Trials@uspto.gov
`Tel: 571-272-7822
`
`
`
`
`
`Paper 9
`Entered: April 2, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`SAMSUNG ELECTRONICS AMERICA, INC. and
`SAMSUNG ELECTRONICS CO., LTD.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2014-00190
`Patent 7,334,720 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, GREGG I. ANDERSON,
`MATTHEW R. CLEMENTS, and PETER P. CHEN,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`Tel: 571-272-7822
`
`
`
`
`
`Paper 9
`Entered: April 2, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`SAMSUNG ELECTRONICS AMERICA, INC. and
`SAMSUNG ELECTRONICS CO., LTD.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2014-00190
`Patent 7,334,720 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, GREGG I. ANDERSON,
`MATTHEW R. CLEMENTS, and PETER P. CHEN,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`CBM2014-00190
`Patent 7,334,720 B2
`
`INTRODUCTION
`
`A. Background
`Petitioner, Samsung Electronics America, Inc. and Samsung
`Electronics Co., Ltd. (collectively “Samsung”)1, filed a Corrected Petition
`(Paper 4, “Pet.”) to institute a covered business method patent review of
`claims 13 and 14 (“the challenged claims”) of US Patent No. 7,334,720 B2
`(Ex. 1001, “the ’720 patent”) pursuant to § 18 of the Leahy-Smith America
`Invents Act (“AIA”).2 Patent Owner, Smartflash LLC (“Smartflash”), filed
`a Preliminary Response (Paper 7, “Prelim. Resp.”).
`We have jurisdiction under 35 U.S.C. § 324, which provides that a
`covered business method patent review may not be instituted “unless . . . it is
`more likely than not that at least 1 of the claims challenged in the petition is
`unpatentable.”
`
`
`1 Samsung provided in its updated mandatory notice that “Samsung
`Electronics America, Inc., and Samsung Electronics Co.,
`Ltd. are now the real-parties-in-interest in this Covered Business Method
`Review. Samsung Telecommunications America, LLC, (“STA”) originally
`a Petitioner and real-party-in-interest at the time of filing the Petition
`requesting Covered Business Method Review, has merged with and into
`Petitioner Samsung Electronics America, Inc. as of January 1, 2015, and
`therefore STA no longer exists as a separate corporate entity.” Paper 8, 1.
`2 Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011)
`
`2
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`CBM2014-00190
`Patent 7,334,720 B2
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`B. Asserted Grounds
`Samsung contends that the challenged claims are unpatentable under
`35 U.S.C. §§ 101 and/or 103 based on the following grounds (Pet. 3).
`
`References
`
`Not applicable
`Gruse,3 Stefik ’235,4 and
`Stefik ’98056
`
`Basis
`
`§ 101
`
`§ 103
`
`Claims Challenged
`
`13 and 14
`
`13 and 14
`
`Samsung also provides a declaration from Jeffrey A. Bloom, Ph.D. Ex.
`1003.
`
`After considering the Petition and Preliminary Response, we
`determine that the ’720 patent is a covered business method patent. We
`further determine that Samsung has demonstrated that it is more likely than
`not that at least one of the challenged claims is unpatentable. Therefore, we
`institute a covered business method patent review of claims 13 and 14 of the
`’720 patent.
`
`
`3 PCT Publication No. WO 00/08909 (Ex. 1006)
`4 US Patent No. 5,530,235 (“Stefik ’235”) (Ex. 1004).
`5 US Patent No. 5,629,980 (“Stefik ’980”) (Ex. 1005).
`6 Samsung refers to Stefik ’235 and Stefik ’980 collectively as “Stefik”
`because, according to Samsung, Stefik ’235 incorporates Stefik ’980 by
`reference. Pet. 42–43. Smartflash disagrees. Prelim. Resp. 15–18. Based
`our determination below, we need not address this issue, but for purposes of
`this decision, we adopt the convention of referring to the combination of
`both references as “Stefik.”
`
`3
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`Patent 7,334,720 B2
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`C. Related Matters
`Samsung indicates that the ’720 patent is the subject of the following
`co-pending district court cases: Smartflash LLC v. Apple Inc., Case No.
`6:13-cv-447 (E.D. Tex.); and Smartflash LLC v. Samsung Electronics Co.,
`Case No. 6:13-cv-448 (E.D. Tex.). Pet. 1; Paper 5, 2–3. Patent Owner
`asserts that patents claiming priority back to a common series of applications
`are currently the subject of CBM2014-00102, CBM2014-00106, and
`CBM2014-00108, filed by Apple Inc. See Paper 5, 2.
`Samsung filed a concurrent petition for covered business method
`patent review of the ’720 patent: CBM2014-00196.7 In addition, Samsung
`filed eight other Petitions for covered business method patent review
`challenging claims of other patents owned by Smartflash and disclosing
`similar subject matter: CBM2014-00192; CBM2014-00193;
`CBM2014-00194; CBM2014-00197; CBM2014-00198; CBM2014-00199;
`CBM2014-00200; and CBM2014-00204. Paper 5, 2
`
`D. The ’720 Patent
`The ’720 patent relates to “a portable data carrier for storing and
`paying for data and to computer systems for providing access to data to be
`stored” and the “corresponding methods and computer programs.”
`Ex. 1001, 1:6–10. Owners of proprietary data, especially audio recordings,
`
`
`7 Smartflash argues that the multiple petitions filed against the ’720 patent
`violate the page limit requirement of 37 C.F.R. § 42.24(a)(iii), but does not
`cite any authority to support its position. Prelim. Resp. 9–12. The page
`limit for petitions requesting covered business method patent review is 80
`pages (37 C.F.R. § 42.24(a)(iii)), and each of the ’190 and ’196 Petitions
`meets that requirement.
`
`
`4
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`CBM2014-00190
`Patent 7,334,720 B2
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`have an urgent need to address the prevalence of “data pirates,” who make
`proprietary data available over the Internet without authorization. Id. at
`1:15–41. The ’720 patent describes providing portable data storage together
`with a means for conditioning access to that data upon validated payment.
`Id. at 1:46–62. According to the ’720 patent, this combination of the
`payment validation means with the data storage means allows data owners to
`make their data available over the Internet without fear of data pirates. Id. at
`1:62–2:3.
`As described, the portable data storage device is connected to a
`terminal for Internet access. Id. at 1:46–55. The terminal reads payment
`information, validates that information, and downloads data into the portable
`storage device from a data supplier. Id. The data on the portable storage
`device can be retrieved and output from a mobile device. Id. at 1:56–59.
`The ’720 patent makes clear that the actual implementation of these
`components is not critical, and the alleged invention may be implemented in
`many ways. See, e.g., id. at 26:13–16 (“The skilled person will understand
`that many variants to the system are possible and the invention is not limited
`to the described embodiments.”).
`
`E. Challenged Claims
`Samsung challenges claims 13 and 14 of the ’720 patent. Claim 13
`depends from independent claim 3, which is not explicitly challenged in this
`proceeding, and claim 14 is independent. Claims 3 and 14 are illustrative of
`the claims at issue and recite the following.
`3.
`A data access terminal for retrieving data from a data supplier
`and providing the retrieved data to a data carrier, the terminal
`comprising:
`a first interface for communicating with the data supplier;
`
`5
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`CBM2014-00190
`Patent 7,334,720 B2
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`a data carrier interface for interfacing with the data carrier;
`a program store storing code; and
`a processor coupled to the first interface, the data carrier
`interface, and the program store for implementing the stored code, the
`code comprising:
`code to read payment data from the data carrier and to forward
`the payment data to a payment validation system;
`code to receive payment validation data from the payment
`validation system;
`code responsive to the payment validation data to retrieve data
`from the data supplier and to write the retrieved data into the data
`carrier; and
`code responsive to the payment validation data to receive at
`least one access rule from the data supplier and to write the at least
`one access rule into the data carrier, the at least one access rule
`specifying at least one condition for accessing the retrieved data
`written into the data carrier, the at least one condition being dependent
`upon the amount of payment associated with the payment data
`forwarded to the payment validation system.
`Ex. 1001, 26:41–67.
`14. A method of providing data from a data supplier to a data
`carrier, the method comprising:
`reading payment data from the data carrier;
`forwarding the payment data to a payment validation system;
`retrieving data from the data supplier;
`writing the retrieved data into the data carrier;
`receiving at least one access rule from the data supplier; and
`writing the at least one access rule into the data carrier, the at
`least one access rule specifying at least one condition for accessing
`the retrieved data written into the data carrier, the at least one
`condition being dependent upon the amount of payment associated
`with the payment data forwarded to the payment validation system.
`Id. at 28:5–20.
`
`6
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`ANALYSIS
`
`A. Claim Construction
`While Samsung presents constructions for several claim terms, no
`terms require express construction for purposes of this Decision.
`
`B. Covered Business Method Patent
`Section 18 of the AIA provides for the creation of a transitional
`program for reviewing covered business method patents. A “[c]overed
`business method patent” is a patent that “claims a method or corresponding
`apparatus for performing data processing or other operations used in the
`practice, administration, or management of a financial product or service,
`except that the term does not include patents for technological inventions.”
`Leahy-Smith America Invents Act (AIA) § 18(d)(1); see 37 C.F.R.
`§ 42.301(a). A patent need have only one claim directed to a covered
`business method to be eligible for review. See Transitional Program for
`Covered Business Method Patents—Definitions of Covered Business
`Method Patent and Technological Invention; Final Rule, 77 Fed. Reg.
`48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8).
`
`1. Financial Product or Service
`Samsung asserts that “claim 14 unquestionably is used for data
`processing in the practice, administration and management of financial
`products and services; specifically, for processing payments for data
`downloads.” Pet. 9. Based on this record, we agree with Samsung that the
`subject matter recited by claim 14 is directed to activities that are financial in
`nature, namely data access conditioned on payment validation. Claim 14
`recites:
`writing the at least one access rule into the data carrier, the at least one
`access rule specifying at least one condition for accessing the
`
`7
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`retrieved data written into the data carrier, the at least one condition
`being dependent upon the amount of payment associated with the
`payment data forwarded to the payment validation system.
`
`We are persuaded that payment validation is a financial activity, and
`conditioning data access based on payment validation amounts to a financial
`service. This is consistent with the Specification of the ’720 patent, which
`confirms claim 14’s connection to financial activities by stating that the
`invention “relates to a portable data carrier for storing and paying for data.”
`Ex. 1001, 1:6–7. The Specification also states repeatedly that the disclosed
`invention involves managing access to data based on payment validation.
`See, e.g., Ex. 1001, 1:46–49, 2:4–19, 3:19–27, 3:50–54, 7:62–8:9, 8:21–35.
`Smartflash disagrees that claim 14 satisfies the financial in nature
`requirement of AIA § 18(d)(1), arguing that that section should be
`interpreted narrowly to cover only technology used specifically in the
`financial or banking industry. Prelim. Resp. 3–7. Smartflash cites to
`various portions of the legislative history as support for its proposed
`interpretation. Id.
`Although we agree with Smartflash that the statutory language
`controls whether a patent is eligible for a covered business method patent
`review, we do not agree that the phrase “financial product or service” is as
`limited as Smartflash proposes. The AIA does not include as a prerequisite
`for covered business method patent review, a “nexus” to a “financial
`business,” but rather a “method or corresponding apparatus for performing
`data processing or other operations used in the practice, administration, or
`management of a financial product or service.” AIA § 18(d)(1). Further,
`contrary to Smartflash’s view of the legislative history, the legislative
`history indicates that the phrase “financial product or service” is not limited
`
`8
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`CBM2014-00190
`Patent 7,334,720 B2
`
`to the products or services of the “financial services industry,” and is to be
`interpreted broadly. CBM Rules, 77 Fed. Reg. at 48,735–36. For example,
`the “legislative history explains that the definition of covered business
`method patent was drafted to encompass patents ‘claiming activities that are
`financial in nature, incidental to a financial activity or complementary to a
`financial activity.’” Id. at 48,735 (citing 157 Cong. Rec. S5432 (daily ed.
`Sept. 8, 2011) (statement of Sen. Schumer)).
`In addition, Smartflash asserts that claim 14 is not directed to an
`apparatus or method that is financial in nature because claim 14 “omits the
`specifics of how payment is made.” Prelim. Resp. 7. We are not persuaded
`by this argument because § 18(d)(1) of the AIA does not include such a
`requirement, nor does Smartflash point to any other authority that makes
`such a requirement. Id. We determine that because payment data is recited
`by claim 14, the financial in nature requirement of § 18(d)(1) is satisfied.
`For the reasons stated above, and based on the particular facts of this
`proceeding, we conclude that the ’720 patent includes at least one claim that
`meets the financial in nature requirement of § 18(d)(1) of the AIA.
`
`2. Exclusion for Technological Inventions
`Samsung asserts that the claims of the ’720 patent do not fall within
`§ 18(d)(1)’s exclusion for “technological inventions.” Pet. 10–13. In
`particular, Samsung argues that the claims do not recite a technological
`feature that is novel and unobvious, or solve a technical problem using a
`technical solution. Id. Smartflash disagrees and argues that claim 14, as a
`whole, recites at least one technological feature that is novel and unobvious
`over the prior art. Prelim. Resp. 7–9.
`
`9
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`We are persuaded that claim 14 as a whole does not recite a
`technological feature that is novel and unobvious over the prior art. Claim
`14 does recite a “data carrier.” The claimed “data carrier,” however, is a
`generic hardware device known in the prior art. The Specification discloses,
`for instance, that a portable data carrier may be a “standard smart card.” See
`Ex. 1001, 11:36–39; Pet. 17. Claim 14 also recites a “payment validation
`system.” The Specification, however, discloses that the required payment
`validation system may be one that is already in use or otherwise
`commercially available. For example, “[t]he payment validation system
`may be part of the data supplier’s computer systems or it may be a separate
`e-payment system.” Ex.1001, 8:64–66; see id. at 13:46–58.
`In addition, the ’720 patent makes clear that the asserted novelty of
`the invention is not in any specific improvement of software or hardware,
`but in the method of controlling access to data. For example, the ’720 patent
`states that “there is an urgent need to find a way to address the problem of
`data piracy,” (id. at 1:40–41) while acknowledging that 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” (id. at 12:38–41). Thus, we determine that claim 14 is merely the
`recitation of a combination of known technologies, which indicates that it is
`not a claim for a technological invention. See Office Patent Trial Practice
`Guide, 77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012).
`Smartflash also argues that claim 14 falls within § 18(d)(1)’s
`exclusion for “technological inventions” because it is directed towards
`solving the technological problem of “writing data and at least one access
`rule from a data supplier into a data carrier” with the technological solution
`
`10
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`Patent 7,334,720 B2
`
`of “a data carrier from which payment data is read and to which retrieved
`data and at least one access rule from a data supplier is written.” Prelim.
`Resp. 8. We are not persuaded by this argument because, as Samsung
`argues, the problem being solved by claim 14 is a business problem—data
`piracy. Pet. 12. For example, the Specification states that “[b]inding data
`access and payment together allows the legitimate owners of the data to
`make the data available themselves over the internet without fear of loss of
`revenue, thus undermining the position of data pirates.” Ex. 1001, 1:66–2:3.
`Therefore, based on the particular facts of this proceeding, we conclude that
`claim 14 does not recite a technological invention and is eligible for a
`covered business method patent review.
`
`3. Conclusion
`In view of the foregoing, we conclude that the ’720 patent is a covered
`business method patent under AIA § 18(d)(1) and is eligible for review
`under the transitional covered business method patent program.
`
`C. Section 101 Unpatentability
`Samsung challenges claims 13 and 14 as directed to patent-ineligible
`subject matter under 35 U.S.C. § 101. Pet. 22–37. Samsung asserts that the
`challenged claims are directed to an abstract idea without additional
`elements that transform the claims into a patent-eligible application of that
`idea. Id. Specifically, Samsung argues that the challenged claims are
`directed to the abstract idea “that copyrighted content needs to be licensed
`for a specified amount of use, and that copyright requirements regulate how
`content can be used (e.g., ASCAP use rights for music radio stations).” Pet.
`25.
`
`11
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`Smartflash argues that the challenged claims are directed to a more
`narrow invention than that asserted by Samsung. Prelim. Resp. 12–13.
`Smartflash specifically cites to the following limitations from claim 3, from
`which claim 13 depends, and claim 14 as evidence that claims 13 and 14
`“[are] not preemptory as asserted and [are], at least for that reason, directed
`to statutory subject matter.” Id. at 13.
`Claim 3
`the at least one access rule specifying at least one condition for
`accessing the retrieved data written into the data carrier, the at least one
`condition being dependent upon the amount of payment associated with the
`payment data forwarded to the payment validation system
`
`Claim 14
`
`writing the at least one access rule into the data carrier, the at least one
`access rule specifying at least one condition for accessing the retrieved data
`written into the data carrier, the at least one condition being dependent upon
`the amount of payment associated with the payment data forwarded to the
`payment validation system
`
`Id. Based on the analysis of the challenged claims using the two-step
`process set forth in Alice Corp. Pty, Ltd. v. CLS Bank International, 134 S.
`Ct. 2347 (2014), as discussed below, we agree with Samsung that claims 13
`and 14 of the ’720 patent are more likely than not directed to patent-
`ineligible subject matter.
`Under 35 U.S.C. § 101, we must first identify whether an invention
`fits within one of the four statutorily provided categories of patent-
`eligibility: “processes, machines, manufactures, and compositions of
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–714 (Fed. Cir.
`2014). Here, claim 13 recites a “machine” (i.e.,“[a] data access terminal”)
`and claim 14 recites a process or “method” (i.e., “[a] method of providing
`
`12
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`CBM2014-00190
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`data from a data supplier to a data carrier”) under § 101. Section 101,
`however, “contains an important implicit exception [to subject matter
`eligibility]: Laws of nature, natural phenomena, and abstract ideas are not
`patentable.” Alice, 134 S. Ct. at 2354 (citing Assoc. for Molecular
`Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (internal
`quotation marks and brackets omitted)).
`We are persuaded that the challenged claims are more likely than not
`drawn to a patent-ineligible abstract idea. In Alice, the Supreme Court
`reiterated the framework set forth previously in Mayo Collaborative Services
`v. Prometheus Laboratories, 132 S. Ct. 1289, 1293 (2012), “for
`distinguishing patents that claim laws of nature, natural phenomena, and
`abstract ideas from those that claim patent-eligible applications of these
`concepts.” Alice, 134 S. Ct. at 2355. The first step in the analysis is to
`“determine whether the claims at issue are directed to one of those patent-
`ineligible concepts.” Id. If so, the second step in the analysis is to consider
`the elements of the claims “individually and ‘as an ordered combination’ to
`determine whether [there are] additional elements that ‘transform the nature
`of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S.
`Ct. at 1291, 1297). In other words, the second step is to “search for an
`‘inventive concept’—i.e., an element or combination of elements that is
`‘sufficient to ensure that the patent in practice amounts to significantly more
`than a patent on the [ineligible concept] itself.’” Id. (brackets in original)
`(quoting Mayo, 132 S. Ct. at 1294).
`Samsung contends that the “recited actions [in the challenged claims]
`merely describe an abstract idea, namely, the abstract idea that copyrighted
`content needs to be licensed for a specified amount of use, and that
`
`13
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`copyright requirements regulate how content can be used (e.g., ASCAP use
`rights for music radio stations).” Pet. 25. For example, claim 3, from which
`claim 13 depends, recites “the at least one access rule specifying at least one
`condition for accessing the retrieved data written into the data carrier, the at
`least one condition being dependent upon the amount of payment associated
`with the payment data forwarded to the payment validation system.”
`Claim 14 contains a similar limitation. Furthermore, as discussed above, the
`’720 patent discusses addressing recording industry concerns of data pirates
`offering unauthorized access to widely available compressed audio
`recordings. Ex. 1001, 1:26–41. The ’720 patent proposes to solve this
`problem by restricting access to data on a portable data carrier based upon
`payment validation. Id. at 1:46–1:59. The ’720 patent makes clear that the
`heart of the claimed subject matter is restricting access to stored data based
`on supplier-defined access rules and validation of payment. Id. at 1:60–2:3.
`We are persuaded, on this record, that the challenged claims are directed to
`an abstract idea. See Alice, 134 S. Ct. at 2356 (holding that the concept of
`intermediated settlement at issue in Alice was an abstract idea); Accenture
`Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344
`(Fed. Cir. 2013) (holding the abstract idea at the heart of a system claim to
`be “generating tasks [based on] rules . . . to be completed upon the
`occurrence of an event” (citation omitted)).
`Turning to the second step of the analysis, we look for additional
`elements that can “transform the nature of the claim” into a patent-eligible
`application of an abstract idea. Mayo, 132 S. Ct. at 1297. On this record,
`we are not persuaded that the challenged claims of the ’720 patent add an
`inventive concept sufficient to ensure that the patent in practice amounts to
`
`14
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`significantly more than a patent on the abstract idea itself. Alice, 134 S. Ct.
`at 2355; see Accenture Global Servs., 728 F.3d at 1344 (holding claims
`directed to the abstract idea of “generating tasks [based on] rules . . . to be
`completed upon the occurrence of an event” to be unpatentable even when
`applied in a computer environment and within the insurance industry).
`As discussed above, with respect to claim 14, the Specification notes
`that the claimed data carrier may be a generic, known, hardware device such
`as a “standard smart card,” and that “[t]he payment validation system may
`be part of the data supplier’s computer systems or it may be a separate e-
`payment system.” Id. at 11:36–39, 8:21–25. Moreover, on this record, we
`are not persuaded that the recited technical components of claim 3, from
`which claim 13 depends, which include, for example, “a program store,”
`“processor,” and code to receive/retrieve/write data perform a function that
`are anything other than “purely conventional.” See Alice, 134 S. Ct. at 2359.
`Furthermore, claim 13 requires the “data access terminal” of claim 3 to be
`integrated with a “mobile communication device, a personal computer, an
`audio/video player, and/or a cable or satellite television interface device,”
`features we are persuaded are “purely conventional.” Id. Furthermore, the
`linkage of existing hardware devices to existing payment validation
`processes and supplier-defined access rules, as claimed by the challenged
`claims, appear to be “‘well-understood, routine, conventional activit[ies]’
`previously known to the industry.” Id. (quoting Mayo, 132 S. Ct. at 1294).
`None of the technical limitations viewed “both individually and ‘as an
`ordered combination,’” transform the nature of the claims into patent-
`eligible subject matter. See Alice, 134 S. Ct. at 2355 (quoting Mayo, 132
`S. Ct. at 1297, 1298).
`
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`Having considered the information provided in the Petition and the
`Preliminary Response, we are persuaded that Samsung has demonstrated
`that it is more likely than not that challenged claims 13 and 14 are
`unpatentable under 35 U.S.C. § 101.
`
`D. Obviousness Over Gruse and Stefik
`Samsung asserts that claims 13 and 14 would have been obvious over
`Gruse and Stefik under 35 U.S.C. § 103. Pet. 3. Claim 3, from which claim
`13 depends, recites (emphasis added):
`code responsive to the payment validation data to receive at
`least one access rule from the data supplier and to write the at
`least one access rule into the data carrier, the at least one access
`rule specifying at least one condition for accessing the retrieved
`data written into the data carrier, the at least one condition
`being dependent upon the amount of payment associated with
`the payment data forwarded to the payment validation system.
`Claim 14 includes a similar limitation. See Pet. 68 (in arguing that the
`disclosure teaches the limitations of claim 14, Samsung refers to its analysis
`of claim 3).
`In support of its assertion that the combination of Gruse and Stefik
`teaches these limitations, Samsung provides the following:
`Gruse in view of Stefik renders obvious that the
`processor on the data access terminal implements code
`responsive to receiving the payment validation data (e.g.,
`license SC) to receive at least one access rule (e.g., Store Usage
`Conditions 519) from the data supplier (e.g., Content Hosting
`Site(s) 111) and then to write the access rule (e.g., Store Usage
`Conditions 519) to the data carrier (e.g., the Docu-Card device
`of Stefik). The access rule specifies conditions for accessing
`the retrieved data (e.g., songs) written into the data carrier (e.g.,
`the DocuCard device of Stefik). The access rule depends on the
`amount of payment (e.g., fees the user has paid for the content)
`associated with the payment data (e.g., credit card information)
`
`16
`
`
`
`CBM2014-00190
`Patent 7,334,720 B2
`
`forwarded to the payment validation system (e.g.,
`Clearinghouse 105).
`
`Pet. 62. Samsung also cites to the following disclosure from Gruse:
`[T]he Store Usage Conditions 519 purchased by the End-
`User(s) . . . is included in the License Watermark 527 and used
`by the End-User Device(s) 109 in Copy and Play Control.
`
`Pet. 65 (citing Ex. 1006, 93:811–13). Based on this disclosure,
`Samsung asserts that “[t]he Storage Usage Conditions 519 has been
`purchased by the End-User(s) and is thus dependent upon the amount
`of payment the particular end-user made towards the purchase.”
`Pet. 65.
`The claims, however, recite “at least one access rule specifying at
`least one condition for accessing the retrieved data written into the data
`carrier,” and that “condition being dependent upon the amount of payment
`associated with the payment data forwarded to the payment validation
`system.” Samsung’s citation to Gruse does not show sufficiently how the
`condition for accessing the data written into the data carrier is dependent
`upon the amount of payment associated with the payment data forwarded to
`the payment validation system. Nor does Samsung explain that a person of
`ordinary skill would find such dependency obvious.
`Thus, Samsung has not persuaded us that the combination of
`Gruse and Stefik teach or suggest the limitations referred to above.9
`
`
`8 The page number refers to the numbers at the top of the page in Ex. 1006.
`9 Given that we do not institute a covered business method review based on
`this ground, we need not address Smartflash’s remaining arguments,
`(Footnote continued on next page
`
`17
`
`
`
`CBM2014-00190
`Patent 7,334,720 B2
`
`For the reasons set forth above, Samsung has failed to establish
`that it is more likely than not that it would prevail in demonstrating
`that claims 13 and 14 are unpatentable as obvious over Gruse and
`Stefik.
`
`CONCLUSION
`For the foregoing reasons, we determine that the information
`presented in the Petition establishes that it is more likely than not that
`Samsung would prevail in establishing the unpatentability of claims 13 and
`14 of the ’720 patent under 35 U.S.C. § 101, but does not establish that it is
`more likely than not that Samsung would prevail in establishing the
`unpatentability of claims 13 and 14 as obvious over the combination of
`Gruse and Stefik under 35 U.S.C. § 103.
`
`ORDER
`
`For the reasons given, it is:
`ORDERED that a covered business method patent review is instituted
`on the sole ground that claims 13 and 14 are directed to patent ineligible
`subject matter under 35 U.S.C. § 101;
`FURTHER ORDERED that the trial is limited to the ground identified
`above. No other grounds are authorized; and
`FURTHER ORDERED that pursuant to 35 U.S.C. § 324(d) and
`37 C.F.R. § 42.4, notice is hereby given of the institution of a trial; the trial
`commencing on the entry date of this Order.
`
`
`
`
`including that Gruse has not been shown to be prior art against the
`challenged claims under 35 U.S.C. § 102(a). See Prelim. Resp. 14–20.
`
`18
`
`
`
`CBM2014-00190
`Patent 7,334,720 B2
`
`PETITIONER:
`
`W. Karl Renner
`Thomas Rozylowicz
`FISH & RICHARDSON P.C.
`axf@fr.com
`CBM39843-0003CP1@fr.com
`
`PATENT OWNER:
`
`Michael R. Casey
`DAVIDSON BERQUIST JACKSON & GOWDEY, LLP
`mcasey@dbjg.com
`
`
`
`19
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