UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`GOOGLE INC.,
`
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`
`Patent Owner.
`
`____________
`
`Case CBM2015-00125
`
`Patent 7,334,720 B2
`
`____________
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`GOOGLE INC.,
`
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`
`Patent Owner.
`
`____________
`
`Case CBM2015-00125
`
`Patent 7,334,720 B2
`
`____________
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`
`PATENT OWNER’S LIST OF EXHIBITS ............................................................ iii
`
`INTRODUCTION ........................................................................................... 1
`
`OVERVIEW OF U.S. PATENT NO. 7,334,720 ............................................ 4
`
`III. THE BOARD SHOULD EXERCISE ITS DISCRETION UNDER 35
`U.S.C. § 325(D) AND DECLINE TO INSTITUTE COVERED BUSINESS
`METHOD PATENT REVIEW ....................................................................... 7
`
`IV. THE CLAIMS ARE STATUTORY ............................................................... 9
`A.
`The Two-Part Test for Statutory Subject Matter .................................. 9
`The Claims Are Statutory Under Mayo and Alice .............................. 10
`B.
`C.
`Claims 1 and 15 Do Not Result in Inappropriate Preemption ............ 13
`Preemption under DDR Holdings ............................................. 13
`1.
`Preemption under Mayo and Alice ............................................ 16
`2.
`3.
`Non-Infringing Alternatives Show a Lack of Preemption ........ 17
`4. The Challenged Claims are Distinguishable from the Claims in
`Ariosa Diagnostics .................................................................... 19
`
`
`V. A FEDERAL COURT HAS ALREADY FOUND CLAIMS 1 AND 15 OF
`THE ‘720 PATENT TO BE STATUTORY UNDER § 101 ........................ 22
`
`VI. THE USPTO IS ESTOPPED FROM REVISITING THE ISSUE OF
`WHETHER THE CLAIMS ARE DIRECTED TO STATUTORY SUBJECT
`MATTER ....................................................................................................... 23
`
`INVALIDATING PATENT CLAIMS VIA CBM REVIEW IS
`UNCONSTITUTIONAL ............................................................................... 24
`
`VIII. SECTION 101 IS NOT A GROUND THAT MAY BE RAISED IN
`COVERED BUSINESS METHOD PATENT REVIEW ............................. 26
`
`VII.
`
`
`
`- i -
`
`
`
`
`IX. THE CHALLENGED CLAIMS ARE NOT DIRECTED TO A
`FINANCIAL PRODUCT OR SERVICE ...................................................... 28
`
`THE CHALLENGED CLAIMS OF THE ‘720 PATENT ARE
`TECHNOLOGICAL INVENTIONS EXEMPT FROM CBM REVIEW .... 33
`
`XI. CONCLUSION .............................................................................................. 35
`
`X.
`
`
`
`
`
`- ii -
`
`
`
`PATENT OWNER’S LIST OF EXHIBITS
`
`Exhibit Number
`
`Exhibit Description
`
`2001
`
`2002
`
`Congressional Record - House, June 23, 2011, H4480-4505
`
`Congressional Record - Senate, Sep. 8, 2011, S5402-5443
`
`2003-2048
`
`Reserved
`
`2049
`
`2050
`
`Report and Recommendation (on Defendants’ Motions for
`Summary Judgment of Invalidity Pursuant to 35 U.S.C. 101),
`from Smartflash LLC et al. v. Apple, Inc., et al., Case No.
`6:13-CV-447 (E.D. Tex.) and Smartflash LLC et al. v.
`Samsung Electronics Co. Ltd, et al., Case No. 6:13-CV-448
`(E.D. Tex.), dated Jan. 21, 2015
`
`Order adopting Report and Recommendation (on
`Defendants’ Motions for Summary Judgment of Invalidity
`Pursuant to 35 U.S.C. 101), from Smartflash LLC et al. v.
`Apple, Inc., et al., Case No. 6:13-CV-447 (E.D. Tex.) and
`Smartflash LLC et al. v. Samsung Electronics Co. Ltd, et al.,
`Case No. 6:13-CV-448 (E.D. Tex.), dated Feb. 13, 2015
`
`2051-2074
`
`Reserved
`
`2075
`
`2076
`
`
`
`Order (on Defendants’ Renewed Motion for Judgment as a
`Matter of Law on the Issue of § 101 under Rule 50(b)); Dkt.
`# 585; from Smartflash LLC, et al. v. Apple Inc., et al., Case
`No. 6:13-CV-447 (E.D. Tex.) dated July 8, 2015.
`
`Deposition Transcript of Anthony J. Wechselberger dated
`July 22, 2015 taken in CBM2015-00028, -00029, -00031, -
`
`- iii -
`
`
`
`Exhibit Number
`
`Exhibit Description
`
`00032 and -00033
`
`2077-2086
`
`Reserved
`
`2087
`
`Declaration of Emily E. Toohey in Support of Patent
`Owner’s Preliminary Response
`
`
`
`
`
`- iv -
`
`
`
`Pursuant to 37 C.F.R. § 42.107, Smartflash LLC (“Patent Owner”) files this
`
`preliminary response to the petition, setting forth reasons why no new covered
`
`business method review of U.S. Patent 7,334,720 should be instituted as requested
`
`by Google Inc. (“Google” or “Petitioner”). Arguments presented herein are
`
`presented without prejudice to presenting additional arguments in a later response
`
`should the Board institute a CBM review.
`
`
`
`I.
`
`INTRODUCTION
`
`Petitioner Google seeks covered business method (CBM) review of claims 1
`
`and 15 of U.S. Patent No. 7,334,720 (“the ‘720 Patent”). Redacted Petition, Paper
`
`3 at 1.
`
`On March 31, 2014, another petitioner, Apple Inc. (“Apple”), filed two
`
`petitions, in CBM2014-00104 and -00105, seeking CBM review of claims of
`
`claims 1, 3, 11, and 13-15 of the ‘720 Patent on §§ 102 and 103 grounds. On
`
`November 24, 2014, Apple filed two more petitions: CBM2015-00028, seeking
`
`review of ‘720 Patent claims 1 and 2 as unpatentable under § 101 and claim 1 as
`
`obvious under § 103 (CBM2015-00028, Corrected Petition, Paper 5 at 1); and
`
`CBM2015-00029, seeking review of ‘720 Patent claims 3 and 13-15 as
`
`unpatentable under § 101 and § 103 (CBM2015-00029, Corrected Petition, Paper 5
`
`at 1).
`
`
`
`- 1 -
`
`
`
`On May 28, 2015 the Board instituted covered business method patent
`
`review under 35 U.S.C. § 101 as to claims 1 and 2 (CBM2015-00028 Paper 11 at
`
`18) and as to claims 3 and 15 (CBM2015-00029 Paper 11 at 19). Thus the instant
`
`Google petition seeks review of two of the same claims (claims 1 and 15) of the
`
`‘720 Patent on the same grounds (§ 101) as were already instituted by the Board.
`
`As such, the Board should follow its past precedent and exercise its discretion
`
`under 35 U.S.C. § 325(d) to decline to institute a covered business method patent
`
`review of claims 1 and 15 of the ‘720 Patent on § 101 grounds here.
`
`Additionally, the challenged claims of the ‘720 Patent are 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.” DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d
`
`1245, 1257 (Fed. Cir. 2014). In particular, independent claims 1 and 14 (claim 15
`
`depends from claim 14), overcome the problem of data content piracy on the
`
`Internet “[b]y combining digital rights management with content data storage using
`
`a single carrier” such that “the stored content data becomes mobile and can be
`
`accessed anywhere while retaining control over the stored data for the data content
`
`provider or data copyright owner.” Ex. 1001, ‘720 Patent at 5:25-29. In other
`
`words, claims 1 and 15 are directed to a method of controlling access to content
`
`data that combines on the data carrier both the digital content and payment data /
`
`
`
`- 2 -
`
`
`
`access rules, so that access control to the digital content can be enforced prior to
`
`access to the digital content.
`
`As demonstrated below, evidence in CBM2015-00028 and -00029 shows
`
`that the challenged claims do not result in inappropriate preemption nor is there
`
`any credible evidence that a disproportionate amount of future innovation is
`
`foreclosed by the challenged claims of the ‘720 Patent.
`
`Additionally, in February 2015, The United States District Court for the
`
`Eastern District of Texas examined the identical purely legal issue raised by the
`
`petition – whether claims 1 and claim 15 are directed to statutory subject matter
`
`under 35 U.S.C. § 101, and found the claims to be statutory. See Exhibit 2049,
`
`Report and Recommendation (on Defendants’ Motions for Summary Judgment of
`
`Invalidity Pursuant to 35 U.S.C. § 101) (hereinafter “Report and
`
`Recommendation”), from Smartflash LLC, et al. v. Apple Inc., et al., Case No.
`
`6:13-CV-447 (E.D. Tex.) and Smartflash LLC, et al. v. Samsung Electronics Co.
`
`Ltd, et al., Case No. 6:13-CV-448 (E.D. Tex.), dated Jan. 21, 2015, and Exhibit
`
`2050, Order adopting Report and Recommendation (on Defendants’ Motions for
`
`Summary Judgment of Invalidity Pursuant to 35 U.S.C. § 101), from Smartflash
`
`LLC, et al. v. Apple Inc., et al., Case No. 6:13-CV-447 (E.D. Tex.) and Smartflash
`
`LLC, et al. v. Samsung Electronics Co. Ltd, et al., Case No. 6:13-CV-448 (E.D.
`
`Tex.), dated Feb. 13, 2015.
`
`
`
`- 3 -
`
`
`
`On July 8, 2015 the same District Court “decline[d] to revise or revisit its
`
`Rule 56 Order” on post-trial motion, finding that “[t]he § 101 issue has already
`
`received full and fair treatment.” See Exhibit 2075, Order (on Defendants’
`
`Renewed Motion for Judgment as a Matter of Law on the Issue of § 101 under
`
`Rule 50(b)); Dkt. # 585; Smartflash LLC, et al. v. Apple Inc., et al., Case No. 6:13-
`
`CV-447 (E.D. Tex. July 8, 2015) (emphasis added).
`
`Patent Owner submits that the USPTO has already adjudicated the threshold
`
`question of whether the challenged claims comport with 35 U.S.C. § 101, which is
`
`a question of law, during the prosecution of the ‘720 Patent. The USPTO is
`
`estopped from re-litigating this purely legal issue already considered and
`
`adjudicated by the USPTO.
`
`Patent Owner further submits that the CBM review process is an
`
`unconstitutional violation of Separation of Powers principles.
`
`Finally, Patent Owner submits that § 101 is not a ground on which CBM
`
`review may be instituted.
`
`
`
`II. OVERVIEW OF U.S. PATENT NO. 7,334,720
`
`Although the claims define the actual scope of coverage of the patent, as
`
`described in the first paragraph of the BACKGROUND OF THE INVENTION,
`
`the ‘720 Patent generally describes “data storage and access systems ... [and] is
`
`
`
`- 4 -
`
`
`
`particularly useful for managing stored audio and video data, but may also be
`
`applied to storage and access of text and software, including games, as well as
`
`other types of data.” Col. 1, lines 5-14.
`
`Preferred embodiments described in the first paragraph of col. 16 illustrate
`
`this further: “FIG. 7 ... shows a variety of content access terminals for accessing
`
`data supply computer system 120 over internet 142. The terminals are provided
`
`with an interface to a portable data carrier or ‘smart Flash card’ (SFC) as generally
`
`described with reference to FIG. 2 and as described in more detail below. In most
`
`embodiments of the terminal the SFC interface allows the smart Flash card data
`
`carrier to be inserted into and removed from the terminal, but in some
`
`embodiments the data carrier may be integral with the terminal.” Exemplary
`
`terminals include, but are not limited to, set-top boxes 154, CD/DVD Players 170
`
`and mobile communications devices 152. Col. 16, lines 13-33.
`
`Referring to preferred embodiments, the ‘720 Patent discloses that a data
`
`supply system may provide users with a seamless purchase and content delivery
`
`experience. Col. 24, lines 25-30. Users are able to purchase content from a variety
`
`of different content providers even if they do not know where the content providers
`
`are located or how the content is delivered. See id. The exemplary system is
`
`operated by a “content data supply ‘system owner,’” who may act as an
`
`intermediary between a user seeking to purchase content and content providers,
`
`
`
`- 5 -
`
`
`
`such as record labels, movie studios, and software providers. See col. 14, lines 5-
`
`13. When a user accesses the system, he or she is able to select content to purchase
`
`or rent from a variety of different content providers. See col. 4, line 59 – col. 5,
`
`line 3. If the user finds a content item to buy, his or her device will transmit stored
`
`“payment data” to a “payment validation system” to validate the payment data. See
`
`col. 8, lines 4-7. The payment validation system returns proof that the payment
`
`data has been validated, in the form of “payment validation data,” and the user is
`
`able to retrieve the purchased content from the content provider. See col. 8, lines
`
`4-9.
`
`Col. 24, lines 46-48, discloses that “FIG. 13 ... shows a flow chart for user
`
`access of stored data on a smart Flash card using a data access device such as the
`
`MP3 player of FIG. 1.” Col. 9, lines 21-23, discloses “The data access device uses
`
`the use status data and use rules to determine what access is permitted to data
`
`stored on the data carrier.” Col. 4, line 62 – col 5, line 3, discloses “The carrier
`
`may ... store content use rules pertaining to allowed use of stored data items. These
`
`use rules may be linked to payments made from the card to provide payment
`
`options such as access to buy content data outright; rental access to content data for
`
`a time period or for a specified number of access events; and/or rental/purchase,
`
`for example where rental use is provided together with an option to purchase
`
`content data at the reduced price after rental access has expired.” Further, as
`
`
`
`- 6 -
`
`
`
`described in col. 9, lines 36-40, “use status data [is retrieved] from the data carrier
`
`[to] indicat[e] past use of the stored data.” Thus, as described in col. 5, lines 325-
`
`29, “[b]y combining digital rights management with content data storage using a
`
`single carrier, the stored content data becomes mobile and can be accessed
`
`anywhere while retaining control over the stored data for the data content provider
`
`or data copyright owner.”
`
`By using a system that combines on the data carrier both the digital content
`
`and the use rules/use status data, access control to the digital content can be
`
`continuously enforced prior to access to the digital content. By comparison, unlike
`
`a system that uses use rules/use status data as claimed, when a DVD was
`
`physically rented for a rental period, the renter could continue to play the DVD,
`
`even if the renter kept the DVD past the rental period because the use rules were
`
`not associated with the DVD. Similarly, there was no way to track a use of the
`
`DVD such that a system could limit its playback to specific number of times (e.g.,
`
`three times) or determine that the DVD had only been partially used.
`
`
`
`III. THE BOARD SHOULD EXERCISE ITS DISCRETION UNDER 35
`U.S.C. § 325(D) AND DECLINE TO INSTITUTE COVERED BUSINESS
`METHOD PATENT REVIEW
`
`Google’s § 101 unpatentable subject matter ground asserted here completely
`
`overlaps Apple’s § 101 subject matter grounds against the ‘720 Patent asserted and
`
`
`
`- 7 -
`
`
`
`instituted in CBM2015-00028 and -00029. Patent Owner submits that the Board
`
`should follow its precedent from other Smartflash CBM proceedings and deny
`
`Google’s petition. See, Apple Inc. v, Smartflash LLC, CBM2015-00015, Paper 23
`
`at 18, Decision, Institution of Covered Business Method Patent Review and
`
`Denying Motion for Joinder 37 C.F.R. § 42.208 37 C.F.R. § 42.222(b), (PTAB
`
`April 10, 2015)(declining to institute covered business method patent review of
`
`claims under §101, an issue of law, because Board already instituted covered
`
`business method review of same claims under § 101 in other proceeding).
`
`Here, the Board should exercise its discretion under 35 U.S.C. § 325(d) and
`
`decline to institute a covered business method patent review of claims 1 and 15 of
`
`the ‘720 Patent on 35 U.S.C. § 101 grounds in CBM2015-00125 because it has
`
`already instituted covered business method review of those same claims on the
`
`same purely legal § 101 grounds in CBM2015-00028 and -00029.
`
`“[T]he Board is charged with securing the just, speedy, and inexpensive
`
`resolution of every proceeding.” EMC Corporation, et al. v. Personal Web
`
`Technologies, LLC, Case IPR2013-00082, Paper 33 at 4 (PTAB June 5,
`
`2013)(Decision, Denying Request for Rehearing)(citing 37 C.F.R. § 42.1(b)).
`
`“Rules for inter partes review proceedings were promulgated to take into account
`
`the ‘regulation on the economy, the integrity of the patent system, the efficient
`
`
`
`- 8 -
`
`
`
`administration of the Office, and the ability of the Office to timely complete
`
`proceedings.’” Id. at 2 (citing 35 U.S.C. § 316(b)).
`
`Here, instituting a duplicative action runs afoul of the Board’s charge to
`
`“secure the just, speedy, and inexpensive resolution” of the covered business
`
`method challenges to the ‘720 Patent. Patent Owner respectfully requests that the
`
`Board deny review on Google’s § 101 unpatentable subject matter grounds that are
`
`duplicative of Apple’s grounds that were instituted in CBM2015-00028 and -
`
`00029.
`
`
`
`IV. THE CLAIMS ARE STATUTORY
`
`A.
`
`The Two-Part Test for Statutory Subject Matter
`
`The Supreme Court articulated a two-part test for patentability in Mayo
`
`Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012),
`
`which has been followed by Alice Corp. Pty. v. CLS Bank Int'l, 134 S. Ct. 2347
`
`(2014). The first step in the analysis is to determine whether the claims at issue are
`
`directed to patent-ineligible concepts. If the claims at issue are directed to a
`
`patent-ineligible concept, the second step of the analysis is to determine whether
`
`the limitations of the claims, individually and as ordered combinations, contain an
`
`inventive concept that transforms the nature of the claims into patent-eligible
`
`subject matter. Mayo, 132 S. Ct. at 1294.
`
`
`
`- 9 -
`
`
`
`B.
`
`The Claims Are Statutory Under Mayo and Alice
`
`
`
`Post Mayo and Alice, the Federal Circuit has provided guidance on how to
`
`distinguish statutory claims, like those of the ‘720 Patent, from non-statutory
`
`claims. In DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir.
`
`2014), the Federal Circuit analyzed claims, such as the ones at issue here, that have
`
`technological solutions to technological problems created by the nature of digital
`
`content and the Internet. In DDR Holdings, the system of exemplary claim 19
`
`included (a) a computer store containing the data needed to support operation of
`
`the system and (b) a computer server (or processor) that was coupled to the
`
`computer store, where the claimed system was programmed to (by having code
`
`configured to) perform the solution to a network-specific problem. The computer
`
`server was “programmed to” perform four steps. The first two steps are “(i)
`
`receive from the web browser of a computer user a signal indicating activation of
`
`one of the links displayed by one of the first web pages; [and] (ii) automatically
`
`identify as the source page the one of the first web pages on which the link has
`
`been activated.” The third and fourth steps were “(iii) in response to identification
`
`of the source page, automatically retrieve the stored data corresponding to the
`
`source page; and (iv) 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)
`
`
`
`- 10 -
`
`
`
`the plurality of visually perceptible elements visually corresponding to the source
`
`page.” The Court found the claims to be statutory because “the claimed solution is
`
`necessarily rooted in computer technology in order to overcome a problem
`
`specifically arising in the realm of computer networks.” Id. at 1257.
`
`Such is the case here, too. Independent claims 1 and 14 (from which claim
`
`15 depends) of the ‘720 Patent are not directed to mental processes or processes
`
`performed using pen and paper, rather the claims are directed to a particular
`
`method that can download and store digital content into a data carrier. By
`
`combining on the data carrier both the digital content and use status data and at
`
`least one use rule (as in claim 1, Ex. 1001, ‘720 Patent at 26:59-67) or at least one
`
`access rule conditioned on the amount of payment to control access to the digital
`
`content when obtaining digital content (as in claim 14, Ex. 1001, ‘720 Patent at
`
`28:15-26), the claimed data access terminal and method of providing data enable
`
`digital content to be obtained effectively and legitimately, including, for example,
`
`by allowing or prohibiting access to the downloaded or stored content (e.g., in
`
`accordance with the rule conditioned on the amount of payment as required or
`
`specified by content rights owners).
`
`Thus, claims 1 and 15 are “rooted in computer technology in order to
`
`overcome a problem specifically arising in the realm of computer networks” –
`
`that of digital data piracy – and, like in DDR Holdings, “address … a challenge
`
`
`
`- 11 -
`
`
`
`particular to the Internet.” DDR Holdings, 773 F.3d at 1257. The Report and
`
`Recommendation from the District Court that looked at claims 1 and 15 of the ‘720
`
`Patent under § 101 also acknowledged this distinction, finding:
`
`As in DDR Holdings, the patents here do not simply
`apply a known business practice from the pre-Internet
`world to computers or the Internet. “The claimed solution
`is necessarily rooted in computer technology in order to
`overcome a problem specifically arising in the realm of
`computer networks.” ... Digital Rights Management is a
`technology that was developed after widespread use of
`the Internet. Entry into the Internet Era presented new
`and unique problems for digital content providers in
`combatting unauthorized use and reproduction of
`protected media content.
`
`Report and Recommendation at 19, lines 7-12 (quoting DDR Holdings, 773 F.3d at
`
`1257) (internal citation omitted).
`
`Thus, like in DDR Holdings, when “the limitations of the … claims are
`
`taken as [a] combination, the claims recite[] an invention that is not merely the
`
`routine or conventional use of the Internet.” DDR Holdings, 773 F.3d at 1259.
`
`Such a finding was further echoed by the Report and Recommendation when it
`
`held that the “asserted claims … recite specific ways of using distinct memories,
`
`data types, and use rules that amount to significantly more than the underlying
`
`abstract idea. Although in some claims the language is functional and somewhat
`
`generic, the claims contain significant limitations on the scope of the inventions.”
`
`Report and Recommendation at 19, lines 1-4 (emphasis added).
`
`
`
`- 12 -
`
`
`
`C.
`
`Claims 1 and 15 Do Not Result in Inappropriate Preemption
`
`1.
`
`Preemption under DDR Holdings
`
`The Petition alleges that “[t]he challenged claims are explicitly drawn to the
`
`abstract idea of controlling access based on one or more conditions (such as
`
`payment).” Redacted Petition, Paper 3 at 1. The Petition further alleges in a
`
`conclusory manner that “[h]ere, the challenged method claims firmly trigger
`
`preemption concerns. The challenged claims disclose only an ultimate objective:
`
`using a generic computer to implement the steps inherent in the abstract idea of
`
`providing access to content based on one or more condition.” Id. at 33. However,
`
`the challenged claims of the ‘720 Patent do not result in inappropriate preemption
`
`under DDR Holdings, Mayo and Alice. Using the analysis of the Federal Circuit in
`
`DDR Holdings, claims are statutory when “the claims ... do not attempt to preempt
`
`every application of the idea [relating to the field of the invention]. Rather, they
`
`recite a specific way … that incorporates elements from multiple sources in order
`
`to solve a problem faced by [servers] on the Internet.” DDR Holdings, 773 F.3d at
`
`1259. Such a standard is consistent with other Supreme Court precedent as well.
`
`As cited in Mayo, in “Bilski, the Court pointed out that to allow ‘petitioners to
`
`patent risk hedging would [inappropriately] preempt use of this approach in all
`
`fields.” Mayo, 132 S. Ct. at 1301 (citing Bilski v. Kappos, 561 U.S. 612 (2010)).
`
`
`
`- 13 -
`
`
`
`Evidence from CBM2015-00028 and -00029 brought by Apple Inc., where
`
`claims 1 and 15 are also challenged under § 101, supports that the claims of the
`
`‘720 Patent do not result in inappropriate preemption. There, Apple alleged that
`
`the ‘720 Patent claims result in inappropriate preemption of the “idea of paying for
`
`and controlling access to data.” See, CBM2015-00028, Corrected Petition, Paper 5
`
`at 5. This is just another way of stating Google’s allegation that the claims of the
`
`‘720 Patent are directed to “controlling access based on one or more conditions
`
`(such as payment).” Redacted Petition, Paper 3 at 1.
`
`The evidence of record in CBM2015-00028 and -00029, however, shows
`
`that the claims of the ‘720 Patent do not result in inappropriate preemption because
`
`they do not preempt every application of the idea of paying for and controlling
`
`access to content, nor are a disproportionate number of applications preempted. In
`
`those cases, Apple’s purported expert Mr. Wechselberger conceded that “none of
`
`the claims of the ‘720 Patent cover all conceivable ways of paying for and
`
`controlling access to the content data” (Ex. 2076 at 128:17-21) and that “none of
`
`the claims of the ‘720 Patent cover all conceivable ways of paying for and
`
`controlling access to content data that utilize a processor and program store” (id. at
`
`129:4-9). In fact, Mr. Wechselberger testified that “there’s potentially a nearly
`
`infinite number of different ways that one could [pay for and control access to
`
`content using a processor and a program store].” Id. at 54:16-24 (emphasis added).
`
`
`
`- 14 -
`
`
`
`In fact, the Report and Recommendation from the District Court that looked
`
`at claims 1 and 15 of the ‘720 Patent under § 101 found that claims 1 and 15 “do
`
`not risk preempting all future inventions related to exchanging access to data for
`
`payment on the Internet. Instead, when taken as ordered combinations, the claims
`
`recite specific ways of combining system components and method steps beyond
`
`the routine use of the Internet. The claims address specific ways of managing
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`access to digital content data based on payment validation through storage and
`
`retrieval of use status data and use rules in distinct memory types and evaluating
`
`the use data according to the use rules.” Report and Recommendation at 20.
`
`Moreover, the Petition’s assertion that “the challenged method claims firmly
`
`trigger preemption concerns” (Paper 3 at 33) is contradicted by the existence of
`
`non-infringing alternatives to the claims. As described in the Report and
`
`Recommendation, “both Smartflash and Defendants identified numerous non-
`
`infringing alternatives, such as those employed by Netflix and Spotify.” Report and
`
`Recommendation at 15. (Emphasis added.)
`
`Thus, the Petition’s argument that the challenged claims would result in
`
`inappropriate preemption should be disregarded.
`
`
`
`
`
`- 15 -
`
`
`
`2.
`
`Preemption under Mayo and Alice
`
`The Supreme Court’s analyses in Mayo and Alice further confirm that the
`
`challenged claims do not result in preemption. In Mayo, the Supreme Court
`
`clarified that “the underlying functional concern ... is a relative one: how much
`
`future innovation is foreclosed relative to the contribution of the inventor.” Mayo,
`
`132 S. Ct. at 1303. To analyze that issue, the Court looks to the “risk [of]
`
`disproportionately tying up the use of the underlying natural laws, inhibiting their
`
`use in the making of further discoveries.” Id. at 1294. However, neither the
`
`Petition nor Petitioner’s expert performed a relative analysis. The Petition merely
`
`incorrectly asserts that “the claims ‘recite limitations that amount to nothing more
`
`than computers doing what computers do routinely’” and that “[i]t is exactly this
`
`type of claiming that has the greatest potential to foreclose future innovation
`
`disproportionately ‘relative to the contribution of the inventor.’” Redacted Petition
`
`at 33-34. Thus, the Petition has failed to show that the challenged claims
`
`disproportionately inhibit the making of future discoveries.
`
`Similarly, the Court held in Alice:
`
`Accordingly, in applying the § 101 exception, we must
`
`distinguish between patents that claim the “‘building blocks’” of
`
`human ingenuity and those that integrate the building blocks into
`
`something more, ...thereby “transforming” them into a patent-
`
`
`
`- 16 -
`
`
`
`eligible invention. The former “would risk disproportionately
`
`tying up the use of the underlying” ideas, and are therefore
`
`ineligible for patent protection. The latter pose no comparable
`
`risk of pre-emption, and therefore remain eligible for the
`
`monopoly granted under our patent laws.
`
`Alice, 134 S. Ct. at 2354 (citing Mayo). (Internal citations omitted.)
`
`As discussed in greater detail below, there are numerous non-infringing
`
`alternatives. Thus, the Petition has failed to carry its burden of proof that a
`
`disproportionate amount of future innovation is foreclosed. Said differently,
`
`without an analysis of the number of “innovations” that are not foreclosed and the
`
`relative contribution of the inventor, the Petition fails to prove disproportionality or
`
`that the relative preemption results in a finding of non-statutory subject matter.
`
`
`
`3.
`
`Non-Infringing Alternatives Show a Lack of Preemption
`
`The existence of a large number of non-infringing alternatives shows that the
`
`claims of the ‘720 Patent do not raise preemption concerns. Again, evidence from
`
`CBM2015-00028 and -00029 supports the lack of preemption. There, Apple’s
`
`Declarant Anthony Wechselberger testified that there are an infinite number of
`
`ways of paying for and controlling access to content using a processor and a
`
`program store. Exhibit 2076, July 22, 2015 Deposition of Apple Witness Anthony
`
`
`
`- 17 -
`
`
`
`J. Wechselberger in CBM2015-00029, et al., at 54:16-56:24. He also agreed that
`
`there were a significant number of alternatives that would nonetheless still meet
`
`the alleged field of paying for and controlling access to data.
`
`Furthermore, Mr. Wechselberger testified with respect to independent claim
`
`14 (from which challenged claim 15 depends), that it is “possible to implement the
`
`abstract idea of paying for and controlling access to content”
`
`• “without both reading payment data from a data carrier and writing
`
`data retrieved from a data supplier to the same data carrier from which
`
`the payment data was originally read” (id. at 126:20-127:2);
`
`• “without receiving at least one access rule from a data supplier” (id. at
`
`127:4-8);
`
`• “without writing at least one access rule into the same data carrier
`
`from which the payment data was read into which data retrieved from
`
`a data supplier was written” (id. at 127:9-14);
`
`• “without utilizing at least one access rule specifying at least one
`
`condition for accessing data written into a data carrier” (id. at 127:15-
`
`20); and
`
`• “without utilizing at least one access rule specifying at least one
`
`condition for accessing data written into a data carrier where at least
`
`
`
`- 18 -
`
`
`
`one condition is dependent upon the amount of payment associated
`
`with the payment data forwarded to a payment validation system” (id.
`
`at 127:21-128:4)
`
`all as required by claim 14 and 15. And, as specifically required by claim 15:
`
`• “without transmitting at least a portion of the payment validation data
`
`to a data supplier from which data is retrieved, as in claim 15” (id. at
`
`128:5-10)
`
`Thus, given the number of embodiments that are not precluded, the Petition
`
`has not shown that there is a disproportionate amount of preemption.
`
`4. The Challenged Claims are Distinguishable from the Claims in
`Ariosa Diagnostics
`
`The Smartflash patent claims are statutory under 35 U.S.C. §101 and do not
`
`result in inappropriate preemption of the purported “the abstract idea of providing
`
`access to content based on one or more condition.” Redacted Petition, Paper 3 at
`
`33. The Smartflash claims are distinguishable from the claims in Ariosa
`
`Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371; 2015 U.S. App. LEXIS 9855,
`
`(Fed. Cir. 2015), and the existence of non-infringing alternatives to the Smartflash
`
`claims show the lack of preemption in a way that Sequenom, the patentee in Ariosa
`
`Diagnostics, could not for its claims.
`
`
`
`- 19 -
`
`
`
`The Sequenom patent claimed methods of detecting cffDNA, as well as uses
`
`of cffDNA. 2015 U.S. App. LEXIS 9855 at *17. Importantly, the claims for
`
`detecting cffDNA covered “the only commercially viable way of detecting that
`
`phenomenon.” Id.
`
`It is not surprising that the Sequenom claims raised preemption concerns
`
`given that they covered the only commercially viable way of detecting the natural
`
`phenomenon cffDNA. It is also not surprising that Sequenom’s evidence of “other
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`uses of cffDNA aside from those claimed in the ‘540 patent”
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