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`Trials@uspto.gov
`Tel: 571-272-7822
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`Paper 34
`Entered: January 27, 2017
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00121
`Patent 8,794,516 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, and GREGG I.
`ANDERSON, Administrative Patent Judges.
`
`ANDERSON, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71
`
`
`
`
`
`
`CBM2015-00121
`Patent 8,794,516 B2
`
`INTRODUCTION
`Apple Inc. (“Petitioner”), filed a Petition to institute covered business
`method patent review of claims 1–28 of U.S. Patent No. 8,794,516 B2 (Ex.
`1001, “the ’516 patent”) pursuant to § 18 of the Leahy-Smith America
`Invents Act (“AIA”). Paper 2 (“Pet.”).1 Smartflash LLC (“Patent Owner”)
`filed a Preliminary Response. Paper 6 (“Prelim. Resp.”). On November 10,
`2015, we instituted a covered business method patent review (Paper 8,
`“Institution Decision” or “Inst. Dec.”) based upon Petitioner’s assertion that
`claims 1–28 (“the challenged claims”) are directed to patent ineligible
`subject matter under 35 U.S.C. § 101. Inst. Dec. 24.
`Subsequent to institution, Patent Owner filed a Patent Owner
`Response (Paper 17, “PO Resp.”) and Petitioner filed a Reply (Paper 21,
`“Pet. Reply”) to Patent Owner’s Response. Patent Owner, with
`authorization, filed a Notice of Supplemental Authority. Paper 29
`(“Notice”). Petitioner filed a Response to Patent Owner’s Notice. Paper 30
`(“Notice Resp.”).
`In our Final Decision, we determined Petitioner had established, by a
`preponderance of the evidence, that claims 1–28 of the ’516 patent are
`directed to patent ineligible subject matter under 35 U.S.C. § 101. Paper 32
`(“Final Dec.”), 2, 35. Patent Owner requests rehearing of the Final Decision
`with respect to patent ineligibility of the challenged claims under § 101.
`Paper 33 (“Request” or “Req. Reh’g”). Having considered Patent Owner’s
`Request, we decline to modify our Final Decision.
`
`
`
`1 Pub. L. No. 112–29, 125 Stat. 284, 296–07 (2011).
`
`2
`
`
`
`CBM2015-00121
`Patent 8,794,516 B2
`
`STANDARD OF REVIEW
`In covered business method review, the petitioner has the burden of
`showing unpatentability by a preponderance of the evidence. 35 U.S.C.
`§ 326(e). The standard of review for rehearing requests is set forth in 37
`C.F.R. § 42.71(d), which states:
`The burden of showing a decision should be modified lies with
`the party challenging the decision. The request must specifically
`identify all matters the party believes the Board misapprehended
`or overlooked, and the place where each matter was previously
`addressed in a motion, an opposition, or a reply.
`
`
`ANALYSIS
`Patent Owner’s Request is based on a disagreement with our
`determination that the challenged claims are directed to patent-ineligible
`subject matter. Req. Reh’g 4.
`In its Request, Patent Owner initially presents arguments directed to
`alleged similarities between the challenged claims and those at issue in DDR
`Holdings2, Enfish3, and Bascom4. Req. Reh’g 5–11. Those cases were each
`addressed in the Patent Owner Response or Patent Owner’s Notice, as well
`as in our Final Decision. As noted above, our rules require that the
`requesting party “specifically identify all matters the party believes the
`Board misapprehended or overlooked, and the place where each matter was
`previously addressed in a motion, an opposition, or a reply.” 37 C.F.R.
`42.71(d) (emphasis added). In its Request, however, Patent Owner does not
`
`
`2 DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).
`3 Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).
`4 BASCOM Global Internet Services, Inc. v. AT&T Mobility, LLC, 827 F.3d
`1341 (Fed. Cir. 2016).
`
`3
`
`
`
`CBM2015-00121
`Patent 8,794,516 B2
`
`identify any specific matter that we previously allegedly misapprehended or
`overlooked. Although Patent Owner repeatedly states that “the Board
`misapprehends Smartflash’s argument” (see, e.g., Req. Reh’g 5, 10), it offers
`no explanation as to how we misapprehended or overlooked any particular
`“matter [that] was previously addressed in a motion, an opposition, or a
`reply.” In fact, Patent Owner does not sufficiently cite to its papers when
`alleging an argument with respect to these decisions was misapprehended.
`See id. at 5–11. Rather than providing a proper request for rehearing,
`addressing particular matters that we previously misapprehended or
`overlooked, Patent Owner’s Request provides new briefing by expounding
`on argument already made.
`To the extent portions of the Request are supported by Patent Owner’s
`argument in the Patent Owner Response or in Patent Owner’s Notice, we
`considered those arguments in our Final Decision, as Patent Owner
`acknowledges. See, e.g., Req. Reh’g 5, 7, 9 (noting that “[t]he Board
`rejected Smartflash’s argument” with respect to each of DDR Holdings,
`Enfish, and Bascom). The only paper cited by Patent Owner is our Final
`Decision, which, as noted above, addresses Patent Owner’s arguments
`related to DDR Holdings (Final Dec. 18–21), Enfish (id. at 12), and Bascom
`(id. at 23–24). Patent Owner’s Request is simply based on disagreement
`with our Final Decision, which is not a proper basis for rehearing.
`Patent Owner also presents new arguments directed to alleged
`similarities between the challenged claims and those addressed in McRO5
`
`
`5 Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir.
`2016).
`
`4
`
`
`
`CBM2015-00121
`Patent 8,794,516 B2
`
`and Amdocs6, which were issued after Patent Owner’s Notice was filed.
`Req. Reh’g 11–15. Patent Owner alleges that we overlooked the Federal
`Circuit’s decisions in McRO and Amdocs. Id. at 2. The decisions in those
`cases issued before our Final Decision and, although not specifically
`referenced, were considered when we determined that the challenged claims
`are patent-ineligible.
`When addressing McRO, Patent Owner does little, if anything, to
`analogize those claims to the challenged claims, other than summarizing the
`discussion in McRO (id. at 11–13), and concluding that
`
`Because the challenged claims are a technological
`improvement over the then-existing systems and methods, and
`limit transfer and retrieval of content based on payment
`validation in a process specifically designed to achieve an
`improved technological result in conventional industry practice,
`the challenged claims are not directed to an abstract idea.
`Id. at 13 (citing Ex. 1001, 26:35–37 (claim 1), 28:3–9 (claim 14)). But
`McRO does not stand for the general proposition that payment validation to
`achieve an improved technological result, alone, removes claims from the
`realm of abstract ideas. In McRO, the Court explained that “the claimed
`improvement [was] allowing computers to produce ‘accurate and realistic lip
`synchronization and facial expressions in animated characters’ that
`previously could only be produced by human animators.” McRO, 837 F.3d
`at 1313 (citation omitted). The Court explained that the claimed rules in
`McRO transformed a traditionally subjective process performed by human
`artists into a mathematically automated process executed on computers (i.e.,
`the processes were fundamentally different). Id. at 1314. The Court
`
`
`6 McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir.
`2016).
`
`5
`
`
`
`CBM2015-00121
`Patent 8,794,516 B2
`
`explained that “it [was] the incorporation of the claimed rules, not the use of
`the computer, that ‘improved [the] existing technological process’ by
`allowing the automation of further tasks.” Id. at 1314 (alteration in original)
`(quoting Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2358
`(2014)). The Court distinguished this from situations “where the claimed
`computer-automated process and the prior method were carried out in the
`same way.” Id. (citing Parker v. Flook, 437 U.S. 584, 585–86 (1978); Bilski
`v. Kappos, 561 U.S. 593, 611 (2010); Alice, 134 S. Ct. at 2356)).
`As explained in our Final Decision, the challenged claims “merely
`implement an old practice in a new environment.” Final Dec. 13 (quoting
`FairWarning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1094 (Fed. Cir.
`2016)). The challenged claims are similar to the claims found ineligible in
`FairWarning, which the Court distinguished from those at issue McRO.
`FairWarning, 839 F.3d at 1094–95. In FairWarning, the Court explained
`that “[t]he claimed rules ask . . . the same questions . . . that humans in
`analogous situations . . . have asked for decades, if not centuries” and that it
`is the “incorporation of a computer, not the claimed rule, that purportedly
`‘improve[s] [the] existing technological process.’” Id. at 1095 (citing Alice,
`134 S. Ct. at 2358). This is similar to the challenged claims, where the
`“payment validation” in claim 14, for example, is merely a condition for
`“retrieving . . . and transmitting the purchased item of multimedia content to
`the handheld multimedia terminal” that the ’516 patent explains “will
`normally be dependent upon payments made for data stored on the data
`carrier” (i.e., allowing access when the data, i.e., the claimed “multimedia,”
`has been purchased). Ex. 1001, 9:27–30.
`
`6
`
`
`
`CBM2015-00121
`Patent 8,794,516 B2
`
`With respect to Amdocs, after generally summarizing that case, Patent
`Owner concludes that “the challenged claims of the ’516 Patent are like the
`eligible claim in Amdocs because they solve a problem unique to computer
`networks . . . and use an unconventional technological approach.” Req.
`Reh’g 14–15 (citing PO Resp. 47–48)7. We disagree.
`In Amdocs, the Court held that “[claim 1] is eligible under step two
`because it contains a sufficient ‘inventive concept.’” Amdocs, 841 F.3d at
`1300. The claim at issue recited “computer code for using the accounting
`information with which the first network accounting record is correlated to
`enhance the first network accounting record.” Id. The Court explained that
`the “claim entails an unconventional technological solution (enhancing data
`in a distributed fashion) to a technological problem (massive record flows
`which previously required massive databases).” Id. The Court noted that,
`although the solution requires generic computer components, “the claim’s
`enhancing limitation necessarily requires that these generic components
`operate in an unconventional manner to achieve an improvement in
`computer functionality.” Id. at 1300–1301. When determining that the
`claim was patent-eligible, the Court explained that the “enhancing limitation
`necessarily involves the arguably generic gatherers, network devices, and
`other components working in an unconventional distributed fashion to solve
`a particular technological problem.” Id. at 1301. The Court distinguished
`the claim from the claim held unpatentable in Content Extraction &
`Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 (Fed.
`Cir. 2014) on the grounds that the “enhancing limitation . . . necessarily
`
`
`7 This is the only instance where one of Patent Owner’s papers is cited in
`the Request.
`
`7
`
`
`
`CBM2015-00121
`Patent 8,794,516 B2
`
`incorporates the invention’s distributed architecture—an architecture
`providing a technological solution to a technological problem,” which
`“provides the requisite ‘something more’ than the performance of ‘well-
`understood, routine, [and] conventional activities previously known to the
`industry.’” Id. (citations omitted).
`We are not persuaded that we misapprehended Amdocs. As noted in
`our Final Decision, “[t]he ’516 patent treats as well-known all potentially
`technical aspects of the challenged claims, which simply require generic
`computer components.” Final Dec. 15. Unlike the generic components at
`issue in Amdocs, the generic components recited in claims 1–28 of the ’516
`patent do not operate in an unconventional manner to achieve an
`improvement in computer functionality. See Final Dec. 20–22. Claims 1–
`28 of the ’516 patent simply recite generic memories, processors, and “code
`to” perform well-known functions with no description of the underlying
`implementation or programming.
`Accordingly, Patent Owner’s Request does not apprise us of sufficient
`reason to modify our Final Decision.
`
`
`ORDER
`
`Accordingly, it is:
`ORDERED that Patent Owner’s Request is denied.
`
`
`
`
`
`8
`
`
`
`CBM2015-00121
`Patent 8,794,516 B2
`
`PETITIONER:
`J. Steven Baughman
`Megan F. Raymond
`James R. Batchelder
`ROPES & GRAY LLP
`steven.baughman@ropesgray.com
`megan.raymond@ropesgray.com
`james.batchelder@ropesgray.com
`
`PATENT OWNER:
`
`Michael R. Casey
`J. Scott Davidson
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`mcasey@dbjg.com
`jsd@dbjg.com
`smartflash-cbm@dbjg.com
`
`Wayne M. Helge
`whelge@davidsonberquist.com
`
`
`9
`
`
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