throbber
Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 9
`Entered: March 30, 2015
`
`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 CBM2014-00194
`Patent 8,118,221 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, GREGG I. ANDERSON,
`MATTHEW R. CLEMENTS, and PETER P. CHEN,
`Administrative Patent Judges.
`
`BISK, Administrative Patent Judge.
`
`DECISION
`
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`A. Background
`
`INTRODUCTION
`
`Petitioner, named above, filed a Corrected Petition to institute covered
`
`business method patent review of claims 2, 11, and 32 (the “challenged
`
`claims”) of U.S. Patent No. 8,118,221 B2 (Ex. 1001, “the ’221 patent”)
`
`pursuant to § 18 of the Leahy-Smith America Invents Act (“AIA”).1 Paper 4
`
`(“Pet.”). Smartflash LLC (“Patent Owner”) filed a Preliminary Response.
`
`Paper 7 (“Prelim. Resp.”).
`
`We have jurisdiction under 35 U.S.C. § 324, which provides that a
`
`covered business patent review may not be instituted “unless . . . it is more
`
`likely than not that at least 1 of the claims challenged in the petition is
`
`unpatentable.”
`
`B. Asserted Grounds
`
`Petitioner contends that the challenged claims are unpatentable under
`
`35 U.S.C. §§ 101 and/or 103 over the combination of Stefik ’235,2 Stefik
`
`’980,3 and Gruse4 (Pet. 3).5 Petitioner also provides a Declaration from Dr.
`
`Jeffrey A. Bloom (“the Bloom Declaration”). Ex. 1003.
`
`
`1 Patent Owner argues that the multiple petitions filed against the ’221 patent
`violate the page limit requirement of 37 C.F.R. § 42.24(a)(iii), but does not
`cite any authority to support its position. Prelim. Resp. 10–12. The page
`limit for petitions requesting covered business method patent review is 80
`pages (37 C.F.R. § 42.24(a)(iii)), and this Petition is within that requirement.
`2 U.S. Patent 5,530,235 (Ex. 1004) (“Stefik ’235”).
`3 U.S. Patent 5,629,980 (Ex. 1005) (“Stefik ’980”).
`4 PCT Publication No. WO 00/08909 (Ex. 1006) (“Gruse”).
`5 Petitioner refers to Stefik ’235 and Stefik ’980 collectively as “Stefik”
`because, according to Petitioner, Stefik ’235 incorporates Stefik ’980 by
`reference. Pet. 39. Patent Owner disagrees. Prelim. Resp. 15–18. Based on
`our determination below, we need not address this issue.
`
`2
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`After considering the Petitions and Preliminary Responses, we
`
`determine that the ’221 patent is a covered business method patent and that
`
`Petitioner has demonstrated that it is more likely than not that at least one of
`
`the challenged claims is unpatentable. Therefore, we institute a covered
`
`business method patent review of claims 2, 11, and 32.
`
`C. Related Matters
`
`Petitioner indicates that the ’221 patent is the subject of the following
`
`co-pending district court cases: Smartflash LLC v. Apple Inc., Case No.
`
`6:13-cv-447 (E.D. Tex.); and Smartflash LLC v. Samsung Electronics Co.,
`
`Case No. 6:13-CV-448 (E.D. Tex.). Pet. 1–2. Patents claiming priority back
`
`to a common series of applications are currently the subject of CBM2014-
`
`00102, CBM2014-00103, CBM2014-00106, CBM2014-00107, CBM2014-
`
`00108, CBM2014-00109, CBM2014-00112, and CBM2014-00113, filed by
`
`Apple Inc. See Paper 5, 2–3.
`
`Petitioner filed one other petition for covered business method patent
`
`review challenging claims of the ’221 patent: CBM2014-00199.6 In
`
`addition, Petitioner filed eight other Petitions for covered business method
`
`patent review challenging claims of other patents owned by Patent Owner
`
`and disclosing similar subject matter: CBM2014-00190; CBM2014-00192;
`
`CBM2014-00193; CBM2014-00196; CBM2014-00197; CBM2014-00198;
`
`CBM2014-00200; and CBM2014-00204.
`
`
`6 Patent Owner argues that the multiple petitions filed against the ’221 patent
`violate the page limit requirement of 37 C.F.R. § 42.24(a)(iii), but does not
`cite any authority to support its position. Prelim. Resp. 10–12. The page
`limit for petitions requesting covered business method patent review is 80
`pages (37 C.F.R. § 42.24(a)(iii)), and each of the ’194 and ’199 Petitions
`meets that requirement.
`
`3
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`D. The ’221 Patent
`
`The ’221 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
`
`1:29–56. The ’221 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 data piracy. 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 the data supplier. Id. The data on the portable storage
`
`device can be retrieved and output from a mobile device. Id. at 2:1–4. The
`
`’221 patent makes clear that the actual implementation of these components
`
`is not critical, and the alleged invention may be implemented in many ways.
`
`See, e.g., id. at 25:41–44 (“The skilled person will understand that many
`
`variants to the system are possible and the invention is not limited to the
`
`described embodiments . . . .”).
`
`E. Challenged Claims
`
`Petitioner challenges claims 2, 11, and 32 of the ’221 patent. Claim
`
`32 is independent. Claims 2 and 11 depend from claim 1, which is not
`
`explicitly challenged in this proceeding. Claims 1, 2, 11, and 32 recite the
`
`following:
`
`4
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`1.
`A data access terminal for retrieving data from a data
`supplier and providing the retrieved data to a data carrier, the
`terminal comprising:
`
`a first interface for communicating with the data supplier;
`
`a data carrier interface for interfacing with the data
`carrier;
`
`a program store storing code implementable by a
`processor; and
`
`a processor, coupled to the first interface, to the data
`carrier interface and to the program store for implementing the
`stored code, the code comprising:
`
`code to read payment data from the data carrier and to
`forward the payment data to a payment validation system;
`
`code to receive payment validation data from the
`payment validation system;
`
`code responsive to the payment validation data to retrieve
`data from the data supplier and to write the retrieved data into
`the data carrier.
`
`Ex. 1001, 25:45–61.
`
`A data access terminal as claimed in claim 1, further
`2.
`comprising code to transmit at least a portion of the payment
`validation data to the data supplier or to a destination received
`from the data supplier.
`
`Id. at 25:62–65.
`
`11. A data access terminal according to claim 1 integrated
`with at least one of a mobile communication device, a personal
`computer, an audio/video player, and a cable or satellite
`television interface device.
`
`Id. at 26:39–42.
`
`32. A data access terminal for retrieving data from a data
`supplier and providing the retrieved data to a data carrier, the
`terminal comprising:
`
`a first interface for communicating with the data supplier;
`
`5
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`a data carrier interface for interfacing with the data
`carrier;
`
`a program store storing code; and
`
`a processor coupled to the first interface, the data carrier
`interface, and the program store for implementing the stored
`code, the code comprising:
`
`code to read payment data from the data carrier and to
`forward the payment data to a payment validation system;
`
`code to receive payment validation data from the
`payment validation system;
`
`code responsive to the payment validation data to retrieve
`data from the data supplier and to write the retrieved data into
`the data carrier;
`
`code responsive to the payment validation data to receive
`at least one access rule from the data supplier and to write the at
`least one access rule into the data carrier, the at least one access
`rule specifying at least one condition for accessing the retrieved
`data written into the data carrier, the at least one condition
`being dependent upon the amount of payment associated with
`the payment data forwarded to the payment validation system;
`and
`
`code to retrieve from the data supplier and output to a
`user-stored data identifier data and associated value data and
`use rule data for a data item available from the data supplier.
`
`Id. at 28:23–50.
`
`A. Claim Construction
`
`ANALYSIS
`
`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); see also In re Cuozzo Speed Techs., LLC, 2015 WL
`
`448667 at *7 (Fed. Cir. Feb. 4, 2015) (“We conclude that Congress
`
`6
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`implicitly adopted the broadest reasonable interpretation standard in
`
`enacting the AIA.”). Applying that standard, we interpret the claim terms of
`
`the ’221 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
`
`construe the claim term “access rule.”
`
`Independent claim 32 requires receiving at least one “access rule”
`
`from the data supplier and that the “at least one access rule specif[ies] at
`
`least one condition for accessing the retrieved data.” The ’221 patent also
`
`states that “one or more content access rules are received from the system
`
`owner data supply computer and written to the smart Flash card so that each
`
`content data item has an associated use rule to specify under what conditions
`
`a user of the smart Flash card is allowed access to the content data item.”
`
`Ex. 1001, 21:48–53; see also id. at 7:31–32 (stating that access data “links a
`
`content identifier with an access rule, typically based upon a required
`
`payment value”). Accordingly, for purposes of this Decision, we construe
`
`“access rule” as a rule specifying a condition under which access to content
`
`is permitted.
`
`B. Covered Business Method Patent
`
`Section 18 of the AIA provides for the creation of a transitional
`
`program for reviewing covered business method patents. A “[c]overed
`
`business method patent” is a patent that “claims a method or corresponding
`
`apparatus for performing data processing or other operations used in the
`
`practice, administration, or management of a financial product or service,
`
`except that the term does not include patents for technological inventions.”
`
`AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). A patent need have only one
`
`7
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`claim directed to a covered business method to be eligible for review. See
`
`Transitional Program for Covered Business Method Patents—Definitions of
`
`Covered Business Method Patent and Technological Invention; Final Rule,
`
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8).
`
`1. Financial Product or Service
`
`Petitioner asserts that claim 32 “unquestionably is used for data
`
`processing in the practice, administration and management of financial
`
`products and services; specifically, for processing payments for data
`
`downloads.” Pet. 9. Based on this record, we agree with Petitioner that the
`
`subject matter recited by claim 32 is directed to activities that are financial in
`
`nature, namely data access conditioned on payment validation. Claim 32
`
`recites “code to read payment data from the data carrier and to forward the
`
`payment data to a payment validation system” and “code responsive to the
`
`payment validation data . . . dependent upon the amount of payment
`
`associated with the payment data forwarded to the payment validation
`
`system.” We are persuaded that payment validation is a financial activity,
`
`and conditioning data access based on payment validation amounts to a
`
`financial service. This is consistent with the specification of the ’221 patent,
`
`which confirms claim 32’s connection to financial activities by stating that
`
`the invention “relates to a portable data carrier for storing and paying for
`
`data.” Ex. 1001, 1:21–23. The specification also states repeatedly that the
`
`disclosed invention involves managing access to data based on payment
`
`validation. See, e.g., Ex. 1001, 1:59–68, 6:60–64, 20:50–54.
`
`Patent Owner disagrees that claim 32 satisfies the financial in nature
`
`requirement of AIA § 18(d)(1), arguing that that section should be
`
`interpreted narrowly to cover only technology used specifically in the
`
`8
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`financial or banking industry. Prelim. Resp. 3–6. Patent Owner cites to
`
`various portions of the legislative history as support for its proposed
`
`interpretation. Id.
`
`Although we agree with Patent Owner that the statutory language
`
`controls whether a patent is eligible for a covered business method patent
`
`review, we do not agree that the phrase “financial product or service” is as
`
`limited as Patent Owner proposes. The AIA does not include as a
`
`prerequisite for covered business method patent review, a “nexus” to a
`
`“financial business,” but rather a “method or corresponding apparatus for
`
`performing data processing or other operations used in the practice,
`
`administration, or management of a financial product or service.” AIA
`
`§ 18(d)(1). Further, contrary to Patent Owner’s view of the legislative
`
`history, the legislative history indicates that the phrase “financial product or
`
`service” is not limited to the products or services of the “financial services
`
`industry,” and is to be interpreted broadly. CBM Rules, 77 Fed. Reg. at
`
`48,735–36. For example, the “legislative history explains that the definition
`
`of covered business method patent was drafted to encompass patents
`
`‘claiming activities that are financial in nature, incidental to a financial
`
`activity or complementary to a financial activity.’” Id. (quoting 157 Cong.
`
`Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
`
`In addition, Patent Owner asserts that claim 32 is not directed to an
`
`apparatus or method that is financial in nature because claim 32 “omits the
`
`specifics of how payment is made.” Prelim. Resp. 8. We are not persuaded
`
`by this argument because § 18(d)(1) of the AIA does not include such a
`
`requirement, nor does Patent Owner point to any other authority that makes
`
`9
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`such a requirement. Id. We determine that because payment data is recited
`
`by claim 32, the financial in nature requirement of § 18(d)(1) is satisfied.
`
`For the reasons stated above, and based on the particular facts of this
`
`proceeding, we conclude that the ’221 patent includes at least one claim that
`
`meets the financial in nature requirement of § 18(d)(1) of the AIA.
`
`2. Exclusion for Technological Inventions
`
`Petitioner asserts that the claims of the ’221 patent do not fall within
`
`§ 18(d)(1)’s exclusion for “technological inventions.” Pet. 10–13. In
`
`particular, Petitioner argues that the claims do not recite a technological
`
`feature that is novel and unobvious, or solve a technical problem using a
`
`technical solution. Id. Patent Owner disagrees and argues that claim 32, as
`
`a whole, recites at least one technological feature that is novel and
`
`nonobvious over the prior art. Prelim. Resp. 8–9.
`
`We are persuaded that claim 32 as a whole does not recite a
`
`technological feature that is novel and unobvious over the prior art.
`
`Claim 32 does recite a “payment validation system.” The specification,
`
`however, discloses that the required payment validation system may be one
`
`that is already in use or otherwise commercially available. For example,
`
`“[t]he payment validation system may be part of the data supplier’s
`
`computer systems or it may be a separate e-payment system.” Ex. 1001,
`
`8:63–65; see id. at 13:35–47. Claim 32 also recites a “data carrier.” This
`
`component, however, is a generic hardware device known in the prior art.
`
`The specification discloses, for instance, that a data carrier may be a
`
`“standard smart card.” Id. at 11:28–29.
`
`In addition, the ’221 patent makes clear that the asserted novelty of
`
`the invention is not in any specific improvement of software or hardware,
`
`10
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`but in the method of controlling access to data. For example, the ’221 patent
`
`states that “there is an urgent need to find a way to address the problem of
`
`data piracy” (id. at 1:52–55), while acknowledging that the “physical
`
`embodiment of the system is not critical and a skilled person will understand
`
`that the terminals, data processing systems and the like can all take a variety
`
`of forms” (id. at 12:29–32). Claim 32 is merely the recitation of known
`
`technologies to perform a method, which indicates that it is not a claim for a
`
`technological invention. See Office Patent Trial Practice Guide, 77 Fed.
`
`Reg. 48,756, 48,764 (Aug. 14, 2012).
`
`Patent Owner also argues that claim 32 falls within § 18(d)(1)’s
`
`exclusion for “technological inventions” because it is directed toward
`
`solving the technological problem of “writing data and at least one access
`
`rule from a data supplier into a data carrier” with the technological solution
`
`of “a data carrier from which payment data is read and to which retrieved
`
`data and at least one access rule from a data supplier [is] written.” Prelim.
`
`Resp. 8–9. We are not persuaded by this argument because, as Petitioner
`
`argues, the problem being solved by claim 32 is a business problem—data
`
`piracy. Pet. 12. For example, the specification states that “[b]inding the
`
`data access and payment together allows the legitimate owners of the data to
`
`make the data available themselves over the internet without fear of loss of
`
`revenue, thus undermining the position of data pirates.” Ex. 1001, 2:11–15.
`
`Therefore, based on the particular facts of this proceeding, we conclude that
`
`claim 32 does not recite a technological invention and is eligible for a
`
`covered business method patent review.
`
`11
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`3. Conclusion
`
`In view of the foregoing, we conclude that the ’221 patent is a covered
`
`business method patent under AIA § 18(d)(1) and is eligible for review
`
`under the transitional covered business method patent program.
`
`C. Statutory Subject Matter
`
`Petitioner challenges claims 2, 11, and 32 as directed to patent-
`
`ineligible subject matter under 35 U.S.C. § 101. Pet. 21–34. Petitioner
`
`asserts that all the challenged claims are directed to an abstract idea without
`
`additional elements that transform the claims into a patent-eligible
`
`application of that idea. Id. Specifically, Petitioner argues that the
`
`challenged claims are directed to the abstract idea of “enabling limited use
`
`of paid-for/licensed content.” Pet. 23.
`
`Patent Owner argues that the challenged claims are directed to a more
`
`narrow invention than that asserted by Petitioner. Prelim. Resp. 12–13.
`
`Patent Owner specifically cites to the limitations “code to read payment data
`
`from the data carrier and to forward the payment data to a payment
`
`validation system” and “code to receive payment validation data from the
`
`payment validation system” as evidence that claims 2 and 11 “are not
`
`preemptory as asserted and are, at least for that reason, directed to statutory
`
`subject matter.” Id. at 13. And Patent Owner points to similar limitations in
`
`claim 32 as evidence that it is also directed to statutory subject matter. Id. at
`
`13–14. Based on the analysis of the challenged claims using the two-step
`
`process set forth in Alice Corporation Pty, Ltd. v. CLS Bank International,
`
`134 S.Ct. 2347 (2014), as discussed below, we agree with Petitioner claims
`
`2, 11, and 32 of the ’221 patent are more likely than not directed to patent-
`
`ineligible subject matter.
`
`12
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`

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`CBM2014-00194
`Patent 8,118,221 B2
`
`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, each of the challenged claims recites a “machine,” e.g., a “data
`
`access terminal,” 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, 134 S.Ct.
`
`at 2354 (citing Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 133
`
`S.Ct. 2107, 2116 (2013) (internal quotation marks and brackets omitted)).
`
`We are persuaded that the challenged claims are more likely than not
`
`drawn to a patent-ineligible abstract idea. In Alice, the Supreme Court
`
`reiterated the framework set forth previously in Mayo Collaborative Services
`
`v. Prometheus Laboratories, 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. If so, the second step in the analysis is to consider
`
`the elements of the claims “individually and ‘as an ordered combination’” to
`
`determine whether there are additional elements that “‘transform the nature
`
`of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S.Ct.
`
`at 1291, 1297). In other words, the second step is to “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
`
`13
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`
`CBM2014-00194
`Patent 8,118,221 B2
`
`than a patent on the [ineligible concept] itself.’” Id. (brackets in original)
`
`(quoting Mayo, 132 S.Ct. at 1294).
`
`Petitioner contends that the challenged claims are directed to “the
`
`abstract idea of enabling limited use of paid-for/licensed content.” Pet. 24.
`
`For example, claim 32 recites “the at least one access rule specifying at least
`
`one condition for accessing the retrieved data written into the data carrier,
`
`the at least one condition being dependent upon the amount of payment
`
`associated with the payment data forwarded to the payment validation
`
`system.” Furthermore, as discussed above, the ’221 patent discusses
`
`addressing recording industry concerns of data pirates offering unauthorized
`
`access to widely available compressed audio recordings. Ex. 1001, 1:20–55.
`
`The ’221 patent proposes to solve this problem by restricting access to data
`
`on a portable data carrier based upon payment validation. Ex. 1001, 1:59–
`
`2:4. The ’221 patent makes clear that the heart 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. We are persuaded, on this record,
`
`that the claimed “data access terminal,” 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”).
`
`Turning to the second step of the analysis, we look for additional
`
`elements that can “transform the nature of the claim” into a patent-eligible
`
`application of an abstract idea. Mayo, 132 S.Ct. at 1297. On this record, we
`
`are not persuaded that the challenged claims of the ’221 patent add an
`
`14
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`
`CBM2014-00194
`Patent 8,118,221 B2
`
`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, 728 F.3d at 1345 (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).
`
`As discussed above, the specification notes that the data carrier may
`
`be a generic, known, hardware device such as a “standard smart card,” and
`
`that “[t]he payment validation system may be part of the data supplier’s
`
`computer systems or it may be a separate e-payment system.” Ex. 1001,
`
`11:28–29, 8:63–65. Moreover, on this record, Patent Owner has not shown
`
`that all other potentially technical additions to the claims—including
`
`“processor,” “program store,” and code to receive/retrieve/write data—
`
`perform a function that is anything other than “purely conventional.” See
`
`Alice, 134 S.Ct. at 2359. The linkage of existing hardware devices to
`
`existing payment validation processes and supplier-defined access rules, as
`
`claimed here, appear to be “‘well-understood, routine, conventional
`
`activit[ies]’ previously known to the industry.” Id. (quoting Mayo, 132 S.Ct.
`
`at 1294). None of these limitations, viewed “both individually and as an
`
`ordered combination,” transform the nature of the claims into patent-eligible
`
`subject matter. See Alice, 134 S.Ct. at 2355 (quoting Mayo, 132 S.Ct. at
`
`1297, 1298).
`
`Having considered the information provided in the Petition and the
`
`Preliminary Response, we are persuaded that Petitioner has demonstrated
`
`that it is more likely than not that the challenged claims are unpatentable
`
`under 35 U.S.C. § 101.
`
`15
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`D. Obviousness Over Stefik ’235, Stefik ’980, and Gruse
`
`1. The Effective Filing Date of the ’221 Patent
`
`Patent Owner argues that Petitioner has not shown that it is more
`
`likely than not that dependent claims 2 and 11, and independent claim 32 are
`
`obvious over Stefik ’235, Stefik ’980, and Gruse. Specifically, Patent
`
`Owner argues that Petitioner has not shown sufficiently that Gruse qualifies
`
`as § 102(a) prior art. Prelim. Resp. 18–21.
`
`Petitioner proffers Gruse as § 102(a) art. Pet. 4. There is no dispute
`
`that Gruse’s publication date of February 24, 2000, is before the filing date
`
`of PCT Application No. PCT/GB00/04110 (“the ’110 application”)—
`
`October 25, 2000—to which the ’221 patent claims priority. See Pet. 16;
`
`Prelim. Resp. 18–21. Patent Owner, however, asserts that the ’221 patent is
`
`entitled to the filing date of United Kingdom Patent Application
`
`GB9925227.2 (“the GB application”)—October 25, 1999. Prelim. Resp.
`
`18–21. Petitioner disagrees. Pet. 16–20. Because Gruse was published on
`
`February 24, 2000, it is prior art under § 102(a) only if Petitioner is correct
`
`and the ’221 patent is not entitled to the filing date of the GB application.
`
`As Petitioner points out, the GB application is significantly shorter
`
`than the ’110 application. Pet. 16. The relevant issue, however, is whether
`
`the GB application contains written description that supports all the
`
`limitations of dependent claims 2 and 11, which depend from claim 1, and
`
`independent claim 32. See Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d
`
`1316, 1327 (Fed. Cir. 2008).
`
`For the reasons described below, we need not address the question of
`
`whether or not claim 32 is entitled to the filing date of the GB application.
`
`We determine, however, that Petitioner has not shown that claims 2 and 11
`
`16
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`are not entitled to the filing date of the GB application. Thus, Gruse is not
`
`prior art to claims 2 and 11.
`
`The GB application discloses a “payment validation means” that
`
`allows “access to the downloaded data which is to be stored by the data
`
`storage means, to be made conditional upon checked and validated payment
`
`being made for the data.” Ex. 1008, 8.7 In addition, “[t]he data storage
`
`means and/or the retrieval device can be provided with access control means
`
`to prevent unauthorized access to the downloaded data” or “to stop or
`
`provide only limited access of the user to the downloaded data in accordance
`
`with the amount paid.” Id. at 9–10. This access control means can be
`
`“responsive to the payment validation means” and “stored with the
`
`downloaded data or in a separate storage area.” Id. at 10. Finally, “[t]he
`
`user’s access to the downloaded data could advantageously be responsive to
`
`the payment validation means.” Id.
`
`For dependent claims 2 and 11, the parties specifically dispute only
`
`whether the GB application sufficiently supports “code responsive to the
`
`payment validation data to retrieve data from the data supplier and to write
`
`the retrieved data into the data carrier” recited by independent claim 1 and,
`
`thus, included in both claims 2 and 11 (“claim 1’s responsive limitation”).
`
`Pet. 20; see Prelim. Resp. 19–21.
`
`Based on the disclosure described above, we are persuaded that the
`
`GB application “reasonably conveys to those skilled in the art that the
`
`inventor had possession” of claim 1’s responsive limitation. Ariad Pharms.
`
`v. Eli Lilly and Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc).
`
`Petitioner has not persuaded us otherwise. Petitioner, in particular, argues
`
`
`7 We refer to the page number at the bottom of each page in Exhibit 1008.
`
`17
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`that the GB application does not “suggest downloading and hence receiving
`
`any access rule from the data supplier responsive to payment validation data,
`
`let alone writing the received access rule into any data carrier responsive to
`
`payment validation.” Pet. 19–20 (citing Ex. 1003 ¶ 112). This argument
`
`does not apply to claim 1’s responsive limitation because that limitation does
`
`not recite an access rule. Petitioner, however, addresses whether this
`
`limitation is disclosed in the GB application only by stating that
`
`“[s]imilarly,” claim 1’s responsive limitation “is likewise unsupported.” Id.
`
`Thus, we are not persuaded that Petitioner has shown sufficiently that claims
`
`2 and 11 of the ’221 patent are not entitled to the benefit of the GB
`
`application’s filing date. Consequently, we are not persuaded that Petitioner
`
`has shown sufficiently that Gruse is properly § 102(a) prior art to claims 2
`
`and 11. Petitioner’s challenge to claims 2 and 11 therefore fails.
`
`2. Analysis
`
`Gruse discloses “[a] system for tracking usage of digital content on
`
`user devices,” including [c]ontent players, which receive from the network
`
`the licensed content data.” Ex. 1006 Abs. The system also includes a
`
`“logging site that is coupled to the network,” which tracks the “play
`
`information from the network.” Id. “[A] license to play digital content data
`
`is sold to a user, and the licensed content data is transmitted to a content
`
`player for the user.” Id.
`
`Petitioner relies on Gruse to disclose every limitation of the
`
`challenged claims except “an interface for facilitating secure
`
`communications between the PC and the external portable device.” Pet. 40–
`
`42. Petitioner relies on Stefik ’235 and Stefik ’980 for the disclosure of this
`
`element. Id. at 42.
`
`18
`
`

`
`CBM2014-00194
`Patent 8,118,221 B2
`
`a. Claim 32
`
`Independent claim 32 requires “at least one access rule specifying at
`
`least one condition for accessing the retrieved data . . . the at least one
`
`condition being dependent upon the amount of payment associated with the
`
`payment data forwarded to the payment validation system” (emphasis
`
`added). Petitioner asserts that the combination of Gruse, Stefik ’235, and
`
`Stefik ’980 render

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