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`571-272-7822
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`CBM2015-00015, Paper No. 57
`CBM2015-00018, Paper No. 44
`March 8, 2016
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`RECORD OF ORAL HEARING
`UNITED STATES PATENT AND TRADEMARK OFFICE
`- - - - - -
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`- - - - - -
`APPLE INC.,
`Petitioner,
`vs.
`SMARTFLASH LLC,
`Patent Owner.
`- - - - - -
`CBM2015-00015 (Patent 8,118,221)
`CBM2015-00018 (Patent 7,942,317)
`Technology Center 2800
`
`Oral Hearing Held: Wednesday, January 6, 2016
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`Before: JENNIFER S. BISK; RAMA G. ELLURU; JEREMY
`M. PLENZLER (via audio link); GREGG ANDERSON (via video link);
`and MATTHEW R. CLEMENTS (via video link), Administrative Patent
`Judges.
`
`The above-entitled matter came on for hearing on Wednesday,
`January 6, 2016, at 1:24 p.m., Hearing Room B, taken at the U.S. Patent and
`Trademark Office, 600 Dulany Street, Alexandria, Virginia.
`REPORTED BY: RAYMOND G. BRYNTESON, RMR,
`
`CRR, RDR
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`APPEARANCES:
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`ON BEHALF OF THE PATENT OWNER:
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`MICHAEL R. CASEY, PH.D., ESQ.
`Davidson Berquist Jackson & Gowdey LLP
`8300 Greensboro Drive
`Suite 500
`McLean, Virginia 22102
`571-765-7705
`
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`CBM2015-00015 (Patent 8,118,221)
`CBM2015-00018 (Patent 7,942,317)
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`
`P R O C E E D I N G S
`
`(1:24 p.m.)
`JUDGE ELLURU: Good afternoon. This is the
`final hearing for CBM2015- 00015 and CBM2015- 00018,
`Apple, Inc. against Smartflash LLC. After we instituted trial
`in these cases we dismissed Apple, Inc. as a Petitioner.
`I'm Judge Elluru. To my right is Judge Bisk. And
`appearing remotely from San Jose is Judge Clements, from San
`Diego is Judge Anderson, and from Detroit is Judge Plenzler.
`Let's begin with appearances of Patent Owner,
`Smartflash. Counsel, please.
`MR. CASEY: Good afternoon, Your Honor.
`Michael Casey on behalf of Smartflash.
`JUDGE ELLURU: Thank you. Mr. Casey, you
`have 15 minutes total to present your arguments in these two
`cases. You may begin when you are ready, and the
`transcription of this hearing may now begin.
`MR. CASEY: Thank you, Your Honor. Are we --
`just for safekeeping -- are we short Judge Plenzler? I don't
`see him.
`
`JUDGE BISK: He is only joining us on the phone
`because we can only do two. Our technology is running - - it's
`limited today in every aspect.
`JUDGE ELLURU: But he is on.
`MR. CASEY: I understand that. I saw the video
`screen and I wanted to make sure there wasn't a problem.
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`CBM2015-00015 (Patent 8,118,221)
`CBM2015-00018 (Patent 7,942,317)
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`May it please the Board. Michael Casey on behalf
`of Patent Owner, Smartflash. Your Honors, I wanted to start
`with the fact that the record from the previous hearing does
`not reflect the discussion that was had about whether or not
`this proceeding should continue.
`The previous hearing transcript was only filed in
`15, and not 18, and so if I could have your indulgence for two
`seconds to put them -- sorry, if I could have your indulgence
`just for two seconds to make sure the record for both 15 and
`18 is clear that Patent Owner previously requested that the
`case be terminated and, in fact, requested that the Board
`recuse itself.
`So just for the record I wanted to make sure that
`that was included in the record in both cases. And I assume
`that the Board hasn't elected to actually terminate this case
`because we are here.
`Your Honor, the Petitioner in the post-grant, in
`this post-grant review is now gone. So we are now in a
`position where the Patent Owner in its brief raised the fact
`that the Patent Owner should be estopped -- sorry, that the
`Patent Office should be estopped from re-raising the issue of
`101 in this proceeding and coming to a decision contrary to
`what the agency has already ruled, that the current situation,
`in fact, is highlighted by the fact that the Petitioner is now
`gone.
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`CBM2015-00015 (Patent 8,118,221)
`CBM2015-00018 (Patent 7,942,317)
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`The review of the claims for matters 15 and 18
`show that the agency is re-reviewing what it has already ruled
`upon once, and, that is, that the claims are patent eligible.
`The CBM statute does not permit the issue of
`patent -- sorry, of eligibility, which is under 101, to be raised.
`That was before the Patent Examiner who found that the
`claims were patent eligible and, as a result, the claim 1 of the
`'221 patent and claim 18 of the '317 patent should be found to
`be patent eligible on that basis alone.
`Nor has there been a change in the law such that
`there is anything new to review. This is the very essence of
`res judicata and ties into the Congressional intent not to allow
`the Patent Owner to be subjected to serial suits by a Petitioner,
`and, in fact, by continuing this process that's where we are.
`Moreover, Your Honor, the claims at issue are
`patentable. For example, claim 1 of the '221 patent recites
`both the code to repayment data from the data carrier and to
`forward the payment data to a payment validation system as
`well as code responsive to payment validation data to retrieve
`data from the data supplier and to write the retrieved data into
`the data carrier.
`Such a structure provides the necessary elements
`even by themselves to ensure that the claim is directed to
`something more than just the abstract idea. The claim is not
`directed to -- claim 1 of the '221 patent is not directed to
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`CBM2015-00015 (Patent 8,118,221)
`CBM2015-00018 (Patent 7,942,317)
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`mental process or paper and pen -- a process to be formed by
`paper and pen. It is directed to a computer network problem.
`And as described in the brief for CBM2015- 00015,
`under the DDR analysis, the last limitation of the claim, which
`is code responsive to the payment validation data to retrieve
`data from the data supplier and to write the retrieved data into
`the data carrier, is like the last limitation of DDR where the
`received data is used to automatically transmit a web page that
`has information on the selected object.
`And, in addition, Your Honor, the Petitioner's
`witness, the now dismissed Petitioner's witness, Mr.
`Wechselberger, identified at least three embodiments that are
`not covered by the claims, showing that the fear of preemption
`is not actually met by claim 1 of the '221 patent.
`Similarly, Mr. Wechselberger testified that it is
`possible to build a computer system that enables paying for
`and controlling access to content that does not read payment
`distribution information from a data store, when he was
`referring to claim 18 in CBM2015- 00018.
`Thus, both of these proceedings should find that
`the Patent Office does not need to reexamine the eligibility of
`claim 1 of the '221 patent and claim 18 of the '317 patent and
`that these claims should be found to be patent eligible under
`35 U.S.C. 101.
`Do you have any questions, Your Honors? So, in
`summary, I think that the claims themselves show the statutory
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`CBM2015-00015 (Patent 8,118,221)
`CBM2015-00018 (Patent 7,942,317)
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`nature of the inventions, that these inventions are not abstract
`ideas but are directed to actual implementations of inventions
`that provide new and useful results and, therefore, their
`patentability should be confirmed.
`JUDGE ELLURU: Thank you, counsel. Do you
`have any other further comments for the record?
`MR. CASEY: For the record for 15 and 18? No,
`Your Honor, not at this time.
`JUDGE ELLURU: Thank you. The final hearing
`in CBM2015- 00015 and CBM2015- 00018 is adjourned and the
`transcription of this hearing will now end. The second session
`will begin in about five minutes.
`(Whereupon, at 1:31 p.m., the hearing was
`adjourned.)
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