UNITED STATES PATENT AND TRADEMARK OFFICE
`
`___________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`___________________________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`___________________________
`
`Case CBM2014-001121
`Patent 7,942,317 B2
`
`
`
`
`
`
`PETITIONER’S REPLY TO PATENT OWNER’S RESPONSE
`
`
`
`
`
`
`
`
`
`
`
`
`1 Case CBM2014-00113 has been consolidated with the instant proceeding.
`
`
`
`___________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`___________________________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`___________________________
`
`Case CBM2014-001121
`Patent 7,942,317 B2
`
`
`
`
`
`
`PETITIONER’S REPLY TO PATENT OWNER’S RESPONSE
`
`
`
`
`
`
`
`
`
`
`
`
`1 Case CBM2014-00113 has been consolidated with the instant proceeding.
`
`
`
`
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`III.
`
`Petitioner’s Response to PO’s Statement of Facts ................................................... 3
`PO Incorrectly Interprets Petitioner’s Proposed Construction of
`“Payment Data” and Ignores the Explicit Teachings of the ’317 Patent ............. 3
`Stefik Renders The Instituted Claims Obvious ........................................................ 5
`A.
`Stefik Discloses or Renders Obvious a “Pointer to a Data Provider”
`and “Resource Locator Identifying a Data Provider” (Claims 1, 6, 7,
`and 16) ................................................................................................................. 5
`Stefik Discloses or Renders Obvious Payment Data (Claims 8, 12,
`13, and 18) ........................................................................................................... 7
`Stefik Discloses or Renders Obvious Providing Data “Responsive
`to Received Payment Data” (Claim 8) and “On Validation of
`Payment Data” (Claims 12 and 13) ................................................................. 9
`IV. Ginter Renders The Instituted Claims Obvious ..................................................... 11
`A.
`Pre-Purchase Processing Does Not Change the Principle of
`Operation of Ginter ........................................................................................ 11
`B. Ginter Discloses Multiple Examples of “Payment Data” ......................... 14
`V. Mr. Wechselberger’s Opinions Are Entitled to Far Greater Weight than
`Dr. Katz’s ...................................................................................................................... 16
`
`B.
`
`C.
`
`
`
`
`
`
`
`
`
`i
`
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Extreme Networks, Inc. v. Enterasys Networks, Inc.,
`395 F. App’x 709 (Fed. Cir. 2010) .....................................................................................16
`
`Flex-Rest LLC v. Steelcase, Inc.,
`455 F.3d 1351 (Fed. Cir. 2006) ..........................................................................................16
`
`In re Ratti,
`270 F.2d 810 (C.C.P.A. 1959) ............................................................................................13
`
`Sundance, Inc. v. DeMonte Fabricating Ltd.,
`550 F.3d 1356 (Fed. Cir. 2008) ....................................................................................16, 17
`
`
`
`
`
`
`
`
`-ii-
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`
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`
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`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
`
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`1015
`
`1016
`
`1017
`
`1018
`
`1019
`
`
`
`
`Exhibit
`
`LIST OF EXHIBITS
`
`Description
`U.S. Patent No. 7,942,317
`
`Plaintiff’s First Amended Complaint
`
`U.S. Patent No.8,118,221
`
`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. 5,754,645
`
`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
`
`U.S. Patent No. 5,629,980
`
`U.S. Patent No. 5,915,019
`
`European Patent Application, Publication No. EP0809221A2
`
`PCT Application Publication No. WO99/43136
`
`JP Patent Application Publication No. H11-164058
`(translation)
`JP Patent Application Publication No. H10-269289
`(translation)
`
`-iii-
`
`
`
`1020
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`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
`
`1028
`
`1029
`
`1030
`
`1031
`
`1032
`
`
`
`
`
`
`
`Eberhard von Faber, Robert Hammelrath, and Peter Heider,
`“The Secure Distribution of Digital Contents,” IEEE (1997)
`Declaration of Anthony J. Wechselberger In Support of
`Apple Inc.’s Petition for Covered Business Method Patent
`Review
`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
`
`U.S. Patent No. 8,033,458
`
`U.S. Patent No. 8,061,598
`
`U.S. Patent No. 8,336,772
`
`File History for U.S. Patent No. 7,334,720
`
`File History for U.S. Patent No. 8,033,458
`
`File History for U.S. Patent No. 8,061,598
`
`Wechselberger Transcript Excerpts
`
`Katz Deposition Transcript
`
`Declaration of Michael P. Duffey
`
`
`
`-iv-
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`
`
`
`
`
`
`Shorthand
`’317 patent
`’235 Stefik
`’980 Stefik
`112 Petition
`113 Petition
`BRI
`Claims
`Decision
`PO
`Poggio
`POSITA
`Resp.
`
`
`GLOSSARY OF ABBREVIATIONS
`
`Description
`United States Patent No. 7,942,317
`United States Patent No. 5,530,235
`United States Patent No. 5,629,980
`Case CBM2014-00112 Petition, Paper 2
`Case CBM2014-00113 Petition, Paper 2
`Broadest Reasonable Interpretation
`Challenged Claims
`Case CBM2014-00112 Institution Decision, Paper 7
`Patent Owner
`EP Patent Application Publication No. 0809221A1
`Person of ordinary skill in the art
`Case CBM 2014-00112 Patent Owner Response, Paper 22
`
`
`
`
`-v-
`
`
`
`PO does not dispute that the hardware and software components recited in the
`
`Claims were well-known in the prior art. Instead, PO’s Response takes a scattershot
`
`approach in criticizing the prior art for not disclosing a specific combination of
`
`known elements. PO’s arguments fail to rebut Petitioner’s evidence of invalidity.
`
`The cited prior art disclosed multiple payment schemes available to a POSITA
`
`that fully satisfy the limitations of the Claims, including schemes in which payment
`
`was made either before, during, or after content was provided to the purchaser. The
`
`cited prior art also disclosed embodiments in which conditions, including fee
`
`conditions, must be satisfied before a user could access digital content. Regardless of
`
`these disclosures, however, requiring successful payment as a condition to providing
`
`digital content would have been a design choice obvious to a POSITA. Even PO’s
`
`own expert, Dr. Jonathan Katz, acknowledged that a POSITA in the prior art time
`
`period would have “understood that payment validation could be made a condition of
`
`providing content that was electronically sold.” Ex. 1031 at 27:4-9.
`
`This is confirmed in the ’317 patent specification itself, which indicates, in
`
`describing PO’s own “invention,” that payment can be validated before or after
`
`content access or usage. Ex. 1001 at 23:2-7. The specification does not describe any
`
`changes that would need to be made to accommodate providing content before or
`
`after payment is validated. Instead, the decision is presented as a mere design choice.
`
`No more detail was needed, as a POSITA would already have been aware of different
`
`
`
`1
`
`
`
`disclosed electronic payment systems and found it obvious to implement such a
`
`system in which payment was confirmed before providing content to the purchaser.
`
`Dr. Katz fails to support PO’s arguments and, in some cases, directly
`
`contradicts PO’s positions. For example, PO’s Response tries to draw a patentable
`
`distinction between processing payment before and after usage, but Dr. Katz admits
`
`that a POSITA would have understood that payment validation could be made a
`
`condition to providing content. Ex. 1031 at 27:4-9. Dr. Katz’s testimony also
`
`undermines PO’s arguments regarding a claimed “pointer” or “resource locator” in
`
`the claims and a POSITA’s understanding of that term. Ex. 1031 at 27:10-28:19.
`
` Dr. Katz’s deposition testimony also demonstrates that his opinions should be
`
`given little or no weight. In addition to failing to meet his own definition of a
`
`POSITA at the priority date of the ’317 patent, Dr. Katz repeatedly testified he is “not
`
`sure” what a POSITA would have understood regarding (1) concepts that were
`
`indisputably in the prior art, (2) specific passages of the cited prior art, and (3) specific
`
`passages of the ’317 patent. See, e.g., Ex. 1031 at 18:1-18:20, 23:2-15, 30:15-19, 31:3-
`
`17, 33:11-34:1, 36:19-37:11, and 38:2-10 (POSITA’s understanding of prior art
`
`concepts); 70:1-73:9 and 126:1-128:11 (POSITA’s understanding of passages of the
`
`cited prior art); 86:4-87:22 and 152:7-156:12 (POSITA’s understanding of passages of
`
`the ’317 patent). Dr. Katz also admitted that his construction of “payment data”
`
`excludes examples in the specification of that term, and that the specification’s
`
`definition aligns with Petitioner’s proposed construction. Ex. 1031 47:22-50:4, 52:25-
`
`
`
`
`-2-
`
`
`
`54:11. His deposition testimony contradicts itself and demonstrates confusion about
`
`what he stated in his own declaration. See, e.g., Ex. 1031 at 138:4-17, 178:4-179:1,
`
`200:22-202:7 (contradictory testimony regarding Poggio’s disclosure of payment
`
`validation data); 190:14-20 (stating that he does not know what “prepurchase
`
`processing,” which is used repeatedly in his own declarations, means).
`
`I.
`
`PETITIONER’S RESPONSE TO PO’S STATEMENT OF FACTS
`
`As to PO’s alleged facts (1) and (2), Petitioner admits that the phrase
`
`“preponderance of the evidence” does not appear in the Wechselberger declarations.
`
`Petitioner otherwise denies these allegations. As to PO’s alleged facts (3)-(5), Ex.2007
`
`is dated September 19, 2012, entitled In-App Purchase Programming Guide, and
`
`includes an Exhibit label. Ex.2008 is dated September 18, 2013, entitled In-App
`
`Purchase Programming Guide, and includes an Exhibit label. Ex.2013 is dated
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`September 18, 2013, entitled Receipt Validation Programming Guide, and includes an
`
`Exhibit label. Petitioner otherwise denies these allegations.
`
`II.
`
`PO INCORRECTLY INTERPRETS PETITIONER’S PROPOSED
`CONSTRUCTION OF “PAYMENT DATA” AND IGNORES THE
`EXPLICIT TEACHINGS OF THE ’317 PATENT
`
`PO incorrectly argues that “payment data” cannot represent past payment
`
`because it is “data that can be used to make payment for content.” Resp. at 8-9. But
`
`the ’317 patent itself explicitly states that “[t]he payment data received may either be
`
`data relating to an actual payment made to the data supplier, or it may be a record of a
`
`payment made to an e-payment system….” Ex. 1001 at 6:57-61 (emphasis added).
`
`
`
`
`-3-
`
`
`
`Thus, as PO’s expert admits, the specification’s description of “payment data”
`
`encompasses data relating to either concurrent or past payment. Ex. 1031 at 52:22-53:9;
`
`53:17-54:11. This is consistent with Petitioner’s proposed construction of “payment
`
`data” (under the BRI in light of the specification) as “data representing payment made for
`
`requested content data,” which includes the same key phrase—“payment made”—
`
`used in the specification’s description of “payment data.” Ex. 1001 at 6:57-61. PO
`
`misrepresents Petitioner’s construction as limited to data representing past payment,
`
`but that characterization ignores what PO’s expert even admits is the grammatical
`
`meaning of “payment made.” See, e.g., Resp. at 8-9; Ex. 1031 at 54:2-11. PO’s
`
`interpretation is inconsistent with both the use of the phrase “payment made” in the
`
`’317 patent and the plain grammatical meaning of that phrase. Ex. 1031 at 52:22-
`
`54:11; 56:14-57:6.
`
`PO’s proposed interpretation of as “data that can be used to make payment for
`
`content” improperly excludes explicit examples of payment data in the ’317 patent itself.
`
`See, e.g., Ex. 1001 at 6:57-61. Dr. Katz’s and PO’s construction does not encompass,
`
`e.g., a “record of a payment made to an e-payment system relating either to a payment
`
`to the data supplier or to a payment to a third party,” Ex. 1001 at 6:57-61, and Dr.
`
`Katz confirmed his construction excludes this example from the specification. Ex. 1031
`
`at 48:8-50:4. Under the BRI consistent with the specification, Petitioner’s construction,
`
`which includes rather than rejects the specification’s description of “payment data”
`
`that PO’s expert admits is excluded by PO’s construction, should be adopted.
`
`
`
`
`-4-
`
`
`
`III.
`
`STEFIK2 RENDERS THE INSTITUTED CLAIMS OBVIOUS
`
`A.
`
`Stefik Discloses or Renders Obvious a “Pointer to a Data
`Provider” and “Resource Locator Identifying a Data Provider”
`(Claims 1, 6, 7, and 16)
`
`In PO’s only argument addressing Stefik in the context of claims 1, 6, 7, and
`
`16, PO admits that Stefik discloses pointers, but erroneously argues that these
`
`pointers do not point to or identify a “data provider for the data item.” See Resp. at
`
`11-13 (“[T]hat cited section also describes ‘a starting address 502 providing the start
`
`address of the first byte of the work’….”; “[T]his is a pointer to the content part itself,
`
`not the claimed ‘data provider for the data item.’”). Both Dr. Katz’s own testimony
`
`and the explicit disclosure of Stefik disprove PO’s argument. Dr. Katz admitted that
`
`a POSITA would have understood that a pointer “points to an address in memory,”
`
`and “could be used to refer to the address of a remote server.” Ex. 1031 at 27:10-
`
`28:19. Thus, a POSITA would have understood that Stefik’s pointers would point to
`
`a memory address that identifies the device (i.e., the data provider) where that content
`
`is stored. See Ex. 1031 at 28:4-19; Ex. 1021 at 55; Ex. 1013 at 7:35-42; see also Ex.
`
`1021 at 54-57. Indeed, this is reflected in Stefik’s disclosure that the pointer includes
`
`a reference to a “unique number assigned to the repository [where the content is
`
`
`2 The ’235 Stefik patent and ’980 Stefik patent are argued in this Reply as an
`
`obviousness combination, and reference is made to the combined disclosure of the
`
`two patents as “Stefik” throughout.
`
`
`
`
`-5-
`
`
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`located] upon manufacture.” Ex. 1013, 8:4-7; Ex. 1014 at 9:62-65; Ex. 1021 at 56.
`
`This pointer in Stefik is both a “pointer to a data provider” and a “resource locator
`
`identifying a data provider” because under the broadest reasonable interpretation, the
`
`“content part”—also referred to as “content storage” or a “contents file”—is a data
`
`provider. See id.; Ex. 1014 at Fig. 12, 14:32-39; Ex. 1021 at 54-57.
`
`To the extent PO contends that a pointer must identify a “data provider” that
`
`is separate from the data access data store where the “pointer” or “resource locator”
`
`are found, PO is also wrong. The ’317 patent’s disclosure of pointers does not limit
`
`pointers to identifying a location separate from the data access data store. See Ex.
`
`1001 at 14:61-65. Moreover, Dr. Katz testified that a pointer would typically refer to
`
`memory “within the same computer”—i.e., for a data access data store, on a location
`
`that is not “separate” from the data access data store. Ex. 1031 at 28:8-30:2. PO’s
`
`argument is also contrary to the ’317 patent’s sole disclosure of a “resource locator,”
`
`which states simply that the data items are “available from the system”—not
`
`necessarily “separate” from the data access data store. See Ex. 1001 at 9:61-66.
`
`Regardless, even under PO’s improperly narrow interpretation, Stefik still
`
`discloses the recited “pointer” and “resource locator.” Stefik discloses that a
`
`repository uses a description file (also referred to as “description tree storage”) as the
`
`recited “data access data store for storing records of data items.” Ex. 1021 at 54-57;
`
`Ex. 1013 at 3:32-38, 6:2-17, 7:35-42; Ex. 1014 at Fig. 12, 9:21-29, 14:28-39. This
`
`description file can be kept on a physically separate device from the content storage
`
`
`
`
`-6-
`
`
`
`where the data items themselves are stored. Ex. 1021 at 54-57; Ex. 1013 at 6:2-17,
`
`7:35-42; Ex. 1014 at Fig. 12, 14:28-39. In this embodiment, Stefik’s “pointer to the
`
`document in the content part” (content storage), would identify both the unique
`
`identifying number for the physically separate storage where the work is stored, and
`
`the “start address of the first byte of the work.” Ex. 1013 at 7:35-42, 7:63-8:10; see also
`
`Ex. 1014 Figs. 7, 12, 9:54-10:1; Ex. 1021 at 54-56. This meets even PO’s improperly
`
`narrow interpretation that requires pointing to a data provider (content
`
`storage/content part) that is physically separate from the data access data store
`
`(description file / description tree storage).
`
`B.
`
`Stefik Discloses or Renders Obvious Payment Data (Claims 8, 12,
`13, and 18)
`
`PO’s only argument regarding Stefik in the context of claim 18 is that the
`
`Petitioner has proposed an incorrect interpretation of “payment data.” See Resp. at
`
`15. And PO’s only argument addressing claims 8, 12, and 13 is a conclusory
`
`characterization of ’980 Stefik’s disclosure of a debit card embodiment as “post-usage
`
`processing” that depends on PO’s improper construction of “payment data.” See
`
`Resp. at 14-15. PO’s arguments are wrong. While, as explained above, PO’s
`
`proposed construction of “payment data” is incorrect, this limitation is nevertheless
`
`met by Stefik under both PO’s and Petitioner’s proposed constructions by at least
`
`Stefik’s disclosure of billing information and credit accounts.
`
`Figure 1 of ’980 Stefik discloses a requesting repository receiving a digital work
`
`
`
`
`-7-
`
`
`
`from a supplying repository with the repositories transmitting payment data to a credit
`
`server. In that transaction, the supplying repository transmits a requested digital work
`
`to the requesting repository. Ex. 1014 at Figure 1, 7:31-33. The repositories then
`
`generate billing information that is transmitted to a credit server. Ex. 1014 at 7:33-36.
`
`The ’980 Stefik specification indicates that such billing transactions were well
`
`understood in the state of the art, and involve sending transaction identifiers,
`
`identities of the repositories and a list of charges. Ex. 1014 at 29:61-62; 30:7-14. The
`
`billing transactions also update balance information and credit limits for debit and
`
`credit cards. Ex. 1014 at 30:25-30. PO does not dispute that the information
`
`exchanged in a billing transaction disclosed in ’980 Stefik includes payment data.
`
`Resp. at 14-15.
`
`PO fails to even address ’235 Stefik, which also discloses payment data. Figure
`
`3 of ’235 Stefik discloses logging in and activating credit accounts before assigning
`
`fees, selecting documents, and confirming a transaction in which fees may be
`
`incurred. Ex. 1013 at 6:60-7:13. At deposition, Dr. Katz did not dispute that ’235
`
`Stefik’s description of logging in to activate credits accounts in Step 302 means that
`
`the user makes available credit accounts for the payment of the fees referenced in the
`
`following Step 303. Ex. 1031 at 61:8-63:11. Instead, he testified that while he was
`
`“not sure” if this reading of Stefik’s disclosure is reasonable, he did not know of any
`
`other way to read it. Id. Dr. Katz also acknowledged that a POSITA would have
`
`understood that the fees for accessing the “desired document” of Step 305 would be
`
`
`
`
`-8-
`
`
`
`paid. Ex. 1031 at 64:22-65:4. Dr. Katz was “not sure” (1) whether a POSITA would
`
`have understood that fees could be assigned to an activated credit account; (2)
`
`whether a POSITA would have understood that a credit card number associated with
`
`an activated account could be payment data; (3) whether a credit card number could
`
`be used to pay for the transaction; or (4) whether a POSITA would have understood
`
`that payment of fees or accessing a document could occur in step 307 of that process.
`
`Ex. 1031 at 70:1-7; 71:12-20; 76:13-77:9. PO’s attorney argument, and Dr. Katz’s
`
`inability to provide any supporting opinions, does not rebut Petitioner’s ample
`
`evidence that it would have been obvious to a POSITA, in view of Stefik’s teachings,
`
`to use the referenced credit account to pay for the transactions in Figure 3.
`
`C.
`
`Stefik Discloses or Renders Obvious Providing Data “Responsive
`to Received Payment Data” (Claim 8) and “On Validation of
`Payment Data” (Claims 12 and 13)
`
`Stefik discloses enforcing conditions before providing a user with requested
`
`content. Examples of such conditions include “fee conditions” that must be satisfied
`
`before retrieving and providing data to a user. Ex. 1014 at Figure 18, 30:61-64.
`
`Checking fee conditions “will initiate various financial transactions between [a]
`
`repository and associated credit server”; “[i]f any financial transaction fails, the
`
`transaction terminates” before providing content to the user. Ex. 1014 at 32:19-26.
`
`Stefik provides additional design options for an electronic payment scheme that
`
`were well understood to a POSITA. Stefik explicitly discloses authorizing and
`
`reconciling transactions either periodically or in real-time against user accounts in a
`
`
`
`
`-9-
`
`
`
`debit card embodiment. Ex. 1014 at 17:21-33. PO’s conclusory argument that
`
`Stefik’s disclosure of a “debit card” transaction occurring in “real-time” against a user
`
`account is “post-usage processing” is wrong and lacks support from even PO’s own
`
`expert. See Resp. at 15-16. A debit transaction is settled against a user account in real-
`
`time as the transaction occurs. Ex. 1014 at 17:31-33. Mr. Wechselberger testified that
`
`it would have been obvious for a credit server operating in a real-time debit
`
`transaction to validate payment data. Ex. 2025 at 166:11-167:22. And Dr. Katz
`
`testified that this credit server would “directly” request money from a user account to
`
`effectuate payment in real-time. Ex. 1031 at 82:6-83:20. Both Dr. Katz’s and Mr.
`
`Wechselberger’s testimony confirm that a POSITA would have understood that this
`
`’980 Stefik debit transaction is reconciled as it is reported to the credit server and not
`
`at a later time. Based on Stefik’s disclosure, a POSITA would have at least found it
`
`obvious to perform billing and payment, including validating payment data, before
`
`providing content.
`
`Moreover, even apart from Stefik’s disclosures, Dr. Katz confirmed a POSITA
`
`would already have understood that payment validation could be made a condition of
`
`providing content that was electronically sold. Ex. 1031 at 27:4-9. The ’317 patent
`
`discloses that in embodiments where payment is made directly to a system owner,
`
`“either concurrently with the content access and download process, or at some later
`
`stage,” payment data may be verified with an e-payment system. Ex. 1001 at 23:2-7.
`
`These alternate embodiments reflect a mere design choice in the relative timing of (A)
`
`
`
`
`-10-
`
`
`
`content access and download and (B) payment verification steps. Dr. Katz testified
`
`that a POSITA would have understood “payment verification” to mean the same
`
`thing as the claimed “payment validation,” and that he was not aware of anything in
`
`the prior art time period that would hinder a POSITA from implementing either of
`
`these two embodiments. Ex. 1031 at 105:18-106:6, 114:3-11. He also could not
`
`identify anything in the ’317 patent describing changes to the system required to
`
`switch between these two embodiments. Ex. 1031 at 115:20-116:13. The choice
`
`between validating payment before or after providing content is a simple design
`
`choice, and a POSITA would have found it obvious to implement either approach.
`
`See 112 Petition at 41-46.
`
`IV. GINTER RENDERS THE INSTITUTED CLAIMS OBVIOUS
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`The 113 Petition proposed the same construction of “payment data” proposed
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`in the 112 Petition. 113 Petition, 22-23. While Petitioner disagrees with PO’s
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`proposed construction, as discussed supra, this limitation is nevertheless disclosed by
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`Ginter under either interpretation.
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`A.
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`Pre-Purchase Processing Does Not Change the Principle of
`Operation of Ginter
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`Many of PO’s arguments surrounding payment in Ginter focus on the
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`supposed difference between what PO calls “post-usage tracking” and “pre-purchase
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`processing.” But PO’s argument that changing from post-usage to pre-purchase
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`processing would change the principle upon which Ginter works (see Resp. at 19-20) is
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`
`
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`-11-
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`
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`contradicted by Dr. Katz’s own testimony, the teaching of the ’317 patent itself, the
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`disclosure of Ginter, and the knowledge of a POSITA.
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`To begin with, the phrases “post-usage tracking” and “pre-purchase
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`processing” do not appear anywhere in the Ginter patent; rather, they are used by PO
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`and Dr. Katz to characterize various disclosures of Ginter. Resp. at 19-20; Ex. 2031
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`¶¶ 28-30. But Dr. Katz was openly confused about his own characterizations: he was,
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`for example, “not sure” whether various payment-related disclosures in Ginter would
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`qualify as pre-purchase processing. Ex. 1031 at 126:1-6; 127:10-128:11. And when
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`questioned by his own counsel, Dr. Katz testified that he did not even know what the
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`phrase “prepurchase processing” meant, even though it is used multiple times in his own
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`sworn declaration’s discussions of Ginter. Ex. 1031 at 190:14-20.
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`As discussed supra in section III.C., the ’317 patent discloses two alternate
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`embodiments that describe a mere design choice in the relative timing of (A) content
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`access and download and (B) payment verification steps. Dr. Katz’s own testimony
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`supports a finding that a POSITA would not have been hindered from implementing
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`either of the two embodiments (Ex. 1031 at 114:3-11) and that the ’317 patent itself
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`does not explain any changes needed to switch the system between those
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`embodiments (Ex. 1031 at 114:12-116:13). Dr. Katz even admitted without
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`reservation that a POSITA in the prior art time period would have understood that
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`payment validation could be made a condition of providing content that was
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`electronically sold. Ex. 1031 at 27:4-9.
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`
`
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`-12-
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`
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`In addition to disclosing multiple forms of payment and payment methods,
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`which a POSITA would have understood could be selected and combined, Ginter
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`expressly discloses “prepayments, credits, [and] real-time debits.” Ex. 1015 at 63:34-
`
`41. Thus, Ginter itself expressly teaches that its system may support approaches in which payment
`
`is made before content access or usage is allowed. But Dr. Katz testified he did not remember
`
`if he even knew before signing his declaration that Ginter disclosed prepayments. Ex.
`
`1031 at 119:18-21. Dr. Katz also testified he was not sure whether “[e]nsuring that
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`sufficient credit from an authorized source is available before allowing a transaction to
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`proceed,” “prepayments,” “realtime electronic debits from bank accounts,” or “VDE
`
`node currency token deposit accounts” disclosed in Ginter are examples of what he
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`terms “prepurchase processing.” Ex. 1031 at 126:1-6, 127:10-128:11. Dr. Katz was
`
`thus unable to explain how these relevant disclosures in Ginter relate to his opinion
`
`on supposedly changing Ginter’s principle of operation, and his opinion that a
`
`POSITA would not have changed that principle is therefore entitled to no weight.
`
`PO’s argument also misapplies the legal principle upon which it purports to
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`rely. The lone support PO cites is a case addressing a combination of two references
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`asserted to show obviousness. See In re Ratti, 270 F.2d 810 (C.C.P.A. 1959). In that
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`case, modifying the first reference with the second impermissibly changed the first
`
`reference’s principle of operation. Id. at 981. In contrast, Petitioner here does not
`
`propose combining separate references at all, but instead cites disclosures within
`
`Ginter itself. PO essentially argues that Ginter changes its own principle of operation—an
`
`
`
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`-13-
`
`
`
`argument that is devoid of legal support and should be rejected. Coupled with
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`Ginter’s disclosure of flexibility in the devices used to implement the system and Dr.
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`Katz’s admission that a POSITA would have understood implementing payment
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`validation as a condition to providing content (see Ex. 1031 at 27:4-9), Ginter’s
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`embodiments demonstrate the obviousness of the claimed payment steps.
`
`B.
`
`Ginter Discloses Multiple Examples of “Payment Data”
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`PO wrongly asserts audit information in Ginter cannot be “payment data”
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`because “audit information is for tracking post-usage information….” Resp. at 19; see
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`also Ex. 1015 at 161:65-162:3. As demonstrated by Petitioner (e.g., 113 Petition 52-53),
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`Ginter discloses that audit information is also used to process payment, confirming it
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`is indisputably “payment data,” and PO’s position to the contrary flies in the face of
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`examples throughout Ginter:
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` Ginter discloses packaging audit information in administrative requests sent to
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`a content provider or financial provider (Ex. 1015 at Figure 44A, 179:27-36),
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`including a request to perform electronic funds transfers against a user’s bank
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`account or some other bank account (Ex. 1015 at Figure 44B, 179:57-60).
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` Ginter discloses an “auditor (receiver of audit information)” passing
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`acknowledgement back to a user that audit information has been received or
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`“recognized.” Ex. 1015 at 270:19-22. The auditor responds to the user, and
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`that response may be delayed to first allow “processing of the audit trail and/or
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`
`
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`-14-
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`
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`payment by a user to an auditor or other party.” Ex. 1015 at 270:33-36
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`(emphasis added).
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` Ginter discloses a VDE repository performing services for usage information
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`reported by VDE users, including analyzing such usage information, creating
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`reports, and collecting payments. Ex. 1015 at 281:37-39.
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`In addition to billing based on audit information, Ginter discloses multiple
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`other examples of payment methods that use payment data. 113 Petition at 44-46.
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`For example, Ginter discloses a processing unit of a VDE appliance performing
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`payment for VDE objects using “prepayments, credits, real-time electronic debits
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`from bank accounts and/or VDE node currency token deposit accounts.” Ex. 1015
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`at 63:37-40. While PO argues that such real-time debits relate to paying for previous
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`usage of VDE objects, PO does not provide any support for that characterization,
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`and indeed a POSITA would have appreciated that a real-time debit could also be
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`used in pre-usage transactions, and indeed a POSITA would have appreciated that it
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`could. Resp. at 19-20. PO does not address use of any of the disclosed payment
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`forms other than real-time debits, for example prepayment. Dr. Katz testified that he
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`could not remember whether, before signing his declaration in this matter, he had
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`been aware that Ginter disclosed prepayment to pay for VDE objects. Ex. 1031 at
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`119:18-21.
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`These examples illustrate Ginter’s ample disclosure of payment methods and
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`payment data used in those methods. PO’s erroneous arguments focus only on the
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`-15-
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`
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`“audit information” cited in the 113 Petition, and either ignore or fail to fully address
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`the additional cited methods, such as credit, debit, and prepayment transactions.
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`V. MR. WECHSELBERGER’S OPINIONS ARE ENTITLED TO FAR
`GREATER WEIGHT THAN DR. KATZ’S
`
`Dr. Katz’s unsupported opinions, to the extent that they are given any weight
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`at all, should be given far less weight than Mr. Wechselberger’s. Dr. Katz’s degrees in
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`chemistry and mathematics at the time of the invention did not qualify him as a
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`POSITA under either party’s definition. See Ex. 2031 App’x A; Extreme Networks, Inc.
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`v. Enterasys Networks, Inc., 395 F. App’x 709, 715 (Fed. Cir. 2010) (opinion from expert
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`who was not a POSITA was properly excluded). PO cannot reasonably dispute that,
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`at the priority date, Dr. Katz met neither Petitioner’s nor even Dr. Katz’s own
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`definition of a POSITA—a person with “a bachelor’s degree in electrical engineering
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`or its equivalent, or at least 5 years of experience in manufacturing or engineering, with
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`significant exposure to the digital content distribution and/or e-commerce industries.” See Ex. 2031
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`¶ 9 (emphasis added); 112 Petition at 2 n.2. Dr. Katz testified at deposition that, at
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`the priority date, he had, at most, just over one year of classes relating to computer
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`science and a few months’ experience as a security consultant. See Ex. 1031 at 183:20-
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`185:17; Ex. 2031 at App’x A; Extreme Networks, 395 F. App’x at 715 (“General
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`experience in a related field may not suffice when experience and skill in [the specific
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`art] are necessary to resolve patent issues.” citing Flex-Rest, LLC v. Steelcase, Inc., 455
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`F.3d 1351, 1360-61 (Fed. Cir. 2006)); Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d
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`-16-
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`1356, 1364 (Fed. Cir. 2008) (invalidity opinions from a witness w
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