`
`_________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`_________
`
`Case CBM2015-00016
`
`Patent 8,033,458 B2
`
`_________
`
`
`
`PATENT OWNER’S NOTICE OF APPEAL
`
`
`
`
`
`Notice is hereby given, pursuant to 37 C.F.R. § 90.2(a), that Patent Owner
`
`Smartflash LLC hereby appeals to the United States Court of Appeals for the
`
`Federal Circuit from the Final Written Decision entered on March 29, 2016 (Paper
`
`56), Decision Denying Request for Rehearing entered June 9, 2016 (Paper 58) and
`
`from all underlying orders, decisions, rulings and opinions regarding U.S. Patent
`
`No. 8,033,458 (the “’458 Patent”) including the Decision - Institution of Covered
`
`Business Method Patent Review entered on April 10, 2015 (Paper 23).
`
`For the limited purpose of providing the Director with the information
`
`requested in 37 C.F.R. § 90.2(a)(3)(ii), Patent Owner anticipates that the issues on
`
`appeal may include the following, as well as any underlying findings,
`
`determinations, rulings, decisions, opinions, or other related issues:
`
`• Whether the Board erred in finding that claims 6, 8 and 10 of the ’458
`
`Patent are unpatentable under 35 U.S.C. § 101;
`
`• Whether the Board erred in finding that claim 11 of the ’458 Patent is
`
`indefinite under 35 U.S.C. § 112;
`
`• Whether the Board erred in denying Patent Owner’s Motion to
`
`Exclude (Paper 39); and
`
`• Whether the Board erred in finding that the subject matter of the ‘458
`
`Patent is directed to activities that are financial in nature and in
`
`instituting Covered Business Method review of the ‘458 Patent.
`
`
`
`1
`
`
`
`Copies of this Notice of Appeal are being filed simultaneously with the
`
`Director, the Patent Trial and Appeal Board, and the Clerk of the United States
`
`Court of Appeals for the Federal Circuit.
`
`Any required fee may be charged to Deposit Account No. 501860.
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`2
`
`
`
`Dated: August 9, 2016
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that this PATENT OWNER’S NOTICE
`OF APPEAL was filed with the Patent Trial and Appeal Board using the E2E
`System and was served, by agreement of the parties, by emailing copies to counsel
`for the Petitioner as follows:
`
`
`J. Steven Baughman (steven.baughman@ropesgray.com)
`Megan Raymond (megan.raymond@ropesgray.com)
`James R. Batchelder (james.batchelder@ropesgray.com)
`ApplePTABService-SmartFlash@ropesgray.com
`
`The undersigned hereby further certifies that on August 9, 2016 this
`PATENT OWNER’S NOTICE OF APPEAL (and its three attached decisions)
`were filed with the Federal Circuit via CM/ECF (along with one courtesy copy by
`hand delivery) and two (2) copies were served on the U.S. Patent and Trademark
`Office via in-hand delivery as follows:
`
`
`Director of the United States Patent and Trademark Office
`c/o Office of the General Counsel
`Madison Building East, 10B20
`600 Dulaney Street
`
`Alexandria, VA 22314‐5793
`
`
`Dated: August 9, 2016
`
`
`
`
`
`
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`3
`
`
`
`
`
`
`
`
`
`
`
`Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 58
`Entered: June 9, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-000161
`Patent 8,033,458 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`PLENZLER, Administrative Patent Judge.
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71
`
`
`
`
`
`1 Apple Inc. has been dismissed as Petitioner from this proceeding with
`respect to claim 1. Paper 50.
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`
`INTRODUCTION
`Apple Inc. (“Petitioner”), filed a Corrected Petition to institute
`covered business method patent review of claims 1, 6, 8, 10, and 11 of U.S.
`Patent No. 8,033,458 B2 (Ex. 1201, “the ’458 patent”) pursuant to § 18 of
`the Leahy-Smith America Invents Act (“AIA”).2 Paper 9 (“Pet.”). On April
`10, 2015, we instituted a transitional covered business method patent review
`(Paper 23, “Institution Decision” or “Inst. Dec.”) based upon Petitioner’s
`assertion that claims 1, 6, 8, and 10 are directed to patent ineligible subject
`matter under 35 U.S.C. § 101 and that claim 11 is unpatentable under 35
`U.S.C. § 112 ¶ 2.3 Inst. Dec. 26. Subsequent to institution, Smartflash LLC
`(“Patent Owner”) filed a Patent Owner Response (Paper 33, “PO Resp.”)
`and Petitioner filed a Reply (Paper 35, “Pet. Reply”) to Patent Owner’s
`Response.
`In our Final Decision, we terminated with respect to claim 1, which
`had already been finally cancelled, and we determined that Petitioner had
`established, by a preponderance of the evidence, that claims 6, 8, 10, and 11
`of the ’458 patent are unpatentable. Paper 56 (“Final Dec.”), 3, 29. Patent
`Owner requests rehearing of the Final Decision. Paper 57 (“Request” or
`“Req. Reh’g”). Having considered Patent Owner’s Request, we decline to
`modify our Final Decision.
`
`
`
`2 Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011).
`3 Petitioner cites 35 U.S.C. § 112(b). We note, however, that the ’458 patent
`was filed in 2010 (prior to application of the AIA). The pre-AIA laws,
`therefore, apply to the challenges to the ’458 patent.
`
`2
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`
`STANDARD OF REVIEW
`In covered business method review, the petitioner has the burden of
`showing unpatentability by a preponderance of the evidence. 35 U.S.C.
`§ 326(e). The standard of review for rehearing requests is set forth in 37
`C.F.R. § 42.71(d), which states:
`The burden of showing a decision should be modified lies with
`the party challenging the decision. The request must specifically
`identify all matters the party believes the Board misapprehended
`or overlooked, and the place where each matter was previously
`addressed in a motion, an opposition, or a reply.
`
`
`ANALYSIS
`Patent Owner’s Request is based on a disagreement with our
`determination that claims 6, 8, and 10 (“the challenged claims”) are directed
`to patent-ineligible subject matter. Req. Reh’g 2. In its Request, Patent
`Owner presents arguments directed to alleged similarities between the
`challenged claims and those at issue in DDR Holdings, LLC v. Hotels.com,
`L.P., 773 F.3d 1245 (Fed. Cir. 2014) (Req. Reh’g 5–9) and alleged
`differences between the challenged claims and those at issue in Alice Corp.
`Pty. Ltd. v. CLS Bank Int’l., 134 S. Ct. 2347 (2014) (id. at 10–15).
`As noted above, our rules require that the requesting party
`“specifically identify all matters the party believes the Board
`misapprehended or overlooked, and the place where each matter was
`previously addressed in a motion, an opposition, or a reply.” 37 C.F.R.
`42.71(d) (emphasis added). In its Request, however, Patent Owner does not
`identify any specific matter that we misapprehended or overlooked. Rather,
`the only citation to Patent Owner’s previous arguments are general citations,
`
`3
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`
`without explanation as to how we misapprehended or overlooked any
`particular matter in the record. For example, with respect to Patent Owner’s
`arguments regarding DDR Holdings, Patent Owner simply notes that
`“[p]ursuant to 37 C.F.R. § 42.71(d), the issue of whether the challenged
`claims were similar to those in DDR Holdings was previously addressed.
`See PO Resp. 11–12, 18–19; Ex. 2049, 19.” Request 6 n.3. Similarly, in
`Patent Owner’s arguments regarding Alice, Patent Owner simply notes that
`“[p]ursuant to 37 C.F.R. § 42.71(d), the issue of whether the claims are
`abstract ideas was previously addressed. See PO Resp. 10-27; see also Tr.
`46:21-47:11” (id. at 11 n.5) and “[p]ursuant to 37 C.F.R. § 42.71(d), the
`issue of whether the challenged claims contain ‘additional features’ beyond
`an abstract idea was previously addressed. See PO Resp. 11-12, 18-19; Ex.
`2049, 19” (id. at 12 n.7). These generic citations to large portions of the
`record do not identify, with any particularity, specific arguments that we
`may have misapprehended or overlooked.
`Rather than providing a proper request for rehearing, addressing
`particular matters that we previously misapprehended or overlooked, Patent
`Owner’s Request provides new briefing by expounding on argument already
`made. Patent Owner cannot simply allege that an “issue” (e.g., whether the
`claims are directed to an abstract idea) was previously addressed, generally,
`and proceed to present new argument on that issue in a request for rehearing.
`See 37 C.F.R. § 42.71.
`Patent Owner’s arguments are either new or were addressed in our
`Final Decision. For example, Patent Owner’s argument that the challenged
`claims are not directed to an abstract idea (Req. Reh’g 10–12) is new, and
`therefore, improper in a request for rehearing, because Patent Owner did not
`
`4
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`
`argue the first step of the analysis articulated in Mayo and Alice in its Patent
`Owner Response (see Paper 33 (PO Resp.) passim (arguing only the second
`step of the Mayo and Alice test)). To the extent portions of the Request are
`supported by Patent Owner’s argument in the general citations to the record,
`we considered those arguments in our Final Decision, as even Patent Owner
`acknowledges. See, e.g., Req. Reh’g 6 (citing Fin. Dec. 16) (“The Board
`rejected Patent Owner’s reliance on DDR Holdings (at 16), holding that the
`challenged claims were not ‘rooted in computer technology in order to
`overcome a problem specifically arising in the realm of computer
`networks.’”). For example, Patent Owner’s arguments about inventive
`concept (Req. Reh’g 5–6, 12–15) were addressed at pages 9–14 of our Final
`Decision, Patent Owner’s arguments about preemption (Req. Reh’g. 6) were
`addressed at pages 17–20 of our final Decision, and Patent Owner’s
`arguments about DDR Holdings (Req. Reh’g. 6–10) were addressed at pages
`14–17 of our Final Decision. Mere disagreement with our Final Decision
`also is not a proper basis for rehearing.
`Accordingly, Patent Owner’s Request does not apprise us of sufficient
`reason to modify our Final Decision.
`
`
`ORDER
`
`Accordingly, it is:
`ORDERED that Patent Owner’s Request is denied.
`
`5
`
`
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`
`PETITIONER:
`J. Steven Baughman
`Ching-Lee Fukuda
`Megan Raymond
`Ropes & Gray LLP
`steven.baughman@ropesgray.com
`ching-lee.fukuda@ropesgray.com
`Megan.raymond@ropesgray.com
`
`PATENT OWNER:
`
`Michael R. Casey
`J. Scott Davidson
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`mcasey@dbjg.com
`jsd@dbjg.com
`
`
`
`6
`
`
`
`
`
`
`
`
`
`
`
`Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 56
`Entered: March 29, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-000161
`Patent 8,033,458 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`PLENZLER, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 328(a) and 37 C.F.R. § 42.73
`
`
`
`
`
`1 Apple Inc. has been dismissed as Petitioner from this proceeding with
`respect to claim 1. Paper 50.
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`
`INTRODUCTION
`
`A. Background
`Apple Inc. (“Petitioner”), filed a Corrected Petition to institute
`covered business method patent review of claims 1, 6, 8, 10, and 11 of U.S.
`Patent No. 8,033,458 B2 (Ex. 1201, “the ’458 patent”) pursuant to § 18 of
`the Leahy-Smith America Invents Act (“AIA”).2 Paper 9 (“Pet.”). On April
`10, 2015, we instituted a transitional covered business method patent review
`(Paper 23, “Institution Decision” or “Inst. Dec.”) based upon Petitioner’s
`assertion that claims 1, 6, 8, and 10 are directed to patent ineligible subject
`matter under 35 U.S.C. § 101 and that claim 11 is unpatentable under 35
`U.S.C. § 112 ¶ 2.3 Inst. Dec. 26.
`Subsequent to institution, Smartflash LLC (“Patent Owner”) filed a
`Patent Owner Response (Paper 33, “PO Resp.”) and Petitioner filed a Reply
`(Paper 35, “Pet. Reply”) to Patent Owner’s Response.
`An oral hearing was held on November 9, 2015, and a transcript of the
`hearing is included in the record. Paper 53 (“Tr.”).
`We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
`Decision is issued pursuant to 35 U.S.C. § 328(a) and 37 C.F.R. § 42.73.
`For the reasons that follow, we determine that Petitioner has shown by a
`preponderance of the evidence that claims 6, 8, and 10 of the ’458 patent are
`directed to patent ineligible subject matter under 35 U.S.C. § 101 and that
`claim 11 is unpatentable under 35 U.S.C. § 112 ¶ 2. We terminate this
`proceeding with respect to claim 1.
`
`
`2 Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011).
`3 Petitioner cites 35 U.S.C. § 112(b). We note, however, that the ’458 patent
`was filed in 2010 (prior to application of the AIA). The pre-AIA laws,
`therefore, apply to the challenges to the ’458 patent.
`
`2
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`B. Related Matters and Termination
`In a previous covered business method patent review, CBM2014-
`00106, we issued a Final Written Decision determining claim 1 unpatentable
`under 35 U.S.C. § 103. CBM2014-00106, Paper 52. Because Apple was
`the petitioner in that proceeding, we found that § 325(e)(1) estops Apple
`from filing or maintaining a proceeding before the Office with respect to
`claim 1, i.e., the same claim, in this case. Paper 50 (“Estoppel Order”), 4.
`We, therefore, ordered Apple not to present argument with respect to the
`patentability of that claim at the oral hearing on November 9, 2015. Id. at 8.
`On March 15, 2016, Patent Owner filed an authorized motion to
`terminate this proceeding with respect to claim 1 stating that “[o]n March 4,
`2016, pursuant to Fed. R. App. P. 42(b), the United States Court of Appeals
`for the Federal Circuit dismissed [Patent Owner’s] appeal of [the final
`written decision in CBM2014-00106 determining] that claim 1 of the ’458
`Patent is unpatentable.” Paper 55, 3.4
`We are persuaded that the particular facts of this proceeding now
`counsel in favor of termination with respect to claim 1. 37 C.F.R. § 42.72.
`Claim 1 of the ’458 patent has been finally cancelled and any decision we
`might reach in this proceeding regarding the patentability of this claim
`would be moot and purely advisory. We do not see how the just, speedy,
`and inexpensive resolution of every proceeding (37 C.F.R. § 42.1(b)) would
`be secured by rendering a final written decision with respect to claim 1.
`
`
`4 Fed. R. App. P. 42 provides for dismissal of an appeal at the request of the
`parties or on motion by the appellant.
`
`3
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`C. The ’458 Patent
`The ’458 patent relates to “a portable data carrier for storing and
`paying for data and to computer systems for providing access to data to be
`stored,” and the “corresponding methods and computer programs.”
`Ex. 1201, 1:21–25. Owners of proprietary data, especially audio recordings,
`have an urgent need to address the prevalence of “data pirates” who make
`proprietary data available over the internet without authorization. Id. at
`1:29–55. The ’458 patent describes providing portable data storage together
`with a means for conditioning access to that data upon validated payment.
`Id. at 1:59–2:11. This combination allows data owners to make their data
`available over the internet without fear of data pirates. Id. at 2:11–15.
`As described, the portable data storage device is connected to a
`terminal for internet access. Id. at 1:59–67. The terminal reads payment
`information, validates that information, and downloads data into the portable
`storage device from a data supplier. Id. The data on the portable storage
`device can be retrieved and output from a mobile device. Id. at 2:1–5.
`The ’458 patent makes clear that the actual implementation of these
`components is not critical and may be implemented in many ways. See, e.g.,
`id. at 25:49–52 (“The skilled person will understand that many variants to
`the system are possible and the invention is not limited to the described
`embodiments.”).
`D. Challenged Claims
`Petitioner challenges claims 6, 8, 10, and 11. Claim 6 is independent,
`with claims 8, 10, and 11 depending from claim 6, and claim 6 is reproduced
`below:
`
`6. A data access device for retrieving stored data from
`a data carrier, the device comprising:
`
`4
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`
`a user interface;
`a data carrier interface;
`a program store storing code implementable by a
`processor; and
`a processor coupled to the user interface, to the data
`carrier interface and to the program store for
`implementing the stored code, the code comprising:
`code to retrieve use status data indicating a use
`status of data stored on the carrier, and use rules
`data indicating permissible use of data stored on
`the carrier;
`code to evaluate the use status data using the use
`rules data to determine whether access is
`permitted to the stored data; and
`code to access the stored data when access is
`permitted.
`
`Id. at 27:8–23.
`
`ANALYSIS
`
`A. Claim Construction
`In a covered business method patent review, claim terms are given
`their broadest reasonable interpretation in light of the specification in which
`they appear and the understanding of others skilled in the relevant art. See
`37 C.F.R. § 42.300(b). Applying that standard, we interpret the claim terms
`of the ’458 patent according to their ordinary and customary meaning in the
`context of the patent’s written description. See In re Translogic Tech., Inc.,
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this Decision, we
`need not construe expressly any claim term.
`
`5
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`B. Statutory Subject Matter
`Petitioner challenges claims 6, 8, and 10 (“the challenged claims”) as
`directed to patent-ineligible subject matter under 35 U.S.C. § 101.5 Pet. 24–
`36. Petitioner submitted a declaration from Anthony J. Wechselberger
`(“Wechselberger declaration”)6 in support of its petition. Ex. 1220.
`Patent Owner contends that the challenged claims are patent-eligible.
`PO Resp. 10–27.
`
`1. Abstract Idea
`Under 35 U.S.C. § 101, we must first identify whether an invention
`fits within one of the four statutorily provided categories of patent-
`eligibility: “processes, machines, manufactures, and compositions of
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–14 (Fed. Cir.
`2014). Here, each of the challenged claims recites a “machine,” i.e., a “data
`access device.” Section 101, however, “contains an important implicit
`exception [to subject matter eligibility]: Laws of nature, natural phenomena,
`and abstract ideas are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bank
`Int’l., 134 S. Ct. 2347, 2354 (2014) (citing Assoc. for Molecular Pathology
`v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (internal quotation
`marks and brackets omitted)). In Alice, the Supreme Court reiterated the
`framework set forth previously in Mayo Collaborative Services v.
`
`5 We do not address claim 1 because, as noted above, this Decision
`terminates the proceeding with respect to that claim.
`6 In its Response, Patent Owner argues that the Wechselberger declaration
`should be given little or no weight. PO Resp. 4–5. Because Patent Owner
`has filed a Motion to Exclude that includes a request to exclude the
`Wechselberger declaration in its entirety, or in the alternative, portions of the
`declaration based on essentially the same argument, we address Patent
`Owner’s argument as part of our analysis of the motion, discussed below.
`
`6
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`Prometheus Laboratories, Inc., 132 S. Ct. 1289, 1293 (2012) “for
`distinguishing patents that claim laws of nature, natural phenomena, and
`abstract ideas from those that claim patent-eligible applications of these
`concepts.” Alice, 134 S. Ct. at 2355. The first step in the analysis is to
`“determine whether the claims at issue are directed to one of those patent-
`ineligible concepts.” Id.
`According to the Federal Circuit, “determining whether the section
`101 exception for abstract ideas applies involves distinguishing between
`patents that claim the building blocks of human ingenuity—and therefore
`risk broad pre-emption of basic ideas—and patents that integrate those
`building blocks into something more, enough to transform them into specific
`patent-eligible inventions.” Versata Dev. Grp., Inc. v. SAP Am., Inc., 793
`F.3d 1306, 1332 (Fed. Cir. 2015) (emphasis added); accord id. at 1333–34
`(“It is a building block, a basic conceptual framework for organizing
`information . . . .” (emphasis added)). This is similar to the Supreme Court’s
`formulation in Bilski v. Kappos, 561 U.S. 593, 611 (2010) (emphasis added),
`noting that the concept of risk hedging is “a fundamental economic practice
`long prevalent in our system of commerce.” See also buySAFE Inc. v.
`Google, Inc., 765 F.3d 1350, 1353-54 (Fed. Cir. 2014) (stating that patent
`claims related to “long-familiar commercial transactions” and relationships
`(i.e., business methods), no matter how “narrow” or “particular,” are
`directed to abstract ideas as a matter of law). As a further example, the
`“concept of ‘offer based pricing’ is similar to other ‘fundamental economic
`concepts’ found to be abstract ideas by the Supreme Court and [the Federal
`Circuit].” OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed.
`Cir. 2015) (citations omitted).
`
`7
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`
`Petitioner argues that the challenged claims are directed to the abstract
`idea of “paying for and/or controlling access to content.” Pet. 24.
`Specifically, Petitioner contends that “claims 6, 8, [and] 10 [] are drawn to
`the concept of controlling access in that they recite steps to and ‘code to’
`evaluate rules to determine whether access is permitted.” Id. at 26.
`Although Patent Owner does not concede, in its brief, that the challenged
`claims are directed to an abstract idea, it does not persuasively explain how
`the claimed subject matter escapes this classification. PO Resp. 10–27; see
`also Tr. 46:21–47:11 (Patent Owner arguing that the challenged claims are
`not abstract ideas, but conceding this argument was not made in the briefs).
`We agree that the challenged claims are drawn to a patent-ineligible
`abstract idea. Specifically, the challenged claims are directed to performing
`the fundamental economic practice of controlling access to content. For
`example, claim 6 recites “code to evaluate the use status data using the use
`rules data to determine whether access is permitted to the stored data” and
`“code to access the stored data when access is permitted.”
`As discussed above, the ’458 patent discusses addressing recording
`industry concerns of data pirates offering unauthorized access to widely
`available compressed audio recordings. Ex. 1201, 1:20–55. The ’458 patent
`proposes to solve this problem by restricting access to data on a device based
`upon satisfaction of use rules linked to payment data. Id. at 9:7–25. As
`Petitioner notes (Pet. 26), the ’458 patent makes clear that the claimed
`subject matter is directed to paying for data and providing access to data.
`See Ex. 1201 at 2:20–23 (“This invention is . . . particularly . . . relate[d] to a
`portable data carrier for storing and paying for data and to computer systems
`for providing access to data.”). Although the specification discusses data
`
`8
`
`
`
`CBM2015-00016
`Patent 8,033,458 B2
`piracy on the Internet (see id. at 1:29–39), the challenged claims are not
`limited to the Internet. The underlying concept of the challenged claims,
`particularly when viewed in light of the ’458 patent specification, is
`controlling access to content, as Petitioner contends. As discussed further
`below, this is a fundamental economic practice long in existence in
`commerce. See Bilski, 561 U.S. at 611.
`We are, thus, persuaded, based on the ’458 patent specification and
`the language of the challenged claims, that claims 6, 8, and 10 are directed to
`an abstract idea. See Alice, 134 S. Ct. at 2356 (holding that the concept of
`intermediated settlement at issue in Alice was an abstract idea); Accenture
`Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344
`(Fed. Cir. 2013) (holding the abstract idea at the heart of a system claim to
`be “generating tasks [based on] rules . . . to be completed upon the
`occurrence of an event”).
`
`2. Inventive Concept
`“A claim that recites an abstract idea must include ‘additional
`features’ to ensure ‘that the [claim] is more than a drafting effort designed to
`monopolize the [abstract idea].’” Alice, 134 S. Ct. at 2357 (quoting Mayo,
`132 S. Ct. at 1297). “This requires more than simply stating an abstract idea
`while adding the words ‘apply it’ or ‘apply it with a computer.’ Similarly,
`the prohibition on patenting an ineligible concept cannot be circumvented by
`limiting the use of an ineligible concept to a particular technological
`environment.” Versata, 793 F.3d at 1332 (citations omitted). Moreover, the
`mere recitation of generic computer components performing conventional
`functions is not enough. See Alice, 134 S. Ct. at 2360 (“Nearly every
`computer will include a ‘communications controller’ and ‘data storage unit’
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`capable of performing the basic calculation, storage, and transmission
`functions required by the method claims.”).
`Petitioner argues “the Challenged Claims do nothing more than recite
`routine, conventional computer functions in implementing an abstract idea.”
`Pet. Reply 7. Petitioner persuades us that claims 6, 8, and 10 of the ’458
`patent do not add an inventive concept sufficient to ensure that the patent in
`practice amounts to significantly more than a patent on the abstract idea
`itself. Alice, 134 S. Ct. at 2355; see also Accenture Global Servs., 728 F.3d
`at 1344 (holding claims directed to the abstract idea of “generating tasks
`[based on] rules . . . to be completed upon the occurrence of an event” to be
`unpatentable even when applied in a computer environment and within the
`insurance industry). Specifically, we agree with and adopt Petitioner’s
`rationale that the additional elements of the challenged claims are either field
`of use limitations and/or generic features of a computer that do not bring the
`challenged claim within § 101 patent eligibility. Pet. 27–34.
`
`a. Technical Elements
`Petitioner argues that the challenged claims are unpatentable because
`they “are directed only to an abstract idea with nothing more than ‘well-
`understood, routine, conventional activity’ added.” Pet. 28 (citations
`omitted). Patent Owner disagrees, arguing that the challenged claims are
`patentable because they “recite specific ways of using distinct memories,
`data types, and use rules that amount to significantly more than the
`underlying abstract idea.” PO Resp. 18–19 (quoting Ex. 2049, 19). We
`agree with Petitioner for the following reasons.
`The specification of the ’458 patent treats as well-known all
`potentially technical aspects of the claims, which simply require generic
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`computer components (e.g., interfaces, program store, and processor). The
`linkage of existing hardware devices to supplier-defined access rules appear
`to be “‘well-understood, routine, conventional activit[ies]’ previously known
`to the industry.” Alice, 134 S. Ct. at 2359; Mayo, 132 S. Ct. at 1294.
`Further, the claimed computer code simply performs generic computer
`functions, such as accessing, retrieving, and evaluating data. See Pet. 29–30.
`The recitation of these generic computer functions is insufficient to confer
`specificity. See Content Extraction and Transmission LLC v. Wells Fargo
`Bank, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (“The concept of data
`collection, recognition, and storage is undisputedly well-known. Indeed,
`humans have always performed these functions.”).
`Moreover, we are not persuaded that claims 6, 8, and 10 “recite
`specific ways of using distinct memories, data types, and use rules that
`amount to significantly more than” conditioning and controlling access to
`content based on payment. See PO Resp. 18. The challenged claims do not
`recite any particular or “distinct memories.” To the extent Patent Owner
`argues that the claimed “program store” is a memory, Patent Owner does not
`provide any argument as to how it is constructed or implemented in an
`unconventional manner. Moreover, the claims recite several generic data
`types, such as “code,” “use status data,” and “use rules data.” We are not
`persuaded that the recitation of these data types, by itself, amounts to
`significantly more than the underlying abstract idea. Patent Owner does not
`point to any inventive concept in the ’458 patent related to the way these
`data types are constructed or used. The recitation of generic data types,
`being used in the conventional manner, is insufficient to confer the
`specificity required to elevate the nature of the claims into a patent-eligible
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`application. Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1294)
`(“We have described step two of this analysis as a search for an ‘inventive
`concept’—i.e., an element or combination of elements that is ‘sufficient to
`ensure that the patent in practice amounts to significantly more than a patent
`on the [ineligible concept] itself.’”) (brackets in original). In addition, the
`’458 patent simply recites data types with no description of the underlying
`implementation or programming that results in these data types. See Content
`Extraction and Transmission LLC, 776 F.3d at 1347 (“The concept of data
`collection, recognition, and storage is undisputedly well-known. Indeed,
`humans have always performed these functions.”).
`In addition, because the recited elements can be implemented on a
`general purpose computer, the challenged claims do not cover a “particular
`machine.” Pet. 36; see Bilski, 561 U.S. at 604–05 (stating that machine-or-
`transformation test remains “a useful and important clue” for determining
`whether an invention is patent eligible). And the challenged claims do not
`transform an article into a different state or thing. Pet. 36.
`Thus, we determine the potentially technical elements of the claims
`are nothing more than “generic computer implementations” and perform
`functions that are “purely conventional.” Alice, 134 S. Ct. at 2358–59;
`Mayo, 132 S. Ct. at 1294.
`To the extent Patent Owner argues that the challenged claims include
`an “inventive concept” because of the specific combination of elements in
`the challenged claims, we disagree. Patent Owner contends that
`[b]y using a system that combines on the data carrier both the
`digital content and use rules/use status data, and by using “code
`to evaluate the use status data using the use rules data to
`determine whether access is permitted to the stored data” and
`“code to access the stored data when access is permitted,” access
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`control to the digital content can be continuously enforced prior
`to access to the digital content, allowing subsequent use (e.g.,
`playback) of the digital content to be portable and disconnected.
`PO Resp. 12. Patent Owner further contends that “the claimed portable data
`carriers enable the tracking of partial use of a stored data item (e.g., so that
`the rest can be used/played back later)” and
`[b]y comparison, unlike a system that uses use rules/use status
`data as