IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
` Covered Business Method Patent Review
`United States Patent No. 7,942,317
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-812
`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
`
`
`
`
`
`
`
` Covered Business Method Patent Review
`United States Patent No. 7,942,317
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-812
`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
`
`
`
`
`
`
`
`
`
` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`
`TABLE OF CONTENTS
`
`INTRODUCTION ....................................................................................................... 1
`I.
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 4
`III. PETITIONER HAS STANDING .......................................................................... 13
`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 ............................ 21
`A.
`Claim Construction .......................................................................................... 22
`B.
`The Challenged Claims Are Invalid Under § 103 ....................................... 26
`1.
`Overview of Ginter .............................................................................. 26
`2. Motivation to Combine Ginter with Poggio.................................... 29
`3. Motivation to Combine Ginter with Stefik ...................................... 33
`4. Motivation to Combine Ginter with Poggio and Stefik ................. 37
`5. Motivation to Combine Ginter with Sato ........................................ 38
`6.
`Claims 1, 6-7, 8, 12-14, 16, and 18 are Obvious in Light of
`Ginter (Ground 1) and Obvious in Light of Ginter in View
`of Poggio (Ground 2); and Claims 12-14 are Obvious in
`Light of Ginter in View of Stefik (Ground 3), Obvious in
`Light of Ginter in View of Stefik and Poggio (Ground 4),
`and Obvious in Light of Ginter in View of Sato (Ground 5) ....... 40
`CONCLUSION........................................................................................................... 78
`
`V.
`
`
`ii
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`
`
`
`EXHIBIT LIST
`1101
`
`1102
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`1103
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`1104
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`1105
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`1106
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`1107
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`1108
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`1109
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`1110
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`1111
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`1112
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`1113
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`1114
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`1115
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`1116
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`1117
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`1118
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`1119
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`1120
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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
`
`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. 5,754,654
`
`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
`
`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
`
`iii
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`
`
`EXHIBIT LIST
`
`1121
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`1122
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`1123
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`1124
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`1125
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`1126
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`1127
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`1128
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`1129
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` Covered Business Method Patent Review
`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
`
`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
`
`iv
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`
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
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`I.
`
`INTRODUCTION
`
`Pursuant to 35 U.S.C. § 321 and 37 C.F.R. § 42.304, the undersigned, on behalf
`
`of and acting in a representative capacity for Apple Inc. (“Petitioner” and the real par-
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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.
`
`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. § 103.1 Petitioner has concurrently filed a Petition seeking CBM re-
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`view of the ’317 patent, requesting judgment against these same claims under based
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`on different prior art. The Director, pursuant to Rule 325(c), may determine that mer-
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`ger, 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. 1101 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
`
`
`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. 1101. 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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`1101 5:4-7 (“the purchase outright option may be equivalent to the purchase of a compact
`
`
`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. 1121 ¶ 28.
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`2
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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. 1101 at 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. 1101 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 generic
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`“data supply computer system,” “electronic payment system,” “data access terminal,”
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`and “data carrier,” all of which were well-known, as discussed infra in II, IV.B.
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`3
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`United States Patent No. 7,942,317
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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. § 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 would have been well-known to a POSITA, and their combination as
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`claimed also would have been well-known or at minimum obvious to a POSITA. See,
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`e.g., Ex. 1121 § V. For example, nearly a decade earlier, on March 12, 1991, U.S. Pa-
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`tent No. 4,999,806 (“Chernow”), entitled “Software Distribution System,” issued. See
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`Ex. 1106 (filed September 4, 1987). Chernow discloses a system and method for the
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`sale and distribution of digital products by telephone, with a focus on software, and
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`also discloses content protection for those digital products. See, e.g., id. Abstract (“A
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`central station distributes software by telephone. The central station accepts credit
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`card information, transmits an acceptance code to a caller and then terminates the call.
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`After verifying the credit card information, the station calls the purchaser back and continues
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`with the transaction only after receiving the acceptance code.”); 1:67-2:9 (“It is an object of this
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`invention to provide a means for selling and distributing protected software using
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`standard telephone lines for transferring the software from the seller to the purchaser.
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`Another object of this invention is to permit the purchaser to rent the protected soft-
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`ware for a period of time after which it will self destruct. Another object of this inven-
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`tion is to permit the purchaser to rent the protected software for a specific number of
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`runs which would be useful, e.g., if the software were a game.”). As illustrated above,
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`Chernow discloses making different types of access available, such as purchase versus
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`rental. Further, Chernow discloses a Control Transfer Program and a Primary Protec-
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`tion Program that ensure the computer receiving a downloaded program does not
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`have another program present that could create unauthorized copies of that down-
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`loaded program. See Ex. 1106 Abstract (“The central station then transmits a Control
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`Transfer Program and Initialization Program to the purchaser, and the purchaser exe-
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`cutes the Initialization Program to turn over control of the purchaser computer to the
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`central station. The Control Transfer Program is then executed to transfer first a Pro-
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`tection program for ensuring that no memory resident copying programs are running,
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`than [sic] a Storing Program for modifying the purchased program for storage at the
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`purchaser computer, and finally the requested program itself.”); see also id. 2:65-3:23.
`
`In April, 1992, U.S. Patent No. 5,103,392 (“Mori”), entitled “System for Stor-
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`ing History of Use of Programs Including User Credit Data and Having Access by the
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`Proprietor,” issued. See Ex. 1112 (filed on December 5, 1990). Mori discloses storing
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`information about customer use of digital products so that a customer can be charged
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`according to its use. See, e.g., id. 1:64-2:17:
`
`In accordance with a fundamental aspect of the present invention, there
`is provided a system for storing data on the history of use of programs,
`including a data processing apparatus used by a user and program stor-
`age means for storing a program acquired from a proprietor and pro-
`gram-specific data. The data processing apparatus includes user-specific
`credit data storage means for storing data identifying the user of the data
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`5
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`processing apparatus and indicating credit for payment capacity, use time
`length, or the like of the user of the data processing apparatus. Also in-
`cluded is use decision means for determining permission to use the program on
`the data processing apparatus on the basis of program-specific data supplied
`from the program storage means or user-specific credit data supplied from
`the user-specific credit data storage means, the use decision means deliv-
`ering either an affirmative or negative signal corresponding to results of
`the decision. Also included is program use history storage means con-
`nected to the use decision means for storing program use history data
`derived from the program-specific data or the user-specific credit data.
`Mori’s emphasis on determining whether a user has permission to access a program
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`and making sure program providers are compensated for the use of their programs
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`underscores this existing focus in the art on digital rights management (“DRM”), over
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`eight years before Smartflash’s claimed October 25, 1999 priority date.
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`Another prior art example of a secure content distribution system with content
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`protection is EP0809221A2 (“Poggio”), entitled “Virtual vending system and method
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`for managing the distribution, licensing and rental of electronic data.” See Ex. 1116.
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`Poggio—published on November 26, 1997—discloses a “virtual vending machine”
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`system for the sale and distribution of digital products. See, e.g., id. Abstract (“A virtu-
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`al vending machine manages a comprehensive vending service for the distribution of
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`licensed electronic data (i.e., products) over a distributed computer system. . . . The
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`virtual vending machine distributes licenses for the electronic data for the complete
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`product or for components thereof and for a variety of time frames, including perma-
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`nent licenses and rental period licenses. The virtual vending machine provides client
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`computers with the capability to obtain information regarding the available products
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`and the associated license fees and rental periods, to receive the product upon receipt of a cor-
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`responding electronic payment, and to reload the product during the term of the license.”). Like
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`Chernow, Poggio discloses different types of access, including rentals, and re-
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`download capabilities for already-purchased content. See, e.g., id.
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`Also in 1997—the same year Poggio was published—IEEE published “The
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`Secure Distribution of Digital Contents,” (“von Faber”). See Ex. 1120. In its intro-
`
`duction, von Faber made the well-known observation that “[e]lectronic commerce
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`systems dealing with the distribution of digital contents like software or multimedia
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`data 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. at 7. Von Faber proposes a system where
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`customers purchase keys required to utilize distributed encrypted content. See, e.g., id.
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`(“The basic idea of one possible solution is to distribute the contents in encrypted form, and to
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`have the customer pay for the key which he needs to transform the encrypted content in an usable form.
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`The security problem can in this way be transformed into a problem of key distribu-
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`tion.”); id. at 8 (“The Content Provider provides digital contents in encrypted form
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`being distributed by the Content Distributor. The Key Management System holds the
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`keys for the contents to be decrypted. The Authorisation System permits the distribution
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`of the appropriate key after settling of the fees payable by the Customer, who will enjoy the de-
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`7
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`crypted digital contents. The role of the Content Distributor is not essential for the
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`subsequent discussion but, of course, for the business to take place.”); see also id. at Fig.
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`1. Von Faber also notes that its system could be used with a variety of known con-
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`tent distribution and payment methods. See, e.g., id. at 13 (“The outlined system has
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`the following characteristics: Different methods can be used to distribute the encrypt-
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`ed contents (standard techniques). This includes broadcasting, point-to-point net-
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`working, as well as offering disks. Different electronic payment methods can be inte-
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`grated independent from the number of protocol steps needed. This includes credit
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`card based systems as well as electronic purses. This flexibility leads to the fact that
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`totally different authorisation methods can be integrated.”). Von Faber further ad-
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`dressed the known issue of payment distribution to content providers. See, e.g., id. at
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`13 (“The system will support re-selling in a simple way. Re-sellers can integrate other
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`manufacturer’s products into own packages without the need of signing any extra
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`contract. The system automatically divides the package price (payments) and guaran-
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`tees that the money is transferred to each Content Provider whose product has been
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`integrated into the package.”).
`
`Also in 1997, the second of two Stefik patents—one which incorporates an ear-
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`lier patent by reference—issued. U.S. Patent No. 5,530,235, entitled “Interactive
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`Contents Revealing Storage Device,” filed February 16, 1995 and issued June 25, 1996
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`(“Stefik ’235”), incorporates by reference U.S. Patent No. 5,629,980, entitled “System
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`for Controlling the Distribution and Use of Digital Works,” filed November 23, 1994
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`and issued May 13, 1997 (“Stefik ’980”). See Ex. 1113 2:48-53 (“The currently pre-
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`ferred embodiment of a DocuCard is an instance of a repository, as defined in co-
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`pending application entitled ‘System for Controlling the Distribution and Use of Digi-
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`tal Works,’. . . which is herein incorporated by reference.”). Stefik ’235 and Stefik ’980 will be
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`referred to collectively herein as “Stefik.”4
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`Stefik discloses “[a] Document Card (DocuCard) for storing documents and
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`4 Because Stefik ’235 incorporates Stefik ’980 by reference, they should be considered
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`a single reference. For clarity in citing to disclosures, however, separate citations are
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`provided to the Stefik ’235 and Stefik ’980 Exhibits (Exs. 1113 and 1114, respectively).
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`To the extent Stefik ’235 (Ex. 1113) and Stefik ’980 (Ex. 1114) are argued to be sepa-
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`rate references, there is explicit motivation to implement the repository disclosed by
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`Stefik ’980 using the Document Card (DocuCard) of Stefik ’235. See, e.g., Ex. 1113
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`2:47-52 (“The currently preferred embodiment of a DocuCard is an instance of a re-
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`pository, as defined in co-pending application entitled ‘System for Controlling the
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`Distribution and Use of Digital Works’, serial number not yet assigned, which is as-
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`signed to the assignee of the present invention and which is herein incorporated by
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`reference.”); Ex. 1114 16:56-58 (“For example, the repository could be embedded in a
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`‘card’ that is inserted into an available slot in a computer system.”); See also, e.g., Ex.
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`1121 ¶ 43.
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`which is content revealing. The DocuCard is a transportable unit having a nonvolatile
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`storage means for storing information in a digital form, a control processor for pro-
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`cessing user initiated functions; an I/O port for interfacing to external devices for
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`reading and writing digital information, and a user interface for allowing a user to di-
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`rectly interact with the DocuCard.” See, e.g., Ex. 1113 Abstract; see also, e.g., Ex. 1114
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`Abstract (“Digital work playback devices, coupled to the repository containing the
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`work, are used to play, display or print the work.”).
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`Stefik also discloses a broader framework within which the DocuCard is used,
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`including the protection of content with “usage rights.” See, e.g., Ex. 1114 Abstract
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`(“A system for controlling use and distribution of digital works. In the present inven-
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`tion, the owner of a digital work attaches usage rights to that work.”); Ex. 1114 Ab-
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`stract (“Usage rights are granted by the ‘owner’ of a digital work to ‘buyers’ of the dig-
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`ital work. The usage rights define how a digital work may be used and further distrib-
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`uted by the buyer. Each right has associated with it certain optional specifications
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`which outline the conditions and fees upon which the right may be exercised.”). Stef-
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`ik’s digital works are stored in a “repository” that processes requests for access—
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`including for such actions as utilizing content (viewing, executing, or printing) or
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`transporting content (copying, borrowing, or transferring)—and evaluates the relevant
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`usage rights to determine whether such access is permitted. See, e.g., id. Abstract
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`(“Digital works are stored in a repository. A repository will process each request to
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`access a digital work by examining the corresponding usage rights . . . Access to digital
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`works for the purposes of transporting between repositories (e.g. copying, borrowing
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`or transfer) is carried out using a digital work transport protocol. Access to digital
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`works for the purposes of replay by a digital work playback device (e.g. printing, dis-
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`playing or executing) is carried out using a digital work playback protocol.”).
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`Storage and utilization of content stored on portable devices, including mobile
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`communication devices such as cellular phones, was also well-known before Smart-
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`flash’s claimed October 25, 1999 priority date. As one example, PCT Application
`
`Publication No. WO 99/43136 (“Rydbeck”) published on August 26, 1999. See Ex.
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`1117. Rydbeck discloses a cellular phone as a user device for storing digital content in
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`non-volatile memory and accessing that content. See, e.g., id. 5 (“Because of its integra-
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`tion into the cellular phone, the digital entertainment module can share components
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`already present in the cellular phone. Such savings would not be available if a CD
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`player were simply aggregated with the phone. Further, the use of solid state RAM or
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`ROM, as opposed to disc storage, eliminates the need for bounce control circuitry.
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`This enables the disclosed invention to provide cellular communications and enter-
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`tainment during leisure activities.”). In addition, JP Patent Application Publication
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`No. H11-164058 (“Sato”), entitled “Portable Music Selection and Viewing System”
`
`and published June 18, 1999, discloses storing media content onto mobile user devic-
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`es and playing the media content from these mobile devices. Sato further discloses
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`storing that media content on a removable IC card. See, e.g., Ex. 1118 ¶ 9 (“The port-
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`able music selection and viewing device 70 provides a removable storage device 76 on a
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`main body 71. This storage device 76 is a memory card similar to, for example, a mag-
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`netic card, a magnetic tape, a CD, a DVD, or an IC card. The user, after downloading
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`the music software to the storage device (medium) 76 of the portable music selection
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`and viewing device 70 by operating the push buttons or the like on the main body 71,
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`can enjoy this music software on a display 72 or a receiver 74 of the portable music
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`selection and viewing device 70, and can also enjoy higher quality music playback by
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`removing this storage device (medium) and inserting it into another audio unit. Further, the user
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`can store the music software from another audio unit into the storage device 76 and
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`enjoy music by inserting this storage unit 76 into this portable music selection and
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`viewing device 70.”); ¶ 13 (“A music storage device 240 connected to the music con-
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`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 Section IV.B (including the primary prior art Ginter patent) illustrate, the prior art
`
`was rife with awareness and discussion of the same supposed “invention” now me-
`
`morialized in the challenged claims of the ’317 patent. Long before the ’317 Patent’s
`
`first purported October 25, 1999 priority date, disclosures abounded of the very fea-
`
`12
`
`
`
` Covered Business Method Patent Review
`United States Patent No. 7,942,317
`
`tures that Smartflash now seeks to claim as its exclusive property. As outlined in more
`
`detail below, the challenged claims are therefore invalid under § 103.
`
`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
`
`42.304(a). The ’317 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
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`patent. See CBM 2012-00001, Doc. 36 at 26; 77 Fed. Reg. 48,709 (Aug. 14, 2012). Ac-
`
`cordingly, Petitioner addresses here exemplary claim 18:5
`
`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
`
`5 See also, e.g., Ex. 1101, claim 8 (“8. 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; reading the re-
`
`quested data from a content provider responsive to the received payment data; and
`
`transmitting the read data to the requester.”); claims 12, 16.
`
`13
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`
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
`
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`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
`
`include 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 comple-
`
`mentary to a financial activity.’” 77 Fed. Reg. 48,734-35 (Aug. 13, 2012) (citing 157 Cong.
`
`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. This Board previously found, e.g., that a
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`claim for “transferring money electronically via a telecommunication line to the first
`
`party . . . from the second party” met the financial product or service requirement,
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`concluding that “the electronic transfer of money is a financial activity, and allowing such a trans-
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`fer amounts to providing a financial service.”6 CBM2013-00020, Paper 14 at 11-12. See also,
`
`
`6 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
`
`14
`
`
`
`e.g., CBM2013-00017, Paper 8 at 5-6 (qualification as CBM patent based on specifica-
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
`
`
`tion’s reference to e-commerce and fact that a POSITA “would have understood that [one
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`of the claim limitations] may be associated with financial services”).
`
`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. 1101
`
`2:12-15. Indeed, in seeking to enforce the ’317 Patent in litigation, Smartflash itself
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`conceded that the alleged invention relates to a financial activity or transaction, stating
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`that “[t]he patents-in-suit generally cover a portable data carrier for storing data and
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`managing access to the data via payment information and/or use status rules. The pa-
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`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.
`
`The ’317 patent generally describes the invention as follows (Ex. 1101 1:55-63):
`
`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-
`
`
`first party to a second memory of a second party comprising the steps of: transferring
`
`money electronically . . . connecting electronically via a telecommunications line . . .
`
`transmitting the desired signal . . . and storing the digital signal.” See CBM2013-00020,
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`paper 14 at 10-17.
`
`15
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` Covered Business Method Patent Review
`United States Patent No. 7,942,317
`
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`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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`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. 1101. In addition, Figs.
`
`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
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