Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 29
`Entered: November 16, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00125
`Patent 7,334,720 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, and
`MATTHEW R. CLEMENTS, 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 29
`Entered: November 16, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GOOGLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00125
`Patent 7,334,720 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, and
`MATTHEW R. CLEMENTS, Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`I. INTRODUCTION
`
`Google Inc. (“Google” or “Petitioner Google”) filed a Petition
`
`requesting covered business method patent review of claims 1 and 15 (the
`
`“challenged claims”) of U.S. Patent No. 7,334,720 (Ex. 1001, “the ’720
`
`patent”) (“Pet.,” Paper 3, 31). Smartflash LLC (“Smartflash”) filed a
`
`Preliminary Response (“Prelim. Resp.,” Paper 9).
`
`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.”
`
`On June 29, 2015, Google filed a Motion for Joinder (Paper 7, 1),
`
`seeking to consolidate this case with earlier-filed petitions for covered
`
`business method patent reviews of the ’720 patent in Apple Inc. v.
`
`Smartflash, LLC, CBM2015-00028 and CBM2015-00029 (collectively, the
`
`“Apple CBM Proceedings,” and “Petitioner Apple” when the Petitioner in
`
`those reviews is referenced), which were instituted on May 28, 2015. See
`
`Apple Inc. v. Smartflash, LLC, Case CBM2015-00028, slip. op. at 18 (PTAB
`
`May 28, 2015 (Paper 11) (instituting review of claims 1 and 2 of the ’720
`
`patent under 35 U.S.C. § 101); and Apple Inc. v. Smartflash, LLC, Case
`
`CBM2015-00029, slip. op. at 19 (Paper 11) (instituting review of claims 3
`
`and 15 of the ’720 patent under 35 U.S.C. § 101).
`
`
`1 Google filed two versions of the Petition: Paper 1, which is sealed and
`accessible to the parties and Board only, and Paper 3, which is a public
`version of the Petition containing a small portion of redacted text. For
`purposes of this Decision, we refer only to the public version of the Petition.
`
`2
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`Smartflash filed an Opposition to Samsung’s Motion for Joinder.
`
`Paper 8 (“Opp.”).
`
`For the reasons explained below, we institute a covered business
`
`method patent review of claims 1 and 15 of the ’720 patent and grant
`
`Google’s Motion for Joinder.
`
`II. INSTITUTION OF COVERED BUSINESS METHOD PATENT
`REVIEW ON SAME GROUND AS THOSE ASSERTED IN THE APPLE
`CBM PROCEEDINGS
`
`In view of the identity of the challenges in the instant Petition and
`
`those of the institutions in each of CBM2015-00028 and CBM2015-00029,
`
`we determine that it is more likely than not that Google will prevail in
`
`demonstrating that the claims challenged in Google’s present petition are
`
`unpatentable.
`
`Smartflash reiterates arguments in support of its position that the ’720
`
`patent is ineligible for covered business method patent. See Prelim. Resp.
`
`28–34. We previously have determined that the ’720 patent contains at least
`
`one claim that is eligible for covered business method patent review. AIA
`
`§ 18(d)(1); see 37 C.F.R. § 42.301(a); see also CBM2015-00028, Paper 11,
`
`5–10 (determining that the ’720 patent is eligible for covered business
`
`method patent review based on claim 2); CBM2015-00029, Paper 11, 6–12
`
`(determining that the ’720 patent is eligible for covered business method
`
`patent review based on claim 14); Samsung Electronics America, Inc. v.
`
`Smartflash LLC, Case CBM2014-00190, slip. op. at 7–11 (PTAB April 2,
`
`2015) (Paper 9) (determining that the ’720 patent is eligible for covered
`
`business method patent review based on claim 14). See Transitional
`
`Program for Covered Business Method Patents—Definitions of Covered
`
`3
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`Business Method Patent and Technological Invention; Final Rule, 77 Fed.
`
`Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8) (A
`
`patent need have only one claim directed to a covered business method to be
`
`eligible for review).
`
`Smartflash’s arguments in the present preliminary response do not
`
`alter our determination. For example, Apple again argues that AIA
`
`§ 18(d)(1) should be interpreted narrowly to cover only technology used
`
`specifically in the financial or banking industry. Prelim. Resp. 30–32. The
`
`Federal Circuit has expressly determined, however, that “the definition of
`
`‘covered business method patent’ is not limited to products and services of
`
`only the financial industry, or to patents owned by or directly affecting the
`
`activities of financial institutions, such as banks and brokerage houses.”
`
`Versata Dev. Grp., Inc. v. SAP America, Inc., 793 F.3d 1306, 1325 (Fed. Cir.
`
`2015). Rather, “it covers a wide range of finance-related activities.” Id.
`
`Furthermore, we have reviewed Smartflash’s present preliminary
`
`response and are not persuaded that we should deny institution of the present
`
`petition. For example, in support of its argument that the challenged claims
`
`are directed to statutory eligible subject matter, Smartflash relies heavily on
`
`DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), a
`
`decision that issued before we instituted each of the Apple CBM
`
`proceedings. See Prelim. Resp. at 10–13. Smartflash also argues that the
`
`challenged claims do not result in inappropriate preemption (Prelim. Resp.
`
`13–22) and alleges that “[t]he existence of a large number of non-infringing
`
`alternatives shows that the claims of the ’720 patent do not raise preemption
`
`concerns” (Prelim. Resp. 17–19). The Federal Circuit, however, has
`
`recently acknowledged that “questions on preemption are inherent in and
`
`4
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`resolved by the § 101 analysis.” Ariosa Diagnostics, Inc. v. Sequenom, Inc.,
`
`788 F.3d 1371, 1379 (Fed. Cir. 2015). The Federal Circuit further stated,
`
`While preemption may signal patent ineligible subject matter,
`the absence of complete preemption does not demonstrate
`patent eligibility. In this case, Sequenom’s attempt to limit the
`breadth of the claims by showing alternative uses of cffDNA
`outside of the scope of the claims does not change the
`conclusion that the claims are directed to patent ineligible
`subject matter. Where a patent’s claims are deemed only to
`disclose patent ineligible subject matter under the Mayo
`framework, as they are in this case, preemption concerns are
`fully addressed and made moot.
`
`Id. (emphasis added).
`
`Smartflash further asserts that (1) the Office is estopped from
`
`revisiting the issue of § 101, which was inherently reviewed during
`
`examination (Prelim. Resp. 23–24); (2) invalidating patent claims via
`
`covered business method patent review is unconstitutional (id. at 24–25);
`
`and (3) section 101 is not a ground that may be raised in a covered business
`
`method patent review (id. at 26–28). For the following reasons, we are not
`
`persuaded by these arguments.
`
`As an initial matter, Smartflash does not provide any authority for its
`
`assertion that “[t]he question of whether the challenged claims are directed
`
`to statutory subject matter has already been adjudicated by the USPTO, and
`
`the USPTO is estopped from allowing the issues to be raised in the present
`
`proceeding.” Id. at 23.
`
`Smartflash also argues that invalidating patent claims via covered
`
`business method patent review “violates the Separation of Powers doctrine
`
`of the United States Constitution” (id. at 24). We decline to consider
`
`Smartflash’s constitutional challenge as, generally, “administrative agencies
`
`5
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`do not have jurisdiction to decide the constitutionality of congressional
`
`enactments.” See Riggin v. Office of Senate Fair Employment Practices, 61
`
`F.3d 1563, 1569 (Fed. Cir. 1995); see also Harjo v. Pro-Football, Inc., 50
`
`U.S.P.Q.2d 1705, 1999 WL 375907, at *4 (TTAB Apr. 2, 1999) (“[T]he
`
`Board has no authority . . . to declare provisions of the Trademark Act
`
`unconstitutional.”); Blackhorse v. Pro-Football, Inc., 111 U.S.P.Q.2d 1080,
`
`2014 WL 2757516, at *1 n.1 (TTAB June 18, 2014); but see American
`
`Express Co. v. Lunenfeld, Case CBM2014-00050, slip. op. at 9–10 (PTAB
`
`May 22, 2015) (Paper 51) (“for the reasons articulated in Patlex, we
`
`conclude that covered business method patent reviews, like reexamination
`
`proceedings, comply with the Seventh Amendment”).
`
`As to Smartflash’s remaining argument, Smartflash concedes that the
`
`Federal Circuit, in Versata, found that “‘the PTAB acted within the scope of
`
`its authority delineated by Congress in permitting a § 101 challenge under
`
`AIA § 18.’” Id. at 26 n.1 (quoting Versata Dev. Grp., Inc. v. SAP America,
`
`Inc., 793 F.3d 1306, 1330 (Fed. Cir. 2015). We conclude that our review of
`
`the issue of § 101 here is proper.
`
`Accordingly, we institute a covered business method patent review in
`
`this proceeding on the same ground, namely § 101, as that on which we
`
`instituted in the Apple CBM proceedings for claims 1 and 15 of the ’720
`
`patent. We do not institute a covered business method patent review on any
`
`other ground.
`
`III. GRANT OF MOTION FOR JOINDER
`
`Smartflash opposes Samsung’s request to consolidate the present
`
`petition with the Apple CBM proceedings. Paper 8. Smartflash opposes
`
`consolidation for the following reasons: “(i) it is too late for the proposed
`
`6
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`joinder to provide the purported efficiencies Petitioner suggests; (ii) the
`
`cases are sufficiently different in terms of proffered exhibits and witnesses to
`
`gain any advantage by joinder; and (iii) the Board should exercise its
`
`discretion under 35 U.S.C. § 325(d) and decline to institute a covered
`
`business method patent review of claims 1 and 15 of U.S. Patent 7,334,734
`
`on 35 U.S.C. § 101 grounds in CBM2015-00125 because it has already
`
`instituted covered business method review of those claims on the same
`
`grounds in CBM2015-00028 and -00029.” Id. at 1.
`
`We are not persuaded by Smartflash’s argument. Smartflash contends
`
`that it is too late for the proposed consolidation to provide efficiencies
`
`because the Apple CBM proceedings have proceeded through Patent Owner
`
`discovery with Patent Owner’s Response being filed on July 29, 2015, and
`
`Apple’s proposed schedule for consolidation is “impractical.” Opp. 2–3. To
`
`address this concern, however, we determine that the Scheduling Order in
`
`place for CBM2015-00028 and CBM2015-00029 shall govern the
`
`consolidated proceedings. Smartflash next argues that there is not complete
`
`overlap in exhibits and witnesses relied upon by Google and the record in
`
`the Apple CBM proceedings. Id. at 4–5. Thus, contends Smartflash,
`
`“[consolidation] would force Patent Owner to respond to different sets of
`
`evidence simultaneously, on a compressed schedule, and in more limited
`
`space.” Id. at 5.
`
`However, Google acknowledges that to the extent we determine that
`
`“incorporating Google’s arguments and evidence in the Apple CBMs would
`
`complicate the schedules, Google requests [consolidation] as to Apple’s
`
`petitions so that Google can, at minimum, ensure that the proceedings on the
`
`challenged claims continue in the event Apple settles or otherwise
`
`7
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`terminates the proceedings.” Mot. 8–9. To address Smartflash’s concerns,
`
`trial will proceed on the basis of the argument and evidence presented by
`
`Petitioner Apple in each of the Apple CBM proceedings without submission
`
`of additional evidence from Petitioner Google. Any additional evidence,
`
`papers, and briefing filed on behalf of Petitioner Apple and Petitioner
`
`Google in the consolidated proceedings shall be filed by Petitioner Apple, as
`
`a consolidated filing, unless we provide authorization otherwise, as noted
`
`below. Furthermore, Petitioner Apple will argue on behalf of Petitioners at
`
`the oral hearing, if any, for these consolidated cases. Lastly, Smartflash
`
`argues that we should exercise our discretion under 35 U.S.C. § 325(d) by
`
`declining to institute a review in the instant case because we have already
`
`instituted review of the same challenged claims “on the same purely legal
`
`§ 101 grounds in” the Apple CBM proceedings. Opp. 6. We decline to
`
`exercise our discretion under § 325(d) because we consolidate these
`
`proceedings based on the same schedule, evidence, and argument proffered
`
`in the Apple CBM proceedings.
`
`As noted above, we instituted the Apple CBM proceedings on May
`
`28, 2015. Google filed the instant petition on May 6, 2015, and its Motion
`
`for Joinder was filed on June 29, 2015. Mot. 2; Paper 7. Thus, Google’s
`
`request satisfies the requirement that the consolidation request be made no
`
`later than one month after the institution date of the Apple CBM
`
`proceedings. See 35 U.S.C. § 325(c) and 37 C.F.R. §§ 42.22 and 42.222(b);
`
`Fed. R. Civ. P. 6(a). As noted above, the only ground upon which we
`
`institute a covered business method patent review in this proceeding is a
`
`challenge to claims 1 and 15 of the ’720 patent based on § 101. Google,
`
`thus, does not assert any new ground of unpatentability that is not already
`
`8
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`being considered in the Apple CBM proceedings. Mot. 7. Under the
`
`circumstances, we conclude Google has demonstrated that consolidation will
`
`not unduly complicate or delay the Apple CBM proceedings, and therefore,
`
`we grant Google’s Motion for Joinder to consolidate this proceeding with
`
`each of the Apple CBM proceedings, CBM2015-00028 and CBM2015-
`
`00029, as follows. We consolidate Google’s challenge to claim 1 based on
`
`§ 101 to CBM2015-00028, and Google’s challenge to claim 15 based on
`
`§ 101 to CBM2015-00029. All filings in the consolidated proceedings will
`
`be made by Petitioner Apple in each of the Apple CBM proceedings.
`
`Petitioner Google shall not file any separate papers or briefing in these
`
`consolidated proceedings without authorization from the Board. In addition,
`
`Petitioner Google shall not seek any additional discovery beyond that sought
`
`by Petitioner Apple. Petitioner Apple and Petitioner Google shall resolve
`
`any disputes between them concerning the conduct of the consolidated
`
`proceedings and shall contact the Board if any such matters cannot be
`
`resolved. No additional burdens shall be placed on Smartflash as a result of
`
`the consolidation. In consideration of the above, we institute a covered
`
`business method patent review in CBM2015-00125 and grant Petitioner’s
`
`Google’s motion to consolidate this proceeding with each of the Apple CBM
`
`proceedings as stated above.
`
`For the reasons given, it is:
`
`ORDER
`
`ORDERED that the challenge to claims 1 and 15 in CBM2015-00125
`
`is instituted;
`
`FURTHER ORDERED that Google’s challenge to claim 1 based on
`
`§ 101 is consolidated with CBM2015-00028;
`
`9
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`FURTHER ORDERED that Google’s challenge to claim 15 based on
`
`§ 101 is consolidated with CBM2015-00029;
`
`FURTHER ORDERED that the grounds on which CBM2015-00028
`
`and CBM2015-00029 were instituted are unchanged, and no other grounds
`
`are instituted in the consolidated proceeding;
`
`FURTHER ORDERED that the Scheduling Order in place for
`
`CBM2015-00028 and CBM2015-00029 shall govern the consolidated
`
`proceedings;
`
`FURTHER ORDERED that the record in each of the Apple CBM
`
`proceedings will remain unchanged;
`
`FURTHER ORDERED that, throughout the consolidated proceeding,
`
`any paper, except for a motion that does not involve the other party, shall be
`
`filed by Petitioner Apple, as a single, consolidated filing on behalf of
`
`Petitioner Apple and Petitioner Google, and Petitioner Apple will identify
`
`each such filing as a consolidated filing;
`
`FURTHER ORDERED that except as otherwise agreed by counsel,
`
`Petitioner Apple will conduct cross-examination and other discovery on
`
`behalf of Petitioner Apple and Petitioner Google and that Patent Owner is
`
`not required to provide separate discovery responses or additional deposition
`
`time as a result of the consolidation;
`
`FURTHER ORDERED that CBM2015-00125 is terminated under
`
`37 C.F.R. § 42.72, and all further filings in the consolidated proceedings are
`
`to be made in each of CBM2015-00028 and CBM2015-00029;
`
`FURTHER ORDERED that a copy of this Decision will be entered
`
`into the records of CBM2015-00028 and CBM2015-00029; and
`
`10
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`FURTHER ORDERED that the case caption in each of CBM2015-
`
`00028 and CBM2015-00029 shall be changed to reflect consolidation with
`
`this proceeding in accordance with the attached examples.
`
`11
`
`
`
`CBM2015-00125
`Patent 7,334,720 B2
`
`
`
`PETITIONER:
`
`Raymond Nimrod
`raynimrod@quinnemauel.com
`
`Andrew Holmes
`QE-SF-PTAB-Service@quinnemanuel.com
`
`PATENT OWNER:
`
`Michael R. Casey
`Smartflash-cbm@dbjg.com
`
`Wayne Helge
`whelge@davidsonberquist.com
`
`
`
`12
`
`
`
`CBM2015-00028
`Patent 7,334,720 B2
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`GOOGLE INC. and APPLE INC.
`Petitioner,
`
`v.
`
`SMARTFLASH LLC
`Patent Owner.
`____________
`
`Case CBM2015-000281
`Patent 7,334,720 B2
`____________
`
`
`
`
`
`
`
`
`
`
`1 CBM2015-00125 has been consolidated with this proceeding.
`
`
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`GOOGLE INC. and APPLE INC.
`Petitioner,
`
`v.
`
`SMARTFLASH LLC
`Patent Owner.
`____________
`
`Case CBM2015-000291
`Patent 7,334,720 B2
`____________
`
`
`
`
`
`
`
`
`
`
`1 CBM2015-00125 has been consolidated with this proceeding.
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