IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`In re Patent of: Racz et al
`U.S. Patent No.: 8,336,772
`Issue Date:
`December 25, 2012
`Appl. Serial No.: 13/212,047
`Filing Date:
`August 17, 2011
`DATA STORAGE AND ACCESS SYSTEMS
`Title:
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`
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`USPTO Control No.: TO BE DETERMINED
`
`DECLARATION OF DR. JEFFREY A. BLOOM
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`1. My name is Dr. Jeffrey A. Bloom. I understand that I am submitting a declaration in connection
`with the above-referenced Covered Business Method (“CBM”) review proceeding pending in the
`United States Patent and Trademark Office for U.S. Patent No. 8,336,772 (“the ‘772 Patent”).
`
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`2. I have been retained on behalf of Samsung Electronics America, Inc. to offer technical opinions
`with respect to the ‘772 patent and the prior art references cited in this CBM review. My
`compensation is not based on the outcome of my opinions.
`
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`3. I am not a lawyer. However, counsel has advised me of legal concepts that are relevant to CBM
`review proceedings and to the opinions that I offer in this declaration. I understand that, during
`CBM review, claims of the subject patent are given a broadest reasonable interpretation.
`Counsel has advised me that the broadest reasonable interpretation must be consistent with the
`specification, and that claim language should be read in light of the specification and teachings in
`the underlying patent.
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`4. I have reviewed the ‘772 patent, including the claims of the patent in view of the specification,
`and I have reviewed the ‘772 patent's prosecution history. In addition, I have reviewed the
`following documents: Declaration by Mr. Steven Blumenfeld, U.S. Patent No. 5,915,019
`(“Ginter”), PCT Publication No. WO 00/08909 (“Gruse”), U.S. Patent Application No.
`10/111,716 (“the ‘716 application”), PCT Application No. PCT/GB00/04110 (“the ‘110
`application”), and United Kingdom Patent Application GB9925227.2 (“the ‘227.2 application”).
`
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`5. I am currently Director of System Engineering and Software Development for Conditional
`Access and Identity Management Systems for SiriusXM radio. In my current position at
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`SiriusXM, I manage systems that employ many of the industry standard techniques for
`calculating one-way hash functions, encrypting content with both symmetric and asymmetric
`encryption, key management, key generation, zero-knowledge proof, authentication via digital
`signature, and other industry standard security techniques. I lead a team of systems engineers,
`requirement analysts, and software developers responsible for all conditional access (CA)
`security systems. This includes CA systems to control delivery of satellite radio services to
`automobiles and other satellite signal receivers, CA systems to control the delivery of streaming
`audio services over the Internet, and CA systems to control delivery of telematics services to
`automobiles. The systems that I manage rely on cryptographic methods and systems for
`protecting content and managing keys, and include identity management infrastructure such as
`SAML and Auth solutions for sign-on. As the Director of System Engineering and Software
`Development for Conditional Access and Identity Management Systems for SiriusXM radio, I
`am familiar with various licensing and reporting requirements, and royalty payment regimes
`used to compensate copyright owners for the broadcast transmission of copyrighted content. A
`media company like SiriusXM has direct arrangements with many rights holders.
`
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`6. From 1997 to 2000, I worked for Signafy (acquired by NEC) where I developed digital
`watermarking technology for use in rights management systems, and participated in the Data
`Hiding Subgroup of the Copy Protection Technical Working Group. In this role, I became very
`familiar with the field of Digital Rights Management and underlying cryptographic component
`technologies including digital signatures, digital certificates, and public key encryption.
`
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`7. From 2000 to 2005, I worked with the National Institute of Standards and Technology to develop
`robust tracking technology allowing content owners to identify sources of digital piracy of
`motion picture content.
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`8. In 2012, I worked as a Video and Streaming Consultant for VideoTechResearch LLC of
`Princeton Jct, NJ. VideoTechResearch provides consulting services that include on-site systems
`engineering for multimedia security and streaming, pre-sales business development, project
`management, and strategy and roadmap development. While at VideoTechResearch, I supported
`SiriusXM Satellite Radio, where I worked with the Streaming Services and Products group on
`the architecture of an IP streaming solution based on HLS with associated metadata. I also wrote
`the primary API documentation for the back-end systems and provided support to partner client
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`developers implementing clients based on that API. I also supported DAX Technologies, where I
`worked with DAX executives to create a video quality monitoring solution proposal for external
`customers.
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`9. Since 2012, I also have been an Adjunct Professor of Electrical and Computer Engineering at the
`New Jersey Institute of Technology Newark, NJ. In this role, I have taught graduate-level
`courses in Digital Image Processing
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`10. From 2009 – 2012, I also worked at Dialogic, Inc. in Eatontown, NJ as the Director Video
`Technologies. At Dialogic, I developed the technology and software components for a new QoE
`video quality monitoring and tracking business, enabling monitoring and tracking of video
`quality across VOD and live streaming.
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`11. From 2008 – 2009, I was a research center director at Thomson, Inc. (Technicolor) in Burbank,
`CA, where I managed a research center of 2 administrators and 15 researchers working in the
`areas of content security, signal processing, and content production and management.
`
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`12. From 2005–2009, I was a content security lab manager at Thomson, Inc. (Technicolor) in
`Princeton, NJ, where I managed an international group of 10 researchers in the US, France, and
`Germany. I led content security R&D efforts including conditional access systems, digital rights
`management systems, and watermarking systems. I also provided content security expertise and
`technical support for all Thomson business units.
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`13. From 2000–2005, I was a technology leader at Sarnoff Corporation in Princeton, NJ. At Sarnoff,
`I lead Sarnoff’s digital watermarking research efforts in tracking watermarks for motion picture
`content, digital cinema watermarking, video database watermarking, and removable visible
`attribution watermarks; authentication watermarks. I also Developed Sarnoff's audio
`fingerprinting technology for audience monitoring and automatic audit log creation.
`
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`14. From 1998–2000, I was a research scientist at the NEC Research Institute / Signafy, Inc. in
`Princeton, NJ. There, I developed a number of still image watermarking products, and I
`developed two video watermarking technologies designed for broadcast monitoring and copy
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`protection, respectively. I also designed, implemented, and executed testing and evaluation
`procedures for video watermarking technologies.
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`15. From 1995-1999, I earned my Ph.D. Electrical and Computer Engineering from University of
`California Davis, CA. My thesis was titled, “The Derivative of Gaussian Transform,” and my
`advisor was Todd Reed. I was a U.S. Department of Education GAANN Fellow under a TRW
`Fellowship. My research represented a study of models of the human visual system and the use
`of one such model to design and build 2D and 3D spatial and spatio-temporal transforms for
`images and image sequences. This transform was then used to build image and image sequence
`compression algorithms that are competitive with JPEG and H.261, respectively.
`
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`16. In 1990, I earned my M.S. Electrical and Computer Engineering from the Worcester Polytechnic
`Institute Worcester, MA. My thesis was entitled, “Feature Extraction and Surface Recognition
`of Arbitrary Surfaces from Range Data.” This research focused on the modeling of surface data
`clouds, as might be obtained from contemporary lidar systems. An adaptive optimization
`method is applied to a standard triangular mesh to align mesh nodes with 3D feature points.
`
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`17. In 1987, I earned my in B.S. Electrical Engineering from the Worcester Polytechnic Institute in
`Worcester, MA.
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`18. I was an Associate Editor, EURASIP Journal on Information Security, 2006 – 2014, and an
`Associate Editor, Springer LNCS Transactions on Data Hiding and Multimedia Security, 2006 –
`2014. I was involved with the Technical Program Committee, IEEE International Conference on
`Images Processing 2014; the Technical Program Committee, International Workshop on Quality
`of Multimedia Experience (QoMEX), 2010 – 2013; the Technical Program Committee, SPIE
`Security and Watermarking of Multimedia Contents, 2003 – 2014; the IEEE Multimedia Signal
`Processing Technical Committee, 2008-2012.
`
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`19. I worked as an editor for Transactions on Evolutionary Computation, 2011; European Signal
`Processing Conference (EUSIPCO), 2008-2011; Journal of Digital Forensics, Security and Law,
`2009; and International Journal of Computer Mathematics, 2008.
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`20. I am an author of two books, including a leading textbook in digital watermarking – an image
`processing technology used for DRM, "Digital Watermarking" by Ingemar J. Cox, Matthew L.
`Miller, and Jeffrey A. Bloom, Morgan Kaufmann Publishers, Inc., San Francisco, 2002, and also
`"Digital Watermarking and Steganography, 2nd Edition" by Ingemar J. Cox, Matthew L. Miller,
`Jeffrey A. Bloom, Jessica Fridrich, and Ton Kalker, Morgan Kaufmann Publishers, Inc., San
`Francisco, 2008.
`
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`21. I have also published chapters in two books: Digital Rights Management–Concepts and
`Applications by Kambhammettu (2005) and Multimedia Security by Zeng, Yu and Lin (2006)
`
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`22. My findings explained below are based on my study, experience, and background
`in the digital rights management industry, and are further informed by my education in electrical
`and computer engineering. This declaration is organized as follows:
`
`
`I. Overview
`II. Terminology
`III. Ineligibility of the Subject Matter of the Challenged Claims
`IV. Discussion of References
`A. Discussion of the Ginter Reference
`B. Discussion of the Gruse Reference
`V. Legal Principles
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`I. Overview
`23. The ‘772 Patent claims and describes systems and methods relating to financial activity;
`specifically, for processing payments for data downloads. See ‘772 at Abstract, 1:24-25, claims
`8 and 10. In the words of the Patent Owner, the claims are directed toward “storing and paying
`for data” and toward “[a] data access terminal for controlling access to one or more content data
`items stored on a data carrier.” See ‘772 at 1:24-25, claims 8, 10. In more detail, the subject
`matter of claim 8 covers the abstract idea of enabling limited use of paid-for/licensed content
`(which was done with pen and paper for decades prior to the invention of modern computers),
`and fails to meaningfully limit the scope of that coverage. See ‘772 at 2:8-19, 5:33-42, claims 8,
`10. Claims 8 and 10 are not tied, for example, to a specific machine, and it fails to transform an
`article into a different state or thing. Id. The independent claims of the ‘772 Patent do recite
`computer-related terms such as “data access terminal”, “data carrier”, and “payment validation
`system”, but these are generic computer terms referring to concepts that were well understood
`by the ‘772 Patent’s effective filing date. Indeed, as described in more detail below, several
`prior art references show that the claims of the ‘772 Patent altogether fail to recite a novel and
`unobvious technological feature, just as they fail to recite a technical problem solved by a
`technical solution.
`
`24. The specification of the ‘772 Patent confirms that the computer-related terms recited in the ‘772
`Patent’s claims do in fact relate to technology that is merely, in the words of the patentee,
`“conventional”: the specification states, for example, that “The data access terminal may be a
`conventional computer or, alternatively, it may be a mobile phone” that terminal memory “can
`comprise any conventional storage device,” and that a “data access device . . . such as a portable
`audio/video player . . . comprises a conventional dedicated computer system including a
`processor . . . program memory . . . and timing and control logic . . . coupled by a data and
`communications bus.” 4:7-8, 16:55-58, 18:14-25. That the ‘772 Patent is concerned with
`financial-related data processing rather than with technological innovation is further confirmed
`by other statements in the specification, explaining that payment data forwarded to a payment
`validation system may be “data relating to an actual payment made to the data supplier, or . . . a
`record of a payment made to an e-payment system” that can be “coupled to banks.” See ‘772 at
`6:62-7:10, 13:43-63. In short, the ‘772 Patent applies generic computer technology toward the
`solution of a financial problem: enabling limited use of paid-for/licensed content. See ‘772 at
`2:8-19, 5:24-33.
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`II.
`Terminology
`28. A POSITA1 would understand that the term “payment data,” as described by, and used in the
`claims of the ‘772 Patent, retains its ordinary meaning, and that it encompasses data that relates
`to previous, present, and/or prospective payment. See, e.g., ‘772 at Abstract, 2:8-15, 4:54-61,
`3:49-64, 4:36-38, 5:1-12, 5:4-11, 5:17-20, claims 1, 4, 8, 14, 19, 25, 30, and 35. A POSITA
`would understand, for example, that payment data includes information that can be used to make
`payment, and/or to check and validate that payment was made. See, e.g., ‘772 at Abstract, 2:8-
`15.
`
`
`III.
`Ineligibility of the Subject Matter of the Challenged Claims
`25. I have spent a large portion of my professional and academic career developing watermark
`technologies designed to protect the rights of copyright holders. Much of my research
`supported watermarking digital technologies enabling content to be uniquely identified and thus
`tracked, in order to ensure that copyright holders would be compensated based on the number of
`purchases and/or plays of their songs.
`
`
`26. At the outset, the following discussion contemplates two separate components of a musical
`work: (1) the musical composition and the (2) sound recording. A musical composition consists
`of music, including accompanying words. The author of a musical composition is generally the
`composer and the lyricist, if there are lyrics. A musical composition can be in the form of sheet
`music, or a phonorecord (e.g., cassette tape, LP, or CD), for example. On the other hand, a
`sound recording results from the fixation of a series of musical, spoken, or other sounds. The
`author of a sound recording is the performer(s) whose performance is recorded, the record
`producer who processes the sounds and fixes them in the final recording, or both. The record
`label also owns rights in the sound recordings produced by its artists. A copyright in a sound
`recording is not the same as a copyright in the underlying musical composition. Due to these
`different layers of copyright ownership in music, there are different types of copyright licensing
`regimes that are administered by various agencies and rights holders, which entail different
`reporting obligations.
`
`
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`1 The term “POSITA”, as used in this declaration, refers to a Person of Ordinary Skill In the Art at
`the ‘772 Patent’s effective filing date.
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`27. As a general rule, for anyone other than a copyright owner to use copyrightable work, they must
`either obtain the owner’s permission (via a license), be eligible for a statutory license, or qualify
`for free use under an exception (e.g., fair use).
`
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`28. I am generally familiar with many of the compulsory licensing schemes and rate setting
`procedures, e.g., those provided by the U.S. Copyright Office and the Library of Congress, in
`conjunction with rate setting boards like the Copyright Royalty Board (CRB). A rate setting
`board determines rates and terms for copyright statutory licenses and makes determinations on
`distribution of statutory license royalties collected by the U.S. Copyright Office.
`
`
`29. I also am familiar with many of the Performance Rights Organizations (PROs) including the
`American Society of Composers, Authors and Publishers (ASCAP), and Broadcast Music, Inc.
`(BMI), which administer the collection and payment of public performance royalties to the
`copyright owners (i.e., authors, composers and music publishers) of musical compositions.
`
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`30. In addition, I am generally familiar with (1) SoundExchange, another PRO that administers,
`collects, and pays royalties to the copyright owners of sound recordings (e.g., the record labels
`and the performing artists), in connection with the streaming of sound recordings by non-
`interactive digital transmissions, including satellite and Internet radio transmissions; and (2) the
`Harry Fox Agency (HFA), which administers the collection and payment of mechanical license
`fees, pursuant on behalf of music publishers in the United States. A mechanical license is
`granted by the holder of the underlying musical composition to a third party who reproduces
`and distributes the song on a “phonorecord” or “digital phonorecord.”
`
`
`31. It is well known that the artists and performers have faced difficulties in collecting
`compensation for use by others of their creative works. While advances in technologies have
`changed the nature of the mediums to which the artistic expression is attached (e.g., from piano
`rolls to CDs and satellite radio), artists and performers are rewarded for creativity through
`licenses that are premised on copyrights in their works. The widespread use of vinyl records
`and terrestrial radio enabled millions of Americans to develop and share a common musical
`heritage, thereby playing a large part in the growth of the U.S. entertainment industry. The
`natural limitations of transmissions distances and the desire to support different genres of music
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`led to the growth of countless radio stations throughout the country. While successful in
`distributing copyrighted content, the sheer number of the stations, many of which were small,
`local operations, made it difficult to ensure that artists and performers were compensated for the
`use of their works.
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`32. PROs employ various tracking methods to ascertain when music is publicly performed on
`television, radio, or during live performances and collect royalty payments through blanket
`licenses that are then allocated on a credit system and distributed to songwriters and publishers.
`
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`33. The Harry Fox Agency grants licenses to copyrightable works and provides accounting of
`revenues pursuant to accounting requirements imposed by the artists that have agreed to work
`with the Harry Fox Agency.
`
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`34. ASCAP also facilitates royalty payments to copyright owners, and ASCAP’s role in collecting
`and distributing royalties for the benefits of artists is well documented. For example, as
`ASCAP’s 1999 article “About ASCAP Licensing” explains:
`
`
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`Since 1914 the Leader in Music Licensing ASCAP licenses the right to
`perform songs and musical works created and owned by songwriters,
`composers, lyricists and music publishers who are ASCAP members and
`members of foreign performing rights organizations who are represented by
`ASCAP in the United States. It is impossible for individual composers and
`publishers to monitor the hundreds of thousands of businesses that use music.
`It would be equally difficult, time consuming and expensive for business
`owners to locate and negotiate with all the owners of the music that might be
`used. There is a simple, fast and reasonably priced alternative. Through
`ASCAP, in one simple transaction, businesses can obtain the right to perform
`the millions of songs created or owned by more than 80,000 of America's and
`hundreds of thousands of the world's best songwriters, composers, lyricists
`and publishers. Founded in 1914, and still owned by and managed for its
`writer and publisher members, ASCAP grants businesses the permission they
`need to perform music publicly. The money collected is distributed, after
`deducting operating costs (approximately 16.5%), directly to ASCAP
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`members and to affiliated foreign performing rights organizations for their
`members.
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`35. Indeed, ASCAP’s operations and publications illustrate the well-known principal of distributing
`royalties to the rights holders. See also ASCAP, “Frequently Asked Questions About
`Licensing” (1999) (“Where does the money go? . . . 17. Quite simply, to our members. All the
`fees we collect are distributed as royalties, after deducting operating expenses (approximately
`16.5%)”). To this point, the role of licensing regimes in reimbursing copyright owners is well
`documented. In “Music for Money” (1999), ASCAP notes, “This performing right is one of the
`most important rights granted by a country's copyright laws. It's based on the concept that a
`writer's creation is a property right and that a license must be acquired by any user of music in
`order for that user to perform a copyrighted musical work.”
`
`36. The 2014 ASCAP publication “ASCAP’s Survey and Distribution System: Rules & Policies”
`explains that ASCAP distributes royalties on the basis of a survey “that enables ASCAP to track
`music use on radio, television, the Internet, live venues and other media, [to] determine which
`music has been performed, and [to] pay the appropriate writers and publishers.” ASCAP,
`“ASCAP’s Survey and Distribution System: Rules & Policies” at 2 (2014). Distributions are
`made “on a basis that gives primary consideration to the actual performance of members’
`compositions,” and “performances may be identified from a variety of sources, including
`recordings of broadcasts . . . computerized program schedules obtained from industry sources,
`[and] logs furnished by broadcasters and other music users . . . .” ASCAP, “ASCAP’s
`Survey and Distribution System: Rules & Policies” at 2-3 (2014) (emphasis added). With regard
`to radio, specifically, ASCAP explains on its website that “[o]ur radio survey uses information
`provided to us by . . . advanced digital tracking technology . . ., [obtained through] station logs
`(lists of works performed) provided to us by radio stations, and by recorded tapes of actual
`broadcasts. ASCAP, “ASCAP Payment System: Identifying Performances” (2014) (emphasis
`added). BMI also calculates and distributes royalties on the basis of performance data. See, e.g.
`BMI, “Royalty Policy Manual” (2014).
`
`37. The documents discussed in the previous paragraph describe contemporary techniques used by
`PROs to track performances and to pay royalties, but these contemporary techniques reflect
`long-standing practices. See, generally, Russell Sanjek, Pennies from Heaven: The American
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`Popular Music Business in the Twentieth Century (1996). Pennies from Heaven explains, for
`example, that during the 1930s songwriters and composers whose works were published by
`BMI were paid one penny per live or recorded broadcast performance. Id. at 181. Payments
`were determined based on a system that involved “monthly examination of 60,000 hours of
`program logs listing all music, [the program logs being] supplied to BMI by 150 stations in all
`parts of the country, as required in their contracts with the licensing body.” Id. at 181-182.
`During this same period, ASCAP also provided payments to members predicated on numbers of
`performances of their works, the numbers being determined on the basis of a census of radio
`licensees. Id. at 192; see also id. at 322-24 (describing logging operations during the 1950s),
`397 (describing payment on the basis of licensed performances), 424 (“From the start, BMI had
`paid distributions on a local- and network-station performance basis”); Blumenfeld Declaration
`¶¶9-14.
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`38. Logging, as conducted by PROs such as BMI and ASCAP, has traditionally relied on forms
`manually completed by radio station personnel. See, e.g., Blumenfeld Declaration ¶¶10-14.
`The “Facts on BMI Logging and Membership Noted” article appearing in the January 30, 1961
`edition of Billboard Music Week states, for example, that “[e]ach station in [a] sample fills out
`forms for an entire month showing songs performed, composer and author names, record
`companies, etc.” Another article, “BMI to Log Airplay at College Stations”, which appeared in
`the November 12, 1988 edition of Billboard Newspaper, compares radio personnel performing
`BMI logging to store managers taking inventory. Radio station disc jockeys, for example,
`whose duties traditionally include introducing and playing records also, during logging periods,
`wrote “down the names of all songs played during that [period], with writer’s and publisher’s
`names as well.” See, e.g., Dick Weissman, Songwriter’s Handy Guide Selling Your Songs –
`Part 3 at 19 (1980); see also Encyclopaedia Britannica, Disc jockey,
`http://www.britannica.com/EBchecked/topic/165206/disc-jockey (last visited Nov. 25, 2014)
`(“person who conducts a program of recorded music on radio . . . introducing and playing
`phonograph records”).
`
`39. Audit logs have also been used to account for precise listening habits of audiences on an
`individual listening basis. See, e.g., U.S. Patent No. 5,778,187 to Monteiro et al., which
`described an Internet radio architecture capable to facilitating such audit log usage. At 3:41-55,
`Monteiro noted, for instance (emphasis added):
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`[t]he Administration Server 60 is responsible for registering new Users,
`authenticating Users who want to log onto the system, and maintaining audit
`logs for how many Users are listening to which channels and at which times.
`Maintaining audit logs and gathering statistics are features critical to
`monitoring the delivery of paid commercial messages as well as for other
`purposes. For example, for purposes of assessing copyright royalties, the
`audit logs can record the number of listeners for each musical or video
`selection that is distributed by the system. Another application is to
`determine the percentage of listeners who are interested in listening to a
`particular musical selection by determining how many listen to the entire
`selection and how many turn it off.
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`40. Oftentimes, radio stations would develop content in the form of playlists. For example, a radio
`station personnel would typically plan the programming for a station on a given day. See, e.g.,
`Blumenfeld Declaration ¶¶5-8, 12. Although not published before the effective filing date of
`the ‘720 Patent, I believe that the following excerpt from “The Radio Station: Broadcast,
`Satellite and Internet” by Michael C. Keith nevertheless describes the manner in which a radio
`station personnel would plan the programming for the day:
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`In most cases, the PD [Program Director, i.e., a radio station personnel]
`determines how much music is programmed hourly and in what rotation and
`when news, public affairs features, and commercials are slotted. Program
`wheels, also variously known as sound hours, hot clocks and format disks, are
`carefully designed by the PD to ensure the effective presentation of on air
`ingredients. Program wheels are posted in the control studio to inform and
`guide air people as to what is to be broadcast and at what point in the hour.
`Although not every station provides deejays with such specific programming
`schemata, today very few stations leave things up to chance since the
`inappropriate scheduling and sequencing of sound elements may drive
`listeners to a competitor.
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`41. I am familiar with the Digital Millennium Copyright Act (DMCA), which was passed in 1998.
`DMCA ultimately resulted in formal requirements on programming for Internet radio stations in
`2003. These restrictions formalized requirements and limitations that had been previously
`informally adopted, including:
`no more than 3 songs from one album;
`no more than 2 played consecutively
`no more than 4 songs from a set/compilation;
`no more than 3 played consecutively
`no more than 4 recorded songs by the same artist
`(except that live studio appearances are okay).
`
`
`42. I have reviewed the specification of the ‘772 Patent, noting its disclosure of well-understood
`and routine algorithms that are implemented on what the Patent Owner repeatedly describes as
`“conventional” computer systems that are used in a “conventional manner.” See e.g., ‘772 at
`4:4-5, 16:46-49, 21:33-38. Indeed, having reviewed the specification of the ‘772 Patent for
`disclosure of additional details that speak to functionality beyond that of the common copyright
`and licensing precepts discussed herein, I emerge finding no such details. That is, the
`specification of the ‘772 Patent simply describes well-known concepts related to copyright and
`licensing. The claims of the ‘772 Patent, moreover, cover nothing more than the basic financial
`idea of enabling limited use of paid for and/or licensed content using “conventional” computer
`systems and components. See ‘772 at 2:7-11, 5:29-33, claim 32. The recitation of these
`“conventional” systems and components does not meaningfully limit the coverage of that idea,
`which can be performed through human thought and pen and paper, entirely without the use of a
`computer. A human being could, for example, follow instructions to administer a paper ledger
`that records and tracks royalties for purposes of payment, a process that was being performed
`decades prior to the invention of modern computer systems by, for example, radio operators.
`The recited “conventional” systems and components can include generic a user interface, such
`as a keyboard, a mouse, or a display, that is present on virtually all computers for interacting
`with the user.
`
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`43. Additionally, I reviewed the specification of the ‘772 Patent to ascertain whether it disclosed
`transformation or modification of any described content in the course of performing steps
`described and claimed. The ‘772 Patent’s specification generally speaks to exchanges, stores,
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`locks, and unlocks of content, and of transfer and use payment data and of payment validation
`data, but it does not disclose transformation of objects, even digital ones.
`
`
`44. Additionally, the specification of the ‘772 Patent seems to mimic historic retail operations and
`credit operations within a retail presence. Numerous publications describe well-known aspects
`of credit facilities being used within a retail establishment. It is well-known that a user could
`visit a retail establishment, shop around in order to select some goods to purchase, and then
`present cash or credit to a credit facility (e.g., a credit card processing station or machine) in
`order to purchase a good. Alternatively, a consumer could pay via a check or a check
`processing machine. An article published by American Banker on April 6, 1984 entitled
`“MasterCard Plans Point-of-Sale Product For Merchants Leery of Bank Cards”, for example,
`describes the planned establishment of credit facilities into retail establishments. According to
`the article:
`MasterCard International Inc. is developing a new point-of-sale product designed for
`merchants who traditionally refuse to accept bank cards. This is the latest of several
`moves by MasterCard to offer point-of-sale services. With this new product, the bank
`card organization is taking advantage of the renewed interest in direct-debit, point-of-
`sale systems. MasterCard will offer a branded logo specifically for the new service to
`be used on banks' proprietary debit cards, said F. Alan Schultheis, senior vice
`president of marketing and product development at MasterCard.
`
`
`
`IV. Discussion of References
`45. As discussed above, the ‘772 Patent applies generic computer technology toward the solution of
`an abstract financial problem: enabling limit