Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Petitioner: Apple Inc.
`
`Attorney Docket No.:
`
` 104677-5008-818
`Customer No. 28120
`
`§
`Inventor: Racz et al.
`United States Patent No.: 8,336,772 §
`Formerly Application No.: 13/212,047 §
`Issue Date: December 25, 2012
`§
`Filing Date: August 17, 2011
`§
`Former Group Art Unit: 2887
`§
`Former Examiner: Thien M. Le
`§
`
`For: Data Storage and Access Systems
`
`MAIL STOP PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`Post Office Box 1450
`Alexandria, Virginia 22313-1450
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF
`UNITED STATES PATENT NO. 8,336,772 PURSUANT TO 35 U.S.C. § 321,
`37 C.F.R. § 42.304
`
`
`
`
`
`1
`
`SAMSUNG-1063
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`TABLE OF CONTENTS
`INTRODUCTION ....................................................................................................... 1 
`I. 
`II.  OVERVIEW OF FIELD OF THE CLAIMED INVENTION ......................... 6 
`III.  PETITIONER HAS STANDING .......................................................................... 10 
`A. 
`The ’772 Patent Is a Covered Business Method (“CBM”) Patent ........... 10 
`1. 
`Exemplary Claim 8 Is Financial In Nature ...................................... 10 
`2. 
`Claim 8 Does Not Cover A Technological Invention ................... 13 
`Related Matters and Mandatory Notice Information; Petitioner Is a Real
`Party In Interest Sued for and Charged With Infringement ..................... 17 
`IV.  DETAILED EXPLANATION OF REASONS FOR RELIEF REQUESTED,
`SHOWING IT IS MORE LIKELY THAN NOT THAT AT LEAST ONE
`CHALLENGED CLAIM IS UNPATENTABLE ............................................... 18 
`A. 
`Claim Construction .......................................................................................... 20 
`B. 
`The Challenged Claims Are Unpatentable Under 35 U.S.C. § 101 .......... 24 
`1. 
`Claims Are Directed To Abstract Ideas ........................................... 25 
`2. 
`Claims Do Not Disclose An “Inventive Concept” That Is
`“Significantly More” Than An Abstract Idea .................................. 28 
`Field Of Use Limitations Cannot Create Patent Eligibility ........... 28 
`Generic Computer Implementation Cannot Transform
`Abstract Ideas Into Patent Eligible Inventions ............................... 29 
`Functional Nature Confirms Preemption and Ineligibility ............ 34 
`Machine-or-Transformation Test Also Confirms Patent
`Ineligibility ............................................................................................. 35 
`The Challenged Claims Are Invalid Under § 103 ....................................... 36 
`1. 
`Overview of Ginter .............................................................................. 36 
`2. 
`Motivation to Combine Ginter with Poggio.................................... 38 
`3. 
`Motivation to Combine Ginter with Poggio and Subler ............... 40 
`4. 
`Motivation to Combine Ginter with Poggio, Subler, and
`Sato ......................................................................................................... 41 
`Claims 1, 5, 8, and 10 are Obvious in Light of Ginter in
`View of Subler and Poggio (Ground 2), Obvious in Light
`of Ginter in View of Subler, Poggio, and Sato (Ground 3). .......... 42 
`CONCLUSION........................................................................................................... 79 
`
`3. 
`4. 
`
`V. 
`
`ii
`
`B. 
`
`C. 
`
`5. 
`6. 
`
`5. 
`
`2
`
`

`

`
`
`
`EXHIBIT LIST
`1201
`
`1202
`
`1203
`
`1204
`
`1205
`
`1206
`
`1207
`
`1208
`
`1209
`
`1210
`
`1211
`
`1212
`
`1213
`
`1214
`
`1215
`
`1216
`
`1217
`
`1218
`
` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`U.S. Patent No. 8,336,772
`
`Plaintiffs’ First Amended Complaint
`
`U.S. Patent No. 5,925,127
`
`U.S. Patent No. 5,940,805
`
`Russell Housley and Jan Dolphin, “Metering: A Pre-pay
`Technique,” Storage and Retrieval for Image and Video Data-
`bases V, Conference Volume 3022, 527 (January 15, 1997)
`U.S. Patent No. 4,999,806
`
`U.S. Patent No. 5,675,734
`
`U.S. Patent No. 4,878,245
`
`File History for U.S. Patent No. 8,336,772
`
`U.S. Patent No. 7,942,317
`
`U.S. Patent No. 5,103,392
`
`U.S. Patent No. 5,530,235
`
`U.S. Patent No. 5,629,980
`
`U.S. Patent No. 5,915,019
`
`European Patent Application, Publication No. EP0809221A2
`
`International Publication No. WO 99/43136
`
`JP Patent Application Publication No. H11-164058 (transla-
`tion)
`Eberhard von Faber, Robert Hammelrath, and Frank-Peter
`Heider, “The Secure Distribution of Digital Contents,” IEEE
`(1997)
`
`iii
`
`3
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`Declaration of Anthony J. Wechselberger In Support of Apple
`Inc.’s Petition for Covered Business Method Patent Review
`U.S. Patent No. 8,033,458
`
`Declaration of Michael P. Duffey In Support of Apple Inc.’s
`Petition for Covered Business Method Patent Review
`Declaration of Megan F. Raymond In Support of Apple Inc.’s
`Petition for Covered Business Method Patent Review
`Claim Construction Memorandum Opinion from Smartflash
`LLC v. Apple Inc., No. 6:13cv447 (Dkt. 229)
`File History for U.S. Patent No. 8,061,598
`
`U.S. Patent No. 4,337,483
`
`U.S. Patent No. 7,725,375
`
`International Publication No. WO 95/34857
`
`JP Patent Application Publication No. H10-269289 (transla-
`tion)
`File History for U.S. Patent No. 7,942,317
`
`File History for U.S. Patent No. 8,033,458
`
`U.S. Patent No. 8,061,598
`
`U.S. Patent No. 8,118,221
`
`File History for U.S. Patent No. 8,118,221
`
`U.S. Patent No. 7,334,720
`
`File History for U.S. Patent No. 7,334,720
`
`U.S. Patent No. 5,646,992
`
`EXHIBIT LIST
`1219
`
`1220
`
`1221
`
`1222
`
`1223
`
`1224
`
`1225
`
`1226
`
`1227
`
`1228
`
`1229
`
`1230
`
`1231
`
`1232
`
`1233
`
`1234
`
`1235
`
`1236
`
`iv
`
`4
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`I.
`
`INTRODUCTION
`Pursuant to § 321 and Rule § 42.304,1 the undersigned, on behalf of and acting
`
`in a representative capacity for Apple Inc. (“Petitioner”), petitions for review under
`
`the transitional program for covered business method patents of claims 1, 5, 8, and 10
`
`(challenged claims) of U.S. Pat. No. 8,336,772, issued to Smartflash Technologies
`
`Limited and assigned to Smartflash LLC (“Patentee”). Petitioner asserts it is more
`
`likely than not that at least the challenged claims are unpatentable for the reasons
`
`herein and requests review of, and judgment against, the challenged claims under §§
`
`101 and 103.
`
`As discussed in Sec. III.B., infra, Petitioner has concurrently filed two other
`
`CBM Petitions, requesting judgment against different ’772 claims based on different
`
`prior art. The Director, pursuant to Rule 325(c), may determine that merger or at min-
`
`imum coordination of these proceedings is appropriate.
`
`Petitioner previously filed CBM2014-00110/111 seeking review of the ’772 pa-
`
`tent under §§102 and 103. In its Decisions Denying Institution, the Board deter-
`
`mined that Petitioner had not shown that it was more likely than not that it would
`
`prevail in demonstrating that Stefik and/or Ginter, or Stefik or Ginter combined with
`
`
`1 Petitioner is demonstrating, in pending litigation, that these claims are invalid for
`
`numerous additional reasons. All section cites herein are to 35 U.S.C. or 37 C.F.R., as
`
`the context indicates, and all emphasis herein added unless otherwise noted.
`
`
`
`5
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`Poggio and/or Sato rendered obvious limitations related to “code to request identifier
`
`data...” CBM2014-00110, Pap. 7, at 15-18; -00111, Pap. 7, at 15-21. In light of the
`
`Board’s decision, Petitioner now identifies additional prior art—Subler (Ex. 1236)—
`
`with explicit disclosures of the limitations related to “code to request identifier da-
`
`ta…” For example, Subler discloses an end user device that provides a powerful,
`
`easy-to-use interface to browse through and analyze products available from a storage
`
`database. Ex. 1236 3:46-52. The end user device software includes code that retrieves
`
`product information from the database and presents the information to the user in a
`
`windowed graphical user interface. Ex. 1236 4:49-54; 5:26-30. Petitioner has also iden-
`
`tified additional disclosures in Ginter and Poggio concerning these limitations, further
`
`confirming a POSA2 would have found it obvious and routine to implement the sys-
`
`tem disclosed by Ginter and Poggio using the expressly advantageous teachings of
`
`Subler and/or Sato, detailed in §IV.C, infra. See, e.g., Ex. 1219 ¶¶ 58-66.
`
`The challenged claims merely recite basic computer systems well-known in the
`
`field of data storage and access, including a “handheld multimedia terminal for retriev-
`
`2 References to a POSA refer to the knowledge or understanding of a person of ordi-
`
`nary skill in the art POSA as of October 25, 1999. A POSA would have at least a B.S.
`
`degree in E.E., C.S., or a telecommunications related field, and at least three years of
`
`industry experience that included client-server data/information distribution and
`
`management architectures. See Ex. 1219 ¶¶ 25, 28 n.3.
`
`2
`
`6
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`ing and accessing protected multimedia content” and a “data access terminal for con-
`
`trolling access to one or more content data items stored on a data carrier.” Ex. 1201
`
`1:24-26. Claim 8, for example, recites four rudimentary components of a data access
`
`terminal “for controlling access to one or more content data items”—(A) a user interface, (B) a
`
`data carrier interface, (C) a program store storing code implementable by a processor, and
`
`(D) a processor . . . for implementing the stored code. The recited code is similarly ele-
`
`mentary, requesting and receiving user identifier data (D1-D2), presenting available content data
`
`items (D3), receiving a selection and transmitting payment for the data item (D4-D5), receiving
`
`payment validation data (D6), and controlling access to the data item in response (D7):
`
`8. A data access terminal for controlling access to one or more content
`data items stored on a data carrier, the data access terminal comprising:
`[A] a user interface;
`[B] a data carrier interface;
`[C] a program store storing code implementable by a processor; and
`[D] a processor coupled to the user interface, to the data carrier inter-
`face and to the program store for implementing the stored code, the
`code comprising:
`[D1] code to request identifier data identifying one or more content
`data items stored on the data carrier;
`[D2] code to receive said identifier data;
`[D3] code to present to a user via said user interface said identified
`one or more content data items available from the data carrier;
`[D4] code to receive a user selection selecting at least one of said one
`or more of said stored content data items;
`
`3
`
`7
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`[D5] code responsive to said user selection of said selected content
`data item to transmit payment data relating to payment for said se-
`lected content item for validation by a payment validation system;
`[D6] code to receive payment validation data defining if said payment
`validation system has validated payment for said content data item;
`and [D7] code to control access to said selected content data item re-
`sponsive to the payment validation data.
`Ex. 1201. But at the patent’s earliest claimed priority date, these simple elements and
`
`their combination were well known to any POSA. The patent acknowledges that the
`
`idea of providing access to data in exchange for a payment (e.g., purchase of music on
`
`a CD) was already well known. E.g., Ex. 1201 5:13-16 (“the purchase outright option
`
`may be equivalent to the purchase of a compact disc (CD)”). And, as demonstrated herein,
`
`the prior art was teeming with disclosures of this basic concept and its straightforward
`
`implementation in physical systems.
`
`Moreover, claim 8 clearly involves no “technology” at all other than “a data access
`
`terminal,” with user and data carrier interfaces, a program store storing code, and a
`
`processor that implements the well-known steps disclosed in the specification—all of
`
`which the patent concedes were well known and commonplace, stating that this “ter-
`
`minal comprises a general purpose computer.” E.g., id. 4:7, 16:47-52. Claim 8 recites no
`
`more than a system for requesting and retrieving data from a data carrier while receiv-
`
`ing and responding to payment data for validation and controlling access to the data
`
`based on payment. And the other challenged claims are nothing but variations on this
`
`4
`
`8
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`simple theme, with the addition, in the challenged “handheld multimedia terminal”
`
`claims, of equally generic components (e.g., known wireless interface, non-volatile
`
`memory, and a display).3 See, e.g., id. 12:37-40 (“physical embodiment of the system is not criti-
`
`cal and a skilled person will understand that the terminals, data processing systems and the like can
`
`all take a variety of forms.”).
`
`Indeed, as confirmed by the Supreme Court’s recent decision in Alice Corp.
`
`Pty, Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)—decided after Petitioner’s original
`
`challenges to the ’720 were filed—the challenged claims are also directed to patent in-
`
`eligible subject matter under § 101. As the Board noted in its previous Institution De-
`
`cision, “the ’772 patent makes clear that the asserted novelty of the invention is not in
`
`any specific improvement of software or hardware, but in the method of controlling ac-
`
`cess to data,” CBM2014-00110, Pap. 7, at 13, and the challenged claims are directed to
`
`nothing more than the unpatentable abstract idea of paying for and controlling access
`
`to data, with at most the addition of well-known, routine and conventional features—
`
`in particular, generic computer implementation that cannot confer patentability on
`
`3 Claim 1, e.g., recites a “handheld multimedia terminal,” but simply adds to the fea-
`
`tures of claim 8 the requirements of a wireless interface, non-volatile memory, and a
`
`display, while specifying the user interface enables a user to perform certain functions.
`
`And Claim 10, which depends from claim 8, simply specifies integration with a mobile
`
`communications device. Ex. 1201.
`
`5
`
`9
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`these patent-ineligible abstractions. E.g., Alice, 134 S. Ct. at 2359-60. Each challenged
`
`claim recites ineligible subject matter and is also obvious; thus, each is unpatentable.
`
`II. OVERVIEW OF FIELD OF THE CLAIMED INVENTION
`By October 25, 1999, electronic sale, distribution, and content protection for
`
`digital products was well-known to a POSA, and their combination as claimed would
`
`also have been well-known or at minimum obvious. See, e.g., Ex. 1219 § V. In March
`
`1991, for example, U.S. Pat. No. 4,999,806 issued, disclosing a system and method for
`
`sale and distribution of digital products (e.g., software) by phone, and for content pro-
`
`tection. See, e.g., Ex. 1206 Abstract (“central station distributes software by telephone. . . ac-
`
`cepts credit card information, transmits an acceptance code . . . After verifying the credit card infor-
`
`mation, the station calls the purchaser back and continues with the transaction only after receiving
`
`the acceptance code.”); 1:67-2:9 (describing “means for selling and distributing protected software
`
`using standard telephone lines,” “permit[ting] the purchaser to rent the protected software for a period
`
`of time,” and “to rent the protected software for a specific number of runs”). Ex. 1206 also dis-
`
`closes (1) different types of access, e.g., purchase vs. rental and (2) a Control Transfer
`
`Program and a Primary Protection Program to prevent unauthorized copies. See Ex.
`
`1206 Abstract; 2:65-3:23; Ex. 1219 ¶ 30.
`
`In April 1992, U.S. Patent No. 5,103,392 issued, disclosing use-based charging
`
`for digital products. See, e.g., id. Ex. 1211 1:64-2:17:
`
`The data processing apparatus includes user-specific credit data storage
`means for storing data identifying the user . . . and indicating credit for payment ca-
`
`6
`
`10
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`pacity, use time length, or the like of the user . . . . Also included is use deci-
`sion means for determining permission to use the program . . . on the basis of pro-
`gram-specific data supplied from the program storage means or user-specific
`credit data supplied from the user-specific credit data storage means, the
`use decision means delivering either an affirmative or negative signal corresponding
`to results of the decision. Also included is program use history storage means
`connected to the use decision means for storing program use history data . . . .
`Ex. 1211’s emphasis on assuring permission to access a program and compensating
`
`providers underscores this existing focus in the art on digital rights management
`
`(“DRM”), over eight years before the claimed priority date. See, e,g., Ex. 1219 ¶ 33.
`
`Also in 1997, Exhibit 1218 (“von Faber”) observed that “[e]lectronic commerce sys-
`
`tems dealing with the distribution of digital contents . . . have to couple the use of the provid-
`
`ed digital goods with a prior payment for the goods in a way which cannot be bypassed,” pro-
`
`posing a system where customers purchase keys required to utilize encrypted content.
`
`See, e.g., id. at 7(“The basic idea . . . is to distribute the contents in encrypted form, and to have
`
`the customer pay for the key which he needs to transform the encrypted content in an usable form.”);
`
`id. 8 (“The Content Provider provides digital contents in encrypted form being distributed
`
`by the Content Distributor. . . . The Authorisation System permits the distribution of the
`
`appropriate key after settling of the fees payable by the Customer . . .. The role of the Content
`
`Distributor is not essential for the subsequent discussion but, of course, for the business
`
`to take place.”); see also id. Fig. 1. Von Faber notes its system could be used for a variety
`
`of known distribution and payment methods. See, e.g., id. 13 (“Different methods can be
`
`7
`
`11
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`used to distribute the encrypted contents (standard techniques). . . . Different electronic payment
`
`methods can be integrated . . . . This flexibility leads to the fact that totally different authorisation
`
`methods can be integrated.”). Von Faber further addressed the known issue of payment
`
`distribution to providers. See, e.g., id. (“The system automatically divides the package price
`
`(payments) and guarantees that the money is transferred to each Content Provider.”); Ex. 1219 ¶¶
`
`36-38.
`
`Also in 1996 and 1997, two Stefik patents issued, U.S. Patent No. 5,530,235
`
`(“Stefik ’235,” filed Feb. 16, 1995 and issued June 25, 1996), and U.S. Patent No.
`
`5,629,980 (“Stefik ’980,” filed Nov. 23, 1994 and issued May 13, 1997). Exs. 1212 and
`
`1213. Stefik ’235 discloses “[a] Document Card (DocuCard) for storing documents
`
`and which is content revealing. The DocuCard is a transportable unit having a non-
`
`volatile storage means for storing information in a digital form, a control processor
`
`for processing user initiated functions; an I/O port for interfacing to external devices
`
`for reading and writing digital information, and a user interface for allowing a user to
`
`directly interact with the DocuCard.” Ex. 1212 Abstract. Stefik also discloses a broad-
`
`er framework within which the DocuCard is used, including the protection of content
`
`with “usage rights.” Ex. 1213 Abstract (“A system for controlling use and distribution
`
`of digital works. In the present invention, the owner of a digital work attaches usage
`
`rights to that work. Usage rights are granted by the ‘owner’ of a digital work to ‘buy-
`
`ers’ of the digital work . . . [and] define how a digital work may be used and further
`
`8
`
`12
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`distributed by the buyer. Each right has associated with it certain optional specifica-
`
`tions which outline the conditions and fees upon which the right may be exercised.”).
`
`Stefik’s digital works are stored in a “repository” that processes requests for access—
`
`including for such actions as utilizing content (viewing, executing, or printing) or
`
`transporting content (copying, borrowing, or transferring)—and evaluates the relevant
`
`usage rights to determine whether such access is permitted. See, e.g., id. Abstract (“Dig-
`
`ital works are stored in a repository[, which] will process each request to access a digital work by
`
`examining the corresponding usage rights . . . Access to digital works for the purposes of transporting
`
`between repositories (e.g. copying, borrowing or transfer) is carried out using a digital
`
`work transport protocol. Access to digital works for the purposes of replay by a digital work
`
`playback device (e.g. printing, displaying or executing) is carried out using a digital
`
`work playback protocol.”).
`
`Content storage and utilization on portable devices, including mobile commu-
`
`nication devices such as cellular phones, was also well-known. As one example, Ex.
`
`1216 (pub’d Aug. 26, 1999), discloses a cell phone for storing digital content in non-
`
`volatile memory and accessing that content. See, e.g., Ex. 1216 5 (“Because of its inte-
`
`gration into the cellular phone, the digital entertainment module can share components al-
`
`ready present in the cellular phone. Such savings would not be available if a CD player
`
`were simply aggregated with the phone. Further, the use of solid state RAM or ROM,
`
`as opposed to disc storage, eliminates the need for bounce control circuitry[, enabling
`
`9
`
`13
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`the] invention to provide cellular communications and entertainment during leisure
`
`activities.”); Ex. 1219 ¶ 41. Thus, as these background examples and the additional
`
`prior art detailed below in IV.C (including the primary prior art Ginter patent) illus-
`
`trate, the prior art was rife with awareness and discussion of the same supposed “in-
`
`vention” now memorialized in the challenged claims. Long before the purported pri-
`
`ority date, disclosures abounded of the very features that Smartflash now seeks to
`
`claim as its exclusive property. As outlined below, the challenged claims are obvious.
`
`III. PETITIONER HAS STANDING
`A.
`The ’772 patent is a CBM patent under § 18(d)(1) of the AIA, and Petitioner
`
`The ’772 Patent Is a Covered Business Method (“CBM”) Patent
`
`certifies it is available for review under § 42.304(a). See also CBM2014-0010, Pap. 7, 9-
`
`14 (finding claim 8 satisfies requirement). Although in fact numerous claims qualify, a
`
`patent with even one claim covering a CBM is considered a CBM patent. See CBM
`
`2012-00001, Doc. 36 at 26; 77 Fed. Reg. 48,709 (Aug. 14, 2012). Petitioner thus ad-
`
`dresses exemplary Claim 8 (quoted above).
`
`1.
`A CBM patent is “a patent that claims a method or corresponding apparatus for per-
`
`Exemplary Claim 8 Is Financial In Nature
`
`forming 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); 37 C.F.R. § 42.301. “[T]he definition of covered busi-
`
`ness method patent was drafted to encompass patents claiming activities that are finan-
`
`10
`
`14
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`cial in nature, incidental to a financial activity or complementary to a financial activity.’” 77 Fed.
`
`Reg. 48,734-35 (Aug. 14, 2012) (citing 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011)).
`
`“[F]inancial product or service” is to be interpreted broadly, id., and “financial . . . simp-
`
`ly means relating to monetary matters”—it does not require any link to traditional financial
`
`industries such as banks. See, e.g., CBM2012-00001, Pap. 36 at 23. See also CBM2013-
`
`00020, Pap. 14 at 11-12; CBM2013-00017, Pap. 8 at 5-6.
`
`The ’772 patent includes claims to a “data access terminal” (e.g., a “convention-
`
`al computer” or mobile phone (Ex. 1201 4:7-8)), that reads payment data from a data
`
`carrier (e.g., standard smart card (id. 11:35)), transmits it to a validation system for au-
`
`thorizing payment, and allows access to content in exchange for payment (id. 8:26-28).
`
`See AIA § 18(d)(1); 37 C.F.R. § 42.301(a). The patent alleges this terminal is part of a
`
`system that allows content owners to make content available without fear of losing
`
`revenue, and claim 8 specifies that the terminal is “for controlling access to one or
`
`more content data items.” Ex. 1201 2:15-19; Cl. 8. See also id. Fig 12(a)-(e). More gen-
`
`erally, the patent is about “[d]ata storage and access systems [that] enable downloading
`
`and paying for data.” Id. Abstract. “The combination of payment data and stored
`
`content data . . . helps reduce the risk of unauthorized access.” Id. And in asserting
`
`the patent, Smartflash conceded the alleged invention relates to a financial activity or
`
`transaction, stating “[t]he patents-in-suit generally cover a portable data carrier for
`
`storing data and managing access to the data via payment information and/or use status rules.
`
`11
`
`15
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`The patents-in-suit also generally cover a computer network . . . that serves data and
`
`manages access to data by, for example, validating payment information.” Ex. 1202 ¶ 17.
`
`Indeed, the specification confirms that the recited “data access terminal” is “for
`
`storing and paying for data,” (Ex. 1201 1:20-22), “can communicate with a bank or other fi-
`
`nancial services provider to control payment” (id. 3:53-55), and can “validate payment with an
`
`external authority such as a bank” (id. 2:8-10). Further, “[p]ayment for the data item or
`
`items requested may either be made directly to the system owner or may be made to an e-payment
`
`system” (id. 20:59-61), and such systems may be provided “according to, for example,
`
`MONDEX, Proton, and/or Visa cash compliant standards” and “payment authentication . . .
`
`may [] be performed by, for example, a data access terminal . . . using payment management
`
`code.” Id. 13:43-64. See also id. 7:66-8:61 (esp. 8:26-28); 11:65-12:4; Fig. 12(a)-(e).
`
`Claim 8 expressly recites software to perform data processing and other opera-
`
`tions in connection with the recited “payment validation system” (e.g., “to transmit
`
`payment data . . . for validation by a payment validation system” and “code to receive
`
`payment validation data defining if said payment validation system has validated pay-
`
`ment”), and further requires software “to control access to said selected content data
`
`item responsive to the payment validation data.” Id. Thus, claim 8, which explicitly
`
`describes transmitting payment data to a payment validation system, receiving pay-
`
`ment validation, and controlling access to data based on payment, clearly concerns a
`
`computer system (corresponding to methods discussed in the patent) for performing
`
`12
`
`16
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`data processing and other operations used in the practice, administration, or management of
`
`a financial activity and service. See, e.g., CBM2013-00020, Pap. 14 at 10-11.
`
`2.
`Claim 8 Does Not Cover A Technological Invention
`Further, claim 8 does not cover a “technological invention” within the excep-
`
`tion in AIA § 18(d)(1), because it does not claim “subject matter as a whole [that] re-
`
`cites a technological feature that is novel and unobvious over the prior art[] and solves a technical
`
`problem using a technical solution.” § 42.301(b). To the contrary, the specification explains
`
`that claim 8’s “data access terminal” was commonplace, and is not directed to a tech-
`
`nical problem, but rather offers a non-technical solution to the business problem of data piracy.
`
`(a) Claim 8 Does Not Recite A Technological Feature
`That Is Novel and Unobvious
`First, no “technological feature” of claim 8 is novel and unobvious. The PTAB
`
`has confirmed that “[m]ere recitation of known technologies, such as computer hard-
`
`ware, 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,” or “[r]eciting the use of known prior art technol-
`
`ogy to accomplish a process or method, even if that process or method is novel and
`
`non-obvious” will “not typically render a patent a technological invention.” See, e.g., 77
`
`Fed. Reg. 48,764 (Aug. 14, 2012). As the PTAB further stated, “combining prior art
`
`structures to achieve a normal, expected, or predictable result of that combination” is
`
`not a technological invention. 77 Fed. Reg. 157 (Aug. 14, 2012) at 48,764.
`
`13
`
`17
`
`

`

` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`As its language makes clear, claim 8 involves no “technology” at all other than “a
`
`data access terminal,” which includes a user interface, data carrier interface, a program
`
`store storing code, and a processor that implements the well-known steps disclosed in
`
`the specification. Ex. 1201. “The data access terminal may be a conventional computer or,
`
`alternatively, it may be a mobile phone,” both of which were known in the art well be-
`
`fore the earliest claimed priority date. Id. 4:7; 16:47-52. Indeed, the specification dis-
`
`claims the use of particular hardware, relying instead on conventional hardware known
`
`to a POSA: “[t]he physical embodiment of the system is not critical and a skilled person will
`
`understand that the terminals, data processing systems and the like can all take a variety of
`
`forms.” Id. 12:37-40.
`
`The use of software (code) for requesting and presenting data, transmitting and
`
`validating payment data, and exchanging content for payment, as disclosed in the
`
`specification, was also exceedingly well known in the art, and could not transform the
`
`claims into a technological invention. See, e.g., 77 Fed. Reg. 48,756 48,764 (Aug. 14,
`
`2012) (“[m]ere recitation of known technologies, such as . . . software, memory, com-
`
`puter-readable storage medium . . . [will] not typically render a patent a technological
`
`invention.”); Ex. 1219 § V, ¶¶ 79-87. The functions performed by the code (D1-
`
`D4)—related to the identification, access, and control of data as disclosed in the spec-
`
`ification—were commonplace before the earliest claimed priority date. See, e.g., Ex.
`
`1206 8:62-9:12; Ex. 1201 1:40-50. Further, the financial transaction performed by the
`
`14
`
`18
`
`

`

`code described in elements D5 and D6 was well known, because, as the patent con-
`
` Covered Business Method Patent Review
`United States Patent No. 8,336,772
`
`
`cedes, e-payment systems were known. Ex. 1201 13:43-64 (“E-payment systems coupled to
`
`banks . . . these provide an e-payment system according to, for example, MONDEX, Proton,
`
`and/or Visa cash compliant standards . . . payment data may be validated by a data access terminal
`
`using payment management code.”). Using code to implement this transaction, as disclosed
`
`in the specification, was obvious and known. E.g,, Ex. 1219 §V, ¶¶ 79-87. Providing
`
`access to data in exchange for a payment (D7), as claimed in the patent, was also well
`
`known. See, e.g., Exs. 1207; 1206 Abstract, 1:67-2:9; 1208 Abstract, 4:27-35; 1219 §V,
`
`¶¶ 75-77; Sec. IV.C.5, infra.
`
`The state of the art at the time, and the detailed prior art analysis below, further
`
`reflects claim 8 does not recite a technological feature that is novel and nonobvious.
`
`See, e.g., Section II, supra; Section IV.C, infra. Even apart from other f