throbber
Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-804
`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. § 42.3041
`
`
`1 As authorized by the Board on May 19, 2014, and without opposition from Patent
`
`Owner, Petitioner hereby submits this replacement copy of the Petition to correct
`
`certain typographical errors in the original.
`
`
`
`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
`
`
`
`
`TABLE OF CONTENTS
`
`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 ............................. 13
`B.
`Related Matters; Petitioner Is a Real Party In Interest Sued for and
`Charged With Infringement ........................................................................... 21
`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 ............................ 22
`A.
`Claim Construction .......................................................................................... 23
`B.
`The Challenged Claims Are Invalid Under §§ 102 and/or 103 ................ 28
`CONCLUSION........................................................................................................... 79
`
`V.
`
`
`
`ii
`
`

`

`
`EXHIBIT LIST
`1101
`
`1102
`
`1103
`
`1104
`
`1105
`
`1106
`
`1107
`
`1108
`
`1109
`
`1110
`
`1111
`
`1112
`
`1113
`
`1114
`
`1115
`
`1116
`
`1117
`
`1118
`
`1119
`
` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
`
`
`U.S. Patent No. 7,334,720
`
`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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`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
`
`
`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
`1120
`
`1121
`
`1122
`
`1123
`
`1124
`
`1125
`
`1126
`
`1127
`
`1128
`
`1129
`
`iv
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`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
`
`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
`
`“Patentee”). Petitioner hereby asserts that it is more likely than not that at least one
`
`of the challenged claims is unpatentable for the reasons set forth herein and respect-
`
`fully requests review of, and judgment against, claims 1, 3, 11, and 13-15 as unpatent-
`
`able under 35 U.S.C. § 102 as anticipated and/or § 103 as obvious.2 As discussed in
`
`Section III.B, infra, Petitioner has concurrently filed a Petition seeking covered busi-
`
`ness method review of the ’720 Patent, requesting judgment against these same claims
`
`based on different prior art. Petitioner notes that the Director, pursuant to Rule
`
`325(c), may determine at the proper time that merger of these proceedings, or at min-
`
`imum coordination of proceedings involving the same patent, is appropriate.
`
`The challenged claims of the ’720 Patent merely recite steps and corresponding
`
`systems well-known in the field of data storage and access, including the use of a
`
`
`2 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
`
`numerous additional reasons. All emphasis added unless otherwise noted.
`
`
`
`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
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`“portable data carrier for storing and paying for data and to computer systems for
`
`providing access to data to be stored.” E.g., Ex. 1101 1:5-8. Claim 14, for example,
`
`recites six rudimentary steps relating to data storage and access—(A) reading pay-
`
`ment data from a data carrier, (B) forwarding that data to a payment validation sys-
`
`tem, (C) retrieving data from a data supplier, (D) writing the retrieved data to the da-
`
`ta carrier, (E) receiving from the data supplier at least one access rule specifying at
`
`least one condition for accessing this data (dependent on the amount of payment as-
`
`sociated with the payment data); and (F) writing that rule into the data carrier:
`
`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. 1101. But at the ’720 Patent’s earliest claimed priority date, these simple elements
`
`and their combination would have been well known to any person of ordinary skill
`
`(“POSITA”). Indeed, the patent itself acknowledges that the idea of providing access
`
`2
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`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
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`to data in exchange for a payment (such as the purchase of music on a CD) was well
`
`known at the time. E.g., id. 5:4-7 (“where the data carrier stores . . . music, the pur-
`
`chase outright option may be equivalent to the purchase of a compact disc (CD), preferably
`
`with some form of content copy protection such as digital watermarking”). And, as
`
`demonstrated herein, the prior art was teeming with disclosures of this basic concept.
`
`Moreover, as its language makes clear, Claim 14 involves no “technology” at all
`
`other than “a payment validation system” and “a data carrier”—both of which the pa-
`
`tent itself concedes were well known and entirely commonplace at the time. E.g., Ex.
`
`1101 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 intrinsic record reflects, Claim 14 recites nothing more than a method for retriev-
`
`ing and storing data from a data supplier while reading and forwarding payment data
`
`for validation and receiving and writing an access rule for the stored data. And the
`
`other challenged claims are nothing but variations on this same simple and well-
`
`known theme, with the addition, in the challenged “system” claims, of equally generic
`
`components (such as data terminals with interfaces, processors, program stores and
`
`code).3 See, e.g., id. 12:38-41 (“The physical embodiment of the system is not critical
`
`3 Claims 15, for example, simply adds to claim 14 additional steps involving receiving
`
`payment validation data from the validation system and transmitting at least a portion
`
`to the data supplier. Claim 1 simply recites a method of restricting access to the data
`
`on the data carrier based on use status data and use rules. Claims 3 and 11 simply
`
`3
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`

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` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
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`and a skilled person will understand that the terminals, data processing systems and
`
`the like can all take a variety of forms.”); Fig. 4(b). It is thus little surprise that, as de-
`
`tailed herein, each and every element of the challenged claims of the ’720 Patent and
`
`their claimed combinations have been disclosed in the prior art, either by individual
`
`references, or by those references or systems in combination. Accordingly, each of
`
`the challenged claims is invalid under 35 U.S.C. §§ 102 and/or 103.
`
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
`
`digital products would have been well-known to a POSITA,4 and their combination as
`
`recite a “data access terminal” with interfaces, a processor, a program store and
`
`“code” to perform similar steps, along with the processing of data access requests and
`
`various data (e.g., use status data, identity data, user characterizing data, supplementary
`
`data) via the application of access and use rules. And claim 13 simply adds to claim 3
`
`that the data access terminal is “integrated with a mobile communication device, a
`
`personal computer, an audio/video player, and/or a cable or satellite television inter-
`
`face device.” See Ex. 1101.
`
`4 All references to a person of ordinary skill in the art (“POSITA”) refer to the
`
`knowledge or understanding of a person of ordinary skill in the art as of October 25,
`
`1999, unless specifically noted. A POSITA would have at least a Bachelor of Science
`
`degree in electrical engineering, computer science or a telecommunications related
`
`4
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`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
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`claimed would have also been well-known or at minimum obvious to a POSITA. See,
`
`e.g., Ex. 1121 ¶¶ 30-31. For example, nearly a decade earlier, on March 12, 1991, U.S.
`
`Patent No. 4,999,806 (“Chernow”), “Software Distribution System,” issued. See Ex.
`
`1106 (filed September 4, 1987). Chernow discloses a system and method for the sale
`
`and distribution of digital products by telephone, with a focus on software, and also
`
`discloses content protection for those digital products. See, e.g., id. Abstract (“A cen-
`
`tral station distributes software by telephone. The central station accepts credit card
`
`information, transmits an acceptance code to a caller and then terminates the call. Af-
`
`ter verifying the credit card information, the station calls the purchaser back and continues with
`
`the transaction only after receiving the acceptance code.”); 1:67-2:9 (objects of the claimed in-
`
`vention include “provid[ing] a means for selling and distributing protected software
`
`using standard telephone lines for transferring the software from the seller to the pur-
`
`chaser,” “permit[ting] the purchaser to rent the protected software for a period of
`
`time after which it will self destruct,” and “to rent the protected software for a specif-
`
`ic number of runs which would be useful, e.g., if the software were a game.”). As illus-
`
`trated above, Chernow discloses making different types of access available, such as pur-
`
`chase versus rental. Further, Chernow discloses a Control Transfer Program and a
`
`Primary Protection Program that ensure the computer receiving a downloaded pro-
`
`field, and at least three years of industry experience that included client server da-
`
`ta/information distribution and management architectures. See, e.g., Ex. 1121 ¶ 27.
`
`5
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`

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` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
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`gram does not have another program present that could create unauthorized copies.
`
`See Ex. 1106 Abstract (“The central station . . . transmits a Control Transfer Program
`
`and Initialization Program to the purchaser, [which] executes the Initialization Pro-
`
`gram to turn over control of the purchaser computer to the central station. The Con-
`
`trol Transfer Program is then executed to transfer first a Protection program for en-
`
`suring that no memory resident copying programs are running”); see also id. 2:65-3:23.
`
`In April 1992, U.S. Patent No. 5,103,392 (“Mori,” filed Dec. 5, 1990), “System
`
`for Storing History of Use of Programs Including User Credit Data and Having Ac-
`
`cess by the Proprieter,” issued, disclosing storing data about customer use of digital
`
`products so a customer can be charged according to its use. E.g., Ex. 1112 1:64-2:17:
`
`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
`
`6
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` Covered Business Method Patent Review CBM2014-00105
`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
`
`eight years before Smartflash’s claimed October 25, 1999 priority date.
`
`Another prior art example of a secure content distribution system with content
`
`protection is EP0809221A2 (“Poggio”), “Virtual vending system and method for
`
`managing the distribution, licensing and rental of electronic data.” See Ex. 1116.
`
`Poggio—published November 26, 1997—discloses a “virtual vending machine” sys-
`
`tem for the sale and distribution of digital products. See, e.g., id. Abstract (“A virtual
`
`vending machine manages a comprehensive vending service for the distribution of li-
`
`censed electronic data (i.e., products) over a distributed computer system. . . . The vir-
`
`tual vending machine distributes licenses for the electronic data for the complete
`
`product or for components thereof and for a variety of time frames, including perma-
`
`nent licenses and rental period licenses. The virtual vending machine provides client
`
`computers with the capability to obtain information regarding the available products
`
`and the associated license fees and rental periods, to receive the product upon receipt of a cor-
`
`responding electronic payment, and to reload the product during the term of the license.”). Like
`
`Chernow, Poggio discloses different types of access, including rentals, and re-
`
`download capabilities for already-purchased content. See, e.g., id.
`
`Also in 1997—the same year Poggio was published—IEEE published “The
`
`Secure Distribution of Digital Contents” (“von Faber”). See Ex. 1120. In its intro-
`
`7
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`

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` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
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`duction, von Faber made the well-known observation that “[e]lectronic commerce
`
`systems dealing with the distribution of digital contents like software or multimedia
`
`data have to couple the use of the provided digital goods with a prior payment for the goods in a
`
`way which cannot be bypassed.” See id. at 7. Von Faber proposed a system where
`
`customers purchase keys required to utilize distributed encrypted content. See, e.g., id.
`
`(“The basic idea of one possible solution is to distribute the contents in encrypted form, and to
`
`have the customer pay for the key which he needs to transform the encrypted content in an usable form.
`
`The security problem can in this way be transformed into a problem of key distribu-
`
`tion.”); 8 (“The Content Provider provides digital contents in encrypted form being
`
`distributed by the Content Distributor. The Key Management System holds the keys
`
`for the contents to be decrypted. The Authorisation System permits the distribution of the
`
`appropriate key after settling of the fees payable by the Customer, who will enjoy the decrypted
`
`digital contents. The role of the Content Distributor is not essential for the subsequent
`
`discussion but, of course, for the business to take place.”); see also id. at Fig. 1. Von Faber
`
`also notes its system could be used with a variety of known content distribution and
`
`payment methods. See, e.g., id. at 13 (“Different methods can be used to distribute the en-
`
`crypted contents (standard techniques). This includes broadcasting, point-to-point network-
`
`ing, as well as offering disks. Different electronic payment methods can be integrated independ-
`
`ent from the number of protocol steps needed. This includes credit card based systems as
`
`well as electronic purses. This flexibility leads to the fact that totally different authorisation meth-
`
`8
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`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
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`ods can be integrated.”). Von Faber further addressed the known issue of payment dis-
`
`tribution to content providers. See, e.g., id. at 13 (“The system will support re-selling in
`
`a simple way. Re-sellers can integrate other manufacturer’s products into own packag-
`
`es without the need of signing any extra contract. The system automatically divides the
`
`package price (payments) and guarantees that the money is transferred to each Content Provider”).
`
`Also in 1997, the second of two Stefik patents issued, incorporating the first by
`
`reference. U.S. Patent No. 5,530,235, “Interactive Contents Revealing Storage De-
`
`vice” (“Stefik ’235,” filed Feb. 16, 1995 and issued June 25, 1996), incorporates by
`
`reference U.S. Patent No. 5,629,980, “System for Controlling the Distribution and
`
`Use of Digital Works” (“Stefik ’980,” filed Nov. 23, 1994 and issued May 13, 1997).
`
`See Ex. 1113 2:47-53 (“The currently preferred embodiment of a DocuCard is an in-
`
`stance of a repository, as defined in co-pending application . . . herein incorporated by ref-
`
`erence.”). Stefik ’235 and Stefik ’980 will be referred to collectively herein as “Stefik.”5
`
`5 Because Stefik ’235 incorporates Stefik ’980 by reference, they should be considered
`
`a single reference. For clarity in citing to disclosures, however, separate cites are pro-
`
`vided to the Stefik ’235 and’980 Exhibits (Exs. 1113 and 1114, respectively). To the
`
`extent Stefik ’235 (Ex. 1113) and Stefik ’980 (Ex. 1114) are argued to be separate ref-
`
`erences, there is explicit motivation to implement the repository disclosed by
`
`ik ’980 using the Document Card (DocuCard) of Stefik ’235. See, e.g., Ex. 1113 2:47-52;
`
`Ex. 1114 16:56-58 (“For example, the repository could be embedded in a ‘card’ that is
`
`9
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`Stefik discloses “[a] Document Card (DocuCard) for storing documents and
`
`which is content revealing. The DocuCard is a transportable unit having a nonvolatile
`
`storage means for storing information in a digital form, a control processor for pro-
`
`cessing user initiated functions; an I/O port for interfacing to external devices for
`
`reading and writing digital information, and a user interface for allowing a user to di-
`
`rectly interact with the DocuCard.” See, e.g., Ex. 1113 Abstract; see also, e.g., Ex. 1114
`
`Abstract (“Digital work playback devices, coupled to the repository containing the
`
`work, are used to play, display or print the work.”). Stefik also discloses a broader
`
`framework within which the DocuCard is used, including the protection of content
`
`with “usage rights.” See, e.g., Ex. 1113 Abstract (“A system for controlling use and
`
`distribution of digital works. In the present invention, the owner of a digital work at-
`
`taches usage rights to that work.”); Ex. 1114 Abstract (“Usage rights are granted by
`
`the ‘owner’ of a digital work to ‘buyers’ of the digital work [and] define how a digital
`
`work may be used and further distributed by the buyer. Each right has associated
`
`with it certain optional specifications which outline the conditions and fees upon
`
`which the right may be exercised.”). Stefik’s digital works are stored in a “repository”
`
`that processes requests for access—e.g., for such actions as utilizing content (viewing,
`
`executing, or printing) or transporting content (copying, borrowing, or transferring)—
`
`and evaluates the relevant usage rights to determine whether such access is permitted.
`
`inserted into an available slot in a computer system.”); See also, e.g., Ex. 1121 ¶ 42.
`
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`See, e.g., id. Abstract (“Digital works are stored in a repository. A repository will pro-
`
`cess each request to access a digital work by examining the corresponding usage
`
`rights . . . Access to digital works for the purposes of transporting between reposito-
`
`ries (e.g. copying, borrowing or transfer) is carried out using a digital work transport
`
`protocol. Access [for] replay by a digital work playback device (e.g. printing, displaying
`
`or executing) is carried out using a digital work playback protocol.”).
`
`Storage and utilization of content stored on portable devices, including mobile
`
`communication devices such as cellular phones, was also well-known before Smart-
`
`flash’s claimed October 25, 1999 priority date. As one example, PCT Application
`
`Publication No. WO 99/43136 (“Rydbeck,” published Aug. 26, 1999) discloses a cel-
`
`lular phone as a user device for storing digital content in non-volatile memory and ac-
`
`cessing that content. E.g., Ex. 1117 3 (“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 aggre-
`
`gated with the phone. Further, the use of solid state RAM or ROM, as opposed to
`
`disc storage, eliminates the need for bounce control circuitry[, enabling the] invention
`
`to provide cellular communications and entertainment during leisure activities.”). In
`
`addition, JP Patent Application Pub. No. H11-164058 (“Sato,” pub’d June 18, 1999),
`
`“Portable Music Selection and Viewing System,” discloses storing media content onto
`
`mobile user devices and playing the media content from these mobile devices. Sato
`
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`further discloses storing that media content on a removable IC card. See, e.g., Ex.
`
`1118 ¶ 9 (“portable music selection viewing device 70 provides a removable storage device
`
`76 on a main body 71. This storage device 76 is a memory card similar to, for example, a
`
`magnetic card, a magnetic tape, a CD, a DVD, or an IC card. The user, after down-
`
`loading the music software to the storage device (medium) 76 . . . can enjoy this music
`
`software on a display 70 by operating the push buttons or the like on the main body
`
`71, can enjoy this music software on a display 72 or a receiver 74 of . . . device 70, and
`
`can also enjoy higher quality music playback by removing this storage device (medium) and in-
`
`serting it into another audio unit. Further, the user can store the music software from an-
`
`other audio unit into the storage device 76”); ¶13 (“A music storage medium 250 such
`
`as . . . a memory card such as an IC card stores the music software, and this storage me-
`
`dium 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 Ginter patent) illustrate, the prior art
`
`was rife with awareness and discussion of the same supposed “invention” now me-
`
`morialized in the challenged claims of the ’720 Patent. Long before the ’720 Patent’s
`
`first purported October 25, 1999 priority date, disclosures abounded of the very fea-
`
`tures that Smartflash now seeks to claim as its exclusive property. As outlined in more
`
`detail below, the challenged claims are therefore invalid under §§ 102 and 103.
`
`III. PETITIONER HAS STANDING
`
`12
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` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
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`
`The ’720 Patent Is a Covered Business Method Patent
`
`A.
`Petitioner certifies that the ’720 Patent is available for review under 37 C.F.R.
`
`§ 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
`
`claim covering a covered business method is considered a CBM patent. See CBM
`
`2012-00001, Paper 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.
`1.
`Exemplary Claim 14 Is Financial In Nature
`A “covered business method patent” is “a patent that claims a method or cor-
`
`responding apparatus for performing data processing or other operations used in the
`
`13
`
`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
`
`practice, administration, or management of a financial product or service, except that the term
`
`does not include patents for technological inventions.” AIA § 18(d)(1); 37 C.F.R.
`
`§ 42.301. “The ‘legislative history explains that the definition of covered business
`
`method patent was drafted to encompass patents claiming activities that are financial in
`
`nature, incidental to a financial activity or complementary to a financial activity.’” 77 Fed. Reg.
`
`48,734, 48,735 (Aug. 14, 2012) (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011)
`
`(statement of Sen. Schumer)). “[F]inancial product or service” is to be interpreted
`
`broadly, id., and the term “financial . . . simply means relating to monetary matters”—
`
`it does not require any link to traditional financial industries such as banks. See, e.g.,
`
`CBM2012-00001, Paper 36 at 23. This Board has previously found, for example, that
`
`a claim for “transferring money electronically via a telecommunication line to the first
`
`party . . . from the second party” met the financial product or service requirement,
`
`concluding that “the electronic transfer of money is a financial activity, and allowing
`
`such a transfer amounts to providing a financial service.” CBM2013-00020, Paper 14
`
`at 11-12. 6 See also, e.g., CBM2013-00017, Paper 8 at 5-6 (finding patent sufficiently fi-
`
`6 Indeed, these aspects of claim 14 are generally similar to those of the claim found to
`
`convey CBM standing in CBM2013-00020, which recited: “A method for transmitting
`
`a desired digital audio signal stored on a first memory of a first party to a second
`
`memory of a second party comprising the steps of: transferring money
`
`electronically . . . connecting electronically via a telecommunications line . . .
`
`14
`
`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
`
`nancial based on reference in the specification to e-commerce and the fact that a
`
`POSITA “would have understood that [one of the claim limitations] may be associat-
`
`ed with financial services”).
`
`As discussed above, the ’720 Patent relates to the idea of providing electronic
`
`data in exchange for payment and restricting access to data based on payment amount.
`
`See AIA § 18(d)(1); 37 C.F.R. § 42.301(a); Ex. 1101 1:64-2:3. Indeed, in seeking to en-
`
`force the ’720 Patent in litigation, Smartflash itself conceded that the alleged invention
`
`relates to a financial activity or transaction, stating that “[t]he patents-in-suit generally
`
`cover a portable data carrier for storing data and managing access to the data via pay-
`
`ment information and/or use status rules. The patents-in-suit also generally cover a
`
`computer network . . . that serves data and manages access to data by, for example,
`
`validating payment information.” Ex. 1102 ¶17. The ‘720 patent generally describes
`
`the invention as follows:
`
`According to the present invention there is therefore provided a method
`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-
`
`
`transmitting the desired digital audio signal . . . and storing the digital signal.” Id. at
`
`10-17.
`
`15
`
`

`

` Covered Business Method Patent Review CBM2014-00105
`United States Patent No. 7,334,720
`
`
`ing the payment information; and downloading data into the portable
`storage device from a data supplier.
`Ex. 1101 1:46-55. See also id. 1:56-57 (“Another aspect of the invention provides a
`
`corresponding mobile data retrieval device…”). Indeed, the specification confirms
`
`the recited “portable data carrier” is “for storing and paying for data,” id. 1:6-8, and
`
`the “payment data” forwarded to the “payment validation system” “may either be da-
`
`ta 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.” Id. 6:59-63. “Payment for the data item or items requested may
`
`either be made directly to the system owner or may be made to an e-payment system.” Id.
`
`21:6-8. “E-payment systems [] are coupled to banks” and may be provid

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