CBM2015-00015
`United States Patent No. 8,118,221
`
`
`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
`
`____________
`
`
`
`
`
`
`
`
`
`CORRECTED 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. § 42.3041
`
`
`
`
`1 As directed by the Board in Pap. 7, Petitioner hereby resubmits this Petition to ad-
`
`dress formality issues identified therein.
`
`i
`
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`
`
`TABLE OF CONTENTS
`
`B.
`
`C.
`
`3.
`4.
`
`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 ...................................... 9
`2.
`Claim 32 Does Not Cover A Technological Invention ................. 12
`Related Matters and Mandatory Notice Information; Petitioner Is a
`Real Party In Interest Sued for and Charged With Infringement ............ 17
`IV. DETAILED EXPLANATION OF REASONS FOR RELIEF REQUESTED,
`SHOWING IT IS MORE LIKELY THAN NOT THAT AT LEAST ONE
`CHALLENGED CLAIMS IS UNPATENTABLE ............................................. 18
`A.
`Claim Construction .......................................................................................... 18
`B.
`The Challenged Claims Are Invalid Under 35 U.S.C. §101 ...................... 22
`1.
`Claims Are Directed To Abstract Ideas ........................................... 23
`2.
`Claims Do Not Disclose An “Inventive Concept” That Is
`“Significantly More” Than an Abstract Idea ................................... 26
`Field Of Use Limitations Cannot Create Patent Eligibility ........... 26
`Generic Computer Implementation Cannot Transform
`Abstract Ideas Into Patent Eligible Inventions ............................... 27
`Functional Nature Confirms Preemption and Ineligibility ............ 32
`5.
`6. Machine-or-Transformation Test Confirms Ineligibility ............... 33
`The Challenged Claims Are Invalid Under 35 U.S.C. § 103 ..................... 34
`1.
`Overview of Stefik ............................................................................... 34
`2. Motivation to Combine Stefik with Poggio ..................................... 38
`3. Motivation to Combine Stefik and Poggio with Kopp .................. 42
`4. Motivation to Combine Stefik with Poggio, Kopp, and
`Smith ...................................................................................................... 46
`Claim 32 is Obvious............................................................................. 48
`5.
`CONCLUSION........................................................................................................... 79
`
`V.
`
`
`i
`
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`
`U.S. Patent No. 8,118,221
`
`Plaintiffs’ First Amended Complaint
`
`File History for U.S. Patent No. 8,061,598
`
`File History for U.S. Patent No. 8,336,772
`
`U.S. Patent No. 5,675,734
`
`U.S. Patent No. 4,999,806
`
`U.S. Patent No. 4,878,245
`
`U.S. Patent No. 7,334,720
`
`U.S. Patent No. 7,942,317
`
`U.S. Patent No. 5,940,805
`
`File History for U.S. Patent No. 8,118,221
`
`U.S. Patent No. 5,103,392
`
`U.S. Patent No. 5,530,235
`
`U.S. Patent No. 5,629,980
`
`U.S. Patent No. 5,915,019
`
`European Patent Application, Publication No. EP0809221A2
`
`International Publication No. WO 99/43136
`
`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
`
`ii
`
`
`
`EXHIBIT LIST
`1201
`
`1202
`
`1203
`
`1204
`
`1205
`
`1206
`
`1207
`
`1208
`
`1209
`
`1210
`
`1211
`
`1212
`
`1213
`
`1214
`
`1215
`
`1216
`
`1217
`
`1218
`
`1219
`
`1220
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`
`(1997)
`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
`
`U.S. Patent No. 8,061,598
`
`U.S. Patent No. 8,336,772
`
`File History for U.S. Patent No. 7,334,720
`
`File History for U.S. Patent No. 7,942,317
`
`File History for U.S. Patent No. 8,033,458
`
`Claim Construction Memorandum Opinion from Smartflash
`LLC v. Apple Inc., No. 6:13cv447 (Dkt. 229)
`U.S. Patent No. 4,337,483
`
`U.S. Patent No. 7,725,375
`
`U.S. Patent No. 5,925,127
`
`EXHIBIT LIST
`
`1221
`
`1222
`
`1223
`
`1224
`
`1225
`
`1226
`
`1227
`
`1228
`
`1229
`
`1230
`
`1231
`
`1232
`
`1233
`
`iii
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`I.
`
`INTRODUCTION
`Pursuant to § 321 and Rule § 42.304,2 the undersigned, on behalf of and in a
`
`representative capacity for Apple Inc. (“Petitioner”), petitions for review under the
`
`transitional program for covered business method patents of claim 1, 2, 11, and 32
`
`(“challenged claims”) of U.S. Patent No. 8,118,221 (“the ’221 Patent” or “’221”), is-
`
`sued to Smartflash Technologies Limited and assigned to Smartflash LLC (“Patent-
`
`ee”). Petitioner asserts it is more likely than not that the challenged claims are un-
`
`patentable for the reasons herein and requests review of, and judgment against, claim
`
`1, 2, 11, and 32 as unpatentable under § 101, and claim 32 as unpatentable under §
`
`103. As discussed in Section III.B, infra, Petitioner previously filed CBM2014-
`
`00102/103 seeking CBM review of the ’221 Patent. Those petitions were instituted
`
`for trial (and consolidated) with respect to claims 1, 2, and 11-14 on grounds based on
`
`§ 103, but the Board did not institute trial on claim 32. In its Institution Decision, the
`
`Board construed the term “access rule” as “a rule specifying a condition under which
`
`access to content is permitted,” id. Pap. 8, 8, and determined Petitioner had not
`
`shown it was more likely than not that it would prevail in demonstrating that Stefik,
`
`Poggio, and/or Sato rendered obvious code “responsive to payment validation data”
`
`
`2 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
`
`numerous additional reasons. All section cites herein are to 35 U.S.C. or 37 C.F.R., as
`
`the context indicates, and all emphasis herein is added unless otherwise noted.
`
`1
`
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`to receive an “access rule” specifying at least one condition for accessing data, the
`
`condition being dependent upon the “amount of payment associated with the pay-
`
`ment data forwarded to the payment validation system” under the Board’s construc-
`
`tion, id., 17-20. In light of the Board’s Decision, Petitioner now identifies additional
`
`prior art—Kopp and Smith (Exs.1210, 1219)—with explicit disclosures of “access
`
`rules” as construed by the Board and expressly disclosing code to retrieve access rules
`
`responsive to payment validation data and specifying access conditions dependent on
`
`amount of payment. Kopp, e.g., describes a vending system allowing a user to specify a
`
`desired extent of usage, pay for only that amount of usage, and then receive data lim-
`
`ited to the purchased usage amount (e.g., Ex.1210 2:50-65), while Smith provides ex-
`
`press disclosure of a software vending system allowing a user to pre-pay license fees
`
`proportional to the value received from using software, rather than paying all or noth-
`
`ing (e.g., Ex.1219 6:1-5; 18:4-33). Petitioner has also identified additional disclosures in
`
`Stefik and Poggio concerning these limitations as construed, further confirming a
`
`POSA3 would have found it obvious and routine to implement the system disclosed
`
`
`3 References to a POSA refer to the knowledge or understanding of a person of ordi-
`
`nary skill in the art (“POSA”) as of October 25, 1999. A POSA would have at least a
`
`B.S. degree in E.E., C.S., or a telecommunications-related field, and at least three years
`
`of industry experience that included client-server data/information distribution and
`
`management architectures. See Ex.1221 ¶ 24.
`
`2
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`by Stefik and Poggio using the expressly advantageous teachings of Kopp and Smith,
`
`detailed in Section IV.C, infra. See, e.g., Ex.1221 ¶¶ 57-79.
`
`The challenged claims merely recite a basic computer system well-known in the
`
`field of data storage and access. Claim 32 recites four rudimentary components of a
`
`data access terminal “for retrieving data from a data supplier and providing the retrieved data to a
`
`data carrier”—(A) an interface, (B) a data carrier interface, (C) a program store storing code,
`
`and (D) a processor . . . for implementing the stored code. The recited code is similarly
`
`elementary—(D1) reading and forwarding payment data , (D2) receiving payment validation data,
`
`(D3) responding to payment data, (D4) responding to payment validation data, and (D5) retrieving
`
`value data and use rule data. Ex.1201. But at the earliest claimed priority date, these sim-
`
`ple elements and their combination were all known to any POSA. The patent acknowl-
`
`edges that the idea of providing access to data in exchange for a payment (e.g., purchase
`
`of music on a CD) was already well known, e.g., Ex.1201 5:9-11 (“the purchase out-
`
`right option may be equivalent to the purchase of a compact disc (CD)”), and the prior art
`
`was teeming with disclosures of this basic concept. Further, claim 32 clearly involves
`
`no “technology” at all other than “a data access terminal,” with interfaces, a program store
`
`storing code, and a processor that implements the well-known steps disclosed in the
`
`specification—all of which the patent concedes were well known and commonplace,
`
`stating that this “terminal comprises a general purpose computer.” E.g., Ex.1201 4:4, 16:32-
`
`33. The patent describes no more than a system for retrieving data from, and provid-
`
`3
`
`

`
`ing data to, a data carrier while reading payment data, receiving payment data, re-
`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`
`sponding to payment validation data, and retrieving user-stored data and use rule data.
`
`Indeed, as confirmed by Alice Corp. Pty, Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347
`
`(2014)—decided after Petitioner’s original challenges to the ’221 were filed—claim 32
`
`and the remaining challenged claims are also directed to patent-ineligible subject mat-
`
`ter under § 101. As the Board noted in its previous Institution Decision, “the ’221 pa-
`
`tent makes clear that the asserted novelty of the invention is not in any specific im-
`
`provement of software or hardware, but in the method of controlling access to data,”
`
`CBM2014-00102, Pap. 8, 11, and the challenged claims are directed to nothing more
`
`than the unpatentable abstract idea of paying for and controlling access to data, with
`
`at most the addition of well-known, routine and conventional features—in particular,
`
`generic computer implementation that cannot confer patentability on these patent-
`
`ineligible abstractions. E.g., Alice, 134 S. Ct. at 2359-60. Each challenged claim recites
`
`ineligible subject matter, and claim 32 is also obvious; thus, each is unpatentable.
`
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
`
`digital products all would have been well-known to a POSA, and their combination as
`
`claimed also would have been well-known or at minimum obvious. See, e.g., Ex.1221
`
`¶¶ 27-28. In March, 1991, for example, U.S. Pat. No. 4,999,806, issued, disclosing a
`
`system and method for sale and distribution of digital products (e.g., software) by
`
`phone, and for content protection. See Ex.1206 Abstract (“central station distributes
`
`4
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`software by telephone . . . accepts credit card information, transmits an acceptance code . . . After veri-
`
`fying the credit card information, the station calls the purchaser back and continues with the transac-
`
`tion.”); 1:67-2:9 (describing “means for selling and distributing protected software using stand-
`
`ard telephone lines,” “permit[ting] the purchaser to rent the protected software for a period of time,”
`
`and “to rent the protected software for a specific number of runs””). Ex. 1206 thus discloses
`
`making different types of access available, e.g., purchase vs. rental, with a Control
`
`Transfer Program and Primary Protection Program that ensure the computer receiv-
`
`ing a downloaded program does not have another program present that could create
`
`unauthorized copies. See id. Abstract; 2:65-3:23; see also Ex.1221 ¶ 29.
`
`In April 1992, U.S. Pat. No. 5,103,392, issued, disclosing use-based charging
`
`for digital products, including “user-specific credit data storage means for storing data
`
`identifying the user . . . and indicating credit for payment capacity, use time length, or the like
`
`of the user,” as well as “[1] use decision means for determining permission to use the pro-
`
`gram . . . on the basis 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 corresponding to results of the
`
`decision[, and [2]] program use history storage means connected to the use decision means
`
`for storing program use history data.” See, e.g., Ex.1212 1:64-2:17. Ex. 1212’s emphasis on
`
`assuring permission to access a program and compensation to providers for use un-
`
`derscores the art’s focus on digital rights management (“DRM”), over eight years be-
`
`5
`
`

`
`fore the ’221’s claimed priority date. See also Ex.1221 ¶ 32.
`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`
`Also in 1997, Exhibit 1220 (“von Faber”) observed that “[e]lectronic commerce sys-
`
`tems dealing with the distribution of digital contents like software or multimedia data have to
`
`couple the use of the provided digital goods with a prior payment for the goods in a way which can-
`
`not be bypassed,” proposing a system where customers purchase keys to utilize dis-
`
`tributed encrypted content. E.g., id. 7 (a “solution is to distribute the contents in encrypted
`
`form, and to have the customer pay for the key which he needs to transform the encrypted content in an
`
`usable form.”), 8 (“The Content Provider provides digital contents in encrypted form being
`
`distributed by the Content Distributor . . . . The Authorisation System permits the distribution of
`
`the appropriate key after settling of the fees payable by the Customer, who will enjoy the de-
`
`crypted digital contents.”), Fig. 1. Von Faber states its system could be used for a va-
`
`riety of known distribution and payment methods, and further addressed the known
`
`issue of payment distribution to content providers. See, e.g., id. 13 (“Different methods can
`
`be used to distribute the encrypted contents (standard techniques) . . . Different electronic pay-
`
`ment methods can be integrated . . . This flexibility leads to the fact that totally different authorisa-
`
`tion methods can be integrated.”; “The system automatically divides the package price (payments)
`
`and guarantees that the money is transferred to each Content Provider.”); see Ex.1221 ¶¶ 34-36.
`
`And U.S. Pat. No. 5,915,019 (“Ginter”), issued in June 1999, discloses “systems
`
`and methods for secure transaction management and electronic rights protection,” and describes
`
`a “virtual distribution environment” (VDE) to “control and/or meter or otherwise
`
`6
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`monitor use of electronically stored or disseminated information.” See, e.g., Ex.1215
`
`Abstract. Ginter’s system helps “ensure that information is accessed and used only in au-
`
`thorized ways, and maintain the integrity, availability, and/or confidentiality of the infor-
`
`mation,” e.g., id., and discloses that “[a]ll participants . . . have the innate ability to par-
`
`ticipate in any role, e.g., id. 255:22-23, highlighting the known flexibility in such distri-
`
`bution systems, underscoring that combinations between and among disclosures of
`
`such systems would have been obvious to a POSA. See also, e.g., Ex.1221 ¶¶ 37-38.
`
`Content storage and utilization on portable devices, including mobile commu-
`
`nication devices such as cellular phones, was also well-known. Exhibit 1217 (pub’d
`
`Aug. 26, 1999), discloses a cell phone for storing and accessing digital content. See, e.g.,
`
`id. 5:7-13 (“Because of its integration into the cellular phone, the digital entertainment module
`
`can share components already present in the cellular phone. [T]he use of solid state RAM or ROM,
`
`as opposed to disc storage, eliminates the need for bounce control circuitry. This ena-
`
`bles the disclosed invention to provide cellular communications and entertainment . . . .”). Exhibit
`
`1218 (pub’d June 18, 1999), discloses storing and playing media on mobile devices, e.g.,
`
`using a removable IC card. See, e.g., id. ¶ 9 (“portable music selection viewing device 70
`
`provides a removable storage device 76 [which] is a memory card similar to, for example. . .
`
`an IC card. . . . [T]he user can store the music software from another audio unit into the storage
`
`device 76 and enjoy music by inserting this storage unit 76 into this portable . . . device 70.”), ¶
`
`13 (“music storage medium 250 such as a magnetic card, magnetic tape, a CD, a DVD,
`
`7
`
`

`
`or a memory card such as an IC card stores the music software.”); see Ex.1221 ¶ 39.
`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`
`As these and the additional examples detailed below in Section IV.B illustrate,
`
`the prior art was rife with awareness and discussion of the same supposed “invention”
`
`memorialized in the ’221’s challenged claims.
`
`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
`
`AIA and § 42.301, and Petitioner certifies it is available for review under § 42.304(a).
`
`See also CBM2014-00102, Pap. 8, 8-12 (finding claim 12 satisfies requirement);
`
`CBM2014-00112, Pap. 8, 8-12 (same for similar claim directed to “data access termi-
`
`nal”). Although numerous claims of the ’221 qualify, a patent with even one claim
`
`covering a covered business method is considered a CBM patent. See CBM 2012-
`
`00001, Pap. 36, 26; 77 Fed. Reg. 48,709 (Aug. 14, 2012). Petitioner thus addresses ex-
`
`emplary claim 32:
`
`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-
`
`8
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`
`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
`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 CBM patent is “a patent that claims a method or corresponding apparatus for per-
`
`forming data processing or other operations used in the practice, administration, or management of a
`
`financial product or service, except that the term does not include patents for technological
`
`inventions.” AIA § 18(d)(1); § 42.301. “[T]he definition of covered business method
`
`patent was drafted to encompass patents claiming activities that are financial in nature,
`
`incidental to a financial activity or complementary to a financial activity.’” 77 Fed. Reg. 48,734-
`
`35 (Aug. 14, 2012) (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011)). “[F]inancial
`
`product or service” is to be interpreted broadly, id., and “financial . . . simply means relat-
`
`9
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`ing to monetary matters”—it does not require any link to traditional financial industries
`
`such as banks. See, e.g., CBM2012-00001, Pap. 36, 23. The Board has previously found,
`
`e.g., that a claim for “transferring money electronically via a telecommunication line to
`
`the first party . . . from the second party” met the financial product or service re-
`
`quirement, concluding that “the electronic transfer of money is a financial activity,
`
`and allowing such a transfer amounts to providing a financial service.” CBM2013-
`
`00020, paper 13 at 11-15; 4 see also, e.g., CBM2013-00017, paper 8 at 5-6.
`
`The ’221 patent includes claims to a “data access terminal” (e.g., a “convention-
`
`al computer” or mobile phone (Ex.1201 4:4-5)), that reads and forwards payment data
`
`from a data carrier (e.g., standard smart card (id. 11:29)) to a payment validation system
`
`for authorizing payment, receives payment data from the payment validation system,
`
`and code responsive to payment validation data that allows access to content in ex-
`
`change for payment (id. 8:21-23). See AIA § 18(d)(1); § 42.301(a). The patent alleges
`
`this data access terminal is part of a system that allows content owners to make con-
`
`tent available without fear of losing revenue. Ex.1201 2:11-15; Fig 12(a)-(e). More
`
`generally, the patent is about “[d]ata storage and access systems [that] enable down-
`
`loading and paying for data.” Id. Abstract. “The combination of payment data and
`
`stored content data . . . helps reduce the risk of unauthorized access.” Id. And in as-
`
`
`4 Indeed, these aspects of claim 32 are generally similar to those of the claim found to
`
`convey CBM standing in CBM2014-00106/107, paper 8 at 9-13.
`
`10
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`serting the patent, Smartflash conceded the alleged invention relates to a financial ac-
`
`tivity or transaction, stating “[t]he patents-in-suit generally cover a portable data carri-
`
`er for storing data and managing access to the data via payment information and/or use sta-
`
`tus rules. The patents-in-suit also generally cover a computer network . . . that serves
`
`data and manages access to data by, for example, validating payment information.”
`
`Ex.1202 ¶ 17. The specification confirms the recited “data access terminal” “can com-
`
`municate with a bank or other financial services provider to control payment” (id. 3:50-52) and can
`
`“validate payment with an external authority such as a bank” (id. 2:5-7). Further, “[p]ayment
`
`for the data item or items requested may either be made directly to the system owner or may be
`
`made to an e-payment system” (id. 20:50-54), which may be provided “according to, for
`
`example, MONDEX, Proton, and/or Visa cash compliant standards” and “payment authenti-
`
`cation . . . may [] be performed by, for example, a data access terminal . . . using payment
`
`management code.” Id. 13:37-48; see id. 7:62-8:56 (esp. 8:22-24); 11:59-65; Fig. 12(a)-(e).
`
`Claim 32 expressly recites software to perform data processing and other oper-
`
`ations in connection with the recited “payment validation system” (e.g., “to forward
`
`payment data to a payment validation system,” “to receive payment validation data,”
`
`and “to retrieve data [in response to the payment validation data]”) and further re-
`
`quires software to “receive at least one access rule . . . specifying at least one condi-
`
`tion . . . the at least one condition being dependent upon the amount of payment as-
`
`sociated with the payment data” Id. Thus, claim 32, which explicitly describes trans-
`
`11
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`mitting payment data to a payment validation system, receiving payment validation,
`
`and controlling access to data based on payment, concerns a computer system (corre-
`
`sponding to methods discussed in the patent) for performing data processing and
`
`other operations used in the practice, administration, or management of a financial activity and
`
`service. See, e.g., CBM2013-00020, Pap. 14, 10-11.
`
`2.
`Claim 32 Does Not Cover A Technological Invention
`Further, claim 32 is not a “technological invention” that would trigger the ex-
`
`ception in AIA § 18(d)(1), because it does not claim “subject matter as a whole [that]
`
`recites a technological feature that is novel and unobvious over the prior art[] and solves a
`
`technical problem using a technical solution.” § 42.301(b). To the contrary, the ’221 patent
`
`itself makes clear that its claimed “data carrier” and payment validation systems were
`
`commonplace and could be implemented using well-known industry standards.
`
`(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
`
`confirmed that “[m]ere recitation of known technologies, such as computer hardware, communica-
`
`tion or computer networks, software, memory, computer-readable storage medium, scanners, display
`
`devices or databases, or specialized machines, such as an ATM or point of sale de-
`
`vice,” or “[r]eciting the use of known prior art technology to accomplish a process or method,
`
`even if that process or method is novel and non-obvious” will “not typically render a patent a
`
`technological invention.” E.g., 77 Fed. Reg. 48,756 48,764 (Aug. 14, 2012). Claim 32’s
`
`12
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`language makes clear it involves no “technology” at all other than, at most, “a data access
`
`terminal,” which includes an interface for communicating with the data supplier, data
`
`carrier interface, a program store storing code, and a processor that implements the
`
`well-known steps disclosed in the specification. Ex.1201; see also Section II, supra. “The
`
`data access terminal may be a conventional computer or, alternatively, it may be a mobile
`
`phone,” both of which were known in the art well before the earliest claimed priority
`
`date. Id. 4:4-5; 16:33. Indeed, the specification disclaims the use of particular hardware,
`
`relying instead on conventional hardware known to a POSA: “[t]he physical embodiment
`
`of the system is not critical and a skilled person will understand that the terminals, data pro-
`
`cessing systems and the like can all take a variety of forms.” Id. 12:29-32.
`
`Payment validation systems were also well-known. See id. 13:35-47. The ’221
`
`explains “[t]he payment validation system may be part of the data supplier’s computer systems
`
`or it may be a separate e-payment system.” Id. 8:63-65. “E-payment systems . . . are coupled
`
`to banks [and] provide an e-payment system according to, for example, MONDEX, Proton,
`
`and/or Visa cash compliant standards. . . . [P]ayment data may be validated . . . by for ex-
`
`ample a data access terminal . . . using payment management code.” Id. 13:35-47. The
`
`“data supplier” of the claims is also not a technological component, and requires no
`
`specific hardware, see Ex.1201 6:16-18; 6:58-59, but is, instead, simply a supplier of
`
`online data, id. 5:64-65; see also id. 6:58-60 (“The computer system is operating by a da-
`
`ta supplier or a data supplier ‘system owner’ for providing content data to the data carrier.”);
`
`13
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`8:33-40; 12:2-4, 29-32; Fig. 4(b). Data suppliers were well known long before the ear-
`
`liest claimed priority date. See id. 1:40-55.
`
`The use of software (code) for retrieving and storing data, reading and forward-
`
`ing payment data, receiving and responding to payment validation data, as disclosed in
`
`the specification, was also exceedingly well known in the art, and could not transform
`
`the claims into a technological invention. See, e.g., 77 Fed. Reg. 48,756 48,764 (Aug. 14,
`
`2012) (“Mere recitation of known technologies, such as . . . software, memory, com-
`
`puter-readable storage medium . . . [will] “not typically render a patent a technological
`
`invention.”); Ex.1221 § V; Section II, supra. The financial transaction performed by
`
`the code described in elements D1 through D4 was well known, because, as the pa-
`
`tent concedes, e-payment systems were known. Ex.1201 13:43-64 (“E-payment systems
`
`coupled to banks . . . these provide an e-payment system according to, for example, MONDEX,
`
`Proton, and/or Visa cash compliant standards . . . payment data may be validated by a data access
`
`terminal using payment management code.”); see Ex.1219 18:7-17 (“Since the purchase pro-
`
`cess involves making a charge purchase on a credit card via a data modem, this process
`
`is subject to the strictest integrity controls for electronic financial transactions. How-
`
`ever, there is absolutely nothing new that is required . . . .”). Using code to implement
`
`this transaction, as disclosed in the specification, was obvious and known. E.g,,
`
`Ex.1221 § V; Section II, supra. Further, the functions performed by the code (D3-
`
`D5)—related to the retrieving and outputting data as disclosed in the specification
`
`14
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`and providing and restricting access based on payment, as claimed in the patent—was
`
`also commonplace before the earliest claimed priority date. E.g., Ex.1206 Abstract;
`
`1:67-2:9; 8:62-9:12; 1207 Abstract; 4:27-35; see also Section II, supra; Ex.1221 § V. Ac-
`
`cess and use rules were similarly known. E.g., Ex.1210 5:3-21; Ex.1219 16:25-34.
`
`The state of the art at the time, and the detailed prior art analysis provided be-
`
`low, further reflects claim 32 does not recite a technological feature that is novel and
`
`nonobvious. See, e.g., Section II, supra; Section IV.C, infra. Claim 32 concerns nothing
`
`more than a non-technical idea of selling data in exchange for payment. Even apart
`
`from its other failures to trigger the statutory exception, for these reasons alone, claim
`
`32 would not be technological.
`
`(b) Claim 32 Does Not Solve A Technical Problem Using
`A Technical Solution
`
`Claim 32 also does not solve a technical problem using a technical solution because
`
`there was no technical problem to begin with. While a POSA would certainly have known
`
`how to sell data over the Internet, see, e.g., Ex.1216 Fig. 7; 1:50-55; 10:41-53; Ex.1221 §
`
`V, the patent nonetheless describes the “problem” the invention is intended to solve
`
`as the business problem of data piracy: users were downloading content (such as MP3s)
`
`without paying, and providers were losing money. Ex.1201 1:52-55. However, a
`
`POSA would have known well before the earliest claimed priority date how to sell
`
`electronic data, use payment authorization mechanisms, and provide electronic data
`
`based on payment. E.g., Ex.1216 Fig. 7; 1:56-59, 2:32-36; 9:56-10:25; Ex.1221 § V.
`
`15
`
`

`
` CBM2015-00015
`United States Patent No. 8,118,221
`
`The solution described in claim 32—using previously