UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_________
`
`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 NOTICE OF APPEAL
`
`
`
`
`1 CBM2015-00119 (Patent 8,033,458 B2) has been consolidated with this
`proceeding.
`
`

`
`Notice is hereby given, pursuant to 37 C.F.R. § 90.2(a), that Patent Owner
`
`Smartflash LLC hereby appeals to the United States Court of Appeals for the
`
`Federal Circuit from the Final Written Decision entered on March 30, 2016 (Paper
`
`45), the Decision Denying Rehearing entered on June 9, 2016 (Paper 47) and from
`
`all underlying orders, decisions, rulings and opinions regarding U.S. Patent No.
`
`8,033,458 (“the ’458 Patent”) including the Decision - Institution of Covered
`
`Business Method Patent Review entered on April 2, 2015 (Paper 7).
`
`For the limited purpose of providing the Director with the information
`
`requested in 37 C.F.R. § 90.2(a)(3)(ii), Patent Owner anticipates that the issues on
`
`appeal may include the following, as well as any underlying findings,
`
`determinations, rulings, decisions, opinions, or other related issues:
`
`• Whether the Board erred in finding that claim 11 of the ’458 Patent is
`
`unpatentable under 35 U.S.C. § 101;
`
`• Whether the Board erred in denying Patent Owner’s Motion to
`
`Exclude (Paper 31); and
`
`• Whether the Board erred in finding that the subject matter of the ‘458
`
`Patent is directed to activities that are financial in nature and in
`
`instituting Covered Business Method review of the ‘458 Patent.
`
`
`
`1
`
`

`
`Copies of this Notice of Appeal are being filed simultaneously with the
`
`Director, the Patent Trial and Appeal Board, and the Clerk of the United States
`
`Court of Appeals for the Federal Circuit.
`
`Any required fees may be charged to Deposit Account No. 501860.
`
` /
`
` 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 August 9, 2016
`
`
`
`
`
`
`
`2
`
`

`
`CERTIFICATE OF SERVICE
`The undersigned hereby certifies that this PATENT OWNER’S NOTICE
`OF APPEAL was filed with the Patent Trial and Appeal Board using the E2E
`System and was served, by agreement of the parties, by emailing copies to counsel
`for the Petitioner as follows:
`
`W. Karl Renner (renner@fr.com)
`Thomas A. Rozylowicz (rozylowicz@fr.com)
`CBM39843-0005CP1@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
`
`The undersigned hereby further certifies that on August 9, 2016 this
`PATENT OWNER’S NOTICE OF APPEAL (and its three attached decisions)
`were filed with the Federal Circuit via CM/ECF (along with one courtesy copy by
`hand delivery) and two (2) copies were served on the U.S. Patent and Trademark
`Office via in-hand delivery as follows:
`
`
`Director of the United States Patent and Trademark Office
`c/o Office of the General Counsel
`Madison Building East, 10B20
`600 Dulaney Street
`
`Alexandria, VA 22314‐5793
`
` /
`
` 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
`
`3
`
`
`Dated: August 9, 2016
`
`
`
`
`
`

`
`
`
`
`
`
`
`
`
`Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 47
`Entered: June 9, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`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
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`PLENZLER, Administrative Patent Judge.
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71
`
`
`
`
`
`1 CBM2015-00119 (Patent 8,033,458 B2) has been consolidated with this
`proceeding.
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`INTRODUCTION
`Samsung Electronics America, Inc., Samsung Electronics Co., Ltd.,
`and Samsung Telecommunications America, LLC (“Samsung”)2 filed a
`Petition to institute covered business method patent review of claim 11 (the
`“challenged claim”) of U.S. Patent No. 8,033,458 B2 (Ex. 1001, “the ’458
`patent”) pursuant to § 18 of the Leahy-Smith America Invents Act (“AIA”).3
`Paper 2 (“Pet.”). On April 2, 2015, we instituted a transitional covered
`business method patent review (Paper 7, “Institution Decision” or “Inst.
`Dec.”) based upon Petitioner’s assertion that claim 11 is directed to patent
`ineligible subject matter under 35 U.S.C. § 101. Inst. Dec. 18.
`On April 30, 2015, Apple Inc. (“Apple”) filed a Petition to institute
`covered business method patent review of claim 11 of the ’458 patent based
`on the same ground. CBM2015-00119 (Paper 2, “Apple Pet.”). Apple
`simultaneously filed a “Motion for Joinder” of their newly filed case with
`Samsung’s previously instituted case. CBM2015-00119 (Paper 3, “Apple
`Mot.”). On August 6, 2015, we granted Apple’s Petition and consolidated
`the two proceedings.4 Paper 29; CBM2015-00119, Paper 11.
`Subsequent to institution, Smartflash LLC (“Patent Owner”) filed a
`Patent Owner Response (Paper 21, “PO Resp.”)5 and Samsung and Apple
`
`
`2 Samsung Telecommunications America, LLC, a petitioner at the time of
`filing, merged with and into Samsung Electronics America, Inc. as of
`January 1, 2015. Paper 6.
`3 Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011).
`4 For purposes of this decision, we will cite only to Samsung’s Petition.
`5 Paper 21 is the redacted version of the Patent Owner Response. Paper 20
`is the unredacted version of that Response.
`
`2
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`(collectively, “Petitioner”) filed a Reply (Paper 28, “Pet. Reply”) to Patent
`Owner’s Response.
`In our Final Decision, we determined that Petitioner had established,
`by a preponderance of the evidence, that claim 11 of the ’458 patent is
`unpatentable. Paper 45 (“Final Dec.”), 27. Patent Owner requests rehearing
`of the Final Decision. Paper 46 (“Request” or “Req. Reh’g”). Having
`considered Patent Owner’s Request, we decline to modify our Final
`Decision.
`
`
`STANDARD OF REVIEW
`In covered business method review, the petitioner has the burden of
`showing unpatentability by a preponderance of the evidence. 35 U.S.C.
`§ 326(e). The standard of review for rehearing requests is set forth in 37
`C.F.R. § 42.71(d), which states:
`The burden of showing a decision should be modified lies with
`the party challenging the decision. The request must specifically
`identify all matters the party believes the Board misapprehended
`or overlooked, and the place where each matter was previously
`addressed in a motion, an opposition, or a reply.
`
`
`ANALYSIS
`Patent Owner’s Request is based on a disagreement with our
`determination that claim 11 (“the challenged claim”) is directed to patent-
`ineligible subject matter. Req. Reh’g 2. In its Request, Patent Owner
`presents arguments directed to alleged similarities between the challenged
`claim and those at issue in DDR Holdings, LLC v. Hotels.com, L.P., 773
`F.3d 1245 (Fed. Cir. 2014) (Req. Reh’g 5–10) and alleged differences
`
`3
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`between the challenged claim and those at issue in Alice Corp. Pty. Ltd. v.
`CLS Bank Int’l., 134 S. Ct. 2347 (2014) (id. at 10–15).
`As noted above, our rules require that the requesting party
`“specifically identify all matters the party believes the Board
`misapprehended or overlooked, and the place where each matter was
`previously addressed in a motion, an opposition, or a reply.” 37 C.F.R.
`42.71(d) (emphasis added). In its Request, however, Patent Owner does not
`identify any specific matter that we misapprehended or overlooked. Rather,
`the only citation to Patent Owner’s previous arguments are general citations,
`without explanation as to how we misapprehended or overlooked any
`particular matter in the record. For example, with respect to Patent Owner’s
`arguments regarding DDR Holdings, Patent Owner simply notes that “[t]he
`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.” Request
`7 n.4. Similarly, in Patent Owner’s arguments regarding Alice, Patent
`Owner simply notes that “[t]he 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.” (id. at 11 n.6) and “[t]he 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” (id.
`at 12 n.8). These generic citations to large portions of the record do not
`identify, with any particularity, specific arguments that we may have
`misapprehended or overlooked.
`Rather than providing a proper request for rehearing, addressing
`particular matters that we previously misapprehended or overlooked, Patent
`Owner’s Request provides new briefing by expounding on argument already
`
`4
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`made. Patent Owner cannot simply allege that an “issue” (e.g., whether the
`claims are directed to an abstract idea) was previously addressed, generally,
`and proceed to present new argument on that issue in a request for rehearing.
`See 37 C.F.R. § 42.71.
`Patent Owner’s arguments are either new or were addressed in our
`Final Decision. For example, Patent Owner’s argument that the challenged
`claims are not directed to an abstract idea (Req. Reh’g 10–12) is new, and
`therefore, improper in a request for rehearing, because Patent Owner did not
`argue the first step of the analysis articulated in Mayo and Alice in its Patent
`Owner Response (see Paper 21 (PO Resp.) passim (arguing only the second
`step of the Mayo and Alice test)). To the extent portions of the Request are
`supported by Patent Owner’s argument in the general citations to the record,
`we considered those arguments in our Final Decision, as even Patent Owner
`acknowledges. See, e.g., Req. Reh’g 7 (citing Fin. Dec. 16) (“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.’”). For
`example, Patent Owner’s arguments about inventive concept (Req. Reh’g 5–
`7, 12–15) were addressed at pages 9–14 of our Final Decision, Patent
`Owner’s arguments about preemption (Req. Reh’g. 6–7) were addressed at
`pages 18–20 of our final Decision, and Patent Owner’s arguments about
`DDR Holdings (Req. Reh’g. 5–10) were addressed at pages 14–18 of our
`Final Decision. Mere disagreement with our Final Decision also is not a
`proper basis for rehearing.
`Accordingly, Patent Owner’s Request does not apprise us of sufficient
`reason to modify our Final Decision.
`
`5
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`
`
`ORDER
`
`Accordingly, it is:
`ORDERED that Patent Owner’s Request is denied.
`
`
`
`PETITIONER:
`
`
`Walter Renner
`Thomas Rozylowicz
`Fish & Richardson P.C.
`axf@fr.com
`cbm39843-0005cp1@fr.com
`
`
`PATENT OWNER:
`
`Michael Casey
`Davidson Berquist Jackson & Gowdey
`smartflash-cbm@dbjg.com
`
`
`6
`
`

`
`
`
`
`
`
`
`
`
`Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 45
`Entered: March 30, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`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
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`PLENZLER, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`1 CBM2015-00119 (Patent 8,033,458 B2) has been consolidated with this
`proceeding.
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`INTRODUCTION
`
`A. Background
`Samsung Electronics America, Inc., Samsung Electronics Co., Ltd.,
`and Samsung Telecommunications America, LLC (“Samsung”)2 filed a
`Petition to institute covered business method patent review of claim 11 (the
`“challenged claim”) of U.S. Patent No. 8,033,458 B2 (Ex. 1001, “the ’458
`patent”) pursuant to § 18 of the Leahy-Smith America Invents Act (“AIA”).3
`Paper 2 (“Pet.”). On April 2, 2015, we instituted a transitional covered
`business method patent review (Paper 7, “Institution Decision” or “Inst.
`Dec.”) based upon Petitioner’s assertion that claim 11 is directed to patent
`ineligible subject matter under 35 U.S.C. § 101. Inst. Dec. 18.
`On April 30, 2015, Apple Inc. (“Apple”) filed a Petition to institute
`covered business method patent review of claim 11 of the ’458 patent based
`on the same ground. CBM2015-00119 (Paper 2, “Apple Pet.”). Apple
`simultaneously filed a “Motion for Joinder” of their newly filed case with
`Samsung’s previously instituted case. CBM2015-00119 (Paper 3, “Apple
`Mot.”). On August 6, 2015, we granted Apple’s Petition and consolidated
`the two proceedings.4 Paper 29; CBM2015-00119, Paper 11.
`Subsequent to institution, Smartflash LLC (“Patent Owner”) filed a
`Patent Owner Response (Paper 21, “PO Resp.”)5 and Samsung and Apple
`
`
`2 Samsung Telecommunications America, LLC, a petitioner at the time of
`filing, merged with and into Samsung Electronics America, Inc. as of
`January 1, 2015. Paper 6.
`3 Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011).
`4 For purposes of this decision, we will cite only to Samsung’s Petition.
`5 Paper 21 is the redacted version of the Patent Owner Response. Paper 20
`is the unredacted version of that Response.
`
`2
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`(collectively, “Petitioner”) filed a Reply (Paper 28, “Pet. Reply”) to Patent
`Owner’s Response.
`An oral hearing was held on November 9, 2015, and a transcript of the
`hearing is included in the record. Paper 43 (“Tr.”).
`We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
`Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.
`For the reasons that follow, we determine that Petitioner has shown by a
`preponderance of the evidence that claim 11 of the ’458 patent is directed to
`patent ineligible subject matter under 35 U.S.C. § 101.
`B. The ’458 Patent
`The ’458 patent relates to “a portable data carrier for storing and
`paying for data and to computer systems for providing access to data to be
`stored,” and the “corresponding methods and computer programs.”
`Ex. 1001, 1:21–25. Owners of proprietary data, especially audio recordings,
`have an urgent need to address the prevalence of “data pirates” who make
`proprietary data available over the internet without authorization. Id. at
`1:29–55. The ’458 patent describes providing portable data storage together
`with a means for conditioning access to that data upon validated payment.
`Id. at 1:59–2:11. This combination allows data owners to make their data
`available over the internet without fear of data pirates. Id. at 2:11–15.
`As described, the portable data storage device is connected to a
`terminal for internet access. Id. at 1:59–67. The terminal reads payment
`information, validates that information, and downloads data into the portable
`storage device from a data supplier. Id. The data on the portable storage
`device can be retrieved and output from a mobile device. Id. at 2:1–5.
`
`3
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`The ’458 patent makes clear that the actual implementation of these
`components is not critical and may be implemented in many ways. See, e.g.,
`id. at 25:49–52 (“The skilled person will understand that many variants to
`the system are possible and the invention is not limited to the described
`embodiments.”).
`C. Challenged Claims
`Petitioner challenges claim 11, which depends from independent
`claim 6. Claims 6 and 11 are reproduced below:
`6. A data access device for retrieving stored data from
`a data carrier, the device comprising:
`a user interface;
`a data carrier interface;
`a program store storing code implementable by a
`processor; and
`a processor coupled to the user interface, to the data
`carrier interface and to the program store for
`implementing the stored code, the code comprising:
`code to retrieve use status data indicating a use
`status of data stored on the carrier, and use rules
`data indicating permissible use of data stored on
`the carrier;
`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.
`
`Id. at 27:8–23.
`11. A data access device according to claim 6 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.
`
`4
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`Id. at 28:14–18.
`
`ANALYSIS
`
`A. Claim Construction
`In a covered business method patent review, claim terms are given
`their broadest reasonable interpretation in light of the specification in which
`they appear and the understanding of others skilled in the relevant art. See
`37 C.F.R. § 42.300(b). Applying that standard, we interpret the claim terms
`of the ’458 patent according to their ordinary and customary meaning in the
`context of the patent’s written description. See In re Translogic Tech., Inc.,
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this Decision, we
`need not construe expressly any claim term.
`B. Statutory Subject Matter
`Petitioner challenges claim 11 as directed to patent-ineligible subject
`matter under 35 U.S.C. § 101. Pet. 19–35. Petitioner submitted a
`declaration from Jeffrey Bloom, Ph.D. in support of its Petition. Ex. 1003
`(“Bloom declaration”)6.
`Patent Owner contends that the challenged claims are patent-eligible.
`
`1. Abstract Idea
`Under 35 U.S.C. § 101, we must first identify whether an invention
`fits within one of the four statutorily provided categories of patent-
`eligibility: “processes, machines, manufactures, and compositions of
`
`
`6 In its Response, Patent Owner argues that the Bloom declaration should be
`given little or no weight. PO Resp. 3–6. Because Patent Owner has filed a
`Motion to Exclude that includes a request to exclude the Bloom declaration
`in its entirety, or in the alternative, portions of the declaration based on
`essentially the same argument, we address Patent Owner’s argument as part
`of our analysis of the motion, discussed below.
`
`5
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–14 (Fed. Cir.
`2014). Here, the challenged claim recites a “machine,” i.e., a “data access
`device.” Section 101, however, “contains an important implicit exception
`[to subject matter eligibility]: Laws of nature, natural phenomena, and
`abstract ideas are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l.,
`134 S. Ct. 2347, 2354 (2014) (citing Assoc. for Molecular Pathology v.
`Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (internal quotation
`marks and brackets omitted)). In Alice, the Supreme Court reiterated the
`framework set forth previously in Mayo Collaborative Services v.
`Prometheus Laboratories, Inc., 132 S. Ct. 1289, 1293 (2012) “for
`distinguishing patents that claim laws of nature, natural phenomena, and
`abstract ideas from those that claim patent-eligible applications of these
`concepts.” Alice, 134 S. Ct. at 2355. The first step in the analysis is to
`“determine whether the claims at issue are directed to one of those patent-
`ineligible concepts.” Id.
`According to the Federal Circuit, “determining whether the section
`101 exception for abstract ideas applies involves distinguishing between
`patents that claim the building blocks of human ingenuity—and therefore
`risk broad pre-emption of basic ideas—and patents that integrate those
`building blocks into something more, enough to transform them into specific
`patent-eligible inventions.” Versata Dev. Grp., Inc. v. SAP Am., Inc., 793
`F.3d 1306, 1332 (Fed. Cir. 2015) (emphasis added); accord id. at 1333–34
`(“It is a building block, a basic conceptual framework for organizing
`information . . . .” (emphasis added)). This is similar to the Supreme Court’s
`formulation in Bilski v. Kappos, 561 U.S. 593, 611 (2010) (emphasis added),
`noting that the concept of risk hedging is “a fundamental economic practice
`
`6
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`long prevalent in our system of commerce.” See also buySAFE Inc. v.
`Google, Inc., 765 F.3d 1350, 1353-54 (Fed. Cir. 2014) (stating that patent
`claims related to “long-familiar commercial transactions” and relationships
`(i.e., business methods), no matter how “narrow” or “particular,” are
`directed to abstract ideas as a matter of law). As a further example, the
`“concept of ‘offer based pricing’ is similar to other ‘fundamental economic
`concepts’ found to be abstract ideas by the Supreme Court and [the Federal
`Circuit].” OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed.
`Cir. 2015) (citations omitted).
`Petitioner argues that the challenged claim is directed to the abstract
`idea of “regulating authorized use of information.” Pet. 22. Although Patent
`Owner does not concede, in its brief, that the challenged claims are directed
`to an abstract idea, it does not persuasively explain how the claimed subject
`matter escapes this classification. PO Resp. 9–25; see also Tr. 46:21–47:11
`(Patent Owner arguing that the challenged claims are not abstract ideas, but
`conceding this argument was not made in the briefs).
`We agree that the challenged claim is drawn to a patent-ineligible
`abstract idea. Specifically, the challenged claim is directed to conditioning
`and controlling access to content (which is analogous to the characterization
`of the abstract idea proposed by Petitioner). For example, claim 6 (from
`which claim 11 depends) recites “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” and
`
`7
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`claim 11 recites “code to write partial use status data” and that “wherein said
`use rules permit partial use of a data item.”7
`As discussed above, the ’458 patent discusses addressing recording
`industry concerns of data pirates offering unauthorized access to widely
`available compressed audio recordings. Ex. 1001, 1:20–55. The ’458 patent
`proposes to solve this problem by restricting access to data on a device based
`upon satisfaction of use rules linked to payment data. Id. at 9:7–25. The
`’458 patent makes clear that the claimed subject matter is directed to paying
`for data and providing access to data. See id. at 2:20–23 (“This invention is .
`. . particularly . . . relate[d] . . . to computer systems for providing access to
`data.”). Although the specification discusses data piracy on the Internet (see
`id. at 1:29–39), the challenged claims are not limited to the Internet. The
`underlying concept of the challenged claims, particularly when viewed in
`light of the ’458 patent specification, is controlling access to content, as
`Petitioner contends. As discussed further below, this is a fundamental
`economic practice long in existence in commerce. See Bilski, 561 U.S. at
`611.
`
`We are, thus, persuaded, based on the ’458 patent specification and
`the language of the challenged claim, that claim 11 is directed to an abstract
`idea. See Alice, 134 S. Ct. at 2356 (holding that the concept of
`
`
`7 Although our final decision in CBM2015-00016 determined claim 11 to be
`indefinite, that determination does not prevent us from determining whether
`claim 11 is patent-eligible under § 101. For example, the determination that
`claim 11 is indefinite was based on the uncertainty as to whether “said use
`rules” in claim 11 refers to the “use rule data” recited in claim 6 or a new
`“use rule” limitation. Neither interpretation saves the claim from being
`directed to an abstract idea. Nor does either interpretation involve an
`inventive concept, as discussed below.
`
`8
`
`

`
`CBM2014-00192
`Patent 8,033,458 B2
`
`intermediated settlement at issue in Alice was an abstract idea); Accenture
`Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344
`(Fed. Cir. 2013) (holding the abstract idea at the heart of a system claim to
`be “generating tasks [based on] rules . . . to be completed upon the
`occurrence of an event”).
`
`2. Inventive Concept
`“A claim that recites an abstract idea must include ‘additional
`features’ to ensure ‘that the [claim] is more than a drafting effort designed to
`monopolize the [abstract idea].’” Alice, 134 S. Ct. at 2357 (quoting Mayo,
`132 S. Ct. at 1297). “This requires more than simply stating an abstract idea
`while adding the words ‘apply it’ or ‘apply it with a computer.’ Similarly,
`the prohibition on patenting an ineligible concept cannot be circumvented by
`limiting the use of an ineligible concept to a particular technological
`environment.” Versata, 793 F.3d at 1332 (citations omitted). Moreover, the
`mere recitation of generic computer components performing conventional
`functions is not enough. See Alice, 134 S. Ct. at 2360 (“Nearly every
`computer will include a ‘communications controller’ and ‘data storage unit’
`capable of performing the basic calculation, storage, and transmission
`functions required by the method claims.”).
`Petitioner argues “[t]he claims of the ’458 patent . . . 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.”
`Pet. Reply 11 (quoting Ex. 1003 ¶ 126). Petitioner persuades us that claim
`11 of the ’458 patent does not add an inventive concept sufficient to ensure
`that the patent in practice amounts to significantly more than a patent on the
`abstract idea itself. Alice, 134 S. Ct. at 2355; see also Accenture Global
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`Servs., 728 F.3d at 1344 (holding claims directed to the abstract idea of
`“generating tasks [based on] rules . . . to be completed upon the occurrence
`of an event” to be unpatentable even when applied in a computer
`environment and within the insurance industry). Specifically, we agree with
`and adopt Petitioner’s rationale that the additional elements of the
`challenged claims are generic features of a computer that do not bring the
`challenged claim within § 101 patent eligibility. Pet. 23–29; Pet. Reply 11–
`20.
`
`a. Technical Elements
`Petitioner argues that the challenged claim is unpatentable because it
`is directed to an abstract idea and any technical elements it recites are
`repeatedly described by the ’458 patent itself as “both ‘conventional’ and as
`being used ‘in a conventional manner.’” Pet. 23 (citing Ex. 1001, 4:4–5,
`16:46–49, 21:33–38)). Patent Owner disagrees, arguing that the challenged
`claim is patentable because it “recite[s] specific ways of using distinct
`memories, data types, and use rules that amount to significantly more than
`the underlying abstract idea.” PO Resp. 15–16 (quoting Ex. 2049, 19). We
`agree with Petitioner for the following reasons.
`The specification of the ’458 patent treats as well-known all
`potentially technical aspects of the claims, which simply require generic
`computer components (e.g., interfaces, program store, and processor). The
`linkage of existing hardware devices to existing supplier-defined access
`rules appear to be “‘well-understood, routine, conventional activit[ies]’
`previously known to the industry.” Alice, 134 S. Ct. at 2359; Mayo,
`132 S. Ct. at 1294.
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`Further, the claimed computer code simply performs generic
`computer functions, such as retrieving, accessing, evaluating, and writing.
`See Pet. 23–29. The recitation of these generic computer functions is
`insufficient to confer specificity. See Content Extraction and Transmission
`LLC v. Wells Fargo Bank, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (“The
`concept of data collection, recognition, and storage is undisputedly well-
`known. Indeed, humans have always performed these functions.”).
`Moreover, we are not persuaded that claim 11 “recite[s] specific ways
`of using distinct memories, data types, and use rules that amount to
`significantly more than the underlying abstract idea.” See PO Resp. 15. The
`challenged claim does not recite any particular or “distinct memories.” To
`the extent Patent Owner argues that the claimed “program store” recited in
`claim 6 is a memory, Patent Owner does not provide any argument as to how
`it is constructed or implemented in an unconventional manner. Moreover,
`the challenged claim lists several generic data types, such as “use status
`data,” “use rules data,” and “code.” We are not persuaded that the listing of
`these data types, by itself, amounts to significantly more than the underlying
`abstract idea. Patent Owner does not point to any inventive concept in the
`’458 patent related to the way these data types are constructed or used. The
`recitation of generic data types, being used in the conventional manner, is
`insufficient to confer the specificity required to elevate the nature of the
`claim into a patent-eligible application. Alice, 134 S. Ct. at 2355 (quoting
`Mayo, 132 S. Ct. at 1294) (“We have described step two of this analysis as a
`search for an ‘inventive concept’—i.e., an element or combination of
`elements that is ‘sufficient to ensure that the patent in practice amounts to
`significantly more than a patent on the [ineligible concept] itself.’”)
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`(brackets in original). In addition, the ’458 patent simply recites data types
`with no description of the underlying implementation or programming that
`results in these data types. See Content Extraction and Transmission LLC,
`776 F.3d at 1347 (“The concept of data collection, recognition, and storage
`is undisputedly well-known. Indeed, humans have always performed these
`functions.”).
`In addition, because the recited elements can be implemented on a
`general purpose computer, the challenged claim does not cover a “particular
`machine.” Pet. 31–33; see Bilski, 561 U.S. at 604–05 (stating that machine-
`or-transformation test remains “a useful and important clue” for determining
`whether an invention is patent eligible). And the challenged claim does not
`transform an article into a different state of thing. Pet. 33–35.
`Thus, we determine, the potentially technical elements of the claim
`are nothing more than “generic computer implementations” and perform
`functions that are “purely conventional.” Alice, 134 S. Ct. at 2358–59;
`Mayo, 132 S. Ct. at 1294.
`To the extent Patent Owner argues that the challenged claim includes
`an “inventive concept” because of the specific combination of elements in
`the challenged claim, we disagree. Patent Owner contends that
`[b]y 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.
`
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`PO Res