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 CBM2015-00031
`Patent 8,336,772 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, GREGG I. ANDERSON,
`MATTHEW R. CLEMENTS, Administrative Patent Judges.
`
`ANDERSON, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`A. Background
`
`I. INTRODUCTION
`
`Apple Inc. (“Petitioner”) filed a Corrected Petition requesting covered
`
`business method patent review of claims 1, 5, 8, and 10 (the “challenged
`
`claims”) of U.S. Patent No. 8,336,772 B2 (Ex. 1201, “the ’772 patent”)
`
`pursuant to § 18 of the Leahy-Smith America Invents Act (“AIA”).1 (Paper
`
`5, “Pet.”). Smartflash LLC (“Patent Owner”) 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 Petitioner has demonstrated that it is more likely than not that
`
`the challenged claims are unpatentable. Accordingly, we institute a covered
`
`business method patent review of claims 1, 5, 8, and 10 of the ’772 patent.
`
`B. Asserted Grounds
`
`Petitioner argues that the challenged claims are unpatentable based on
`
`the following grounds (Pet. 17):
`
`References
`Not Applicable
`Ginter2, Subler,3 and Poggio4
`
`Basis Claims Challenged
`§ 101 1, 5, 8, and 10
`§ 103 1, 5, 8, and 10
`
`
`1 Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011).
`2 U.S. Patent No. 5,915,019 (Ex. 1214) (“Ginter”).
`3 U.S. Patent No. 5,646,992 (Ex. 1236) (“Subler”).
`4 European Patent Application, Publication No. EP0809221A2 (translation)
`(Ex. 1215) (“Poggio”).
`
`2
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`Basis Claims Challenged
`References
`Ginter, Subler, Poggio, and Sato5 § 103 1, 5, 8, and 10
`
`Petitioner also provides a declaration from Anthony J. Wechselberger.
`
`Ex. 1219.
`
`C. Related Matters
`
`Petitioner indicates that the ’772 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. 15–16; Paper 9, 2. Patent Owner also indicates that
`
`the ’772 patent is the subject of a two other district court cases: Smartflash
`
`LLC v. Google, Inc., Case No. 6:14-cv-435 (E.D. Tex.); Smartflash LLC, et
`
`al. v. Apple Inc., Case No. 6:15-cv-145 (E.D. Tex.), all pending in the U.S.
`
`District Court for the Eastern District of Texas. Paper 10, 4–5.
`
`Petitioner previously filed two Petitions for covered business method
`
`patent review of the ’772 Patent: CBM2014-00110 and CBM2014-00111.
`
`A covered business method patent review was denied in both cases. Apple
`
`Inc. v. Smartflash LLC, Case CBM2014-00110, slip op. at 19 (PTAB Sept.
`
`30, 2014) (Paper 7); Apple Inc. v. Smartflash LLC, Case CBM2014-00111,
`
`slip op. at 22 (PTAB Sept. 30, 2014) (Paper 7). 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 Petitioner. Paper 10, 3–4.
`
`
`5 JP Patent Application Publication No. H11-164058 (including translation)
`(Ex. 1217) (“Sato”).
`
`3
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`Petitioner filed concurrently another two Petitions for covered
`
`business method patent review of the ’772 patent: CBM2015-00032 and
`
`CBM2015-00033. Id. at 4. In addition, Petitioner concurrently filed two
`
`other Petitions for covered business method patent review challenging
`
`claims of other patents owned by Patent Owner, which disclose similar
`
`subject matter: CBM2015-00028 and CBM2015-00029. Id.
`
`D. The ’772 Patent
`
`The ’772 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. 1201, 1:24–28. 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 1:32–58. The ’772 patent describes providing portable data storage
`
`together with a means for conditioning access to that data upon validated
`
`payment. Id. at 1:62–2:3. According to the ’772 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 2:10–18.
`
`As described, the portable data storage device is connected to a
`
`terminal for internet access. Id. at 1:62–2:3. 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 2:4–7. The
`
`’772 patent makes clear that the actual implementation of these components
`
`is not critical and the alleged invention may be implemented in many ways.
`
`4
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`See, e.g., id. at 25:59–62 (“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
`
`As noted above, Petitioner challenges claims 1, 5, 8, and 10. Claims 1
`
`and 8 are independent and claims 5 and 10 depend respectively from claims
`
`1 and 8. Claims 1 and 8 are illustrative of the claimed subject matter and are
`
`reproduced below:
`
`1. A handheld multimedia terminal, comprising:
`
`a wireless interface configured to interface with a wireless
`network for accessing a remote computer system;
`
`non-volatile memory configured to store multimedia content,
`wherein said multimedia content comprises one or more of
`music data, video data and computer game data;
`
`a program store storing processor control code;
`
`a processor coupled to said non-volatile memory, said
`program store, said wireless interface and
`
`a user interface to allow a user to select and play said
`multimedia content;
`
`a display for displaying one or both of said played
`multimedia content and data relating to said played multimedia
`content;
`
`wherein the processor control code comprises:
`
`code to request identifier data identifying one or more
`items of multimedia content stored in the non-volatile
`memory;
`
`code to receive said identifier data;
`
`code to present to a user on said display said identified
`one or more items of multimedia content available from the
`non-volatile memory;
`
`5
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`code to receive a user selection to select at least one of
`said one or more of said stored items of multimedia content;
`
`code responsive to said user selection of said at least one
`selected item of multimedia content to transmit payment data
`relating to payment for said at least one selected item of
`multimedia content via said wireless interface for validation
`by a payment validation system;
`
`code to receive payment validation data via said wireless
`interface defining if said payment validation system has
`validated payment for said at least one selected item of
`multimedia content; and
`
`code to control access to said at least one selected item of
`multimedia content on said terminal responsive to said
`payment validation data,
`
`wherein said user interface is operable to enable a user to
`select said at least one item of multimedia content available
`from said non-volatile memory; and
`
`wherein said user interface is operable to enable a user to
`access said at least one selected item of multimedia content
`responsive to said code to control access permitting access to
`said at least one selected item of multimedia content.
`
`Ex. 1201, 25:65–26:43.
`
`8. A data access terminal for controlling access to one or
`
`more content data items stored on a data carrier, the data access
`terminal comprising:
`
`a user interface;
`
`a data carrier interface;
`
`a program store storing code implementable by a processor; and
`
`a processor coupled to the user interface, to the data carrier
`interface and to the program store for implementing the stored code,
`the code comprising:
`
`code to request identifier data identifying one or more content data
`items stored on the data carrier;
`
`code to receive said identifier data;
`
`6
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`code to present to a user via said user interface said identified one
`or more content data items available from the data carrier;
`
`code to receive a user selection selecting at least one of said one or
`more of said stored content data items;
`
`code responsive to said user selection of said selected content data
`item to transmit payment data relating to payment for said selected
`content item for validation by a payment validation system;
`
`code to receive payment validation data defining if said payment
`validation system has validated payment for said content data item;
`and
`
`code to control access to said selected content data item responsive
`to the payment validation data.
`
`Ex. 1201, 27:15–41.
`
`A. Claim Construction
`
`II. ANALYSIS
`
`While Petitioner 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
`
`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).
`
`7
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`1. Financial Product or Service
`
`Petitioner asserts that claim 8 “explicitly describes transmitting
`
`payment data to a payment validation system, receiving payment validation,
`
`and controlling access to data based on payment[and thus] clearly concerns a
`
`computer system (corresponding to methods discussed in the patent) for
`
`performing data processing and other operations used in the practice,
`
`administration, or management of a financial activity and service.” Pet. 11
`
`(emphasis in Petition). Based on this record, we agree with Petitioner that
`
`the subject matter recited by claim 8 is directed to activities that are financial
`
`in nature, namely data access conditioned on payment validation.
`
`Claim 8 recites “code . . . to transmit payment data relating to
`
`payment for said at least one selected item of multimedia content via said
`
`wireless interface for validation by a payment validation system,” “code to
`
`receive payment validation data defining if said payment validation system
`
`has validated payment for said content data item,” and “code to control
`
`access to said selected content data item responsive to the payment
`
`validation data.” We are persuaded that payment validation is a financial
`
`activity, and controlling access based on payment validation amounts to a
`
`financial service. This is consistent with the Specification of the ’772
`
`patent, which confirms claim 8’s connection to financial activities by stating
`
`that the invention “relates to a portable data carrier for storing and paying for
`
`data.” Ex. 1201, 1:24–25. The Specification also states repeatedly that the
`
`disclosed invention involves managing access to data based on payment
`
`validation. See, e.g., Ex. 1201, 1:62–2:3, 6:64–7:1, 20:59–63.
`
`Patent Owner disagrees that claim 8 satisfies the financial in nature
`
`requirement of AIA § 18(d)(1), arguing that that section should be
`
`8
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`interpreted narrowly to cover only technology used specifically in the
`
`financial or banking industry. Prelim. Resp. 5–11. Patent Owner 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” is as
`
`limited as Patent Owner 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 Patent Owner’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, Patent Owner asserts that claim 8 is not directed to an
`
`apparatus or method that is financial in nature because claim 8 “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 Patent Owner point to any other authority that
`
`imposes such a requirement. Id. We determine that because claim 8 recites
`
`payment data and controlling access to content based on such payment data,
`
`9
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`as Patent Owner 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 ’772 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
`
`Petitioner asserts that claim 8 does not fall within § 18(d)(1)’s
`
`exclusion for “technological inventions.” Pet. 11–15. In particular,
`
`Petitioner argues that claim 8 “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. 11 (quoting 37 C.F.R. § 42.301(b)) (emphases in Petition). Patent
`
`Owner disagrees and argues that claim 8, as a whole, recites at least one
`
`technological feature that is novel and unobvious over the prior art. Prelim.
`
`Resp. 11–12.
`
`We are persuaded that claim 8 as a whole does not recite a
`
`technological feature that is novel and unobvious over the prior art. For
`
`example, claim 8 recites only features such as “user interface,” “data carrier
`
`interface,” “program store,” “processor,” and “code.”
`
`In addition, the ’772 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 ’772 patent
`
`states that “there is an urgent need to find a way to address the problem of
`
`data piracy,” (id. at 1:56–58) 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
`
`10
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`of forms” (id. at 12:37–40). Thus, we determine that claim 8 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).
`
`Patent Owner also argues that claim 8 falls within § 18(d)(1)’s
`
`exclusion for “technological invention” because it is directed to solving the
`
`technological problem of “controlling access to a selected content data item
`
`responsive to the payment validation data, e.g., as part of a convenient,
`
`legitimate acquisition of data from a data supplier.” Prelim. Resp. 11. We
`
`are not persuaded by this argument because, as Petitioner argues, the
`
`problem being solved by claim 8 is a business problem—data piracy. Pet.
`
`14–15. 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 undermining the position of data pirates.” Ex. 1201, 2:14–19.
`
`Therefore, based on the particular facts of this proceeding, we conclude that
`
`claim 8 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 ’772 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. Statutory Subject Matter
`
`Petitioner challenges claims 1, 5, 8, and 10 as being directed to patent-
`
`ineligible subject matter under 35 U.S.C. § 101. Pet. 22–35. Patent Owner
`
`does not address the merits of this challenge. See Prelim. Resp. 14–17.
`
`11
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`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), Petitioner
`
`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. 24–35. Specifically, Petitioner argues that the
`
`challenged claims are directed to the abstract idea of paying for and/or
`
`controlling access to content. Id. at 23.
`
`We agree with Petitioner that, on this record, the challenged claims of
`
`the ’772 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, 713–714 (Fed. Cir.
`
`2014). Here, each of the challenged claims recites a “machine,” i.e., a
`
`“handheld multimedia terminal” (claims 1 and 5) or a “data access terminal”
`
`(claims 8 and 10) 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
`
`12
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`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 on the
`
`[ineligible concept] itself.’” Id. (brackets in original) (quoting Mayo, 132 S.
`
`Ct. at 1294).
`
`Petitioner 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 ’772 patent.” Pet. 26 (citing Ex. 1219 ¶¶ 75–77;
`
`Ex. 1208 4:27–35; Ex. 1225 Abstract; Ex. 1216 Abstract, Fig. 1). As
`
`discussed above, the ’772 patent discusses addressing recording industry
`
`concerns of data pirates offering unauthorized access to widely available
`
`compressed audio recordings. Ex. 1201, 1:33–58. The ’772 patent proposes
`
`to solve this problem by restricting access to data on a portable data carrier
`
`based upon payment validation. Id. at 1:62–2:7. The ’772 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 2:8–19. We are persuaded, on this record, that the
`
`challenged claims are directed to an abstract idea. See Alice, 134 S. Ct. at
`
`13
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`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 ’772 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).
`
`Petitioner contends that because the “challenged claims are directed
`
`only to an abstract idea with nothing more than ‘well-understood, routine,
`
`conventional activity’ added (Mayo, 132 S. Ct. at 1294) they are
`
`unpatentable.” Pet. 27. On this record, we are not persuaded that the recited
`
`limitations of the challenged claims, which include, for example, “wireless
`
`interface,” “non-volatile memory,” “program store,” “processor,” “display,”
`
`“user interface,” “data carrier interface,” and “code” 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,’”
`
`14
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`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 Petitioner has demonstrated
`
`that it is more likely than not that challenged claims 1, 5, 8, and 10 are
`
`unpatentable under 35 U.S.C. § 101.
`
`Patent Owner argues that Petitioner’s assertion of this ground is
`
`untimely because Petitioner “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 P]etition.” Prelim. Resp. 15.
`
`According to Patent Owner,
`
`[A]llowing Apple to raise a new ground of invalidity that it
`could have and should have raised in its April 3, 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’ of Apple’s
`covered business method challenges to the ‘772 Patent.
`
`Id. at 16. Patent Owner, however, cites no statutory or regulatory authority
`
`precluding Petitioner from asserting this ground. Moreover, Patent Owner
`
`acknowledges that the Supreme Court’s June 19, 2014 decision in Alice was
`
`decided after Petitioner’s original petitions were filed in March 2014. Id. at
`
`15–16. Thus, on this record, we are not persuaded that Petitioner’s assertion
`
`of a new ground based on 35 U.S.C. § 101 is untimely.
`
`Conclusion
`
`On this record, Petitioner has established that it is more likely than not
`
`that claims 1, 5, 8, and 10 of the ’772 patent are unpatentable under 35
`
`U.S.C. § 101.
`
`15
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`D. Obviousness Challenges
`
`Petitioner argues that claims 1, 5, 8, and 10 are unpatentable under 35
`
`U.S.C. § 103(a) as obvious over: Ginter, Subler, and Poggio; and Ginter,
`
`Subler, Poggio, and Sato. Pet. 17, 41–78.
`
`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 Petitioner has not shown that it is more likely than not that it
`
`would prevail in showing that claims 1, 5, 8, and 10 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, Petitioner 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. 35–78. Petitioner also has not shown that any of the individual
`
`references anticipate the challenged claims. Thus, it is unclear how
`
`16
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`Petitioner proposes that we do a proper Graham analysis to determine that
`
`the challenged claims are unpatentable.
`
`We cannot ascertain from the Petition, including claim charts and the
`
`numerous attending footnotes, which disclosure of which prior art reference
`
`Petitioner is referring to as teaching or suggesting each limitation and why
`
`such disclosure satisfies the limitation. With respect to independent claim 1,
`
`for example, Petitioner cites Ginter for each claim limitation. Pet. 42–69.
`
`At the same time, Petitioner cites Sato, Poggio, or Subler for almost half the
`
`limitations of claim 1. Id. With respect to the recited “code to request
`
`identifier data identifying one or more items of multimedia content stored in
`
`the non-volatile memory,”6 in claim 1, for example, Petitioner cites a
`
`number of portions of Ginter, as well as portions of Subler. See id. at 47–50.
`
`Petitioner does not allege directly that Ginter alone teaches or renders
`
`obvious each limitation, yet, as noted above, Petitioner cites Ginter for each
`
`claim limitation. At the same time, Petitioner proposes combining a number
`
`of features from Subler, Poggio, and/or Sato with the teachings of Ginter.
`
`See, e.g., id. at 44 n.14, 50–51 n.16, 58 n.21, 62–63, n.23, 65 n.26, 66 n.27.
`
`Petitioner’s analysis prevents us from determining what specific
`
`teaching is lacking in Ginter (i.e., the differences between the claimed
`
`subject matter and Ginter). See Graham, 383 U.S. at17–18. For example,
`
`with respect to claim 1’s limitation “code responsive to said user selection of
`
`said at least one selected item of multimedia content to transmit payment
`
`data relating to payment for said at least one selected item of multimedia
`
`
`6 Claim 8, the other independent claim, includes a similar limitation, i.e.,
`“identifying one or more content data items” in lieu of identifying items of
`“multimedia content.” Petitioner refers to its analysis with respect to claim 1
`for this limitation of claim 8. Pet. 77.
`
`17
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`content via said wireless interface for validation by a payment validation
`
`system,” Petitioner identifies Ginter’s Virtual Distribution Environment
`
`(“VDE”) and the audit information. Pet. 55–58. In addition, Petitioner
`
`argues that “[t]o the extent it is argued that Ginter’s transmitting of audit
`
`information does not necessarily reflect payment for a currently requested
`
`VDE content object, Ginter at a minimum renders this obvious. Id. at 57–
`
`58. Petitioner also alleges that Poggio discloses transmitting payment data.
`
`Id. at 58–59. Petitioner further contends that it would have been obvious to
`
`“implement Ginter’s VDE environment using the purchase process teachings
`
`of Poggio because Ginter expressly touts the VDE environment’s ability to
`
`be adapted to mirror traditional commercial relationships like that of Poggio,
`
`where a consumer transmits payment data (e.g., credit card number) to a
`
`payment validation system in order to purchase a product.” Id. at 58 n.21.
`
`Nowhere does Petitioner explain any differences between the claimed
`
`invention and Ginter. As a result, it is not clear whether Petitioner is
`
`alleging that certain claim limitations are taught by Ginter, rendered obvious
`
`by Ginter, taught by Subler, Poggio, and/or Sato, or rendered obvious in
`
`view of Ginter, Subler, Poggio, and/or Sato. 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 Petitioner has shown that it is more
`
`likely than not that claim 1 would have been obvious over the combination
`
`of Ginter, Subler, and Poggio, or the combination of Ginter, Subler, Poggio,
`
`and Sato. For the same reasons, we are not persuaded that Petitioner has
`
`18
`
`

`
`CBM2015-00031
`Patent 8,336,772 B2
`
`shown more likely than not that claims 5, 8, and 10 would have been
`
`obvious over the combination of of Ginter, Subler, and Poggio, or the
`
`combination of Ginter, Subler, Poggio, and Sato.
`
`Conclusion
`
`On this record, Petitioner has not established that it is more likely than
`
`not that claims 1, 5, 8, and 10 are unpatentable as obvious over: Ginter,
`
`Subler, and Poggio; or Ginter, Subler, Poggio, and Sato.
`
`CONCLUSION
`
`For the foregoing reasons, we determine that the information
`
`presented in the Petition establishes that it is more likely than not that
`
`Petitioner would prevail in establis