Covered Business Method Patent Review
`United States Patent No. 7,334,720
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-803
`Customer No. 28120
`
`§
`Inventor: Hulst et al.
`United States Patent No.: 7,334,720 §
`Formerly Application No.: 11/336,758 §
`Issue Date: February 26, 2008
`§
`Filing Date: January 19, 2006
`§
`Former Group Art Unit: 2876
`§
`Former Examiner: Steven S. Paik
`§
`
`For: Data Storage and Access Systems
`
`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. 7,334,720 PURSUANT TO 35 U.S.C.
`§ 321, 37 C.F.R. § 42.304
`
`
`
`

`
`
`
` Covered Business Method Patent Review
`United States Patent No. 7,334,720
`
`
`TABLE OF CONTENTS
`
`B. 
`
`INTRODUCTION ....................................................................................................... 1 
`I. 
`II.  OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 4 
`III.  PETITIONER HAS STANDING .......................................................................... 12 
`A. 
`The ’720 Patent Is a Covered Business Method Patent ............................. 12 
`1. 
`Exemplary Claim 14 Is Financial In Nature .................................... 13 
`2. 
`Claim 14 Does Not Cover A Technological Invention ................. 16 
`Related Matters; Petitioner Is a Real Party In Interest Sued for and
`Charged With Infringement ........................................................................... 20 
`IV.  DETAILED EXPLANATION OF REASONS FOR RELIEF REQUESTED,
`SHOWING IT IS MORE LIKELY THAN NOT THAT AT LEAST ONE
`OF THE CHALLENGED CLAIMS IS UNPATENTABLE ............................ 21 
`A. 
`Claim Construction .......................................................................................... 22 
`B. 
`The Challenged Claims Are Invalid Under 35 U.S.C. §§ 102 and 103 .... 28 
`1. 
`Overview of Stefik ............................................................................... 28 
`2. 
`Motivation to Combine Stefik with Poggio ..................................... 33 
`3. 
`Motivation to Combine Stefik with Sato .......................................... 39 
`4. 
`Motivation to Combine Stefik with Maari ....................................... 40 
`5. 
`Claims 1, 3, 11, 13 and 14 are Anticipated by Stefik
`(Ground 1); Claims 1, 3, 11, 13, and 14 are Obvious in
`Light of Stefik (Ground 2); Claims 3, 11, and 13-15 are
`Obvious in Light of Stefik in view of Poggio (Ground 3);
`Claims 1, 3, 11, 13, and 14 are Obvious in Light of Stefik in
`View of Sato (Ground 4); Claims 3, 11, 13, and 14 are
`Obvious in Light of Stefik in View of Poggio and Sato
`(Ground 5); Claim 1 is Obvious in Light of Stefik in view
`of Maari (Ground 6); and Claim 1 is Obvious in Light of
`Stefik in View of Maari and Sato (Ground 7). ................................. 43 
`CONCLUSION........................................................................................................... 79 
`
`V. 
`
`
`ii
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`

`
`
`EXHIBIT LIST
`1001
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
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`1007
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`1008
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`1009
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`1010
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`1011
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`1012
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`1013
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`1014
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`1015
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`1016
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`1017
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`1018
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`1019
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`
`U.S. Patent No. 7,334,720
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`Plaintiffs’ First Amended Complaint
`
`File History for U.S. Patent No. 8,118,221
`
`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. 5,754,654
`
`File History for U.S. Patent No. 7,334,720
`
`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. 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. WO 99/43136
`
`JP Patent Application Publication No. H11-164058 (transla-
`tion)
`JP Patent Application Publication No. H10-269289 (transla-
`tion)
`
`iii
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`

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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`Eberhard von Faber, Robert Hammelrath, and Franz-Peter
`Heider, “The Secure Distribution of Digital Contents,” IEEE
`(1997)
`Declaration of Anthony J. Wechselberger In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`U.S. Patent No. 7,942,317
`
`U.S. Patent No. 8,033,458
`
`U.S. Patent No. 8,061,598
`
`U.S. Patent No. 8,118,221
`
`U.S. Patent No. 8,336,772
`
`File History for U.S. Patent No. 7,942,317
`
`File History for U.S. Patent No. 8,033,458
`
`File History for U.S. Patent No. 8,061,598
`
`EXHIBIT LIST
`1020
`
`1021
`
`1022
`
`1023
`
`1024
`
`1025
`
`1026
`
`1027
`
`1028
`
`1029
`
`iv
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`

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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`I.
`
`INTRODUCTION
`
`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, 3, 11, and 13-15 of U.S. Patent No.
`
`7,334,720 (“the ’720 Patent”), issued to Smart-Flash Limited and currently assigned to
`
`Smartflash LLC (“Smartflash,” also referred to as “Applicant,” “Patent Owner,” or
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`“Patentee”). Petitioner hereby asserts that it is more likely than not that at least one
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`of the challenged claims is unpatentable for the reasons set forth herein and respect-
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`fully requests review of, and judgment against, claims 1, 3, 11, and 13-15 as unpatent-
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`able under 35 U.S.C. § 102 as anticipated and § 103 as obvious.1
`
`As discussed in Section III.B, infra, Petitioner has concurrently filed a Petition
`
`seeking covered business method review of the ’720 Patent, requesting judgment
`
`against these same claims under §§ 102 and 103 based on different prior art references.
`
`Petitioner notes that the Director, pursuant to Rule 325(c), may determine at the
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`proper time that merger of these proceedings, or at minimum coordination of pro-
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`ceedings involving the same patent, is appropriate.
`
`The challenged claims of the ’720 Patent merely recite steps and corresponding
`
`
`1 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
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`numerous additional reasons. All emphasis herein added unless otherwise noted.
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`

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`systems well-known in the field of data storage and access, including use of a “porta-
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`ble data carrier for storing and paying for data and to computer systems for providing
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`access to data to be stored.” E.g., Ex. 1001 1:5-8. Independent Claim 14, for example,
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`recites six rudimentary steps relating to data storage and access—(A) reading pay-
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`ment data from a data carrier, (B) forwarding that data to a payment validation sys-
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`tem, (C) retrieving data from a data supplier, (D) writing the retrieved data to the
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`data carrier, (E) receiving from the data supplier at least one access rule specifying at
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`least one condition for accessing this data (dependent on the amount of payment as-
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`sociated with the payment data); and (F) writing that rule into the data carrier:
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`14. 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;
`writing the retrieved data into the data carrier;
`receiving at least one access rule from the data supplier; and
`writing the at least one access rule into the data carrier, the at least one
`access rule specifying at least one condition for accessing the retrieved
`data written into the data carrier, the at least one condition being de-
`pendent upon the amount of payment associated with the payment data
`forwarded to the payment validation system.
`Ex. 1001. But at the earliest claimed priority date for the ’720 Patent, these simple el-
`
`ements and their combination were all well known to any person of ordinary skill in
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`2
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`United States Patent No. 7,334,720
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`the art (“POSITA”). Indeed, the patent itself acknowledges that the idea of providing
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`access to data in exchange for a payment (e.g., purchase of music on a CD) was well
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`known at the time. E.g., id. 5:4-7 (“where the data carrier stores . . . music, the pur-
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`chase outright option may be equivalent to the purchase of a compact disc (CD), preferably
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`with some form of content copy protection such as digital watermarking”). And, as
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`demonstrated herein, the prior art was teeming with disclosures of this basic concept.
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`Moreover, as its language makes clear, Claim 14 involves no “technology” at all
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`other than “a payment validation system” and “a data carrier”—both of which the pa-
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`tent itself concedes were well known and entirely commonplace at the time. E.g., id.
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`3:29, 8:64-66, 11:36-53, 13:46-58, 14:1-2, 17:23-18:23, 18:38, Figs. 2, 9. Thus, as the
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`intrinsic record reflects, Claim 14 recites nothing more than a method for retrieving
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`and storing data from a data supplier while reading and forwarding payment data for
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`validation and receiving and writing an access rule for the stored data. And the other
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`challenged claims are nothing but variations on this same simple and well-known
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`theme, with the addition, in the challenged “system” claims, of equally generic com-
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`ponents (such as data terminals with interfaces, processors, program stores and
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`code).2 See, e.g., id. 12:38-41 (“The physical embodiment of the system is not critical
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`2 Claims 15, for example, simply adds to claim 14 additional steps involving receiving
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`payment validation data from the validation system and transmitting at least a portion
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`to the data supplier. Claim 1 simply recites a method of restricting access to the data
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`3
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`and a skilled person will understand that the terminals, data processing systems and
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`the like can all take a variety of forms.”); Fig. 4b.
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`It is thus little surprise that, as detailed herein, each and every element of the
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`challenged claims of the ’720 Patent and their claimed combinations have been dis-
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`closed in the prior art, either by individual references, or by those references or sys-
`
`tems in combination. Accordingly, each of the challenged claims is anticipated, obvi-
`
`ous, or both.
`
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
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`digital products all would have been well-known to a POSITA,3 and their combina-
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`on the data carrier based on use status data and use rules. Claims 3 and 11 simply
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`recite a “data access terminal” with interfaces, a processor, a program store and
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`“code” to perform similar steps, along with the processing of data access requests and
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`various data (e.g., use status data, identity data, user characterizing data, supplementary
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`data) via the application of access and use rules. And claim 13 simply adds to claim 3
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`that the data access terminal is “integrated with a mobile communication device, a
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`personal computer, an audio/video player, and/or a cable or satellite television inter-
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`face device.” See Ex. 1001.
`
`3 All references to a POSITA refer to the knowledge or understanding of a person of
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`ordinary skill in the art as of October 25, 1999, unless specifically noted. A POSITA
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`4
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`

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`tion as claimed also would have been well-known or at minimum obvious to a POSI-
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`TA. See, e.g., Ex. 1021 ¶¶ 30-48. For example, nearly a decade earlier, on March 12,
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`1991, U.S. Patent No. 4,999,806 (“Chernow”), entitled “Software Distribution Sys-
`
`tem,” issued. See Ex. 1006 (filed Sept. 4, 1987). Chernow discloses a system and
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`method for the sale and distribution of digital products by telephone, with a focus on
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`software, and also discloses content protection for those digital products. See, e.g., Ex.
`
`1006 Abstract (“A central station distributes software by telephone. The central sta-
`
`tion accepts credit card information, transmits an acceptance code to a caller and then
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`terminates the call. After verifying the credit card information, the station calls the purchaser back
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`and continues with the transaction only after receiving the acceptance code.”); 1:67-2:9 (“It is an
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`object of this invention to provide a means for selling and distributing protected
`
`software using standard telephone lines for transferring the software from the seller to
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`the purchaser. Another object of this invention is to permit the purchaser to rent the
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`protected software for a period of time after which it will self destruct. Another object
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`of this invention is to permit the purchaser to rent the protected software for a specif-
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`ic number of runs which would be useful, e.g., if the software were a game.”). As il-
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`would have at least a Bachelor of Science degree in electrical engineering, computer
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`science or a telecommunications related field, and at least three years of industry
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`experience that included client-server data/information distribution and management
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`architectures. See, e.g., Ex. 1021 ¶ 30, 30 n.2.
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`5
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`lustrated above, Chernow discloses making different types of access available, such as
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`purchase versus rental. Further, Chernow discloses a Control Transfer Program and a
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`Primary Protection Program that ensure the computer receiving a downloaded pro-
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`gram does not have another program present that could create unauthorized copies of
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`that downloaded program. See Ex. 1006 Abstract; 2:65-3:23.
`
`In April 1992, U.S. Patent No. 5,103,392 (“Mori”), “System for Storing History
`
`of Use of Programs Including User Credit Data and Having Access by the Propri-
`
`eter,” issued disclosing storing information about customer use of digital products so
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`that a customer can be charged according to its use. See, e.g., Ex. 1012 1:64-2:17 (filed
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`Dec. 5, 1990).
`
`The data processing apparatus includes user-specific credit data storage
`means for storing data identifying the user of the data processing appa-
`ratus and indicating credit for payment capacity, use time length, or the
`like of the user of the data processing apparatus. Also included is use de-
`cision means for determining permission to use the program on the data pro-
`cessing apparatus on the basis of program-specific data supplied from the pro-
`gram storage means or user-specific credit data supplied from the user-
`specific credit data storage means, the use decision means delivering ei-
`ther an affirmative or negative signal corresponding to results of the de-
`cision. Also included is program use history storage means connected to
`the use decision means for storing program use history data derived
`from the program-specific data or the user-specific credit data.
`Mori’s emphasis on determining whether a user has permission to access a program
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`6
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`and making sure program providers are compensated for the use of their programs
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`underscores this existing focus in the art on digital rights management (“DRM”), over
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`eight years before Smartflash’s claimed October 25, 1999 priority date.
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`Another prior art example of a secure content distribution system with content
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`protection is EP0809221A2 (“Poggio”), “Virtual vending system and method for
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`managing the distribution, licensing and rental of electronic data.” See Ex. 1016.
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`Poggio—published November 26, 1997—discloses a “virtual vending machine” sys-
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`tem for the sale and distribution of digital products. See, e.g., id. Abstract (“A virtual
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`vending machine manages a comprehensive vending service for the distribution of li-
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`censed electronic data (i.e., products) over a distributed computer system. . . . The vir-
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`tual vending machine distributes licenses for the electronic data for the complete
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`product or for components thereof and for a variety of time frames, including perma-
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`nent licenses and rental period licenses. The virtual vending machine provides client
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`computers with the capability to obtain information regarding the available products
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`and the associated license fees and rental periods, to receive the product upon receipt of a cor-
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`responding electronic payment, and to reload the product during the term of the license.”). Like
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`Chernow, Poggio discloses different types of access, including rentals, and re-
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`download capabilities for already-purchased content. See, e.g., id.
`
`Also in 1997, IEEE published “The Secure Distribution of Digital Contents,”
`
`(“von Faber”). See Ex. 1020. In its introduction, von Faber made the well-known ob-
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`7
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`United States Patent No. 7,334,720
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`servation that “[e]lectronic commerce systems dealing with the distribution of digital
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`contents like software or multimedia data have to couple the use of the provided digital goods
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`with a prior payment for the goods in a way which cannot be bypassed.” See id. at 7. Von
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`Faber proposes a system where customers purchase keys required to utilize distributed
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`encrypted content. See, e.g., id. (“The basic idea of one possible solution is to distribute
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`the contents in encrypted form, and to have the customer pay for the key which he needs to transform
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`the encrypted content in an usable form. The security problem can in this way be trans-
`
`formed into a problem of key distribution.”); 8 (“The Content Provider provides digi-
`
`tal contents in encrypted form being distributed by the Content Distributor. The Key
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`Management System holds the keys for the contents to be decrypted. The Authorisa-
`
`tion System permits the distribution of the appropriate key after settling of the fees payable by the
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`Customer, who will enjoy the decrypted digital contents. The role of the Content Dis-
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`tributor is not essential for the subsequent discussion but, of course, for the business
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`to take place.”); see also Ex. 1020 at Fig. 1. Von Faber also notes that its system could
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`be used for a variety of known content distribution and payment methods. See, e.g.,
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`Ex. 1020 at 13 (“The outlined system has the following characteristics: Different
`
`methods can be used to distribute the encrypted contents (standard techniques). This
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`includes broadcasting, point-to-point networking, as well as offering disks. Different
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`electronic payment methods can be integrated independent from the number of pro-
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`tocol steps needed. This includes credit card based systems as well as electronic purses.
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`8
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`This flexibility leads to the fact that totally different authorisation methods can be in-
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`tegrated.”). Von Faber further addressed the known issue of payment distribution to
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`content providers. See, e.g., Ex. 1020 at 13 (“The system will support re-selling in a
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`simple way. Re-sellers can integrate other manufacturer’s products into own packages
`
`without the need of signing any extra contract. The system automatically divides the
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`package price (payments) and guarantees that the money is transferred to each Con-
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`tent Provider whose product has been integrated into the package.”).
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`Moreover, on June 22, 1999, U.S. Patent No. 5,915,019 (“Ginter”), entitled
`
`“Systems and Methods for Secure Transaction Management and Electronic Rights
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`Protection,” issued. See Ex. 1015 (filed on January 8, 1997). Ginter similarly discloses
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`“systems and methods for secure transaction management and electronic rights pro-
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`tection.” See, e.g., id. Abstract. Ginter describes a “virtual distribution environment”
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`(termed a “VDE”) to “control and/or meter or otherwise monitor use of electronical-
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`ly stored or disseminated information.” See, e.g., id. Ginter’s system “help[s] to ensure
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`that information is accessed and used only in authorized ways, and maintain the integrity,
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`availability, and/or confidentiality of the information.” See, e.g., id. Further, Ginter’s
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`“techniques may be used to support an all-electronic information distribution, for ex-
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`ample, utilizing the ‘electronic highway.’” See, e.g., id. Ginter discloses that the various
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`entities that comprise the VDE can flexibly take on any of the roles within the VDE.
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`See, e.g., id. 255:22-23 (“All participants of VDE 100 have the innate ability to partici-
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`9
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`pate in any role.”); 255:23-43. Ginter thus highlights the known flexibility in such dis-
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`tribution systems, underscoring that a POSITA would have known that combinations
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`between and among disclosures of such distribution systems would have been obvi-
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`ous to a POSITA. See also, e.g., Ex. 1021 ¶ 41.
`
`Storage and utilization of content stored on portable devices, including mobile
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`communication devices such as cellular phones, was also well-known before Smart-
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`flash’s claimed October 25, 1999 priority date. As one example, PCT Application
`
`Publication No. WO 99/43136 (“Rydbeck”) published on August 26, 1999. See Ex.
`
`1017. Rydbeck discloses a cellular phone as user device for storing digital content in
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`non-volatile memory and accessing that content. See, e.g., Ex. 1017 3:7-13 (“Because
`
`of its integration into the cellular phone, the digital entertainment module can share
`
`components already present in the cellular phone. Such savings would not be available
`
`if a CD player were simply aggregated with the phone. Further, the use of solid state
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`RAM or ROM, as opposed to disc storage, eliminates the need for bounce control
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`circuitry. This enables the disclosed invention to provide cellular communications and
`
`entertainment during leisure activities.”). In addition, JP Patent Application Publica-
`
`tion No. H11-164058 (“Sato”), entitled “Portable Music Selection and Viewing Sys-
`
`tem,” published June 18, 1999, discloses storing media content onto mobile user de-
`
`vices and playing the media content from these mobile devices. Sato further discloses
`
`storing that media content on a removable IC card. See, e.g., Ex. 1018 ¶9 (“The porta-
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`ble music selection viewing device 70 provides a removable storage device 76 on a main
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`body 71. This storage device 76 is a memory card similar to, for example, a magnetic
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`card, a magnetic tape, a CD, a DVD, or an IC card. The user, after downloading the
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`music software to the storage device (medium) 76 of the portable music selection and
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`viewing device 70 by operating the push buttons or the like on the main body 71, can
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`enjoy this music software on a display 70 by operating the push buttons or the like on
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`the main body selection and viewing device 70, and can enjoy higher quality music
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`playback by removing this storage device (medium) and inserting it into another audio unit. Further,
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`the user can store the music software from another audio unit into the storage device
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`76 and enjoy music by inserting this storage unit 76 into this portable music selection
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`and viewing device 70.”); ¶13 (“A music storage device 240 connected to the music
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`control unit 200 stores the music software. A music storage medium 250 such as a
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`magnetic card, magnetic tape, a CD, a DVD, or a memory card such as an IC card stores
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`the music software, and this storage medium 250 can be removed and used on other
`
`audio units.”).
`
`Thus, as these background examples and the additional prior art detailed below
`
`in Section IV.B (including the primary prior art Stefik patent) illustrate, the prior art
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`was rife with awareness and discussion of the same supposed “invention” now me-
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`morialized in the challenged claims of the ’221 Patent. Long before the ’221 Patent’s
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`first purported October 25, 1999 priority date, disclosures abounded of the very fea-
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`tures that Smartflash now seeks to claim as its exclusive property. As outlined in more
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`detail below, the challenged claims are therefore invalid under §§ 102 and/or 103.
`
`III. PETITIONER HAS STANDING
`A.
`Petitioner certifies that the ’720 Patent is available for review under 37 C.F.R.
`
`The ’720 Patent Is a Covered Business Method Patent
`
`§ 42.304(a). The ’720 Patent is a “covered business method patent” under § 18(d)(1)
`
`of the Leahy-Smith America Invents Act, Pub. L. 112-29 (“AIA”) and § 42.301. Alt-
`
`hough in fact numerous claims of the ‘720 Patent qualify, a patent with even one
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`claim covering a covered business method is considered a CBM patent. See CBM
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`2012-00001, Doc. 36 at 26; 77 Fed. Reg. 48,709 (Aug. 14, 2012). Accordingly, Peti-
`
`tioner addresses here exemplary claim 14:
`
`14. 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;
`writing the retrieved data into the data carrier;
`receiving at least one access rule from the data supplier; and
`writing the at least one access rule into the data carrier, the at least one
`access rule specifying at least one condition for accessing the retrieved
`data written into the data carrier, the at least one condition being de-
`pendent upon the amount of payment associated with the payment
`data forwarded to the payment validation system.
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`12
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`1.
`A “covered business method patent” is “a patent that claims a method or cor-
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`Exemplary Claim 14 Is Financial In Nature
`
`responding apparatus for performing data processing or other operations used in the
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`practice, administration, or management of a financial product or service, except that
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`the term does not include patents for technological inventions.” AIA §18(d)(1); 37
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`C.F.R. §42.301. “The ‘legislative history explains that the definition of covered busi-
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`ness method patent was drafted to encompass patents claiming activities that are fi-
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`nancial in nature, incidental to a financial activity or complementary to a financial ac-
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`tivity.’” 77 Fed. Reg. 48,734, 48,735 (Aug. 14, 2012) (citing 157 Cong. Rec. S5432
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`(daily ed. Sept. 8, 2011) (statement of Sen. Schumer)). “[F]inancial product or ser-
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`vice” is to be interpreted broadly, id., and the term “financial . . . simply means relating
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`to monetary matters”—it does not require any link to traditional financial industries
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`such as banks. See, e.g., CBM2012-00001, Paper 36 at 23.
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`This Board has previously found, for example, that a claim for “transferring
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`money electronically via a telecommunication line to the first party . . . from the sec-
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`ond party” met the financial product or service requirement, concluding that “the
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`electronic transfer of money is a financial activity, and allowing such a transfer
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`amounts to providing a financial service.” CBM2013-00020, Paper 14 at 9-10. 4 See
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`4 Indeed, these aspects of claim 14 are generally similar to those of the claim found to
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`convey CBM standing in CBM2013-00020, which recited: “A method for transmitting
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`also, e.g., CBM2013-00017, Paper 8 at 5-6 (finding patent sufficiently financial based on
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`reference in the specification to e-commerce and the fact that a POSITA “would have
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`understood that [one of the claim limitations] may be associated with financial ser-
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`vices”).
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`As discussed above, the ’720 Patent relates to the idea of providing electronic
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`data in exchange for payment and restricting access to data based on payment amount.
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`See AIA § 18(d)(1); 37 C.F.R. § 42.301(a); Ex. 1001 1:64-2:3. Indeed, in seeking to en-
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`force the ’720 Patent in litigation, Smartflash itself conceded that the alleged invention
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`relates to a financial activity or transaction, stating that “[t]he patents-in-suit generally
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`cover a portable data carrier for storing data and managing access to the data via pay-
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`ment information and/or use status rules. The patents-in-suit also generally cover a
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`computer network . . . that serves data and manages access to data by, for example,
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`validating payment information.” Ex. 1002.
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`The ’720 Patent emphasizes payment in describing the claimed invention:
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`According to the present invention there is therefore provided a method
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`a desired digital audio signal stored on a first memory of a first party to a second
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`memory of a second party comprising the steps of: transferring money
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`electronically . . . connecting electronically via a telecommunications line . . .
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`transmitting the desired digital audio signal . . . and storing the digital signal.” Id. at
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`10-17.
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`14
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`of providing portable data comprising providing a portable data storage
`device comprising downloaded data storage means and payment vali-
`dation means; providing a terminal for internet access; coupling the
`portable data storage device to the terminal; reading payment infor-
`mation from the payment validation means using the terminal; validat-
`ing the payment information; and downloading data into the portable
`storage device from a data supplier.
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`Ex. 1001 1:46-55. See also id. 1:56-57 (“Another aspect of the invention provides a
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`corresponding mobile data retrieval device…”). Indeed, the specification confirms
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`that the “portable data carrier” of the invention is “for storing and paying for data,” id.
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`1:6-8, and the “payment data” forwarded to the “payment validation system” “may
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`either be data relating to an actual payment made to the data supplier, or it may be a record of a
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`payment made to an e-payment system.” Id. 6:59-63. “Payment for the data item or items
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`requested may either be made directly to the system owner or may be made to an e-
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`payment system.” Id. 21:6-8. “E-payment systems [] are coupled to banks” and may be
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`provided in accordance with cash compliant standards such as MONDEX, Proton,
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`and/or Visa. Id. 13:46-58.
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`Thus because claim 14 explicitly describes electronically transferring money and
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`allowing such a transfer, as well as restricting access based on payment, it clearly re-
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`lates to a financial activity and providing a financial service. See CBM2013-00020, pa-
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`per 14 at 9-10 (“the electronic transfer of money is a financial activity, and allowing
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`15
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` Covered Business Method Patent Review
`United States Patent No. 7,334,720
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`such a transfer amounts to providing a financial service.”). See also AIA § 18(d)(1); 37
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`C.F.R. § 42.301(a). See also 77 Fed. Reg. 48,734, 48,735 (Aug. 14, 2012) (“[T]he defini-
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`tion of [CBM] was drafted to encompass patents ‘claiming activities that are financial
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`in nature, incidental to a financial activity or complementary to a financial activity.’”)
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`(citation omitted).
`
`2.
`Further, claim 14 is not a “technological invention” that would trigger the ex-
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`Claim 14 Does Not Cover A Technological Invention
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`ception in AIA § 18(d)(1), because it does not claim “subject matter as a whole [that]
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`recites a technological feature that is novel and unobvious over the prior art[] and solves a
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`technical problem using a technical solution.” § 42.301(b). To the contrary, the patent itself
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`makes clear that its claimed “data carrier,” payment validation system, and “data sup-
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`plier,” were commonplace and could be implemente