Covered Business Method Patent Review
`United States Patent No. 8,061,598
`
`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-809
`Customer No. 28120
`
`§
`Inventor: Racz et al.
`United States Patent No.: 8,061,598 §
`Formerly Application No.: 13/012,541 §
`Issue Date: November 22, 2011
`§
`Filing Date: January 24, 2011
`§
`Former Group Art Unit: 2887
`§
`Former Examiner: Thien M. Le
`§
`
`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. 8,061,598 PURSUANT TO 35 U.S.C. § 321,
`37 C.F.R. § 42.304
`
`
`
`

`

`
`
` Covered Business Method Patent Review
`United States Patent No. 8,061,598
`
`
`TABLE OF CONTENTS
`
`B. 
`
`INTRODUCTION ....................................................................................................... 1 
`I. 
`II.  OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 5 
`III.  PETITIONER HAS STANDING .......................................................................... 12 
`A. 
`The ’598 Patent Is a Covered Business Method Patent ............................. 12 
`1. 
`Exemplary Claim 7 Is Financial In Nature ...................................... 13 
`2. 
`Claim 7 Does Not Cover A Technological Invention ................... 17 
`Related Matters; Petitioner Is a Real Party In Interest Sued for and
`Charged With Infringement ........................................................................... 23 
`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 ............................ 23 
`A. 
`Claim Construction .......................................................................................... 24 
`B. 
`The Challenged Claims Are Invalid Under §§ 102 and/or 103 ................ 29 
`1. 
`Overview of Stefik ............................................................................... 29 
`2. 
`Motivation to Combine Stefik with Poggio ..................................... 34 
`3. 
`Motivation to Combine Stefik with Sato .......................................... 37 
`4. 
`Motivation to Combine Stefik with Rydbeck .................................. 40 
`5. 
`Claims 1, 2, 7, 13, 15, and 31 are Anticipated by Stefik
`(Ground 1); Claims 1, 2, 7, 13, 15, 26, and 31 are Obvious
`in Light of Stefik (Ground 2); Claim 7 is Obvious in Light
`of Stefik in View of Poggio (Ground 3); Claim 26 is
`Obvious in Light of Stefik in View of Sato (Ground 4);
`Claim 26 is Obvious in Light of Stefik in View of Rydbeck
`(Ground 5). ........................................................................................... 41 
`CONCLUSION........................................................................................................... 76 
`
`V. 
`
`
`ii
`
`

`

`
`EXHIBIT LIST
`1001
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`1015
`
`1016
`
`1017
`
`1018
`
`1019
`
`1020
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`
`U.S. Patent No. 8,061,598
`
`Plaintiffs’ First Amended Complaint
`
`File History for U.S. Patent No. 8,033,458
`
`File History for U.S. Patent No. 8,118,221
`
`File History for U.S. Patent No. 8,336,772
`
`U.S. Patent No. 4,999,806
`
`U.S. Patent No. 5,675,734
`
`U.S. Patent No. 4,878,245
`
`U.S. Patent No. 7,334,720
`
`U.S. Patent No. 7,942,317
`
`File History for U.S. Patent No. 8,061,598
`
`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)
`Eberhard von Faber, Robert Hammelrath, and Frank-Peter
`Heider, “The Secure Distribution of Digital Contents,” IEEE
`(1997)
`
`iii
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`

`

` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`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
`
`U.S. Patent No. 8,033,458
`
`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
`
`EXHIBIT LIST
`1021
`
`1022
`
`1023
`
`1024
`
`1025
`
`1026
`
`1027
`
`1028
`
`1029
`
`iv
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`

`

` Covered Business Method Patent Review
`United States Patent No. 8,061,598
`
`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, 2, 7, 13, 15, 26, and 31 of U.S. Pa-
`
`tent No. 8,061,598 (“the ’598 Patent”), issued to Smartflash Technologies 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 respectfully requests review of, and judgment against, claims 1, 2, 7, 13, 15,
`
`26, and 31 as unpatentable under 35 U.S.C. §§ 102 and 103.1
`
`As discussed in Section III.B, infra, Petitioner has concurrently filed a Petition
`
`seeking covered business method review of the ’598 Patent, requesting judgment
`
`against these same claims based on different prior art references. Petitioner notes that
`
`the Director, pursuant to Rule 325(c), may determine at the proper time that merger
`
`of these proceedings, or at minimum coordination of proceedings involving the same
`
`patent, is appropriate.
`
`The challenged claims of the ’598 Patent merely recite steps and corresponding
`
`
`1 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
`
`numerous additional reasons. All emphasis herein added unless otherwise noted.
`
`
`
`

`

`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. 8,061,598
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`
`ble data carrier.” Ex. 1001 at 1:20-24; Abstract, claims 1, 26, 31. Claim 1, for exam-
`
`ple, recites five rudimentary components of a portable data carrier (e.g., smart card)—
`
`(A) an interface, (B and C) content data and use rule memory, (D) a program store
`
`storing code implementable by a processor, and (E) a processor . . . for implementing
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`code. The recited code is similarly elementary, storing content data and a use rule in
`
`memory (F):
`
`1. A portable data carrier comprising:
`[A] an interface for reading and writing data from and to the portable
`data carrier;
`[B] content data memory, coupled to the interface, for storing one or
`more content data items on the carrier;
`[C] use rule memory to store one or more use rules for said one or more
`content data items;
`[D] a program store storing code implementable by a processor;
`[E] and a processor coupled to the content data memory, the use rule
`memory, the interface and to the program store for implementing code
`in the program store,
`[F] wherein the code comprises code for storing at least one content data
`item in the content data memory and at least one use rule in the use rule
`memory.
`Ex. 1001. And dependent claim 7, for instance, adds certain express financial
`
`components to claim 1:
`
`7. A portable data carrier as claimed in claim 1, further comprising
`
`2
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`

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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`[G] payment data memory to store payment data and code to
`provide the payment data to a payment validation system.
`
`Ex. 1001. But at the time of the ’598 patent’s earliest claimed priority date, these sim-
`
`ple elements and their combination would have all been well known to any person of
`
`ordinary skill (“POSITA”). Indeed, the patent itself acknowledges that the idea of
`
`providing access to data in exchange for a payment (e.g., purchase of music on a CD)
`
`was well known at the time. E.g., Ex. 1001 5:9-12 (“where the data carrier stores, for
`
`example, music, the purchase 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”). The idea of purchasing digital data for payment was similarly well
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`known. See, e.g., Ex. 1007. And, as demonstrated herein, the prior art was teeming
`
`with disclosures of this basic concept and its straightforward implementation in physi-
`
`cal systems.
`
`Moreover, as its language makes clear, claim 1 involves no “technology” at all oth-
`
`er than a “portable data carrier” with an interface, non-volatile memory, and program
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`store/processor—which the patent itself concedes was well known and commonplace
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`at the time. See e.g., Ex. 1001 11:28-29 (“standard smart card”), 3:37, 4:7-13, 6:19-21,
`
`11:27-44, 17:6-18:4, Figs. 2, 9. The use rules of claim 1 “may be linked to payments
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`made from the card to provide payment options such as access to buy content data
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`outright; [or] rental access . . .” Id. 5:1-8. Thus, as the intrinsic record reflects, claim 1
`
`recites nothing more than a system for reading and writing data while restricting ac-
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`3
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`cess to that data. Indeed, the ’598 Patent states that “[t]he physical embodiment of
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`the system is not critical and a skilled person will understand that the terminals, data
`
`processing systems and the like can all take a variety of forms.” See, e.g., Ex. 1001 Fig
`
`1; 12:29-32. And the variations presented in the other challenged system claims add
`
`nothing that was not already well-known. Dependent claim 7, for example,2 simply
`
`adds to claim 1 the ability to store and provide payment data. Similarly, the chal-
`
`lenged method claim, claim 31, relating to “controlling access to content data,” recites
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`nothing more than the steps implemented by the portable data carrier that restrict ac-
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`cess to data. See id. Fig. 13.
`
`It is thus little surprise that, as detailed herein, each and every element of the
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`challenged claims of the ’598 Patent and their claimed combinations have been dis-
`
`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.
`
`2 Claim 2 merely adds to claim 1 the well-known notion of providing access to data
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`based on a use rule. Claims 13 and 15 add to claim 1 only the use of content location
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`data and the storage of a PIN number, respectively. Claim 26, the other independent
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`claim directed to a portable data carrier, adds nothing to claim 1 other than the recita-
`
`tion of a “Subscriber Identity Module,” which was well-known. Ex. 1001 4:9-13. See
`
`also Ex. 1011 at 108.
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`4
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
`
`digital products all would have been well-known to a POSITA,3 and their combina-
`
`tion as claimed also would have been well-known or at minimum obvious to a POSI-
`
`TA. See, e.g., Ex. 1021 (Wechselberger Decl.) Sec. V. For example, nearly a decade
`
`earlier, on March 12, 1991, U.S. Patent No. 4,999,806 (“Chernow”), entitled “Soft-
`
`ware Distribution System,” issued. See Ex. 1006 (filed Sept. 4, 1987). Chernow dis-
`
`closes a system and method for the sale and distribution of digital products by tele-
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`phone, with a focus on software, and also discloses content protection for those digi-
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`tal products. See, e.g., Ex. 1006 Abstract (“A central station distributes software by tel-
`
`ephone. The central station accepts credit card information, transmits an acceptance
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`code to a caller and then terminates the call. After verifying the credit card information, the
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`station calls the purchaser back and continues with the transaction only after receiving the acceptance
`
`code.”); 1:67-2:9 (objects of the claimed invention include “provid[ing] a means for
`
`3 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
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`field, and at least three years of industry experience that included client-server
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`data/information distribution and management architectures. See Ex. 1021 ¶ 31.
`
`5
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`

`

`selling and distributing protected software using standard telephone lines for transfer-
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`ring the software from the seller to the purchaser,” “permit[ting] the purchaser to rent
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`the protected software for a period of time after which it will self destruct,” and “to
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`rent the protected software for a specific number of runs which would be useful, e.g.,
`
`if the software were a game.”). As illustrated above, Chernow discloses making dif-
`
`ferent types of access available, such as purchase versus rental. Further, Chernow dis-
`
`closes a Control Transfer Program and a Primary Protection Program that ensure the
`
`computer receiving a downloaded program does not have another program present
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`that could create unauthorized copies. See Ex. 1006 Abstract; 2:65-3:23.
`
`In April 1992, U.S. Patent No. 5,103,392 (“Mori”), entitled “System for Storing
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`History of Use of Programs Including User Credit Data and Having Access by the
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`Proprietor,” issued. See Ex. 1012 (filed on December 5, 1990). Mori discloses storing
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`information about customer use of digital products so that a customer can be charged
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`according to its use. See, e.g., id. 1:64-2:17:
`
`In accordance with a fundamental aspect of the present invention, there
`is provided a system for storing data on the history of use of programs,
`including a data processing apparatus used by a user and program stor-
`age means for storing a program acquired from a proprietor and pro-
`gram-specific data. The data processing apparatus includes user-specific
`credit data storage means for storing data identifying the user of the data
`processing apparatus and indicating credit for payment capacity, use time
`length, or the like of the user of the data processing apparatus. Also in-
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`cluded is use decision means for determining permission to use the program on
`the data processing apparatus on the basis of program-specific data supplied
`from the program storage means or user-specific credit data supplied from
`the user-specific credit data storage means, the use decision means deliv-
`ering either an affirmative or negative signal corresponding to results of
`the decision. Also included is program use history storage means con-
`nected 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
`
`and making sure program providers are compensated for the use of their programs
`
`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
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`protection is EP0809221A2 (“Poggio”), entitled “Virtual vending system and method
`
`for managing the distribution, licensing and rental of electronic data.” See Ex. 1016.
`
`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
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`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, IEEE published “The Secure Distribution of Digital Contents,”
`
`(“von Faber”). See Ex. 1020. In its introduction, von Faber made the well-known ob-
`
`servation 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 proposes 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 trans-
`
`formed into a problem of key distribution.”); id. at 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 Au-
`
`thorisation 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 busi-
`
`8
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`ness to take place.”); see also Ex. 1020 at Fig. 1. Von Faber also notes that its system
`
`could be used for a variety of known content distribution and payment methods. See,
`
`e.g., Ex. 1020 at 13 (“The outlined system has the following characteristics: Different
`
`methods can be used to distribute the encrypted contents (standard techniques). This
`
`includes broadcasting, point-to-point networking, as well as offering disks. Different
`
`electronic payment methods can be integrated independent from the number of pro-
`
`tocol steps needed. This includes credit card based systems as well as electronic purses.
`
`This flexibility leads to the fact that totally different authorisation methods can be in-
`
`tegrated.”). Von Faber further addressed the known issue of payment distribution to
`
`content providers. See, e.g., Ex. 1020 at 13 (“The system will support re-selling in a
`
`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
`
`package price (payments) and guarantees that the money is transferred to each Con-
`
`tent Provider whose product has been integrated into the package.”).
`
`Moreover, on June 22, 1999, U.S. Patent No. 5,915,019 (“Ginter”), entitled
`
`“Systems and Methods for Secure Transaction Management and Electronic Rights
`
`Protection,” issued. See Ex. 1015 (filed on January 8, 1997). Ginter similarly discloses
`
`“systems and methods for secure transaction management and electronic rights pro-
`
`tection.” See, e.g., id. Abstract. Ginter describes a “virtual distribution environment”
`
`(termed a “VDE”) to “control and/or meter or otherwise monitor use of electronical-
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`ly stored or disseminated information.” See, e.g., id. Ginter’s system “help[s] to ensure
`
`that information is accessed and used only in authorized ways, and maintain the integrity,
`
`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-
`
`ample, utilizing the ‘electronic highway.’” See, e.g., id. Ginter discloses that the various
`
`entities that comprise the VDE can flexibly take on any of the roles within the VDE.
`
`See, e.g., id. 255:22-23 (“All participants of VDE 100 have the innate ability to partici-
`
`pate in any role.”); 255:23-43. Ginter thus highlights the known flexibility in such dis-
`
`tribution systems, underscoring that a POSITA would have known that combinations
`
`between and among disclosures of such distribution systems would have been obvi-
`
`ous to a POSITA. See also, e.g., Ex. 1021 ¶ 45.
`
`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 on August 26, 1999. See Ex.
`
`1017. Rydbeck discloses a cellular phone as user device for storing digital content in
`
`non-volatile memory and accessing that content. See, e.g., Ex. 1017 at 5 (“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 port-
`
`able music selection and 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. . . an IC
`
`card. The user, after downloading the music software to the storage device (medium)
`
`76 of the portable music selection and viewing device 70 by operating the push but-
`
`tons or the like on the main body 71, can enjoy this music software on a display 72 or
`
`a receiver 74 of the portable music selection and viewing device 70, and can also enjoy
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`higher quality music playback by removing this storage device (medium) and inserting it into an-
`
`other audio unit. Further, the user can store the music software from another audio unit
`
`into the storage device 76 and enjoy music by inserting this storage unit 76 into this
`
`portable music selection and viewing device 70.”); ¶ 13 (“A music storage device 240
`
`connected to the music control unit 200 stores the music software. A music storage
`
`medium 250 such as a magnetic card, magnetic tape, a CD, a DVD, or a memory card
`
`such as an IC card stores the music software, and this storage medium 250 can be re-
`
`11
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`moved and used on other audio units.”).
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`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
`
`was rife with awareness and discussion of the same supposed “invention” now me-
`
`morialized in the challenged claims of the ’598 patent. Long before the ’598 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/or 103.
`
`III. PETITIONER HAS STANDING
`A.
`Petitioner certifies that the ’598 Patent is available for review under 37 C.F.R.
`
`The ’598 Patent Is a Covered Business Method Patent
`
`§ 42.304(a). The ’598 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 ’598 Patent qualify, a patent with even one claim
`
`covering a covered business method is considered a CBM patent. See CBM 2012-
`
`00001, Doc. 36 at 26; 77 Fed. Reg. 48,709 (Aug. 14, 2012). Accordingly, Petitioner
`
`addresses here exemplary Claim 7, which depends from Claim 1 (Ex. 1001):
`
`1. A portable data carrier comprising:
`[A] an interface for reading and writing data from and to the portable da-
`ta carrier;
`[B] content data memory, coupled to the interface, for storing one or
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`more content data items on the carrier;
`[C] use rule memory to store one or more use rules for said one or more
`content data items;
`[D] a program store storing code implementable by a processor;
`[E] and a processor coupled to the content data memory, the use rule
`memory, the interface and to the program store for implementing code
`in the program store,
`[F] wherein the code comprises code for storing at least one content data
`item in the content data memory and at least one use rule in the use rule
`memory.
`7. A portable data carrier as claimed in claim 1, further comprising
`
`[G] payment data memory to store payment data and code to
`provide the payment data to a payment validation system.
`1.
`A “covered business method patent” is “a patent that claims a method or corre-
`
`Exemplary Claim 7 Is Financial In Nature
`
`sponding apparatus for performing data processing or other operations used in the practice, admin-
`
`istration, or management of a financial product or service, except that the term does not in-
`
`clude patents for technological inventions.” AIA § 18(d)(1); 37 C.F.R. § 42.301. “The
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`‘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,
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`48,735 (Aug. 14, 2012) (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (state-
`
`ment of Sen. Schumer)). “[F]inancial product or service” is to be interpreted broadly,
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`United States Patent No. 8,061,598
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`id., and the term “financial . . . simply means relating to monetary matters”—it does
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`not require any link to traditional financial industries such as banks. See, e.g.,
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`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 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 11-12. See
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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] person of ordinary
`
`skill in the art would have understood that [one of the claim limitations] may be asso-
`
`ciated with financial services”).
`
`As discussed above, the ’598 patent includes claims directed to a “portable data
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`carrier” (such as a standard smart card) that stores content, use rules, payment data,
`
`and code that provides payment data to a payment validation system. See AIA
`
`§ 18(d)(1); 37 C.F.R. § 42.301(a); Ex. 1001. The ’598 patent alleges that this allows
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`content owners to make content available to users without fearing loss of revenue.
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`Ex. 1001 at 2:11-15; see also id. at claim 31 (“A method of controlling access to content data,
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`the method comprising: receiving a data access request from a user for a content data
`
`item, reading the use status data and one or more use rules from parameter memory
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`that pertain to use of the requested content data item; evaluating the use status data
`
`using the one or more use rules to determine whether access to the content data item
`
`is permitted; and enabling access to the content data item responsive to a determina-
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`tion that access to the content data item is permitted”). More generally, the patent is
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`about “[d]ata storage and access systems [that] enable downloading and paying for da-
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`ta . . .” Id. Abstract. “The combination of payment data and stored content data and
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`use rule data helps reduce the risk of unauthorized access to data.” Id. And in seek-
`
`ing to enforce the ’598 patent in litigation, Smartflash itself conceded that the alleged
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`invention relates to a financial activity or transaction, stating that “[t]he patents-in-suit
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`generally cover a portable data carrier for storing data and managing access to the data
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`via payment information and/or use status rules. The patents-in-suit also generally
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`cover a computer network . . . that serves data and manages access to data by, for ex-
`
`ample, validating payment information.” Ex. 1002 ¶ 17.
`
`Indeed, the specification confirms that the “portable data carrier” of the inven-
`
`tion is “for storing and paying for data,” Ex. 1001 1:20-22, and the “use rules” of
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`Claim 1 “may be linked to payments made from the card to provide payment options
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`such as access to buy content data outright; [or] rental access . . .” Id. 5:1-8. Claim 7
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`further requires memory to store payment data and code to “provide the payment da-
`
`ta to a payment validation system.” Id. cl. 7. Thus Claim 7, which explicitly describes
`
`storing and providing payment data to a payment validation system, clearly concerns a
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` Covered Business Method Patent Review
`United States Patent No. 8,061,598
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`computer system (corresponding to the methods discussed and claimed elsewhere) for
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`performing data processing and other operations used in the practice, administration,
`
`or management of a financial activity and service. Indeed, claim 7 expressly recites
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`software (i.e., code) to perform data processing and other operations in connection
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`with the recited “payment validation system” (e.g., “to store payment data and code to
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`provide the payment data to a payment validation system”) and “rules for said one or
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`more content data items” (e.g., “a processor coupled to the content data memory, the
`
`use rule memory, the interface and to the program store for implementing code in the
`
`program store, wherein the code comprises code for storing at least one content data
`
`item in the content data memory and at least one use rule in the use rule memory”).
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`The use rules, too, which may restrict access to content based on payments, further
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`indicate that independent Claim 1 also relates to a financial activity and providing a
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`financial service. See, e.g., id. at 5:1-8; 8:31-33; 9:22-25; 14:65-15:4; claim 31 (“method
`
`of controlling access to c