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.:
`
` 104677-5008-806
`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 .......................................................................... 11 
`A. 
`The ’772 Patent Is a Covered Business Method (“CBM”) Patent ........... 11 
`1. 
`Exemplary Claim 8 Is Financial In Nature ...................................... 12 
`2. 
`Claim 8 Does Not Cover A Technological Invention ................... 15 
`Related Matters; Petitioner Is a Real Party In Interest Sued for and
`Charged With Infringement ........................................................................... 19 
`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 ............................ 20 
`A. 
`Claim Construction .......................................................................................... 20 
`B. 
`The Challenged Claims Are Invalid Under § 103 ...................................... 25 
`1. 
`Overview of Ginter .............................................................................. 25 
`2. 
`Motivation to Combine Ginter with Poggio.................................... 29 
`3. 
`Motivation to Combine Ginter with Stefik ...................................... 32 
`4. 
`Motivation to Combine Ginter with Sato ........................................ 36 
`5. 
`Claims 1, 5, 8, 10, 14, 19, 22, 25, 26, 30, and 32 are
`Obvious in Light of Ginter (Ground 1), Obvious in Light
`of Ginter in View of Poggio (Ground 2), and Obvious in
`Light of Ginter in view of Sato (Ground 3); and Claims 8,
`10, 19, 22, 30, and 32 are Obvious in Light of Ginter in
`View of Stefik (Ground 4) .................................................................. 38 
`CONCLUSION........................................................................................................... 75 
`
`V. 
`
`
`ii
`
`

`

`
`EXHIBIT LIST
`1101
`
`1102
`
`1103
`
`1104
`
`1105
`
`1106
`
`1107
`
`1108
`
`1109
`
`1110
`
`1111
`
`1112
`
`1113
`
`1114
`
`1115
`
`1116
`
`1117
`
`1118
`
`1119
`
`1120
`
` 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
`1121
`
`1122
`
`1123
`
`1124
`
`1125
`
`1126
`
`1127
`
`1128
`
`1129
`
`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 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, 5, 8, 10, 14, 19, 22, 25, 26, 30, and
`
`32 (“the challenged claims”) of U.S. Patent No. 8,336,772 (“the ’772 patent”), issued
`
`to Smartflash Technologies Limited and assigned to Smartflash LLC (“Patentee”). Pe-
`
`titioner hereby 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 § 103.1 Petitioner has concurrently filed a Petition seek-
`
`ing CBM review of the ’772 patent, requesting judgment against these same claims
`
`based on different 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. 1101.
`
`Claim 8, e.g., recites four rudimentary components of a data access terminal “for control-
`
`
`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
`
`ling access to one or more content data items”—(A) a user interface, (B) a data carrier inter-
`
`face, (C) a program store storing code implementable by a processor, and (D) a pro-
`
`cessor . . . for implementing the stored code. The recited code is similarly elementary,
`
`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 pay-
`
`ment 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 con-
`tent 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 identi-
`fied 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 con-
`tent data item to transmit payment data relating to payment for
`said selected content item for validation by a payment validation
`system;
`
`2
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`[D6] code to receive payment validation data defining if said pay-
`ment validation system has validated payment for said content da-
`ta item; and
`[D7] code to control access to said selected content data item re-
`sponsive to the payment validation data.
`Ex. 1101. 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., the purchase of music on a CD) was already well known. See, e.g.,
`
`Ex. 1101 5:13-16 (“the purchase outright option may be equivalent to the purchase of a
`
`compact disc (CD)”). And, as demonstrated here, 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., Ex. 1101 4:7, 16:47-52. Claim 8 recites
`
`nothing more than a system for requesting and retrieving data from a data carrier
`
`while receiving and responding to payment data for validation and controlling access
`
`to the data based on payment. And the other challenged claims are nothing but varia-
`
`tions on this simple theme, with the addition, in the challenged “handheld multimedia
`
`3
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`terminal” claims, of equally generic components (e.g., well-known wireless interface,
`
`non-volatile memory, and a display).2 See, e.g., id. 12:37-40 (“physical embodiment of 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.”).
`
`It is thus little surprise that, as detailed herein, every element of the challenged
`
`claims was disclosed in the prior art, and their claimed combinations are at minimum
`
`obvious in light of individual references, or by those references or systems in combi-
`
`nation. Accordingly, each of the challenged claims is obvious.
`
`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. 1101.
`
`3 All references to a POSITA refer to the knowledge or understanding of a POSITA
`
`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. 1121 § 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
`
`telephone, and for content protection. See, e.g., Ex. 1106 Abstract (“central station dis-
`
`tributes software by telephone. . . . accepts credit card information, transmits an ac-
`
`ceptance 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 (de-
`
`scribing “means for selling and distributing protected software using standard tele-
`
`phone lines,” “permit[ting] the purchaser to rent the protected software for a period of time,” and
`
`“rent[ing] the protected software for a specific number of runs”). Chernow also dis-
`
`closes (1) different types of access, such as purchase versus rental and (2) Control
`
`Transfer Program and a Primary Protection Program to prevent unauthorized copies.
`
`See Ex. 1106 Abstract; see also id. 2:65-3:23; Ex. 1121 ¶ 30.
`
`In April 1992, U.S. Patent No. 5,103,392 (“Mori,” filed Dec. 5, 1990) issued,
`
`disclosing use-based charging for digital products. E.g., Ex. 1112 1:64-2:17:
`
`The data processing apparatus includes user-specific credit data storage
`
`as of October 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 management architectures. Ex. 1121 ¶ 25.
`
`5
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`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
`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. Ex. 1121 ¶ 33.
`
`Exhibit 1116 (“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. 1121 ¶¶ 34, 46.
`
`6
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`Also in 1997, Exhibit 1020 (“von Faber”) (“von Faber”) published, making the
`
`well-known observation that “[e]lectronic commerce systems dealing with the distribution of
`
`digital contents . . . 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 customers 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
`
`Provider provides digital contents in encrypted form being distributed by the Content Dis-
`
`tributor. . . . 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 distri-
`
`bution 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. 1121 ¶¶ 35-37.
`
`Also in 1997, the second of two Stefik patents issued, incorporating the first by
`
`reference. U.S. Patent No. 5,530,235 (“Stefik ’235,” filed Feb. 16, 1995 and issued
`
`7
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`June 25, 1996), incorporates by reference U.S. Patent No. 5,629,980 (“Stefik ’980,”
`
`filed Nov. 23, 1994 and issued May 13, 1997). See Ex. 1113 2:47-53 (“currently pre-
`
`ferred embodiment of a DocuCard is an instance of a repository, as defined in co-
`
`pending application. . . herein incorporated by reference.”). Stefik ’235 and Stefik ’980 will
`
`be referred to collectively herein as “Stefik.”4
`
`Stefik discloses “[a] Document Card (DocuCard) for storing documents and
`
`which is content revealing. The DocuCard is a transportable unit having a nonvolatile
`
`storage means for storing information in a digital form, a control processor for pro-
`
`cessing user initiated functions; an I/O port for interfacing to external devices for
`
`reading and writing digital information, and a user interface for allowing a user to di-
`
`rectly interact with the DocuCard.” See, e.g., Ex. 1113 Abstract; see also, e.g., Ex. 1114
`
`Abstract (“Digital work playback devices, coupled to the repository containing the
`
`4 Because Stefik ’235 incorporates Stefik ’980 by reference, they should be considered
`
`a single reference. For clarity in citation, however, separate citations are provided to
`
`the Stefik ’235 and ’980 (Exs. 1113 and 1114). To the extent Stefik ’235 and
`
`ik ’980 are argued to be separate references, there is explicit motivation to implement
`
`the repository disclosed by Stefik ’980 using the Document Card (DocuCard) of Stef-
`
`ik ’235. See, e.g., Ex. 1113 2:47-52; Ex. 1114 16:56-58 (“For example, the repository
`
`could be embedded in a ‘card’ that is inserted into an available slot in a computer sys-
`
`tem.”); Ex. 1121 ¶ 40.
`
`8
`
`

`

`work, are used to play, display or print the work.”).
`
` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`Stefik also discloses a broader framework within which the DocuCard is used,
`
`including the protection of content with “usage rights.” See, e.g., Ex. 1114 Abstract
`
`(“A system for controlling use and distribution of digital works. In the present inven-
`
`tion, the owner of a digital work attaches usage rights to that work. Usage rights are
`
`granted by the ‘owner’ of a digital work to ‘buyers’ of the digital work . . . [and] define
`
`how a digital work may be used and further distributed by the buyer. Each right has
`
`associated with it certain optional specifications which outline the conditions and fees
`
`upon which the right may be exercised.”). Stefik’s digital works are stored in a “re-
`
`pository” that processes requests for access—including for such actions as utilizing
`
`content (viewing, executing, or printing) or transporting content (copying, borrowing,
`
`or transferring)—and evaluates the relevant usage rights to determine whether such
`
`access is permitted. See, e.g., id. Abstract (“Digital works are stored in a repository[, which]
`
`will process each request to access a digital work by examining the corresponding usage rights . . .
`
`Access to digital works for the purposes of transporting between repositories (e.g. copying, bor-
`
`rowing or transfer) is carried out using a digital work transport protocol. Access to digi-
`
`tal works for the purposes of replay by a digital work playback device (e.g. printing, display-
`
`ing or executing) is carried out using a digital work playback protocol.”).
`
`Storage and utilization of content stored on portable devices, including mobile
`
`communication devices such as cellular phones, was also well-known before the
`
`9
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`claimed October 25, 1999 priority date. As one example, PCT App. Pub. No. WO
`
`99/43136 (“Rydbeck,” pub’d Aug. 26, 1999), discloses a cellular phone as a user de-
`
`vice for storing digital content in non-volatile memory and accessing that content. E.g.,
`
`Ex. 1117 5 (“Because of its integration into the cellular phone, the digital entertain-
`
`ment module can share components already present in the cellular phone. Such sav-
`
`ings 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. This enables the disclosed invention to provide
`
`cellular communications and entertainment during leisure activities.”). In addition,
`
`Exhibit 1018 (“Sato,” pub’d June 18, 1999), discloses storing media content onto mo-
`
`bile user devices and playing the media content from these mobile devices. Sato fur-
`
`ther discloses storing that media content on a removable IC card. See, e.g., ¶ 9 (“porta-
`
`ble 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, a mag-
`
`netic card, a magnetic tape, a CD, a DVD, or 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 buttons 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 higher quality music playback by
`
`removing this storage device (medium) and inserting it into another audio unit. Further, the user
`
`10
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`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 con-
`
`trol unit 200 stores the music software. A 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.”).
`
`Thus, as these background examples and the additional prior art detailed below
`
`in IV.B (including Ginter, the primary prior art) illustrate, the prior art was rife with
`
`awareness and discussion of the same supposed “invention” now memorialized in the
`
`challenged claims. Long before its purported priority date, disclosures abounded of
`
`the very features that Smartflash now seeks to claim exclusively. As outlined in more
`
`detail below, the challenged claims are therefore invalid under § 103.
`
`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
`
`§ 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, Paper 36 at 26; 77 Fed. Reg. 48,709 (Aug. 14, 2012). Ac-
`
`cordingly, Petitioner addresses here exemplary claim 8 (Ex. 1101):
`
`11
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`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 con-
`tent 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 identi-
`fied 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 con-
`tent data item to transmit payment data relating to payment
`for said selected content item for validation by a payment vali-
`dation system;
`[D6] code to receive payment validation data defining if said
`payment 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.
`
`1.
`A “covered business method patent” is “a patent that claims a method or corre-
`
`Exemplary Claim 8 Is Financial In Nature
`
`12
`
`

`

`sponding apparatus for performing data processing or other operations used in the practice, admin-
`
` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`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.
`
`“[T]he definition of covered business method patent was drafted to encompass pa-
`
`tents claiming activities that are financial in nature, incidental to a financial activity or
`
`complementary to a financial activity.’” 77 Fed. Reg. 48,734 (Aug. 14, 2012) (citing
`
`157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (stmt of Sen. Schumer). “[F]inancial
`
`product or service” is to be interpreted broadly, and “financial . . . simply means relating to
`
`monetary matters”—it does not require any link to traditional financial industries such as
`
`banks. See, e.g., CBM2012-00001, Paper 36 at 23. This Board previously found, e.g.,
`
`that a claim for “transferring money electronically via a telecommunication line to the
`
`first party . . . from the second party” met the financial product or service requirement,
`
`concluding that “the electronic transfer of money is a financial activity, and allowing such a trans-
`
`fer 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 a POSITA “would have understood that [one of
`
`the claim limitations] may be associated with financial services”).
`
`As discussed above, the ’772 patent includes claims directed to a “data access
`
`terminal” (e.g., a “conventional computer” or mobile phone (Ex. 1101 4:7-8)), that
`
`reads payment data from a data carrier (e.g., standard smart card (id. 11:35)), transmits
`
`13
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`it to a validation system for authorizing payment, and allows access to content in ex-
`
`change for payment (id. at 8:26-28). See AIA § 18(d)(1); 37 C.F.R. § 42.301(a). The pa-
`
`tent alleges that this terminal is part of a system that allows content owners to make
`
`content available to users without the fear of losing revenue, and claim 8 specifically
`
`states that the terminal is “for controlling access to one or more content data items.”
`
`Ex. 1101 2:15-19; Cl. 8. See also id. Fig 12(a)-(e). More generally, 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 re-
`
`duce the risk of unauthorized access to data.” Id. And in asserting the patent in litiga-
`
`tion, Smartflash conceded that the alleged invention relates to a financial activity or
`
`transaction: “[t]he patents-in-suit generally cover a portable data carrier for storing da-
`
`ta and managing access to the data via payment information and/or use status rules. The pa-
`
`tents-in-suit also generally cover a computer network . . . that serves data and manages
`
`access to data by, for example, validating payment information.” Ex. 1102 ¶ 17.
`
`Indeed, the specification confirms that the recited “data access terminal” is “for
`
`storing and paying for data,” (Ex. 1101 1:20-22), “can communicate with a bank or other fi-
`
`nancial services provider to control payment” (3:53-55) and can “validate payment with an
`
`external authority such as a bank . . .” (2:8-10). Further, “[p]ayment for the data item or items
`
`requested may either be made directly to the system owner or may be made to an e-payment system” (d.
`
`20:59-61), and such systems may be provided “according to, for example, MONDEX,
`
`14
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`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”). The claim further requires software “to control access to said selected content
`
`data item responsive to the payment validation data.” Id. Thus, claim 8, which explicit-
`
`ly 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 11-12.
`
`2.
`Claim 8 Does Not Cover A Technological Invention
`Further, claim 8 is not a “technological invention” within the exception in AIA
`
`§ 18(d)(1), because it does not claim “subject matter as a whole [that] recites a techno-
`
`logical feature that is novel and unobvious over the prior art[] and solves a technical prob-
`
`lem using a technical solution.” §42.301(b). To the contrary, the specification explains that
`
`claim 8’s “data access terminal” was commonplace, and is not directed to a technical
`
`problem, but rather a non-technical solution to the business problem of data piracy.
`
`15
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`(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 accomplis