IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Attorney Docket No.: 104677-5008-824
`
`Hulst et al
`In re Patent of:
`U.S. Patent No.: 7,334,720
`Issue Date:
`February 26, 2008
`Appl. Serial No.: 11/336,758
`Filing Date:
`January 19, 2006
`Title:
`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. 7,334,720 PURSUANT TO 35
`U.S.C. § 321 AND § 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT
`
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`

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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
`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
`PAYMENT OF FEES ..................................................................................... 2
`II.
`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 § 42.304(b) and Relief Requested ........................ 2
`C.
`Claim Constructions under 37 C.F.R. §§ 42.104(b)(3) ......................... 3
`D.
`The ‘720 Patent is a Covered Business Method Patent ........................ 4
`E.
`The ‘720 Patent Is Not Directed to a Technological Invention, And
`Thus, Should Not Be Excluded From the Definition of a CBM
`Patent. .................................................................................................... 7
`IV. SUMMARY OF THE ‘720 PATENT ........................................................... 10
`A.
`Brief Description ................................................................................. 10
`B.
`Summary of the Prosecution History of the ‘720 Patent .................... 12
`C. OMITTED ........................................................................................... 14
`V. DEMONSTRATION OF A REASONABLE LIKELIHOOD THAT AT
`LEAST ONE CLAIM OF THE ‘720 PATENT IS UNPATENTABLE ....... 14
`A. GROUND 1 - Claims 13 and 14 Are Unpatentable Under 35
`U.S.C. § 101 ........................................................................................ 14
`1. Legal Standard ............................................................................... 14
`2. Claims 13 and 14 of the ‘720 Patent Recite an Abstract Idea, as
`it Can be Performed in the Human Mind and by a Human Using
`a Pen and Paper .............................................................................. 16
`(i)
`reading payment data from the data carrier ......................... 17
`(ii)
`forwarding the payment data to a payment validation
`system .................................................................................. 18
`retrieving data from the data supplier .................................. 19
`(iii)
`(iv) writing the retrieved data into the data carrier ..................... 20
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`Attorney Docket No 104677-5008-824
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`receiving at least one access rule from the data supplier ..... 20
`(v)
`(vi) writing the one access rule into the data carrier, the at
`least one access rule specifying at least one condition for
`accessing the retrieved data written into the data carrier,
`the at least one condition being dependent upon the
`amount of payment associated with the payment data
`forwarded to the payment validation system. ...................... 21
`(vii) a first interface, a data carrier interface, and a processor .... 22
`3. Claims 13 and 14 of the ‘720 Patent Recite an Abstract Idea, as
`it Preempts All Effective Uses of the Abstract Idea of Licensing
`and Regulating Access to Copyrighted Content ............................ 23
`4. Claims 13 and 14 of the ‘720 Patent is Not Tied to a Particular
`Machine in any Manner that Would Make Claims 13 and 14
`Patent-Eligible ................................................................................ 25
`5. Claims 13 and 14 of the ‘720 Patent Do Not Transform
`Anything in any Manner that Would Make it Patent-Eligible ....... 27
`B. OMITTED ........................................................................................... 29
`VI. CONCLUSION .............................................................................................. 29
`
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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`EXHIBITS
`
`Exhibit-1001
`
`U.S. Patent No. 7,334,720 to Hulst et al. (“the ‘720 Patent”)
`
`Exhibit-1002
`
`Excerpts from the Prosecution History of the ‘720 Patent (“the
`Prosecution History”)
`
`Exhibit-1003
`
`Declaration of Dr. Jeffrey Bloom re the ‘720 Patent (“Bloom”)
`
`Exhibit-1004
`
`U.S. Patent No. 5,530,235 (“Stefik ‘235”)
`
`Exhibit-1005
`
`U.S. Patent No. 5,629,980 (“Stefik ‘980”)
`
`Exhibit-1006
`
`PCT Publication No. WO 00/08909 (“Gruse”)
`
`Exhibit-1007
`
`Exhibit-1008
`
`Exhibit-1009
`
`Exhibit-1010
`
`Exhibit-1011
`
`Exhibit-1012
`
`Exhibit-1013
`
`PCT Application 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 (Aug. 14, 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 (Jul. 27, 2010)
`
`Apple Inc. v. Sightsound Technologies, LLC, CBM2013-00019
`Paper No. 17 (entered Oct. 8, 2013) at 11-13
`
`Volusion, Inc. v. Versata Software, Inc. and Versata Devel-op-
`ment Group, Inc., CBM2013-00017 Paper No. 8 (entered Oct.
`24, 2013)
`
`Exhibit-1014
`
`Salesforce.com, Inc. v. VirtualAgility, Inc., CBM2013-00024
`Paper No. 16 (entered Nov. 19, 2013)
`
`Exhibit-1015
`
`RESERVED
`
`
`
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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`Exhibit-1016
`
`RESERVED
`
`Exhibit-1017
`
`RESERVED
`
`Exhibit-1018
`
`RESERVED
`
`Exhibit-1019
`
`RESERVED
`
`Exhibit-1020
`
`RESERVED
`
`Exhibit-1021
`
`RESERVED
`
`Exhibit-1022
`
`RESERVED
`
`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)
`
`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)
`
`
`
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`Attorney Docket No 104677-5008-824
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`Exhibit-1036
`
`SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319 (Fed.
`Cir. 2010)
`
`Exhibit-1037
`
`In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008)
`
`Exhibit-1038
`
`Accenture Global Services, GmbH v. Guidewire Software, Inc.,
`728 F.3d 1336 (Fed. Cir. 2013)
`
`Exhibit-1039
`
`RESERVED
`
`
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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`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 13 and 14 (“the Challenged Claims”) of U.S.
`
`Patent No. 7,334,720. 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
`
`‘720 Patent. The ‘720 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-
`
`
`
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`00104, CBM2014-00105, CBM2014-00190, CBM2014-00196, CBM2015-00028,
`
`and CBM2015-00029.
`
`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 charges to Deposit Account No. 061075 for the fee set in
`
`37 C.F.R. § 42.15(b) for this Petition and any related additional fees.
`
`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 ‘720 Patent is available 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 § 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
`
`found unpatentable. An explanation of how these claims are unpatentable under
`
`the statutory ground identified below is provided in the form of detailed
`
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`Attorney Docket No 104677-5008-824
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`description that follows. Additional explanation and support for the ground of
`
`rejection is set forth in Exhibit-1003, the Declaration of Dr. Jeffrey Bloom
`
`(“Bloom”), which was originally submitted by Samsung in CBM2014-00190 and
`
`is 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
`
`‘720 Patent Claims
`
`Basis for Rejection
`
`Ground 1
`
`13 and 14
`
`§ 101
`
`
`
`The ‘720 Patent issued Feb. 26, 2008 from the ‘758 Appln., which was filed
`
`Jan. 19, 2006 as a continuation of the ‘716 Appln. (now abandoned), which was
`
`filed Apr. 25, 2002. The ‘716 Appln. is a National Stage Entry of the ‘110 Appln.
`
`(Exhibit-1007), which was filed Oct. 25, 2000. The ‘110 Appln. claimed priority
`
`to United Kingdom Patent Appln. GB9925227.2 (Exhibit-1008, “the ‘227.2
`
`Appln.” or “227.2”), which was filed Oct. 25, 1999.
`
`C. Claim Constructions under 37 C.F.R. §§ 42.104(b)(3)
`In the institution decision in CBM2014-00190, the PTAB decided that “no
`
`terms require express construction for purposes of this Decision.” See 4/2/2015
`
`Decision in CBM2014-00190 (Pap. 9) at 7. Petitioner submits that, under these
`
`circumstances and the broadest reasonable interpretation standard applicable in this
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`review, it would be appropriate for the Patent Trial and Appeal Board (“PTAB”) to
`
`adopt this position in this Covered Business Method review.1
`
`D. The ‘720 Patent is a Covered Business Method Patent
`The ‘720 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. ‘720 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”
`
`(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
`
`
`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).
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`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.
`
`In the words of the Patent Owner, the claims of the ‘720 Patent are directed
`
`to a “portable data carrier” for “storing and paying for data.” See ‘720 at 1:6-8.
`
`Claim 14 of the ‘720 Patent, for example, recites a “method of providing data from
`
`a data supplier to a data carrier,” that includes “reading payment data from a data
`
`carrier,” “forwarding the payment data to a payment validation system,” and
`
`“writing [an] access rule into the data carrier . . . dependent upon the amount of
`
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`payment associated with the payment data forwarded to the payment validation
`
`system.”
`
`As an example, the method of claim 14 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”).
`
`The specification of the ‘720 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 ‘720 at 6:59-63, 13:46-58. Even if claim 14 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 ‘720 Patent is a CBM patent. See Exhibit-1012 at 5,
`
`6 (determining, based on a specification statement that ‘embodiments of the
`
`
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`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 ‘720 Patent is a CBM
`
`patent that is eligible for the review requested by Petitioner.
`
`E.
`
`The ‘720 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
`
`4873637 (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
`
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`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, 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 ‘720 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.
`
`Although the independent claims of the ‘720 Patent recite computer-related terms
`
`such as “nonvolatile 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 ‘720 Patent confirms that the computer-related
`
`terms recited in the ‘720 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
`
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`processor . . . program memory . . . and timing and control logic . . . coupled by a
`
`data and communications bus.” ‘720 at 3:64-65; 16:62-65; 18:24-30.
`
`Consequently, the ‘720 Patent claim is not transformed into a technological
`
`invention by their recitation of these computer-related terms.
`
`The ‘720 Patent fails even to recite a technical problem, and instead
`
`addresses the non-technical task of allowing “owners of . . . data to make the data
`
`available themselves over the internet without fear of loss of revenue . . .
`
`undermining the position of data pirates.” ‘720 at 1:66-2:3, 5:25-26. The ‘720
`
`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 data carrier to
`
`restrict access to data based on payment. See, e.g., ‘720 at Abstract; 13:33-38. A
`
`teaching of a combination of prior art structures that achieves a predictable result
`
`does not “render a patent a technological invention.” Exhibit-1009 at 48755.
`
`Indeed, “[a] person having ordinary skill in the art at the time that the ‘720 Patent
`
`was filed would not have considered the methods described and claimed by the
`
`‘720 Patent to be technical”. Bloom at, e.g., ¶ 24.
`
`In sum, the AIA’s exclusion of “patents for technological inventions” from
`
`the definition of CBM patents is not applicable here because the ‘720 Patent fails
`
`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
`
`the ‘720 Patent.
`
`IV.
`
`SUMMARY OF THE ‘720 PATENT
`A. Brief Description
`The ‘720 Patent includes 18 claims, of which claims 1, 3 and 14 are
`
`independent.
`
`The claims of the ‘720 Patent generally relates to systems and methods “for
`
`downloading and paying for data such as audio and video data, text, software,
`
`[and] games . . . .” ‘720 at Abstract. The ‘720 Patent purports to address a specific
`
`problem: “the growing prevalence of so-called data pirates” who “obtain data
`
`either by unauthorized or legitimate means and then make this data available
`
`essentially world-wide over the internet without authorization.” ‘720 at 1:17-19.
`
`Within this context, the ‘720 Patent describes “combining digital right
`
`management with content data storage,” and states that “[b]inding the data access
`
`and payment together allows the legitimate owners of the data to make the data
`
`available themselves over the internet without fear of loss of revenue, thus
`
`undermining the position of data pirates.” ‘720, at 1:66-2:3, 5:25-26.
`
`Specifically, the ‘720 Patent discloses a data supply system 120 (as shown in
`
`Fig. 6) coupled to a content provision system 100 (as shown in Fig. 5). ‘720,
`
`13:37-38. The data supply system includes content access terminals, e-payment
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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`systems, and a content access web server. See ‘772 at FIG. 6; 13:30-63. The
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`content provision system 100 includes content providers and content publishers
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`coupled to content databases. See ‘772 at FIG. 5; 12:41-61; 14:66-15:13.
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`The ‘720 Patent also discloses a “portable data carrier for storing and paying
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`for data.” ‘720 at 1:5-8. The ‘720 Patent further discloses “use status data
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`indicating a use status of data stored on the carrier, and use rules data indicating
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`permissible use of data stored on the carrier.” ‘720 at 9:14-17. This disclosure is
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`reflected in the limitations of independent claim 1, which recites “reading the use
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`status data and use rules from the parameter memory that pertain to use of the at
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`least one requested content item; evaluating the use status data using the use rules
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`to determine whether access to the at least one requested content item stored in the
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`content memory is permitted....” ‘720 at 26:27-32.
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`In addition to the claimed features of “use status data” and “use rules,”
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`independent claims 3 and 14 of the ‘720 Patent recite an “access rule 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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`‘720 at 26:62-67; 28:16-19. Access rule data, according to the specification, “may
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`be stored by a content provider but is preferably held by the computer system, and
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`-11-
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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`links a content identifier with an access rule, typically based upon a required
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`payment value. . . .” See ‘720 at 7:28-30.
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`Summary of the Prosecution History of the ‘720 Patent
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`B.
`U.S. 7,334,720 issued on Feb. 26, 2008 from the ‘758 Appln.” filed on Jan.
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`19, 2006 initially with 74 claims.
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`During the prosecution of the ‘758 Appln., on Nov. 6, 2006, a Non-Final
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`Office Action rejected pending claims 22, 23, 35-50 and 59-62 under 35 U.S.C.
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`§102(b) as anticipated by U.S. Patent 5,754,654 to Hiroya (“Hiroya”). See Non-
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`Final Office Action of Nov. 6, 2006 at 3-9.
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`In a response filed Feb. 6, 2007, Patent Owner amended claim 22 and
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`asserted that the Hiroya “does not disclose status data and use rules stored in a
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`parameter memory, wherein the use rules stored on the non-volatile memory are
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`used to analyze the use status data stored on the nonvolatile memory to determine
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`whether access to separately-stored requested content is permitted as required in
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`Applicants’ claim 22 as amended.” See Response to Office Action of Feb. 6,
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`2007, at 9 (emphasis added). Noting that the prior art disclosure of “electronic
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`ticket information itself includes both the ticket data and the validity data, and that
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`the electronic ticket information must be decrypted to be validated,” the Patent
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`Owner reasoned that the prior art “does not disclose use status data stored
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`separately from associated content data.” See id (emphasis added).
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`-12-
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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`A Final Office Action mailed May 3, 2007 indicated an intent to allow
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`Claims 22, 23, and 35-50 because the applied prior art “does not disclose use status
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`data stored separately from associated content data [and that it] also fails to teach
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`writing separate access rules to an electronic ticket storage device, particularly
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`where the access rules contain conditions that are dependent upon an amount of
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`payment associated with the payment data forwarded to the payment validation
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`system.” See Final Office Action of May 3, 2007, at 4 (emphasis added).
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`On Sep. 4, 2007, the Patent Owner cancelled the remaining rejected claims
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`and without substantive amendments. See Response to Final Office Action of Sep.
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`4, 2007. Subsequently Claims 22, 23 and 35-50 were allowed, which are
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`renumbered as claims 1-18 in the issued patent. See Notice of Allowance Oct. 4,
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`2007. The Notice stated that “none of the cited prior art of the record discloses,
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`teaches, or fairly suggests claimed method and apparatus for controlling access to
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`content data on a data carrier where the data carrier comprising non-volatile data
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`memory storing content memory and non-volatile parameter memory storing use
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`status and use rules.” See id. at 2. The Notice further stated that “[t]he prior art is
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`also silent about the step of evaluating the use status data using the use rules to
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`determine whether access to the at least one requested content item stored in the
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`content memory is permitted and displaying to the user whether access is permitted
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`-13-
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`for each of the at least one requested content item stored in the data memory.” Id.
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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`at 2-3.
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`C. OMITTED
`DEMONSTRATION OF A REASONABLE LIKELIHOOD THAT AT
`LEAST ONE CLAIM OF THE ‘720 PATENT IS UNPATENTABLE
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`V.
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`Claims 13 and 14 are challenged. Claim 13 depends from claim 3 and,
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`therefore, incorporates the subject matter of claim 3. As demonstrated below,
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`claims 13 and 14 are directed toward ineligible subject matter.
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`A. GROUND 1 - Claims 13 and 14 Are Unpatentable Under 35
`U.S.C. § 101
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`1.
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`Legal Standard
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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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`-14-
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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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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`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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`-15-
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`Attorney Docket No 104677-5008-824
`CBM of U.S. Patent No. 7,334,720
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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 13 and 14 of the ‘720 Patent incorporates a “first interface,” “data
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`carrier interface,” “program store,” and “processor,” does not salvage this
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`otherwise patent ineligible claim. Indeed, the ‘720 Patent itself repeatedly
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`describes its computing systems as both “conventional” and as being used “in a
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`conventional manner.” See, e.g., ‘720 at 3:64-55, 16:63-65, 21:59-60.
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`As explained in detail below, claims 13-14 of the ‘720 Patent recite and
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`impermissibly preempt an abstract idea that can be performed in the human mind
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`and by paper and pen, namely the abstract idea of licensing/regulating access to
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`copyrighted 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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`Claims 13 and 14 of the ‘720 Patent Recite an Abstract
`2.
`Idea, as it Can be Performed in the Human Mind and by a Human Using a
`Pen and Paper
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`Claims 14 require the following limitations: (i) reading payment data from
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`the data carrier, (ii) forwarding the payment data to a payment validation system,
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`(iii) retrieving data from the data supplier, (iv) writing the retrieved data into the
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`-16-
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`Attor