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 CBM2015-00029
`Patent 7,334,720 B2
`
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, GREGG I. ANDERSON,
`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 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 CBM2015-00029
`Patent 7,334,720 B2
`
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, GREGG I. ANDERSON,
`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
`
`
`
`
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`A. Background
`
`INTRODUCTION
`
`Apple Inc. (“Petitioner”), filed a Corrected Petition (Paper 5, “Pet.”)
`
`requesting covered business method patent review of claims 3 and 13–15
`
`(the “challenged claims”) of U.S. Patent No. 7,334,720 B2 (Ex. 1301, “the
`
`’720 patent”) pursuant to § 18 of the Leahy-Smith America Invents Act
`
`(“AIA”).1 Smartflash LLC (“Patent Owner”) filed a Preliminary Response
`
`(Paper 8, “Prelim. Resp.”).
`
`We have jurisdiction under 35 U.S.C. § 324(a), which provides that a
`
`covered business 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.”
`
`After considering the Petition and Preliminary Response, we
`
`determine that the ’720 patent is a covered business method patent and that
`
`Apple has demonstrated that it is more likely than not that at least one of the
`
`challenged claims is unpatentable. Therefore, we institute a covered
`
`business method patent review of claims 3 and 15. We decline to institute a
`
`covered business method patent review of claims 13 and 14.
`
`B. Asserted Grounds
`
`Apple argues that the challenged claims are unpatentable based on the
`
`following grounds (Pet. 14–15):
`
`
`1 Pub. L. No. 112–29, 125 Stat. 284, 296–07 (2011).
`
`2
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`Basis
`References
`§ 101
`Not Applicable
`Stefik,2 Poggio,3 and Kopp4
`§ 103
`Stefik, Poggio, Kopp, and Smith5 § 103
`
`Apple also provides a Declaration from Anthony J. Wechselberger.
`
`Ex. 1319.
`
`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. 13; 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,
`
`
`2 U.S. Patent No. 5,530,235 issued June 25, 1996 (Ex. 1312) (“Stefik ’235”),
`and U.S. Patent No. 5,629,980 issued May 13, 1997 (Ex. 1313) (“Stefik
`’980”) (collectively, “Stefik”).
`3 European Patent Application, Publication No. EP 0 809 221 A2 published
`Nov. 26, 1997 (Ex. 1315) (“Poggio”).
`4 U.S. Patent No. 5,940,805 issued Aug. 17, 1999 (Ex. 1304) (“Kopp”).
`5 International Publication No. WO 95/34857 published Dec. 21, 1995 (Ex.
`1327) (“Smith”).
`
`3
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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: CBM2015-00028. In addition, Apple
`
`concurrently filed three other Petitions for covered business method patent
`
`review challenging claims of other 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. 1301, 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
`
`4
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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.”).
`
`E. Illustrative Claims
`
`Apple challenges claims 3 and 13–15 of the ’720 patent. Claims 3
`
`and 14 are independent, and claims 13 and 15 depend from these claims,
`
`respectively. Claims 3 and 14 are illustrative of the claimed subject matter
`
`and recite the following:
`
`A data access terminal for retrieving data from a data
`3.
`supplier and providing the retrieved data to a data carrier, the
`terminal comprising:
`
`a first interface for communicating with the data supplier;
`
`a data carrier interface for interfacing with the data
`carrier;
`
`a program store storing code; and
`
`a processor coupled to the first interface, the data carrier
`interface, and the program store for implementing the stored
`code, the code comprising:
`
`code to read payment data from the data carrier and to
`forward the payment data to a payment validation system;
`
`code to receive payment validation data from the
`payment validation system;
`
`code responsive to the payment validation data to retrieve
`data from the data supplier and to write the retrieved data into
`the data carrier; and
`
`code responsive to the payment validation data to receive
`at least one access rule from the data supplier and to write the at
`least one access rule into the data carrier, the at least one access
`
`5
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`rule specifying at least one condition for accessing the retrieved
`data written into the data carrier, the at least one condition
`being dependent upon the amount of payment associated with
`the payment data forwarded to the payment validation system.
`
`Ex. 1301, 26:41–67.
`
`14. A method of providing data from a data supplier to a data
`carrier, the method comprising:
`
`reading payment data from the data carrier;
`
`forwarding the payment data to a payment validation
`system;
`
`retrieving data from the data supplier;
`
`writing the retrieved data into the data carrier;
`
`receiving at least one access rule from the data supplier;
`
`and
`
`writing the at least one access rule into the data carrier,
`the at least one access rule specifying at least one condition for
`accessing the retrieved data written into the data carrier, the at
`least one condition being dependent upon the amount of
`payment associated with the payment data forwarded to the
`payment validation system.
`
`Id. at 28:5–20.
`
`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 “[c]overed
`
`business method patent” is a patent that “claims 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,
`
`6
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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. Exclusion for Technological Inventions
`
`Apple asserts that claim 14 does not fall within § 18(d)(1)’s exclusion
`
`for “technological invention.” Pet. 9–13. In particular, Apple argues that
`
`claim 14 “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.’” Id. at 9 (quoting
`
`37 C.F.R. § 42.301(b)). Smartflash disagrees and argues that claim 14, as a
`
`whole, recites at least one technological feature that is novel and unobvious
`
`over the prior art and solves a technical problem using a technical solution.
`
`Prelim. Resp. 10.
`
`We are persuaded that claim 14 as a whole does not recite a
`
`technological feature that is novel and unobvious over the prior art. The
`
`claimed “data carrier” is a generic hardware device known in the prior art.
`
`The Specification discloses, for instance, that a data carrier may be a
`
`“standard smart card.” See Ex. 1301, 11:36–39; Pet. 10. Claim 14 also
`
`recites a “payment validation system.” The Specification, however,
`
`discloses that the required payment validation system may be one that is
`
`already in use or otherwise commercially available. For example, “[t]he
`
`payment validation system may be part of the data supplier’s computer
`
`7
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`systems or it may be a separate e-payment system.” Ex. 1301, 8:64–66; see
`
`id. at 13:46–58.
`
`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, on this record, we determine that claim
`
`14 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 14 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 . . . stored on the data carrier” with the technological solution of “(1) a
`
`data carrier from which payment data is read and to which retrieved data
`
`from a data supplier is written and (2) at least once access rule, also stored
`
`on the data carrier, specifying at least one condition for accessing the
`
`retrieved data written into the data carrier.” Prelim. Resp. 11. We are not
`
`persuaded by this argument because, as Apple argues, the problem being
`
`solved by claim 14 is a business problem—data piracy. Pet. 12. 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 without fear of loss of revenue, thus
`
`8
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`undermining the position of data pirates.” Ex. 1301, 1:66–2:3. Therefore,
`
`based on the particular facts of this proceeding, we conclude that claim 14
`
`does not recite a technological invention and is eligible for a covered
`
`business method patent review.
`
`2. Financial Product or Service
`
`Apple asserts that because claim 14 “explicitly describes
`
`electronically transferring money and allowing such a transfer, as well as
`
`restricting access based on payment . . . and clearly relates to a financial
`
`activity and providing a financial service.” Pet. 9. Based on this record, we
`
`agree with Apple that the subject matter recited by claim 14 is directed to
`
`activities that are financial in nature, namely data access conditioned on
`
`payment validation. Claim 14 recites:
`
`writing the at least one access rule into the data carrier, the at least one
`access rule specifying at least one condition for accessing the
`retrieved data written into the data carrier, the at least one condition
`being dependent upon the amount of payment associated with the
`payment data forwarded to the payment validation system.
`
`We are persuaded that payment validation is a financial activity, and
`
`conditioning data access based on the amount of payment associated with
`
`the payment data forwarded to the payment validations system amounts to a
`
`financial service. This is consistent with the Specification of the ’720
`
`patent, which confirms claim 14’s connection to financial activities by
`
`stating that the invention “relates to a portable data carrier for storing and
`
`paying for data.” Ex. 1301, 1:6–7. The Specification also states repeatedly
`
`that the disclosed invention involves managing access to data based on
`
`payment validation. See, e.g., id. at 1:46–49, 2:4–19, 3:19–27, 3:50–54,
`
`7:62–8:9, 8:21–35.
`
`9
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`Smartflash disagrees that claim 14 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. 5–8. Smartflash cites to
`
`various portions of the legislative history as support for its proposed
`
`interpretation. Id.
`
`We do not agree that the phrase “financial product or service” in
`
`§ 18(d)(1) 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 14 is not directed to an
`
`apparatus or method that is financial in nature because claim 14 “omits the
`
`specifics of how payment is made.” Prelim. Resp. 10. We are not
`
`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
`
`10
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`imposes such a requirement. Id. We determine that because payment is
`
`required by claim 14, 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.
`
`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
`
`under the transitional covered business method patent review program.
`
`C. Statutory Subject Matter
`
`Apple challenges claims 3 and 13–15 as directed to patent-ineligible
`
`subject matter under 35 U.S.C. § 101. Pet. 19–30. 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. Id.
`
`Specifically, Apple argues that each of the challenged claims is directed to
`
`the abstract idea of “payment for something, and/or of controlling access to
`
`something.” Pet. 21.
`
`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.
`
`11
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`2014). Here, each of the challenged claims recites either a “machine,” i.e., a
`
`“data access terminal” (claims 3 and 13) or a “process,” i.e., a “method of
`
`providing data from a data supplier” (claims 14 and 15) 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 (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., Inc., 132 S. Ct. 1289, 1293 (2012) “for distinguishing
`
`patents that claim laws of nature, natural phenomena, and abstract ideas
`
`from those that claim patent-eligible applications of those 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).
`
`12
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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’
`
`long pre-dating the ’720 Patent.” Pet. 22. As discussed above, the ’720
`
`patent discusses addressing recording industry concerns of data pirates
`
`offering unauthorized access to widely available compressed audio
`
`recordings. Ex. 1301, 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” (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 1344–45 (holding
`
`claims directed to the abstract idea of “generating tasks [based on] rules . . .
`
`13
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`to be completed upon the occurrence of an event” to be unpatentable even
`
`when applied in a computer environment and within the insurance industry).
`
`Apple contends that the “challenged claims simply instruct that the
`
`abstract ideas of payment for and/or controlling access to data should be
`
`implemented in software[ and] they refer only to generic computer
`
`functions.” Pet. 25. Independent claims 3 and 14, for example, recite a
`
`“data carrier” and a “payment validation system.” The Specification,
`
`however, notes that the data carrier may be a generic, known, hardware
`
`device such as a “standard smart card,” and that “[t]he payment validation
`
`system may be part of the data supplier’s computer systems or it may be a
`
`separate e-payment system.” See Ex. 1301, 8:64–66, 11:36–39, 13:46–58.
`
`Moreover, on this record, Smartflash has not shown sufficiently that any of
`
`the other potentially technical additions to the claims—including, for
`
`example, “processor,” “program store,” “accessing,” and code to
`
`receive/retrieve/write data (claims 3 and 13); “reading,” “forwarding,”
`
`“retrieving,” “writing,” “receiving,” and “transmitting” (claims 14 and 15)—
`
`performs a function that is anything other than “purely conventional.” See
`
`Alice, 134 S. Ct. at 2359. The linkage of existing hardware devices to
`
`existing payment validation processes and supplier-defined access rules, as
`
`claimed here, appear to be “‘well-understood, routine, conventional
`
`activit[ies]’ previously known to the industry.” Id.; Mayo, 132 S. Ct. at
`
`1294. Based on the present record, we determine that none of these
`
`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).
`
`14
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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 the challenged claims are unpatentable under
`
`35 U.S.C. § 101. However, because we already instituted a covered business
`
`method patent review of claims 13 and 14 under 35 U.S.C. § 101 in
`
`CBM2014-00190 (Samsung Elecs. Am. Inc. v. Smartflash LLC, Case
`
`CBM2014-00190, slip op. at 18 (PTAB April 2, 2015) (Paper 9)), and
`
`because whether these claims are directed to patent-eligible subject matter is
`
`an issue of law, we exercise our discretion under 35 U.S.C. § 325(d) to
`
`decline to institute a covered business method patent review of claims 13
`
`and 14 under this ground in this case.
`
`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 . . . in its two prior petitions.” Prelim. Resp. 15. 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 PTAB’s
`charge to “secure the just, speedy, and inexpensive resolution”
`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.
`
`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.
`
`15
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`On this record, Apple has established that it is more likely than not
`
`that claims 3 and 15 are unpatentable under 35 U.S.C. § 101.
`
`D. Obviousness Challenges
`
`Apple argues that claim 3 and 13–15 are unpatentable under 35 U.S.C.
`
`§ 103(a) as obvious over Stefik, Poggio, and Kopp, and Stefik, Poggio,
`
`Kopp, and Smith. Pet. 42–79.
`
`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).
`
`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 3 and 13–15 are unpatentable as
`
`obvious over either of the 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. 42–79. Apple also has not
`
`16
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`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. Apple cites Stefik for each
`
`claim limitation of claims 3 and 13–15. Id. at 48–77. Apple even cites to
`
`two different embodiments of Stefik for most claim elements. See, e.g., id.
`
`at 45–46, nn.27, 28. At the same time, Apple also cites Poggio and Kopp for
`
`a majority of the limitations of these claims. Id. at 48–77. With respect to
`
`teaching or suggesting the recited “access rule” recited in claim 3, for
`
`example, Apple cites a number of portions of Stefik in the Petition’s claim
`
`chart, as well as portions of Poggio, Kopp, and Smith. See id. at 69–76.
`
`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
`
`features from Poggio, Kopp, and/or Smith with the teachings of Stefik. Id.
`
`at 33–42.
`
`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. With respect to
`
`“access rule,” the claim chart identifies various “rights” in Stefik, and Apple
`
`contends that “[t]hese rules (e.g., enumerated types of associated right
`
`restrictions) disclosed in Stefik include some of the same content rules
`
`disclosed in the ’720 patent.” Id. at 69, n.98. The claim chart, however, also
`
`17
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`indicates that Kopp discloses writing an “access rule”—“(e.g., limitation
`
`specifying purchased extent of utilization)”—and Apple contends that it
`
`would have been “obvious to implement Stefik and Poggio with Kopp’s
`
`explicit teachings of specified limitations on extent of utilization, including
`
`limits on the total amount of use allowed, length of time during which the
`
`data is accessible, a time limit up to which the data record is accessible, and
`
`specific devices on which data is accessible, to bolster the varied product
`
`offering and flexibility in the system disclosed by Stefik and Poggio” Id. at
`
`73, n. 109, 74–75, n.116; (see also id. at 75–76, nn.117–120 (arguing that
`
`Smith discloses “access rules” and contending that the combination of
`
`Stefik, Poggio, Kopp, and Smith render obvious the limitation)).
`
`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 Poggio, Kopp, and/or Smith, or rendered
`
`obvious in view of Stefik, Poggio, Kopp, and/or Smith. 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 claims 3 and 13–15 would have been obvious over the
`
`combination of Stefik, Poggio, and Kopp, or the combination of Stefik,
`
`Poggio, Kopp, and Smith.
`
`18
`
`
`
`CBM2015-00029
`Patent 7,334,720 B2
`
`For the reasons given, it is:
`
`ORDER
`
`ORDERED that a covered business method patent review is instituted
`
`on the ground that claims 3 and 15 are patent ineligible under 35 U.S.C.
`
`§ 101;
`
`FURTHER ORDERED that the trial is limited to the grounds
`
`identified above. No other grounds are authorized; 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, the trial
`
`commencing on the entry date of this Decision.
`
`
`
`19
`
`
`
`CBM2015-00029
`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
`
`
`20
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
