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 CBM2014-001931
`
`Patent 8,061,598 B2
`
`_________
`
`
`
`PATENT OWNER’S NOTICE OF APPEAL
`
`
`
`
`1 CBM2015-00120 (Patent 8,061,598 B2) was consolidated with this proceeding.
`
`
`
`
`
`_________
`
`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 CBM2014-001931
`
`Patent 8,061,598 B2
`
`_________
`
`
`
`PATENT OWNER’S NOTICE OF APPEAL
`
`
`
`
`1 CBM2015-00120 (Patent 8,061,598 B2) was 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 Request for Rehearing entered June 10, 2016 (Paper 47)
`
`and from all underlying orders, decisions, rulings and opinions regarding U.S.
`
`Patent No. 8,061,598 (“the ’598 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 7 of the ’598 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 ‘598
`
`Patent is directed to activities that are financial in nature and in
`
`instituting Covered Business Method review of the ‘598 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 fee 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 Dr., Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7700
`Fax : (571) 765-7200
`Email: mcasey@dbjg.com
`
`
`
`
`
`
`
`
`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 Rozylowicz (rozylowicz@fr.com)
`CBM39843-0006CP1@fr.com
`
`J. Steven Baughman (steven.baughman@ropesgray.com)
`James R. Batchelder (james.batchelder@ropesgray.com)
`Megan Raymond (megan.raymond@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
`
`Dated: August 9, 2016
`
`
`
`Alexandria, VA 22314‐5793
`
`
`/ Michael R. Casey /
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Dr., Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7700
`Fax : (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`3
`
`
`
`
`
`
`
`
`
`
`
`
`Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 47
`Entered: June 10, 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 CBM2014-001931
`Patent 8,061,598 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`CLEMENTS, Administrative Patent Judge.
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71
`
`
`
`
`
`1 CBM2015-00120 (Patent 8,061,598 B2) has been consolidated with this
`proceeding.
`
`
`
`CBM2014-00193
`Patent 8,061,598 B2
`
`INTRODUCTION
`Samsung Electronics America, Inc., Samsung Electronics Co., Ltd.,
`and Samsung Telecommunications America, LLC (“Samsung”),2 filed a
`Corrected Petition to institute covered business method patent review of
`claim 7 of U.S. Patent No. 8,061,598 B2 (Ex. 1001, “the ’598 patent”)
`pursuant to § 18 of the Leahy-Smith America Invents Act (“AIA”).3 Paper 2
`(“Pet.”). On April 2, 2015, we instituted a covered business method patent
`review (Paper 7, “Institution Decision” or “Inst. Dec.”) based upon
`Samsung’s assertion that claim 7 (“the challenged claim”) is directed to
`patent ineligible subject matter under 35 U.S.C. § 101. Inst. Dec. 19.
`On April 30, 2015, Apple Inc. (“Apple”) filed a Petition to institute
`covered business method patent review of the same claim of the ’598 patent
`based on the same ground. Apple Inc. v. Smartflash LLC, Case CBM2015-
`00120 (Paper 2, “Apple Pet.”). Apple simultaneously filed a “Motion for
`Joinder” of its newly filed case with Samsung’s previously instituted case.
`CBM2015-00120 (Paper 3, “Apple Mot.”). On August 6, 2015, we granted
`Apple’s Petition and consolidated the two proceedings. Paper 29; Apple Inc.
`v. Smartflash LLC, Case CBM2015-00120, (Paper 13).
`Subsequent to institution, Smartflash LLC (“Patent Owner”) filed a
`Patent Owner Response (Paper 20, “PO Resp.”) and Samsung and Apple
`(collectively, “Petitioner”) filed a Reply (Paper 28, “Pet. Reply”) to Patent
`Owner’s Response.
`
`
`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).
`
`2
`
`
`
`CBM2014-00193
`Patent 8,061,598 B2
`
`In our Final Decision, we determined that Petitioner had established,
`by a preponderance of the evidence, that claim 7 of the ’598 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 7 is directed to patent-ineligible subject matter.
`Req. Reh’g 1. 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 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
`
`3
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`CBM2014-00193
`Patent 8,061,598 B2
`
`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 “the
`issue of whether the claim was similar to those in DDR Holdings was
`previously addressed. See PO Resp. 1, 10–12.” Request 6 n.3. Similarly, in
`Patent Owner’s arguments regarding Alice, Patent Owner simply notes that
`“the issue of whether Claim 7 is directed to an abstract idea was previously
`addressed. See PO Resp. 9–20; see also Tr. 46:21–47:11” (id. at 10 n.5) and
`“the issue of whether the claim contains ‘additional features’ beyond an
`abstract idea was previously addressed. See PO Resp. 11–12” (id. at 12 n.7).
`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
`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.
`
`4
`
`
`
`CBM2014-00193
`Patent 8,061,598 B2
`
`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 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 6 (citing Final Dec. 14) (“The Board
`rejected Patent Owner’s reliance on DDR Holdings (at 14), holding that
`Claim 7 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–
`6, 12–15) were addressed at pages 9–12 and 16–17 of our Final Decision,
`Patent Owner’s arguments about preemption (Req. Reh’g. 6) were addressed
`at pages 17–20 of our Final Decision, and Patent Owner’s arguments about
`DDR Holdings (Req. Reh’g. 6–9) were addressed at pages 12–16 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.
`
`ORDER
`
`Accordingly, it is:
`ORDERED that Patent Owner’s Request is denied.
`
`
`
`5
`
`
`
`CBM2014-00193
`Patent 8,061,598 B2
`
`PETITIONER:
`Walter Renner
`Thomas Rozylowicz
`Fish & Richardson P.C.
`axf@fr.com
`cbm39843-0006cp1@fr.com
`
`PATENT OWNER:
`
`Michael R. Casey
`J. Scott Davidson
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`mcasey@dbjg.com
`jsd@dbjg.com
`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 CBM2014-001931
`Patent 8,061,598 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`CLEMENTS, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`1 CBM2015-00120 (Patent 8,061,598 B2) was consolidated with this
`proceeding.
`
`
`
`CBM2014-00193
`Patent 8,061,598 B2
`
`INTRODUCTION
`
`A. Background
`Samsung Electronics America, Inc., Samsung Electronics Co., Ltd.,
`and Samsung Telecommunications America, LLC (“Samsung”),2 filed a
`Corrected Petition to institute covered business method patent review of
`claim 7 (the “challenged claim”) of U.S. Patent No. 8,061,598 B2 (Ex. 1001,
`“the ’598 patent”) pursuant to § 18 of the Leahy-Smith America Invents Act
`(“AIA”). Paper 2 (“Pet.”). On April 2, 2015, we instituted a covered
`business method patent review (Paper 7, “Institution Decision” or “Inst.
`Dec.”) based upon Samsung’s assertion that claim 7 (“the challenged
`claim”) is directed to patent ineligible subject matter under 35 U.S.C. § 101.
`Inst. Dec. 19.
`On April 30, 2015, Apple Inc. (“Apple”) filed a Petition to institute
`covered business method patent review of the same claim of the ’598 patent
`based on the same ground. Apple Inc. v. Smartflash LLC, Case CBM2015-
`00120 (Paper 2, “Apple Pet.”). Apple simultaneously filed a “Motion for
`Joinder” of its newly filed case with Samsung’s previously instituted case.
`CBM2015-00120 (Paper 3, “Apple Mot.”). On August 6, 2015, we granted
`Apple’s Petition and consolidated the two proceedings.3 Paper 29; Apple
`Inc. v. Smartflash LLC, Case CBM2015-00120, (Paper 13).
`
`
`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 For purposes of this decision, we will cite only to Samsung’s Petition.
`
`2
`
`
`
`CBM2014-00193
`Patent 8,061,598 B2
`
`Subsequent to institution, Smartflash LLC (“Patent Owner”) filed a
`Patent Owner Response (Paper 20, “PO Resp.”) and Petitioner filed a Reply
`(Paper 31, “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.”).
`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 7 of the
`’598 patent is directed to patent ineligible subject matter under 35 U.S.C.
`§ 101.
`B. Related Matters and Estoppel
`In a previous covered business method patent review, CBM2014-
`00108, we issued a Final Written Decision determining claim 26 of the ’598
`patent unpatentable under 35 U.S.C. § 103. Apple Inc. v. Smartflash LLC,
`Case CBM2014-00108, (PTAB Sept. 25, 2015) (Paper 50).
`C. The ’598 Patent
`The ’598 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 ’598 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 with less fear of piracy. Id. at 2:11–15.
`
`3
`
`
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`CBM2014-00193
`Patent 8,061,598 B2
`
`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 the data supplier. Id. The data on the portable storage
`device can be retrieved and output from a mobile device. Id. at 2:1–5. The
`’598 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 . . . .”).
`D. Challenged Claim
`Petitioner4 challenges claim 7 of the ’598 patent. Claim 7 depends
`from claim 1, which is not explicitly challenged in this proceeding. Claims
`1 and 7 recite the following:
`A portable data carrier comprising:
`1.
`an interface for reading and writing data from and to the portable data
`carrier;
`content data memory, coupled to the interface, for storing one or more
`content data items on the carrier;
`use rule memory to store one or more use rules for said one or more
`content data items;
`a program store storing code implementable by a processor;
`and a processor coupled to the content data memory, the use rule
`memory, the interface and to the program store for implementing
`code in the program store,
`wherein the code comprises code for storing at least one content data
`item in the content data memory and at least one use rule in the use
`rule memory.
`
`4 We refer to Samsung and Apple collectively as “Petitioner.”
`
`4
`
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`CBM2014-00193
`Patent 8,061,598 B2
`
`Ex. 1001, 25:54–67.
`
`A portable data carrier as claimed in claim 1, further
`7.
`comprising payment data memory to store payment data and code to
`provide the payment data to a payment validation system.
`Id. at 26:25–28.
`
`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 ’598 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 7 as directed to patent-ineligible subject
`matter under 35 U.S.C. § 101. Pet. 20–32. According to Petitioner, the
`challenged claim is directed to an abstract idea without additional elements
`that transform the claim into a patent-eligible application of that idea. Id.
`Petitioner submits a declaration from Jeffrey A. Bloom, Ph.D. in support of
`its Petition.5 Ex. 1003. Patent Owner argues that the subject matter claimed
`
`
`5 In its Response, Patent Owner argues that this declaration should be given
`little or no weight. PO Resp. 3–4. Because Patent Owner has filed a Motion
`to Exclude that includes a request to exclude Dr. Bloom’s 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 to exclude, below.
`
`5
`
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`CBM2014-00193
`Patent 8,061,598 B2
`
`by claim 7 is statutory because it is “‘rooted in computer technology in order
`to overcome a problem specifically arising in the realm of computer
`networks,’” that of “data content piracy on the Internet.” PO Resp. 1
`(quoting DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257
`(Fed. Cir. 2014)).
`
`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
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–714 (Fed. Cir.
`2014). Here, the challenged claim recites a “machine,” i.e., a “portable data
`carrier,” under § 101. Section 101, however, “contains an important implicit
`exception [to subject matter eligibility]: Laws of nature, natural phenomena,
`and abstract ideas are not patentable.” Alice 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 those
`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
`
`6
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`CBM2014-00193
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`
`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
`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 “enabling limited use of paid-for/licensed content.” Pet. 23.
`Although Patent Owner does not concede, in its brief, that the challenged
`claim is directed to an abstract idea, it does not persuasively explain how the
`claimed subject matter escapes this classification. PO Resp. 9–20; see also
`Paper 43 (transcript of oral hearing) 46:21–47:11 (Patent Owner arguing that
`the subject matter of the claim is not an abstract idea, but conceding this
`argument was not made in the briefs).
`
`7
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`CBM2014-00193
`Patent 8,061,598 B2
`
`We are persuaded that the challenged claim is drawn to a patent-
`ineligible abstract idea. Specifically, the challenged claim is directed to
`performing the fundamental economic practice of conditioning and
`controlling access to content based on payment. For example, claim 7
`recites “payment data memory to store payment data and code to provide the
`payment data to a payment validation system.” Furthermore, as discussed
`above, the ’598 patent discusses addressing recording industry concerns of
`data pirates offering unauthorized access to widely available compressed
`audio recordings. Ex. 1001, 1:20–55. The Specification explains that these
`pirates obtain data either by unauthorized or legitimate means and then make
`the data available over the Internet without authorization. Id. The
`Specification further explains that once data has been published on the
`Internet, it is difficult to police access to and use of it by Internet users who
`may not even realize that it is pirated. Id. The ’598 patent proposes to solve
`this problem by restricting access to data on a portable data carrier based
`upon payment validation. Id. at 1:59–2:4. The ’598 patent makes clear that
`the crux of the claimed subject matter is restricting access to stored data
`based on supplier-defined access rules and validation of payment. Id. at
`1:59–2:15.
`Although the Specification refers to data piracy on the Internet, the
`challenged claim is not limited to the Internet. The underlying concept of
`the challenged claim, particularly when viewed in light of the Specification,
`is conditioning and controlling access to content based upon payment. As
`discussed further below, this is a fundamental economic practice long in
`existence in commerce. See Bilski, 561 U.S. at 611.
`
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`We are, thus, persuaded, based on the Specification and the language
`of the challenged claim, that claim 7 is directed to an abstract idea. See
`Alice, 134 S. Ct. at 2356 (holding that the concept of intermediated
`settlement at issue in Alice was an abstract idea); Accenture Global Servs.,
`GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344 (Fed. Cir. 2013)
`(holding the abstract idea at the heart of a system claim to be “generating
`tasks [based on] rules . . . to be completed upon the occurrence of an event”).
`
`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 ’598 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 7
`of the ’598 patent does not add an inventive concept sufficient to ensure that
`
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`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
`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 claim are generic features of a computer that do not bring the
`challenged claim within § 101 patent eligibility. Pet. 23–27; Pet. Reply 11–
`19.
`
`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 ’598 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. 11 (quoting Ex. 2049, 19). We
`agree with Petitioner for the following reasons.
`The ’598 patent treats as well-known all potentially technical aspects
`of the challenged claim, which simply require generic computer components
`(e.g., interfaces, memory, program store, and processor). See Pet. Reply 13
`(citing Ex. 1003 ¶ 24; Ex. 1001, 4:4–5, 16:46–53, 18:7–11). With respect to
`the “portable data carrier” recited in claim 1, for example, the Specification
`states it may be a generic device such as “a standard smart card.” Ex. 1001,
`
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`11:27–29; see also id. at 14:25–29 (“[l]ikewise data stores 136, 138 and 140
`may comprise a single physical data store or may be distributed over a
`plurality of physical devices and may even be at physically remote locations
`from processors 128-134 and coupled to these processors via internet 142”),
`Fig. 6. With respect to the “payment validation system” recited in claim 7,
`the Specification states that it “may be part of the data supplier’s computer
`systems or it may be a separate e-payment system.” Id. at 8:63–65); see also
`13:36–38 (“an e-payment system according to, for example, MONDEX,
`Proton, and/or Visa cash compliant standards”).
`Further, the claimed computer code performs generic computer
`functions, such as storing, retrieving, receiving, reading, evaluating, and
`enabling access to. See Pet. 23–29; Pet. Reply 14–16. The recitation of
`these generic computer functions is insufficient to confer specificity. See
`Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat’l
`Assoc., 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 7 “recite[s] specific ways
`of using distinct memories, data types, and use rules that amount to
`significantly more than” conditioning and controlling access to content
`based on payment. See PO Resp. 11. The challenged claim recites several
`memories, including “content data memory,” “use rule memory,” “a
`program store,” and “payment data memory,” and several data types,
`including “data,” “content data items,” “use rules,” “code,” “payment data,”
`and “use status data.” We are not persuaded that the recitation of these
`memories and data types, by itself, amounts to significantly more than the
`
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`underlying abstract idea. 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.’”) (brackets in original).
`Patent Owner does not point to any inventive concept in the ’598 patent
`related to the way these memories or data types are constructed or used. In
`fact, the ’598 patent simply discloses these memories and data types with no
`description of the underlying implementation or programming that results in
`these data constructs. See Content Extraction, 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. 29–31; 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. 31–32.
`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.
`
`b. DDR Holdings
`Relying on the Federal Circuit’s decision in DDR Holdings, Patent
`Owner asserts that the challenged claim is directed to statutory subject
`matter because the claimed solution is “necessarily rooted in computer
`
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`Patent 8,061,598 B2
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`technology in order to overcome a problem specifically arising in the realm
`of computer networks.’” PO Resp. 1 (quoting DDR Holdings, LLC v
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