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`571-272-7822
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC. and GOOGLE, INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`____________
`
`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
` CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`____________
`
`Held: July 18, 2016
`____________
`
`
`
`CBM2015-00121, Paper 31
`CBM2015-00123, Paper 30
`CBM2015-00124, Paper 30
`CBM2015-00126, Paper 30
` CBM2015-00130, Paper 32
`CBM2015-00127, Paper 30
`CBM2015-00131, Paper 32
`CBM2015-00133, Paper 36
`October 5, 2016
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`571-272-7822
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC. and GOOGLE, INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`____________
`
`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
` CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`____________
`
`Held: July 18, 2016
`____________
`
`
`
`CBM2015-00121, Paper 31
`CBM2015-00123, Paper 30
`CBM2015-00124, Paper 30
`CBM2015-00126, Paper 30
` CBM2015-00130, Paper 32
`CBM2015-00127, Paper 30
`CBM2015-00131, Paper 32
`CBM2015-00133, Paper 36
`October 5, 2016
`
`
`
`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`
`
`
`BEFORE: JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, GREGG I. ANDERSON, and
`MATTHEW R. CLEMENTS, Administrative Patent Judges.
`
`
`
`The above-entitled matter came on for hearing on Monday, July
`18, 2016, commencing at 1:00 p.m., at the U.S. Patent and
`Trademark Office, 600 Dulany Street, Alexandria, Virginia.
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`
`APPEARANCES:
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`
`
`ON BEHALF OF THE PETITIONER (APPLE):
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`ON BEHALF OF THE PETITIONER (GOOGLE):
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`J. STEVEN BAUGHMAN, ESQ.
`JAMES R. BATCHELDER, ESQ.
`Ropes & Gray LLP
`2099 Pennsylvania Avenue, N.W.
`Washington, DC 20006-6807
`
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`
`
`ANDREW M. HOLMES, ESQ.
`Quinn Emanuel Urquhart & Sullivan, LLP
`50 California Street, 22nd Floor
` San Francisco, California 94111
`
`MICHAEL R. CASEY, Ph.D., ESQ.
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive, Suite 500
`McLean, Virginia 22102
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`ON BEHALF OF PATENT OWNER:
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`1
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`P R O C E E D I N G S
`- - - - -
`JUDGE ELLURU: Good afternoon. This is the final
`oral hearing for CBM2015-00121, 123, 124, 127, 130, 131, 133,
`and CBM2015-00126. I'm Judge Elluru, to my right is Judge
`Bisk, and appearing remotely are Judges Anderson, Clements and
`Plenzler.
`Could we have appearances of counsel, please.
`MR. BAUGHMAN: Your Honor, Steve Baughman,
`Jim Batchelder and Megan Raymond from Ropes & Gray for
`Petitioner Apple, Inc., and with us in the courtroom is Cyndi
`Wheeler from Apple.
`JUDGE ELLURU: And for Patent Owner?
`MR. CASEY: Michael Casey, Your Honor, Davidson,
`Berquist, Jackson & Gowdey on behalf of Patent Owner
`Smartflash LLC.
`MR. HOLMES: Your Honor, also Andrew Holmes on
`behalf of Google, and with me here today is Ken Maikish from
`Google as well.
`JUDGE ELLURU: Thank you. Per our hearing order,
`Petitioners have an hour to present their cases, followed by Patent
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`Owner, who also has an hour to present its case. With that, we
`would like to begin.
`MR. BAUGHMAN: Thank you, Your Honor. Good
`afternoon, may it please the Board. At the outset, we would like
`to reserve 30 minutes of our time for rebuttal, if we may.
`JUDGE ELLURU: Thirty minutes?
`MR. BAUGHMAN: Of which we will reserve three
`minutes for Google, which is Petitioner in CBM2015-00126 and
`joined with us in the 00133 matter. Google will also speak
`briefly in the last two minutes of these opening comments.
`JUDGE ELLURU: Counsel, I just didn't catch what
`you said, 30 minutes for your rebuttal?
`MR. BAUGHMAN: Thirty minutes for rebuttal,
`please, and we are giving three minutes of those to the Google
`proceedings.
`JUDGE ELLURU: Thank you.
`MR. BAUGHMAN: And, Your Honor, as before,
`given our short time limits, Petitioners rely on the positions and
`evidence we've provided in briefing to support our arguments on
`the seven patents at issue in these trials. To assist the Board in
`considering that record, just as in the November 9th and January
`6th hearings on 101 issues on these and related Smartflash
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`patents, we plan an opening discussion of three topics, along with
`any questions, of course, that the Board may have.
`We thank the Board for its continuing attention to these
`seven patents, five of which have already been the subject of
`rulings by this Board finding very related claims to be directed to
`abstract ideas with no inventive concept that could render them
`patent-eligible under the Supreme Court's mandatory two-step
`analysis in Mayo and Alice, and, respectfully, Patent Owner has
`raised nothing new here. Nothing to make these claims being
`challenged today patent-eligible, when very similar claims in five
`of these same patents, which are closely related to the remaining
`two, have correctly been found patent ineligible under Section
`101.
`
`We can discern no argument from Patent Owner of
`anything special or different among these claims to suggest
`they're eligible in a way that distinguishes them from those that
`have already failed under Section 101.
`And just to note, despite repeated mentions in
`numerous hearings, we still have before the Board no expert
`testimony from Patent Owner to even attempt to rebut any of the
`testimony or other evidence from Petitioners, all we have is
`unsupported attorney argument.
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`This afternoon, the three topics we would like to talk
`about, first, I will address the abstract idea to which these claims
`are directed under step 1 of Mayo. The topic the parties and the
`Board have already discussed in prior hearings but have now
`actually raised in Patent Owner's patents for the first time.
`Then my colleague, Mr. Batchelder, is going to discuss
`two other aspects of these trials. First he will discuss the claims
`at issue here and how they're not materially different from those
`already addressed by the Board's previous final written decisions
`concerning these patents. Nothing new here.
`Second, Mr. Batchelder will discuss the most recent
`batch of cases that have continued to apply the law governing
`Section 101 eligibility, already laid out by the Supreme Court in
`cases that don't change the result here and simply confirm both
`the analysis and the results of the prior cases before this Board.
`In fact, the Board has already decided in the context of
`highly similar claims the issues confirming that Enfish and
`Bascom make no difference to the outcome here and the
`challenged claims are ineligible.
`And, finally, before launching into those three topics, I
`do want to note, if we could bring up Patent Owner's slide 2,
`please, it indicates that these are exclusively Section 101 issues
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`before the Board; that's not correct. If you take a look at our slide
`6, we have instituted grounds for indefiniteness of five claims in
`three patents. We are happy to address any questions the Board
`may have on those.
`Now, turning to our slide 27, and Mayo step 1, the first
`step of the Mayo analysis is determining whether the claims are
`directed to a patent ineligible concept and in particular here an
`abstract idea.
`Turning to our slide 28, please. The result is clear,
`every challenged claim in these proceedings is directed to an
`abstract idea. As summarized by the Board in the quote at the
`bottom, in considering five related claims, the same is true here,
`these patents all involve the abstract idea of conditioning and
`controlling access to content based on payment.
`The way we've articulated that for each of the patents is
`noted above on the slide, and the only response we can discern in
`the papers of the Patent Owner about step 1 is an argument that
`there are physical real-world components that are claimed in the
`apparatus claims or between which the method claims operate.
`Turning to slide 29, that's simply not the law. So, we
`note here Patent Owner's argument about these being machines
`and therefore not abstract. As the Supreme Court made clear in
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`Alice, computerizing is not enough to render claims eligible under
`101. And as the Federal Circuit made clear in CyberSource,
`regardless of the statutory category that a claim's language is
`crafted to literally invoke, what we're supposed to do is look to
`the underlying invention for patent eligibility purposes.
`And that's what the Board has done here repeated
`times, looking at related apparatus claims. Turning to slide 30.
`The Board has found them to be directed to abstract ideas. And
`unless the Board has initial questions about step 1, I'll pass the
`podium now to my colleague, Mr. Batchelder.
`JUDGE ELLURU: I don't think there are any
`questions.
`MR. BAUGHMAN: Thank you, Your Honor.
`MR. BATCHELDER: Good afternoon, Your Honors,
`may it please the Board, James Batchelder for Petitioner, Apple.
`As Mr. Baughman mentioned, what I would like to do
`with my time, again, with the Board's permission, is to address in
`my opening remarks two issues. The first is to establish that
`these claims at issue here are materially the same as those already
`addressed by the Board's final written decisions on these and
`related patents.
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`And then the second is to turn to the governing cases,
`including the recent Federal Circuit cases, Enfish, TLI, Bascom,
`and confirm that the challenged claims are ineligible under those
`cases as well.
`So, if I could start with slide 8 in Petitioner's deck on
`the issue of the material identity of the claims. This is an
`example. On the left we have claim 32 of the '221 patent, already
`adjudged by this Board to be patent ineligible, and on the right we
`have claim 5 of the '720 patent, which is one of the claims at issue
`here.
`
`And we've used color coding to show corresponding
`language, so the blue at the top in the preamble, you see the
`language on the right is the same, the red language on the left for
`the first interface, the right language is the same, et cetera, step by
`step by step. The claim on the right is structured slightly
`differently, but I would submit that in substance, it's the same
`claim.
`
`And I would say, too, that not all the claims match up
`verbatim this way, but there really is nothing new here. These
`claims all came from the same disclosure, and they claim the
`same things again and again and again.
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`So, I what would like to do, to drill down into more
`detail is talk about the hardware in the claims, then the
`functionality in the claims, and then talk about the combination.
`So, let's start with the hardware.
`JUDGE ELLURU: In talking about the combination,
`could you please also focus on the two recent Federal Circuit
`cases.
`
`MR. BATCHELDER: Will do for sure, thank you,
`Your Honor.
`So, let's start with the hardware. Slide 9, on the left,
`you've seen this format before in our prior proceedings, but we
`list on the left what we call generic hardware. And you can see
`why we call it that. Going down the list, for example, you have
`data carrier, memory, program store, processor, user interface,
`et cetera. I would submit to the Board that this is the stuff of
`general purpose computers. These are generic computer
`components, and as these black dots reflect, what patent applicant
`did here was, like a pepper shaker, essentially sprinkle these
`generic computer components throughout their claim set.
`Turning to slide 10, many of these generic computer
`components have already been addressed in the Board's final
`written decisions, each blacked out reflects such an occurrence,
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`and as you can see, again, generic hardware component by
`component by component, these have already been found by the
`Board in related claims not to confer eligibility.
`Turning to slide 11, moving from hardware to function,
`same analysis, and again, we've used the same format before for
`the Board, so on the left we have generic functions, and again, we
`call them that for good reason. Starting at the top, for example,
`you have storing, receiving, reading, evaluating, determining,
`communicating. Again, these are the things done by those
`generic computer parts that we've just examined. These are the
`verbs associated with their basic conventional expected
`functionality.
`And then, turning to slide 12, again, this is how they
`map to the final written decisions, the vast majority of those verbs
`have already been addressed as generic functions as reflected in
`each of these dots, and again, applicant took these generic verbs
`performed by generic computer parts, sprinkled them throughout
`the claims and they've already been addressed by the Board as not
`conferring eligibility or inventiveness.
`And then as to the combination, as Mr. Baughman
`alluded to at the outset, here we have expert testimony on that
`very issue, unrebutted. Slide 13 provides some examples. We
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`have Dr. Kelly in the top quote saying, "the challenged claims are
`directed to only a general abstract idea of payment for and
`controlling access to data based on payment or rules, combined
`with well-understood, routine, conventional activities." He
`understood that the claim must be analyzed as a whole, as he said
`in the second box, and in the third box, he says, "all of the
`claimed hardware elements are conventional computer system
`components that were well known in the prior art, both
`individually and as combined in the claims."
`And then in his deposition, he was asked, "which
`elements or combination of elements, if any, in the claims you
`analyzed, override the way a computer network normally
`operates?
`"Answer: None of them." And then he added, "none
`of the elements in the claims are inventive alone or in
`combination with others." So, again, that is on-the-record,
`unrebutted, expert testimony. Patent Owner could, of course,
`have attempted to come forward with expert testimony to
`contravene that and chose not to do so.
`So, Your Honor, you asked about the combination,
`what I would like to do is start the discussion of the case law, as
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`we have in the prior decisions with Ultramercial and then with
`DDR and then talk about, together, Enfish and TLI and Bascom.
`So, on Ultramercial, let's look at slide 14. This was the
`Court's application of Ultramercial, and reasoning in the final
`written decisions on the related claims, and what you've said,
`correctly, is, "the challenged claims are like the claims at issue in
`Ultramercial. The Ultramercial claims condition and control
`access based on viewing an advertisement ... similar to the claims
`in Ultramercial, the majority of limitations in the challenged
`claims comprise this abstract concept of conditioning and
`controlling access to data, based on, for example, payment."
`And you similarly distinguished DDR. Let's look at
`slide 15.
`JUDGE ELLURU: Talking about Ultramercial,
`though, do the two new cases change that as far as the way that
`the abstract concept of the conditioning and controlling access to
`the data is achieved?
`MR. BATCHELDER: They don't, Your Honor. I
`would submit that Ultramercial among all of these cases is by far
`the most analogous. In Ultramercial, the Federal Circuit
`characterized the abstract ideas using advertising as currency.
`And, so, what this claim in Ultramercial claimed was, taking
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`content, restricting its general access, and then selling it for the
`viewing of currency to an end user, and it even involved use of
`status data and use rule data.
`JUDGE ELLURU: But aren't we looking at the claims
`at too high of a level by doing that? Should we look at also the
`limitations as they're particularly achieved in these claims,
`according to the new two cases?
`MR. BATCHELDER: I'm sorry, Your Honor, I didn't
`mean to cut you off.
`JUDGE ELLURU: That's okay.
`MR. BATCHELDER: In Ultramercial, there were 11
`steps that were enumerated in the claim. We can actually take a
`look at -- we have the claim language.
`JUDGE BISK: So, how do we know, though, when
`to -- how do we know when to -- in Ultramercial we can use a
`very high-level abstract idea and when, as in Enfish, we can't?
`MR. BATCHELDER: Perhaps the best way to cut to
`this would be go to slide 25, which discusses the combination of
`Enfish and TLI and Bascom and the Board's final written
`decisions. And I apologize, this is a fairly busy slide. But let me
`tell you, at the outset, what I would ask you to take away from it,
`and then let's step through it.
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`What I'm going to ask you to take away from it is that
`Smartflash has a contention here, it has a premise upon which it
`bases its argument that Enfish and Bascom are analogous. And I
`would submit that the Board has already rejected that premise in
`connection with related claims, and so let's step through it.
`So, you'll see, put aside for the moment that the quote
`on the top, I'll get to that in a minute. On the left we have a
`heading called Specific Improvement to Computer Technology,
`or improvement to how the computer works. And on the right we
`have a heading No Specific Improvement to Computer
`Technology.
`And on the left, we have Enfish and Bascom, on the
`right we have TLI, and we have the Board's comments, both from
`the institution decision and its final written decision about related
`claims here.
`So, let's start with Enfish. The claims there were
`directed to an "innovative," that word was used in the opinion,
`"self-referential table to allocate memory in a particular way to
`improve the functioning of the computer such as by reducing
`memory requirements." And Your Honors may remember that in
`Enfish, the claim is actually construed as governed by Section
`112(6) and the 112(6) phrase was "means for configuring such
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`memory." And that means was found to be an algorithm in the
`specification that disclosed a specific creation of a self-referential
`table that was new in the art, had not been used before, and had
`certain features, and that coupled with the statements in the
`specification about what was inventive made clear that there, the
`inventive thing, the things that the specification said was
`inventive was the self-referential table, and so the Court found
`there and in the step --
`JUDGE BISK: What if those steps hadn't been novel?
`MR. BATCHELDER: What if the --
`JUDGE BISK: What if the algorithm there hadn't been
`
`novel?
`
`MR. BATCHELDER: Well, then I'm sure the patent
`would have suffered from a host of problems.
`JUDGE BISK: Yeah. But what would have happened
`to the 101 analysis?
`MR. BATCHELDER: Well, let's see. The
`self-referential table here was, you know, it was described as
`overcoming prior art problems.
`JUDGE BISK: So, is it just that the patent itself says
`that it's novel and then we don't get into a 103/102 analysis?
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`MR. BATCHELDER: Well, not so here. In Enfish, we
`had a limited procedural record, it was on summary judgment.
`JUDGE BISK: Um-hmm.
`MR. BATCHELDER: In Bascom, the record was even
`more limited because it was tied to a motion to dismiss, and so
`the Court said in its opinion several times it was taking as true the
`allegations of the Patent Owner, et cetera.
`But here we have a full record. We have a full record
`that can shed light from a variety of perspectives as to what
`happens when you tease out the abstract idea, what's left in the
`claims, and we can examine is there anything inventive.
`JUDGE BISK: But we don't have art, proposed art
`grounds on each of the claims that we're analyzing here on 101.
`Right?
`
`MR. BATCHELDER: I'm not sure I follow you, Your
`
`Honor.
`
`JUDGE BISK: So, actually in this particular set of
`cases, we don't have any prior art grounds, so we're not analyzing
`anything under 102 and 103.
`MR. BATCHELDER: That's correct, we don't have
`102/103 challenges, but we do have expert opinion saying when
`you tease out the abstract idea you look at what's left, there is
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`nothing inventive, even in combination, and we have -- actually,
`we have a variety of things confirming that, Your Honor. I would
`say we have actually seven independent sources of proof on that.
`We have the Board already adjudicating that on related
`claims that we've talked about; we have the patents themselves
`that disclaim anything inventive and the technology; we have the
`admissions of the named inventor, a variety of them; we have
`unrebutted expert testimony as I've discussed; we have -- we have
`belt and suspenders, that expert not only pointed to his own
`decade of experience, but pointing to a variety of prior art
`references that established as conventional the very things that the
`Patent Owner has pointed to.
`We have case law. We have case law on whether it's
`inventive to combine two more kinds of data, Accenture,
`Digitech, Mortgage Grader, TLI. We have case law addressing
`whether it's inventive to apply rules to content to make decisions,
`Accenture, SmartGene, Alice, Ultramercial, all did those things.
`JUDGE BISK: So, my understanding prior to Enfish
`was that that sort of analysis, conventional or --
`JUDGE ELLURU: Generic.
`JUDGE BISK: -- generic, yeah, came at step 2. Do we
`now also do that at step 1?
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`MR. BATCHELDER: Well, I think in Enfish, what
`they were really asking was, what is the essence of the invention?
`And again, in Enfish, you had a 112(6) structure baked into the
`claim, and you had in the summary of the invention the fact that
`what they invented was the self-referential table. It was right
`there.
`
`And in contrast, if you read the first sentence of the
`abstract here, it makes clear that what this patent is about is
`basically selling data for money. It's about the abstract idea of the
`economic model.
`So, if you look back on slide 25 in Enfish, for example,
`it's drawing a distinction between claimed inventions on the one
`hand are "invoked merely as a tool," do you see that language?
`So, is it something that qualifies as an abstract idea for which
`computers are used merely as a tool, or is it an improvement to
`computer functionality itself.
`And at the bottom, Bascom does the same thing. It
`asks, it says, "the patent at issue is claiming a technology-based
`solution ... that improves the performance of the computer system
`itself," and then in parenthetical it says, "not an
`abstract-idea-based solution implemented with generic technical
`components in a conventional way."
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`And I would submit that both Enfish and Bascom,
`therefore, in saying why they found those inventions patentable,
`they've said here why this invention is not patentable. They've
`distinguished our facts very explicitly, because we do have an
`abstract idea that is solution-implemented with generic technical
`components in a conventional way.
`Smartflash at the top, Patent Owner says in its briefing,
`that's the quote in red at the top, that the claimed invention is a
`specific solution to a problem in computer networks and they say
`it's "directed to an improvement to computer functionality." And
`I would submit the Board has already rejected that premise. You
`did so in your institution decision and again in your final written
`decision, and those are the two quotes on the bottom right. In the
`institution decision, "the asserted novelty of the invention is not
`in any specific improvement of software or hardware," and you
`identified the problem as a business problem, a data piracy.
`And then in the final written decision, you said,
`"whatever the problem, the solution provided by the challenged
`claims is not rooted in specific computer technology, we are not
`persuaded that they do so by achieving a result that overrides the
`routine and conventional use of the recited devices and
`functions."
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`Now, if I could just read a couple of other quotes from
`your final written decision, this one, for example, from the 720,
`I'm reading now from page 11. You said, "Petitioner argues that
`claims 13 and 14 are unpatentable because these claims are
`directed to an abstract idea and any recited technical elements are
`repeatedly described by the '720 patent itself as both conventional
`and as being used in a conventional manner." You go on to say,
`"We agree with Petitioner."
`And then on the next page, you say, "The '720 patent
`specification treats as well-known and conventional all
`potentially technical aspects of claims 13 and 14." In other
`words, not like Enfish, not like Bascom, not improving the
`computer itself, they're just claiming the abstract idea and using
`the computer as a tool.
`So, the Enfish and Bascom distinctions, explaining why
`they held the way they did and how they would have held
`differently on different facts, the very facts that they posited that
`would have caused a different ruling, are the very facts here.
`JUDGE ELLURU: So, how about the arrangement of
`those -- sorry -- how about the arrangement of those generic
`hardware components? The claims recite a specific way of
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`CBM2015-00121 (Patent 8,794,516)
`CBM2015-00123 (Patent 8,033,458)
`CBM2015-00124 (Patent 7,942,317)
`CBM2015-00126 (Patent 8,118,221)
`CBM2015-00130 (Patent 8,118,221)
`CBM2015-00127 (Patent 7,334,720)
`CBM2015-00131 (Patent 8,061,598)
`CBM2015-00133 (Patent 8,336,772)
`arranging those hardware components and using, for example,
`use rules and data.
`MR. BATCHEL
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