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`Trials@uspto.gov
`Tel: 571-272-7822
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`Paper 33
`Entered: January 27, 2017
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`
`Case CBM2015-00127
`Patent 7,334,720 B2
`
`Before JENNIFER S. BISK, RAMA G. ELLURU, and
`JEREMY M. PLENZLER, Administrative Patent Judges.
`
`ELLURU, Administrative Patent Judge.
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71
`
`
`
`
`
`
`CBM2015-00127
`Patent 7,334,720 B2
`
`INTRODUCTION
`Apple Inc. (“Petitioner”), filed a Petition to institute covered business
`method patent review of claims 4–12 and 16–18 of U.S. Patent No.
`7,334,720 B2 (Ex. 1001, “the ’720 patent”) pursuant to § 18 of the Leahy-
`Smith America Invents Act (“AIA”). Paper 2 (“Pet.”).1 On November 10,
`2015, we instituted a covered business method patent review (Paper 7,
`“Institution Decision” or “Inst. Dec.”) based upon Petitioner’s assertion that
`claims 4–12 and 16–18 (“the challenged claims”) are directed to patent
`ineligible subject matter under 35 U.S.C. § 101. Inst. Dec. 25. Subsequent
`to institution, Smartflash LLC (“Patent Owner”) filed a Patent Owner
`Response (Paper 17, “PO Resp.”) and Petitioner filed a Reply (Paper 21,
`“Pet. Reply”) to Patent Owner’s Response. Patent Owner, with
`authorization, filed a Notice of Supplemental Authority. Paper 28
`(“Notice”). Petitioner filed a Response to Patent Owner’s Notice. Paper 29
`(“Notice Resp.”).
`In our Final Decision, we determined Petitioner had established, by a
`preponderance of the evidence, that claims 4–12 and 16–18 of the ’720
`patent are directed to patent ineligible subject matter under 35 U.S.C. § 101.
`Paper 31 (“Final Dec.”), 2–3, 34. Patent Owner requests rehearing of the
`Final Decision with respect to patent ineligibility of the challenged claims
`under § 101. Paper 32 (“Request” or “Req. Reh’g”). Having considered
`Patent Owner’s Request, we decline to modify our Final Decision.
`
`
`
`1 Pub. L. No. 112–29, 125 Stat. 284, 296–07 (2011).
`
`2
`
`
`
`CBM2015-00127
`Patent 7,334,720 B2
`
`STANDARD OF REVIEW
`In covered business method review, the petitioner has the burden of
`showing unpatentability by a preponderance of the evidence. 35 U.S.C.
`§ 326(e). The standard of review for rehearing requests is set forth in 37
`C.F.R. § 42.71(d), which states:
`The burden of showing a decision should be modified lies with
`the party challenging the decision. The request must specifically
`identify all matters the party believes the Board misapprehended
`or overlooked, and the place where each matter was previously
`addressed in a motion, an opposition, or a reply.
`
`
`ANALYSIS
`Patent Owner’s Request is based on a disagreement with our
`determination that the challenged claims are directed to patent-ineligible
`subject matter. Req. Reh’g 3.
`In its Request, Patent Owner initially presents arguments directed to
`alleged similarities between the challenged claims and those at issue in DDR
`Holdings2, Enfish3, and Bascom4. Id. at 4–10. Those cases were each
`addressed in the Patent Owner Response or Patent Owner’s Notice, as well
`as in our Final Decision. As noted above, our rules require that the
`requesting party “specifically identify all matters the party believes the
`Board misapprehended or overlooked, and the place where each matter was
`previously addressed in a motion, an opposition, or a reply.” 37 C.F.R.
`42.71(d) (emphasis added). In its Request, however, Patent Owner does not
`
`
`2 DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).
`3 Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).
`4 BASCOM Global Internet Services, Inc. v. AT&T Mobility, LLC, 827 F.3d
`1341 (Fed. Cir. 2016).
`
`3
`
`
`
`CBM2015-00127
`Patent 7,334,720 B2
`
`identify any specific matter that we misapprehended or overlooked.
`Although Patent Owner repeatedly states that the Board “misapprehends”
`Smartflash’s argument (see, e.g., Req. Reh’g 5, 10), it does not offer
`sufficient explanation as to how we misapprehended or overlooked any
`particular “matter [that] was previously addressed in a motion, an
`opposition, or a reply.” Rather than providing a proper request for
`rehearing, addressing particular matters that we previously allegedly
`misapprehended or overlooked, Patent Owner’s Request provides new
`briefing by expounding on argument already made.
`To the extent portions of the Request are supported by Patent Owner’s
`argument in the Patent Owner Response or in Patent Owner’s Notice, we
`considered those arguments in our Final Decision, as Patent Owner
`acknowledges. See, e.g., Req. Reh’g 5, 7, 9 (noting that the Board
`“rejected” Smartflash’s argument with respect to each of DDR Holdings,
`Enfish, and Bascom). Our Final Decision, as noted above, addresses Patent
`Owner’s arguments related to DDR Holdings (Final Dec. 17–21), Enfish (id.
`at 12–13), and Bascom (id. at 21–23). Patent Owner’s Request is simply
`based on disagreement with our Final Decision, which is not a proper basis
`for rehearing.
`Patent Owner also presents new arguments directed to alleged
`similarities between the challenged claims and those addressed in McRO5
`and Amdocs6, which were issued after Patent Owner’s Notice was filed.
`Req. Reh’g 11–15. Patent Owner alleges that we overlooked the Federal
`
`
`5 McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir.
`2016).
`6 Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir.
`2016).
`
`4
`
`
`
`CBM2015-00127
`Patent 7,334,720 B2
`
`Circuit’s decisions in McRO and Amdocs. Id. at 2. The decisions in those
`cases issued before our Final Decision and, although not specifically
`referenced, were considered when we determined that the challenged claims
`are patent-ineligible.
`When addressing McRO, Patent Owner does little, if anything, to
`analogize those claims to the challenged claims, other than summarizing the
`discussion in McRO (id. at 11–13), and concluding that
`[b]ecause the challenged claims are a technological improvement
`over the then-existing systems and methods, and limit transfer
`and retrieval of content data based on payment and/or access
`rules in a process specifically designed to achieve an improved
`technological result in conventional industry practice, the
`challenged claims are not directed to an abstract idea.
`Id. at 13 (citing Ex. 1001, 26:59–67 (claims 4–12), 28:12–19 (claims 16–
`18)). But McRO does not stand for the general proposition that use of rules
`or conditions, such as payment, to achieve an improved technological result,
`alone, removes claims from the realm of abstract ideas. In McRO, the Court
`explained that “the claimed improvement [was] allowing computers to
`produce ‘accurate and realistic lip synchronization and facial expressions in
`animated characters’ that previously could only be produced by human
`animators.” Id. at 1313 (citation omitted). The Court explained that the
`claimed rules in McRO transformed a traditionally subjective process
`performed by human artists into a mathematically automated process
`executed on computers (i.e., the processes were fundamentally different).
`Id. at 1314. The Court explained that “it [was] the incorporation of the
`claimed rules, not the use of the computer, that ‘improved [the] existing
`technological process’ by allowing the automation of further tasks.” Id. at
`1314 (alteration in original) (quoting Alice Corp. Pty. Ltd. v. CLS Bank
`
`5
`
`
`
`CBM2015-00127
`Patent 7,334,720 B2
`
`Int’l., 134 S. Ct. 2347, 2358 (2014)). The Court distinguished this from
`situations “where the claimed computer-automated process and the prior
`method were carried out in the same way.” Id. (citing Parker v. Flook, 437
`U.S. 584, 585–86 (1978); Bilski v. Kappos, 561 U.S. 593, 611 (2010); Alice,
`134 S. Ct. at 2356)).
`As explained in our Final Decision, the challenged claims “merely
`implement an old practice in a new environment.” Final Dec. 12 (quoting
`FairWarning IP, LLC v. Iatric Systems, Inc., 839 F.3d 1089, 1094 (Fed. Cir.
`2016)). The challenged claims are similar to the claims found ineligible in
`FairWarning, which the Court distinguished from those at issue McRO.
`FairWarning, 839 F.3d at 1094–95. In FairWarning, the Court explained
`that “[t]he claimed rules ask . . . the same questions . . . that humans in
`analogous situations . . . have asked for decades, if not centuries” and that it
`is the “incorporation of a computer, not the claimed rule, that purportedly
`‘improve[s] [the] existing technological process.’” Id. at 1095 (citing Alice,
`134 S. Ct. at 2358). This is similar to the challenged claims, where the
`“payment validation data” and “access rule” in claim 4, via its dependency
`from claim 3, for example, is merely a condition for “determin[ing] what
`access is permitted to data stored on the data carrier,” that the ’720 patent
`explains “will normally be dependent upon payments made for data stored
`on the data carrier” (i.e., allowing access when the data has been purchased).
`Ex. 1001, 9:21–25.
`With respect to Amdocs, after generally summarizing that case, Patent
`Owner concludes that “the challenged claims of the ’720 Patent are like the
`eligible claim in Amdocs because they solve a problem unique to computer
`
`6
`
`
`
`CBM2015-00127
`Patent 7,334,720 B2
`
`networks . . . and use[] an unconventional technological approach.” Req.
`Reh’g 14–15 (citing PO Resp. 17, 36–37)7. We disagree.
`In Amdocs, the Court held that “[claim 1] is eligible under step two
`because it contains a sufficient ‘inventive concept.’” Amdocs, 841 F.3d at
`1300. The claim at issue recited “computer code for using the accounting
`information with which the first network accounting record is correlated to
`enhance the first network accounting record.” Id. The Court explained that
`the “claim entails an unconventional technological solution (enhancing data
`in a distributed fashion) to a technological problem (massive record flows
`which previously required massive databases).” Id. The Court noted that,
`although the solution requires generic computer components, “the claim’s
`enhancing limitation necessarily requires that these generic components
`operate in an unconventional manner to achieve an improvement in
`computer functionality.” Id. at 1300–1301. When determining that the
`claim was patent-eligible, the Court explained that the “enhancing limitation
`necessarily involves the arguably generic gatherers, network devices, and
`other components working in an unconventional distributed fashion to solve
`a particular technological problem.” Id. at 1301. The Court distinguished
`the claim from the claim held unpatentable in Content Extraction &
`Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 (Fed.
`Cir. 2014) on the grounds that the “enhancing limitation . . . necessarily
`incorporates the invention’s distributed architecture—an architecture
`providing a technological solution to a technological problem,” which
`“provides the requisite ‘something more’ than the performance of ‘well-
`
`
`7 This is the only instance where one of Patent Owner’s papers is cited in
`the Request with respect to arguments directed to Amdocs.
`
`7
`
`
`
`CBM2015-00127
`Patent 7,334,720 B2
`
`understood, routine, [and] conventional activities previously known to the
`industry.’” Id. (citations omitted).
`We are not persuaded that we misapprehended Amdocs. As noted in
`our Final Decision, “[t]he ’720 patent treats as well-known all potentially
`technical aspects of the challenged claims, which simply require generic
`computer components.” Final Dec. 15. Unlike the generic components at
`issue in Amdocs, the generic components recited in claims 4–12 and 16–18
`of the ’720 patent do not operate in an unconventional manner to achieve an
`improvement in computer functionality. See id. at 17–21. The challenged
`claims of the ’720 patent simply recite generic memories, data types,
`processors, and “code to” perform well-known functions with no description
`of the underlying implementation or programming. See id. at 14–17.
`Accordingly, Patent Owner’s Request does not apprise us of sufficient
`reason to modify our Final Decision.
`
`
`ORDER
`
`Accordingly, it is:
`ORDERED that Patent Owner’s Request is denied.
`
`
`
`8
`
`
`
`CBM2015-00127
`Patent 7,334,720 B2
`
`PETITIONER:
`J. Steven Baughman
`Megan F. Raymond
`James R. Batchelder
`ROPES & GRAY LLP
`steven.baughman@ropesgray.com
`megan.raymond@ropesgray.com
`james.batchelder@ropesgray.com
`
`PATENT OWNER:
`
`Michael R. Casey
`Wayne Helge
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`smartflash-cbm@dbjg.com
`whelge@davidsonberquist.com
`
`9
`
`
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