Covered Business Method Patent Review
`United States Patent No. 7,942,317
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
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` 104677-5008-811
`Customer No. 28120
`
`§
`Inventor: Racz et al.
`United States Patent No.: 7,942,317 §
`Formerly Application No.: 12/014,558 §
`Issue Date: May 17, 2011
`§
`Filing Date: January 15, 2008
`§
`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. 7,942,317 PURSUANT TO 35 U.S.C. § 321,
`37 C.F.R. § 42.304
`
`
`
`
`
`
`United States Patent No. 7,942,317
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-811
`Customer No. 28120
`
`§
`Inventor: Racz et al.
`United States Patent No.: 7,942,317 §
`Formerly Application No.: 12/014,558 §
`Issue Date: May 17, 2011
`§
`Filing Date: January 15, 2008
`§
`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. 7,942,317 PURSUANT TO 35 U.S.C. § 321,
`37 C.F.R. § 42.304
`
`
`
`
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`TABLE OF CONTENTS
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`B.
`
`INTRODUCTION ....................................................................................................... 1
`I.
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 4
`III. PETITIONER HAS STANDING ............................................................................ 7
`A.
`The ’317 Patent Is a Covered Business Method (“CBM”) Patent ............. 7
`1.
`Exemplary Claim 18 Is Financial In Nature ...................................... 8
`2.
`Claim 18 Does Not Cover A Technological Invention ................. 11
`Related Matters; Petitioner Is a Real Party In Interest Sued for and
`Charged With Infringement ........................................................................... 15
`IV. DETAILED EXPLANATION OF REASONS FOR RELIEF REQUESTED,
`SHOWING IT IS MORE LIKELY THAN NOT THAT AT LEAST ONE
`CHALLENGED CLAIM IS UNPATENTABLE ............................................... 16
`A.
`Claim Construction .......................................................................................... 16
`B.
`The Challenged Claims Are Invalid Under §§ 102 and/or 103 ................ 20
`1.
`Overview of Stefik ............................................................................... 20
`2.
`Motivation to Combine Stefik with Poggio ..................................... 25
`3.
`Claims 1, 6-8, 12-14, 16, and 18 are Anticipated by Stefik
`(Ground 1), Obvious in Light of Stefik (Ground 2), and
`Obvious in Light of Stefik in View of Poggio (Ground 3). .......... 28
`CONCLUSION........................................................................................................... 77
`
`V.
`
`
`ii
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`
`
`EXHIBIT LIST
`1001
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`1002
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`1003
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`1004
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`1005
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`1006
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`1007
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`1008
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`1009
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`1010
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`1011
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`1012
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`1013
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`1014
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`1015
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`1016
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`1017
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`1018
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`1019
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`1020
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`U.S. Patent No. 7,942,317
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`Plaintiff’s First Amended Complaint
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`U.S. Patent No. 8,118,221
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`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. 5,754,654
`
`File History for U.S. Patent No. 7,942,317
`
`Declaration of Flora D. Elias-Mique In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`U.S. Patent No. 5,103,392
`
`U.S. Patent No. 5,530,235
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`U.S. Patent No. 5,629,980
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`U.S. Patent No. 5,915,019
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`European Patent Application, Publication No. EP0809221A2
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`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
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`iii
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`United States Patent No. 7,942,317
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`
`Heider, “The Secure Distribution of Digital Contents,” IEEE
`(1997)
`Declaration of Anthony J. Wechselberger In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`Declaration of Michael P. Duffey In Support of Apple Inc.’s
`Petition for Covered Business Method Patent Review
`U.S. Patent No. 7,334,720
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`U.S. Patent No. 8,033,458
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`U.S. Patent No. 8,061,598
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`U.S. Patent No. 8,336,772
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`File History for U.S. Patent No. 7,334,720
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`File History for U.S. Patent No. 8,033,458
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`File History for U.S. Patent No. 8,061,598
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`EXHIBIT LIST
`
`1021
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`1022
`
`1023
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`1024
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`1025
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`1026
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`1027
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`1028
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`1029
`
`iv
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`I.
`
`INTRODUCTION
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`Pursuant to 35 U.S.C. § 321 and 37 C.F.R. § 42.304, the undersigned, on behalf
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`of and acting in a representative capacity for Apple Inc. (“Petitioner” and the real par-
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`ty in interest), petitions for review under the transitional program for covered busi-
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`ness method patents of claims 1, 6, 7, 8, 12-14, 16, and 18 (challenged claims) of U.S.
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`Pat. No. 7,942,317 (“the ’317 patent”), issued to Smartflash Technologies Limited and
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`assigned to Smartflash LLC (“Patentee”). Petitioner hereby asserts that it is more like-
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`ly than not that at least one of the challenged claims is unpatentable for the reasons
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`herein and requests review of, and judgment against, the challenged claims as invalid
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`under 35 U.S.C. §§ 102 and 103.1 Petitioner has concurrently filed a Petition seeking
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`CBM review of the ’317 patent, requesting judgment against these same claims under
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`based on different prior art. The Director, pursuant to Rule 325(c), may determine
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`that merger, or at minimum coordination of these proceedings, is appropriate.
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`The challenged claims merely recite steps and corresponding basic computer
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`systems well-known in the field of data storage and access, including methods of
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`“providing data to a data requester, a “computer system for providing data to a data
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`requester,” and a “data access system.” E.g., Ex. 1001 at claims 1, 8, 16, 18; 1:18-21;
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`Abstract “Data storage and access systems are described for downloading and paying
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`1 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
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`numerous additional reasons. All emphasis herein added unless otherwise noted.
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`United States Patent No. 7,942,317
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`for data . . .”). Claim 18, for example, recites five rudimentary steps relating to data
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`storage and access—(A) receiving a request for data, (B) receiving payment data
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`relating to the data, (C) transmitting requested data, (D) reading payment distribu-
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`tion information, and (E) outputting payment data for distributing the requested data:
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`18. A method of providing data to a data requester comprising:
`receiving a request for a data item from the requester;
`receiving payment data from the requester relating to payment for
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`the requested data;
`transmitting the requested data to the requestor;
`reading payment distribution information from a data store; and
`outputting payment data to a payment system for distributing the
`payment for the requested data
`Ex. 1001. But at the patent’s earliest claimed priority date, these simple elements and
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`their combination were well known to any person of ordinary skill (“POSITA”2). In-
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`deed, the patent acknowledges that the idea of providing access to data in exchange
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`for a payment (e.g., purchase of music on a CD) was already well known. E.g., Ex.
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`1001 5:4-7 (“the purchase outright option may be equivalent to the purchase of a compact
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`2 All references to a POSITA refer to the knowledge or understanding of a person of
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`ordinary skill in the art as of October 25, 1999, unless specifically noted. A POSITA
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`would have at least a B.S. in E.E., 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 ¶ 28.
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`2
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`United States Patent No. 7,942,317
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`disc (CD)”). And, as demonstrated herein, the prior art was teeming with disclosures of
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`this basic concept and its straightforward implementation in physical systems.
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`Moreover, claim 18 clearly involves no “technology” at all other than, at most, a
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`“data requester,” which is merely an entity that may make a data request, and a “pay-
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`ment system” and “data store,” which were commonplace and do not require any par-
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`ticularized hardware. E.g., Ex. 1001 4:27-42; 6:38-40; 7:52-53; 9:62; 10:16, 25, 36, 44;
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`12:29-32; 13:35-47; 14:25-29; 19:43-44; Figs. 6, 12(d), (e). Thus, as the intrinsic record
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`reflects, Claim 18 recites no more than a method for receiving a request for and
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`transmitting data while receiving and outputting payment data. Independent claims 1,
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`8, and 16 are nothing but variations on this same simple theme, with the addition, in
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`the challenged “system” claims, of equally generic components (such as a communica-
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`tion interface, program store, and processor).3 See, e.g., Ex. 1001 12:29-32 (“The phys-
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`ical embodiment of the system is not critical and a skilled person will understand that
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`the terminals, data processing systems and the like can all take a variety of forms.”).
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`It is thus no surprise that each element of the challenged claims was disclosed
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`3 Method claim 8 does not even recite a “data requester,” “payment system,” or “data
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`store.” Dependent claims 6 and 7 only add to the system of claim 1 a data store and
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`code, respectively. Claim 12 is directed to a “data access system,” and recites a gener-
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`ic “data supply computer system,” “electronic payment system,” “data access termi-
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`nal,” and “data carrier,” all of which were well-known, as discussed infra in II, IV.B.
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`in the prior art, either by individual references or by those references in combination,
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`and each challenged claim is accordingly invalid under 35 U.S.C. §§ 102 and 103.
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`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
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`digital products all would have been well-known to a POSITA, and their combination
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`as claimed also would have been well-known or at minimum obvious. See, e.g., Ex.
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`1021 § V. On March 12, 1991, for example, U.S. Pat. No. 4,999,806 (“Chernow,” filed
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`Sept. 4, 1987) issued, disclosing a system and method for sale and distribution of digi-
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`tal products by phone, and for content protection. See, e.g., Ex. 1006 Abstract (“central
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`station distributes software by telephone. . . accepts credit card information, transmits an acceptance
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`code . . . After verifying the credit card information, the station calls the purchaser back and contin-
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`ues with the transaction only after receiving the acceptance code.”); 1:67-2:9 (describing “means
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`for selling and distributing protected software using standard telephone lines,” “permit[ting] the pur-
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`chaser to rent the protected software for a period of time,” and “to rent the protected software for a
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`specific number of runs”). Chernow also discloses (1) different types of access, such as
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`purchase vs. rental and (2) a Control Transfer Program and a Primary Protection Pro-
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`gram to prevent unauthorized copies. See Ex. 1006 Abstract; 2:65-3:23; Ex. 1021 ¶ 33.
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`In April 1992, U.S. Patent No. 5,103,392 (“Mori,” filed Dec. 5, 1990) issued,
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`disclosing use-based charging for digital products. See, e.g., id. Ex. 1012 1:64-2:17:
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`The data processing apparatus includes user-specific credit data storage
`means for storing data identifying the user . . . and indicating credit for payment ca-
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`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-
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`viders underscores this existing focus in the art on digital rights management
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`(“DRM”), over eight years before the claimed priority date. See, e,g., Ex. 1021 ¶ 36.
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`Exhibit 1016 (“Poggio”, pub’d Nov. 26, 1997) gives another example of secure
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`content distribution with content protection, disclosing a “virtual vending machine”
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`system for sale and distribution of digital products. See, e.g., id. Abstract (“virtual vending
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`machine manages a comprehensive vending service for the distribution of licensed electronic data (i.e.,
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`products) over a distributed computer system. . . . [and] distributes licenses for the electronic data for
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`the complete product or for components thereof and for a variety of time frames, including permanent
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`licenses and rental period licenses. [It] provides . . . capability to obtain information regarding the
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`available products and the associated license fees and rental periods, to receive the product upon re-
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`ceipt of a corresponding electronic payment, and to reload the product during the term of the license.”).
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`Poggio, too, discloses different types of access, including rentals, and re-download ca-
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`pabilities for already-purchased content. See, e.g., id.; Ex. 1021 ¶¶ 37, 48.
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`Also in 1997, Exhibit 1020 (“von Faber”) published, making the well-known
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`observation that “[e]lectronic commerce systems dealing with the distribution of digital con-
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`tents . . . have to couple the use of the provided digital goods with a prior payment for the goods in a
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`way which cannot be bypassed.” See id. 7. Von Faber proposed a system where cus-
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`tomers purchase keys required to utilize encrypted content. See, e.g., id. (“The basic
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`idea . . . is to distribute the contents in encrypted form, and to have the customer pay for the key
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`which he needs to transform the encrypted content in an usable form.”); id. 8 (“The Content Pro-
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`vider provides digital contents in encrypted form being distributed by the Content Distribu-
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`tor. . . . The Authorisation System permits the distribution of the appropriate key after settling
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`of the fees payable by the Customer . . .. The role of the Content Distributor is not essential
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`for the subsequent discussion but, of course, for the business to take place.”); see also id. Fig.
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`1. Von Faber notes its system could be used for a variety of known distribution and
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`payment methods. See, e.g., id. 13 (“Different methods can be used to distribute the encrypted
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`contents (standard techniques). . . . Different electronic payment methods can be integrated . . . .
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`This flexibility leads to the fact that totally different authorisation methods can be integrated.”).
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`Von Faber further addressed the known issue of payment distribution to providers.
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`See, e.g., id. (“The system automatically divides the package price (payments) and guarantees that
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`the money is transferred to each Content Provider.”); Ex. 1021 ¶¶ 38-40.
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`Moreover, on June 22, 1999, U.S. Pat. No. 5,915,019 (“Ginter,” filed Jan. 8,
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`1997) issued, disclosing “systems and methods for secure transaction management
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`and electronic rights protection.” See, e.g., Ex. 1015 Abstract. Ginter describes a “vir-
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`United States Patent No. 7,942,317
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`tual distribution environment” (“VDE”) to “control and/or meter or otherwise moni-
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`tor use of electronically stored or disseminated information.” Id. Ginter’s system
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`“help[s] to ensure that information is accessed and used only in authorized ways, and main-
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`tain the integrity, availability, and/or confidentiality of the information.” See, e.g., id. Further,
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`Ginter’s “techniques may be used to support an all-electronic information distribution, for
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`example, utilizing the ‘electronic highway.’” Id. Ginter discloses that the various entities of
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`the VDE can flexibly take on any VDE roles. See, e.g., id. 255:22-23 (“All participants
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`of VDE 100 have the innate ability to participate in any role.”); 255:23-43. Ginter thus
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`highlights the known flexibility in such distribution systems, underscoring that a
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`POSITA would have known that combinations between and among disclosures of
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`such distribution systems would have been obvious. See, e.g., Ex. 1021 ¶¶ 41-42.
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`Thus, as these background examples and the additional prior art detailed below
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`in IV.B (including the primary prior art Stefik patent) illustrate, the prior art was rife
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`with awareness and discussion of the same supposed “invention” now memorialized
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`in the challenged claims. Long before the purported priority date, disclosures abound-
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`ed of the very features that Smartflash now seeks to claim as its exclusive property. As
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`outlined below, the challenged claims are anticipated and/or obvious.
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`III. PETITIONER HAS STANDING
`A.
`Petitioner certifies that the ’317 patent is available for review under 37 C.F.R. §
`
`The ’317 Patent Is a Covered Business Method (“CBM”) Patent
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`7
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`United States Patent No. 7,942,317
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`42.304(a). The ’317 patent is a CBM patent under § 18(d)(1) of the Leahy-Smith
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`America Invents Act, Pub. L. 112-29 (“AIA”) and § 42.301. Although in fact numer-
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`ous claims qualify, a patent with even one claim covering a CBM is considered a CBM
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`patent. See CBM 2012-00001, Doc. 36 at 26; 77 Fed. Reg. 48,709 (Aug. 14, 2012). Ac-
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`cordingly, Petitioner addresses here exemplary claim 18:4
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`18. A method of providing data to a data requester comprising:
`receiving a request for a data item from the requester;
`receiving payment data from the requester relating to payment for
`
`the requested data;
`transmitting the requested data to the requestor;
`reading payment distribution information from a data store; and
`outputting payment data to a payment system for distributing the
`payment for the requested data.
`1.
`Exemplary Claim 18 Is Financial In Nature
`A CBM patent is “a patent that claims a method or corresponding apparatus
`
`for performing data processing or other operations used in the practice, administra-
`
`tion, or management of a financial product or service, except that the term does not
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`4 See also, e.g., Ex. 1001, claim 8 (“8. A method of providing data to a data requester
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`comprising: receiving a request for a data item from the requester; receiving payment
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`data from the requester relating to payment for the requested data; reading the re-
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`quested data from a content provider responsive to the received payment data; and
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`transmitting the read data to the requester.”); claims 12, 16.
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`8
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`include patents for technological inventions.” AIA § 18(d)(1); 37 C.F.R. § 42.301.
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`“[T]he definition of covered business method patent was drafted to encompass pa-
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`tents claiming activities that are financial in nature, incidental to a financial activity or comple-
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`mentary to a financial activity.’” 77 Fed. Reg. 48,734-35 (Aug. 13, 2012) (citing 157 Cong.
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`Rec. S5432 (daily ed. Sept. 8, 2011) (stm’t Sen. Schumer)). “[F]inancial product or ser-
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`vice” is to be interpreted broadly, id., and “financial . . . simply means relating to monetary
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`matters”—it does not require any link to traditional financial industries such as banks.
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`See, e.g., CBM2012-00001, Paper 36 at 23.
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`This Board previously found, e.g., that a claim for “transferring money electron-
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`ically via a telecommunication line to the first party . . . from the second party” met
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`the financial product or service requirement, concluding that “the electronic transfer of
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`money is a financial activity, and allowing such a transfer amounts to providing a financial service.”5
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`CBM2013-00020, Paper 14 at 11-12. See also, e.g., CBM2013-00017, Paper 8 at 5-6
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`5 Indeed, these aspects of claim 18 are generally similar to those of the claim found to
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`convey covered business method standing in CBM2013-00020, which recited: “A
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`method for transmitting a desired digital audio signal stored on a first memory of a
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`first party to a second memory of a second party comprising the steps of: transferring
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`money electronically . . . connecting electronically via a telecommunications line . . .
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`transmitting the desired signal . . . and storing the digital signal.” See CBM2013-00020,
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`paper 14 at 10-17.
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`(qualification as CBM patent based on specification’s reference to e-commerce and
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`fact that a POSITA “would have understood that [one of the claim limitations] may be associated
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`with financial services”).
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`As discussed above, the ’317 patent relates to the idea of providing electronic
`
`data in exchange for payment. See AIA § 18(d)(1); 37 C.F.R. § 42.301(a); Ex. 10012:12-
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`15. Indeed, in seeking to enforce the ’317 patent in litigation, Smartflash itself conced-
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`ed that the alleged invention relates to a financial activity or transaction, stating that
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`“[t]he patents-in-suit generally cover a portable data carrier for storing data and man-
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`aging access to the data via payment information and/or use status rules. The patents-in-
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`suit also generally cover a computer network . . . that serves data and manages access
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`to data by, for example, validating payment information.” Ex. 1002 ¶ 17.
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`The ‘317 patent generally describes the invention as follows (Ex. 1001 1:55-63):
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`According to the present invention there is therefore provided a method
`of providing portable data comprising providing a portable data storage
`device comprising downloaded data storage means and payment vali-
`dation means; providing a terminal for internet access; coupling the
`portable data storage device to the terminal; reading payment infor-
`mation from the payment validation means using the terminal; validat-
`ing the payment information; and downloading data into the portable
`storage device from a data supplier.”
`More specifically, claim 18 is directed to a method of providing data to a data
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`
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`requester in response to receiving payment data. Figures 12d and 12e describe various steps
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`in this process, including: (a) receiving a request for a data item (S63), (b) receiving
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`payment data from the requestor (S66), (c) reading content from the content provider
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`(S73), (d) transmitting the content to the terminal (S73). Ex. 1001. In addition, Figs.
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`12d and 12e show that providing data to a data requester may involve (e) transmitting
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`access rules to the requester (S71), (f) reading payment distribution data (S68), and (g) dis-
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`tributing payments according to distribution data (S69). Id. The specification describes
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`that “[p]ayment for the data item or items requested may either be made directly to the system owner
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`or may be made to an e-payment system.” Id.20:50-54. “E-payment systems [] are coupled to
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`banks” and may be provided in accordance with cash compliant standards such as
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`MONDEX, Proton, and/or Visa. Id.13:35-46. Thus because claim 18 explicitly de-
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`scribes receiving and responding to payment data, as well as outputting payment data, it clearly
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`relates to a financial activity and providing a financial service. See CBM2013-00020,
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`Institution Decision at 9-10 (“the electronic transfer of money is a financial activity,
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`and allowing such a transfer amounts to providing a financial service.”). See also AIA
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`§ 18(d)(1); 37 C.F.R. § 42.301(a). See also 77 Fed. Reg. at 48,735.
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`2.
`Further, claim 18 does not cover a “technological invention” within the excep-
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`Claim 18 Does Not Cover A Technological Invention
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`tion in AIA § 18(d)(1), because it does not claim “subject matter as a whole [that] re-
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`cites a technological feature that is novel and unobvious over the prior art[] and solves a
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`technical problem using a technical solution.” § 42.301(b). To the contrary, the specifica-
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`tion that claim 18 does not require any specific hardware at all. The “data requester” is not
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`any particular hardware according to the patent, and may even be an individual who
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`requests data. The claimed “data store” and “payment systems” were commonplace
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`and could be implemented using well-known industry standards.
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`(a) Claim 18 Does Not Recite A Technological Feature
`That Is Novel and Unobvious
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`First, no “technological feature” of claim 18 is novel and unobvious. The
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`PTAB has confirmed that “[m]ere recitation of known technologies, such as comput-
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`er hardware, communication or computer networks, software, memory, computer-
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`readable storage medium, scanners, display devices or databases, or specialized ma-
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`chines, such as an ATM or point of sale device,” or “[r]eciting the use of known prior
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`art technology to accomplish a process or method, even if that process or method is
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`novel and non-obvious” will “not typically render a patent a technological invention.”
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`See, e.g., 77 Fed. Reg. 48,764 (Aug. 14, 2012).
`
`As its language makes clear, claim 18 requires no particularized hardware: in-
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`stead, it simply describes the idea of providing electronic data in exchange for pay-
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`ment. The claim involves no “technology” at all other than, at most, the use of a data
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`store and payment system. Ex. 1001. The “data requestor” of claim 8 is not described
`
`as hardware, let alone any particular type of hardware. The data requester is simply de-
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`scribed as an entity that may make a data request and to which data is provided. Ex.
`
`10016:38-40; 7:52-53; 9:62; 10:16, 25, 36, 44; 12:29-32. The patent also confirms that
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`12
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`the “data store” is not any particularized hardware, but rather generic memory. See id.
`
`14:25-29; Fig 6 (136 (payment record data store)); 14:43-44. See also, e.g., Ex.
`
`100112:29-32 (“The 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.”). Further, receiving, reading, and outputting payment data
`
`was known because e-payment systems were known, as were payment systems. See Ex.
`
`100113:35-47. The patent explains that “[e]-payment systems are coupled to banks . . .
`
`these provide an e-payment system according to, for example, MONDEX, Proton, and/or Visa
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`cash compliant standards . . . payment data may be validated [by] a data access terminal using pay-
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`ment management code.” Id.13:35-47. The specification makes clear that no particular pay-
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`ment system is required. See, e.g., Fig. 6 (121a and 121b); 19:43-44; 4:27-42; 12:29-32.
`
`Finally, the mere idea of providing access to data in exchange for a payment, as
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`claimed in the ’317 patent, was known. See, e.g., Ex. 10015:4-7 (“Thus where the data
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`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.”). See also, e.g., 5,675,734 (Hair) (Ex. 1007); U.S. Patent
`
`No. 4,999,806 (Chernow) (Ex. 1006) Abstract, 1:67-2:9; U.S. Patent No. 4,878,245
`
`(Bradley) (Ex. 1008) Abstract, 4:27-35; Ex. 1021 § V. The alleged invention of the
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`‘317 patent merely combines a known payment system with the known ability to
`
`download data. But “combining prior art structures to achieve a normal, expected, or
`
`13
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`
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`predictable result of that combination” does not render a patent a technological in-
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`vention.” 77 Fed. Reg. 157 (Aug. 14, 2012) at 48764.
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`In sum, the supposed invention of the ’317 patent concerns nothing more than
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`a non-technical idea of selling data in exchange for payment over the internet. Even
`
`apart from its other failures to trigger the statutory exception, for these reasons alone,
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`claim 18 would not be a technological invention.
`
`(b) Claim 8 Does Not Solve A Technical Problem Using A
`Technical Solution
`
`Moreover, claim 18 also does not solve a technical problem using a technical
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`solution because there was no technical problem to begin with. While a POSITA certainly
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`already would have known how to sell data over the Internet, see, e.g., Ex. 1016 Fig. 7;
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`1:50-55, 10:41-53; Ex. 1021 § V, the patent nonetheless describes the “problem” it is
`
`intended to solve as the business problem of data piracy: users were downloading online
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`content (such as MP3s) without paying for the content, and content providers were
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`losing money as a result. Ex. 1001 1:38-51. However, a POSITA knew well before
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`2000 how to sell electronic data and how to use payment authorization mechanisms,
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`and how to provide electronic data based on payment. See, e,g., Ex. 1021 § V. The so-
`
`lution described in claim 18—combining previously-known data access and previous-
`
`ly-known data payment abilities—was also not “technical.” As the patent states,
`
`“[b]inding the data access and payment together allows the legitimate owners of the data to
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`make the data available themselves over the internet without fear or loss of revenue, thus
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`14
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`undermining the position of data pirates.” Ex. 1001 2:7-11; see also id. 4:27-29. But the basic
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`notion of coupling of data access to payment, as claimed in the ’317 patent, is not a
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`“technical” solution under § 42.301(b).6
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`Further, even if the solution were somehow deemed “technical” (it is not), it
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`would not alter that there was no technical problem presented and addressed by the pa-
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`tent. As the PTAB stated in CBM 2012-00007, “[d]ifficulty implementing an automat-
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`ed or technical solution to a problem that is not technical does not transform that
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`non-technical problem into a technical one.” Paper 16 at 17.
`
`In sum, the “invention” of claim 18 concerns no more than the non-technical
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`idea of restricting access to content based on payment to solve the business problem
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`of data piracy. For this reason, too, claim 18 does not claim a technological invention.
`
`B. Related Matters; Petitioner Is a Real Party In Interest Sued For
`and Charged With Infringement
`
`Smartflash’s Case No. 6:13-cv-447, Smartflash LLC. et al. v. Apple Inc. et al.,
`
`pending in E.D. Texas, asserts the ’317 patent against Petitioner. Pursuant to Rule
`
`42.8(b)(2), the patent is also the subject of a second litigation, Smartflash LLC et al. v.
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`Samsung et al., No.6:13-cv-448 (E.D. Tex), to which Apple is not a party. Petitioner
`
`identifies the following administrative matters, including patents to which the ‘317 pa-
`
`
`6 Moreover , the idea of providing access to data in exchange for a payment was itself
`
`known. See, e.g., Ex. 1007; Ex. 1006 Abstract, 1:67-2:9; Ex. 1008 Abstract, col. 4:27-35.
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`15
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`tent claims the benefit of priority: App’n No. 10/111,716 (filed as No.
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`PCT/GB00/4110); and U.S. Patent No. 7,334,720.7
`
`IV. DETAILED EXPLANATION OF REASONS FOR RELIEF
`REQUESTED, SHOWING IT IS MORE LIKELY THAN NOT THAT
`AT LEAST ONE CHALLENGED CLAIM IS UNPATENTABLE
`
`Pursuant to §§ 42.22, 42,208, and 42.304(b), a full statement of the reasons for
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`the relief requested, including a detailed explanation of the evidence, material facts,
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`and the governing law, rules and precedent is provided below. IV.A lists and explains
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`the bases for Petitioner’s relevant claim constructions. IV.B provides each ground for
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`which it is more likely than not that each challenged claim is invalid. In particular,
`
`claims 1, 6-8, 12-14, 16, and 18 are a
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