throbber
UNITED STATES PATENT AND TRADEMARK OFFICE
`
`___________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`___________________________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`___________________________
`
`Case CBM2014-001061
`Patent 8,033,458 B2
`
`
`
`PETITIONER’S REPLY TO PATENT OWNER’S RESPONSE
`
`
`
`
`
`
`
`
`1 Case CBM2014-00107 has been consolidated with the instant proceeding.
`
`

`
`
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`Petitioner’s Response to PO’s Statement of Facts ................................................... 3
`PO Incorrectly Interprets Petitioner’s Proposed Construction of “Payment
`Data” and Ignores the Explicit Teachings of the ’458 Patent ................................ 4
`III. Claim 1 Is Invalid In View Of Stefik .......................................................................... 6
`A.
`Stefik Discloses “Payment Data” .................................................................... 6
`B.
`Using a SIM Portion in Stefik Is Obvious ..................................................... 9
`IV. Claim 1 Is Invalid In View Of Ginter ...................................................................... 12
`A.
`Pre-Purchase Processing Does Not Change the Principle of
`Operation of Ginter ........................................................................................ 12
`B. Ginter Discloses Multiple Examples of “Payment Data” ......................... 14
`C.
`Using a SIM Portion in Ginter Is Obvious ................................................. 16
`V. Mr. Wechselberger’s Opinions Are Entitled to Greater Weight than Dr.
`Katz’s ............................................................................................................................. 19
`
`
`
`
`
`i
`
`

`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Boston Scientific Scimed, Inc. v. Cordis Corp.,
`554 F.3d 982 (Fed. Cir. 2009) ............................................................................................18
`
`Extreme Networks, Inc. v. Enterasys Networks, Inc.,
`395 F. App’x 709 (Fed. Cir. 2010) ...............................................................................19, 20
`
`Flex-Rest, LLC v. Steelcase, Inc.,
`455 F.3d 1351 (Fed. Cir. 2006)................................................................................................20
`
`In re Ratti,
`270 F.2d 810 (C.C.P.A. 1959) ............................................................................................14
`
`SRI Int'l v. Matsushita Elec. Corp. of Am.,
`775 F.2d 1107 (Fed. Cir. 1985) ..........................................................................................11
`
`Sundance, Inc. v. DeMonte Fabricating Ltd.,
`550 F.3d 1356 (Fed. Cir. 2008) ..........................................................................................20
`
`
`
`
`
`
`
`-ii-
`
`

`
`Exhibit
`
`
`
`1001
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`1015
`
`1016
`
`1017
`
`1018
`
`1019
`
`
`
`LIST OF EXHIBITS
`
`Description
`U.S. Patent No. 8,033,458
`
`Plaintiff’s First Amended Complaint
`
`U.S. Patent No. 8,061,598
`
`File History for U.S. Patent No. 8,033,458
`
`File History for U.S. Patent No. 8,118,221
`
`U.S. Patent No. 4,999,806
`
`U.S. Patent No. 5,675,734
`
`File History for U.S. Patent No. 8,336,772
`
`U.S. Patent No. 4,878,245
`
`U.S. Patent No. 7,334,720
`
`U.S. Patent No. 7,942,317
`
`U.S. Patent No. 5,103,392
`
`U.S. Patent No. 5,530,235
`
`U.S. Patent No. 5,629,980
`
`U.S. Patent No. 5,915,019
`
`European Patent Application, Publication No. EP0809221A2
`
`PCT Application Publication No. WO99/43136
`
`JP Patent Application Publication No. H11-164058
`(translation)
`JP Patent Application Publication No. H10-269289
`(translation)
`
`-iii-
`
`

`
`Eberhard von Faber, Robert Hammelrath, and 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. 5,754,654
`
`Declaration of Michael P. Duffey In Support of Apple Inc.’s
`Petition for Covered Business Method Patent Review
`Declaration of Flora D. Elias-Mique In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`U.S. Patent No. 8,118,221
`
`U.S. Patent No. 8,336,772
`
`File History for U.S. Patent No. 7,334,720
`
`File History for U.S. Patent No. 7,942,317
`
`File History for U.S. Patent No. 8,061,598
`
`Wechselberger Transcript Excerpts
`
`Katz Deposition Transcript
`
`Declaration of Michael P. Duffey
`
`
`
`-iv-
`
`1020
`
`1021
`
`1022
`
`1023
`
`1024
`
`1025
`
`1026
`
`1027
`
`1028
`
`1029
`
`1030
`
`1031
`
`1032
`
`
`
`
`
`

`
`GLOSSARY OF ABBREVIATIONS
`
`Description
`United States Patent No. 8,033,458
`United States Patent No. 8,061,598
`United States Patent No. 5,530,235
`United States Patent No. 5,629,980
`Case CBM2014-00106 Petition, Paper 2
`Broadest Reasonable Interpretation
`Challenged Claims
`Case CBM2014-00106 Institution Decision, Paper 8
`Patent Owner
`EP Patent Application Publication No. 0809221A1
`Person of ordinary skill in the art
`Case CBM 2014-00106 Patent Owner Response, Paper 23
`Case CBM 2014-00106 Preliminary Response, Paper 6
`
`
`
`Shorthand
`’458 patent
`’598 patent
`’235 Stefik
`’980 Stefik
`107 Petition
`BRI
`Claims
`Decision
`PO
`Poggio
`POSITA
`Resp.
`Prelim. Resp.
`
`
`
`
`-v-
`
`

`
`PO does not dispute that the hardware and software components recited in the
`
`Claims were well-known in the prior art. Instead, PO’s Response takes a scattershot
`
`approach in criticizing the prior art for not disclosing a specific combination of
`
`known elements. PO’s arguments fail to rebut Petitioner’s evidence of invalidity.
`
`The cited prior art disclosed multiple payment schemes available to a POSITA
`
`that fully satisfy the limitations of the Claims, including schemes in which payment
`
`data was used and payment was made either before, during, or after content was
`
`provided to the purchaser. The cited prior art also disclosed embodiments in which
`
`conditions, including fee conditions, must be satisfied before a user could access
`
`digital content. Regardless, of these disclosures, however, requiring successful
`
`payment as a condition to providing digital content would have been design choice
`
`obvious to a POSITA. Even PO’s own expert, Dr. Jonathan Katz, acknowledged that
`
`a POSITA in the prior art time period would have “understood that payment
`
`validation could be made a condition of providing content that was electronically
`
`sold.” Ex. 1031 at 27:4-9.
`
`As to the recited SIM portion in ’458 claim 1, PO’s response argues only that
`
`the prior art does not render obvious a subscriber identity module (SIM) card. But
`
`that is not what is required by claim 1: while the related ’598 patent’s claim 29 does
`
`recite a “subscriber identity module (SIM) card device,” ’458 claim 1 recites a SIM
`
`portion. PO presented no evidence disputing that a common memory block
`
`containing only a single user identifier can be a SIM portion—in fact, Dr. Katz
`
`1
`
`

`
`expressed no opinion about this issue. See Ex. 1031 at 152:7-156:12.
`
`Moreover, both Dr. Katz’s deposition testimony and the cited prior art itself
`
`confirm that the Board correctly concluded that combining the cited prior art with
`
`references disclosing a SIM card is “redundant.” Decision at 18. The cited prior art
`
`discloses using unique identifying information that a POSITA would understand
`
`served the same purpose as the identifier of a SIM card. See, e.g., Ex. 1021 at 63-65.
`
`Indeed, the ’458 patent discloses that a SIM card is used for its “user identification
`
`means.” Ex. 1001 at 4:9-13. Petitioner’s expert Mr. Wechselberger confirmed that it
`
`would have been obvious to include a SIM portion in the cited prior art. By contrast,
`
`in addition to not presenting evidence addressing the difference between a SIM card
`
`and a SIM portion or that a common memory block containing only a single user
`
`identifier can be a SIM portion, PO also presents no evidence disputing that a
`
`POSITA would have found it obvious to conform the identifier disclosed in the cited
`
`prior art to the well-known SIM specification. See Ex. 1031 at 158:22-159:7, 160:5-
`
`161:22, 164:18-165:8; Ex. 1021 at 63-64.
`
`Dr. Katz fails to support PO’s arguments and, in some cases, directly
`
`contradicts PO’s positions. For example, PO’s Response tries to draw a patentable
`
`distinction between processing payment before and after usage, but Dr. Katz admits
`
`that a POSITA would have understood that payment validation could be made a
`
`condition to providing content. Ex. 1031 at 27:4-9. Similarly, when questioned
`
`regarding disclosures in the prior art that PO disputes, Dr. Katz admitted that he
`
`
`
`-2-
`
`

`
`could not provide any reasonable reading a POSITA would have had of those
`
`disclosures other than those proposed by Petitioner. Ex. 1031 at 62:21-63:11.
`
` Dr. Katz’s deposition testimony also demonstrates that his opinions should be
`
`given little or no weight. In addition to failing to meet his own definition of a
`
`POSITA at the priority date of the ’458 patent, Dr. Katz repeatedly testified he is “not
`
`sure” what a POSITA would have understood regarding (1) concepts that were
`
`indisputably in the prior art, (2) specific passages of the cited prior art, and (3) specific
`
`passages of the ’458 patent. See, e.g., Ex. 1031 at 18:1-20, 23:2-15, 30:15-19, 31:3-17,
`
`33:11-34:1, 36:19-37:11, and 38:2-10 (POSITA’s understanding of prior art concepts);
`
`70:1-73:9 and 126:1-128:11 (POSITA’s understanding of passages of the cited prior
`
`art); 86:4-87:22 and 152:7-156:12 (POSITA’s understanding of passages of the ’458
`
`patent). Dr. Katz also admitted that his construction of “payment data” excludes
`
`examples in the specification of that term, and that the specification’s definition aligns
`
`with Petitioner’s proposed construction. Ex. 1031 at 47:22-50:4, 52:22-54:11. His
`
`deposition testimony contradicts itself and demonstrates confusion about both claim
`
`language and what he stated in his own declaration. See, e.g., Ex. 1031 at 168:20-169:1,
`
`180:7-20 (Dr. Katz’s understanding of “comprising”); Ex. 1031 at 152:7-156:12,
`
`158:22-159:7, 161:17-22 (Dr. Katz’s opinion about the meaning of the term “SIM
`
`portion”).
`
`I.
`
`
`
`PETITIONER’S RESPONSE TO PO’S STATEMENT OF FACTS
`
`As to PO’s alleged facts (1) and (2), Petitioner admits that the phrase
`
`-3-
`
`

`
`“preponderance of the evidence” does not appear in the Wechselberger declarations.
`
`Petitioner otherwise denies these allegations. As to PO’s alleged facts (3)-(10),
`
`Ex.2007 is dated September 19, 2012, entitled In-App Purchase Programming Guide,
`
`and includes an Exhibit label. Ex.2008 is dated September 18, 2013, entitled In-App
`
`Purchase Programming Guide, and includes an Exhibit label. Ex.2013 is dated
`
`September 18, 2013, entitled Receipt Validation Programming Guide, and includes an
`
`Exhibit label. Ex.2014 is dated February 6, 2013, entitled iTunes Store Sets New
`
`Record with 25 Billion Songs Sold, and includes an Exhibit label. Ex.2015 is dated
`
`January 7, 2014, entitled App Store Sales Top $10 Billion in 2013, and includes an
`
`Exhibit label. Ex.2016 is dated January 7, 2013, entitled App Store Tops 40 Billion
`
`Downloads with Almost Half in 2012, and includes an Exhibit label. Ex.2017 is dated
`
`May 16, 2013, entitled Apple’s App Store Marks Historic 50 Billionth Download, and
`
`includes an Exhibit label. Ex.2018 is dated September 22, 2014, entitled First
`
`Weekend iPhone Sales Top 10 Million, and includes an Exhibit label. Petitioner
`
`otherwise denies these allegations.
`
`II.
`
`PO INCORRECTLY INTERPRETS PETITIONER’S PROPOSED
`CONSTRUCTION OF “PAYMENT DATA” AND IGNORES THE
`EXPLICIT TEACHINGS OF THE ’458 PATENT
`
`PO incorrectly argues that “payment data” cannot represent past payment
`
`because it is “data that can be used to make payment for content.” Resp. at 8-9. But
`
`the ’458 patent itself explicitly states that “[t]he payment data received may either be
`
`data relating to an actual payment made to the data supplier, or it may be a record of a
`
`
`
`-4-
`
`

`
`payment made to an e-payment system.” Ex. 1001 at 6:60-63 (emphasis added). Thus,
`
`as PO’s expert admits, the specification’s description of “payment data” encompasses
`
`data relating to either concurrent or past payment. Ex. 1031 at 52:22-53:9, 53:17-54:11.
`
`This is consistent with Petitioner’s proposed construction of “payment data” (under
`
`the BRI in light of the specification) as “data representing payment made for requested
`
`content data,” which includes the same key phrase—“payment made”—used in the
`
`specification’s description of “payment data.” Ex. 1001 at 6:60-63. PO misrepresents
`
`Petitioner’s construction as limited to data representing past payment, but that
`
`characterization ignores what even PO’s expert admits is the grammatical meaning of
`
`“payment made.” See, e.g., Resp. at 8-9; Ex. 1031 at 54:2-11. PO’s interpretation is
`
`inconsistent with both the use of the phrase “payment made” in the ’458 patent and
`
`the plain grammatical meaning of that phrase. Ex. 1031 at 52:22-54:11, 56:14-57:6.
`
`PO’s proposed interpretation as “data that can be used to make payment for
`
`content” improperly excludes explicit examples of payment data in the ’458 patent
`
`itself. See, e.g., Ex. 1001 at 6:60-63. For example, Dr. Katz’s and PO’s construction
`
`does not encompass, e.g., a “record of a payment made to an e-payment system
`
`relating either to a payment to the data supplier or to a payment to a third party,” Ex.
`
`1001 at 6:60-63, and Dr. Katz confirmed his construction excludes this example from
`
`the specification. Ex. 1031 at 48:8-50:4. Under the BRI consistent with the
`
`specification, Petitioner’s construction, which includes rather than rejects the
`
`specification’s description of “payment data” that PO’s expert admits is excluded by
`
`
`
`-5-
`
`

`
`PO’s construction, should be adopted.
`
`III. CLAIM 1 IS INVALID IN VIEW OF STEFIK
`
`A.
`
`Stefik2 Discloses “Payment Data”
`
`PO incorrectly argues in its Response that Stefik does not disclose “payment
`
`data” because it discloses only “post-usage processing.” Resp. at 11-13. The ’458
`
`claim 1 does not exclude post-usage payment because, as explained above, “payment
`
`data” encompasses data pertaining to past payment. See, e.g., Ex. 1031 at 52:22-53:9,
`
`53:17-54:11. Moreover, PO’s position on this issue is unsupported by its expert—Dr.
`
`Katz did not opine on PO’s argument in his declaration, and when asked at
`
`deposition about Stefik’s underlying disclosure, he repeatedly testified he was “not
`
`sure” what was disclosed or what a POSITA would have understood from that
`
`disclosure. See Ex. 2029 at ¶¶ 14-20; Ex. 1031 at 70:1-7, 71:12-20, 76:13-77:9.
`
`Stefik discloses multiple examples of payment data. The ’980 Stefik
`
`specification states that billing transactions were well understood in the state of the
`
`art, and involved sending transaction identifiers, identities of the repositories and a list
`
`of charges. Ex. 1014 at 29:61-62, 30:7-14. The billing transactions also updated
`
`balance information and credit limits for debit and credit cards. Ex. 1014 at 30:25-30.
`
`
`2 The ’235 Stefik patent and ’980 Stefik patent are argued in this Reply as an
`
`obviousness combination, and reference is made to the combined disclosure of the
`
`two patents as “Stefik” throughout.
`
`
`
`-6-
`
`

`
`PO does not dispute that the information exchanged in a billing transaction disclosed
`
`in ’980 Stefik includes payment data, and instead only characterizes a “debit card”
`
`embodiment as “post-usage processing.” Resp. at 11-13.
`
`Figure 3 of ’235 Stefik also discloses, or at minimum renders obvious, using
`
`payment data in a transaction. That figure discloses logging in and activating credit
`
`accounts before assigning fees, selecting documents, and confirming a transaction in
`
`which fees may be incurred. Ex. 1013 at 6:60-7:13. At deposition, Dr. Katz did not
`
`dispute that ’235 Stefik’s description of logging in to activate credits accounts in Step
`
`302 means that the user makes available credit accounts for the payment of the fees
`
`referenced in the following Step 303. Ex. 1031 at 61:8-63:8. Instead, he testified that
`
`while he was “not sure” if this reading of Stefik’s disclosure is reasonable, he did not
`
`know of any other way to read it. Id. Dr. Katz also acknowledged that a POSITA
`
`would have understood that the fees for accessing the “desired document” of Step
`
`305 would be paid. Ex. 1031 at 64:22-65:4. He was “not sure” (1) whether a
`
`POSITA would have understood that fees could be assigned to an activated credit
`
`account; (2) whether a POSITA would have understood that a credit card number
`
`associated with an activated account could be payment data; (3) whether a credit card
`
`number could be used to pay for the transaction; or (4) whether a POSITA would
`
`have understood that payment of fees or accessing a document could occur in step
`
`307 of that process. Ex. 1031 at 70:1-7, 71:12-20, 76:13-77:9. PO’s attorney
`
`argument, and Dr. Katz’s inability to provide any supporting opinions, does not rebut
`
`
`
`-7-
`
`

`
`Petitioner’s ample evidence that it would have been obvious to a POSITA, in view of
`
`Stefik’s teachings, to use the referenced credit account to pay for the transactions in
`
`Figure 3.
`
`Regardless, PO is incorrect that Stefik discloses only post-usage processing.
`
`Stefik discloses enforcing conditions before providing a user with requested content.
`
`Examples of such conditions include “fee conditions” that must be satisfied before
`
`retrieving and providing data to a user. Ex. 1014 at Figure 18, 30:61-64. Checking fee
`
`conditions “will initiate various financial transactions between [a] repository and
`
`associated credit server”; “[i]f any financial transaction fails, the transaction
`
`terminates” before providing content to the user. Ex. 1014 at 32:19-26.
`
`Stefik provides additional design options for an electronic payment scheme that
`
`were well understood to a POSITA. Stefik explicitly discloses authorizing and
`
`reconciling transactions either periodically or in real-time against user accounts in a
`
`debit card embodiment. Ex. 1014 at 17:21-33. PO’s conclusory argument that
`
`Stefik’s disclosure of a “debit card” transaction occurring in “real-time” against a user
`
`account is “post-usage processing” is wrong and lacks support from even PO’s own
`
`expert. See Resp. at 12. A debit transaction is settled against a user account in real-
`
`time as the transaction occurs. Ex. 1014 at 17:31-33. Mr. Wechselberger testified that
`
`it would have been obvious for a credit server operating in a real-time debit
`
`transaction to validate payment data. Ex. 2025 at 166:11-167:22. And Dr. Katz
`
`testified that this credit server would “directly” request money from a user account to
`
`
`
`-8-
`
`

`
`effectuate payment in real-time. Ex. 1031 at 82:6-83:20. Both Dr. Katz’s and Mr.
`
`Wechselberger’s testimony confirm that a POSITA would have understood that this
`
`’980 Stefik debit transaction is reconciled as it is reported to the credit server and not
`
`at a later time. Based on Stefik’s disclosure, a POSITA would have at least found it
`
`obvious to perform billing and payment, including validating payment data, before
`
`providing content.
`
`B.
`
`Using a SIM Portion in Stefik Is Obvious
`
`As the Board correctly concluded, use of a Subscriber Identification Module
`
`(SIM) portion is not a “novel and unobvious technological feature” of the ’458 patent;
`
`“the ’458 patent makes clear that the asserted novelty of the invention is not in any
`
`specific improvement of hardware….” Decision at 12. The ’458 patent discloses
`
`using a SIM card for the well-known function of providing a “user identification
`
`means.” See id. at 12, 20; see also Ex. 1001 at 4:9-13. Moreover, unlike ’598 patent
`
`claim 29 (where PO opted to recite a “subscriber identity module (SIM) card device”),
`
`’458 patent claim 1 does not recite a SIM card; it recites a SIM portion. Cf. ’598 patent
`
`claim 29. PO presents no evidence disputing that a common memory block
`
`containing only a single user identifier can be a SIM portion. See Ex. 1031 at 158:22-
`
`159:7. Indeed, the Board is correct that combining Stefik with references disclosing a
`
`SIM card is “redundant.” Decision at 18.
`
`A POSITA would have at least found it obvious to incorporate this well-
`
`known SIM portion into Stefik’s DocuCard repository to provide a user identification
`
`
`
`-9-
`
`

`
`means. Stefik’s DocuCard repository is a portable card used to communicate with
`
`other repositories. Ex. 1013 at 1:53-54, 5:1-4, 13:51-57. Stefik expressly discloses that
`
`the DocuCard includes unique identifying information used by other repositories to
`
`locate where content is stored and to confirm that the repository is trustworthy. Ex.
`
`1013 at 7:63-8:7; Ex. 1014 at 9:27-30, 8:4-9, 9:54-65; Ex. 1021 at 63-64. A POSITA
`
`would have known that a SIM portion would have served the same purpose.
`
`Moreover, PO presents no evidence disputing that a block of memory
`
`containing only a single user identifier can be a SIM portion, or that a POSITA would
`
`have known how to conform Stefik’s unique identifying number to the well-known
`
`SIM specification. See Ex. 1031 at 158:22-159:7, 160:5-161:22, 164:18-165:8; Ex. 1021
`
`at 63-64. Mr. Wechselberger explained that a POSITA would have found it obvious
`
`to embed a SIM portion (which could be, e.g., either memory or a card) in a DocuCard
`
`repository for the well-known purpose of using the SIM portion to identify the
`
`DocuCard repository to a network operator. Ex. 1021 at 63-64; Ex. 2025 at 281:4-
`
`282:3. This SIM portion is one way of including unique identifying information (e.g., a
`
`SIM PIN) in the DocuCard repository when it is manufactured. See Ex. 1021 at 63-
`
`64; Ex. 1013 at 8:4-7; Ex. 1014 at Fig. 2, 7:51-65, 13:51-57; see also Decision at 12, 20.
`
`Thus, both Mr. Wechselberger’s and Dr. Katz’s testimony support the conclusion that
`
`it would have been obvious to include a SIM portion in a DocuCard repository.
`
`PO argues, without support, that Stefik might require a different “number of
`
`bits” than the number used by a SIM card. Not surprisingly, however, Stefik does not
`
`
`
`-10-
`
`

`
`specify a number of bits that must be used for its unique identifier. See Exs. 1013,
`
`1014. Moreover, PO presents no evidence substantiating that Stefik’s unique
`
`identifier would be incompatible with even the specification of a SIM card (not
`
`claimed). See Ex. 1031 at 164:18-165:8. Thus, a POSITA would not have been
`
`deterred from using a SIM portion based on Stefik’s disclosure of unique identifying
`
`information.
`
`To the extent PO contends the claim at issue requires a SIM card for a cell
`
`phone in a wireless or cellular network, PO improperly interprets the claim. “It is
`
`settled law that when a patent claim does not contain a certain limitation and another
`
`claim does, that limitation cannot be read into the former claim in determining either
`
`validity or infringement.” SRI Int'l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1122
`
`(Fed. Cir. 1985). PO and Dr. Katz both did not take into account that ’458 patent
`
`claim 1 recites a SIM “portion,” while PO opted in a different claim to instead recite a
`
`“subscriber identity module (SIM) card device, wherein the SIM card device provides network
`
`access to a mobile communications network….” See Ex. 1031 at 147:7-22, 150:17-151:9; ‘598
`
`patent claim 29. Indeed, PO’s expert Dr. Katz expressed no opinion as to whether a
`
`block of memory could satisfy the SIM portion recited in ‘458 claim 1. See Ex. 1031 at
`
`158:22-159:7, 160:5-161:22. While claim 29 of the ’598 patent does require a SIM card
`
`in a mobile communications network, ’458 claim 1 does not, but instead requires only a
`
`SIM portion used “to identify a subscriber to a network operator.” See Ex. 1001 claim 1.
`
`
`
`-11-
`
`

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`IV. CLAIM 1 IS INVALID IN VIEW OF GINTER
`
`A.
`
`Pre-Purchase Processing Does Not Change the Principle of
`Operation of Ginter
`
`PO’s arguments surrounding payment in Ginter focus on the supposed
`
`difference between what PO calls “post-usage tracking” and “pre-purchase
`
`processing.” But PO’s argument that changing from post-usage to pre-purchase
`
`processing would change the principle upon which Ginter works (see Resp. at 21-22) is
`
`contradicted by Dr. Katz’s own testimony, the teaching of the ’458 patent itself, the
`
`disclosure of Ginter, and the knowledge of a POSITA.
`
`To begin with, the phrases “post-usage tracking” and “pre-purchase
`
`processing” do not appear anywhere in the Ginter patent; rather, they are used by PO
`
`and Dr. Katz to characterize various disclosures of Ginter. Resp. at 23-27; Ex. 2029
`
`¶¶ 27. But Dr. Katz was openly confused about his own characterizations: he was, for
`
`example, “not sure” whether various payment-related disclosures in Ginter would
`
`qualify as pre-purchase processing. Ex. 1031 at 126:1-6, 127:10-128:11. And when
`
`questioned by his own counsel, Dr. Katz testified that he did not even know what the
`
`phrase “prepurchase processing,” meant even though it is used multiple times in his
`
`own sworn declaration’s discussions of Ginter. Ex. 1031 at 190:14-20.
`
`As discussed supra in section III.A., the ’458 patent discloses two alternate
`
`embodiments that describe a mere design choice in the relative timing of (A) content
`
`access and download and (B) payment verification steps. Dr. Katz’s own testimony
`
`
`
`-12-
`
`

`
`supports a finding that a POSITA would not have been hindered from implementing
`
`either of the two embodiments (Ex. 1031 at 114:3-11) and that the ’458 patent itself
`
`does not explain any changes needed to switch the system between those
`
`embodiments (Ex. 1031 at 114:12-116:13). Dr. Katz even admitted without
`
`reservation that a POSITA in the prior art time period would have understood that
`
`payment validation could be made a condition of providing content that was
`
`electronically sold. Ex. 1031 at 27:4-9.
`
`In addition to disclosing multiple forms of payment and payment methods,
`
`which a POSITA would have understood could be selected and combined, Ginter
`
`expressly discloses “prepayments, credits, [and] real-time debits.” Ex. 1015 at 63:34-41.
`
`Thus, Ginter itself expressly teaches that its system may support approaches in which
`
`payment is made before content access or usage is allowed. But Dr. Katz testified he
`
`did not remember if he even knew before signing his declaration that Ginter disclosed
`
`prepayments. Ex. 1031 at 119:18-21. Dr. Katz also testified he was not sure whether
`
`“[e]nsuring that sufficient credit from an authorized source is available before
`
`allowing a transaction to proceed,” “prepayments,” “realtime electronic debits from
`
`bank accounts,” or “VDE node currency token deposit accounts” disclosed in Ginter
`
`are examples of what he terms “prepurchase processing.” Ex. 1031 at 126:1-6;
`
`127:10-128:11. Dr. Katz was thus unable to explain how these relevant disclosures in
`
`Ginter relate to his opinion on supposedly changing Ginter’s principle of operation,
`
`and his opinion that a POSITA would not have changed that principle is therefore
`
`
`
`-13-
`
`

`
`entitled to no weight.
`
`PO’s argument also misapplies the legal principle upon which it purports to
`
`rely. The lone support PO cites is a case addressing a combination of two references
`
`asserted to show obviousness. See In re Ratti, 270 F.2d 810 (C.C.P.A. 1959). In that
`
`case, modifying the first reference with the second impermissibly changed the first
`
`reference’s principle of operation. Id. at 981. In contrast, Petitioner here does not
`
`propose combining separate references at all, but instead cites disclosures within
`
`Ginter itself. PO essentially argues that Ginter changes its own principle of
`
`operation—an argument that is devoid of legal support and should be rejected.
`
`Coupled with Ginter’s disclosure of flexibility in the devices used to implement the
`
`system and Dr. Katz’s admission that a POSITA would have understood
`
`implementing payment validation as a condition to providing content (see Ex. 1031 at
`
`27:4-9), Ginter’s embodiments demonstrate the obviousness of the claimed payment
`
`steps.
`
`B.
`
`Ginter Discloses Multiple Examples of “Payment Data”
`
`PO wrongly asserts audit information in Ginter cannot be “payment data”
`
`because “audit information is for tracking post-usage information….” Resp. at 21; see
`
`also Ex. 1015 at 161:65-162:3. As demonstrated by Petitioner (e.g., 107 Petition 51-54),
`
`Ginter discloses that audit information is also used to process payment, confirming it
`
`is indisputably “payment data,” and PO’s position to the contrary flies in the face of
`
`examples throughout Ginter:
`
`
`
`-14-
`
`

`
` Ginter discloses packaging audit information in administrative requests sent to
`
`a content provider or financial provider (Ex. 1015 at Figure 44A; 179:27-36),
`
`including a request to perform electronic funds transfers against a user’s bank
`
`account or some other bank account (Ex. 1015 at Figure 44B; 179:57-60).
`
` Ginter discloses an “auditor (receiver of audit information)” passing
`
`acknowledgement back to a user that audit information has been received or
`
`“recognized.” Ex. 1015, 270:19-22. The auditor responds to the user, and that
`
`response may be delayed to first allow “processing of the audit trail and/or
`
`payment by a user to an auditor or other party.” Ex. 1015 at 270:33-36.
`
` Ginter discloses a VDE repository performing services for usage information
`
`reported by VDE users, including analyzing such usage information, creating
`
`reports, and collecting payments. Ex. 1015 at 281:37-39.
`
`In addition to billing based on audit information, Ginter discloses multiple
`
`other examples of payment methods that use payment data. See 107 Petition at 51-54.
`
`For example, Ginter discloses a processing unit of a VDE appliance performing
`
`payment for VDE objects using “prepayments, credits, real-time electronic debits
`
`from bank accounts and/or VDE node currency token deposit accounts.” Ex. 1015
`
`at 63:37-40. PO does not address use of any of the other disclosed payment forms,
`
`including real-time debits and prepayment. Dr. Katz testified that he could not
`
`remember whether, before signing his declaration in this matter, he had been aware
`
`that Ginter disclosed prepayment to pay for VDE objects. Ex. 1031, 119:18-21.
`
`
`
`-15-
`
`

`
`These examples illustrate Ginter’s ample disclosure of payment methods and
`
`payment data used in those methods. PO’s erroneous arguments focus only on the
`
`“audit information” cited in the 107 Petition, and either ignore or fail to fully address
`
`the additional cited methods, such as credit, debit, and prepayment transactions.
`
`C. Using a SIM Portion in Ginter Is Obvious
`
`As explained above, PO improperly interprets “SIM portion.” PO’s own
`
`expert admits that a POSITA would have understood that a SIM card’s memory
`
`stored information that could uniquely identify either a device or a user. Ex. 1031 at
`
`43:20-44:8. PO also presents no evidence disputing that a block of memory (e.g., the
`
`RAM disclosed in Ginter) containing only a user identifier can be a SIM portion, or
`
`addressing the difference between a SIM portion and a SIM card. See Ex. 1031 at 147:4-
`
`22, 150:14-151:1, 158:22-159:7, 163:21-165:8; cf. Ex. 1015 at 229:12-17; Ex. 1021 at
`
`81-83. Ginter’s disclosure of memory used to uniquely identify an appliance itself
`
`therefore already discloses, and at minimum renders obvious, a “SIM portion.”
`
`Moreover, a POSITA would have found it obvious to include a SIM portion in
`
`the “Host” described by Ginter. As Dr. Katz admitted in his deposition, Ginter
`
`discloses that one embodiment of an electronic appliance is a “Host” that includes an
`
`“auxiliary terminal” that communicates “through the use of cellular, satellite, radio
`
`frequency, or other communications means.” See Ex. 1021 at 81-82; see also Ex. 1015
`
`at 228:50-54 (host can be “another VDE electronic appliance”), 232:64-233:1 (host
`
`“may comprise an auxiliary terminal”), 233:40-42 (auxiliary terminal host “might take
`
`
`
`-16-
`
`

`
`the form of a portable device”), 233:53-57 (portable auxiliary terminal host can
`
`communicate “through the use of cellular … communications means”); Ex. 1031 at
`
`168:7-10, 168:14-16, 169:8-16, 1

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