Trials@uspto.gov
`571-272-7822
`
`
`Paper 17
`Entered: October 8, 2013
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.
`Petitioner
`
`v.
`
`SIGHTSOUND TECHNOLOGIES, LLC
`Patent Owner
`____________
`
`Case CBM2013-00019
`Patent 5,191,573
`
`
`
`Before MICHAEL P. TIERNEY, JUSTIN T. ARBES, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`Opinion for the Board filed by Administrative Patent Judge ARBES.
`
`Opinion Concurring filed by Administrative Patent Judge TIERNEY.
`
`ARBES, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Review
`37 C.F.R. § 42.208
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`Petitioner Apple Inc. filed a Corrected Petition (Paper 8) (“Pet.”) to
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`institute a covered business method review of claims 1, 2, 4, and 5 of Patent
`
`5,191,573 (the “‟573 patent”) pursuant to 35 U.S.C. § 321 et seq. Patent
`
`Owner SightSound Technologies, LLC filed a preliminary response
`
`(“Prelim. Resp.”). We have jurisdiction under 35 U.S.C. § 324. For the
`
`reasons that follow, the Board has determined not to institute a covered
`
`business method review.1
`
`
`
`I. BACKGROUND
`
`The standard for instituting a covered business method review is set
`
`forth in 35 U.S.C. § 324(a):
`
`THRESHOLD—The Director may not authorize a post-grant
`review to be instituted unless the Director determines that the
`information presented in the petition filed under section 321, if
`such information is not rebutted, would demonstrate that it is
`more likely than not that at least 1 of the claims challenged in
`the petition is unpatentable.
`
`Petitioner challenges claims 1, 2, 4, and 5 as unpatentable under
`
`35 U.S.C. §§ 101 and 112. Pet. 34-58. We deny the Petition as discussed
`
`below.
`
`
`
`A. The ’573 Patent (Ex. 1001)
`
`The ‟573 patent, entitled “Method for Transmitting a Desired Digital
`
`Video or Audio Signal,” issued on March 2, 1993 based on Application
`
`07/586,391, filed September 18, 1990, which is a file wrapper continuation
`
`
`1 In a decision entered concurrently, a covered business method review of
`the ‟573 patent is being instituted in Case CBM2013-00020.
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`
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`2
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`of Application 07/206,497, filed June 13, 1988. The ‟573 patent has
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`expired.
`
`The ‟573 patent was previously the subject of an ex parte
`
`reexamination (Control No. 90/007,402) requested by Napster, Inc. on
`
`January 31, 2005. Following reexamination, claims 1-6 of the ‟573 patent
`
`were confirmed. Ex. 1001 at 10-25 (reexamination certificate issued
`
`November 30, 2010). Claims 1, 2, 4, and 5 of the ‟573 patent also are the
`
`subject of Case CBM2013-00020 (grounds based on 35 U.S.C. §§ 102 and
`
`103).
`
`The ‟573 patent relates to a “method for the electronic sales and
`
`distribution of digital audio or video signals.” Ex. 1001, col. 1, ll. 9-14. The
`
`patent describes how three types of media used for storing music at the time
`
`of the invention—records, tapes, and compact discs—did not allow for
`
`music to be transferred easily and had various problems, such as low
`
`capacity and susceptibility to damage during handling. Id., col. 1, l. 17-col.
`
`2, l. 9. The patent discloses storing “Digital Audio Music” (i.e., music
`
`encoded into binary code) on a computer hard disk and selling and
`
`distributing such music electronically. Id., col. 1, ll. 53-56; col. 2, ll. 10-35.
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`Figure 1 of the ‟573 patent is reproduced below:
`
`
`
`As shown in Figure 1 above, an agent authorized to sell and distribute
`
`“Digital Audio Music” has a control unit 20 (control panel 20a, control
`
`integrated circuit 20b, and sales random access memory chip 20c) and hard
`
`disk 10, which stores the music to be distributed. Id., col. 3, ll. 44-67. On
`
`the other side of the figure, a user has a control unit 50 (control panel 50a,
`
`control integrated circuit 50b, incoming random access memory chip 50c,
`
`and playback random access memory chip 50d), hard disk 60, video display
`
`unit 70, and speakers 80. Id., col. 3, l. 67-col. 4, l. 10. The agent and user
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`are connected via telephone lines 30. Id., col. 3, ll. 63-67. According to the
`
`‟573 patent, control units 20 and 50 are “designed specifically to meet the
`
`teachings of this invention,” but all other components shown in Figure 1
`
`were “already commercially available.” Id., col. 4, ll. 16-23.
`
`The patent describes a process by which a user transfers money “via a
`
`telecommunications line” to purchase music from the agent and the music is
`
`transferred electronically “via a telecommunications line” to the user and
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`stored on the user‟s hard disk. Id., col. 5, ll. 29-45. Control integrated
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`
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`circuits 20b and 50b regulate the electronic transfer. Id., col. 4, ll. 29-47.
`
`The agent‟s sales random access memory chip 20c stores music temporarily
`
`so that it can be transferred to the user. Id. The user‟s incoming random
`
`access memory chip 50c stores music temporarily before storage in hard disk
`
`60, and playback random access memory chip 50d stores music temporarily
`
`so that it can be played. Id. Once a song is stored in the user‟s hard disk 60,
`
`the user can select it among others in a visual display using control panel
`
`50a and play it on speakers 80. Id., col. 4, ll. 52-63. In addition to “Digital
`
`Audio Music,” the patent contemplates “Digital Video” being sold and
`
`distributed electronically via the disclosed methods. Id., col. 5, l. 67-col. 6,
`
`l. 2.
`
`
`
`B. Related Matters
`
`The ‟573 patent was asserted previously in two district court
`
`litigations: SightSound.com Inc. v. N2K, Inc. et al., W.D. Pa. Case No.
`
`2:98-cv-00118-DWA (filed January 16, 1998) (the “N2K litigation”), and
`
`SightSound Techs., LLC et al. v. Roxio, Inc. et al., W.D. Pa. No.
`
`2:04-cv-01549-DWA (filed October 8, 2004). Pet. 17-18. Both cases settled
`
`prior to trial. See Ex. 2001. The ‟573 patent is being asserted currently
`
`against Petitioner in SightSound Techs. LLC v. Apple Inc., W.D. Pa. Case
`
`No. 2:11-cv-01292-DWA (filed October 10, 2011) (the “Apple litigation”).
`
`Pet. 17-18. The Apple litigation has been stayed. Prelim. Resp. 9.
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`
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`C. Exemplary Claim
`
`Claim 1 of the ‟573 patent is exemplary of the claims at issue:
`
`1. A method for transmitting a desired digital audio
`signal stored on a first memory of a first party to a second
`memory of a second party comprising the steps of:
`
`transferring money electronically via a
`telecommunication line to the first party, at a location remote
`from the second memory and controlling use of the first
`memory, from the second party financially distinct from the
`first party, said second party controlling use and in possession
`of the second memory;
`
`connecting electronically via a telecommunications line
`the first memory with the second memory such that the desired
`digital audio signal can pass therebetween;
`
`transmitting the desired digital audio signal from the first
`memory with a transmitter in control and possession of the first
`party to a receiver having the second memory at a location
`determined by the second party, said receiver in possession and
`control of the second party; and
`
`storing the digital signal in the second memory.
`
`
`
`D. The Asserted Grounds
`
`Petitioner challenges claims 1, 2, 4, and 5 of the ‟573 patent on the
`
`grounds that the claims do not recite patent-eligible subject matter under
`
`35 U.S.C. § 101 and lack sufficient written description support under
`
`35 U.S.C. § 112.
`
`
`
`E. Claim Interpretation
`
`Consistent with the statute and legislative history of the America
`
`Invents Act (AIA), the Board interprets claims of an unexpired patent using
`
`the “broadest reasonable construction in light of the specification of the
`
`
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`patent in which [they] appear[].” 37 C.F.R. § 42.300(b); see also Office
`
`Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48766 (Aug. 14, 2012).
`
`For claims of an expired patent, however, the Board‟s claim interpretation
`
`analysis is similar to that of a district court. See In re Rambus Inc., 694 F.3d
`
`42, 46 (Fed. Cir. 2012). Claim terms are given their ordinary and customary
`
`meaning as would be understood by a person of ordinary skill in the art at
`
`the time of the invention and in the context of the entire patent disclosure.
`
`In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). We
`
`apply this standard to the claims of the expired ‟573 patent.
`
`We note that the district court interpreted various terms of the ‟573
`
`patent in both the N2K litigation and Apple litigation. See SightSound.com
`
`Inc. v. N2K, Inc., 185 F. Supp. 2d 445 (W.D. Pa. 2002) (report and
`
`recommendation in the N2K litigation); Exs. 1014-15 (Apple litigation).
`
`Petitioner‟s proposed interpretations are consistent with the district court‟s
`
`interpretations in the Apple litigation, and Patent Owner does not dispute
`
`Petitioner‟s proposed interpretations in its preliminary response. See Pet.
`
`30-34. We have reviewed the district court‟s claim interpretations and
`
`determine that the interpretations in the Apple litigation are consistent with
`
`the ordinary and customary meaning of the terms as understood by one of
`
`ordinary skill in the art. Accordingly, for purposes of this decision, we
`
`adopt the following interpretations of terms in claims 1, 2, 4, and 5 of the
`
`‟573 patent:
`
`Claim Term
`
`Interpretation
`
`“first party”
`
`a first entity, whether a corporation or a real
`person
`
`
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`Claim Term
`
`Interpretation
`
`“second party”
`
`“telecommunication
`line” (claim 1),
`“telecommunications
`line” (claims 1 and 4)
`
`a second entity, whether a corporation or a
`real person
`
`an electronic medium for communicating
`between computers
`
`“electronically”
`
`through the flow of electrons
`
`“connecting
`electronically”
`
`connecting through devices or systems which
`depend on the flow of electrons
`
`“transferring money
`electronically”
`
`providing payment electronically (i.e.,
`through devices or systems which depend on
`the flow of electrons)
`
`“digital audio signal”
`
`digital representation of sound waves
`
`All other terms in claims 1, 2, 4, and 5 are given their ordinary and
`
`customary meaning and need not be further construed at this time.
`
`
`
`II. ANALYSIS
`
`We turn now to Petitioner‟s asserted grounds of unpatentability and
`
`Patent Owner‟s arguments in its preliminary response to determine whether
`
`Petitioner has met the threshold standard of 35 U.S.C. § 324(a).
`
`
`
`A. Standing
`
`The parties disagree as to whether Petitioner has standing to file a
`
`petition for a covered business method review of the ‟573 patent. See
`
`Pet. 11-17; Prelim. Resp. 23-39.
`
`Section 18 of the AIA provides for the creation of a transitional
`
`program for reviewing covered business method patents. Section 18 limits
`
`
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`reviews to persons or their privies that have been sued or charged with
`
`infringement of a “covered business method patent,” which does not include
`
`patents for “technological inventions.” AIA §§ 18(a)(1)(B), 18(d)(1); see
`
`37 C.F.R. § 42.302. It is undisputed that Petitioner has been sued for
`
`infringement of the ‟573 patent. The Apple litigation was filed in the U.S.
`
`District Court for the Western District of Pennsylvania on October 10, 2011,
`
`and is pending. See Pet. 17; Prelim. Resp. 8-9. The only dispute is whether
`
`the ‟573 patent is a “covered business method patent” as defined in the AIA.
`
`See Pet. 11-17; Prelim. Resp. 23-39. For the reasons explained below, we
`
`conclude that the ‟573 patent is a “covered business method patent” and
`
`Petitioner has standing to file a petition for a covered business method
`
`review of the ‟573 patent.
`
`
`
`1. Financial Product or Service
`
`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). For
`
`purposes of determining whether a patent is eligible for a covered business
`
`method patent review, the focus is on the claims. See Transitional Program
`
`for Covered Business Method Patents—Definitions of Covered Business
`
`Method Patent and Technological Invention; Final Rule, 77 Fed. Reg.
`
`48734, 48736 (Aug. 14, 2012) (“CBM Rules”). A patent need have only one
`
`claim directed to a covered business method to be eligible for review. Id.
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`
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`In promulgating rules for covered business method reviews, the Office
`
`considered the legislative intent and history behind the AIA‟s definition of
`
`“covered business method patent.” Id. at 48735-36. 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)). The legislative history indicates that “financial product or
`
`service” should be interpreted broadly. Id.
`
`Claim 1 of the ‟573 patent is directed to activities that are financial in
`
`nature, namely the electronic sale of digital audio. Claim 1 recites
`
`“transferring money electronically via a telecommunication line to the first
`
`party . . . from the second party.” The electronic transfer of money is a
`
`financial activity, and allowing such a transfer amounts to providing a
`
`financial service. Indeed, Patent Owner acknowledges that a fundamental
`
`step of claim 1 of the ‟573 patent is “selling” a desired digital audio signal to
`
`a user. See Prelim. Resp. 9-10. The financial nature of the claimed method
`
`is indicated further by the fact that the claim requires the first and second
`
`parties to be “financially distinct” from each other. The Specification of the
`
`‟573 patent also confirms the claimed method‟s connection to financial
`
`activities. The Specification states that the invention is a method for the
`
`electronic “sale[]” of digital audio where a user may “purchase” and receive
`
`digital audio. See, e.g., Ex. 1001, col. 1, ll. 9-14; col. 2, ll. 26-30; col. 2,
`
`ll. 51-58; see also claim 3 (“providing a credit card number of the second
`
`party . . . so the second party is charged money”). We are persuaded that
`
`claim 1 recites a method for performing data processing or other operations
`
`
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`used in the practice, administration, or management of a financial product or
`
`service, as required by Section 18(d)(1) of the AIA.
`
`In its preliminary response, Patent Owner makes a number of
`
`arguments that the ‟573 patent does not qualify as a “covered business
`
`method patent.” Patent Owner contends that Congress intended covered
`
`business method reviews to apply only to a “narrow class of patents,”
`
`relying on various statements in the legislative history of the AIA. Prelim.
`
`Resp. 25-30. In particular, Patent Owner asserts that only patents with a
`
`“clear nexus to the financial business” are eligible for a covered business
`
`method review. Id. at 23-24, 27, 30. As such, “a petitioner must show more
`
`than just the existence of a payment step or a monetary element in a patent
`
`claim to establish the necessary nexus between the patent and a financial
`
`product or service.” Id. at 27.
`
`It is the statutory language, however, that controls whether a patent is
`
`eligible for a covered business method review. The AIA does not require 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
`
`48735-36. Senator Schumer, for example, stated:
`
`Nothing in the America Invents Act limits use of section
`18 to banks, insurance companies or other members of the
`financial services industry. Section 18 does not restrict itself to
`being used by petitioners whose primary business is financial
`
`
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`products or services. Rather, it applies to patents that can apply
`to financial products or services. Accordingly, the fact that a
`patent is being used by a company that is not a financial
`services company does not disqualify the patent from section 18
`review. . . .
`
`The plain meaning of “financial product or service”
`demonstrates that section 18 is not limited to the financial
`services industry. At its most basic, a financial product is an
`agreement between two parties stipulating movements of money
`or other consideration now or in the future. . . .
`
`157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)
`
`(emphasis added). Although claim 1 of the ‟573 patent does not relate to a
`
`financial services business, it does recite the electronic movement of money
`
`between financially distinct entities, which is an activity that is financial in
`
`nature.
`
`Patent Owner further argues that SightSound Technologies, LLC was
`
`formed as a media company, not a financial services company, and the
`
`entities sued by Patent Owner for infringement of the ‟573 patent (including
`
`Petitioner) sell digital content, not financial products. Prelim. Resp. 30-31.
`
`Again, however, as the legislative history cited above demonstrates, a patent
`
`need not be used by a financial services company or involve a traditional
`
`financial services business to qualify as a covered business method patent.
`
`The cited entities may not provide typical financial services, but, according
`
`to Petitioner, they do sell digital content, which is the financial activity
`
`recited in claim 1.
`
`Finally, Patent Owner argues that a determination that the ‟573 patent
`
`is a covered business method patent would be a “radical expansion of the
`
`scope of patents subject to CBM review” where “[v]irtually any patent that
`
`mentions a sale would be subject to CBM review, even when the patent
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`itself has nothing to do with finance.” Id. at 31-33. Patent Owner‟s
`
`argument is not persuasive. The Board reviews petitions on their own facts
`
`to determine whether the challenged patent is a “covered business method
`
`patent” under the AIA definition. Petitioner‟s argument that every patent
`
`mentioning a sale would be subject to covered business method review
`
`ignores the specific language of claim 1 (“transferring money electronically”
`
`from a second party to a “financially distinct” first party) and the claim‟s
`
`expressly stated connection to financial activity.2 Further, we do not agree
`
`with Patent Owner that the ‟573 patent has nothing to do with finance. The
`
`Specification of the ‟573 patent states repeatedly that the disclosed method
`
`involves the electronic “sale” of digital audio and the electronic “transfer” of
`
`“money.” See, e.g., Ex. 1001, col. 1, ll. 9-14; col. 2, ll. 26-30; col. 2, ll.
`
`51-58; col. 3, ll. 3-8; col. 5, ll. 33-35. For the reasons stated above, and
`
`based on the particular facts of this proceeding, we conclude that claim 1 of
`
`the ‟573 patent meets the “financial product or service” component of the
`
`definition in Section 18(d)(1) of the AIA.
`
`
`
`2. Technological Invention
`
`The definition of “covered business method patent” in Section
`
`18(d)(1) of the AIA does not include patents for “technological inventions.”
`
`To determine whether a patent is for a technological invention, we consider
`
`“whether the claimed subject matter as a whole recites a technological
`
`feature that is novel and unobvious over the prior art; and solves a technical
`
`
`2 Petitioner‟s argument also ignores the fact that a patent mentioning a sale,
`but directed to a “technological invention[],” would not be a covered
`business method patent. See AIA § 18(d)(1); infra Section II.A.2.
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`problem using a technical solution.” 37 C.F.R. § 42.301(b). The following
`
`claim drafting techniques, for example, typically do not render a patent a
`
`“technological invention”:
`
`(a) Mere recitation of known technologies, such as
`computer hardware, communication or computer networks,
`software, memory, computer-readable storage medium,
`scanners, display devices or databases, or specialized machines,
`such as an ATM or point of sale device.
`
`(b) Reciting the use of known prior art technology to
`accomplish a process or method, even if that process or method
`is novel and non-obvious.
`
`(c) Combining prior art structures to achieve the normal,
`expected, or predictable result of that combination.
`
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48763-64 (Aug. 14,
`
`2012).
`
`We are persuaded that claim 1 as a whole does not recite a
`
`technological feature that is novel and unobvious over the prior art. See Pet.
`
`11-17. The method of claim 1 utilizes various technical components: a
`
`“first memory,” “second memory,” “telecommunications line,”
`
`“transmitter,” and “receiver.” All of these components, however, were
`
`generic hardware devices known in the prior art. The Specification of the
`
`‟573 patent discloses, for instance, that “agent‟s Hard Disk 10,” “user‟s Hard
`
`Disk 60,” and “Telephone Lines 30” were “already commercially available.”
`
`See Ex. 1001, col. 4, ll. 16-20; Pet. 14. The applicant also acknowledged
`
`during prosecution that certain prior art references had a “transmitter” and
`
`“receiver,” and stated that claim 1 can use “[a]ny suitable recording
`
`apparatus” and is “not limited to a predesigned receiver.” See Ex. 1002 at
`
`100, 139-41; Pet. 10, 14-15. Claim 1 is merely the recitation of known
`
`technologies to perform a method, which indicates that it is not a patent for a
`
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`technological invention. See Office Patent Trial Practice Guide, 77 Fed.
`
`Reg. at 48764 (examples a and b).
`
`Patent Owner does not dispute that the individual technical
`
`components of claim 1 were known in the art, but argues that Petitioner fails
`
`to address whether the particular combination of steps in claim 1 was novel
`
`and non-obvious. Prelim. Resp. 33-37. Petitioner, however, discusses claim
`
`1 as a whole in its Petition and explains sufficiently why the combination of
`
`steps does not recite a technological feature that is novel and non-obvious
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`over the prior art. See, e.g., Pet. 11-16 (addressing Patent Owner‟s
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`admissions regarding the claim).
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`Patent Owner also argues that claim 1 of the ‟573 patent is not merely
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`an abstract idea and is not a business process capable of being performed
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`using a pen and paper. Prelim. Resp. 35-37. According to Patent Owner,
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`the hardware components recited in the claim are necessary to perform the
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`claimed method. Id. Patent Owner‟s argument appears to relate to whether
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`claim 1 recites patent-eligible subject matter under 35 U.S.C. § 101 rather
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`than whether the patent is for a “technological invention” under the AIA.
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`The tests are not the same. As explained above, none of the technical
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`components of claim 1 were novel or non-obvious at the time of the ‟573
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`patent, and we are not persuaded that the particular combination of
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`components in the claim amounts to a technological feature that is novel and
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`unobvious over the prior art. Further, while we agree with Patent Owner
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`that the steps in claim 1 must be implemented using the recited hardware
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`(i.e., a “first memory,” “second memory,” “telecommunications line,”
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`“transmitter,” and “receiver”), that does not mean necessarily that the patent
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`is for a technological invention because the components themselves were
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`known in the art.
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`We also have considered whether the method of claim 1 solves a
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`technical problem using a technical solution, but, because we conclude that
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`claim 1 does not recite a technological feature that is novel and unobvious
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`over the prior art, the ‟573 patent is a “covered business method patent” and
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`is eligible for a covered business method patent review.
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`
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`B. Asserted Ground Based on 35 U.S.C. § 101
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`Petitioner challenges claims 1, 2, 4, and 5 of the ‟573 patent as
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`claiming patent-ineligible subject matter under 35 U.S.C. § 101. Pet. 34-51.
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`Petitioner relies on the declaration of Dr. John P. J. Kelly (Exhibit 1051) in
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`support of its position. Id. Patent Owner, in its preliminary response, does
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`not argue the merits of Petitioner‟s asserted ground of unpatentability based
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`on Section 101. In connection with its standing argument, however, Patent
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`Owner asserts that the challenged claims are not directed to an “abstract
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`idea” and instead claim a specific combination of “critical hardware
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`components.” Prelim. Resp. 35-37. Upon review of Petitioner‟s analysis
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`and supporting evidence, we determine that Petitioner has not established
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`that claims 1, 2, 4, and 5 are more likely than not unpatentable under Section
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`101 for the reasons explained below.
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`The Supreme Court has made it clear that the test for patent eligibility
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`under Section 101 is not amenable to bright-line categorical rules. Bilski v.
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`Kappos, 130 S. Ct. 3218, 3229-30 (2010). Further, the Federal Circuit has
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`recognized that it has been especially difficult to apply Section 101 properly
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`in the context of computer-implemented inventions. CLS Bank Int’l v. Alice
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`Corp. Pty. Ltd., 717 F.3d 1269, 1277 (Fed. Cir. 2013).
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`Our analysis begins with the statute. Section 101 provides that
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`“[w]hoever invents or discovers any new and useful process, machine,
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`manufacture, or composition of matter, or any new and useful improvement
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`thereof, may obtain a patent therefor, subject to the conditions and
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`requirements of this title.” “„In choosing such expansive terms . . . modified
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`by the comprehensive „any,‟ Congress plainly contemplated that the patent
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`laws would be given wide scope.‟” Bilski, 130 S. Ct. at 3225 (quoting
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`Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980)). There are, however,
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`three limited, judicially created exceptions to the broad categories of
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`patent-eligible subject matter in Section 101: laws of nature, natural
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`phenomena, and abstract ideas. Mayo Collaborative Services v. Prometheus
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`Labs., Inc., 132 S. Ct. 1289, 1293 (2012).
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`While an abstract idea by itself is not patentable, a practical
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`application of an abstract idea may be deserving of patent protection. Id. at
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`1293-94; Bilski, 130 S. Ct. at 3230; Diamond v. Diehr, 450 U.S. 175, 187
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`(1981). To be patent-eligible, a claim cannot simply state the abstract idea
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`and add the words “apply it.” See Mayo, 132 S. Ct. at 1294. The claim must
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`incorporate enough meaningful limitations to ensure that it claims more than
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`just an abstract idea and is not merely a “drafting effort designed to
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`monopolize the [abstract idea] itself.” See id. at 1297. Limiting the claim to
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`a particular technological environment or field of use, or adding insignificant
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`pre- or post-solution activity, do not constitute meaningful limitations. See
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`Bilski, 130 S. Ct. at 3230; Diehr, 450 U.S. at 191-92; Parker v. Flook, 437
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`U.S. 584, 595 n.18 (1978).
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`It is undisputed that the challenged claims of the ‟573 patent each
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`recite a “method,” or process, that is by definition statutory subject matter
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`under Section 101. The question is whether the claims recite just an abstract
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`idea and, therefore, fall under the abstract idea exception. Petitioner has not
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`persuaded us that it is more likely than not that they do.
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`We address primarily independent claim 1 of the ‟573 patent, as
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`Petitioner‟s arguments are directed to that claim. See Pet. 34-36. Petitioner
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`contends that claim 1 recites the abstract idea of “selling digital music
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`electronically in a series of rudimentary steps between a buyer and seller”
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`and preempts the entire field of “selling downloadable digital music.” Id. at
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`34-42; Ex. 1051 ¶¶ 58-64.
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`We do not view claim 1 as reciting merely a seller selling digital
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`music electronically to a buyer. The claim recites a specific combination of
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`computer components, at specific locations, that interact in a specific way to
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`accomplish the steps of the method. Money is transferred electronically “via
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`a telecommunication line” from a second party to a first party. The second
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`party is in control of a “second memory” and is remote from the first party,
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`which is in control of a “first memory” where a desired digital audio signal
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`is stored. The first memory and second memory are connected
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`electronically “via a telecommunications line” so that the desired signal can
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`pass between. The signal is transmitted from the first memory with a
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`“transmitter” in control of the first party to a “receiver” in control of the
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`second party and having the second memory, where the signal then is stored.
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`The “first memory,” “second memory,” “transmitter,” “receiver,” and
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`“telecommunications line” components, and the specific functions
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`performed using those components, represent meaningful limitations on the
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`scope of the claim that take it beyond the abstract concept of selling music.
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`To illustrate, the claim does not recite merely transferring money from one
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`party to another to buy music and then transmitting the music purchased
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`with that money. Instead, a desired digital audio signal is stored in a
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`particular location (“first memory”), transmitted with a particular device
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`(“transmitter”) to another location over a particular medium
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`(“telecommunications line”), received with a particular device (“receiver”),
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`and stored in the other location (“second memory”). These specific
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`functions performed using the components are not insignificant pre- or
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`post-solution activity—they are the solution itself.
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`Petitioner further argues that the specific computer components
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`recited in claim 1 add nothing to the claims because each was known
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`individually in the prior art and can be found in a general purpose computer.
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`Id. at 37, 42-45; see Ex. 1051 ¶¶ 58-78. Petitioner‟s analysis, however, does
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`not account sufficiently for the claim as a whole (i.e., the particular
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`combination of components and how the claim requires that they be used).3
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`The Supreme Court‟s holding in Diehr is instructive on this point:
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`In determining the eligibility of [a] claimed process for
`patent protection under § 101, . . . claims must be considered as
`a whole. It is inappropriate to dissect the claims into old and
`new elements and then to ignore the presence of the old
`elements in the analysis. This is particularly true in