`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`In re Patent of:
`U.S. Patent No.:
`Issue Date:
`Appl. Serial No.:
`Filing Date:
`Title:
`
`Attorney Docket No.: 104677-5008-822
`
`Racz et al.
`8,118,221
`February 21, 2012
`12/943,872
`
`
`November 10, 2010
`DATA STORAGE AND ACCESS SYSTEMS
`
`
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`PETITION FOR COVERED BUSINESS METHOD PATENT
`REVIEW OF UNITED STATES PATENT NO. 8,118,221 PURSUANT TO 35
`U.S.C. § 321 AND § 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT
`
`
`
`
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`TABLE OF CONTENTS
`
`I. MANDATORY NOTICES UNDER 37 C.F.R § 42.8(a)(1) ........................... 1
`A.
`Real Party-In-Interest Under 37 C.F.R. § 42.8(b)(1) ............................ 1
`B.
`Related Matters Under 37 C.F.R. § 42.8(b)(2) ..................................... 1
`C.
`Lead And Back-Up Counsel Under 37 C.F.R. § 42.8(b)(3) ................. 2
`
`II.
`
`PAYMENT OF FEES ..................................................................................... 2
`
`III. REQUIREMENTS FOR CBM UNDER 37 C.F.R. § 42.304 ......................... 2
`A. Grounds for Standing Under 37 C.F.R. § 42.304(a) ............................. 2
`B.
`Challenge Under 37 C.F.R. § 42.304(b) and Relief Requested ............ 2
`C.
`Claim Construction under 37 C.F.R. §§ 42.304(b)(3) .......................... 4
`D.
`The ‘221 Patent is a Covered Business Method Patent ........................ 5
`E.
`The ‘221 Patent Is Not Directed to a Technological Invention, And
`Thus, Should Not Be Excluded From the Definition of a CBM
`Patent. .................................................................................................... 9
`
`IV. SUMMARY OF THE ‘221 Patent ................................................................ 11
`A.
`Brief Description ................................................................................. 11
`B.
`Summary of the Prosecution History of the ‘221 Patent .................... 13
`C. OMITTED ........................................................................................... 14
`
`V. DEMONSTRATION OF A REASONABLE LIKELIHOOD THAT AT
`LEAST ONE CLAIM OF THE ‘221 PATENT IS UNPATENTABLE ....... 14
`A. GROUND 1 – Claims 2, 11 and 32 Are Patent Ineligible Under 35
`U.S.C. § 101 ........................................................................................ 14
`1.
`Legal Standard .......................................................................... 14
`2.
`The ‘221 Patent Claims an Abstract Idea ................................. 17
`(a)
`read payment data from the data carrier and to
`forward the payment data to a payment validation
`system ............................................................................. 18
`receive payment validation data from the payment
`validation system ............................................................ 19
`
`(b)
`
`
`
`i
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`(c)
`
`(d)
`
`retrieve data from the data supplier and to write the
`retrieved data into the data carrier responsive to
`reading payment data from the data carrier .................... 20
`transmit at least a portion of the payment validation
`data to the data supplier or to a destination received
`from the data supplier ..................................................... 21
`The ‘221 patent Claims Preempt All Effective Uses of the
`Abstract Idea of Enabling Limited Use of Paid-for/Licensed
`Content ...................................................................................... 23
`The ‘221 patent is Not Tied to a Particular Machine in any
`Manner that Would Make the Claims Patent-Eligible .............. 25
`The ‘221 patent Does Not Transform Anything ....................... 27
`5.
`B. OMITTED ........................................................................................... 28
`
`3.
`
`4.
`
`VI. CONCLUSION .............................................................................................. 28
`
`
`
`
`ii
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`EXHIBITS
`
`Exhibit-1001
`
`Exhibit-1002
`
`Exhibit-1003
`
`U.S. Patent No. 8,118,221 to Racz et al. (“the ‘221 Patent” or
`“‘221”)
`
`Excerpts from the Prosecution History of the ‘221 Patent (“the
`Prosecution History”)
`
`Declaration of Dr. Jeffrey Bloom re the ‘221 Patent
`(“Bloom”)
`
`Exhibit-1004
`
`U.S. Patent No. 5,530,235 (“Stefik ‘235”)
`
`Exhibit-1005
`
`U.S. Patent No. 5,629,980 (“Stefik ‘980”) (incorporated by
`5,530,235)
`
`Exhibit-1006
`
`PCT Publication No. WO 00/08909 (“Gruse”)
`
`Exhibit-1007
`
`Exhibit-1008
`
`Exhibit-1009
`
`Exhibit-1010
`
`Exhibit-1011
`
`PCT Application No. PCT/GB00/04110 (“the ‘110 Appln.”
`Or
`“‘110”)
`
`United Kingdom Patent Application GB9925227.2 (“the
`‘227.2
`Appln.” or “‘227.2”)
`
`Transitional Program for Covered Business Method Pa-
`tents—Definitions of Covered Business Method Patent and
`Technological Invention, 77 Fed. Reg. 157 (August14, 2012)
`
`A Guide to the Legislative History of the America Invents
`Act;
`Part II of II, 21 Fed. Cir. Bar J. No. 4
`
`Interim Guidance for Determining Subject Matter Eligibility
`for
`Process Claims in View of Bilski v. Kappos (July 27, 2010)
`
`Exhibit-1012
`
`Apple Inc. v. Sightsound Technologies, LLC, CBM2013-
`00019 Paper No. 17 (entered October 8, 2013) at 11-13
`
`
`
`iii
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`Exhibit-1013
`
`Volusion, Inc. v. Versata Software, Inc. and Versata
`Development Group, Inc., CBM2013-00017 Paper No. 8
`(entered October 24, 2013)
`
`Exhibit-1014
`
`Salesforce.com, Inc. v. VirtualAgility, Inc., CBM2013-00024
`Paper No. 16 (entered November 19, 2013)
`
`Exhibit-1015
`
`U.S. Patent No. 8,336,772 (“the ‘772 Patent” or “‘772”)
`
`Exhibit-1016
`
`RESERVED
`
`Exhibit-1017
`
`U.S. Patent No. 8,061,598 (“the ‘598 Patent” or “‘598”)
`
`Exhibit-1018
`
`U.S. Patent No. 8,033,458 (“the ‘458 Patent” or “‘458”)
`
`Exhibit-1019
`
`U.S. Patent No. 7,942,317 (“the ‘317 Patent” or “‘317”)
`
`Exhibit-1020
`
`RESERVED
`
`Exhibit-1021
`
`U.S. Patent No. 7,334,720 (“the ‘720 Patent” or “‘720”)
`
`Exhibit-1022
`
`U.S. Patent Application No. 12/943,872 (“the ‘872 Appln.” or
`“872”)
`
`Exhibit-1023
`
`RESERVED
`
`Exhibit-1024
`
`RESERVED
`
`Exhibit-1025
`
`RESERVED
`
`Exhibit-1026
`
`RESERVED
`
`Exhibit-1027
`
`RESERVED
`
`Exhibit-1028
`
`Exhibit-1029
`
`Weinstein “MasterCard Plans Point-of-Sale Product for
`Merchants Leery of Bank Cards”
`
`Mayo Collaborative Serv v. Prometheus Labs., Inc., 132 S. Ct.
`1289 (2012)
`
`Exhibit-1030
`
`Gottschalk v. Benson, 409 U.S. 63 (1972)
`
`
`
`iv
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`Exhibit-1031
`
`Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366
`(Fed. Cir. 2011)
`
`Exhibit-1032
`
`Bilski v. Kappos, 130 S. Ct. 3218 (2010)
`
`Exhibit-1033
`
`Alice Corp. v. CLS Bank International,134 S.Ct. 2347 (2014)
`
`Exhibit-1034
`
`Bancorp Serv., L.L.C. v. Sun Life Assur. Co., (U.S.) 687 F.3d
`1266 (Fed. Cir. 2012)
`
`Exhibit-1035
`
`Dealertrack, Inc. v. Huber, 674 F.3d 1323 (Fed. Cir. 2012)
`
`Exhibit-1036
`
`Exhibit-1037
`
`Exhibit-1038
`
`SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319 (Fed.
`Cir. 2010)
`
`In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir.
`2008)
`
`Accenture Global Services, GmbH v. Guidewire Software,
`Inc.,
`728 F.3d 1336 (Fed. Cir. 2013)
`
`Exhibit-1039
`
`Keith, Michael C., The Radio Station Broadcast, Satellite and
`Internet, Eighth Edition, 2009
`
`
`
`
`
`
`v
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`Apple Inc. (“Petitioner” or “Apple”) petitions for Covered Business Method
`
`Patent Review (“CBM”) under 35 U.S.C. §§ 321 and § 18 of the Leahy-Smith
`
`American Invents Act of claims 2, 11 and 32 (“the Challenged Claims”) of U.S.
`
`Patent No. 8,118,221. As explained in this petition, there exists a reasonable
`
`likelihood that Apple will prevail in demonstrating unpatentability with respect to
`
`at least one of the Challenged Claims based on this petition. Apple respectfully
`
`submits that a CBM review should be instituted, and that the Challenged Claims
`
`should be canceled as unpatentable.
`
`I. MANDATORY NOTICES UNDER 37 C.F.R § 42.8(a)(1)
`
`A. Real Party-In-Interest Under 37 C.F.R. § 42.8(b)(1)
`
`Apple Inc. is filing this Petition and is the real party-in-interest.
`
`B. Related Matters Under 37 C.F.R. § 42.8(b)(2)
`
`Apple is not aware of any disclaimers or reexamination certificates for the
`
`‘221 Patent. The ‘221 Patent is the subject of a number of civil actions including:
`
`Smartflash LLC et al. v. Apple, Inc., Case No. 6:13-cv-00447, Smartflash et al v.
`
`Samsung Electronics Co. Ltd. et al, Case No. 6:13-cv-00448, Smartflash LLC et al
`
`v. Google, Inc. et al., Case No. 6:14-cv-00435, Smartflash LLC et al. v.
`
`Amazon.Com, Inc., et al., No. 6:14-cv-992, and Smartflash LLC et al. v. Apple,
`
`Inc., Case No. 6:15-cv-00145. It is also the subject of the following Petitions for
`
`Covered Business Method Review: Apple Inc. v. Smartflash LLC, CBM2014-
`
`
`
`1
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`00102, CBM2014-00103, CBM2014-00194, CBM2014-00199, and CBM2015-
`
`00015.
`
`C. Lead And Back-Up Counsel Under 37 C.F.R. § 42.8(b)(3)
`
`Apple designates J. Steven Baughman, Reg. No. 47,414, as Lead Counsel
`
`and Ching-Lee Fukuda, Reg. No. 44,334, and Megan Raymond, Reg. No. 72,997,
`
`as Backup Counsel, all available for service at Ropes & Gray LLP, IPRM – Floor
`
`43, Prudential Tower, 800 Boylston Street, Boston, MA 02199-3600 or by
`
`electronic service by email at ApplePTABService-SmartFlash@ropesgray.com.
`
`II.
`
`PAYMENT OF FEES
`
`Apple authorizes charge Deposit Account No. 061075 for the fee set in 37
`
`C.F.R. § 42.15(b) and any additional related fees to be charged.
`
`III. REQUIREMENTS FOR CBM UNDER 37 C.F.R. § 42.304
`
`A. Grounds for Standing Under 37 C.F.R. § 42.304(a)
`
`Apple certifies that the ‘221 Patent is eligible for CBM review. Apple is not
`
`barred or estopped from requesting this review challenging the Challenged Claims
`
`on the below-identified grounds.
`
`B. Challenge Under 37 C.F.R. § 42.304(b) and Relief
`Requested
`
`Apple requests a CBM review of the Challenged Claims on the grounds set
`
`forth in the table shown below, and requests that each of the Challenged Claims be
`
`
`
`2
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`found unpatentable. An explanation of how these claims are unpatentable under
`
`the statutory ground identified below is provided in the form of detailed
`
`description that follows. Additional explanation and support for the ground of
`
`rejection is set forth in Exhibit-1003, the Declaration of Dr. Jeffrey Bloom,
`
`originally filed by Samsung in CBM2014-00194 and re-filed and relied upon here
`
`by Apple only as it relates to the ground of rejection under 35 U.S.C. § 101 set
`
`forth in this Petition.
`
`Ground
`
`‘221 Patent Claims
`
`Basis for Rejection
`
`Ground 1
`
`2, 11, and 32
`
`§ 101
`
`
`
`The ‘221 Patent issued from the ‘872 Appln. (Exhibit-1022) filed November
`
`10, 2010, which is a continuation of the ‘558 Appln. filed January 15, 2008 (now
`
`U.S. Patent No. 7,942,317), which is a continuation of the ‘758 Appln. filed
`
`January 19, 2006 (now U.S. Patent No. 7,334,720), which is a continuation of the
`
`‘716 Appln. filed September 17, 2002 (abandoned), which is a National Stage
`
`Entry of the ‘110 Appln. (Exhibit-1007) filed October 25, 2000. The ‘110 Appln.
`
`claimed priority to the ‘227.2 Appln. (Exhibit-1008), which was filed October 25,
`
`1999.
`
`
`
`3
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`C. Claim Construction under 37 C.F.R. §§ 42.304(b)(3)
`
`In the institution decision in CBM2014-00194, the PTAB construed only the
`
`term “access rule,” and decided that the other terms should be interpreted
`
`according to their ordinary and customary meaning:
`
`In a covered business method patent review, claim terms are given
`their broadest reasonable interpretation in light of the specification in which
`they appear and the understanding of others skilled in the relevant art. See
`37 C.F.R. § 42.300(b); see also In re Cuozzo Speed Techs., LLC, 2015 WL
`448667 at *7 (Fed. Cir. Feb. 4, 2015) (“We conclude that Congress
`implicitly adopted the broadest reasonable interpretation standard in
`enacting the AIA.”). Applying that standard, we interpret the claim terms of
`the ’221 patent according to their ordinary and customary meaning in the
`context of the patent’s written description. See In re Translogic Tech., Inc.,
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this Decision, we
`construe the claim term “access rule.”
`Independent claim 32 requires receiving at least one “access rule”
`from the data supplier and that the “at least one access rule specif[ies] at
`least one condition for accessing the retrieved data.” The ’221 patent also
`states that “one or more content access rules are received from the system
`owner data supply computer and written to the smart Flash card so that each
`content data item has an associated use rule to specify under what conditions
`a user of the smart Flash card is allowed access to the content data item.”
`Ex. 1001, 21:48–53; see also id. at 7:31–32 (stating that access data “links a
`content identifier with an access rule, typically based upon a required
`payment value”). Accordingly, for purposes of this Decision, we construe
`
`
`
`4
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`“access rule” as a rule specifying a condition under which access to content
`is permitted.
`
`See 3/30/2015 Decision in CBM2014-00194 (Pap. 9) at 6-7. Petitioner submits
`
`that, under these circumstances and the broadest reasonable interpretation standard
`
`applicable in this review, it would be appropriate for the Patent Trial and Appeal
`
`Board (“PTAB”) to adopt these constructions in this Covered Business Method
`
`review.1
`
`D. The ‘221 Patent is a Covered Business Method Patent
`
`The ‘221 Patent, which generally relates to systems and methods “for
`
`downloading and paying for data” is a “covered business method patent” (“CBM
`
`patent”) as defined under § 18 of the AIA and 37 C.F.R. § 42.301. ‘221 at
`
`Abstract.
`
`The AIA defines a CBM patent as “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”
`
`
`1 Because the standards of claim interpretation applied in litigation differ from
`
`PTO proceedings, any interpretation of claim terms in this CBM review is not
`
`binding upon Petitioner in any litigation related to the subject patent. See In re
`
`Zletz, 893 F.2d 319, 321-22 (Fed. Cir. 1989).
`
`
`
`5
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`(emphases added). AIA § 18(d)(1); see also 37 C.F.R. § 42.301. The AIA’s
`
`legislative history demonstrates that the term “financial product or service” should
`
`be “interpreted broadly,” encompassing patents “‘claiming activities that are
`
`financial in nature, incidental to a financial activity or complementary to a
`
`financial activity.’” Exhibit-1009 at 48735 (quoting 157 Cong. Rec. S5432 (daily
`
`ed. Sept. 8, 2011) (statement of Sen. Schumer)). Moreover, as the Guide to the
`
`Legislative History of the America Invents Act indicates, the language “practice,
`
`administration, or management” is “intended to cover any ancillary activities
`
`related to a financial product or service, including . . . marketing, customer
`
`interfaces [and] management of data . . .” (emphases added). Exhibit-1010 at 635-
`
`36.
`
`Augmenting the statutory language with the above-referenced clarifications
`
`from the legislative history, and from the Guide to that legislative history, yields
`
`the following definition of a CBM patent: a patent that claims a method or
`
`corresponding apparatus for performing data processing or other operations used in
`
`activities that are financial in nature, incidental to a financial activity, or
`
`complementary to a financial activity, including the management of data. See AIA
`
`§ 18(d)(1); Exhibit-1009 at 48735; and Exhibit-1010 at 635-26.
`
`
`
`6
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`In the words of the Patent Owner, the claims of the ‘221 Patent are directed
`
`to a “portable data carrier” for “storing and paying for data.” See ‘221 at 1:20-23.
`
`Claim 32 of the ‘221 Patent, for example, recites a data access terminal for
`
`retrieving data from a data supplier and providing the retrieved data to a data
`
`carrier,” that includes “a program store storing code . . . the code comprising: code
`
`to read payment data from a data carrier and to forward the payment data to a
`
`payment validation system,” and “code responsive to the payment validation data
`
`to receive at least one access rule from the data supplier and to write the at least
`
`one access rule into the data carrier . . . dependent upon the amount of payment
`
`associated with the payment data forwarded to the payment validation system.”
`
`As an example, the data access terminal of claim 32 unquestionably is used
`
`for data processing in the practice, administration, and management of financial
`
`products and services; specifically, for processing payments for data downloads.
`
`Bloom at, e.g., ¶ 23. Indeed, in a recent decision involving highly similar claims,
`
`the Board determined that selling a desired digital audio signal to a user constitutes
`
`financial activity. See Exhibit-1012 at 11-13 (“The cited entities may not provide
`
`typical financial services, but . . . they do sell digital content, which is the financial
`
`activity recited in claim 1”).
`
`
`
`7
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`The specification of the ‘221 Patent, moreover, is replete with examples of
`
`financial activity, stating 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 ‘221 at 6:59-63, 13:46-58. Even if claim 32 did not explicitly
`
`reference financial activity, and it does, this description alone would be sufficient
`
`to establish that the claimed method is a method for performing data processing
`
`used in the practice, administration, or management of a financial product or
`
`service and that, therefore, the ‘221 Patent is a CBM patent. See Exhibit-1012 at 5,
`
`6 (determining, based on a specification statement that ‘embodiments of the
`
`present invention have application to a wide range of industries’ including
`
`‘financial services,’ despite the apparent lack of financial-related language in the
`
`claims); see also Exhibit-1013 at 9-15 (“Although claim 8 does not expressly refer
`
`to financial activity . . . When applied to the activities listed [in the patent’s
`
`specification] . . . the method of claim 8 represents a financial product or service”).
`
`Thus, for at least the reasons described above, the ‘221 Patent is a CBM
`
`patent that is eligible for the review requested by Petitioner.
`
`
`
`8
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`E.
`The ‘221 Patent Is Not Directed to a Technological
`Invention, And Thus, Should Not Be Excluded From the Definition of a
`CBM Patent.
`
`The AIA excludes “patents for technological inventions” from the definition
`
`of CBM patents. AIA § 18(d)(2). To determine when a patent covers a
`
`technological invention, “the following will be considered on a case-by-case basis:
`
`whether the claimed subject matter as a whole recites a technological feature that is
`
`novel and unobvious over the prior art; and solves a technical problem using a
`
`technical solution.” 37 C.F.R. § 42.301 (emphasis added); see also Exhibit-1009 at
`
`48736-37 (USPTO clarified that to qualify as a technological invention, a patent
`
`must have a novel, unobvious technological feature and a technical problem solved
`
`by a technical solution). “[A]bstract business concepts and their implementation,
`
`whether in computers or otherwise,” are not included in the definition of
`
`“technological inventions.” Exhibit-1010 at 634. Indeed, Congress has explained
`
`that accomplishing a business process or method is not technological, whether or
`
`not that process or method is novel. See id. Finally, to institute a CBM review, a
`
`patent need only have one claim directed to a covered business method, and not a
`
`technological invention. See, e.g., Exhibit-1009 at 48736-37.
`
`The claims of the ‘221 Patent fail to recite a novel and unobvious
`
`technological feature, and fail to recite a technical problem solved by a technical
`
`solution. See Bloom at, e.g., ¶ 24. Thus, the patent is subject to Section 18 review.
`
`
`
`9
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`Although the independent claims of the ‘221 Patent recite computer-related terms
`
`such as “non-volatile memory”, “data terminal”, and “data carrier”, Congress has
`
`explained that simply reciting words describing generic technology such as
`
`“computer hardware, . . .software, memory, computer-readable storage medium,
`
`[or] databases” does not make a patent a technological invention. Exhibit-1010 at
`
`634.
`
`The specification of the ‘221 Patent confirms that the computer-related
`
`terms recited in the ‘221 Patent’s claims relate to technology that is merely, in the
`
`words of the Patent Owner, “conventional”: the specification states, for example,
`
`that “[t]he 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.” 4:4-5, 16:46-50, 18:7-11. Consequently, the ‘221
`
`Patent claim is not transformed into a technological invention by their recitation of
`
`these computer-related terms.
`
`The ‘221 Patent fails even to recite a technical problem, and instead
`
`addresses the non-technical task of allowing “owners of . . . data to make the data
`
`
`
`10
`
`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
`
`available themselves over the internet without fear of loss of revenue . . .
`
`undermining the position of data pirates.” ‘221, at 1:29-39, 2:5-15, 5:29-33. The
`
`‘221 Patent’s solution to this non-technical problem is nothing more the
`
`combination of prior art structures to achieve a normal, expected, and predictable
`
`result: the use of a data supply system, content provision system, data terminal and
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`data carrier to restrict access to data based on payment. See, e.g., ‘221 at Abstract,
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`13:35-41. A teaching of a combination of prior art structures that achieves a
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`predictable result does not “render a patent a technological invention.” Exhibit-
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`1009 at 48755. Indeed, “[a] person having ordinary skill in the art at the time that
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`the ‘221 Patent was filed would not have considered the methods described and
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`claimed by the ‘221 Patent to be technical”. Bloom at, e.g., ¶ 24.
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`In sum, the AIA’s exclusion of “patents for technological inventions” from
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`the definition of CBM patents is not applicable here because the ‘221 Patent fails
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`to recite a novel and unobvious technological feature, and fails to recite a technical
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`problem solved by a technical solution. CBM review is therefore appropriate for
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`the ‘221 Patent.
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`IV. SUMMARY OF THE ‘221 PATENT
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`A. Brief Description
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`The ‘221 Patent includes 33 claims, of which claims 1, 12, 17, 28, and 32
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`are independent.
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`
`
`11
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`

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`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
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`The technology claimed in the ‘221 Patent generally relates to systems and
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`methods “for downloading and paying for data such as audio and video data, text,
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`software, [and] games . . . .” ‘221 at Abstract. The ‘221 Patent purports to address
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`a specific problem: “the growing prevalence of so-called data pirates” who “obtain
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`data either by unauthorized or legitimate means and then make this data available
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`essentially world-wide over the internet without authorization.” ‘221 at 1:31-33.
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`Within this context, the ‘221 Patent describes “combining digital right
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`management with content data storage,” and states that “[b]inding the data access
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`and payment together allows the legitimate owners of the data to make the data
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`available themselves over the internet without fear of loss of revenue, thus
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`undermining the position of data pirates.” ‘221, at 2:7-11, 5: 29-33.
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`Specifically, the ‘221 Patent discloses a data supply system 120 (as shown in
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`Fig. 6) coupled to a content provision system 100 (as shown in Fig. 5). ‘221 at 13:
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`22-34. The ‘221 Patent also discloses a “portable data carrier for storing and
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`paying for data.” ‘221 at 1:21-23. The portable data carrier stores, in a parameter
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`memory, use status data and use rules that are used by the data supply system to
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`control access to content data and, in a separate content memory, the portable data
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`carrier stores content data acquired through the content provision system. This
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`disclosure is reflected in the limitations of independent claim 12, which recites
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`
`
`12
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`

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`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
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`“retrieving data from the data supplier; and writing the retrieved data into the data
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`carrier.” ‘221 at 26:43-48.
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`In addition to the claimed features of “use status data” and “use rules,”
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`independent claim 32 of the ‘221 Patent recites an “access rule” for “specifying at
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`least one condition for accessing the retrieved content data written into the data
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`carrier, the at least one condition being dependent on the amount of payment
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`associated with the payment data forwarded to the payment validation system.”
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`‘221 at 26:59-67. According to the specification, “access rule data . . . links a
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`content identifier with an access rule,” and are “typically based upon a required
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`payment value . . . .” See ‘221 at 7:29-35.
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`B.
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`Summary of the Prosecution History of the ‘221 Patent
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`The ‘221 Patent issued on February 21, 2012 from U.S. Patent Application
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`No. 12/943,872 (Exhibit-1022, “the ‘872 application) filed November 10, 2010
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`with 76 claims.
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`During the prosecution of the ‘872 application, on March 22, 2011, the
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`Examiner issued a restriction requirement under 35 U.S.C § 121 noting
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`nonoverlapping features of five (5) subcombinations. See Restriction Requirement
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`March 22, 2011 at 3. In response, the Patent Owner elected claims 35-65, 73, and
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`75. See Patent Owner’s Response May 20, 2011 at 9. Thereafter, the Examiner
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`rejected claims 35-55, 57-59, 62, 73 and 75 on the ground of nonstatutory
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`
`
`13
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`

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`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
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`obviousness-type double patenting as being unpatentable over claims of U.S.
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`Patent No. 7,334,720 while indicating allowable subject matter in claims 56, 60,
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`and 61. See Non-Final Office Action of July 29, 2011 at 3 and 9. Subsequently,
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`the Patent Owner filed a Terminal Disclaimer. See Patent Owner’s Response
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`August 16, 2011 at 9. The Examiner then mailed a Notice of Allowance to allow
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`pending claims, noting that “the prior art fails to disclose a data access terminal
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`comprising the interface, the data carrier, the processor and the program store for
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`storing the codes in the manner as recited in claim 35. The prior art also fails to
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`disclose the limitations of claims 46, 51, 58, 62 and 73.” See Notice of Allowance
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`at 2.
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`C. OMITTED
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`V. DEMONSTRATION OF A REASONABLE LIKELIHOOD
`THAT AT LEAST ONE CLAIM OF THE ‘221 PATENT IS
`UNPATENTABLE
`
`Claims 2, 11, and 32 are challenged. Claims 2 and 11 depend from claim 1
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`and, therefore, incorporate the subject matter of claim 1. As demonstrated below,
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`claims 2, 11, and 32 are directed toward ineligible subject matter.
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`A. GROUND 1 – Claims 2, 11 and 32 Are Patent Ineligible
`Under 35 U.S.C. § 101
`
`1.
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`Legal Standard
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`
`
`14
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`

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`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
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`Laws of nature, abstract ideas and natural phenomena cannot be patented.
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`Mayo Collaborative Serv v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012).
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`Allowing patents on such matters would effectively grant impermissible
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`monopolies over entire concepts. See, e.g., Gottschalk v. Benson, 409 U.S. 63, 71-
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`72 (1972). Thus, when claims of a patent recite abstract ideas, such as those that
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`“can be performed in the human mind, or by a human using a pen and paper,” and
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`those that preempt an entire concept or field, they must add “significantly more” to
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`be patent-eligible. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366,
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`1372 (Fed. Cir. 2011); See also Mayo, 132 S. Ct. at 1294; Bilski v. Kappos, 130 S.
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`Ct. 3218, 3230 (2010).
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`As the Supreme Court recently reiterated, mere recitation of “a particular
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`technological environment” does not make eligible a claim that is otherwise
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`improperly abstract. Alice Corp. v. CLS Bank International,134 S.Ct. 2347, 2358
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`(2014) (quoting Bilski at 3230). Nor does addition of “insignificant post solution
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`activity” or “well-understood, routine, conventional activity.” Mayo at 1291
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`(quoting Bilski at 3230), 1294, 1297-98. Instead, a claim involving an
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`unpatentable abstract idea must contain “other elements or a combination of
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`elements, sometimes referred to as the inventive concept,” sufficient to prevent
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`patenting the underlying idea itself. Mayo at 1294 (internal quotations omitted).
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`
`
`15
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`

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`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
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`One indication that a claim recites more than an abstract idea is that it is “tied to a
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`particular machine or apparatus” or “transform[s] a particular article into a
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`different state or thing.” Bilski at 3230.
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`An abstract claim is not salvaged, however, by “claiming only its
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`performance by computers, or by claiming the process embodied in program
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`instructions on a computer readable medium.” CyberSource at 1375. Instead, to
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`impart patent-eligibility to otherwise unpatentable subject matter “under the theory
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`that the [claimed subject matter] is linked to a machine, the use of the machine
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`must impose meaningful limits on the claim’s scope.” Id. at 1369 (internal
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`quotations omitted); see also Bancorp Serv., L.L.C. v. Sun Life Assur. Co. (U.S.),
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`687 F.3d 1266, 1278 (Fed. Cir. 2012) (“To salvage an otherwise patent-ineligible
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`process, a computer must be integral to the claimed invention, facilitating the
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`process in a way that a person making calculations or computations could not”).
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`Using a computer “for no more than its most basic function—making calculations
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`or computations — fails to circumvent the prohibition against patenting abstract
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`ideas and mental processes.” Id. As such, and as explained below, the mere fact
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`that claims 2, 11 and 32 of the ‘221 Patent incorporate terms such as a “data access
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`terminal,” “data supplier,” “data carrier,” “data carrier interface,” “program store,”
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`and “processor,” does not salvage these otherwise patent ineligible claims. Indeed,
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`
`
`16
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`

`

`Attorney Docket No 104677-5008-822
`CBM of U.S. Patent No. 8,118,221
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`the ‘221 Patent itself repeatedly describes its computing systems as both
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`“conventional” and as being used “in a conventional manner.” See, e.g., ‘221 at
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`4:4-5, 16:46-49, 21:33-38.
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`As explained in detail below, claims 2, 11 and 32 of the ‘221 Patent recite
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`and impermissibly preempt an abstract idea that can be performed in the human
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`mind and by paper and pen, namely the abstract idea of enabling limited use of
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`paid-for/licensed content, without being “tied to a particular machine” and without
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`“transform[ing] a particular article” into anything different.
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`2.
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`The ‘221 Patent Claims an Abstract Idea
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`Through its dependence on claim 1, claim 2 requires the following
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`components and actions: (i) a first interface for communicating with the data
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`supplier, (ii) a data carrier interface for interfacing with the data carrier, (iii) a
`
`