UNITED STATES PATENT AND TRADEMARK OFFICE
`________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`APPLE INC.,
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`Petitioner,
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`v.
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`SMARTFLASH LLC,
`
`Patent Owner.
`
`________________________
`Case CBM2015-00124
`Patent 7,942,317 B2
`________________________
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`PATENT OWNER’S NOTICE OF SUPPLEMENTAL AUTHORITY
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`
`
`________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`APPLE INC.,
`
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`
`Patent Owner.
`
`________________________
`Case CBM2015-00124
`Patent 7,942,317 B2
`________________________
`
`PATENT OWNER’S NOTICE OF SUPPLEMENTAL AUTHORITY
`
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`
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`Two recent Federal Circuit decisions clarify the analysis required under step
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`one and step two of Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014),
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`confirming that, whether the Board’s focus is on step one or step two of Alice,
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`Petitioner cannot establish that the challenged claims of the patents at issue are
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`ineligible for patent protection under 35 U.S.C. § 101.
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`1.
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`Enfish, LLC v. Microsoft Corp., ___ F.3d ___, 2016 WL 2756255,
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`No. 2015-1244 (Fed. Cir. May 12, 2016), makes clear that the challenged
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`Smartflash claims are not “directed to” an abstract idea but instead are “directed to
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`an improvement to computer functionality” relating to devices, systems, and
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`methods for purchasing, downloading, storing, and accessing content data securely
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`and are thus patent-eligible. 2016 WL 2756255, at *5. In Enfish, the district court
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`held that all of the asserted claims, which involved a “self-referential” database,
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`were “directed to the abstract idea of ‘storing, organizing, and retrieving memory
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`in a logical table’ or, more simply, ‘the concept of organizing information using
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`tabular formats.’” Id. at *6. The Federal Circuit reversed, explaining that the
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`district court erred by describing the claims at too high a “level of abstraction and
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`untethered from the language of the claims,” which “all but ensures that the
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`exceptions to § 101 swallow the rule.” Id.
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`The Court explained that the “directed to” inquiry mandated by the first step
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`of Alice “cannot simply ask whether the claims involve a patent-ineligible
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`1
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`concept.” Id. at *4. The Court held that “improvements in computer-related
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`technology” – whether involving hardware or software – are not necessarily
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`directed to an abstract idea; rather, “the first step . . . asks whether the focus of the
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`claims is on the specific asserted improvement in computer capabilities . . . or,
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`instead, on a process that qualifies as an ‘abstract idea’ for which computers are
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`invoked merely as a tool.” Id. at *5.
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`Under Enfish, the challenged claims are not directed to an abstract idea but
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`to specific devices, systems, and methods for managing data to facilitate
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`convenient and secure provision of digital content. Just as the self-referential
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`database was “a specific type of data structure designed to improve the way a
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`computer stores and retrieves data in memory,” 2016 WL 2756255, at *6, so too
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`the patents at issue are directed to specific organization of data and defined
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`sequences of transaction steps with distinct advantages over alternatives. For
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`example, Claim 1 of the ’516 patent (at issue in CBM2015-00121) describes a
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`handheld multimedia terminal including, among other elements, non-volatile
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`memory storing content data; code to request identifier data related to multimedia
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`content available from non-volatile memory; code to receive a user selection; code
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`responsive to the selection to transmit payment data for validation wherein the
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`payment data comprises user identification data; and code to control access to
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`content data responsive to said payment validation data. CBM2015-00121, Ex.
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`
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`2
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`
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`1001 25:65-26:45. This scheme – which controls access to data already stored in
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`non-volatile memory through use of payment validation data – is not fairly
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`captured by the reductive “abstract idea” Petitioner posits.
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`Rather than add “general-purpose computer components” to “a fundamental
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`economic practice,” the challenged claims, like those in Enfish, “are directed to a
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`specific implementation of a solution to a problem” in Internet digital commerce.
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`2016 WL 2756255, at *8 (emphasis added). Smartflash’s claims are not “simply
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`directed to any form” of controlling access to content data based on payment, id.,
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`but claim-defined hardware components and software elements that interact with
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`particular systems and carry out their functions in a specific manner. They are
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`patent-eligible under Alice step one.
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`2.
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`BASCOM Global Internet Services, Inc. v. AT&T Mobility, LLC., ___
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`F.3d ___, 2016 WL 3514158, No. 2015-1763 (Fed. Cir. June 27, 2016) confirms
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`that the claims contain an “inventive concept” and that “an inventive concept can
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`be found in the non-conventional and non-generic arrangement of known,
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`conventional pieces.” 2016 WL 3514158, at *6; see also Rapid Litigation
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`Management Ltd. V. Cellzdirect, Inc., ___ F.3d ___, 2016 WL 3606624, at *6, No.
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`2015-1570 (Fed. Cir. July 5, 2016).
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`The claims in BASCOM involved a system for filtering Internet content. The
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`system could be located on a remote ISP server and customized to individual
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`3
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`
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`subscribers’ accounts by associating each network account with one or more
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`filtering schemes and filtering elements. See 2016 WL 3514158, at *3. The
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`district court found that the claims “were directed to the abstract idea of ‘filtering
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`content.’” Id. at *4. The Federal Circuit reversed. It found that although it was a
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`“close call[] about how to characterize what the claims are directed to” at step one
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`of Alice, it concluded at step two that the claims did not “merely recite the abstract
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`idea of filtering content along with the requirement to perform it on the Internet, or
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`to perform it on a set of generic computer components.” Id. at *6-*7. The patent
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`claimed “installation of a filtering tool at a specific location . . . with customizable
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`filtering features specific to each end user.” Id. at *6. That design provided
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`specific benefits over alternatives; it was not “conventional or generic.” Id.
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`The Alice step-two analysis in BASCOM applies to the Smartflash claims.
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`Even on the premise that the claims are directed to an abstract idea (“controlling
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`access based on payment” in one of Petitioner’s formulations), they do not “merely
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`recite [that] abstract idea” nor do they “preempt all ways” of paying for and
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`controlling access to digital content. Id. at *7. On the contrary, the claims “recite
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`a specific, discrete implementation” – concrete devices, systems, and methods –
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`for purchasing, downloading, storing, and conditioning access to digital content.
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`Id. In BASCOM, locating a filtering system on an ISP server was conventional, as
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`was customizing a filtering scheme for an individual user. See Id. at *6.
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`4
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`Nevertheless, “the inventive concept inquiry requires more than recognizing that
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`each claim element, by itself, was known in the art.” Id. The fact that known
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`components were arranged in a non-conventional and non-generic way satisfied
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`§ 101. Here, as in BASCOM, the “patent describes how its particular arrangement
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`of elements is a technical improvement over prior art ways” of distributing digital
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`content – for example, in the case of the ’516 patent, by configuring a handheld
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`multimedia terminal to store both payment data and multimedia content data – thus
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`“improv[ing] an existing technological process.” Id. at *7.
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`
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`BASCOM also confirms that DDR is controlling notwithstanding the asserted
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`generality of the claims. The Smartflash patents provide a “technical solution to a
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`problem unique to the Internet.” Id. The patents “claim[] a technical way to
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`satisfy an existing problem” for digital content providers – namely, rampant digital
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`content piracy – thus providing a “technology-based solution . . . that overcomes
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`existing problems” with digital content distribution. Id. The patent does not claim
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`“an abstract-idea-based solution implemented with generic technical components
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`in a conventional way.” Id. Like the patents in DDR and Bascom, Smartflash
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`claims a “software-based invention[] that improve[s] the performance of the
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`computer system itself.” Id. The claims are accordingly patent-eligible.
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`5
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`Dated: July 11, 2016
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`
`
`
`
`/ Michael R. Casey /
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`
`6
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`
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that PATENT OWNER’S NOTICE OF
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`SUPPLEMENTAL AUTHORITY in CBM2015-00124 was served today, by
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`agreement of the parties, by emailing a copy to counsel for the Petitioner(s) as
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`follows:
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`Steven.Baughman@ropesgray.com
`James.Batchelder@ropesgray.com
`Megan.Raymond@ropesgray.com
`ApplePTABService-SmartFlash@ropesgray.com
`
`
`
`Dated: July 11, 2016
`
`/ Michael R. Casey /
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`
`7
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