`Entered: November 10, 2015
`
`Trials@uspto.gov
`Tel: 571-272-7822
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`_______________
`
`Case CBM2015-00123
`Patent 8,033,458 B2
`_______________
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`
`PLENZLER, Administrative Patent Judge.
`
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
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`
`
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`
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`
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`CBM2015-00123
`Patent 8,033,458 B2
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`
`A. Background
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` INTRODUCTION
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`Petitioner, Apple Inc. (“Apple”), filed a Petition requesting covered
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`business method patent review of claims 2–5, 7, 9, and 12 (the “challenged
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`claims”) of U.S. Patent No. 8,033,458 (Ex. 1001, “the ’458 patent”) (Paper
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`2, “Pet.”). On August 13, 2015, Patent Owner, Smartflash LLC
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`(“Smartflash”), filed a Preliminary Response (Paper 5, “Prelim. Resp.”).
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`We have jurisdiction under 35 U.S.C. § 324, which provides that a
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`covered business method patent review may not be instituted “unless . . . it is
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`more likely than not that at least 1 of the claims challenged in the petition is
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`unpatentable.”
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`Upon consideration of the Petition and Preliminary Response, we
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`determine that Petitioner has demonstrated that it is more likely than not that
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`the challenged claims are unpatentable. Accordingly, we institute a covered
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`business method review of claims 2–5, 7, 9, and 12 of the ’458 patent.
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`B. Asserted Grounds
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`Petitioner argues that all of the challenged claims are unpatentable
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`under 35 U.S.C. § 101, as being directed to patent-ineligible subject matter,
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`and that claims 3–5 also are unpatentable under 35 U.S.C. § 112, ¶ 2 as
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`indefinite. Pet. 41–75. Petitioner provides a declaration from John P.J.
`
`Kelly, Ph.D. to support its challenges. Ex. 1020 (“the Kelly Declaration”).
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`C. Related Matters
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`The parties indicate that the ’458 patent is the subject of the following
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`district court cases: Smartflash LLC v. Apple Inc., Case No. 6:13-cv-447
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`(E.D. Tex.); and Smartflash LLC et al. v. Apple Inc., Case No. 6:15-cv-
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`00145 (E.D. Tex.). Pet. 34; Paper 4, 4–5. The parties also indicate that the
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`2
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`CBM2015-00123
`Patent 8,033,458 B2
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`’458 patent is the subject of a number of other district court cases, to which
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`Petitioner is not a party. Pet. 34; Paper 4, 4.
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`Petitioner previously filed four petitions for covered business method
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`patent review of the ’458 Patent: CBM2014-00106, CBM2014-00107
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`(consolidated with CBM2014-00106), CBM2015-00016, and CBM2015-
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`00119. A final written decision has issued in CBM2015-00106, determining
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`claim 1 of the ’458 patent is unpatentable pursuant to § 103. Apple Inc. v.
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`Smartflash LLC, Case CBM2014-00106, slip op. at 31 (PTAB Sept. 25,
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`2015) (Paper 52). Trial was instituted in CBM2015-00016 with respect to
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`claims 1, 6, 8, and 10 based on challenges under 35 U.S.C. § 101, and with
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`respect to claim 11 based on a challenge under 35 U.S.C. § 112, ¶ 2. Apple
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`Inc. v. Smartflash LLC, Case CBM2015-00016, slip op. at 26 (PTAB Apr.
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`10, 2015) (Paper 23). Trial was instituted in CBM2015-00119 with respect
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`to claim 11 based on a challenge under 35 U.S.C. § 101, and that proceeding
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`was consolidated with CBM2014-00192. Apple Inc. v. Smartflash LLC,
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`Case CBM2015-00119, slip op. at 6 (PTAB Aug. 6, 2015) (Paper 11).
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`D. The ’458 Patent
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`The ’458 patent relates to “a portable data carrier for storing and
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`paying for data and to computer systems for providing access to data to be
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`stored,” and the “corresponding methods and computer programs.”
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`Ex. 1001, 1:21–25. Owners of proprietary data, especially audio recordings,
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`have an urgent need to address the prevalence of “data pirates” who make
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`proprietary data available over the internet without authorization. Id. at
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`1:29–55. The ’458 patent describes providing portable data storage together
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`with a means for conditioning access to that data upon validated payment.
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`3
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`CBM2015-00123
`Patent 8,033,458 B2
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`Id. at 1:59–2:11. This combination allows data owners to make their data
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`available over the internet without fear of data pirates. Id. at 2:11–15.
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`As described, the portable data storage device is connected to a
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`terminal for internet access. Id. at 1:59–67. The terminal reads payment
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`information, validates that information, and downloads data into the portable
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`storage device from a data supplier. Id. The data on the portable storage
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`device can be retrieved and output from a mobile device. Id. at 2:1–5.
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`The ’458 patent makes clear that the actual implementation of these
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`components is not critical and may be implemented in many ways. See, e.g.,
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`id. at 25:49–52 (“The skilled person will understand that many variants to
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`the system are possible and the invention is not limited to the described
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`embodiments.”).
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`E. Illustrative Claim
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`As noted above, Petitioner challenges claims 2–5, 7, 9, and 12.
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`Claims 3, 4, and 5 are independent. Claim 2 depends from claim 1, and
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`claims 7, 9, and 12 depend from claim 6. Claim 4 is illustrative of the
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`claimed subject matter and is reproduced below:
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`4.
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`A portable data carrier, comprising:
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`an interface for reading and writing data from and to the
`carrier;
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`non-volatile data memory, coupled to the interface, for
`storing data on the carrier;
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`non-volatile payment data memory, coupled to the
`interface, for providing payment data to an external device;
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`a program store storing code implementable by a
`processor; and
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`a processor, coupled to the content data memory, the
`payment data memory, the interface and to the program store
`for implementing code in the program store;
`
`
`
`4
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`CBM2015-00123
`Patent 8,033,458 B2
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`wherein the portable data carrier is configured for storing
`supplementary data in said data memory, and further
`comprising code to output the supplementary data from the
`interface in addition to the stored data, in response to an
`external request to read the data memory, and
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`wherein the code comprises code to output payment data
`from the payment data memory to the interface and code to
`provide external access to the data memory.
`
`Ex. 1001, 26:36–55.
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`
`
`A. Claim Construction
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`ANALYSIS
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`In a covered business method patent review, claim terms are given
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`their broadest reasonable interpretation in light of the specification in which
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`they appear and the understanding of others skilled in the relevant art. See
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`37 C.F.R. § 42.300(b). Applying that standard, we interpret the claim terms
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`of the ’458 patent according to their ordinary and customary meaning in the
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`context of the patent’s written description. See In re Translogic Tech., Inc.,
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`504 F.3d 1249, 1257 (Fed. Cir. 2007). Petitioner proposes constructions for
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`“payment data,” “supplementary data,” and “use rules data” (Pet. 38–40),
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`and Patent Owner offers no proposed claim constructions. For purposes of
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`this Decision, we determine that “payment data” is the only term requiring
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`an express construction in order to conduct properly our analysis.1
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`The term “payment data” is recited in claims 2–5. Petitioner asserts
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`that “[f]or review purposes, [payment data] should be construed to mean
`
`
`1 Petitioner makes certain contentions regarding the definiteness of the term
`“supplementary data” in its discussion of claim construction (Pet. 40 n.17),
`but does not include this term in its challenges based on indefiniteness (see
`id. at 71–75).
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`
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`5
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`CBM2015-00123
`Patent 8,033,458 B2
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`‘data representing payment made for requested content data’ and is distinct
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`from ‘access control data.’” Pet. 38–39.
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`The plain and ordinary meaning of the two words that make up the
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`term—“payment” and “data”—do not incorporate any notion of time and
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`nothing about their combination changes that determination. As used in the
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`’458 patent, “payment data” encompasses data relating to future, current,
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`and past payments. For example, the ’458 patent states that “payment data
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`for making a payment to the system owner is received from the smart Flash
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`card by the content access terminal and forwarded to an e-payment system.”
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`Ex. 1001, 20:59–62. This language indicates that payment data exists prior
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`to the payment being made for the requested content. The ’458 patent also
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`explains that “payment data received may either be data relating to an actual
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`payment made to the data supplier, or it may be a record of a payment made
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`to an e-payment system.” Ex. 1001, 6:60–63. This indicates that “payment
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`data,” includes data for payments that have already been made.
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`Moreover, the plain and ordinary meaning of data does not implicate
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`changes in character based on when it is used in a transaction. For example,
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`a credit card number may qualify as “data relating to payment” before the
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`number is processed, while the number is being processed, and after the
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`number is processed. See Ex. 1015, 232:14–24 (providing credit or debit
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`card information to a retail terminal). Thus, without an express description
`
`to the contrary, we presume that “payment data” retains the same meaning
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`before, during, and after the payment operation. Neither party points to any
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`such contrary description. In fact, the ’458 patent describes “payment data”
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`in several instances as data relating to payment for the requested data item.
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`Ex. 1001, 10:8–8, 10:28–30, 10:40–41.
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`
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`6
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`CBM2015-00123
`Patent 8,033,458 B2
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`For purposes of this decision, we determine that the broadest
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`reasonable interpretation of “payment data” as used in the ’458 patent is
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`“data relating to payment for the requested data item.”
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`B. Covered Business Method Patent
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`Section 18 of the AIA provides for the creation of a transitional
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`program for reviewing covered business method patents. A “covered
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`business method patent” is a patent that “claims a method or corresponding
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`apparatus for performing data processing or other operations used in the
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`practice, administration, or management of a financial product or service,
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`except that the term does not include patents for technological inventions.”
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`AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). A patent need have only one
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`claim directed to a covered business method to be eligible for review. See
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`Transitional Program for Covered Business Method Patents—Definitions of
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`Covered Business Method Patent and Technological Invention; Final Rule,
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`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8).
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`We previously have determined that the ’458 patent is a “covered
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`business method patent.” See, e.g., CBM2014-00106, Paper 8, 9–13
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`(determining that the ’458 patent is eligible for covered business method
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`patent review based on claim 1). In this Petition, Petitioner cites claim 4 as
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`the basis for covered business method patent review of the ’458 patent,
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`which includes limitations similar to those found in claim 1 (e.g., “providing
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`payment data to an external device”). Pet. 23.
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`1. Financial Product or Service
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`Petitioner asserts that claim 4 “concerns a system (corresponding to
`
`methods claimed elsewhere in the patent family) for performing data
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`processing and other operations used in the practice, administration, or
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`7
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`management of a financial activity and service” because it “expressly recites
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`code to perform data processing and other operations in connection with
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`providing and outputting ‘payment data.’” Pet. 27. Based on this record, we
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`agree with Petitioner that the subject matter recited by claim 4 is directed to
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`activities that are financial in nature, namely “providing payment data to an
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`external device,” which is recited in the claim. The transfer of data relating
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`to payment is a financial activity, and providing for such a transfer amounts
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`to a financial service. This is consistent with the Specification of the ’458
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`patent, which confirms claim 4’s connection to financial activities by stating
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`that the invention “relates to a portable data carrier for storing and paying for
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`data.” Ex. 1001, 1:21–23. The specification also states repeatedly that the
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`disclosed invention involves handling payment data. See, e.g., id. at 17:30–
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`42, 17:49–53.
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`Patent Owner disagrees that claim 4 satisfies the financial in nature
`
`requirement of AIA § 18(d)(1), arguing that that section should be
`
`interpreted narrowly to cover only technology used specifically in the
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`financial or banking industry. Prelim. Resp. 49–53. Patent Owner cites to
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`various portions of the legislative history as support for its proposed
`
`interpretation. Id.
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`The Federal Circuit has expressly determined, however, that “the
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`definition of ‘covered business method patent’ is not limited to products and
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`services of only the financial industry, or to patents owned by or directly
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`affecting the activities of financial institutions, such as banks and brokerage
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`houses.” Versata Dev. Grp., Inc. v. SAP America, Inc., 793 F.3d 1306, 1325
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`(Fed. Cir. 2015). Rather, “it covers a wide range of finance-related
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`activities.” Id. Further, contrary to Patent Owner’s view of the legislative
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`8
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`Patent 8,033,458 B2
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`history, the legislative history overall indicates that the phrase “financial
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`product or service” is not limited to the products or services of the “financial
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`services industry” and is to be interpreted broadly. CBM Rules, 77 Fed.
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`Reg. at 48,735–36. For example, the “legislative history explains that the
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`definition of covered business method patent was drafted to encompass
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`patents ‘claiming activities that are financial in nature, incidental to a
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`financial activity or complementary to a financial activity.’” Id. (citing 157
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`Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
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`In addition, Patent Owner asserts that claim 4 is not directed to an
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`apparatus or method that is financial in nature because claim 4 “omits the
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`specifics of how payment is made.” Prelim. Resp. 53. We are not
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`persuaded by this argument because § 18(d)(1) of the AIA does not include
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`such a requirement, nor does Patent Owner point to any other authority that
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`makes such a requirement. Id. We determine that because claim 4 recites
`
`“payment data,” the financial in nature requirement of § 18(d)(1) is satisfied.
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`For the reasons stated above, and based on the particular facts of this
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`proceeding, we conclude that the ’458 patent includes at least one claim that
`
`meets the financial in nature requirement of § 18(d)(1) of the AIA.
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`2. Exclusion for Technological Inventions
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`Petitioner asserts that claim 4 does not fall within § 18(d)(1)’s
`
`exclusion for “technological inventions.” Pet. 28–34. In particular,
`
`Petitioner argues that claim 4 “does not claim ‘subject matter as a whole
`
`[that] recites a technological feature that is novel and unobvious over the
`
`prior art[] and solves a technical problem using a technical solution.’”
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`Pet. 28 (quoting 37 C.F.R. § 42.301(b)) (emphases in original).
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`9
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`We are persuaded that claim 4 as a whole does not recite a
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`technological feature that is novel and unobvious over the prior art. The
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`’458 patent makes clear that the asserted novelty of the invention is not in
`
`any specific improvement of hardware, but in the method of controlling
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`access to data. For example, the ’458 patent states that “there is an urgent
`
`need to find a way to address the problem of data piracy” (Ex. 1001, 1:52–
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`55), and provides the example of a “smart Flash card” for a data carrier,
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`referring to “the ISO (International Standards Organization) series of
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`standards, including ISO 7810, ISO 7811, ISO 7812, ISO 7813, ISO 7816,
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`ISO 9992 and ISO 10102” (id. at 17:8–9, 11–15) for further details on smart
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`cards. Thus, we determine that claim 4 recites merely known technological
`
`features, which indicates that it is not a patent for a technological invention.
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`See Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,764 (Aug.
`
`14, 2012).
`
`Patent Owner argues that claim 4 falls within § 18(d)(1)’s exclusion
`
`for “technological inventions” because it is directed towards solving the
`
`technological problem of “storing and outputting supplemental data in/from
`
`a data memory of the portable data carrier” with the technological solution
`
`of
`
`using (1) a data memory, (2) a program store storing code
`implementable by a processor, and (3) a processor, coupled to
`the data memory, for implementing code in the program store,
`such that supplementary data is stored in said data memory and
`output, using code, from the interface in addition to the stored
`data, in response to an external request to read the data
`memory.
`
`Prelim. Resp. 54. We are not persuaded by this argument because, as
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`Petitioner argues, the problem being solved by claim 4 is a business
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`
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`10
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`CBM2015-00123
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`problem—data piracy. Pet. 32. For example, the specification states that
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`“[b]inding the data access and payment together allows the legitimate
`
`owners of the data to make the data available themselves over the internet
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`without fear of loss of revenue, thus undermining the position of data
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`pirates.” Ex. 1001, 2:11–15. Thus, based on the particular facts of this
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`proceeding, we conclude that claim 4 does not recite a technological
`
`invention.
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`3. Conclusion
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`In view of the foregoing, we conclude that the ’458 patent is a covered
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`business method patent under AIA § 18(d)(1) and is eligible for review
`
`using the transitional covered business method patent program.
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`C. Section 101 Patent-Eligible Subject Matter
`
`Petitioner challenges claims 2–5, 7, 9, and 12 as directed to patent-
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`ineligible subject matter under 35 U.S.C. § 101. Pet. 41–71. Petitioner
`
`asserts that the challenged claims are directed to an abstract idea without
`
`additional elements that transform it into a patent-eligible application of that
`
`idea (id. at 42–67), triggers preemption concerns (id. at 67–70), and fails the
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`machine-or-transformation test (id. at 70–71).
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`Patent Owner disagrees, arguing that the limitations of each of the
`
`challenged claims, taken as a combination, “recite specific ways of using
`
`distinct memories, data types, and use rules that amount to significantly
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`more than the underlying abstract idea” (Prelim. Resp. 15, 18, 22, 25, 29
`
`(quoting Ex. 2049, 19)), and does not result in inappropriate preemption (id.
`
`at 29–39). Patent Owner also asserts that (1) the Office is estopped from
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`revisiting the issue of § 101, which was inherently reviewed during
`
`examination (id. at 44); (2) invalidating patent claims via covered business
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`11
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`method patent review is unconstitutional (id. at 44–46); and (3) section 101
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`is not a ground that may be raised in a covered business method patent
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`review (id. at 46–48).
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`1. Abstract Idea
`
`Under 35 U.S.C. § 101, we must first identify whether an invention
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`fits within one of the four statutorily provided categories of patent-
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`eligibility: “processes, machines, manufactures, and compositions of
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`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–14 (Fed. Cir.
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`2014). Here, each of the challenged claims recites a “machine,” i.e., a
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`“portable data carrier” (claims 2–5) or a “data access device” (claims 7, 9,
`
`and 12), under § 101. Section 101, however, “contains an important implicit
`
`exception to subject matter eligibility: Laws of nature, natural phenomena,
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`and abstract ideas are not patentable.” Alice, 134 S.Ct. 2347, 2354 (2014)
`
`(citing Assoc. for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct.
`
`2107, 2116 (2013) (internal quotation marks and brackets omitted)). In
`
`Alice, the Supreme Court reiterated the framework set forth previously in
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`Mayo Collaborative Services v. Prometheus Laboratories, 132 S.Ct. 1289,
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`1293 (2012) “for distinguishing patents that claim laws of nature, natural
`
`phenomena, and abstract ideas from those that claim patent-eligible
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`applications of those concepts.” Alice, 134 S.Ct. at 2355. The first step in
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`the analysis is to “determine whether the claims at issue are directed to one
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`of those patent-ineligible concepts.” Id.
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`Petitioner argues that the challenged claims are directed to the abstract
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`idea of “payment for and/or controlling access to data based on payment or
`
`rules.” Prelim. Resp. 42. Patent Owner does not dispute that the challenged
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`claims are directed to an abstract idea. See Id. at 8–41.
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`12
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`We are persuaded that the challenged claims are more likely than not
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`drawn to a patent-ineligible abstract idea. As discussed above, the ’458
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`patent discusses addressing recording industry concerns of data pirates
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`offering unauthorized access to widely available compressed audio
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`recordings. Ex. 1001, 1:20–55. The ’458 patent proposes to solve this
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`problem by restricting access to data on a device based upon satisfaction of
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`use rules linked to payment data. Id. at 9:7–25. The ’458 patent makes clear
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`that the heart of the claimed subject matter is restricting access to stored data
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`based on supplier-defined access rules and payment data. Id. at Abstract,
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`1:59–2:15. We are, thus, persuaded, on this record, that the claimed device
`
`is directed to an abstract idea. See Alice, 134 S.Ct. at 2356 (holding that the
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`concept of intermediated settlement at issue in Alice was an abstract idea);
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`Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336,
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`1344 (Fed. Cir. 2013) (holding the abstract idea at the heart of a system
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`claim to be “generating tasks [based on] rules . . . to be completed upon the
`
`occurrence of an event”).
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`2. Inventive Concept
`
`Turning to the second step of the analysis, we look for additional
`
`elements that can “transform the nature of the claim” into a patent-eligible
`
`application of an abstract idea. Mayo, 132 S.Ct. at 1297. On this record, we
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`are not persuaded that the challenged claims of the ’458 patent add an
`
`inventive concept sufficient to ensure that the patent in practice amounts to
`
`significantly more than a patent on the abstract idea itself. Alice, 134 S.Ct.
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`at 2355; see also Accenture Global Servs., 728 F.3d at 1345 (holding claims
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`directed to the abstract idea of “generating tasks [based on] rules . . . to be
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`13
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`completed upon the occurrence of an event” to be unpatentable even when
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`applied in a computer environment and within the insurance industry).
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`Patent Owner argues that the challenged claims are patentable because
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`they “recite specific ways of using distinct memories, data types, and use
`
`rules that amount to significantly more than the underlying abstract idea.”
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`Prelim. Resp. 15, 18, 22, 25, 29 (quoting Ex. 2049, 19). Patent Owner,
`
`however, does not elaborate as to how these claim limitations amount to
`
`significantly more than the underlying abstract idea. The specification treats
`
`as well-known all potentially technical aspects of the claims, including
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`“interface,” “data memory,” “program store,” “processor,” “data carrier,”
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`and the various “code to” limitations recited in the challenged claims. The
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`linkage of existing hardware devices to existing payment validation
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`processes and supplier-defined access rules appear to be “‘well-understood,
`
`routine, conventional activit[ies]’ previously known to the industry.” Alice,
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`134 S.Ct. at 2359; Mayo, 132 S.Ct. at 1294.
`
`Patent Owner also asserts that the challenged claims are like those in
`
`DDR Holdings, which the Federal Circuit held were directed to statutory
`
`subject matter because “‘the claimed solution is necessarily rooted in
`
`computer technology in order to overcome a problem specifically arising in
`
`the realm of computer networks.’” Prelim. Resp. 10 (quoting DDR
`
`Holdings, LLC v. Hotels.Com, LP., 773 F.3d 1245, 1257 (Fed. Cir. 2014)).
`
`According to Patent Owner, the challenged claims overcome the problem of
`
`“digital data piracy,” “‘a challenge particular to the Internet.’” Prelim. Resp.
`
`11 (quoting DDR Holdings, 773 F.3d at 1257).
`
`We are not persuaded that the challenged claims are like those at issue
`
`in DDR Holdings. In DDR Holdings, the Federal Circuit found that the
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`challenged claims were directed to patentable subject matter because they
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`“specif[ied] how interactions with the Internet are manipulated to yield a
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`desired result—a result that overrides the routine and conventional sequence
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`of events triggered by the click of a hyperlink.” 773 F.3d at 1258. We are
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`not persuaded that the challenged claims specify interactions that depart
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`from the routine use of the recited devices. Instead, we determine, based on
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`the current record, that the claims merely apply conventional computer
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`processes to restrict access to data based on payment.
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`The differences between the challenged claims and those at issue in
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`DDR Holdings are made clear by Patent Owner in its tables mapping the
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`challenged claims of the ’458 patent to claim 19 of the patent at issue in
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`DDR Holdings. Prelim. Resp. 12–28. For example, claim 5 of the ’458
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`patent recites “synthesis code to receive a first portion of data from the
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`interface and to combine the first portion with a second portion of data
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`stored in the data memory and to store the result in the data memory.” There
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`is no language in this, or any other, limitation of claim 5, any of the other
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`challenged claims, or the specification of the ’458 patent, that demonstrates
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`that the generic computer components function in an unconventional manner
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`or employ sufficiently specific programming. Instead, this limitation, like
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`all the other limitations of the challenged claims, is “specified at a high level
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`of generality,” which the Federal Circuit has found to be “insufficient to
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`supply an ‘inventive concept.’” Ultramercial, 772 F.3d at 716.
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`The limitation of claim 19 in DDR Holdings, which Patent Owner
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`contends corresponds to the “synthesis code to” limitation from claim 5 of
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`the ’458 patent, recites “using the data retrieved, automatically generate and
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`transmit to the web browser a second web page that displays:
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`(A) information associated with the commerce object associated with the
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`link that has been activated, and (B) the plurality of visually perceptible
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`elements visually corresponding to the source page.” Prelim. Resp. 14–15.
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`It was this limitation from claim 19 in DDR Holdings, according to the
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`Federal Circuit, that specifies “how interactions with the Internet are
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`manipulated to yield a desired result—a result that overrides the routine and
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`conventional sequence of events ordinarily triggered by the click of a
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`hyperlink.” 773 F.3d at 1258. Importantly, the Federal Circuit identified
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`this limitation as differentiating the DDR Holdings claims from those held to
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`be unpatentable in Ultramercial, which “broadly and generically claim ‘use
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`of the Internet’ to perform an abstract business practice (with insignificant
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`added activity).” Id.
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`On this record, we are persuaded that Petitioner has shown that it is
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`more likely than not that claims 2–5, 7, 9, and 12 of the ’458 patent do not
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`add an inventive concept sufficient to ensure that the patent in practice
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`amounts to significantly more than a patent on the abstract idea itself. Alice,
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`134 S.Ct. at 2355; see also Accenture, 728 F.3d at 1345 (holding claims
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`directed to the abstract idea of “generating tasks [based on] rules . . . to be
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`completed upon the occurrence of an event” to be unpatentable even when
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`applied in a computer environment and within the insurance industry).
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`3. Preemption
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`Petitioner argues that “the challenged claims’ attempt to achieve
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`broad functional coverage—with no relative contribution from the named
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`inventors—firmly triggers preemption concerns.” Pet. 68. Patent Owner
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`responds that the challenged claims do not result in inappropriate
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`preemption. Prelim. Resp. 29–39. According to Patent Owner, the claims of
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`the ’458 patent recite “specific ways of managing access to digital content
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`data based on payment validation through storage and retrieval of use status
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`data and use rules in distinct memory types and evaluating the use data
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`according to use rules.” Id. at 30 (quoting Ex. 2049, 20). Patent Owner also
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`asserts that the existence of a large number of non-infringing alternatives
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`shows that the claims of the ’458 patent do not raise preemption concerns.
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`Id. at 35–36.
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`Patent Owner’s preemption argument does not alter our § 101
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`analysis. The Supreme Court has described the “pre-emption concern” as
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`“undergird[ing] our § 101 jurisprudence.” Alice, 134 S.Ct. at 2358. The
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`concern “is a relative one: how much future innovation is foreclosed relative
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`to the contribution of the inventor.” Mayo, 132 S.Ct. at 1303. “While
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`preemption may signal patent ineligible subject matter, the absence of
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`complete preemption does not demonstrate patent eligibility.” See Ariosa
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`Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
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`Importantly, the preemption concern is addressed by the two part test
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`considered above. After all, every patent “forecloses ... future invention” to
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`some extent, Mayo, 132 S.Ct. at 1292, and, conversely, every claim
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`limitation beyond those that recite the abstract idea limits the scope of the
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`preemption. Ariosa, 788 F.3d at 1379 (“The Supreme Court has made clear
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`that the principle of preemption is the basis for the judicial exception to
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`patentability. For this reason, questions on preemption are inherent in and
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`resolved by the § 101 analysis.”).
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`The two-part test elucidated in Alice and Mayo does not require us to
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`anticipate the number, feasibility, or adequacy of non-infringing alternatives
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`to gauge a patented invention’s preemptive effect in order to determine
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`whether a claim is patent-eligible under § 101. The relevant precedents
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`simply direct us to ask whether the claim involves one of the patent-
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`ineligible categories, and, if so, whether additional limitations contain an
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`“inventive concept” that is “sufficient to ensure that the claim in practice
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`amounts to ‘significantly more’ than a patent on an ineligible concept.”
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`DDR Holdings, 773 F.3d at 1255. This is the basis for the rule that the
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`unpatentability of abstract ideas “cannot be circumvented by attempting to
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`limit the use of the formula to a particular technological environment,”
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`despite the fact that doing so reduces the amount of innovation that would be
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`preempted. Diamond v. Diehr, 450 U.S. 175, 191; see also Alice, 134 S.Ct.
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`at 2358; Mayo, 132 S.Ct. at 1303; Bilski v. Kappos, 561 U.S. 593, 612
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`(2010); Parker v. Flook, 437 U.S. 584, 593 (1978). The Federal Circuit
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`spelled this out, stating that “[w]here a patent’s claims are deemed only to
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`disclose patent ineligible subject matter under the Mayo framework, as they
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`are in this case, preemption concerns are fully addressed and made moot.”
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`Ariosa, 788 F.3d at 1379. Patent Owner argues that Ariosa does not apply
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`here because the claims and facts are distinguishable. Prelim. Resp. 36–39.
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`Although the facts and claims in this case certainly differ from those in
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`Ariosa, we are not persuaded by Patent Owner’s arguments that the general
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`principle described by the Federal Circuit in that case does not apply here.
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`As described above, after applying this two-part test, we are
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`persuaded that Petitioner has shown that it is more likely than not that the
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`challenged claims of the ’458 patent are drawn to an abstract idea that does
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`not add an inventive concept sufficient to ensure that the patent in practice
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`amounts to significantly more than a patent on the abstract idea itself. The
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`alleged existence of a large number of non-infringing, and, thus, non-
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