Paper No. 21
`
`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 No. CBM2015-000401
`U.S. Patent No. 7,774,280
`____________________
`
`__________________________________________________________________
`
`PETITIONERS’ REPLY BRIEF
`
`1 Case No. CBM2015-00160
`
`
`
`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 No. CBM2015-000401
`U.S. Patent No. 7,774,280
`____________________
`
`__________________________________________________________________
`
`PETITIONERS’ REPLY BRIEF
`
`1 Case No. CBM2015-00160
`
`
`
`Table of Contents
`
`I.
`
`II.
`
`Introduction......................................................................................................1
`
`The ’280 Patent Covers Financial Activities And Is CBM-Eligible...............2
`
`A.
`
`B.
`
`Claim 1 Of The ’280 Patent Covers A Financial Activity....................2
`
`The ’280 Patent Does Not Claim A Technological Invention..............5
`
`III. Claim Construction..........................................................................................7
`
`IV. Anticipation .....................................................................................................9
`
`A.
`
`Stefik’s NSOR Is A “Meta-Right” Because It Is A Right To Generate,
`Dispose Of, Or Modify Usage Rights...................................................9
`
`1.
`
`2.
`
`3.
`
`4.
`
`The NSOR Controls Usage Rights Creation.............................10
`
`A Participant In The System Can Choose Whether To Exercise
`An NSOR ..................................................................................13
`
`The NSOR Element Can Specify Particular Rights By Itself ..14
`
`Even Under ContentGuard’s Proposed Claim Construction, the
`NSOR Is a Meta-Right..............................................................15
`
`B.
`
`Stefik Discloses The “Determining” Step...........................................18
`
`1.
`
`2.
`
`NSOR Elements Cannot Be Exercised Unless All Conditions
`Are Satisfied, Including Those Specific To The NSOR And To
`The Requesting Repository.......................................................18
`
`Stefik Shows Any Required Fees Can Be Paid By The
`Requesting Repository..............................................................19
`
`C.
`
`Stefik Discloses The “Exercising” Step..............................................20
`
`V.
`
`Obviousness...................................................................................................21
`
`A.
`
`A Person Of Ordinary Skill Would Have Been Motivated To Adapt
`Stefik To Exercise The NSOR In A Separate Transaction .................22
`
`i
`
`
`
`CBM2015-00040
`CBM2015-00160
`
`B.
`
`Stefik Does Not “Teach Away” From Adding Or Modifying Usage
`Rights Separately From An Action To Content..................................25
`
`VI. Conclusion .....................................................................................................25
`
`ii
`
`
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`Bicon, Inc. v. Struamann Co.,
`441 F.3d 945 (Fed. Cir. 2006) ..............................................................................3
`
`Compass Bank v. Maxim Integrated Prods., Inc.,
`CBM2015-00102, Paper 16 at 12 (PTAB Oct. 7, 2015) ......................................4
`
`Global Tel*Link Corp. v. Securus Techs., Inc.,
`CBM2015-00145, Paper 20 at 10-14 (PTAB Nov. 25, 2015)..............................5
`
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007)......................................................................................22, 23
`
`Photoshelter, Inc. v. Uniloc USA, Inc.,
`CBM2015-00023, Paper 24 at 12-13 (PTAB May 21, 2015) ..............................4
`
`SightSound Techs., LLC v. Apple Inc.,
`Nos. 2015-1159, slip op. (Fed. Cir. Dec. 15, 2015) .........................................5, 6
`
`Sony Comput. Entm’t Am. LLC v. ADC Tech. Inc.,
`CBM2015-00026, Paper 10 at 12-13 (PTAB July 3, 2015).................................4
`
`Versata Development Group, Inc. v. SAP Am., Inc.,
`793 F.3d 1306 (Fed. Cir. 2015) ........................................................................6, 8
`
`Other Authorities
`
`37 C.F.R. § 42.301(b) ................................................................................................6
`
`AIA § 18(d)(1) ...........................................................................................................2
`
`iii
`
`
`
`EXHIBIT LIST
`
`Petitioners’ Exhibit #
`1032
`1033
`
`Description
`Declaration of Benjamin Goldberg, Ph.D.
`Deposition Transcript of David Martin, Ph.D.
`
`iv
`
`
`
`I.
`
`Introduction
`
`In its Institution Decision, the Board correctly found the ’280 patent eligible
`
`for Covered Business Method (“CBM”) review, and that the Stefik ’012 patent
`
`anticipates or renders obvious claims 1, 5, and 11 of the ’280 patent.
`
`In its Response, ContentGuard disputes that the ’280 patent is CBM-eligible.
`
`It contends that any financial transactions that occur are “merely an optional
`
`condition” on the exercise of rights. Paper 15 at 32. But ContentGuard cannot run
`
`away from its own patent disclosure, which makes clear those transactions are the
`
`central purpose of its meta-rights scheme. See Ex. 1001 at 6:1-17. Next, it
`
`contends that its claims involve a “technological invention.” But again, the ’280
`
`patent itself refutes this assertion; it explains the technology used to implement the
`
`“meta-rights” scheme is old—it is the same technology described years earlier in
`
`the Stefik patents. Ex. 1001 at 7:23-24 (“At a high level the process of enforcing
`
`and exercising meta-rights are the same as for usage rights.”); id. at 7:36-39
`
`(“Thus, the mechanism for exercising and enforcing a meta-right can be the same
`
`as that for a usage right. For example, the mechanism disclosed in U.S. Pat. No.
`
`5,634,012 can be used.”).
`
`ContentGuard also argues its scheme is both novel and non-obvious over
`
`Stefik. To advance that argument, however, ContentGuard demands the Board first
`
`read several new limitations into its claims. Then, it argues the Next-Set-of-Rights
`
`1
`
`
`
`element in the Stefik scheme does not do what Stefik literally says it does—create
`
`or delete usage rights for downstream copies of a digital work.
`
`The Board should maintain its findings that (i) the ’280 patent is eligible for
`
`CBM review, and (ii) claims 1, 5, and 11 of the ’280 patent are unpatentable. As
`
`ContentGuard does not present separate arguments for claims 5 and 11, those
`
`claims stand or fall with claim 1.
`
`II.
`
`The ’280 Patent Covers Financial Activities And Is CBM-Eligible
`
`Under § 18 of the AIA, 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.” AIA § 18(d)(1). The Board correctly found the ’280 patent
`
`covers a financial activity because, inter alia, claim 1 covers purchase transactions
`
`between a consumer and a supplier. Paper 9 at 7-10. The Board also correctly
`
`found the ’280 patent does not qualify for the technological invention exception to
`
`CBM authority because, inter alia, the only “technological” element in the claim is
`
`admittedly old and well-known. Id. at 10-12.
`
`A.
`
`Claim 1 Of The ’280 Patent Covers A Financial Activity
`
`The ’280 patent is directed to systems and methods to enable the commercial
`
`distribution of digital content from a content supplier, via distributers and retailers,
`
`to consumers. See Paper 1 at 9-15. The very purpose of that scheme is to enable
`
`2
`
`
`
`financial transactions where a “rights consumer” purchases rights from a “rights
`
`supplier.” For example, claim 1 specifies a process where a supplier “obtain[s] a
`
`set of rights” that includes a meta-right, “determin[es]” whether the “rights
`
`consumer” is entitled to the right specified by the meta-right, and if so,
`
`“exercise[es]” the meta-right to create the right for “the rights consumer.” Ex. 1001
`
`at 15:5-22.2 Indeed, as the Petition explained and as the Board recognized, the ’280
`
`specification describes numerous embodiments where a rights consumer purchases
`
`rights from a rights supplier. Paper 1 at 10-12; Paper 9 at 9-10.
`
`These financial transactions are not a mere coincidence in the ’280 patent
`
`scheme—securing payment for uses of digital works is the central purpose of that
`
`scheme. See, e.g., Ex. 1001 at 5:36-38 (“Clearinghouse 90 can be used to process
`
`payment transactions and verify payment prior to issuing a license.”); id. at 2:18-
`
`21; Id. at 14:5-10 (explaining use of state variables to “…acknowledge that an
`
`appropriate fee has been paid…”); see also id. at 6:1-4; id. at 6:18-25 (explaining
`
`2 ContentGuard faults the Board for relying on the preamble of claim 1. See Paper
`
`15 at 29-30. But Bicon, Inc. v. Struamann Co., 441 F.3d 945, 952-53 (Fed. Cir.
`
`2006), cited by ContentGuard, actually shows the Board properly considered claim
`
`1’s preamble, as it recites “essential elements of the invention” and includes terms
`
`such as “rights consumer” that serve as antecedent bases to the body of the claim.
`
`3
`
`
`
`role of meta-rights in commercial distribution chain including distributors, retailers
`
`and consumers). More than substantial evidence supports the Board’s conclusion
`
`the claim 1 covers an activity “that, at the very least, is incidental or
`
`complementary to a financial activity.” Paper 9 at 9-10.
`
`In its Response, ContentGuard argues the Board erred in finding the ’280
`
`Patent CBM-eligible because claim 1 could cover a no-fee transaction. Paper 15 at
`
`31. It then contends that to be CBM eligible, a claim must necessarily cover only
`
`financial activities or an activity incidental or complementary to a financial
`
`activity, and no other kind of activity. Id. at 33.
`
`The Board properly considered and rejected this argument. Paper 9 at 8-9.
`
`That a single transaction might not collect fees in a scheme designed to collect fees
`
`is irrelevant—that hypothetical may never occur and plainly is not the intended
`
`purpose of the ’280 patent. More directly, nothing in § 18 limits CBM-eligibility in
`
`this way. See, e.g., Compass Bank v. Maxim Integrated Prods., Inc., CBM2015-
`
`00102, Paper 16 at 12 (PTAB Oct. 7, 2015) (CBM-eligible Patent where
`
`“independent claim 1 encompasses an apparatus for managing financial products
`
`or delivering financial services”) (emphasis added); Sony Computer Entm’t Am.
`
`LLC v. ADC Tech. Inc., CBM2015-00026, Paper 10 at 12-13 (PTAB July 3, 2015)
`
`(“[w]e do not interpret the statute as requiring the literal recitation of financial
`
`products or services in a claim”); Photoshelter, Inc. v. Uniloc USA, Inc.,
`
`4
`
`
`
`CBM2015-00023, Paper 24 at 12-13 (PTAB May 21, 2015) (Wood, J.); Global
`
`Tel*Link Corp. v. Securus Techs., Inc., CBM2015-00145, Paper 20 at 10-14
`
`(PTAB Nov. 25, 2015) (Braden, J.).
`
`Despite this, ContentGuard devotes four pages of its response to a discussion
`
`of decisions addressing CBM eligibility. Those cases are all readily distinguishable
`
`from the present case because the ’280 patent does not describe or claim a
`
`generalized technological process that might only theoretically be applied in a
`
`financial context. Instead, the central purpose of the ’280 patent is to control the
`
`sale of rights in multi-tiered distribution schemes. E.g., Ex. 1001 at 2:22-48
`
`(describing problems with the sale and distribution of content and rights); Paper 15
`
`at 42-43 (arguing ’280 patent enables greater control over “distributors or
`
`resellers”). Cases more relevant than the ones cited by ContentGuard find
`
`challenged patents CBM-eligible. For example, the Federal Circuit recently
`
`affirmed the Board’s finding of CBM eligibility for claims directed to “the
`
`electronic sale of digital audio” using “components [that] themselves were known
`
`in the art.” SightSound Techs., LLC v. Apple Inc., Nos. 2015-1159, -1160, slip op.
`
`at 12-13 (Fed. Cir. Dec. 15, 2015). Like that case, the ’280 patent claims are all
`
`concerned with methods for selling digital content to consumers.
`
`B.
`
`The ’280 Patent Does Not Claim A Technological Invention
`
`The Board also correctly found that the ’280 patent does not fall within the
`
`5
`
`
`
`“technological invention” exception to CBM authority. Paper 9 at 10-12. A
`
`“technological invention” is one in which (i) “the claimed subject matter as a
`
`whole recites a technological feature that is novel and unobvious over the prior art”
`
`and (ii) “solves a technical problem using a technical solution.” 37 C.F.R.
`
`§ 42.301(b); Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1326 (Fed.
`
`Cir. 2015). Claim 1 of the ’280 patent fails both prongs of this inquiry.
`
`First, the record supports the Board’s finding the ’280 patent does not claim
`
`a novel and non-obvious technological feature. Paper 9 at 12. Most significantly,
`
`the ’280 patent itself admits the claimed meta-right methods are to be practiced
`
`using pre-existing technologies— it states: “the mechanism for exercising and
`
`enforcing a meta-right can be the same as that for a usage right” and it identifies as
`
`one example the mechanisms described in U.S. Pat. No. 5,634,012 to Stefik. Ex.
`
`1001 at 7:36-39. The ’280 patent also freely admits the claimed meta-rights
`
`scheme is built on old and known technologies including repositories, usage rights,
`
`state variables, and mechanisms for enforcing and exercising rights (including
`
`meta-rights). See Ex. 1001 at 1:37-43, 7:23-24, 7:36-39, 9:38-40; Paper 1 at 20-24.
`
`Such features cannot impart technical novelty to the ’280 claims. See Paper 9 at 11;
`
`Paper 1 at 17-18; SightSound, slip op. at 12-13. The ’280 patent also admits that
`
`meta-rights are an extension of the pre-existing concept of rights taught in Stefik.
`
`Ex. 1001 at 5:43-47. Thus, a meta-right is simply another type of “right”—at a
`
`6
`
`
`
`technical level, it is a simple and pre-existing software construct. See Ex. 1014
`
`¶¶ 38-42. And even if meta-rights were considered to be a technological feature
`
`(which they are not), they are not novel because meta-rights are disclosed and
`
`taught by the Stefik patent. See Paper 1 at 16-20; Paper 9 at 12.
`
`Claim 1 also fails the second prong of the exception. The ’280 specification
`
`admits that meta-rights address a business problem, not a technological problem.
`
`As the ’280 patent explains, meta-rights enable “typical business models for
`
`distributing digital content,” (Ex. 1001 at 5:39-40), and are particularly useful in
`
`“multi-tiered distribution models” that include “entities that . . . are in the business
`
`of manipulating the rights associated with the content” (id. at 6:1-8). See also
`
`Paper 1 at 11-12, 21. And the patent, as described by ContentGuard, solves a
`
`business problem: improving the control of the transfer of rights through
`
`distribution channels. Paper 15 at 6-7, 41-42.
`
`III. Claim Construction
`
`The Board construed the term “meta-right” to mean “a right that one has to
`
`generate, manipulate, modify, dispose of or otherwise derive another right.” Paper
`
`9 at 17. Although Dr. Martin agreed that the Board’s construction describes
`
`properties of meta-rights (Ex. 1033 at 14:24-15:9), ContentGuard argues the Board
`
`should instead adopt the district court’s construction, which would add that the
`
`meta-right “is not itself a usage right because exercising a meta-right does not
`
`7
`
`
`
`result in action to content.” The district court included that additional language to
`
`aid the jury, which is unnecessary here because there is no risk the Board will be
`
`confused by its own construction. It is also unnecessary because, as the Board
`
`correctly found, the claim adequately identifies the actions taken by “meta-rights,”
`
`and additional verbiage is not needed to give meaning to the claim term. Paper 9 at
`
`16. And, of course, the Board and the district court apply different claim
`
`construction standards. Versata, 793 F.3d at 1328 (applying broadest reasonable
`
`interpretation standard to CBMs).
`
`In any event, adding ContentGuard’s proposed language is unwarranted
`
`because it has no consequence in this case. This is because, as explained below,
`
`exercising a “Next-Set-of-Rights” in the Stefik scheme does not result in action to
`
`content. ContentGuard’s proposal may actually be an indirect attempt to add yet
`
`another restriction into the claims; namely, that a meta-right cannot be exercised
`
`concurrently with the exercising of one or more independent usage rights. But
`
`nothing in the ’280 claims or disclosure can be construed as precluding a meta-
`
`right from being exercised at the same time as a usage right.
`
`Separately, Petitioners disagree with ContentGuard’s interpretations of some
`
`other terms (e.g., “behavioral integrity”). But regardless of the exact claim
`
`construction used, Stefik undisputedly discloses the “repository,” “usage right,”
`
`and “state variable” elements. See Ex. 1033 at 39:19-22, 57:13-21, 132:15-19.
`
`8
`
`
`
`IV. Anticipation
`
`The Board correctly found that Stefik describes a “meta-right” in the form of
`
`the “Next-Set-of-Rights” (“NSOR”) grammar element, because the NSOR
`
`specifies usage rights a repository can create or delete when the NSOR is
`
`exercised. Paper 9 at 35-37. ContentGuard challenges that finding by contending
`
`that Stefik does not disclose or suggest a “meta-right” that can be “exercised
`
`independently of” a usage right, (Paper 15 at 53-54), and similar arguments about
`
`“independently” or “separately” exercisable meta-rights appear throughout
`
`ContentGuard’s brief. The problem with these arguments is that the claims do not
`
`require that meta-rights and usage rights be “exercised independently” or
`
`“exercised separately,” even under ContentGuard’s proposed construction.
`
`ContentGuard also argues that Stefik does not disclose the “determining” or
`
`“exercising” steps. Paper 15 at 56-63. The Board correctly rejected those
`
`arguments based on the way that the NSOR is actually used by repositories in the
`
`Stefik scheme. Paper 9 at 35-37.
`
`A.
`
`Stefik’s NSOR Is A “Meta-Right” Because It Is A Right To
`Generate, Dispose Of, Or Modify Usage Rights
`
`In arguing that Stefik’s NSOR grammar element is not a meta-right,
`
`ContentGuard seems to assume that the claims—whether as construed by the
`
`Board or as ContentGuard proposes in its response—preclude a meta-right from
`
`being exercised concurrently with one or more usage rights. Nothing in the claims
`
`9
`
`
`
`imposes any such restriction—the claims employ open “comprising” language, and
`
`only address actions being taken regarding meta-rights. ContentGuard’s arguments
`
`also ignore how the NSOR is actually used in the Stefik scheme.
`
`1.
`
`The NSOR Controls Usage Rights Creation
`
`The NSOR element is used by repositories in the Stefik scheme to control
`
`what usage rights the repository can create, delete, or modify for a work after it is
`
`transported. Paper 1 at 58-60; Ex. 1002 at 21:47-59; Ex. 1014 ¶ 64. If the NSOR
`
`does not specify the rights for the next copy of the work, the new copy’s rights will
`
`be the same as those of the original copy. Ex. 1002 at 21:50-52. If the NSOR does
`
`specify rights, those usage rights will be added, deleted, or replaced when the
`
`NSOR is exercised. Id. at 21:47-59.
`
`A simple example illustrates how the NSOR element can be used by a
`
`publisher to specifically grant the right to add, delete, or replace certain usage
`
`rights. Consider two digital works with the following rights:
`
`Work 1
`
`Work 2
`[Play] [Copy]
`[Play] [Copy]
`[Loan] [Next-Set-of-Rights: (Delete:
`[Loan]
`Copy Loan) (Add: Print)]
`In this example, if the Loan right for either work is exercised, the repository
`
`will make a copy of the content and then will create usage rights for that copy
`
`either according to the default rules (Work 1) or as specified in the NSOR (Work
`
`2). Ex. 1032 ¶ 9. Thus, for Work 1, the repository will create Play, Copy, and Loan
`
`10
`
`
`
`usage rights for the new copy of the work. This is because there is no NSOR
`
`element that modifies the default rules. See id.; Ex. 1002 at 21:50-52. For Work 2,
`
`the repository will create for the new copy of the work a different set of usage
`
`rights: (i) it will create a Play usage right (same as the original copy), (ii) it will not
`
`create a Copy or Loan usage right for that copy (i.e., it will “delete” those usage
`
`rights in the copy) and (iii) it will add a “Print” usage right (not present in original
`
`copy). Importantly, the different set of usage rights in the copy relative to the usage
`
`rights for the original digital work is directly attributable to actions taken by the
`
`repository when using the NSOR. In other words, the data in the NSOR directs the
`
`repository to: (i) delete the Copy and Loan usage rights from the copy (i.e., by
`
`specifying “Delete: Copy Loan”) and (ii) add the Print usage right to the copy (i.e.,
`
`“Add: Print”). See Ex. 1032 ¶ 9; see also Paper 1 at 59-60, Ex. 1014 ¶¶ 64-66, 72.
`
`The “Loan” usage right thus specifies certain actions that can be taken on the
`
`content; namely, making a copy of the content and transferring it to another
`
`repository. Ex. 1032 ¶ 10. For both Work 1 and Work 2, exercising the Loan right
`
`causes the same action to the content: a copy is made and loaned to another
`
`repository. Id. But the usage rights that are created in the loaned copies are
`
`different because only one of the works has a Next-Set-of-Rights meta-right. Id.
`
`Exercising the NSOR is what results in addition of the “Print” usage right that
`
`would not be created by exercising the Loan usage right, and it is the NSOR which
`
`11
`
`
`
`causes deletion of the “Copy” and “Loan” usage rights in the copy of the digital
`
`work. This can be easily appreciated by recognizing if there is no NSOR (i.e., as in
`
`the Work 1 example), the Loan usage right will create the copy with the same set
`
`of usage rights as the original.
`
`Because exercising the NSOR element determines what usage rights a
`
`repository can generate during a transaction, it is “a right that one has to generate,
`
`manipulate, modify, dispose of or otherwise derive another right,” which satisfies
`
`the Board’s construction. For the same reasons, the NSOR element is also “a right
`
`about a right” and “a right that, when exercised, creates or disposes of usage rights
`
`(or other meta-rights).”
`
`ContentGuard nonetheless argues the NSOR element must be considered a
`
`“usage right” because the NSOR is consulted during the exercise of the Loan usage
`
`right. Paper 15 at 53. But in its arguments, ContentGuard improperly conflates the
`
`use of the NSOR element with the use of the associated Loan usage right. What
`
`Stefik actually shows is that exercising the usage right controls the actions being
`
`taken on the content (e.g., making a copy or loaning a copy of the digital work),
`
`while exercising the NSOR creates or deletes “usage rights” which are attached to
`
`the copy of the digital work. Ex. 1032 ¶ 11. Both are exercised, for different
`
`purposes, as Petitioners and Dr. Goldberg have clearly and consistently explained.
`
`12
`
`
`
`2.
`
`A Participant In The System Can Choose Whether To Exercise
`An NSOR
`
`ContentGuard contends an NSOR is not a “right” (meta or usage) because it
`
`is “unconditionally applied” and the user has no choice about whether to use it.
`
`Paper 15 at 49, 52. But Stefik illustrates that a participant in its distribution scheme
`
`can choose whether to exercise an NSOR by selecting from multiple versions of
`
`the same usage right, and furthermore that the use of the NSOR can be subject to
`
`conditions. See, e.g., Ex. 1002 at 27:15-33. For example, Stefik describes a digital
`
`work with two different versions of a “Loan” right:
`
`Ex. 1002 at 27:15-33; see also Paper 15 at 58-59 (discussing this example). In this
`
`example, the first “Loan” right has an NSOR element, as well as a Remaining-
`
`Copy-Rights element that can also be exercised to create rights (for the original
`
`copy owner), and it requires a daily $10 fee. Ex. 1002 at 27:27-30. The second
`
`“Loan” right has no NSOR element and no rights specified in the Remaining-
`
`Copy-Rights. Id. at 27:30-33.
`
`When this digital work is loaned to another repository, the NSOR element is
`
`13
`
`
`
`only exercised if the first Loan right is selected and the $10 fee is paid. Id. at 27-
`
`30; see also Ex. 1014 ¶ 76; Ex. 1032 ¶ 13; Ex. 1033 at 113:12-14 (confirming the
`
`first Loan right costs $10 to exercise). The same is true for Remaining-Copy-
`
`Rights. As this example shows, a participant in the system may choose to exercise
`
`a particular version of a usage right based on its associated NSOR element or its
`
`Remaining-Copy-Rights, and must meet the corresponding conditions to do so. Ex.
`
`1032 ¶ 13.
`
`In addition, the NSOR element allows a publisher to control usage rights
`
`creation as a digital work is passed down a chain of repositories. See Paper 1 at 59.
`
`For example, the publisher could supply a digital work with multiple versions of a
`
`Copy usage right, each with a different NSOR element bearing a different fee. Ex.
`
`1032 ¶¶ 14-16. The publisher could thereby exert control over usage rights creation
`
`as a digital work is passed down a chain of repositories, while permitting a degree
`
`of choice (as to which NSOR element to use) by downstream distributors and
`
`consumers. Id.; see also Ex. 1002 at 27:1-28:3; Ex. 1014 ¶¶ 59, 64, 68.
`
`3.
`
`The NSOR Element Can Specify Particular Rights By Itself
`
`ContentGuard argues that “an NSOR parameter cannot even be interpreted
`
`as a separate right all by itself.” Paper 15 at 54. The point of this argument is
`
`unclear, since Dr. Martin admitted the claims do not require that a meta-right has
`
`to be interpreted all by itself. Ex. 1033 at 150:23-151:7. ContentGuard nevertheless
`
`14
`
`
`
`proceeds to discuss an embodiment of Stefik in which the NSOR parameter is
`
`unspecified. Paper 15 at 54. But the embodiments of greater interest (because they
`
`use the NSOR to create rights) are those in which the NSOR parameter is
`
`specified. In those embodiments the NSOR determines usage rights that get added
`
`or created, without reference to other usage rights.
`
`The Board recognized this in its Institution Decision. As it correctly found,
`
`Stefik teaches that the NSOR grammar element can be implemented by including
`
`key words in the NSOR, including “Add.” Paper 9 at 33-34, 37. Indeed, Stefik
`
`clearly explains this, stating: “Versions of rights after Add: are added to the current
`
`set of rights. Ex. 1002 at 21:53-54. “Add” precisely identifies the rights that may
`
`be generated and does so without reference to other usage rights.
`
`4.
`
`Even Under ContentGuard’s Proposed Claim Construction, the
`NSOR Is a Meta-Right
`
`ContentGuard contends that if the Board were to adopt ContentGuard’s
`
`construction of meta-right, the NSOR element could not be found to be a meta-
`
`right. But, as explained in §§ IV.A.1-3, above, exercising the NSOR element
`
`creates (or destroys or modifies) usage rights; it does not result in actions to
`
`content. For example, if a “Copy” usage right has an NSOR element, exercising
`
`the Copy usage right results in an action to content (making a copy) while
`
`exercising the NSOR element results in creating or destroying usage rights for the
`
`copy of the digital work (the rights specified using “Add:” or “Delete:”). Ex. 1032
`
`15
`
`
`
`¶ 17. Because the NSOR element is “a right that, when exercised, creates or
`
`disposes of usage rights (or other meta-rights) but that is not itself a usage right
`
`because exercising a meta-right does not result in action to content,” it satisfies
`
`even ContentGuard’s alternative construction of a “meta-right.” Id.
`
`Importantly, there is no evidence in the record that the NSOR is “itself” a
`
`usage right. Certainly, ContentGuard has never suggested this is the case. In fact,
`
`ContentGuard’s expert acknowledged the NSOR exists as a discrete and distinct
`
`field within a data structure that also includes the data representing the usage
`
`rights. See, e.g., Ex. 2009 ¶¶ 104-105. ContentGuard does contend the NSOR is
`
`“part of a usage right,” Paper 15 at 56 (emphasis added). But this is not the same as
`
`saying that the NSOR is itself a usage right, which is what the “not itself a usage
`
`right” portion of ContentGuard’s construction would require. That the data
`
`representing the meta-right is stored in a common file structure with other data
`
`representing usage rights is of no consequence. Ex. 1032 ¶ 18.
`
`There also is no evidence that using a Stefik NSOR “result[s] in”—i.e.,
`
`causes—an action to content. Critically, ContentGuard’s expert Dr. Martin offered
`
`no opinion in his declaration that using the NSOR results in an action to content.
`
`See Ex. 1033 at 149:22-150:6. Dr. Martin also agreed the NSOR does not cause a
`
`usage right to be exercised. Id. at 148:19-24 (“… I guess I would agree that the
`
`presence of a next set of rights parameter does not cause a particular usage right to
`
`16
`
`
`
`be exercised.”). To the extent there is any causal relationship between use of the
`
`NSOR and exercise of a usage right, it is that the usage right can trigger the
`
`exercising of the NSOR, not the other way around. This is how ContentGuard itself
`
`describes the system, stating that “during exercise of the usage right Stefik’s
`
`system consults the NSOR parameter to populate the next set of rights for that
`
`post-operation content.” Paper 15 at 53 (emphasis added); see also Ex. 1033 at
`
`148:10-18. Whether the usage right causes use of the NSOR or not is immaterial to
`
`the claim, even under ContentGuard’s proposed construction. That sequence is
`
`simply not one in which exercising the NSOR “result[s] in action to content.”
`
`At his deposition, Dr. Martin seemed to attribute relevance to the notion that
`
`the NSOR is used “in the context of exercising a usage right that does result in
`
`actions to content.” Ex. 1033 at 150:3-6. But, again, this cannot distinguish the
`
`claims at issue from the NSOR in Stefik, because no claim limitation bars a meta-
`
`right from operating “in the context of” a usage right, or otherwise being used
`
`contemporaneously with a usage right. The question, under ContentGuard’s
`
`proposed construction, is whether exercising the NSOR will “result in” action to
`
`content. The evidence demonstrates it does not.
`
`To summarize, there is no evidence in the record that suggests, much less
`
`proves, that the NSOR described in Stefik is a “usage right” according to the ’280
`
`patent. Likewise, there is no evidence in the record establishing that the exercise of
`
`17
`
`
`
`the NSOR results in actions to content. Whether exercising the usage right results
`
`in exercising the NSOR is irrelevant, as is whether the NSOR is exercised
`
`contemporaneously with actions that are being taken on content. As long as
`
`exercising the NSOR does not result in actions to content, it does not run afoul of
`
`the claim requirements for a meta-right, under both the Board’s construction and
`
`ContentGuard’s alternative construction. See Ex. 1032 ¶¶ 17-18. Thus, even under
`
`ContentGuard’s proposed construction, the NSOR shown in Stefik is a meta-right,
`
`not a usage right.
`
`B.
`
`Stefik Discloses The “Determining” Step
`
`Stefik shows that during a usage rights transaction between two repositories
`
`(e.g., a server repository and a requesting repository), a server repository validates
`
`all conditions on the exercise of a usage right before permitting the requesting
`
`repository to access a digital work. See Paper 1 at 65-68; Paper 9 at 37. This
`
`process satisfies the claim limitation “determining, by a repository, whether the
`
`rights consumer is entitled to the right specified by the meta-right.” Paper 9 at 37.
`
`ContentGuard’s attempts to distinguish Stefik’s validation process from the
`
`“determining” step disregard the claim language and the actual teachings in Stefik.
`
`1.
`
`NSOR Elements Cannot Be Exercised Unless All Conditions
`Are Satisfied, Including Those Specific To The NSOR And To
`The Requesting Repository
`
`Stefik teaches that to exercise a usage right with an NSOR, a repository must
`
`18
`
`
`
`first determine whether all applicable conditions are met. For example, in the Loan
`
`example discussed above (Ex. 1002 at 27:15-33), a $10 fee must be paid to
`
`exercise the first Loan right. If the $10 is not paid, the requester can still borrow
`
`the work (using the second Loan right), but different rights are created (at both the
`
`original copy owner’s and the requester’s repositories). Id. at 27:26-33. This
`
`example shows that compliance with the $10 fee condition controls whether the
`
`NSOR element is exercised. See id.; Ex. 1032 ¶ 19. Similarly, if a Loan right
`
`contains a “Security Level” parameter, the Loan right cannot be exercised unless
`
`the requesting repository meets the minimum security level requirement. See Ex.
`
`1002 at 26:16-28 (discussing “SC:3” element). As Stefik explains, during a
`
`transaction, a server repository validates all conditions on the exercise of a usage
`
`right, including any security level conditions applicable to the consumer
`
`repository. See, e.g., id. at 7:23-29, 27
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