UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________
`
`GOOGLE INC. and APPLE INC.,
`Petitioners,
`
`v.
`
`CONTENTGUARD HOLDINGS, INC.
`Patent Owner
`____________________
`
`Case CBM 2015-000401
`
`U.S. Patent 7,774,280
`Filed October 4, 2004
`Issued August 10, 2010
`Title: SYSTEM AND METHOD FOR MANAGING TRANSFER OF
`RIGHTS USING SHARED STATE VARIABLES
`____________________
`
`Attorney Docket No. 20318-134361
`Customer No: 22242
`____________________
`
`PATENT OWNER’S REPLY IN SUPPORT OF CONTINGENT
`MOTION TO AMEND UNDER 37 C.F.R. § 42.121
`
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`P.O. Box 1450
`Alexandria, Virginia 22313-1450
`___________________
`1 Case CBM2015-00160 has been joined with this proceeding.
`
`
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________
`
`GOOGLE INC. and APPLE INC.,
`Petitioners,
`
`v.
`
`CONTENTGUARD HOLDINGS, INC.
`Patent Owner
`____________________
`
`Case CBM 2015-000401
`
`U.S. Patent 7,774,280
`Filed October 4, 2004
`Issued August 10, 2010
`Title: SYSTEM AND METHOD FOR MANAGING TRANSFER OF
`RIGHTS USING SHARED STATE VARIABLES
`____________________
`
`Attorney Docket No. 20318-134361
`Customer No: 22242
`____________________
`
`PATENT OWNER’S REPLY IN SUPPORT OF CONTINGENT
`MOTION TO AMEND UNDER 37 C.F.R. § 42.121
`
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`P.O. Box 1450
`Alexandria, Virginia 22313-1450
`___________________
`1 Case CBM2015-00160 has been joined with this proceeding.
`
`
`
`Table of Contents
`
`I.
`II.
`
`INTRODUCTION ................................................................................ 1
`THE PROPOSED AMENDMENT RESPONDS TO THE
`PATENTABILITY ISSUES RAISED ................................................. 1
`III. THE SUBSTITUTE CLAIM IS NOT ANTICIPATED BY
`STEFIK ................................................................................................. 2
`IV. THE SUBSTITUTE CLAIM IS NOT OBVIOUS IN VIEW OF
`STEFIK ................................................................................................. 5
`THE SUBSTITUTE CLAIM HAS WRITTEN DESCRIPTION
`SUPPORT ............................................................................................. 8
`VI. THE
`SUBSTITUTE CLAIM
`IS
`SUBSTANTIALLY
`IDENTICAL TO ORIGINAL CLAIM 1 WITHIN THE
`MEANING OF 35 U.S.C. ¶252 ......................................................... 10
`VII. CONCLUSION .................................................................................. 12
`
`
`V.
`
`i
`
`
`
`Table of Authorities
`
`Cases
`Nichia Corp. v. Emcore Corp.,
`IPR2012-00005, Paper 27 (PTAB June 3, 2014) ........................................ 9
`
`Other Authorities
`Office Patent Trial Practice Guide,
`77 Fed. Reg. 48756–73 (Aug. 14, 2012) ................................................... 10
`
`
`
`ii
`
`
`
`I.
`
`INTRODUCTION
`
`Petitioners’ response to Patent Owner’s contingent motion to amend
`
`challenges the patentability of proposed substitute claim 37 solely on written
`
`description grounds and in view of the prior art Stefik ‘012 patent. It does not
`
`dispute Patent Owner’s showing of patentability over the other references
`
`identified as the closest known prior art. The specific objections to the motion are
`
`addressed below.
`
`PROPOSED AMENDMENT RESPONDS TO THE
`II. THE
`PATENTABILITY ISSUES RAISED
`
`The proposed substitute claim 37 amends original claim 1 to expressly
`
`require that a meta-right “is not itself a usage right because exercising the meta-
`
`right does not result in action to the content,” and to provide proper antecedent
`
`basis for this language. In its Institution Decision, the Board applied a broader
`
`definition of “meta-right” under the claim construction standard applicable in
`
`CBM proceedings. Applying this broader construction, the Board found that Stefik
`
`raised issues of patentability as to claim 1 and dependent claims 5 and 11. (Paper 9
`
`at 15-17 and 43.) The proposed substitute claim expressly recites characteristics of
`
`meta-rights not included in the Board’s initial construction. In the event that the
`
`Board maintains its initial construction of meta-right, and ultimately finds claim 1
`
`unpatentable over Stefik using that construction, the proposed substitute claim
`
`would distinguish Stefik on grounds unavailable under that construction. The
`
`1
`
`
`
`amendment is thus directly related and responsive to issues of patentability
`
`involved in this proceeding.
`
`Contrary to Petitioners’ representation, the motion does not characterize the
`
`amendment as having no effect on the scope or meaning of claim 1. Patent Owner
`
`has shown that the scope of the amended claim is substantially identical to the
`
`scope given to the original claim in pending district litigation, which is a distinct
`
`issue relevant to intervening rights. (Paper 16 at 24-25.) That does not make the
`
`substitute claim any less responsive to the grounds of patentability in this
`
`proceeding, which are based on a broader claim construction than the district court
`
`applied.
`
`III. THE SUBSTITUTE CLAIM IS NOT ANTICIPATED BY STEFIK
`
`The Goldberg declaration submitted in support of the Petition asserts that
`
`Stefik discloses meta-rights because certain usage rights may include a NSOR
`
`grammar element identifying rights to be added to or deleted from the usage rights
`
`for the transferred digital work. According to this theory, the right being exercised
`
`is the encapsulating usage right. (See, e.g., Ex. 1014 at ¶72 (“the meta-right is
`
`‘Loan,’ which allows the repository that receives that right to create Play and
`
`Delete usage rights for subsequent distribution”) and ¶80 (“the Loan right allows a
`
`repository to create new rights, Play and Delete, when a Loan transaction is
`
`completed”.) Dr. Goldberg further opined that exercising the alleged meta-right
`
`2
`
`
`
`involves action to content. (Id. at ¶79 (“the sending repository will then exercise
`
`the meta-right by transmitting to the requesting repository a copy of the work with
`
`rights as specified by the ‘Next-Set-Of-Rights’”).) Petitioners wholly embraced
`
`this analysis. (Paper 1 at 64, 68-69.) Although he recharacterized Loan as a usage
`
`right encapsulating a meta-right during deposition (Ex. 2010 at 37:7-21), Dr.
`
`Goldberg has always maintained that Stefik does not disclose any right that creates
`
`new rights and is exercisable independent of exercising the encapsulating usage
`
`right. (Id. at 37:23-38:10, 53:11-24, 54:5-15.)
`
`Petitioners’ assertion that Stefik’s NSOR field is itself a right exercisable to
`
`create new rights without resulting in actions to content contradicts the analysis of
`
`their own expert. Indeed, after Petitioners’ response to the motion to amend was
`
`filed, Dr. Goldberg reaffirmed that rights creation in Stefik occurs when the usage
`
`right containing the NSOR field is exercised, and that Stefik’s system is incapable
`
`of processing the NSOR field outside of the process of exercising the
`
`encapsulating usage right. (Ex. 2023 at 88:17-23 and 91:22-92:9.)
`
`These undisputed facts alone demonstrate that the Stefik NSOR element
`
`does not disclose an exercisable right that is not a usage right. The only exercisable
`
`rights disclosed in Stefik are usage rights, with the NSOR field affecting the
`
`behavior of the system during the exercise of usage rights. The NSOR field is only
`
`accessed and used during the process of exercising the encapsulating usage right to
`
`3
`
`
`
`transfer content to a requesting repository; its only purpose is to control rights
`
`associated with the transferred copy. Petitioners’ assertion that one may choose
`
`whether to process a particular NSOR field by selecting a particular version of
`
`encapsulating usage right is of no consequence. This only further demonstrates that
`
`the NSOR field is not a right per se, but an element of a selectable usage right.
`
`The argument that new rights can be created using the NSOR field without
`
`resulting in actions to content is also contrary to Stefik’s actual disclosure. The
`
`NSOR field is only processed as part of the sequence of steps constituting exercise
`
`of a usage right. Petitioners now describe the encapsulating usage right as acting
`
`on content and the NSOR field as acting on rights, and further argue that the
`
`NSOR field does not cause the usage right to be exercised. Those assertions miss
`
`the mark. The substitute claim requires that “exercising the meta-right does not
`
`result in actions to the content.” The only way to process the NSOR field is to
`
`exercise the encapsulating usage right to trigger an integrated sequence of events
`
`resulting in both the transfer of content and the creation of rights for the transferred
`
`copy. Petitioners’ arguments also directly contradict their prior assertions that the
`
`analogous exercising step in Stefik involves transmitting a copy of the digital work
`
`to the requesting repository together with the rights specified by the NSOR field.
`
`(Paper 1 at 68, citing Ex. 1014 at ¶79.) That Stefik provides no mechanism for
`
`4
`
`
`
`using the NSOR field to create rights without resulting in actions to content is
`
`dispositive against Petitioners’ anticipation challenge.
`
`Petitioners also assert that Patent Owner misreads the “determining” step.
`
`But the opposite is true. This limitation explicitly requires determining whether the
`
`consumer is entitled “to the rights specified by the meta-right,” yet Petitioners fail
`
`to identify any mechanism in Stefik for a repository to evaluate whether a
`
`consumer is entitled to the specific rights identified in the NSOR field. Petitioners
`
`do not challenge Dr. Martin’s opinion that Stefik’s decision making procedure for
`
`performing a transaction is independent of whatever rights are specified in the
`
`NSOR field. Their own expert has not identified any mechanism in Stefik for
`
`placing conditions on the processing of the NSOR field itself. (Ex. 2023 at 101:5-
`
`19.) The substitute claim is not anticipated by Stefik for this additional reason.
`
`IV. THE SUBSTITUTE CLAIM IS NOT OBVIOUS IN VIEW OF STEFIK
`
`Petitioners have not shown that the subject matter of the substitute claim as a
`
`whole would have been obvious in view of Stefik. Their argument addresses only
`
`whether it would have been obvious to “exercise” a NSOR field at a different time
`
`than the usage right is exercised or separate from the exercise of the usage right.
`
`However, the substitute claim as a whole requires addressing, at a minimum, the
`
`obviousness of transferring rights using a meta-right that (i) is provided as an
`
`exercisable right, (ii) is not a usage right, (iii) can be exercised to create new rights
`
`5
`
`
`
`without resulting in actions to content, and (iv) can only be exercised upon a
`
`determination that the rights consumer is entitled to a right specified by the meta-
`
`right. Petitioners have not done so, and their arguments ignore both the claim as a
`
`whole and Stefik’s disclosure at a rather fundamental level.
`
`The Martin declaration explains the complex interdependency between the
`
`processing of the NSOR parameters and the exercise of the associated usage right
`
`in Stefik. (Ex. 2009 at ¶¶60-63, 70-72.) The NSOR field has no purpose in Stefik
`
`outside of this specific architecture and functionality. It cannot simply be removed
`
`from the usage right and provided as a separately exercisable right because the
`
`NSOR field must be consulted during the exercise of Stefik’s transport usage
`
`rights.
`
`Moreover, Stefik provides no mechanism for placing conditions on the rights
`
`identified in the NSOR field themselves, and fails to disclose a repository
`
`functioning to first determine whether the consumer is entitled to the specific rights
`
`identified in the NSOR field before creating the rights named in the NSOR field
`
`for the transferred copy of the content. Rather, the NSOR rights are created
`
`automatically upon exercising the encapsulating usage right.
`
`Modifying Stefik to practice the method of the substitute claim would have
`
`required significant changes to its design and operation. Petitioners do not address
`
`how the proposed modifications are consistent with the teachings of Stefik as a
`
`6
`
`
`
`whole. They fail to explain exactly how Stefik could have been modified to
`
`practice the claimed subject matter without rendering the NSOR feature of Stefik
`
`unsatisfactory for its intended purpose, or how this could have been accomplished
`
`without changing Stefik’s fundamental principles of operation.
`
`Petitioners do not provide any cogent rationale supporting a motivation to
`
`modify Stefik. They assert that Stefik describes numerous distribution models. But
`
`each model involves only usage rights, and Stefik does not suggest the models
`
`could be improved using meta-rights as claimed.
`
`Petitioners resort to mischaracterizing Stefik’s “Embed” usage right in
`
`arguing that Stefik teaches permitting rights to be added to a digital work without
`
`actions to content. The cited passage describing the Embed right states that the
`
`Embed transaction is initiated with a request to a server that includes a destination
`
`address. (Ex. 1002 at 41:54-63.) Upon completing opening transaction steps, “the
`
`server transmits the requested contents and data to the requestor according to the
`
`transmission protocol.” (Id. at 42:3-4.) Rights are also transmitted with the
`
`contents according to the NSOR field, and the requestor repository then “records
`
`the contents, data and usage rights and embeds the work in the destination file.”
`
`(Id. at 42:4-11.)
`
`Dr. Goldberg’s second declaration directly contradicts this disclosure in
`
`asserting that there is no action to content when the Embed right is exercised. (Ex.
`
`7
`
`
`
`1032 at ¶25.) It provides an example in which a Copy right is used to transfer the
`
`content prior to exercising the Embed right. (Id. at ¶27.) Dr. Goldberg confirmed at
`
`deposition that the example is not disclosed in Stefik, and he conceded that Stefik’s
`
`disclosure of the Embed transaction describes transmitting the requested contents
`
`to the requestor. (Ex. 2023 at 102:15-103:20 and 105:22-106:6.) He agreed that
`
`Stefik does not disclose any way of embedding content in a shell or another digital
`
`work besides the Embed transaction, and that embedding cannot occur without
`
`transferring the work from one repository to another. (Id. at 114:16-115:3.) Stefik’s
`
`Embed transaction, and its entire scheme for modifying downstream rights using
`
`the NSOR field of usage rights, teach directly away from exercising rights to create
`
`new rights without resulting in actions to content.
`
`V.
`
`THE SUBSTITUTE CLAIM HAS WRITTEN DESCRIPTION
`SUPPORT
`
`Patent Owner has demonstrated written description support for the entire
`
`substitute claim. Petitioners’ challenge improperly assumes that a person of
`
`ordinary skill in the art would not consider the full teachings of the cited
`
`application passages. The argument focuses on one sentence stating that exercising
`
`a meta-right creates new rights or disposes of existing rights, which Petitioners
`
`contend does not show possession of an invention in which meta-rights exclude
`
`actions to content. (Paper 22 at 21.) This ignores the more full teaching of the same
`
`paragraph that meta-rights differ from usage rights in that exercising usage rights
`8
`
`
`
`results in actions to content. Additional passages cited in the motion further explain
`
`the characteristics and functions of meta-rights, how meta-rights can be used in
`
`complex distribution networks, and the processes involved in exercising meta-
`
`rights to create new rights. None of these additional disclosures suggest that
`
`exercising meta-rights may result in actions to content. They further confirm the
`
`direct teaching distinguishing meta-rights from usage rights on the basis that
`
`exercising usage rights results in actions to content.
`
`Petitioners also give an artificial reading to a single sentence of the ‘624
`
`provisional application. (Paper 22 at 21, citing Ex. 2013 at 1.) A person of ordinary
`
`skill would understand the word “rights” in the quoted sentence to refer to usage
`
`rights, such as the stated examples of rights to view or use content. Even if
`
`Petitioners were correct that written description support is lacking in the ‘624
`
`provisional (they are not), that would only affect the priority entitlement of the
`
`substitute claim. See Nichia Corp. v. Emcore Corp., IPR2012-00005, Paper 27 at
`
`3-4 (PTAB June 3, 2014). It is not grounds for denying the motion.
`
`Petitioners raise a false dilemma in asserting that the Stefik reference is the
`
`sole basis of written description support for the substitute claim and therefore must
`
`anticipate. The ‘280 specification indicates that the “mechanism” for exercising
`
`and enforcing meta-rights can be the same as that disclosed in Stefik, namely,
`
`repositories. (Ex. 1001 at 7:36-39.) It does not incorporate meta-rights from Stefik
`
`9
`
`
`
`or any description of procedures for exercising and enforcing meta-rights. As
`
`discussed, Stefik contains no such description. The ‘280 specification indicates that
`
`meta-rights processing is similar to usage rights processing only “[a]t a high level.”
`
`(Id. at 7:23-24.) It discloses meta-rights manager 510 in Fig. 5, which has functions
`
`not disclosed in Stefik directed to processing requests to exercise meta-rights in
`
`accordance with the specific steps recited in original claim 1 and the substitute
`
`claim. (Id. at 6:47-60, 8:56-9:13, 9:33-43.) The ‘280 specification also illustrates
`
`several DRM scenarios involving the exercise and enforcement of meta-rights
`
`(e.g., id. at Figs. 9-16), none of which are disclosed in Stefik.
`
`VI. THE SUBSTITUTE CLAIM IS SUBSTANTIALLY IDENTICAL TO
`ORIGINAL CLAIM 1 WITHIN THE MEANING OF 35 U.S.C. ¶252
`
`
`
`Patent Owner has demonstrated that the scope of proposed substitute claim
`
`37 is substantially identical to the scope that original claim 1 would have as
`
`interpreted by a district court, such that it is entitled to a Board determination that
`
`the amended claim and original claim are substantially identical within the
`
`meaning of 35 U.S.C. 252. (See USPTO Patent Trial Practice Guide, 77 Fed. Reg.
`
`48,756, 48,766 (Aug. 14, 2012).) Petitioners’ objections to this request lack merit.
`
`The U.S. District Court for the Eastern District of Texas construed claim 1 using
`
`the Phillips standard applicable in litigation. (Ex. 2001 at 5-9, 106.) Petitioners do
`
`not demonstrate or even assert that the district court applied Phillips erroneously or
`
`otherwise construed claim 1 erroneously. Nor do they challenge Patent Owner’s
`10
`
`
`
`showing that the substitute claim has substantially the same scope that original
`
`claim 1 has under that construction.
`
`It is irrelevant to the Section 252 issue that amended claim 37 is narrower
`
`than original claim 1 under the construction applied by the Board in its Institution
`
`Decision. And rather than addressing the scope actually given to claim 1 in the
`
`pending litigation, Petitioners speculate that the Board would have applied Phillips
`
`differently to reach a different construction than the district court. Yet Petitioners
`
`fail to demonstrate that original claim 1 could properly be construed under Phillips
`
`to have a scope other than the scope determined by the district court.
`
`Petitioners’ remaining assertions are easily addressed. The proposed
`
`amendment is contingent on the Board ultimately finding claim 1 unpatentable
`
`applying the construction of meta-rights set forth in the Institution Decision. It both
`
`narrows the claim relative to the Board’s initial construction and results in the
`
`same scope that original claim 1 would have in litigation.
`
`While not pertinent to the intervening rights issue, Petitioners assert
`
`incorrectly that Dr. Martin could not opine whether the amendment addresses a
`
`ground of unpatentability involved in the Institution Decision. The cited testimony
`
`reflects Dr. Martin’s reluctance to speculate in response to questions that he
`
`understood were asking how the Board would view the proposed amendment. Dr.
`
`Martin’s declaration maintains that original claim 1 is patentable over Stefik even
`
`11
`
`
`
`under the Board’s claim construction of “meta-right,” but also opines that the
`
`amended claim distinguishes Stefik on additional grounds that may not be
`
`available under the Board’s construction. Contrary to Petitioners’ argument, Patent
`
`Owner need not amend the claim to have a scope narrower than it would have in
`
`litigation for the proposed amendment to be responsive to a ground of
`
`unpatentability. Here, the amendment is both responsive and results in the same
`
`claim scope as original claim 1 has in litigation.
`
`VII. CONCLUSION
`
`If original claim 1 is found unpatentable, Patent Owner respectfully requests
`
`that the Board grant its Contingent Motion to Amend and, further, that the Board
`
`enter a finding that the substitute claim 37 is substantially identical to that of
`
`original patent claim 1 within the meaning of 35 U.S.C. ¶252.
`
`By:
`
`Respectfully submitted,
`FITCH EVEN TABIN & FLANNERY, LLP
`/Timothy P. Maloney/
`
`Timothy P. Maloney
`Registration No. 38,233
`tim@fitcheven.com
`
`
`
`Dated: January 21, 2016
`
`
`
`
`120 South LaSalle Street
`Suite 1600
`Chicago, Illinois 60603
`(312) 577-7000
`(312) 577-7007 (fax)
`
`12
`
`
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. §42.6(e), the undersigned hereby certifies that a true
`
`copy of
`
`the foregoing PATENT OWNER’S REPLY IN SUPPORT OF
`
`CONTINGENT MOTION TO AMEND UNDER 37 C.F.R. § 42.121 is being
`
`served on counsel for petitioners.
`
`By:
`
`Respectfully submitted,
`FITCH EVEN TABIN & FLANNERY, LLP
`/Timothy P. Maloney/
`
`Timothy P. Maloney
`Registration No. 38,233
`tim@fitcheven.com
`
`
`
`
`Dated: January 21, 2016
`
`
`
`
`120 South LaSalle Street
`Suite 1600
`Chicago, Illinois 60603
`(312) 577-7000
`(312) 577-7007 (fax)
`
`13
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