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 CBM2014-00192
`
`Patent 8,033,458
`
`PATENT OWNER’S RESPONSE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`SAMSUNG ELECTRONICS AMERICA, INC. AND
`
`SAMSUNG ELECTRONICS CO., LTD,
`
`Petitioner,
`
`V.
`
`SMARTFLASH LLC,
`
`Patent Owner.
`
`Case CBM2014-00192
`
`Patent 8,033,458
`
`PATENT OWNER’S RESPONSE
`
`
`
`TABLE OF CONTENTS
`
`PATENT OWNER’S LIST OF EXHIBITS ............................................................ iii
`
`I.
`
`INTRODUCTION ........................................................................................... 1
`
`II.
`
`STATEMENT OF MATERIAL FACTS ........................................................ 3
`
`III.
`
`THE BLOOM DECLARATION SHOULD BE GIVEN LITTLE OR NO
`WEIGHT .......................................................................................................... 3
`
`A.
`
`B.
`
`No Evidentiary Standard Is Disclosed in the Bloom Declaration ......... 3
`
`Dr. Bloom Is Not a Disinterested Party .......... _. ..................................... 4
`
`IV.
`
`OVERVIEW OF THE TECHNOLOGY OF US. PATENT NO. 8,033,458 .6
`
`CLAIM 11 IS DIRECTED TO STATUTORY SUBJECT MATTER ........... 9
`
`A.
`
`B.
`
`C.
`
`D.
`
`The Two—Part Test for Statutory Subject Matter ........................'.......... 9
`
`Claim 11 Is Statutory Under the Second Step of Mayo and Alice ...... 10
`
`The Claims Do Not Result in Inappropriate Preemption .................... 18
`
`1.
`
`2.
`
`Preemption under DDR Holdings ............................................. 18
`
`Preemption under Mayo and Alice ............................................22
`
`Evidence Relied Upon by the Bloom Declaration Is Not from the
`Appropriate Timeframe
`.................................................................24
`
`VI.
`
`PETITIONER HAS ALREADY LOST A CHALLENGE ON THE SAME
`
`STATUTORY GROUNDS IN ITS LITIGATION WITH PATENT
`
`OWNER ......................................................................................................... 25
`
`VII.
`
`THE USPTO IS ESTOPPED FROM REVISITING THE ISSUE OF
`
`WHETHER CLAIM 11 IS DIRECTED TO STATUTORY SUBJECT
`
`MATTER ....................................................................................................... 26
`
`
`
`VIII. CONCLUSION..................................................................‘............................27
`
`
`
`-11-
`
`
`
`PATENT OWNER’S LIST OF EXHIBITS
`
`
`
`Exhibit Description ‘
`Exhibit Number
`
`
`‘ 2001
`
`Congressional Record - House, June 23, 2011, H4480-4505
`
`Congressional Record - Senate, Sep. 8, 2011, 85402-5443
`2002
`
`
`Reserved
`2003-2023
`
`
`2024
`
`Samsung’s Motion To Stay Litigation Pending CBM Review
`
`2049,
`
`Report and Recommendation (on Defendants’ Motions for
`Summary Judgment of Invalidity Pursuant to 35 U.S.C. 101),
`
`from Smartflash LLC et al. v. Apple, Inc, et al. , Case No.
`6:13-CV-447 (E.D. Tex.) and Smartflaslz LLC et al. v.
`
`Samsung Electronics Co. Ltd, et al., Case No. 6:13-CV—448
`
`(ED. Tex.), dated Jan. 21, 2015
`
`2050
`
`Order adopting Report and Recommendation (on
`
`Defendants” Motions for Summary Judgment of Invalidity
`
`Pursuant to 35 U.S.C. 101), from Smartflaslz LLC et al. v.
`
`‘
`
`Apple, Inc, et al., Case No. 6:13—CV-447 (E.D. Tex.) and
`
`Smartflash LLC et al. V. Samsung Electronics Co. Ltd, et al,
`Case No. 6:13-CV—448 (ED. Tex.), dated Feb. 13,2015
`
`
`
`2055
`
`Deposition Transcript of Jeffrey A. Bloom dated May 19,
`
`2015
`
`-iii-
`
`
`
`Non-Confidential Portion of Deposition Transcript of Jeffrey
`
`et al. v. Apple, Inc, et al, Case No. 6:13-CV—447 (E.D.
`
`Tex), Smartflash LLC et al. v. Samsung Electronics Co. Ltd,
`
`et al, Case No. 6:13-CV—448 (ED. Tex), Smartflash LLC et
`
`al. v. Google, Inc, et al, Case No. 6:14-CV—435 (E.D. TeX.),
`
`and Smartflash LLC et al. v. Amazon, Inc, et al, Case No.
`
`6: l4-CV—992 (ED. TeX.) dated May 29, 2015
`
`Reserved
`
`CiVil Docket Report from Smartflash LLC et al. v. Samsung
`
`A. Bloom dated May 20, 2015
` Confidential Portion of Deposition Transcript of Jeffrey A.
`
`
`Bloom dated May 20, 2015
` Memorandum Opinion and Order (on Defendants’ Motions
`
`
`for Stay Pending the Outcome CBMs) from Smart/lash LLC
`
`
`
`
`
`
`
`
`
`
`Electronics Co. Ltd, et al, Case No. 6:13—CV-448 (E.D.
`
`TeX.)
`
`2056
`
`2057
`
`2058
`
`2059-2062
`
`2063
`
`
`
`b
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Reserved
`2064
`
`
`2065
`
`Declaration of Emily E. Toohey in Support of Patent
`
`Owner’s Response
`
`
`
`
`
`
`
`-iv-
`
`
`
`I.
`
`INTRODUCTION
`
`Claim 11 of US. Patent 8,033,458 (“the ‘45 8 Patent”) is directed to statutory
`
`subject matter because it claims a solution “necessarily rooted in computer
`
`technology in order to overcome a problem specifically arising in the realm of
`
`computer networks.” DDR Holdings, LLC v. Hotels. com, L.P., 773 F.3d 1245,
`
`1257 (Fed. Cir. 2014). In particular, claim 11 of the ‘458 Patent overcomes the
`
`problem of data content piracy on the Internet “[b]y combining digital rights
`
`management with content data storage using a single carrier” such that “the stored
`
`content data becomes mobile and can be accessed anywhere while retaining control
`
`over the stored data for the data content provider or data copyright owner.” EX.
`
`1001, ‘458 Patent at 5:29-33. In other words, claim 11 ofthe ‘458 Patent is
`
`directed to a system that combines on the data carrier both the digital content and
`
`the use rules/use status data, so that access control to the digital content can be
`
`continuOusly enforced prior to each access to the digital content.
`
`Moreover, as demonstrated below, claim 11 of the ‘458 Patent does not
`
`result in inappropriate preemption of “the abstract idea of regulating authorized use
`
`of information” (Petition at 22), nor is there any evidence that a disproportionate
`
`amount of future innovation is foreclosed by claim 11 of the ‘458 Patent.
`
`As set out in detail below, by Order dated February 13, 2015, Petitioner
`
`already lost in Federal Court the exact same purely legal isSue the Board is
`
`-1-
`
`
`
`considering here — whether claim 11 of the ‘45 8' Patent is directed to statutory
`
`subject matter under 35 U.S.C. § 101. See Exhibit 2049, Report and
`
`RecommendatiOn (on Defendants’ Motions for Summary Judgment of Invalidity
`
`Pursuant to 35 U.S.C. 101) (hereinafter “Report and Recommendation”), from
`
`Smartflash LLC et al. v. Apple, Inc, et all, Case No. 6:13-CV—447 (E.D. Tex.) and
`
`Smart/lash LLC et al. v. Samsung Electronics Co. Ltd, er al., Case No. 6:13-CV—
`
`448 (ED. TeX.), dated Jan. 21, 2015, and Exhibit 2050, Order adopting Report and
`
`Recommendation (on Defendants’ Motions for Summary Judgment of Invalidity
`
`Pursuant to 35 U.S.C. 101), from Smartflaslz LLC et al. v. Apple, Inc, et al, Case
`
`No. 6: l3-CV—447 (E.D. Tex.) and Smarlflash LLC et al. 12. Samsung Electronics
`
`Co. Ltd, et al, Case No. 6:13-CV—448 (E.D. Tex), dated Feb. 13, 2015.
`
`Finally, l’atent Owner submits that the USPTO has already adjudicated the
`
`threshold question of whether claim 11 of the ‘458 Patent comports with 35 U.S.C.
`
`I
`
`§ 101, which is a question of law, during the prosecution of the ‘458 Patent. The
`
`USPTO is estopped from re-litigating this purely legal issue already considered
`
`and adjudicated by the USPTO.
`
`In support of this Patent Owner’s Response, reference will be made to
`
`concurrently filed Exhibits 205 5-2057: (1) the non-confidential Deposition
`
`Transcript of Jeffrey A. Bloom, PhD., dated May 19, 2015, (2) the non—
`
`confidential Deposition Transcript of Jeffrey A. Bloom, PhD, dated May 20, 2015,
`
`'
`
`-2-
`
`
`
`and (3) the confidential Deposition Transcript of Jeffrey A. Bloom, PhD, dated
`
`0 May 20, 2015, respectively. Those deposition transcripts refer. to Exhibit 1003, the
`
`Declaration of Jeffrey A. Bloom, Ph.D. (hereinafter “the Bloom Declaration”).
`
`II.
`
`STATEMENT OF MATERIAL FACTS
`
`l.
`
`The Bloom Declaration does not state that Dr. Bloom’s opinions
`
`presented therein were based on a “preponderance of the evidence” standard.
`
`2.
`
`The Bloom Declaration does not state that Dr. Bloom’s opinions
`
`presented therein were based on a “more likely than not” evidentiary weight
`
`standard.
`
`III.
`
`THE BLOOM DECLARATION SHOULD BE GIVEN LITTLE OR NO
`
`WEIGHT
`
`A.
`
`No Evidentiary Standard Is Disclosed in the BIOOm Declaration
`
`The Bloom Declaration does not disclose the underlying facts on which the
`
`opinions are based and is, therefore, entitled to little or no weight. 37 CFR 42.65
`
`(“Expert testimony that does not disclose the underlying facts or data on which the
`
`opinion is based is entitled to little or no weight”). More specifically, the Bloom
`
`Declaration does not state the evidentiary weight standard (e.g., substantial
`
`evidence versus preponderance of the evidence) that Dr. Bloom used in arriving at
`
`._3_
`
`
`
`ir
`
`l 2
`
`‘
`
`ilgigi5l13ii
`
`:
`
`
`
`tt l
`
`‘ his conclusions. Given that there is no evidence that Dr. Bloom even knows how
`
`much weight need be relied upon to show that/a claim is nonstatutory, the PTAB
`
`can only afford little or no weight to the testimony therein. To do otherwise would
`
`be to accept his opinions Without knowing “the underlying facts
`
`on which the
`
`opinion is based” (i.e., how much evidence he thinks shows any of his opinions
`
`discussed therein).
`
`For example, when Dr. Bloom opines that he believes a statement to be true
`
`or thathe believes an element is inherently present, is that belief based on less than
`
`a preponderance of the evidence, or more? Without his having disclosed what
`
`evidentiary standard he used in forming his opinions, and given that there is no
`
`evidence that he even knew what evidentiary standard he wassupposed to be
`
`using, the PTAB cannot rely on his statements. Thus, the PTAB should find that
`
`his declaration is entitled to little or no weight.
`
`B.
`
`Dr. Bloom Is Not a Disinterested Party
`
`Dr. Bloom has taken the position with respect to another patent in the family
`
`of patents being challenged that “The claims of the ‘221
`
`cover nothing more than
`
`the basic financial idea of enabling limited use of paid for and/or licensed content
`
`using conventional computer systems and components.” Exhibit 2055, 8124-8.
`
`However, as noted in paragraph 5 of the Bloom Declaration, Dr. Bloom is
`
`-4-
`
`
`
`“currently Director of System Engineering and Software Development for
`
`Conditional Access and Identity Management Systems for SiriusXM radio.” Dr.
`
`Bloom further testified that SiriusXM radio has a product that enables paid for
`
`and/or licensed content to be stored locally and played back later in a disconnected
`
`fashion.
`
`Q. Does SiriusXM have a product or service that enables paid for
`
`and/or licensed content to be stored locally and played back later in a
`
`disconnected fashion from either the Internet or the satellite to which
`
`it received the inf— '-- information?
`
`A. Yes, it does.
`
`Q. Can you describe that product for me, please, without disclosing
`
`any confidential information?
`
`A. On—demand content can be downloaded and stored locally and then
`
`played at a later, off-line time.
`
`Q. What's the name of the product that performs that function?
`
`A. It's a feature in our Internet streaming product.
`
`Q. What's the name of the Internet streaming product?
`
`A. SiriusXM Internet Radio.
`
`See Exhibit 2056, 17921-20.
`
`
`
`Moreover, when Dr. Bloom was questioned about the SiriusXM Internet
`
`Radio product 1
`
`\Dr. Bloom refused to testify about its
`
`operation alleging that the information was confidential. See e.g., Exhibit 2057,
`
`193 217—19428; 195 :5—16. However, similarity between his employer’s products and
`
`the claims of the patent would provide Dr. Bloom with a motivation to be biased
`
`against the claims being found to be statutory subject matter under 35 U.S.C.
`
`§101.
`
`IV. OVERVIEW OF THE TECHNOLOGY OF US PATENT NO. 8,033,458
`
`Although the claims define the actual scope of coverage of the patent, as
`
`described in the first paragraph of the BACKGROUND OF THE INVENTION,
`
`the patent-at-issue, the ‘458 patent, generally describes “data storage and access
`
`systems
`
`[and] is particularly useful for managing stored audio and video data,
`
`but may also be applied to storage and access of text and software, including
`
`games, as well as other types of data.” Col. 1', lines 20-28.
`
`Preferred embodiments described in the last full paragraph of col. 15
`
`illustrate this further: “FIG. 7
`
`shows a variety of content access terminals for
`
`accessing data supply computer system 120 over internet 142. The terminals are
`
`provided with an interface to a portable data carrier or ‘smart Flash card’ (SFC) as
`
`generally described with reference to FIG. 2 and as described in more detail below.
`
`-6-
`
`
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`
`' In most embodiments of the terminal the SFC interface allows the smart Flash card
`
`data carrier to be inserted into and removed from the terminal, but in some
`
`embodiments the data carrier may be integral with the terminal.” Exemplary
`
`terminals include, but are not limited to, set-top boxes 154, CD/DVD Players 170
`
`and mobile communications devices 152. Col. 15, line 66 to col. 16, line 1.
`
`Referring to preferred embodiments, the ‘45 8 patent discloses that a data
`
`supply system may provide users with a seamless purchase and content delivery
`
`experience. Col. 23, line 63 — col. 24, line 1. Users are able to purchase content
`
`from a variety of different content providers even if they do not know where the
`
`content providers are located or how the content is delivered. See id. The
`
`exemplary system is operated by a “content data supply ‘system owner,”’ who may
`
`act as an intermediary between a user seeking to purchase content and content
`
`providers, such as record labels, movie studios, and software providers. See col.
`
`13, lines 60-67. When a user accesses the system, he or she is able to select
`
`content to purchase or rent from a variety of different content providers. See col. 4,
`
`line 64 — col. 5, line 8. If the user finds a content item to buy, his or her device will
`
`transmit stored “payment data” to a “payment validation system” to validate the
`
`payment data. See col. 8, lines 3-6. The payment validation system returns proof
`
`that the payment data has been validated, in the form of “payment validation data,”
`
`
`
`i ige
`
`-
`
`i
`
`
`
`
`
`
`
`and the user is able to retrieve the purchased content from the content provider.
`
`See col. 8, lines 7—9.
`
`Col. 24, lines 16—18, discloses that “FIG. .13
`
`shows a flow chart for user
`
`access of stored data on a smart Flash card using a data access device such as the
`
`MPB player ofFIG. 1.” Col. 9, lines 20-22, discloses “The data access device uses
`
`the use status data and use rules to determine What access is permitted-to data
`
`stored on the data carrier.” Col. 4, line67 — col. 5, line 8, discloses “The carrier
`
`may
`
`store content use rules pertaining to allowed use of stored data items. These
`
`use rules may be linked to payments made from the card to provide payment
`
`options such as access to buy content data outright; rental access to content data for
`
`a time period or for a specified number of access events; and/or rental/purchase,
`
`for example where rental use is provided together with an option to purchase
`
`content data at the reduced price after rental access has expired.” Further, as
`
`described in col. 9, lines 33-35, “use status data [is retrieved] from the data carrier
`
`[to] indicat[e] past use of the stored data.” Thus, as described in col. 5, lines 29-
`
`33, “[b]y combining digital rights management with content data storage using a
`
`single carrier, the stored content data becomes mobile and can be accessed
`
`anywhere while retaining control over the stored data for the data content provider
`
`or data copyright owner.”
`
`
`
`By using a system that combines on the data carrier both the digital content
`
`and the use rules/use status data, access control to the digital content can be
`
`continuously enforced prior to access to the digital content. By comparison, unlike
`
`a system that uses use rules/use status data as claimed, when a DVD was
`
`physically rented for a rental period, there was no mechanism to write partial use
`
`1 status data to the DVD when only part of the DVD had been accessed (e.g., to
`
`track whether a renter had “finished with” the DVD yet).
`
`V.
`
`CLAIM 11 IS DIRECTED TO STATUTORY SUBJECT MATTER
`
`A.
`
`The Two-Part Test for Statutory Subject Matter
`
`The Supreme Court articulated a two-part test for patentability in Mayo
`
`Collaborative Services v. Prometheus Laboratories, Inc, 132 S. Ct. l289 (2012),
`
`which has been followed by Alice Corp. P232. v. CLS Bank Int’l, 134 S. Ct. 2347
`
`(2014). The first step in the analysis is to determine whether the claims at issue are
`
`directed to patent-ineligible concepts. If the claims at issue are directed to a
`
`patent-ineligible concept, the second step of the analysis is to determine whether
`
`the limitations of the claims, individually and as ordered combinations, Contain an
`
`inventive concept that transforms the nature of the claims into patent-eligible
`
`subject matter. Mayo, 132 S. Ct. at 1294.
`
`
`
`
`
`B.
`
`Claim 11 Is Statutory Under the SecondStep of Mayo and Alice
`
`Post Mayo and Alice, the Federal‘Circuit has provided guidance on how to
`
`distinguish statutory claims, like that of the ‘458 patent, from non-statutory claims.
`
`In ‘DDR Holdings, the Federal Circuit analyzed claims, like claim 11 of the ‘458
`
`‘ patent here, that have technological solutions to technological problems created by
`
`the nature of digital content and the Internet. In DDR Holdings, the system of
`
`exemplary claim 19 included (a) a computer store containing the data needed to
`
`support operation of the system and (b) a computer server (or processor) that was
`
`coupled to the computer store, where the claimed system was programmed to (by
`
`having code configured to) perform the solution to a network-specific problem.
`
`The computer server was “programmed to” perform four steps. The first two steps
`
`are “(i) receive from the web browser of a computer user a signal indicating
`
`activation of one of the links displayed by one of the first web pages; [and] (ii)
`
`automatically identify as the source page the one of the first web pages on which
`
`the link has been activated.” The third and fourth steps were “(iii) in response to
`
`identification of the source page, automatically retrieve the stored data
`
`corresponding to the source page; and (iv) using the data retrieved, automatically
`
`generate and transmit to the web browser a second web page that displays: (A)
`
`information associated with the commerce object associated with the link that has
`
`been activated, and (B) the plurality of Visually perceptible elements visually
`
`-10_
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`corresponding to the source page.” The Court found the claims to be statutory
`
`because “the claimed solution is necessarily rooted in computer technology in
`
`order to overcome a problem specifically arising in the realm of computer
`
`networks.” Id. at 1257.
`
`Such is the case here too. Here, the claims are not directed to mental
`
`processes or processes performed using pen and paper, rather the claims are
`
`directed to particular devices that can download and store digital content into a
`
`data carrier. By using a system that combines on the data carrier both the digital
`
`content and use rules/use status data, and by using “code to evaluate the use status
`
`data using the use rules data to determine whether access is permitted to the stored
`
`data” and “code to access the stored data when access is permitted,” access control
`
`to the digital content can be continuously enforced prior to access to the digital
`
`content, allowing subsequent use (e.g., playback) of the digital content to be
`
`portable and disconnected. Moreover, the claimed data access terminals enable the
`
`tracking of partial use of a stored data item (e.g., so that the rest can be used/played
`
`back later). By comparison, unlike a system that uses use rules/use status data as
`
`claimed, when a DVD was physically rented for a rental period, there was no
`
`mechanism to write partial use status data to the DVD when only part of the DVD
`
`had been accessed (e. g., to track whether a renter had “finished with” the DVD
`
`yet).
`
`‘-11—
`
`
`
`Thus, the claims are rooted in computer technology in order to overcome a
`
`problem specifically arising in the realm of computer networks — that of digital
`
`data piracy, and, like in DDR Holdings, “address
`
`a challenge particular to the
`
`Internet.” Id. at 1257. The Report and Recommendation too acknowledged this
`
`distinction, finding:
`
`As in DDR Holdings, the patents here do not simply apply a known
`
`business practice from the pre-Internet world to computers or the
`
`Internet. “The claimed solution is necessarily rooted in computer
`
`technology in order to overcome a problem specifically arising in the
`
`realm of computer networks.” Digital Rights Management is a
`
`technology that was developed after widespread use of the Internet.
`
`Entry into the Internet Era presented new and unique problems for
`
`digital content providers in combatting unauthorized use and
`
`reproduction of protected media content.
`
`Report and Recommendation at 19, lines 7 ~12 (quoting DDR Holdings, 773 F.3d at
`
`1257) (internal citation omitted).
`
`As discussed above, claim 11, which depends from claim 6, recites a data
`
`access terminal (a system) that parallels the structure of the statutory claim 19 in
`
`DDR Holdings. The table below sets forth a mapping of claims 6 and 11 of the
`
`-12-
`
`
`
`lt
`EI
`
`2
`
`
`
`‘45 8 patent to claim 19 of the patent in DDR Holdings and shows that claim 11 is
`
`directed to statutory subject matter.
`
`Claim element from DDR Holding
`
`Similar claim element from claims 6
`
`and 11
`
`
`stored data from a data carrier, the
`
`device comprising”
`
`“a data carrier” that is used to store
`
`payment data, data retrieved from a data
`
`supplier, at least one access rule
`
`retrieved from the data supplier, and use
`
`
`
`19. A system useful in an outsource
`
`provider serving web pages offering
`
`commercial opportunities, the system
`
`comprising:
`
`(a) a computer store containing data, for
`
`each of a plurality of first web pages,
`
`defining a plurality of visually
`
`perceptible elements, which Visually
`
`perceptible elements correspond to the
`
`plurality of first web pages; (i) wherein
`
`each of the first web pages belongs to
`
`one of a plurality of web page owners;
`
`(ii) wherein each of the first web pages
`
`displays at least one active link
`
`associated with a commerce object
`
`associated with a buying opportunity of
`
` “6. A data access device for retrieving
`
`stats data
`
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`
`
`Claim element from DDR Holding
`
`Similar claim element from claims 6
`
`and 11
`
`a selected one of a plurality of
`
`merchants; and (iii) ...
`
`(b) a computer server at the Outsource
`
`provider, which computer server is
`
`coupled to the computer store and
`
`programmed to:
`
`(i) receive from the web browser of a
`
`computer user a signal indicating
`
`
`
`“a processor coupled to the user
`
`interface, to the data carrier interface
`
`and to the program store for
`
`implementing the stored code, the code
`
`comprisingz”
`
`“code to retrieve use status data
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`indicating a use status of data stored on
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`data”
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`activation of one of the links displayed
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`the carrier...”
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`by one of the first web pages;
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`(ii) automatically identify as the source
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`“code to retrieve
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`use rules data
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`page the one of the first web pages on
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`indicating permissible use of data stored
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`which the link has been activated;
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`on the carrier”
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`(iii) in response to identification of the
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`“code to evaluate the use status data
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`source page, automatically retrieve the
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`using the use rules data to determine
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`stored data corresponding to the source
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`whether access is permitted to the stored
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`page; and
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`
`
`‘
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`
`
`$1
`21ii
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`Claim element from DDR Holding
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`Similar claim element from claims 6
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`_V
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`(iv) using the data retrieved,
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`“code to access the stored data when
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`automatically generate and transmit to
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`access is permitted”
`
`
` and 11
`
`the web browser a second web page that
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`displays: (A) information associated
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`with the commerce object associated
`
`with the link that has been activated, and
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`(B) the plurality of visually perceptible
`
`elements visually corresponding to the
`
`SOUTCC page.
`
`Thus, like in DDR Holdings, when “the limitations of the
`
`claims are taken as [a]
`
`combination, the claims recite[] an invention that is not merely the routine or
`
`conventional use of the Internet.” DDR Holdings, 773 F.3d at 1259. Such a
`
`finding was further echoed by the Report and Recommendation when it held the
`
`“asserted claims
`
`recite specific ways of using distinct memories, data types, and
`
`use rules that amount to significantly more than the underlying abstract idea.
`
`Although in some claims the language is functional and somewhat generic, the
`
`-15-
`
`
`
`claims contain significant limitations on the scope of the inventions.” ‘ Report and
`
`Recommendation at 19, lines 1—4.
`
`While it is the combination of elements that ultimately defines patentability,
`
`exemplary limitations show that the Petition has failed to show that claim ll is
`
`non-statutory. For example, claim 11 expressly recites “wherein said use rules
`
`permit partial use of a data item stored on the carrier and further comprising code
`
`to write partial use status data to the data carrier when only part of a stored data
`item has been accessed.” As admitted by Dr. Bloom, such a limitation is not V
`
`taught by any of the performance rights organizations:
`
`Q. With respect to Claim ll, is it fair to say that your report does not
`
`describe how reporting obligations for any of the performance rights
`
`organizations listed in your report change based on how much of a
`
`song is played?
`
`A. The report doesn't say that.
`
`Exhibit 2056, 161213-18.
`
`Alternatively, page 26 of the Petition alleges with respect to that limitation
`
`that “it was well known that Internet radio broadcasters would need to account for
`
`(i) which content was played by their stations, and (ii) the amount of content that
`
`was played by those stations.” The Petition cites US. Patent No. 5,778,187 (“the
`
`‘187 patent”) and paragraphs 123—125 cf the Bloom Declaration in support of this
`
`-16-
`
`
`
`l:
`
`g i E
`
`
`
` Igil‘
`
`;i
`iz
`
`ii
`
`l l
`
`assertion. However, as described in the quoted section, the ‘187 patent relates to
`
`“audit logs” for post-usage information gathering, not to use status data that is
`
`evaluated “using the use rules data to determine whether access is permitted to the
`
`stored data” such that “code to access the stored data when access is permitted”
`
`can control access to the stored data.
`
`In addition, as admitted by paragraph 124 of the Bloom Declaration, “The
`
`Radio Station: Broadcast, Satellite and Internet” by Michael C. Keith relied upon
`
`by the Petition (and the Bloom Declaration) is “not published before the effective
`
`filing date of the ‘458 Patent.” Thus, its contents are not relevant.
`
`Similarly, paragraph 125 of the Bloom Declaration, also admits that the
`
`“DMCA ultimately resulted in formal requirements on programming for Internet
`
`radio stations in 2003. These restrictions formalized requirements and limitations
`
`that had been previously informally adopted.” However, since the cited
`
`“restrictions” do not relate to writing partial use status data to the data carrier, and
`
`since neither the Petition nor the Bloom declaration allege that the “restrictions”
`
`were known prior to the effective filing date of the patent, they are not relevant to
`
`the limitation of claim ll of “said use rules permit partial use of a data item stored
`
`on the carrier and further comprising code to write partial use status data to the
`
`data carrier when only part of a stored data item has been accessed.”
`
`-17_
`
`
`
`Claim 11 (based on its dependence on claim 6) also recites that the use rules,
`
`use status data and the stored data are all stored in the same data carrier. However,
`
`the Petition does not allege that such a configuration was known, nor does such a
`
`configuration relate to mental or pen-and—paper processes. Dr. Bloom expressly
`
`testified with respect to claim ll:
`
`Q. So you agree that the report does not describe what the data carrier
`
`of Claim 11 corresponds to, correct?
`
`A. Correct.
`
`Exhibit 2056,; 16423—6.
`
`By ignoring that the use rules, use Status data and the stored data are all
`
`stored in the same data carrier, it can be seen that the Petition is ignoring even the
`
`context of the problem -- that a technological solution is necessary to address the
`
`technological problem created by the nature of digital content and the Internet.
`
`Accordingly, claim 11 is directed to statutory subject matter under the two—part test
`
`of Mayo and Alice.
`
`C.
`
`The Claims Do Not Result in Inappropriate Preemption
`
`l.
`
`Preemption under DDR Holdings
`
`Claim 11 of the ‘458 patent does not result in inappropriate preemption
`
`under DDR Holdings, Mayo and Alice. Page 29 of the Petition alleges that “Claim
`
`-18-
`
`
`
`
`
`
`
`11 ofthe ‘458 Patent Preempts All Effective Uses of the Abstract Idea of
`
`Regulating Authorized Use of Information.” However, using the analysis of the
`
`Federal Circuit in DDR Holdings, claims are statutory when “the claims
`
`do not
`
`attempt to preempt every application of the idea [relating to the field of the
`
`invention]. Rather, they recite a specific way
`
`that incorporates elements from
`
`multiple sources in order to solve a problem faced by [servers] on the Internet.”
`
`DDR Holdings, 773 F.3d at 1259. Such a standard is consistent with other
`
`Supreme Court precedent as well. As cited in Mayo, in “Bilski, the Court pointed
`
`out that to allow ‘petitioners to patent risk hedging would [inappropriately]
`
`preempt use of this approach in all fields.” Mayo, 132 S. Ct. at 1301 (citing Bilski
`
`v. Kappos, 561 US. 612 (2010)).
`
`Because the claims under review have similarstructures to the claims of
`
`DDR Holdings, as discussed above, the result of the preemption analysis is the
`
`same here as in DDR Holdings —— the claims do not result in inappropriate
`
`preemption. Likewise, even Dr. Bloom agreed that the claims of the ‘45 8 patent
`
`do not result in inappropriate preemption when he testified:
`
`Q. So Claim 11, for example, does not preempt all effective uses of
`
`enabling limited use of paid for and/or licensed content using
`
`conventional computer systems and components?
`
`A. Yes.
`
`_19_
`
`
`
`S lil ii f1 l
`
`: Ex l l
`
`Q. And, likewise, Claim 11 does not preempt all effective uses of
`
`systems that regulate authorized use of information?
`
`A. Yes.
`
`Exhibit 2055, 119:4-12. In fact, the Report and Recommendation found that “the
`
`claims do not risk preempting all future inventions related to exchanging access to
`
`data for payment on the Internet. Instead, when taken as ordered combinations, the
`
`claims recite specific ways of combining system components and method steps
`
`beyond the routine use of the Internet. The claims address specific ways of
`
`managing access to digital content data based on payment validation through
`
`storage and retrieval of use status data and use rules in distinct memory types and
`
`evaluating the use data according to the use rules.” Report and Recommendation at
`
`20.
`
`Moreover, the Petition’s assertion that “Claim 11 of the ‘458 Patent
`
`Preempts All Effective Uses of the Abstract Idea of Regulating Authorized Use of
`
`Information,” (Petition at 29) is contradicted by Petitioner’s litigation assertions (1)
`
`that it does not infringe the challenged claim and (2) that there are non-infringing
`
`alternatives to the claim. As described in the Report and Recommendation, “both
`
`Smartflash and Defendants identified numerous non—infringing alternatives, such
`
`as those employed by NetfliX and Spotify.” Id. at 15. (Emphasis added.)
`
`-20-
`
`
`
`l laltt l
`
`
`
`
`
`
`
`
`
`Indeed, Dr. Bloom agreed that there are at least .2 different alternatives to
`
`claim 11. As to the first alternative, Dr. Bloom testified:
`
`Q. Looking at Claim 11, it says, A data access device, according to
`
`Claim 6, wherein said use rules permit partial use of a data item stored
`
`on the data carrier and further comprising code to write partial use
`
`data to the data carrier when only part of a data item has been
`
`accessed.
`
`Do you see that?
`
`A. Yes.
`
`Q. Is it possible to build a data access device that does not utilize the
`
`additional limitation of Claim 11 that, nonetheless, regulates
`
`authorized use of information?
`
`A. Yes.
`
`Q. And would that data access device also enable limited use of paid
`
`for and/or licensed content?
`
`A. It could be used in a system that does.
`
`Exhibit 2055, 117:21-118213.
`
`As to the second alternative, Dr. Bloom testified:
`
`Q. Could you build a system like this system of Claim 6 that does not
`
`evaluate use status data using use rules data to determine when access
`
`-21_
`
`
`
`,5g
`il:
`
`
`
`
`
`L)
`
`liil.ai3 ilil
`
`is permitted to the stored data but, nonetheless, includes code to
`
`access the stored data When access according to some other condition
`
`is permitted?
`
`A. You c
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