`Tel: 571-272-7822
`
`Paper 52
`Entered: September 25, 2015
`
`
`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
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`BISK, Administrative Patent Judge.
`
`
`
`FINAL WRITTEN DECISION
`
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`
`1 Case CBM2014-00103 has been consolidated with this proceeding.
`
`
`
`CBM2014-00102
`Patent 8,118,221 B2
`
`I.
`
`INTRODUCTION
`
`A.
`
`Background
`
`Apple Inc., Petitioner, filed two Petitions to institute covered business
`
`method patent review of claims 1, 2, 11–14, and 32 (“the challenged
`
`claims”) of U.S. Patent No. 8,118,221 B2 (Ex. 1001, “the ’221 patent”)
`
`pursuant to § 18 of the Leahy-Smith America Invents Act. CBM2014-
`
`00102 (Paper 2, “102 Pet.”) and CBM2014-00103 (Paper 2, “103 Pet.”).2
`
`On September 30, 2014, we consolidated CBM2014-00102 and
`
`CBM2014-00103 and instituted a transitional covered business method
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`patent review (Paper 8, “Decision to Institute” or “Dec.”) based upon
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`Petitioner’s assertion that claims 1, 2, and 11–14 are unpatentable based on
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`the following grounds:
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`Reference[s]3
`
`Basis
`
`Claims Challenged
`
`Stefik ’2354 and Stefik ’9805
`
`§ 103(a)
`
`1, 11, and 12
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`Stefik ’235, Stefik ’980, and Poggio6 § 103(a)
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`2, 13, and 14
`
`Ginter7
`
`§ 103(a)
`
`1, 2, and 11–14
`
`
`2 Unless otherwise specified, paper numbers refer to paper numbers in
`CBM2014-00102.
`3 Exhibits with numbers 1001–1035 were filed in CBM2014-00102 and
`those with numbers 1101–1129 were filed in CBM2014-00103. For
`purposes of this decision, where the two cases have duplicate exhibits, we
`refer to the exhibit filed in CBM2014-00102.
`4 U.S. Patent No. 5,530,235 (Ex. 1013, “Stefik ’235”).
`5 U.S. Patent No. 5,629,980 (Ex. 1014, “Stefik ’980”).
`6 European Patent Application, Publication No. EP 0809221 A2 (Ex. 1016,
`“Poggio”).
`7 U.S. Patent No. 5,915,019 (Ex. 1015, “Ginter”).
`
`2
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`
`
`CBM2014-00102
`Patent 8,118,221 B2
`
`Dec. 24. Petitioner provides declarations from Anthony J. Wechselberger
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`(102 Pet., Ex. 1021; 103 Pet., Ex. 1121) and Patent Owner provides a
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`declaration from Dr. Jonathan Katz (Ex. 2028).
`
`We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
`
`Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.
`
`For the reasons that follow, we determine that Petitioner has shown by a
`
`preponderance of the evidence that claims 1, 2, and 11–14 of the ’221 patent
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`are unpatentable.
`
`B.
`
`The ’221 Patent
`
`The ’221 patent relates to “a portable data carrier for storing and
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`paying for data and to computer systems for providing access to data to be
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`stored” and the “corresponding methods and computer programs.”
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`Ex. 1001, 1:21–25. Owners of proprietary data, especially audio recordings,
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`have an urgent need to address the prevalence of “data pirates” who make
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`proprietary data available over the internet without authorization. Id. at
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`1:29–56. The ’221 patent describes providing portable data storage together
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`with a means for conditioning access to that data upon validated payment.
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`Id. at 1:59–2:11. This combination allows data owners to make their data
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`available over the internet without fear of data pirates. Id. at 2:11–15.
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`As described, the portable data storage device is connected to a
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`terminal for internet access. Id. at 1:59–67. The terminal reads payment
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`information, validates that information, and downloads data into the portable
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`storage device from a data supplier. Id. The data on the portable storage
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`device can be retrieved and output from a mobile device. Id. at 2:1–4. The
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`’221 patent makes clear that the actual implementation of these components
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`is not critical and may be implemented in many ways. See, e.g., id. at
`
`3
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`
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`CBM2014-00102
`Patent 8,118,221 B2
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`25:41–44 (“The skilled person will understand that many variants to the
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`system are possible and the invention is not limited to the described
`
`embodiments.”).
`
`C.
`
`Related Matters
`
`The parties indicate that Smartflash has sued Apple for infringement
`
`of the ’221 patent and identify the following district court case: Smartflash
`
`LLC v. Apple Inc., Case No. 6:13-cv-447 (E.D. Tex.). See, e.g., 102 Pet. 20;
`
`Paper 5, 2. Patent Owner indicates that the ’221 patent and other patents in
`
`the same patent family are the subject of a several other district court cases.
`
`Paper 36, 3–4.
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`In addition to the 102 and 103 Petitions, Apple and several other
`
`Petitioners have filed numerous other Petitions for covered business method
`
`patent review challenging claims of the ’221 patent and other patents owned
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`by Smartflash that disclose similar subject matter.
`
`D.
`
`The Instituted Claims
`
`As noted above, we instituted review of claims 1, 2, and 11–14. Of
`
`those, claims 1 and 12 are independent. Claims 2 and 11 depend from claim
`
`1 and claims 13 and 14 depend either directly or indirectly from claim 12.
`
`Claims 1 and 12 are illustrative of the claims at issue and recite the
`
`following:
`
`1.
`A data access terminal for retrieving data from a data
`supplier and providing the retrieved data to a data carrier, the
`terminal comprising:
`
`a first interface for communicating with the data supplier;
`
`a data carrier interface for interfacing with the data
`carrier;
`
`a program store storing code implementable by a
`processor; and
`
`4
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`
`
`CBM2014-00102
`Patent 8,118,221 B2
`
`a processor, coupled to the first interface, to the data carrier
`interface and to the program store for implementing the
`stored code, the code comprising:
`
`code to read payment data from the data carrier and to
`forward the payment data to a payment validation
`system;
`
`code to receive payment validation data from the
`payment validation system;
`
`code responsive to the payment validation data to retrieve
`data from the data supplier and to write the retrieved
`data into the data carrier.
`
`Ex. 1001, 25:45–61.
`
`12. A method of providing data from a data supplier to a data
`carrier, the method comprising:
`
`reading payment data from the data carrier;
`
`forwarding the payment data to a payment validation
`system;
`
`retrieving data from the data supplier; and
`
`writing the retrieved data into the date [sic] carrier.
`
`Id. at 26:42–48.
`
`
`A. Wechselberger Declarations
`
`II. ANALYSIS
`
`In its Preliminary Response, Patent Owner argued that we should
`
`disregard Mr. Wechselberger’s testimony, but we determined that Patent
`
`Owner did not offer any evidence that Mr. Wechselberger “used incorrect
`
`criteria, failed to consider evidence, or is not an expert in the appropriate
`
`field.” Dec. 4 n.8. Patent Owner renews this contention, arguing in its
`
`Response that both declarations by Mr. Wechselberger (Ex. 1021; Ex. 1121)
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`should be given little or no weight because they do not state the evidentiary
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`5
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`CBM2014-00102
`Patent 8,118,221 B2
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`standard that he used in arriving at his conclusions and, therefore, he “used
`
`incorrect criteria.” Paper 26 (“PO Resp.”) 4–7. In addition, referring to
`
`excerpts from Mr. Wechselberger’s deposition, Patent Owner contends that
`
`Mr. Wechselberger “could neither articulate what the difference was
`
`between ‘substantial evidence’ and ‘preponderance of the evidence,’ nor
`
`could he articulate which standard he was supposed to use when alleging
`
`invalidity of claims in a patent.” Id. at 5. Thus, according to Patent Owner,
`
`should we afford any weight to Mr. Wechselberger’s testimony, we would
`
`be accepting his opinion without knowing “‘the underlying facts . . . on
`
`which the opinion is based’ (i.e., how much evidence he thinks show any of
`
`his opinions discussed therein).” Id. at 7.
`
`In its Reply, Petitioner argues that “Mr. Wechselberger is a highly-
`
`qualified expert,” that Patent Owner offers no evidence disputing that he is a
`
`qualified expert, and that an expert is not required to recite or apply the
`
`“preponderance of evidence” standard expressly in order for the expert
`
`testimony to be accorded weight.” Paper 34 (“Reply”), 24–25.
`
`Patent Owner has not articulated a persuasive reason for giving Mr.
`
`Wechselberger’s declarations, as a whole, little or no weight in our analysis.
`
`Patent Owner has not cited any authority requiring an expert to recite or
`
`apply the “preponderance of the evidence” standard in order for the expert
`
`opinion to be accorded weight. Under 37 C.F.R. § 42.1(d), we apply the
`
`preponderance of the evidence standard in determining whether Petitioner
`
`has established unpatentability. In doing so, it is within our discretion to
`
`determine the appropriate weight to be accorded the evidence presented,
`
`including expert opinion, based on the disclosure of the underlying facts or
`
`data upon which that opinion is based. Thus, we decline to make a
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`6
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`CBM2014-00102
`Patent 8,118,221 B2
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`determination about Mr. Wechselberger’s opinion, as a whole. Rather, in
`
`our analysis we will consider, as it arises, relevant portions of Mr.
`
`Wechselberger’s testimony and determine the appropriate weight to accord
`
`that particular testimony.
`
`B. Katz Declaration
`
`Petitioner contends that “Dr. Katz’s unsupported opinions, to the
`
`extent they are given any weight at all, should be given far less weight than
`
`Mr. Wechselberger’s.” Reply 20. Specifically, Petitioner argues that Dr.
`
`Katz is not qualified as a person of ordinary skill in the art under either
`
`party’s definition, he repeatedly stated that “he was ‘not sure’ about various
`
`technologies that are indisputably in the relevant prior art, and that he does
`
`not know what a POSITA would have understood about that technology,”
`
`and he repeatedly stated that “he was ‘not sure’ how a POSITA would
`
`interpret several passages of the cited prior art and several passages of the
`
`challenged patent[].” Id. at 20–22. Thus, according to Petitioner, “Dr. Katz
`
`(a) does not know this information and is therefore not a qualified expert;
`
`and/or (b) did not properly consider the scope and content of the prior art or
`
`a POSITA’s understanding of the prior art.” Id. at 24.
`
`We decline to make a determination as to Dr. Katz’s testimony, as a
`
`whole. As noted above, we have the discretion to determine the appropriate
`
`weight to be accorded to the evidence presented, including expert opinion,
`
`based on the disclosure of the underlying facts or data upon which the
`
`opinion is based. Thus, as with Mr. Wechselberger’s opinion, in our
`
`analysis we will consider relevant portions of Dr. Katz’s testimony as it
`
`arises and determine the appropriate weight to accord that particular
`
`testimony.
`
`7
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`CBM2014-00102
`Patent 8,118,221 B2
`
`C. Claim Construction
`
`We construe all terms, whether or not expressly discussed here, using
`
`the broadest reasonable construction in light of the ’221 patent specification.
`
`37 C.F.R. § 42.300(b). Applying that standard, we interpret the claim terms
`
`of the ’221 patent according to their ordinary and customary meaning in the
`
`context of the ’221 patent’s written description. See In re Translogic Tech.,
`
`Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this decision,
`
`we construe the term “payment data.”
`
`Petitioner asserts that “[f]or review purposes, [payment data] is
`
`construed to mean ‘data representing payment made for requested content
`
`data’ and is distinct from ‘access control data.’” 102 Pet. 22; 103 Pet. 24
`
`(emphasis added). Patent Owner disagrees, arguing that the term “payment
`
`data” should be interpreted to mean “data that can be used to make payment
`
`for content.” PO Resp. 8 (emphasis added).
`
`Although Petitioner and Patent Owner disagree on the proper broadest
`
`reasonable construction of the term “payment data,” their proposed
`
`constructions are similar in that they both incorporate an element of timing.
`
`The main dispute between the parties relates to this timing element.
`
`Specifically, the parties’ proposed constructions differ in how “payment
`
`data” relates to the actual payment operation. Petitioner asserts that the
`
`claimed “payment data” “encompasses data relating to either current or past
`
`payment.” Reply 3–4. Patent Owner, on the other hand, argues that the
`
`’221 payment discloses that payment data exists prior to the payment
`
`operation. PO Resp. 8.
`
`We are persuaded that the broadest reasonable interpretation of the
`
`term “payment data,” encompasses both Petitioner’s and Patent Owner’s
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`8
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`CBM2014-00102
`Patent 8,118,221 B2
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`definitions of the term—it encompasses data relating to future, current, and
`
`past payments. In other words, we are persuaded that the ’221 patent does
`
`not incorporate an element of timing into the definition of payment data.
`
`First, the plain and ordinary meaning of the two words that make up the
`
`term—“payment” and “data”—do not incorporate any notion of time and
`
`nothing about their combination changes that determination.
`
`Second, we agree with both parties that language in the ’221 patent
`
`supports “payment data” representing data existing prior to, concurrent with,
`
`and after payment of the requested content. For example, the ’221 patent
`
`states that “payment data for making a payment to the system owner is
`
`received from the smart Flash card by the content access terminal and
`
`forwarded to an e-payment system.” Ex. 1001, 20:59–62. We agree with
`
`Patent Owner that this language indicates that payment data exists prior to
`
`the payment being made for the requested content. See PO Resp. 8.
`
`Petitioner does not address this language. See Reply 3–5. In addition, we
`
`agree with Petitioner that the language in the ’221 patent, “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 made to an e-payment system,”
`
`(Ex. 1001, 6:60–63) clearly shows that “payment data” includes data for
`
`payments that have already been made. See Reply 3–5.
`
`Moreover, the plain and ordinary meaning of data does not allow for a
`
`change in the character of that data based on when it is used in a transaction.
`
`For example, a credit card number may qualify as “data relating to payment”
`
`before that credit card number is processed, while the credit card number is
`
`being processed, and after the credit card number is processed. Thus,
`
`without an express description to the contrary, we presume that “payment
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`9
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`CBM2014-00102
`Patent 8,118,221 B2
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`data” retains the same meaning before, during, and after the payment
`
`operation. Neither party points to persuasive evidence of any such contrary
`
`description.
`
`In fact, the ’221 patent broadly describes “payment data” in several
`
`places as “comprising data relating to payment for the requested data item.”
`
`Ex. 1001, 6:51–53, 10:26–30, 10:39–41, 10:44–46. This is consistent with
`
`the plain meaning of the term. Thus, we are persuaded that the broadest
`
`reasonable interpretation of “payment data” in light of the specification of
`
`the ’221 patent is “data relating to payment for the requested data item.”
`
`D. Obviousness Over Stefik ’235 and Stefik ’9808
`
`1. Overview of Stefik ’980
`
`Stefik ’980 teaches a system for controlling use and distribution of
`
`digital works by attaching “usage rights” to the work and storing it in a
`
`“secure repository.” Ex. 1014, 3:51–61. Each repository allows for secure
`
`and trusted communications and “has two primary operating modes, a server
`
`mode and a requester mode.” Id. at 4:9–10, 7:41–43. In server mode, a
`
`repository receives access requests for digital works and responds to those
`
`requests by examining the work’s usage rights. Id. at 4:10–24, 7:46–48. In
`
`requester mode, a repository requests access to a digital work from another
`
`repository. Id. at 4:10–13, 7:48–49. Stefik ’980 discloses that “a repository
`
`
`8 Petitioner refers to Stefik ’235 and Stefik ’980, collectively, as “Stefik.”
`Pet. 27. Petitioner contends that “[b]ecause Stefik ’235 incorporates Stefik
`’980 by reference, they should be considered a single reference,” and
`additionally provides rationale for the combination the combination of the
`teachings of Stefik ’235 and Stefik ’980. 102 Pet. 26 n.13. In its Response,
`Patent Owner does not dispute Petitioner’s contentions regarding “Stefik”
`being a single reference, or Petitioner’s rationale for combining the
`teachings of Stefik ’235 and Stefik ’980. See PO Resp. 10–22.
`
`10
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`CBM2014-00102
`Patent 8,118,221 B2
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`may be embedded in some other device,” for example, “a ‘card’ that is
`
`inserted into an available slot in a computer system.” Id. at 16:54–58.
`
`Figure 12 of Stefik ’980 is reproduced below.
`
`
`
`Figure 12 is a block diagram of the hardware components of a repository.
`
`Id. at 5:4–6. The components include processing means 1200, clock 1205,
`
`external interface 1206, and storage system 1207. Id. at 14:11–13.
`
`Processing means 1200 is comprised of processor element 1201, which may
`
`be a microprocessor or other suitable computing component, and processor
`
`memory 1202, which typically contains the software instructions used by
`
`processor element 1201 in performing the functions of the repository. Id. at
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`14:13–27.
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`11
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`CBM2014-00102
`Patent 8,118,221 B2
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`Figure 1 of Stefik ’980 is reproduced below.
`
`
`
`Figure 1 is a flowchart demonstrating the basic operation of the system
`
`disclosed by Stefik ’980. Id. at 4:38–40, 7:6–8. First, in step 101, a digital
`
`work is created and, in step 102, its creator attaches the appropriate usage
`
`rights and fees to the work and stores it in a first repository—Repository 1
`
`(i.e., a supplying repository). Id. at 7:8–11. Later, in step 103, a second
`
`repository—Repository 2—operating in requester mode (i.e., a requesting
`
`repository), requests access to the stored digital work by initiating a session
`
`with Repository 1 and includes with its request, a stated purpose for the
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`12
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`CBM2014-00102
`Patent 8,118,221 B2
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`digital work corresponding to a specific usage right—step 104. Id. at 7:11–
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`24. In step 105, Repository 1, operating in server mode, checks the usage
`
`rights associated with the requested digital work to determine if access may
`
`be granted to Repository 2. Id. at 7:24–29. If access is denied, Repository 1
`
`terminates the session with an error message—step 106. Id. at 7:29–31. If
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`access is granted, Repository 1 transmits the digital work to Repository 2—
`
`step 107—followed by each of Repository 1 and 2 generating billing
`
`information to transmit to a credit server—step 108. Id. at 7:31–37.
`
`2. Overview of Stefik ’235
`
`Stefik ’235 teaches a portable Document Card (“DocuCard”) for
`
`storing information in a digital form, storing usage rights for that
`
`information, processing user-initiated functions and requests to access the
`
`stored information, interfacing to external devices for reading and writing
`
`digital information, and allowing a user to directly interact with the
`
`DocuCard. Ex. 1013, 2:29–40, 7:35–42.
`
`As noted above, the repositories described in Stefik ’980 may be
`
`embedded in a card. Ex. 1014, 16:54–58. In fact, Stefik ’235 discloses that
`
`“[t]he currently preferred embodiment of a DocuCard is an instance of a
`
`repository, as defined in [Stefik ’980].” Ex. 1013, 2:47–53. Stefik ’235,
`
`thus, states that the “user interface of the present invention enables a user to
`
`interact with a DocuCard to manage the contents contained therein, as well
`
`as to obtain Documents stored in other repositories” and describes the
`
`“general steps for accessing a document stored in another repository.” Id. at
`
`2:53–67.
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`13
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`CBM2014-00102
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`Figure 3 of Stefik ’235 is reproduced below.
`
`
`
`Figure 3 is a “flowchart describing the interaction between a DocuCard anti
`
`a repository in the course of accessing a document stored in the repository.”
`
`Ex. 1013, 6:45–47. The establishment of an electrical connection between
`
`the DocuCard and repository triggers automatic registration process 301, by
`
`which the two establish a secure and trusted session. Id. at 6:47–59.
`
`Following registration, login transaction 302 is performed by a user,
`
`typically by entering a Personal Identification Number (PIN). Id. at 6:60–
`
`65. Step 302 “may also activate credit accounts.” Id. Next, in step 303, the
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`user “uses the user interface to assign payment of any fees associated with
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`the transaction to be executed” and “the acceptance of fees by the repository
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`may be a prerequisite to the continuation of the process.” Id.at 6:66–7:4.
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`The following steps, 304–307, allow the user of the DocuCard to select
`
`documents and functions from the repository. Id. at 7:5–16.
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`3. Claims 1, 11, and 12
`
`Petitioner asserts that claims 1, 11, and 12 would have been obvious
`
`over the combination of Stefik ’235 and Stefik ’980. 102 Pet. 40–69.
`
`Specifically, Petitioner asserts that Stefik ’980 describes a system of
`
`multiple repositories, acting in different capacities, which are in
`
`communication and transporting data amongst each other. 102 Pet. 41
`
`(citing Ex. 1014, Abstract, Figs. 1–4b, 13:43–46). Pointing to Figure 2 of
`
`Stefik ’980, Petitioner asserts that a repository may act as an exchange
`
`medium for digital works—the claimed data access terminal—with one
`
`repository acting as a data supplier and another repository acting as a data
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`carrier. Id. at 41–42. Petitioner relies on Stefik ’235 for its disclosure that
`
`the portable device called a DocuCard is a type of repository. See, e.g., id. at
`
`26 n.13.
`
`In the Decision to Institute, we determined that Petitioner had shown a
`
`likelihood of prevailing on this proposed ground of unpatentability. Dec. 15.
`
`In particular, we determined that Petitioner was more likely than not to
`
`prevail on its assertions that the combination of Stefik ’235 and Stefik ’980
`
`disclosed every limitation of claims 1, 11, and 12. Id. We also found
`
`reasonable Petitioner’s asserted rationale that a person of ordinary skill
`
`would have combined the teachings of Stefik ’235 and Stefik ’980 based on
`
`the explicit teachings in both references. Id. (citing Ex. 1013, 2:47–52;
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`Ex. 1014, 16:56–58; Ex. 1021 ¶ 56).
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`15
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`We have reviewed Petitioner’s obviousness arguments and supporting
`
`evidence, including the disclosure of both Stefik references and the detailed
`
`claim chart appearing on pages 41–69 of the Petition. Despite the counter-
`
`arguments in Patent Owner’s Response, and the evidence cited therein,
`
`which we also have considered, for the reasons discussed below, Petitioner
`
`has shown, by a preponderance of the evidence, that each of claims 1, 11,
`
`and 12 is unpatentable under 35 U.S.C. § 103 as having been obvious over
`
`the combination of Stefik ’235 and Stefik ’980.
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`a. “data carrier”
`
`Rather than challenging the merits of Petitioner’s theory of
`
`obviousness based on the disclosures of the prior art references, Patent
`
`Owner takes the position that the Petition is flawed because it “is
`
`inconsistent with regard to those elements of Stefik that it alleges correspond
`
`to the ‘data carrier’ of the ’221 patent.” PO Resp. 11, 17.
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`We are not persuaded that Petitioner’s position as to which component
`
`of Stefik teaches the claimed “data carrier” is unclear such that it has not
`
`shown by a preponderance of the evidence that claims 1, 11, and 12 would
`
`have been obvious over the combination of Stefik ’235 and Stefik ’980.
`
`Petitioner replies that Stefik ’980 discloses multiple embodiments and
`
`argues that the Petition explains that several of those embodiments would
`
`have made the claimed subject matter obvious to a person of ordinary skill in
`
`the art. 102 Pet. 44 n.14; Reply 10. We agree that the Petition sufficiently
`
`describes how at least one embodiment described by Stefik ’980 teaches the
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`claimed “data carrier.”
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`For example, Petitioner explains that it would have been obvious to a
`
`person of ordinary skill in the art to implement the operation described by
`
`16
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`Figure 1 of Stefik ’980 using the hardware components described by Figure
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`12 of Stefik ’980. 102 Pet. 42; Reply 10 (citing Ex. 1021, (App’x D) 61–
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`62). Specifically, the Petition maps processing means 1200, depicted in
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`Stefik ’980’s Figure 12, used in Repository 2, depicted in Stefik ’980’s
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`Figure 1 (the requesting repository), to the claimed “data access terminal,”
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`which, as taught by Stefik ’235, may be implemented using a DocuCard.
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`Reply 10 (citing 102 Pet. 42–45); see also, Pet. 44 n.14. The Petition further
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`maps Stefik ’980’s storage system 1207, depicted in Stefik ’980’s Figure 12,
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`used in Repository 2, depicted in Stefik ’980’s Figure 1, to the claimed “data
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`carrier.” Id. In this example, content is retrieved from Repository 1 (the
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`supplying repository). Id.
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`We agree with Petitioner that the Petition is sufficiently clear in
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`explaining, and shows by a preponderance of the evidence, that a person of
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`skill in the art would understand that the storage system of a repository
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`operating in requesting mode discloses the claimed data carrier and that any
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`such repository could be embedded in a removable card, such as the
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`DocuCard described by Stefik ’235. 102 Pet. 42–45; Ex. 1021, (App’x D)
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`61–65.9
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`b. “payment data”
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`Patent Owner argues that the Petition “does not prove how the alleged
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`‘payment data’ is being transferred.” PO Resp. 13. Patent Owner asserts
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`that the Petition does not specify “which DocuCard is being read from and
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`which is allegedly acting as a data carrier” nor does it identify “what the
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`‘transaction identifiers, identifiers for repositories involved in the
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`9 In this decision, when referring to Appendix D of Exhibit 1021, page
`numbers correspond to the numbers in the bottom, center of each page.
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`transaction, and lists of charges for the transaction’ allegedly are such that
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`one can verify that that [sic] they really are being read from the same data
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`carrier as the ‘retrieved data’ is eventually written.” Id. at 13–14 (citing 102
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`Pet. 54; Ex. 2028 ¶ 21). Patent Owner then identifies various alleged
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`deficiencies in the Petition including that: (1) the Petition cites to, but
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`doesn’t explain the relevance of “various ‘logging in’ steps” (id. at 14 (citing
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`102 Pet. 55–56)); (2) the Petition doesn’t clearly define what it means to
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`“activate credit accounts” (id. (citing 102 Pet. 56)); (3) “how that the bank
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`account information is allegedly used is unclear” (id. at 15 (citing 102 Pet.
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`54); (4) fee information is not known in step 303 of Figure 3 “because no
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`document or function has yet been selected that might incur a fee” (id. at 14–
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`15); and (5) Stefik’s embodiment with the credit server acting as a debit card
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`“is not discussing ‘real-time’ transactions” and instead is discussing post-
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`usage processing (id. at 15–16 (citing 102 Pet. 45, 76–77)).
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`We are not persuaded that any of Patent Owner’s alleged
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`“deficiencies” in the Petition make Petitioner’s position unclear such that it
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`has not shown by a preponderance of the evidence that claims 1, 11, and 12
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`would have been obvious over the combination of Stefik ’235 and Stefik
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`’980. First, it is clear from the disclosure of Stefik ’235 that logging steps,
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`activating credit accounts, and using bank account information are simply a
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`part of a payment processing and validation scheme used by a particular
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`embodiment of Stefik’s disclosed system. See, e.g., Ex. 1013 6:60–7:4;
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`Ex. 1014, 29:58–30:36.
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`Second, although Patent Owner does not explain the relevance of its
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`arguments that “fee information is not known is step 303 of Figure 3,” or
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`that “Stefik’s embodiment with the credit server acting as a ‘debit card’ is
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`not discussing ‘real-time’ transactions,” we presume these arguments refer
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`to Patent Owner’s proposed construction of “payment data,” which would
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`limit that term to data existing prior to the payment operation. See, e.g.,
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`Paper 51 (“Tr.”), 77:10–78:14 (Patent Owner discussing Stefik’s teaching of
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`“payment data” at the hearing in virtually the same context in the IPR2015-
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`00112 and conceding that if we do not adopt its construction of “payment
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`data” proceeding and instead adopt Petitioner’s construction, it has no
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`remaining argument as to why Stefik does not teach “payment data.”). As
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`explained above, we do not adopt this limited construction, but instead
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`construe “payment data” as “data relating to payment for the requested data
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`item.” Using this construction, we are not persuaded that Patent Owner’s
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`arguments related to the timing of “payment data” in relation to the actual
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`payment operation are relevant.
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`More importantly, Patent Owner does not persuasively address the
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`ultimate issue here. The relevant inquiry is whether the transfer of payment
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`data, as claimed, would have been obvious to those of ordinary skill in the
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`art in light of the combined teachings of Stefik ’235 and Stefik ’980. See
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`Leapfrog Enters., Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir.
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`2007). Petitioner asserts that a person of ordinary skill in the art would have
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`understood the Stefik references to teach the acceptance of fees and
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`payments for digital works and, to support this assertion, points to the
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`express disclosure that “billing transactions were well understood in the state
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`of the art.” 102 Pet. 54–55 n.26; Ex. 1014, 29:61–64; see also Ex. 1021,
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`(App’x D) 79–82. Indeed, Patent Owner’s expert, Dr. Katz, acknowledged
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`that a person of ordinary skill would have understood the basics of payment
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`validation. See, e.g., Ex. 1031, 16:15–27:9. Patent Owner does not point to
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`anything in the claim language indicating that such basic payment
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`processing and validation is outside the scope of the claims. Thus, we are
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`persuaded that a person of ordinary skill would find the Stefik references
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`sufficiently teach payment processing and validation such that the claimed
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`subject matter relating to transferring payment data would have been
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`obvious.
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`4. Conclusion
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`We conclude that Petitioner has shown by a preponderance of the
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`evidence that claims 1, 11, and 12 of the ’221 Patent would have been
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`obvious over Stefik ’235 and Stefik ’980.
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`E. Obviousness Over Stefik ’235, Stefik ’980, and Poggio
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`Petitioner asserts that claims 2, 13, and 14 would have been obvious
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`over the Stefik references combined with Poggio. 102 Pet. 73–79.
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`Petitioner asserts that “Poggio teaches that facilitating the content
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`transactions can advantageously be done with minimal action from the
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`vendor, and payment validation processes that are automatically executed
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`from stored code, as taught by Poggio, would contribute this additional
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`benefit to Stefik’s repository system.” 102 Pet. 34 (citing Ex. 1014 2:66–
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`3:1; Ex. 1016 2:32–36; Ex. 1021 ¶¶ 59–62).
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`In the Decision to Institute, we determined that Petitioner had shown a
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`likelihood of prevailing on this proposed ground of unpatentability. Dec.
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`16–17. In particular, we determined that Petitioner was more likely than not
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`to prevail on its assertions that the combination of Stefik ’235, Stefik ’980,
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`and Poggio disclosed every limitation of claims 2, 13, and 14. Id. We also
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`found reasonable Petitioner’s asserted rationale that a person of ordinary
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`skill would have combined the teachings of Stefik ’235, Stefik ’980, and
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`Poggio based on the benefit to Stefik’s system of Poggio’s teaching that
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`content transactions can be done with minimal action from the vendor and
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`also that payment validation processes can be automatically executed from
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`stored code. 102 Pet. 34 (citing Ex. 1014, 2:66–3:1; Ex. 1016, 2:32–36; Ex.
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`1021 ¶¶ 59–62).
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`We have reviewed Petitioner’s obviousness arguments and supporting
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`evidence, including the disclosure of both Stefi