`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`_________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_________________
`
`GOOGLE LLC and APPLE INC.,
`
`Petitioners,
`
`v.
`
`CONTENTGUARD HOLDINGS, INC.,
`
`Patent Owner.
`_________________
`
`Case CBM2015-000401
`Patent No. 7,774,280 B2
`_________________
`
`PATENT OWNER’S REMAND BRIEF
`
`
`
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`1 Case CBM2015-00160 has been joined with this proceeding.
`
`
`
`I.
`
`Introduction
`
`The invention described in U.S. Patent 7,774,280 (“the ‘280 patent”) relates
`
`generally to computer security, with a focus on creating and distributing rights to
`
`use digital content. It applies to digital rights management activities that are not
`
`financial in nature. The ‘280 patent claims contain no language requiring the
`
`disclosed digital rights management methods or systems to be used in the practice,
`
`administration or management of a financial product or service.
`
`Petitioners nevertheless challenged the ‘280 patent as a covered business
`
`method (“CBM”) patent. In so doing, Petitioners assumed the burden of
`
`demonstrating that it is a CBM patent. AIA §18(d)(1); 37 C.F.R. §42.301(a).
`
`A CBM 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 . . . .” and that is not
`
`a “patent[] for [a] technological invention[].” AIA §18(d)(1). Petitioners argued that
`
`the recited terms “rights supplier” and “rights consumer” in claim 1 are “economic
`
`terms,” and pointed to the ‘280 specification, which describes embodiments where
`
`a rights consumer purchases rights from a rights supplier. (Paper 1 at 9-14.)
`
`Endorsing Petitioners’ argument, the Board broadly interpreted the CBM
`
`patent definition to encompass patents claiming activities that are incidental to
`
`1
`
`
`
`financial activity or complementary to a financial activity. Applying that expansive
`
`definition, the Board held that claim 1 was a CBM claim. (Paper 34 at 7-14.)
`
`On July 11, 2018 the Federal Circuit issued a decision, vacating and
`
`remanding the Final Written Decision. Apple Inc. v. ContentGuard Holdings, Inc.,
`
`2018 U.S. App. LEXIS 19258, *8 (Fed. Cir. July 11, 2018) (nonprecedential). The
`
`Federal Circuit held that the Board applied the improper “incidental or
`
`complementary” standard to find that the ‘280 patent is a CBM patent. Id. at *6. The
`
`Federal Circuit directed the Board to determine whether the ‘280 patent qualifies as
`
`a CBM patent under the statutory definition without relying on the “incidental to” or
`
`“complementary to” standard. Id. at *8.
`
`The Federal Circuit decision requires the Board to focus its CBM patent
`
`review eligibility on what the ‘280 patent claims. The ‘280 patent claims are context-
`
`neutral, can be used in numerous non-financial settings, and do not recite any
`
`financial activity. This places the ‘280 patent outside the scope of CBM review.
`
`II. Argument
`
`As the Federal Circuit recognized in in Unwired Planet, a patent does not
`
`become eligible for CBM patent review merely because its specification proposes
`
`using the invention to facilitate a financial activity:
`
`Likewise, it cannot be the case that a patent covering a method and
`corresponding apparatuses becomes a CBM patent because its practice
`could involve a potential sale of a good or service . . . It is not enough
`that a sale has occurred or may occur, or even that the specification
`
`2
`
`
`
`speculates such a potential sale might occur.
`
`Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1382 (Fed. Cir. 2016). Instead,
`
`to qualify as a CBM patent a patent’s claims must be “directed to” a method or
`
`apparatus “used in the practice, administration, or management of a financial product
`
`or service.” Id.2 As the Federal Circuit reiterated in this case, “the mere possibility
`
`that a patent can be used in financial transactions is not enough to make it a CBM
`
`patent.” ContentGuard Holdings, 2018 U.S. App. LEXIS 19258, *7 (citing Unwired
`
`Planet, 841 F.3d at 1382). Because not a single ‘280 patent claim recites a business
`
`practice, the commercial distribution of digital content, the payment of a fee, or any
`
`other activity that is financial in nature, it does not qualify for CBM patent review.
`
`The Board’s expansion of the CBM eligibility standard to encompass patents
`
`that claim activities “incidental or complimentary to a financial activity” led to the
`
`erroneous conclusion that the ‘280 patent is a CBM patent. The Board based its
`
`conclusion on the specification, which includes embodiments involving the sale of
`
`digital content for a fee. The Federal Circuit held that the mere disclosure in the ‘280
`
`patent specification of the potential for using the computer security technology of
`
`
`2 In Secure Axcess, LLC v. PNC Bank Nat’l Ass’n, the Federal Circuit clarified that
`“the statutory definition of a CBM patent requires that the patent have a claim that
`contains, however phrased, a financial activity element.” 848 F.3d 1370, 1377, 1381
`(Fed. Cir. 2017). That decision, however, has since been vacated as moot by the
`Supreme Court. PNC Bank Nat. Ass’n v. Secure Axcess, LLC, 138 S. Ct. 1982
`(2018).
`
`3
`
`
`
`the invention in connection with a sale of rights in digital content is not a sufficient
`
`basis to find it a CBM patent:
`
`Although the ’280 patent describes embodiments where the claimed
`DRM system is used to monetize digital works, it also explains how the
`claimed invention can be used in ways that do not involve financial
`transactions. For instance, the specification describes how the claimed
`invention can manage healthcare records. ’280 patent, col. 7, ll. 6–17.
`In one embodiment, patients can grant “meta-rights” to their hospitals,
`which allow their hospital to transfer specific access rights to a second
`hospital where the patient might need treatment. Id.. . . [W]e hold only
`that it is not enough for the specification to describe how the invention
`could, in some instances, be used to facilitate financial transactions.
`
`Id. at *7.
`
`The claims of the ‘280 patent are plainly non-financial. In its Final Written
`
`Decision, the Board observed that the preamble to the patent refers to transferring
`
`rights from a “rights supplier” to a “rights consumer.” (Paper 34 at 11.) The Board
`
`then characterized claim 1 generally as being directed to controlling “the distribution
`
`or resale of rights associated with an item from a supplier to a consumer . . . .” (Id.
`
`at 14.). But the claim language is not directed to the resale of rights because it recites
`
`no sales related activity. The claim language does not require the sale or purchase of
`
`rights, making or accepting payment, or any other financial activity element. The
`
`claims refer only to “transferring rights,” not selling or reselling them.
`
`The transfer of rights from a rights supplier to a rights consumer is not
`
`inherently a financial activity. The phrase “transferring rights” means nothing more
`
`than rights being conveyed from one party to another. Many scenarios involving
`
`4
`
`
`
`rights transfer are not financial in nature, for example, the transfer of rights by gift,
`
`or the transfer of rights among employees of an enterprise. The preamble language
`
`by itself does not connote consideration being paid for the transfer of rights.
`
`Indeed, the ‘280 patent specification indicates that “the party granting usage
`
`rights or meta-rights is referred to as ‘supplier’ and the party receiving and/or
`
`exercising such rights is referred to as ‘consumer’ herein.” (GOOG 1001 at 6:10-
`
`13.) Those terms are used consistently throughout the specification to refer to parties
`
`engaged in rights transfers occurring in non-financial contexts. (See e.g., id. at 7:6-
`
`17, referring to hospitals engaged in non-financial transfer of healthcare records as
`
`“supplier” and “consumer” of rights.) These generic definitions, and the generic
`
`usage throughout the specification, preclude any argument that the terms “rights
`
`supplier” and “rights consumer” limit the claims to the financial realm.
`
`None of the recited method claim steps supply the missing financial activity
`
`element. The body of claim 1 has three primary steps: (1) “obtaining a set of rights
`
`associated with an item, the set of rights including a meta-right …”; (2)
`
`“determining, by a repository, whether the rights consumer is entitled to the right
`
`specified by the meta-right” and (3) “exercising the meta-right to create the right
`
`specified by the meta-right if the rights consumer is entitled to the right specified by
`
`the meta-right ….” (GOOG 1001 at 15:10-22.). None of these steps relate to a
`
`financial product or service or any financial activity. The remaining aspects of the
`
`5
`
`
`
`claim, specifying a state variable for determining a state of the created right and
`
`enforcement of the digital meta-right by a repository, are also non-financial.
`
`The disclosed examples in the specification of a fee or processing by a
`
`clearinghouse do not limit the claims. The Petitioners never argued, and the Board
`
`did not find, that those examples provide a basis for construing any claim to require
`
`the sale of digital rights for a fee. Indeed, the Board emphasized the optional nature
`
`of those features, noting that the specification discloses that the transfer of rights
`
`associated with an item from a rights supplier to a rights consumer “may require the
`
`payment of a fee or processing by a clearing house.” (Paper 34 at 11) (emphasis
`
`added). The Board also commented that the “consumer/supplier relationship, at least
`
`in some instances, requires the payment of a fee or processing by a clearing house,
`
`both of which are activities that are financial in nature.” (Id. at 13) (emphasis added).
`
`As the Federal Circuit recognized, the invention disclosed in the ‘280 patent
`
`specification has utility in contexts outside of the financial realm. ContentGuard
`
`Holdings, 2018 U.S. App. LEXIS 19258, *7. Disclosed implementations that do not
`
`involve payment of a fee include, for example, controlling content usage within an
`
`organization or enterprise (GOOG 1001 at 6:61-67, 14:41-44), managing
`
`distribution of healthcare records between hospitals (id. at 7:6-17), managing
`
`distribution of legal documents between law firms and third parties (id. at 7:17-22)
`
`and sharing rights to e-books between a librarian and university students (id. at
`
`6
`
`
`
`12:39-50).
`
`Furthermore, Figs. 9 to 12 and 14 to 16 and the accompanying text provide
`
`numerous examples of the use of meta-rights and associated conditions and state
`
`variables to derive and transfer new rights. Not one of these examples requires the
`
`payment of a fee or the use of a state variable to track payment of a fee. (Id. at Fig.
`
`9 (exercising meta-right to derive usage right to play e-book) and 11:52-12:2; Fig.
`
`10) (exercising meta-right to transfer usage right to play e-book to PDA) and 12:22-
`
`32; Fig. 11 (exercising meta-rights issued by librarian to derive usage rights
`
`permitting university students to view e-books) and 12:39-50; Fig. 12 (exercising
`
`meta-rights permitting 5 members of each affiliated book club to view e-book) and
`
`12:57-13:8; Fig. 14 (exercising meta-rights permitting 5 members of each affiliated
`
`book club to view e-book) and 13:18-33; Fig. 15 (exercising meta-rights to generate
`
`usage right to play and view content on PDA) and 14:11-18; Fig. 16 (exercising
`
`meta-rights to generate usage right to play and view content on PDA) and 14:22-31.)
`
`The usefulness of the claimed techniques and systems in the sale of digital
`
`content items does not make the ‘280 patent a CBM patent. This is especially clear
`
`where the specification describes the use of the invention for other non-financial
`
`purposes. Treating the ‘280 patent as a CBM patent just because the subject matter
`
`claimed could be used in a financial context is precluded by the holding in Unwired
`
`Planet, where the Federal Circuit ruled that a patent does not become a CBM patent
`
`7
`
`
`
`because “its practice could involve a potential sale of a good or service.” Unwired
`
`Planet, 841 F.3d 1376 at 1382.
`
`The Unwired Planet decision is consistent with the Federal Circuit’s earlier
`
`decision in Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir.
`
`2016), which held the challenged patent was eligible for CBM review because the
`
`claims recited “an express financial component in the form of a subsidy” that was
`
`“central to the operation of the claimed invention.” The Blue Calypso decision also
`
`approved of prior PTAB decisions that “properly focuse[d] on the claim language at
`
`issue and, finding nothing explicitly or inherently financial in the construed claim
`
`language, decline[d] to institute CBM review.” Id. at 1340.
`
`Other PTAB decisions that have denied CBM review in similar circumstances
`
`following the guidance provided by Unwired Planet include: Cloud9 Techs. LLC v.
`
`IPC Systems, Inc., CBM2017-00037 at 4-8 (P.T.A.B. July 21, 2017) (declining CBM
`
`review of patent claiming communications system that may be used by traders for
`
`financial activity because properly construed claims do not recite a financial
`
`element); Ford Motor Company v. Versata Dev. Grp., Inc., CBM2016-00100 at 9-
`
`11 (P.T.A.B. Mar. 20, 2017) (declining CBM review because claims do not specify
`
`applicability to sales of products, financial services or other financial applications
`
`and specification discloses embodiments that are not financial related); and Twilio
`
`Inc., v. Telesign Corp., CBM2016-00099 at 10-14 (P.T.A.B. Feb. 27, 2017)
`
`8
`
`
`
`(declining CBM review of patent claiming fraud prevention process where claims
`
`recited context-neutral terms without any connection to financial products or
`
`services and specification discloses embodiments that are not financial related).
`
`Also instructive is the recent opinion terminating the Unwired Planet CBM
`
`proceeding after that case was remanded by the Federal Circuit with a directive to
`
`apply the statutory CBM patent definition. Google, Inc. v. Unwired Planet, LLC,
`
`CBM2014-00006 (P.T.A.B. Aug. 13, 2018). The patent claims challenged there are
`
`directed to a method of controlling access to location information for wireless
`
`communications devices. The claims recite a generic “method for controlling access
`
`to location information,” including “receiving, querying, determining, and denying
`
`steps,” such as by a client application “that may request location information, or that
`
`is used with access control that manage access based on subscriber privacy
`
`preferences.” Id. at 7. The Board found that the patent specification disclosed certain
`
`finance-related actions, such as automated billing and administrative functions, that
`
`may be used in connection with providing the location information to the client
`
`application. Id. at 7-8. It concluded that these exemplar applications are insufficient
`
`to invoke CBM jurisdiction under the statutory definition:
`
`Although this language indicates that some incidental “administrative
`functions,” such as accounting or payment activities may be included
`with the described invention, it does not change that these claims are
`directed to controlling access to location information and do not involve
`performing data processing or other operations used in the practice,
`administration, or management of a financial product or service. See
`
`9
`
`
`
`Contentguard Holdings, 2018 WL 3387537, *3 (holding that “it is not
`enough for the specification to describe how the invention could, in
`some instances, be used to facilitate financial transactions”).
`
`Id. at 8.
`
`The same reasoning applies here. The ‘280 patent claims are drawn to the
`
`digital rights management methods and systems themselves, not to particular uses
`
`of the technology to perform financial activities or otherwise practice financial
`
`products or services. This is not enough to make it a CBM patent, especially when
`
`the specification confirms that the invention has applications outside of the sale of
`
`digital rights involving the payment of fees.
`
`III. Conclusion
`
`The Board should conclude that the ‘280 patent does not include any claim
`
`that could qualify it as a CBM patent under the statutory definition provided by
`
`Congress and terminate this CBM review.
`
`
`
`
`
`
`
`Date: October 19, 2018
`
`120 S. LaSalle Street, Suite 2100
`Chicago, Illinois 60603-3406
`(312) 577-7000
`(312) 577-7007 (fax)
`
`
`
`
`
`Respectfully submitted,
`
`FITCH EVEN TABIN & FLANNERY LLP
`
`
`
`
`
`/Timothy P. Maloney/
`Timothy P. Maloney
`Registration No. 38,233
`tim@fitcheven.com
`
`
`10
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies in accordance with 37 C.F.R. § 42.6(e) that on
`
`October 19, 2018, a copy of the foregoing PATENT OWNER’S REMAND BRIEF
`
`was served on Petitioners at the following email addresses:
`
`Robert Unikel, robertunikel@paulhastings.com
`Robert R. Laurenzi, robertlaurenzi@paulhastings.com
`Jeffrey P. Kushan, jkushan@sidley.com
`Michael R. Franzinger, mfranzinger@sidley.com
`Thomas A. Broughan, III, tbroughan@sidley.com
`
`Date: October 19, 2018
`
`120 S. LaSalle Street, Suite 2100
`Chicago, Illinois 60603-3406
`(312) 577-7000
`(312) 577-7007 (fax)
`
`
`
`
`
`/Timothy P. Maloney/
`Timothy P. Maloney
`Registration No. 38,233
`tim@fitcheven.com
`
`
`
`
`
`
`11
`
`
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