Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-805
`Customer No. 28120
`
`§
`Inventor: Racz et al.
`United States Patent No.: 8,336,772 §
`Formerly Application No.: 13/212,047 §
`Issue Date: December 25, 2012
`§
`Filing Date: August 17, 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. 8,336,772 PURSUANT TO 35 U.S.C. § 321,
`37 C.F.R. § 42.304
`
`
`
`
`
`
`
`

`

`
`
` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`TABLE OF CONTENTS
`
`B. 
`
`INTRODUCTION ....................................................................................................... 1 
`I. 
`II.  OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 4 
`III.  PETITIONER HAS STANDING ............................................................................ 9 
`A. 
`The ’772 Patent Is a Covered Business Method Patent ............................... 9 
`1. 
`Exemplary Claim 8 Is Financial In Nature ...................................... 11 
`2. 
`Claim 8 Does Not Claim A Technological Invention .................... 13 
`Related Matters; Petitioner Is a Real Party In Interest Sued for and
`Charged With Infringement ........................................................................... 17 
`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 ............................ 18 
`A. 
`Claim Construction .......................................................................................... 18 
`B. 
`The Challenged Claims Are Invalid Under §§ 102 and/or 103 ................ 23 
`1. 
`Overview of Stefik ............................................................................... 23 
`2. 
`Motivation to Combine Stefik with Poggio ..................................... 27 
`3. 
`Motivation to Combine Stefik with Sato .......................................... 29 
`4. 
`Claims 8, 10, 19, 22, 30, and 32 are Anticipated by Stefik
`(Ground 1); Claims 1, 5, 8, 10, 14, 19, 22, 25, 26, 30, and 32
`are Obvious in Light of Stefik (Ground 2); Claims 1, 5, 8,
`10, 14, 19, 22, 25, 26, 30, and 32 are Obvious in Light of
`Stefik in View of Poggio (Ground 3); Claims 1, 5, 8, 10, 14,
`19, 22, 25, 26, 30, and 32 are Obvious in Light of Stefik in
`View of Sato (Ground 4); Claims 1, 5, 8, 10, 14, 19, 22, 25,
`26, 30, and 32 are Obvious in Light of Stefik in View of
`Poggio and Sato (Ground 5) . ............................................................ 31 
`CONCLUSION........................................................................................................... 79 
`
`V. 
`
`
`ii
`
`

`

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

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`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. 8,033,458
`
`U.S. Patent No. 8,061,598
`
`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. 8,033,458
`
`EXHIBIT LIST
`1021
`
`1022
`
`1023
`
`1024
`
`1025
`
`1026
`
`1027
`
`1028
`
`1029
`
`iv
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`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 Apple Inc. (“Petitioner” and the real par-
`
`ty in interest), petitions for review under the transitional program for covered busi-
`
`ness method patents of claims 1, 5, 8, 10, 14, 19, 22, 25, 26, 30, and 32 (challenged
`
`claims) of U.S. Patent No. 8,336,772 (“the ’772 patent”), issued to Smartflash Tech-
`
`nologies Limited and assigned to Smartflash LLC (“Patentee”). Petitioner asserts it is
`
`more likely than not that at least one of the challenged claims is invalid for the reasons
`
`herein and requests review of, and judgment against, the challenged claims under 35
`
`U.S.C. §§ 102 and 103.1 Petitioner has concurrently filed a Petition seeking CBM re-
`
`view of the ’772 patent, requesting judgment against these same claims based on dif-
`
`ferent prior art. The Director, pursuant to Rule 325(c), may determine that merger or
`
`at minimum coordination of these proceedings is appropriate.
`
`The challenged claims merely recite basic computer systems well-known in the
`
`field of data storage and access, including a “handheld multimedia terminal for retriev-
`
`ing and accessing protected multimedia content” and a “data access terminal for con-
`
`trolling access to one or more content data items stored on a data carrier.” Ex. 1001
`
`1:24-26. Claim 8, for example, recites four rudimentary components of a data access
`
`
`1 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
`
`numerous additional reasons. All emphasis herein added unless otherwise noted.
`
`
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`terminal “for controlling access to one or more content data items”—(A) a user interface, (B) a
`
`data carrier interface, (C) a program store storing code implementable by a processor, and
`
`(D) a processor . . . for implementing the stored code. The recited code is similarly ele-
`
`mentary, requesting and receiving user identifier data (D1-D2), presenting available content data
`
`items (D3), receiving a selection and transmitting payment for the data item (D4-D5), receiving
`
`payment validation data (D6), and controlling access to the data item in response (D7):
`
`8. A data access terminal for controlling access to one or more content
`data items stored on a data carrier, the data access terminal comprising:
`[A] a user interface;
`[B] a data carrier interface;
`[C] a program store storing code implementable by a processor; and
`[D] a processor coupled to the user interface, to the data carrier inter-
`face and to the program store for implementing the stored code, the
`code comprising:
`[D1] code to request identifier data identifying one or more content
`data items stored on the data carrier;
`[D2] code to receive said identifier data;
`[D3] code to present to a user via said user interface said identified
`one or more content data items available from the data carrier;
`[D4] code to receive a user selection selecting at least one of said one
`or more of said stored content data items;
`[D5] code responsive to said user selection of said selected content
`data item to transmit payment data relating to payment for said se-
`lected content item for validation by a payment validation system;
`[D6] code to receive payment validation data defining if said payment
`
`2
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`validation system has validated payment for said content data item;
`and [D7] code to control access to said selected content data item re-
`sponsive to the payment validation data.
`Ex. 1001. But at the patent’s earliest claimed priority date, these simple elements and
`
`their combination were well known to any person of ordinary skill (“POSITA”). In-
`
`deed, the patent acknowledges that the idea of providing access to data in exchange
`
`for a payment (e.g., purchase of music on a CD) was already well known. E.g., Ex.
`
`1001 5:13-16 (“the purchase outright option may be equivalent to the purchase of a com-
`
`pact disc (CD)”). And, as demonstrated herein, the prior art was teeming with disclo-
`
`sures of this basic concept and its straightforward implementation in physical systems.
`
`Moreover, claim 8 clearly involves no “technology” at all other than “a data access
`
`terminal,” with user and data carrier interfaces, a program store storing code, and a
`
`processor that implements the well-known steps disclosed in the specification—all of
`
`which the patent concedes were well known and commonplace, stating that this “ter-
`
`minal comprises a general purpose computer.” E.g., id. 4:7, 16:47-52. Claim 8 recites no
`
`more than a system for requesting and retrieving data from a data carrier while receiv-
`
`ing and responding to payment data for validation and controlling access to the data
`
`based on payment. And the other challenged claims are nothing but variations on this
`
`simple theme, with the addition, in the challenged “handheld multimedia terminal”
`
`claims, of equally generic components (e.g., known wireless interface, non-volatile
`
`3
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`memory, and a display).2 See, e.g., id. 12:37-40 (“physical embodiment of the system is not criti-
`
`cal and a skilled person will understand that the terminals, data processing systems and the like can
`
`all take a variety of forms.”). It is thus no surprise that each element of the challenged
`
`claims was disclosed in the prior art, by individual references or by those references in
`
`combination, and each challenged claim is accordingly obvious and/or anticipated.
`
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
`
`digital products was well-known to a POSITA,3 and their combination as claimed
`
`
`2 Claims 1, 14, and 25, e.g., recite a “handheld multimedia terminal,” but simply add to
`
`claim 8 the requirements of a wireless interface, non-volatile memory, and a display,
`
`while specifying the user interface enables a user to perform certain functions. Claim
`
`19, like claim 8, recites a data access terminal, but specifies it is “for retrieving a con-
`
`tent data item from a data supplier and providing the retrieved data item to a data car-
`
`rier.” Claim 30 also recites a data access terminal, but with code performing slightly
`
`different functions. Id. And Claims 10, 22, and 32, which depend from claims 8, 19,
`
`and 30, simply specify integration with a mobile communications device. Ex. 1001.
`
`3 All references to a POSITA refer to the knowledge or understanding of a POSITA
`
`as of Oct. 25, 1999, unless specifically noted. A POSITA would have at least a B.S in
`
`E.E, computer science or a telecommunications related field, and at least three years
`
`of industry experience that included client-server data/information distribution and
`
`4
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`would also have been well-known or at minimum obvious. See, e.g., Ex. 1021 § V. On
`
`March 12, 1991, for example, U.S. Pat. No. 4,999,806 (“Chernow,” filed Sept. 4, 1987)
`
`issued, disclosing a system and method for sale and distribution of digital products by
`
`phone, and for content protection. See, e.g., Ex. 1006 Abstract (“central station distrib-
`
`utes software by telephone. . . accepts credit card information, transmits an acceptance code . . . After
`
`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 (describing “means for selling
`
`and distributing protected software using standard telephone lines,” “permit[ting] the purchaser to
`
`rent the protected software for a period of time,” and “to rent the protected software for a specific
`
`number of runs”). Chernow also discloses (1) different types of access, such as purchase
`
`vs. rental and (2) a Control Transfer Program and a Primary Protection Program to
`
`prevent unauthorized copies. See Ex. 1006 Abstract; 2:65-3:23; Ex. 1021 ¶ 30.
`
`In April 1992, U.S. Patent No. 5,103,392 (“Mori,” filed Dec. 5, 1990) issued,
`
`disclosing use-based charging for digital products. See, e.g., id. Ex. 1012 1:64-2:17:
`
`The data processing apparatus includes user-specific credit data storage
`means for storing data identifying the user . . . and indicating credit for payment ca-
`pacity, use time length, or the like of the user . . .. Also included is use deci-
`sion means for determining permission to use the program . . . on the basis of pro-
`gram-specific data supplied from the program storage means or user-specific
`credit data supplied from the user-specific credit data storage means, the
`
`
`management architectures. See Ex. 1021 ¶ 25.
`
`5
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`use decision means delivering either an affirmative or negative signal corresponding
`to results of the decision. Also included is program use history storage means
`connected to the use decision means for storing program use history data . . ..
`Mori’s emphasis on assuring permission to access a program and compensating pro-
`
`viders underscores this existing focus in the art on digital rights management
`
`(“DRM”), over eight years before the claimed priority date. See, e,g., Ex. 1021 ¶ 33.
`
`Exhibit 1016 (“Poggio”, pub’d Nov. 26, 1997) gives another example of secure
`
`content distribution with content protection, disclosing a “virtual vending machine”
`
`system for sale and distribution of digital products. See, e.g., id. Abstract (“virtual vending
`
`machine manages a comprehensive vending service for the distribution of licensed electronic data (i.e.,
`
`products) over a distributed computer system. . . . [and] distributes licenses for the electronic data for
`
`the complete product or for components thereof and for a variety of time frames, including permanent
`
`licenses and rental period licenses. [It] provides . . . capability to obtain information regarding the
`
`available products and the associated license fees and rental periods, to receive the product upon re-
`
`ceipt of a corresponding electronic payment, and to reload the product during the term of the license.”).
`
`Poggio, too, discloses different types of access, including rentals, and re-download ca-
`
`pabilities for already-purchased content. See, e.g., id.; Ex. 1021 ¶¶ 34, 45.
`
`Also in 1997, Exhibit 1020 (“von Faber”) published, making the well-known
`
`observation that “[e]lectronic commerce systems dealing with the distribution of digital con-
`
`tents . . . 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. 7. Von Faber proposed a system where cus-
`
`6
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`tomers purchase keys required to utilize encrypted content. See, e.g., id. (“The basic
`
`idea . . . 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.”); id. 8 (“The Content Pro-
`
`vider provides digital contents in encrypted form being distributed by the Content Distribu-
`
`tor. . . . The Authorisation System permits the distribution of the appropriate key after settling
`
`of the fees payable by the Customer . . .. 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. Fig.
`
`1. Von Faber notes its system could be used for a variety of known distribution and
`
`payment methods. See, e.g., id. 13 (“Different methods can be used to distribute the encrypted
`
`contents (standard techniques). . . . Different electronic payment methods can be integrated . . . .
`
`This flexibility leads to the fact that totally different authorisation methods can be integrated.”).
`
`Von Faber further addressed the known issue of payment distribution to providers.
`
`See, e.g., id. (“The system automatically divides the package price (payments) and guarantees that
`
`the money is transferred to each Content Provider.”); Ex. 1021 ¶¶ 35-37.
`
`Moreover, on June 22, 1999, U.S. Pat. No. 5,915,019 (“Ginter,” filed Jan. 8,
`
`1997) issued, disclosing “systems and methods for secure transaction management
`
`and electronic rights protection.” See, e.g., Ex. 1015 Abstract. Ginter describes a “vir-
`
`tual distribution environment” (“VDE”) to “control and/or meter or otherwise moni-
`
`tor use of electronically stored or disseminated information.” Id. Ginter’s system
`
`“help[s] to ensure that information is accessed and used only in authorized ways, and main-
`
`7
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`tain the integrity, availability, and/or confidentiality of the information.” See, e.g., id. Further,
`
`Ginter’s “techniques may be used to support an all-electronic information distribution, for
`
`example, utilizing the ‘electronic highway.’” Id. Ginter discloses that the various entities of
`
`the VDE can flexibly take on any VDE roles. See, e.g., id. 255:22-23 (“All participants
`
`of VDE 100 have the innate ability to participate in any role.”); 255:23-43. Ginter thus
`
`highlights the known flexibility in such distribution systems, underscoring that a
`
`POSITA would have known that combinations between and among disclosures of
`
`such distribution systems would have been obvious. See, e.g., Ex. 1021 ¶¶ 38, 39.
`
`Storage and utilization of content stored on portable devices, including mobile
`
`communication devices such as cellular phones, was also well-known at the claimed
`
`October 25, 1999 priority date. As one example, Exhibit 1017 (“Rydbeck,” pub’d Aug.
`
`26, 1999), discloses a cellular phone as user device for storing digital content in non-
`
`volatile memory and accessing that content. See, e.g., Ex. 1017 5 (“Because of its inte-
`
`gration into the cellular phone, the digital entertainment module can share components al-
`
`ready 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 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.”); Ex. 1021 ¶ 40. And Exhibit 1018 (“Sato,” pub’d June 18, 1999), discloses
`
`storing media content onto mobile user devices and playing the media content from
`
`8
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`these mobile devices, as well as storing that media content on a removable IC card. See,
`
`e.g., ¶9 (“portable music selection and viewing device 70 provides a removable storage de-
`
`vice 76 on a main body 71. This storage device 76 is a memory card similar to, for exam-
`
`ple. . . an IC card. The user, after downloading the music software to the storage de-
`
`vice (medium) 76 of the portable music selection and viewing device 70 . . . can enjoy
`
`this music software on a display 72 or a receiver 74 of . . . device 70, and can also en-
`
`joy higher quality music playback by removing this storage device (medium) and inserting it into
`
`another audio unit. Further, the user can store the music software from another audio
`
`unit into the storage device 76”); ¶13 (“music storage medium 250 such as . . . a
`
`memory card such as an IC card stores the music software, and this storage medium 250
`
`can be removed and used on other audio units.”); Ex. 1021 ¶ 41.
`
`Thus, as these background examples and the additional prior art detailed below
`
`in 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 memorialized
`
`in the challenged claims. Long before the purported priority date, disclosures abound-
`
`ed of the very features that Smartflash now seeks to claim as its exclusive property. As
`
`outlined below, the challenged claims are anticipated and/or obvious.
`
`III. PETITIONER HAS STANDING
`A.
`Petitioner certifies that the ’772 patent is available for review under 37 C.F.R.
`
`The ’772 Patent Is a Covered Business Method (“CBM”) Patent
`
`9
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`§ 42.304(a). The ’772 patent is a CBM patent under § 18(d)(1) of the Leahy-Smith
`
`America Invents Act, Pub. L. 112-29 (“AIA”) and § 42.301. Although in fact numer-
`
`ous claims qualify, a patent with even one claim covering a CBM is considered a CBM
`
`patent. See CBM 2012-00001, Doc. 36 at 26; 77 Fed. Reg. 48,709 (Aug. 14, 2012). Ac-
`
`cordingly, Petitioner addresses here exemplary Claim 8 (Ex. 1001):
`
`8. A data access terminal for controlling access to one or more content
`data items stored on a data carrier, the data access terminal comprising:
`[A] a user interface;
`[B] a data carrier interface;
`[C] a program store storing code implementable by a processor; and
`[D] a processor coupled to the user interface, to the data carrier interface
`and to the program store for implementing the stored code, the code
`comprising:
`[D1] code to request identifier data identifying one or more content
`data items stored on the data carrier;
`[D2] code to receive said identifier data;
`[D3] code to present to a user via said user interface said identified
`one or more content data items available from the data carrier;
`[D4] code to receive a user selection selecting at least one of said one
`or more of said stored content data items;
`[D5] code responsive to said user selection of said selected content
`data item to transmit payment data relating to payment for said
`selected content item for validation by a payment validation system;
`[D6] code to receive payment validation data defining if said
`payment validation system has validated payment for said con-
`
`10
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`tent data item; and
`[D7] code to control access to said selected content data item re-
`sponsive to the payment validation data.
`1.
`Exemplary Claim 8 Is Financial In Nature
`A CBM patent is “a patent that claims a method or corresponding apparatus for per-
`
`forming data processing or other operations used in the 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. “[T]he definition of covered busi-
`
`ness method patent was drafted to encompass patents claiming activities that are finan-
`
`cial in nature, incidental to a financial activity or complementary to a financial activity.’” 77 Fed.
`
`Reg. 48,734-35 (Aug. 14, 2012) (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011)).
`
`“[F]inancial product or service” is to be interpreted broadly, id., and “financial . . . simp-
`
`ly 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 previ-
`
`ously found, e.g., that a claim for “transferring money electronically via a telecommu-
`
`nication 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. See also, e.g., CBM2013-00017, Paper 8 at 5-6 (qualification as CBM patent
`
`based on specification’s reference to e-commerce and fact that POSITA “would have
`
`understood that [one of the claim limitations] may be associated with financial services”).
`
`11
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`The ’772 patent includes claims to a “data access terminal” (e.g., a “convention-
`
`al computer” or mobile phone (Ex. 1001 4:7-8)), that reads payment data from a data
`
`carrier (e.g., standard smart card (id. 11:35)), transmits it to a validation system for au-
`
`thorizing payment, and allows access to content in exchange for payment (id. 8:26-28).
`
`See AIA § 18(d)(1); 37 C.F.R. § 42.301(a). The patent alleges this terminal is part of a
`
`system that allows content owners to make content available without fear of losing
`
`revenue, and claim 8 specifies that the terminal is “for controlling access to one or
`
`more content data items.” Ex. 1001 2:15-19; Cl. 8. See also id. Fig 12(a)-(e). More gen-
`
`erally, the patent is about “[d]ata storage and access systems [that] enable downloading
`
`and paying for data . . .” Id. Abstract. “The combination of payment data and stored
`
`content data . . . helps reduce the risk of unauthorized access.” Id. And in asserting
`
`the patent, Smartflash conceded the alleged invention relates to a financial activity or
`
`transaction, stating “[t]he patents-in-suit generally cover a portable data carrier for
`
`storing data and managing access to the data via payment 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. 1002 ¶ 17.
`
`Indeed, the specification confirms that the recited “data access terminal” is “for
`
`storing and paying for data,” (Ex. 1001 1:20-22), “can communicate with a bank or other fi-
`
`nancial services provider to control payment” (id. 3:53-55) and can “validate payment with an
`
`external authority such as a bank” (id. 2:8-10). Further, “[p]ayment for the data item or
`
`12
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`items requested may either be made directly to the system owner or may be made to an e-payment
`
`system” (id. 20:59-61), and such systems may be provided “according to, for example,
`
`MONDEX, Proton, and/or Visa cash compliant standards” and “payment authentication . . .
`
`may [] be performed by, for example, a data access terminal . . . using payment management
`
`code.” Id. 13:43-64. See also id. 7:66-8:61 (esp. 8:26-28); 11:65-12:4; Fig. 12(a)-(e).
`
`Claim 8 expressly recites software to perform data processing and other opera-
`
`tions in connection with the recited “payment validation system” (e.g., “to transmit
`
`payment data . . . for validation by a payment validation system” and “code to receive
`
`payment validation data defining if said payment validation system has validated pay-
`
`ment”), and further requires software “to control access to said selected content data
`
`item responsive to the payment validation data.” Id. Thus, claim 8, which explicitly
`
`describes transmitting payment data to a payment validation system, receiving pay-
`
`ment validation, and controlling access to data based on payment, clearly concerns a
`
`computer system (corresponding to methods discussed in the patent) for performing
`
`data processing and other operations used in the practice, administration, or management of
`
`a financial activity and service. See, e.g., CBM2013-00020, Paper 14 at 10-11.
`
`2.
`Claim 8 Does Not Cover A Technological Invention
`Further, claim 8 does not cover a “technological invention” within the excep-
`
`tion in AIA § 18(d)(1), because it does not claim “subject matter as a whole [that] re-
`
`cites a technological feature that is novel and unobvious over the prior art[] and solves a technical
`
`problem using a technical solution.” § 42.301(b). To the contrary, the specification explains
`
`13
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`that claim 8’s “data access terminal” was commonplace, and is not directed to a tech-
`
`nical problem, but rather offers a non-technical solution to the business problem of data piracy.
`
`(a) Claim 8 Does Not Recite A Technological Feature
`That Is Novel and Unobvious
`First, no “technological feature” of claim 8 is novel and unobvious. The PTAB
`
`has confirmed that “[m]ere recitation of known technologies, such as computer hard-
`
`ware, communication or computer networks, software, memory, computer-readable
`
`storage medium, scanners, display devices or databases, or specialized machines, such
`
`as an ATM or point of sale device,” or “[r]eciting the use of known prior art technol-
`
`ogy to accomplish a process or method, even if that process or method is novel and
`
`non-obvious” will “not typically render a patent a technological invention.” See, e.g., 77
`
`Fed. Reg. 48,764 (Aug. 14, 2012). The PTAB further stated “combining prior art
`
`structures to achieve a normal, expected, or predictable result of that combination” is
`
`not a technological invention. 77 Fed. Reg. 157 (Aug. 14, 2012) at 48764.
`
`As its language makes clear, claim 8 involves no “technology” at all other than “a
`
`data access terminal,” which includes a user interface, data carrier interface, a program
`
`store storing code, and a processor that implements the well-known steps disclosed in
`
`the specification. Ex. 1001. “The data access terminal may be a conventional computer or,
`
`alternatively, it may be a mobile phone,” both of which were known in the art well be-
`
`fore 2000. Id. 4:7; 16:47-52. Indeed, the specification disclaims the use of particular
`
`hardware, relying instead on conventional hardware known to a POSITA: “[t]he physi-
`
`14
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`cal embodiment of the system is not critical and a skilled person will understand that the termi-
`
`nals, data processing systems and the like can all take a variety of forms.” Id. 12:37-40.
`
`The use of software (code) for requesting and presenting data, transmitting and
`
`validating payment data, and exchanging content for payment, as disclosed in the
`
`specification, was also exceedingly well known in the art, and could not transform the
`
`claims into a technological invention. See, e.g., 77 Fed. Reg. 48,756 48,764 (Aug. 14,
`
`2012) (“[m]ere recitation of known technologies, such as . . . software, memory, com-
`
`puter-readable storage medium . . . [will] “not typically render a patent a technological
`
`invention.”); Ex. 1021 § V. The functions performed by the code (D1-D4)—related
`
`to the identification, access, and control of data as disclosed in the specification—
`
`were commonplace in 2000. See, e.g., Ex. 1006 8:62-9:12; Ex. 1001 1:40-50. Further,
`
`the financial transaction performed by the code described in elements D5 and D6 was
`
`well known, because, as the patent concedes, e-payment systems were known. Ex.
`
`1001 13:43-64 (“E-payment systems coupled to banks . . . these provide an e-payment system
`
`according to, for example, MONDEX, Proton, and/or Visa cash compliant standards . . . pay-
`
`ment data may be validated by a data access terminal using payment management code.”). Using
`
`code to implement this transaction, as disclosed in the specification, was obvious and
`
`known. E.g,, Ex. 1021 §V. Providing access to data in exchange for a payment (D7),
`
`as claimed in the patent, was also well known. See, e.g., Exs. 1003; 1006 Abstract, 1:67-
`
`2:9; 1007 Abstract, 4:27-35; 1021 §V. Even apart from other failures to trigger the ex-
`
`15
`
`

`

`ception,