`
`_________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_________
`
`SAMSUNG ELECTRONICS AMERICA, INC. and
`SAMSUNG ELECTRONICS CO. LTD.,
`Petitioner
`
`and
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`_________
`
`Case CBM2014-001921
`
`Patent 8,033,458 B2
`
`_________
`
`
`
`PATENT OWNER’S REQUEST FOR REHEARING
`
`
`
`
`1 CBM2015-00119 (Patent 8,033,458 B2) has been consolidated with this
`proceeding.
`
`
`
`TABLE OF CONTENTS
`
`INTRODUCTION ........................................................................................... 1
`
`STATEMENT OF PRECISE RELIEF REQUESTED ................................... 2
`
`
`
`I.
`
`
`II.
`
`
`III. BACKGROUND ............................................................................................. 2
`
`
`IV. ARGUMENT ................................................................................................... 4
`
`A. Like the Claims in DDR Holdings, Claim 11 Is Patent Eligible
`Because It Teaches a Specific Solution to a Novel Problem Presented
`By Digital Commerce ............................................................................. 5
`
`B. Claim 11 Does Not Resemble the Claims in Alice ............................... 10
`
`1. Claim 11 Is Directed to a Specific Device, Not an Abstract Idea . 10
`
`2. Claim 11 Contains Numerous “Additional Features” That
`Demonstrate That It Does Not Cover An Abstract Idea ................ 12
`
`CONCLUSION .............................................................................................. 15
`
`i
`
`
`V.
`
`
`
`
`
`
`
`I.
`
`INTRODUCTION
`
`The Board’s final written decision in this covered business method patent
`
`review misapprehends the Federal Circuit’s and Supreme Court’s guidance on
`
`patent eligible subject matter under 35 U.S.C. § 101. Claim 11 covers a specific
`
`physical device operating within a novel content delivery system that facilitates
`
`distribution of digital content over the Internet while helping to reduce piracy—a
`
`pressing problem at the time of invention. It contains significant and meaningful
`
`limitations that are both inventive and technological, which, when taken in ordered
`
`combination, amount to more than the idea of “conditioning and controlling access
`
`to content” and does not pre-empt the field. Furthermore, the claim improves the
`
`functioning of computers used to download, store, and access data, thereby
`
`effecting a technological improvement in the relevant field.
`
`The Board wrongly determined that this claim on a physical device actually
`
`covered an abstract idea and ignored the claim’s combination of hardware and
`
`software to hold that the claim contains no inventive concept. Under the Board’s
`
`analysis, any device used in an economic transaction that contains conventional
`
`components would be patent ineligible. This error is exactly what the Supreme
`
`Court cautioned against in Alice. See Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134
`
`S. Ct. 2347, 2354 (2014) (warning against “construing this exclusionary principle
`
`
`
`1
`
`
`
`[to] swallow all of patent law”). Patent Owner respectfully requests rehearing to
`
`correct these errors. See 37 C.F.R. § 42.71(d).
`
`II.
`
`STATEMENT OF PRECISE RELIEF REQUESTED
`
`Patent Owner requests that the Board reverse its original decision (Paper 45,
`
`March 30, 2016) and hold challenged claim 11 subject matter eligible.2
`
`III. BACKGROUND
`
`1.
`
`The opportunities and challenges associated with distribution of
`
`digital content over the Internet “introduces a problem that does not arise” with
`
`content that is distributed on physical media. DDR Holdings, LLC v. Hotels.com,
`
`L.P., 773 F.3d 1245, 125 (Fed. Cir. 2014). By the late 1990s, as a result of
`
`improved data compression and increasing bandwidth for Internet access, content
`
`providers, for the first time, had the ability to offer data for purchase over the
`
`Internet; at the same time, unprotected data files could be easily pirated and made
`
`available “essentially world-wide” without authorization. Ex. 1001, 1:32-33. The
`
`conventional operation of the Internet does not solve the problem of data piracy:
`
`on the contrary, the Internet facilitates the distribution of data without restriction or
`
`protection. Id. 1:49-55.
`
`Content providers had faced the issue of piracy before—a CD can be copied
`
`onto a cassette tape or onto another CD and the pirated copy sold—but the problem
`
`2 Claim 11 was invalidated on indefiniteness grounds in CBM2015-00016.
`
`
`
`2
`
`
`
`of widespread distribution of pirated content over the Internet was unprecedented.
`
`There had never before been a way to make free, identical, and flawless copies of
`
`physical media available to millions of people instantaneously at virtually no
`
`incremental cost. See generally Metro-Goldwyn-Mayer Studios, Inc. v. Grokster,
`
`Ltd., 545 U.S. 913, 929-30 (2005). The advent of the Internet thus gave rise to an
`
`urgent need to address the problem of data piracy.
`
`
`
`The inventor devised a data storage and access system for downloading and
`
`paying for data, described in the specification and claimed in this patent and others,
`
`comprising specific elements designed to overcome the problems inherent in
`
`making digital content available over the Internet. Ex. 1001, at 1 (Abstract).
`
`Claim 11 is directed to one aspect of that system: namely, a “data access
`
`device”—for example, a mobile multi-media player—for “retrieving stored data
`
`from a data carrier.” Id. at 27:8-9. Related patents cover other aspects of the
`
`system and interactions explained in the specification.
`
`Claim 6, on which challenged claim 11 depends, requires the “data access
`
`device” to include (among other elements) a “processor” coupled to a “program
`
`store” storing code to “retrieve use status data” and “use rules data” from the data
`
`carrier. The device includes code “to evaluate the use status data using the use
`
`rules data to determine whether access is permitted.” “[W]hen access is
`
`permitted,” the device includes code to access the content data stored on the data
`
`
`
`3
`
`
`
`carrier. Ex. 1001, 27:8–23. The dependent limitations of claim 11 add an element
`
`permitting “partial use of a data item stored on the carrier” and “code to write
`
`partial use status data . . . when only part of a stored data item has been accessed.”
`
`
`
`2.
`
`The Board found claim 11 to be patent ineligible. First, the Board
`
`found (at 7) that the claim was “drawn to a patent-ineligible abstract idea,” that is,
`
`performing the “fundamental economic practice” of “conditioning and controlling
`
`access to content.” The Board also found “the additional elements of the
`
`challenged claims are generic features of a computer that do not bring the
`
`challenged claim within § 101 patent eligibility.” Id. at 10. And the Board
`
`distinguished DDR Holdings because “[d]ata piracy exists in contexts other than
`
`the Internet,” “the solution provided by the challenged claim is not rooted in
`
`specific computer technology,” and the Board was “not persuaded that [the
`
`challenged claim addresses data piracy on the Internet] by achieving a result that
`
`overrides the routine and conventional use of the recited devices and functions.”
`
`Id. at 16-17.
`
`IV. ARGUMENT
`
`The Board should reverse its decision in this case and find claim 11 directed
`
`to statutory subject matter because, in evaluating whether it complies with the
`
`requirements of § 101, the Board failed to give effect to the actual language of the
`
`
`
`4
`
`
`
`claim and its specific limitations.3 The actual claim language, read in light of the
`
`specification, reflects a specific and concrete solution to a novel problem
`
`associated with distribution of digital content over the Internet. Such a
`
`technological advance is patent eligible.
`
`A. Like the Claims in DDR Holdings, Claim 11 Is Patent Eligible
`Because It Teaches a Specific Solution to a Novel Problem
`Presented By Digital Commerce
`
`1.
`
`Claim 11 of the ’458 patent is patent eligible because it
`
`embodies one concrete aspect of a particular solution to the Internet-specific
`
`problem of digital piracy. This is not a claim that simply recites “use of the
`
`Internet” or a computer to perform an established business method. Cf.
`
`Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716 (Fed. Cir. 2014). This is no
`
`digital telephone book. Cf. Paper 45 at 13. On the contrary, the challenged claim
`
`limitations reflect specific technical choices: a “data carrier” that is a distinct
`
`element from the “data access device”; “use status data” (including “partial use
`
`status data”) and “use rules data” that are distinct from stored content data; and
`
`storage of those various elements on the same data carrier.
`
`3 The Board disregarded the actual text of the claims, using nearly identical
`
`language in all the final written decisions concerning patents related to the ’458
`
`patent, even though the challenged claims were distinct and varied dramatically in
`
`their coverage. See CBM2015-00016, CBM2015-00017.
`
`
`
`5
`
`
`
`That particular configuration of elements provides distinct advantages over
`
`alternatives. For example, by storing “use rules data” as a distinct element on the
`
`data carrier—rather than (for example) requiring that any use rules be included as
`
`part of the content file—the invention allows for different levels of usage of the
`
`same digital content. This permits, for example, both rental and sale of a particular
`
`content item; it further allows for provision of enhanced access without
`
`downloading the content data anew. Ex. 1001, 22:49-51. By storing the use status
`
`data on the data carrier rather than (for example) on the access device, the
`
`invention ensures that a portable data carrier can be used with various access
`
`devices without losing the ability to control access to the stored data. Indeed, the
`
`basic insight reflected in the claim—that a single portable data carrier can store
`
`content data, use rule data, and use status data (including partial use status data) for
`
`use with a data access device—is itself inventive.
`
`Because claim 11 teaches specific technical solutions to one problem
`
`associated with distribution of digital content through specific organization of
`
`distinct data types, implemented on specific devices, there is no risk that the
`
`patents monopolize “fundamental economic concepts,” as the Board held (at 8).
`
`Consequently, there is no concern that recognizing the patent-eligibility of this
`
`claim will “impede innovation” or “improperly t[ie] up . . . building blocks of
`
`human ingenuity,” Alice, 134 S. Ct. at 2354. On the contrary, claim 11 teaches a
`
`
`
`6
`
`
`
`“specific way” to control access to stored digital content; it does not attempt to
`
`“preempt every application of the idea.” DDR Holdings, 773 F.3d at 1259.
`
`2.
`
`The Board rejected Patent Owner’s reliance on DDR Holdings
`
`(at 16), holding that claim 11 was not “rooted in computer technology in order to
`
`overcome a problem specifically arising in the realm of computer networks.”4
`
`That is incorrect: the claim discusses specific computer functions and interactions,
`
`including with data carriers, to perform a defined series of operations. Indeed, the
`
`Board’s own summary of the ’458 patent (at 4) states:
`
`The ’458 patent describes providing portable data storage together
`with a means for conditioning access to that data upon validated
`payment. This combination allows data owners to make their data
`available over the internet without fear of data pirates.
`
`The patent specification further explains that the purpose of the invention is
`
`to “make . . . data available . . . over the internet without fear of loss of revenue.”
`
`Ex. 1001, 2:13-15. The specification notes that “the growing prevalence of so-
`
`called data pirates” is a problem that arises by virtue of “increasingly wide use of
`
`the internet.” Id. 1:29-30. Because the Internet facilitates the “essentially world-
`
`wide” distribution of flawless, identical copies of content data, the data piracy
`
`problems it creates are qualitatively different from the problem of copying of
`
`
`4 The issue of whether claim 11 was similar to the DDR Holdings claims was
`
`previously addressed. See 37 C.F.R. § 42.71(d); PO Resp. 11-12.
`
`
`
`7
`
`
`
`physical media (videotapes, CDs, software, books), which necessarily takes time,
`
`imparts imperfections, and imposes incremental costs. See Grokster, Ltd., 545
`
`U.S. at 929-30. Rather than generically claiming use of the Internet to perform an
`
`abstract business practice, the claim solves problems faced by digital content
`
`providers in the Internet Era and improves the functioning of the computer itself.5
`
`The Board also held (at 16-17) that the claim contained limitations—unlike
`
`the claims in DDR Holdings—that were “specified at a high level of generality.”
`
`But the claim and the specification discuss specific data stored in specific places,
`
`not mere generalities. There is “use status data” and “use rules data” stored on the
`
`carrier. See Ex. 1001 27:17-19. In the dependent limitations, there is “partial use
`
`status data” written to the carrier to “permit partial use of a data item.” See id.
`
`28:5-8. Unlike the terms in DDR Holdings, which have broad acceptance, these
`
`phrases are uniquely used in the ’458 patent. See DDR Holdings, 773 F.3d at 1249
`
`(reciting “links,” “source page,” and “web page”). These limitations thus cannot
`
`be said to be “specified at a high level of generality.”
`
`
`5 Claim 11 does not directly involve Internet transactions; rather, it is directed to a
`
`data access device interacting with a data carrier. Nevertheless, it is directed
`
`towards an Internet-specific problem – that is, storing and controlling access to
`
`content data that is sold separately from a storage medium.
`
`
`
`8
`
`
`
`Indeed, in CBM2015-00016 (Paper 56), the Board concluded (at 21) that
`
`claim 11 is indefinite because the dependent claim recites “said use rules,” while
`
`claim 6, the independent claim, only recites “use rules data.” The Board held that
`
`these limitations had precise meanings and could not be used interchangeably or
`
`generically. The fact that the patentee uses its own lexicography does not mean
`
`that the claim limitations are not precisely described. Here, the device must
`
`transfer, receive, and act on different specific data. The claim does not “merely
`
`recite the performance of some business practice known from the pre-Internet
`
`world along with the requirement to perform it on the Internet.” DDR Holdings,
`
`LLC, 773 F.3d at 1257. By ignoring these limitations, the Board erred in holding
`
`that there were not “additional features” present in claim 11 that made it patent-
`
`eligible.
`
`
`
` Finally, the Board held (at 12) that claim 11 could be performed by “a
`
`general-purpose computer.” But, again, this ignores the limitations of the claim,
`
`which, as explained above, require specific configurations of distinct data types
`
`and defined interactions among system components to facilitate secure access to
`
`data stored on a data carrier. As the specification makes clear, when digital data is
`
`sent over the Internet operating in its normal, expected manner and stored by a
`
`recipient, the content data are insecure; the content owner has no means to exert
`
`further control over access. Claim 11 provides a specific mechanism to ensure that
`
`
`
`9
`
`
`
`content, once downloaded and stored, can be accessed only when the associated
`
`use rules and use status data confirm that access is authorized. Just as the claims in
`
`DDR Holdings “specif[ied] how interactions with the Internet are manipulated to
`
`yield a desired result,” 773 F.3d at 1258, so too the claim here specifies how
`
`manipulation of specific data facilitates convenient and secure provision of digital
`
`content, a result that neither the conventional Internet nor unimproved computers
`
`can produce. The patent “improve[s] the functioning” and the functionality of
`
`digital media players, which, as the specification makes clear, likewise improves
`
`the functioning of data communications networks used for digital content
`
`distribution. Alice, 134 S. Ct. at 2359.
`
`B. Claim 11 Does Not Resemble the Claims in Alice
`
`Claim 11 does not fit the mold of the patent-ineligible claims of Alice. It
`
`does not recite an “abstract idea” and, in any event, teaches a specific
`
`“combination of elements” that amounts to “significantly more” than any ineligible
`
`concept.
`
`1.
`
`Claim 11 Is Directed to a Specific Device, Not an Abstract
`Idea
`
`The Board’s determination that claim 11 is directed to an abstract idea is
`
`incorrect because the claim is directed to a concrete machine with specific
`
`hardware and software components – not merely to the abstract idea of controlling
`
`access to content. As the Board acknowledged (at 6) the claim “recites a
`
`
`
`10
`
`
`
`‘machine,’ i.e., a ‘data access device’” with defined components. See Ex. 1001,
`
`27:8–23. It contains a user interface, a data carrier interface, memory, and a
`
`processor. The machine runs specific software to retrieve information governing
`
`whether a user may access data on the data carrier. The patent specification
`
`emphasizes that the patent is on a machine. See, e.g., id. 1:21-25.6
`
`In finding this claimed machine was directed to an abstract idea, the Board
`
`focused on the problem that the patented machine was designed to solve and
`
`treated the problem itself as the abstract idea to which the claims were directed.
`
`Specifically, the Board held (at 8) that claim 11 was directed as an abstract idea
`
`because “the underlying concept of the challenged claim[] . . . is controlling access
`
`to content,” a “fundamental economic practice.”7 But while it is true that the
`
`claimed machine provides a specific mechanism that can be used to control access
`
`to content, thus combatting problems of data piracy, see Ex. 1001, 1:20-55, that
`
`does not provide a fair description of the claim, which, as explained, provides a
`
`specific solution to an aspect of the problem.
`
`6 The issue of whether claim 11 is directed to an abstract idea was previously
`
`addressed. See 37 C.F.R. § 42.71(d); PO Resp. 10-27; see also Tr. 46:21-47:11.
`
`7 The Board identified the abstract idea without explaining its methodology, which
`
`itself merits rehearing. Cf. Avago Techs. Gen. IP (Singapore) Pte Ltd. v. Asustek
`
`Computer, Inc., No. 15-cv-04525-EMC, at 10-11 (N.D. Cal. Apr. 25, 2016).
`
`
`
`11
`
`
`
`There is a fundamental difference between claiming a specific device or
`
`method that can be used to accomplish an economic practice and claiming the
`
`practice itself. See Brookhill-Wilk 1, LLC v. Intuitive Surgical, Inc., 326 F.3d
`
`1215, 1223 (Fed. Cir. 2003) (“Advantages described in the body of the
`
`specification, if not included in the claims, are not per se limitations to the claimed
`
`invention.”). As an example, a cash register is a physical device that is used to
`
`perform a fundamental economic practice, namely, collecting, storing, and tracking
`
`payment. A claim on a specific novel device—with specific circuit boards, keys,
`
`and cash drawers—may be patentable even if a claim on collecting and storing
`
`payment itself would not be. The Board’s decision equates a claim on a machine
`
`that may be used to perform an economic task with a claim on the economic task
`
`itself, which risks turning all devices used in commerce into abstract ideas. This is
`
`the problem that the Supreme Court warned against in Alice. 134 S. Ct. at 2354.
`
`2.
`
`Claim 11 Contains Numerous “Additional Features” That
`Demonstrate That It Does Not Cover An Abstract Idea
`
`In any event, the Board was incorrect to find that claim 11 does not contain
`
`“additional features” to ensure it is more than a drafting effort designed to
`
`monopolize the abstract idea. 8 On the contrary, because claim 11 is not limited to
`
`
`8 The issue of whether claim 11 contains “additional features” beyond an abstract
`
`idea was previously addressed. See 37 C.F.R. § 42.71(d); PO Resp. 11-12, 18-19
`
`
`
`12
`
`
`
`generic computer implementation, it contains an inventive concept sufficient to
`
`establish patent eligibility.
`
`Just as the claim does not purport to cover an abstract idea, it also does not
`
`“simply stat[e] an abstract idea while adding the words ‘apply it’ or ‘apply it with a
`
`computer.’” Versata Development Group, Inc. v. SAP America, Inc., 793 F.3d
`
`1306, 1332 (Fed. Cir. 2015). It is, of course, true that the claimed machine has
`
`several components, including computer code. Some of that code allows the
`
`machine to retrieve “use status data” and “use rules” from a carrier through the
`
`machine’s data carrier interface. And, after evaluating these specific pieces of
`
`data, the machine can access other “stored data.” But these limitations specify a
`
`way in which the machine provides access to stored data to the user. It does not
`
`claim the general idea of controlling access to content. The Board came to a
`
`different conclusion by failing to consider the various claim limitations as an
`
`ordered combination reflecting distinct technological choices and advantages.
`
`The Board held (at 10-11) that each specific limitation was a “generic
`
`computer component” such as a program store or a processor and, with respect to
`
`the claimed software limitations, that the claims lack “any inventive concept …
`
`related to the way these data types are constructed or used.” But that basic
`
`methodology is flawed, because it is not proper to look at individual limitations
`
`and determine if each specified component of the machine is conventional in
`
`
`
`13
`
`
`
`isolation. “[I]nventions in most, if not all, instances rely upon building blocks long
`
`since uncovered, and claimed discoveries almost of necessity will be combinations
`
`of what, in some sense, is already known.” KSR Int’l Co. v. Teleflex Inc., 550 U.S.
`
`398, 418-19 (2007). The fact that a machine uses individual well-known pieces
`
`does not mean that the particular combination of elements lacks an inventive
`
`concept. A novel cash register will likely be made of well-known circuitry or
`
`plastics, but that does not mean that the combination is not technological. See
`
`Alice, 134 S. Ct. at 2359 (a claim may be patentable if it “effect an improvement in
`
`any other technology or technical field”).
`
`As explained above, the ’458 patent claims a data access device used with
`
`data carrier storing content data, use rule data, and use status data; that
`
`combination enables (for example) a portable “Smartflash” card to securely store
`
`downloaded content—a technological invention. See Ex. 1001, 24:16-18. Nothing
`
`in the Board’s opinion supports its conclusion that such an approach to data storage
`
`and access was merely conventional—which, in any event, should be a question of
`
`substantive validity, not patent eligibility.
`
`The Board acknowledged (at 13) that a combination of elements may
`
`provide an inventive concept under the Alice analysis. But in doing so, the Board
`
`not only improperly focused on a single aspect of the invention, it also drew the
`
`wrong conclusion. The Board acknowledged that the claim teaches storing “two
`
`
`
`14
`
`
`
`specific types of information—content and the conditions for providing access to
`
`the content – . . . in the same place or on the same storage device.” The Board then
`
`simply pronounced itself “not persuaded” that this particular configuration of data
`
`is “an inventive concept” —no reason given.
`
`Citing two prior art patents, (Exs. 1004, 1005), the Board then asserted that
`
`this idea was known in the prior art. These prior art references hardly suggest that
`
`a particular concept, if deployed as part of a novel configuration, is conventional;
`
`just as significant, the reference does not disclose the type of data storage and
`
`manipulation that the ’458 patent claims. On the contrary, both patents teach
`
`having the content owner attach usage rights as part of the content item. Ex. 1004
`
`at 4:40-41 (“Usage rights are attached to digital works . . .”); Ex. 1005, Abstract
`
`(“the owner . . . attaches usage rights to that work”). That makes it impossible to
`
`provide greater access without modifying the content itself. By contrast, the ’458
`
`patent, by teaching separate storage and retrieval of content data, on the one hand,
`
`and use rules data and use status data on the other, as distinct elements, solves this
`
`very problem. Thus a comparison to that prior art actually confirms the patent
`
`eligibility of the claim.
`
`V. CONCLUSION
`
`The Board should reverse its original decision and hold challenged
`
`claim 11 patent-eligible.
`
`
`
`15
`
`
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`
`Dated April 29, 2016
`
`
`
`
`
`
`
`16
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that this PATENT OWNER’S REQUEST
`
`FOR REHEARING in CBM2015-00192 was served today by emailing a copy to
`
`counsel for the Petitioner as follows:
`
`W. Karl Renner (renner@fr.com)
`Thomas A. Rozylowicz (rozylowicz@fr.com)
`CBM39843-0003CP1@fr.com
`
`J. Steven Baughman (steven.baughman@ropesgray.com)
`Megan Raymond (megan.raymond@ropesgray.com)
`James R. Batchelder (james.batchelder@ropesgray.com)
`ApplePTABService-SmartFlash@ropesgray.com
`
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`Dated: Dated April 29, 2016
`
`
`
`
`
`
`
`
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`17