Stefik .......................................................................................................................... 5
`A.
`Stefik Discloses "Payment Data" (Claims 1, 11, and 12) ............................. 5
`B.
`PO Does Not Rebut Evidence That ’235 Stefik and ’980 Stefik
`Render Obvious Retrieving Data “Responsive to Payment Valida-
`tion Data” (Claims 1 and 11) ........................................................................... 8
`IV. Petitioner Identified Multiple Embodiments Of “Data Carrier” In
`Stefik, Each Of Which Invalidates The Challenged Claims ................................. 10
`Po Fails To Rebut The Obviousness Of Claims 2, 13, And 14 In View
`Of Stefik And Poggio .................................................................................................. 11
`A.
`PO Does Not Dispute That It Would Have Been Obvious to
`Combine Stefik with Poggio .......................................................................... 11
`The Combination of Stefik and Poggio Discloses Forwarding
`Payment Validation Data to a Data Supplier ............................................... 11
`VI. Ginter Renders Obvious The Payment Limitations Of The Challenged
`Claims ............................................................................................................................ 13
`A.
`Pre-Purchase Processing Does Not Change the Principle of Op-
`eration of Ginter .............................................................................................. 14
`B. Ginter Discloses Multiple Examples of “Payment Data” ......................... 16
`C. Ginter Discloses “Payment Validation Data” ............................................. 18
`VII. Ginter Renders Obvious Forwarding Payment Validation Data To A
`Data Supplier ................................................................................................................ 19
`VIII. Mr. Wechselberger’s Opinions Are Entitled To Far Greater Weight
`Than Dr. Katz’s ........................................................................................................... 20
`
`B.
`
`
`
`
`
`
`
`
`
`i
`
`

`

`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Extreme Networks, Inc. v. Enterasys Networks, Inc.,
`395 F. App’x 709 (Fed. Cir. 2010) .................................................................................. 20
`
`Flex-Rest, LLC v. Steelcase, Inc.,
`455 F.3d 1351 (Fed. Cir. 2006) ........................................................................................ 21
`
`In re Ratti,
`270 F.2d 810 (C.C.P.A. 1959) .......................................................................................... 16
`
`Sundance, Inc. v. DeMonte Fabricating Ltd.,
`550 F.3d 1356 (Fed. Cir. 2008) ........................................................................................ 21
`
`
`
`
`
`
`
`
`-ii-
`
`

`

`
`
`1001
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`1015
`
`1016
`
`1017
`
`1018
`
`1019
`
`
`
`
`Exhibit
`
`LIST OF EXHIBITS
`
`Description
`U.S. Patent No. 8,118,221
`
`Plaintiff’s First Amended Complaint
`
`File History for U.S. Patent No. 8,061,598
`
`File History for U.S. Patent No. 8,336,772
`
`U.S. Patent No. 5,675,734
`
`U.S. Patent No. 4,999,806
`
`U.S. Patent No. 4,878,245
`
`U.S. Patent No. 7,344,720
`
`U.S. Patent No. 7,942,317
`
`U.S. Patent No. 5,754,654
`
`File History for U.S. Patent No. 8,118,221
`
`U.S. Patent No. 5,103,392
`
`U.S. Patent No. 5,530,235
`
`U.S. Patent No. 5,629,980
`
`U.S. Patent No. 5,915,019
`
`European Patent Application, Publication No. EP0809221A2
`
`PCT Application Publication No. WO99/43136
`
`JP Patent Application Publication No. H11-164058
`(translation)
`JP Patent Application Publication No. H10-269289
`(translation)
`
`-iii-
`
`

`

`Exhibit
`
`Description
`Eberhard von Faber, Robert Hammelrath, and Peter Heider,
`“The Secure Distribution of Digital Contents,” IEEE (1997)
`Declaration of Anthony J. Wechselberger In Support of Ap-
`ple Inc.’s Petition for Covered Business Method Patent Re-
`view
`Declaration of Michael P. Duffey In Support of Apple Inc.’s
`Petition for Covered Business Method Patent Review
`Declaration of Flora D. Elias-Mique In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`U.S. Patent No. 8,033,458
`
`U.S. Patent No. 8,061,598
`
`U.S. Patent No. 8,336,772
`
`File History for U.S. Patent No. 7,334,720
`
`File History for U.S. Patent No. 7,942,317
`
`File History for U.S. Patent No. 8,033,458
`
`Wechselberger Transcript Excerpts
`
`Katz Deposition Transcript
`
`Declaration of Michael P. Duffey
`
`
`
`-iv-
`
`1020
`
`1021
`
`1022
`
`1023
`
`1024
`
`1025
`
`1026
`
`1027
`
`1028
`
`1029
`
`1030
`
`1031
`
`1032
`
`
`
`
`
`
`
`

`

`
`
`
`
`Shorthand
`’221 patent
`’235 Stefik
`’980 Stefik
`102 Petition
`103 Petition
`BRI
`Claims
`Decision
`PO
`Poggio
`POSITA
`Resp.
`
`
`GLOSSARY OF ABBREVIATIONS
`
`Description
`United States Patent No. 8,118,221
`United States Patent No. 5,530,235
`United States Patent No. 5,629,980
`Case CBM2014-00102 Petition, Paper 2
`Case CBM2014-00103 Petition, Paper 2
`Broadest Reasonable Interpretation
`Challenged Claims
`Case CBM2014-00102 Institution Decision, Paper 8
`Patent Owner
`EP Patent Application Publication No. 0809221A1
`Person of ordinary skill in the art
`Case CBM 2014-00102 Patent Owner Response, Paper 26
`
`
`
`
`-v-
`
`

`

`PO does not dispute that the hardware and software components recited in the
`
`Claims were well-known in the prior art. Instead, PO’s Response takes a scattershot
`
`approach in criticizing the prior art for not disclosing a specific combination of
`
`known elements. PO’s arguments fail to rebut Petitioner’s evidence of invalidity.
`
`PO’s Response alleges that the cited prior art lacks sufficient description of
`
`payment concepts that, in fact, were well-known to a POSITA in the field of digital
`
`content sales. The cited prior art disclosed multiple payment schemes available to a
`
`POSITA that fully satisfy the limitations of the Claims, including schemes in which
`
`payment was made either before, during, or after content was provided to the pur-
`
`chaser. The cited prior art also disclosed embodiments in which conditions, including
`
`fee conditions, must be satisfied before a user could access digital content. Regardless
`
`of these disclosures, however, requiring successful payment as a condition to provid-
`
`ing digital content would have been a design choice obvious to a POSITA. Even
`
`PO’s own expert, Dr. Jonathan Katz, acknowledged that a POSITA in the prior art
`
`time period would have “understood that payment validation could be made a condi-
`
`tion of providing content that was electronically sold.” Ex.1031 27:4-9.
`
`This is confirmed in the ’221 patent specification itself, which indicates that in
`
`PO’s own “invention,” payment can be validated before or after content access or us-
`
`age. Ex.1001 23:2-7. The specification does not describe any changes that would
`
`need to be made to accommodate providing content before or after payment is vali-
`
`dated. Instead, the decision is presented as a mere design choice. No more detail was
`
`
`
`1
`
`

`

`needed, as a POSITA would already have been aware of different disclosed electronic
`
`payment systems and found it obvious to implement such a system in which payment
`
`was confirmed before providing content to the purchaser.
`
`Dr. Katz fails to support PO’s arguments and, in some cases, directly contra-
`
`dicts PO’s positions. For example, PO’s Response tries to draw a patentable distinc-
`
`tion between processing payment before and after usage, but Dr. Katz admits that a
`
`POSITA would have understood that payment validation could be made a condition
`
`to providing content. Ex.1031 27:4-9. Similarly, when questioned regarding disclo-
`
`sures in the prior art that PO disputes, Dr. Katz admitted that he could not provide
`
`any reasonable reading a POSITA would have had of those disclosures other than
`
`those proposed by Petitioner. Ex.1031 62:21-63:11.
`
` Dr. Katz’s deposition testimony demonstrates that his opinions should be giv-
`
`en little or no weight. In addition to failing to meet his own definition of a POSITA
`
`at the priority date of the ’221 patent, Dr. Katz repeatedly testified he is “not sure”
`
`what a POSITA would have understood regarding (1) concepts that were indisputably
`
`in the prior art, (2) specific passages of the cited prior art, and (3) specific passages of
`
`the ’221 patent. See, e.g., Ex.1031 18:1-20, 23:2-15, 30:15-19, 31:3-17, 33:11-34:1,
`
`36:19-37:11, and 38:2-10 (POSITA’s understanding of prior art concepts); 70:1-73:9
`
`and 126:1-128:11 (POSITA’s understanding of passages of the cited prior art); 86:4-
`
`87:22 and 152:7-156:12 (POSITA’s understanding of passages of the ’221 patent). Dr.
`
`Katz also admitted that his construction of “payment data” excludes examples in the
`
`
`
`
`-2-
`
`

`

`specification, and that the specification’s definition aligns with Petitioner’s proposed
`
`construction. Ex.1031 47:22-50:4, 52:22-54:11. His deposition testimony contradicts
`
`itself and demonstrates confusion about he stated in his declaration. See, e.g., Ex.1031
`
`138:4-17, 178:4-179:1, 200:22-202:7 (contradictory testimony regarding Poggio’s dis-
`
`closure of payment validation data); 190:14-20 (stating that he does not know what
`
`“prepurchase processing,” which is used repeatedly in his own declarations, means).
`
`I.
`
`PETITIONER’S RESPONSE TO PO’S STATEMENT OF FACTS
`
`As to PO’s alleged facts (1) and (2), Petitioner admits that the phrase “prepon-
`
`derance of the evidence” does not appear in the Wechselberger declarations. Peti-
`
`tioner otherwise denies these allegations. As to PO’s alleged facts (3)-(5), Ex.2007 is
`
`dated September 19, 2012, entitled In-App Purchase Programming Guide, and in-
`
`cludes an Exhibit label. Ex.2008 is dated September 18, 2013, entitled In-App Pur-
`
`chase Programming Guide, and includes an Exhibit label. Ex.2013 is dated Septem-
`
`ber 18, 2013, entitled Receipt Validation Programming Guide, and includes an Exhibit
`
`label. Petitioner otherwise denies these allegations.
`
`II.
`
`PO INCORRECTLY INTERPRETS PETITIONER’S PROPOSED
`CONSTRUCTION OF “PAYMENT DATA” AND IGNORES THE
`EXPLICIT TEACHINGS OF THE ’221 PATENT
`
`PO incorrectly argues that “payment data” cannot represent past payment be-
`
`cause it is “data that can be used to make payment for content.” Resp. 8-9. But the
`
`’221 patent itself explicitly states that “[t]he payment data received may either be data
`
`relating to an actual payment made to the data supplier, or it may be a record of a payment
`
`
`
`
`-3-
`
`

`

`made to an e-payment system….” Ex.1001 6:60-63.2 Thus, as PO’s expert admits, the
`
`specification’s description of “payment data” encompasses data relating to either con-
`
`current or past payment. Ex.1031 52:22-53:9, 53:17-54:11. This is consistent with Peti-
`
`tioner’s proposed construction of “payment data” (under the BRI in light of the specifica-
`
`tion) as “data representing payment made for requested content data,” which includes
`
`the same key phrase—“payment made”—used in the specification’s description of
`
`“payment data.” Ex.1001 6:60-63. PO misrepresents Petitioner’s construction as lim-
`
`ited to data representing past payment, but that characterization ignores what even
`
`PO’s expert admits is the grammatical meaning of “payment made.” See, e.g., Resp. 8-
`
`9; Ex.1031 54:2-11. PO’s interpretation is inconsistent with both the use of the
`
`phrase “payment made” in the ’221 patent and the plain grammatical meaning of that
`
`phrase. Ex.1031 52:22-54:11, 56:14-57:6.
`
`PO’s proposed interpretation as “data that can be used to make payment for
`
`content” improperly excludes explicit examples of payment data in the ’221 patent itself.
`
`See, e.g., Ex. 1001 at 6:60-63. Dr. Katz’s and PO’s construction does not encompass,
`
`e.g., a “record of a payment made to an e-payment system relating either to a payment
`
`to the data supplier or to a payment to a third party,” Ex. 1001 at 6:60-63, and Dr.
`
`Katz confirmed his construction excludes this example from the specification. Ex. 1031
`
`at 48:8-50:4. Under the BRI consistent with the specification, Petitioner’s construction,
`
`
`2 All emphasis herein added unless otherwise noted.
`
`
`
`
`-4-
`
`

`

`which includes rather than rejects the specification’s description of “payment data”
`
`that PO’s expert admits is excluded by PO’s construction, should be adopted.
`
`III. PO FAILS TO REBUT THE OBVIOUSNESS OF CLAIMS 1, 11, AND
`12 IN VIEW OF STEFIK
`
`A.
`
`Stefik3 Discloses “Payment Data” (Claims 1, 11, and 12)
`
`While Petitioner disagrees with PO’s proposed construction of “payment data,”
`
`Stefik’s disclosure of billing information and credit accounts meets this limitation un-
`
`der both Petitioner’s and PO’s interpretations. PO advances three broken arguments
`
`regarding Stefik’s alleged failure to disclose “payment data,” all directed to Fig. 3 of
`
`’235 Stefik. PO argues that (1) Stefik’s disclosure of logging into a DocuCard to acti-
`
`vate credit accounts does not disclose “code to read payment data” (Resp. 14); (2)
`
`Stefik does not specify whether bank account information transmitted with fee charg-
`
`es is read from a DocuCard that the user logged into or how that information is used
`
`(Resp. 15); and (3) Stefik’s disclosure of assigning payment of fees does not mean that
`
`payments are made at that point or that fee information is known (Resp. 14-15).
`
`PO’s first two arguments simply ignore the fact that a POSITA would have
`
`understood what “activat[ing] credit accounts” means and how those credit accounts
`
`would be used. Resp. 14-15; Ex.2028 ¶¶ 23-24. Figure 3 of ’235 Stefik discloses log-
`
`ging in and activating credit accounts before assigning fees, selecting documents, and
`
`confirming a transaction in which fees may be incurred. Ex.1013 6:60-7:13. At depo-
`
`
`3References to “Stefik” refer to the combination of ’235 Stefik and ’980 Stefik.
`
`
`
`
`-5-
`
`

`

`sition, Dr. Katz did not dispute that ’235 Stefik’s description of logging in to activate
`
`credits accounts in Step 302 means that the user makes available credit accounts for
`
`the payment of the fees referenced in the following Step 303. Ex. 1031 61:8-63:8. In-
`
`stead, he testified that while he was “not sure” if this reading of Stefik’s disclosure is
`
`reasonable, he did not know of any other way to read it. Id. Dr. Katz also acknowl-
`
`edged that a POSITA would have understood that the fees for accessing the “desired
`
`document” of Step 305 would be paid. Ex.1031 64:22-65:4; cf. Resp. 14-15. Petition-
`
`er has established that it would at minimum have been obvious to read and forward
`
`Step 302’s activated credit account information to pay the fees referenced in Step 303,
`
`and PO has provided no evidence to rebut that assertion.
`
`PO’s third argument—that no fees are known or paid during the assignment of
`
`fees in Figure 3 of ’235 Stefik—also fails to rebut the obviousness of the claimed
`
`“payment data” and “payment validation data.” Dr. Katz himself testified that if
`
`payment of fees was assigned to the user of the DocuCard, the user would have to
`
`pay those fees. Ex.1031 66:22-67:5. Tellingly, Dr. Katz was “not sure” whether he
`
`supported any of PO’s criticisms, including: (1) whether a POSITA would have un-
`
`derstood that fees could be assigned to an activated credit account; (2) whether a
`
`POSITA would have understood that a credit card number associated with an activat-
`
`ed account could be payment data; (3) whether a credit card number could be used to
`
`pay for the transaction; or (4) whether a POSITA would have understood that pay-
`
`ment of fees or accessing a document could occur in step 307 of that process.
`
`
`
`
`-6-
`
`

`

`Ex.1031 70:1-7, 71:12-20, 76:13-77:9. PO’s attorney argument, and Dr. Katz’s inabil-
`
`ity to provide any supporting opinions, does not rebut Petitioner’s ample evidence
`
`that it would have been obvious to a POSITA, in view of Stefik’s teachings, to use the
`
`referenced credit account to pay for the transactions in Figure 3.
`
`Moreover, Petitioner’s identification of additional disclosure of payment data in
`
`’980 Stefik remains unrebutted by PO because none of PO’s three arguments is directed to
`
`’980 Stefik. Figure 1 of ’980 Stefik discloses a requesting repository receiving a digital
`
`work from a supplying repository with both repositories transmitting payment data to
`
`a credit server. In that transaction, the supplying repository transmits a requested dig-
`
`ital work to the requesting repository. Ex.1014 Figure 1, 7:31-33. Both repositories
`
`then generate billing information that is transmitted to a credit server. Ex.1014 7:33-
`
`36. The ’980 Stefik specification indicates that such billing transactions were well un-
`
`derstood in the state of the art, and involve sending transaction identifiers, identities
`
`of the repositories, and a list of charges. Ex.1014 29:61-62, 30:7-14. The billing
`
`transactions also update balance information and credit limits. Ex.1014 30:25-30.
`
`PO does not dispute that the information exchanged in ’980 Stefik’s billing
`
`transactions includes payment data, but instead argues it is “unclear” whether the data
`
`is read from the same data carrier to which retrieved data is eventually written. Resp.
`
`13-14, 17. Yet ’980 Stefik explicitly discloses that the requesting repository in Figure 1
`
`transmits billing information, and that retrieved data is stored in memory within a re-
`
`pository. Ex.1014 7:31-36, 14:28-32. A POSITA would have understood or, at a
`
`
`
`
`-7-
`
`

`

`minimum, have found it obvious that billing information is read from the memory of
`
`the requesting repository. 102 Petition 54-55. Even PO’s Dr. Katz agreed that a
`
`POSITA would have understood that the processing means of the Stefik repository
`
`reads data from and writes data to the repository’s memory. Ex.1031 80:19-81:10.
`
`B.
`
`PO Does Not Rebut Evidence That ’235 Stefik and ’980 Stefik
`Render Obvious Retrieving Data “Responsive to Payment Valida-
`tion Data” (Claims 1 and 11)
`
`Stefik discloses enforcing conditions before providing a user with requested
`
`content. Examples of such conditions include “fee conditions” that must be satisfied
`
`before retrieving and providing data to a user. Ex.1014 Figure 18, 30:61-64. Check-
`
`ing fee conditions “will initiate various financial transactions between [a] repository
`
`and associated credit server”; “[i]f any financial transaction fails, the transaction ter-
`
`minates” before providing content to the user. Ex.1014 32:19-26.
`
`Stefik provides additional design options for an electronic payment scheme that
`
`were well understood to a POSITA. Stefik explicitly discloses authorizing and recon-
`
`ciling transactions either periodically or in real-time against user accounts in a debit
`
`card embodiment. Ex.1014 17:21-33. PO’s conclusory argument that Stefik’s disclo-
`
`sure of a “debit card” transaction occurring in “real-time” against a user account is
`
`“post-usage processing” is wrong and lacks support from even PO’s own expert. See
`
`Resp. 15-16. A debit transaction is settled against a user account in real-time as the
`
`transaction occurs. Ex.1014 17:31-33. Mr. Wechselberger testified that it would have
`
`been obvious for a credit server operating in a real-time debit transaction to validate
`
`
`
`
`-8-
`
`

`

`payment data. Ex.2025 166:11-167:22. And Dr. Katz testified that this credit server
`
`would “directly” request money from a user account to effectuate payment in real-
`
`time. Ex.1031 82:6-83:20. Both Dr. Katz’s and Mr. Wechselberger’s testimony con-
`
`firm that a POSITA would have understood that this ’980 Stefik debit transaction is
`
`reconciled as it is reported to the credit server and not at a later time. Based on Stef-
`
`ik’s disclosure, a POSITA would have at least found it obvious to perform billing and
`
`payment, including validating payment data, before providing content.
`
`Moreover, even apart from Stefik’s disclosures, Dr. Katz confirmed a POSITA
`
`would already have understood that payment validation could be made a condition of
`
`providing content that was electronically sold. Ex.1031 27:4-9. The ’221 patent dis-
`
`closes that in embodiments where payment is made directly to a system owner, “either
`
`concurrently with the content access and download process, or at some later stage,”
`
`payment data may be verified with an e-payment system. Ex.1001 23:2-7. These al-
`
`ternate embodiments reflect a mere design choice in the relative timing of (A) content
`
`access and download and (B) payment verification steps. Dr. Katz testified that a
`
`POSITA would have understood “payment verification” to mean the same thing as
`
`the claimed “payment validation,” and that he was not aware of anything in the prior
`
`art time period that would hinder a POSITA from implementing either of these two
`
`embodiments. Ex.1031 105:18-106:6, 114:3-11. He also could not identify anything
`
`in the ’221 patent describing changes to the system required to switch between these
`
`two embodiments. Ex.1031 115:20-116:13. The choice between validating payment
`
`
`
`
`-9-
`
`

`

`before or after providing content is a simple design choice, and a POSITA would
`
`have found it obvious to implement either approach. 102 Petition 54-58.
`
`IV. PETITIONER IDENTIFIED MULTIPLE EMBODIMENTS OF
`“DATA CARRIER” IN STEFIK, EACH OF WHICH INVALIDATES
`THE CHALLENGED CLAIMS
`
`PO also argues without merit that Petitioner’s identification of multiple embod-
`
`iments of a “data carrier” is “inconsistent.” Resp. 11-15. While Stefik, indeed, dis-
`
`closes multiple embodiments of a data carrier: a repository, a PCMCIA card, and a
`
`storage system (see 102 Petition 41-45; See also Ex.1021 App’x D 57-67), the 102 Peti-
`
`tion makes clear that for each of those different embodiments, each and every element
`
`of the challenged claims is satisfied by that embodiment. See, e.g., 102 Petition 44 n.14.
`
`Figure 1 of Stefik ’980 describes a basic operation of transferring a digital work
`
`from one repository to another. Ex.1014 7:6-37. Figure 12 of Stefik ’980 describes
`
`components of an embodiment of a repository. Ex.1014 14:7-51. At minimum it
`
`would have been obvious to a POSITA to implement the operation in Figure 1 using
`
`the repository in Figure 12. Ex.1021 App’x D 61-62. In this example, as Petitioner
`
`laid out, a processing means (data access terminal) in a requesting repository retrieves
`
`content from a supplying repository (data supplier), and writes the content to a stor-
`
`age system (data carrier) in the requesting repository. 102 Petition 42-45.
`
`PO’s Response does not dispute that this example discloses the claimed “data
`
`access terminal,” “data supplier,” and “data carrier,” but rather nitpicks the petition’s
`
`wording. For example, PO argues the Petition does not make clear whether refer-
`
`
`
`
`-10-
`
`

`

`ences to a “removable card” refer to a “DocuCard.” Resp. 12. But the only disclo-
`
`sure of a “removable card” in Stefik describes a DocuCard—for example, a PCMCIA
`
`card supporting plug and play applications in which the card is inserted into a slot of a
`
`computer system. Ex.1013 4:55-5:10. Indeed, Dr. Katz admitted that Stefik discloses
`
`that a DocuCard can be a “removable card.” Ex.1031 78:2-12.
`
`V.
`
`PO FAILS TO REBUT THE OBVIOUSNESS OF CLAIMS 2, 13, AND
`14 IN VIEW OF STEFIK AND POGGIO
`
`A.
`
`PO Does Not Dispute That It Would Have Been Obvious to
`Combine Stefik with Poggio
`
`
`Petitioner has established that a POSITA would have been motivated to com-
`
`bine the teachings of Stefik and Poggio (see, e.g., 102 Petition 31-38; Ex.1021 ¶¶ 57-
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`66), and PO does not dispute that a POSITA would have combined the two refer-
`
`ences. See Resp. 17-22. Dr. Katz also does not dispute that a POSITA would have
`
`been motivated to combine the teachings of Stefik and Poggio. See Ex.2028 ¶¶ 28-34.
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`B.
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`The Combination of Stefik and Poggio Discloses Forwarding
`Payment Validation Data to a Data Supplier
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`PO argues, instead, that neither Stefik nor Poggio discloses the “code to trans-
`
`mit at least a portion of the payment validation data to the data supplier” limitation
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`recited in claim 2. Resp. 17-19. Again, PO is wrong. Poggio explicitly discloses a
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`payment validation system and payment validation data, as the vending machine in
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`Poggio receives “an indication from the electronic banking network 118 signifying
`
`successful completion of a payment transaction (i.e., credit card or electronic funds
`
`
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`-11-
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`

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`transfer transaction).” Ex.1016 Figure 7, 10:11-15; 102 Petition 74-76; Ex.1021 App’x
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`D 40-42. PO’s Response does not dispute that the indication of successful payment
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`transaction is “payment validation data” (Resp. 19-21), and Dr. Katz himself agreed that it
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`is. Ex.1031 138:4-17, 140:19-141:4.4 Whether Poggio discloses a specific number of
`
`bits or structure of its payment validation data is irrelevant. Cf. Resp. 19-21. The lim-
`
`itation requires only “payment validation data”—not specific bit counts or structure.
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`PO also does not dispute that the vending information database that contains
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`product and sales information for each vendor product in Poggio is a “data supplier.”
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`Resp. 19-22. Instead, PO erroneously asserts that neither the 102 Petition, the cited
`
`portions of Poggio, nor Mr. Wechselberger’s declaration shows how transmitting a
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`portion of payment validation data to that data supplier is disclosed. In fact, both the
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`102 Petition and Mr. Wechselberger’s declaration identify the indication signifying
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`successful payment transaction as “payment validation data” and the recording of a
`
`
`4 When questioned by his own counsel, Dr. Katz backpedalled and said Poggio does
`
`not disclose the structure or number of bits used as payment validation data, and thus
`
`does not disclose payment validation data. Ex.1031 178:4-179:1. Dr. Katz’s willing-
`
`ness to contradict his earlier unequivocal confirmation of Poggio’s disclosure under-
`
`mines his credibility. In any event, when later questioned by Petitioner’s counsel, Dr.
`
`Katz admitted that the indication of successful payment transaction in Poggio is data
`
`that confirms that payment validation has taken place. Ex.1031 201:4-202:7.
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`sale in the vending information database as “transmitting at least a portion of payment
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`validation to the data supplier.” See 102 Petition 75; see also Ex.1021 App’x D 40.
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`PO also mischaracterizes Mr. Wechselberger’s testimony as admitting that
`
`Poggio does not disclose transmitting at least a portion of the payment validation data
`
`to a data supplier. Resp. 21. When questioned by PO’s counsel, Mr. Wechselberger
`
`identified the indication of successful payment transaction as “payment validation da-
`
`ta” and the storing of license information in the vending information database as for-
`
`warding validation data to a data supplier. Ex.2025 204:5-16, 205:5-206:6. Claims 2,
`
`13, and 14 require only that a portion of the payment validation data be transmitted to
`
`the data supplier, not any particular portion or bits. The license information sent to
`
`the vending information database includes both identifiers for the buyer and a time
`
`stamp for the purchase transaction (portion of payment validation data). Ex.1016 7:26-
`
`37. At minimum, a POSITA would have found it obvious to extract from the bank-
`
`ing network’s transaction confirmation (payment validation data) a timestamp indicat-
`
`ing when payment was processed (portion of payment validation data) to include in the
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`license information stored in the vending information database (data supplier); there is
`
`nothing in Poggio that would foreclose such an understanding. Ex.1031 145:6-146:8.
`
`VI. GINTER RENDERS OBVIOUS THE PAYMENT LIMITATIONS OF
`THE CHALLENGED CLAIMS
`
`The 103 Petition proposed the same construction of “payment data” proposed
`
`in the 102 Petition. 103 Petition 24. While Petitioner disagrees with PO’s proposed
`
`
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`-13-
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`construction, as discussed supra, this limitation is nevertheless disclosed by Ginter un-
`
`der either interpretation.
`
`A.
`
`Pre-Purchase Processing Does Not Change the Principle of Oper-
`ation of Ginter
`
`Many of PO’s arguments surrounding payment in Ginter focus on the sup-
`
`posed difference between what PO calls “post-usage tracking” and “pre-purchase
`
`processing.” But PO’s argument that changing from post-usage to pre-purchase pro-
`
`cessing would change the principle upon which Ginter works (see Resp. 22-27) is con-
`
`tradicted by Dr. Katz’s own testimony, the teaching of the ’221 patent itself, the dis-
`
`closure of Ginter, and the knowledge of a POSITA.
`
`To begin with, the phrases “post-usage tracking” and “pre-purchase pro-
`
`cessing” do not appear anywhere in the Ginter patent; rather, they are used by PO
`
`and Dr. Katz to characterize various disclosures of Ginter. Resp. 23-27; Ex.2028 ¶¶
`
`36-39. But Dr. Katz was openly confused about his own characterizations: he was,
`
`for example, “not sure” whether various payment-related disclosures in Ginter would
`
`qualify as pre-purchase processing. Ex.1031 126:1-6; 127:10-128:11. And when ques-
`
`tioned by his own counsel, Dr. Katz testified that he did not even know what the phrase
`
`“prepurchase processing” meant, even though it is used multiple times in his own sworn
`
`declaration’s discussions of Ginter. Ex.1031 190:14-20.
`
`As discussed supra in section III.B., the ’221 patent discloses two alternate em-
`
`bodiments that describe a mere design choice in the relative timing of (A) content ac-
`
`
`
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`-14-
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`cess and download and (B) payment verification steps. Dr. Katz’s own testimony
`
`supports a finding that a POSITA would not have been hindered from implementing
`
`either of the two embodiments (Ex.1031 114:3-11) and that the ’221 patent itself does
`
`not explain any changes needed to switch the system between those embodiments
`
`(Ex.1031 114:12-116:13). Dr. Katz even admitted without reservation that a POSITA
`
`in the prior art time period would have understood that payment validation could be
`
`made a condition of providing content that was electronically sold. Ex.1031 27:4-9.
`
`In addition to disclosing multiple forms of payment and payment methods,
`
`which a POSITA would have understood could be selected and combined, Ginter ex-
`
`pressly discloses “prepayments, credits, [and] real-time debits.” Ex.1015 63:34-41.
`
`Thus, Ginter itself expressly teaches that its system may support approaches in which payment is
`
`made before content access or usage is allowed. But Dr. Katz testified he did not remember if
`
`he even knew before signing his declaration that Ginter disclosed prepayments.
`
`Ex.1031 119:18-21. Dr. Katz also testified he was not sure whether “[e]nsuring that
`
`sufficient credit from an authorized source is available before allowing a transaction to
`
`proceed,” “prepayments,” “realtime electronic debits from bank accounts,” or “VDE
`
`node currency token deposit accounts” disclosed in Ginter are examples of what he
`
`terms “prepurchase processing.” Ex.1031 126:1-6, 127:10-128:11. Dr. Katz was thus
`
`unable to explain how these relevant disclosures in Ginter relate to his opinion on
`
`supposedly changing Ginter’s principle of operation, and his opinion that a POSITA
`
`would not have changed that principle is therefore entitled to no weight.
`
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`-15-
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`PO’s argument also misapplies the legal principle upon which it purports to re-
`
`ly. The lone support PO cites is a case addressing a combination of two references
`
`asserted to show obviousnes