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 CBM2014-00199
`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
`
`
`
`
`
`
`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 CBM2014-00199
`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
`
`
`
`
`
`
`
`CBM2014-00199
`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”). 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 anticipated by
`
`Ginter1. Pet. 4. Petitioner also provides a Declaration from Dr. Jeffrey A.
`
`Bloom (“the Bloom Declaration”). Ex. 1003.
`
`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 and 11. We decline to institute a
`
`covered business method patent review of claim 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.
`
`
`1 U.S. Patent No. 5,915,019 (Ex. 1023) (“Ginter”).
`
`2
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`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: CBM2014-00194.2 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.
`
`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.
`
`
`2 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.
`
`3
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`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:
`
`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:
`
`4
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`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;
`
`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;
`
`5
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`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
`
`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
`
`6
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`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
`
`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
`
`7
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`downloads.” Pet. 10. 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 a 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
`
`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
`
`8
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`“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. (citing 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
`
`such a requirement. Id. We determine that because payment data is used 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
`
`9
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`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
`
`unobvious 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.
`
`In addition, the ’221 patent makes clear that the asserted novelty of
`
`the invention is not in any specific improvement of software or hardware,
`
`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 patent for a
`
`technological invention. See Office Patent Trial Practice Guide, 77 Fed.
`
`Reg. at 48,764.
`
`Patent Owner also argues that claim 32 falls within § 18(d)(1)’s
`
`exclusion for “technological inventions” because it is directed towards
`
`solving the technological problem of “writing data and at least one access
`
`10
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`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 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.
`
`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. Anticipation by Ginter
`
`Petitioner contends that claims 2, 11, and 32 are anticipated by Ginter.
`
`Pet. 28–52. Ginter discloses a portable “virtual distribution environment”
`
`(“VDE”) that can “control and/or meter or otherwise monitor use of
`
`electronically stored or disseminated information.” Ex. 1015, Abstract;
`
`Fig. 71; 52:26–27.
`
`1. 35 U.S.C. § 325(d)
`
`Patent Owner argues that we should reject this Petition under § 325(d)
`
`because the same prior art reference, Ginter, has been applied to the same
`
`claims in CBM2014-00103. Indeed, in CBM2014-00103 (consolidated with
`
`11
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`CBM2014-00102), we instituted a covered business method review on the
`
`grounds that claims 2 and 11 would have been obvious over Ginter.
`
`CBM2014-00102, Paper 8.
`
`We are cognizant of the burden on the patent owner and Office
`
`to rehear the same or substantially the same prior art or arguments that are
`
`being considered by the Office in another proceeding. We are persuaded,
`
`however, that there are sufficient differences in the way Ginter has been
`
`asserted in the two cases. For example, this case proposes that Ginter
`
`anticipates the challenged claims, but CBM2014-00103 proposes that the
`
`challenged claims would have been obvious over Ginter. Accordingly, we
`
`decline to exercise our discretion under § 325(d) to reject this Petition.
`
`2. Claims 2 and 11
`
`Petitioner argues that each limitation of claims 2 and 11 is disclosed
`
`by Ginter. Pet. 17. Specifically, Petitioner asserts that Ginter’s electronic
`
`appliance 600 is equivalent to the claimed “data access terminal,” Ginter’s
`
`external object repository is equivalent to the claimed “data supplier,” and
`
`Ginter’s removable PEA 2600 is equivalent to the claimed “data carrier.”
`
`Pet. 28–41. In light of the arguments and evidence, we are persuaded that
`
`Petitioner has established that it is more likely than not that claims 2 and 11
`
`are anticipated by Ginter.
`
`3. Claim 32
`
`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
`
`identifies in a parenthetical Ginter’s “billing method MDE and/or budget
`
`12
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`method UDE” as the recited “access rule.” Id. at 50–51. The cited portions
`
`of Ginter, however, do not show sufficiently that the billing method map
`
`MDE and/or budget method UDE reflects “a rule specifying a condition
`
`under which access to content is permitted,” as we construed “access rule” to
`
`mean above.
`
`The cited portions of Ginter relate to billing for use of a VDE content
`
`object, but not to “a rule specifying a condition under which access to
`
`content is permitted.” Ex. 1023, 190:45–57; 59:17–23. Ginter describes
`
`billing method map MDE as “a price list, table, or parameters to the billing
`
`amount calculation algorithm” (id. at 190:47–50), and budget method UDE
`
`as “limitations on usage of information content 304, and how usage will be
`
`paid for” (id. at 59:17–20). Petitioner does not explain sufficiently,
`
`however, why a price list (billing method map MDE) and/or limitations on
`
`information content usage (budget method UDE), for example, discloses or
`
`teaches “access rule.” Dr. Bloom’s conclusory testimony on this issue (Ex.
`
`1003 ¶ 96) does not convince us otherwise.
`
`On this record, we are not persuaded that Petitioner has established
`
`that it is more likely than not that claim 32 is anticipated by Ginter.
`
`For the reasons given, it is:
`
`ORDER
`
`ORDERED that a covered business method patent review is instituted
`
`on the sole ground that claims 2 and 11 are anticipated by Ginter.
`
`FURTHER ORDERED that the trial is limited to the ground identified
`
`above. No other grounds are authorized.
`
`13
`
`
`
`CBM2014-00199
`Patent 8,118,221 B2
`
`FURTHER ORDERED that pursuant to 35 U.S.C. § 324(d) and
`
`37 C.F.R. § 42.4, notice is hereby given of the institution of a trial; the trial
`
`commencing on the entry date of this Order.
`
`
`
`PETITIONER:
`
`Walter Renner
`Thomas Rozylowicz
`Fish & Richardson P.C.
`axf@fr.com
`CBM39843-0007CP2@fr.com
`
`PATENT OWNER:
`
`Michael R. Casey
`Davidson Berquist Jackson & Gowdey, LLP
`mcasey@dbjg.com
`
`
`14
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