Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 11
`Entered: May 28, 2015
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00028
`Patent 7,334,720 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`MATTHEW R. CLEMENTS, and GREGG I. ANDERSON,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`Tel: 571-272-7822
`
`Paper 11
`Entered: May 28, 2015
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00028
`Patent 7,334,720 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`MATTHEW R. CLEMENTS, and GREGG I. ANDERSON,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`A. Background
`
`INTRODUCTION
`
`Apple Inc. filed a Corrected Petition requesting covered business
`
`method patent review of claims 1 and 2 (the “challenged claims”) of U.S.
`
`Patent No. 7,334,720 B2 (Ex. 1201, “the ’720 patent”) pursuant to § 18 of
`
`the Leahy-Smith America Invents Act (“AIA”).1 Paper 5 (“Pet.”).
`
`Smartflash LLC filed a Preliminary Response (Paper 8, “Prelim. Resp.”).
`
`We have jurisdiction under 35 U.S.C. § 324, which provides that a
`
`covered business method patent review may not be instituted “unless . . . it is
`
`more likely than not that at least 1 of the claims challenged in the petition is
`
`unpatentable.”
`
`Upon consideration of the Petition and Preliminary Response, we
`
`determine that Apple has demonstrated that it is more likely than not that the
`
`challenged claims are unpatentable. Accordingly, we institute a covered
`
`business method review of claims 1 and 2 of the ’720 patent.
`
`B. Asserted Grounds
`
`Apple argues that the challenged claims are unpatentable based on the
`
`following grounds (Pet. 19):
`
`Basis Claims Challenged
`§ 101 1 and 2
`§ 103 1
`§ 103 1
`§ 103 1
`
`References
`Not Applicable
`Stefik2 and Ahmad3
`Stefik, Ahmad, and Kopp4
`Stefik, Ahmad, and Maari5
`
`1 Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011).
`2 U.S. Patent No. 5,530,235 (Ex. 1212) (“Stefik ’235”), and U.S. Patent No.
`5,629,980 (Ex. 1213) (“Stefik ’980”) (collectively, “Stefik”).
`3 U.S. Patent No. 5,925,127 (Ex. 1203) (“Ahmad”).
`4 U.S. Patent No. 5,940,805 (Ex. 1204) (“Kopp”).
`
`2
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`Stefik, Ahmad, Kopp, and Maari § 103 1
`
`Apple also provides a declaration from Anthony J. Wechselberger.
`
`Ex. 1219.
`
`C. Related Matters
`
`The parties indicate that the ’720 patent is the subject of the following
`
`district court cases: Smartflash LLC v. Apple Inc., Case No. 6:13-cv-447
`
`(E.D. Tex.); Smartflash LLC v. Samsung Electronics Co., Case No. 6:13-cv-
`
`448 (E.D. Tex.). Pet. 18; Paper 6, 3. Smartflash also indicates that the ’720
`
`patent is the subject of a third district court case: Smartflash LLC v. Google,
`
`Inc., Case No. 6:14-cv-435 (E.D. Tex.). Paper 6, 3.
`
`Apple previously filed two Petitions for covered business method
`
`patent review of the ’720 Patent: CBM2014-00104 and CBM2014-00105.
`
`A covered business method patent review was denied in both cases. Apple
`
`Inc. v. Smartflash LLC, Case CBM2014-00104, slip op. at 20 (PTAB Sept.
`
`30, 2014) (Paper 9); Apple Inc. v. Smartflash LLC, Case CBM2014-00105,
`
`slip op. at 21 (PTAB Sept. 30, 2014) (Paper 9). Several related patents,
`
`which claim priority back to a common series of applications are currently
`
`the subject of CBM2014-00102, CBM2014-00106, CBM2014-00108,
`
`CBM2014-00112, CBM2015-00015, CBM2015-00016, CBM2015-00017,
`
`and CBM2015-00018, filed by Apple. The ’720 patent also is the subject of
`
`CBM2014-00190, filed by another Petitioner.
`
`Apple filed a concurrent Petition for covered business method patent
`
`review of the ’720 patent: CBM2015-00029. In addition, Apple
`
`concurrently filed three other Petitions for covered business patent review
`
`
`5 JP Patent Application Publication No. H10-269289 (including translation),
`published October 9, 1998 (Ex. 1228) (“Maari”).
`
`3
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`challenging claims of othr patents owned by Smartflash, which disclose
`
`similar subject matter: CBM2015-00031, CBM2015-00032, and CBM2015-
`
`00033.
`
`D. The ’720 Patent
`
`The ’720 patent relates to “a portable data carrier for storing and
`
`paying for data and to computer systems for providing access to data to be
`
`stored” and the “corresponding methods and computer programs.”
`
`Ex. 1001, 1:6–10. Owners of proprietary data, especially audio recordings,
`
`have an urgent need to address the prevalence of “data pirates,” who make
`
`proprietary data available over the Internet without authorization. Id. at
`
`1:15–41. The ’720 patent describes providing portable data storage together
`
`with a means for conditioning access to that data upon validated payment.
`
`Id. at 1:46–62. According to the ’720 patent, this combination of the
`
`payment validation means with the data storage means allows data owners to
`
`make their data available over the Internet without fear of data pirates. Id. at
`
`1:62–2:3.
`
`As described, the portable data storage device is connected to a
`
`terminal for Internet access. Id. at 1:46–55. The terminal reads payment
`
`information, validates that information, and downloads data into the portable
`
`storage device from a data supplier. Id. The data on the portable storage
`
`device can be retrieved and output from a mobile device. Id. at 1:56–59.
`
`The ’720 patent makes clear that the actual implementation of these
`
`components is not critical, and the alleged invention may be implemented in
`
`many ways. See, e.g., id. at 26:13–16 (“The skilled person will understand
`
`that many variants to the system are possible and the invention is not limited
`
`to the described embodiments.”).
`
`4
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`E. Illustrative Claim
`
`As noted above, Apple challenges claims 1 and 2. Claim 1 is
`
`independent and claim 2 depends from claim 1. Claim 1 is illustrative of the
`
`claimed subject matter and is reproduced below:
`
`1. A method of controlling access to content data on a
`data carrier, the data carrier comprising non-
`volatile data memory storing content memory and
`non-volatile parameter memory storing use status
`data and use rules, the method comprising:
`
`receiving a data access request from a user for at least one
`content item of the content data stored in the non-volatile data
`memory;
`
`reading the use status data and use rules from the parameter
`memory that pertain to use of the at least one requested content
`item;
`
`evaluating the use status data using the use rules to determine
`whether access to the at least one requested content item stored
`in the content memory is permitted; and
`
`displaying to the user whether access is permitted for each of
`the at least one requested content item stored in the non-volatile
`data memory.
`
`Id. at 26:17–36.
`
`A. Claim Construction
`
`ANALYSIS
`
`While Apple presents constructions for several claim terms, no terms
`
`require express construction for purposes of this Decision.
`
`B. Covered Business Method Patent
`
`Section 18 of the AIA provides for the creation of a transitional
`
`program for reviewing covered business method patents. A “covered
`
`business method patent” is a patent that “claims a method or corresponding
`
`apparatus for performing data processing or other operations used in the
`
`5
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`practice, administration, or management of a financial product or service,
`
`except that the term does not include patents for technological inventions.”
`
`AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). A patent need have only one
`
`claim directed to a covered business method to be eligible for review. See
`
`Transitional Program for Covered Business Method Patents—Definitions of
`
`Covered Business Method Patent and Technological Invention; Final Rule,
`
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8).
`
`1. Financial Product or Service
`
`Apple asserts that claim 2 “explicitly describes storing payment data
`
`as well as restricting access to content based on payment, and therefore
`
`clearly relates to a financial activity and providing a financial service.” Pet.
`
`12. Based on this record, we agree with Apple that the subject matter recited
`
`by claim 2 is directed to activities that are financial in nature, namely
`
`“wherein said parameter memory further stores payment data and further
`
`comprising selecting one of said use rules dependent upon said payment
`
`data,” which is recited in the claim. We are persuaded that storing payment
`
`data and restricting access to content based on such payment data is a
`
`financial activity, and conditioning data access based on the payment data
`
`amounts to a financial service. This is consistent with the Specification of
`
`the ’720 patent, which confirms claim 2’s connection to financial activities
`
`by stating that the invention “relates to a portable data carrier for storing and
`
`paying for data.” Ex. 1201, 1:6–7. The Specification also states repeatedly
`
`that the disclosed invention involves managing access to data based on
`
`payment validation. See, e.g., Ex. 1201, 1:46–49, 2:4–19, 3:19–27, 3:50–54,
`
`7:62–8:9, 8:21–35.
`
`6
`
`
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`CBM2015-00028
`Patent 7,334,720 B2
`
` Smartflash disagrees that claim 2 satisfies the financial in nature
`
`requirement of AIA § 18(d)(1), arguing that that section should be
`
`interpreted narrowly to cover only technology used specifically in the
`
`financial or banking industry. Prelim. Resp. 5–10. Smartflash cites to
`
`various portions of the legislative history as support for its proposed
`
`interpretation. Id.
`
`Although we agree with Smartflash that the statutory language
`
`controls whether a patent is eligible for a covered business method patent
`
`review, we do not agree that the phrase “financial product or service” is as
`
`limited as Smartflash proposes. The AIA does not include as a prerequisite
`
`for covered business method patent review, a “nexus” to a “financial
`
`business,” but rather a “method or corresponding apparatus for performing
`
`data processing or other operations used in the practice, administration, or
`
`management of a financial product or service.” AIA § 18(d)(1). Further,
`
`contrary to Smartflash’s view of the legislative history, the legislative
`
`history indicates that the phrase “financial product or service” is not limited
`
`to the products or services of the “financial services industry” and is to be
`
`interpreted broadly. CBM Rules, 77 Fed. Reg. at 48,735–36. For example,
`
`the “legislative history explains that the definition of covered business
`
`method patent was drafted to encompass patents ‘claiming activities that are
`
`financial in nature, incidental to a financial activity or complementary to a
`
`financial activity.’” Id. (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8,
`
`2011) (statement of Sen. Schumer)).
`
`In addition, Smartflash asserts that claim 2 is not directed to an
`
`apparatus or method that is financial in nature because claim 1 “omits the
`
`specifics of how payment is made.” Prelim. Resp. 10. We are not
`
`7
`
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`CBM2015-00028
`Patent 7,334,720 B2
`
`persuaded by this argument because § 18(d)(1) of the AIA does not include
`
`such a requirement, nor does Smartflash point to any other authority that
`
`imposes such a requirement. Id. We determine that because claim 2 recites
`
`storing payment data and restricting access content based on such payment
`
`data, as Smartflash acknowledges (id.), the financial in nature requirement of
`
`§ 18(d)(1) is satisfied.
`
`For the reasons stated above, and based on the particular facts of this
`
`proceeding, we conclude that the ’720 patent includes at least one claim that
`
`meets the financial in nature requirement of § 18(d)(1) of the AIA.
`
`2. Exclusion for Technological Inventions
`
`Apple asserts that claim 2 does not fall within § 18(d)(1)’s exclusion
`
`for “technological inventions.” Pet. 13–17. In particular, Apple argues that
`
`claim 1 “does not claim ‘subject matter as a whole [that] recites a
`
`technological feature that is novel and unobvious over the prior art[] and
`
`solves a technical problem using a technical solution.’” Pet. 13 (quoting 37
`
`C.F.R. § 42.301(b)) (emphases in original). Smartflash disagrees and argues
`
`that claim 2, as a whole, recites at least one technological feature that is
`
`novel and unobvious over the prior art. Prelim. Resp. 11.
`
`We are persuaded that claim 2 as a whole does not recite a
`
`technological feature that is novel and unobvious over the prior art. For
`
`example, claim 1, from which claim 2 depends, recites only features such as
`
`“nonvolatile data memory,” “parameter memory,” and “content memory.”
`
`Dependent claim 2 adds only that “said parameter memory further stores
`
`payment data.” The Specification does not indicate, nor does Smartflash
`
`provide any support, that these features are not novel and nonobvious.
`
`Furthermore, even assuming claim 2 requires a “data carrier,” the
`
`8
`
`
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`CBM2015-00028
`Patent 7,334,720 B2
`
`Specification discloses, for instance, that a portable data carrier may be a
`
`“standard smart card.” See Ex. 1201, 11:36–39.
`
`In addition, the ’720 patent makes clear that the asserted novelty of
`
`the invention is not in any specific improvement of software or hardware,
`
`but in the method of controlling access to data. For example, the ’720 patent
`
`states that “there is an urgent need to find a way to address the problem of
`
`data piracy,” (id. at 1:40–41) while acknowledging that the “physical
`
`embodiment of the system is not critical and a skilled person will understand
`
`that the terminals, data processing systems and the like can all take a variety
`
`of forms” (id. at 12:38–41). Thus, we determine that claim 2 is merely the
`
`recitation of a combination of known technologies, which indicates that it is
`
`not a patent for a technological invention. See Office Patent Trial Practice
`
`Guide, 77 Fed. Reg. 48, 756 48,764 (Aug. 14, 2012).
`
`Smartflash also argues that claim 2 falls within § 18(d)(1)’s exclusion
`
`for “technological invention” because it is directed to solving the
`
`technological problem of “controlling access, according to access rules, to
`
`data (retrieved from a data supplier) stored on the data carrier” with the
`
`technological solution of “(1) reading use status data and use rules from
`
`parameter memory that pertain to use of a requested content item
`
`(2) evaluating the use status data using the use rules to determine whether
`
`access to the requested content item stored in the content memory is
`
`permitted.” Prelim. Resp. 11–12. We are not persuaded by this argument
`
`because, as Apple argues, the problem being solved by claim 2 is a business
`
`problem—data piracy. Pet. 16–17. For example, the Specification states
`
`that “[b]inding the data access and payment together allows the legitimate
`
`owners of the data to make the data available themselves over the internet
`
`9
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`CBM2015-00028
`Patent 7,334,720 B2
`
`without fear of loss of revenue, thus undermining the position of data
`
`pirates.” Ex. 1201, 1:66–2:3. Therefore, based on the particular facts of this
`
`proceeding, we conclude that claim 2 does not recite a technological
`
`invention and is eligible for a covered business method patent review.
`
`3. Conclusion
`
`In view of the foregoing, we conclude that the ’720 patent is a covered
`
`business method patent under AIA § 18(d)(1) and is eligible for review
`
`using the transitional covered business method patent review program.
`
`C. 35 U.S.C. § 101
`
`Apple challenges claims 1 and 2 as being directed to patent-ineligible
`
`subject matter under 35 U.S.C. § 101. Pet. 24–36. Smartflash does not
`
`address the merits of this challenge. See Prelim. Resp. 19. Analyzing the
`
`challenged claims using the two-step process applied recently in Alice Corp.
`
`Pty, Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347 (2014), Apple asserts that all the
`
`challenged claims are directed to an abstract idea without additional
`
`elements that transform the claims into a patent-eligible application of that
`
`idea. Pet. 25–38. Specifically, Apple argues that the challenged claims are
`
`directed to the abstract idea of “controlling access to content, including
`
`based on payment data.” Id. at 25.
`
`We agree with Apple that, on this record, the challenged claims of the
`
`’720 patent are more likely than not directed to patent-ineligible subject
`
`matter. Under 35 U.S.C. § 101, we must first identify whether an invention
`
`fits within one of the four statutorily provided categories of patent-
`
`eligibility: “processes, machines, manufactures, and compositions of
`
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–14 (Fed. Cir.
`
`2014). Here, each of the challenged claims recites a “process,” i.e., a
`
`10
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`
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`CBM2015-00028
`Patent 7,334,720 B2
`
`“method of controlling access to content data on a data carrier,” under § 101.
`
`Section 101, however, “contains an important implicit exception [to subject
`
`matter eligibility]: Laws of nature, natural phenomena, and abstract ideas
`
`are not patentable.” Alice, 134 S.Ct. at 2354 (2014) (citing Assoc. for
`
`Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2116 (2013)
`
`(internal quotation marks and brackets omitted)).
`
`We are persuaded that the challenged claims are more likely than not
`
`drawn to a patent-ineligible abstract idea. In Alice, the Supreme Court
`
`reiterated the framework set forth previously in Mayo Collaborative Servs.
`
`v. Prometheus Labs., 132 S.Ct. 1289, 1293 (2012) “for distinguishing
`
`patents that claim laws of nature, natural phenomena, and abstract ideas
`
`from those that claim patent-eligible applications of these concepts.” Alice,
`
`134 S.Ct. at 2355. The first step in the analysis is to “determine whether the
`
`claims at issue are directed to one of those patent-ineligible concepts.” Id.
`
`If so, the second step in the analysis is to consider the elements of the claims
`
`“individually and ‘as an ordered combination’” to determine whether there
`
`are additional elements that “‘transform the nature of the claim’ into a
`
`patent-eligible application.” Id. (quoting Mayo, 132 S.Ct. at 1291, 1297). In
`
`other words, the second step is to “search for an ‘inventive concept’—i.e., an
`
`element or combination of elements that is ‘sufficient to ensure that the
`
`patent in practice amounts to significantly more than a patent upon the
`
`[ineligible concept] itself.’” Id. (brackets in original) (quoting Mayo, 132 S.
`
`Ct. at 1294).
`
`Apple contends that each challenged claim is drawn to the concept of
`
`controlling access based on payment, a “well known ‘building block of the
`
`modern economy’ and a longstanding ‘method of organizing human activity’
`
`11
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`CBM2015-00028
`Patent 7,334,720 B2
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`long pre-dating the ’720 Patent.” Pet. 29. As discussed above, the ’720
`
`patent discusses addressing recording industry concerns of data pirates
`
`offering unauthorized access to widely available compressed audio
`
`recordings. Ex. 1001, 1:26–41. The ’720 patent proposes to solve this
`
`problem by restricting access to data on a portable data carrier based upon
`
`payment validation. Id. at 1:46–1:59. The ’720 patent makes clear that the
`
`heart of the claimed subject matter is restricting access to stored data based
`
`on supplier-defined access rules and validation of payment. Id. at 1:60–2:3.
`
`We are persuaded, on this record, that the challenged claims are directed to
`
`an abstract idea. See Alice, 134 S. Ct. at 2356 (holding that the concept of
`
`intermediated settlement at issue in Alice was an abstract idea); Accenture
`
`Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344
`
`(Fed. Cir. 2013) (holding the abstract idea at the heart of a system claim to
`
`be “generating tasks [based on] rules . . . to be completed upon the
`
`occurrence of an event” (brackets in original) (citation omitted)).
`
`Turning to the second step of the analysis, we look for additional
`
`elements that can “transform the nature of the claim” into a patent-eligible
`
`application of an abstract idea. Mayo, 132 S.Ct. at 1297. On this record, we
`
`are not persuaded that the challenged claims of the ’720 patent add an
`
`inventive concept sufficient to ensure that the patent in practice amounts to
`
`significantly more than a patent on the abstract idea itself. Alice, 134 S. Ct.
`
`at 2355; see also Accenture Global Servs., 728 F.3d at 1345 (holding claims
`
`directed to the abstract idea of “generating tasks [based on] rules . . . to be
`
`completed upon the occurrence of an event” to be unpatentable even when
`
`applied in a computer environment and within the insurance industry).
`
`12
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`CBM2015-00028
`Patent 7,334,720 B2
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`Apple contends that the “challenged claims simply instruct that the
`
`abstract ideas of payment for controlling access to data should be
`
`implemented in software and refer only to generic computer functions.” Pet.
`
`31. On this record, we are not persuaded that the recited limitations of the
`
`challenged claims, which include, for example, “receiving,” “reading,”
`
`“evaluating,” “displaying,” “nonvolatile data memory,” “parameter
`
`memory,” “content memory,” and “said parameter memory further stores
`
`payment data,” perform functions that are anything other than “purely
`
`conventional.” See Alice, 134 S.Ct. at 2359. Thus, on this record, we are
`
`not persuaded that any of the allegedly technical limitations viewed “both
`
`individually and ‘as an ordered combination,’” transform the nature of the
`
`claims into patent-eligible subject matter. See Alice, 134 S.Ct. at 2355
`
`(quoting Mayo, 132 S.Ct. at 1297, 1298).
`
`Having considered the information provided in the Petition and the
`
`Preliminary Response, we are persuaded that Apple has demonstrated that it
`
`is more likely than not that challenged claims 1 and 2 are unpatentable under
`
`35 U.S.C. § 101.
`
`Smartflash argues that Apple’s assertion of this ground is untimely
`
`because Apple “provides no valid reason why it did not raise this purely
`
`legal issue as grounds for invalidity in its two prior petitions filed long
`
`before [the instant Corrected Petition].” Prelim. Resp. 15–16. According to
`
`Smartflash,
`
`[A]llowing Apple to raise a new ground of invalidity that it
`could have and should have raised in its March 31, 2014
`petitions encourages Apple’s piecemeal invalidity challenges to
`Patent Owner’s patent claims and runs afoul of the [Board’s]
`charge to ‘secure the just, speedy, and inexpensive resolution’
`
`13
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`CBM2015-00028
`Patent 7,334,720 B2
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`of Apple’s covered business method challenges to the ‘720
`Patent.
`
`Id. at 16. Smartflash, however, cites no statutory or regulatory authority
`
`precluding Apple from asserting this ground. Moreover, Smartflash
`
`acknowledges that the Supreme Court’s June 19, 2014 decision in Alice was
`
`decided after Apple’s original petitions were filed in March 2014. Id. at 15–
`
`16. Thus, on this record, we are not persuaded that Apple’s assertion of a
`
`new ground based on 35 U.S.C. § 101 is untimely.
`
`Conclusion
`
`On this record, Apple has established that it is more likely than not
`
`that claims 1 and 2 of the ’720 patent are unpatentable under 35 U.S.C.
`
`§ 101.
`
`D. Obviousness Challenges
`
`Apple argues that claim 1 is unpatentable under 35 U.S.C. § 103(a) as
`
`obvious over: Stefik and Ahmad; Stefik, Ahmad, and Kopp; Stefik, Ahmad,
`
`and Maari; and Stefik, Ahmad, Kopp, and Maari. Pet. 19.
`
`A patent claim is unpatentable, under 35 U.S.C. § 103(a), if the
`
`differences between the claimed subject matter and the prior art are such that
`
`the subject matter, as a whole, would have been obvious at the time the
`
`invention was made to a person having ordinary skill in the art to which said
`
`subject matter pertains. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
`
`(2007). The question of obviousness is resolved on the basis of underlying
`
`factual determinations, including: (1) the scope and content of the prior art,
`
`(2) any differences between the claimed subject matter and the prior art,
`
`(3) the level of skill in the art, and (4) where in evidence, so-called
`
`secondary considerations. Graham v. John Deere Co., 383 U.S. 1, 17–18
`
`(1966).
`
`14
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`CBM2015-00028
`Patent 7,334,720 B2
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`After carefully considering the Petition and Preliminary Response, we
`
`determine that Apple has not shown that it is more likely than not that it
`
`would prevail in showing that claims 1 and 2 are unpatentable as obvious
`
`over any of the proposed obviousness combinations identified above. An
`
`obviousness inquiry is based on factual inquiries including the difference
`
`between the claimed invention and the prior art. Graham, 383 U.S. at 17–
`
`18. For each of the challenged claims, Apple has not identified sufficiently
`
`the differences between the claimed invention and each reference, or how
`
`the teachings of the references are to be combined, if at all. Pet. 49–75.
`
`Apple also has not shown that any of the individual references anticipate the
`
`challenged claims. Thus, it is unclear how Apple proposes that we do a
`
`proper Graham analysis to determine that the challenged claims are
`
`unpatentable.
`
`We cannot ascertain from the Petition, including the claim charts and
`
`the numerous attending footnotes, which disclosure of which prior art
`
`reference Apple is referring to as teaching or suggesting each limitation and
`
`why such disclosure satisfies the limitation. With respect to independent
`
`claim 1, for example, Apple cites Stefik for each claim limitation. Id. at 50–
`
`75. At the same time, Apple cites Ahmad, Kopp, and/or Maari for a
`
`majority of the limitations of claim 1. Id. With respect to the recited “use
`
`status data,” “use rules,” and “evaluating the use status data using the use
`
`rules” in claim 1, for example, Apple cites a number of portions of Stefik in
`
`the Petition’s claim chart, as well as portions of Ahmad and Kopp. See id. at
`
`61–70. Apple does not allege directly that Stefik alone teaches or renders
`
`obvious each limitation, yet, as noted above, Apple cites Stefik for each
`
`claim limitation. At the same time, Apple proposes combining a number of
`
`15
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`CBM2015-00028
`Patent 7,334,720 B2
`
`features from Ahmad and/or Kopp with the teachings of Stefik. Id. at 42–
`
`46, 64 n.47, 65 n.49.
`
`Moreover, in the “Motivation to Combine Stefik with Ahmad” section
`
`(id. at 42–44), Apple alleges that both Stefik and Ahmad “aim to enforce
`
`usage restrictions tied to content in order to prevent unauthorized access”
`
`and “[t]he teachings of Stefik and Ahmad render obvious various limitations
`
`of challenged claim 1, including ‘use status data,’ ‘use rules,’ and
`
`‘evaluating the use status data using the use rules to determine whether
`
`access . . . is permitted.’” Pet. 44. Apple notes that “the data usage
`
`controlling system taught by the combination of Stefik and Ahmad” teaches
`
`these limitations. Id. Similarly, in the “Motivation to Combine Stefik with
`
`Ahmad and Kopp” section (id. at 44–46), Apple indicates that “[t]he
`
`teachings of Stefik, Ahmad, and Kopp render obvious various limitations of
`
`challenged claim 1, including ‘use status data,’ ‘use rules,” and ‘evaluating
`
`the use status data using the use rules to determine whether access is
`
`permitted’” (id. at 46). Apple notes that “the data usage controlling system
`
`taught by the combination of Stefik and Ahmad in view of Kopp” teaches
`
`these limitations. Id.
`
`Apple’s analysis prevents us from determining what specific teaching
`
`is lacking in Stefik, for example (i.e., the differences between the claimed
`
`subject matter and Stefik). See Graham, 383 U.S. at 17–18. Apple’s claim
`
`charts, nor the numerous footnotes referenced therein, make clear the
`
`differences between the claimed subject matter and cited references. For
`
`example, with respect to “use status data” and “use rules,” the claim chart
`
`for claim 1 identifies various “usage rights” in Stefik (id. at 54–55, 61–62),
`
`and Apple contends that “[t]hese rules . . . disclosed in Stefik include some
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`16
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`CBM2015-00028
`Patent 7,334,720 B2
`
`of the same examples of content rules disclosed in the ’720 patent.” Id. at
`
`55, n.29. The claim chart, however, also alleges that Ahmad discloses a
`
`“software monitor and check-in/check-out modules” that store “use rules.”
`
`Id. at 58, n.34. Apple further contends that it would have been obvious “to
`
`implement Stefik’s repository configuration using Ahmad’s advantageous
`
`teachings of time-limiting rental restrictions.” Id. at 57, n.33. Similarly,
`
`Apple contends that “Kopp also expressly discloses storing use rules” (id. at
`
`59, n.36) and that it would have been obvious “to implement the content
`
`access control system taught by Stefik and Ahmad using Kopp’s
`
`advantageous teachings of utilization limitations.” Id. at 59–60, n.38.
`
`Nowhere does Apple explain any differences between the claimed
`
`invention and Stefik. As a result, it is not clear, for example, whether Apple
`
`is alleging that certain claim limitations are taught by Stefik, rendered
`
`obvious by Stefik, taught by Ahmad, Kopp, and/or Maari, or rendered
`
`obvious in view of Stefik, Ahmad, Kopp, and/or Maari. Given this
`
`ambiguity in the Petition, we cannot ascertain which reference to rely on for
`
`any given limitation or why a person of ordinary skill in the art would have
`
`found it obvious to combine that particular disclosed subject matter with the
`
`subject matter disclosed by the other references.
`
`We are, thus, not persuaded that Apple has shown that it is more
`
`likely than not that claim 1 would have been obvious over the combination
`
`of Stefik and Ahmad, the combination of Stefik, Ahmad, and Kopp, the
`
`combination of Stefik, Ahmad, and Maari, or the combination of Stefik,
`
`Ahmad, Kopp, and Maari.
`
`17
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`CBM2015-00028
`Patent 7,334,720 B2
`
`Conclusion
`
`On this record, Apple has not established that it is more likely than not
`
`that claim 1 is unpatentable as obvious over: Stefik and Ahmad; Stefik,
`
`Ahmad, and Kopp; Stefik, Ahmad, and Maari; or Stefik, Ahmad, Kopp, and
`
`Maari. For the same reasons, we are not persuaded that Apple has shown
`
`more likely than not that dependent claim 2 would have been obvious over:
`
`Stefik and Ahmad; Stefik, Ahmad, and Kopp; Stefik, Ahmad, and Maari; or
`
`Stefik, Ahmad, Kopp, and Maari.
`
`CONCLUSION
`
`For the foregoing reasons, we determine that the information
`
`presented in the Petition establishes that it is more likely than not that Apple
`
`would prevail in establishing the unpatentability of claims 1 and 2 of the
`
`’720 patent.
`
`The Board has not made a final determination on the patentability of
`
`any challenged claims.
`
`For the reasons given, it is:
`
`ORDER
`
`ORDERED that a covered business method patent review is instituted
`
`as to claims 1 and 2 under 35 U.S.C. § 101 as being directed to patent-
`
`ineligible subject matter under;
`
`FURTHER ORDERED that no other ground raised in the Petition is
`
`authorized for covered business method patent review; and
`
`FURTHER ORDERED that, pursuant to 35 U.S.C. § 324(d) and
`
`37 C.F.R. § 42.4, notice is hereby given of the institution of a trial on the
`
`grounds of unpatentability authorized above, the trial commencing on the
`
`entry date of this Decision.
`
`18
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`
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`CBM2015-00028
`Patent 7,334,720 B2
`
`PETITIONER:
`
`J. Steven Baughman
`Ching-Lee Fukuda
`ROPES & GRAY LLP
`steven.baughman@ropesgray.com
`ching-lee.fukuda@ropesgray.com
`
`
`PATENT OWNER:
`
`Michael R. Casey
`J. Scott Davidson
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`mcasey@dbjg.com
`jsd@dbjg.com
`
`19
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