Case CBM2015-00016
`Patent 8,033,458 B2
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`______________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
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`APPLE INC.,
`Petitioner
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`v.
`
`SMARTFLASH LLC,
`Patent Owner
`______________________
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`Case CBM2015-00016
`Patent 8,033,458 B2
`______________________
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`Before JENNIFER S. BISK, RAMA G. ELLURU, JEREMY M. PLENZLER, and
`MATTHEW R. CLEMENTS, Administrative Patent Judges.
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`PETITIONER’S REPLY TO PATENT OWNER’S RESPONSE
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`Case CBM2015-00016
`Patent 8,033,458 B2
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`TABLE OF CONTENTS
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`INTRODUCTION ........................................................................................... 1
`I.
`PETITIONER’S RESPONSE TO PO’S STATEMENT OF FACTS ............. 3
`II.
`III. THE CHALLENGED CLAIMS ARE NOT § 101 PATENT ELIGIBLE ..... 3
`A.
`PO Fails to Identify Any Inventive Concept ......................................... 4
`The DDR Claims Are Not Analogous to the Challenged Claims ......... 8
`B.
`1.
`The Challenged Claims Do Not Address an Internet-
`Specific Problem ....................................................................... 10
`The Challenged Claims Do Not “Override” Routine and
`Conventional Computer Action ................................................ 12
`The Challenged Claims Do Not “Parallel” the DDR Claims ... 15
`3.
`PO’s Preemption Arguments Are Misplaced ...................................... 17
`C.
`IV. CLAIM 11 IS INDEFINITE UNDER 35 U.S.C. § 112, ¶ 2 ......................... 20
`V.
`PO’S OTHER ARGUMENTS ARE IRRELEVANT TO THE MERITS .... 21
`A. Mr. Wechselberger Was Not Required to Recite the
`“Preponderance of the Evidence” Standard ....................................... 21
`PO’s Construction of “Payment Data” Ignores the Explicit
`Teachings of the ’458 Patent ............................................................... 22
`PO’s “Estoppel” Arguments Are Unfounded ..................................... 23
`1.
`The ’458 Patent’s Prosecution Before the PTO Does Not
`Estop the Board from Considering § 101 or § 112 Here .......... 23
`Non-Final § 101 Determinations in District Court
`Litigation Have No Impact on This Proceeding ....................... 24
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`2.
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`2.
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`B.
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`C.
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`Case CBM2015-00016
`Patent 8,033,458 B2
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`TABLE OF AUTHORITIES
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`CASES
`Accenture Global Servs., GmbH v. Guidewire Software, Inc.,
`728 F.3d 1336 (Fed. Cir. 2013) ................................................................ 6, 16, 25
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`Page(s)
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`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`134 S. Ct. 2347 (2014) .................................................................................passim
`
`Ariosa Diagnostics, Inc. v. Sequenom, Inc.,
`788 F.3d 1371 (Fed. Cir. 2015) ...................................................................passim
`
`Arrhythmia Research Tech., Inc. v. Corazonix Corp.,
`958 F.2d 1053 (Fed. Cir. 1992) .......................................................................... 25
`
`Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can.,
`687 F.3d 1266 (Fed. Cir. 2012) ................................................................ 4, 16, 19
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`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014) ................................................................ 6, 12, 15
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`Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n,
`776 F.3d 1343 (Fed. Cir. 2014) .............................................................. 1, 4, 6, 15
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`DDR Holdings, LLC v. Hotels.com, L.P.,
`773 F.3d 1245 (Fed. Cir. 2014) ...................................................................passim
`
`Digitech Image Techs., LLC v. Elecs. for Imaging, Inc.,
`758 F.3d 1344 (Fed. Cir. 2014) ............................................................................ 7
`
`Enzo Biochem, Inc. v. Gen-Probe, Inc.,
`424 F.3d 1276 (Fed. Cir. 2005) .......................................................................... 22
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`Ethicon, Inc. v. Quigg,
`849 F.2d 1422 (Fed. Cir. 1988) .......................................................................... 25
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`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`721 F.3d 1330 (Fed. Cir. 2013) .......................................................................... 24
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`Gottschalk v. Benson,
`409 U.S. 63 (1972) .......................................................................................... 1, 12
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`Intellectual Ventures I LLC v. Capital One Bank (USA)
`(“IV”), 792 F.3d 1363 (Fed. Cir. 2015) .................................................... 2, 12, 14
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`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) .................................................................................passim
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`Nautilus, Inc. v. Biosig, Instruments, Inc.,
`134 S. Ct. (2014) ..................................................................................... 20, 21, 23
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`OIP Techs., Inc. v. Amazon.com, Inc.,
`788 F.3d 1359 (Fed. Cir. 2015) ...................................................................passim
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`SmartGene, Inc. v. Adv. Biological Labs. SA,
`555 F. App’x 950 (Fed. Cir. 2014) ....................................................................... 7
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`Suffolk Techs., LLC v. AOL Inc.,
`752 F.3d 1358 (Fed. Cir. 2014) .......................................................................... 22
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`Telebuyer, LLC v. Amazon.com, Inc.,
`No. 2:13-cv-1677, 2015 WL 4493045 (W.D. Wash. July 23, 2015) ................... 7
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`Ultramercial, Inc. v. Hulu, LLC,
`772 F.3d 709 (Fed. Cir. 2014) .....................................................................passim
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`Versa Corp. v. Ag-Bag Int’l Ltd.,
`392 F.3d 1325 (Fed. Cir. 2004) .......................................................................... 20
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`Versata Dev. Grp., Inc. v. SAP Am., Inc.,
`793 F.3d 1306 (Fed. Cir. 2015) .................................................................... 22, 24
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`PTAB RULINGS
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`CBM2012-00007, Papers 15 & 58........................................................................... 25
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`CBM2013-00013, Paper 61 ....................................................................................... 7
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`CBM2014-00079, Paper 28 ................................................................................. 2, 18
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`CBM2014-00106, Paper 8 ....................................................................................... 21
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`CBM2015-00059, Paper 13 ................................................................................. 2, 18
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`IPR2013-00078, Paper 15 ........................................................................................ 22
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`IPR2013-00172, Paper 50 .................................................................................... 3, 21
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`STATUTES & REGULATIONS
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`35 U.S.C. § 101 .................................................................................................passim
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`35 U.S.C. § 112, ¶ 2 ................................................................................................. 20
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`35 U.S.C. § 324(a) ................................................................................................... 24
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`37 C.F.R. § 42.65 ..................................................................................................... 21
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`Case CBM2015-00016
`Patent 8,033,458 B2
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`LIST OF EXHIBITS
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`Description
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`Exhibit
`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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`U.S. Patent No. 8,033,458
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`Plaintiffs’ First Amended Complaint
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`U.S. Patent No. 5,925,127
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`File History for U.S. Patent No. 8,033,458
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`U.S. Patent No. 5,940,805
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`U.S. Patent No. 4,999,806
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`U.S. Patent No. 5,675,734
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`Russell Housley and Jan Dolphin, “Metering: A Pre-pay Tech-
`nique,” Storage and Retrieval for Image and Video Databases V,
`Conference Volume 3022, 527 (January 15, 1997)
`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. 4,337,483
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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 (translation)
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`Eberhard von Faber, Robert Hammelrath, and Franz-Peter Heider,
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`v
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`Exhibit
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`1220
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`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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`Description
`“The Secure Distribution of Digital Contents,” IEEE (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 Peti-
`tion for Covered Business Method Patent Review
`Declaration of Megan F. Raymond In Support of Apple Inc.’s Peti-
`tion for Covered Business Method Patent Review
`U.S. Patent No. 8,118,221
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`File History for U.S. Patent No. 8,061,598
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`Claim Construction Memorandum Opinion from Smartflash LLC v.
`Apple Inc., No. 6:13cv447 (Dkt. 229)
`U.S. Patent No. 7,725,375
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`International Publication No. WO 95/34857
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`Excerpts from the Deposition Transcript of Jonathan Katz, Ph.D.
`Vol. 1, April 8, 2015, taken in connection with CBM2014-
`00102, -00106, -00108, and 00112
`Smartflash LLC, et al. v. Apple Inc., et al., No. 6:13-cv-447, Dkt
`585, Order (E.D. Tex. July 8, 2015)
`U.S. Patent No. 8,083,137
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`U.S. Patent No. 7,603,382
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`U.S. Patent No. 7,970,713
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`Declaration of Michael P. Duffey In Support of Petitioner’s Reply
`to Patent Owner’s Response
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`Case CBM2015-00016
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`GLOSSARY OF ABBREVIATIONS
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`Description
`Shorthand
`’458 Patent or ’458 United States Patent No. 8,033,458
`§ 101
`35 U.S.C. § 101
`BRI
`Broadest Reasonable Interpretation
`Petition or Pet’n
`Case CBM2015-00016 Corrected Petition, Paper 9
`Decision or Dec
`Case CBM2015-00016 Institution Decision, Paper 23
`PO
`Patent Owner
`POSITA
`Person of ordinary skill in the art
`Response or Resp
`Case CBM 2015-00016 Patent Owner Response, Paper 33
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`Case CBM2015-00016
`Patent 8,033,458 B2
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`I.
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`INTRODUCTION
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` PO does not dispute that Challenged Claims 1, 6, 8, and 10 of the ’458, are
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`directed to an abstract idea under step 1 of the patent eligibility test in Mayo Col-
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`laborative Servs. v. Prometheus Labs, Inc., 132 S. Ct. 1289, 1296-97 (2012) and
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`Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014). Instead, PO
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`argues only that the Challenged Claims have an “inventive concept” sufficient to
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`satisfy §101 under step 2 of Mayo. But PO fails to demonstrate that any such in-
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`ventive concept exists. Indeed, it does not identify even one inventive concept, let
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`alone one “‘sufficient to ensure that the patent in practice amounts to significantly
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`more than a patent upon the [ineligible concept] itself.’” Alice, 134 S. Ct. at 2355
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`(quoting Mayo, 132 S. Ct. at 1294).
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`Instead, in an effort to circumvent the Mayo two-step analysis, PO relies ex-
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`clusively on conclusory attorney argument that the invention involves a computer-
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`related problem and solution, and erroneously analogizes the Challenged Claims to
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`those in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1255-59 (Fed.
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`Cir. 2014). But the DDR claims are entirely distinguishable, and in a failed effort
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`to suggest superficial similarities, PO ignores important case law finding claims
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`similar to the Challenged Claims to be patent ineligible. See, e.g., Alice, 134 S. Ct.
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`2347; Gottschalk v. Benson, 409 U.S. 63 (1972); Ultramercial, Inc. v. Hulu, LLC,
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`772 F.3d 709 (Fed. Cir. 2014); Content Extraction & Transmission LLC v. Wells
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`Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 (Fed. Cir. 2014); OIP Techs., Inc. v. Ama-
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`zon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015); Intellectual Ventures I LLC v. Capi-
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`tal One Bank (USA) (“IV”), 792 F.3d 1363 (Fed. Cir. 2015). And, in any case,
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`DDR does not allow PO to circumvent the two-step Mayo inquiry.
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`PO also misapplies the preemption concern underlying the §101 analysis.
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`PO incorrectly argues that, separate from the two-step Mayo, the Challenged
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`Claims are patent eligible because they do “not result in inappropriate preemp-
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`tion.” Resp20-27. This very same argument—contradicted by Mayo in language
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`PO fails to mention—has been considered and rejected in recent decisions, which
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`PO entirely ignores. See, e.g. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d
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`1371, 1379 (Fed. Cir. 2015); OIP, 788 F.3d at 1362-63. Indeed, preemption is not
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`an alternative or addition to the Mayo test, but rather is the motivation that led to
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`that test: it is the “concern that drives” the exclusion of ineligible subject matter
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`from § 101, Alice, 134 S. Ct. at 2354, and the Mayo two-part test acts as a “more
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`easily administered proxy” for making judgments about how much future innova-
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`tion is preempted. Mayo, 132 S. Ct. at 1303. Indeed, as the Board has correctly
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`recognized, “questions on preemption are inherent in and resolved by the 101
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`analysis,” and “[w]here a patent’s claims are deemed only to disclose patent ineli-
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`gible subject matter under the Mayo framework . . . preemption concerns are fully
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`addressed and made moot.” Ariosa, 788 F.3d at 1379 (emphases added);
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`CBM2015-00059, Pap. 13 at 5 (discussing Ariosa); CBM2014-00079, Pap. 28 at
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`19. Thus, non-infringement and non-infringing alternatives are irrelevant to §101,
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`as ineligible subject matter is not rendered patentable by the existence of non-
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`infringing alternatives. E.g., Ariosa, 788 F.3d at 1379; OIP, 788 F.3d at 1362-63.
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`PO also fails to cite evidence to rebut Petitioner’s showing that a POSITA
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`would find Claim 11 indefinite. Finally, PO’s arguments about claim construction,
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`the weight to accord Petitioner’s unrebutted expert opinions, and estoppel, are le-
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`gally incorrect and do not alter the unpatentability of the Challenged Claims.
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`II.
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`PETITIONER’S RESPONSE TO PO’S STATEMENT OF FACTS
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`As to PO’s alleged facts (1) and (2), Petitioner admits that the phrases “pre-
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`ponderance of the evidence” and “more likely than not” do not appear in Mr.
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`Wechselberger’s declaration. The evidentiary standard need not be recited in ex-
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`pert declarations. See, e.g., IPR2013-00172, Pap. 50 at 42. Petitioner otherwise de-
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`nies these allegations. Petitioner further states the following material fact: PO did
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`not submit any expert opinion in this proceeding.
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`III. THE CHALLENGED CLAIMS ARE NOT § 101 PATENT ELIGIBLE
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`PO does not dispute that the Challenged Claims are directed to an abstract
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`idea under part 1 of the Mayo analysis. Cf. Resp10.1 Thus, the only remaining
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`1 See also Dec17-18 (“the heart of the claimed subject matter is restricting access
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`to stored data based on supplier-defined access rules and payment data.”); Ex.2049
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`question is whether, under part 2 of the Mayo analysis, the Challenged Claims in-
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`clude “additional features” amounting to an “inventive concept” that is “signifi-
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`cantly more” than the claimed abstract idea. Alice, 134 S. Ct. at 2355, 2357.
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`“[I]mplement[ing] the abstract idea with ‘routine, conventional activit[ies],’ . . . is
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`insufficient to transform the patent-ineligible abstract idea into patent-eligible sub-
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`ject matter.” Ultramercial, 772 F.3d at 716 (quoting Mayo, 132 S. Ct. at 1298). In-
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`deed, “[t]here is no ‘inventive concept’ in [the] use of a generic . . . computer to
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`perform well-understood, routine, and conventional activities commonly used in
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`industry.” Content Extraction, 776 F.3d at 1348 (citing Alice, 134 S. Ct. at 2359);
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`see also Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Can., 687 F.3d 1266,
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`1278-80 (Fed. Cir. 2012). As discussed below, the Challenged Claims recite only
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`well-known, routine, and conventional computer activities, which is insufficient.
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`A.
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`PO Fails to Identify Any Inventive Concept
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`17-18 (“The asserted claims recite abstract ideas. . . . controlling access to content
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`data, such as various types of multimedia files, and receiving and validating pay-
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`ment data. . . . the general purpose of the claims—conditioning and controlling ac-
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`cess to data based on payment—is abstract and a fundamental building block of the
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`economy in the digital age.”); Ex.2050 1-2; Ex.2068 11:16-12:7, 65:16-66:20,
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`67:1-68:20, 69:8-70:5; cf. Pap. 24 at 3 (arguments not raised in response waived).
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`Smartflash fails to identify any “inventive concept” in the Challenged
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`Claims. The most PO states is that the claims “combine[] on the data carrier both
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`the digital content and use rules/use status data, and [] us[e] ‘code to evaluate the
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`use status data using the use rules data to determine whether access is permitted to
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`the stored data’ and code to access the stored data when access is permitted.’”
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`Resp12. 2 But simply storing multiple types of data (i.e., “combin[ing]” digital con-
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`tent and use rules/use status data) in a conventional data carrier, employing code to
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`evaluate rules, and accessing data, are well-understood, routine, conventional com-
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`puter activities, not inventive concepts. Indeed, claims held unpatentable in Alice
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`similarly recited limitations for storing multiple types of information and ensuring
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`that valuation rules were met. 3 See, e.g., Pet’n32-34; Ex.1226 cl. 26; Ex.1220 ¶¶
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`2 Claim 1 does not even recite use rules or use status data.
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`3 PO also asserts that these features of the claims somehow provide that “access
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`control to the digital content can be continuously enforced prior to access to the
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`digital content, allowing subsequent use (e.g., playback) of the digital content to be
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`portable and disconnected,” create a “mechanism to write partial use status data,”
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`and “enable the tracking of partial use of a stored data item (e.g., so that the rest
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`can be used/played back later).” Resp12. Yet, even were these assertions accurate,
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`these concepts are neither claimed in the Challenged Claims nor does PO even at-
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`87-95; Alice, 134 S. Ct. at 2352 nn.1-2 (rep. cl. 33), 2360 (no inventive concept in
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`reciting generic computer components, noting “[n]early every computer . . . [is]
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`capable of performing [] basic calculation, storage, and transmission functions”);
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`Content Extraction, 776 F.3d at 1345 (rep. cl. 1), 1347-49 (no inventive concept in
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`routine and conventional activities, including collecting, recognizing, and storing
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`data); Ultramercial, 772 F.3d at 712 (rep. cl. 1), 714-16 (routine, conventional ac-
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`tivities, such as “selecting an ad,” “restricting public access,” “facilitating display,”
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`“allowing the consumer access,” “updating the activity log,” and “receiving pay-
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`ment,” add no inventive concept; “that the system is active . . . and restricts public
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`access also represents only insignificant pre-solution activity”) (internal quotations
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`omitted); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1351-52, 1355 (Fed. Cir.
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`2014) (no inventive concept in reciting generic computer functionality (rep. cls. 1,
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`14), explaining that “a computer [that] receives and sends [] information over a
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`network . . . is not even arguably inventive”); Accenture Global Servs., GmbH v.
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`tempt to explain how these concepts show that the computer-based limitations are
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`functioning in anything more than a routine and conventional way. See, e.g., Alice,
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`134 S. Ct. at 2359. Indeed, Alice makes clear that the implementation of an abstract
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`idea on a computer is not patent eligible if it does not “improve the functioning of
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`the computer itself.” Id. PO has failed to show that the claimed limitations do so.
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`Guidewire Software, Inc., 728 F.3d 1336, 1338, 1344-46 (Fed. Cir. 2013) (claims
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`(rep. cl. 1) reciting only “generalized software components” for “generating tasks
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`[based on] rules . . . to be completed upon the occurrence of an event” unpatenta-
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`ble); CBM2013-00013, Pap. 61 at 8, 16 (claims (rep. cl. 1) reciting “an abstract
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`method, i.e., performing a real-time Web transaction . . . to access checking and
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`savings accounts, and transferring funds (i.e., debiting or crediting) in response to
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`user signals from an input device” unpatentable); Digitech Image Techs., LLC v.
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`Elecs. for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014) (claim directed to
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`generating two data sets and combining them into a device profile is an ineligible
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`abstract process); SmartGene, Inc. v. Advanced Biological Labs., SA, 555 F. App’x
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`950, 955 (Fed. Cir. 2014) (“The claim does not purport to identify new computer
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`hardware: it assumes the availability of physical components for input, memory,
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`look-up, comparison, and output.”); Telebuyer, LLC v. Amazon.com, Inc., No.
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`2:13-cv-1677, 2015 WL 4493045, at *1-5, *10-12 (W.D. Wash. July 23, 2015) (no
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`inventive concept in claims directed to traffic control system that accesses multiple
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`sources of information and “uses various types of stored data”).
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`Because the Challenged Claims do nothing more than recite routine, conven-
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`tional computer functions in implementing an abstract idea, they are patent ineligi-
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`ble under Alice. See, e.g., 134 S. Ct. 2358; Pet’n28-34; Ex.1220 ¶¶ 87-95; Ex.1201
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`4:4-13, 16:46-50, 18:7-11; see also Ex.2068 14:17-15:1, 69:8-70:5, 77:7-18, 78:6-
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`11, 87:19-88:11, 96:6-18, 96:25-98:24, 99:7-23, 100:6-101:8.4 PO has submitted
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`no evidence to the contrary and Alice makes clear that, as here, “the mere recitation
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`of a generic computer cannot transform a patent-ineligible abstract idea into a pa-
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`tent-eligible invention.” 134 S. Ct. at 2358.
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`B.
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`The DDR Claims Are Not Analogous to the Challenged Claims
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`PO’s entire argument regarding Mayo step 2 is premised on its flawed as-
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`sumption that the Challenged Claims are patent eligible because they resemble the
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`claims in DDR that were found eligible—but they do not. To begin with, DDR
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`does not overturn the two-step inquiry required by Mayo. If the Challenged Claims
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`are directed to an abstract idea (they are), and if there is no “inventive concept”
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`“sufficient to ensure that the patent in practice amounts to significantly more than a
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`4 Petitioner also notes that PO’s so-called “Overview” of the ’458 (Resp6-8) is not
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`tied to the Challenged Claims’ limitations. PO discusses, e.g., a user “select[ing]
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`content to purchase or rent from a variety of different content providers,” “trans-
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`mit[ting] stored ‘payment data’ to a ‘payment validation system’ to validate the
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`payment data,” and “writ[ing] partial use status data.” Resp6-8 (citing Ex.1201
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`4:64-5:8, 5:29-33, 8:3-9). Yet none of the Challenged Claims recites “select[ing]
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`content . . . from a variety of different content providers,” a “payment validation
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`system” (or validation data), or “writ[ing] partial use status data.”
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`patent upon the [ineligible concept] itself” (there is none), then the claims are pa-
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`tent ineligible. As noted above, PO does not dispute that the claims are directed to
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`an abstract idea under step 1, and has provided no evidence of any “inventive con-
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`cept” under step 2. That analysis is dispositive: the Challenged Claims are not pa-
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`tent eligible. Superficial comparisons to the claims in DDR cannot substitute for
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`the Mayo inquiry. In any case, the DDR claims are not analogous, and in fact the
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`Challenged Claims are much more similar to claims found patent ineligible.
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`In DDR, the asserted patent addressed the problem of retaining website visi-
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`tors when clicking on an advertisement within the host’s website. See 773 F.3d at
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`1257. Under the conventional Internet function, clicking an advertisement hyper-
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`link would transport a website visitor away from the host’s website to, e.g., a third-
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`party advertiser’s website. Id. The patented claims provided a solution where the
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`visitor is no longer transported to the third-party website, but, instead, has an out-
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`source provider automatically generate a hybrid web page that combines the visual
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`“look and feel” elements from the host website and product information from the
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`third-party website. Id. This allows for the host website to retain the visitors but
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`still enable the visitors to purchase the product from the third-party merchant. Id. at
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`1257-58. The court distinguished this Internet-centric problem by stating that this
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`practice “introduces a problem that does not arise in the ‘brick and mortar’ con-
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`text” as “[t]here is . . . no possibility that by walking up to [a kiosk in a warehouse
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`store], the customer will be suddenly and completely transported outside the ware-
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`house store and relocated to a separate physical venue associated with the third-
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`party.” Id. at 1258. Specifically, the court found that the result of the claimed
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`method “overrides the routine and conventional sequence of events ordinarily trig-
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`gered by” routine and conventional computer action and is not directed to the gen-
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`eral abstract idea of “‘use of the Internet’ to perform an abstract business practice
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`(with insignificant added activity).” Id. In contrast, the Challenged Claims do not
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`address an internet-specific problem, nor do they “override[] the routine and con-
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`ventional sequence of events ordinarily triggered by” conventional processes.
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`1.
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`The Challenged Claims Do Not Address an Internet-
`Specific Problem
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` PO incorrectly argues the Challenged Claims are like those in DDR because
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`they allegedly address a “technological problem,” are rooted in computer technol-
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`ogy and are directed to a challenge particular to the Internet/computer networks.
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`Resp10-12. However, “data piracy”—the business problem PO argues its Chal-
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`lenged Claims address—is neither a technological problem, rooted in computer
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`technology nor a “problem specifically arising in the realm of computer networks.”
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`E.g., Ex.1220 ¶¶ 83-84; Dec15-16; see Ex.2068 15:17-16:5, 25:3-16, 76:10-77:6.
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`Indeed, it is undisputed that the problem of data piracy exists outside the
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`context of the Internet/computer networks in the context of, e.g., content copy pro-
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`tection with digital watermarking. See Ex.1201 5:9-12 (“where the data carrier
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`stores . . . music, the purchase outright option may be equivalent to the purchase of
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`a compact disc (CD), preferably with some form of content copy protection such as
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`digital watermarking”). Similarly, to prevent piracy of video data (copying and
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`misuse), video on demand was used in the pay TV industry, to prevent piracy of
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`software data, time-limited promotional trials were used for software (including in
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`the prior art Poggio), and to prevent piracy of DVDs, region codes and encryptions
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`were used to control the use of DVDs well before the priority date of the ’458 Pa-
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`tent. See Ex.1220 ¶ 84; see also, e.g., Ex.1216 1:13-23 (discussing purchasing “try
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`and buy” software in a store).
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`Further, unlike the DDR claims, which addressed “a problem that does not
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`arise in the ‘brick and mortar’ context,” PO’s Challenged Claims really address a
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`problem of controlling access based on payment or rules—an age-old business
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`problem that many have solved outside the context of the Internet, such as through
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`apartment rentals, movie rentals, movie tickets, subscription plans, and pay-per-
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`view programming. See, e.g., Ex.1220 ¶¶ 31, 82-84; see also, e.g., Ex.1209 Ab-
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`stract, 4:27-35 (describing a pay-per-use cable system). Thus, the fact that data pi-
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`racy (and providing access to goods based on payment or rules) may also exist on
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`the Internet does not render it a “‘challenge particular to the Internet’” (Resp11
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`(quoting DDR, 773 F.3d at 1257)). See, e.g., Ultramercial, 772 F.3d at 716 (“Nar-
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`rowing the abstract idea of using advertising as a currency to the Internet is . . . is
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`insufficient to save a claim.” (citing Alice, 134 S. Ct. at 2358)). Thus, the Chal-
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`lenged Claims are not analogous to the DDR claims, where “the claimed solution
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`[was] necessarily rooted in computer technology in order to overcome a problem
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`specifically arising in the realm of computer networks.” DDR, 773 F.3d at 1257.
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`And, even if the only practical application of the Challenged Claims is for use with
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`a computer, that fact would not render the claim patent eligible. See, e.g., Benson,
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`409 U.S. at 71-74 (claims 8 and 13 ineligible despite “no substantial practical ap-
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`plication except in connection with a digital computer”). Regardless, because the
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`claims here “do not address problems unique to the Internet . . . DDR has no ap-
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`plicability.” IV, 792 F.3d at 1371.
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`Instead, the business problem and purported solution addressed by the Chal-
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`lenged Claims are more like those for claims held patent ineligible, despite their
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`application to the Internet. E.g., Ultramercial, 772 F.3d at 715-16 (using advertis-
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`ing as currency on the Internet); buySAFE, 765 F.3d at 1355 (creating transaction
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`performance guaranty on the Internet); IV, 792 F.3d at 1367-71 (tracking financial
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`transactions on the Internet; tailoring advertisements on the Internet); see also
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`Pet’n32-34 (comparing ’458 Patent claim to Alice patent claim).
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`2.
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`The Challenged Claims Do Not “Override” Routine and
`Conventional Computer Action
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` Contrary to Smartflash’s assertion (see Resp10-12), and unlike the DDR
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`claims, the Challenged Claims do not “override” routine and conventional comput-
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`er action, and therefore remain ineligible. See DDR, 773 F.3d at 1258; id. at 1256
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`(“[A]fter Alice, there can remain no doubt: recitation of generic computer limita-
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`tions does not make an otherwise ineligible claim patent-eligible.”). The Chal-
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`lenged Claims simply recite computer-based limitations acting in a routine and
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`conventional manner. For example, the Claims recite a known data carrier that may
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`be a generic device such as a “standard smart card,” Ex.1201 11:28-29, a known
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`data access device that may be a “conventional dedicated computer system,” id.
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`18:7-11, and a known subscriber identity module (SIM), id. 4:10-13. See also
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`Pet’n28-32; Ex.1201 4:4-5, 16:46-50 (describing components as “conventional”).
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`Furthermore, the claimed “code to” limitations perform generic computer func-
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`tions, such as outputting, accessing, retrieving, and evaluating data. See, e.g.,
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`Pet’n28-32; see also Ex.2068 14:17-15:1, 77:7-18, 78:6-11, 87:19-88:11, 96:6-18,
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`96:25-98:24, 99:7-23, 100:6-101:8 (explaining routine and conventional nature of
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`computer-based limitations); Ex.1220 ¶¶ 87-95. Therefore, the Challenged Claims
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`do not override routine and conventional computer actions—they claim such ac-
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`tions, and they are patent ineligible.
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`Rather than the claims in DDR, the Challenged Claims are analogous to nu-
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`merous claims held unpatentable. For example, in IV, patent-ineligible claims were
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`directed to the abstract idea of budgeting on the Internet, employing “generic com-
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`puter elements,” including “a database, a user profile, . . . and a communication
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`medium,” and reciting steps of “storing” the user profile (i.e., data) in the database
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`and “causing communication” between the database and a “receiving device.” 792
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`F.3d at 1366-69 (analyzing cls. 5-11 of U.S. Pat. 8,083,137 (Ex.1230)). Additional
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`ineligible claims in IV were directed to the abstract idea of tailoring advertise