UNITED STATES PATENT AND TRADEMARK OFFICE
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`SAMSUNG ELECTRONICS AMERICA, INC. and
`SAMSUNG ELECTRONICS CO., LTD.,
`Petitioner
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`v.
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`SMARTFLASH LLC,
`Patent Owner
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`Case CBM2014-00190
`Patent 7,334,720
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`PETITIONERS’ REPLY TO PATENT OWNER’S RESPONSE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`

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`Case CBM2014-00190
`Attorney Docket No: 39843-0003CP1
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`
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`TABLE OF CONTENTS
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`I. Introduction ........................................................................................................... 1
`II. The Board acted within its authority when it instituted trial on the ground that
`claims 13 and 14 are directed to patent-ineligible subject matter (POR § VII) ........ 1
`III. Despite suggestions to the contrary, in co-pending litigation, challenges on
`patent eligibility remain pending and unresolved (POR § VI) .................................. 2
`IV. Testimony from Dr. Bloom deserves full credit (POR §§ III, V.D) .................... 3
`A. Dr. Bloom’s testimony is grounded in underlying facts and data, and
`worthy of weight, despite Patent Owner’s unsupported suggestion that his
`declaration must state the evidentiary standard used in formulating his
`opinions (POR § III) ................................................................................... 3
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`B. The POR’s allegation of bias by Dr. Bloom is unfounded and purely
`speculative (POR § III) ............................................................................... 3
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`C. Dr. Bloom cites relevant evidence that corroborates his expert opinions
`(POR § V.D) ............................................................................................... 8
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`V. Claims 13 and 14 are directed to patent-ineligible subject matter (POR §§ V.A-
`C) ............................................................................................................................... 9
`A. The Challenged Claims fail to recite an “inventive concept” sufficient to
`transform the claimed abstract idea into patent-eligible subject matter
`(POR §§ V.A-B) ....................................................................................... 11
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`a. The POR describes the claims as rooted in computer technology, yet the
`claimed computer elements are entirely generic (POR § V.B) ................ 12
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`b. The POR emphasizes functions performed by the claimed computer
`elements yet, whether viewed individually or as an ordered combination,
`these functions are nothing more than purely conventional (POR § V.B)
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`c. The POR describes the claims as providing technological solutions to
`technological problems, yet the claims do nothing more than apply
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`i
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`Case CBM2014-00190
`Attorney Docket No: 39843-0003CP1
`generic computer technology toward the solution of a business problem
`(POR § V.B) ............................................................................................. 16
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`B. Preemption of the claimed abstract idea by the Challenged Claims is
`conclusively established through application of the Supreme Court’s two-
`step analysis, regardless of non-infringing alternatives (POR § V.C) ..... 21
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`ii
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`Case CBM2014-00190
`Attorney Docket No: 39843-0003CP1
`EXHIBIT LIST
`SAMSUNG-1001 U.S. Patent No. 7,334,720 to Hulst et al. (“the ‘720 Patent”)
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`SAMSUNG-1002 Excerpts from the Prosecution History of the ‘720 Patent (“the
`Prosecution History”)
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`SAMSUNG-1003 Declaration of Dr. Jeffrey Bloom re the ‘720 Patent (“Bloom”)
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`SAMSUNG-1004 U.S. Patent No. 5,530,235 (“Stefik ‘235”)
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`SAMSUNG-1005 U.S. Patent No. 5,629,980 (“Stefik ‘980”)
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`SAMSUNG-1006 PCT Publication No. WO 00/08909 (“Gruse”)
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`SAMSUNG-1007 PCT Application PCT/GB00/04110 (“the ‘110 Appln.” or
`“‘110”)
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`SAMSUNG-1008 United Kingdom Patent Application GB9925227.2 (“the ‘227.2
`Appln.” or “‘227.2”)
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`SAMSUNG-1009 Transitional Program for Covered Business Method Pa-tents—
`Definitions of Covered Business Method Patent and
`Technological Invention, 77 Fed. Reg. 157 (Aug. 14, 2012)
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`SAMSUNG-1010 A Guide to the Legislative History of the America Invents Act;
`Part II of II, 21 Fed. Cir. Bar J. No. 4
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`SAMSUNG-1011 Interim Guidance for Determining Subject Matter Eligibility for
`Process Claims in View of Bilski v. Kappos (Jul. 27, 2010)
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`SAMSUNG-1012 Apple Inc. v. Sightsound Technologies, LLC, CBM2013-00019
`Paper No. 17 (entered Oct. 8, 2013) at 11-13
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`SAMSUNG-1013 Volusion, Inc. v. Versata Software, Inc. and Versata Devel-
`opment Group, Inc., CBM2013-00017 Paper No. 8 (entered
`Oct. 24, 2013)
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`iii
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`Case CBM2014-00190
`Attorney Docket No: 39843-0003CP1
`SAMSUNG-1014 Salesforce.com, Inc. v. VirtualAgility, Inc., CBM2013-00024
`Paper No. 16 (entered Nov. 19, 2013)
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`SAMSUNG-1015 RESERVED
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`SAMSUNG-1016 RESERVED
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`SAMSUNG-1017 RESERVED
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`SAMSUNG-1018 RESERVED
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`SAMSUNG-1019 RESERVED
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`SAMSUNG-1020 RESERVED
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`SAMSUNG-1021 RESERVED
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`SAMSUNG-1022 RESERVED
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`SAMSUNG-1023 RESERVED
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`SAMSUNG-1024 RESERVED
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`SAMSUNG-1025 RESERVED
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`SAMSUNG-1026 RESERVED
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`SAMSUNG-1027 RESERVED
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`SAMSUNG-1028 Weinstein “MasterCard Plans Point-of-Sale Product for
`Merchants Leery of Bank Cards”
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`SAMSUNG-1029 Mayo Collaborative Serv v. Prometheus Labs., Inc., 132 S. Ct.
`1289 (2012)
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`SAMSUNG-1030 Gottschalk v. Benson, 409 U.S. 63 (1972)
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`Case CBM2014-00190
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`SAMSUNG-1031 Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366
`(Fed. Cir. 2011)
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`SAMSUNG-1032 Bilski v. Kappos, 130 S. Ct. 3218 (2010)
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`SAMSUNG-1033 Alice Corp. v. CLS Bank International,134 S.Ct. 2347 (2014)
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`SAMSUNG-1034 Bancorp Serv., L.L.C. v. Sun Life Assur. Co. (U.S.), 687 F.3d
`1266 (Fed. Cir. 2012)
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`SAMSUNG-1035 Dealertrack, Inc. v. Huber, 674 F.3d 1323 (Fed. Cir. 2012)
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`SAMSUNG-1036 SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319 (Fed.
`Cir. 2010)
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`SAMSUNG-1037 In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008)
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`SAMSUNG-1038 Accenture Global Services, GmbH v. Guidewire Software, Inc.,
`728 F.3d 1336 (Fed. Cir. 2013)
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`SAMSUNG-1039 RESERVED
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`SAMSUNG-1040 Affidavit in Support of Petitioner's Motion for Pro Hac Vice
`Admission of Ralph A. Phillips
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`SAMSUNG-1041 Ariosa Diagnostics, Inc. v. Sequenom, Inc., 14-1144, slip op.
`(Fed. Cir. June 12, 2015)
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`SAMSUNG-1042 Versata Development Group, Inc. v. SAP America, Inc. et al.,
`14-1194, slip op. (Fed. Cir. July 9, 2015)
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`SAMSUNG-1043 RESERVED
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`SAMSUNG-1044 RESERVED
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`SAMSUNG-1045 RESERVED
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`SAMSUNG-1046 RESERVED
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`Case CBM2014-00190
`Attorney Docket No: 39843-0003CP1
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`SAMSUNG-1047 RESERVED
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`SAMSUNG-1048 RESERVED
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`vi
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`Case CBM2014-00190
`Attorney Docket No: 39843-0003CP1
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`I.
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`Introduction
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`Rather than addressing the Board’s initial determination that claims of the
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`‘720 Patent are drawn to patent-ineligible abstract ideas (see Institution Decision at
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`13), the Patent Owner contends in its Patent Owner’s Response (“POR”) that the
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`‘720 Patent claims recite an “inventive concept” that makes them patent eligible
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`(POR §§ V.A-B), and then separately contends that claims do not inappropriately
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`preempt future innovation (POR § V.C). The Patent Owner also argues that the
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`Board is improperly “re-litigat[ing]” the issue of eligibility (POR § VI), that the
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`Board exceeded its authority when it granted Petitioner’s request to institute trial
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`on grounds rooted in 35 U.S.C. § 101 (POR § VII), and that the Board should not
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`credit the testimony of Dr. Bloom (POR §§ III, V.D). Petitioner disagrees with
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`each noted contention.
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`In the discussion below, the Petitioner addresses each of the POR’s
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`procedural arguments (POR §§ III, V.D, VI, and VII) first, to clear the way for the
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`substantive discussion that follows (POR §§ V.A-C).
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`II. The Board acted within its authority when it instituted trial on the
`ground that claims 13 and 14 are directed to patent-ineligible subject
`matter (POR § VII)
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`The Patent Owner alleges that the Board exceeded its authority when it
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`granted Petitioner’s request to institute trial on grounds rooted in 35 U.S.C. § 101.
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`See POR at 35 (“The question of whether the claims are directed to statutory
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`1
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`Attorney Docket No: 39843-0003CP1
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`subject matter has already been adjudicated by the [examiner], and the USPTO is
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`estopped from allowing the issue to be raised in the present proceeding”).
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`This challenge to the Board’s authority is misplaced, as recognized by the
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`Federal Circuit in Versata Development Group, Inc. v. SAP America, Inc. et al.,
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`14-1194, slip op. at 45 (Fed. Cir. July 9, 2015) (“It would require hyper-technical
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`adherence to form rather than understanding of substance to arrive at a conclusion
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`that § 101 is not a ground available to test patents under either the PGR or [AIA] §
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`18 processes”). Indeed, the Federal Circuit has conclusively determined that when
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`the Board “permit[s] a § 101 challenge under AIA § 18,” as it has done in this case,
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`it “acts within the scope of its authority delineated by Congress.” See id.
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`III. Despite suggestions to the contrary, in co-pending litigation,
`challenges on patent eligibility remain pending and unresolved (POR
`§ VI)
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`The Patent Owner alleges that “Petitioner has already lost [a] purely legal
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`challenge to the patentability of the claims under 35 U.S.C. § 101,” and that “there
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`is no reason to re-litigate the issue before the PTAB . . . .” POR at 34.
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`The Patent Owner fails to point out, however, that the issue of patent eligibility
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`was NOT fully adjudicated in civil litigation. See Exhibits 2049, 2050. Indeed,
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`the supposed loss was nothing more than a denied motion – for summary judgment.
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`See id. Given the relatively high standard applied in civil litigation, and the
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`constraints peculiar to summary judgment motions,1 the Patent Owner’s
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`mischaracterization of the current proceeding as “re-litigat[ion]” is misleading.
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`Because the District Court’s summary judgment order is appealable to the Federal
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`Circuit, it is not a final adjudication of the issues under 35 U.S.C. § 101, and it has
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`no conclusive effect. See Exhibit 2050; see also Interthinx, Inc. v. Corelogic
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`Solutions, LLC, CBM2012-00007 Paper No. 15 at 9-10 (concluding that a district
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`court’s denial of a petitioner’s summary judgment motion of invalidity does not
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`preclude consideration of invalidity issues by the Board). For at least these
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`reasons, the Board acted properly when it instituted trial on the ground that claims
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`13 and 14 are directed to patent-ineligible subject matter.
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`IV. Testimony from Dr. Bloom deserves full credit (POR §§ III, V.D)
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`A. Dr. Bloom’s testimony is grounded in underlying facts and data,
`and worthy of weight, despite Patent Owner’s unsupported
`suggestion that his declaration must state the evidentiary
`standard used in formulating his opinions (POR § III)
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`The POR asserts that the Bloom Declaration is entitled to little or no weight
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`based on its observation that the Declaration stated no evidentiary standard. See
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`1 Specifically, the movant must show “that there is no genuine dispute as to
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`any material fact and [that] the movant is entitled to judgment as a matter of law.”
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`Federal Rules of Civil Procedure, Rule 56.
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`3
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`POR at 3-4 (citing 37 CFR 42.65). Yet, the Patent Owner bases this contention on
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`its flawed and unsupported interpretation of 37 CFR 42.65, which requires only
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`that a declarant “disclose the underlying facts or data on which the opinion is
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`based” and, notably, does not require a declarant to expressly state an evidentiary
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`basis on which the opinion is based. See POR at 3-4 (quoting 37 CFR 42.65)
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`(emphasis added).
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`Indeed, Smartflash has earlier advanced that declarations should be
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`disregarded in post-grant proceedings unless overtly referencing a declarant’s
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`application of the preponderance of the evidence standard, and the Board rightly
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`rejected Smartflash’s argument.2
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`2 See Apple Inc. v. Smartflash LLC, CBM2014-00102, Paper 8 at 4
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`(considering and dismissing a similar challenge by Smartflash to an expert’s
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`declaration, the challenge being based on the absence of the phrase “preponderance
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`of the evidence” within that declaration, and concluding that “Patent Owner
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`identifies purported omissions from the Declaration, but offers no evidence that
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`[the expert] used incorrect criteria, failed to consider evidence, or is not an expert
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`in the appropriate field”).
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`That decision was consistent with the Board’s earlier decision in the Vibrant
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`Media v. General Electric Company case, IPR2013-00172. Specifically, in the
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`Vibrant Media case, a party argued that 35 U.S.C. § 316(e) requires an expert
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`declaration to expressly recite or apply the preponderance of the evidence standard
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`in order for the expert testimony to be accorded weight. See Vibrant Media, Paper
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`50 at 42. The Board considered and decisively rejected that argument, concluding
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`that 35 U.S.C. § 316(e) makes no such requirement and finding that “[r]ather, it is
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`within our discretion to assign the appropriate weight to be accorded to evidence
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`based on whether the expert testimony discloses the underlying facts or data on
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`which the opinion is based.” Id. (emphasis added)(citing 37 C.F.R. § 42.64(a)).
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`42.65 does not undermine the authority rightly noted in the Vibrant Media
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`decision. It is instead consistent with that authority, setting forth requirements
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`having nothing to do with citation of an evidentiary standard.
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`Consistent with the requirements of 37 § CFR 42.65, Dr. Bloom’s testimony
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`disclosed underlying facts and data on which his opinions were based. For
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`example, Dr. Bloom’s declaration extensively referenced prior art disclosures, and
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`it also noted Dr. Bloom’s relevant and timely industry experience with digital
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`rights management. See Bloom at ¶¶ 5-22, ¶¶ 29-103.
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`Moreover, by attesting to facts set forth in his declaration, Dr. Bloom has
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`indicated his belief that those facts are correct, and, therefore, that those facts are
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`more likely true than not based on evidence known to him. See Bloom at ¶ 138 (“I
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`hereby declare that all statements made herein of my own knowledge are true and
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`that all statements made on information and belief are believed to be true”). From
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`this, Dr. Bloom’s statements are self-revealing of his satisfaction of the
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`preponderance of evidence standard.
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`Accordingly, Petitioner respectfully submits that Dr. Bloom’s declaration is
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`worthy of weight.
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`B. The POR’s allegation of bias by Dr. Bloom is unfounded and
`purely speculative (POR § III)
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`The POR contends bias by Dr. Bloom based on nothing more than his
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`employment by SiriusXM Radio, and alleged “similarity between his employer’s
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`products and the claims of the patent would provide Dr. Bloom with a bias against
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`the claims.” Id. at 6. This argument is unsustainable, as it is unproven and
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`illogical.
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`Substantively, while SiriusXM is Dr. Bloom’s employer, there is no
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`evidence that Dr. Bloom perceived similarities between his employer’s products
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`and the claims of the patent prior to his deposition. That is, whether alleged
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`similarities existed or not, an allegation of bias would require a showing that Dr.
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`Bloom did indeed perceive such similarities when rendering the opinions offered in
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`the instant case. The Patent Owner had the opportunity to question Dr. Bloom on
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`this point during his deposition, yet the record is without such evidence.
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`Logically, this argument is equally flawed. Without more, PO seeks to
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`establish bias based on mere affiliation of an expert with an operating company.
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`Surely, for an expert to have bias, it is necessary for the expert to have knowledge
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`of the facts giving rise to the same. Mere employment is not enough, nor is
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`knowledge of the products offered by one’s employer. It is instead necessary to
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`perceive infringement for bias to exist, and for such perception to exist at the time
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`of an opinion’s rendering. On a record that is without a showing of either, this
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`argument is logically flawed.
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`Equally flawed is the apparent suggestion by Patent Owner’s counsel that, to
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`avoid allegations of bias, Petitioner should have used a University professor in
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`place of Dr. Bloom. See Transcript at 232:5-35. Indeed, applying the POR’s logic
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`across the breadth of proceedings before the Board and asserting it as a general
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`basis for discrediting expert opinion would seem to foreclose consideration by the
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`Board of relevant testimony from experts (like Dr. Bloom) who have professional
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`experiences that inform opinions on technology to which they directed their
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`careers. Specifically, the Patent Owner would deny the Board access to testimony
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`by any engineer whose employer developed, made, and/or sold products or
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`services that could be accused of infringing a patent under review (i.e., engineers
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`with industrial employment experience), with or without their knowledge of such
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`offerings or their prospective infringement. Such an outcome would be absurd, yet
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`it is precisely what Patent Owner was advocating during Dr. Bloom’s deposition
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`when counsel suggested that, to avoid allegations of bias, Petitioner should have
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`used a university professor in place of Dr. Bloom. See Transcript at 232:5-35.
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`The Petitioner, moreover, was free at the outset of this proceeding to provide
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`testimony from a qualified expert of the Petitioner’s choosing, and the selection of
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`Dr. Bloom reflects confidence that his opinions are objective and technically-
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`sound. Ultimately, the Patent Owner has provided no reason to avoid taking Dr.
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`Bloom at his word – that he believes his testimony is true and objective, and that
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`he therefore believes in the positions that he has advanced. See Bloom at ¶ 138 (“I
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`hereby declare that all statements made herein of my own knowledge are true and
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`that all statements made on information and belief are believed to be true”).
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`C. Dr. Bloom cites relevant evidence that corroborates his expert
`opinions (POR § V.D)
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`The POR further argues that “[t]he Bloom declaration relies upon a
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`document and a set of rules which are not from prior to the effective filing date of
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`the ‘720 patent” and that “[a]s such, they are irrelevant to showing that a
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`corresponding portion of one of the challenged claims was known prior to the
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`invention.” POR at 32-33. Specifically, the POR takes issue with Dr. Bloom’s
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`citation of (1) The Radio Station: Broadcast, Satellite and Internet by Michael C.
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`Keith (Exhibit 1039) and of (2) formal requirements on programming for Internet
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`radio stations that existed in 2003 and that resulted from the DMCA. POR at 32-
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`33.
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`Yet, as the POR notes, Dr. Bloom clearly states in his declaration with
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`respect to The Radio Station, e.g., that “[a]lthough not published before the
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`effective filing date of the ‘720 Patent, I believe that . . . [a quoted excerpt]
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`nevertheless describes the manner in which a program director would plan the
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`programming for the day.” Bloom at ¶ 124. In other words, Dr. Bloom was aware
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`of the publication date of The Radio Station but nevertheless cited it because the
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`cited passages are consistent with and corroborate his expert understanding, and
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`are relevant to his explanation of the fact that human beings, long before the ‘720
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`Patent’s effective filing date, traditionally engaged in mental activities aimed at
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`enabling limited use of paid for and/or licensed content. Dr. Bloom further
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`explains that the formal restrictions that he cites at ¶ 125 are exemplary of the
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`kinds of limitations on the use of paid for and/or licensed content that were
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`“informally adopted” long before the ‘720 Patent’s effective filing date.
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`V. Claims 13 and 14 are directed to patent-ineligible subject matter
`(POR §§ V.A-C)
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`As to substance, rather than addressing the Board’s acknowledgment that the
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`claims of the ‘720 Patent are drawn to patent-ineligible abstract ideas, the Patent
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`Owner endeavors to locate something more in the claims that might rise to the
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`level of an “inventive concept” sufficient to confer eligibility3, and then separately
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`contends that claims do not inappropriately preempt future innovation. See POR §
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`V.
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`3 The Supreme Court has articulated a two-step analysis for determining
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`whether claims are directed to patent-ineligible subject-matter. See Alice Corp. Pty.
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`Ltd. V. CLS Bank Int’l, et al., 134 S. Ct. 2347 (2014); Mayo, 132 S. Ct. at 1293–94.
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`The first step in the analysis is to determine whether the claims at issue are directed
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`to a patent-ineligible abstract idea. Alice, 134 S. Ct. at 2355. Only after finding
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`that the claims at issue are directed to a patent-ineligible abstract idea, as the Board
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`has found here, is the second step reached. The second step, then, involves
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`determining whether the limitations of the claims, individually and as ordered
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`combinations, contain an “inventive concept” that transforms the nature of the
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`claims into patent-eligible subject matter. See Mayo, 132 S. Ct. at 1293–94. The
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`transformation “requires ‘more than simply stat[ing] the [abstract] idea while
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`adding the words ‘apply it.’” Alice, 134 S. Ct. at 2357 (quoting Mayo, 132 S. Ct. at
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`1294) (alterations in original). In order to transform an otherwise abstract and
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`consequently patent-ineligible idea into patent eligible subject matter, a claim must
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`recite “additional features” that are more than “well-understood, routine,
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`conventional activity.” Mayo, 132 S. Ct. at 1298.
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`In more detail, and as Dr. Bloom explains, “[t]he claims of the ‘720 Patent . .
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`. cover nothing more than the basic financial idea of enabling limited use of paid
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`for and/or licensed content using ‘conventional’ computer systems and
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`components.” Bloom at ¶ 126. Your honors concluded similarly. See Institution
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`Decision at 14 (“The ‘720 Patent makes clear that the heart of the claimed subject
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`matter is restricting access to stored data based on supplier-defined access rules
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`and validation of payment . . . [w]e are persuaded, on this record, that the
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`challenged claims are directed to an abstract idea”) (citing ‘720 Patent at 1:60-2:3).
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`The POR offers no argument, and cites no evidence, to the contrary, thereby
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`conceding that the claims are directed to patent-ineligible concepts. Instead,
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`broadly referencing the DDR decision and focusing on only the second step of
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`Mayo and Alice, the POR alleges that the claims are statutory under that second
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`step (POR § V.B), and then separately contends that there is no inappropriate
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`preemption under DDR (POR § V.C.1), under Mayo and Alice (POR § V.C.2), and
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`due to the alleged existence of non-infringing alternatives (POR § V.C.3). These
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`arguments are each flawed, as discussed below.
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`A. The Challenged Claims fail to recite an “inventive concept”
`sufficient to transform the claimed abstract idea into patent-
`eligible subject matter (POR §§ V.A-B)
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`The POR attempts to salvage the claims by alleging that they “are rooted in
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`computer technology in order to overcome a problem specifically arising in the
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`11
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`Case CBM2014-00190
`Attorney Docket No: 39843-0003CP1
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`realm of computer networks – that of digital data piracy, and like in DDR
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`Holdings, ‘address . . . a challenge particular to the Internet.’” POR at 13 (quoting
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`DDR at 1257). On this basis, the POR contends that the claims feature an
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`inventive concept sufficient to render the claimed abstract subject matter statutory
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`under Mayo and Alice. Yet, as explained below, the claimed computer elements
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`are generic and perform functions that, whether viewed individually or as an
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`ordered combination, are nothing other than purely conventional. Ultimately, the
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`claims do nothing more than apply generic computer technology toward the
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`solution of a business problem, which is insufficient to impart patentability to an
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`abstract idea.
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`a. The POR describes the claims as rooted in computer
`technology, yet the claimed computer elements are entirely
`generic (POR § V.B)
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`In its endeavor to locate an inventive concept in the ‘720 Patent’s claims, the
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`POR compares the claimed hardware elements to those recited in the claims at
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`issue in DDR, and states that the claims “are directed to particular devices that can
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`download and store digital content into a data carrier.” See POR at 12. Yet, as the
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`Federal Circuit recognized in DDR, “after Alice, there can remain no doubt:
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`recitation of generic computer limitations does not make an otherwise ineligible
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`claim patent-eligible.” DDR at 1256.
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`Case CBM2014-00190
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`As Dr. Bloom explains, “the computer-related terms recited in the ‘720
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`Patent’s claims . . . relate to technology that is merely, in the words of the patentee,
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`‘conventional’ . . . .” Bloom at ¶ 24 (citing ‘720 Patent at 3:64-65; 16:62-65;
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`18:24-30). That is, these computer-related terms, which the ‘720 Patent
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`specification describes as “conventional,” are exactly those that are emphasized in
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`the POR. The specification states, for example, that “[t]he data access terminal
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`may be a conventional computer,” that the terminal memory “can comprise any
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`conventional storage device,” and that a “data access device . . . such as a portable
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`audio/video player . . . comprises a conventional dedicated computer system
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`including a processor . . . program memory . . . and timing and control logic . . .
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`coupled by a data and communications bus.” ‘720 Patent at 4:4-5, 16:46-50, 18:7-
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`11; see also Institution Decision at 15 (“the Specification notes that the claimed
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`data carrier may be a generic, known, hardware device such as a ‘standard smart
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`card,’ and that ‘[t]he payment validation system may be part of the data supplier’s
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`computer systems or it may be a separate e-payment system’”) (quoting ‘720
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`Patent at 11:36-39, 8:21-25).
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`The combination of these elements is therefore nothing more than the
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`recitation of a generic computer system, and “the mere recitation of a generic
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`computer cannot transform a patent-ineligible abstract idea into a patent-eligible
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`invention.” Alice, 134 S. Ct. at 2358; see also CyberSource, 654 F.3d at 1375
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`(explaining that an abstract claim is not salvaged by “claiming only its
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`performance by computers, or by claiming the process embodied in program
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`instructions on a computer readable medium”), Institution Decision at 15 (“the
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`linkage of existing hardware devices to existing payment validation processes and
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`supplier-defined access rules, as claimed by the challenged claims, appear to be
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`well-understood, routine, conventional activit[ies] previously known to the
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`industry””)(citing Alice, 134 S. Ct. at 2359, Mayo, 132 S. Ct. at 1294)(internal
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`quotation marks omitted).
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`b. The POR emphasizes functions performed by the claimed
`computer elements yet, whether viewed individually or as
`an ordered combination, these functions are nothing more
`than purely conventional (POR § V.B)
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`By highlighting functional aspects of the claims in an attempt to establish
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`the existence of an inventive concept, Patent Owner further exposes the claims’
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`deficiencies. Specifically, as illustrated in detail below, the identified limitations
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`are themselves each directed to subject matter that was not only well-understood
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`and routine prior to the ‘720 Patent’s effective filing date, but that had, in fact,
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`been practiced with pen and paper for decades prior to the invention of modern
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`computers. See POR at 18-20, 24; Bloom at ¶¶ 23-108; see also Institution
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`Decision at 15 (“on this record, we are not persuaded that the recited technical
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`components . . . which include, for example, ‘a program store,’ ‘processor,’ and
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`code to receive/retrieve/write data perform a function that are anything other than
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`‘purely conventional’”)(citing Alice, 134 S. Ct. at 2359).
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`At pages 18-21, the POR discusses three exemplary limitations of claims 13
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`and 14. For ease of review, these limitations are reproduced and enumerated
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`below:
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`[1] 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;
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`[2] code responsive to the payment validation data to retrieve data
`from the data supplier and to write the retrieved data into the data
`carrier;
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`[3] 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.
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`Together, these limitations require nothing more than receiving, in response
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`to validation, content and a rule defining access to content, and then storing the
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`rule. These functions, like every other function embodied in the claims, were
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`purely conventional by the ‘720 Patent’s effective filing date, having been “done
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`with pen and paper for decades prior to the invention of modern computers.” See
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`Bloom at ¶ 23.
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`As the Board recognized at page 15 of the Institution Decision, “the linkage
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`of existing hardware devices” to these “existing payment validation processes and
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`supplier-defined access rules” was itself “‘well understood, routine, conventional
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`[activity]’ previously known to the industry” (quoting Alice at 134, S.Ct. at 2359).
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`Indeed, the ‘720 Patent itself emphasizes that the claimed computer elements are
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`“conventional” elements “used in a conventional manner.” See Bloom at ¶ 126
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`(citing ‘720 Patent at 4:4-5, 16:46-49, 21:33-38); see also Institution Decision at
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`15 (“we are not persuaded that the recited technical components . . . which include,
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`for example, ‘a program store,’ ‘processor,’ and code to receive/retrieve/write data
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`perform a function that are anything other than ‘purely conventional’”).
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`The Federal Circuit has repeatedly “found similar claims to be ineligible
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`despite the recitation of a general purpose computer or the Internet . . . .” Versata
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`Development Group, Inc. v. SAP America, Inc. et al., 14-1194, slip op. at 52-53
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`(Fed. Cir. July 9, 2015) (citing Content Extraction, Ultramercial, buySAFE,
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`Bancorp, and CyberSource); see also CyberSource, 654 F.3d at 1375 (noting that
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`“an abstract idea is not changed by . . . claiming the process embodied in program
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`instructions on a computer readable medium”).
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`c. The POR describes the claims as providing technological
`solutions to technological problems, yet the claims do
`nothing more than apply generic computer technology
`toward the solution of a business problem (POR § V.B)
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`At page 13, the POR characterizes the claims as being “rooted in computer
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`technology in order to overcome a problem specifically arising in the realm of
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`computer networks-that of digital piracy,” likening them to the claims found
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`eligible in DDR Ho