Covered Business Method Patent Review
`United States Patent No. 8,118,221
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-813
`Customer No. 28120
`
`§
`Inventor: Racz et al.
`United States Patent No.: 8,118,221 §
`Formerly Application No.: 12/943,872 §
`Issue Date: February 21, 2012
`§
`Filing Date: November 10, 2010
`§
`Former Group Art Unit: 2887
`§
`Former Examiner: Thien M. Le
`§
`
`For: Data Storage and Access Systems
`
`MAIL STOP PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`Post Office Box 1450
`Alexandria, Virginia 22313-1450
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF
`UNITED STATES PATENT NO. 8,118,221 PURSUANT TO 35 U.S.C. § 321,
`37 C.F.R. § 42.304
`
`
`
`i
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`

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` Covered Business Method Patent Review
`United States Patent No. 8,118,221
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`TABLE OF CONTENTS
`
`INTRODUCTION ....................................................................................................... 1
`I.
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 4
`III. PETITIONER HAS STANDING ............................................................................ 8
`A.
`The ’221 Patent Is a Covered Business Method Patent ............................... 8
`1.
`Exemplary Claim 32 Is Financial In Nature .................................... 10
`2.
`Claim 32 Does Not Cover A Technological Invention ................. 13
`Related Matters and Mandatory Notice Information; Petitioner Is a
`Real Party In Interest Sued for and Charged With Infringement ............ 18
`IV. DETAILED EXPLANATION OF REASONS FOR RELIEF REQUESTED,
`SHOWING IT IS MORE LIKELY THAN NOT THAT AT LEAST ONE
`CHALLENGED CLAIMS IS UNPATENTABLE ............................................. 19
`A.
`Claim Construction .......................................................................................... 19
`B.
`The Challenged Claims Are Invalid Under 35 U.S.C. §101 ...................... 23
`1.
`Claims Are Directed To Abstract Ideas ........................................... 24
`2.
`Claims Do Not Disclose An “Inventive Concept” That Is
`“Significantly More” Than an Abstract Idea ................................... 27
`Field Of Use Limitations Cannot Transform Abstract Ideas
`Into Patent Eligible Inventions .......................................................... 27
`Generic Computer Implementation Cannot Transform Ab-
`stract Ideas Into Patent Eligible Inventions..................................... 28
`The Functional Nature Of The Challenged Claims Con-
`firms Preemption and Patent Ineligibility ........................................ 34
`6. Machine-or-Transformation Test Confirms Ineligibility ............... 36
`The Challenged Claims Are Invalid Under 35 U.S.C. § 103 ..................... 36
`1.
`Overview of Stefik ............................................................................... 36
`2. Motivation to Combine Stefik with Poggio ..................................... 41
`3. Motivation to Combine Stefik and Poggio with Kopp .................. 45
`4. Motivation to Combine Stefik with Poggio, Kopp, and
`Smith ...................................................................................................... 49
`Claim 32 is Obvious............................................................................. 52
`
`B.
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`C.
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`3.
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`4.
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`5.
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`5.
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`CONCLUSION........................................................................................................... 79
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`V.
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`ii
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`EXHIBIT LIST
`1201
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`1202
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`1203
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`1204
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`1205
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`1206
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`1207
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`1208
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`1209
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`1210
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`1211
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`1212
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`1213
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`1214
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`1215
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`1216
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`1217
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`1218
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`1219
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`1220
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` Covered Business Method Patent Review
`United States Patent No. 8,118,221
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`U.S. Patent No. 8,118,221
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`Plaintiffs’ First Amended Complaint
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`File History for U.S. Patent No. 8,061,598
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`File History for U.S. Patent No. 8,336,772
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`U.S. Patent No. 5,675,734
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`U.S. Patent No. 4,999,806
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`U.S. Patent No. 4,878,245
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`U.S. Patent No. 7,334,720
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`U.S. Patent No. 7,942,317
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`U.S. Patent No. 5,940,805
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`File History for U.S. Patent No. 8,118,221
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`U.S. Patent No. 5,103,392
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`U.S. Patent No. 5,530,235
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`U.S. Patent No. 5,629,980
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`U.S. Patent No. 5,915,019
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`European Patent Application, Publication No. EP0809221A2
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`International Publication No. WO 99/43136
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`JP Patent Application Publication No. H11-164058 (transla-
`tion)
`International Publication No. WO 95/34857
`
`Eberhard von Faber, Robert Hammelrath, and Franz-Peter
`Heider, “The Secure Distribution of Digital Contents,” IEEE
`(1997)
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`iii
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`United States Patent No. 8,118,221
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`Declaration of Anthony J. Wechselberger In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`Declaration of Michael P. Duffey In Support of Apple Inc.’s
`Petition for Covered Business Method Patent Review
`Declaration of Flora D. Elias-Mique In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`U.S. Patent No. 8,033,458
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`U.S. Patent No. 8,061,598
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`U.S. Patent No. 8,336,772
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`File History for U.S. Patent No. 7,334,720
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`File History for U.S. Patent No. 7,942,317
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`File History for U.S. Patent No. 8,033,458
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`Claim Construction Memorandum Opinion from Smartflash
`LLC v. Apple Inc., No. 6:13cv447 (Dkt. 229)
`U.S. Patent No. 4,337,483
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`U.S. Patent No. 7,725,375
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`U.S. Patent No. 5,925,127
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`EXHIBIT LIST
`1221
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`1222
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`1223
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`1224
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`1225
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`1226
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`1227
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`1228
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`1229
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`1230
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`1231
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`1232
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`1233
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`iv
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` Covered Business Method Patent Review
`United States Patent No. 8,118,221
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`I.
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`INTRODUCTION
`Pursuant to 35 U.S.C. § 321 and 37 C.F.R. § 42.304,1 the undersigned, on be-
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`half of and acting in a representative capacity for petitioner, Apple Inc. (“Petitioner”
`
`and the real party in interest), petitions for review under the transitional program for
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`covered business method patents of claim 1, 2, 11, and 32 (“the challenged claims”) of
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`U.S. Patent No. 8,118,221 (“the ’221 Patent”), issued to Smartflash Technologies
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`Limited and assigned to Smartflash LLC (“Smartflash,” also referred to as “Patentee”).
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`Petitioner asserts it is more likely than not that the challenged claims are unpatentable
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`for the reasons herein and requests review of, and judgment against, claim 1, 2, 11,
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`and 32 as unpatentable under § 101, and claim 32 as unpatentable under § 103.
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`As discussed in Section III.B, infra, Petitioner previously filed CBM2014-
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`00102/103 seeking CBM review of the ’221 Patent. Those petitions were instituted
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`for trial (and consolidated2) with respect to claims 1, 2, and 11-14 on grounds based
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`on § 103, but the Board did not institute trial on claim 32. In its Institution Decision,
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`the Board construed the term “access rule” as “a rule specifying a condition under
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`which access to content is permitted,” and determined Petitioner had not shown it
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`1 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
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`numerous additional reasons. All section cites herein are to 35 U.S.C. or 37 C.F.R.,
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`as the context indicates, and all emphasis herein is added unless otherwise noted.
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`2 Petitioner concurrently moves for joinder of this petition and CBM2014-00102.
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`1
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`was more likely than not that it would prevail in demonstrating that Stefik, Poggio,
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`and/or Sato rendered obvious code “responsive to payment validation data” to re-
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`ceive an “access rule” specifying at least one condition for accessing data, the condi-
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`tion being dependent upon the “amount of payment associated with the payment data
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`forwarded to the payment validation system” under the Board’s construction. In light
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`of the Board’s Decision, Petitioner now identifies additional prior art—Kopp and
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`Smith (Exs.1210, 1219)—with explicit disclosures of “access rules” as construed by
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`the Board and expressly disclosing code to retrieve access rules responsive to payment
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`validation data and specifying access conditions dependent on amount of payment.
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`Kopp, for example, describes a vending system that allows a user to specify a desired
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`extent of usage, pay for only that amount of usage, and then receive data limited to
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`the purchased usage amount (see, e.g., Ex.1210 2:50-65), while Smith provides express
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`disclosure of a software vending system that allows a user to pre-pay license fees pro-
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`portional to the value received from using software, rather than paying all or nothing
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`(see, e.g., Ex.1219 6:1-5; 18:4-33). Petitioner has also identified additional disclosures in
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`Stefik and Poggio concerning these limitations as construed, further confirming a
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`POSITA3 would have found it entirely obvious and routine to implement the system
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`3 All references to a person of ordinary skill in the art (“POSITA”) refer to the
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`knowledge or understanding of a person of ordinary skill in the art as of October 25,
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`1999, unless specifically noted. A POSITA would have at least a Bachelor of Science
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`disclosed by Stefik and Poggio using the expressly advantageous teachings of Kopp
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`and Smith, detailed in §IV.C, infra. See, e.g., Ex.1221 ¶¶ 57-79.
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`The challenged claims merely recite a basic computer system well-known in the
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`field of data storage and access. Claim 32 recites four rudimentary components of a
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`data access terminal “for retrieving data from a data supplier and providing the retrieved data to a
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`data carrier”—(A) an interface, (B) a data carrier interface, (C) a program store storing code,
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`and (D) a processor . . . for implementing the stored code. The recited code is similarly
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`elementary, reading and forwarding payment data (D1), receiving payment validation data (D2),
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`responding to payment data (D3), responding to payment validation data (D4), and retrieving . . .
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`value data and use rule data. Ex.1201 cl. 32. But at the earliest claimed priority date, these
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`simple elements and their combination were well known. Indeed, the patent acknowl-
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`edges that the idea of providing access to data in exchange for a payment (e.g., purchase
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`of music on a CD) was already well known. E.g., Ex.1201 5:9-11 (“the purchase out-
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`right option may be equivalent to the purchase of a compact disc (CD)”). And, as shown
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`herein, the prior art was teeming with disclosures of this basic concept and its
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`straightforward implementation. Further, claim 32 clearly involves no “technology” at all
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`other than “a data access terminal,” with interfaces, a program store storing code, and a
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`degree in electrical engineering, computer science or a telecommunications related
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`field, and at least three years of industry experience that included client-server
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`data/information distribution and management architectures. See Ex.1221 ¶ 24.
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`processor that implements the well-known steps disclosed in the specification—all of
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`which the patent concedes were well known and commonplace, stating that this “ter-
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`minal comprises a general purpose computer.” E.g., Ex.1201 4:4, 16:32-33. The patent de-
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`scribes no more than a system for retrieving data from and providing data to a data
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`carrier while reading payment data, receiving payment data, responding to payment
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`validation data, and retrieving user-stored data and use rule data.
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`Indeed, as confirmed by the Supreme Court’s recent decision in Alice Corp. Pty,
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`Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)—decided after Petitioner’s original chal-
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`lenges to the ’221 were filed—claim 32 and the remaining challenged claims are also
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`directed to patent-ineligible subject matter under § 101. As the Board noted in its
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`previous Institution Decision, “the ’221 patent makes clear that the asserted novelty
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`of the invention is not in any specific improvement of software or hardware, but in
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`the method of controlling access to data,” CBM2014-00102, Pap. 8, 11, and the challenged
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`claims are directed to nothing more than the unpatentable abstract idea of paying for
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`and controlling access to data, with at most the addition of well-known, routine and
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`conventional features—in particular, generic computer implementation that cannot
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`confer patentability on these patent-ineligible abstractions. E.g., Alice, 134 S. Ct. at
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`2359-60. Because each challenged claim recites unpatentable subject matter, and claim
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`32 is also obvious, all of the challenged claims should be invalidated.
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`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
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`digital products all would have been well-known to a POSITA, and their combination
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`as claimed also would have been well-known or at minimum obvious to a POSITA.
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`See, e.g., Ex.1221 ¶¶ 27-28. On March 12, 1991, for example, U.S. Patent No.
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`4,999,806 (“Chernow,” filed Sept. 4, 1987), issued, disclosing a system and method for
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`sale and distribution of digital products by phone, and for content protection. See
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`Ex.1206 Abstract (“central station distributes software by telephone . . . accepts credit card in-
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`formation, transmits an acceptance code . . . After verifying the credit card information, the station
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`calls the purchaser back and continues with the transaction.”); 1:67-2:9 (describing “means for
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`selling and distributing protected software using standard telephone lines,” “permit[ting] the purchaser
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`to rent the protected software for a period of time,” and “to rent the protected software for a specific
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`number of runs””). Chernow thus discloses making different types of access available,
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`such as purchase versus rental, and further discloses a Control Transfer Program and
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`Primary Protection Program that ensure the computer receiving a downloaded pro-
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`gram does not have another program present that could create unauthorized copies.
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`See Ex.1206 Abstract; 2:65-3:23; see also Ex.1221 ¶ 29.
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`In April 1992, U.S. Patent No. 5,103,392 (“Mori,” filed Dec. 5, 1990), issued,
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`disclosing use-based charging for digital products. See Ex.1212, 1:64-2:17:
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`[D]ata processing apparatus includes user-specific credit data storage
`means for storing data identifying the user … and indicating credit for pay-
`ment capacity, use time length, or the like of the user … Also included is [1]
`use decision means for determining permission to use the program … on the basis
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`of program-specific data supplied from the program storage means or user-
`specific credit data supplied from the user-specific credit data storage means,
`the use decision means delivering either an affirmative or negative signal corre-
`sponding to results of the decision[, and [2]] program use history storage
`means connected to the use decision means for storing program use history da-
`ta . . ..
`Mori’s emphasis on assuring permission to access a program and compensation to
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`providers for use underscores the art’s focus on digital rights management (“DRM”),
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`over eight years before the ’221’s claimed priority date. See also Ex.1221 ¶ 32.
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`Also in 1997, Exhibit 1020 (“von Faber”) observed that “[e]lectronic commerce sys-
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`tems dealing with the distribution of digital contents like software or multimedia data
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`have to couple the use of the provided digital goods with a prior payment for the goods in a way
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`which cannot be bypassed.” See id. at 7. Von Faber proposed a system where custom-
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`ers purchase keys to utilize distributed encrypted content. See, e.g., id. (“one possible
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`solution is to distribute the contents in encrypted form, and to have the customer pay for the key
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`which he needs to transform the encrypted content in an usable form.”); id. at 8 (“The Content
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`Provider provides digital contents in encrypted form being distributed by the Content Distribu-
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`tor . . . The Authorisation System permits the distribution of the appropriate key after settling of
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`the fees payable by the Customer, who will enjoy the decrypted digital contents.”); see also
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`Ex.1220 at Fig. 1. Von Faber states its system could be used for a variety of known
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`distribution and payment methods, and further addressed the known issue of payment
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`distribution to content providers. See, e.g., Ex.1220 at 13 (“Different methods can be used
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`to distribute the encrypted contents (standard techniques) . . . Different electronic payment meth-
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`ods can be integrated . . . This flexibility leads to the fact that totally different authorisation methods
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`can be integrated.”; “The system automatically divides the package price (payments) and guarantees
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`that the money is transferred to each Content Provider.”). See also Ex.1221 ¶¶ 34-36.
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`Moreover, U.S. Patent No. 5,915,019 (“Ginter,” filed Jan. 8, 1997), issued June
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`22, 1999, disclosing “systems and methods for secure transaction management and
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`electronic rights protection,” and describing a “virtual distribution environment”
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`(VDE) to “control and/or meter or otherwise monitor use of electronically stored or
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`disseminated information.” See, e.g., Ex.1215 Abstract. Ginter’s system “help[s] to
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`ensure that information is accessed and used only in authorized ways, and maintain the integ-
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`rity, availability, and/or confidentiality of the information.” See, e.g., id. Ginter discloses
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`that entities can flexibly take on any of the roles within the VDE, see, e.g., id. 255:22-23
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`(“All participants of VDE 100 have the innate ability to participate in any role.”);
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`255:23-43, and thus highlights the known flexibility in such distribution systems, un-
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`derscoring that combinations between and among disclosures of such distribution sys-
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`tems would have been obvious to a POSITA. See also, e.g., Ex.1221 ¶¶ 37-38.
`
`Storage and utilization of content on portable devices, including mobile com-
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`munication devices such as cellular phones, was also well-known before Smartflash’s
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`claimed October 25, 1999 priority date. As one example, Exhibit 1017 (“Rydbeck,”
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`pub’d Aug. 26, 1999), discloses a cellular phone for storing and accessing digital con-
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`tent. See, e.g., Ex.1017 5:7-13 (“Because of its integration into the cellular phone, the digital
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`entertainment module can share components already present in the cellular phone. [T]he use of solid
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`state RAM or ROM, as opposed to disc storage, eliminates the need for bounce control
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`circuitry. This enables the disclosed invention to provide cellular communications and entertain-
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`ment”). And Exhibit 1018 (“Sato,” pub’d June 18, 1999), discloses storing and playing
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`media on mobile devices, for example using a removable IC card. See, e.g., Ex.1218 ¶
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`9 (“The portable music selection viewing device 70 provides a removable storage device 76
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`[which] is a memory card similar to, for example. . . an IC card…. [T]he user can store the
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`music software from another audio unit into the storage device 76 and enjoy music by inserting
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`this storage unit 76 into this portable music selection and viewing device 70.”); ¶ 13
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`(“A music storage medium 250 such as a magnetic card, magnetic tape, a CD, a DVD,
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`or a memory card such as an IC card stores the music software, and this storage medium
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`250 can be removed and used on other audio units.”). See also Ex.1221 ¶ 39.
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`As these and the additional examples detailed below in Section IV.B illustrate,
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`the prior art was rife with awareness and discussion of the same supposed “invention”
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`memorialized in the challenged claims of the ’221 Patent.
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`III. PETITIONER HAS STANDING
`A.
`The ’221 Patent Is a Covered Business Method Patent
`The ’221 Patent is a “covered business method patent” under § 18(d)(1) of the
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`Leahy-Smith America Invents Act, Pub. L. 112-29 (“AIA”) and § 42.301, and Peti-
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`tioner certifies it is available for review under § 42.304(a). See also CBM2014-00102,
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`Pap. 8, 8-12 (finding claim 12 of ’221 Patent satisfies requirement); CBM2014-00112,
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`Pap. 8, 8-12 (same for similar claim directed to a “data access terminal”). Although
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`numerous claims of the ’221 qualify, a patent with even one claim covering a covered
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`business method is considered a CBM patent. See CBM 2012-00001, Doc. 36 at 26;
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`77 Fed. Reg. 48,709 (Aug. 14, 2012). Petitioner thus addresses exemplary claim 32:
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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] a first interface for communicating with the data supplier;
`[B] a data carrier interface for interfacing with the data carrier;
`[C] a program store storing code; and
`[D] a processor coupled to the first interface, the data carrier interface,
`and the program store for implementing the stored code, the code com-
`prising:
`[D1] code to read payment data from the data carrier and to for-
`ward the payment data to a payment validation system;
`[D2] code to receive payment validation data from the payment
`validation system;
`[D3] code responsive to the payment validation data to retrieve
`data from the data supplier and to write the retrieved data into the
`data carrier;
`[D4] 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 speci-
`fying at least one condition for accessing the retrieved data written in-
`to the data carrier, the at least one condition being dependent
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`upon the amount of payment associated with the payment data
`forwarded to the payment validation system; and
`[D5] 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.
`1.
`Exemplary Claim 32 Is Financial In Nature
`A “covered business method patent” is “a patent that claims a method or corre-
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`sponding apparatus for performing data processing or other operations used in the practice, admin-
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`istration, or management of a financial product or service, except that the term does not in-
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`clude patents for technological inventions.” AIA § 18(d)(1); § 42.301. “[T]he defini-
`
`tion of covered business method patent was drafted to encompass patents claiming
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`activities that are financial in nature, incidental to a financial activity or complementary to a finan-
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`cial activity.’” 77 Fed. Reg. 48,734-35 (Aug. 14, 2012) (citing 157 Cong. Rec. S5432 (dai-
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`ly ed. Sept. 8, 2011)). “[F]inancial product or service” is to be interpreted broadly, id.,
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`and “financial . . . simply means relating to monetary matters”—it does not require any link to
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`traditional financial industries such as banks. See, e.g., CBM2012-00001, paper 36 at 23.
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`The Board has previously found, e.g., that a claim for “transferring money electronical-
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`ly via a telecommunication line to the first party . . . from the second party” met the
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`financial product or service requirement, concluding that “the electronic transfer of
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`money is a financial activity, and allowing such a transfer amounts to providing a fi-
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`nancial service.” CBM2013-00020, paper 14 at 9-10. 4 See also, e.g., CBM2013-00017,
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`paper 8 at 5-6.
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`The ’221 patent includes claims to a “data access terminal” (e.g., a “convention-
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`al computer” or mobile phone (Ex.1201 4:4-5)), that reads and forwards payment data
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`from a data carrier (e.g., standard smart card (id. 11:29)) to a payment validation system
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`for authorizing payment, receives payment data from the payment validation system,
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`and code responsive to payment validation data that allows restricts to content in ex-
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`change for payment (id. 8:21-23). See AIA § 18(d)(1); § 42.301(a). The patent alleges
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`this data access terminal is part of a system that allows content owners to make con-
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`tent available without fear of losing revenue. Ex.1201 2:11-15. See also id. Fig 12(a)-(e).
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`More generally, the patent is about “[d]ata storage and access systems [that] enable
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`downloading and paying for data . . .” Id. Abstract. “The combination of payment da-
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`ta and stored content data . . . helps reduce the risk of unauthorized access.” Id. And
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`in asserting the patent, Smartflash conceded the alleged invention relates to a financial
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`activity or transaction, stating “[t]he patents-in-suit generally cover a portable data car-
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`rier for storing data and managing access to the data via payment information and/or use
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`status rules. The patents-in-suit also generally cover a computer network . . . that serves
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`data and manages access to data by, for example, validating payment information.”
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`4 Indeed, these aspects of claim 32 are generally similar to those of the claim found to
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`convey CBM standing in CBM2014-00106/107, paper 8 at 9-13.
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`Ex.1202 ¶ 17. The specification confirms the recited “data access terminal” “can
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`communicate with a bank or other financial services provider to control payment” (id. 3:50-52) and
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`can “validate payment with an external authority such as a bank” (id. 2:5-7). Further,
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`“[p]ayment for the data item or items requested may either be made directly to the system owner
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`or may be made to an e-payment system” (id. 20:50-54), which may be provided “according
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`to, for example, MONDEX, Proton, and/or Visa cash compliant standards” and “payment
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`authentication . . . may [] be performed by, for example, a data access terminal . . . using
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`payment management code.” Id. 13:37-48. See also id. 7:62-8:56 (esp. 8:22-24); 11:59-65;
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`Fig. 12(a)-(e).
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`Claim 32 expressly recites software to perform data processing and other oper-
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`ations in connection with the recited “payment validation system” (e.g., “to forward
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`payment data to a payment validation system,” “to receive payment validation data”),
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`and “to retrieve data [in response to the payment validation data”) and further re-
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`quires software to “receive at least one access rule . . . specifying at least one condi-
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`tion . . . the at least one condition being dependent upon the amount of payment as-
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`sociated with the payment data . . .” Id. Thus, claim 23, which explicitly describes
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`transmitting payment data to a payment validation system, receiving payment valida-
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`tion, and controlling access to data based on payment, concerns a computer system
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`(corresponding to methods discussed in the patent) for performing data processing
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`and other operations used in the practice, administration, or management of a financial activity
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`12
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`and service. See, e.g., CBM2013-00020, Paper 14 at 10-11.
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` Covered Business Method Patent Review
`United States Patent No. 8,118,221
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`2.
`Claim 32 Does Not Cover A Technological Invention
`Further, claim 32 is not a “technological invention” that would trigger the ex-
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`ception in AIA § 18(d)(1), because it does not claim “subject matter as a whole [that]
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`recites a technological feature that is novel and unobvious over the prior art[] and solves a
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`technical problem using a technical solution.” § 42.301(b). To the contrary, the ’221 patent
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`itself makes clear that its claimed “data carrier” and payment validation systems were
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`commonplace and could be implemented using well-known industry standards.
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`(a) Claim 32 Does Not Recite A Technological Feature
`That Is Novel and Unobvious
`First, no “technological feature” of claim 32 is novel and unobvious. The PTO
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`has confirmed that “[m]ere recitation of known technologies, such as computer hard-
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`ware, communication or computer networks, software, memory, computer-readable
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`storage medium, scanners, display devices or databases, or specialized machines, such
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`as an ATM or point of sale device,” or “[r]eciting the use of known prior art technol-
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`ogy to accomplish a process or method, even if that process or method is novel and
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`non-obvious” will “not typically render a patent a technological invention.” See, e.g.,
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`77 Fed. Reg. 48,756 48,764 (Aug. 14, 2012).
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`As its language makes clear, claim 32 involves no “technology” at all other than, at
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`most, “a data access terminal,” which includes an interface for communicating with
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`the data supplier, data carrier interface, a program store storing code, and a processor
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`13
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` Covered Business Method Patent Review
`United States Patent No. 8,118,221
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`that implements the well-known steps disclosed in the specification. Ex.1201; see also
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`Section II, supra. “The data access terminal may be a conventional computer or, alterna-
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`tively, it may be a mobile phone,” both of which were known in the art well before 2000.
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`Id. 4:4-5; 16:33. Indeed, the specification disclaims the use of particular hardware, rely-
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`ing instead on conventional hardware known to a POSITA: “[t]he physical embodiment
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`of the system is not critical and a skilled person will understand that the terminals, data pro-
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`cessing systems and the like can all take a variety of forms.” Id. 12:29-32. Payment validation
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`systems were also well-known. See Ex.1201 13:35-47. The patent explains that “[t]he
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`payment validation system may be part of the data supplier’s computer systems or it may be a
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`separate e-payment system.” Id. 8:63-65. “E-payment systems. . .are coupled to banks
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`[and] provide an e-payment system according to, for example, MONDEX, Proton, and/or Visa
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`cash compliant standards. . . . payment data may be validated…by for example a data access
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`terminal…using payment management code.” Id. 13:35-47.
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`The “data supplier” of the claims is not a technological component, and does
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`not require any specific hardware. See Ex.1201 6:16-18; 6:58-59. Rather, it is simply a
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`supplier of online data. Id. 5:64-65; see also id. 6:58-60 (“The computer system is oper-
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`ating by a data supplier or a data supplier ‘system owner’ for providing content data to
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`the data carrier.”); 8:33-40; 12:2-4, 29-32; Fig. 4(b). Data suppliers were well known
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`long before 2000. See id. 1:40-55.
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`The use of software (code) for retrieving and storing data, reading and forward-
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`14
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` Covered Business Method Patent Review
`United States Patent No. 8,118,221
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`ing payment data, receiving and responding to payment validation data, as disclosed in
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`the specification, was also exceedingly well known in the art, and could not transform
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`the claims into a technological invention. See, e.g., 77 Fed. Reg. 48,756 48,764 (Aug. 14,
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`2012) (“[m]ere recitation of known technologies, such as . . . software, memory, com-
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`puter-readable storage medium . . . [will] “not typically render a patent a technological
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`invention.”); Ex.1221 § V; Section II, supra. The financial transaction performed by
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`the code described in elements D1 through D4 was well known, because, as the pa-
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`tent concedes, e-payment systems were known. Ex.1201 13:43-64 (“E-payment systems
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`coupled to banks . . . these provide an e-payment system according to, for example, MONDEX,
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`Proton, and/or Visa cash compliant standards . . . payment data may be validated by a data access
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`terminal using payment management code.”); Ex.1219 18:7-17 (“Since the purchase process
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`involves making a charge purchase on a credit card via a data modem, this process is
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`subject to the strictest integrity controls for electronic financial transactions. Howev-
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`er, there is absolutely nothing new that is required . . .”). Using code to implement this
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`transaction, as disclosed in the specific