Covered Business Method Patent Review
`United States Patent No. 8,033,458
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-814
`Customer No. 28120
`
`§
`Inventor: Hulst et al.
`United States Patent No.: 8,033,458 §
`Formerly Application No.: 12/943,847 §
`Issue Date: October 11, 2011
`§
`Filing Date: November 10, 2010
`§
`Former Group Art Unit: 2887
`§
`Former Examiner: Thien M. Le
`§
`
`For: Data Storage and Access Systems
`
`MAIL STOP PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`Post Office Box 1450
`Alexandria, Virginia 22313-1450
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF
`UNITED STATES PATENT NO. 8,033,458 PURSUANT TO 35 U.S.C. § 321,
`37 C.F.R. § 42.304
`
`
`
`

`

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` Covered Business Method Patent Review
`United States Patent No. 8,033,458
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`
`TABLE OF CONTENTS
`
`B.
`
`3.
`
`4.
`
`
`INTRODUCTION ....................................................................................................... 1
`I.
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 6
`III. PETITIONER HAS STANDING .......................................................................... 11
`A.
`The ’458 Patent Is a Covered Business Method Patent ............................. 11
`1.
`Exemplary Claim 1 Is Financial In Nature ...................................... 12
`2.
`Claim 1 Does Not Cover A Technological Invention ................... 15
`Related Matters and Mandatory Notice Information; Petitioner Is a Real
`Party In Interest Sued for and Charged With Infringement ..................... 20
`IV. DETAILED EXPLANATION OF REASONS FOR RELIEF REQUESTED,
`SHOWING IT IS MORE LIKELY THAN NOT THAT AT LEAST ONE
`CHALLENGED CLAIMS IS UNPATENTABLE ............................................. 21
`A.
`Claim Construction .......................................................................................... 21
`B.
`The Challenged Claims are Unpatentable Under § 101 ............................. 26
`1.
`Claims Are Directed To Abstract Ideas ........................................... 27
`2.
`Claims Do Not Disclose An “Inventive Concept” That Is
`“Significantly More” Than An abstract Idea ................................... 30
`Field Of Use Limitations Cannot Transform Abstract Ideas
`Into Patent Eligible Inventions .......................................................... 31
`Generic Computer Implementation Cannot Transform Ab-
`stract Ideas Into Patent Eligible Inventions..................................... 31
`The Functional Nature Of The Challenged Claims Con-
`firms Preemption and Patent Ineligibility ........................................ 37
`6. Machine-or-Transformation Test Confirms Patent Ineligi-
`bility ........................................................................................................ 39
`Claims 6, 8, 10, and 11 Are Unpatentable Under §103 .............................. 40
`1.
`Overview of Stefik ............................................................................... 40
`2. Motivation to Combine Stefik with Ahmad .................................... 45
`3. Motivation to Combine Stefik with Ahmad and Kopp ................. 47
`4. Motivation to Combine Stefik with Ahmad and Sato .................... 49
`
`5.
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`C.
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`ii
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`United States Patent No. 8,033,458
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`5. Motivation to Combine Stefik with Ahmad, and Ginter ............... 50
`6.
`Claims 6 and 8 are Obvious in Light of Stefik in View of
`Ahmad (Ground 2); Claims 6 and 8 are Obvious in Light of
`Stefik in View of Ahmad and Kopp (Ground 3); Claims 6
`and 8 are Obvious in Light of Stefik in View of Ahmad and
`Sato (Ground 4); Claims 6 and 8 are Obvious in Light of
`Stefik in View of Ahmad, Kopp, and Sato (Ground 5);
`Claims 10 and 11 are Obvious in Light of Stefik in View of
`Ahmad and Ginter (Ground 6); Claims 10 and 11 are Ob-
`vious in Light of Stefik in View of Ahmad, Kopp, and
`Ginter (Ground 7) ................................................................................ 53
`Claim 11 is indefinite under §112(b) ............................................................. 78
`D.
`CONCLUSION........................................................................................................... 79
`
`V.
`
`
`iii
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`EXHIBIT LIST
`1201
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`1202
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`1203
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`1204
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`1205
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`1206
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`1207
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`1208
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`1209
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`1210
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`1211
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`1212
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`1213
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`1214
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`1215
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`1216
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`1217
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`1218
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`1219
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` Covered Business Method Patent Review
`United States Patent No. 8,033,458
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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
`
`U.S. Patent No. 4,999,806
`
`U.S. Patent No. 5,675,734
`
`Russell Housley and Jan Dolphin, “Metering: A Pre-pay
`Technique,” Storage and Retrieval for Image and Video Data-
`bases V, Conference Volume 3022, 527 (January 15, 1997)
`U.S. Patent No. 4,878,245
`
`U.S. Patent No. 7,334,720
`
`U.S. Patent No. 4,337,483
`
`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
`
`International Publication No. WO 99/43136
`
`JP Patent Application Publication No. H11-164058 (transla-
`tion)
`Eberhard von Faber, Robert Hammelrath, and Franz-Peter
`Heider, “The Secure Distribution of Digital Contents,” IEEE
`(1997)
`
`iv
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`United States Patent No. 8,033,458
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`Declaration of Anthony J. Wechselberger In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`Declaration of Michael P. Duffey In Support of Apple Inc.’s
`Petition for Covered Business Method Patent Review
`Declaration of Megan F. Raymond In Support of Apple Inc.’s
`Petition 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
`
`Claim Construction Memorandum Opinion from Smartflash
`LLC v. Apple Inc., No. 6:13cv447 (Dkt. 229)
`U.S. Patent No. 7,725,375
`
`EXHIBIT LIST
`1220
`
`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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`v
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` Covered Business Method Patent Review
`United States Patent No. 8,033,458
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`I.
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`INTRODUCTION
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`Pursuant to 35 U.S.C. § 321 and 37 C.F.R. § 42.304, 1 the undersigned, on be-
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`half of and acting in a representative capacity for petitioner, Apple Inc. (“Petitioner”
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`and the real party in interest), hereby petitions for review under the transitional pro-
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`gram for covered business method patents of claims 1, 6, 8, 10, and 11 (“the chal-
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`lenged claims”) of U.S. Patent No. 8,033,458 (“the ’458 Patent”), issued to Smartflash
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`Technologies Limited and assigned to Smartflash LLC (“Patentee”). Petitioner here-
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`by asserts that it is more likely than not that at least one of the challenged claims is
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`unpatentable for the reasons herein and requests review of, and judgment against,
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`claims 1, 6, 8, 10 and 11 as invalid under § 101, , claims 6, 8, 10, and 11 as unpatenta-
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`ble under §103, and claim 11 as unpatentable under §112.
`
`As discussed in Section III.B, infra, Petitioner previously filed CBM2014-
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`00106/107 seeking CBM review of the ’458 Patent. Those petitions were instituted
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`for trial (and consolidated2) with respect to claim 1 on grounds based on § 103, but
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`the Board did not institute trial on claims 6, 8, 10, or 11. In its Institution Decision,
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`1 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
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`numerous additional reasons. All emphasis herein added unless otherwise noted. All
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`section cites herein are to 35 U.S.C. or 37 C.F.R., as the context indicates, and all em-
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`phasis herein is added unless otherwise noted.
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`2 Petitioner concurrently moves for joinder of this petition and CBM2014-00102.
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`United States Patent No. 8,033,458
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`the Board determined that Petitioner had not shown it was more likely than not that it
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`would prevail in demonstrating that Stefik, Sato, and/or Poggio rendered obvious
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`“use status data,” which is required by claim 6 (and thus by dependent claims 8, 10
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`and 11). In particular, the Board found Petitioner had not sufficiently explained why
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`Stefik’s usage rights disclose “use status data” or fall within examples of “use status
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`data” provided in the ’458 Patent’s specification (e.g., past usage of stored data, that
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`stored data has not been accessed, number of times stored data has been accessed, du-
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`ration of access of stored data). In light of the Board’s Decision, Petitioner now
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`identifies herein additional prior art—Ahmad and Kopp (Exs. 1203 and 1205)—with
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`explicit disclosures of “use status data,” including data that meets particular examples
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`of “use status data” provided by the specification of the ’458 Patent. Ahmad, for ex-
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`ample, describes a software rental system that monitors an elapsed time of use record-
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`ed by a timer or a number of uses recorded by a counter to determine if a software
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`rental license has been exhausted (see, e.g., Ex. 1203 2:62-3:18), while Kopp discloses
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`checking recorded utilization data to determine if a licensed extent of utilization for a
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`data record has been exhausted (see, e.g., Ex. 1205 at 6:41-47). Petitioner has also iden-
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`tified additional disclosures in Stefik concerning this limitation of claims 8, 10, and 11,
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`further confirming a POSITA3 would have found it entirely obvious and routine to
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`3 All references to a person of ordinary skill in the art (“POSITA”) refer to the
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`knowledge or understanding of a POSITA as of October 25, 1999, unless specifically
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`2
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`United States Patent No. 8,033,458
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`implement the system disclosed by Stefik using the express and advantageous teach-
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`ings of Ahmad and Kopp, detailed in Section IV.C, infra, and in Ex. 1220.
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`The challenged claims of the ’458 Patent merely recite “[d]ata storage and ac-
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`cess systems [that] enable downloading and paying for data,” including a well-known
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`“portable data carrier” and a “data access device for retrieving stored data from a data
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`carrier.” Ex. 1201 at Abstract, claims 1 and 6. Independent Claim 1, for example, re-
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`cites six rudimentary components of a portable data carrier (e.g., smart card)—(A) an
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`interface, (B and C) non-volatile memory, (D) a program store storing code im-
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`plementable by a processor, (E) a processor . . . for implementing code, and (F) a
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`SIM (subscriber identity module) portion. The recited code is similarly elementary,
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`outputting payment data and providing external access to data memory (F):
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`1. A portable data carrier comprising:
`[A] an interface for reading and writing data from and to the carrier;
`[B] non-volatile data memory, coupled to the interface, for storing data on
`the carrier;
`[C] non-volatile payment data memory, coupled to the interface, for
`providing payment data to an external device;
`
`
`noted. A POSITA would have at least a Bachelor of Science degree in electrical
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`engineering, computer science or a telecommunications related field, and at least three
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`years of industry experience that included client-server data/information distribution
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`and management architectures. See Ex. 1220 ¶ 25.
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`United States Patent No. 8,033,458
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`[D] a program store storing code implementable by a processor;
`[E] a processor, coupled to the content data memory, the payment data
`memory, the interface and to the program store for implementing code in the
`program store; and
`[F] a subscriber identity module (SIM) portion to identify a subscriber to a
`network operator
`[F] wherein the code comprises code to output payment data from the
`payment data memory to the interface and code to provide external access
`to the data memory.
`Ex. 1201. But at the earliest claimed priority date, these simple elements and their
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`combination would have been all well known. Indeed, the patent itself acknowledges
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`that the idea of providing access to data in exchange for a payment (e.g., purchase of
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`music on a CD) was well known at the time. E.g., Ex. 1201 5:9-12 (“where the data
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`carrier stores … music, the purchase outright option may be equivalent to the purchase
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`of a compact disc (CD), preferably with some form of content copy protection such as
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`digital watermarking”). The idea of purchasing digital data for payment was similarly
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`well known. See, e.g., Ex. 1207. And, as shown herein, the prior art was teeming with
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`disclosures of this basic concept and its straightforward implementation.
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`Further, as its language makes clear, claim 1 involves no “technology” at all other
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`than a “portable data carrier” with interface, non-volatile memory, program
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`store/processor, and SIM features—which the patent itself concedes was well known
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`and entirely commonplace at the time. See e.g., Ex. 1201 11:28-29 (“standard smart
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`card”), 3:37, 4:9-13, 6:19-11, 11:27-44, 17:6-18:4, Figs. 2, 9. Thus, as the intrinsic rec-
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`ord reflects, Claim 1 recites nothing more than a system for reading and writing data
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`while outputting payment data. And the other challenged independent claim, relating
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`to a “data access device,” is nothing more than the computer system that retrieves da-
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`ta from the data carrier (smart card), id. 11:22-24, and contains equally generic com-
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`ponents (such as a user interface, program store, and processor).4 Indeed, the ’458
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`Patent states that “[t]he physical embodiment of the system is not critical and a skilled
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`person will understand that the terminals, data processing systems and the like can all
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`take a variety of forms.” See, e.g., id. Fig 1; 12:29-32. It is thus no surprise that each
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`element of the challenged claims of the ’458 Patent and their claimed combinations
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`have been disclosed in the prior art by those references or systems in combination.
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`Indeed, as confirmed by the Supreme Court’s recent decision in Alice Corp. Pty,
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`Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)—decided after Petitioner filed its origi-
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`4 Claim 6 further recites code for retrieving use status data, evaluating use status data
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`to determine if access to the data is permitted, and accessing the stored data when ac-
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`cess is permitted. Dependent claim 8 merely adds to claim 6 the well-known notion
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`of code for inputting user access data and receiving user access permission data. Id.
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`Dependent claim 10 merely adds to claim 6 and 8 the well-known notion of code for
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`retrieving and outputting supplementary data. Id. Dependent claim 11 states that
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`“said use rules” permit partial use of data and corresponding code. Id.
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`5
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`United States Patent No. 8,033,458
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`nal petitions challenging the ’458 Patent—claim 1 and the remaining challenged
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`claims are also directed to patent-ineligible subject matter under § 101. As the Board
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`noted in its previous Institution Decision, “the ’458 patent makes clear that the assert-
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`ed novelty of the invention is not in any specific improvement of hardware, but in the
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`method of controlling access to data,” CBM2014-00106, Pap. No. 8, 12, and the chal-
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`lenged claims are directed to nothing more than the unpatentable abstract idea of pay-
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`ing for and controlling access to data, with at most the addition of well-known, rou-
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`tine and conventional features that do not render them patentable—in particular, ge-
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`neric computer implementation that cannot confer patentability on these patent-
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`ineligible abstractions. E.g., Alice, 134 S. Ct. at 2359-60.
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`Further, claim 11, which depends from claim 6, lacks antecedent basis and is
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`indefinite. Because each claim recites unpatentable subject matter, claims 6, 8, 10, 11
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`are obvious, and claim 11 is indefinite, all challenged claims should be invalidated.
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`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
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`digital products all would have been well-known to a POSITA, and their combination
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`as claimed also would have been well-known or at minimum obvious to a POSITA.
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`See, e.g., Ex. 1220 Sec. V. On March 12, 1991, for example, U.S. Pat. No. 4,999,806
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`(“Chernow,” filed Sept. 4, 1987) issued, disclosing a system and method for sale and
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`distribution of digital products by phone, and for content protection. See, e.g., Ex.
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`6
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`1206 Abstract (“A central station distributes software by telephone[,] accepts credit
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`card information, transmits an acceptance code to a caller and then terminates the call.
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`After verifying the credit card information, the station calls the purchaser back and continues with
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`the transaction only after receiving the acceptance code.”); 1:67-2:9 (objectives include
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`“provid[ing] a means for selling and distributing protected software using standard
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`telephone lines for transferring the software from the seller to the purchaser,” “per-
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`mit[ting] the purchaser to rent the protected software for a period of time after which
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`it will self destruct,” “rent[ing] the protected software for a specific number of runs
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`which would be useful, e.g., if the software were a game.”). Chernow thus discloses
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`making different types of access available, such as purchase versus rental, and further
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`discloses a Control Transfer Program and Primary Protection Program that ensures
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`the computer receiving a downloaded program does not have another program pre-
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`sent that could create unauthorized copies. See Ex. 1206 Abstract; 2:65-3:23. See also,
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`e.g., Ex. 1220 ¶ 30.
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`In April 1992, U.S. Patent No. 5,103,392 (“Mori,” filed Dec. 5, 1990) issued,
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`disclosing use-based charging for digital products. See, e.g., Ex. 1212 1:64-2:17:
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`The data processing apparatus includes user-specific credit data storage
`means for storing data identifying the user . . . and indicating credit for payment ca-
`pacity, use time length, or the like of the user of the data processing appa-
`ratus. Also included is use decision means for determining permission to use
`the program on the data processing apparatus on the basis of program-specific
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`data supplied from the program storage means or user-specific credit data
`supplied from the user-specific credit data storage means, the use deci-
`sion means delivering either an affirmative or negative signal corre-
`sponding to results of the decision. Also included is program use history
`storage means connected to the use decision means for storing program
`use history data . . ..
`Mori’s emphasis on assuring permission to access a program and compensation to
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`providers underscores the art’s focus on digital rights management (“DRM”), over
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`eight years before the claimed priority date. See, e.g., Ex. 1220 ¶ 33.
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`Exhibit 1216 (“Poggio”, pub’d Nov. 26, 1997) gives another example of secure
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`distribution with content protection, disclosing a “virtual vending machine” system
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`for sale and distribution of digital products. See, e.g., Ex. 1216 Abstract (“virtual vending
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`machine manages a comprehensive vending service for the distribution of licensed electronic data (i.e.,
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`products) over a distributed computer system. . . . [and] distributes licenses for the electronic data for
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`the complete product or for components thereof and for a variety of time frames, including permanent
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`licenses and rental period licenses. [It] provides . . . capability to obtain information regarding the
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`available products and the associated license fees and rental periods, to receive the product upon re-
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`ceipt of a corresponding electronic payment, and to reload the product during the term of the license.”).
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`Poggio, too, discloses different types of access, including rentals, and re-download ca-
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`pabilities for already-purchased content. See, e.g., id. See also, e.g., Ex. 1220 ¶ 34.
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`Also in 1997, Exhibit 1219, observed that “[e]lectronic commerce systems deal-
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`ing with the distribution of digital contents like software or multimedia data have to
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`couple the use of the provided digital goods with a prior payment for the goods in a way which can-
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`United States Patent No. 8,033,458
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`not be bypassed.” See id. at 7. Von Faber proposes a system where customers pur-
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`chase keys required to utilize distributed encrypted content. See, e.g., id. (“The basic
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`idea of one possible solution is to distribute the contents in encrypted form, and to have the cus-
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`tomer pay for the key which he needs to transform the encrypted content in an usable form. The se-
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`curity problem can in this way be transformed into a problem of key distribution.”); id.
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`at 8 (“The Content Provider provides digital contents in encrypted form being distributed by
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`the Content Distributor. The Key Management System holds the keys for the contents to be
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`decrypted. The Authorisation System permits the distribution of the appropriate key after settling
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`of the fees payable by the Customer, who will enjoy the decrypted digital contents. The role
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`of the Content Distributor is not essential for the subsequent discussion but, of
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`course, for the business to take place.”); see also Ex. 1219 at Fig. 1. Von Faber states
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`its system could be used for a variety of known distribution and payment methods,
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`and further addressed the known issue of payment distribution. See, e.g., Ex. 1219 at
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`13 (“The outlined system has the following characteristics: Different methods can be
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`used to distribute the encrypted contents (standard techniques). This includes broad-
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`casting, point-to-point networking, as well as offering disks. Different electronic pay-
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`ment methods can be integrated independent from the number of protocol steps
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`needed. This includes credit card based systems as well as electronic purses. This flex-
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`ibility leads to the fact that totally different authorisation methods can be integrated.”;
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`“The system will support re-selling in a simple way. Re-sellers can integrate other
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`manufacturer’s products into own packages without the need of signing any extra
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`contract. The system automatically divides the package price (payments) and guaran-
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`tees that the money is transferred to each Content Provider whose product has been
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`integrated into the package.”). See, e.g., Ex. 1220 ¶¶ 35-37.
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`Storage and utilization of content on portable devices, including mobile com-
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`munication devices such as cellular phones, was also well-known before the claimed
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`priority date. As one example, Ex. 1217 (“Rydbeck,” pub’d Aug. 26, 1999) discloses a
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`cellular phone as user device for storing digital content in non-volatile memory and
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`accessing that content. See, e.g., Ex. 1217 p. 5 (“Because of its integration into the cellular
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`phone, the digital entertainment module can share components already present in the cellular phone.
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`Such savings would not be available if a CD player were simply aggregated with the
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`phone. Further, the use of solid state RAM or ROM, as opposed to disc storage, elimi-
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`nates the need for bounce control circuitry. This enables the disclosed invention to provide
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`cellular communications and entertainment during leisure activities.”). And Exhibit 1218
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`(“Sato,” pub’d June 18, 1999), discloses storing media content onto and playing the
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`media content from mobile user devices. Sato further discloses storing that media
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`content on a removable IC card. See, e.g., Ex. 1218 ¶ 9 (“The portable music selection
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`and viewing device 70 provides a removable storage device 76 [which] is a memory card simi-
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`lar to, for example. . . an IC card. The user, after downloading the music software to
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`the storage device (medium) 76 of the portable music selection and viewing device 70
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`by operating the push buttons or the like on the main body 71, can enjoy this music
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`software on a display 72 or a receiver 74 of the portable music selection and viewing
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`device 70, and can also enjoy higher quality music playback by removing this storage device
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`(medium) and inserting it into another audio unit. [T]he user can store the music software from an-
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`other audio unit into the storage device 76 and enjoy music by inserting this storage unit 76
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`into this portable music selection and viewing device 70.”); ¶ 13 (“A music storage
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`device 240 connected to the music control unit 200 stores the music software. A mu-
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`sic storage medium 250 such as a magnetic card, magnetic tape, a CD, a DVD, or a
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`memory card such as an IC card stores the music software, and this storage medium 250
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`can be removed and used on other audio units.”). See, e.g., Ex. 1220 ¶¶ 40-41.
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`As these background and the additional examples detailed below in Section
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`IV.C illustrate, the prior art was rife with awareness and discussion of the same sup-
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`posed “invention” now memorialized in the challenged claims of the ’458 patent.
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`III. PETITIONER HAS STANDING
`A.
`The ’458 Patent is a “covered business method patent” under § 18(d)(1) of the
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`The ’458 Patent Is a Covered Business Method Patent
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`Leahy-Smith America Invents Act, Pub. L. 112-29 (“AIA”) and § 42.301, and Peti-
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`tioner certifies it is available for review under § 42.304(a). See also CBM2014-
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`00106/107, Pap. 8 (finding claim 1 of ’458 Patent satisfies requirement). Although
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`numerous claims of the ’458 qualify, a patent with even one claim covering a covered
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`business method is considered a CBM patent. See CBM 2012-00001, Doc. 36 at 26;
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`77 Fed. Reg. 48,709 (Aug. 14, 2012). Petitioner thus addresses here exemplary claim 1:
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`1. A portable data carrier comprising:
`[A] an interface for reading and writing data from and to the carrier;
`[B] non-volatile data memory, coupled to the interface, for storing data
`on the carrier;
`[C] non-volatile payment data memory, coupled to the interface, for
`providing payment data to an external device;
`[D] a program store storing code implementable by a processor;
`[E] a processor, coupled to the content data memory, the payment data
`memory, the interface and to the program store for implementing code
`in the program store; and
`[F] a subscriber identity module (SIM) portion to identify a subscriber to
`a network operator
`[F] wherein the code comprises code to output payment data from
`the payment data memory to the interface and code to provide external
`access to the data memory.
`1.
`Exemplary Claim 1 Is Financial In Nature
`A “covered business method patent” is “a patent that claims a method or corre-
`
`sponding apparatus for performing data processing or other operations used in the practice, admin-
`
`istration, or management of a financial product or service, except that the term does not in-
`
`clude patents for technological inventions.” AIA § 18(d)(1); 37 C.F.R. § 42.301. “The
`
`‘legislative history explains that the definition of covered business method patent was
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` Covered Business Method Patent Review
`United States Patent No. 8,033,458
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`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,
`
`48,735 (Aug. 14, 2012) (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (state-
`
`ment of Sen. Schumer)). “[F]inancial product or service” is to be interpreted broadly,
`
`id., and the term “financial . . . simply means relating to monetary matters”—it does
`
`not require any link to traditional financial industries such as banks. See, e.g.,
`
`CBM2012-00001, Paper 36 at 23.
`
`The Board has previously found, e.g., that a claim for “transferring money elec-
`
`tronically via a telecommunication line to the first party . . . from the second party”
`
`met the financial product or service requirement, 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 14 at 11-12. See also, e.g.,
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`CBM2013-00017, Paper 8 at 5-6 (finding patent sufficiently financial based on refer-
`
`ence in the specification to e-commerce and the fact that “[a] person of ordinary skill
`
`in the art would have understood that [one of the claim limitations] may be associated
`
`with financial services”).
`
`The ’458 Patent includes claims directed to a “portable data carrier” (e.g., a
`
`standard smart card) that stores content, use rules, payment data, and code that pro-
`
`vides payment data to a payment validation system. See AIA § 18(d)(1); 37 C.F.R.
`
`§ 42.301(a). The patent alleges that this allows content owners to make content avail-
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` Covered Business Method Patent Review
`United States Patent No. 8,033,458
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`able to users without fear of losing of revenue. Ex. 1201 2:11-15. More generally, the
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`patent is about “[d]ata storage and access systems [that] enable downloading and pay-
`
`ing for data . . .” Id. Abstract. “The combination of payment data and stored content
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`data . . . helps reduce the risk of unauthorized access to data.” Id. And in asserting
`
`the patent, Smartflash conceded that the alleged invention relates to a financial activity
`
`or transaction, stating “[t]he patents-in-suit generally cover a portable data carrier for
`
`storing data and managing access to the data via payment information and/or use status rules.
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`The patents-in-suit also generally cover a computer network . . . that serves data and
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`manages access to data by, for example, validating payment information.” Ex. 1202 ¶ 17.
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`Indeed, the specification confirms the “portable data carrier” is “for storing
`
`and paying for data.” Ex. 1201 1:22. Claim 1 further requires memory to store pay-
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`ment data and code to “output payment data from the payment data memory to the in-
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`terface . . . .” Id. 26:1-3. Thus Claim 1, which explicitly describes storing and provid-
`
`ing payment data to a payment validation system, concerns a computer system (correspond-
`
`ing to methods claimed elsewhere in the patent family) for performing data processing
`
`and other operations used in the practice, administration, or management of a financial activity
`
`and service. Indeed, claim 1 expressly recites software to perform data processing and
`
`other operations in connection with providing and outputting “payment data.” See
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`CBM2013-00020, Pap. 14, 9-10 (“the electronic transfer of money is a financial activi-
`
`ty, and allowing such a transfer amounts to providing a financial service.”). See also
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` Covered Business Method Patent Review
`United States Patent No. 8,033,458
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`AIA § 18(d)(1); 37 C.F.R. § 42.301(a); 77 Fed. Reg. 48,734, 48,735 (Aug. 14, 2012)
`
`(“[T]he definition of [CBM] was drafted to encompass patents ‘claiming activities that
`
`are financial in nature, incidental to a financial activity or complementary to a financial
`
`activity.’”) (citation omitted).
`
`2.
`Further, claim 1 is not a “technological invention” that would trigger the excep-
`
`Claim 1 Does Not Cover A Technological Invention
`
`tion in AIA § 18(d)(1), because it does not claim “subject matter as a whole [that] re-
`
`cites a technological feature that is novel and unobvious over the prior art[] and solves a
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`technical problem using a technical solution.” § 42.301(b). To the contrary, the ’458 patent
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`itself makes clear that its claimed “portable data carrier” was a commonplace device
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`that could be implemented using well-known industry standards.
`
`(a) Claim 1 Does Not Recite A Technological Feature
`That Is Novel and Unobvious
`
`First, no “technological feature” of claim 1 is novel and unobvious. The PTO
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`has confirmed that “[m]ere recitation of known technologies, such as computer hard-
`
`ware, communication or com