`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`APPLE INC.,
`
`Petitioner
`
`v.
`
`SMARTFLASH LLC
`
`Patent Owner
`
`____________
`
`Case CBM2015-00015
`
`Patent 8,118,221
`
`____________
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`TABLE OF CONTENTS
`
`
`
`
`
`INTRODUCTION ........................................................................................... 1
`
` OVERVIEW OF U.S. PATENT NO. 8,118,221 ............................................ 3
`
`PATENT OWNER’S LIST OF EXHIBITS ............................................................. ii
`
`I.
`
`II.
`
`III. THE CHALLENGED CLAIMS ARE NOT DIRECTED TO A
`FINANCIAL PRODUCT OR SERVICE ........................................................ 5
`
`
`IV. THE CHALLENGED CLAIMS OF THE ‘221 PATENT ARE
`TECHNOLOGICAL INVENTIONS EXEMPT FROM CBM REVIEW .... 10
`
`
`V.
`
` APPLE’S UNTIMELY § 101 CHALLENGE WILL NOT SECURE THE
`JUST, SPEEDY, AND INEXPENSIVE RESOLUTION OF THE ISSUES
`SURROUNDING THE ‘221 PATENT ......................................................... 12
`
`
`VI. APPLE’S § 103 OBVIOUSNESS CHALLENGES RAISE
`SUBSTANTIALLY THE SAME PRIOR ART AND ARGUMENTS
`PREVIOUSLY PRESENTED ....................................................................... 15
`
`
`VII. STEFIK ‘235 and STEFIK ‘980 ARE NOT A SINGLE REFERENCE ...... 20
`
`VIII. CONCLUSION .............................................................................................. 23
`
`
`
`
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`- i -
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`
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`PATENT OWNER’S LIST OF EXHIBITS
`
`Exhibit Number
`
`Exhibit Description
`
`2001
`
`2002
`
`2003
`
`2004
`
`2005
`
`Redline Showing “Corrected Petition” Compared to Original
`Petition in CBM2015-00015
`
`Reserved
`
`Reserved
`
`Congressional Record - House, June 23, 2011, H4480-4505
`
`Congressional Record - Senate, Sep. 8, 2011, S5402-5443
`
`
`
`
`
`
`
`
`
`- ii -
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`
`
`Pursuant to 37 C.F.R. § 42.107, Smartflash LLC (“Patent Owner”) files this
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`preliminary response to the corrected petition, setting forth reasons why no new
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`covered business method review of U.S. Patent 8,118,221 should be instituted as
`
`requested by Apple, Inc. (“Apple” or “Petitioner”). Arguments presented herein
`
`are presented without prejudice to presenting additional arguments in a later
`
`response should the Board institute a CBM review.
`
`
`
`I.
`
`INTRODUCTION
`
`Petitioner Apple seeks covered business method (CBM) review of claims 1,
`
`2, 11, and 32 of U.S. Patent No. 8,118,221 (“the ‘221 Patent”). Paper 9 at 1
`
`(“Corrected Petition”). On March 28, 2014, Apple filed two earlier petitions, in
`
`CBM2014-00102 and -00103, also seeking CBM review of claims 1, 2, 11, and 32
`
`of the ‘221 Patent, among others. The PTAB granted review of claims 1, 2, and 11
`
`(among others) on 35 U.S.C. § 103 obviousness grounds. Apple Inc. v. Smartflash
`
`LLC, Cases CBM2014-00102 and -00103, Paper 8 at 24 (PTAB September 30,
`
`2014) (hereinafter “00102/00103 Institution Decision”). However, the PTAB
`
`denied review of claim 32. Id. at 14-15 and 22-23.
`
`In the instant petition, Apple raises for the first time a 35 U.S.C. § 101
`
`statutory subject matter challenge to claims 1, 2, 11, and 32. Corrected Petition at
`
`1, 18. Apple also re-raises § 103 obviousness challenges to claim 32, relying on
`
`
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`- 1 -
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`
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`five pieces of prior art: three of which (Stefik ‘235, Stefik ‘980, and Poggio) are
`
`the same prior art raised in CBM2014-00102 and -00103; and two of which (Kopp
`
`and Smith) are “additional prior art” Apple “now identifies” “in light of the
`
`Board’s Decision.” Corrected Petition at 2. However, Apple does not allege that
`
`such additional references were not known or available to it when it filed its earlier
`
`petitions.
`
`As the Board has already correctly noted about the Corrected Petition and
`
`other petitions filed in 2014 on the same patent family, “[t]he 2015 set of petitions
`
`assert substantially overlapping arguments and prior art as asserted in the 2014 set
`
`of petitions, as well as challenges pursuant to 35 U.S.C. § 101, which raise purely
`
`legal issues.” CBM2015-00015, Paper 6 at 2. The Board should deny review of
`
`claims 1, 2, 11, and 32 on Apple’s § 101 unpatentable subject matter grounds set
`
`forth in the Corrected Petition because Apple’s purely legal challenge is untimely
`
`and thus does not “secure the just, speedy, and inexpensive resolution” of the
`
`Board’s proceedings reviewing the ‘221 Patent claims. 37 C.F.R. § 42.1(b). The
`
`Board should also deny review of claim 32 on Apple’s § 103 obviousness grounds
`
`because the Corrected Petition “raises substantially the same prior art or arguments
`
`previously presented” and rejected by the Board in CBM2014-00102 and -00103.
`
`See, Unilever, Inc. v. The Proctor & Gamble Company, Case IPR2014-00506,
`
`Paper 17 at 6 (PTAB July 7, 2014)(Decision, Denying Institution of Inter Partes
`
`
`
`- 2 -
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`
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`Review)(quoting 35 U.S.C. § 325(d)). In fact, in the face of serial petitions by
`
`other Petitioners, the PTAB has already held that the PTAB’s “resources are better
`
`spent addressing matters other than [a Petitioner’s] second attempt to raise a
`
`plurality of duplicative grounds against the same patent claims.” Conopco, Inc. dba
`
`Unilever v. The Proctor & Gamble Company, Case IPR2014-00628, Paper 21 at 21
`
`(PTAB October 20, 2014)(Decision, Declining Institution of Inter Partes Review).
`
`
`
`II. OVERVIEW OF U.S. PATENT NO. 8,118,221
`
`Although the claims define the actual scope of coverage of the patent, as
`
`described in the first paragraph of the BACKGROUND OF THE INVENTION,
`
`the patent-at-issue, U.S. Patent No. 8,118,221 (hereinafter “the ‘221 patent”)
`
`generally describes “data storage and access systems ... [and] is particularly useful
`
`for managing stored audio and video data, but may also be applied to storage and
`
`access of text and software, including games, as well as other types of data.” Col.
`
`1, lines 20-28.
`
`Preferred embodiments described in the last full paragraph of col. 15
`
`illustrate this further: “FIG. 7 ... shows a variety of content access terminals for
`
`accessing data supply computer system 120 over internet 142. The terminals are
`
`provided with an interface to a portable data carrier or ‘smart Flash card’ (SFC) as
`
`generally described with reference to FIG. 2 and as described in more detail below.
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`- 3 -
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`
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`In most embodiments of the terminal the SFC interface allows the smart Flash card
`
`data carrier to be inserted into and removed from the terminal, but in some
`
`embodiments the data carrier may be integral with the terminal.” Exemplary
`
`terminals include, but are not limited to, set-top boxes 154, CD/DVD Players 170
`
`and mobile communications devices 152. Col. 16, lines 5-17.
`
`Referring to preferred embodiments, the ‘221 patent discloses that a data
`
`supply system may provide users with a seamless purchase and content delivery
`
`experience. Col. 23, lines 61-66. Users are able to purchase content from a variety
`
`of different content providers even if they do not know where the content providers
`
`are located or how the content is delivered. See id. The exemplary system is
`
`operated by a “content data supply ‘system owner,’” who may act as an
`
`intermediary between a user seeking to purchase content and content providers,
`
`such as record labels, movie studios, and software providers. See col. 13, lines 60-
`
`67. When a user accesses the system, he or she is able to select content to purchase
`
`or rent from a variety of different content providers. See col. 4, line 64 - col. 5, line
`
`8. If the user finds a content item to buy, his or her device will transmit stored
`
`“payment data” to a “payment validation system” to validate the payment data. See
`
`col. 8, lines 3-6. The payment validation system returns proof that the payment
`
`data has been validated, in the form of “payment validation data,” and the user is
`
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`- 4 -
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`
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`able to retrieve the purchased content from the content provider. See col. 8, lines
`
`6-9.
`
`
`
`III. THE CHALLENGED CLAIMS ARE NOT DIRECTED TO A
`FINANCIAL PRODUCT OR SERVICE
`
`Petitioner has cited claim 32 as being the “exemplary” basis for requesting
`
`that a covered business method review be instituted. Petition at 9. Since claim 32
`
`does not, in fact, meet the requirements for instituting a review, the Petition should
`
`be denied.
`
`As set forth in 37 CFR 42.301(a), to be eligible for CBM review, claim 32
`
`must be found to be claiming “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.” In the publication of the Final
`
`Rules for “Transitional Program for Covered Business Method Patents -
`
`Definitions of Covered Business Method Patent and Technological Invention,” the
`
`PTO stated:
`
`The definition set forth in § 42.301(a) for covered business
`method patent adopts the definition for covered business method
`patent provided in section 18(d)(1) of the AIA. In administering the
`program, the Office will consider the legislative intent and history
`behind the public law definition and the transitional program itself.
`For example, the legislative history explains that the definition of
`
`
`
`- 5 -
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`
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`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.” 157
`CONG. REC. S5432 (daily ed. Sept. 8, 2011) (statement of Sen.
`Schumer). This remark tends to support the notion that “financial
`product or service” should be interpreted broadly.
`
`
`Regardless of this explanation, it is improper for this tribunal to rely on the
`
`legislative history of the AIA to determine the specific issue before it, i.e., whether
`
`trial should be instituted on the present petition. The Supreme Court has “stated
`
`time and again that courts must presume that a legislature says in a statute what it
`
`means and means in a statute what it says. When the words of a statute are
`
`unambiguous, then, this first canon of construction is also the last: judicial inquiry
`
`is complete.” Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 253–54 (1992).
`
`“[W]hen the language of the statute is plain, legislative history is irrelevant.”
`
`Zedner v. United States, 547 U.S. 489, 510–11 (2006) (Scalia, J., concurring-in-
`
`part). This long standing rule is based on the constitutional limitation that
`
`legislators cannot achieve through floor statements what “they were unable to
`
`achieve through the statutory text.” Exxon Mobil Corp. v. Allapattah Servs., Inc.,
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`545 U.S. 546, 568 (2005). Because Section 18 is unambiguously limited to
`
`“financial product[s] and service[s],” there is no reason to look to the statements of
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`
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`- 6 -
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`
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`a single Senator to re-tool text that was approved by both houses of Congress and
`
`signed by the President.
`
`Moreover, the PTO’s synopsis of the legislative history is an improper
`
`oversimplification and does not address that “financial product or service” was
`
`intended to be interpreted narrowly. In fact, when the House of Representatives
`
`debated Congressman Schock’s Amendment to remove Section 18 in its entirety
`
`from the America Invents Act, several members of Congress discussed their
`
`understanding of that narrower interpretation. For example, Mr. Schock himself
`
`discussed at the beginning of his remarks that “Section 18 carves out a niche of
`
`business method patents covering technology used specifically in the financial
`
`industry and would create a special class of patents in the financial services field
`
`subject to their own distinctive post-grant administrative review.” (Exhibit 2004,
`
`Congressional Record - House, June 23, 2011, H4496.) (Emphasis added.)
`
`Similarly, Congressman Shuster expressly discussed his understanding of
`
`the narrow interpretation of the legislation. He stated:
`
`Mr. Chair, I would like to place in the record my understanding
`that the definition of ‘‘covered business method patent,’’ Section
`18(d)(1) of H.R. 1249, the America Invents Act, is intended to be
`narrowly construed to target only those business method patents that
`are unique to the financial services industry in the sense that they are
`patents which only a financial services provider would use to
`furnish a financial product or service. The example that I have been
`- 7 -
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`
`
`
`
`given is a patent relating to electronic check scanning, which is the
`type of invention that only the financial services industry would
`utilize as a means of providing improved or more efficient banking
`services. In contrast, Section 18 would not encompass a patent that
`can be used in other industries, but which a financial services
`provider might also use. Lastly, it is also my understanding from
`discussions with the Committee that Section 18 is targeted only
`towards patents for non-technological inventions.
`
`
`
`Id. at H4497. (Emphasis added.) It was based on that understanding that
`
`Congressman Shuster then voted to keep Section 18 in the bill. (See Id. at H4503.)
`
`
`
`Likewise, Congresswoman Waters discussed that Section 18 was directed to
`
`cost savings measures in the banking industry when she stated “too-big-to-fail
`
`banks ... are now coming to Congress in hopes that [Congress] will help them steal
`
`a specific type of innovation and legislatively take other financial services-related
`
`business method patents referenced in H.R. 1249, section 18. ... Financial
`
`services-related business method patents have saved financial services companies
`
`billions of dollars.” Id. at H4496. See also Exhibit 2005, 157 Cong. Rec. S5428
`
`(Rep. Pryor) (“It is of crucial importance to me that we clarify the intent of the
`
`[AIA § 18] process and implement it as narrowly as possible.”)
`
`In contrast to the banking or other financial products or services patents,
`
`claim 32 recites:
`
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`- 8 -
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`
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`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;
`
`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
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`- 9 -
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`
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`written into the data carrier, the at least one condition being dependent
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`upon the amount of payment associated with the payment data
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`forwarded to the payment validation system; and
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`code to retrieve from the data supplier and output to a user-
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`stored data identifier data and associated value data and use rule data
`
`for a data item available from the data supplier.
`
`
`
`Rather than recite the “practice, administration, or management of a financial
`
`product or service,” claim 32 actually omits the specifics of how payment is made
`
`and focuses on technical aspects of data and at least one access rule on a data
`
`carrier, e.g., code to write data and at least one access rule. Claim 32, therefore,
`
`does not recite a “financial product or service” when that phrase is properly
`
`construed, both under its plain meaning and in light of the legislative history
`
`showing Congress’ intent of the narrow meaning of that phrase.
`
`
`
`IV. THE CHALLENGED CLAIMS OF THE ‘221 PATENT ARE
`TECHNOLOGICAL INVENTIONS EXEMPT FROM CBM REVIEW
`
`As set forth in 37 CFR 42.301(a), even if claim 32 were considered to be
`
`claiming “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,” Petitioner must show that claim 32 does not meet the
`
`
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`- 10 -
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`
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`exception of being directed to a technological invention. Section 42.301(b) sets
`
`forth that a claim is directed to a technological invention (and therefore not the
`
`basis for instituting a CBM review) if “the claimed subject matter as a whole
`
`recites a technological feature that is novel and unobvious over the prior art; and
`
`solves a technical problem using a technical solution.”
`
`Claim 32, as a whole, recites at least one technological feature that is novel
`
`and unobvious over the prior art and solves a technical problem using a technical
`
`solution. At least one technological problem solved by the data access terminal of
`
`claim 32 is writing data and at least one access rule from a data supplier into a data
`
`carrier, e.g., as part of a convenient, legitimate acquisition of data from a data
`
`supplier. Moreover, it does so using a technical solution -- a data carrier from
`
`which payment data is read and to which retrieved data and at least one access rule
`
`from a data supplier are written.
`
`Section III.A. of the Petition also does not allege, much less prove, that
`
`reading payment data and at least one access rule from the data carrier and writing
`
`the retrieved data and the at least one access rule from the data supplier into the
`
`data carrier were known at the time of the invention of the patent-at-issue. Thus,
`
`as previously held in Epsilon Data Management, LLC et al. v. RPOST Comm. Ltd.,
`
`CBM2014-00017, paper 21, page 8, any analysis in any other portion of the
`
`Petition (other than the portion relating to whether CBM review is proper) need not
`
`
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`- 11 -
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`
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`be considered in determining that the Petitioner has not met its burden of proving
`
`that the claim at issue is a covered business method patent. Id. (“In addition,
`
`although Patent Owner addresses the analysis in the Declaration of [Petitioner’s
`
`Declarant] (id. at 19), which Petitioner submitted with the Petition, this analysis
`
`was not included in the relevant portion of the Petition (Pet. 2-6), and need not be
`
`considered in determining that the ... Patent[-at-issue] is a covered business method
`
`patent.”) Thus, Petitioner has not proven that the claims of the ‘221 patent are not
`
`directed to technological inventions exempt from CBM review.
`
`
`
`V. APPLE’S UNTIMELY § 101 CHALLENGE WILL NOT SECURE THE
`JUST, SPEEDY, AND INEXPENSIVE RESOLUTION OF THE ISSUES
`SURROUNDING THE ‘221 PATENT
`
`The Corrected Petition is Apple’s third-filed covered business method
`
`challenge against claims 1, 2, 11, and 32 of the ‘221 Patent. Apple filed its first
`
`two petitions on March 28, 2014 (CBM2014-00102, Paper 2 and CBM2014-
`
`00103, Paper 2), more than 7 months before filing its initial petition in this matter
`
`on October 30, 2014 (CBM2015-00015, Paper2).
`
`“[T]he Board is charged with securing the just, speedy, and inexpensive
`
`resolution of every proceeding.” EMC Corporation, et al. v. Personal Web
`
`Technologies, LLC, Case IPR2013-00082, Paper 33 at 4 (PTAB June 5,
`
`2013)(Decision, Denying Request for Rehearing)(citing 37 C.F.R. § 42.1(b)).
`
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`- 12 -
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`“Rules for inter partes review proceedings were promulgated to take into account
`
`the ‘regulation on the economy, the integrity of the patent system, the efficient
`
`administration of the Office, and the ability of the Office to timely complete
`
`proceedings.’” Id. at 2 (citing 35 U.S.C. § 316(b)).
`
`Apple’s § 101 unpatentable subject matter grounds are raised for the first
`
`time in the Corrected Petition. As the Board has acknowledged, “challenges
`
`pursuant to 35 U.S.C. § 101 … raise purely legal issues.” CBM2015-00015, Paper
`
`6 at 2. Apple provides no valid reason why it did not raise this purely legal issue
`
`as grounds for invalidity in its two prior petitions filed long before the instant
`
`Corrected Petition. While it is true that Alice Corp. Pty, Ltd. v. CLS Bank Int’l,
`
`134 S. Ct. 2347 (2014) was “decided after Petitioner’s original challenges to the
`
`‘221 were filed” (Corrected Petition at 4), there was no impediment to Apple
`
`asserting § 101 back in March 2014 when it filed the petitions in CBM2014-00102
`
`and -00103. As Apple acknowledges, “[i]n Alice, the Supreme Court applied
`
`[Mayo Collaborative Servs. v. Prometheus Labs, 132 S. Ct. 1289, 1293 (2012)]’s
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`two-part framework to ‘distinguish[] patents that claim laws of nature, natural
`
`phenomena, and abstract ideas from those that claim patent-eligible applications of
`
`these concepts.’” Corrected Petition at 22-23. Apple proffers no reason why it
`
`could not have raised this purely legal issue and applied Mayo’s two-part
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`- 13 -
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`framework in its March petitions, as it does now in the Corrected Petition.
`
`Corrected Petition at 23-26.
`
`Here, allowing Apple to raise a new ground of invalidity that it could have
`
`and should have raised in its March 28, 2014 petitions encourages Apple’s
`
`piecemeal invalidity challenges to Patent Owner’s patent claims and runs afoul of
`
`the PTAB’s charge to “secure the just, speedy, and inexpensive resolution” of
`
`Apple’s covered business method challenges to the ‘221 Patent. In fact, Patent
`
`Owner has been subjected to a continuing barrage of Petitions such that, together
`
`with the ten petitions filed by another group of Petitioners, the six patents in the
`
`patent family under review have now been subject to 31 different CBM petitions.
`
`Thus, of the 277 CBM petitions filed through the end of 2014, 31/277 or more
`
`than 11% of all CBMs ever filed have targeted only six patents belonging to the
`
`same assignee. As in Conopco, Smartflash’s “concern that it will ‘have to
`
`continually defend against repetitive challenges’ to the same patent claims is not
`
`without merit, given the multiplicity of grounds applied in each petition.”
`
`Conopco at 12. Patent Owner therefore respectfully requests that the Board deny
`
`review of claims 1, 2, 11, and 32 on Apple’s newly asserted § 101 nonstatutory
`
`subject matter grounds.
`
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`- 14 -
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`
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`VI. APPLE’S § 103 OBVIOUSNESS CHALLENGES RAISE
`SUBSTANTIALLY THE SAME PRIOR ART AND ARGUMENTS
`PREVIOUSLY PRESENTED
`
`“As set forth in 35 U.S.C. § 325(d), the Director, and by extension the
`
`Board, has broad discretion to deny a petition that raises substantially the same
`
`prior art or arguments previously presented to the Office.” Unilever at 6. Here,
`
`the Corrected Petition raises substantially the same prior art and arguments
`
`previously presented in the CBM2014-00102 and -00103 petitions. The Board
`
`should exercise its broad discretion and deny the Corrected Petition.
`
`The instant Corrected Petition challenges claim 32 of the ‘221 Patent on §
`
`103 obviousness grounds, a claim that was previously denied review on § 103
`
`obviousness grounds in the CBM2014-00102 and -00103 proceedings. Compare
`
`Corrected Petition at 18 with 00102/00103 Institution Decision at 3-4 (showing
`
`Apple’s prior ‘221 Patent claim 32 challenges based on § 103 obviousness grounds
`
`and denying institution of a covered business method patent review of claim 32).
`
`Apple’s current request for covered business method review of the ‘221
`
`Patent on § 103 obviousness grounds argues that “[c]laim 32 is obvious in light of
`
`Stefik in view of Poggio and Kopp” and that “[c]laim 32 is obvious in light of
`
`Stefik in view of [of] Poggio, Kopp, and Smith.” Corrected Petition at 18. Apple
`
`admits that Kopp and Smith are “additional prior art” that it “now identifies” “[i]n
`
`light of the Board’s Decision” denying review of claim 32 as unpatentable under
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`- 15 -
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`35 U.S.C. § 103. Corrected Petition at 1-2. Apple’s Corrected Petition is nothing
`
`more than an attempt to use the Board’s 00102/00103 Institution Decision
`
`declining to review claim 32 as a road map to resurrect challenges that were
`
`rejected in the CBM2014-00102 and -00103 proceedings.
`
`Apple cannot dispute that Stefik ‘235, Stefik ‘980 and Poggio constitute the
`
`same prior art previously presented against claim 32 of the ‘221 Patent as § 103
`
`invalidating prior art in CBM2014-00102 and -00103 and rejected by the Board.
`
`00102/00103 Institution Decision at 3-4 (summarizing references and claims
`
`challenged under § 103).
`
`Simply put, Apple put its best case on claim 32 invalidity before the Board
`
`in CBM2014-00102 and -00103 and should not now be allowed to try again just
`
`because the Board declined to institute a review of that claim. Allowing Apple to
`
`file serial CBM petitions using the Board’s prior decision as guidance to fix flaws
`
`in its prior petitions encourages piecemeal litigation and promotes inefficiency.
`
`Forcing Patent Owner to respond and defend against the duplicative challenges is a
`
`financial burden. Serial filing of duplicative challenges is also a drain on the
`
`Board’s resources. The “interests of fairness, economy, and efficiency support
`
`declining review—a result that discourages the filing of a first petition that holds
`
`back prior art for use in successive attacks, should the first petition be denied.”
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`- 16 -
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`Conopco at 11. In fact, in Apple’s case, it is actually successive attacks, should the
`
`first and second petitions be denied.
`
`As to the newly-cited prior art, Apple has not provided any argument or
`
`evidence that the Kopp and Smith references (Exhibits 1210 and 1219) were not
`
`known or available to it in March 2014 when it filed the CBM2014-00102
`
`and -00103 petitions. If Apple wanted to rely on Kopp and Smith as § 103
`
`invalidating prior art against claim 32 it could have, and should have, done so in
`
`March 2014 in CBM2014-00102 and -00103.
`
`Moreover, the Kopp and Smith references are not alleged to teach anything
`
`that the references Apple cited in the CBM2014-00102 and -00103 petitions were
`
`not alleged to teach. In CBM2014-00102, Apple asserted that claim 32 was
`
`obvious based on the combined Stefik ‘235, Stefik ‘980, Poggio, and Sato
`
`references. 00102/00103 Institution Decision at 3. Here, Apple asserts that claim
`
`32 is obvious based on the combined Stefik ‘235, Stefik ‘980, Poggio, and Kopp
`
`references as well as the combined Stefik ‘235, Stefik ‘980, Poggio, Kopp and
`
`Smith references. As compared to CBM2014-00102, Apple simply swaps Sato,
`
`with Kopp, and then with Kopp plus Smith. The Board declined to initiate review
`
`of claim 32 based on Apple’s combination of Stefik ‘235, Stefik ‘980, Poggio, and
`
`Sato. Id. at 20. The Board’s decision was based on insufficiencies in the
`
`application of the Stefik ‘235, Stefik ‘980 and Poggio, the same prior art references
`
`
`
`- 17 -
`
`
`
`submitted here, to the claim elements of claim 32. For example, the Board did not
`
`find support in Stefik ‘235, Stefik ‘980 or Poggio for the claim 32 requirement
`
`that “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.” Id. at 19-20 (“Our review of the claim chart does not indicate which
`
`specific disclosure in either Stefik ’235 or Stefik ’980 supports Petitioner’s
`
`assertion;” “Petitioner does not explain persuasively why the amount of the
`
`payment that was made is the same amount of payment associated with the
`
`payment data forwarded to the payment validation system. Our review of the
`
`Petition does not indicate that Petitioner refers to any other reference as teaching
`
`this claim limitation”). Yet Apple continues to assert these same references for the
`
`same elements of claim 32. Compare, 2014-00102 petition at 70-72 with
`
`Corrected Petition at 70-73. Apple adds Kopp and Smith to the claim chart in the
`
`Corrected Petition, but Kopp and Smith are not alleged to teach anything that
`
`Stefik ‘235, Stefik ‘980 and Poggio were not were not alleged to teach. Kopp, like
`
`Stefik ‘235, Stefik ‘980 and Poggio, is alleged to disclose an access rule provided
`
`with a data record specifying the amount of utilization of the data record allowed.
`
`Compare Corrected Petition at 74 with 2014-00102 petition at 70-72. As to the
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`Smith reference, Apple admits that Smith is merely cumulative of Stefik ‘235,
`
`
`
`- 18 -
`
`
`
`Stefik ‘980, Poggio, and Kopp, stating “[t]o the extent it is argued that any further
`
`disclosure is needed for this limitation, Smith explicitly discloses…” Corrected
`
`Petition at 76. Thus, the Corrected Petition raises substantially the same prior art
`
`and arguments previously presented to the Board in CBM2014-00102.
`
`Similarly, in CBM2014-00103, Apple asserted that claim 32 was obvious
`
`based on the combined Stefik ‘235, Stefik ‘980, Poggio, and Ginter references.
`
`00102/00103 Institution Decision at 3. Thus, as compared to CBM2014-00103,
`
`Apple’s Corrected Petition simply swaps Ginter, with Kopp, and then with Kopp
`
`plus Smith. The Board found deficiencies with Ginter. 00102/00103 Institution
`
`Decision at 22 (“Petitioner has not persuaded us that the amount a user is charged
`
`is the same amount of payment forwarded to the payment validation system.
`
`Petitioner also equates Ginter’s ‘control information’ to the claimed ‘access rule’
`
`(’103 Pet. 76), but also does not explain persuasively how control information is
`
`dependent upon the amount of payment associated with the payment data
`
`forwarded to the payment validation system.”). But Kopp and Smith are not
`
`alleged to teach anything that Ginter was not alleged to teach. For example, Ginter
`
`was alleged to teach “writing the at least one access rule … into the data carrier”
`
`(‘103 Petition 75) and “that the at least one condition for accessing the retrieved
`
`data … depends upon the amount of payment associated with the payment data
`
`forwarded to the payment validation system.” Id. at 76. Kopp is alleged to teach
`
`
`
`- 19 -
`
`
`
`the same. “Kopp discloses writing an access rule … to a data carrier” (Corrected
`
`Petition at 74) and “[t]he access rule specifies the maximum amount of utilization
`
`of the data record that a user is allowed” … “[t]he specified maximum amount of
`
`utilization associated with a sold data record in Kopp is dependent on the amount
`
`of payment.” Id. at 75. As to the Smith reference, again, Apple concedes it is
`
`cumulative of prior art already presented, stating “[t]o the extent it is argued that
`
`any further disclosure is needed for this limitation, Smith explicitly discloses…”
`
`Id. at 76. Thus, the Corrected Petition raises substantially the same prior art and
`
`arguments previously presented to the Board in CBM2014-00103.
`
`Given that the Corrected Petition raises substantially the same prior art and
`
`arguments previously presented by Apple to attempt to invalidate claim 32 of the
`
`‘221 Patent in the CBM2014-00102 and -00103 petitions and given that the
`
`arguments based on that prior art were rejected by the Board, the Board should
`
`exercise its broad discretion here and deny the instant Corrected Petition. To do
`
`otherwise promotes piecemeal litigation, inefficient duplicative serial filings, and
`
`drains the resources of Patent Owner and the Board.
`
`
`
`VII. STEFIK ‘235 and STEFIK ‘980 ARE NOT A SINGLE REFERENCE
`
`The Petition alleges at page 34 that Stefik ’235 incorporates Stefik ’980 by
`
`reference. However, Petitioner has not proven that the alleged incorporation by
`
`
`
`- 20 -
`
`
`
`reference in the ‘235 patent is sufficient to support a finding that the ‘235 and ‘980
`
`patents should be considered a single reference. The ‘235 patent states, at col. 2,
`
`lines 48-53, that “The currently preferred embodiment of a DocuCard is an
`
`instance of a repository, as defined in co-pending application entitled ‘System for
`
`Controlling the Distribution and Use of Digital Works,’ serial number not yet
`
`assigned, which is assigned to the assignee of the present invention and which is
`
`herein incorporated by reference.” However, such a reference does not meet the
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`MPEP’s standard for incorporation by reference. MPEP 608.01(p) (Sixth Ed., Jan.
`
`1995) set forth the procedure for incorporation by reference at the time the ‘235
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`patent was filed. As specified in
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