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
`
`____________
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`APPLE INC.,
`
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`
`Patent Owner.
`
`____________
`
`Case CBM2015-00127
`
`Patent 7,334,720
`
`____________
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`TABLE OF CONTENTS
`
`INTRODUCTION ........................................................................................... 1
`
`
`PATENT OWNER’S LIST OF EXHIBITS ............................................................ iii
`
`I.
`
`II.
`
`III. APPLE’S REPETITIVE AND UNTIMELY § 101 and § 112
`CHALLENGES RESULT IN PIECEMEAL LITIGATION AND WILL
`NOT SECURE THE JUST, SPEEDY, AND INEXPENSIVE
`RESOLUTION OF THE BOARD’S PROCEEDINGS .................................. 8
`
`OVERVIEW OF U.S. PATENT NO. 7,334,720 ............................................ 5
`
`
`IV. THE CLAIMS ARE STATUTORY ............................................................. 11
`A.
`The Two-Part Test for Statutory Subject Matter ................................ 11
`The Claims Are Statutory Under Mayo and Alice .............................. 11
`B.
`C.
`The Claims Do Not Result in Inappropriate Preemption .................... 18
`Preemption under DDR Holdings ............................................. 18
`1.
`Preemption under Mayo and Alice ............................................ 21
`2.
`3.
`Admitted Non-Infringing Alternatives Show a Lack of
`Preemption ................................................................................ 22
`4. The Challenged Claims are Distinguishable from the Claims in
`Ariosa Diagnostics .................................................................... 26
`
`
`V.
`
`PETITIONER HAS ALREADY LOST A CHALLENGE TO RELATED
`CLAIMS ON THE SAME STATUTORY GROUNDS IN ITS
`LITIGATION WITH PATENT OWNER BASED ON EVIDENCE THAT
`IT HAS NOT PROVIDED TO THE PTAB.................................................. 29
`
`
`VI. CLAIM 17 IS DEFINITE .............................................................................. 31
`A. Claim 17 .............................................................................................. 31
`B.
`Petitioner’s Expert is Uncrossed and Not Proven to be Reliable ........ 32
`
`
`
`- i -
`
`
`
`VII.
`
`THE USPTO IS ESTOPPED FROM REVISITING THE ISSUES OF
`
`
`VII. THE USPTO IS ESTOPPED FROM REVISITING THE ISSUES OF
`WHETHER THE CLAIMS ARE DIRECTED TO STATUTORY SUBJECT
`MATTER AND ARE DEFINITE ................................................................. 33
`
`WHETHER THE CLAIMS ARE DIRECTED TO STATUTORY SUBJECT
`
`MATTER AND ARE DEFINITE ............................................................... ..33
`
`
`VIII. INVALIDATING PATENT CLAIMS VIA CBM REVIEW IS
`UNCONSTITUTIONAL ............................................................................... 33
`
`VIII.
`
`INVALIDATING PATENT CLAIMS VIA CBM REVIEW IS
`
`UNCONSTITUTIONAL ............................................................................. . .33
`
`
`IX. SECTION 101 IS NOT A GROUND THAT MAY BE RAISED IN
`COVERED BUSINESS METHOD PATENT REVIEW ............................. 35
`
`IX.
`
`SECTION 101 IS NOT A GROUND THAT MAY BE RAISED IN
`
`COVERED BUSINESS METHOD PATENT REVIEW ........................... ..35
`
`
`X.
`
`THE CHALLENGED CLAIMS ARE NOT DIRECTED TO A
`
`THE CHALLENGED CLAIMS ARE NOT DIRECTED TO A
`FINANCIAL PRODUCT OR SERVICE ...................................................... 38
`
`FINANCIAL PRODUCT OR SERVICE .................................................... ..38
`
`
`XI. THE CHALLENGED CLAIMS OF THE ‘720 PATENT ARE
`TECHNOLOGICAL INVENTIONS EXEMPT FROM CBM REVIEW .... 43
`
`XI.
`
`THE CHALLENGED CLAIMS OF THE ‘72O PATENT ARE
`
`TECHNOLOGICAL INVENTIONS EXEMPT FROM CBM REVIEW....43
`
`
`XII. CONCLUSION .............................................................................................. 44
`
`CONCLUSION ............................................................................................ . .44
`
`XII.
`
`
`
`- 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
`
`2051-2057
`
`Reserved
`
`
`
`- iii -
`
`
`
`Exhibit Number
`
`2058
`
`Exhibit Description
`
`Memorandum Opinion and Order (on Defendants’ Motions
`for Stay Pending the Outcome of CBMs) from Smartflash
`LLC, et al. v. Apple Inc., et al., Case No. 6:13-CV-447 (E.D.
`Tex.), Smartflash LLC, et al. v. Samsung Electronics Co. Ltd,
`et al., Case No. 6:13-CV-448 (E.D. Tex.), Smartflash LLC, et
`al. v. Google, Inc., et al., Case No. 6:14-CV-435 (E.D. Tex.),
`and Smartflash LLC, et al. v. Amazon, Inc., et al., Case No.
`6:14-CV-992 (E.D. Tex.) dated May 29, 2015
`
`2059-2074
`
`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, -
`00032 and -00033
`
`2077-2081
`
`Reserved
`
`2082
`
`Trial Transcript from Virnetx Inc. v. Apple Inc., Case No.
`6:10-cv-417 (E.D. Tex.) dated November 2, 2012.
`
`2083-2085
`
`Reserved
`
`2086
`
`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 Apple, Inc. (“Apple” 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 Apple seeks covered business method (CBM) review of claims 4-
`
`12 and 16-18 of U.S. Patent No. 7,334,720 (“the ‘720 patent”). Petition, Paper 2 at
`
`1.
`
`On March 31, 2014, Apple filed two earlier 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. Claim 11, at issue here, was also put at
`
`issue in the 00104/00105 petitions. The PTAB did not institute review of claims 1,
`
`3, 11, and 13-15. Apple Inc. v. Smartflash LLC, Cases CBM2014-00104 Paper 9 at
`
`20 (PTAB September 30, 2014) and -00105, Paper 9 at 21 (PTAB September 30,
`
`2014). 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 -
`
`
`
`1); and CBM2015-00029, seeking review of ‘720 patent claims 3 and 13-15 as
`
`unpatentable under § 101 and § 103 (CBM2015-00019, Corrected Petition, Paper 5
`
`at 1).
`
`In the instant petition, Apple’s fifth CBM petition against claims of the ‘720
`
`patent, Apple raises a 35 U.S.C. § 101 unpatentable subject matter challenge to
`
`claims 4-12 and 16-18 and a 35 U.S.C. § 112 indefiniteness / lack of antecedent
`
`basis challenge to claim 17. Petition, Paper 2 at 1, 37. However, all the
`
`challenged claims in the instant petition depend from independent claims 3 and
`
`14 already at-issue in CBM2015-00029.
`
`As the Board has already correctly noted in CBM2015-00016, “[t]he 2015
`
`set of petitions assert … challenges pursuant to 35 U.S.C. § 101, which raise
`
`purely legal issues.” CBM2015-00016, Paper 6 at 2. . Challenges under 35
`
`U.S.C. § 112 similarly raise purely legal issues. The Board should decline to
`
`institute review of claims 4-12 and 16-18 on Apple’s § 101 unpatentable subject
`
`matter grounds and claim 17 on Apple’s § 112 indefiniteness / lack of antecedent
`
`basis grounds because Apple’s purely legal challenges are repetitive and untimely
`
`and thus do not “secure the just, speedy, and inexpensive resolution” of the
`
`Board’s proceedings reviewing the ‘720 patent claims. 37 C.F.R. § 42.1(b).
`
`The challenged claims of the ‘720 patent are directed to statutory subject
`
`matter because they claim a solution “necessarily rooted in computer technology in
`
`
`
`- 2 -
`
`
`
`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 3 and 14, from which all the other
`
`claims depend, 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 3 and 14 (and likewise the challenged claims) are directed to a system and
`
`method of controlling access to content data that combines on the data carrier both
`
`the digital content and payment data / access rules, so that access control to the
`
`digital content can be enforced prior to access to the digital content.
`
`As demonstrated below, 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, Petitioner lost in Federal Court the purely
`
`legal issue of whether claim 13 (which depends from independent claim 3) and
`
`claim 15 (from which challenged claims 16 and 17 depend) are directed to
`
`statutory subject matter under 35 U.S.C. § 101. See Exhibit 2049, Report and
`
`Recommendation (on Defendants’ Motions for Summary Judgment of Invalidity
`
`
`
`- 3 -
`
`
`
`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.
`
`On July 8, 2015 the 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.
`
`
`
`- 4 -
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`
`
`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
`
`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
`
`
`
`- 5 -
`
`
`
`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,
`
`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
`
`
`
`- 6 -
`
`
`
`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
`
`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,
`
`
`
`- 7 -
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`
`
`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. APPLE’S REPETITIVE AND UNTIMELY § 101 and § 112
`CHALLENGES RESULT IN PIECEMEAL LITIGATION AND WILL
`NOT SECURE THE JUST, SPEEDY, AND INEXPENSIVE
`RESOLUTION OF THE BOARD’S PROCEEDINGS
`Petitioner Apple seeks covered business method review of claims 4-12 and
`
`16-18 of the ‘720 patent as being directed to ineligible subject matter under 35
`
`U.S.C. § 101 and claim 17 as being indefinite under 35 U.S.C. § 112. This is
`
`Apple’s fifth covered business review petition filed against the ‘720 patent. Apple
`
`filed CBM2014-00104 on March 31, 2014, CBM2014-00105 on March 31, 2014,
`
`CBM2015-00028 on November 24, 2014 and CBM2015-00029 on November 24,
`
`2014. CBM2015-00028 and -00029 also raises challenges to the ‘720 patent under
`
`§ 101. However, all the challenged claims in the instant petition depend from
`
`independent claims 3 and 14 already at-issue in CBM2015-00029. The Board
`
`should exercise its discretion under 35 U.S.C. § 325(d) and deny the petition here
`
`because it raises substantially the same § 101 arguments previously presented to
`
`the Board and § 112 arguments that should have been brought earlier, is repetitive,
`
`untimely, and results in expensive and inefficient piecemeal proceedings.
`
`
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`- 8 -
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`
`
`Instituting covered business method review here will not secure the just, speedy,
`
`and inexpensive resolution of Apple’s challenges to the ‘720 patent.
`
`“[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
`
`administration of the Office, and the ability of the Office to timely complete
`
`proceedings.’” Id. at 2 (citing 35 U.S.C. § 316(b)).
`
`Apple’s § 101 unpatentable subject matter ground asserted here constitutes
`
`Apple’s second § 101 subject matter attack against the ‘720 patent. CBM2015-
`
`00028 and -00029 also challenge the ‘720 patent under § 101. As the Board
`
`acknowledged in CBM2015-00016, “challenges pursuant to 35 U.S.C. § 101 …
`
`raise purely legal issues.” CBM2015-00016, Paper 6 at 2. Apple provides no valid
`
`reason why it did not raise this purely legal issue as grounds for review of claims
`
`4-12 and 16-18 when it filed CBM2015-00028 and -00029 on November 24, 2014.
`
`Similarly, there is no reason why Apple could not have brought its § 112
`
`indefiniteness / lack of antecedent basis challenge asserted here when it filed its
`
`prior petitions. This is a claim construction issue, and thus a purely legal issue.
`
`
`
`- 9 -
`
`
`
`Markman v. Westview Instruments, 517 U.S. 370, 372 (U.S. 1996)(construction of
`
`patent claim exclusively within the province of the court). Apple provides no
`
`explanation for why this purely legal issue, based solely on claim language that
`
`was available to Apple when it filed CBM2015-00028 and -00029, was not raised
`
`in that prior petition.
`
`Apple’s multiple duplicative petitions are resulting in inefficient and
`
`expensive proceedings. In fact in the current petition, Apple relies on a declaration
`
`from a different supporting witness than in any of its prior petitions, including
`
`CBM2015-00028 and -00029. Instituting review will require Smartflash to
`
`undertake discovery based on the new declaration and take the deposition of a
`
`completely new witness. Smartflash will not even enjoy any efficiencies from
`
`previously having taken the deposition of Apple’s prior § 101 declarant.
`
`Here, allowing Apple to raise grounds for review that it could have and
`
`should have raised in its November 24, 2014 00028 and -00029 petitions, if not
`
`sooner, encourages Apple’s piecemeal challenges to Patent Owner’s patent claims
`
`and runs afoul of the Board’s charge to “secure the just, speedy, and inexpensive
`
`resolution” of Apple’s covered business method challenges to the ‘720 patent.
`
`Patent Owner respectfully requests that the Board deny review on Apple’s
`
`repetitive § 101 unpatentable subject matter grounds and § 112 indefiniteness
`
`grounds.
`
`
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`- 10 -
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`
`
`
`
`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.
`
`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
`
`
`
`- 11 -
`
`
`
`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)
`
`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 3 and 14 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 device and method that can download
`
`
`
`- 12 -
`
`
`
`and store digital content into a data carrier. By using a system that combines on
`
`the data carrier both the digital content and at least one access rule conditioned on
`
`the amount of payment to control access to the digital content when obtaining
`
`digital content (Ex. 1001, ‘720 patent at 26:59-67; 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 in accordance with the rule conditioned
`
`on the amount of payment as required or specified by content rights owners.
`
`Thus, claims 3 and 14 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
`
`particular to the Internet.” DDR Holdings, 773 F.3d at 1257. The Report and
`
`Recommendation 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.
`
`
`
`- 13 -
`
`
`
`Report and Recommendation at 19, lines 7-12 (quoting DDR Holdings, 773 F.3d at
`
`1257) (internal citation omitted).
`
`Independent claim 3 of the ‘720 patent meets the requisites of § 101 under
`
`DDR Holdings. Challenged claims 4-12 all depend from claim 3, and if claim 3 is
`
`statutory, then so too are challenged claims 4-12. Claim 3 recites a data access
`
`terminal (a system) that parallels the structure of the statutory claim 19 in DDR
`
`Holdings. The table below sets forth a mapping of claim 3 of the ‘720 patent to
`
`claim 19 of the patent in DDR Holdings and shows that claim 3 is directed to
`
`statutory subject matter, and claim 14 recites a similar, corresponding method.
`
`Claim element from DDR Holdings
`
`Similar claim element from claim 3
`
`19. A system useful in an outsource
`
`“3. A data access terminal for retrieving
`
`provider serving web pages offering
`
`data from a data supplier and providing
`
`commercial opportunities, the system
`
`the retrieved data to a data carrier, the
`
`comprising:
`
`terminal comprising:”
`
`(a) a computer store containing data, for
`
`“a first interface for communicating
`
`each of a plurality of first web pages,
`
`with the data supplier;
`
`defining a plurality of visually
`
`a data carrier interface for interfacing
`
`perceptible elements, which visually
`
`with the data carrier;
`
`perceptible elements correspond to the
`
`a program store storing code; and”
`
`plurality of first web pages; (i) wherein
`
`
`
`- 14 -
`
`
`
`Claim element from DDR Holdings
`
`Similar claim element from claim 3
`
`each of the first web pages belongs to
`
`one of a plurality of web page owners;
`
`(ii) wherein each of the first web pages
`
`displays at least one active link
`
`associated with a commerce object
`
`associated with a buying opportunity of
`
`a selected one of a plurality of
`
`merchants; and (iii) …
`
`(b) a computer server at the outsource
`
`“a processor coupled to the first
`
`provider, which computer server is
`
`interface, the data carrier interface, and
`
`coupled to the computer store and
`
`the program store for implementing the
`
`programmed to:
`
`stored code, the code comprising:”
`
`(i) receive from the web browser of a
`
`“code to receive payment validation
`
`computer user a signal indicating
`
`data from the payment validation
`
`activation of one of the links displayed
`
`system;”
`
`by one of the first web pages;
`
`(ii) automatically identify as the source
`
`“code to read payment data from the
`
`page the one of the first web pages on
`
`data carrier and to forward the payment
`
`which the link has been activated;
`
`data to a payment validation system;”
`
`
`
`- 15 -
`
`
`
`Claim element from DDR Holdings
`
`Similar claim element from claim 3
`
`(iii) in response to identification of the
`
`“code responsive to the payment
`
`source page, automatically retrieve the
`
`validation data to retrieve data from the
`
`stored data corresponding to the source
`
`data supplier and to write the retrieved
`
`page; and
`
`data into the data carrier; and”
`
`(iv) using the data retrieved,
`
`“code responsive to the payment
`
`automatically generate and transmit to
`
`validation data to receive at least one
`
`the web browser a second web page that
`
`access rule from the data supplier and to
`
`displays: (A) information associated
`
`write the at least one access rule into the
`
`with the commerce object associated
`
`data carrier, the at least one access rule
`
`with the link that has been activated, and
`
`specifying at least one condition for
`
`(B) the plurality of visually perceptible
`
`accessing the retrieved data written into
`
`elements visually corresponding to the
`
`the data carrier, the at least one
`
`source page.
`
`condition being dependent upon the
`
`amount of payment associated with the
`
`payment data forwarded to the payment
`
`validation system.”
`
`
`
`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.
`- 16 -
`
`
`
`
`
`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.
`
`While it is the combination of elements that ultimately defines patentability,
`
`exemplary limitations show that the Petition has failed to show that claims 3 and
`
`14 are non-statutory. Therefore, the challenged claims -- all of which depend from
`
`claims 3 and 14 -- also are statutory. For example, claim 3 recites “code
`
`responsive to the payment validation data to receive at least one access rule from
`
`the data supplier and to write 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.” Ex. 1001, ‘720 patent at 26:41-67. The at least one access rule
`
`is written into the data carrier that also stores data received from the data supplier.
`
`Claim 14 similarly recites “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
`
`
`
`- 17 -
`
`
`
`dependent upon the amount of payment associated with the payment data
`
`forwarded to the payment validation system.” The Petition has not shown that
`
`such limitations were known.
`
`
`
`
`
`C.
`
`The Claims Do Not Result in Inappropriate Preemption
`
`1.
`
`Preemption under DDR Holdings
`
`Page 6 of the Petition incorrectly alleges that “the challenged claims are
`
`directed to nothing more than the unpatentable abstract idea of payment for and
`
`controlling access to data.” Page 70 of the Petition further incorrectly alleges that
`
`“the challenged claims of the ’720 patent do[] not add anything meaningful that
`
`would transform the challenged claims into patent-eligible ones.” However, the
`
`challenged claims of the ‘720 patent do not result in inappropriate preemption
`
`under DDR Holdings, Mayo and Alice. The Federal Circuit in DDR Holdings was
`
`faced with this kind of issue and held that “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
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