throbber
Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 7
`Entered: November 10, 2015
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00124
`Patent 7,942,317 B2
`
`
`
`
`
`
`
`
`
`Before JENNIFER S. BISK, RAMA G. ELLURU,
`JEREMY M. PLENZLER, and MATTHEW R. CLEMENTS,
`Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`A. Background
`
`INTRODUCTION
`
`Petitioner, Apple Inc. (“Apple”), filed a Petition (Paper 2, “Pet.”) to
`
`institute a covered business method patent review of claims 1–17 and 19 of
`
`U.S. Patent No. 7,942,317 B2 (Ex. 1001, “the ’317 patent”) pursuant to § 18
`
`of the Leahy-Smith America Invents Act (“AIA”).1 Patent Owner,
`
`Smartflash LLC (“Smartflash”), filed a Preliminary Response (Paper 5,
`
`“Prelim. Resp.”).
`
`We have jurisdiction under 35 U.S.C. § 324(a), which provides that a
`
`covered business method patent review may not be instituted “unless . . . it is
`
`more likely than not that at least 1 of the claims challenged in the petition is
`
`unpatentable.”
`
`After considering the Petition and Preliminary Response, we
`
`determine that the ’317 patent is a covered business method patent. We
`
`further determine that Apple has demonstrated that it is more likely than not
`
`that challenged claims 2–5, 9–11, 14, 15, 17, and 19 are unpatentable. We
`
`further determine that Appel is estopped from challenging claims 1, 6–8, 12,
`
`13, and 16 in this proceeding. Accordingly, we institute a covered business
`
`method review of claims 2–5, 9–11, 14, 15, 17, and 19 (“the challenged
`
`claims”), but deny review of claims 1, 6–8, 12, 13, and 16 of the ’317 patent,
`
`as discussed below.
`
`B. Asserted Ground
`
`Apple contends that claims 1–17 and 19 are unpatentable under 35
`
`U.S.C. § 101, as being directed to patent-ineligible subject matter, and that
`
`
`1 Pub. L. No. 112–29, 125 Stat. 284, 296–307 (2011).
`
`2
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`claims 13 and 19 also are unpatentable under 35 U.S.C. § 112, as indefinite.
`
`Pet. 1, 73. Apple provides a declaration from John P.J. Kelly, Ph.D. to
`
`support its challenges. Ex. 1017 (“the Kelly Declaration”).
`
`C. Related Matters
`
`The parties indicate that the ’317 patent is the subject of the following
`
`district court cases: Smartflash LLC v. Apple Inc., Case No. 6:15-cv-145
`
`(E.D. Tex.); Smartflash LLC v. Google, Inc., Case No. 6:14-cv-435 (E.D.
`
`Tex.); Smartflash LLC v. Apple Inc., Case No. 6:13-cv-447 (E.D. Tex.);
`
`Smartflash LLC v. Samsung Electronics Co. Ltd., Case No. 6:13-cv-448
`
`(E.D. Tex.); and Smartflash LLC v. Amazon.Com, Inc., Case No. 6:14-cv-
`
`992 (E.D. Tex.). Pet. 2, 32–33; Paper 4, 4–5.
`
`Apple previously has filed three petitions requesting covered business
`
`method patent review of the ’317 patent: CBM2014-00112, CBM2014-
`
`00113 (consolidated with CBM2014-00112), and CBM2015-00018. Pet. 33.
`
`A final written decision has issued in CBM2015-00112, determining claims
`
`1, 6–8, 12, 13, 16, and 18 of the ’317 patent are unpatentable pursuant to
`
`35 U.S.C. § 103. Apple Inc. v. Smartflash LLC, Case CBM2014-00112, slip
`
`op. at 29 (PTAB Sept. 25, 2015) (Paper 48). Trial was instituted in
`
`CBM2015-00018 with respect to claim 18 under 35 U.S.C. § 101. Apple
`
`Inc. v. Smartflash LLC, Case CBM2015-00018, slip op. at 13 (PTAB Apr.
`
`10, 2015) (Paper 15).
`
`Apple and other Petitioners have filed additional petitions requesting
`
`covered business method patent reviews of related patents. See Pet. 33–34;
`
`Paper 4, 2–4.
`
`3
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`D. The ’317 Patent
`
`The ’317 patent relates to “a portable data carrier for storing and
`
`paying for data and to computer systems for providing access to data to be
`
`stored,” and the “corresponding methods and computer programs.”
`
`Ex. 1001, 1:18–23. Owners of proprietary data, especially audio recordings,
`
`have an urgent need to address the prevalence of “data pirates,” who make
`
`proprietary data available over the internet without authorization. Id. at
`
`1:38–51. The ’317 patent describes providing portable data storage together
`
`with a means for conditioning access to that data upon validated payment.
`
`Id. at 1:55–2:3. This combination allows data owners to make their data
`
`available over the internet without fear of data pirates. Id. at 2:3–11.
`
`As described, the portable data storage device is connected to a
`
`terminal for internet access. Id. at 1:55–63. The terminal reads payment
`
`information, validates that information, and downloads data into the portable
`
`storage device from a data supplier. Id. The data on the portable storage
`
`device can be retrieved and output from a mobile device. Id. at 1:64–67.
`
`The ’317 patent makes clear that the actual implementation of these
`
`components is not critical and the alleged invention may be implemented in
`
`many ways. See, e.g., id. at 25:49–52 (“The skilled person will understand
`
`that many variants to the system are possible and the invention is not limited
`
`to the described embodiments.”).
`
`E. Challenged Claims
`
`Apple challenges claims 1–17 and 19 of the ’317 patent. Claims 1, 8,
`
`12, 16, 17, and 19 are independent. Claims 2–7 depend, directly or
`
`indirectly, from claim 1. Claims 9–11, depend directly or indirectly, from
`
`claim 8. Claims 13–15 depend directly or indirectly from claim 12. Claims
`
`4
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`17 and 19 are illustrative of the claimed subject matter and are reproduced
`
`below:
`
`17. A computer system for providing data to a data requester,
`the system comprising:
`a communication interface;
`a data access data store for storing records of data items
`available from the system, each record comprising a data item
`description and location data identifying an electronic address
`for a provider for the data item;
`a program store storing code implementable by a
`processor;
`a processor coupled to the communications interface, to
`the data access data store, and to the program store for
`implementing the stored code, the code comprising:
`code to receive a request for a data item from the
`requester:,
`code to receive from the communications interface
`payment data comprising data relating to payment for the
`requested data item;
`code responsive to the request and to the received
`payment data to output the item data to the requester over the
`communication interface; wherein
`said data access data store further comprises data item
`access rule data for output to the requester with a said data item;
`and
`
`further comprising code to select access rule data for
`output with a data item in response to said payment data.
`
`
`19. A method of providing data to a data requester
`comprising:
`receiving a request for a data item from the requester;
`receiving payment data from the requester relating to
`payment for the requested data;
`transmitting the requested data to the requester; and
`transmitting data access rule data to requester with the
`read data.
`
`5
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`ANALYSIS
`
`A. Estoppel
`
`35 U.S.C. § 325(e)(1) mandates that
`
`[t]he petitioner in a post-grant review of a claim in a patent
`under this chapter that results in a final written decision under
`section 328(a) or the real party in interest or privy of the
`petitioner, may not request or maintain a proceeding before the
`Office with respect to that claim on any ground that the
`petitioner raised or reasonably could have raised during that
`post-grant review.
`
`As noted above, we issued a final written decision in CBM2014-
`
`00112, determining that claims 1, 6–8, 12, 13, 16, and 18 of the ’317 patent
`
`are unpatentable pursuant to 35 U.S.C. § 103. Apple Inc. v. Smartflash LLC,
`
`Case CBM2014-00112, slip op. at 29 (PTAB Sept. 25, 2015) (Paper 48).
`
`Apple was the petitioner in CBM2014-00112, which resulted in a final
`
`written decision with respect to claims 1, 6–8, 12, 13, 16, and 18. Thus,
`
`pursuant to § 325(e)(1), Apple cannot “request or maintain” a proceeding
`
`before the Office with respect to these claims “on any ground” that Apple
`
`“raised or reasonably could have raised” during CBM2014-00112.
`
`Apple is estopped from maintaining a proceeding with respect to these
`
`affected claims based on § 101. Specifically, § 325(e)(1) estops Apple from
`
`filing or maintaining a proceeding before the Office with respect to the
`
`claims at issue on “any ground that [Apple] raised or reasonably could have
`
`raised.” (Emphasis added). The Supreme Court issued its decision in Alice
`
`Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) after Apple filed
`
`its petition in CBM2014-00112. Section 325(e)(1), however, does not make
`
`exceptions for intervening case law that clarifies jurisprudence. Moreover,
`
`although Alice was not decided, the Supreme Court had already decided
`
`6
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`Bilski and Mayo on which Alice relied, and a number of Federal Circuit
`
`cases had already issued finding computer-based method claims invalid
`
`under § 101. See, e.g., Accenture Global Servs. GmbH v. Guidewire
`
`Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013); Bancorp Servs, LLC v. Sun
`
`Life Asur. Co., 687 F.3d 1266 (Fed. Cir. 2012); Dealertrack, Inc. v. Huber,
`
`674 F.3d 1315 (Fed. Cir. 2012); Cybersource Corp. v. Retail Decisions, Inc.,
`
`654 F.3d 1366 (Fed. Cir. 2011). Thus, we determine Apple “reasonably
`
`could have raised” a challenge to claims 1, 6–8, 12, 13, 16, and 182 of the
`
`’317 patent based on § 101 in its CBM2014-00112/CBM2014-00113
`
`petitions. Likewise, Apple could have raised its indefiniteness challenge to
`
`claim 13 pursuant to 35 U.S.C. § 112 in its CBM2014-00112/CBM2014-
`
`00113 petitions. Thus, § 325(e)(1) is applicable to these claims.
`
`Because Apple is estopped from maintaining a proceeding with
`
`respect to claims 1, 6–8, 12, 13, and 16 based on any ground it “reasonably
`
`could have raised” in its earlier petitions, we deny covered business method
`
`patent review of claims 1, 6–8, 12, 13, and 16 in the present proceeding.
`
`B. Claim Construction
`
`In a covered business method patent review, claim terms are given
`
`their broadest reasonable interpretation in light of the specification in which
`
`they appear and the understanding of others skilled in the relevant art. See
`
`37 C.F.R. § 42.300(b). Applying that standard, we interpret the claim terms
`
`of the ’317 patent according to their ordinary and customary meaning in the
`
`context of the patent’s written description. See In re Translogic Tech., Inc.,
`
`504 F.3d 1249, 1257 (Fed. Cir. 2007). For purposes of this decision, we
`
`
`2 Apple does not challenge claim 18 in this case.
`
`7
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`determine that “payment data” is the only terms requiring an express
`
`construction in order to conduct properly our analysis.
`
`Apple asserts that “for review purposes, [payment data] should be
`
`construed to mean ‘data representing payment made for requested content
`
`data’ and is distinct from ‘access control data.’” Pet. 37.
`
`The plain and ordinary meaning of the two words that make up the
`
`term—“payment” and “data”—do not incorporate any notion of time and
`
`nothing about their combination changes that determination. As used in the
`
`’317 patent, “payment data” encompasses data relating to future, current,
`
`and past payments. For example, the ’317 patent states that “payment data
`
`for making a payment to the system owner is received from the smart Flash
`
`card by the content access terminal and forwarded to an e-payment system.”
`
`Ex. 1001, 20:59–62. This language indicates that payment data exists prior
`
`to the payment being made for the requested content. The ’317 patent also
`
`explains that “payment data received may either be data relating to an actual
`
`payment made to the data supplier, or it may be a record of a payment made
`
`to an e-payment system.” Id. at 6:57–60. This indicates that “payment data”
`
`includes data for payments that have already been made.
`
`Moreover, the plain and ordinary meaning of data does not implicate
`
`changes in character based on when it is used in a transaction. For example,
`
`a credit card number may qualify as “data relating to payment” before the
`
`number is processed, while the number is being processed, and after the
`
`number is processed. See Ex. 1012, 232:14–24 (providing credit or debit
`
`card information to a retail terminal). Thus, without an express description
`
`to the contrary, we presume that “payment data” retains the same meaning
`
`before, during, and after the payment operation. Neither party points to any
`
`8
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`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`such contrary description. In fact, the ’317 patent describes “payment data”
`
`in several instances as data relating to payment for the requested data item.
`
`Ex. 1001, 10:5–6, 10:27–28, 10:38–39.
`
`For purposes of this Decision, we determine that the broadest
`
`reasonable interpretation of “payment data” as used in the ’317 patent is
`
`“data relating to payment for the requested data item.”
`
`C. Covered Business Method Patent
`
`Section 18 of the AIA provides for the creation of a transitional
`
`program for reviewing covered business method patents. A “covered
`
`business method patent” is a patent that “claims a method or corresponding
`
`apparatus for performing data processing or other operations used in the
`
`practice, administration, or management of a financial product or service,
`
`except that the term does not include patents for technological inventions.”
`
`AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). A patent need have only one
`
`claim directed to a covered business method to be eligible for review. See
`
`Transitional Program for Covered Business Method Patents—Definitions of
`
`Covered Business Method Patent and Technological Invention; Final Rule,
`
`77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (“CBM Rules”) (Comment 8).
`
`We previously have determined that the ’317 patent is a “covered
`
`business method patent.” See, e.g., CBM2014-00112, Paper 7, 8–12
`
`(determining that the ’317 patent is eligible for covered business method
`
`patent reviewed based on claim 18). In this case, Apple asserts that claim 83
`
`qualifies the ’317 patent for covered business method patent review. Pet. 23.
`
`
`3 Our determination that Apple is estopped from challenging the
`patentability of claim 8 based on 35 U.S.C. § 101 does not affect our
`(Footnote continued on next page
`
`9
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`1. Financial Product or Service
`
`Apple asserts that “because claim 8 explicitly describes receiving and
`
`responding to payment data, it clearly relates to a financial activity and
`
`providing a financial service.” Pet. 27. Based on this record, we agree with
`
`Apple that the subject matter recited by claim 8 is directed to activities that
`
`are financial in nature, namely “receiving payment data from the requester
`
`relating to payment for the requested data” and “reading the requested data
`
`. . . responsive to the received payment data,” limitations which are recited
`
`in the claim. The transfer of data relating to payment and providing data in
`
`response to data relating to payment are financial activities, and providing
`
`for such transfers amounts to a financial service. This is consistent with the
`
`Specification of the ’317 patent, which confirms claim 8’s connection to
`
`financial activities by stating that the invention “relates to a portable data
`
`carrier for storing and paying for data.” Ex. 1001, 1:18–20. The
`
`Specification also states repeatedly that the disclosed invention involves
`
`managing access to data based on payment validation. See, e.g., id. at 1:55–
`
`63, 2:12–26, 3:22–30, 3:51–56, 7:59–8:6, 8:18–31.
`
`Smartflash disagrees that claim 8 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
`
`financial or banking industry. Prelim. Resp. 40–43. Smartflash cites to
`
`
`
`
`analysis that the ‘317 patent is eligible for a covered business method patent
`review. 77 Fed. Reg. 48,735, 48,736 (Aug. 14, 2012) (“A patent having one
`or more claims directed to a covered business method is a covered business
`method patent for purposes of the review, even if the patent includes
`additional claims.”).
`
`10
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`various portions of the legislative history as support for its proposed
`
`interpretation. Id.
`
`The Federal Circuit has expressly determined, however, that “the
`
`definition of ‘covered business method patent’ is not limited to products and
`
`services of only the financial industry, or to patents owned by or directly
`
`affecting the activities of financial institutions, such as banks and brokerage
`
`houses.” Versata Dev. Grp., Inc. v. SAP America, Inc., 793 F.3d 1306, 1325
`
`(Fed. Cir. 2015). Rather, “it covers a wide range of finance-related
`
`activities.” Id. Further, contrary to Smartflash’s view of the legislative
`
`history, the legislative history overall indicates that the phrase “financial
`
`product or service” is not limited to the products or services of the “financial
`
`services industry” and is to be interpreted broadly. CBM Rules, 77 Fed.
`
`Reg. at 48,735–36. For example, the “legislative history explains that the
`
`definition of covered business method patent was drafted to encompass
`
`patents ‘claiming activities that are financial in nature, incidental to a
`
`financial activity or complementary to a financial activity.’” Id. (citing 157
`
`Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
`
`In addition, Smartflash asserts that claim 8 is not directed to an
`
`apparatus or method that is financial in nature because claim 8 “omits the
`
`specifics of how payment is made.” Prelim. Resp. 43. We are not
`
`persuaded by this argument because § 18(d)(1) of the AIA does not include
`
`such a requirement, nor does Smartflash point to any other authority that
`
`makes such a requirement. Id. We determine that because claim 8 recites
`
`“payment data,” as Smartflash acknowledges (Prelim. Resp. 43), the
`
`financial in nature requirement of § 18(d)(1) is satisfied.
`
`11
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`

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`CBM2015-00124
`Patent 7,942,317 B2
`
`For the reasons stated above, and based on the particular facts of this
`
`proceeding, we conclude that the ’317 patent includes at least one claim that
`
`meets the financial in nature requirement of § 18(d)(1) of the AIA.
`
`2. Exclusion for Technological Inventions
`
`Apple asserts that claim 8 does not fall within § 18(d)(1)’s exclusion
`
`for “technological inventions.” Pet. 27–32. In particular, Apple argues that
`
`claim 8 “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.’” Pet. 27 (quoting 37
`
`C.F.R. § 42.301(b)).
`
`We are persuaded that claim 8 as a whole does not recite a
`
`technological feature that is novel and unobvious over the prior art. The
`
`’317 patent makes clear that the asserted novelty of the invention is not in
`
`any specific improvement of software or hardware, but in the method of
`
`controlling access to data. For example, the ’317 patent states that “there is
`
`an urgent need to find a way to address the problem of data piracy” (Ex.
`
`1001, 1:50–51), while acknowledging that the “physical embodiment of the
`
`system is not critical and a skilled person will understand that the terminals,
`
`data processing systems and the like can all take a variety of forms” (id. at
`
`12:29–32). For example, the ’317 patent provides the example of a “smart
`
`Flash card” for a data carrier, referring to “the ISO (International Standards
`
`Organization) series of standards, including ISO 7810, ISO 7811, ISO 7812,
`
`ISO 7813, ISO 7816, ISO 9992 and ISO 10102” (id. at 17:6–8, 11–15) for
`
`further details on smart cards. Thus, we determine that claim 8 recites
`
`merely known technological features, which indicates that it is not a patent
`
`12
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`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`for a technological invention. See Office Patent Trial Practice Guide, 77
`
`Fed. Reg. 48,756, 48,764 (Aug. 14, 2012).
`
`Smartflash also argues that claim 8 falls within § 18(d)(1)’s exclusion
`
`for “technological inventions” because it is directed towards solving the
`
`technological problem of “controlling when requested data is read from a
`
`content provider” with the technological solution of “a content provider
`
`from which requested data is read ‘responsive to the received payment
`
`data.’” Prelim. Resp. 44. We are not persuaded by this argument because,
`
`as Apple argues, the problem being solved by claim 8 is a business
`
`problem—data piracy. Pet. 31–32. For example, the Specification states
`
`that “[b]inding the data access and payment together allows the legitimate
`
`owners of the data to make the data available themselves over the internet
`
`without fear of loss of revenue, thus undermining the position of data
`
`pirates.” Ex. 1001, 2:7–11. Therefore, based on the particular facts of this
`
`proceeding, we conclude that claim 8 does not recite a technological
`
`invention.
`
`3. Conclusion
`
`In view of the foregoing, we conclude that the ’317 patent is a covered
`
`business method patent under AIA § 18(d)(1) and is eligible for review
`
`using the transitional covered business method patent program.
`
`C. Section 101 Patent-Eligible Subject Matter
`
`Apple challenges claims 2–5, 9–11, 14, 15, 17, and 19 as directed to
`
`patent-ineligible subject matter under 35 U.S.C. § 101. Pet. 38–73. Apple
`
`argues that the challenged claims are directed to an abstract idea without
`
`additional elements that transform it into a patent-eligible application of that
`
`13
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`
`CBM2015-00124
`Patent 7,942,317 B2
`
`idea (id. at 39–69), triggers preemption concerns (id. at 69–72), and fails the
`
`machine-or-transformation test (id. at 72–73).
`
`Smartflash 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[s] to significantly
`
`more than the underlying abstract idea” (Prelim. Resp. 21 (quoting Ex.
`
`2049, 19)), and that the claims do not result in inappropriate preemption (id.
`
`at 22–30). Smartflash also asserts that (1) the Office is estopped from
`
`revisiting the issue of § 101, which was inherently reviewed during
`
`examination (id. at 34–35); (2) invalidating patent claims via covered
`
`business method patent review is unconstitutional (id. at 35–37); and (3)
`
`section 101 is not a ground that may be raised in a covered business method
`
`patent review (id. at 37–39).
`
`1. Abstract Idea
`
`Under 35 U.S.C. § 101, we must first identify whether an invention
`
`fits within one of the four statutorily provided categories of patent-
`
`eligibility: “processes, machines, manufactures, and compositions of
`
`matter.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 713–14 (Fed. Cir.
`
`2014). Here, each of the challenged claims recites a “machine,” i.e., a
`
`“computer system” (claims 2–5, 17), a “data access system” (claims 14 and
`
`15), or a “process,” i.e., a “method” (claims 9–11, 19), under § 101. Section
`
`101, however, “contains an important implicit exception to subject matter
`
`eligibility: Laws of nature, natural phenomena, and abstract ideas are not
`
`patentable.” Alice Corporation Pty. Ltd. V. CLS Bank Int’l., 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
`
`14
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`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`brackets omitted)). In Alice, the Supreme Court reiterated the framework set
`
`forth previously in Mayo Collaborative Services v. Prometheus
`
`Laboratories, 132 S. Ct. 1289, 1293 (2012) “for distinguishing patents that
`
`claim laws of nature, natural phenomena, and abstract ideas from those that
`
`claim patent-eligible applications of these concepts.” Alice, 134 S. Ct. at
`
`2355. The first step in the analysis is to “determine whether the claims at
`
`issue are directed to one of those patent-ineligible concepts.” Id.
`
`Apple argues that the challenged claims are directed to the abstract
`
`idea of “payment for and controlling access to data.” Pet. 38. Smartflash
`
`does not dispute that the challenged claims are directed to an abstract idea.
`
`See Prelim. Resp. 10–30.
`
`We are persuaded that the challenged claims are more likely than not
`
`drawn to a patent-ineligible abstract idea. As discussed above, the ’317
`
`patent discusses addressing recording industry concerns of data pirates
`
`offering unauthorized access to widely available compressed audio
`
`recordings. Ex. 1001, 1:27–51. The ’317 patent proposes to solve this
`
`problem by restricting access to data on a device based upon satisfaction of
`
`use rules linked to payment data. Id. at 9:4–22. The ’317 patent makes clear
`
`that the heart of the claimed subject matter is restricting access to stored data
`
`based on supplier-defined access rules and payment data. Id. at 1:55–2:11,
`
`Abstract. We are, thus, persuaded, on this record, that the challenged claims
`
`are directed to an abstract idea. See Alice, 134 S. Ct. at 2356 (holding that
`
`the concept of intermediated settlement at issue in Alice was an abstract
`
`idea); Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d
`
`1336, 1344 (Fed. Cir. 2013) (holding the abstract idea at the heart of a
`
`15
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`system claim to be “generating tasks [based on] rules . . . to be completed
`
`upon the occurrence of an event”).
`
`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 are not persuaded that the challenged claims of the ’317 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.
`
`at 2355; see also Accenture Global Servs., 728 F.3d at 1345 (holding claims
`
`directed to the abstract idea of “generating tasks [based on] rules . . . to be
`
`completed upon the occurrence of an event” to be unpatentable even when
`
`applied in a computer environment and within the insurance industry).
`
`Smartflash argues that the challenged claims are patentable because
`
`they “recite specific ways of using distinct memories, data types, and use
`
`rules that amount[s] to significantly more than the underlying abstract idea.”
`
`Prelim. Resp. 21 (quoting Ex. 2049, 19). Smartflash, however, does not
`
`elaborate as to how these claim limitations amount to significantly more than
`
`the underlying abstract idea.
`
`The Specification, as discussed above, treats as well-known all
`
`potentially technical aspects of the claim, including the “interface,” “data
`
`store” and “processor” limitations recited in the challenged claims. For
`
`example, with respect to the recited “data store,” the Specification discloses
`
`that “[t]he data storage means is based on a standard smart card.” Id. at
`
`11:28–30; see also id. at 14:25–29 (“[l]ikewise data stores 136, 138 and 140
`
`may comprise a single physical data store or may be distributed over a
`
`16
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`plurality of physical devices and may even be at physically remote locations
`
`from processors 128-134 and coupled to these processors via internet 142.”),
`
`Fig. 6. Moreover, on this record, Smartflash has not shown sufficiently that
`
`any of the other potentially technical additions to the claims performs a
`
`function that is anything other than “purely conventional.” Alice, 134 S. Ct.
`
`at 2359. The use of a data store and the linkage of existing hardware devices
`
`to existing payment validation processes appear to be “‘well-understood,
`
`routine, conventional activit[ies]’ previously known to the industry.” Alice,
`
`134 S. Ct. at 2359; Mayo, 132 S. Ct. at 1294.
`
`Smartflash also asserts that the challenged claims are like those in
`
`DDR Holdings, which the Federal Circuit held were directed to statutory
`
`subject matter because “they claim a solution ‘necessarily rooted in
`
`computer technology in order to overcome a problem specifically arising in
`
`the realm of computer networks.’” Prelim. Resp. 2 (quoting DDR Holdings,
`
`LLC v. Hotels.Com, LP., 773 F.3d 1245, 1257 (Fed. Cir. 2014)). According
`
`to Smartflash, the challenged claims overcome the problem of “digital data
`
`piracy,” “‘a challenge particular to the Internet.’” Prelim. Resp. 12 (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
`
`challenged claims were directed to patentable subject matter because they
`
`“specif[ied] how interactions with the Internet are manipulated to yield a
`
`desired result—a result that overrides the routine and conventional aspects
`
`of the technology.” 773 F.3d at 1258. We are not persuaded that the
`
`challenged claims specify interactions that depart from the routine use of the
`
`recited devices. Instead, we determine, based on the current record, that the
`
`17
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`claims merely apply conventional computer processes to restrict access to
`
`data based on payment.
`
`The differences between the challenged claims and those at issue in
`
`DDR Holdings are made clear by Smartflash in its tables mapping the
`
`challenged claims of the ’317 patent to claim 19 of the patent at issue in
`
`DDR Holdings. Prelim. Resp. 13–21. For example, claim 17 of the ’317
`
`patent recites “code to select access rule data for output with a data item in
`
`response to said payment data.” There is no language in this, or any other,
`
`limitation of claim 17, in any of the other challenged claims, or in the
`
`specification of the ’317 patent, that demonstrates that the generic computer
`
`components—“code to select . . . for output . . . in response to said payment
`
`data,” “access rule data,” “data item,” and “payment data”—function in an
`
`unconventional manner or employ sufficiently specific programming.
`
`Instead, the limitations, for example, like all the other limitations of the
`
`challenged claims, are “specified at a high level of generality,” which the
`
`Federal Circuit has found to be “insufficient to supply an inventive concept.”
`
`Ultramercial, 772 F.3d at 716.
`
`The limitation of claim 19 in DDR Holdings that Smartflash contends
`
`corresponds to the “code to select access rule data for output with a data
`
`item in response to said payment data” limitation from claim 17 of the ’317
`
`patent, recites “using the data retrieved, automatically generate and transmit
`
`to the web browser a second web page that displays: (A) information
`
`associated with the commerce object associated with the link that has been
`
`activated, and (B) the plurality of visually perceptible elements visually
`
`corresponding to the source page.” Prelim. Resp. 20–21. It was this
`
`limitation from claim 19 in DDR Holdings, according to the Federal Circuit,
`
`18
`
`

`
`CBM2015-00124
`Patent 7,942,317 B2
`
`that specifies “how interactions with the Internet are manipulated to yield a
`
`desired result—a result that overrides the routine and conventional sequence
`
`of events ordinarily triggered by the click of a hyperlink.” 773 F.3d at 1258.
`
`Importantly, the Federal Circuit identified this limitation as differentiating
`
`the DDR Holdings claims from those held to be unpatentable in
`
`Ultramercial, which “broadly and generically claim ‘use of the Internet’ to
`
`perform an abstract business practice (with insignificant added activity).”
`
`Id. We are persuaded, at this point in the proceeding, that the challenged
`
`claims are closer to the claims at issue in Ultramercial than to those at issue
`
`in DDR Holdings. The claims at issue in Ultramercial, like the challenged
`
`claims of the ’317 patent, were also directed

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