IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`Attorney Docket No:
`01980-00035-72001
`
`Petitioner: Google Inc.
`
`
`
`
`
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`In re Covered Business Method Review
`of:
`
`
`U.S. Patent No. 7,334,720
`
`
`Issued: February 26, 2008
`
`Inventors: Hermen-ard Hulst and
`Patrick Racz
`
`
`Application No. 11/336,758
`
`Filed: January 19, 2006
`
`For: DATA STORAGE AND
`ACCESS SYSTEMS
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF
`UNITED STATES PATENT NO. 7,334,720 PURSUANT TO 35 U.S.C. § 321
`AND § 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT
`
`
`
`
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S.P.T.O.
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`Attorney Docket No:
`01980-00035-72001
`
`Petitioner: Google Inc.
`
`
`
`
`
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`In re Covered Business Method Review
`of:
`
`
`U.S. Patent No. 7,334,720
`
`
`Issued: February 26, 2008
`
`Inventors: Hermen-ard Hulst and
`Patrick Racz
`
`
`Application No. 11/336,758
`
`Filed: January 19, 2006
`
`For: DATA STORAGE AND
`ACCESS SYSTEMS
`
`PETITION FOR COVERED BUSINESS METHOD PATENT REVIEW OF
`UNITED STATES PATENT NO. 7,334,720 PURSUANT TO 35 U.S.C. § 321
`AND § 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT
`
`
`
`
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S.P.T.O.
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`INTRODUCTION ........................................................................................... 1
`
`II.
`
`PETITIONER HAS STANDING .................................................................... 2
`
`A.
`
`THE ’720 PATENT IS A COVERED BUSINESS METHOD
`PATENT ................................................................................................ 2
`
`1.
`
`2.
`
`The Board Has Already Found That Claim 14 Qualifies
`The ’720 Patent As A CBM Patent ............................................. 3
`
`Claim 15 Also Qualifies The ’720 Patent As A CBM
`Patent ........................................................................................... 4
`
`(a) Claim 15 Covers Subject Matter That Is Financial
`In Nature ........................................................................... 5
`
`(b) Claim 15 Does Not Cover A Technological
`Invention ........................................................................... 7
`
`III. MANDATORY NOTICES UNDER 37 C.F.R. § 42.8(A)(1) ........................ 9
`
`A.
`
`B.
`
`C.
`
`PETITIONER IS A REAL PARTY IN INTEREST SUED FOR
`AND CHARGED WITH INFRINGEMENT ....................................... 9
`
`RELATED MATTERS UNDER 37 C.F.R. § 42.8(B)(2) .................... 9
`
`LEAD AND BACKUP COUNSEL UNDER 37 C.F.R. §
`42.8(B)(2) ............................................................................................ 10
`
`IV. PAYMENT OF FEES ................................................................................... 10
`
`V.
`
`CLAIM CONSTRUCTION .......................................................................... 10
`
`A.
`
`B.
`
`C.
`
`“DATA CARRIER” ............................................................................ 12
`
`“USE RULE(S)” AND “ACCESS RULE(S)” .................................... 13
`
`“NON-VOLATILE DATA MEMORY” AND “NON-
`VOLATILE PARAMETER MEMORY” ........................................... 15
`
`
`
`i
`
`
`
`
`
`
`
`D.
`
`“PAYMENT DATA” .......................................................................... 16
`
`E.
`
`F.
`
`“PAYMENT VALIDATION SYSTEM” ........................................... 17
`
`“PAYMENT VALIDATION DATA” ................................................ 18
`
`VI. THE CHALLENGED CLAIMS ARE UNPATENTABLE UNDER 35
`U.S.C. § 101 ................................................................................................... 19
`
`A.
`
`THE CHALLENGED CLAIMS ARE DIRECTED TO A
`PATENT-INELIGIBLE ABSTRACT IDEA ..................................... 21
`
`1.
`
`2.
`
`The Challenged Claims Are Directed To The Abstract
`Idea Of Controlling Access To Something Based On One
`Or More Conditions .................................................................. 22
`
`The Abstract Idea Of Controlling Access To Something
`Based On One Or More Conditions Is Not Patentable ............. 26
`
`B.
`
`THE CHALLENGED CLAIMS DO NOT DISCLOSE AN
`“INVENTIVE CONCEPT” THAT IS “SIGNIFICANTLY
`MORE” THAN AN ABSTRACT IDEA ............................................ 28
`
`1.
`
`2.
`
`Field Of Use Limitations Cannot Transform Abstract
`Ideas Into Patent Eligible Inventions ........................................ 28
`
`Tangential References To Generic Computer
`Implementation Cannot Transform Abstract Ideas Into
`Patent Eligible Inventions ......................................................... 29
`
`C.
`
`D.
`
`PREEMPTION CONCERNS CONFIRM PATENT
`INELIGIBILITY ................................................................................. 33
`
`THE MACHINE-OR-TRANSFORMATION TEST
`CONFIRMS PATENT INELIGIBILITY ........................................... 34
`
`VII. CONCLUSION .............................................................................................. 34
`
`
`
`
`ii
`
`
`
`Exhibit No.
`1001
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`
`
`
`
`
`
`EXHIBIT LIST
`
`Description
`
`U.S. Patent No. 7,334,720 to Hulst et al. (“the ’720 patent”)
`
`Declaration of Dr. Justin Douglas Tygar Regarding the ’720
`Patent
`
`Curriculum Vitae of Dr. Justin Douglas Tygar
`
`PCT Publication No. WO 99/07121 (“Fetik”)
`
`U.S. Patent No. 5,790,423 to Lau et al. (“the ’423 patent”)
`
`SOFTBOOK PRESS—Secure Information Delivery to a
`Distributed Workforce, CIO Magazine, Aug. 1, 1999
`
`Kevin Maney, Electronic Books to Hit the Shelves, New Straits
`Times (Computimes), Aug. 24, 1998
`
`Liquid Audio, Music on the Net—A Topographic Tour of the
`Online Music World (1997)
`
`Liquid Audio Indie 1000 Program, http://www.liquidaudio.com
`(archived Feb. 11, 1998)
`
`Reserved
`
`Report and Recommendation Regarding Claim Construction,
`Smartflash LLC v. Samsung Elecs. Co., No. 6:13-cv-448, Dkt.
`274 (E.D. Tex. Sept. 24, 2014)
`
`Plaintiffs Smartflash LLC’s and Smartflash Technologies
`Limited’s Opening Claim Construction Brief, Smartflash LLC v.
`Samsung Elecs. Co., No. 6:13-cv-448, Dkt. 175 (E.D. Tex. June
`13, 2014)
`
`Supplemental Memorandum Opinion and Order Regarding
`Claim Construction, Smartflash LLC v. Samsung Elecs. Co., No.
`6:13-cv-448, Dkt. 467 (E.D. Tex. Jan. 26, 2015)
`
`A.M. Turing, On Computable Numbers, with an Application to
`the Entscheidungsproblem, Proceedings of the London
`Mathematical Society, Vol. 42:2, pp. 230-265 (Nov. 12, 1936)
`
`iii
`
`
`
`Exhibit No.
`1015
`
`1016
`
`1017
`
`1018
`
`1019
`
`1020
`
`1021
`
`1022
`
`1023
`
`1024
`
`1025
`
`1026
`
`
`
`Description
`
`Plaintiffs’ Original Complaint for Patent Infringement,
`Smartflash LLC v. Apple Inc., No. 6:13-cv-447, Dkt. 1 (E.D. Tex.
`May 29, 2013)
`
`U.S. Patent No. 7,334,720 Claim Chart—Google (Android),
`Exhibit 1 to Plaintiffs Smartflash LLC and Smartflash
`Technologies Limited’s P.R. 3-1 and 3-2 Disclosure of Asserted
`Claims and Infringement Contentions, Smartflash LLC v. Google
`Inc., No. 6:14-cv-435 (E.D. Tex. Aug. 22, 2014) (excerpted)
`
`Reserved
`
`U.S. Patent No. 7,942,317 to Racz et al. (“the ’317 patent”)
`
`U.S. Patent No. 8,033,458 to Hulst et al. (“the ’458 patent”)
`
`U.S. Patent No. 8,061,598 to Racz et al. (“the ’598 patent”)
`
`U.S. Patent No. 8,118,221 to Racz et al. (“the ’221 patent”)
`
`Roger A. Cunningham et al., The Law of Property (2d ed. 1993)
`(excerpted)
`
`Michael H. Harris, History of Libraries in the Western World,
`(4th ed. 1999) (excerpted)
`
`David Broderick, The First Toll Roads—Ireland’s Turnpike
`Roads 1729-1858 (2002) (excerpted)
`
`James Nicholls, The Politics of Alcohol—A History of the Drink
`Question in England, Kindle ed. (2009) (excerpted)
`
`Jeffrey C. Price & Jeffrey S. Forrest, Practical Aviation
`Security—Predicting and Preventing Future Threats, Kindle ed.
`(2d ed. 2013) (excerpted)
`
`iv
`
`
`
`
`
`
`
`
`
`
`
`I.
`
`INTRODUCTION
`
`
`
`Pursuant to 35 U.S.C. § 321 and 37 C.F.R. § 42.304, the undersigned, on
`
`behalf of and acting in a representative capacity for petitioner Google Inc., hereby
`
`petitions for review under the transitional program for covered business method
`
`patents of method claims 1 and 15 of U.S. Patent No. 7,334,720 (“challenged
`
`claims”), issued to Smart-Flash Limited and currently assigned to Smartflash LLC
`
`(the patent holder). Petitioner hereby asserts that it is more likely than not that
`
`both of the challenged claims are unpatentable for the reasons set forth herein and
`
`respectfully requests review of, and judgment against, claims 1 and 15 as
`
`unpatentable under 35 U.S.C. § 101.
`
`The subject matter of the challenged claims is ineligible for patenting
`
`pursuant to controlling precedents from the Supreme Court, the Federal Circuit,
`
`and the Board. The challenged claims are explicitly drawn to the abstract idea of
`
`controlling access based on one or more conditions (such as payment). The claims
`
`recite method steps inherent in that abstract idea, such as receiving a request for
`
`access, evaluating one or more conditions for access (such as whether payment has
`
`been made), and displaying whether access is permitted. The challenged claims
`
`contain no inventive, technological limitations concerning how to perform or
`
`implement the claimed methods; at most, the claims simply convey that those
`
`
`
`1
`
`
`
`
`
`
`
`methods—which have been a staple of commerce for more than a century—could
`
`be performed on a generic computer.
`
`For these reasons, among others, the Board has already determined that two
`
`claims of the ’720 patent (claims 13 and 14)—and fifteen claims of related
`
`patents—“are more likely than not drawn to a patent-ineligible abstract idea” and
`
`are thus “unpatentable under 35 U.S.C. § 101.” E.g., Samsung Elecs. Am., Inc. v.
`
`Smartflash LLC, CBM2014-00190, Paper 9 at 13, 16 (P.T.A.B. Apr. 2, 2015). The
`
`Board should reach the same conclusion with respect to the challenged claims here.
`
`II.
`
`PETITIONER HAS STANDING
`
`A. THE ’720 PATENT IS A COVERED BUSINESS METHOD
`PATENT
`
`The ’720 patent is a “covered business method patent” under Section
`
`18(d)(1) of the Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29,
`
`125 Stat. 284, 329-31 (2011), and petitioner certifies that it is available for review
`
`under Section 42.304(a).
`
`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); 37 C.F.R. § 42.301(a). “The legislative history explains that the
`
`definition of covered business method patent was drafted to encompass patents
`
`
`
`2
`
`
`
`
`
`
`
`‘claiming activities that are financial in nature, incidental to a financial activity or
`
`complementary to a financial activity.’” Transitional Program for Covered
`
`Business Method Patents—Definitions of Covered Business Method Patent and
`
`Technological Invention (“CBM Definitions”), 77 Fed. Reg. 48,734, 48,735 (Aug.
`
`14, 2012) (quoting 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of
`
`Sen. Schumer)). “Financial product or service” is interpreted broadly: for
`
`example, the term “financial . . . simply means relating to monetary matters” and
`
`does not require any link to traditional financial industries such as banks. E.g.,
`
`SAP Am., Inc. v. Versata Dev. Grp., Inc., CBM2012-00001, Paper 36 at 23
`
`(P.T.A.B. Jan. 9, 2013).
`
`1.
`
`The Board Has Already Found That Claim 14 Qualifies The
`’720 Patent As A CBM Patent
`
`The Board has already (and repeatedly) determined “that the ’720 patent is a
`
`covered business method patent under AIA § 18(d)(1) and is eligible for review
`
`under the transitional covered business method patent program.” Samsung,
`
`CBM2014-00190, Paper 9 at 11; see also, e.g., Apple Inc. v. Smartflash LLC,
`
`CBM2014-00104, Paper 9 at 13 (P.T.A.B. Sept. 30, 2014). In so finding, the
`
`Board focused on claim 14 of the ’720 patent. Specifically, the Board found that
`
`claim 14 satisfies “the financial in nature requirement of § 18(d)(1)” because
`
`“payment data is recited” in that claim. Samsung, CBM2014-00190, Paper 9 at 9.
`
`And the Board found that “claim 14 is merely the recitation of a combination of
`
`
`
`3
`
`
`
`
`
`
`
`known technologies, which indicates that it is not a claim for a technological
`
`invention.” Id. at 10; see also id. at 11 (“[W]e conclude that claim 14 does not
`
`recite a technological invention and is eligible for a covered business method
`
`patent review.”). Based on the Board’s prior conclusions with respect to claim 14,
`
`the ’720 patent should be found eligible for review under the transitional covered
`
`business method patent program. See CBM Definitions, 77 Fed. Reg. at 48,736
`
`(noting that a patent qualifies as a CBM patent if even one claim is directed to a
`
`covered business method).
`
`2.
`
`Claim 15 Also Qualifies The ’720 Patent As A CBM Patent
`
`Although the Board’s previous findings with respect to claim 14 are
`
`sufficient to establish the ’720 patent as a CBM patent here, challenged claim 15
`
`further supports the same conclusion. Claim 15 recites:
`
`15. A method of providing data from a data supplier
`
`according to claim 14 further comprising:
`
`receiving payment validation data from the payment
`
`validation system; and
`
`transmitting at least a portion of the payment
`
`validation data to the data supplier.
`
`And claim 14, from which challenged claim 15 depends, recites:
`
`14. A method of providing data from a data supplier to a
`
`data carrier, the method comprising:
`
`reading payment data from the data carrier;
`
`
`
`4
`
`
`
`
`
`
`
`forwarding the payment data to a payment validation
`
`system;
`
`retrieving data from the data supplier;
`
`writing the retrieved data into the data carrier;
`
`receiving at least one access rule from the data supplier;
`
`and
`
`writing the at least one access rule into the data carrier,
`
`the at least one access rule specifying at least one
`
`condition for accessing the retrieved data written into the
`
`data carrier, the at least one condition being dependent
`
`upon the amount of payment associated with the
`
`payment data forwarded to the payment validation
`
`system.
`
`Because claim 15 is directed to subject matter that is both financial in nature and
`
`devoid of any technological invention, the ’720 patent is eligible for review under
`
`the transitional covered business method patent program.
`
`(a) Claim 15 Covers Subject Matter That Is Financial In
`Nature
`
`The ’720 patent relates to the idea of providing data in exchange for
`
`payment and controlling access to data based on one or more conditions (such as
`
`payment). Ex. 1001 at 1:60-2:3. Indeed, the specification of the ’720 patent
`
`emphasizes payment in describing the purported invention. Id. at 1:46-55
`
`(“According to the present invention there is therefore provided a method of
`
`
`
`5
`
`
`
`
`
`
`
`providing portable data comprising . . . payment validation means; . . . reading
`
`payment information from the payment validation means using the terminal;
`
`validating the payment information; . . . .”); see also id. at 6:59-63 (noting that the
`
`“payment data” forwarded to the “payment validation system” “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 21:6-8 (“Payment for the data
`
`item or items requested may either be made directly to the system owner or may be
`
`made to an e-payment system. . . .”); id. at 13:46-58 (explaining that “[e]-payment
`
`systems . . . are coupled to banks” and may be provided in accordance with
`
`“MONDEX, Proton, and/or Visa cash compliant standards”); id. at 2:4-19, 3:19-
`
`27, 3:48-54, 7:62-8:9, 8:21-35 (emphasizing that the purported invention involves
`
`controlling access to data based on payment validation). Indeed, in seeking to
`
`enforce the ’720 patent in litigation, the patent holder conceded that the alleged
`
`invention relates to a financial activity or transaction, stating that “the patents-in-
`
`suit generally cover a portable data carrier for storing data and managing access to
`
`the data via payment information and/or use status rules.” Ex. 1015 at ¶ 1.
`
`Claim 15 explicitly describes forwarding payment information, receiving
`
`payment validation data from a payment validation system, and transmitting that
`
`payment validation data. It thus clearly claims activities that are “financial in
`
`nature, incidental to a financial activity or complementary to a financial activity.”
`
`
`
`6
`
`
`
`
`
`
`
`CBM Definitions, 77 Fed. Reg. at 48,735 (quoting 157 Cong. Rec. S5432 (daily
`
`ed. Sept. 8, 2011) (statement of Sen. Schumer)); Samsung, CBM2014-00190,
`
`Paper 9 at 8 (“We are persuaded that payment validation is a financial activity, and
`
`conditioning data access based on payment validation amounts to a financial
`
`service.”).
`
`(b) Claim 15 Does Not Cover A Technological Invention
`
`Claim 15 of the ’720 patent does not describe a “technological invention,”
`
`because it 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.” 37 C.F.R. § 42.301(b). Accordingly, the ’720
`
`patent does not fall into the sole statutory exception that would remove it from the
`
`definition of a covered business method patent. AIA § 18(d)(1).
`
`As an initial matter, no “technological feature” of claim 15 is “novel and
`
`unobvious.” See Ex. 1002 at ¶¶ 63-67. “Mere recitation of known technologies,
`
`such as computer hardware, communication or computer networks, software,
`
`memory, computer-readable storage medium, scanners, display devices or
`
`databases, or specialized machines, such as an ATM or point of sale device” will
`
`“not typically render a patent a technological invention.” Office Patent Trial
`
`Practice Guide, 77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012). The sole
`
`“technological feature” recited in claim 15 is a “data carrier.” The ’720 patent
`
`
`
`7
`
`
`
`
`
`
`
`confirms that a “data carrier” is in no way novel or unobvious, explaining that a
`
`“data carrier” may be a “standard smart card,” an “electronic memory card,” or “an
`
`IC card . . . incorporating a processor and Flash data memory.” Ex. 1001 at 3:29,
`
`11:37-38, 17:25-28. Indeed, the patent holder has argued that a “data carrier” is no
`
`more than a generic “medium capable of storing information.” Ex. 1011 at 19-20;
`
`Ex. 1012 at 21-22; see Ex. 1002 at ¶ 49. And the ’720 patent specification
`
`confirms that “the asserted novelty of the [alleged] invention is not in any specific
`
`improvement of software or hardware.” Samsung, CBM2014-00190, Paper 9 at
`
`10. Because claim 15 does not recite any technological feature that is novel and
`
`unobvious over the prior art, claim 15 is not a claim for a technological invention.
`
`Moreover, the subject matter of claim 15 does not solve “a technical
`
`problem using a technical solution.” 37 C.F.R. § 42.301(b). The ’720 patent
`
`purportedly solves a business problem—namely, the problem of consumers
`
`accessing content (like videos and music) without paying for it. Ex. 1001 at 1:26-
`
`41. Indeed, the ’720 patent states that “there is an urgent need to find a way to
`
`address the problem of data piracy” (i.e., a business problem), while
`
`simultaneously acknowledging that the “physical embodiment of the system” for
`
`solving that problem “is not critical” (i.e., the solution is not a technical one). Id.
`
`at 1:40-41, 12:38-41. Thus, for this reason as well, claim 15 does not recite a
`
`
`
`8
`
`
`
`
`
`
`
`technological invention, and the ’720 patent is eligible for a covered business
`
`method patent review.
`
`III. MANDATORY NOTICES UNDER 37 C.F.R. § 42.8(A)(1)
`
`A.
`
`PETITIONER IS A REAL PARTY IN INTEREST SUED FOR
`AND CHARGED WITH INFRINGEMENT
`
`Petitioner Google is a real party-in-interest. The patent holder’s complaint
`
`in Smartflash LLC, et al. v. Google Inc., et al., No. 6:14-cv-435, pending in the
`
`Eastern District of Texas, asserts the ’720 patent against the petitioner.
`
`B. RELATED MATTERS UNDER 37 C.F.R. § 42.8(B)(2)
`
`The patent holder has also asserted the ’720 patent in the following cases to
`
`which petitioner is not a party: Smartflash LLC, et al. v. Apple Inc., et al., No.
`
`6:13-cv-447 (E.D. Tex.), Smartflash LLC, et al. v. Samsung Electronics Corp. Ltd.,
`
`et al., No. 6:13-cv-448 (E.D. Tex.), Smartflash LLC, et al. v. Amazon.com, Inc.,
`
`No. 6:14-cv-992 (E.D. Tex.), and Smartflash LLC, et al. v. Apple Inc., No. 6:15-cv-
`
`145 (E.D. Tex.). Petitioner identifies the following administrative matters,
`
`including patent to which the ’720 patent claims the benefit of priority: App’n No.
`
`10/111,716 (filed as No. PCT/GB00/4110); CBM Nos. CBM2014-00104,
`
`CBM2014-00105, CBM2015-00028, CBM2015-00029, and CBM2015-00118,
`
`filed by Apple Inc.; and CBM Nos. CBM2014-00190 and CBM2014-00196 filed
`
`by Samsung Electronics America, Inc., Samsung Electronics Co., Ltd., and
`
`Samsung Telecommunications America, LLC (“Samsung”).
`
`
`
`9
`
`
`
`
`
`
`
`C. LEAD AND BACKUP COUNSEL UNDER 37 C.F.R. § 42.8(B)(2)
`
`Petitioner designates Raymond N. Nimrod (Reg. No. 31,987) as Lead
`
`Counsel and Charles K. Verhoeven (pro hac vice motion to be filed), Melissa J.
`
`Baily (pro hac vice motion to be filed), and Andrew M. Holmes (Reg. No. 64,718)
`
`as Backup Counsel. Petitioner may be served at Quinn Emanuel Urquhart &
`
`Sullivan, LLP, 50 California Street, 22nd Floor, San Francisco, California 94111
`
`(Tel: 415-875-6600; Fax: 415-875-6700) or by electronic service at the address
`
`QE-SF-PTAB-Service@quinnemanuel.com.
`
`IV. PAYMENT OF FEES
`
`Petitioner authorizes charges to Deposit Account No. 505708 for the fee set
`
`in 37 C.F.R. § 42.15(b) for this Petition and any related additional fees.
`
`V. CLAIM CONSTRUCTION
`
`
`
`The challenged claims must be given their broadest reasonable
`
`interpretations (“BRI”). 37 C.F.R. § 42.300(b). When there is co-pending
`
`litigation regarding the challenged claims, the patent owner’s litigation positions
`
`regarding claim scope are instructive, especially where those positions support a
`
`broad reading of the claims. See, e.g., SAP Am., Inc. v. Versata Dev. Grp., Inc.,
`
`CBM2012-00001, Paper 70 at 19-24 (P.T.A.B. June 11, 2013). Any constructions
`
`adopted by a district court are also highly relevant because it would be
`
`“incongruous to adopt a narrower construction in [a post-grant proceeding],
`
`wherein the claims are construed using the broadest reasonable interpretation
`
`
`
`10
`
`
`
`
`
`
`
`standard, than was adopted in [a district court], in which a narrower, Phillips
`
`construction standard applied.” Ariosa Diagnostics v. Isis Innovation Ltd.,
`
`IPR2012-00022, Paper 166 at 24 (P.T.A.B. Sept. 2, 2014); Foursquare Labs Inc. v.
`
`Silver State Intellectual Techs., Inc., IPR2014-00159, Paper 13 at 3-4 (P.T.A.B.
`
`Aug. 1, 2014) (revisiting and broadening a previous construction to be at least as
`
`broad as the district court’s construction).
`
`
`
`In light of these principles, any constructions adopted in this proceeding
`
`should be at least as broad as those adopted by the district court in Smartflash LLC,
`
`et al. v. Samsung Electronics Co., Ltd., et al., No. 6:13-cv-448 (E.D. Tex.) and
`
`Smartflash LLC, et al. v. Apple Inc., et al., No. 6:13-cv-447 (E.D. Tex.).1 Ariosa,
`
`IPR2012-00022, Paper 166 at 24; Foursquare, IPR2014-00159, Paper 13 at 3-4.
`
`Moreover, any constructions adopted in this proceeding should be heavily
`
`informed by the patent holder’s positions in its various district court actions, as the
`
`patent holder should not be permitted to both wield broad constructions in an
`
`attempt to establish infringement in the district court and simultaneously seek to
`
`
`1 Because the standard for claim construction here is different than the
`
`standard used in litigation, Google expressly reserves the right to argue in litigation
`
`a different claim construction for any term in the ’720 patent, as appropriate to that
`
`proceeding. See In re Am. Acad. of Sci. Tech. Ctr., 367 F.3d 1359, 1364, 1369
`
`(Fed. Cir. 2004); MPEP § 2111.
`
`
`
`11
`
`
`
`
`
`
`
`establish validity using narrower constructions here. See SAP, CBM2012-00001,
`
`Paper 70 at 20 n.16, 23; Ariosa, IPR2012-00022, Paper 166 at 24; Foursquare,
`
`IPR2014-00159, Paper 13 at 3-4. For these reasons and those noted below, the
`
`Board should adopt the following constructions for the terms “data carrier,” “use
`
`rule,” “access rule,” “use status data,” “non-volatile data memory storing content”
`
`and “non-volatile parameter memory storing use status data and use rules,”
`
`“payment data,” “payment validation system,” and “payment validation data.”
`
`A.
`
`“DATA CARRIER”
`
`
`
`The term “data carrier” is recited in both of the challenged claims. Although
`
`the Board did not find it necessary to expressly construe “data carrier” in
`
`connection with its previous finding that certain claims of the ’720 patent are more
`
`likely than not invalid under Section 101, the Board noted that “[t]he claimed data
`
`carrier . . . is a generic hardware device known in the prior art.” Samsung,
`
`CBM2014-00190, Paper 9 at 10 (noting that the specification of the ’720 patent
`
`discloses that a data carrier “may be a ‘standard smart card’”) (citing Ex. 1001 at
`
`11:36-39).
`
`
`
`It should also be noted that, in the Samsung and Apple district court
`
`proceedings, the patent holder contended that the “data carrier” claimed in the ’720
`
`patent encompasses any “medium capable of storing information.” Ex. 1012 at 17-
`
`22. The district court agreed, noting that a “data carrier” need not be limited to any
`
`
`
`12
`
`
`
`
`
`
`
`particular physical structure. Ex. 1011 at 19-22. And in the Google district court
`
`action, the patent holder has continued to assert that
`
`
`
` E.g.,
`
`Ex. 1016 at 191-92, 237, 409.
`
`
`
`In light of the Board’s previous observations, the district court’s construction
`
`in the Samsung and Apple actions, the patent holder’s litigation position vis-à-vis
`
`the petitioner in the Google action, and the BRI standard applicable here, the Board
`
`should construe “data carrier” to mean: “any medium, regardless of structure, that
`
`is capable of storing information.” See Ex. 1002 at ¶¶ 48-51.
`
`B.
`
`“USE RULE(S)” AND “ACCESS RULE(S)”
`
`
`
`Challenged claim 1 of the ’720 patent recites the term “use rules,” and
`
`challenged claim 15 of the ’720 patent recites the term “access rule.” The Board
`
`has previously found that “use rule” and “access rule” should be given the same
`
`construction: a rule “specifying a condition under which access to content is
`
`permitted.” E.g., Samsung Elecs. Am., Inc. v. Smartflash LLC, CBM2014-00192,
`
`Paper 7 at 6-7 (P.T.A.B. Apr. 2, 2015); Samsung Elecs. Am., Inc. v. Smartflash
`
`LLC, CBM2014-00194, Paper 9 at 6-7 (P.T.A.B. Mar. 30, 2015). Using that
`
`construction for “use rule” and “access rule,” the Board has found that numerous
`
`claims in patents sharing the same specification as the ’720 patent are more likely
`
`than not invalid under Section 101. E.g., Samsung, CBM2014-00192, Paper 7 at 2
`
`
`
`13
`
`
`
`
`
`
`
`(claim 11 of the ’458 patent); Samsung Elecs. Am., Inc. v. Smartflash LLC,
`
`CBM2014-00193, Paper 7 at 2 (P.T.A.B. Apr. 2, 2015) (claim 7 of the ’598
`
`patent); Samsung, CBM2014-00194, Paper 9 at 3 (claim 32 of the ’221 patent);
`
`Apple Inc. v. Smartflash LLC, CBM2015-00016, Paper 23 at 2 (P.T.A.B. Apr. 10,
`
`2015) (claims 6, 8, and 10 of the ’458 patent); Apple Inc. v. Smartflash LLC,
`
`CBM2015-00017, Paper 22 at 2 (P.T.A.B. Apr. 10, 2015) (claims 1, 2, 15, and 31
`
`of the ’598 patent). Under that same construction for “use rule” and “access rule,”2
`
`the challenged claims of the ’720 patent are also invalid under Section 101. See
`
`infra Part VI.
`
`
`2 Petitioner notes that the Board’s previous construction of “use rule” and
`
`“access rule” is much more narrow than the patent holder’s interpretation of the
`
`same claim terms in the context of its district court infringement actions. (Notably,
`
`the patent holder has obtained a jury verdict of infringement against Apple based
`
`on its much broader interpretation of “use rule” and “access rule.”) Nonetheless,
`
`because the challenged claims are invalid for failing to claim patent eligible subject
`
`matter under the Board’s more narrow construction (and hence also under any
`
`broader construction), the Board’s previous construction is adopted here.
`
`
`
`14
`
`
`
`
`
`
`
`
`
`C.
`
`“NON-VOLATILE DATA MEMORY” AND “NON-VOLATILE
`PARAMETER MEMORY”
`
`Challenged claim 1 recites the phrase “non-volatile data memory storing
`
`content and non-volatile parameter memory storing use status data and use rules.”
`
`In the Samsung and Apple actions, the district court construed “non-volatile data
`
`memory” and “parameter memory” according to their plain meanings. Ex. 1011 at
`
`19; Ex. 1013 at 11. The district court made clear that the two recited non-volatile
`
`memories need not be physically separate from one another, finding that “content”
`
`need only be “logically separate” from the “use status data” / “use rules” within a
`
`single non-volatile memory in order to satisfy the entire limitation. Id. According
`
`to the patent holder, “any degree of separation satisfies the [logically separate]
`
`requirement,” even where parameters and content are stored in a single archive file
`
`and even where a generic non-volatile memory device randomly stores content at
`
`one memory address and parameters at another. See Ex. 1013 at 8.
`
`
`
`In light of the district court’s opinion in the Samsung and Apple actions, the
`
`patent holder’s litigation position regarding the claimed non-volatile memories,
`
`and the BRI standard applicable here, the Board should construe the phrase “non-
`
`volatile data memory storing content and non-volatile parameter memory storing
`
`use status data and use rules” as “any generic non-volatile memory device or
`
`devices capable of assigning (randomly or otherwise) content and rules to different
`
`memory addresses.” See Ex. 1002 at ¶¶ 52-56.
`
`
`
`15
`
`
`
`
`
`D.
`
`“PAYMENT DATA”
`
`Challenged claim 15 of the ’720 patent recites the term “payment data.” The
`
`
`
`
`
`Board has not found it necessary to expressly construe “payment data” in
`
`connection with its previous findings that numerous claims in the ’720 patent and
`
`related patents are more likely than not invalid under Section 101. E.g., Samsung,
`
`CBM2014-00190, Paper 9 at 11-16.
`
`
`
`Nonetheless, the breadth of the patent holder’s and the district court’s
`
`construction of the term “payment data” is worth noting here. In the Samsung and
`
`Apple actions, at the patent holder’s urging, the district court construed “payment
`
`data” to mean “data that can be used to make a payment for content.” Ex. 1011 at
`
`11. In arriving at this construction, the district court stated that “[t]he specification
`
`and cited claim language use payment data broadly to refer to whatever data is
`
`being used ‘for making a payment.’” Id. (citing the ’720 patent specification at
`
`21:15). In the Google district court action, the patent holder has asserted that
`
`
`
`
`
`
`
` E.g., Ex. 1016 at 293.
`
`
`
`In light of the district court’s construction in the Samsung and Apple actions,
`
`the patent holder’s litigation position vis-à-vis the petitioner in the Google district
`
`court proceedings, and the BRI standard applicable here, the Board should construe
`
`
`
`16
`
`
`
`
`
`
`
`“payment data” to mean: “any information that can be used in connection with the
`
`process of making a payment for content.” See Ex. 1002 at ¶¶ 38-40.
`
`E.
`
`“PAYMENT VALIDATION SYSTEM”
`
`
`
`Challenged claim 15 of the ’720 patent recites the term “payment validation
`
`system.” Although the Board did not find it necessary to expressly construe
`
`“payment validation system” in connection with its previous finding that certain
`
`claims of the ’720 patent are more likely than not invalid under Section 101, the
`
`Board noted that the specification of the ’720 patent “discloses that the required
`
`payment validation system may be one that is already in use or otherwise
`
`available.” Samsung, CBM2014-00190, Paper 9 at 10 (noting that the
`
`specification of the ’720 patent discloses that a “[t]he payment validation system
`
`may be part of the data supplier’s computer systems or it may be a separate e-
`
`payment system”) (quoting Ex. 1001 at 8:64-66).
`
`
`
`It should also be noted that in the Samsung and Apple actions, the district
`
`court construed “payment validation system” broadly to mean a “system that
`
`returns payment validation data based on an attempt to validate payment data.”
`
`Ex. 1011 at 11-14. And in the Google district court proceedings, the patent holder
`
`has identified
`
` E.g., Ex. 1016 at 293.
`
`
`
`17
`
`
`
`
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
